Vertis Infrastructure Trust Management Discussions

EVOLUTION OF SEBI INVIT REGULATIONS

Since the introduction of the Securities and Exchange Board of

India (SEBI) InvIT framework in 2014, the regulatory framework has evolved in a calibrated, experience-led manner, moving from enabling market creation to strengthening governance, and most recently to strengthening investor protection and market access.

As a result, the framework is significantly more robust today than it was at inception, and that continues to evolve in step with the markets growing maturity. The regulatory journey can be understood in three phases

2014–2018

Establishing the Foundations

The initial phase of the InvIT framework focused on creating a credible structure for capital formation and establishing the core characteristics of the asset class.

The requirement to distribute at least 90% of Net

Distributable Cash Flows (NDCF) established a clear and predictable income profile for investors.

The reduction in minimum sponsor holding from 25% to 15% in 2016 lowered capital lock-in requirements, improved transaction economics and facilitated the first wave of InvIT listings.

2019 2024

Institutionalisation and Market Deepening

The next phase marked a transition towards a more mature and institutional market, with a strong emphasis on governance, investor protection and structural flexibility.

The permissible leverage threshold was increased from

49% to 70% of asset value, subject to safeguards including a AAA credit rating and a track record of six consecutive distributions.

SEBI progressively enhanced related-party transaction norms, disclosure requirements, audit oversight and board independence, including mandating that at least half of the investment managers board comprise independent directors

Minimum public float requirements were strengthened unitholders holding 10% or more of outstanding units were granted the right to nominate a director to the investment managers board, reinforcing alignment and accountability.

2024–2026

Enhancing Transparency and Broadening Participation

The latest phase represents the most intensive cycle of regulatory reforms since the inception of the framework, with a focus on transparency, investor protection and widening market participation.

The reduction in minimum investment and trading lot size to

25 lakh in September 2025 materially expanded access for retail and non-institutional investors.

SEBI further strengthened trustee responsibilities, tightened timelines for independent director appointments and refined rules governing locked-in unit transfers.

Simplified conversion norms for private-to-public InvITs and expanded permissible investments have provided greater operational and treasury flexibility, supporting further market deepening.

SEBI has proposed expanding the permitted end-use of borrowings for InvITs with leverage above prescribed thresholds to include major maintenance and capital expenditure, in addition to refinancing activities. Once implemented, the framework is expected to better align financing structures with the lifecycle requirements of road assets, reduce reliance on internal accruals and support smoother long-term distributions to unitholders. Overall, the evolution of the regulatory framework over the past decade reflects a clear progression from enabling capital formation, to strengthening governance and institutionalisation, and more recently, towards enhancing transparency and broadening investor participation. These developments have been instrumental in establishing InvITs as a credible and increasingly mature asset class within Indias capital markets.

NHAI: ENABLING PREDICTABILITY THROUGH CONTRACTUAL AND TECHNOLOGICAL EVOLUTION

Over the years, NHAI has systematically evolved its concession frameworks, strengthened investor protections through successive amendments to the Model Concession Agreements (MCAs) and implemented technology-driven reforms aimed at enhancing both user experience and revenue realisation. Collectively, these developments have improved the risk-reward profile of the sector and reinforced the attractiveness of Indian road infrastructure for long-term capital.

More broadly, NHAI has progressively enhanced the investability of the highway sector through differentiated concession structures, stronger contractual protections and technology-enabled operational improvements. Together, these developments have transformed the sector into an increasingly mature and institutional asset class, providing investors with greater visibility, resilience and predictability of cash flows.

CAPITAL FORMATION: BROADENING CAPITAL PARTICIPATION THROUGH DIFFERENTIATED CONCESSION FRAMEWORKS

Indias highway sector has evolved through successive concession structures, reflecting a deliberate approach to risk allocation and capital mobilisation. Rather than adopting a one-size-fits-all framework, NHAI has systematically developed differentiated concession models aligned with the requirements of distinct pools of capital.

Under the pre-2016 BOT (Toll) framework, concessionaires assumed construction, financing and traffic risks, making the model most suitable for developers with strong execution capabilities and a relatively higher risk appetite. Recognising the need to broaden the investor base, NHAI subsequently introduced alternative contractual frameworks with distinct risk-return characteristics.

The Hybrid Annuity Model (HAM), introduced in 2016, significantly reduced traffic risk by transferring demand exposure to NHAI and providing annuity-based cash flows.

This framework proved particularly attractive for developers and EPC companies, allowing them to leverage their construction and operating capabilities while benefiting from enhanced cash flow visibility.

In parallel, the Toll-Operate-Transfer (TOT) model created an investable platform for long-duration institutional capital by offering operational brownfield assets with established traffic profiles and no construction risk. The model was specifically designed to appeal to infrastructure funds, pension funds, sovereign wealth funds and InvITs seeking stable, yield-oriented returns backed by predictable cash flows. By creating differentiated concession structures rather than relying on a uniform approach, NHAI has successfully broadened the investor universe for the sector. This segmentation of risk and return characteristics has enabled the participation of diverse pools of capital, enhanced the depth and resilience of the highway financing ecosystem and supported the emergence of infrastructure as a mainstream asset class.

As a result, Indias highway sector today offers investment opportunities spanning the entire risk spectrum—from construction-led development platforms to mature, cash-generating operating assets—providing investors with multiple avenues to participate in the countrys long-term infrastructure growth.

CONTRACTUAL DE-RISKING:

STRENGTHENING CASH FLOW

VISIBILITY AND DOWNSIDE PROTECTION

Beyond the evolution of project delivery models, NHAI has continuously refined the Model Concession Agreements to address long-standing concerns of developers, lenders and financial investors, with a particular focus on enhancing downside protection and improving cash flow visibility.

A notable example has been the strengthening of termination payment provisions under the TOT framework, with payouts linked to pre-defined percentages of the concession fee.

This has materially improved recovery visibility for lenders and reduced uncertainty under stressed scenarios, thereby enhancing the bankability of the underlying assets.

More significantly, NHAI has transitioned from a traffic-based framework to a revenue-based mechanism for concession extensions in the event of revenue shortfalls. Under the revised structure, concessionaires are required to absorb only a limited first loss before contractual protection mechanisms are triggered. This represents a meaningful improvement over earlier BOT structures, where downside protection was linked to traffic assumptions and concessionaires were exposed to significantly higher levels of unprotected revenue risk.

The framework has also become more dynamic, with revenue assessments now conducted every five years rather than only once over the concession life. By linking protection mechanisms to actual revenues instead of traffic estimates, the revised framework mitigates risks arising from traffic forecasting inaccuracies and variations in toll rates, thereby improving the predictability and resilience of cash flows over the asset lifecycle.

The revised mechanism is already being implemented, with TOT Bundle 16 being the first concession to benefit from the new revenue protection framework. Given that

Bundle 16 accounts for approximately 28% of Vertis AUM, a meaningful portion of the portfolio now benefits from enhanced protection against revenue volatility.

Overall, these developments reflect NHAIs continued commitment to creating a more balanced and investor-friendly concession framework. By progressively improving cash flow visibility and reducing downside risks while preserving operational upside, the sector has become increasingly aligned with the requirements of long-term institutional capital.

OPERATIONAL EFFICIENCY:

TECHNOLOGY-LED IMPROVEMENTS

IN REVENUE REALISATION AND USER

EXPERIENCE

Alongside the evolution of concession structures and contractual frameworks, NHAI has undertaken a series of technology-driven initiatives aimed at modernising Indias tolling ecosystem. These reforms have not only enhanced user experience but have also contributed to higher collection efficiency, improved transparency and stronger revenue realisation for concessionaires.

FASTag: Digitising Toll Collection

The nationwide rollout of FASTag has fundamentally transformed the economics of toll collection. Prior to electronic tolling, cash-based collections were characterised by revenue leakages, congestion and limited auditability. By enabling seamless electronic transactions and real-time monitoring, FASTag has significantly improved collection efficiency while reducing waiting times at toll plazas.

Between FY21 and FY25, electronic toll collection revenues grew at a CAGR of 28.4%, increasing from 228 billion to 729 billion. As of November 2025, more than 117 million

FASTags had been issued, while average daily collections on national highways stood at approximately 1.84 billion.

The widespread adoption of digital tolling has resulted in structurally higher revenue realisation and enhanced transparency across the tolling ecosystem.

National Highway Annual Pass:

Advancing Seamless Mobility

The introduction of the FASTag-based annual pass represents another step towards frictionless and prepaid mobility for frequent users. Since its launch in August 2025, the programme has witnessed encouraging adoption, with more than five million subscribers and over 265 million cumulative transactions within six months.

Particularly relevant for commuter-intensive and peri-urban corridors, the initiative is expected to improve traffic flow user convenience while supporting the broader transition towards a fully digital tolling ecosystem. According to IHMCL data, annual pass users already account for approximately

26% of transactions in the car, jeep and van category, with penetration expected to increase further over time.

Multi-Lane Free Flow (MLFF):

The Next Phase of Tolling Evolution

As part of its continued efforts to improve road-user experience and enhance highway efficiency, NHAI has commenced the phased rollout of Multi-Lane Free Flow (MLFF) tolling. MLFF represents the next stage in the evolution of Indias digital tolling infrastructure, enabling barrier-less toll collection through the use of FASTag RFID readers, Automatic Number Plate Recognition (ANPR) cameras, radar and LiDAR technologies.

The framework is expected to improve traffic throughput, reduce congestion and waiting times, lower fuel consumption and vehicle emissions, and enhance overall corridor efficiency. Equally important, the system has the potential to improve collection accuracy and further reduce revenue leakages.

To facilitate implementation, the Government has introduced several enabling measures, including integration with the VAHAN database and the elimination of manual cash lanes across toll plazas with effect from May 1, 2026, with toll payments to be processed exclusively through FASTag or UPI. Additional enforcement mechanisms have also been introduced by linking unpaid toll obligations to various vehicle-related services, thereby strengthening compliance within the ecosystem.

Pilot implementation has commenced at the Chouryasi Toll Plaza in Gujarat and is expected to provide valuable operational insights ahead of a wider national rollout.

NHAI MONETISATION PROGRAMMES

SUPPORTING A LONG-TERM ASSET

PIPELINE

Asset monetisation has emerged as a key mechanism for recycling public capital and has become an important source of asset supply for the InvIT ecosystem. Since

FY19, NHAI has increasingly relied on the Toll-Operate-

Transfer (TOT) and InvIT routes to monetise operational assets, cumulatively raising approximately 1.02 trillion through these mechanisms up to FY26. During FY26 alone, against a monetisation target of 300 billion, NHAI has realised approximately 283 billion through a combination of public InvIT, private InvIT and TOT transactions.

NMP 2.0: INSTITUTIONALISING CAPITAL

RECYCLING

The National Monetisation Pipeline (NMP) has played an important role in establishing asset monetisation as a structural feature of Indias infrastructure financing framework. Under NMP 1.0 (FY22 FY25), the Government adopted a systematic approach towards monetising operational infrastructure assets with stable cash flows. The programme achieved approximately 89% of its overall target, translating into nearly 5.3 lakh crore of monetised assets, with highways emerging as one of the most successful sectors supported by strong investor appetite for de-risked brownfield assets. Building on this momentum, NMP 2.0, launched in February 2026, envisages monetisation opportunities of approximately 16.7 lakh crore across twelve infrastructure sectors, representing a 2.6x increase over NMP 1.0. Roads and highways constitute the largest sectoral allocation under the programme, with an estimated monetisation potential of 4.14 lakh crore, equivalent to around 26% of the overall pipeline.

Within the highways sector, approximately 3.35 lakh crore of monetisation opportunities, spanning nearly

19,200 km of road assets, are expected to be pursued through the InvIT and TOT routes. With roads and highways having achieved around 70% of their targets under NMP 1.0 and benefiting from accumulated execution experience, achievement rates under NMP

2.0 are expected to improve further.

LARGE AND VISIBLE MONETISABLE UNIVERSE

The highway monetisation opportunity extends beyond the assets identified under the current National Monetisation Pipeline. Of the approximately 1,150 operational toll plazas under NHAI, around 370 have already been monetised through the InvIT and TOT routes. The remaining toll plazas represent a sizeable pool of potential monetisable assets, which is expected to expand further as currently under-construction projects become operational.

Collectively, these developments point to a deep and visible asset pipeline and support the view that capital recycling through InvITs and TOT structures is evolving from a transaction-led approach to a permanent feature of

Indias infrastructure financing architecture. The continued availability of monetisable assets is expected to provide a strong foundation for the long-term growth of the InvIT ecosystem.

VERTIS : A SCALED PLATFORM BUILT

FOR LONG-TERM VALUE CREATION

STRATEGIC FINANCE

Acquisitions During the Year

During the year ended March 31, 2026, we completed the acquisition of twelve road assets from PNC Infratech Limited and PNC Infra Holdings Limited, with the final tranche closing on March 27, 2026. The acquired portfolio comprises eleven

National Highway Hybrid Annuity Model (HAM) projects and one State Highway Build-Operate-Transfer (BOT Toll) project, aggregating ~3,800 lane-km across the states of Uttar Pradesh, Madhya Pradesh, Karnataka and Rajasthan.

The acquisition represents an important milestone in Vertis strategy of building a diversified portfolio of high-quality transportation assets with predictable cash flows. Following the transaction, the Trusts portfolio has expanded to 8,428 lane-km across nine states, enhancing the scale, geographic diversification and resilience of the platform. The enlarged portfolio further strengthens Vertis ability to deliver stable and sustainable cash flows to unitholders while providing a strong foundation for long-term growth.

Details of Special Purpose Vehicles (SPVs) Acquired

The Trust acquired 100% equity stake and management control in the following twelve SPVs:

TRAFFIC PERFORMANCE: PCU TRENDS, VEHICLE MIX AND CAGR BY ASSETS

During FY26, the portfolio delivered traffic growth of 9.8% in PCU terms, materially exceeding the projected growth of 5.5%. Traffic performance was supported by broad-based economic activity, favourable tourism trends and the commissioning of adjacent road infrastructure, partially offset by diversion impacts and higher base effects at certain assets.

TRAFFIC GROWTH OF 9.9%⁽¹⁾ VS PROJECTED 5.5%

Commercial vehicle growth continued to benefit from healthy industrial and logistics activity across multiple regions. Key cargo segments contributing to traffic growth included cement, metals, food products, pharmaceuticals, petroleum products, coal, granite and construction materials. In addition, economic activity associated with industrial clusters, special economic zones, mining operations and capital expenditure projects provided further support to freight movement across the portfolio.

Passenger traffic was aided by strong festive and holiday travel demand, the operationalisation of new transport infrastructure and increasing connectivity to key economic and tourism centres. Assets with significant commuter and tourism exposure particularly benefited from these trends. Traffic growth was also supported by network completion effects. Capacity augmentation and six-laning of adjacent stretches improved corridor continuity and enhanced traffic throughput, resulting in incremental traffic accretion at select assets. Notable examples included the completion of six-laning works on the Talapady–Cochin stretch of NH-66 and the Renigunta–Tirupati corridor, which provided additional traffic support to UTPL and STPL-TN, respectively. Overall, the portfolio continued to benefit from its geographic footprint and balanced mix of passenger and commercial traffic, enabling resilient traffic growth across varying economic and regional conditions

DEBT POSITION

During FY26, the Trust raised 87,812 million of debt to fund acquisitions and refinancing requirements. The borrowings comprised Sustainability-Linked Debt of 9,000 million, rupee term loans from banks of 55,592 million and capital market issuances of 23,220 million.

The debt raised during the year included refinancing of existing borrowings of 13,918 million, resulting in reduced borrowing costs for the refinanced facilities.

Trust has reduced its cost of borrowing by 91bps during the year half of which through active treasury management.

FINANCIAL PERFORMANCE

Net Distributable Cash Flow (NDCF) and Distribution

Vertis has maintained a consistent track record of cash distributions since listing. During FY26, the Trust distributed 18,120 million to unitholders, equivalent to 12.00 per unit. Cumulative distributions since listing in August 2022 have reached 49,171 million, or 57.09 per unit, underscoring the strength and resilience of the underlying portfolio and the Trusts commitment to delivering predictable cash flows to unitholders.

Notes to NDCF

REVENUE FROM OPERATIONS AND TOTAL INCOME

146 is receivable. For the quarter ended March 31, 2026, annual pass transactions accounted for approximately

8.5% of toll revenue across the impacted projects.

During FY26, annuity receipts increased significantly to 14,796 million from 3,014 million in FY25, primarily driven by the acquisition of eleven HAM assets from PNC Infratech Limited. As the acquisition was completed during the year, FY26 includes only part-year annuity receipts from these assets. During the year, the Reserve Bank of India reduced the repo rate by 100 basis points. While lower interest rates have an impact on annuity income from offset by a corresponding projectstheimpactwaslargely reduction in borrowing costs on repo-linked debt facilities across the portfolio. The acquired HAM portfolio witnessed some delays in annuity receipts during the initial period following acquisition, primarily due to the transition and integration process. During FY26 Q2, the weighted average collection period was 3.4 days behind the scheduled due date. Collection efficiency improved significantly thereafter, with annuities being received, on average, 2.6 days ahead of schedule in FY26 Q3 and 6.4 days ahead of schedule in FY26 Q4.

The improvement in EBITDA margin was largely attributable to the increased contribution from HAM assets, which inherently operate with a lower cost structure as they do not incur toll collection and toll plaza operating expenses

Higher operating and maintenance expenses, employee costs and other administrative expenses primarily reflected the addition of new assets and the corresponding increase in platform scale.

FY26

NDCF AT TRUST

Debt Servicing: Debt servicing costs (comprising scheduled principal repayments and interest payments) increased to 9,615 million in FY26 from 3,570 million in

FY25. The increase was primarily attributable to incremental borrowings associated with the acquisition of NTEPL and the 12 HAM SPVs acquired from PNC Infratech Limited.

During FY26, the Trust raised 87,812 million for acquisition and refinancing of existing borrowings ( 13,918 million). Borrowings at trust level has increased from 48,110 million in FY25 to 1,11,647 million in FY26, resulting in a corresponding increase in debt servicing obligations.

SAFETY PERFORMANCE

Safety remains a core operational priority at Vertis, given the complexity of managing live traffic environment across highway assets. The Trusts OHS (Occupational Health and

Safety) System covers 100% of employees and contractors, embedding safety oversight across all levels of organisation.

RISK, OUTLOOK & INVESTOR REFERENCE

Risk Identification Matrix & Risk framework

Vertis InvIT established a structured Enterprise Risk Management ("ERM") framework in consultation with a leading Big Four professional services firm in 2024 to systematically identify, assess, monitor and mitigate risks across strategic, operational, financial, regulatory and legal dimensions. The framework includes a comprehensive enterprise-wide Risk Register covering key areas such as

O&M, traffic and revenue performance, financial exposures, regulatory developments and strategic initiatives. Each identified risk is evaluated through standardised impact and profitability parameters to support prioritisation and focused mitigation planning. The frameworks follows a process-owner model, embedding accountability for monitoring, escalation and mitigation directly within functional teams, while ensuring that risk awareness remains integrated into day to day operations and key business decisions, including acquisitions, O&M planning and traffic forecasting.

Supported by periodic internal and external reviews and oversight from the Risk Management Committee, the ERM framework enables Vertis to adopt a disciplined, forward project looking approach towards protecting asset performance, in FY26. preserving cash flow visibility and delivering sustainable long term returns to unitholders.

Investment Managers Brief Report on the Activities of the Trust -

PERIOD UNDER COVERAGE APRIL 01, 2025 TO MARCH 31, 2026

About Vertis Infrastructure Trust (formerly known as Highways Infrastructure Trust)

Vertis Infrastructure Trust (formerly known as Highways Infrastructure Trust) ("Trust") is a SEBI-regulated InvIT managing road assets across India. The Trust was set up by

Galaxy Investments II Pte. Ltd. under Indian Trust Act, 1882 with the objective of undertaking investment activities as an InvIT. The Trust was registered as an InvIT under Securities and Exchange Board of India (Infrastructure Investment

Trusts) Regulations, 2014 (hereinafter referred as "SEBI InvIT Regulations") on December 23, 2021, having registration number IN/InvIT/21-22/0019. Trust was listed on the National

Stock Exchange of India ("NSE") on August 25, 2022. The Trust upon change of name from Highways Infrastructure Trust to Vertis Infrastructure Trust has received new certificate registration dated June 18, 2025. The Trust has acquired and maintained various infrastructure development projects on Toll Operate Transfer ("TOT"), Build-Operate-Transfer ("BOT"), Design-Build-Finance-Operate-Transfer ("DBFOT"), and Hybrid Annuity Model ("HAM"). The Trusts portfolio includes national and state corridors. This report provides an overview of the key activities, performance, and strategic developments of the Trust during the reporting period. The Trust remains committed to achieving its investment objectives while managing risks and adhering to its investment philosophy.

The Trust upon change of name from Highways Infrastructure

Trust to Vertis Infrastructure Trust has received new certificate of registration dated June 18, 2025

The Sponsor of theTrustisaffiliated with funds, vehicles, and entities managed and/or advisedbyaffiliates of KKR & Co

Inc. The Sponsor is a 100% subsidiary of Galaxy Investments Pte. Ltd., which is majorly owned and controlled by KKR Asia Pacific Infrastructure Holdings Pte. Ltd. During the year 2023-24 Nebula Asia Holdings II Pte. Limited ("Nebula") also invested in the Trust. Nebula is wholly owned by Nebula I Investments Pte. Limited, which is in turn, majority-owned by

KKR Asia Pacific Infrastructure Holdings II Pte. Limited.

The Trusts principal investment objective is to operate as an Infrastructure Investment Trust (InvIT) under the InvIT Regulations. The Trust is permitted to undertake investments in any manner permissible under, and in accordance with, the SEBI InvIT Regulations and applicable laws. This includes investments in special purpose vehicles ("SPVs") in India as allowed under the SEBI InvIT Regulations.

About the Investment Manager

Vertis Fund Advisors Private Limited (formerly known as Highway Concessions One Private Limited) acting as the Investment Manager to the Trust (hereinafter referred as "Investment Manager") is responsible to manage the assets and investments of the Trust as outlined in the Investment Management Agreement and SEBI InvIT Regulations. Additionally, the Investment Manager makes investment decisions with respect to the Trust and the funds of the InvITof including any investments or divestments. The Investment Manager also handles the dissemination of statutory and material information and addresses Unitholders grievances.

The Investment Manager is committed to good corporate governance practices and has adopted various policies to ensure sustainable business growth, promoted a pro-active approach in reporting and set the philosophy and principles for compliance.

For further details on the Parties to the InvIT and the structure of the InvIT, kindly refer the page 38 of the Annual Report.

Asset Under Management

The Trusts assets under management ("AUM") increased to

272 Bn as of March 31, 2026, up from 190 Bn as of March 31, 2025. During the year 12 projects were added to the existing portfolio, increasing the total number of projects to 28.

During the period under review, the Trust completed 100% acquisition of 12 (Twelve) assets from PNC Infratech Limited and PNC Infra Holdings Limited.

For more information, refer page 76.

Summary of Consolidated Financial Performance

The Summary of the Audited Consolidated Financial Statements of the Trust for the Financial Year ended March 31, 2026, is provided below:

(Refer to page267to393fordetailedfinancials.)