April 20, 2017 - s1.q4cdn.coms1.q4cdn.com/.../2017/Fairfax-India-Annual-Meeting-4.20.2017.pdf · April 20, 2017. Forward-Looking ... Home, Gold and Commercial Vehicle Loans. 14 IIFL

Annual MeetingApril 20, 2017

Forward-Looking StatementsThis Presentation has been prepared for informational purposes only from information supplied by Fairfax India Holdings Corporation (“Fairfax India” or the “Company”) and from third-party sources indicated herein.

Such third-party information has not been independently verified. The Company makes no representation or warranty, expressed or implied, as to the accuracy or completeness of suchinformation.

Any graphs, tables or other data demonstrating the historical performance of Fairfax India or its Indian Investments contained in the presentation are intended only to illustrate pastperformance and are not necessarily indicative of the future performance of Fairfax India or its Indian Investments.

This Presentation may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking statements may relate to the company’s or an IndianInvestment’s future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, growth strategy, budgets, operations,financial results, taxes, dividends, plans and objectives of the company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities of thecompany, an Indian Investment, or the Indian market are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-lookingterminology such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘is expected’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, ‘‘forecasts’’, ‘‘intends’’, ‘‘anticipates’’ or ‘‘does not anticipate’’ or‘‘believes’’, or variations of such words and phrases or state that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’, ‘‘will’’ or ‘‘will be taken’’, ‘‘occur’’ or ‘‘be achieved’’.

Forward-looking statements are based on the opinions and estimates of the company as of the date of this Presentation, and they are subject to known and unknown risks, uncertainties,assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the following factors: taxation of the company and its subsidiaries; substantial loss of capital; long-term nature of investment; limited numberof investments; geographic concentration of investments; potential lack of diversification; financial market fluctuations; pace of completing investments; control or significant influenceposition risk; minority investments; ranking of company investments and structural subordination; follow-on investments; prepayments of debt investments; risks upon dispositions ofinvestments; bridge financings; reliance on key personnel; effect of fees; performance fee could induce Fairfax to make speculative investments; operating and financial risks ofinvestments; allocation of personnel; potential conflicts of interest; employee misconduct at the portfolio advisor could harm the company; valuation methodologies involve subjectivejudgments; lawsuits; foreign currency fluctuation; derivative risks; unknown merits and risks of future investments; resources could be wasted in researching investment opportunities thatare not ultimately completed; investments may be made in foreign private businesses where information is unreliable or unavailable; illiquidity of investments; competitive market forinvestment opportunities; use of leverage; investing in leveraged businesses; regulation; investment and repatriation restrictions; aggregation restrictions; restrictions relating to debtsecurities; pricing guidelines; emerging markets; corporate disclosure, governance and regulatory requirements; legal and regulatory risks; volatility of the Indian securities markets;political, economic, social and other factors; governance issues risk; Indian tax law; changes in law; exposure to permanent establishment; enforcement of rights; smaller company risk;due diligence and conduct of potential investment entities; Asian economic risk; reliance on trading partners risk; natural disaster risks; government debt risk; and economic risk.Additional risks and uncertainties are described in the company’s annual information form which is available on SEDAR at www.sedar.com and on the company’s website atwww.fairfaxindia.ca. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the company. These factors andassumptions, however, should be considered carefully.

The preparation of financial statements requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities, the disclosure of contingentassets and liabilities, the reported amounts of revenues and expenses and the calculation of the Net Asset Value of the Company during the reporting periods. Financial informationprovided throughout this presentation is prepared in accordance with IFRS, unless otherwise noted.

An investment company focused on making outstandinglong-term returns through investments in Indianbusinesses

Unique opportunity to co-invest with Fairfax FinancialHoldings (FFH) in India

Alignment of interest – FFH’s long-term investment of$450 million in FIH

What is Fairfax India Holdings Corporation (FIH)?

3

New, business-friendly government

Strong growth profile

Attractive demographic trends

India – Compelling Investment Destination

4

HWIC Asia Fund – Class A is the Fairfax Financial group investment vehiclefor investments in Asia, predominately India

Fairfax Financial – Superior Investing Record in India

5

Monthly performance through March 31, 2017(U.S.$100 Invested in February 2000)

$2,482

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

$2,800

HWIC Asia Fund Class ABSE Index

HWIC AsiaFund BSE

Annual Total Return (U.S.$) Class A Index5 year 20.0% 6.0%10 year 12.4% 4.3%Since Inception - Feb '00 20.7% 7.9%

6

Fairfax India Holdings Corporation (FIH)($ millions, except for per share data)

(1) Subsequent to the issuance of 42.6 million subordinate voting shares on January 13, 2017 at $11.75 per share (net proceeds of $494 million)

Actual Proforma(1)

Dec 31, 2015 Dec 31, 2016 Dec 31, 2016

Book value per share $9.50 $10.25 $10.64Closing share price 10.10 11.55Earnings per share 0.42 1.01

Income $65 $129Net earnings $41 $108

Investments $979 $1,096Total assets $1,025 $1,304Common shareholders' equity $1,013 $1,075 $1,569

Shares outstanding 106.7 104.9 147.4

($ millions) Amount InvestedNational Collateral Management Services Limited $149IIFL Holdings Limited 277Adi Finechem Limited (renamed Fairchem Speciality Limited) 19Privi Organics Limited 55Sanmar Chemicals Group 300National Stock Exchange of India Limited 27

Total invested at December 31, 2016 $827

Saurashtra Freight Private Limited 30Bangalore International Airport Limited 386

Total invested at March 31, 2017 $1,243

Amount currently available for new investments and ongoing expenses 228Total $1,471

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Summary of Investments

(1) Includes additional $75 million investment in IIFL Holdings in February 2017

(1)

Fairfax India – Intrinsic Value

8(1) April 13, 2017 closing price

IIFL Holdings Limited 10 Year CAGRBook value per share 26%

Earnings per share 22%

Fairfax India average cost per share Rs 217

Current market price per share(1) Rs 442

Price/earnings ratio on expected earnings 16.9x

WarehousingCollateralmanagement ofagri commodities NBFC

88% FIHownershipPrivate

Over $1.2 Billion Investments Completed

$149m

India’s 3rd

largest airportMonopoly assetReal estateassets


$386m

PVC andCaustic Sodaproducer

30% FIHownership7-yeardebenturesPrivate

(1)

(1) Fairfax Financial Holdings Limited holds a 30.2% equity interest and 93.6% voting interest in Fairfax India

$277m

NBFCWealthManagementCapital Markets& Other

27% FIHownership9% FFHownershipPublic

$300m $27m

IndianStockExchange


Fairfax India Investments

$30m

Containerfreightstation


$74m

SpecialtyChemicalManufacturer

49% FIHownershipPublic

BIAL

National Collateral Management Services Limited

Storage &Preservation

Procurement &Supply Chain

CollateralManagement

Loans Testing &Certification

Commodityand WeatherIntelligence &Consultancy

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National Collateral Management Services

(1) Average ROE over the last 5 years

Investment date August 2015Ownership % 88.1%Initial investment $149Fair value - Dec 31, 2016 $147Transaction IRR -1.0%Multiple of net investment 1.0x

5 Year(Rs billions - Indian GAAP) Mar 31, 2012 Dec 31, 2015 Dec 31, 2016 CAGRTotal assets 2.9 6.9 10.0Shareholders' equity 1.7 5.0 5.1 26%

Revenue 2.0 3.8 7.9 34%Net earnings 0.1 0.3 0.3 21%Return on equity 5.9% 6.3% 4.9% 7% (1)

Twelve months ended

Revenue grew by 109% to $118 million but net earnings fell 21% to $4million

Successful launch of NCML Finance, an RBI regulated NBFC

Successfully bid for 11 large silo contracts from the Food Corporationof India, representing 550,000 metric tons of storage capacity

Collateral management business increased assets undermanagement to $2.5 billion, serving 74 lending institutions

Significant expansion of the Supply Chain segment

NCML – Business Update

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Investment Banking Project Financing and

Advisory

Institutional Equities India Investment

Advisory

WealthManagement

Asset Management

Broking, Insurance,Mutual Fund

Home, Gold andCommercial VehicleLoans

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IIFL


Investment date Dec 2015 Feb 2017 TotalOwnership % 21.7% 5.0% 26.7%Initial investment $202 $75 $277Fair value - April 13, 2017 $580Transaction IRR 97.0%Multiple of net investment 2.1x



Twelve months ended

Wealth Management

Emerged as one of the leading wealth managers in India

Assets under management, advice and distribution grew 22% toabout $16 billion

In February 2016, this division launched its own NBFC to offer loansagainst securities to its high net worth clients – it already has a loanbook of $430 million

General Atlantic invested $173 million for a 22% stake in the wealthmanagement business, valuing this division at $800 million – we paida valuation of $930 million for the whole company

IIFL – Business Update

15

NBFC

Loan book grew 15% to approximately $3 billion

CDC, the UK government-sponsored fund invested $150 million for a 15%stake in the NBFC, valuing this division at $1 billion – the whole companywas valued at approximately $1.3 billion

Capital markets and other activities

The investment banking division had a landmark year completing 16transactions including 5 IPOs

IIFL Markets App is highest rated and most downloaded stock trading appon Android and IOS Over 800,000 downloads on Android

IIFL – Business Update

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FAIRCHEM SPECIALITY LIMITEDRenewable Specialty Chemicals

OleoChemicals

AromaChemicals

Fairchem Speciality Limited

18(1) Average ROE over the last 5 years

Adi Privi FairchemInvestment date Feb 2016 Aug 2016 March 2017Ownership % 44.9% 50.8% 48.8%Initial investment $19 $55 $74Fair value - April 13, 2017 $145Transaction IRR 133%Multiple of net investment 2.0x

Fairchem (former Adi) 5 Year(Rs millions - Indian GAAP) Mar 31, 2012 Dec 31, 2015 Dec 31, 2016 CAGRTotal assets 544 1,159 1,408Shareholders' equity 238 624 711 26%

Revenue 972 1,473 1,727 13%Net earnings 74 86 128 12%Return on equity 31.1% 13.8% 18.2% 28% (1)

Twelve months ended

While revenues grew 17% to $26 million, net earnings remained flat at$2 million

Return on equity of 18.2%

Revenue and net earnings growth were below expectation –significant plant upgrades resulted in production losses

With the upgrades completed, Fairchem is poised for strong growth inthe next year

Fairchem (Formerly Adi Finechem) – Business Update

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Founded in 1992 by Mahesh Babani and D.B. Rao, two outstandingentrepreneurs who continue to run the company

One of India’s leading suppliers of aroma chemicals

With a capacity of 22,000 tons per annum, Privi has a dominantposition and economies of scale

Strong R&D capabilities

Privi Organics – Investment Rationale

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Low crude oil prices and a slowdown in China resulted in pricingpressure worldwide

Despite this, Privi maintained its revenue and had nominal growth inEBITDA and net earnings

Net operating cash flow improved to $8 million, following negativecash flow in 2015

Privi Organics – Business Update

21

Sanmar Chemicals GroupMajor PVC and Caustic Soda ManufacturerSANMAR

23

Sanmar Chemicals GroupInvestment date Apr 2016 Sep 2016 TotalOwnership % 30.0% 30.0%Initial investment - debentures $250 $50 $300Initial investment - equity $1 $1Fair value - Dec 31, 2016 $300Transaction IRR 0.0%Multiple of net investment 1.0x

5 Year(Rs billions - Indian GAAP) Mar 31, 2012 Dec 31, 2015 Dec 31, 2016 CAGRTotal assets 73.5 85.1 105.4Shareholders' equity 15.4 (3.3) (11.3)

Revenue 25.7 35.4 36.6 8%Net earnings 3.3 (6.7) (7.8)Return on equity 21.3%

Twelve months ended

Strong and highly ethical ownership and management team with over45 years experience in PVC and Caustic Soda businesses, withoperations in India and Egypt

Second largest PVC player in India – the top three account for 90% ofIndia’s domestic PVC manufacturing

Sanmar acquired TCI Egypt in 2007 with the intention of serving thegrowing market for PVC in North Africa, the Middle East and parts ofEurope

Capacity expansion planned in India and Egypt to supply the growingPVC demand in India, the Middle East and parts of Europe

Sanmar – Investment Rationale

24

For the first time in a decade, optimism returned to the global PVCmarket

Chemplast, Sanmar’s company in India, had excellent performance in2016 Sales grew 11% to $401 million EBITDA grew 103% to $67 million

TCI, Sanmar’s company in Egypt, has restructured its balance sheetwith the help of our loan and the CapEx project to increase capacity iswell under way

Sanmar – Business Update

25

Mundra port (Gujarat) - second largest and fastest growing port in India

WORLD CLASSCONTAINER FREIGHT STATIONat Mundra Port

27

Saurashtra Freight Private LimitedInvestment date February 2017Ownership % 51.0%Initial investment $30Fair value n.a.Transaction IRR n.a.Multiple of net investment n.a.



Revenue 0.5 0.9 1.0 18%Net earnings (0.0) 0.2 0.2Return on equity n.a. 31.0% 24.5% 36% (1)

Twelve months ended

A 12 year old company, with an excellent track record and impressivegrowth since management was taken over by Raghav Agarwalla

Saurashtra is the number one CFS company at Mundra port, the secondlargest and fastest growing container port in India

Attractive valuation at a price/earnings ratio of 13.9x, price/free cash flowratio of 8.3x

Saurashtra – Investment Rationale

28

Saurashtra had an excellent year in 2016 growing revenue by 23% to$14.4 million and net profit by 105% to $2.9 million

Saurashtra is on track to grow revenue and net income by over 25%in the next fiscal year

Saurashtra – Business Update

29

Bangalore International Airport- South India’s largest airport

31

Bangalore International Airport Limited (BIAL)Investment date March 2017Ownership % 38.0%Initial investment $386Fair value n.a.Transaction IRR n.a.Multiple of net investment n.a.




Twelve months ended

Operational since 2008, BIAL is India’s third largest airport and thelargest in South India – it is expected to grow from 20 million to 60million passengers by 2030

Bangalore is considered the ‘Silicon Valley of India’ Concession to operate the airport for 30 years with the option to

extend for another 30 years

BIAL – Investment Rationale

32

Regulated return of 16% from 100% of aero revenue and 30% of non-aero revenue

Approximately 460 acres of land that can be monetized Potential real estate revenue is not included in our projections

Attractive valuation at a price/earnings ratio of 14.4x and price/freecash flow ratio of 8.3x

BIAL – Investment Rationale

33

BIAL – Business Update

34

In 2016 BIAL handled traffic of 22 million passengers

Plans are in place to gradually expand the capacity of the airport to 60million passengers by 2030

Land preparation for a second runway is underway and halfcompleted

April 20, 2017 - s1.q4cdn.coms1.q4cdn.com/.../2017/Fairfax-India-Annual-Meeting-4.20.2017.pdf · April 20, 2017. Forward-Looking ... Home, Gold and Commercial Vehicle Loans. 14 IIFL

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