Transcript No Slide Title

WELCOMES
DISTINGUISHED INVITEES & GUESTS
April 2006
Corporate vision
Corporate vision:
“A world class integrated power major, powering
India’s growth, with increasing global presence”
Core Values:
BCOMIT
B-Business Ethics
C-Customer Focus
O-Organizational & Professional pride
M-Mutual Respect and Trust
I-Innovation & Speed
T-Total quality for Excellence
2
Company overview
A national generation company, supplying electricity to all
major states (28 states)
Installed capacity of 24,249MW, projects spread
geographically across the country
Diversified generation portfolio
High capacity utilization of 87.5% for fiscal 2006
Experienced professional management team with proven
track record
One of the foremost power generation companies, with
comprehensive in-house capabilities in building and
operating power projects
3
Key milestones to market dominance
1975
2004
1997
 NTPC was set up in 1975
with 100% ownership by the
Government of India. In the
last 30 years, NTPC has
grown into the largest power
utility in India.
 NTPC became a listed
company with majority
Government ownership of
89.5%.
 In 1997, Government of
India granted NTPC status
of “Navratna’ being one of
the nine jewels of India,
enhancing the powers to
the Board of Directors.
 The company changed its
name to NTPC Limited to
change its business
portfolio and transform itself
from a thermal power utility
to an integrated power
utility.
 NTPC becomes third Largest
by Market Capitalisation of
listed companies
Stakeholder
Value Creation
Disciplined and focused investments aimed at
maximizing returns; adherence to best practices
Strong Management team,
Professional and dedicated
organization
2005
Sound business concept & investment
philosophy, High standards of
Corporate Governance

Total shareholder’s
funds of USD10.213
billion as on 31st
December 2005.

Total Asset base of
USD 15.409 Billion
as on 31st December
2005.
Today, NTPC is the largest power utility in India, accounting for about 20% of India’s
installed capacity
Exchange rate used: 1 USD = 45.07 INR
4
Corporate structure of NTPC group
Subsidiaries
100%
NTPC Vidyut Vyapar
Nigam Limited
100%
100%
Pipavav Power
Development Co.
Limited
NTPC Electric Supply
Co. Limited
100%
NTPC Hydro Limited
Joint ventures
50%
NTPC-SAIL Power
Company Pvt. Limited
50%
50%
NTPC Alstom Power
Services Pvt. Limited
Bhilai Electric Supply
Co. Pvt. Limited
50%
NTPC Tamilnadu Energy
Co. Limited
8%
PTC India Limited
5
50%
Utility Powertech Limited
28.33%
Ratnagiri Gas & Power
Private Ltd
Key competitive strengths
High off take security
Proximity to fuel sources
High operating and cost efficiency
Low Operational Risk Profile
Strong Relation with Government of India
Strong management team with solid track
record
Strong credit ratings
6
Strategic importance to India
Dominant market share in India
Market leader and dominant power provider in India

NTPC's share in total capacity and total generation in India
Generation (All India 617.293 Bus)
Total capacity (All India 124,237MW)
NTPC 24,249 MW
(19.52%)

NTPC 170.88 BUs
(27.7%)
Tentative figures as of 31st March 2006

NTPC’s contribution to total installed
capacity
Installed and generation capacity
NTPC Generation
CAGR 25% Vs All
India 6.70%
(MW)
140,000
000' MW
120,000
30
24,249
100,000
25
80,000
20
60,000
99,988
40,000
20,000
NTPC Capacity
CAGR 20% Vs
All India 5.30%

bn units
180
160
140
120
100
80
60
40
20
0
Capacity as on date - 24,249
Ow n
- 22,929
Taken-over
- 1,320
15
10
35,781
5
0
0
1982
Others
Mar-06
NTPC
Installed Capacity
7
Generation

Market leadership – The
next largest power
utility owns 5.9% of
market share in terms
of capacity and 7.2% of
share in terms of units
generated
More than one-fourth of
India’s generation with
one-fifth capacity
A national level
generation company,
supplying electricity
across the country.
Possesses
comprehensive inhouse capabilities in
building and operating
power plants
NTPC has contributed
to over 27% of
Generating Capacity
addition in the country
during last 23 years
NTPC’s nationwide footprint
Owns multi-fuel stations

At multiple locations

No of plants
Capacity (MW)
- Coal
13
19,980
- Gas / Liquid Fuel
7
3,955
Total
20
23,935
- Coal
3
314
Grand Total
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24,249
NTPC Owned
Owned by Joint Ventures
In addition, NTPC also manages Badarpur Thermal
Power Station (705 MW ) of GOI in Delhi

Source: Company Data
NTPC is India’s premier national generating company
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High off take security [source]




Commercially attractive source of power
 Average selling price is US 3.4 cents approx. per KWh in fiscal 2005 compared to:
 Malaysia Average: US 6.3 cents per KWH
 Thailand Average: US 7.2 cents per KWH
 Singapore Average: US 9.4 cents per KWH
 Philippines Average: US 10.5 cents per KWH
Supply decisions based on commercial principles
 Allocation of power to customers with ability to pay
 flexibility to reduce sale to defaulting Customers
Energy sale assured through long-term Power Purchase Agreements (“PPAs”)
 Off take secure with entire output being contracted
 Strong payment security mechanism in place
 25 years life span for coal supply agreement and 15 years for gas agreements
Realized 100% amounts due from SEBs Since fiscal 2004
 New collection mechanism has minimized delays in customer payments
 One-time settlement of overdue receivables, which were converted into bonds bearing tax-free
interest of 8.5%, and were issued by the respective state government-owners of the defaulted
SEUs
Long-term contracts with clients
Source: S&P Report
Exchange rate used: 1 USD = 45.07 INR
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Proximity to fuel sources

Fuel constitutes nearly 70% of total operating costs


Optimal cost and timely availability of fuel is a must
Therefore, proximity to fuel sources is critical

Lower fuel transportation costs

9 of the 13 coal based stations are “pit head” plants

Most gas fired plants located along major gas pipelines

NTPC has fuel linkages tied-up prior to commencement of construction

Furthermore, NTPC has secured fuel sources via allotment of 8 mining
blocks
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Leads to high utilisation rates
Capacity Utilization
Turn Around Ability
Unchahar Plant PLF
Rest of India
83.6
81.1
80
60
80
70
92.2
100
87.5
87.5
84.4
64.8
66.4
68.7
68.8
69.9
%
90
81.8
NTPC
70
40
20
60
18.0
0
50
Tak e n ove r in 1992
2005
40
Talcher Plant PLF
30
20
100
10
80
79.3
60
%
0
40
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
18.7
20
Data for coal based power plants
0
Tak e n ove r in 1995
Source: Ministry of Power Annual Reports, CEA Executive
Summary, Planning Commission Annual Report
2005
Tanda Plant PLF
100
86.07
80
%
60
Operational availability at 91.2% in fiscal ’05
Recorded highest ever PLF of 87.5%
40
20
14.9
0
Tak e n ove r in 2000
11
2005
Operating efficiency
Low cost operations…
Supply price (in US cents per kWh.)
9.0
7.8
8.0
7.0
6.0
5.0
3.4
4.0
3.0
2.0
1.0
0.0
NTPC
Source: S&P Report
Industry Av e rage
Generation per employee
MU
8
4.6
5.3
6.1
6.3
01-02
4.5
5.1
98-99
4.1
96-97
5
95-96
6
97-98
7
00-01
7.1
7.4
6.6
5.6
4
3
2
1
Exchange rate used: 1 USD = 45.07 INR
12
04-05
03-04
02-03
99-00
94-95
0
Project Implementation … a proven track record
Reducing project completion time
(No. of M onths)
70
60
59
50
50
39
40
39
39
36
30
20
10
0
Singrauli (1988)
Vindhyachal
(1999)
Simhadri
(2002)
Talcher - II
(2003)
Simhadri (2002)
RamagundamIII (2004)

Track record in project implementation and completion

An integrated system for planning, scheduling, monitoring, control of projects and capital costs

Strong in-house engineering strength
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Low Operational Risk Profile
Diversified
Generation
Portfolio
Reduced Tariff
Collection Risk
Minimal External
Risk due to “Pass
Thru” Tariff
Low Off-take Risk

Low site risk – generating stations spread across 20 locations in
India

Minimal risk of coal unavailability – favourable position of most of
its coal based stations at mine mouths

Billings secured by Letter of Credit

In case of default, NTPC has access to Central Government’s fund
allocation to State

Tariff, as determined by CERC, enable complete pass through of
changes in fuel cost and foreign exchange to the customer

With the announcement of Tariff Policy in Jan 06 the uncertainty of
determinants of Tariff is eliminated

Long term power purchase agreements with SEB

Energy deficient market and NTPC’s cost competitiveness minimize
offtake risk
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Strong Relationship with Government of India

Navratna status has given autonomy in making investment decisions

Facilitated tripartite agreements for one time settlement of outstanding dues and future
payment security

Supported new initiatives:

Coal mining

Participation in LNG value chain

Entry into power trading, distribution and hydro power generation

Assigned NTPC the consultant role to modernize and improve several plants across the
country

Partnering in GOI Rajiv Gandhi Grameen Vidyutikaran Yojana

Chose NTPC to disseminate technologies to other players in the sector
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Partners in Progress - NTPC’s Contribution to National
Reform

NTPC has been identified as expert partner under the ‘Partnership in
Excellence’ program taken up by Ministry of Power in conjunction with
Central Electricity Authority. This program aims in improving the performance
of power stations with lower PLF.

NTPC has been assigned a role of consultant for undertaking Renovation and
Modernization of old plants of State Utilities.

NTPC has been appointed as advisor cum consultant for Project Monitoring
and quality Assurance and inspection of assigned Accelerated Power
Development & Reforms Program projects.

NTPC also provides training to engineers of state electricity boards through
its Power Management Institute.

Assigned Rural Electrification work under Rajiv Gandhi Grameen Vidyutikaran
Yojana Scheme
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Strong credit ratings
Current credit rating
Standard & Poor’s:
Fitch:
BB+ (Stable outlook)
BB+ (Stable outlook)
S&P
Fitch

“Standard and Poor’s believes the government
of India is likely to offer moderate support to
NTPC in the event of a financial crisis, given its
important role in a critical economic service.”

“The rating reflects NTPC’s strong operating
record, its cost competitiveness relative to its
domestic peers, and its strong financial profile
based on low debt levels and stable cash flows”

“NTPC is largely insulated against a significant
loss in revenues in the event of a breakdown in
one or two of the generation units, given its
generation portfolio of 20 stations spread
throughout the country. Furthermore, most of
its generating plants have favorable minemouth locations, resulting in lower fuel
transportation costs, and a lower risk of
interruption in fuel supply.”

“The rating also reflects NTPC’s flagship status
as a leading CPSU and its market prominence
as the largest generator in India”

December 2005

January 2005
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Snap Shot of growth strategies
Maintain sector
leadership position
through rapid
capacity expansion
Further enhance fuel
security
Prudent financial
strategies
Other initiatives
Exploit new business
opportunities
Technology
initiatives
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Financial Summary
USD MILLIONS
Profit & Loss Statement
FY04
FY05
FY05 – (Apr-Dec)
Revenue(1)
5,547
5,530
4,623
EBITDA(2)
2,503
2,159
1,613
Interest and finance charges
748
376
287
Profit after Tax
1167
1288
944
March 31, 2004
March 31, 2005
Dec 31, 2005
Plant, Property & Equipment
6,379
7,154
7,614
Investments
3,847
4,615
4,656
Cash & Cash Equivalent
1,411
1,349
1,640
Other Current Assets
1,595
1,514
1,499
13,232
14,632
15,409
Net Worth
7,888
9,269
10,213
Long Term Debt
3,156
3,468
3,714
Short Term Debt
273
323
277
Other Liabilities
1,915
1,572
1,205
13,232
14,632
15,409
Balance Sheet - As on
Assets
Total Assets
Liabilities
Total Liabilities
Exchange rate used: 1 USD = 45.07 INR
(1) Revenue = Sales + Other income excluding Provisions written back;
(2) EBITDA = Revenue- Operating Expenses
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Revenues & Income
Operating revenues
(Million USD)
4,994
4,175
4,216
2002-03
2003-04
2004-05
Net income
(Million USD)
1,288
1,167
800
2002-03
2003-04
Exchange rate used: 1 USD = 45.07 INR
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2004-05
Financial discipline
Capital
structure
Dividend
policy
Liquidity

Diversified sources of funds

Prudent financial profile - Debt to Net Worth of 0.41:1

Highest ever dividend for fiscal 2005 @ 24%

Interim dividend for fiscal 2006 @ 20%.

NTPC will continue to balance dividend pay-out and growth to take advantage of
country’s deficit power position

Access to large credit lines, both from financial institutions, Banks, Multilateral and
Bilateral agencies

Net cash flow of USD 1.12 bln generated from operating activities in FY 2004-05

Leveraging borrowing with a debt-to-equity ratio of 70:30
Exchange rate used: USD = 45.07 INR
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In a nutshell
Dominant market share in India
Proximity to fuel sources
High operating and cost efficiency
Strong management team with solid track
record
Strong Relation with Government of India
Strong credit ratings
Strong Financial Position
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Government support
High off take security
Industry Dynamics
Industry dynamics
Global drivers

Energy is an industry essentially driven by GDP and disposable income growth

India’s GDP outlook remains strong with demand for energy expected to rise
significantly in the future
High potential for growth
Per capita energy consumption
in kwh (CY 2002)
India - A supply deficit power market
591
600
559
580
2,465
World avg.
Positive supplydemand balance
(Demand expected
to outstrip supply)
546
560
523
7.1%
13,456
USA
540
11,299
Australia
6,614
UK
520
500
8.8%
507
1,484
Egypt
1,287
460
548
519
498
483
480
China
7.5%
7.8%
2,183
Brazil
7.3%
467
440
2001
India 569
2002
Requirement
Source: UN Development Program, Human
Development Indicators, 2005
2003
Availability
2004
% Energy Deficit
All figures are in bn units, except where stated otherwise
Source: Annual Report, Ministry of Power, 2002-2003, CEA Executive Summary
India is a very attractive energy market
Demand has consistently outstripped supply in the last few years
24
2005
Industry dynamics – New initiatives
National Electricity
Policy

Providing policy guidance to Electricity Regulatory Commissions and to
Central Electricity Authority (CEA) for preparation of National Electricity Plan
Tariff Policy

Provides guidance to regulatory commission for tariff setting
Competitive Bidding
Process

Guidelines for procurement of electricity through competitive bidding

Has been set up to expedite the process of settlement of appeals against the
rulings of regulatory commissions

For providing electricity to all rural households in five years

A joint venture company namely ‘Ratnagiri Gas and Power Private Limited’
with shareholding of NTPC, GAIL, Indian Financial Institutions and
Maharashtra State Electricity Board has taken over the assets of the Dabhol
Power Project

Government is facilitating the setting up of ultra-mega power projects with
capacity of 4000 MW each
Appellate Tribunal
Rajiv Gandhi Grameen
Vidhyutikaran Yojana
Revival of Dabhol
Power Project
Launch of Ultra-Mega
Power Projects
25
CONCLUSION
•GOVT HAS PUT IN PLACE LEGAL FRAMEWORK FOR ENABLING POLICIES
•INDIAN ECONOMY IS ON GROWTH PATH
•DEMAND FOR ELECTRICITY IS IMMINENT
•REFORMS STARTED YIELDING RESULTS
•MARKET IS ENORMOUS
•INDIA IS PREFERED DESTINATION FOR INVESTMENT
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DISCLAIMER
The information contained in this document relating to projections and estimates are forward looking
statements based on existing laws & Regulations. Actual result may vary materially from those
expressed or implied, depending upon economic conditions, government policies and other
incidental factors. Any opinion expressed is given in good faith but is subject to change without
notice. No liability is accepted whatsoever for any direct or consequential loss arising from the use
of this documents. The Financial figures as reported in Indian rupees have been translated into US
Dollars using Reserve Bank of India Reference Rate for US Dollar solely for the purpose of
convenience of the readers. No representation is made that the Indian Rupee amounts have been,
could have been or could be converted into United States Dollars at such a rate or any other rate.
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