Transcript www.ptcfinancial.com

Corporate Presentation
June 30, 2008
Disclaimer

This presentation and the accompanying slides (the “Presentation”), which have been prepared by PTC India Limited (the “Company”), have been
prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever.

This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company
makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness,
fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the
information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly
excluded.

Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that
are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not
limited to: the performance of the Indian economy and of the economies of various international markets, the performance of the power industry in
India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and
expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market
preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or
achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no
obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third
parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and
projections.

The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes
should inform themselves about and observe any such restrictions.
2
Agenda
PTC India - Overview
Unique Business Model
Key Financials and Strong Management Team
Highlights
3
Overview
PTC Today
Genesis of PTC

Set up in 1999 at the initiative of Government of India with the
following objectives:


Promoting power trading to optimally utilize the existing
resources;
PTC’s business includes Short term, Medium term and Long
term trading (including cross border) of electricity, as well as
offering Advisory services
11,029
12,000


Facilitate development of power projects under private
sector and development of power market for market
based investment in the Indian Power Sector; and
10,119
9,549
9,889
FY 2006
FY 2007
FY 2008
8,887
9,000
6,000
4,178
3,000
Promote exchange of power with neighboring countries.
1,617
-


Promoted by industry participants with a credible track record
and significant sectoral experience

NTPC - India’s largest thermal power generator

POWERGRID - India’s largest central transmission utility

PFC – Development financial institution dedicated to the
power sector

NHPC - Large hydroelectric power generator in India
FY 2002
Sale of MUs increased from 1,617 MUs* in FY 2002 to
9,889 MUs in FY 2008
FY 2004
FY 2005
Total MUs traded

PTC is now expanding its business operations and is moving
from Short term trading towards an Integrated Energy play

Long Term Power Trading

Fuel Intermediation

Power Tolling Arrangements

PTC India Financial Services Limited

Investments in other identified projects
Played a pivotal role in creation of power market in India

FY 2003
* MUs: Million Units
4
PTC Shareholding Pattern
20%
21%
12%
5%
31%
Promoters
FI & Banks
FII
11%
Mutual Funds
Insurance Companies
Others (including Individuals)
* As on June 30, 2008
5
Proven Track Record of Value Creation

Set up in 1999 at the
initiative of Government of
India

Power trading business
began operations

1,617 MUs traded

Listed on BSE and NSE
since 2004

Market Cap.: INR
2,400mn (US$ 61 mn*)

Market Cap.: INR 22,014 mn
(US$550 mn**)

9,889 MUs traded
FY 2008
FY 2004
FY 2002
FY 2000
* Based on the IPO price of INR 16 per share, ** Based on BSE closing price of INR 96.80 as on March 31, 2008.
1 USD = 40.02 INR (March 31, 2008)
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Uniquely Placed as an Integrated Energy Player
Integrated energy play

Leading Market Position

Market maker

49% market-share during FY
07-08*

One of the first participants in
Power Trading in India


Unique Business Model

Power Trading

Advisory Services

Investments in Energy
Value Chain

Fuel Intermediation

Network of relationships

Strong relationships with
various key industry
participants

Provides an edge over our
competitors in various
businesses segments

Cross border trading with
Bhutan


Experienced Team



Promoters with a credible
track record and significant
power sector experience
Diversified Board with well
known Independent Directors
Professional and well qualified
Management
GoI, Utilities and IPPs
Robust Sector Prospects



India’s power deficit economy
creates significant growth
opportunities
Strong economic growth and
Power Sector reforms creating
investment avenues in the sector
Strong Performance




Robust financial performance
till date
Zero default in collections**
Over the past five years:
 Revenues: CAGR of
10.67%
* Source: REA
**excludes disputed rebate claims
7
Power Sector: Maturity following the Right Trend
Current – encouraging scenario
Perspective – pre reform period


Multiple acts and legislations governing
operations of the sector
Ambiguity between role of centre and state
Regulatory powers vested with Government
Enactment of single unifying Electricity Act 2003

Notified a National Electricity Policy

National Tariff Policy

Clarity on regulatory set-up

Low attractiveness of power sector

Generation delicensed
10,760MW capacity addition proposed by
Private Sector during XIth plan
100% FDI allowed in the power sector

POLICY CLARITY


INVESTOR APPETITE

Projects awarded on MoU basis
1st and 2nd generation PPAs

3rd generation PPAs and tariff based
competitively bid projects

Number of stakeholders restricted to few PSUs
with limited participation from other segments

Private and State sector maturing with
participation from many more credible players

Slow progress on regulatory set-up with lack of
clarity on key aspects

Mandatory constitution of regulatory
commissions – CERCs and SERCs
AWARD OF
PROJECTS

STAKEHOLDER
MATURITY
REGULATORY
DEVELOPMENTS

Source: Planning Commission, CEA, Ministry of Power
8
Power Sector: Huge Capacities Planned
XIth Plan
2008
2009

198,089 ckms
251,439MVA


2011
2012
Generation: Capacity addition of 78,577MW has been planned
during XIth Plan period

39,865MW (50.7%) in central sector;
293,312 ckms

27,952MW (35.6%) in state sector; and
428,002MVA

10,760MW in private sector
Transmission: to add 95,823 ckms transmission lines

132,110MW
2010
AC Substation capacity to increase by 176,563 MVA
Distribution: to focus on village and household electrification

210,687MW
Continuation of ARDRP with revised terms focused on
reduction of AT&C losses
Plans to add 160,770MW generation capacity in next 10 years (XIth and XIIth Plan) with transmission and distribution
sector growing in parallel to support additional capacities
Source: Planning Commission, CEA, Ministry of Power
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Agenda
PTC India - Overview
Unique Business Model
Key Financials and Strong Management Team
Highlights
10
Growing Presence in Broader Energy Value Chain
Power Trading




Short term domestic trading
Cross Border trading
Long Term PPAs/ MoUs
Power Tolling Arrangements
Advisory

Investments

Consulting to various stake holders
in the sector such as




Captives
Utilities
IPPs



PTC India Financial Services Ltd.
Athena Energy Ventures Private Ltd.
Teesta Urja Ltd.
Krishna Godavari Power Utilities Ltd.
Wind Power
Fuel Intermediation

Long Term Arrangement to secure
fuel

Opportunity to be a strategic partner
in a vehicle for acquiring coal assets
11
Early movers in Short Term Domestic Power Trading

Market leader in Short term power trading




Traded volumes increased from 1,617 MUs in FY
2002 to 9,889 MUs** in FY2008
Transactions cover almost all the State Electricity
Utilities in the country
Purchase: 3238 MUs
Purchase: 195 MUs
Supply: 4655 MUs*
Supply: 13 MUs*
NORTHERN
Business focuses on identifying parties with a surplus of
power and parties with a deficit of power at particular
times and for specific durations
NORTH EASTERN
Various products created to provide flexibility to its clients

Round the clock power

Evening or Morning peak/ Afternoon or Night offpeak power

Specific time blocks for six to 18 hours

Weekend or Holiday power

Day ahead power
EASTERN
WESTERN
Purchase: 399 MUs
Supply: 4775 MUs*
SOUTHERN
Purchase: 248 MUs
Supply: 207 MUs*
Purchase: 582 MUs
Supply: 240 MUs*
Traded volumes with each region for FY 2008
* Supply figures includes supply from cross border purchases
**includes cross border trading volumes
12
Trades with Bhutan and Nepal
Bhutan


Long term agreements in place for purchase of power from
Bhutan

Chukha: 336 MW

Kurichhu: 60 MW and

Tala: 1,020 MW
Nepal
West Seti: 750MW
BHUTAN
(1416MW)
For FY 2008, PTC purchased 5,228 MUs from the above
mentioned three active projects in Bhutan
Nepal
Bhutan

Long term agreement initialed for purchase of entire power
from 750 MW West Seti hydro-electric power project in Nepal

The purchase of power has not started as yet

Active engagement in the development of Indo – Nepal
transmission interconnection for enhancement of power trade

PTC is also a member of Indo-Nepal Power Exchange
Committee
Chukha: 336MW
Kurichhu: 60MW
Tala: 1,020MW
Capacities available to PTC for cross border trades
13
Long term arrangements for trading business

Strategizing to increase the volume and mix of Medium and
Long term trading contracts - To reduce volatility in trading
volumes



Long term power purchase agreements with new IPPs
and Captives with surplus capacity
PTC has entered into PPAs and MoUs to procure long term
power

PPAs** initialed/ signed for 10,470 MW*

MoUs for Long Term Purchase with Projects for around
28,469 MW*
J&K (18MW)
Punjab (1568MW)
Chandigarh (100MW)
Delhi (30MW)
Haryana (1235MW)
Rajasthan (419MW)
PTC has entered into PSAs/ MoUs^ to ensure long term sale
of power

PSAs finalised for 4,452 MW*

MoUs signed for 2,300 MW*
Uttar Pradesh
(795MW)
Assam (200MW)
Sikkim (7MW)
Bihar (360MW)
Jharkhand (153MW)
Tripura (100MW)
Madhya Pradesh
(700MW)
WB (557MW)
DVC (90MW)
Orissa (95MW)
States with PSA/ MoU
signed
IPPs with PPAs
As of June 30, 2008, 38,939 MW of PPAs/ MoUs initialed/ signed and 6,752 MW of PSAs/ MoUs signed
*as of June 30, 2008; **Includes West Seti (750MW) hydro project in Nepal, Chukha (336MW), Kurichhu (60MW), and Tala (1020 MW) in Bhutan;
^includes PSAs for cross border power from West Seti, Chukha, Kurichhu and Tala
14
Power Tolling Arrangements



Power Tolling Arrangement

PTC to procure fuel (coal) for the power plant and
pay an energy conversion charge to IPP

The power so procured is to be owned and traded
by PTC
Power tolling arrangements for 400 MW (in AP) already
in place

MoU for a period of 25 years signed with two power
projects of 270 MW capacity each

Both the projects are based on imported Coal and
PTC needs to arrange for the imported coal
Purchase of coal at
competitive prices
Supply of coal to IPP as
per PTA
Purchase of power after
paying capacity charge
PTC has entered into MoU with Indonesian coal mine for
supply of 1.5 million tons of thermal coal annually for a
period of (15 + 5 years)
UTILITIES
Sale of power
at market
prices
15
Fuel Intermediation

PTC plans to play the role of aggregator of fuel

Intend to purchase imported coal from
individual suppliers

Arrange for the aggregated amount to be sold
to power plants for processing


Such fuel would also be used for PTC’s Power
Tolling Arrangements
Presently in discussions to enter into long term
arrangement to secure fuel


PTC has entered into MOU with Indonesian
coal mine for supply of 1.5 million tons of
thermal coal annually for a period of (15 + 5
years)
MoU/
Arrangements
equity stake
Investment in vehicle
Long term arrangements

Long term arrangement for
supply of 1.5mtpa coal

Opportunity to be a strategic
partner in a SPV
Acquiring coal
mines
Opportunity to be a strategic partner in a
vehicle for acquiring coal assets
16
Uniquely Positioned: Relationships
New Relationships
Relationships

Government Departments

State Utilities

Independent Power Producers

Financial Institutions

Reputable financial investors

Nordic Power Exchange

United States Energy Association

Athena Power Projects Limited and IDFC


IL&FS and Nepal Electricity Authority


Partners in Transmission Venture
Financial Technologies of India Limited


Partners in Athena Energy Ventures Limited
Partners in India Energy Exchange
Strategic financial partners in PTC India Financial
Services Limited
An ability to leverage on established relationships to grow business and develop new relationships
17
Advisory Solutions

PTC’s Advisory Services group has evolved with a view to advise clients in dealing with emerging issues in
the development of Power Market


The gamut of services offered include

Tariff and financial modeling for IPPs/ Captives;

Preparation of RFP & RFQ for competitive bidding of power projects;

Consultancy on CDM Certification;

Advisory on matters relating to regulatory framework; and

Market study reports amongst others.
Wide variety of clients for PTC Advisory services including State Utilities, Private sector and other players
with existing presence or interested in exploring opportunities in the Power Sector
18
Investments in Energy Value Chain: PFS
To provide Investment and Financing solutions for the broader Energy Value Chain
Identified target sectors
Proposed business activities
To the companies engaged in identified
target sectors
Investment in identified projects

Power Exchange

Tolling projects

Biomass project

Wind project

Investment in cross border transmission link

IL&FS Transmission ventures

Power generation
Power Exchange


Gas pipelines
Fuel sources
Transmission and

distribution

LNG terminals
FINANCIAL SERVICES

Electricity
equipment

Equity offerings
En
ra erg
st
y
r
fo uct
cu
ur
e
s



Invest in Greenfield projects, Brownfield projects
and provide expansion capital on an ongoing basis
Ports

in
f


Term Financing
Strategic financial partnership in PTC India Financial
Services to bring in:

Financial solutions and advisory


Fund management best practices
Strong relationship with global investors
19
Investments in Energy Value Chain (cont’d)
Investment and Stake
Business Description

ATHENA ENERGY
VENTURES (ATHENA)

1,200 MW hydro project
based in Sikkim, India

63 MW imported coal based
project in Andhra Pradesh

Developing 6 MW capacity
wind power project in
Maharashtra
TEESTA URJA LIMITED
(TEESTA URJA)
KRISHNA GODAVARI
POWER UTILITIES
WIND POWER ASSETS
Power project developmental
company across generation,
transmission and distribution
assets

Subscribed for 20% equity
stake in Athena for a
commitment of INR 300mn

Board approval for
subscribing to 11% stake in
Teesta Urja for a commitment
of up to INR 1,360mn


ESA signed for subscribing to
52% equity stake in Krishna
Godavari for a commitment of
up to INR 400mn
Project cost of about INR 375
mn
Current status

Athena won a bid to construct
a 3000 MW Hydro plant in
Arunachal Pradesh

Expected to be
commissioned by 2013

Expected to be
commissioned in FY 2010

Commissioned in March
2008
20
Agenda
PTC India - Overview
Unique Business Model
Key Financials and Strong Management Team
Highlights
21
Key Financials
Sales (in INR mn)
40,000
PAT (in INR mn)
37,859
39,490
500
488
406
35,000
400
31,205
352
30,000
300
243
25,000
20,373
200
20,000
100
15,000
10,000
0
FY 2005
FY 2006
FY 2007
FY 2008
FY 2005
FY 2006
FY 2007
FY 2008
Key Financial Highlights

Revenues showing a CAGR of 10.67%

Margins on Short Term trading capped at 4 paise/ unit in FY
2008, New Business and Long Term Trading to drive future
profitability
22
Strong Board and Management Team
Experienced and stable senior management
team
Senior Management Team
Corporate governance structure in line with
global best practices
Board of Directors
Years of
experience
Mr. T. N. Thakur
Chairman and MD
Mr. Shashi Shekhar
Director
23
Mr. Deepak Amitabh
Director
Executive Director
33
Mr. Gireesh B. Pradhan
Director – Jt. Secy, MoP
Mr. S. S. Sharma
Executive Vice President
32
Ms. Preeti Saran
Director – Jt. Secy, MEA
Mr. Arun Kumar
Executive Vice President
31
Mr. M.K.Goel
Director (PFC)
Mr. Sanjeev Mehra
Executive Vice President
25
Mr. A.B.L.Srivastava
Director (Finance) NHPC
Mr. Rakesh Kumar
Executive Vice President
25
Mr. I. J. Kapoor
Mr. P. Varshney
Vice President
32
Executive Director (Commercial)
NTPC
Mr. Ramesh
ChandraChaudhary
Vice President
34
Mr. R. G. Yadav
Director (Nominee of POWERGRID)
Mr. Harish Saran
Vice President
20
Mr. G. P. Gupta
Director
Mr. Hiranmay De
Vice President
20
Mr. D. P. Bagchi
Director
Ms. Puja Mehrish
Vice President
20
Mr. M. S. Verma
Director
Mr. P . Abraham
Director
Mr. T. N. Thakur
Chairman and MD
31
Mr. Shashi Shekhar
Director
27
Mr. Deepak Amitabh
Director
Mr. Arun Bhalla
Professionally managed company with corporate governance structure in line with global best practices
23