…Message Box 1 - Tata PowerAGM Presentation to the Stakeholders Anil Sardana CEO & Managing Director September 2016 ... Energy for coal logistics 9,184 MW installed capacity as on

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AGM Presentation to the Stakeholders

Anil Sardana

CEO & Managing Director

September 2016


Agenda

• About Tata Power

• Financial Performance and Statistics

• Significant Developments in the Sector

• Key Events and Highlights of the Year

• Sustainability

• Awards and Recognition


About Tata Power


Integrated power play across value-chain

Play across the entire value chain

Fuel & Logistics Generation TransmissionDistribution

& Supply

Stake in Indonesian

coal mines

Fuel supply for all of

operational projects

Investment in Trust

Energy for coal

logistics

9,184 MW installed

capacity as on 31st

Mar 2016

Nearly 445 MW of

generation

capacity under

execution in India

and international

geographies

Mumbai:

1,200 cKm network

21 receiving stations

Powerlinks:

1,166 km long line

connecting Tala

hydro project–Bhutan

to North India

Mumbai

– Over 6.5 lakh

consumers

Delhi

– Over 15 lakh

consumers

Coal production

rose from 87.2 MT in

FY15 to 88.8 MT in

FY16

In FY16, 359 MW of

net generation

capacity added

Additional 254 MW

of greenfield

capacity added

after 31st Mar 2016(Cennergi and Rojmal)

500 MVA of

transformation

capacity and 18.5

cKm of lines added

or augmented in

Mumbai LA in FY16

Customers added

in FY16:

- 60,000 in

Mumbai LA

- 75,000 in Delhi

(TPDDL)

In FY16 Tata Power

Trading Company

Ltd traded 17,309

MUs against 10,572

MUs in FY15

Value Added

Businesses

SED - developing

State-of-the-art

facility spread

across 75 acres at

Vemagal, Karnataka

Collaborating with

domestic and

international entities

FY

16


Centenary Year Celebrations

Centenary Year Celebrations were held across all key establishments. The year saw the

launch of a Stamp celebrating 100 years of Tata Power, a book (The Untold Tales of Tata

Power) and many other events. Celebrations culminated in a mega ceremony at Mumbai with

the sealing of a Time Capsule, in the presence of Hon’ble Chief Minister of Maharashtra,

Energy Minister of Maharashtra, Mayor of Mumbai and Tata Group Chairman


Expanding global footprint driving growth

Hydro Project -

Bhutan

Logistics

Office -

Singapore

Wind Project

– South Africa

Tata Power – Global presence

Distribution

Consultancy

Assignment - Nigeria

Hydro Projects-

Georgia

Hydro Project-

Zambia

Rep. Office

Vietnam

Projects under execution / Commissioned in FY16

Coal Mines

- Indonesia

Existing Projects and Representative Offices

Rep. Office

Indonesia

Rep. Office

South Africa


Financial Performance

and Statistics


Improvement in profitability

• The Consolidated Profit After Tax improved significantly on account of improved

operational performance and reversal of impairment loss in CGPL.

• The Operating Revenue at a Consolidated level also rose by over ` 2,000 Crore on the

basis of higher volumes in power trading and higher revenues from solar business.

• At standalone level, the Operating Profit rose by over ` 500 Crore, the reduction in PAT

was mainly due to provision for diminution in the value of investment made by your

Company

1010772

FY15 FY16

Standalone PAT (` crore)Consolidated PAT (` crore)

168

873

FY15 FY16

238 Crore

5X improvement

Mainly on account

of diminution in

value of Telecom

Investments of `226 Crore


Consolidated Financials – FY16

Figures in ` Crore FY16 FY15

Net Sales/Income from Other Operations 36,461 34,367

Operating Expenditure 28,470 27,426

Operating Profit 7,991 6,941

Less: Forex Loss/(Gain) 218 -64

Add: Other Income 297 352

Less: Finance Cost 3,477 3,699

Profit Before Depreciation and Tax 4,593 3,658

Less: Depreciation/Amortization/Impairment 2,376 2,174

Profit Exceptional Item 2,217 1,484

Exceptional Item 281 NIL

Profit/(Loss) Before Tax 1,936 1,484

Tax Expense 869 1,075

Net Profit/(Loss) After Tax 1,067 409

Less: Minority Interest 256 289

Add: Share of Profit of Associates 62 48

Net Profit After Tax, Minority Interest and Share of Profit

of Associates873 168

Including rate regulatory income/(expense)


Standalone Financials – FY16

Figures in ` Crore FY16 FY15

Net Sales/Income from Other Operations 8,438 8,678

Operating Expenditure 5,721 6,516

Operating Profit 2,717 2,162

Less: Forex Loss 58 48

Add: Other Income 555 1,025

Less: Finance Cost 1,156 1,048

Profit Before Depreciation and Tax 2,058 2,091

Less: Depreciation/Amortization/Impairment 665 575

Profit Before Exceptional Item 1,393 1,516

Exceptional Item 226* NIL

Profit Before Tax 1,167 1,516

Tax Expenses 395 506

Net Profit/(Loss) After Tax 772 1,010

Including rate regulatory income/(expense)

* Exceptional item for diminution in value of Telecom Investments of ` 226 Crore


Tata Power Stock Performance

(`)Tata Power Share Price Power Index

BSE

• Company specific issues i.e. Compensatory Tariff at CGPL, Low coal prices

• Sectoral challenges i.e. financial situation of discoms, fuel & transmission and

regulatory uncertainties affecting growth are key factors

77.6 77.2 76.1 74.769.5

60.465.8

68.966.3

68.9

60.658.3

65.270.2

72.9 74.572.1

76.6

2138 21372078 2055 2080

1796 18311914 1910

1975

1828

1620

17891847 1863

20082074 2074

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

3000

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Tata Power

Power Index

As on 19th

Sept 2016


Significant Developments in

the Sector


UDAY – Key Objectives

• The Scheme is designed to facilitate financial turn around of State Discoms

• Improving Operational Efficiency is the key imperative and it outlines the proposed

activities, benefits targeted and the stipulated timelines for the improvement measures

• Targets the reduction of AT&C losses to 15% by 2018-19 along with the reduction of

the gap between ACoS and average revenue realized to zero by 2018-19

• Aims to reduce cost of supply by improving coal linkages, reduction of grade slippages

and price rationalization on the basis of GCV

• Directs states to take over 75% of the DISCOM debt as on 30th Sept 2015, over a 2 year

period along with transfer of future DISCOM losses to state to facilitate financial

disburdening of DISCOMS


Fuel Price Volatility

The International Coal prices continue to be volatile

45

50

55

60

65

70

75

Coal Price (USD/Tonne)

Data on chart updated up till 19th Sept 2016

Australian thermal coal, FOB Newcastle/port Kembla


Amendments to EA 2003 & Draft Renewable Energy Act

The Electricity (Amendment) Bill, 2014-

• The Bill mainly seeks to segregate the distribution network from the electricity

supply business and to introduce multiple supply licensees in the market.

• The Bill was referred to Parliamentary Standing Committee on Energy which

has submitted its report, the Bill is expected to be placed in the Parliament

soon.

Draft Renewable Energy Act –

• As per the draft, Central Government will formulate a National Renewable

Energy Policy and National Renewable Energy Plan.

• The policy will include national targets over a five-year period and provide

incentives framework.


MERC Regulations

• The MERC notified the MYT Regulations, 2015 on 8th December 2015 for the

Control Period from 1st April 2016 up to 31st March 2020.

• The key changes are tightening of norms for-

– The components of working capital

– O&M allowances for the distribution business

– Stricter heat rate and auxiliary norms

– No recovery of penalties and compensation payable by the Licensee to any

party for failure to meet any Standards of Performance in the ARR

– Changes in the sharing of gains / losses between Utility and consumers

– Increase in Norm for Transmission Availability.

• MERC notified the Distribution Open Access (DOA) Regulations, 2016 on 30th

March 2016 for the state of Maharashtra.


Key Events and Highlights of

the Year


Strategic Focus of Tata Power


Coastal Gujarat Power Limited

• CGPL operates India’s first UMPP and

is amongst the largest power stations

in the country

• It is operating at benchmark levels of

operating efficiency

• On 7th April 2016, ATE pronounced its

Judgement on the compensatory tariff

issue.

• It held that the increase in price of coal

on account of the intervention by the

Indonesian Regulation constituted a

Force Majeure event

• ATE directed CERC to quantify the

relief or compensation within a period

of three months

• CERC commenced hearing w.e.f 26th

April 2016 for the purpose of

calculation of relief under Force

Majeure.


Maithon Power Limited

• During FY16, higher than targeted profit was achieved on account of 100% tie up of power under

LT PPA and lower operating expenditures on account of fuel.

• Sale of power to KSEB was established from 17th December 2015 resulting in 100% LT portfolio

for MPL’s power generated


Tata Power Delhi Distribution Limited

• TPDDL managed to reduce its AT&C losses further by nearly 1% in the last financial year

• TPDDL has also met peak demand of 1,633 MW in FY16

• TPDDL unveiled the Smart Grid Lab for demonstration of various foundational and advanced

operational technologies, information technologies and benefits derived by convergence of

information and operational technologies.

47.6 45.4

40.9

35.431.1

22.0 20.4 18.7 17.0 15.312.5 12.0 11.5 11.0

47.844.9

33.8

26.523.7

18.616.7 15.2 14.2

11.5 10.7 10.4 9.9 8.8

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Target

Actual

AT & C Loss Reduction (%)


Tata Power Renewable Energy Limited

• TPREL, a 100% subsidiary of Tata

Power is the renewable energy arm

of the company

• TPREL had an overall

commissioned capacity of 264 MW

by the end of FY16. It commissioned

104 MW capacity during FY16

• In the recent months TPREL has

successfully won bids for capacity

addition to the tune of 145 MW

• Tata Power has initiated the process

to carve out around 500 MW of

assets from its books to TPREL

• TPREL signed an SPA with Welspun

Energy Private Limited to acquire its

subsidiary Welspun Renewables

Energy Private Limited having 1,140

MW renewable portfolio

44 MW

Lahori

24 MW

Rojmal - II

50 MW

Rojmal - I

1,140 MW

Welspun

30 MW

Indo Rama


Tata Power Solar Systems Limited

• Tata Power Solar Systems Limited saw significant improvement on volume of sales and

operational performance

• The company made a cash profit in FY16, ending a 3 year period of cash losses and achieved a

PAT in the fourth quarter of FY16

• The company was able to utilize 100% of its operational cell line capacity

• Also, its exports grew significantly in FY16, to more than the cumulative value of exports in the last

3 financial years


IEL - Kalinganagar

• The company successfully commissioned 135 MW (Unit 1 & 2 of 67.5 MW each) capacity of its

cogeneration plant at Kalinganagar by deploying production gases from the Tata Steel plant.

• Third unit is under development based on discussions with Tata Steel for the phase two of the steel

plant.


Itezhi Tezhi Power Corporation - Zambia

• ITPC, a JV with the Zambian utility ZESCO has built and operates a 120 MW hydro power plant in

Itezhi Tezhi district in Zambia.

• ITPC has been the first Public Private Partnership of its kind in the energy sector in Zambia

• Both units of 60 MW each of the 120 MW plant were commissioned during the year


Cennergi – South Africa

• Cennergi (Pty) Ltd, is Tata Power's 50:50 joint venture with Exxaro Resources in South Africa

• It announced the commercial operation commencement of its nearly 230 MW wind generation

capacity through its 2 wind farms (Tsitsikamma Community Wind farm and Amakhala Emoyeni

Wind Project) in July and Aug 2016


Trust Amity

Trust Energy Resources Pte Ltd, christened its new 208,000 DWT Vessel – TRUST AMITY built at

Yangzijiang Shipbuilding Yard in China on 1st July 2016.

It is the third vessel after Trust Agility and Trust Integrity, which are already in service.

The fuel efficient ship can carry over 20,000 MT of additional coal than a conventional 180,000 DWT

capesize vessel

The name Trust Amity, denotes the core value of the Tata Power group, of collaboration.


Georgia Hydro Project

The Georgia Project is a 187 MW hydro power generation project

The construction work for the Project has been in full swing and the tunnelling work has progressed

as per schedule

Commercial Operation is expected by early 2017


Power Platform

USD 850 Million

Tata Power

ICICI

CDPQ Canada

KIA Kuwait

SGRF Oman

•Platform to target investment in the power sector (operating & near operating assets) over the next

2-3 years

•Joint commitment of up to USD 850 million by Tata Power, ICICI, Caisse de dépôt et placement du

Québec (CDPQ) of Canada, Kuwait Investment Authority (KIA) and State General Reserve Fund

(SGRF) of the Sultanate of Oman

•The Platform targets acquisition of controlling stakes in power generating companies (both thermal

and hydroelectric) and transmission assets in India.


Tata Power Mobile Apps

Tata Power introduced its digital interface by

launching a universal Mobile Application for all its

stakeholders including customers of Mumbai & Delhi

The app has been developed using one of the most

robust SAP platforms making Tata Power as the first

utility in the Global Power Sector to do so

Tata Power, with its strong focus on safety,

developed the ‘Suraksha’ mobile app to

enhance and improve the safety culture in the

organization

The app facilitates this by making incident

reporting fast and easy


Key areas of concern

• CGPL – Resolution of Compensatory Tariff

• Mumbai Operations – Competitiveness of Mumbai License Area Business

• Valuation of telecom investments and monetization thereof

• Opportunity of hive off non-core assets and investments


Sustainability


Arogya/ Swatch

Jal–Healthcare

facilities

Samridhi & Daksh –

Livelihood and Employ

-ability

Vidya –Augmenting

primary education

Sanrachna– Building

Social Capital

Akshay –Sustainable

Growth

Sustainability, Community Relations – 5 Key Thrust Areas

Tata Power has spent `29.01 crores as against its Companies Act requirement

(2% of Net profit) of `28.29 crores.

Tata Power reached out to over 5 lakh beneficiaries through its initiatives


Community Relations Highlights

Reached out to more than 230 schools

covering more than 1,00,000 school

students

114 villages covered under Rural

Energy Programme benefitting over

5,800 homes


Community Relations Highlights

Maithon hosted Life-Line Express

(World’s First Hospital Train) serving

nearly 6,000 patients

Helped provide 6,700 households with

access to sanitation covering 36,700

children


Tata Power Skill Development Institute

Tata Power Skill Development Institute (TPSDI) launched four key centres and traininghubs at Trombay and Shahad (Mumbai), Maithon (Jharkhand) and Mundra (Gujarat).

TPSDI undertook modular power skills training and positively impacted 1700 persons inFY16.

TPSDI - Mundra TPSDI - Maithon


Mahseer Breeding program

Since 1971, your Company has

been involved in the species

conservation project with state

Fisheries Department

For creating awareness on

Mahseer, an International

Conference on Conservation of

Mahseer was hosted by Tata

Power

It was attended by fisheries

scientists from across the

country which culminated in the

adoption of the ‘Lonavala

Declaration’ on Conservation of

Mahseer.

Additionally, an awareness

campaign, Act for Mahseer was

launched for the Company’s

internal as well as external

stakeholders.


Club Enerji

Tata Power’s Club Enerji is focused on school students to champion the noble cause of

conservation of resources and moral and civic values.

Club Enerji covers 500 schools across Mumbai, Delhi, Pune, Ahmedabad, Bengaluru,

Kolkata, Belgaum, Jamshedpur, Lonavala and five more cities.

It has reached out to more than 12.8 million citizens, collectively saved 17.26 million units of

electricity - equivalent to saving 17,000 tons of CO2.

The Company has further scaled up the magnitude of this initiative by launching an online

module of the Club Enerji programme in November 2015 which has also reached out to

audiences in new international geographies like Philippines, UAE, USA, UK and South Africa


Relief efforts for natural calamities

Commitment to Society, Sustainability and CSR for Tata Power goes beyond

the statutory requirements and national boundaries

Tata Power extended its full

support to relief operations

during natural calamities

during FY16 and contributed

towards:

• Jammu & Kashmir Flood

Relief Operations

• Tamil Nadu Flood Relief

Operations

• Nepal Earthquake Relief

Operations

• Georgia Flood Relief

Operations


Tata Power retains Rank #2 in Economic Times’ list of

India’s Top Companies for Sustainability and CSR

Source: The Economic Times


Awards and Recognition


Awards and Recognitions

Amongst the world’s most ethical

companies for the third consecutive

year

CBIP Award – Outstanding Performance

in the Power Sector

SAP ACE Award 2015

Enterprise wide technology adaption

Mega Corporate Film Awards, 2016 -

Visitor Safety Induction Module


Website: www.tatapower.com

Email ID: [email protected]

Contact No: +91 22 6665 8888

Documents

…Message Box 1 - Tata PowerAGM Presentation to the Stakeholders Anil Sardana CEO & Managing Director September 2016 ... Energy for coal logistics 9,184 MW installed capacity as on