presentation title the tata power company ltd · fsa has been signed with bharat coking coal for...

Presentation Title

Presentation Subtitle

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The Tata Power Company Ltd Analyst Call – 14th Feb 2011

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Disclaimer

Certain statements made in this presentation may not be based on historical information or facts and may be“forward looking statements”, including those relating to The Tata Power Company Limited’s general business plansand strategy, its future outlook and growth prospects, and future developments in its industry and its competitiveand regulatory environment. Actual results may differ materially from these forward-looking statements due to anumber of factors, including future changes or developments in The Tata Power Company Limited’s business, itscompetitive environment, its ability to implement its strategies and initiatives and respond to technological changesand political, economic, regulatory and social conditions in India.

This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer to acquireany Shares and should not be considered as a recommendation that any investor should subscribe for or purchaseany of The Tata Power Company Limited’s Shares. Neither this presentation nor any other documentation orinformation (or any part thereof) delivered or supplied under or in relation to the Shares shall be deemed toconstitute an offer of or an invitation by or on behalf of The Tata Power Company Limited.

The Company, as such, makes no representation or warranty, express or implied, as to, and do not accept anyresponsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information oropinions contained herein. The information contained in this presentation, unless otherwise specified is only currentas of the date of this presentation. Unless otherwise stated in this document, the information contained herein isbased on management information and estimates. The information contained herein is subject to change withoutnotice and past performance is not indicative of future results. The Tata Power Company Limited may alter, modifyor otherwise change in any manner the content of this presentation, without obligation to notify any person of suchrevision or changes. This presentation may not be copied and disseminated in any manner.

THE INFORMATION PRESENTED HERE IS NOT AN OFFER FOR SALE OF ANY EQUITY SHARES OR ANYOTHER SECURITY OF THE TATA POWER COMPANY LIMITED.

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Outline of Presentation

• Introductory Remarks & Highlights AKS

• Projects Update AKS

• Financial Performance Circulated

• Q & A All

We are pleased to welcome you to the Analyst call for the Q3 FY11 Standalone and

Consolidated Results for Tata Power

The line-by-line explanation of our financial statements has already been circulated to you

We will take questions on results after my briefing regarding key highlights

Introductory Remarks

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We have signed a Power Purchase Agreement (PPA) with Gujarat Urja Vikas Nigam Limited

(GUVNL) for a 25 MW solar power project in Mithapur. The project is expected to be

commissioned by December 2011

In the Mumbai Operations, we continue to add new customers and during this quarter, we

added over 20,000 customers. The total retail customer base has now crossed the 1 lakh

mark

As you all know, we had challenged the Government’s memorandum in the Bombay High

Court and the Honorable Court held that the memorandum dated 7th May 2010 issued by the

Govt. of Maharashtra is ultra vires the Electricity Act, 2003 and has been set aside. However,

we have not yet been permitted to schedule power to our own distribution company. We,

therefore, continue to supply 200 MW to RInfra

In this quarter, we have also seen improved realizations on coal

Q3 FY11 Highlights

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Projects Update

CGPL (Mundra UMPP)

The Mundra UMPP has progressed ~71% on an overall basis

Unit#1 TG has been put in turning gear operation in February 2011

Structural fabrication of external coal handling system is ~95% complete. We are awaiting the diversion of a village road to complete the remaining work

Civil & structural erection works of the Internal Coal Handling System in most areas has been completed

New coal jetty with ship unloading facilities is complete and the first vessel berthed in December 2010 at the West Port Jetty

Equipment testing for 400 KV switchyard is in progress; stringing for Unit #1 is complete

Work is in progress for the power evacuation lines. PGCIL is trying its best to overcome certain RoW issues

Unit #2 boiler hydro testing was successfully completed in September 2010

Erection of boiler pressure parts for Units 3, 4 and 5 is progressing well

Key Projects Update

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Maithon

The Maithon project is ~92% complete on an overall basis

Boiler light up for Unit #1 was completed in December 2010

Erection of HP turbine 1 and the 400 kV switchyard back charging has been completed

Unit #1 is expected to be synchronized with oil this month and coal synchronization is expected within a month thereafter

Long term PPAs for Maithon begin in April 2012

FSA has been signed with Bharat Coking Coal for 1.659 mtpa

Coal off take agreement has been signed with Tata Steel for 0.5-1 MTPA

Phase I of Railway siding is expected to be completed by December 2011. Till then the coal will be transported by road

400 kV lines from switchyard are ready and back charging has been done

Connection agreement has been signed with PGCIL

Unit #2 is expected to commission around 4 months after Unit #1

CCL has agreed to supply 1.975 mtpa for Unit #2

Key Projects Update

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Key Projects Update

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IEL IEL Unit #5 has been synchronized in Jan 2011 The unit has successfully carried out coal firing and will be commissioned in March 2011

Dagachhu Civil works are in progress

Construction of access road to the Tail Race Tunnel completed and 2 km tunneling completed

Commissioning for the project is expected by 2013

Dehrand

We are awaiting completion of land acquisition activities. As you may be aware, disbursements

have already begun towards land acquisition

We are working on optimizing various design parameters and are also evaluating additional

off-take arrangements for securing the coal required for the project

Financial Performance – Standalone

Standalone Results: Q3 FY11

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Particulars 31-Dec-10

(A) MUs MUs MUs MUs MUs1. Generation 3,713 3,851 11,794 12,157 15,9462. Sales 3,824 3,714 12,283 11,829 15,574

(B) ` Crores ` Crores ` Crores ` Crores ` Crores1. a) Revenue from Power Supply and Transmission Charges 1,559.87 1,449.80 5,045.14 4,701.27 6,387.64

Add / (Less) : Revenue adjustments pertaining to prior years - - - 232.40 252.40 Income to be (utilised) / recovered in future tariff determination 36.00 78.00 (76.00) 242.00 253.43

Net Revenue 1,595.87 1,527.80 4,969.14 5,175.67 6,893.47b) Other Operating Income 56.01 38.71 186.71 127.55 204.80

2. Total Income 1,651.88 1,566.51 5,155.85 5,303.22 7,098.273. Expenditure

a) Staff Cost 102.77 79.58 264.20 241.61 305.29b) Cost of Power Purchased 174.32 32.63 580.24 106.04 251.69c) Cost of Fuel 855.59 942.92 2,660.49 3,124.56 4,045.56d) Cost of components, materials and services in respect of contracts 13.66 7.54 46.74 17.44 42.15e) Depreciation 128.62 120.79 388.05 350.99 477.94f) Other expenditure 173.65 139.76 470.37 400.38 591.32

4. Total expenditure 1,448.61 1,323.22 4,410.09 4,241.02 5,713.955. Profit from Operations before Other Income, Interest and Exceptional Items (2-4) 203.27 243.29 745.76 1,062.20 1,384.326. Other Income

a) Gain on exchange (Net) 5.80 12.23 44.24 39.66 51.98b) Others 79.44 32.94 362.06 188.60 229.60

7. Profit before Interest and Exceptional Items (5+6) 288.51 288.46 1,152.06 1,290.46 1,665.908. Interest 109.49 92.19 297.49 311.66 406.649. Profit after Interest but before Exceptional Items (7-8) 179.02 196.27 854.57 978.80 1,259.26 10. Exceptional Item -

Adjustment of expenses recoverable through Tariff - - - 108.83 108.83 Less: Drawn from Contingencies Reserve - - - 108.83 108.83

- - - - -

11. Profit from Ordinary Activities before Tax 179.02 196.27 854.57 978.80 1,259.26 12. Provision for Taxation 25.95 48.38 180.79 270.64 320.5013. Profit after Tax 153.07 147.89 673.78 708.16 938.76

31-Dec-10 31-Dec-09 31-Dec-09 31-Mar-10Quarter ended Nine months ended Year ended

Standalone Results: Q3 FY11 Segmental Performance

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Year endedParticulars 31-Dec-10 31-Dec-09 31-Dec-10 31-Dec-09 31-Mar-10

Segment RevenuePower Business 1,614.87 1,541.24 5,037.59 5,209.90 6,944.02Others 37.01 25.27 118.26 93.32 154.25

Total Segment Revenue 1,651.88 1,566.51 5,155.85 5,303.22 7,098.27Less: Inter segment revenue - - - - - Net Revenue 1,651.88 1,566.51 5,155.85 5,303.22 7,098.27

Segment Results [Profit /(Loss) before Interest and Tax]Power Business 229.77 264.99 822.54 1,111.22 1,442.98Others 2.61 (0.34) 14.90 13.76 25.01

Total Segment Results 232.38 264.65 837.44 1,124.98 1,467.99

Less: Interest Expense 109.49 92.19 297.49 311.66 406.64Add: 56.13 23.81 314.62 165.48 197.91

Total Profit Before Tax 179.02 196.27 854.57 978.80 1,259.26

Capital EmployedPower Business 7,805.21 6,972.91 7,805.21 6,972.91 7,283.74Others 123.86 190.71 123.86 190.71 211.15Unallocable 3,310.68 3,494.64 3,310.68 3,494.64 3,037.47

Total Capital Employed 11,239.75 10,658.26 11,239.75 10,658.26 10,532.36

Unallocable Income (Net)

Quarter ended Nine months ended

Q3 FY 11 Financial Performance – Standalone

Q3 FY 11 Highlights – Standalone

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Gross generation at 3713 MUs as against 3851 MUs in PY down by 4%- Generation in Mumbai LA was 2487 MUs as against 2755 MUs in PY

- Lower generation from Unit 6 as cheaper power was available for purchase outside

- Generation outside Mumbai LA was 1226 MUs as against 1096 MUs in PY up by 12%

Sales (net of eliminations) at 3824 MUs as against 3714 MUs in PY- Sales in Mumbai LA were 2640 MUs as against 2625 in PY- Sales outside Mumbai LA were 1211 MUs as against 1088 MUs in PY up by 11%

Merchant sales from Unit 8 were 142 MUs (PY 66 MUs) and from Haldia were 172 MUs (PY 131 MUs) in this quarter

Average merchant realization in this quarter was ~Rs. 3.7 (PY ~Rs. 5.6) per unit

Q3 FY 11 Financial Highlights – Standalone

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• Revenue at Rs. 1595.87 Cr (PY Rs. 1527.80 Cr) up by 4%

• Higher sales in Mumbai LA from changeover consumers offset by lower sales to RInfra

• Lower revenue from outside Mumbai LA mainly due to lower demand from Karnataka at Belgaum (Rs. 42 Cr) and lower merchant realization at Haldia (~Rs. 27 Cr) offset by higher merchant sales from Unit 8 (~Rs. 34 Cr)

• Other Operating Income at Rs. 56.01 Cr (PY Rs. 38.71 Cr) higher by 45%

• Mainly due to reversal of doubtful debt/ advances, VAT refund and compensation on power sale (Rs. 10 Cr) and higher revenue from new projects in SED (Rs. 3 Cr)

• Staff Cost at Rs. 102.77 Cr (PY Rs. 79.58 Cr) up by 29%

• Mainly due to revision of salaries in line with market benchmark

• Cost of Power Purchased at Rs. 174.32 Cr (PY Rs. 32.63 Cr) up by 434%

• Higher purchase mainly for changeover customers and availability of cheaper power resulting in lower generation from Unit #6

• This was partly offset by lower purchase cost (~Rs.4.8 / unit vs. ~Rs. 5.3 / unit in PY)


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• Cost of Fuel at Rs. 855.59 Cr (PY Rs. 942.92 Cr) lower by 9%

• ~Rs. 33 Cr due to lower generation and ~Rs. 76 Cr due to change in fuel mix in Mumbai LA offset by higher fuel prices of ~Rs. 28 Cr

• Depreciation at Rs. 128.62 Cr (PY Rs. 120.79 Cr) up by 6%

• Higher mainly due to capitalization of T & D projects in Mumbai LA and acquisition of new wind mills

• Other Expenditure at Rs. 173.65 Cr (PY Rs. 139.76 Cr) higher by 24%

• ~Rs. 6 Cr of reclassification of fuel handling charges

• ~Rs. 13 Cr due to increased wheeling charges for switched over consumers and a higher consumer base

• ~Rs. 9 Cr due to higher hedging charges


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• Profit from Operations before Other Income, Interest and Exceptional Items at Rs. 203.27 Cr

(PY Rs. 243.29 Cr) lower by 17%

• Other Income

• Gain on Exchange at Rs. 5.80 Cr (PY Rs. 12.23 Cr) due to marginal Rupee appreciation

• Others at Rs. 79.44 Cr (PY Rs. 32.94 Cr) higher mainly due to higher dividend income

(Rs. 21 Cr) and buyback of shares by a subsidiary from Tata Power (Rs. 17 Cr)

• Profit Before Interest and Exceptional Items at Rs. 288.51 Cr (PY Rs. 288.46 Cr)

• Interest at Rs. 109.49 Cr (PY Rs.92.19 Cr) up by 19%

• Higher primarily due to capitalization of T&D projects in Mumbai LA (~Rs. 9 Cr)

• Higher interest on new debentures issued and FCCBs issued in part of Q3 PY (~Rs. 6 Cr)


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• Profit before Tax at Rs. 179.02 Cr (PY Rs. 196.27 Cr) down by 9%

• Tax at Rs. 25.95 Cr (PY Rs. 48.38 Cr) lower by 46%

• Mainly due to more dividend income as a part of profit that attracts no MAT or tax and

lower deferred tax rate due to lower capitalization

• PAT at Rs. 153.07 Cr (PY Rs. 147.89 Cr) up by 3%

YTD Q3 FY 11 Financial Performance – Standalone

YTD Q3 FY 11 Highlights – Standalone

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Gross generation at 11794 MUs as against 12157 MUs in PY down by 3%

- Generation in Mumbai LA was 7872 MUs as against 8593 MUs in PY down by 8%

- As explained earlier, mainly due to lower generation from Unit 6 as cheaper power

was available from outside purchase

- Generation outside Mumbai LA was 3923 MUs as against 3564 MUs in PY up by 10%

Sales (net of eliminations) at 12283 MUs as against 11829 MUs in PY up by 4%

- Sales in Mumbai LA were 8387 MUs as against 8371 MUs in PY

- Sales outside Mumbai LA were 4042 MUs as against 3539 MUs in PY up by 14%

YTD Q3 FY 11 Financial Highlights – Standalone

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• Revenue at Rs. 4969.14 Cr (PY Rs. 5175.67 Cr) lower by 4%• Mainly due to Rs. 232 Cr of favorable ATE/ MERC truing up in PY

• Other Operating Income at Rs. 186.71 Cr (PY Rs. 127.55 Cr) higher by 46%• Due to profit on sale of helicopter (Rs. 15 Cr)

• Mainly due to reversal of doubtful debt/ advances and compensation on power sale (Rs. 30 Cr) and higher revenue from new projects in SED (Rs. 17 Cr)

• Staff cost at Rs. 264.20 Cr (PY Rs. 241.61 Cr) higher by 9%• Mainly due to revision of salaries in line with market benchmark

• Cost of Power Purchased at Rs. 580.24 Cr (PY Rs. 106.04 Cr) up by 447%• Higher purchase mainly for changeover customers and availability of cheaper power resulting in

lower generation from Unit #6

• This was partly offset by lower purchase cost (~Rs.5.0 / unit vs. Rs. 6.3 / unit in PY)

• Cost of Fuel at Rs. 2660.49 Cr (PY Rs. 3124.56 Cr) lower by 15%• ~ Rs. 149 Cr due to lower generation in Mumbai LA offset by lower fuel cost (~Rs. 89 Cr)

• ~Rs. 438 Cr mainly due to change in fuel mix


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• Profit from Operations before Other Income, Interest and Exceptional Items at Rs. 745.76 Cr (PY

Rs. 1062.20 Cr) lower by 30%

• Other Income

• Gain on Exchange at Rs. 44.24 Cr (PY Rs. 39.66 Cr)

• Others at Rs.362.06 Cr (PY Rs. 188.60 Cr) higher mainly due to higher dividend income

(Rs. 100 Cr), IT refund in Jojobera (~Rs. 23 Cr), buyback of shares by a Tata Power

subsidiary (Rs. 17 Cr), higher interest on FCCB funds and higher interest income on

shareholder loan to Coal SPVs due to higher interest rate applicable

• Profit Before Interest and Exceptional Items at Rs. 1152.06 Cr (PY Rs. 1290.46 Cr) down by 11%

• Interest at Rs. 297.49 Cr (PY Rs. 311.66 Cr) down by 5%

• Mainly due to higher interest in PY due to short term borrowings to fund investment in SPVs


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• Profit before Tax at Rs. 854.57 Cr (PY Rs. 978.80 Cr) down by 13%

• Tax at Rs. 180.79 Cr (PY Rs. 270.64 Cr) lower by 33%

• Effective tax rate being lower due to reversal of excess MAT provision made in previous

year and higher dividend received which does not attract tax

• Lower effective deferred tax rate due in Q3 FY11

• PAT at Rs. 673.78 Cr (PY Rs. 708.16 Cr) lower by 5%

Financial Performance – Consolidated

Consolidated Results: Q3 FY11

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Particulars 31-Dec-10 31-Dec-09 31-Dec-10 31-Dec-09

` Crores ` Crores ` Crores ` Crores ` Crores1. a) Revenue 4,201.37 4,185.34 13,608.79 13,090.77 17,655.71

Add : Revenue adjustments pertaining to prior years - - - 232.40 272.94Income to be recovered in future tariff determination (Net) 211.54 303.03 753.58 741.99 926.11

Net Revenue 4,412.91 4,488.37 14,362.37 14,065.16 18,854.76b) Other Operating Income 28.02 27.39 72.91 56.87 131.08

2. Total Income 4,440.93 4,515.76 14,435.28 14,122.03 18,985.843. Expenditure

a) Staff Cost 230.36 184.81 628.81 618.10 805.99b) Cost of Power Purchased 849.88 1,098.75 3,631.52 3,466.97 4,582.94c) Royalty towards Coal Mining 201.34 175.33 559.30 489.25 695.37d) Cost of Coal Purchased 20.86 - 32.27 - 16.00e) Cost of Fuel 1,056.26 1,096.14 3,244.06 3,563.33 4,662.72f) Coal Processing Charges 439.53 372.59 1,211.00 1,262.69 1,719.40g) Raw Materials Consumed 122.57 115.26 312.28 352.47 478.52h) Purchase of goods / spares / stock for resale 13.15 8.56 25.23 42.93 60.05i) Cost of components, materials and services in respect of contracts 13.66 7.54 46.74 17.44 42.15j) Decrease / (Increase) in stock-in-trade and work-in-progress (28.36) (34.57) 21.06 (56.77) (27.47)k) Depreciation/Amortisation 248.95 220.79 730.96 646.28 877.68l) Impairment - - - - 15.28m) Deferred Stripping Costs (Net) - write-off / (capitalised) (71.43) 370.67 (254.00) 244.81 119.53n) Other Expenditure 538.53 573.90 1,646.22 1,418.18 1,995.39

4. Total Expenditure 3,635.30 4,189.77 11,835.45 12,065.68 16,043.555. Profit from Operations before Other Income, Interest and Exceptional Items (2-4 805.63 325.99 2,599.83 2,056.35 2,942.296. Other Income

a) Gain on exchange (Net) 32.06 12.50 101.68 87.19 455.45b) Others 46.19 26.02 203.24 98.41 133.43

7. Profit before Interest and Exceptional Items (5+6) 883.88 364.51 2,904.75 2,241.95 3,531.178. Interest 210.92 185.30 590.84 578.57 763.879. Profit after Interest but before Exceptional Items (7-8) 672.96 179.21 2,313.91 1,663.38 2,767.3010. Exceptional Item -

Adjustment of expenses recoverable through tariff - - - 108.83 108.83Less: Drawn from : Contingencies Reserve - - - 108.83 108.83

- - - - -

11. Profit before Tax, Share of Associates, Minority Interest and Statutory Appropria 672.96 179.21 2,313.91 1,663.38 2,767.3012. Provision for Taxation

a) Current year 209.65 (47.81) 781.76 483.40 657.67b) Previous years (0.80) 74.29 (19.09) 66.33 (29.01)

13. 464.11 152.73 1,551.24 1,113.65 2,138.6414. Share of Profit of Associates 8.00 0.95 21.63 19.37 61.6615. Less: Minority Interest 30.74 55.11 138.29 112.96 233.4616. Net Profit before Statutory Appropriations 441.37 98.57 1,434.58 1,020.06 1,966.8417. Statutory Appropriations (Net) (1.00) 6.00 8.00 (12.89) (8.89)18. Net Profit after Statutory Appropriations 442.37 92.57 1,426.58 1,032.95 1,975.73

31-Mar-10(Reviewed)

Net Profit after Tax and before Share of Associates, Minority Interest and

Quarter ended Nine months ended Year ended

(Reviewed) (Audited)

Q3 FY 11 Financial Performance – Consolidated

Q3 FY 11 Financial Highlights – Consolidated

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• Total Income at Rs. 4440.93 Cr (PY Rs. 4515.76 Cr) down by 2%

• Increase of Rs. 174 Cr in coal companies (Rs. 361 Cr due to higher realization offset by lower quantity

of coal sold (Rs. 109 Cr) and appreciation of INR (Rs. 78 Cr))

• Lower UI sales of ~Rs. 43 Cr in NDPL

• Increase of ~Rs. 108 Cr in Tata Power mainly due to higher sales in Mumbai LA (~Rs. 85 Cr) and

lower sale through Tata Power Trading eliminated in consolidation (~Rs. 23 Cr)

• Decrease of ~Rs. 339 Cr in Tata Power Trading due to lower rate of power sold and lower volume

traded (~Rs. 282 Cr) and eliminations in consolidation (~Rs. 57 Cr)


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• Key reasons for variation in the Total Expenditure are as follows:

• Staff Costs up by Rs. 46 Cr mainly due to increase in salaries in NDPL (Rs. 13 Cr), revision of

salaries in Tata Power (Rs. 22 Cr) and higher salaries in KPC/ Arutmin (Rs. 11 Cr)

• Cost of Power Purchased lower by Rs. 249 Cr due to higher power purchase in Tata Power net

of eliminations with Tata Power Trading (Rs. 56 Cr) offset by Rs. 41 Cr of lower cost of power

purchase in NDPL and Rs. 264 Cr in lower cost of power purchased in Tata Power Trading due

to lower average cost of power and lower volumes traded net of eliminations in consolidation

• Coal Processing Charges higher by Rs. 67 Cr due to higher cost of coal processing per ton

(Rs. 117 Cr) and lower quantity of coal sold (Rs. 29 Cr)

• Deferred Stripping Costs (Net) lower by Rs. 442 Cr mainly due to a charge taken in Q3 PY for

carrying cost of deferred stripping cost based on a technical report

• Profit from Operations before Other Income, Interest and Exceptional Items at Rs. 805.63 Cr (PY Rs. 325.99

Cr) higher by 147%

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• Gain on exchange of Rs. 20 Cr mainly due to Rs. 26 Cr forex gain reported in CGPL due realignment of foreign exchange liabilities and Rs.(6) Cr in Tata Power

• Other Income up by Rs. 20 Cr mainly due to Rs. 20 Cr income in coal investments related to compensation received as per our shareholder’s agreement

• Interest expense higher by Rs. 26 Cr

• Mainly due to higher capitalization for T&D projects in Tata Power (Rs. 17 Cr) and higher capitalization in NDPL (Rs. 22 Cr) partly offset by debt repayment as per schedule in coal SPVs (Rs. 6 Cr)

• Provision for Tax higher by Rs. 182 Cr

• Mainly due to reversal of tax in PY for the Coal companies (~Rs. 193 Cr)

• Lower tax in Tata Power (~Rs. 23 Cr)

• Net Profit before Statutory Appropriations at Rs. 441.37 Cr (PY Rs. 98.57 Cr) up by 348%


YTD Q3 FY 11 Financial Performance – Consolidated

YTD Q3 FY 11 Financial Highlights – Consolidated

31

• Total Income at Rs. 14435.28 Cr (PY Rs. 14122.03 Cr) up by 2%

• Increase of Rs. 488 Cr in coal companies mainly due to higher realizations (Rs. 899 Cr) offset by

lower volumes sold (Rs. 191 Cr) and exchange rate fluctuation (Rs. 220 Cr)

• Increase in revenue of ~Rs. 485 Cr in NDPL due to higher cost of power purchased, higher ROE due

to higher capitalization and higher incentives due to AT&C loss reduction offset by lower UI sales

• Decrease of ~Rs. 207 Cr in Tata Power mainly due to

• Lower fuel costs and incentives offset by higher power purchase on account of changeover

customers and PY includes favorable impact of ATE/ MERC truing up of ~Rs. 232 Cr

• Decrease of ~Rs. 640 Cr in Tata Power Trading due to lower rate of power sold (~Rs. 298 Cr) and

eliminations in consolidation (~Rs. 342 Cr)

• ~Rs. 188 Cr sale of non-core investments through subsidiary


32

• Key reasons for variation in the Total Expenditure are as follows:

• Cost of Power Purchased up by ~Rs. 248 Cr mainly due to Rs. 262 Cr (net of eliminations) higher cost in NDPL due to higher demand and higher cost per unit and Rs. 248 Cr (net of eliminations) in Tata Power due to higher demand due to increase in changeover customers and Rs. 307 Cr lower in Tata Power Trading due to lower cost per unit and lower traded volume

• Royalty towards mining higher by Rs. 70 Cr due to higher coal prices

• Cost of Fuel lower by Rs. 319 Cr due to lower generation and change in fuel mix in Tata Power (Rs. 481 Cr) offset by Rs. 145 Cr in higher fuel costs in the coal companies

• Coal Processing Charges lower by Rs. 52 Cr due to higher cost of coal processing per ton (Rs.

68 Cr) offset by lower quantity of coal sold (Rs. 60 Cr) and exchange rate variation (Rs. 60 Cr)

• Other expenditure includes higher stripping cost and higher selling expenses (Rs. 56 Cr), Rs.

27 Cr higher hedging cost, higher wheeling charges due to increase in changeover customers

(Rs. 13 Cr) and Rs. 88 Cr being provisioned for diminution in value of long term investment by

a subsidiary company

• Profit from Operations before Other Income, Interest and Exceptional Items at Rs. 2599.83 Cr (PY Rs.

2056.35 Cr) up by 26%

33

• Other Income up by Rs. 105 Cr mainly due to

• Rs. 55 Cr due to sale of certain Nelco businesses to Crompton Greaves Ltd.

• IT refund in Jojobera (~Rs. 23 Cr), higher interest on MF/ FCCB

• Rs. 20 Cr income in coal investments related to compensation received as explained earlier

• Provision for Tax higher by Rs. 231 Cr mainly due to

• Lower tax in Tata Power (~Rs. 89 Cr) partly offset by higher tax due to sale of non-core investments through subsidiary (~Rs. 34 Cr)

• Reversal of tax in PY for the Coal companies (~Rs. 237 Cr) and reversal of withholding tax on Management fees in coal SPV in PY (Rs. 14 Cr)

• Net Profit before Statutory Appropriations at Rs. 1434.58 Cr (PY Rs. 1020.06 Cr) up by 41%


Segmentwise Performance

Segment Results (Consolidated): Q3 FY11 (Ltd. Review)

35

` CroresYear ended

Particulars 31-Dec-10 31-Dec-09 31-Dec-10 31-Dec-09 31-Mar-10(Audited)

Segment RevenuePower Business 2,611.26 2,909.35 9,108.76 9,450.94 12,550.05Coal Business 1,672.31 1,434.62 4,686.29 4,112.18 5,620.95 Others 212.52 190.42 773.69 651.98 906.95

Total Segment Revenue 4,496.09 4,534.39 14,568.74 14,215.10 19,077.95Less: Inter segment revenue 55.16 18.63 133.46 93.07 92.11 Net Revenue 4,440.93 4,515.76 14,435.28 14,122.03 18,985.84

Segment Results [Profit / (Loss) before Interest and Tax]Power Business 401.82 515.48 1,390.27 1,600.82 2,076.36Coal Business 432.57 (171.17) 1,218.84 542.38 999.20 Others 2.60 7.45 196.05 57.37 65.92

Total Segment Results 836.99 351.76 2,805.16 2,200.57 3,141.48

Less: Interest Expense 210.92 185.30 590.84 578.57 763.87Add: 46.89 12.75 99.59 41.38 389.69

Total Profit Before Tax 672.96 179.21 2,313.91 1,663.38 2,767.30

Capital EmployedPower Business 27,084.16 17,924.32 27,084.16 17,924.32 20,886.25Coal Business 6,144.21 5,199.83 6,144.21 5,199.83 5,384.45 Others 1,156.37 1,257.90 1,156.37 1,257.90 1,102.49Unallocable (19,620.85) (11,904.98) (19,620.85) (11,904.98) (14,229.44)

Total Capital Employed 14,763.89 12,477.07 14,763.89 12,477.07 13,143.75

Quarter ended Nine months ended

Unallocable Income (Net)

(Reviewed) (Reviewed)

36

• Revenue from Power Business at Rs. 2611.26 Cr (PY Rs. 2909.35 Cr) down by 10%• As explained before, this is mainly due to lower UI sales of ~Rs. 43 Cr in NDPL

• Increase of ~Rs. 108 Cr in Tata Power mainly due to higher sales in Mumbai LA (~Rs. 85 Cr) and lower

sale through Tata Power Trading eliminated in consolidation (~Rs. 23 Cr)

• Decrease of ~Rs. 339 Cr in Tata Power Trading due to lower rate of power sold and lower volume

traded (~Rs. 282 Cr) and eliminations in consolidation (~Rs. 57 Cr)

• Revenue from the Coal business at Rs. 1672.31 Cr (PY Rs. 1434.62 Cr) up by 17%• Mainly due to higher realization (Rs. 430 Cr) offset by lower volumes (Rs. (110) Cr)

• Revenue from ‘Others’ at Rs. 212.52 Cr (PY Rs. 190.42) up by 12% mainly due to higher sales in SED (Rs. 3 Cr) and higher sales due to capacity expansion in Tata BP Solar (Rs. 8 Cr)

• PBIT for the Power Business at Rs. 401.82 Cr (PY Rs. 515.48 Cr) down by 22%• Mainly due to lower incentives in NDPL (Rs. 36 Cr) and lower operating profit in Tata Power (Rs. 40 Cr)

• PBIT for the Coal Business at Rs. 432.57 Cr (PY Rs. (171.17) Cr) up by 153%• Mainly due to higher realization (Rs. 195 Cr) offset by lower quantity sold and Rs. 442 Cr of deferred

stripping cost charged in PY

Segment Highlights (Consolidated): Q3 FY11

37

• Revenue from Power Business at Rs. 9108.76 Cr (PY Rs. 9450.94Cr) down by 4%• Increase in revenue of ~Rs. 470 Cr in NDPL due to higher cost of power purchased, higher ROE due to

higher capitalization and higher incentives due to AT&C loss reduction offset partly by lower UI sales• Decrease of ~Rs. 223 Cr in Tata Power mainly due to

• Lower fuel costs and incentives offset by higher power purchase on account of changeover customers and PY includes favorable impact of ATE/ MERC truing up of ~Rs. 232 Cr

• Decrease of ~Rs. 638 Cr in Tata Power Trading due to lower rate of power sold (~Rs. 352 Cr) and eliminations in consolidation (~Rs. 286 Cr)

• Revenue from the Coal business at Rs. 4686.29 Cr (PY Rs. 4112.18 Cr) up by 14%• Increase mainly due to higher realizations (Rs. 999 Cr) offset by lower volumes sold (Rs. 196 Cr) and

INR appreciation (Rs. 229 Cr)

• Revenue from ‘Others’ at Rs. 773.69 Cr (PY Rs. 651.98) up by 19% mainly due to sale of non-core investments as explained earlier and lower income due to sale of Nelco division

• PBIT for the Power Business at Rs. 1390.27 Cr (PY Rs. 1600.82 Cr) down by 13%• Mainly Rs. 232 Cr in PY due to favorable MERC/ ATE order and increase of Rs. 96 Cr in NDPL due to

higher ROE /incentives

• PBIT for the Coal Business at Rs. 1218.84 Cr (PY Rs. 542.38 Cr) up by 125%• Mainly due to higher realization and lower quantity sold and deferred stripping cost in PY (Rs. 499 Cr)

Segment Highlights (Consolidated): YTD Q3 FY11

Subsidiary Performance

Key Subsidiary Performance: Q3 FY 11

39

Key Subsidiaries

Revenues Op. Profit PBT PAT % change in PATFY 11 FY 10 FY 11 FY 10 FY 11 FY 10 FY 11 FY 10

NDPL 788.5 790.4 95.9 104.0 44.4 74.5 34.8 68.4 -49.12%

Powerlinks 73.5 72.4 70.9 69.7 35.0 29.4 28.0 34.4 -18.60%

Tata Power Trading

253.6 535.5 (0.2) 2.0 0.6 2.1 0.6 1.5 -60%

Coal SPVs ($ mn)

0.0 0.0 (0.6) (0.4) 13.3 10.2 11.5 7.6 51.32%

Key Subsidiary Performance: YTD Q3 FY 11

40

Key Subsidiaries

Revenues Op. Profit PBT PAT % change in PATFY 11 FY 10 FY 11 FY 10 FY 11 FY 10 FY 11 FY 10

NDPL 3063.5 2554.6 339.8 253.2 207.4 175.7 165.6 135.4 22.30%

Powerlinks 218.7 219.1 209.2 209.3 101.8 88.6 81.5 73.6 10.73%

Tata Power Trading

1386.6 1685.1 5.8 6.3 6.8 6.9 5.1 4.9 4.08%

Coal SPVs ($ mn)

0.0 0.0 (4.1) (4.0) 29.1 26.8 23.4 24.4 -4.10%

Coal Performance: Q3 and YTD Q3 FY 11

41

Coal Operating Numbers YTD Q3 FY 11 YTD Q3 FY 10 % change

- Production (mn tons) 45.10 50.53 -10.74%

- Sales (mn tons) 44.59 46.82 -4.76%

- Net Realization ($ / ton) 73.04 58.61 24.62%

- Cost of Production ($/ton)(excl. Depreciation / Deferred Stripping cost)

36.58 31.21 17.21%

Coal Operating Numbers Q3 FY 11 Q3 FY 10 % change

- Production (mn tons) 17.36 18.46 -5.96%

- Sales (mn tons) 15.79 17.1 -7.66%

- Net Realization ($ / ton) 74.9 58.39 28.28%

- Cost of Production ($/ton)(excl. Depreciation / Deferred Stripping cost)

37.24 30.95 20.32%

presentation title the tata power company ltd · fsa has been signed with bharat coking coal for...

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