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National Thermal Power Corporation Limited

Welcomes You

to

11stst Analysts & Investors Meet Analysts & Investors Meet

2222ndnd August 2005August 2005MumbaiMumbai

22

A Presentation on

National Thermal Power Corporation Limitedby

Mr. A.K. SinghalDirector (Finance), NTPC

atat11stst Analyst & Investor Meet Analyst & Investor Meet

2222ndnd August 2005August 2005

33

Contents Contents

NTPC’sNTPC’s Business and Strengths Business and Strengths 11

Key Challenges Key Challenges 55Indian Power SectorIndian Power Sector44Key StrategiesKey Strategies33Performance Highlights Performance Highlights 22

44

Nation wide PresenceNation wide Presence

NTPC’sNTPC’s Business and StrengthsBusiness and Strengths

In addition, NTPC also manages Badarpur Thermal Power Station (705 MW ) of GOI in Delhi

No of plants

Capacity (MW) ( March 2005)

NTPC Owned - Coal 13 19,480 - Gas / Liquid Fuel 7 3,955 Total 20 23,435 Owned by Joint Ventures

- Coal 3 314 Grand Total 23 23,749

GAS POWER STATIONS

THERMAL POWER STATIONHYDRO POWER STATION

Owns multi fuel and multi location plants

Possesses comprehensive In house capabilities in building and operating power plants

NTPC is India’s premier national generating companyNTPC is India’s premier national generating company

55

NTPC’s Business and StrengthsNTPC’s Business and Strengths

35,781

94,984

23,435

0

020,00040,00060,00080,000

100,000120,000140,000

1982 2005

(MW)

Others NTPC

1943519935

2093521435

23435

18000

19000

20000

21000

22000

23000

24000

2001 2002 2003 2004 2005

Capacity (MW)

Growth in Capacity Growth in Generation & Sales

NTPC in the last 23 years NTPC in the last 23 years has added over 28% of has added over 28% of generation capacity of the generation capacity of the countrycountry

130.2 133.2140.9

149.2159.1

38.541.4

138.0 147.8124.5 129.3

120.7

0

40

80

120

160

2001 2002 2003 2004 2005 Q1-06Generation Sales (bn units)

66

NTPC GroupNTPC GroupSubsidiaries

Joint Ventures

Pipavav Power Development Co.

Ltd.

NTPC Vidyut Vyapar Nigam Ltd.

NTPC Electric Supply Co. Ltd.

NTPC Hydro Ltd.

NTPC-SAIL Power Company

Pvt. Ltd.

Ratnagiri Gas and Power

Private Limited PTC India Ltd.

NTPC Tamilnadu

Energy Co. Ltd.

Bhilai Electric Supply Co. Pvt.

Ltd.

NTPC Alstom Power Services

Pvt. Ltd.

Utility Powertech Ltd.

77

AWARDS & ACCREDITIONSAWARDS & ACCREDITIONS

Golden Peacock Global Award for Excellence in Golden Peacock Global Award for Excellence in Corporate Governance 2005Corporate Governance 2005ISTD FICCI Award for excellence in HR ISTD FICCI Award for excellence in HR PracticesPracticesGreentech Safety Award 2004Greentech Safety Award 2004--0505National Award for excellence in consultancy National Award for excellence in consultancy services.services.CNBC TVCNBC TV-- 1818-- Hewitt ranked NTPC “Third best Hewitt ranked NTPC “Third best employer in India”employer in India”Performance Excellence Award for 2003Performance Excellence Award for 2003--0404

88

Key Competitive Strengths Key Competitive Strengths

Unmatched competitive position Unmatched competitive position High off take security High off take security Proven track record in project implementation Proven track record in project implementation Proximity to fuel sourcesProximity to fuel sourcesHigh operating efficiencyHigh operating efficiencyLargest pool of power engineering talent in IndiaLargest pool of power engineering talent in IndiaStrong financial position Strong financial position

99

Strong Government Support

NavratnaNavratna status has given Autonomy in making investment status has given Autonomy in making investment decisions decisions Facilitated Tripartite Agreements for One time settlement of Facilitated Tripartite Agreements for One time settlement of outstanding dues and Future payment securityoutstanding dues and Future payment securitySupported new initiativesSupported new initiatives

Coal MiningCoal MiningParticipation in LNG Value ChainParticipation in LNG Value ChainEntry into power trading, distribution and hydro power generatioEntry into power trading, distribution and hydro power generationn

Assigned NTPC the consultant role to modernize and Assigned NTPC the consultant role to modernize and improvise several plants across the countryimprovise several plants across the countryChosen NTPC to disseminate technologies to other players Chosen NTPC to disseminate technologies to other players in the sectorin the sector

1010

Contents Contents

NTPC’sNTPC’s business and strengths business and strengths 11


1111

Performance HighlightsPerformance Highlights

Physical PerformancePhysical Performance

Performance of Subsidiaries and JVsPerformance of Subsidiaries and JVsCapacity Growth Capacity Growth Commercial PerformanceCommercial PerformanceFinancial PerformanceFinancial Performance

1212

Physical Performance

Improvement in Asset UtilisationImprovement in Asset Utilisation

–– Generation of 159.11 bln Generation of 159.11 bln units in 2004units in 2004--05 as against 05 as against 149.16 bln units in 2003149.16 bln units in 2003--0404

–– Highest ever PLF of 87.5% Highest ever PLF of 87.5% in 2004in 2004--0505

–– High operational availability High operational availability of 91.2%of 91.2%

–– 11stst Qtr 2005Qtr 2005--06 PLF was 06 PLF was 87.31% (coal) and 68.06% 87.31% (coal) and 68.06% (gas) in comparison to 1(gas) in comparison to 1stst

Qtr 2004Qtr 2004--05 PLF of 87.13% 05 PLF of 87.13% (coal) and 65.51% (gas) (coal) and 65.51% (gas)

81.8

69

81.1

69.9

83.6

72.1

84.4

72.7

87.5

74.8

0

10

20

30

40

50

60

70

80

90

2001 2002 2003 2004 2005

NTPC All India

1313

Financial Performance Financial Performance --Profit & Loss StatementsProfit & Loss Statements

11stst Quarter Quarter Ending JuneEnding June

FiscalFiscal

52,37152,37146,18846,188194,678194,678200,745200,745Total expenditure

66,09566,09557,29657,296255,460259,642Total income

52,60852,60858,89758,89733,69733,69720,23220,232

122,150122,150

70,95870,958188,684188,684

20042004

58,07058,07060,78260,78216,95516,95519,58419,584

137,235137,235

29,81029,810225,650225,650

20052005

13,08713,08713,72413,724

4,0944,0944,8734,873

38,24038,240

5,5285,52860,56760,567

20052005

10,54110,54111,10811,108

4,5114,5114,7854,785

31,88331,883

5,3835,38351,91351,913

20042004

PATPATPBT PBT

Interest & finance charges Interest & finance charges DepreciationDepreciationFuel Fuel

Other income Other income Sales Sales

Rs. Mln.

1414

Financial Performance .. Financial Performance .. contdcontdBalance SheetsBalance Sheets

As on As on

277,376277,37678,12578,125

355,501355,501108,684108,68445,84445,844

240,845240,845135,468135,468173,380173,380212,545212,545400,281400,281

31.03.200431.03.2004

335,308335,30882,45582,455

417,763417,763126,471126,47144,40744,407

241,720241,720129,073129,073207,977207,977223,148223,148431,062431,062

31.03.200531.03.2005

Unsecured loans Unsecured loans Secured loans Secured loans

Reserves and surplus Reserves and surplus Equity share capital Equity share capital

Net worth Net worth

Liabilities and provisions Liabilities and provisions Current assets, loans and advances Current assets, loans and advances Investments Investments Net blockNet blockGross fixed assets Gross fixed assets

Rs. Mln.

1515

Dividend & GrowthDividend & GrowthDividend (Rs.Mln)

6500 7470 7079 7080

10823

19790

0

5000

10000

15000

20000

25000

2000 2001 2002 2003 2004 2005

Highest ever dividend for fiscal 2005 @ 24%, considering final dHighest ever dividend for fiscal 2005 @ 24%, considering final dividend ividend recommended by the Board of Directors of recommended by the Board of Directors of RsRs. 9895 Million. 9895 Million

The company would continue to balance growth and dividend payThe company would continue to balance growth and dividend pay--out to out to take advantage of country’s deficit power positiontake advantage of country’s deficit power position

1616

Financial PositionFinancial PositionDebt Equity Ratio of 0.41:1 as on 31.03.2005Debt Equity Ratio of 0.41:1 as on 31.03.2005Capacity Expansion Plan has captured the leveraging Capacity Expansion Plan has captured the leveraging advantageadvantage–– Net cash flow of INR 50.47 bln generated from operating activitiNet cash flow of INR 50.47 bln generated from operating activities in FY es in FY

20042004--0505

–– Leveraging Borrowing with a Debt Equity ratio of 70 : 30 Leveraging Borrowing with a Debt Equity ratio of 70 : 30

–– Domestic Bonds Rated Domestic Bonds Rated AAA by CRISIL AAA by CRISIL

LAAA by ICRALAAA by ICRA

–– Foreign Currency Rating at par with Sovereign RatingForeign Currency Rating at par with Sovereign RatingBB with positive outlook by Standard & Poor’sBB with positive outlook by Standard & Poor’s

BB+ with stable outlook by Fitch RatingsBB+ with stable outlook by Fitch Ratings

1717

Commercial Performance

100% realization in the FY 2004100% realization in the FY 2004--05 of the amounts 05 of the amounts billed to the customersbilled to the customers

Same trend continues in the first quarter of 2005Same trend continues in the first quarter of 2005--0606

Letters of Credits to the extent of 105% of average Letters of Credits to the extent of 105% of average monthly billing established by all customers monthly billing established by all customers

Timely Servicing of Bonds under OneTimely Servicing of Bonds under One--timetime--settlement settlement SchemeScheme

1818

Capacity Growth

2001 2002 2003 2004 2005

1943519935

20935

21435

23435

18000

21000

24000

Capacity (MW)Capacities Added Fiscal’ 05Capacities Added Fiscal’ 05

TalcherTalcher 500 MW500 MWTalcherTalcher 500 MW500 MWRamagundamRamagundam 500 MW 500 MW RihandRihand 500 MW500 MW

New StartsNew Starts

SipatSipat I 1980 MW I 1980 MW BarhBarh 1980 MW1980 MWBhilaiBhilai ( JV ) ( JV ) 500 MW 500 MW

Under Construction Under Construction

9470 MW *9470 MW ** * Including New StartsIncluding New Starts

1919

Human ResourcesHuman Resources-- The Performer The Performer

23,385 highly trained employees of 23,385 highly trained employees of which 21,420 are engaged in NTPC which 21,420 are engaged in NTPC owned projectowned projectSenior executives possess extensive Senior executives possess extensive experience of the industry experience of the industry Executive Turnover Rate 0.44%Executive Turnover Rate 0.44%Planned interventions at various stages Planned interventions at various stages of careerof careerSystematic training ensures 7 man days Systematic training ensures 7 man days training per employee per yeartraining per employee per yearKnowledge sharing & development Knowledge sharing & development through various HR initiativethrough various HR initiative

The Best Employer in India for the year 2004 ranking 3The Best Employer in India for the year 2004 ranking 3rdrd for the second for the second consecutive year (survey by Hewitt’s Associates and CNBC TV 18)consecutive year (survey by Hewitt’s Associates and CNBC TV 18)

Third Great Place to work for in India for the year 2004 in a suThird Great Place to work for in India for the year 2004 in a survey conducted rvey conducted by Grow Talent and Business World by Grow Talent and Business World

Improving ProductivityImproving Productivity

7.437.43GenerationGeneration per Employeeper Employee

4.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

94-9

5

95-9

6

96-9

7

97-9

8

98-9

9

99-0

0

00-0

1

01-

02

02-

03

03-

04

04-

05

MU

2020

Our SubsidiariesOur Subsidiaries1.1. NTPC NTPC VidyutVidyut VyaparVyapar NigamNigam (NVVN) , a wholly owned subsidiary has been set (NVVN) , a wholly owned subsidiary has been set

up with an objective of trading in power, to effectively use thup with an objective of trading in power, to effectively use the installed e installed capacity and reduction in the cost of power . NTPC has invested capacity and reduction in the cost of power . NTPC has invested RsRs. 200 . 200 million in the equity share capital of the company . million in the equity share capital of the company .

200200200200NTPC’sNTPC’s InvestmentInvestment21215757Profit After taxProfit After tax

662020Dividend Dividend

2291229159925992Gross IncomeGross Income20032003--040420042004--0505Particulars Particulars ( ( RsRs. . MlnMln) )

2.2. NTPC Hydro Ltd a wholly owned subsidiary has been formed, with NTPC Hydro Ltd a wholly owned subsidiary has been formed, with an an objective to develop small and medium hydro electric power projeobjective to develop small and medium hydro electric power projects up to cts up to 250 MW. NTPC has invested 250 MW. NTPC has invested RsRs. 48 million in the equity share capital of the . 48 million in the equity share capital of the company . The company proposes to takecompany . The company proposes to take--up up LataLata TapovanTapovan HEPP (162 MW) in HEPP (162 MW) in UttaranchalUttaranchal ( Implementation agreement under discussion ) and ( Implementation agreement under discussion ) and RammamRammamHEPP StageHEPP Stage-- II ( 90 MW ) in West Bengal (Implementation agreement signed )II ( 90 MW ) in West Bengal (Implementation agreement signed )

The company traded in The company traded in electricity and sold 2,616 electricity and sold 2,616 MUsMUsof power in fiscal 2005 as of power in fiscal 2005 as against 962 against 962 MUsMUs in the in the previous fiscal, registering a previous fiscal, registering a growth of 172 %growth of 172 %

2121

Our SubsidiariesOur Subsidiaries3.3. NTPC Electric Supply Company Limited (NESCLNTPC Electric Supply Company Limited (NESCL) , a wholly owned ) , a wholly owned

subsidiary has been set up for taking up electricity distributisubsidiary has been set up for taking up electricity distribution on business as a sequel to reforms initiated in the power sector anbusiness as a sequel to reforms initiated in the power sector and d company is looking at opportunities to take up distribution circcompany is looking at opportunities to take up distribution circles.les.The company has taken up The company has taken up

“Advisor“Advisor--cumcum--consultant” work under APDRP schemes of consultant” work under APDRP schemes of Ministry of PowerMinistry of PowerFacilitating Project Monitoring ,quality assurance and Facilitating Project Monitoring ,quality assurance and Inspection services to MPSEB Inspection services to MPSEB Execution of rural electrification in one block of Execution of rural electrification in one block of MidnapurMidnapurdistrict in West Bengal.district in West Bengal.

4.4. PipavavPipavav Power Development Company, a wholly owned subsidiary was Power Development Company, a wholly owned subsidiary was promoted for acquisition of land for promoted for acquisition of land for PipavavPipavav Mega Power Project (1000 MW) Mega Power Project (1000 MW) and infrastructure for setting up power plant in Gujarat . FR ofand infrastructure for setting up power plant in Gujarat . FR of the said the said project is under preparation project is under preparation

2222

Our Joint VenturesOur Joint Ventures1.1. NTPCNTPC--SAIL Power Supply SAIL Power Supply

Company Ltd has been Company Ltd has been formed as a joint venture with formed as a joint venture with SAIL with 50% stake, owning SAIL with 50% stake, owning and operating 2 power and operating 2 power projects of 120 MW each. projects of 120 MW each.

587587587587NTPC’sNTPC’s InvestmentInvestment240240233233Profit After tax Profit After tax


1550155013221322Gross IncomeGross Income20032003--040420042004--0505Particulars Particulars ( ( RsRs. . MlnMln) )

2.2. BhilaiBhilai Electric Supply Electric Supply Company Ltd has been Company Ltd has been formed as a joint venture with formed as a joint venture with SAIL with 50% stake, owning SAIL with 50% stake, owning and operating a 74 MW and operating a 74 MW project at project at BhilaiBhilai

166166566566NTPC’sNTPC’s InvestmentInvestment66666161Profit after TaxProfit after Tax


610610607607Gross IncomeGross Income20032003--040420042004--0505Particulars Particulars

BhilaiBhilai Electric Supply Company Ltd has commenced expansion of 2x 250 MElectric Supply Company Ltd has commenced expansion of 2x 250 MW W

2323

Our Joint VenturesOur Joint Ventures

3.3. NTPCNTPC--AlstomAlstom Power Services Power Services Limited in partnership with Limited in partnership with ALSTOM with 50% stake has ALSTOM with 50% stake has been promoted to undertake been promoted to undertake R&M jobs of under performing R&M jobs of under performing stations stations

30303030NTPC’sNTPC’s InvestmentInvestment23232121Profit After taxProfit After tax


1078107810211021Gross IncomeGross Income20032003--040420042004--0505Particulars Particulars

( ( RsRs. . MlnMln) )

4.4. Utility Utility PowertechPowertech Ltd has been Ltd has been formed as a joint venture with formed as a joint venture with Reliance Energy with 50% Reliance Energy with 50% stake, to undertake stake, to undertake construction, erection & construction, erection & supervision jobs supervision jobs

10101010NTPC’sNTPC’s InvestmentInvestment34345757Profit After tax Profit After tax


86786711241124Gross IncomeGross Income

20032003--040420042004--0505Particulars Particulars

2424

Our Joint VenturesOur Joint Ventures5.5. NTPC NTPC TamilnaduTamilnadu Energy Company Ltd has been formed Energy Company Ltd has been formed

as a joint venture with Tamil as a joint venture with Tamil NaduNadu Electricity Board with Electricity Board with 50% stake, to construct and operate a plant of 1000 MW in 50% stake, to construct and operate a plant of 1000 MW in the statethe state

66. PTC India Limited was promoted with 8% stake each from . PTC India Limited was promoted with 8% stake each from NTPC, PGCIL, PFC and NHPC for trading of power and NTPC, PGCIL, PFC and NHPC for trading of power and purchase of power from identified purchase of power from identified IPPsIPPs

7.7. In line with decision taken by the Government of India to In line with decision taken by the Government of India to restart restart DabholDabhol Power Project, Special Purpose Vehicle Power Project, Special Purpose Vehicle ““RatnagiriRatnagiri Gas and Power Pvt. Ltd.” has been Gas and Power Pvt. Ltd.” has been incorporated for taking over the assets of incorporated for taking over the assets of DabholDabhol Power Power ProjectProject

2525

Contents Contents



2626

Key Strategies Key Strategies

Maintain sector leadership position through Maintain sector leadership position through rapid capacity expansionrapid capacity expansionFurther enhance fuel security Further enhance fuel security Exploit new business opportunitiesExploit new business opportunitiesOther InitiativesOther Initiatives

2727

Rapid Capacity addition

R & D Initiatives in Diversified

Fuel sources

Distribution &

Trading30,000 MW by 2007

46,000 MW by 2012

Progress in Hydro Capacityaddition

ParticipatingIn the LNGValue chain

IntegratedProject Development

Coal Mining

Strategy to Maintain Leadership PositionStrategy to Maintain Leadership Position

2828

Rapid Capacity Addition Program

XI Plan XI Plan

Present Plan Present Plan 17000 MW17000 MW

Under Constn 5260 MW Under Constn 5260 MW Under Evaluation* 1150 MWUnder Evaluation* 1150 MWOther Projects Other Projects 10590 MW10590 MWTotal Total 17000 MW17000 MW

Earlier Plan 11558 MWEarlier Plan 11558 MW

X Plan X Plan

Plan Plan 9160 MW9160 MW

AddedAdded 3500 MW3500 MW

Under Construction 4210MW Under Construction 4210MW Under Evaluation* Under Evaluation* 1450 MW1450 MW

Total Total 9160 MW9160 MW

**KawasKawas II & II & GandharGandhar II II –– 1300 MW each1300 MW each

2929

Further Enhance Fuel SecurityFurther Enhance Fuel Security

6571 72

76 78 79 8187

92 94

23 24

0

20

40

60

80

100

'01 '02 '03 '04 '05 Q1-06

CEA Target Recd

Supplies are enough to Supplies are enough to generate as per targets generate as per targets set by CEA,set by CEA,

Additional requirements Additional requirements are met through importare met through import

PLF of 87.5% in fiscal 05 as against 84.4% in last fiscal PLF of 87.5% in fiscal 05 as against 84.4% in last fiscal

Mill

Ton

Mill

Ton

Coal Availability – Current Scenario

3030


Strategies For CoalStrategies For CoalShort Term MeasuresShort Term Measures

Import of Coal to meet shortages as an immediate Import of Coal to meet shortages as an immediate measuremeasure

–– Import of 2.1 MT through MMTC, supplies commencedImport of 2.1 MT through MMTC, supplies commenced–– Import of 1.9 MT through STC being tiedImport of 1.9 MT through STC being tied--upup

The overall impact on fuel cost is insignificant and the The overall impact on fuel cost is insignificant and the same is passsame is pass--throughthrough

Medium Term MeasuresMedium Term MeasuresNTPC is working on Coal Block NTPC is working on Coal Block PakriPakri BarwadihBarwadihNegotiation with coal companies for enhancing suppliesNegotiation with coal companies for enhancing suppliesCoordination between Ministry of Power & Ministry of Coordination between Ministry of Power & Ministry of Coal for expeditious clearance of coal mining projectCoal for expeditious clearance of coal mining project

3131


Long Term MeasuresLong Term MeasuresNTPC has initiated advance actions to enter NTPC has initiated advance actions to enter into coal mining and applied for additional 15 into coal mining and applied for additional 15 mining blocks mining blocks Ministry of power has recommended allocation Ministry of power has recommended allocation of 4 blocks on priority basis to NTPC for of 4 blocks on priority basis to NTPC for development of integrated projects development of integrated projects Coal extraction from Linked Mines are also Coal extraction from Linked Mines are also expeditedexpedited

3232


Strategies For GasStrategies For GasHistorically Gas has been in short supply in India, Historically Gas has been in short supply in India, NTPC’sNTPC’s gas stations have been operating at Low gas stations have been operating at Low PLFPLFShort Term MeasuresShort Term Measures

To augment existing supplies additional gas from To augment existing supplies additional gas from PannaPanna--MuktaMukta--TaptiTapti gas fields have been tied upgas fields have been tied upAs a result gas supplies of 12.5 MMCMD tied up as As a result gas supplies of 12.5 MMCMD tied up as against earlier 9.1 MMCMDagainst earlier 9.1 MMCMDContinue negotiation with existing supplier for Continue negotiation with existing supplier for augmentation at reasonable priceaugmentation at reasonable price

PLF of gas stations 68.06% in (Q1PLF of gas stations 68.06% in (Q1--06) against 65.51% in (QI06) against 65.51% in (QI--05)05)

3333


Long Term MeasuresLong Term MeasuresAcquiring acreage in domestic gas fields Acquiring acreage in domestic gas fields –– NTPC NTPC has participated in bid process for blocks on offer has participated in bid process for blocks on offer under NELPunder NELP-- V V Participation in various elements of LNG value Participation in various elements of LNG value chain includingchain including––Gas Exploration and productionGas Exploration and production––Participation in Gas Liquefaction and Participation in Gas Liquefaction and regassificationregassification

terminalterminal–– Participation in LNG shipping Participation in LNG shipping

Agreement for supply of gas for Agreement for supply of gas for KawasKawas II & II & GandharGandhar II to be signed shortlyII to be signed shortly

3434

Further Enhance Fuel Security Further Enhance Fuel Security -- Fuel MixFuel Mix

Diversifying fuel mix by setting up hydroDiversifying fuel mix by setting up hydro--power power plants plants –– both big and smallboth big and smallProjects Under DevelopmentProjects Under Development

KoldamKoldam Hydro 800 MWHydro 800 MW

TapovanTapovan ––VishnugarhVishnugarh 520 MW520 MW

LoharinagLoharinag PalaPala 600 MW600 MW

Projects Under ConsiderationProjects Under Consideration

KalaiKalai 1040 MW1040 MWHutangHutang 1000 MW1000 MWLataLata TapovanTapovan 162 MW162 MWKhasiabaraKhasiabara 230 MW230 MWRamamRamam IIIIII 90 MW90 MW

NTPC will continue to identify more Hydel projects for development

NTPC has also been engaged by CEA for preparation of Pre –feasibility reports for few hydro projects

3535

Further Enhance Fuel Security Further Enhance Fuel Security -- Fuel MixFuel Mix

Capacity Mix - existing(23749 MW)

314 MW 1%

19480 MW 82%

3955 MW 17%

Coal Gas JV (Coal)

Capacity Mix - 2012(46742 MW)

2314 MW 5%5133 MW

11%

8505 MW 18% 30790MW

66%

Coal Gas Hydro JV (Coal)

Efforts to change the fuelEfforts to change the fuel--mix of installed capacity graduallymix of installed capacity gradually

3636

Exploit New Business Opportunities

Regulatory and economic reforms have thrown new Regulatory and economic reforms have thrown new business opportunitiesbusiness opportunities

Forward and Backward integration across energy chainForward and Backward integration across energy chainDiversifying fuel mix by setting up hydroDiversifying fuel mix by setting up hydro--power plants power plants Exploring various options for setting up of Merchant Exploring various options for setting up of Merchant PlantsPlantsCommenced power trading business Commenced power trading business Entry into electricity distribution Entry into electricity distribution Exploring business from overseas operations by Exploring business from overseas operations by providing consultancy services providing consultancy services

3737

Other Initiatives

Technology InitiativesTechnology Initiatives

Launch of Energy Technology Center Launch of Energy Technology Center --A new initiative for A new initiative for development of technologies with focus on fundamental R&D development of technologies with focus on fundamental R&D Plans to develop coal based thermal power projects with SuperPlans to develop coal based thermal power projects with Super--Critical Technology with higher unit size machines having higherCritical Technology with higher unit size machines having higherefficiency and lower green house gas emissionsefficiency and lower green house gas emissionsRoadmap developed for adopting ‘Clean Development Roadmap developed for adopting ‘Clean Development Mechanism’ to help get / earn ‘Certified Emission Reduction’ Mechanism’ to help get / earn ‘Certified Emission Reduction’ Geographical Information System (GIS) for mapping Geographical Information System (GIS) for mapping environmental dataenvironmental dataNew Technologies in C&I systems for improvement in plant New Technologies in C&I systems for improvement in plant performance and efficienciesperformance and efficiencies

3838

Other initiatives

Taken up Distributed Generation (DG) for rural Taken up Distributed Generation (DG) for rural electrificationelectrificationImplementing APDRP in various Circles and Implementing APDRP in various Circles and advising SEBs advising SEBs Steps taken to establish “Power Exchange” in Steps taken to establish “Power Exchange” in the countrythe countryAdvising SEBs on Efficiency improvements and Advising SEBs on Efficiency improvements and also engaged in R & Malso engaged in R & M

3939

Other Initiatives Other Initiatives Corporate GovernanceCorporate Governance

Board and SubBoard and Sub--committees of Board including Audit Committee committees of Board including Audit Committee and Governance Committee (Committee on Management and Governance Committee (Committee on Management Control)Control)Well defined Delegation of PowerWell defined Delegation of PowerEngineering & Project Management Systems Engineering & Project Management Systems Contract Systems Contract Systems Financial Systems having Internal checks & balances Financial Systems having Internal checks & balances Three tier Audit System Three tier Audit System

Internal Audit to check efficacy of internal controlsInternal Audit to check efficacy of internal controlsStatutory AuditStatutory AuditGovernment Audit Government Audit –– Proprietary AuditProprietary Audit

4040

Other InitiativesCorporation Social Responsibility Corporation Social Responsibility

As a responsible corporate citizen NTPC has taken up As a responsible corporate citizen NTPC has taken up number of CSR initiativesnumber of CSR initiatives

NTPC Foundation formed to address Social issues at NTPC Foundation formed to address Social issues at national level .national level .

NTPC has framed Corporate Social Responsibility NTPC has framed Corporate Social Responsibility Guidelines committing up to 0.5% of net profit annually for Guidelines committing up to 0.5% of net profit annually for Community Welfare Measures on perennial basis Community Welfare Measures on perennial basis

The welfare of project affected persons and the local The welfare of project affected persons and the local population around NTPC projects are taken care of through population around NTPC projects are taken care of through well drawn Rehabilitation and Resettlement policieswell drawn Rehabilitation and Resettlement policies

4141

Contents Contents



4242

Indian Power Sector Indian Power Sector –– An OverviewAn Overview

4343

507

523

546

559

591

467483

498519

548

440

460

480

500

520

540

560

580

600

2001 2002 2003 2004 2005Requirement Availability

India India -- aa Supply Deficit Power MarketSupply Deficit Power Market

All figures are in bn units, except where stated otherwiseSource: Annual Report, Ministry of Power, 2002-2003, CEA Executive Summary and CEA Annual Report

Attractive energy market as demand in India has consistently outAttractive energy market as demand in India has consistently outstripped supplystripped supply

7.8%

7.5%

8.8%

7.1%

7.3%

% Energy Deficit

4444

High potential for GrowthHigh potential for Growth

Source: UN Development Program, Human Development Indicators, 2004

Per capita energy consumption in kwh (CY 2001)

561

1129

1139

2122

6631

11205

13241

2361

India

Egypt

China

Brazil

UK

Australia

USA

World avg.

4545

Generation Capacity: Current & ProposedGeneration Capacity: Current & Proposed

41,11041,1107,1217,12111,15711,15722,83222,832Total Total 1,3001,300--------1,3001,300NuclearNuclear

14,39314,3931,1701,1704,4814,4818,7428,742HydroHydro25,41725,4175,9515,9516,6766,67612,79012,790Thermal Thermal

Total Total PrivatePrivateState State Central Central

Proposed Capacity Addition (Tenth Plan)

Source: CEA Executive Summary, March 2004

212,058

105,046

107,973112,058

90,000

115,000

140,000

165,000

190,000

215,000

240,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Fiscal Year

Gen

erat

ion

Cap

acity

(MW

)

Hydro26.3%

Thermal69.6%

Nuclear2.4%Wind

1.7%

4646

Contents Contents



4747

Key Challenges Key Challenges

Availability of fuel at competitive prices Availability of fuel at competitive prices Various short, medium and longVarious short, medium and long--term measures to term measures to mitigate the riskmitigate the riskDelay in development of some linked coal mines Delay in development of some linked coal mines causing concern on coal supplies causing concern on coal supplies Availability of Gas Availability of Gas

Health of CustomersHealth of CustomersPayment discipline arising out of triPayment discipline arising out of tri--partite agreementpartite agreementCommercial realisations are expected to improveCommercial realisations are expected to improve

4848

Key Challenges Key Challenges

Regulatory RiskRegulatory RiskRegulator is expected to ensure reasonability of Regulator is expected to ensure reasonability of returns and continue to incentivise efficient returns and continue to incentivise efficient operationsoperationsDraft National Tariff Policy is indicative of continuing Draft National Tariff Policy is indicative of continuing with a regime of reasonable return for all the utilities in with a regime of reasonable return for all the utilities in the sectorthe sector

Competition Competition Indian Power Sector has enormous opportunities for Indian Power Sector has enormous opportunities for growth and NTPC can benefit from enhanced growth and NTPC can benefit from enhanced competitioncompetition

4949

Power Producer of International ReputeThe largest Indian power utility, NTPC has a vision to be one of the world’s largest

and best power utilities, powering India’s growth

DISCLAIMER

The information contained in this document relating to projectioThe information contained in this document relating to projections and estimates are forward ns and estimates are forward looking statements based on existing laws & Regulations. Actual looking statements based on existing laws & Regulations. Actual result may vary materially result may vary materially from those expressed or implied, depending upon economic conditifrom those expressed or implied, depending upon economic conditions, government policies ons, government policies and other incidental factors. Any opinion expressed is given inand other incidental factors. Any opinion expressed is given in good faith but is subject to good faith but is subject to change without notice. No liability is accepted whatsoever for change without notice. No liability is accepted whatsoever for any direct or consequential loss any direct or consequential loss arising from the use of this documents. arising from the use of this documents.

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