CESC Limited Investing in sustainable Growth November 2009 RPG Enterprises Respond, Perform, Grow 8 Business Sectors, 20+ companies, 60,000+ employees, 4,00,000 + shareholders 2 RPG Enterprises – Business Sectors Business Sectors Companies Entertain KEC International ment Transmission 1% RPG Cables Speciality 6% CESC IT 7% Transmi Noida Power Co.* Power ssion Carbon 26% Tyre Black CEAT 9% Spencer`s Retail Revenue Retail Retail FY 2009 Spencer`s Travel 9% Rs. 14,500 crs Carbon Black PCBL IT Power Zensar Technologies Tyre 22% HML 20% Raychem RPG Speciality RPG Life Sciences Entertainment Saregama India RPG Enterprises - Financials ( Rs. Crs ) Market cap Revenues EBIDTA Net Profit Promoter Institutional as on 30th (FY`09) (FY`09) (FY`09) Holding Holding Sep’09 CESC 3,200 865 410 4863 52% 37% KEC International 3,428 200 116 2771 42% 43% RPG Cables 358 24 (7) 84 34% 9% CEAT 2,558 53 (16) 554 43% 36% Phillips Carbon Black 1,180 (48) (65) 509 50% 19% Harrisons Malayalam 292 23 6 234 50% 11% Zensar Technologies 922 140 86 554 52% 24% RPG Life Sciences 144 26 7 66 51% 16% Saregama India 135 6 (8) 140 53% 34% 4 POWER BUSINESS 5 CESC- An Overview 110 year old fully Integrated Energy Utility: Coal Mining - Generation - Distribution . Other business through subsidiaries include Retail and Real Estate Capacity Four coal fired stations - 975 MW, T&D loss less than 14% , Collection efficiency 99.5% : PLF 98% (Base Load Stations) - 500 MW Budge Budge at 100% PLF Budge Budge plant received outstanding performance award from the Prime Achievements Minister Budge Budge – First Thermal Power Plant in the world registered with UNFCCC for Carbon Credit Demand Peak System Demand 1600 MW Area 567 sq.km area, 2.3 mn consumers, 16500 ckt km T&D network Stock Listed on BSE (Code – 500084); NSE (CESC) 6 CESC-Generating Stations Budge Budge generating Station New Cossipore generating Station Southern generating Station Titagarh generating Station BBGS, SGS, TGS have a combined PLF of 97.3% in FY09 7 Budge Budge-III Augmenting Generation Capacity of CESC by 25% 8 The nine year old Budge Budge has many distinctions……… Second highest PLF among all thermal power stations in India Acclaimed as environment friendly by Govt. agencies. The CDM Project at Budge Budge is the first thermal project in the world to earn Carbon credits. 9 Operating performance: Annual Net generation & Electricity Sales Generation (MU) Sales (MU) *7218 *7479 *7456 *7206 8000 7400 7000 7200 *6948 6000 7000 5000 6800 4000 *6424 6600 3000 6400 2000 1000 6200 0 6000 FY07 FY08 FY09 FY07 FY08 FY09 *Excluding Peaking Station * Excluding Export 10 Operational Efficiencies T & D Loss(%) PLF%(excluding Pilferage peaking Station) Technical 1600 1404 1400 1234 1200 960 1000 861 857 800 749 Power Import(MU) 600 Power Export(MU) 418 458 441 400 302 160 200 7 0 FY04 FY05 FY06 FY07 FY08 FY09 11 Tariff & Profitability Tariff (Rs./ unit) PAT (Rs. Crs) 450 410 4.20 4.15 400 4.09 355 4.10 4.03 350 301 300 4.00 3.91 250 3.90 3.86 3.81 200 178 3.80 3.74 3.76 147 150 3.70 100 82 3.60 50 3.50 0 FY04 FY05 FY06 FY07 FY08 Feb-08 FY09 FY10 FY04 FY05 FY06 FY07 FY08 FY09 Debt / Equity Ratio EPS (Rs.) 2.50 2.11 40 36 33 2.00 35 30 30 1.42 23 1.50 25 20 1.06 20 1.00 0.75 15 12 0.65 0.55 10 0.50 5 0 - FY04 FY05 FY06 FY07 FY08 FY09 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 12 HY1 FY10 Performance PLF(%)* T & D Losses(%) 99% 100% 14.2% 14.2% 100% 14.00% 95% 13.75% 90% 13.50% 85% 13.25% 80% 13.00% H1 FY10 H1 FY09 H1 F Y10 H1 F Y09 Generation (MU)* Revenue (Rs. Crs) 3794 3877 4000 1822 1628 1900 3400 1600 2800 1300 2200 1000 1600 H1 FY 10 H1 FY 09 700 H1 F Y10 H1 F Y09 * Excluding Peaking station 13 HY1 FY10 Performance EBITDA (Rs. Crs) PBT (Rs. Crs) 519 466 400 278 600 247 300 400 200 200 100 0 0 H1 F Y10 H1 F Y09 H1 F Y10 H1 F Y09 PAT (Rs. Crs) EPS (Rs.) (not annualised) 231 218 18.49 17.45 250 20.00 200 16.00 150 12.00 100 8.00 50 4.00 0 H1 F Y10 H1 F Y09 0.00 H1 F Y 10 H1 F Y 09 14 14 Capacity (MW) Cost Rs bn 2000 Generation Dhenkanal, Orissa 80 1500 Regulated Power Merchant Power 70 62 Cost (Rs.bn) Dumka, Pirpainty, Bihar Jharkhand 60 1000 Under Implementation 50 50 Haldia Phase I, Chandrapur, 47 West Bengal Maharashtra 500 40 Budge Budge, 30 28 30 West Bengal 250 13 20 10 0 FY09-10 FY12-13 FY12-13 FY13-14 FY13-14 FY13-14 Budge Budge and Haldia plants will help to Merchant Power Plant attain self sufficiency in meeting Base Load Pit head / load centre station with fuel linkage requirement. Long term PPA for 50% power to meet Debt Servicing Dispersed locations for spreading risk 15 15 Growth Plans Generation – Increasing the capacity to more than 5,745 MW from existing 975 MW Location Purpose Size Cost Commissioning Remarks (Rs.bn) 1. Budge Budge, Licence 250MW 13 2009 Test synchronization West Bengal Area achieved on 14 July, 2009 Commissioning in Dec’09 2. Haldia Phase I Licence 600 MW 30 2013 Over 80% Land acquired West Bengal Area / Long term linkage obtained Merchant Environmental clearance received, Financial closure : Feb’10 3. Chandrapur, Partly 600 MW 28 2013 450 acres of Land in Maharashtra Merchant possession Coal Linkage obtained Environmental clearance in place, other major clearance received Financial closure in an advanced stage 16 Growth Plans Location Purpose Size Cost Commissioning Remarks (Rs.bn) 4. Dumka, Merchant 1000MW 50 2014 110 MT coal block allocated Jharkhand MOU signed with Jharkhand Govt. Land acquisition process initiated, Mining prospecting license awaited 5. Dhenkanal, Merchant 1320MW 62 2014 MOU signed, Land Orissa acquisition process at an advanced stage Awaiting coal linkage 6. Pirpainty, Merchant 1000 MW 47 2015 MoU signed with Bihar Govt. Bihar / Haldia for the Pirpainty project Phase II/ Hydel • To attain self sufficiency in meeting License Area requirement • Merchant Power Plant - Pit head power station or load centre station with fuel linkage - Long term PPA for 50% capacity to ensure Debt Servicing - Dispersed locations for spreading risk 17 • Separate SPVs (subsidiaries) for Generation Projects CESC – Location of Generating Stations Budge Budge, WB Southern, WB Titagarh, WB Haldia, WB Pirpainty, Bihar Dumka, Jharkhand Dhenkanal, Orissa Chandrapur, Maharashtra 18 Distribution 220/132 kv Network Augmentation capex - Rs.4.5 bn by 2011 Connectivity to National Grid to To receive 700 MW by 2011-12 facilitate export of power Downstream transmission of power to different load centres Reorganisation following NCGS on commissioning of decommissioning Haldia Phase I Routine Capital Expenditure Rs. 3 bn per year Pursuing franchise opportunity in Bihar 19 Opportunities Performance based regulations introduced by the State Regulatory Environment Regulatory Commission inspired CESC to move towards higher efficiency level Cross subsidies in tariff have declined, making tariff near Cross Subsidies average for all consumers . SPV projects to be financed at 75:25 Debt Equity Ratio . Equity generally from Internal Accrual, balance equity infusion at Holding Company (licence area projects) Financing and Return and SPV level (Merchant market Initiatives) on Investment . Return on licence Area Investments 14% post tax + Incentive and Normative gains . SPV projects will have a mix of long term PPA and short term merchant market operations for ensuring a higher return duly mitigating the project risk. 20 REAL ESTATE BUSINESS 21 Real Estate . Being a 110 year old utility CESC has a huge unexplored land bank . Utilizing idle company assets for additional income generation and Capital appreciation . Floated 100% subsidiary “CESC Properties Ltd” to develop real estate projects. Property Company Identified properties • Property Co. floated in Apr’07 as 100% • 3 acre of land at Central Kolkata subsidiary – International standard premium • Initial focus on developing: shopping mall planned – 3 acre of land at Central Kolkata – 4 lac sq.ft area, 900+ car parking – 35 acre of land on the Northern Fringe of – RTKL appointed as architects the City – 100,000 sq.ft property in Salt Lake City • Other surplus land being identified besides acquiring land for development RETAIL BUSINESS 23 Food | Fashion | Home | Entertainment The baseline serves as an invitation to the shoppers to an international experience with respect to products, ambience, quality, price and engagement 24 Snapshot Year of Establishment 1996 Trading Area(‘000 sqft) 890 No. of Stores in operation 216 Annual Turnover (Rs. Crs) 1071 Customer Care Associate 5,281 26 Spencer`s Retail • Rs 1000 crores food-first, multi-format retailer • India’s oldest retail chain since 1863 introducing Indian consumers to the concept of organized retail • Formats – Hyper, Super, Dailies & Express • Garner 60 million footfalls per annum • Stock approximately 30000 SKUs in a typical hyper store • Has an extensive private label program across food, fashion, home and entertainment - 20 brands and more than 6000 SKUs 27 Where is our brand positioned? Consumer Spending Life Food & Life Style Grocery Style Range, SEC A/A+ Niche retailers Assort mint , Superior Service, Quality Spencer’s SEC A/B+ Ambience. Looks Differentiator Mass Market / Retail Organized Price, Discount retailers Basic SEC B/C Service Purchasing Power Purchasing Unorganized sector 28 Merchandise- Apparel-Spencer’s Pvt. Label 29 Some Intl Tie-ups exclusively at Spencer’s Beverley Hills Polo Club – An international fashion brand of lifestyle clothing for men and women – Presents casual and formal wear, winter wear, eyewear and watches – BHPC merchandize is available in all the Spencer’s Hypers – Plans to launch independent stores for BHPC.