CESC - Investor Presentation - Aug 2010

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CESC LimitedPowering India since 1899

August 2010

www.cesc.co.in

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RPG Enterprises

8 Business Sectors, 20+ companies, 40,000+ employees, 4,00,000 + shareholders

Respond, Perform, Grow

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Infrastructure27%

Power22%Tyre

21%

Retail11%

CarbonBlack

9%

IT6%

Speciality6%

Entertainment1%Infrastructure

Power

Tyre

Retail

Carbon Black

IT

Speciality

Entertainment

KEC International

CESC

Noida Power Co.*

Integrated Coal Mining *

CEAT

CEAT SriLanka

Spencer`s Retail

Spencer`s Travel

Phillips Carbon Black

Zensar Technologies

Harrisons Malayalam

Raychem RPG

RPG Life Sciences

Saregama India

Business Sectors Companies

Revenue

FY 2009-10

`160 bn

* unlisted

RPG Enterprises Business Sectors

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RPG Enterprises - Financials( bn )

market cap as on 31stJuly10

Revenues

(FY`10)

EBIDTA

(FY`10)

Net Profit

(FY`10)

Current

Market cap

Promoter

Holding

Institutional

Holding

CESC 34.50 9.06 4.33 49.26 52% 37%

KEC International 39.50 4.07 1.90 24.99 42% 43%

CEAT 25.60 3.03 1.65 4.59 48% 31%

Phillips Carbon Black 13.50 1.91 1.23 6.40 46% 25%

Harrisons Malayalam 3.30 0.30 0.11 2.44 50% 11%

Zensar Technologies 9.50 1.70 1.27 7.96 52% 24%

RPG Life Sciences 1.60 0.32 0.12 1.35 51% 16%

Saregama India 0.99 0.13 0.01 1.30 53% 34%

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POWER BUSINESS

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CESC- An Overview

110 year old fully Integrated Energy Utility: Coal Mining - Generation -

Distribution . Other business through subsidiaries include Retail and Real Estate

Stock Listed on BSE (Code 500084); NSE (CESC)

AchievementsBudge Budge plant received outstanding performance award from the PrimeMinister

Budge Budge First Thermal Power Plant in the world registered withUNFCCC for Carbon Credit

DemandPeak System Demand 1600 MW

Area 567 sq.km area, 2.3 mn consumers, 16500 ckt km T&D network

Capacity - 4 thermal plants - 1225 MW, BBGS-III 250 MW commissioned in Q4 FY10

- PLF 93%, T&D loss less than 13.3% , Collection efficiency 99.5%


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Southern 135 MW - 1991 Titagarh 240 MW - 1984

Budge Budge - 3 x 250 MW(Phase I- 500 MW in 1999, Phase II- 250 MW in 2010

New Cossipore 100 MW - 1950

BBGS (1 & 2), SGS, TGS have a combined PLF of 93% in FY10

CESC-Generating Stations

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Operating performance:

Sales (MU)

* Excluding Export

*6424

*6948

*7206

*7593

5800

6000

6200

6400

6600

6800

7000

7200

7400

7600

7800

FY07 FY08 FY09 FY10

T & D Loss(%)PLF%(excludingpeaking Station)

22.8%

16.3%15.5%

14.7%13.9%

13.3% 13.3%

6.0%

8.0%

10.0%12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

FY01 FY05 FY06 FY07 FY08 FY09 FY10

8086

94 94 97 97 93

0

20

40

60

80

100

120


National average PLF is 90%


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4.154.03

3.81 3.74 3.763.86 3.91

4.57

4.73

3.5

3.7

3.9

4.1

4.3

4.5

4.74.9

FY04 FY05 FY06 FY07 FY08 Feb08 FY09 FY10 Aug10

Tariff (` / unit) PBT (` Bn)

Debt / Equity Ratio

Tariff & Profitability

2.11

1.42

1.060.75

0.550.65 0.70

0.00

0.50

1.00

1.50

2.00

2.50


12

2023

36

30*33

35

0

5

10

15

20

25

30

35

40


*Issue of 31.06 mn equity shares in the scheme of amalgamation withSpencers retail and 9.56 mn shares via QIP in FY08

EPS (`)

0.89

1.601.97

3.41

4.03

4.65

5.22

0.00

1.00

2.00

3.00

4.00

5.00

6.00

http://www.google.co.in/url?q=http://www.moneycontrol.com/news/rupee/rupee-bounces-off-6-week-lowcorporate-dollar-sales_471311.html&sa=X&ei=hiBNTI64BM2UrAfoqqy5Dg&ved=0CCAQpwIwAA&usg=AFQjCNH6oSHUUBP0U90_TR43dCunkSmdBAhttp://www.google.co.in/url?q=http://www.moneycontrol.com/news/rupee/rupee-bounces-off-6-week-lowcorporate-dollar-sales_471311.html&sa=X&ei=hiBNTI64BM2UrAfoqqy5Dg&ved=0CCAQpwIwAA&usg=AFQjCNH6oSHUUBP0U90_TR43dCunkSmdBA


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Q1 FY11 Performance

7

8

9

Q1 FY11 Q1 FY10

10.82

8.09

Revenue (`Bn)

1800

1860

1920

1980

2040

2100

Q1 FY11 Q1 FY10

2443

1979

Generation (MU)

0

2

4

Q1 FY11 Q1 FY10

2.712.18

EBITDA (`Bn) PAT (`Bn )

0

0.5

1

1.5

Q1 FY11 Q1 FY10

1.1 1.05


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GROWTH STRATEGY

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Foray into infrastructure space

Coal based capacity expansion to meet growth in Kolkata circle

Entry into Hydel and other Renewables

3.

Private participation in Distribution through Franchise

4.

PAN India investment in merchant power plants (coal & gas)

2.1.

Key Growth Areas

5.12


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Planning to bid for Ultra Mega Power Projects (UMPPs) i.e 4,000 MW each

Looking at M&A route for capacity expansion

Future expansion to include alternate fuel like Gas & Nuclear

Planning to add renewable such as solar, wind, hydro etc

Aggressively looking to acquire coal assets

Generation

Acquired 600 MW thermal project in Maharashtra

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FY12-13FY13-14

FY13-14

Chandrapur,

Maharashtra

FY13-14

Haldia Phase I,

West Bengal

Dumka,

Jharkhand

Capacity (MW)

FY14-15

Dhenkanal, Orissa

30

50

65

Cost

Rs `bn

Regulated Power

Merchant Power

Cost (Rs.bn)

29

250

500

1000

1500

0

2000

10

20

30

40

50

70

60

80

Under Implementation

Generation - Growth Opportunities

Pirpainty,

Bihar

47

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1

ProjectChandrapur,

Maharashtra

Haldia Phase 1,

W.BDhenkanal, Orissa

Dumka,

JharkhandPirpainty, Bihar

Capacity (MW) 600 600 1320 1000 1000

Technology 300x2 300x2 660x2 500x2 500x2

Type Thermal Thermal Thermal Thermal Thermal

Commissioning FY12-13 FY13-14 FY13-14 FY13-14 FY14-15

Cost (`bn) 29 30 65 50 47PPA

Mix Mix Mix Mix MixMerchant

Project Status

BTG/EPC Y

Fuel Y Y Awaiting Linkage Y Awaiting Linkage

Clearances:

- Land Y Y Y Started Started

- Water Y Y Y Y

- Environment Y Y In progress In progress In progress

Generation - Project Status


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600 MW Dhariwal Infrastructure (Maharashtra)

Dhariwal Infrastructure Limited is a 600 MW Power Project located in Maharashtra, in close

proximity to state highways and railway link

The project is expected to be commissioned by FY 2013

Introduction

Coal linkage for project has been obtained from South Eastern Coal fields LimitedFuel

100% land acquired (455 acres)

Company has entered in to a water supply agreement with Govt. of Maharashtra (Water Resource

Deptt.)

Land and Water

Project has received all clearances for the project from Ministry of Environment and ForestsClearances

Dhariwal Infrastructure has awarded the EPC contract to Punj Lloyd and the BTG contract has

been awarded to Shanghai Electric Power CompanyEPC

The project is estimated to cost `29 bn and will be funded in the debt equity ratio of 75:25

Financial Closure for the project has been obtainedFinancial Closure

Evacuation of Power The power project is envisaged as a combination of long term and opportunistic power sale mix

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600 MW Haldia Phase I

Haldia Phase I is a 600 MW Power project to be setup in West Bengal

The project is based on domestic coal feedstock and is expected to be commissioned by FY 2014

The project will have a mix of both LT-PPA sales to CESC and merchant power sale

Introduction

A coal linkage for the project has been obtained from Mahanadi Coal Fields LimitedFuel

Of the nearly 345 acres required for the project, 282 acres have been acquired

Approval for drawal of water has been obtained for the projectLand and Water

Environmental clearance for the project has been obtainedClearances

The project is estimated to cost `30 bn and will be funded in the ratio of 75:25

Financial Closure for the project has been obtained

Financial Closure

Evacuation of Power Long term open access for the project from Power Grid has been obtained

Yet to be awardedEPC


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1320 MW Project Dhenkanal Orissa

Dhenkanal is a 1320 MW Power project to be setup in Orissa based on super-critical technology


The project will have a mix of both Long term-PPA sales and merchant power sale

Introduction

A coal linkage has been applied for the projectFuel

Required land has been acquiredLand and Water

Terms of Reference for the project have been approved and the Environmental Impact Assessment

studies have been completedClearances

The project is estimated to cost `65 bn and will be funded in the ratio of 75:25Financial Closure

Evacuation of Power Long term open access for the project from Power Grid received.

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1000 MW Dumka Power Project Jharkhand

Dumka is a 1000 MW Power project to be setup in Jharkhand

The project is based on captive coal stock and is expected to be commissioned by FY 2014

The project will have a mix of both LT-PPA sales and merchant power sale

Introduction

A captive coal block based in Dumka, Jharkhand has been awarded for the project.

The company has obtained a prospecting license for the mineFuel


studies have been completed

Land and Water Land acquisition currently commenced for the project. The power project requires ~430acres land

Approval for drawal of water has been obtained for the project

Clearances

Yet to start the processEPC


Evacuation of Power Long Term open access for the project has been obtained

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1000 MW Pirpainty Power Project Bihar

Pirpainty is a 1000 MW Power project to be setup in Bihar


The project will have a mix of both LT-PPA sales and merchant power sale

Introduction

Application for coal linkage made


studies have been completed

Land and Water Land acquisition currently commenced. The power project requires ~800acres of land

Approval for drawal of water has been obtained for the project

Clearances

Yet to start the processEPC


Evacuation of Power Application for LT open access has made to the Power Grid Corporation

Fuel


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Existing Business

Routine Capital Expenditure `5 bn per year for Kolkata business

220/132 kv Network Augmentation capex - `4.5 bn by 2011

Connectivity to National Grid to facilitate export of power Downstream transmission of power to different load centres on

commissioning of Haldia Phase I

New Licensing

Pursuing franchise opportunity in Bihar

Distribution - Growth Opportunities

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REAL ESTATE BUSINESS

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Development of premium shopping mall

3 acre of land at Central Kolkata International standard premium shopping mall planned 4 lac sq.ft retail area, 900+ car parking RTKL appointed as architects Order has been placed for turnkey project Work has started, mall expected to start operations in 2012-13

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Being a 110 year old utility CESC has a large unexploited land bank

Utilizing idle company assets for additional income generation and Capitalappreciation

Floated 100% subsidiary CESC Properties Ltd to develop real estate projects.

Real Estate


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RETAIL BUSINESS

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Snapshot

Year of Establishment

Trading Area(000 sqft)

No. of Stores in operation

Annual Turnover (` Bn)

Customer Care Associate

1996

884

208

9.06

5,000

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S ` R t il


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`9 bn food-first, multi-format retailer

Indias oldest retail chain since 1863 introducing Indian consumers to

the concept of organized retail

Formats Hyper, Super, Daily & 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, homeand entertainment - 20 brands and more than 6000 SKUs

Spencer`s Retail

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Chronology

FY 08-09 : Rapid growth to establish Pan India presence

FY 09-10 : Closures and consolidation

FY 10-11 : Consolidation continues, modest growth

FY 11-12 : Rapid growth to double current retail space bySeptember 2012


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Macro Environment

All retailers grew aggressively in FY 08-09 taking store rentsand salaries to unsustainable levels

Industry correction in FY 09-10

Meltdown

market for retail growth heterogeneous

rentals and salaries needed market correction

Spencers Footprint July 2010


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Regions StatesTA

(000)

Hypers >15

k

Supers3k -15k

Dailies


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Hyper & Super footprint July 10

Hypers

Supers

Mumbai(Malad)

HyderabadVizag

Vijayawada, Guntur

Kakinada

Durgapur

Gorakhpur

NCR

Hypers : Ghaziabad, GurgaonSuper : Faridabad

Vadodara

Aurangabad

Warangal

Bangalore - Hyper : Koramangala, Sarjapur; Supers: MG Rd, Mosque Rd, JPBrigade

Trichy

Manacaud

Kolkata

Hypers : South City, Mani Square, Rash Behari

Super : Avisar

Lucknow

19 Hypers 452K sqft

10 Supers 57K sqft

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Rajamundhry

Guntur Hyper launched on 2ndJuly10


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Current segment-wise sales

FMCG

StaplesHWP

Apparel

F&V

Bakery & FoodServices

Fish & Meat

The focus is on increasing sales from apparel and E&E segment.

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E&E


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Spencers Strategy

Brand traction with Sec A, A+ solid, expand reach to Sec Bwith embedded value communication

Tag line moved from taste the world to MAKES FINE

LIVING affordable to incorporate the value message


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Spencers Strategy

Drive price message harder through in-store communication

Success Measure

FY08-09 FY0910 FY1011 Objective

Revenue /Sft (in ) 695 795 925


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Spencers Strategy

Cost Reduction / Loss Reduction

Savings of `100 mn per month achieved through a combination of:

a) Closure of unprofitable stores

b) Rent re-negotiations

c) Back-end consolidation with GST coming in 2011 furtherconsolidation possible

d) Organisation de-layering

e) Operational efficiencies

Illustration:

a) Removal / de-layering of zonal structureb) DC consolidation, including shifting of DC to Hyper (Ghaziabad)


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Spencers Strategy

Margin Enhancement

To move from 19% to 21.5% GM by March 2011

Private Label penetration to be enhanced move from 10% of overall

business to 16% by March 2011

Growth in General Merchandise, net of shrinkage in consumerelectronics

High margin SKUs gourmet, liquor , patisserie to drive profitability

Reposition hyper apparel assortment

Private Label


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FMCG / Food FMCG / Non- Food

Private Label


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General Merchandise Apparel

Formal Wear Casual Wear Ethnic Wear

S i lt B d St t


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Specialty Brands - Strategy

Beverly Hills Polo Club (BHPC) affordable fashion

3 new stores opened in Delhi, Punjab & Mumbai in July10

October 09 to March 10 Revenue / sft (in `) 1025 per month

Ebitda projected for 20 stores ` 50 / Sft per month

Target is to exit March 2012 with 50 stores

Ladybird kids apparel brand

1 store planned as proof of concept

Mark Ecko Fashion apparel brand

1 store opened in Delhi in July10

Except for Mark Ecko, other brands will also be sold from Spencers Hyper

au bon pain (ABP) bakery caf chain 1 caf in main street and another in an IT park opened as proof of concept

Monitor results before further roll out


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THANK YOU

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CESC - Investor Presentation - Aug 2010

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