WELCOME TO 85TH ANNUAL GENERAL MEETING 29TH JUNE 2004

Organisational Transformation Company Focus Organisational Transformation Regulation TBEM* 3 SCR Growth * Tata Business Excellence Model

Introduction to Management Team Mr F A Vandrevala Managing Director Mr P K Kukde Executive Director Mr A Charan VP Finance Mr M Gurunath VP S & BD Mr M Bhandari CRO Mr S Deshpande VP Technical Mr R Sequeira VP HR Mr R Chaudhary CEO- Broadband Mr A Sardana CEO-NDPL Mr S Wadhwa CFO-NDPL

Performance Highlights of FY 04 Highest PBT of Rs 734 Crs so far Tariffs reduced by 17 paise/Kwh in Mumbai Area Sales to outside SEBs Commenced Achieves fuel savings Of Rs 166 Crs-Fuel Mix Change Three 100% Subsidiaries Formed Other Business of TPC Revenue up Operating profits higher at Rs 1192 Crs ( FY 03-Rs 1184 Crs) Company proposes a dividend of 70 % -Highest so far

Revenue Mix Revenues

Licensed Area SEB Sales- 650 MUs FY 04: Tot Sale- 9777 MUs New Benchmark set for overhauling for 500 MW Unit within 25 days ( Previous TPC best of 34 days) Pumped Storage Unit Operations started

Power Business- Outside Licensed Area Total Sales of 2454 Mus in FY 04 against 2473 Mus in FY 03 –less by 1% Jojobera Belgaum Wadi Jojobera Sales to DVC increase to 71 Mus from 17 Mus Belgaum Plant islanded 9 times for feeding power to Belgaum City Wadi PLF 72% -highest so far ( PY of 61%)

Other Business Revenue in Rs Cr Performance Highlights I Power System Division Orders in hand worth of Rs 428 Crores (previous year Rs 138 Cr) II Strategic Electronics Division Order booking doubled during the year compared to previous year (FY 04-Rs 74 Crs, FY 03-Rs 38 Crs) III Broadband PBT positive in first year of operation.

Contribution to the Exchequer FY 04 Total : Rs 535 Cr This contributes more than 12% of our Revenue

3 SCR Programme Speedy Cost Reduction Significant Sustainable Major Initiatives Multiple schemes of Nallah diversion Remotely controlling receiving stations using SCADA Leasing unutilised property Reducing fuel logistics cost Operational efficiency initiatives Reducing auxiliary consumption Ideas worth Rs 38 Crores of annual savings implemented Ideas worth Rs 36 Crores of annual savings under implementation Ideas worth Rs 9 Crores in pipe line

Cost Reduction Initiatives- Fuel Cost Reduction Consumption of cheaper fuel in Licensed Area leads to reduction in Tariff FY03 FY04 Change in fuel mix i.e Oil to Coal and Gas Long Term Fuel Contract entered by TPC

TPC Coal Purchases -Spot Vs Long Term 10 Year Indonesian Spot Prices Max 49 USD/MT in Jun'04 and Min 17 USD/MT in Aug'02 / Jun’03 Source: Platts Monthly Reports

Cost Reduction Initiatives- Cost of Capital Reduction I Costly Loans Prepaid Rs Cr Commercial Banks 150 NCD 170 World Bank 245 Reduction of Interest by Rs 50 crores II Loans Refinanced/Renegotiated Rs Cr NCDs 180 ( 12.75% to 8.25%) Interest Reduction of Rs 8 crores

New Subsidiaries Formed Three 100% subsidiaries formed Tata Power Tata Power Broadband Ltd Alaknanda Hydro Power Company Ltd Tata Power Trading Co Ltd Power Trading Shrinagar Project Broadband Communication

Q1 –FY 05 Load Despatch centre of TPC dons a new look MERC Orders Standby Charge MERC Orders Tariff for FY 05 Charter of Demands with Union signed Estimated Sales for Q1 higher by 11% over Q1 of FY 04

Standby Charge- Developments Background Matter of dispute since Dec 98 The dispute is on sharing of Standby Charge levied by MSEB on TPC (Rs 396 Cr p.a). Standby Capacity 50:50 As per TPC the charges should be shared in the Ratio of 50:50 REL did not agree with this ratio Matter referred to GOM to MERC to High Court to Supreme Court and back to MERC Matter was referred by MERC to CEA for Technical Advice

Standby Charge- Developments TPC’s Stand CEA recommendation Standby is independent of Peak Demand Required in the event of loss of any generating unit In line with High Court and Supreme Court Order Sharing of standby charge on the basis of Peak Demand of TPC and REL MERC Order MERC order on the basis of CEA report Ratio of Sharing on 77:23 ( instead of 50:50) Amt to be paid to REL –Rs 322 Cr Amt to be paid to MSEB –Rs 275 Cr The amount would be adjusted from Statutory Reserves TPC has appealed in the High Court for stay and for review of order

Tariff Order for 2004-05 Average Tariff in FY 05 reduced by 9.2% MERC Order Average Tariff in FY 05 reduced by 9.2% Impact of Standby Charge payable by TPC incorporated TPC allowed to adjust against the Statutory Reserves No Impact on General Reserves Tariff allows TPC to earn 16% Reasonable Return as before

Growth -Audio Visual Presentation