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11
5th Annual Report-2011-12
Directors Report
Dear Members,Dear Members,Dear Members,Dear Members,Dear Members,
TheBoardofDirectorshaveimmensepleasureinpresentingthe5thAnnualReportonthestateof
affairsofPowerCompanyofKarnatakaLimited(PCKL),togetherwiththeAuditedAccountsforthe
yearended31stMarch,2012.
ABOUT US :ABOUT US :ABOUT US :ABOUT US :ABOUT US :
GovernmentofKarnatakaaccordedapprovalinApril,2007forsettingupofaSpecialPurpose
Vehicle(SPV)viz.,PowerCompanyofKarnatakaLimited(PCKL)tosupplementtheeffortsofKPCL
incapacityaddition.PCKLwasincorporatedon20thAugust,2007undertheCompaniesAct,
1956withaninitialauthorizedcapitalof 5(Five)croreandcommenceditsbusinessoperations
witheffectfrom16th
October,2007.Eachofthe5ESCOMshavecontributedasumofRupeesOne
croreeachinPCKLwhichincludes`1(One)lakhtowardsEquityShareCapitaland`99(Ninety
Nine)Lakhtowardsseedmoney.
During the year, AuthorizedShareCapital of theCompany is enhanced from` 5.00crore to
`21.00croreintheformof210000sharesof 1000eachasapprovedinthe4thAnnualGeneral
Meetingheld on24th September2011.ShareDeposit Pendingallotment of previous year of
` 20.00 crore has been allotted to ESCOMs in the form of Equity shares videResolution
No.PCKL/AS/20thBM/2011-12/453-54dated21.03.2012of20thmeetingoftheBoardofDirectors
ofPCKLheldon17thJanuary2012.
PCKL is responsible forcapacityadditionbywayof settingupofnewpowerprojects through
biddingprocess,under Case-IIbiddingguidelines issuedbyMinistryofPower, (MoP),GOI,and
longtermprocurementofpowerunderCase-IbiddingguidelinesofMoP,GoI.Inordertobridgethe
shorttermdemandandsupplygap,PCKLhasbeenprocuringpoweronbehalfoftheESCOMs
fromvarioussourcesincludingpurchaseofpowerthroughEnergyExchanges,Banking(SWAP)as
wellasbilateraltransactions.PCKLalsoco-ordinateswithotherStatesandCentralGovernment
agencies onpower related issuesaswell as through the forumofSouthernRegional Power
Committee(SRPC).
Activities:Activities:Activities:Activities:Activities:
Toactasfacilitatorfor
a.a.a.a.a. LandacquisitionthroughRevenueDepartment/KIADB
b .b .b .b .b . AllocationofwaterfromtheWaterResourceDepartment
c.c .c .c .c . Allocationoffuellinkages/coalblocksfromMoPandMinistryofCoal,GoI
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2
Power Company of Karnataka Limited
d .d .d .d .d . ArrangingEnvironmentImpactAssessment,Pre-FeasibilityReportandDetailed
ProjectReportsthroughconsultants/experts
e .e .e .e .e . PowerevacuationsystempertainingtoprojectsthroughCase.2Competitive
BiddingRoute.
NegotiationswithpowerTraders/Generatorsforshorttermprocurementandpreparation
ofPPAsonbehalfoftheESCOMs.
ForecastingenergyavailabilityanddemandforecastingonbehalfoftheESCOMs.
Preparation/ScrutinyofPowerPurchaseAgreementsofConventionalPowerPlantsbeing
developedbyIPPsandUltraMegaPowerProjectsbyCentralGovernmentundertakings,
toensurecompliancewithtechnicalandcommercialparameters.
ApportionmentofcostofpowerpurchasedamongtheESCOMsandaccountingofenergy
exported/imported fromvarious sources includingbarter arrangementsandbilateral
exchanges.
Pre&postPPAissuesrelatingtoIPPProjects,MoUprojectsandJointVentureprojects
RepresentingtheESCOMsinSouthernRegionalPowerCommittee(SRPC)
VerificationofRegionalEnergyAccountingclaimsandapportionmentamongtheESCOMs
Preparationofdocumentsandotherrelatedpreliminaryactivitiesforprocurementofpower
underCompetitivebidding.
ProcuringpowerandmaintenanceofIndianEnergyExchange(IEX)andPowerExchange
(PXIL)transactionsonbehalfoftheESCOMs.
Verificationandscrutinyofshorttermpowerprocurementbills&UPCLenergycharges
billsandinformingESCOMSforpayment.
Invitationoftendersforprocuringpoweronlongterm,mediumterm,shorttermbasis&
peakpower.
FINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULTS:TS:TS:TS:TS:
(Amount(Amount(Amount(Amount(Amount `inlakhs)inlakhs)inlakhs)inlakhs)inlakhs)
Financial ResultsFinancial ResultsFinancial ResultsFinancial ResultsFinancial Results For the year endedFor the year endedFor the year endedFor the year endedFor the year ended For the year endedFor the year endedFor the year endedFor the year endedFor the year ended
MarMarMarMarMarch 3ch 3ch 3ch 3ch 311111,20,20,20,20,201212121212 MarMarMarMarMarch 3ch 3ch 3ch 3ch 311111,20,20,20,20,201111111111
GrossIncome 323.20 257.46
GrossExpenditure 280.03 229.49
ProfitbeforeDepreciation&Interest 43.17 27.97
ProfitbeforeTaxation 42.73 30.04
NetProfit/LossafterTaxation 17.75 23.62
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33
5th Annual Report-2011-12
AnnualaccountsfortheFinancialyear2011-12werecompliedinaccordancewiththeprovisions
oftheCompaniesAct,1956,andinthemodifiedformatofBalanceSheetandProfit&LossAccount
asnotifiedbyMinistryofCorporateAffairs,NewDelhi,intheGazetteofIndia,Dated28thFebruary
2011.PreviousyearsfigureareregroupedtoconformtotheRevisedFormatofAccounts
TheGrossIncomeofPCKLfortheyearis`323.20lakhs-vis-a-vis`257.46lakhsintheprevious
year.ThesourceofincomeduringtheFinancialYear2011-12ismainlytheinterestearnedon
shorttermdeposits.Theprofitaftertaxprovisionis`17.75lakhs.TheCompanyduringtheyear
hasrecoveredasumof 498.23lakhson11thNovember2011fromM/sBajajAllianzLifeInsurance
CorporationlimitedundertheordersofHonbleHighCourtofKarnataka.Asaresultandconsidering
theprofitofthecurrentyear,thecarriedforwardlossfrompreviousyearamountingto`444.75
lakhsturnedintoaccumulatedprofitof`71.24lakhs.
BUSINESS OPERABUSINESS OPERABUSINESS OPERABUSINESS OPERABUSINESS OPERATIONS:TIONS:TIONS:TIONS:TIONS:
Procurement of power:-Procurement of power:-Procurement of power:-Procurement of power:-Procurement of power:-
PCKLonbehalfofESCOMsprocuredpowerduringtheyear2011-12throughShortterm/Medium
term/PeakpowerandPowerExchangestomeetthesupplyanddemandgapintheStateasindicated
below:
ShorShorShorShorShort Tt Tt Tt Tt Termermermermerm
2727.02MUswereprocuredundershorttermatanaveragecostof 5.15perkWhand225.65MUs
wereprocuredthroughPowerExchangesatanaveragecostof 4.58perkWh.
Sl NoSl NoSl NoSl NoSl No Sources Sources Sources Sources Sources EnergyEnergyEnergyEnergyEnergy Average Rate perAverage Rate perAverage Rate perAverage Rate perAverage Rate per Amount inAmount inAmount inAmount inAmount in ` CrCrCrCrCr
in MUsin MUsin MUsin MUsin MUs Unit Unit Unit Unit Unit ` / / / / / kwhkwhkwhkwhkwh
ShorShorShorShorShort Tt Tt Tt Tt Termermermermerm
1 JSWPTCIL 1507.09 5.51 830.89
2 PTCIL 504.43 4.15 219.21
3 Chattisgarh 205.73 4.81 102.26
4 NTPCVVNL 117.20 5.65 68.13
5 M/sNETS 88.35 4.57 41.06
6 IEX 203.28 4.32 92.70
7 PXIL 22.37 4.50 10.60
8 HarekrishnaMetallics 34.29 4.97 17.03
9 NSLSugars 44.28 5.30 23.47
TTTTToooootaltaltaltaltal 22222727272727277777.02.02.02.02.02 11111405.35405.35405.35405.35405.35
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Power Company of Karnataka Limited
Medium TMedium TMedium TMedium TMedium Termermermermerm
1280MWpowerwastiedupforprocurement throughmediumtermfromSeptember2011to
15thJune2013.Accordingly,2748.08MUswereprocuredupto31stMarch,2012,atanaverage
costof 4.24perkWh.
Sl NoSl NoSl NoSl NoSl No Sources Sources Sources Sources Sources EnergyEnergyEnergyEnergyEnergy Average Rate perAverage Rate perAverage Rate perAverage Rate perAverage Rate per Amount inAmount inAmount inAmount inAmount in ` Cr Cr Cr Cr Cr
in MUsin MUsin MUsin MUsin MUs Unit Unit Unit Unit Unit ` /kwh /kwh /kwh /kwh /kwh
Medium TMedium TMedium TMedium TMedium Termermermermerm
1 JSWPTCIL 2444.93 4.26 1041.54
2 NETS 223.74 3.83 91.85
3 BMMISPAT 79.40 4.10 32.56
TTTTToooootaltaltaltaltal 222227777748.0848.0848.0848.0848.08 111111111165.9565.9565.9565.9565.95
Duringtheyear227.58MUspeakenergywasalsoprocuredfromOctober-2011to15thJune2012,
atanaveragerateof 6.017perkWh.
Sl NoSl NoSl NoSl NoSl No Sources Sources Sources Sources Sources EnergyEnergyEnergyEnergyEnergy Average Rate perAverage Rate perAverage Rate perAverage Rate perAverage Rate per Amount inAmount inAmount inAmount inAmount in ` Cr Cr Cr Cr Cr
in MUsin MUsin MUsin MUsin MUs Unit Unit Unit Unit Unit ` /kwh /kwh /kwh /kwh /kwh
Peak PowerPeak PowerPeak PowerPeak PowerPeak Power
1 M/sNETS 50.72 7.06 37.33
2 TatapowerCompanyLtd 120.54 5.36 67.68
3 PTCIL 56.32 5.39 31.93
TTTTToooootaltaltaltaltal 222222222277777.58.58.58.58.58 136.94136.94136.94136.94136.94
Section 11(1)Section 11(1)Section 11(1)Section 11(1)Section 11(1)
Inaddition,GoKhadinvokedSection11(1)ofElectricityAct,2003anddirectedalltheGenerators
locatedintheStatetomaintaintheirfullPlantLoadFactor(PLF)andtosupplytheirentireexportable
capacitytotheStateGridbetweenFebruary2012toMay-2012Paymentfor616.94MUssosupplied
wasmadeatanaveragecostof 5.30perkWh.
Sl NoSl NoSl NoSl NoSl No Sources Sources Sources Sources Sources EnergyEnergyEnergyEnergyEnergy Average Rate perAverage Rate perAverage Rate perAverage Rate perAverage Rate per Amount inAmount inAmount inAmount inAmount in ` Cr Cr Cr Cr Cr
in MUsin MUsin MUsin MUsin MUs Unit Unit Unit Unit Unit ` /kwh/kwh/kwh/kwh/kwh
1 Co-generation 395.04 5.30 209.37
2 M/sJSW 135.09 5.30 71.60
3 Captive 86.81 5.30 46.01
TTTTToooootaltaltaltaltal 66666111116.96.96.96.96.944444 326.98326.98326.98326.98326.98
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5th Annual Report-2011-12
PPPPPooooowwwwwer Purer Purer Purer Purer Purchased during the months frchased during the months frchased during the months frchased during the months frchased during the months from April-20om April-20om April-20om April-20om April-2012 t12 t12 t12 t12 to Ao Ao Ao Ao August -20ugust -20ugust -20ugust -20ugust -2012 are indicat12 are indicat12 are indicat12 are indicat12 are indicatededededed
belowbelowbelowbelowbelow
Sl NoSl NoSl NoSl NoSl No Sources Sources Sources Sources Sources EnergyEnergyEnergyEnergyEnergy Average Rate perAverage Rate perAverage Rate perAverage Rate perAverage Rate per Amount inAmount inAmount inAmount inAmount in ` Cr Cr Cr Cr Cr
in MUsin MUsin MUsin MUsin MUs Unit Unit Unit Unit Unit ` /kwh /kwh /kwh /kwh /kwh
Peak PowerPeak PowerPeak PowerPeak PowerPeak Power
1 M/sNETS 13.70 6.99 9.91
2 TatapowerCompanyLtd 47.49 5.36 26.68
3 PTCIL 28.09 5.39 18.96
ShorShorShorShorShor t Tt Tt Tt Tt Termermermermerm
1 M/sJSWPTC 267.70 5.30 141.88
2 NSLSugars 15.59 5.30 8.26
3 HareKrishnaMettalics 17.33 5.15 8.92
4 PTCIL
5 VijayanagarSugars 26.03 5.30 13.79
6 M/sSathavanaIspat 36.48 5.28 19.26
Medium TMedium TMedium TMedium TMedium Termermermermerm
1 BMMISPAT 97.19 4.10 39.85
2 JSWPTC 1761.05 4.26 750.21
3 M/sNETS-100MW 204.94 3.75 77.35
4 M/sNETS-150MW 368.42 3.92 144.93
5 GUVNL 1104.00 4.10 452.64
6 PXIL
7 IEX
Section 11Section 11Section 11Section 11Section 11
1 JSWPTC 424.69 5.30 225.08
2 Co-generation 273.75 5.30 145.09
3 Captive 93.97 5.30 49.81
TTTTToooootaltaltaltaltal 44444780.4780.4780.4780.4780.411111 222221111132.6232.6232.6232.6232.62
Theabovepowerprocurementwasmadeatcompetetiveratesthroughbid.
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6
Power Company of Karnataka Limited
Medium TMedium TMedium TMedium TMedium Term Perm Perm Perm Perm Pooooowwwwwer Prer Prer Prer Prer Procurementocurementocurementocurementocurement
The LOIswere placed for1280MW for procurement ofRTC firmpower for theperiod from
1stSeptember2011to15thJune2013underCase-1biddingprocedure.ThetariffatKPTCLperiphery
rangedbetween`4.10perKwhand`4.51perKwh.
Procurement of Peak PowerProcurement of Peak PowerProcurement of Peak PowerProcurement of Peak PowerProcurement of Peak Power
PCKLinvitedbidsforprocuring200MWofpowerduringmorningandeveningpeakhoursbetween
(7AMto10AM)and(7PMto10PM)fortheperiodfrom1stDecember-2012toMay-2013.
ShorShorShorShorShort Tt Tt Tt Tt Term Perm Perm Perm Perm Pooooowwwwwer Prer Prer Prer Prer Procurementocurementocurementocurementocurement
PCKLinvitedabidforprocurementof750MWRTCfirmpowerfortheperiodfrom15thSeptember
2012to15thJune2013tomeetthedeficitpowerintheStateaspercompetitivebiddingguidelines.
Thenonfinancialbidswereopenedinrespectofall7bidderon3rdSeptember2012andfinancial
bidswereopenedon6thSeptember2012inrespectof5biddersconsideringasresponse.TheLOI
was issuedafterapproval fromKERC toGUVNL for supplyof power toanextentof200MW
15thSeptember2012to31stDecember2012&250MWfrom1stJanuary2012to15thJune2013
@`5.156perKwh@KPTCLperiphery.
Bidding Route Case-II Projects:Bidding Route Case-II Projects:Bidding Route Case-II Projects:Bidding Route Case-II Projects:Bidding Route Case-II Projects:
1320MW Coal based Thermal Power Project at Gulbarga1320MW Coal based Thermal Power Project at Gulbarga1320MW Coal based Thermal Power Project at Gulbarga1320MW Coal based Thermal Power Project at Gulbarga1320MW Coal based Thermal Power Project at Gulbarga
PCKL initiatedthebiddingprocessforselectionofsuccessfulbidderforsettingup 1320MW
(2X660)CoalBasedThermalPowerProject,basedonSuperCriticalTechnology,inthevillagelimits
ofFirozabad,Kiranagi&NadisinnurinGulbargataluk.
Land:Land:Land:Land:Land:
1601Acres&13GuntasoflandrequiredfortheprojectwasacquiredbyPCKLatarateof 9Lakh
peracreandisinpossessionofPCKL.
Topographicalsurveyforobtainingblocklevels,preparationofcontourdrawingsincludingfixingof
GridPillarshasbeencompleted.Geo-technicalfieldstudieswerecompleted.DPRpreparedand
furnishedtoallthe23qualifiedbiddersatRFQstage.
Environmental clearanceEnvironmental clearanceEnvironmental clearanceEnvironmental clearanceEnvironmental clearance:
TheSuccessfulBiddershallhave toobtainconsents,clearancesandpermits fromMinistryof
EnvironmentandForest(MOEF)basedonthetypeoffuelusedfortheproject.
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77
5th Annual Report-2011-12
Coal:Coal:Coal:Coal:Coal:
TheapplicationfiledinJuly2008,isnowlistedatSl.No.9underStateGovernmentprojectas
recommendedbytheCentralElectricityAuthoritytotheMinistryofPower,GoI.Duetouncertainty
insecuringdomesticcoalallocationfromMoC,GoI,PCKLdecidedtoissuemodifiedbiddocument
incorporatingusageofimportedcoalordomesticorblendedcoal.
Bidding processBidding processBidding processBidding processBidding process
PursuanttotheapprovalofEnergyDepartment,GoK,dated24thJune2011:
TheSuccessfulBiddershallhavetheresponsibilitytoarrangetheentirequantumoffuelto
runtheprojectatNormativeAvailability.
TheBidderisallowedtouseDomesticCoalorImportedCoalorBlendedCoal.Incaseof
blendedcoal,thebiddershalluseimportedcoalonlyuptotheshortfallinthelongterm
domesticcoallinkage,whichispresentlyexpectedminimum30%.
TheSelectedBidder bear complete responsibility to tie up the fuel linkage and the
infrastructural requirements for fuel transportation, handling and storage. For coal
transportationthenearestrailwaystationatShahabadisabout12Kmsfromthesite.
ProvisionwasalsomadeinthedocumentthatPCKL/ESCOMsshalloff-take80%ofthe
installedcapacityi.e.1056MWpowerfromtheprojectandsaleof20%ofthepowerwould
beatthediscretionoftheselectedbidder.
BasedonthedirectionsfromKERC,modifiedRFQdocumentwaspublishedinNewspapers,inviting
thepotentialbidderstoparticipateinthebiddingprocess.Inresponse9biddersamong23earlier
qualifiedbiddershaverepeatedtheirearlierqualificationandagaindeclaredasqualified.Allthe
above23biddersaretobetreatedasresponsivebidderstoqualifyatRFQstage.
700MWGas based P700MWGas based P700MWGas based P700MWGas based P700MWGas based Pooooowwwwwer Prer Prer Prer Prer Projects each in the districts of Belgaum (Vojects each in the districts of Belgaum (Vojects each in the districts of Belgaum (Vojects each in the districts of Belgaum (Vojects each in the districts of Belgaum (Vantamuri Village),antamuri Village),antamuri Village),antamuri Village),antamuri Village),
Gadag (Mevundi village) and Davanagere (Ragimasalavada Village) under Case-2 BidGadag (Mevundi village) and Davanagere (Ragimasalavada Village) under Case-2 BidGadag (Mevundi village) and Davanagere (Ragimasalavada Village) under Case-2 BidGadag (Mevundi village) and Davanagere (Ragimasalavada Village) under Case-2 BidGadag (Mevundi village) and Davanagere (Ragimasalavada Village) under Case-2 Bid
RouteRouteRouteRouteRoute
GovernmentofKarnatakahasenteredintoaMemorandumofUnderstanding(MoU)withM/sGas
Authority of India Ltd. (GAIL) on29th April, 2009 for natural gas infrastructure and city gas
distribution.Underthisagreement,GAILwilllaytwogaspipelinesintheState:
a) DabholtoBangalore(Trunkline-746kms,Spurline-650kms)
b) Kochi-Kanjirrkod(Kootnadu)-BangalorePipelineandKochi-Kanjirrkod(Kootnadu)-Mangalore
Pipeline(Trunkline862kms,Spurline-252kms)
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Power Company of Karnataka Limited
With the objective ofmaximizing the gains from the gas pipeline running across theState,
Governmentinendeavoringtodevelopgasbasedpowerplantsallalongtheproposedtrunkand
spurlineswhichpassthroughthedistrictsofBelgaum,Gadag,Davanagere,Chitradurga,Tumkur
andterminateatBidadi,Governmentvideitsorderdated:14thMay2010,issueddirectionsto
developthreegasbasedpowerplantsof700MWcapacityeachatBelgaum(HukkeriTq),Gadag
(MundargiTq.)andDavanagere(HarapanahalliTq.)districtsthroughcompetitivebiddingroute
underCase-2.
TheProgressoftheProjectisasfollows:
1.1.1.1.1. Land:Land:Land:Land:Land:300Acresrequiredateachlocation.
AllotmentoflandshallbethroughKIADB.Effortsarebeingmadeforallocationof
land.
2.2.2.2.2. Water:Water:Water:Water:Water:15Cusecsrequiredthroughouttheyearforeachplant.
InPrincipleWaterAllocationhasbeenobtainedfromWRD,GoK,on21stApril2010
forallthethreeplants.
3.3.3.3.3. FFFFFuelueluelueluel:DomesticGas/LNG:3.2MMSCMDforeachplant.
ApplicationhasbeenmadewithCEAon31stDecember2010forDomesticallocation
ofGasforallthethreeplants.ClarificationsoughtbyCEAinthisregardwassubmitted
on25thApril2011.
4.4.4.4.4. Bidding PrBidding PrBidding PrBidding PrBidding Processocessocessocessocess: 18 bidders each for Belgaum&Gadag plants and 17 bidders for
Davanagereplant,wereselectedatRFQStage.
1320MW Coal Based Thermal Power project at Ghataprabha1320MW Coal Based Thermal Power project at Ghataprabha1320MW Coal Based Thermal Power project at Ghataprabha1320MW Coal Based Thermal Power project at Ghataprabha1320MW Coal Based Thermal Power project at Ghataprabha
Land:Land:Land:Land:Land:
GoKvideorderdated3rdJune,2009accordedapprovalforacquisitionof1300acresof
landfortheproject.However,allotmentoflandinVantamurivillageispendingduetoWrit
petitionfiledbySri.ShankargoudaandothersvideWP31829/2008(LR)andWP66818-
19/2011(LR)intheDharwadCircuitBenchofHighCourtofKarnataka,forquashingthe
orderissuedbyBelgaumLandTribunalforacquiring3500acresofland.DharwadCircuit
Benchissuedstayorderinthisregard.ApplicationwasfiledinDharwadCircuitBench,to
impleadPCKLasaRespondentinthecase,toenablePCKLforexpeditingthevacationof
stay.
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99
5th Annual Report-2011-12
Water:Water:Water:Water:Water:
Inprincipleapprovalwasaccordedtoallocate2.06TMCwaterfortheprojectbyGoKvide
orderdated3rdJune,2009.
Coal:Coal:Coal:Coal:Coal:
CEA informed that coal linkageapplication for6.3MTPAwill be consideredafter land
acquisitiondetailsaresubmittedtoCEA.However,duetopendinglitigationlandacquisition
isdelayed.AtpresenttheprojectislistedatSl.No.197intheprioritizationlistqualified
underCentral/StateSectorprojectsforcoallinkage.
Bidding Process:Bidding Process:Bidding Process:Bidding Process:Bidding Process:
10biddersarequalifiedatRFQstage.KERCapproval forextensionof time forbidding
processisawaited.
KRISHNAPKRISHNAPKRISHNAPKRISHNAPKRISHNAPAAAAATNAM UMPP (4000MW)TNAM UMPP (4000MW)TNAM UMPP (4000MW)TNAM UMPP (4000MW)TNAM UMPP (4000MW)
The project had been awarded to RRRRReliance Peliance Peliance Peliance Peliance Pooooowwwwwererererer in the year 2007. The initial
configurationof5x800MWwassubsequentlyrevisedto6x660MWwithCERCapproval.
TheprocurersareDistributionCompaniesofAndhraPradesh,Tamilnadu,Karnataka
andMaharashtra.
APTRANSCO,theleadprocurerfortheaboveproject,reportedthatconstructionworkat
sitewasstopped.CoastalAndhraPowerLtd.,(CAPL),asubsidiaryofReliancePower,
informedthattherewasachangeinpolicyinIndonesiaandthecostofcoalwastobe
marketdriven. Thismade theproject economicallyunviable in theapproved tariff
structure.
Leadprocurerhasissuednoticeon28th
January,2012toCAPLforsellereventofdefault
asperArticle14.1ofPPA.CAPLvideletterdated13th
March,2012hassentaDispute
NoticeandaskedtoinvokeprovisionsunderArticle13-ChangeinLaw,Article12-
ForceMajeure,Article17.2-AmicablysettlementandArticle17.3-DisputeResolutionof
PPA.
On15thMarch2012, LeadProcurer issuedTerminationNoticeonbehalf of all the
ProcurersanddemandedCAPLtopaythepenaltyamountofRs400croreasliquidated
damages.CAPLfiledapetitionOMP267/2012beforeDelhiHighCourt,underSection
9oftheArbitrationandConciliationAct,1996,seekingstayfortheTerminationNotice.
CAPLalsofiledthecasebeforeIndianCouncilofArbitrationforResolutionofthedispute.
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10
Power Company of Karnataka Limited
Indian Council Arbitration vide letter dated 8th September, 2012, intimated to
APTRANSCO,LeadProcurertonominatetheArbitratorfromthelistofpanelofArbitrators
oftheCouncilinordertofacilitatethearbitrationproceedings.
Progress of Case-1 ProjectsProgress of Case-1 ProjectsProgress of Case-1 ProjectsProgress of Case-1 ProjectsProgress of Case-1 Projects
MoU Route ProjectsMoU Route ProjectsMoU Route ProjectsMoU Route ProjectsMoU Route Projects
OnbehalfofESCOMs,PCKLhasbeenvestedwiththeresponsibilityofassistingGovernment
inresolvingbothPre-PPAissueandPostPPAsigningissues.
1200MW(2x600) Coal Based Thermal Power Project of M/s. Udupi1200MW(2x600) Coal Based Thermal Power Project of M/s. Udupi1200MW(2x600) Coal Based Thermal Power Project of M/s. Udupi1200MW(2x600) Coal Based Thermal Power Project of M/s. Udupi1200MW(2x600) Coal Based Thermal Power Project of M/s. Udupi
Power Corporation Limited (UPCL).Power Corporation Limited (UPCL).Power Corporation Limited (UPCL).Power Corporation Limited (UPCL).Power Corporation Limited (UPCL).
Unit-IofUPCLwassynchronizedwithKPTCLgridon3rd
June,2010andcommercialoperation
declared(CoD)duringNovember,2010.UnitIIwassynchronizedtogridon7th
March,
2011andCoDon19th
August,2012.UPCLfiledpetitionbeforeCERCon14th
December,
2011fordeterminationoftarifffortheperiodfrom11th
November2010to31st
March2014
forUnit-I and from1st
April 2012 to31st
March2014 forUnit-II based on the CERC
Regulations,2009.PCKLfiledcounterreplieson20th
January,2012.
Priyadarshini Jurala Hydro Electric Project (Interstate Project)Priyadarshini Jurala Hydro Electric Project (Interstate Project)Priyadarshini Jurala Hydro Electric Project (Interstate Project)Priyadarshini Jurala Hydro Electric Project (Interstate Project)Priyadarshini Jurala Hydro Electric Project (Interstate Project)
(6 X39. (6 X39. (6 X39. (6 X39. (6 X39.1MW1MW1MW1MW1MW)
PriyadarshiniJuralaHydroElectricprojectisamultipurposeprojectmainlyforirrigationcum
hydropowergenerationacrossKrishnarivernearRevulapallyvillageinMehboobnagarDistrict
ofAndhraPradeshwithaninstalledcapacityof6X39.1MW(234.6MW).TheGovernmentof
KarnatakaandtheGovernmentofAndhraPradeshhaveagreedtosharethepowergenerated
fromthisprojectintheratioof50:50.Karnatakasshareis117.3MW.
TheGovernmentofAndhraPradeshhasalreadyimplementedtheirrigationcomponentof
theprojectandthecosttowardspowerblockis 143crores.Thiscosthastobesharedbythe
statesofKarnatakaandAndhraPradesh.ThestateofKarnatakahasagreedtopay`70
crorestowardstheshareaftersigningtheMemorandumofAgreement(MoA)betweenGoK
andGoAP.ThetarifffortheprojectistobedeterminedbytheAppropriateCommission.
RegardingsigningofMoA,aletterwasaddressedduringJanuary,2012bytheChiefSecretary,
GoKtotheChiefSecretary,GoAP,requestingtoconfirmthedateofsigningofMoA.Thedraft
MoAwasalsosenttoAPTRANSCOinaccordancewiththedecisiontakenduringthemeeting
heldon11thNovember,2011.ThedateofsigningofMoAisyettobeconfirmed.Aletterwas
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1111
5th Annual Report-2011-12
alsoaddressedbytheEnergyMinister,Karnataka,totheChiefMinisterofAndhraPradeshon
14th September 2012, requesting to issue necessary directions to the concerned to
communicateconvenientdateforsigningofMoA.
Establishing 500 MW Coal based Thermal Power Project at Hassan byEstablishing 500 MW Coal based Thermal Power Project at Hassan byEstablishing 500 MW Coal based Thermal Power Project at Hassan byEstablishing 500 MW Coal based Thermal Power Project at Hassan byEstablishing 500 MW Coal based Thermal Power Project at Hassan by
M/s. Hassan Thermal Power (P) Limited (HTPPL).M/s. Hassan Thermal Power (P) Limited (HTPPL).M/s. Hassan Thermal Power (P) Limited (HTPPL).M/s. Hassan Thermal Power (P) Limited (HTPPL).M/s. Hassan Thermal Power (P) Limited (HTPPL).
KERCvideletterdated12thNovember2010issueddirectionstosubmitthePPAinaccordance
withKERC(TermsandConditionsofGenerationTariff)Regulation2009,dulysignedbyboththe
partiestotheagreement.M/s.HTPPLhaveagreedforthetermsandconditionsofthedraftAmended
RevisedRestated Power Purchase Agreement (ARRPPA) and same has been submitted to
Governmentforapprovalon14th
May2011.TheGovernmenthasconstitutedaCommitteeheaded
by the Chief Secretary, GoK videG.O. dated 14th June, 2011 for examining the request of
M/s.HTPPLforestablishing500MWcoalbasedpowerplant.The1stmeetingofthecommittee
wasconvenedon14thOctober,2011anddecidedtoenhancethecapacityfrom500MWto660
MW.Further,responsefromM/s.HTPPLwasrequestedregardingoptionofbenchmarkedcapital
costandtariffstructuretobealignedwithcase-IIfuellinkagebasedprojects.
On23rdDecember,2011M/s.HTPPLcommunicatedtheirconcurrenceforoptionofbenchmarked
capitalcostwithbetternorms.The2ndcommitteemeetingwasconvenedon7thMay,2012wherein
thetermsandconditionsofthedraftARRPPAwereresolved.The3rdCommitteemeetingwasheld
on12thJune2012and13thJune2012andrequestedM/s.HTPPLtorevisetheproposalindicating
theprojectcostof`3759.024crorefor660MWi.e,`5.70crore/MW.ThereThereThereThereTherevisedprvisedprvisedprvisedprvisedproposalisoposalisoposalisoposalisoposalis
being placed before cabinet for approval.being placed before cabinet for approval.being placed before cabinet for approval.being placed before cabinet for approval.being placed before cabinet for approval.
Banking of power between Kalyani Power Development (P) Limited andBanking of power between Kalyani Power Development (P) Limited andBanking of power between Kalyani Power Development (P) Limited andBanking of power between Kalyani Power Development (P) Limited andBanking of power between Kalyani Power Development (P) Limited and
MESCOMMESCOMMESCOMMESCOMMESCOM
TheentirequantumofbankedenergywasreturnedtoMESCOMbyM/sKPDPL.PCKLclaimfor
interestfordelayedreturnofpowerispendingbeforeKERC.
KKKKKudgiudgiudgiudgiudgi Thermal PThermal PThermal PThermal PThermal Pooooowwwwwer Planter Planter Planter Planter Plant
n SigningofMoU:GovernmentofKarnatakahassignedMoUwithM/s.NTPCLimitedfor
establishing4000MW(5x800MW)CoalbasedPowerplantatKudgi,BijapurDistrict,in
twophaseswithSuperCriticalTechnology.
Phase-I3x800MW
Phase-II2x800MW
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12
Power Company of Karnataka Limited
n EstimatedProjectcost:`16991Crores(Incl.IDCandWCM)(considering3rd
quarter2009
pricelevel).
n Karnatakasshare:2000MW.
n Land:
o Mainplantarea:Anamountof`127croreshasbeendepositedtoKIADB.Landto
anextentof1923acreshasbeenhandedovertoNTPCon6th
September2011.
o Ashdyke: An amount of` 68.68 crores has beendeposited toKIADB.28(4)
Notificationissuedon18th
March2011towardsacquiring1015Acres.
o Township: Application for 263 acres (For Township, Roads etc) submitted on
27.05.2011.
n Statusofclearances:MOEFClearancereceivedon25.01.2012.
n Statusoftendersinvitedforworksandmaterial:
n BidsforSteamTurbineandGeneratorpackage(BulkTendering)for3unitsforKudgiopened
on01.06.2011.TheSteamGeneratororderhasbeenplacedwithM/sDoosanChennai
worksforanamountof`3804.7CroresandtheSteamTurbineGeneratororderhasbeen
placedonM/s Toshiba Turbine andGenerator for anamount of` 2282.9Crores on
22.02.2012.
n WorkunderprogressWorkunderprogressWorkunderprogressWorkunderprogressWorkunderprogress:Fencingalonglandacquisitionlineunderprogressandsiteleveling
workisnearingcompletion.
n Coal linkCoal linkCoal linkCoal linkCoal linkage statusage statusage statusage statusage status: In-principle allocationof coal block givenon23.09.2011.Coal is
proposedtobemetfromNTPCsownminesatPakhriBarwadiinJharkhand.
n Waterallocation:5.2tmcwaterallocatedfromAlmattidam
Enhancement of Unit 5 & 6 from 2X220MW to 2X700MW at KaigaEnhancement of Unit 5 & 6 from 2X220MW to 2X700MW at KaigaEnhancement of Unit 5 & 6 from 2X220MW to 2X700MW at KaigaEnhancement of Unit 5 & 6 from 2X220MW to 2X700MW at KaigaEnhancement of Unit 5 & 6 from 2X220MW to 2X700MW at Kaiga
n SiteSelectionCommitteeofDepartmentof AtomicEnergyexamined the feasibility for
capacityexpansionfromtheexisting2X220MWbyaddition2X700MW(5th&6thUnits)at
theexistingsite.
n Theissueregardingthecompensationforreleasingofadditionalwaterfor5thand6thunit
of Kaiga has been resolved in themeeting held on 11th January, 2011 under the
ChairmanshipoftheChiefSecretarytoGovernmentofKarnataka.
-
1313
5th Annual Report-2011-12
n KPTCLwasrequestedtoconductloadflowstudiesanddecidetheupgradationofexisting
400KVnetworkforevacuationofadditionalpowergenerationfromKaiga.
n Asearlyas1987,Governmentof Indiahadpermittedthediversionof545hectaresof
forestlandfortheExclusionZoneand120hectaresofforestlandforthe6Kaigaunits.
n Outofthe120hectaresoflandallocatedforthepowerplant,85hectaresoflandhasbeen
utilisedforestablishingthefirst4units.Thebalance35hectaresremainsunutilizedinthe
possessionofM/s.NuclearPowerCorporationofIndiaLimited.
n Forconstructionof5th&6thunitsof2X700MW,60hectaresoflandwouldbesufficient.
Theadditionalrequirementof25hectaresisavailableinBlockNoXXVI,CompartmentNo.
46,47&48whichintheexistingzoneof545hectareswhichwasclearedearlierbythe
GOI.
n PCKLscrutinizedalltherelevantdocumentsrequiredforapplicationforforestclearance
alongwiththeformatsincoordinationwithM/s.NPCIL.TheChiefConservatorofForest,
KPTCL, iscoordinatingthetreefellingpermissionissuewiththeDeputyConservatorof
Forest,Karwar.
n TheUnionCabinetaccordedinprincipleapprovalon12thAugust,2011forthecapacity
additionof2X700MWatKaigaNuclearPowerPlant.
n M/s.NPCILsapplicationforforestclearancefor25hectaresisunderprocess.
Greenfield Nuclear power plant at Mannur (3X700MW)Greenfield Nuclear power plant at Mannur (3X700MW)Greenfield Nuclear power plant at Mannur (3X700MW)Greenfield Nuclear power plant at Mannur (3X700MW)Greenfield Nuclear power plant at Mannur (3X700MW)
n Green Field Project:Green Field Project:Green Field Project:Green Field Project:Green Field Project:
MannurinBijapurDistrictwasfoundsuitableforsettingupthe2100MWNuclearPower
Plant.
Land:Land:Land:Land:Land:
3000acresofdrylandwhichwasbarrenandfairlylevelwasidentifiedforacquisition.No
forestlandwouldbeinvolvedandtherewouldbenoshiftingofvillages.
Water:Water:Water:Water:Water:
Allocationofwatertoanextentof30000cubicmeterperhourfromAlmattiDamwhichis
30kmsawayfromthesiteisawaitedfromWRD,GoK.
PPPPPororororor t:t:t :t :t :
Goawouldbe thenearestseaportwhichwasatadistanceofaround350Kms. from
BasavanaBagewadiRailwayStation,thesiteisonly10Kmsaway.
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14
Power Company of Karnataka Limited
Evacuation:Evacuation:Evacuation:Evacuation:Evacuation:
Powerevacuationwouldbethrough400KvlinefromMannurtothe400KvStationproposed
atKudgi.PowerGridhasproposeda765KvstationaroundBijapur.CEAwouldberequested
toconductstudiestofinalizelocation.
StatutStatutStatutStatutStatutororororory Ay Ay Ay Ay Auditudituditudituditorororororsssss
TheC&AGofIndiaappointedM/s.Rao&Emmar,CharteredAccountants,Bangaloreu/s619(2)of
theCompaniesAct,1956asStatutoryAuditorsforauditingtheAccountsofPCKLfortheFinancial
year2011-12.
PPPPParararararticularticularticularticularticulars of ems of ems of ems of ems of emploploploploployyyyyees under section 2ees under section 2ees under section 2ees under section 2ees under section 2111117(2A):7(2A):7(2A):7(2A):7(2A):
Theinformationundersection217(2A)ofCompaniesAct1956,readwithCompany(Particularsof
employee)Rules,1976maybetakenasNIL.
Man Power:Man Power:Man Power:Man Power:Man Power:
TheworkingstrengthofthePCKLason31.03.2012isdetailedbelow:
CategoryCategoryCategoryCategoryCategory Working StrengthWorking StrengthWorking StrengthWorking StrengthWorking Strength
AAAAA 2020202020
BBBBB 33333
CCCCC 88888
DDDDD 11111
TTTTToooootaltaltaltaltal 3232323232
Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit Committee
TheBoardofDirectorsofPCKLatits22nd
meetingheldon23.04.2012reconstitutedtheAudit
Committee.
ThepresentcompositionofAuditCommitteeisasfollows:
Sl NoSl NoSl NoSl NoSl No Audit Committee memberAudit Committee memberAudit Committee memberAudit Committee memberAudit Committee member
( By name)( By name)( By name)( By name)( By name)
1 ManagingDirector,HESCOM ChairmanofAuditCommittee
2 ManagingDirector,BESCOM Member
3 ManagingDirector,MESCOM Member
4 AuthorizedSignatory,PCKL Convener
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1515
5th Annual Report-2011-12
Note:Note:Note:Note:Note:MembershipiscoterminouswiththeirDirectorshipontheBoardofPCKL.
Director (Commercial), Statutory Auditors andOfficers in chargeof Internal Audit and
AccountsareinvitedtotheAuditcommitteemeetings.
FollowingaretheTermsofReferencetoAuditCommittee,
Toreviewreportsofinternalaudit
Tohaveanoversightofthecompanysfinancialreportingprocessandthedisclosure
ofitsfinancialinformationtoensurethatthefinancialstatementiscorrect,sufficient,
transparentandcredible.
Tomeet Statutory and Internal Auditors periodically and discuss their findings,
suggestionsandotherrelatedmatters.
To review theStatutory Auditors report on the financial statements and to seek
clarificationsthereon,ifrequiredfromtheauditors.
ToactasalinkbetweentheStatutoryandInternalAuditorsandtheBoardofDirectors.
TorecommendachangeintheStatutoryAuditors, incasetheCommitteeisofthe
opinionthattheStatutoryAuditorshavefailedtodischargetheirdutiesadequately.
Tosuggesttakingupofspecialauditintheareaswhereveritisneeded.
Toensurethatthefinancialstatementsaretrue,correct,adequateandreliable
TorecommendappointmentsofInternalAuditors,scopeofaudit,feeandtheirterms
andconditions.
TorecommendanychangeintheAccountingPolicies,withreasonsthereof
ToensureadequacyofInternalControlSystemsandtorecommendimprovementsto
strengthentheInternalControlSystems.
ToreviewperiodicallyallthefindingsofDomesticInquires,InvestigationbyInternal
Auditors,InternalAuditReport,StatutoryReportandtheobservationsofthevarious
inspectingauthorities
Tohavediscussionswiththeexternalauditorstoascertainareaofconcern.
Toconsidermajorfinancialdecisionsandtoensurecompliancewiththeguidelines,
policiesetc.,issuedbytheBoard.
ToconsiderissuesrelatingtoFinancialandRiskManagementPoliciesandFraudand
FraudulentRisks.
-
16
Power Company of Karnataka Limited
Board MeetingsBoard MeetingsBoard MeetingsBoard MeetingsBoard Meetings
ThemeetingsoftheBoardofDirectorsarenormallyheldattheregisteredofficeatKaveriBhavan,
KGRoad,Bangalore.MeetingsoftheBoardofDirectorsarescheduledinadvanceforwhichnotice
isgiventoeachDirector inwriting.Theagendaandother relevantnotesarecirculatedto the
Directorsinadvance.Duringtheyear2011-12,five(5)meetingswereheldasdetailedbelow:
Meeting NoMeeting NoMeeting NoMeeting NoMeeting No Held on Held on Held on Held on Held on
17thMeeting 29thJune2011
18thMeeting 22ndSeptember2011
19thMeeting 28thOctober2011
20thMeeting 17thJanuary2012
21stMeeting 30thMarch2012
The following are the Board of Directors of PCKL as on the date of AGMThe following are the Board of Directors of PCKL as on the date of AGMThe following are the Board of Directors of PCKL as on the date of AGMThe following are the Board of Directors of PCKL as on the date of AGMThe following are the Board of Directors of PCKL as on the date of AGM
11111 Sri. S.SelvSri. S.SelvSri. S.SelvSri. S.SelvSri. S.Selvakakakakakumarumarumarumarumar, I.A, I.A, I.A, I.A, I.A.S.,.S.,.S.,.S.,.S., : Chairman: Chairman: Chairman: Chairman: Chairman
22222 Sri S. Sumanth, BE, MBASri S. Sumanth, BE, MBASri S. Sumanth, BE, MBASri S. Sumanth, BE, MBASri S. Sumanth, BE, MBA : Managing Director: Managing Director: Managing Director: Managing Director: Managing Director
33333 Sri. D.N Narasimha Raju I.A.S.,Sri. D.N Narasimha Raju I.A.S.,Sri. D.N Narasimha Raju I.A.S.,Sri. D.N Narasimha Raju I.A.S.,Sri. D.N Narasimha Raju I.A.S., : Director: Director: Director: Director: Director
44444 Sri. PSri. PSri. PSri. PSri. P.Maniv.Maniv.Maniv.Maniv.Manivannan, I.Aannan, I.Aannan, I.Aannan, I.Aannan, I.A.S.,.S.,.S.,.S.,.S., : Director: Director: Director: Director: Director
55555 Sri. PSri. PSri. PSri. PSri. P. Rajendra Cholan, I.A. Rajendra Cholan, I.A. Rajendra Cholan, I.A. Rajendra Cholan, I.A. Rajendra Cholan, I.A.S.,.S.,.S.,.S.,.S., : Director: Director: Director: Director: Director
66666 Sri. Manoj KSri. Manoj KSri. Manoj KSri. Manoj KSri. Manoj Kumar Meena,I.Aumar Meena,I.Aumar Meena,I.Aumar Meena,I.Aumar Meena,I.A.S.,.S.,.S.,.S.,.S., : Director: Director: Director: Director: Director
77777 Sri. D. Randeep, I.A.S.,Sri. D. Randeep, I.A.S.,Sri. D. Randeep, I.A.S.,Sri. D. Randeep, I.A.S.,Sri. D. Randeep, I.A.S., : Director: Director: Director: Director: Director
88888 Sri. Vijayanarasimha, B.ESri. Vijayanarasimha, B.ESri. Vijayanarasimha, B.ESri. Vijayanarasimha, B.ESri. Vijayanarasimha, B.E : Director: Director: Director: Director: Director
9 Sri.B.M.Chandrashekhar9 Sri.B.M.Chandrashekhar9 Sri.B.M.Chandrashekhar9 Sri.B.M.Chandrashekhar9 Sri.B.M.Chandrashekhar, M.Com : Direct, M.Com : Direct, M.Com : Direct, M.Com : Direct, M.Com : Director (Commeror (Commeror (Commeror (Commeror (Commercial)cial)cial)cial)cial)
Directors Responsibility Statement:Directors Responsibility Statement:Directors Responsibility Statement:Directors Responsibility Statement:Directors Responsibility Statement:
PursuanttotherequirementunderSection217(2A)oftheCompaniesAct,1956theDirectors,
basedontheinformationreceivedfromtheoperatingmanagementconfirmthat
Inthepreparationoftheannualaccounts,theapplicableaccountingstandardshavebeen
followedalongwithproperexplanationrelatingtomaterialdepartures
Accounting policies havebeen selected andapplied consistently and judgments and
estimatesaremadethatarereasonableandprudentsoastogiveatrueandfairviewofthe
stateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitorlossofthe
Companyfortheperiod.
-
1717
5th Annual Report-2011-12
Proper and sufficient care has been taken for maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities.
Annual accounts have been prepared on a going concern basis.
AcknowledgementsAcknowledgementsAcknowledgementsAcknowledgementsAcknowledgements
The Board of Directors would like to place on record their appreciation for all the assistance and
guidance extended by the Government of Karnataka, Ministry of Power, GoI, Chairman and Member
of the Karnataka Electricity Regulatory Commission, KPTCL,CERC, Karnataka ESCOMs, CAG of India
and others for the co-operation and active support rendered to PCKL in its endeavours. The Board
of Directors would also like to place on record their appreciation of the dedication and commitment
displayed by the officers and staff of the Company during the year.
Sd/- Sd/- Sd/- Sd/- Sd/-
Chairman,Chairman,Chairman,Chairman,Chairman,
PCKL PCKL PCKL PCKL PCKL
-
18
Power Company of Karnataka Limited
AnnexureAnnexureAnnexureAnnexureAnnexure
PrPrPrPrProjects superojects superojects superojects superojects supervised bvised bvised bvised bvised by PCKL anney PCKL anney PCKL anney PCKL anney PCKL annexxxxxed ted ted ted ted to Directo Directo Directo Directo Directororororors Rs Rs Rs Rs Reporeporeporeporeporttttt
Sl NoSl NoSl NoSl NoSl No Name of the ProjectsName of the ProjectsName of the ProjectsName of the ProjectsName of the Projects KarnatakaKarnatakaKarnatakaKarnatakaKarnataka
Share inMWShare inMWShare inMWShare inMWShare inMW
1 Kudugi4000MWSuperCriticalThermalPowerProjectby
M/s.NTPCLimitedinKarnatakaState 2000.00
2 4000MWKrishnapatnamUltraMegaPowerProjectinAndhraPradesh 792.00
3 234.6MWJuralaProjectinAndhraPradesh 117.30
4 Kaiga4thunit-InstalledCapacity220MWinKarnatakaState 60.00
5 500MWNLCTPSstageIIexpansion 110.00
6 1000MWTuticornTPSinTamilnadu 262.00
7 1000MWSimhadriTPSinAndhraPradesh 176.00
8 1500MWVallurTPSinTamilnadu 111.00
9 4000MWMunge,MaharastraUMPP 500.00
10 4000MWTamilNaduCoastalUMPP 800.00
11 2000MWKundanKulamAtomicPowerStation(APS) 442.00
12 500MWM/s.HassanThermalPowerPvtLtdinKarnatakaState 500.00
13 4000MWUdangudiSuperCriticalThermalPowerproject 1600.00
14 1200MWNorthChennaiThermalPowerprojectStage-II 100.00
15 1000MWNeyveliNewTPP 500.00
16 4000MWOrissaUMPP 350.00
17 4000MWAndhraPradesh2ndUMPP 115.00
-
1919
5th Annual Report-2011-12
COMMENTS OCOMMENTS OCOMMENTS OCOMMENTS OCOMMENTS OF THE COMPTRF THE COMPTRF THE COMPTRF THE COMPTRF THE COMPTROLLER AND AOLLER AND AOLLER AND AOLLER AND AOLLER AND AUDITUDITUDITUDITUDITOR GENERAL OF INDIAOR GENERAL OF INDIAOR GENERAL OF INDIAOR GENERAL OF INDIAOR GENERAL OF INDIA
UNDER SECTION 6UNDER SECTION 6UNDER SECTION 6UNDER SECTION 6UNDER SECTION 6111119(4) OF THE COMP9(4) OF THE COMP9(4) OF THE COMP9(4) OF THE COMP9(4) OF THE COMPANIES AANIES AANIES AANIES AANIES ACTCTCTCTCT, 1, 1, 1, 1, 1956 ON THE A956 ON THE A956 ON THE A956 ON THE A956 ON THE ACCOUNTS OFCCOUNTS OFCCOUNTS OFCCOUNTS OFCCOUNTS OF
POPOPOPOPOWER COMPWER COMPWER COMPWER COMPWER COMPANY OF KARNAANY OF KARNAANY OF KARNAANY OF KARNAANY OF KARNATTTTTAKA LIMITED, BANGAKA LIMITED, BANGAKA LIMITED, BANGAKA LIMITED, BANGAKA LIMITED, BANGALALALALALORE FORE FORE FORE FORE FOR THE YEAR ENDEDOR THE YEAR ENDEDOR THE YEAR ENDEDOR THE YEAR ENDEDOR THE YEAR ENDED
333331 MAR1 MAR1 MAR1 MAR1 MARCH 20CH 20CH 20CH 20CH 2012.12.12.12.12.
The preparation of financial statement of THE POTHE POTHE POTHE POTHE POWER COMPWER COMPWER COMPWER COMPWER COMPANY OF KARNAANY OF KARNAANY OF KARNAANY OF KARNAANY OF KARNATTTTTAKAAKAAKAAKAAKA
LIMITED,BANGLIMITED,BANGLIMITED,BANGLIMITED,BANGLIMITED,BANGALALALALALOREOREOREOREORE for the year ended3333311111stststststMarMarMarMarMarch20ch20ch20ch20ch201212121212 inaccordancewith the financial
reportingframeworkprescribedundercompaniesAct,1956,isthereponsibilityofthemanagement
oftheCompany.TheStatutoryAuditorsappointedbytheComptrollerandAuditorGeneralofIndia
underSection619(2)oftheCompaniesAct,1956,areresponsibleforexpressingopiniononthese
financialstatementsunderSection227oftheCompaniesAct,1956basedonindependentaudit
inaccordancewiththeauditingandassurancestandardsprescribedbytheirprofessionalbody
theInstituteofCharteredAccountatntsofIndia.Thisisstatedtohavebeendonebythemvide
their AuditReport dated 2323232323rrrrrddddd A A A A August 20ugust 20ugust 20ugust 20ugust 2012.12.12.12.12.
I,onbehalfoftheComptorllerandAuditorGeneralofIndia,havedecidednottoreviewthe
report of theStatutory Auditors on theAccounts of THEPOTHEPOTHEPOTHEPOTHEPOWERCOMPWERCOMPWERCOMPWERCOMPWERCOMPANYOFKARNAANYOFKARNAANYOFKARNAANYOFKARNAANYOFKARNATTTTTAKAAKAAKAAKAAKA
LIMITED,BANGLIMITED,BANGLIMITED,BANGLIMITED,BANGLIMITED,BANGALALALALALOREOREOREOREOREfortheyearended31stMarch2012andassuchhavenocommentsto
makeundersection619(4)oftheCompaniesAct,1956.
Forandonbehalfofthe
Comptroller&AuditorGeneralofIndia
Sd/-
(ANIT(ANIT(ANIT(ANIT(ANITA PA PA PA PA PAAAAATTTTTTTTTTANAANAANAANAANAYYYYYAK)AK)AK)AK)AK)
PRINCIPALACCOUNTANTGENERAL
(ECONOMIC&REVENUESECTORAUDIT)
KARNATAKA,BANGALORE
Bangalore
Dated:20thSeptember2012
-
20
Power Company of Karnataka Limited
TO
THE MEMBERS OF POWER COMPANY OF KARNATAKA LIMITED
WehaveauditedtheattachedBalanceSheetofPowerCompanyofKarnatakaLimited(herein
referredtoasPCKLorCompany),asat31stMarch2012,andtherelatedProfit&LossAccountand
CashFlowStatementfortheyearendedonthatdateannexedthereto.Thesefinancialstatements
aretheresponsibilityoftheCompanysmanagement.Ourresponsibilityistoexpressanopinion
onthesefinancialstatementsbasedonouraudit.
WeconductedourauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.
ThoseStandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceabout
whetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,
onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.An
auditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadeby
themanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelieve
thatourauditprovidesareasonablebasisforouropinion.
As requiredby theCompanies (AuditorsReport)Order2003,asamendedby theCompanies
(AuditorsReport)AmendmentOrder2004, issuedby theGovernmentof India, inpursuant to
subsection(4A)ofSection227oftheCompaniesAct.1956,weenclosedintheannexureareport
onmattersspecifiedinPara4and5ofthesaidorder.
WWWWWe repore repore repore repore report thatt thatt thatt thatt that
Wehaveobtainedalltheinformationandexplanations,whichtothebestofourknowledge
andbeliefwerenecessaryforthepurposeofouraudit.
Inouropinion,properbooksofaccountsasrequiredbylawhavebeenkeptbytheCompany,
insofarasitappearsfromourexaminationofthosebooks.
TheBalanceSheet,ProfitandLossaccountandCashFlowStatementsdealtwithbythis
reportareinagreementwiththebooksofaccounts.
Inouropinion,TheBalanceSheetandProfitandLossaccountdealtwithbythisreport
complywiththeAccountingStandardsreferredtoinsub-section3CofSection211ofthe
CompaniesAct,1956readwithaccountingpoliciesadoptedby theCompanyunder its
givenoperationalrequirementsexceptincaseofAS15-EmployeeBenefitsContribution
Auditors Report
-
2121
5th Annual Report-2011-12
towards Pension Fund, Gratuity Fund, Provision towards unutilized portion of leave
encashment not being determined on the basis of current actuarial valuation. The
consequential effect in this regard on the Profit and Loss and Balance Sheet as disclosed in
the financial statements with regard to Contribution towards Pension Fund, Gratuity Fund,
Provision towards unutilized portion of leave encashment could not be determined.
On the basis of the written representation received from the Directors as on 31st march
2012, and taken into record by the board of directors, we report that none of the Directors
are disqualified as on 31st March 2012, from being appointed as Directors in terms of
clause (g) of sub-section (1) of section 274 of Companies Act, 1956.
In the course of our audit, we observeIn the course of our audit, we observeIn the course of our audit, we observeIn the course of our audit, we observeIn the course of our audit, we observe
1. The company is not uniform in apportioning the expenditure to seed money and to the
profit and loss account. The company is not recognising any revenues for its services rendered
to the ESCOMS as it is a Special Purpose Vehicle formed by the Karnataka State Government
with all ESCOMs as its members. Hence all expenses incurred by the company is reimbursed
by the ESCOMs through Seed money. Thereby all expenses incurred by the PCKL should be
apportioned to the respective Seed money of ESCOMs in proportion to the contributions
fixed by the ESCOMs in the Government Order.
2. The company has earned only Interest Income on its fixed deposits during the financial
year and there cannot be any Direct Expenditure attributed to the earnings from Interest on
Fixed Deposits, there are no interest expenditures paid that can be claimed as a direct
expenditure to such earnings.
3. In respect to the specific expenditures related to the seed money which is otherwise
transferred to Profit and Loss account is given under notes to accounts as per note number
19 of the Financial Statements.
4. Vide Government Order EN 138 PPC 2006 Bangalore dated 1st September 2007 the State
Power Procurement Co-ordination Cell (SPPCC) was merged with PCKL. The company
accordingly has taken over fixed assets of erstwhile SPPCC at the written down value
`. 10, 52,080/- and the liability for the same has been shown as capital reserve. However,
there is no Government Order or agreement on take over cost to be classified as contribution
from those entities. In absence of any order to classify the cost as contribution from those
entities concerned, the company has till date charged and absorbed the applicable
depreciation on the takeover assets.
5. The balances in Revenue Deposit, Loans and Advances and Current Liabilities, and
Liability towards Pension and Gratuity Fund are subject to confirmation.
-
22
Power Company of Karnataka Limited
6. FixedAssetsof 37.17lakhs(Gross)includesassetstakenoverfromtheerstwhileSPPCCof
KPTCL and reported in the accounts as contribution fromESCOMs/KPTCL. The title/
OwnershiptotheassetshavenotbeentransferredtotheCompany.
7. VideGovernmentorderNo.EN4PPC2010Bangalore,dated4thMay,2010,theCompany
hasreceivedasumof 70.00Crores,towards50%ofcostofPowerBlockpayablebyPCKL
todraw50%of thepower fromJuralaHydroElectricProjectonbehalfofESCOMs,on
signingofMOUbetweenGovernmentofKarnatakaandGovernmentofAndhraPradesh.
TheGOissilentregardingtheutilizationofthesameuntiltheMOUissigned.However,the
CompanyhasinvestedthesameinFixedDepositsandisearninginterestincome,whichis
transferredtotheESCOMsPowerpurchaseaccounts,andisutilizedforPowerpurchases
fromPXILandIEXonbehalfofESCOMs.
8. ThecompanyduringtheyearhasprocuredlandforGulbargaProjectfundedbytheKarnataka
StateGovernment.Thetotallandprocuredisaround1601.13acresandthetotalcostincurred
towardsthesameis 142,64,09,086/-.Thecompanyhasnotobtainedanylegalopinion
regardingthedocumentationstatusofland.Thelandprocurementprocessisundertaken
bytheDCGulbarga.
9. TheSecurityDepositwithM/sPXILason31stMarch2012is`85,00,000/-whereasthe
BalanceSheetunderLongTermDepositsareshownat`25,00,000/-.Thebalanceof
` 60, 00,000 is treated as Bank Balancewith State Bank of India Account under
reconciliation.Thesaidamountof`60,00,000/-isreceivedonlyon11thMay2012from
PXIL.
10. TheCompanyduringtheyearhasrecoveredasumof 4,98,23,500/-fromBajajAlliance
LifeInsuranceCorporationLtd.ThesaidamountwastreatedasarevenuelossintheProfit
&LossAccountduring the financial year2008-09. Theamountof loss incurred in the
respectivefinancialyearwasmadegoodbytheBajajLifeInsuranceundertheHighCourt
orderason11thNovember2011.Inthisprocessthecompanyduringthefinancialyearhas
reverseditsrevenuelossof 4,98,23,580/-asclaimsreceivable.Onreceiptoftheamount
of`4,98,23,500/-theclaimsreceivableaccountwassetoffandthebalanceof`80/-is
treatedasBaddebt.
11. ThecompanyisnotaccruingtheinterestonunsecuredloansreceivedfromtheGovernment
ofKarnatakatowardstheGulbargaPowerProjectLoanandKudgiPowerProjectLoans.No
provisionforinterestonunsecuredloansismadeduringtheyearastheGovernmentof
Karnatakaordersdonotspecifytherateofinterest.
12.Thecompanyhasmaintained fixeddepositsoutof the funds received towardsvarious
projects,GovernmentSubsidiesandalsooutofitsseedmoniesreceived.TheFixeddeposits
haveearnedinterestduringtheyearandthesameisrecognisedtoIncomeandrespective
projectaccountsaspertheaccountingpolicyofthecompany.Duringtheyearthebanks
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2323
5th Annual Report-2011-12
have made a Tax Deduction on these Interests earned and accrued to an extent of
` 17,04,841/-. The said amount is determined to be earned out of the Jurala Project Fixed
Deposits and hence the interests earned is credited to respective ESCOMs as power purchase
advances in respective ratios as per MOU. Similarly the Tax Deducted at source is reduced
to the provision for income tax account of the company in the financial year 2011-12.
The nature of comments made in Para 1 to 9, does not warrant any qualification of observation
for the purpose of assessing impact on the financial results of the Company for the year. In
our opinion and to the best of our knowledge and belief and according to the information
and explanations given to us, the said accounts read together with notes thereon give the
information required by the Companies Act, 1956, in the manner so required in conformity
with the accounting policies generally accepted in India, subject to observations made in
bold above and Para 1 to 12 give a true and fair view:
(a) In the case of Balance Sheet, of the state of affairs of the Company at 31st March, 2012
(b) In the case of Profit and Loss account, of the profit for the year ended as on that date.
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For Rao and Emmar
Chartered Accountants
FRN 003084S
Sd/-
(S. B. Subhash)
Partner
M. no. 212948
Bangalore
Date: 23rd August 2012
-
24
Power Company of Karnataka Limited
Annexure to Auditors Report
(Referred to in paragraph 3 of our report of even date)
i) a) TheCompany hasmaintained proper records showing particulars including
quantitativedetailsandlocationofFixedAssets.
b) Inouropinionandaccordingtotheinformationandexplanationsgiventous,no
substantialpartoffixedassetshasbeendisposedbytheCompanyduringthe
year.
ii) a) Asthecompanyisaserviceorientedanddoesntdealwithanyinventory,Inventory
clauseisnotapplicable.
iii) a) TheCompanyismaintainingRelatedPartyRegisterasrequiredunderSection
301oftheCompaniesAct,1956.
b) TheCompanyhasnot grantedany loans, securedandunsecured toparties
coveredintheregistertobemaintainedundersection301oftheAct.ButduringButduringButduringButduringButduring
the year the company has spent more than the seed money to thethe year the company has spent more than the seed money to thethe year the company has spent more than the seed money to thethe year the company has spent more than the seed money to thethe year the company has spent more than the seed money to the
fffffolloolloolloolloollowing relatwing relatwing relatwing relatwing related pared pared pared pared parties and the outstanding balances are as beloties and the outstanding balances are as beloties and the outstanding balances are as beloties and the outstanding balances are as beloties and the outstanding balances are as belowwwww:::::
Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. RRRRRelatelatelatelatelated Ped Ped Ped Ped Pararararar tytytytyty Outstanding Debit Balance in SeedMoneyOutstanding Debit Balance in SeedMoneyOutstanding Debit Balance in SeedMoneyOutstanding Debit Balance in SeedMoneyOutstanding Debit Balance in SeedMoney
Account (Deemed Loan)Account (Deemed Loan)Account (Deemed Loan)Account (Deemed Loan)Account (Deemed Loan)
11111 CESCOCESCOCESCOCESCOCESCO ` 25,53,388/-25,53,388/-25,53,388/-25,53,388/-25,53,388/-
22222 HESCOMHESCOMHESCOMHESCOMHESCOM ` 4,45,4,45,4,45,4,45,4,45,12121212121/-1/-1/-1/-1/-
33333 GESCOMGESCOMGESCOMGESCOMGESCOM ` 4,44,44,44,44,44,984,984,984,984,981/-1/-1/-1/-1/-
c) TheCompanyhasnottakenloansfromanyofitsShareholdersandtheirrelatives.
TheCompanyhasnottakenanyLoans,securedorunsecured,fromcompanies,
firmsorotherpartiescoveredintheregistertobemaintainedunderSection301
oftheAct.
iv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,there
isanadequateinternalcontrolsystemcommensuratewiththesizeoftheCompany
andthenatureofitsbusinessforthepurchaseoffixedassetsandfortheservices
rendered.Further,onthebasisofourexaminationofthebooksandrecordsofthe
company,andaccordingtotheinformationandexplanationsgiventous,wehave
neithercomeacrossnorhavebeeninformedofanycontinuingfailuretocorrect
majorweaknessesintheaforesaidinternalcontrolsystem.
v) Inouropinionandaccordingtotheinformationandexplanationsgiventous,there
arenocontractsorarrangementsreferredtoinSection301oftheActthatneedto
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2525
5th Annual Report-2011-12
beenteredintheregisterrequiredtobemaintainedunderthatsection.Thereare
however transactionsundertakenby theCompanyonbehalf of theESCOMs for
PowerPurchase,establishingofco-linkagesofpowerprojectsforgenerationand
purchaseofpower,towardswhichnoservicecontractsareenteredintobetween
ESCOMsandtheCompanyandhencenorevenueischarged.
vi) TheCompanyhasnotacceptedanydepositsfromthepublicwithinthemeaningof
Sections58Aand58AAoftheActandtherulesframedthereunder.
vii) Inouropinionandaccordingtotheinformationprovidedtous,theCompanyhasan
internalauditsystem.However,consideringthenatureandsizeofexpenditureand
Investmentsofthecompanyitshoulddevelopaneffectiveinternalauditsystem.
viii) TheCentralGovernmentofIndiahasnotprescribedthemaintenanceofcostrecords
underclause(d)ofsubsection(1)ofsection209oftheActforanyoftheproductsof
theCompany.
ix) a) Accordingtotheinformationandexplanationsgiventousandtherecordsofthe
companyexaminedbyus,inouropinion,theCompanyisgenerallyregularin
depositing theundisputed statutory dues includingprovident fund, investor
educationandprotectionfund,employeesstateinsurance,incometax,sales-
tax,wealthtax,servicetax,customsduty,exciseduty,cessandothermaterial
statutoryduesasapplicablewiththeappropriateauthorities.
b) Accordingtotheinformationandexplanationsgiventousandtherecordsofthe
Companyexaminedbyus,therearenoduesofIncomeTax,SalesTax,Wealth
Tax, Service Tax,Customsduty, Exciseduty, andCesswhichhavenotbeen
depositedonaccountofanydispute.
x) TheCompanyhasnoaccumulatedlossesasat31stMarch2012andithasnotincurred
any cash losses in the financial year endedon thatdateor in the immediately
precedingfinancialyearthatarenotlessthanfiftypercentofitsnetworthstanding
asonthatdate.
xi) AccordingtotherecordsoftheCompanyexaminedbyusandtheinformationand
explanationgiventous,theCompanyhasnotdefaultedinrepaymentofduesto
anyfinancialinstitutionorbankasattheBalanceSheetdate.
xii) Accordingtotheinformationandexplanationsgiventous,theCompanyhasnot
grantedanyloansandadvancesonthebasisofsecuritybywayofpledgeofshares,
debenturesandothersecurities.
xiii) Theprovisionsofanyspecialstatuteapplicabletochitfund/nidhi/mutualbenefit
fund/societiesarenotapplicabletotheCompany.
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26
Power Company of Karnataka Limited
xiv) Inouropinion,theCompanyisnotadealerortraderinshares,securities,debentures
andotherinvestments.
xv) Inouropinion,andaccordingtotheinformationandexplanationsgiventous,the
companyhasnot givenany guarantee for loans takenbyothers frombanksor
financialinstitutionsduringtheyear.
xvi) Inouropinion,andaccordingtotheinformationandexplanationsgiventous,the
CompanyhasnotobtainedanyTermLoansandthusourcommentingonanoverall
basis,whetherthetermloanshavebeenappliedforthepurposesforwhichthey
wereobtaineddoesnotarise.
xvii) OnthebasisofanoverallexaminationofthebalancesheetoftheCompany,inour
opinionandaccordingtotheinformationandexplanationsgiventous,thereareno
fundsraisedonashort-termbasiswhichhavebeenusedforlong-terminvestment.
xviii) TheCompanyhasnotmadeanypreferential allotmentof shares topartiesand
companiescoveredintheregistertobemaintainedunderSection301oftheAct
duringtheyear.
xix) Asthecompanyhasnotissuedanydebentures,thequestionofcreatinganysecurity
orchargeonthesamedoesnotarise.
xx) TheCompanyhasnotraisedanymoneybypublicissuesduringtheyear.
xxi) DuringthecourseofourexaminationofthebooksandrecordsoftheCompany,
carriedoutinaccordancewiththegenerallyacceptedauditingpracticesinIndia,
andaccording to the informationandexplanationsgiven tous,wehaveneither
comeacrossanyinstanceoffraudonorbytheCompany,noticedorreportedduring
theyear,norhavewebeeninformedofsuchcasebythemanagement.
For Rao and Emmar
Chartered Accountants
FRN 003084S
Sd/-
(S. B. Subhash)
Partner
M. no. 212948
Bangalore
Date: 23rd August 2012
-
2727
5th Annual Report-2011-12
Addendum to Directors Report
for the period ending 31st March, 2012
Sl.Sl .Sl .Sl .Sl .No.No.No.No.No.
Observations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory Auditors Managements ReplyManagements ReplyManagements ReplyManagements ReplyManagements Reply
Inouropinion , TheBalanceSheetandProfitand
Lossaccountdealtwithby this reportcomplywith
theAccountingStandardsreferredtoinsub-section
3CofSection211oftheCompaniesAct,1956read
withaccountingpoliciesadoptedby theCompany
under itsgivenoperationalrequirementsexcept in
case of AS15- EmployeeBenefitsContribution
towards Pension Fund, Gratuity Fund, Provision
towardsunutilizedportionofleaveencashmentnot
beingdeterminedonthebasisofcurrentactuarial
valuation.Theconsequentialeffectinthisregardon
theProfitandLossandBalanceSheetasdisclosed
in the financial statements with regard to
Contribution towardsPensionFund,Gratuity Fund,
Provision towards unutilized portion of leave
encashmentcouldnotbedetermined.
The company is not uniform in apportioning the
expendituretoseedmoneyandtotheprofitandloss
account.Thecompanyisnotrecognisinganyrevenues
for itsservices rendered to theESCOMSas it isa
Special PurposeVehicle formedby theKarnataka
StateGovernmentwithallESCOMsasitsmembers.
Hence all expenses incurred by the company is
reimbursedby theESCOMs throughSeedmoney.
Therebyallexpenses incurredby thePCKLshould
be apportioned to the respective Seedmoney of
ESCOMsinproportiontothecontributionsfixedby
theESCOMsintheGovernmentOrder.
ThecompanyhasearnedonlyInterestIncomeonits
fixeddeposits during the financial year and there
cannotbeanyDirectExpenditureattributedtothe
earningsfromInterestonFixedDeposits,thereare
nointerestexpenditurespaidthatcanbeclaimedas
adirectexpendituretosuchearnings.
Inrespecttothespecificexpendituresrelatedtothe
seedmoneywhichisotherwisetransferredtoProfit
andLossaccountisgivenundernotestoaccountsas
pernotenumber19oftheFinancialStatements.
1
2
3
Actuarial valuation of Pension
Fund,GratuityFundisbeingmade
byKPTCL&ESCOMsPension&
Gratuity Trust. Since all the
employeesworkinginPCKLareon
deputationfromKPTCL.Basedon
thedemandfromtheaboveTrust
provisionisbeingmade.
These issueswere discussed at
length in the Audit Committee
meetingheldon04.08.2012and
itwasfeltbytheAuditCommittee
thatPCKLcanbringoutaconcept
paper on generation of its own
resources and accounting
proceduretobeadoptedkeeping
in view the implicationsunder IT
Act, by involving the present
StatutoryAuditors.Actionisbeing
taken.
These issueswere discussed at
length in the Audit Committee
meetingheldon04.08.2012and
itwasfeltbytheAuditCommittee
thatPCKLcanbringoutaconcept
paper on generation of its own
resources and accounting
proceduretobeadoptedkeeping
in view the implicationsunder IT
Act, by involving the present
Statutory Auditors. The concept
paperisunderpreparation.
4
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28
Power Company of Karnataka Limited
Sl.Sl .Sl .Sl .Sl .No.No.No.No.No.
Observations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory Auditors Managements ReplyManagements ReplyManagements ReplyManagements ReplyManagements Reply
VideGovernmentOrderEN138PPC2006Bangalore
dated 1st September 2007 the State Power
ProcurementCo-ordinationCell(SPPCC)wasmerged
withPCKL.Thecompanyaccordinglyhastakenover
fixedassetsoferstwhileSPPCCatthewrittendown
value 10,52,080/-andtheliabilityforthesamehas
beenshownascapitalreserve.However,thereisno
GovernmentOrderoragreementontakeovercostto
beclassifiedascontribution from thoseentities. In
absenceofanyordertoclassifythecostascontribution
fromthoseentitiesconcerned,thecompanyhastill
date charged and absorbed the applicable
depreciationonthetakeoverassets.
The balances in Revenue Deposit, Loans and
Advances and Current Liabilities, and Liability
towards Pension andGratuity Fund are subject to
confirmation.
FixedAssetsof` 37.17lakhs(Gross)includesassets
takenover fromtheerstwhileSPPCCofKPTCLand
reported in the accounts as contribution from
ESCOMs/KPTCL.The title/Ownership to theassets
havenotbeentransferredtotheCompany.
VideGovernmentorderNo.EN4PPC2010Bangalore,
dated4thMay,2010,theCompanyhasreceivedasum
of 70.00Crores,towards50%ofcostofPowerBlock
payablebyPCKLtodraw50%ofthepowerfromJurala
HydroElectricProjectonbehalfofESCOMs,onsigning
ofMOA between Government of Karnataka and
Government of Andhra Pradesh. TheGO is silent
regardingtheutilizationofthesameuntiltheMOAis
As per the Government Order
EN 138 PPC 2006, Bangalore,
dated 1st September, 2007 the
State Power Procurement Co-
Ordination Cell (SPPCC) was
mergedwith PCKL. Accordingly,
fixedassetsoferstwhilei.e,SPPCC
werealsotakenoverbyPCKLand
accountedunderCapitalReserve.
Depreciationontheaboveassetsis
debitedagainsttheCapitalReserve
andnotchargedtotheP&LA/c.
(referNoteNo.11toaccounts).
NoComments.
As the activities of SPPCC has
been merged with PCKL
videGovernment Order EN 138
PPC 2006, Bangalore, dated
1stSeptember,2007.Theseassets
beingusedbythestaffofSPPCC
has been transferred to PCKL.
Natureofassetstransferredfrom
SPPCC - immovableproperty, it is
onlyComputersandfurnitureand
fixtures.Assuchtheseassetswill
nothavetitledeedstobeobtained.
NoComments.
5
6
7
8
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2929
5th Annual Report-2011-12
Sl.Sl .Sl .Sl .Sl .No.No.No.No.No.
Observations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory Auditors Managements ReplyManagements ReplyManagements ReplyManagements ReplyManagements Reply
9
10
11
signed,However,theCompanyhasinvestedthesame
inFixedDepositsandisearninginterestincome,which
istransferredtotheESCOMsPowerpurchaseaccounts,
andisutilizedforPowerpurchasesfromPXILandIEX
onbehalfofESCOMs.
Thecompanyduringtheyearhasprocuredlandfor
Gulbarga Project funded by the Karnataka State
Government.Thetotallandprocuredisaround1601.13
acresandthetotalcostincurredtowardsthesameis
` 142,64,09,086/-Thecompanyhasnotobtained
anylegalopinionregardingthedocumentationstatus
ofland.Thelandprocurementprocessisundertaken
bytheDCGulbarga.
TheSecurityDepositwithM/sPXILason31stMarch
2012 is ` 85,00,000/- whereas the Balance
Sheet under Long Term Deposits are shown at
` 25,00,000/-.Thebalanceof 60,00,000istreated
asBankBalancewithStateBankof IndiaAccount
under reconciliation. The said amount of
` 60,00,000/-isreceivedonlyon11thMay2012from
PXIL.
TheCompanyduringtheyearhasrecoveredasumof
` 4,98,23,500/- fromBajaj Alliance Life Insurance
CorporationLtd.Thesaidamountwastreatedasa
revenuelossintheProfit&LossAccountduringthe
financialyear2008-09.Theamountoflossincurred
intherespectivefinancialyearwasmadegoodbythe
BajajLifeInsuranceundertheHighCourtorderason
11thNovember2011. In thisprocess thecompany
duringthefinancialyearhasreverseditsrevenueloss
of 4,98,23,580/-asclaimsreceivable.Onreceiptof
theamountof 4,98,23,500/-theclaimsreceivable
accountwassetoffandthebalanceof 80/-istreated
asBaddebt.Theamountof 4,98,23,580/-received
isnottreatedasIncome.
The process of acquiring land is
undertakenbyDC,Gulbargaduly
observing therequired formalities
and the acquired land by DC,
Gulbargahasbeenhandedoverto
PCKLalongwithtitledocuments.
ThesecuritydepositwithPXILason
31.03.2012is 25Lakhsonly.The
balanceof` 60Lakhs is towards
marginmoney, which has been
wronglytermedasSecurityDeposit
byPXILintheirconfirmationletter.
NoComments.
-
30
Power Company of Karnataka Limited
Sl.Sl .Sl .Sl .Sl .No.No.No.No.No.
Observations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory AuditorsObservations of Statutory Auditors Managements ReplyManagements ReplyManagements ReplyManagements ReplyManagements Reply
12
13
Thecompanyisnotaccruingtheinterestonunsecured
loans received from theGovernmentofKarnataka
towardstheGulbargaPowerProjectLoanandKudgi
PowerProject Loans.Noprovision for interest on
unsecured loans ismade during the year as the
GovernmentofKarnatakaordersdonotspecifythe
rateofinterest.
Thecompanyhasmaintainedfixeddepositsoutof
the funds received towards various projects,
GovernmentSubsidiesandalsooutofitsseedmonies
received. TheFixeddepositshaveearned interest
duringtheyearandthesameisrecognisedtoIncome
andrespectiveprojectaccountsaspertheaccounting
policyofthecompany.Duringtheyearthebankshave
madeaTaxDeductionontheseInterestsearnedand
accrued to an extent of` 17,04,841/-. The said
amountisdeterminedtobeearnedoutoftheJurala
ProjectFixedDepositsandhencetheinterestsearned
iscreditedtorespectiveESCOMsaspowerpurchase
advancesinrespectiveratiosasperMOU.Similarly
theTaxDeductedatsourceisreducedtotheprovision
forincometaxaccountofthecompanyinthefinancial
year2011-12.
NoComments.
NoComments.
Sd/-Sd/-Sd/-Sd/-Sd/- Sd/-Sd/-Sd/-Sd/-Sd/-
(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar)
Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial) Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial)
PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore
-
3131
5th Annual Report-2011-12
BALANCE SHEET AS ABALANCE SHEET AS ABALANCE SHEET AS ABALANCE SHEET AS ABALANCE SHEET AS AT 3T 3T 3T 3T 31S1S1S1S1STMARTMARTMARTMARTMARCH, 20CH, 20CH, 20CH, 20CH, 201212121212
(Amount in(Amount in(Amount in(Amount in(Amount in )))))
Sl. Sl. Sl. Sl. Sl.
No. No. No. No. No. ParticularsParticularsParticularsParticularsParticulars Note NoNote NoNote NoNote NoNote No As at 3As at 3As at 3As at 3As at 311111.03.20.03.20.03.20.03.20.03.201212121212 As at 3As at 3As at 3As at 3As at 311111.03.20.03.20.03.20.03.20.03.201111111111
I I I I I EQUITEQUITEQUITEQUITEQUITY AND LIABILITIESY AND LIABILITIESY AND LIABILITIESY AND LIABILITIESY AND LIABILITIES
1 Shareholders FundsShareholders FundsShareholders FundsShareholders FundsShareholders Funds
a ShareCapital 3 200500000 500000
b ReservesandSurplus 3A 7663794 -43744084
22222 ShareDepositMoneyPendingShareDepositMoneyPendingShareDepositMoneyPendingShareDepositMoneyPendingShareDepositMoneyPending
AllotmentAllotmentAllotmentAllotmentAllotment 4 - 200000000
3 Non-Current LiabilitiesNon-Current LiabilitiesNon-Current LiabilitiesNon-Current LiabilitiesNon-Current Liabilities
a LongTermBorrowings
-UnsecuredLoans 5 1521200000 1521200000
b Deferredtaxliabilities(Net) 6 275835 156199
c DepositsfromESCOMs 7 2335609 22486405
d OtherLongTermBorrowings 8 743632809 1517938515
4 Current LiabilitiesCurrent LiabilitiesCurrent LiabilitiesCurrent LiabilitiesCurrent Liabilities
a SundryPayables 9 145688496 319355448
b ShortTermProvisions 10 5315981 7116229
TTTTToooootaltaltaltaltal 262661252 262661252 262661252 262661252 26266125244444 3 54 50 08 73 54 50 08 73 54 50 08 73 54 50 08 73 54 50 08 71212121212
III II II II I AssetsAssetsAssetsAssetsAssets
1 Non-Current AssetsNon-Current AssetsNon-Current AssetsNon-Current AssetsNon-Current Assets
a FixedAssets 11 2689107 2035441
b LongTermDeposits 12 5010500 5005000
c OtherNon-CurrentAssets 13 1438749526 1374417921
2 Current assetsCurrent assetsCurrent assetsCurrent assetsCurrent assets
a CashandCashEquivalents 14 1158260748 2121586512
b ShortTermLoansandAdvances 15 407291 18695845
c OtherCurrentAssets 16 21495352 23267993
TTTTToooootaltaltaltaltal 262661252 262661252 262661252 262661252 26266125244444 35450087 35450087 35450087 35450087 354500871212121212
SignificantAccountingPolicies 23
Asperourreportofevendate
FFFFFororororor Rao & EmmarRao & EmmarRao & EmmarRao & EmmarRao & Emmar,,,,,
Chartered Accountants,Chartered Accountants,Chartered Accountants,Chartered Accountants,Chartered Accountants,
Sd/ -Sd / -Sd / -Sd / -Sd / -
PartnerPartnerPartnerPartnerPartner
Membership No.212948Membership No.212948Membership No.212948Membership No.212948Membership No.212948
Sd/-Sd/-Sd/-Sd/-Sd/- Sd/-Sd/-Sd/-Sd/-Sd/- Sd/-Sd/-Sd/-Sd/-Sd/-
BANGALOREBANGALOREBANGALOREBANGALOREBANGALORE (K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar) (B.M.Chandrashekar) (S.Sumanth)(S.Sumanth)(S.Sumanth)(S.Sumanth)(S.Sumanth)
Date:23-08-2012Date:23-08-2012Date:23-08-2012Date:23-08-2012Date:23-08-2012 Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial) Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial) Managing DirectorManaging DirectorManaging DirectorManaging DirectorManaging Director
PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore
-
32
Power Company of Karnataka Limited
PRPRPRPRPROFIT AND LOSS STOFIT AND LOSS STOFIT AND LOSS STOFIT AND LOSS STOFIT AND LOSS STAAAAATEMENT FTEMENT FTEMENT FTEMENT FTEMENT FOR THE PERIOD ENDED3OR THE PERIOD ENDED3OR THE PERIOD ENDED3OR THE PERIOD ENDED3OR THE PERIOD ENDED31S1S1S1S1STMARTMARTMARTMARTMARCH, 20CH, 20CH, 20CH, 20CH, 201212121212
(Amount in(Amount in(Amount in(Amount in(Amount in )))))
Particulars Particulars Particulars Particulars Particulars NoteNo NoteNo NoteNo NoteNo NoteNo For the period For the period For the period For the period For the period For the period For the period For the period For the period For the period
ended 3ended 3ended 3ended 3ended 311111.03.20.03.20.03.20.03.20.03.201212121212 ended 3ended 3ended 3ended 3ended 311111.03.20.03.20.03.20.03.20.03.201111111111
IIIII IncomeIncomeIncomeIncomeIncome 17 31959601 20380558
AAAAA Miscellaneous receiptsMiscellaneous receiptsMiscellaneous receiptsMiscellaneous receiptsMiscellaneous receipts 17A 360648 5365468
TTTTToooootal Rtal Rtal Rtal Rtal Reeeeevvvvvenueenueenueenueenue 3 23 20 23 23 20 23 23 20 23 23 20 23 23 20 24949494949 2 52 52 52 52 57 46 0267 46 0267 46 0267 46 0267 46 026
II II II II II Expenses:Expenses:Expenses:Expenses:Expenses:
1 EmployeesCost 18 20174644 17201353
2 AdministrationandGeneralExpenses 19 7755947 5577096
3 Depreciation 20 72213 170200
4 StampDuty 0 0
TTTTToooootal Expensestal Expensestal Expensestal Expensestal Expenses 2 80 02 8042 80 02 8042 80 02 8042 80 02 8042 80 02 804 2 29 48 6492 29 48 6492 29 48 6492 29 48 6492 29 48 649
III. III. III. III. III. Profit before exceptional andProfit before exceptional andProfit before exceptional andProfit before exceptional andProfit before exceptional and (I-II) 43 1 43 1 43 1 43 1 43 17 47 47 47 47 44545454545 2 2 2 2 27 97 97 97 97 97 37 37 37 37 37777777777
extraordinary items and taxextraordinary items and taxextraordinary items and taxextraordinary items and taxextraordinary items and tax
IVIVIVIVIV Priorperiodincome 17B 12795 206731
Priorperiodcharges 22 -57688 0
V V V V V..... Profit before taxProfit before taxProfit before taxProfit before taxProfit before tax (III-IV) 42 72 552 42 72 552 42 72 552 42 72 552 42 72 552 30 04 108 30 04 108 30 04 108 30 04 108 30 04 108
VI. VI. VI. VI. VI. TTTTTax eax eax eax eax expense:xpense:xpense:xpense:xpense:
1 Currenttax 21 2325603 593000
2 Deferredtax 119636 49134
3 ShortprovisionofIncomeTax 51973 0
VII VII VII VII VII ProfitProfitProfitProfitProfit ///// (Loss) for the period(Loss) for the period(Loss) for the period(Loss) for the period(Loss) for the period (V-VI) 1 1 1 1 17 75 3407 75 3407 75 3407 75 3407 75 340 23 6 23 6 23 6 23 6 23 61 91 91 91 91 97777744444
Balanceofprofit/lossbroughtover
fromPreviousYear -44474656 -46836630
Previousyearslossmadegood 49823580
duringtheyear
Balancecarriedover 7 7 7 7 71 21 21 21 21 24 264 264 264 264 2644444 -4 4-4 4-4 4-4 4-4 44 74 74 74 74 74 6564 6564 6564 6564 656
Asperourreportofevendate
FFFFFor Rao & Emmaror Rao & Emmaror Rao & Emmaror Rao & Emmaror Rao & Emmar,,,,,
Chartered Accountants,Chartered Accountants,Chartered Accountants,Chartered Accountants,Chartered Accountants,
Sd/-Sd/-Sd/-Sd/-Sd/-
PartnerPartnerPartnerPartnerPartner
Membership No.Membership No.Membership No.Membership No.Membership No.212948212948212948212948212948
Sd/-Sd/-Sd/-Sd/-Sd/- Sd/-Sd/-Sd/-Sd/-Sd/- Sd/-Sd/-Sd/-Sd/-Sd/-
BANGALOREBANGALOREBANGALOREBANGALOREBANGALORE (K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam)(K.S.Subramanyam) (B.M.Chandrashekar)(B.M.Chandrashekar)(B.M.Chandrashekar)(B.M.Chandrashekar)(B.M.Chandrashekar) (S.Sumanth)(S.Sumanth)(S.Sumanth)(S.Sumanth)(S.Sumanth)
Date:23-08-2012Date:23-08-2012Date:23-08-2012Date:23-08-2012Date:23-08-2012 Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial)Joint Director (Commercial) Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial)Director(Commercial) Managing DirectorManaging DirectorManaging DirectorManaging DirectorManaging Director
PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore PCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, BangalorePCKL, Bangalore
-
3333
5th Annual Report-2011-12
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