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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

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

33


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

4


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


1 JSWPTCIL 2444.93 4.26 1041.54

2 NETS 223.74 3.83 91.85

3 BMMISPAT 79.40 4.10 32.56


Duringtheyear227.58MUspeakenergywasalsoprocuredfromOctober-2011to15thJune2012,

atanaveragerateof 6.017perkWh.



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


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.


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


55


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



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


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


Theabovepowerprocurementwasmadeatcompetetiveratesthroughbid.

6


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.

77


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)

8


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


GoKvideorderdated3rdJune,2009accordedapprovalforacquisitionof1300acresof

landfortheproject.However,allotmentoflandinVantamurivillageispendingduetoWrit

petitionfiledbySri.ShankargoudaandothersvideWP31829/2008(LR)andWP66818-

19/2011(LR)intheDharwadCircuitBenchofHighCourtofKarnataka,forquashingthe

orderissuedbyBelgaumLandTribunalforacquiring3500acresofland.DharwadCircuit

Benchissuedstayorderinthisregard.ApplicationwasfiledinDharwadCircuitBench,to

impleadPCKLasaRespondentinthecase,toenablePCKLforexpeditingthevacationof

stay.

99


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.

10


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

1111


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

12


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


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.


3000acresofdrylandwhichwasbarrenandfairlylevelwasidentifiedforacquisition.No

forestlandwouldbeinvolvedandtherewouldbenoshiftingofvillages.

Water:Water:Water:Water:Water:

Allocationofwatertoanextentof30000cubicmeterperhourfromAlmattiDamwhichis

30kmsawayfromthesiteisawaitedfromWRD,GoK.

PPPPPororororor t:t:t :t :t :

Goawouldbe thenearestseaportwhichwasatadistanceofaround350Kms. from

BasavanaBagewadiRailwayStation,thesiteisonly10Kmsaway.

14


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

1515


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


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


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


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


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


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


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


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

2323


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


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

2525


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.

26


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


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

28




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

2929




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




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


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


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


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