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POWER TRADING COMPANY LIMITEDTata Power Mahalaxmi Receiving Station,

Senapati Bapat Marg, Lower Parel, Mumbai 400 013Fax: 91 22 66658614 / 22069669 / 66310849 E-mail: [email protected]

www.tatapowertrading.com

6th Annual Report2008 - 09

POWER TRADING COMPANY LIMITED

SHAPINGINDIA’S VIBRANTPOWER MARKET

01 04

02

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01. Conference Room

02. Trading Room

03. Reception

04. Inside view - O�ce

05. Zainet Implementation

06. Team Huddle

07. Cafetaria

AGM Notice 08

Directors’ Report 10

Management Discussionand Analysis 13

Auditors’ Report 16

Balance Sheet 20

Profit and Loss Account 21

Cash Flow Statement 22

Schedules forming part of Balance Sheet 23

Schedules forming part of Profit and Loss Account 26

Notes forming part ofthe Accounts 27

CONTENTS

06

03

ABOUT US

We are the first company in the country to be awarded a

power trading license by Central Electricity Regulatory

Commission on 9th June, 2004. The Category ‘A’ License

that the company had obtained then was upgraded to

Category ‘F’ on 9th June 2005. Tata Power Trading

Company Ltd. has become a trailblazer in Power trading

with a host of innovative initiatives.

TATA POWER TRADING COMPANY LTD. IS A WHOLLY OWNED SUBSIDIARY OF THE TATA POWER COMPANY LTD.

The Tata Power Company is India’s oldest and largest private sector power utility with an installed generation capacity of 2,785 MW.

The Company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth.

Tata Power has a presence in all areas of power sector viz Generation (thermal, hydro, solar and wind), Transmission and Distribution.

Tata Power Trading Company Ltd. was incorporated on 31st December, 2003 and regis-tered as a Limited Company on 16th February, 2004.

Tata Power Trading has been at the forefront in shaping

India's vibrant power trading market. With access to

Technical, Managerial and Financial resources of its parent

company, it is uniquely equipped to provide an unmatched

range of services, customer care and complete payment

security to its customers at the most competitive rates. As

an extremely well knit organization, it has domain

expertise in all segments of Power Trading whether it be

Marketing, Commercial or Operations, supported ably by

the Finance, Legal and Administrative functions.

In a short span of time after procuring the license, Tata

Power Trading has catalyzed the flow of electricity across

the length and breadth of the country helping bridge the

demand and supply gap of the various utilities.


WE ARE DETERMINED TO DELIGHT ALL OUR CUSTOMERS THRU’

SERVICES IN THE AREAS OF

TRANSPARENT, EFFICIENT AND DEPENDABLE

POWER TRADING, FUEL MANAGEMENT, CDMAND RELATED ADVISORY SERVICES.

To evacuate power from surplus regions/entities thereby helping them in optimum resource utilization.

To serve power customers in deficient States/regions in a reasonable manner.

To conduct trading of power in a transparent manner assuring both suppliers and customers of dependable and efficient service.

To make power trading business a growth oriented business with good future potential in various regions in India and bordering countries.

To emerge viable in a strong competitive environment by using relevant technology and deploying talented people.

Conduct business in accordance with Market Dynamics and yet care for customers and suppliers.

Abide by Tata Code of Conduct scrupulously as also the Regulatory guidelines and procedures.

Provide opportunities to employees to deliver excellent performance and offer corresponding career progression.

Foster team work and mutual respect and strive to accomplish the mission intelligently and diligently.

MISSION

CORE VALUES

VISIONTo be the most respected and one of the leading Power Trading Companies in India.

THROUGH EXPERTISE

FUELINGPROGRESS

Mr. Sunil Wadhwa is the Chief Executive Officer & Executive Director of North Delhi Power Limited (NDPL),

a joint venture of Tata Power and Govt. of Delhi. Mr. Wadhwa joined NDPL as Chief Finance Officer in

August 2002, when the company started its operations on taking over the erstwhile DVB's distribution

business in North/West Delhi. In the last 5 years, NDPL has achieved a record 50% reduction in Aggregate

Technical and Commercial Losses, as compared to the opening loss level. Today, NDPL is acknowledged

for excellence in service enhancement and innovative consumer friendly interfaces.

Mr. Wadhwa has been with Tatas for last 21 years, starting with Hitech Drilling, a joint venture of Tata

Group and Schumberger of France in the Oil and Gas drilling business. He was also instrumental in setting

up Tata Petrodyne Limited, the oil exploration business of the Tata Group. His last assignment prior to

NDPL was with Tata Chemicals as CFO till 2002.

Mr. S. Ramakrishnan holds a B.Tech (Mechanical) degree from IIT, Madras and a Management degree

from IIM, Ahmedabad. He joined The Tata Administrative Service in 1972 and during his long tenure

handled a multitude of national as well as international projects. He is currently Executive Director

(Finance) of The Tata Power Company Ltd. He is also on the Board of several Tata companies.

Mr. Sankaranarayanan Padmanabhan, or "Paddy" as he is better known, is the Executive Director

(Operations) at Tata Power and is responsible for all the Company's Operations, including the Mumbai

Licence Area business and also the Maharashtra Projects.

Mr. Padmanabhan brings rich experience in large-scale project build up and delivery, global sourcing

and value creation in operational efficiencies. He joined TCS in 1982 as a trainee and progressed into

various roles. As the Executive Director & Head Global Human Resources of Tata Consultancy Services

Limited (TCS), he drove initiatives at TCS's helm to create a multi-lingual and culturally-diverse global

workforce and was responsible for over 100,000 employees worldwide. In his capacity, he achieved the

highest retention rates at TCS as compared to the overall Indian IT industry, besides creating a

world-class training and learning focused organisation, capable of integrating over 30,000 new

employees every year.

(Held post till 3rd June, 2009)

Mr. Amulya Charan is a B.E. (Mechanical) from the University of Roorkee, India and Post-Graduate

Diploma in Business Administration from Indian Institute of Management, Ahmedabad. He has an overall

experience of 37 years in various industries, ranging from consumer goods, international marketing, joint

venture promotion, automotive components, information technology, telecom and power sector. He has

been with The Tata Group since 1996. He is also on the Board of several Tata companies.

Mr. Amulya Charan Managing Director

Mr. S. PadmanabhanDirector

Mr. Sunil WadhwaDirector

BOARD OF DIRECTORS

Mr. S. RamakrishnanChairman

Mr. Ashok Sethi, a metallurgical engineer from IIT, Kharagpur, started his career as a Mechanical

Maintenance Engineer at Tata Power’s Trombay Thermal Power plant. He was associated with the

erection & commissioning of India’s first 500 MW thermal unit with multi-fuel firing facility and Quality

Assurance & commissioning of second 500 MW unit. Mr. Sethi subsequently headed Mechanical

Maintenance, Planning and Coal handling plant O&M for 1330 MW Trombay station.

He assumed charge of three Hydro power stations of Tata Power in 2004 and in addition, from 2006 he

was also responsible for T&D business area. In 2007, as Sr. General Manager he was heading Commercial

Operations covering Regulatory, Corporate Sourcing, Fuel procurement and Customer relations for the

License Area-Mumbai.

Mr. Sethi assumed charge as Vice President, Mumbai License Area – Operations from 2008. He is

responsible for Thermal & Hydro Stations, Load Control Center, Revenue collection, Customer relations,

Demand Side Management and Fuel logistic for its thermal plants.

During the above tenure, Mr Sethi has presented number of papers at conferences organized by NITIE,

IIPE, NTPC, CII etc.

Mr. U. S. Bapat is B.E. (Electrical). He has a Post-graduate Diploma in Management and Masters in

Marketing Management from Jamunalal Bajaj Institute, Mumbai University. He has overall experience of

over 35 years in the Power Industry. He has during the service handled several functions like Engineering

and Planning, Transmission and Distribution & Operations and Maintenance & Hydro and Thermal

Generation. At present he is Vice President, Operation (Eastern Region) for Tata Power Company Ltd.

Mr. Sharad Baijal graduated from BIT, Mesra (Mech. Engineering) in 1980. Joined The Tata Steel in 1981

and worked there for 16 years before joining The Tata Power in 1997. He was General Manager-Operation

Services (Eastern Region) in The Tata Power Jamshedpur Division and is currently Head (Operations) at

CGPL. He has obtained his Post-Graduate Diploma in Business Management (PGDBM) from XLRI in 1990.

He has his expertise in Power Plants including execution of projects and Operation & Maintenance of the

same. Mr. Baijal is Director on the Board of Industrial Energy Limited, a wholly owned company of The

Tata Power. He is also a member of Institution of Engineers and qualified External Assessor (EACP) for

TBEM. Mr. Baijal is also a Convenor of Energy Panel, Confederation of Indian Industry, Jharkhand Council.

Mr. Sharad Baijal Director

Mr. U. S. BapatDirector

Mr. Ashok SethiDirector

(Appointed from 3rd June, 2009)

ETHICS AND TRUSTWORTHINESS ARE OUR INHERENT ASSETS AND WE STRIVE TO BRING BEST VALUE TO

BOTH OUR SUPPLIERS AND CUSTOMERS. WE CONDUCT OUR OPERATIONS WITH PROFESSIONALISM,

UNCOMPROMISING INTEGRITY, TRANSPARENCY AND COMMITMENT.

THE TATA BRAND SYMBOLIZES LEADERSHIP WITH TRUST.

Our customers comprise of most of the State Utilities, CPPS, IPPs, Merchant Power Plants as well as Industrial Consumers.

SUPPLIERS

HPSEB

NDPLBYPLBRPL

BHUTAN

UPPCLNPCL

WBSEDCL

Tata Steel

CSPDCL

GRIDCO

MeSEB

APPCC

TNEB

GUVNL

MSEDCLTata PowerBESTRInfra

Tata Power

Tata PowerPCKL

CESC

MPPTC

KSEB

LAEDCLCAEDCLUAEDCL

RDPPC

HPPC

PSEBUTC

State owned utilitiesAndhra Pradesh (APPCC)Assam - LAEDCL I CAEDCL I UAEDCL Chhattisgarh (CSPDCL)Gujarat (GUVNL)Himachal Pradesh (HPSEB)Haryana (HPPC)Kerala (KSEB)Madhya Pradesh (MPPTC)Maharashtra (MSEDCL)Meghalaya (MeSEB)Orissa (GRIDCO)Punjab (PSEB)Rajasthan (RDPPC)Tamil Nadu (TNEB)Uttar Pradesh (UPPCL)West Bengal (WBSEDCL)

BUYERS State owned utilitiesAndhra Pradesh (APPCC)Assam - LAEDCL I CAEDCL IUAEDCLChandigarh (UTC)Gujarat (GUVNL)Haryana (HPPC)Himachal Pradesh (HPSEB)Kerala (KSEB)Karnataka (PCKL)Madhya Pradesh (MPPTC)Maharashtra (MSEDCL)Meghalaya (MeSEB)Orissa (GRIDCO)Punjab (PSEB)Rajasthan (RDPPC)Uttar Pradesh (UPPCL)Tamil Nadu (TNEB)West Bengal (WBSEDCL)

Private UtilitiesDelhi - NDPL I BYPL I BRPLMaharashtra - The Tata Power Company Ltd.BESTRInfraWest Bengal - CESCUttar Pradesh - Noida Power Company Ltd.

Private UtilitiesDelhi - NDPL I BYPL I BRPLMaharashtra - The Tata Power Company Ltd.Karnataka - The Tata Power Company Ltd. West Bengal - The Tata Power Company Ltd. I CESC

Captive Power Plants (CPPs)Jharkhand - Tata Steel Ltd. CPPs located in various States

IPPs located in various StatesRenewable Energy PlantsSugar Co-gen power plants in various statesBio-mass based plants in various statesSmall Hydro plants in various states

SUPPLIERS

BUYERS

SUPPLIERS and BUYERS

OUR ESTEEMED CUSTOMERS

REGISTERED OFFICECarnac Receiving Station34, Sant Tukaram RoadCarnac BunderMumbai 400 009

CORPORATE OFFICETata Power Mahalaxmi Receiving StationSenapati Bapat Marg, Lower ParelMumbai 400 013

BANKERSHDFC Bank Ltd.ICICI Bank Ltd.State Bank of IndiaState Bank of PatialaStandard Chartered Bank Limited

COMPANY SECRETARY

Mr T. N. Ramakrishan

AUDITORSDeloitte Haskins & Sells12, Annie Besant RoadOpp. Shivsagar EstateWorli, Mumbai 400 018

COMPANY INFORMATION

TATA POWER TRADING HAS GROWN AT A COMPOUNDED AVERAGE GROWTH RATE EXCEEDING 100% SINCE INCEPTION. IT HAS TAKEN AN IMPORTANT POSITION AMONGST THE VARIOUS TRADING COMPANIES AND IS RECOGNIZED AS AN EFFICIENT AND RELIABLE TRADING COMPANY.

Graphical representation of map. Not to scale.

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NOTICE

Notice is hereby given that the Sixth Annual General Meeting of the Members of Tata Power Trading Company Limited will be held in the Conference Room of The Tata Power Company Limited, Bombay House, 24, Homi Mody Street, Mumbai 400 001 on Thursday, 9th day of July 2009 at 3.00 p.m. to transact the following business :-Ordinary Business1. To receive, consider and adopt the Audited Profit and Loss Account for the period ended 31st March, 2009 and the Balance

Sheet as at that date together with the Report of the Directors and the Auditors thereon.2. To declare dividend on 6% Non-Cumulative Redeemable Preference Shares.3. To declare dividend on Equity Shares.4. To appoint a Director in place of Mr. Sunil Wadhwa, who retires by rotation and being eligible offers himself for

re-appointment.5. To appoint a Director in place of Mr. Ashok Sethi, who retires by rotation and being eligible offers himself for

re-appointment.6. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution : “RESOLVED THAT, subject to the provisions of Sections 224, 225 and other applicable provisions, if any, of the Companies

Act, 1956, Messrs Deloitte Haskins & Sells, Chartered Accountants, be and are hereby re-appointed as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to examine and audit the accounts of the Company for the financial year 2009-10, on such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors plus reimbursement of service tax, travelling and out-of-pocket expenses.”

Special Business7. To appoint a Director in place of Mr. U. S. Bapat, who was appointed as an Additional Director of the Company with effect from

3rd June, 2009 by the Board of Directors and who holds office upto the date of the forthcoming Annual General Meeting of the Company under Section 260 of the Companies Act, 1956 (the Act) and who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 257 of the Act from a member proposing his candidature for the office of Director.

NOteS –

1. A memBer eNtitled tO AtteNd ANd vOte iS eNtitled tO AppOiNt A prOxy tO AtteNd ANd vOte iNSteAd Of himSelf ANd A prOxy Need NOt Be A memBer.

2. Proxies, in order to be effective, must be received at the Registered Office of the Company, not less than 48 hours before the commencement of the Annual General Meeting i.e. by 3.00 p.m. on 7th July, 2009.

3. Corporate Members are requested to send a duly certified copy of the Board Resolution, pursuant to Section 187 of the Companies Act, 1956, authorising their representative to attend and vote at the Annual General Meeting.

4. Members are requested to bring their admission slips alongwith copy of the report and accounts to the Annual General Meeting.

5. All the documents referred to in the accompanying notice are available for inspection at the Registered Office of the Company on all the working days between 11:00 a.m. to 1:00 p.m. upto the date of the Annual General Meeting.

By Order of the Board of Directors,

t. N. rAmAKriShNAN Company Secretary

Mumbai, 3rd June, 2009

registered Office :Carnac Receiving Station34, Sant Tukaram RoadCarnac BunderMumbai 400 009

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explanatory Statement

As required by Section 173 of the Companies Act, 1956 (the Act), the following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos. 7 of the accompanying Notice dated 3rd June, 2009.

item No. 7: Mr. U. S. Bapat is an electrical engineer with a Post graduate Diploma in Management (DMS) from Mumbai University and Masters in Marketing Management. He is also a Fellow of Institution of Engineers, India. He has completed 34 years of meritorious service in TATA Power.

Key positions held in TATA Power are :

l Chief Hydro (In-charge of three hydro stations comprising of 447 MW)

l GM – T & D (In-charge of Transmission & Distribution System of TATA Power supplying the city of Mumbai).

l Sr. GM – LA Generation comprising of 1,777 MW (Trombay Thermal – 1,330 MW, Hydros – 447 MW and Wind – 78MW (OLA)).

l Presently he is Vice President - Operations (Eastern Region) comprising 427 MW Jojobera, 250 MW Haldia and 120 MW Power House No.6 w.e.f 1st October, 2008.

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DIRECTORS’ REPORT

TO THE MEMBERS,

The Directors are pleased to present their Sixth Annual Report on the business and operations of the Company and the statement of

accounts for the year ended 31st March, 2009.

1. fiNANCiAl reSUltSfy 2009

(rupees Crores)FY 2008

(Rupees Crores)(a) Revenue from Power Supply(b) Income from Advisory Services/Consultancy(c) Other Income

2,167.290.905.05

879.860.473.18

(d) total income 2,173.24 883.51(e) Cost of Power Purchased 2,155.26 872.47(f) Operating, Administration and other finance charges 6.55 5.22(g) total expenditure 2,161.81 877.69(h) Profit Before Taxes(i) Provision for Taxation

11.433.80

5.821.52

(j) Net profit After tax(k) Balance brought forward from the previous year

7.635.78

4.303.56

(l) Balance 13.41 7.86 which the Directors have appropriated as under to : (i) Proposed Preference Dividend (ii) Proposed Equity Dividend (iii) Additional Income-tax on Dividend (iv) General Reserve

1.080.400.250.60

1.080.400.250.35

total 2.33 2.08(m) Balance carried to Balance Sheet 11.08 5.78

In its fourth full year of operation, the Company traded 2,996 MUs as compared to 1,711 MUs during the previous year, an increase of 75%. Revenues of the Company also increased by 146% from Rs. 883.51 crores to Rs. 2,173.23 crores. The Company has a CAGR of 151% in terms of power traded.

In addition, to power trading business the Company also provided consultancy services for Energy Management, Project Analysis and Clean Development Mechanism (CDM). The Company earned revenues of Rs. 0.90 crore from advisory services/consultancy business during the year.

During the year, Net Profit After Tax increased from Rs. 4.30 crores to Rs. 7.63 crores as compared to the previous year, an increase of 77%. The Company’s short-term credit facility from banks was rated as ‘BBB+’ by Fitch Rating Agency.

2. divideNd

The Board has recommended a dividend of Rs. 2/- per share on Equity Shares (20%) – same as last year, and Rs. 0.60/- per share on Cumulative Redeemable Preference Shares (6%) – same as last year, for the year ended 31st March, 2009 for approval by the members.

3. direCtOrS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Sunil Wadhwa and Mr. Ashok Sethi retire by rotation. Mr. Sunil Wadhwa and Mr. Ashok Sethi being eligible offer themselves for re-appointment.

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Mr. U. S. Bapat was appointed as Additional Director of the Company with effect from 3rd June, 2009 in accordance with Article 112 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956. Mr. U. S. Bapat holds office only up to the date of the forthcoming Annual General Meeting and a notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose appointment of Mr. U. S. Bapat as a Director.

Mr. Sharad Baijal resigned as Director with effect from 3rd June, 2009 The Board has placed on record its appreciation of the valuable contribution made to the Company by Mr. Sharad Baijal.

None of the Directors of the Company are disqualified under Section 274 (1) (g) of the Companies Act, 1956.

4. AUditOrS

Members would be requested, as usual, to appoint Auditors for the current year and authorise the Board of Directors to fix their remuneration. Messrs Deloitte Haskins & Sells (DHS), the present Auditors who retire at the conclusion of the forthcoming Annual General Meeting are eligible for re-appointment and have expressed their willingness to be re-appointed and have given a certificate to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Act.

5. diSClOSUre Of pArtiCUlArS

Particulars of Employees: Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is not applicable as all the managers, executives and officers are employees of The Tata Power Co. Ltd. and are deputed to the Company.

6. CONServAtiON Of eNerGy, teChNOlOGy ABSOrptiON ANd fOreiGN exChANGe eArNiNGS ANd OUtGO

The Company does not fall under any of the industries covered by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. Hence, the requirements of disclosure in relation to Conservation of Energy and Technology Absorption are not given.

While there were no foreign exchange earnings, the outgo during the year was Rs. 77,59,491/- (Rs. 2,81,550/-) on account of implementation Power Management System software platform and travelling expenses for employees.

7. COrpOrAte GOverNANCe

Board of Directors of the Company has constituted Audit and Remuneration committees, even though it is not a listed company.

The Company has an Audit Committee comprising of three Directors, viz. Mr. S Ramakrishnan, Mr. Amulya Charan and Mr. Sunil Wadhwa. Mr. S Ramakrishnan is the Chairman of the Audit Committee.

The Company has a Remuneration Committee comprising of three Directors, viz. Mr. S. Ramakrishnan Mr. S. Padmanabhan, and Mr. Sunil Wadhwa. Mr S. Ramakrishnan is the Chairman of the Remuneration Committee.

The Company has a Finance Committee comprising of three Directors, viz. Mr. S. Ramakrishnan Mr. Amulya Charan, and Mr. Ashok Sethi. Mr. S. Ramakrishnan is the Chairman of the Finance Committee.

8. SOCiAl reSpONSiBility

The Company is committed to discharging its responsibility as a good corporate citizen. As part of its social responsibility, the Company conducted following activities:

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In the spirit of International Women’s Day, the Company jointly with The Tata Power Company Ltd. (Tata Power) conducted a workshop for lady employees, working at Trombay. The theme of the workshop was ‘Women’s Safety, Fitness and Health’. Relevant topics like personal safety, safety awareness, physical/mental conditioning and work ergonomics were discussed. Female trainees were given special advice about being assertive and self confident.

A training workshop on Quick Response Tactics was conducted by the Company jointly with Tata Power for Fire and Security departments at Trombay. They were imparted practical training in developing alertness, agility, physical reflexes and mental focus. Participants also received special instruction in unarmed combat to tackle antisocial elements.

The Company also conducted a workshop on ‘Personal Safety, Unarmed Combat and Positive Attitude’ for police personnel in Mumbai and Pune.

The Company has identified initiatives to promote health care and energy conservation. An internal committee led by the Managing Director will drive the implementation of the identified initiatives.

9. direCtOrS’ reSpONSiBility StAtemeNt

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that :-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

10. ACKNOWledGemeNt

The Directors thank the Ministry of Power, CERC the concerned state governments and all concerned statutory, including regulatory authorities.

The Directors also thank The Tata Power Company Limited, Company’s customers, vendors, business associates and bankers for the support to the Company.

The Directors appreciate and value the contribution made by every member of the Tata Power Trading family.

On behalf of the Board of Directors,

S. ramakrishnanMumbai, 3rd June, 2009 Chairman

MANAGEMENT DISCUSSION AND ANALYSIS

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1. iNdUStry OvervieW

Electricity Act, 2003 recognised Power Trading as a new segment apart from generation, transmission and distribution. Since

then, Power Trading has been continuously evolving and proving. Newer concepts like Banking of Power, Power Exchange, Power

Distribution Franchisees, etc. are developed in the Power Trading Industry in India. The competition has also grown fierce due to

increase in number of licensed traders from 13 in FY 2004-05 to 43 in FY 2008-09. However total power traded as compared to total

power generation in India is only about 4% to 5%.

2. OppOrtUNitieS & threAtS

2.1 power trading:

India being developing country, its economy is growing at about 8% to 9%. Due to rapid urbanization and change in the lifestyle of

the people, the demand for power is increasing. At present, India has Power deficit of 10% to 12%. Uneven development of power

sector and seasonal variations in the various parts of the Country has created opportunities for Power trading in India. Government

has also taken various regulatory initiatives and introduced favourable policies to attract private investment which has resulted in

many Captives and Independent Power Plants come up. Power trading industry has good potential in India to prosper and fulfill the

Short-term and Long-term demand of the various Consumers.

i) Short-term power trading

The Company is actively involved in meeting the Short-Term Power requirement of various State Utilities and Distribution

Companies (Discoms) by procuring the power from surplus States, Captive Power Plants (CPPs), Liquid Fuel based Power

Plants and Renewable Energy Sources including small hydro power plants.

In India, most of the Discoms are required to buy a certain percentage of power from renewable sources. The Company is

playing an active role in procuring renewable energy for many Discoms. It has traded approximately 10% green power of the

total power traded during the year.

The Company has also acted as power procurer for three franchisees in the State of Maharashtra in Pune, Navi Mumbai and

Thane area. The Company is actively pursuing the opportunity for being a preferred power procurer for new franchisees that

are being established.

ii) long-term power trading:

The Company has created long-term sources by tying up with power projects located across the country and include thermal

power projects based on linked coal and imported coal, run of the canal hydro power plants, run of the river hydro power

plants, renewable sources such as bagasse based cogeneration power plants, biomass based power plants and municipal

solid waste based Power Plants.

Long-term power trading business is expected to hedge the risk of erosion of short-term power trading on account of trend

of increasing volume of short-term trade shifting to the power exchanges.

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iii) trading through power exchange:

CERC has permitted trading of Electricity through Power exchange w.e.f. June 2008. Currently, two exchanges viz. Indian

Energy Exchange (IEX) and Power Exchange of India (PXI) are in operation in India which facilitate an automated on-line

platform for physical day-ahead contracts.

Tata Power Trading is a registered Trading Cum Clearing Member of both exchanges. It trades Power through these Exchanges

on behalf of its clients. This is one more platform for Tata Power Trading to optimize the sale of power from its esteemed

clients in the market by securing most remunerative rates in the day-ahead market. Skilled experts in real time dispatch in our

operations department and our Control Centre ensures high level of dependable power transactions. In FY 2009, the Company

has traded 460 MUs through exchanges.

2.2 energy management

The Company was appointed as an adviser for six months by The Brihan Mumbai Electricity Supply and Transport Undertaking (BEST)

for managing their power surplus/deficit from 1st January, 2008. The assignment also included training managers from BEST for

power procurement and scheduling activities.

2.3 fuel management Services

The Company along with The Tata Power Company has an expertise and extensive relations with coal suppliers in India as well as

outside India. The Company plans to offer services related to coal procurement and freight facilitation thereby contribute to project

success. The Company with the backing of its parent, The Tata Power Company Ltd., has access to various fuel sources.

2.4 Clean development mechanism (Cdm)

There has been an increasing concern for reducing green house gas emissions all over the world. The Company has planned to

exploit this opportunity and has developed a team of professionals with a high level of technical and financial expertise, engaged

in providing CDM Advisory Services to renewable energy projects. Currently, the Company offers Clean Development Mechanism

Approval Services, Carbon Portfolio Management Services and Structured Financial Solutions with CDM.

2.5 Advisory Services

The Company offers Techno-Commercial Advisory/Consultancy Services to Discoms/ CPPs/ IPPs on matters pertaining to power

dispatch, scheduling, evacuation, project formulation, operation and maintenance. The Company deploys its staff to provide end to

end solution and also to train the staff of the client.

3. SeGmeNt-WiSe revieW Of the COmpANy’S BUSiNeSS

The Company is primarily engaged in the business of power trading spanning across all parts of India. The Company has also started

consultancy business.

particularspower purchased from

total tradediscoms power exchanges Cpps, Co-gens & ipps

MUs Traded 868 460 1,668 2,996

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particulars power trading ConsultancyRevenue Generated (Rs. Crores) 2,202.13 0.90

4. OUtlOOK

Government of India (GoI) is encouraging the concept of Merchant Power Plants to meet the continuously growing demand in the

country. This would help in developing a robust power trading business in the country.

The Company has also obtained membership of the Indian Energy Exchange and Power Exchange India. The advent of power trading

exchange will result in an efficient price discovery mechanism.

The outlook for FY 2009-10 looks to be healthy with good scope for growth. Already, good quantum of power has been tied up

through long-term agreements.

5. riSK ANd CONCerNS

Regulated margins continue to be a concern for the Company considering the increase in input costs. The Company is also concerned

about increasing cost of power per unit which has lead to additional trading exposure and increased requirement of working

capital.

6. iNterNAl CONtrOl SyStemS ANd their AdeQUACy

The Company since its incorporation has been on a periodic basis reviewing its Internal Controls and updating its manuals for various

processes like Accounting, Commercial, Tendering, Operations, etc. Internal Audit is conducted on an annual basis by qualified

auditors, covering various areas. The Company is implementing a power management system to strengthen its Internal Control

systems.

7. diSCUSSiON ON fiNANCiAl perfOrmANCe With reSpeCt tO OperAtiONAl perfOrmANCe

The financial performance has been very much in line with the operational performance as stated in the section on segments above.

The revenue streams have been in accordance with the plans.

As for the operational performance, since the power flow has to be monitored on round-the-clock basis, a good amount of emphasis

has been laid on staffing in the operation area.

8. mAteriAl develOpmeNt iN hUmAN reSOUrCeS/iNdUStriAl relAtiONS frONt, iNClUdiNG NUmBer Of peOple

emplOyed

Over a period of Five years, since operations have begun, it has been realized that timely action with a high level of accuracy and

precision are the key to success of this business. In this context, talented and qualified manpower plays a vital role. The management

is pleased to inform that the attrition rate is quite reasonable and the management has been making serious efforts towards staff

recruitment, training and retention.

AUDITORS’ REPORT

TO THE MEMBERS OF

TATA POWER TRADING COMPANY LIMITED

1. We have audited the attached Balance Sheet of TATA POWER TRADING COMPANY LIMITED as at 31st March, 2009, Profit and

Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are

the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements

based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that

we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the

Management, as well as evaluating the overall financial presentation. We believe that our audit provides a reasonable basis

for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of Section 227(4A)

of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said

Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our

examination of those books;

(c) the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement

with the books of account;

(d) in our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in

compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

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(e) in our opinion and to the best of our information and according to explanations given to us, the said accounts give the

information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity

with the accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of the written representations from the directors as on 31st March, 2009, taken on record by the Board of

Directors, none of the directors is disqualified as of 31st March, 2009 from being appointed as a director under Section 274

(1)(g) of the Companies Act, 1956.

For deloitte haskins & Sells

Chartered Accountants

N. venkatram

Partner

Mumbai, 7th May, 2009 Membership No. 71387

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ANNexUre tO the AUditOrS’ repOrt

(Referred to in paragraph 3 of our report of even date)

(i) The nature of the Companies business/activities during the year is such that the Clauses (ii), (vi), (x), (xii), (xiii), (xiv), (xv),

(xvi), (xviii), (xix) and (xx) of the Companies (Auditor’s Report) Order, 2003 are not applicable.

(ii) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of

fixed assets.

(b) As explained to us the assets have been physically verified by the management, in accordance with the established

system of periodical verification of fixed assets. In our opinion, the frequency of verification is reasonable considering

the size of the operations of the Company. No material discrepancies between the book records and the physical records

were noticed in respect of the assets physically verified.

(c) In our opinion a substantial part of the fixed assets has not been disposed off by the Company during the year.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans secured

or unsecured, to or from Companies, firms or other parties covered in the register maintained under Section 301 of the

Companies Act, 1956. Accordingly, Clause (iii) b, (iii) c, (iii) d, (iii) f and (iii) g of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control systems

commensurate with the size of the Company and the nature of its business for purchase (including fixed assets)/sale of

services, and we have not observed any continuing failure to correct major weakness in such internal controls.

(v) According to the information and explanations given to us, the Company has not entered into any contracts or arrangement

with parties, which needs to be entered in the register maintained under Section 301 of the Companies Act, 1956.

(vi) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the

management have been commensurate with the size of the Company and nature of its business.

(vii) As informed to us by the management, Central Government has not prescribed maintenance of cost records under Section

209 (1) (d) of the Companies Act, 1956.

(viii) (a) According to the information and explanations given to us and according to the books and records as produced and

examined by us, the Company has been generally regular in depositing undisputed statutory dues, including provident

fund, income tax, sales tax, service tax, cess and any other material statutory dues with the appropriate authorities

during the year. According to the information and explanations given to us, no undisputed amounts payable in respect

of income tax, sales tax, service tax and cess were in arrears as at 31st March, 2009 for a period of more than 6 months

from the date they became payable.

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(b) According to the information and explanations given to us there are no unpaid disputed amounts payable in respect of

income tax, sales tax, service tax, and cess as at 31st March, 2009.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment

of dues to any financial institution, bank or to debenture holders during the year.

(x) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company,

funds raised on a short term basis have, prima facie, not been used during the year for long-term investments.

(xi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or

reported during the year.

For deloitte haskins & Sells

Chartered Accountants

N. venkatram

Partner

Mumbai, 7th May, 2009 Membership No. 71387

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BALANCE SHEET AS AT 31ST MARCH, 2009

Schedule As at 31st march, 2009

As at 31st March, 2008

rupees rupees Rupees

fUNdS emplOyed :

1. SHARE CAPITAL A 200,000,000 200,000,000

2. RESERVES AND SURPLUS B 124,767,696 65,780,342

3. UNSECURED LOANS C – 27,695,438

tOtAl 324,767,696 293,475,780

AppliCAtiON Of fUNdS :

4. FIXED ASSETS D

a. Gross Block 3,638,944 2,892,400

Less: Depreciation to date 947,359 627,208

2,691,585 2,265,192

b. Capital Work-in-Progress 10,712,805 –

13,404,390 2,265,192

5. INVESTMENTS E 1,056,838 10,872

6. DEFERRED TAX ASSET (Net) 3,848,800 1,776,000

7. CURRENT ASSETS, LOANS AND ADVANCES F

Sundry Debtors 1,271,768,438 593,005,968

Cash and Bank Balances 380,019,114 82,655,435

Loans and Advances 11,081,577 13,770,681

1,662,869,129 689,432,084

Less :

8. CURRENT LIABILITIES AND PROVISIONS G

Current Liabilities 1,337,184,594 383,013,439

Provisions 19,226,867 17,315,260

1,356,411,461 400,328,699

NET CURRENT ASSETS 306,457,668 289,103,385

9. MISCELLANEOUS EXPENDITURE (to the extent not written off) H – 320,331

tOtAl 324,767,696 293,475,780

Notes forming part of the Accounts I

As per our report of even date attached. For and on behalf of the Board

S. ramakrishnan Chairman

For deloitte haskins & Sells Amulya Charan Managing DirectorChartered Accountants

N. venkatram t. N. ramakrishnan Secretary PartnerMumbai , 7th May, 2009 Mumbai, 7th May, 2009

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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009



For deloitte haskins & Sells Amulya Charan Managing DirectorChartered Accountants

N. venkatram t. N. ramakrishnan Secretary PartnerMumbai , 7th May, 2009 Mumbai, 7th May, 2009

Schedule Current year Previous Yearrupees rupees Rupees

iNCOme :1. Revenue 1 21,719,253,571 8,821,147,171 2. Other Income 2 13,148,154 13,966,062

tOtAl iNCOme 21,732,401,725 8,835,113,233 expeNditUre

3. Cost of Power Purchased 21,901,722,535 8,885,271,356 Less : Cash Discount Earned 349,166,979 160,545,576

21,552,555,556 8,724,725,780 4. Operating and Administration expenses 3 64,623,994 51,775,637 5. Depreciation 320,151 299,860 6. Interest 4 586,960 85,224

tOtAl expeNditUre 21,618,086,661 8,776,886,501 prOfit BefOre tAxeS 114,315,064 58,226,732

7. prOviSiON fOr tAxAtiONa) Current Tax 39,000,000 16,991,000 b) Deferred Tax (2,072,800) (1,876,400)c) Fringe Benefit Tax 800,000 786,624

37,727,200 15,901,224 8. prOviSiON fOr tAxAtiON iN reSpeCt Of eArlier yeArS

a) Current Tax 285,250 (642,060) 38,012,450 15,259,164

prOfit After tAxeS CArried tO BAlANCe Sheet 76,302,614 42,967,568 ApprOpriAtiONS

9. Dividend on:Preference Shares - Proposed 10,800,000 10,800,000 Equity Shares - Proposed 4,000,000 4,000,000

14,800,000 14,800,000 10. Additional Income Tax on Dividend 2,515,260 2,515,260 11. Transfer to General Reserve 6,000,000 3,500,000

23,315,260 20,815,260 12. BAlANCe CArried tO BAlANCe Sheet 52,987,354 22,152,308 13. Basic and Diluted Earning Per Share (in Rs.)

(Face Value Rs.10) 31.83 15.17 Notes forming part of the Accounts i

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009

year ended 31st march, 2009

Year ended 31st March, 2008

rupees rupees Rupees RupeesA. Cash flow from Operating Activities

Profit before Taxes 114,315,064 58,226,732 Adjustments for:Depreciation 320,151 299,860 Interest 586,960 85,224 Dividend from Current Investments (9,000,078) (13,896,584)Profit on Sale of Current Investments (24,168) (2,600)Miscellaneous Expenditure written off 320,331 320,332 Provision for Doubtful debts 6,427,252 5,665,266

(1,369,552) (7,528,502)Operating Profit before Working Capital Changes 112,945,512 50,698,230 Adjustments for:Trade and Other Receivables (683,032,658) (351,679,623)Trade and Other Payables 954,171,155 147,014,788

271,138,497 (204,664,835)Net Cash Generated/(Used) from Operations 384,084,009 (153,966,605)

Taxes Paid (including Fringe Benefit Tax) (37,641,603) (18,692,192) (37,641,603) (18,692,192)

Net Cash from/(used in) Operating Activities A 346,442,406 (172,658,797)B. Cash flow from investing Activities

Purchase of Fixed Assets and CWIP (11,459,349) (896,687)Purchase of Investment (11,205,635,342) (7,170,867,141)Sale of Investment 11,204,613,544 7,376,651,834 Dividend Income 9,000,078 13,896,584

(3,481,069) 218,784,590 Net Cash from/(used in) investing Activities B (3,481,069) 218,784,590

C. Cash flow from financing Activities – Dividend Paid (14,800,000) – Dividend Tax Paid (2,515,260) – Proceeds from Borrowings 825,000,000 255,195,438 Repayment of Borrowings (852,695,438) (227,500,000)Interest Paid (586,960) (72,224)

(45,597,658) 27,623,214 Net Cash from/(used in) financing Activities C (45,597,658) 27,623,214 Net increase in Cash and Cash equivalents (A + B + C) 297,363,679 73,749,007 Cash and Cash equivalents as at 1st April, 2008 82,655,435 8,906,428 Cash and Cash equivalents as at 31st march, 2009 380,019,114 82,655,435



For deloitte haskins & Sells Amulya Charan Managing DirectorChartered AccountantsN. venkatram t. N. ramakrishnan Secretary PartnerMumbai , 7th May, 2009 Mumbai, 7th May, 2009

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As at 31st march, 2009


Rupees rupees RupeesSChedUle “ A“ – ShAre CApitAl

AUTHORISED CAPITAL10,000,000 Equity Shares of Rs. 10 each 100,000,000 100,000,000 18,000,000 6% Non-Cumulative Redeemable Preference Shares of Rs. 10 each 180,000,000 180,000,000

280,000,000 280,000,000 ISSUED SUBSCRIBED AND PAID UP2,000,000 Equity Shares of Rs.10 each fully paid 20,000,000 20,000,000 (The Company is a wholly owned subsidiary of The Tata Power Company Limited)18,000,000 6% Non-Cumulative Redeemable Preference Shares of Rs.10 each fully paid held by the holding company.

180,000,000 180,000,000

(These shares would be redeemable at par at the end of the ten years from the date of allotment i.e. 24th May, 2005)

200,000,000 200,000,000 SChedUle “ B“ – reServeS ANd SUrplUS

GENERAL RESERVEOpening Balance 8,000,000 4,500,000 Add : Transfer from Profit and Loss account 6,000,000 3,500,000

14,000,000 8,000,000 PROFIT AND LOSS ACCOUNTOpening Balance 57,780,342 35,628,034 Add : Profit for the Period 52,987,354 22,152,308 Closing Balance 110,767,696 57,780,342

124,767,696 65,780,342 SChedUle “ C“ – UNSeCUred lOAN:

Temporary overdrawn balances in Bank Current A/c – 27,695,438 – 27,695,438

particulars GrOSS BlOCK depreCiAtiON Net BlOCKAs at

1st April, 2008

Additionsfor the Year

Deductionsfor the Year

As at 31st march,

2009

As at1st April,

2008

For theYear

Deductionsfor the Year

As at 31st march,

2009

As at 31st march,

2009

As at 31st March,

2008 Rupees Rupees Rupees rupees Rupees Rupees Rupees rupees rupees Rupees

A tANGiBle ASSetS 1 Computers 910,288 479,487 – 1,389,775 197,585 154,726 – 352,311 1,037,464 712,703 2 Furniture, Fixtures

and Office Equipment 617,691 267,057 – 884,748 105,573 35,805 – 141,378 743,370 512,118

3 Motor Vehicles 1,364,421 – – 1,364,421 324,050 129,620 – 453,670 910,751 1,040,371 2008 - 09 2,892,400 746,544 – 3,638,944 627,208 320,151 – 947,359 2,691,585 2,265,192 2007 - 08 1,995,713 896,687 – 2,892,400 327,348 299,860 – 627,208 2,265,192 –

SChedUle “ d“ – fixed ASSetS

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009

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Rupees rupees RupeesSChedUle “ f“ – CUrreNt ASSetS, lOANS ANd AdvANCeSa) Sundry debtors

(Unsecured)Debts outstanding for more than six months 11,318,685 5,677,249 Other Debts 1,272,542,271 592,993,985 Sundry Debtors 1,283,860,956 598,671,234 Less : Provision for Doubtful debts 12,092,518 5,665,266

1,271,768,438 593,005,968 Note:Sundry Debtors considered good 1,271,768,438 593,005,968 Sundry Debtors considered doubtful 12,092,518 5,665,266

1,283,860,956 598,671,234 b) Cash and Bank Balances

Current Accounts with Scheduled Banks 380,019,114 82,655,435 Total Current Assets 1,651,787,552 675,661,403

c) loans and AdvancesUnsecured Considered good-unless otherwise stated

(i) Other Advances 1,067,006 3,234,641 (ii) Deposits 10,014,571 10,004,000 (iii) Advance Payment of Taxes (Net) – 532,040

total loans and Advances 11,081,577 13,770,681 total Current Assets, loans and Advances 1,662,869,129 689,432,084

1. during the year, the Company acquired and sold the following investments:particulars No. of units purchase Cost

a) Birla Sun Life Cash Plus - Instl. Prem. 269,924,793 2,704,511,468 b) HDFC Cash Management Fund - Saving Plan 154,270,614 1,640,883,954 c) HDFC Liquid Fund Premium Plan 28,214,190 300,097,406 d) UTI Liquid Cash Plan Institutional 865,617 882,449,739 e) UTI Fixed Income Interval Fund 500,000 5,000,000 f) UTI Money Market Fund 9,183,253 166,102,330 g) ICICI Prudential Institutional Liquid Plan 416,332,308 4,163,531,251 h) SBI Premium Liquid Fund 36,056,483 361,736,667 i) SBI Magnum Insta Cash Fund 32,431,194 543,232,234 j) Tata Liquid Super High Investment Fund 143,636 160,085,485

10,927,630,534

OTHER INVESTMENTS - UNQUOTED - CURRENT Opening (Units)

Purchased (Units)

Sold (Units)

Closing Balance (Units)

face value as at31st march,

2009

Cost as at31st march,

2009

Cost as at 31st March,

2008rupees rupees Rupees

a) Templeton India Liquid Fund 1,087 47,804,956 47,700,360 105,683 1,056,830 1,056,838 10,872 1,056,838 10,872

SChedUle “ e “ – iNveStmeNtS

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009

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Rupees rupees RupeesSChedUle “ G“ – CUrreNt liABilitieS ANd prOviSiONS

CUrreNt liABilitieSSundry Creditors - Micro and Small Enterprises – – (Refer Note No. 2 to Schedule ‘I’)Sundry Creditors - Others 1,332,675,151 382,379,521 Deposit received from Customers 1,935,000 – Other Liabilities 2,574,443 633,918 total Current liabilities 1,337,184,594 383,013,439 prOviSiONSProvision for Taxation (Net) 1,911,607 – Provision for Proposed Dividends 14,800,000 14,800,000 Provision for Additional Income Tax on Dividends 2,515,260 2,515,260 total provisions 19,226,867 17,315,260 total Current liabilities and provisions 1,356,411,461 400,328,699

SChedUle “ h“ – miSCellANeOUS expeNditUre (to the extent not written off)Opening Balance 320,331 640,663 Amount Written off During the period 320,331 320,332 Closing Balance – 320,331

SCHEDULES FORMING PART OF THE BALANCE SHEET AT AT 31ST MARCH, 2009

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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009

Current year Previous Yearrupees rupees Rupees

SChedUle “1” – reveNUea) Revenue from Power Supply 22,021,314,142 8,952,941,269

Less: Cash Discount allowed 348,400,837 154,292,536 21,672,913,305 8,798,648,733

b) Income from Advisory Services 9,035,498 4,700,000 c) Compensation Accrued (Net) 37,304,768 3,489,000 d) Miscellaneous revenue (Net) – 14,309,438

21,719,253,571 8,821,147,171 SChedUle “2” – Other iNCOme

a) Dividend from Current Investments 9,000,078 13,896,584 b) Profit on sale of Current Investments 24,168 2,600 c) Delay Payment Charges received 4,123,908 66,878

13,148,154 13,966,062 SChedUle “3” – OperAtiON ANd AdmiNiStrAtiON expeNSeS

a) Payments to and Provision for EmployeesSalaries 12,600 435,479 Contribution to Provident Fund – 36,520 Leave Encashment – 121,733 Welfare Expenses – 30,421

12,600 624,153 b) Stores, Oil etc. consumed 715,084 84,660 c) Rental of Land, Buildings, Plant and Equipments etc. 3,989,998 894,292 d) Repairs and Maintenance to Furniture, Vehicles etc. 175,300 246,199 e) Other Operation Expenses 17,157,820 11,777,319 f) Auditor’s Remuneration (Refer Note 3 of Schedule “I”) 1,584,930 1,552,253 g) Cost of Services Procured 17,900,373 17,520,206 h) Miscellaneous Expenses 14,728,217 13,054,452 i) Amount Written off - Miscellaneous Expenditure (Schedule “H”) 320,331 320,332 j) Insurance 27,410 36,505 k) Bad Debts 1,584,679 - l) Provision for Doubtful Debts (Net) 6,427,252 5,665,266

64,623,994 51,775,637 SChedUle “4” – iNtereSt ANd fiNANCe ChArGeS

a) Interest on Short Term Borrowings 529,128 72,224 b) Interest on delayed payment of Advance Tax 57,832 13,000

586,960 85,224

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SChedUle “i”

Background:

Tata Power Trading Company Limited is a wholly owned subsidiary of Tata Power Company Limited. The Company is engaged in the business of trading of electricity

across the length and breadth of the country. The Company having a certificate from CERC under Category “F” for trading power units, which allows the Company

to make business without any restrictions on trading of numbers of power units purchased/sold. It sources power from different public and private sectors utilities

(through various CPP’s & IPP’s) and supplies to various consumers from public and private sectors power utilities. Further, the Company also provides consultancy

services relating to procurement/sale of power, Clean Development Mechanism (CDM) advisory services.

1. Significant Accounting policies :

a) Basis of preparation of financial Statements:

The financial statements are prepared under historical cost convention, on accrual basis, and in accordance with requirements of the Companies Act,

1956, and comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act, which have been notified by the Companies

(Accounting Standards) Rules, 2006.

b) Use of estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the

date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and

estimates are recognised in the period in which the results are known/materialised.

c) fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation, amortisation and impairment loss if any. Cost includes purchase price, borrowing costs and

all other applicable expenses incurred to bring the assets to its present location and condition.

d) depreciation:

The Company is providing depreciation on fixed assets at the rate prescribed in the Schedule XIV of the Companies Act, 1956 on Straight Line Method

(SLM) basis. Depreciation on addition/deduction of assets is provided on pro-rata basis. Assets costing less than Rs. 5,000 are depreciated at the rate of

100%.

e) retirement Benefit:

Contribution to Provident Fund is accounted on accrual basis with corresponding contribution to recognised fund.

f) investments:

Current investments are carried at lower of cost and fair value.

NOTES FORMING PART OF THE ACCOUNTS

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g) revenue recognition:

i. Revenue from sale of power is accounted for based on rates agreed with the Customers and is inclusive of trading margin.

ii. Revenue from sale of power under Banking Arrangements is accounted for on gross basis as the Company is the primarily obligor under the

Arrangements.

iii. Revenue in the nature of advisory services rendered towards finalization of power purchase agreements, CDM services, load management etc is

recognized when such fee is assured and determinable under the terms of respective agreements.

iv. Delayed payment charges for power supply are recognized when recovery is virtually certain on grounds of prudence.

v. Compensation recoverable from customers/supplier for default in purchase/sale of power is accrued when determined under the terms of

respective agreements and acknowledge by customers/ suppliers.

h) Segment reporting:

As the Company’s business activity consists only of Power Trading and related consultancy activities, as such there are no separate reportable segments

as per the requirements of Accounting Standard (AS-17) “Segment Reporting” issued by the Institute of Chartered Accountants of India.

i) taxes on income:

Current tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the provisions of the Income

Tax Act, 1961. Deferred tax, which is computed on the basis of enacted/substantively enacted rates, is recognised, on timing differences, being the

difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods –

(See Note 4). Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is reasonable certainty of

realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realization in future.

j) provision, Contingent liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is

probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither

recognised nor disclosed in financial statements.

k) preliminary expenses:

Preliminary Expenses are written off over a period of five years after commencement of business.

2. No enterprises have been identified as “Supplier” under the Micro, Small and Medium Enterprises Development Act, 2006. The aforesaid identification has been

done on the basis of information, to the extent provided by the vendors to the Company. This has been relied upon by the Auditors.


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3. details of Auditor’s remuneration:particulars 2008-09

rupees2007-08

RupeesAudit Fees 800,000 800,000Taxation Matters 150,000 125,000Other Services 450,000 456,500Service Tax on above 173,040 170,753Out of Pocket Expenses 11,890 Niltotal 1,584,930 1,552,253

4. deferred tax:

Deferred Tax (Liability)/Asset as at 31st March, 2009 comprises of:

particulars 2008-09rupees

2007-08Rupees

deferred tax liability:- Depreciation (261,200) (149,000)total deferred tax liability (261,200) (149,000)deferred tax Asset:- Provision for Doubtful debts 4,110,000 1,925,000total deferred tax Asset 4,110,000 1,925,000Net 3,848,800 1,776,000

5. managerial remuneration:

Managerial Remuneration for Directors:

particulars 2008-09rupees

2007-08Rupees

1) Salaries and Allowances 12,600 395,6332) Contribution to Provident Fund Nil 36,5203) Commission to Director Nil 192,0004) Remuneration paid to Managing Director on deputation from the Holding Company* 3,900,000 2,594,841total 3,912,600 3,218,994

* Represents amounts charged by the Holding Company.

6. disclosure as required by Accounting Standard 18 (AS-18) “related party disclosures” issued by the institute of Chartered Accountants of

india is as follows:

(a) Names of the related parties and description of relationship:

Name of the related party Country of originrelated parties where transactions have taken place during the year:holding Company1. The Tata Power Company Ltd. Indiafellow Subsidiary1. North Delhi Power Ltd. IndiaKey management personnel1. N.K. Gupta (till 31st May, 2007)2. Amulya Charan (w.e.f. 1st June, 2007)


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(b) Details of transactions:

particulars As at 31st march, 2009

rupees


RupeesCost of services procured from The Tata Power Company Limited 20,081,326 13,621,100Power purchased from The Tata Power Company Limited 1,860,050,107 591,742,377Cash Discount Earned 34,792,193 11,691,612Power purchased from North Delhi Power Ltd. 1,034,512,315 NilCash Discount Earned 20,690,249 NilPower sold to The Tata Power Company Limited 1,126,387,693 968,204,040Cash Discount given 22,064,850 19,377,214Power sold to North Delhi Power Ltd. 250,918,478 15,792,643Cash Discount given 5,010,154 315,853Power purchased from The Tata Power Company under Banking arrangement 103,494,377 375,684,299Power purchased from North Delhi Power Ltd. under Banking arrangement 237,728,457 108,105,000Power Sold to The Tata Power Company under Banking arrangement Nil 248,684,125Inter Corporate Deposit taken and repaid to The Tata Power Company Limited during the year 825,000,000 227,500,000Interest paid on Inter Corporate Deposit to The Tata Power Company Limited 334,360 63,928Amount payable to The Tata Power Company Limited (365,996,246) (18,087,544)

Amount Receivable / (payable) from/to North Delhi Power Ltd. (189,215,308) 4,212,686Guarantee given on behalf of the Company by The Tata Power Company Limited 500,000,000 500,000,000Amount payable to The Tata Power Company Limited in respect of Preference Shares issued (180,000,000) (180,000,000)

(c) Details of transactions with Key Management Personnel for the current year:

Key management personnel As at 31st march, 2009

rupees


RupeesMr. N.K. Gupta 12,600 624,153Mr. Amulya Charan* 3,900,000 2,594,841total 3,912,600 3,218,994

* included in Cost of Services provided.

7. earning per Share:

particulars fy 2008-09 fy 2007-08Net Profit after tax but before appropriations 76,302,614 42,967,568Less: Dividend on Preference Shares (10,800,000) (10,800,000)Less: Additional Income Tax on Preference Dividend 1,835,460 (1,835,460)Profit Attributable to Equity Share Holders 63,667,154 30,332,108Basic/Diluted Earning Per Share 31.83 15.17


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8. Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956:

particulars fy 2008-09 fy 2007-08Net Profit before Taxes as per Profit & Loss Account 114,315,064 58,226,732Add : Managerial Remuneration 3,912,600 3,218,994Add : Provision for Doubtful Debts 6,427,252 5,665,266Less : Profit on sale of Investments 24,168 2,600Add : Loss on sale of Investments Nil NilNet Profit as per Section 349 of Companies the Act, 1956 124,630,748 67,108,392Limits specified under the Companies Act, 1956 – 5% 6,233,954 3,355,420Commission payable to Whole-time director Nil 192,000

9. Contingent Liabilities Rs. Nil (31st March, 2008 Rs. Nil).

10. Capital Commitment not provided for Rs.325,000 (31st March, 2008 Rs. Nil).

11. Total number of units purchased and sold during the year – 2,996 M.U. (Previous Year 1,711 M.U).

12. Previous years figures are regrouped wherever necessary.

For and on behalf of the Board,


Amulya Charan Managing Director

Mumbai, 7th May, 2009 t. N. ramakrishnan Secretary


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01 04

02

05

07

01. Conference Room

02. Trading Room

03. Reception

04. Inside view - O�ce

05. Zainet Implementation

06. Team Huddle

07. Cafetaria

AGM Notice 08

Directors’ Report 10

Management Discussionand Analysis 13

Auditors’ Report 16

Balance Sheet 20

Profit and Loss Account 21

Cash Flow Statement 22

Schedules forming part of Balance Sheet 23

Schedules forming part of Profit and Loss Account 26

Notes forming part ofthe Accounts 27

CONTENTS

06

03

POWER TRADING COMPANY LIMITEDTata Power Mahalaxmi Receiving Station,

Senapati Bapat Marg, Lower Parel, Mumbai 400 013Fax: 91 22 66658614 / 22069669 / 66310849 E-mail: [email protected]

www.tatapowertrading.com

6th Annual Report2008 - 09

POWER TRADING COMPANY LIMITED


power trading company limitedaimcreativity.com/tatapowersite/pdf/tptcl annual report '08-'09.pdf ·...

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