It indeed gives me immense pleasure to welcome you all to the fourth
 Annual General Meeting of the Power Trading Corporation of India Ltd.
 (PTC).
 
 Overall Performance
 
 During the financial year 2002-2003, which is virtually the second year
 of its operations, your company exceeded every target by a substantial
 degree and introduced many innovations.  Its turnover during the year
 reached Rs.927.37 Crores as against a target of Rs.850 Crores. The
 trading volumes jumped to 4178 MUs, which is a major leap when compared
 to 1617 MUs traded last year. Your Company earned a profit before tax
 of Rs.19.53 Crores as against Rs. 7.66 Crores last year. The Board of
 Directors of your Company declared an interim dividend @ 7% on the
 paid-up capital, which is proposed to be treated as the final dividend.
 PTCs mode of realization through weekly billing and a simple back up
 payment security has been working well. Consequently, PTC has
 maintained its unblemished record of no defaults to its suppliers.
 Our customers have not only continued to do business through us but
 have given us an opportunity to serve them better through identifying
 latent opportunities for enhancing the sale or purchase of power.
 
 Trading
 
 The trading transactions of PTC now cover all the five electricity
 Regions of the country. PTCs major trading partners include
 
 West Bengal, Damodar Valley Corporation, Uttaranchal, Delhi, Haryana,
 Malana Power Company, Gujarat, Maharashtra, Goa and Andhra Pradesh.
 
 PTC has entered into deals with timeframes varying from 3 years to 3
 days, thus progressively putting into shape the concept of a spot
 market in the Indian Power Sector. Your Company has also been able to
 put into effect a variety of concepts like time- of-day trading
 involving power flows for specific time bands each day during the
 contract period. Due to this, the same customer can sell and buy power
 in the course of the same day i.e. one can buy power when in deficit
 and can sell power when in surplus. Thus the vision of developing a
 vibrant power market is gradually taking shape. The concept of
 differential pricing of power, introduced by your Company, gives a
 significant impetus to the achievement of this vision, as it
 meaningfully assigns a market value to power traded at different times
 of the day.
 
 Projects
 
 Owing to market conditions, PTC has shifted its focus from very large
 power projects to small and medium sized projects that are being
 promoted by IPPs. Many project developers approach PTC with indicative
 proposals for large, medium and small sized hydropower projects located
 in the Himalayan Range in India and in Nepal. Some proposals are with
 respect to hydel projects located in states like Orissa. Proposals have
 also come from competitive thermal power projects. These proposals are
 under discussion. MoUs have been signed with developers of projects
 like Lower & Middle Kolab hydro power projects in Orissa, Samal hydro
 power project in Orissa, Vemagiri Gas based Project in Andhra Pradesh,
 besides those of large projects like Maithon Thermal Project in
 Jharkhand and West Seti Hydroelectric Project in Nepal.
 
 Keeping in mind its larger role in the Indian Power sector, PTC is
 marketing power from these projects to several State Utilities in the
 country for long-term purchase. This will further enable your Company
 to diversify its portfolio of power purchases, thus lowering its
 overall business risk.
 
 It is heartening to note that a commitment by PTC to purchase power
 from a private project is being given valuable weightage by the lending
 community, as evidenced in the case of one of the above projects where
 the lender has also agreed to offer a longer debt service period. This
 also augurs well for private project development in our country.
 
 International Trading of Power
 
 Nepal
 
 PTC is the designated Nodal agency for exchange of power between India
 and Nepal. In order to enhance Indo-Nepal power exchanges from the
 current low levels, your Company has signed an agreement with POWERGRID
 to facilitate construction of the 132 KV Anandnagar-Butwal line, which
 will enhance trading of power from Nepal with the power deficit
 Northern Region of India. This agreement between a transmission service
 provider and a trading company is the first of its kind in the country.
 Further, PTC has proposed a tariff mechanism for power exchange with
 Nepal on a commercial basis. Besides these initiatives, PTC is also in
 discussions with developers of private power projects in Nepal.
 
 Bhutan
 
 Your Company is trading Bhutans surplus power from the Chukha (336 MW)
 and Kurichhu (60 MW) projects from October 2002. Trade with Bhutan will
 increase significantly with the commissioning of the Tala Hydro Project
 (1020 MW) in 2005-06.
 
 Increase in Capital Base
 
 The authorized share capital of your Company has been raised from the
 original Rs. 150 crores to Rs. 750 crores.  The paid-up capital of your
 Company was Rs. 72.5 crores at the end of 2002-03 and is presently Rs.
 74.5 crores. Further equity will be raised over a period of time, as
 and when necessitated by the business requirements of PTC. For this
 purpose, various options including a public issue is on the table.
 
 The four Central Power Sector Organizations i.e.  POWERGRID, NTPC, PFC
 and NHPC have promoter status in your Company and shall contribute 8%
 each
 
 towards the authorized capital of Rs. 750 Crores. The balance 68% will
 be raised from others including corporates, State Utilities, FIs and
 Banks, both national and international, and also the public at large.
 You will be happy to know that Damodar Valley Corporation, Tata Power
 Company and leading Financial Institutions i.e. IDBI, IDFC, LIC, IFCI,
 & GIC have picked up equity stake in your Company during the year
 2002-03. This is a strong reflection of the market recognition of your
 Company.
 
 Sectoral Developments
 
 The reforms initiated by the Central Government and by many of the
 State Governments should prove to be instrumental in strengthening the
 fundamentals of the power sector. In this context, I am reminded of the
 words of John P. Kotter The rate of change is not going to slow down
 anytime soon. If anything, competition in most industries will probably
 speed up even more in the next few decades.
 
 The recently introduced comprehensive Electricity Law is expected to
 bring about significant attitudinal changes in the Sector as a whole,
 as it will not only increase the number of market players but would
 also enjoin upon them to adopt a more commercial culture. Open access
 to transmission networks, delicensing of generation, graded open access
 to distribution and introduction of competition in this area,
 recognition of trading as a distinct activity, mandatory establishment
 of Regulatory Commissions, compulsory metering are some of the elements
 that will surely bring about landmark changes in the Indian Power
 Sector.
 
 The introduction of Availability Based Tariff in most parts of the
 country and the stricter implementation of the grid code have already
 begun to bear fruit in the form of greater commercial awareness as well
 as grid discipline.
 
 Future Vision
 
 PTC envisions the development of an active and vibrant competitive
 power market in the foreseeable future.  Such a market will have depth
 and breadth by virtue of multiple participants coming together to match
 their
 
 selling and buying requirements, and by the availability of multiple
 products. The future will see transactions in day-ahead trading.
 Sophisticated contracts like forwards, futures and options will be
 evolved, and hedging products will be introduced to cover risks
 inherent in such contracts. Inherent in the vision are the words of an
 unknown thinker Your current safe boundaries were once unknown
 frontiers.
 
 For increasing the depth of the market, PTC is looking at getting more
 and more State utilities into the trading culture i.e. to understand
 the potential benefits to be derived from trading transactions. Your
 Company is also looking at the possible opportunities presented by
 surplus power available with Captive Power Plants and from pooling of
 distributed generation. All these measures would further enable market
 participants to achieve greater efficiencies and thus lower the average
 cost of power, besides helping to defer some of the costly investments
 to the extent of such higher utilisation of extant capacities.
 
 Moving to the scenario of a sufficiently deep and broad power market
 will require taking a few intermediate steps, which could include pool
 pricing on a regional basis. It would also require building capacity in
 a phased manner, starting with establishment of a control room in PTC,
 to initially capture online information on power supply positions and
 pricing and available transmission capacities. Phased building up of
 mirroring capacity in major market participants would logically follow.
 Presently, in-house exercises are being completed for developing
 specific steps needed to address key market related issues. These
 include development of power trading rules, identification of
 appropriate Information Technology solutions as well as systems
 required for market stability.
 
 Your Company is in the process of making specific suggestions to the
 regulatory authorities for creation of an enabling environment for an
 effective power market. It has been working on framework agreements to
 catalyse electricity trading and for development of projects through
 long-term agreements.
 
 In order to keep up the momentum generated by your Company in 2002-03,
 the target volume for the year 2003-04 has been kept at 6150 Million
 Units (MUs), as against 5647 MUs projected for the year in the Business
 Plan. Consequently, it is envisaged to further increase the capital
 base of your Company to support these trading volumes.
 
 Your Company is also considering embarking on new areas of business
 like carbon trading, green certificates etc. in order to diversify its
 business portfolio. The Vision and the Mission of the Company provide a
 strategic direction to the companys efforts and coalesce the efforts
 of all its employees towards attainment of super-ordinate goals and
 objectives.
 
 The Knowledge Organization
 
 PTC believes in providing the best working environment for its
 employees, most of whom are knowledge workers. In line with this
 philosophy, the office space acquired by your Company in Delhi has been
 made into a modern office that promotes an open work culture. In order
 to create its own cadre of executives, your Company has started
 building relationships with premier management institutes in the
 country through its campus recruitment process. It is also offering
 regular placements in the Companys cadre to deputationists who have
 been key partners in progress for PTC.
 
 Your Company has also developed an organization structure appropriate
 to its business requirements, in consultation with a leading management
 institute. This structure is based on the business processes of the
 Company and attempts to address the issues of low response time for
 meeting customer demands and identifying new business opportunities. It
 forms the framework that promotes the development of a culture where
 teamwork and interdependence among employees are valued, thus making
 your Company a customer centered and performance oriented organization.
 The structure has been implemented successfully and has proved
 effective in meeting the changing business requirements of your
 Company.
 
 Your Company is evolving its culture, focusing on performance based
 growth with minimum of hierarchical levels. A sense of ownership and
 commitment is fostered through the introduction of a performance linked
 incentive. Recognizing the importance of knowledge as its core asset,
 knowledge management initiatives have been started, including
 Jigyasa, the knowledge site of the Company.
 
 Participation in Exchange Programmes PTC has participated actively in
 the South Asian Regional Initiative / Energy (SARI/E) program of the
 USAID, which has facilitated greater appreciation of power sector
 issues in countries of the South Asian Region i.e. India, Bhutan,
 Nepal,
 
 Bangladesh, Sri Lanka and the Maldives, thus leading to evolution of
 better solutions from cross-border energy trade. PTC has also
 participated in the India Energy Partnership Programme of the USEA. It
 is also proposed to have an exchange programme with some other
 organizations like NORDPOOL.
 
 These steps will enhance the knowledge base of your Company and should
 effectively shorten the learning curve, thus enabling a quicker
 fructification of its goal to establish a vibrant power market in the
 country.
 
 Social Responsibility
 
 In keeping with its guiding principle to be a socially responsible
 corporate citizen, your Company has always endeavored to support
 socially relevant causes. During the year, your Company has continued
 to develop relationships with leading NGOs working in areas like child
 welfare and problems of the aged.
 
 Appreciation
 
 I express my sincere appreciation to all the members of the PTC team
 for the dedicated service rendered by them
 
 without which the Company would not have achieved success in such a
 short time. I also express my sincere gratitude and appreciation to the
 Government of India, especially the Ministry of Power, the Promoter
 Companies and other equity holders, and to all our customers. I also
 thank all my colleague members on the Board for their invaluable
 support and contributions. I am confident that your Company will
 continue to provide valuable service to all its customers, who have
 reposed confidence in us and given us the opportunity to serve them.
 
 I thank you all for being with us in this fourth Annual General Meeting
 and look forward to your continued support and cooperation in future as
 well.
 
                                               (Tantra Narayan Thakur) 
                                          Chairman & Managing Director
 
 Place: New Delhi 
 Date : 21/5/2003