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PTC India
BSE: 532524 | NSE: PTC | ISIN: INE877F01012 | Trading
- Directors Report
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- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
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| Directors Report | Year End : Mar '08 |
The Directors have immense pleasure in presenting to you, the ninth
Annual Report on the activities of your Company, together with the
Audited Annual Accounts for the Financial Year 2007–2008.
Performance and Financial Highlights
Your Company has completed another significant year of its operations,
one in which it has sustained and consolidated its position in the
industry. In spite of various constraints, the trading volumes were
marginal higher this year at 9,889 MUs as against 9,549 MUs during the
previous year, with a turnover of Rs. 39,493 Million (Including other
income) as against Rs. 37,859 Million (including other income) in the
financial year 2006–07. Your Company has earned a profit after tax of
Rs. 487 Million as against Rs. 351 Million in the previous year.
Your Company has allotted 77,419,000 equity shares of Rs. 10 each fully
paid up at the issue price of Rs. 155 per equity share aggregating to
an issue size of Rs.11, 99, 99, 45,000/– in favor of Qualified
Institutional Buyers (QIBs) on 15th January, 2008 in terms of Chapter
XIII–A of the Securities and Exchange Board of India (Disclosure and
Investor Protection) Guidelines, 2000 as amended. ABN AMRO Securities
(India) Pvt. Ltd and Kotak Mahindra Capital Company Limited acted as
Book Running Lead Managers for the issue.
The financial results of the Company for the FY 2007–08 vis–a–vis
2006-07 under broad heads are summarized as under:
(in Rupees million)
Particulars For the Year For the Year
ended 31.03.2008 ended 31.03.2007
Sales (including rebate on
purchase of power and surcharge) 39,061.47 37,666.56
Other Income (including income
from consultancy services) 431.62 192.92
Purchase (including rebate on
sale of power, scheduling and
handling charges) 38,693.59 37,216.52
Employee Cost 79.86 57.03
Other Expenses etc. 99.47 94.53
Profit before amortization, 620.17 491.40
depreciation and prior period items
Amortization and Depreciation 29.48 32.83
Prior Period Expenses/(Income) 1.35 1.36
Profit Before Tax 589.34 457.21
Provision for Taxation (including
deferred tax income ) 102.21 106.27
Profit After Tax 487.13 350.94
Balance as per last accounts 404.58 334.41
Transferred to General Reserves 146.14 105.28
Dividend (incl. dividend tax) 266.07 175.49
Balance carried forward to
Balance Sheet 479.50 404.58
Earning Per Share in Rs. 2.93 2.34
Includes Coal Sales of Rs. Nil Million in FY 07-08 and Rs. 134.82
Million in previous FY 06–07.
Includes Coal Purchases of Rs. Nil Million in FY 07-08 and Rs. 134.50
Million in previous FY 06-07.
Dividend
The Directors recommend dividend @ 10% for the FY 07–08.
Reserves
Out of the profit of the Company, a sum of Rs. 146.14 Million has been
transferred to General Reserves during the year and total reserves and
surplus stood at Rs. 12,521.37 Million (including share premium) as on
31.03.2008.
Capital Structure
As on 31.03.2008, PTC has Authorized share capital of Rs. 750,00,00,000
and paid–up capital of Rs. 2,27,41,90,000/– divided into 22,74,19,000
equity shares of Rs. 10 each. The equity shares of your Company are
listed on ‘Bombay Stock Exchange Limited’ (BSE) and ‘The National Stock
Exchange of India Ltd.’ (NSE). The promoters i.e. NTPC Ltd. (NTPC),
Power Grid Corporation of India Ltd. (POWERGRID), Power Finance
Corporation Ltd. (PFC) and NHPC Ltd. (NHPC) individually hold 5.28%
each, or 21.12% collectively of the paid–up equity and subscribed share
capital of your Company and the balance of 78.88% of the equity paid–up
and subscribed share capital of your Company is held by Power Entities,
Financial Institutions, Insurance Companies, Banking Institutions,
Corporations, Investment Companies, Foreign Institutional Investors,
Private Utilities and others including general public at large. The
shareholding pattern of your Company as on 31.03.2008 is as follows:–
Category No. of shares Percentage of
held shareholding
A Promoters holding
1. Promoters
Indian Promoters 48000000 21.12
Foreign Promoters - -
2. Persons acting in concert - -
Sub-Total 48000000 21.12
B. Non-Promoter’s Holding
1. Institutions
Mutual Funds and UTI 21042173 9.25
Banks and Financial Institutions 12317607 5.42
Insurance Companies 20883457 9.18
FIIs 81233861 35.72
Sub-Total B(1) 135477098 59.57
2. Non Institutions
Bodies Corporate ( incl. DVC) 18776079 8.26
Individuals
(holding nominal share capital
upto Rs. One lac) 22677225 9.97
Individuals
(Holding nominal share capital
in excess 1634314 0.72
of Rs. One lac)
Others
NRIs 817484 0.36
Trusts and Foundations 36800 0.02
Sub-Total B (2) 43941902 19.32
GRAND TOTAL 227419000 100.00
Distribution of shareholding – As on 31.03.2008 Nominal value of each
share is Rs. 10/-
Share price data – BSE Scrip Code - 532524 and NSE – PTC
Month Monthly High Monthly Low
April -07 62.20 53.50
May -07 71.30 55.10
June -07 69.15 58.15
July -07 107.00 62.70
August -07 86.00 68.30
September-07 97.85 80.75
October -07 125.40 77.50
November -07 174.65 115.50
December -07 169.70 138.10
January -08 201.70 94.85
February -08 132.00 97.70
March -08 118.00 84.50
Net Worth and Earning Per Share (EPS)
As on 31.03.2008, Net Worth of your Company stands at Rs. 14,795.56
Million as compared to Rs. 2,638.82 Million on 31.03.2007 and EPS of
the Company stands at Rs.2.93 compared to Rs. 2.34 on 31.03.2007.
Management Discussions and Analysis
This year has been a crucial period for the country’s revival of
interest towards the power sector. A number of initiatives were taken
by the Government to encourage investments in the sector and sensitize
the various stakeholders about the importance of energy and need to
conserve the valuable energy resources. Various regulatory and policy
matters have been under active discussions at different platforms for
preparing a clearer road map for evolution of the power market.
The regulatory landscape has seen positive development with the
approval being given to the first National level Power Exchange, Indian
Energy Exchange (IEX). Issues like open access for the collective
transactions on the power exchange have been dealt by the policy
makers. Being the frontrunner in the development of the power market,
your Company has rightly been associated with and co–promoted the
Indian Energy Exchange, along with FTIL and MCX.
However, the mist regarding fixation of the short term trading margin
at 4 paise per KWh continued and there was no change in the status quo.
This regulation, which is a sub–judice matter, has a strong bearing on
your Company’s profitability and its ability to introduce new products
and services in the market since risks and returns go together.
On the performance front, your Company has been constantly adding value
to the sector by the short term trading of power. As a consequence, now
power has been viewed as an asset and a source of earning revenue. Till
now the domestic long term business has not been significantly
contributing to the operational performance. However, the long term
portfolio is in the maturity phase and the year ahead would see
significant benefits to the sector in terms of addition to the
generating capacity and to your Company in terms of greater trading
volumes.
In terms of cross border trade, currently your Company is trading
surplus power from the three hydro projects in Bhutan. 1020 MW Tala
project, becoming fully operational, generated power throughout the
year and contributed significantly to the cross–border trade volumes.
To add to that, PTC is also looking for exchange of power with Nepal
and active efforts are on to strengthen and build transmission lines
between the two countries for operationalizing trading of power based
on commercial principles.
PTC organized a high level Power Summit for the 2nd time, in succession
in Kathmandu during September 2007 in association with Nepal Bankers
Association and Independent Power Producers’ Association of Nepal to
take forward the cooperation between the two countries on development
of Nepal’s hydropower potential. The 2 Power Summit was a resounding
success just as the first one and it kick–started serious dialogues
between Indian and Nepalese Government agencies, investors and private
entrepreneurs towards accelerated development of Nepals hydro
resources. The summit aimed to give special focus on inviting the
investment participation from private players and to explore the
accessibility to the power market in India through Power Exchange. Over
200 participants, including the leading names in the power sector as
well as Financial Institutions such as SN Power, Butwal Power Company,
ICF International, IDFC, POWERGRID, JSPL, IFC Dhaka, L&T, IL&FS, NHPC,
ATHENA, ICTC, Standard Chartered Bank, Nabil Bank, Bank of Kathmandu,
Everest Bank, Himalayan Bank etc. participated in the Summit. This has
led to deeper engagement between the key stakeholders of the two
countries and one can see a spurt in the active discussions on
development and also award of some hydro projects in Nepal to both
public and private project developers from India and other countries.
Today, various power utilities are working round the clock on ways and
means to maximize the cost and reliability benefits that they can
derive from existing power facilities by gainfully using trading
opportunities given by your Company. Building sustainable relationships
with such partners would not have been possible without a foundation of
good governance practices. And this is perhaps the keystone of the
overarching superstructure of PTC; the Company has established the
highest standards of corporate governance in its business operations
and strongly communicated its most important core value – transparency.
PTC has always given due importance to governance and accountability
and has continually revised its standards of transparency within the
organisation. It has also constantly emphasised that risk management
and control framework provides an integrated approach to identify,
assess/quantify, mitigate, monitor and report business risks across an
organisation and improves the ability to make the right decisions at
the right time. Also, Clause 49 of the Listing Agreement by Securities
and Exchange Board of India (SEBI) has emphasized the laying down of
procedures to control risks through means of a properly defined
framework.
Trading, as such, is a highly volatile business and is inherently
influenced by various risks that occur and have an adverse effect on
the profitability of the business. With a view of this, PTC in
association with Pricewaterhouse Coopers (PwC) has proactively
developed a Risk Management Framework for the Company by identifying
significant risks faced by the Company and devising ways to manage
these risks. The Company is now in the process of operationalising the
framework to form it as a part of its day to day operations.
Following the mandated nature of competitive bidding for new generation
capacity procurement by distribution utilities, your Company has been
actively participating in bids floated by state utilities such as
Gujarat, Haryana, Karnataka, Maharashtra among others. Your Company is
confident that it will be able to successfully compete in such
competitive biddings since it has tied up long term capacities at
competitive tariffs with project developers on long term basis..
PTC India Financial Services Ltd. (PFS), the initiative for funding
energy and related infrastructure, has stepped in the energy
infrastructure space and has made certain proprietary investments
including 26% stake in the Indian Energy Exchange (IEX). Over the
coming years, PFS would be a very significant building block for
realizing a part of our vision of acting as a bridge between power and
financial services.
Alongside, Athena Energy Ventures Private Ltd., the developmental
venture promoted by your Company with an equity stake of 20%
effectively bagged projects adding to more than 6000 MW in the first
year of its operation The Business Development Group has been
performing steadily with the order book size for advisory crossing Rs.
35 Million. Your Company’s initiative of setting up a wind power
project in Maharashtra has been successful and the project got
commissioned in March 2008. Realizing the need to promote renewable
sources of energy and to educate people about the growing scarcity of
fossil fuels, global warming etc., your Company is looking for trading
in renewables and aggregating Certified Emission Reductions (CERs) from
the projects where it has participated.
PTC has partnered with USEA in organizing workshops on Grid connected
Renewable Energy and Distributed Generation, which are funded by Asia
Pacific Partnership for Clean Development and Climate of US Department
of State. The purpose of the workshops is to promote policy and
regulatory changes and encourage incentive to accelerate the
development and interconnection of renewable energy and distributed
generation projects into the Indian Power System. The workshops are
scheduled to be organized in the State of West Bengal, Punjab and
Gujarat.
After receiving very encouraging and positive feedback from the key
stakeholders of Indian Power Sector on the first phase of
Indo–Norwegian Institutional Cooperation Program (INPIC) supported by
the Ministry of Power, Government of India, PTC extended the scope of
engagement with Sweco Groner AS, Norway on the project “Nordic Power
Market Experiences and Their Relevance for the Evolving Power Market in
India”. In the 2nd phase of the program the key Norwegian organizations
such as Sweco Groner AS, Statnett, NVE, Nord Pool, Elkem are sharing
their best practices with Indian counterparts on various critical
issues such as development of power market, transmission tariff,
simulation of Indian market, regulatory matters among others. The
collaboration program was unique in that for the first time
certification course for the electricity traders was organized in
association with Nord Pool towards capacity building among the Indian
stakeholders. Keeping in view that India’s first power exchange, Indian
Energy Exchange Ltd. (IEX) is going to be operational soon this was
considered to be a timely developmental effort from your company
towards the growth of the power market. The long term goal of this
co–operative effort is to actively take part in making operational a
successful power market model in India.
Trading of Power
During the year, your Company has signed agreements with CSEB, NDMC for
sale of their surplus power for periods upto nine months. Your Company
is in the process of negotiations with some other surplus
States/Utilities for signing agreements on the lines of CSEB/NDMC. Your
Company could achieve trading volume of 9,889 Million Units from
short/medium term contracts and cross border transactions, which is
higher than the preceding year volume of 9549 Million Units of energy.
A contingent liability claim against PTC amounting to Rs. 849.50
Million (not acknowledging as debt) of Himachal Pradesh State
Electricity Board is pending in the arbitration.
Power trade with Bhutan
The present power trade with Bhutan is being carried out under
bilateral contractual arrangements with tariff fixation based on
negotiations between the two Governments. Surplus power from 336 MW
(4X84 MW) Chhukha project is being supplied to the Eastern Region
constituents namely Bihar, DVC, Orissa, Jharkhand, Sikkim and West
Bengal and surplus power from 60 MW (4X15 MW) Kurichhu project is also
being supplied to Eastern Region constituents namely West Bengal and
DVC. All the six units of Tala Hydroelectric Power Project –1020 MW
(6X170 MW) started commercial operation progressively from July 2007
and the surplus power from this project is being supplied to Bihar,
DVC, Orissa, Jharkhand and West Bengal in the Eastern Region and to
Delhi, Haryana, J&K, Punjab, Rajasthan and Uttar Pradesh in the
Northern Region.
Power Trade with Nepal
The bilateral exchange of power at the borders between the two
countries is presently around 50 MW under Indo–Nepal Power Exchange
Committee Arrangement. The two sides, through Indo–Nepal Power
Exchange Committee decide the tariff at periodic intervals with
underlying principle of meeting only the cost of supply of power.
Your Company, functioning as the nodal agency for matters related to
exchange of power between the two countries, is negotiating with Nepal
Electricity Authority (NEA) for trading of power on commercial
principles and the flow of power from your Company to NEA has been
started w.e.f. 18th May, 2008. This may follow legally enforceable
bilateral contract/ power purchase agreements between the sellers and
buyers of the two countries at market–determined tariffs. Your Company
is also exploring possibilities of import of power from IPPs located in
Nepal through new transmission corridors being proposed between India
and Nepal. Your Company is also exploring the option of entering into
long term PPAs with the prospective IPPs in Nepal. Your Company has
signed a MoU with M/s. Braspower (A JV between Nepalese and Brazilian
company) and negotiations are underway for finalization of PPA.
Long Term Agreements for Purchase & Sale of Power
Your Company’s focus on facilitating Power Projects in the country
continued this year and achieved significant landmarks both in power
purchase from project developers and sale for catering to the long term
power requirement of various States. The Company has signed a couple of
MOUs with developers with tolling concept wherein the power plants
would generate power using imported coal supplied by PTC and supply
power to PTC. It is noteworthy that fourteen (14) of the projects with
which PTC has signed agreements to purchase power on a long term basis
have already commenced construction work at the project site and couple
of projects are expected to be commissioned during the next financial
year. During FY 2007- 08, PTC has initialed / finalized Power Purchase
Agreements for 3787.5 MW with six (6) project developers. In addition
to this, the Company has also entered into MOUs with IPPs for purchase
of capacity for more than 28,000 MW.
From 30th Sept, 2006 onwards, as per the Tariff Policy of Government of
India, the long term power procurement by the SEBs/ DISCOMs has to be
necessarily done through competitive bidding. As such, in case of State
Utilities, onward sale of power by the Company has to be through
participation in the bidding process. The Company is presently
participating in competitive bidding invited by States like Haryana,
Karnataka, Gujarat and Maharashtra and has been qualified for about
4200 MW which are under various stages of tender process.
PURCHASE OF POWER
A. Power Projects which are expected to be commissioned in FY 2008-09
Baglihar HEP (450 MW)
The project is under advance stage of construction and is likely to be
commissioned in the first half of FY 2008-09. PTC has already signed
MOU for purchase and sale of 225 MW of plant capacity from the Project
Pathadi Thermal Power Plant (Phase-I, 300 MW)
The Project is under advanced stages of construction and is expected to
be commissioned in the next financial year. PTC has signed Power Sale
Agreement with Madhya Pradesh, open access Agreement has also been
signed with POWERGRID for evacuation of power from the project Delivery
point to Madhya Pradesh. Madhya Pradesh Electricity Regulatory
Commission has given their approval to Power Sale Agreement. There is,
however, a case pending in Madhya Pradesh High Court in this regard.
1100 MW SUGEN Gas Based Power Project in Gujarat
The Power Project is being developed by M/s Torrent Power Generation
Ltd. and is under advanced stages of construction and is expected to
be commissioned in the next financial year. PTC has entered into a
Power Purchase Agreement with the developer for 100 MW of capacity. PTC
has signed Power Sale Agreement with Madhya Pradesh, open access has
been obtained by M/s Torrent
Middle and Lower Kolab HEP (37 MW) & Samal HEP in Orissa (20 MW)
Both the Projects are in advance stage of construction and expected to
commissioned in the next financial year. State of Orissa has agreed to
purchase the entire plant capacity from both the Projects from PTC.
Swasti Power Engg. Ltd. for Small HEP (22.5 MW)
The Project being constructed at Ghanshali in Uttaranchal is under
advanced stages of construction and is expected to be commissioned in
the next financial year. PTC has signed Power Sale Agreement with
Punjab. Standing Committee has approved the open access for evacuation
of the power. Punjab Electricity Regulatory Commission has given their
approval to Power Sale Agreement.
B. Power Purchase Agreements signed in 2007-08
During the financial year 2007-08, PTC has entered into long term Power
Purchase / Sale Agreements for the following major Power Projects:
AGC Power (India) Pvt. Ltd
Agreement has been signed for purchase of entire power from their 3x350
MW Imported coal based Power Project proposed to be located in Andhra
Pradesh. Coal for the project is proposed to be sourced from the coal
mines owned by the project developer.
Jhabua Power Ltd.
Agreement has been signed for purchase of 530 MW from their 2X330 MW
coal based Power Project proposed to be located in Madhya Pradesh. The
project has recently obtained coal linkage for their first unit.
KVK Nilachal Pvt. Ltd.
The Agreement was initialed in FY 2006–07 and final signing took place
during this year. The Agreement has been signed for purchase of 150 MW
from their 2x150 MW domestic coal Power Project proposed to be located
in Orissa. The project has recently obtained coal linkage for their
first unit.
Chennai Power Generation Ltd.
The Agreement was initialed in FY 2005–06 and final signing took place
during this year. Agreement has been signed for purchase of entire
power from their 1000 MW Imported Coal based Power Project proposed to
be located in Tamil Nadu. The project has already tied–up coal on long
term basis.
Patni Projects Pvt. Ltd.
The Agreement has been initialed for purchase of entire power from
their 270 MW Imported Coal based Power Project in Raigad District in
Maharashtra. The company is in the process of acquiring coal mines in
Indonesia.
GMR Energy Ltd.
The Agreement has been initialed for purchase of 787.5 MW power from
their 1050 MW domestic coal based Thermal Power Project proposed to be
located in Orissa. PTC has participated in Haryana competitive bid for
300 MW and has been declared as L2.
C. Progress on Projects for which Agreements have been entered before
FY 2007-08
Teesta Stage–III HEP in Sikkim (1200 MW)
The Project has achieved financial closure and is under construction.
Punjab, Haryana, Uttar Pradesh and Rajasthan are the beneficiaries,
with which PTC has signed Power Sale Agreements for sale of power on
long term basis. PTC will sell part capacity from the Project on short
term basis.
Karcham Wangtoo HEP in Himachal Pradesh (1000 MW)
The Project is in advance stage of construction. Punjab, Haryana, Uttar
Pradesh and Rajasthan are the beneficiaries, with which PTC has signed
Power Sale Agreements for sale of power. PTC has signed Bulk Power
Transmission Agreement with POWERGRID for Long Term Open Access in
Northern Region.
Pathadi Thermal Power Plant (Phase–II, 300 MW)
The Project is under advanced stages of construction. PTC has signed
Power Sale Agreement with Haryana and Haryana Electricity Regulatory
Commission has approved the Power Sale Agreement.
D. Memorandum of Understanding
In addition to the above Projects, your Company has also signed MoUs
for a number of Projects for purchase and subsequent sale of power. The
capacity tied–up through these MoUs are more than 28,000 MW from
projects based on domestic coal, imported coal, and also using hydro
and gas as fuel. Discussions are on for the finalization of the Power
Purchase and Sale Agreements for these projects.
E. Other Projects under consideration
In addition to the above mentioned projects, your Company has received
proposals for long term sale of power from more than twenty project
developers aggregating to a capacity of about 10,000 MW. Your Company
is actively evaluating these projects for further process of signing
MoUs, based on marketability of power from these Projects.
SALE OF POWER
During the year, MOU has been signed with Punjab for sale of 175 MW
from project being developed by AP Power Development Corporation
Limited. This is a State project wherein the promoters are APGENCO and
IL&FS. In addition to this, MOU has also been was signed with
Electricity Department, UT Chandigarh for sale of upto 150 MW power
from domestic coal based thermal power project located in Orissa being
developed by IPP namely, M/s. Nav Bharat Power Private Ltd.
For sale of power through Competitive bid on case– 1 basis, PTC emerged
as L2 for 300 MW capacity in Haryana. In case of Karnataka Case – 1
competitive bid, PTC cleared RFQ stage with 10 project developers for a
capacity of 2500 MW capacity, RFP stage is under progress. PTC is also
participating in Maharashtra and Gujarat tender which has ben qualified
to participate in RFP stage for about 530 MW each respectively.
Captive, Group Captive, Industries, Renewable, Distribution Reforms and
Advisory Group
Captive Power Plants
In its pursuit of effective and efficient utilization of the existing
resources in the country, your Company has been trying to trade power
from under–utilized captive power plants. In spite of constraints in
open access for third party sale from Captives your company was
successful in operationalizing power flow from captive power plants of
NCS sugars and GEPL. Besides this, your Company has also entered into
PPAs for sale of power from the captive plants of Aryan Coal and
Whitefield (SEZ).
HT Consumers and Group Captive Power Plants
Huge demand supply gaps and power cuts by utilities is forcing a large
number of HT consumers to try and source reliable power from third
party sources. But the high cross subsidy charges combined with open
access charges have made such third party sourcing unviable. In states
where the cross subsidy has been waived off, high short term prices of
electricity have been a deterrent for the industry. Your Company is
also facilitating development of group captive power plants.
Advisory Services and Distribution Reforms
From the modest beginning advisory services of your Company have made
consistent gains. Comparing the revenue of 10 Million from previous
year, this year’s revenue collection have exceeded Rs. 30 Million . The
clientele have been ranging from state utilities to Captive generators,
HT consumers, overseas investors, Association of Industries. Increasing
the scope of advisory services, your Company is moving towards “Total
Solution Provider” for the power sector. Taking these forward, advisory
assignments this year covered Techo–economic feasibility reports for
power plants, financial modeling, and CDM consultancy etc. . Wheeling
of power from captive plants for their own use across the regions has
also started this year. Apart from giving advisory services to
utilities your Company has also initiated alliances with leading
technology partners for associating in the distribution reforms
initiated by various distribution utilities.
Renewable Energy Sources
The focus area this year had been sourcing of power from renewable
sources of energy. Continuing with the theme of renewable sources of
energy, your Company has successfully commissioned 6 MW Wind based
power generation facility at Maharashtara.
Fuel Linkage
Your Company has been exploring avenues for providing long term fuel
linkage (imported coal) to Power Plants and is in serious dialogue with
prospective associates and expects to conclude the same in the near
future.
Manpower
Employees are your Company’s greatest assets and to retain this
talented pool of resources, HR has taken various initiatives during the
year. One of the major highlights of the year was re–designing of
remuneration system to align it with the Industry. The compensation has
now been developed on a Cost to Company pattern moving away from a
traditional pay scale regime.
In its effort to ensure transparency and speed, HR is in the process of
introducing automation of its processes related to Payroll, Performance
Management System, web based employee support service, career
progression, time management, Recruitment, Training and development,
new employee induction process etc.
Conservation of Energy
As your Company is engaged in the activity of trading of power and
other related activities, the particulars relating to conservation of
energy and technology absorption respectively are not applicable to it.
Foreign exchange earnings & outgo etc.
The Company has incurred an expenditure of Rs. 14.55 Million (on
accrual basis) in foreign exchange during the financial year 2007–2008.
No foreign exchange was earned during the financial year.
Particulars of the employees u/s 217 (2A)
During the Financial Year ending 2008, no employee was employed for
full or part of the year, who was in receipt of remuneration, which in
aggregate or as the case may be, at a rate which, in the aggregate was
not less than Rs. 24 lacs per annum or Rs. 2 lakh per month except the
following employees the details of whom are given below:–
- The above remuneration includes the arrears for the previous year of
Rs. 1.74 million (including incentive of Rs. 0.70 million) to Shri T.N.
Thakur, Rs. 1.13 million (including incentive of Rs. 0.50 million) to
Shri S.K. Dube , Rs. 0.62 million (including incentive of Rs. 0.42
million) to Shri Deepak Amitabh Rs. 0.59 million (including incentive
of Rs. 0.39 million) to Shri Arun Bhalla. Since Shri Shashi Shekhar
joined the Company on 29th June, 2007, figures in his case is for the
period from 29th June, 2007 to 31st March, 2008.
Auditors
Statutory Auditors
M/s. T.R. Chadha & Company, Chartered Accountants were appointed as
Statutory Auditors of the Company for the Financial Year 2007–2008 by
the Shareholders in the Eighth Annual General Meeting of the Company
and shall hold office upto the conclusion of the forthcoming Annual
General Meeting of the Company and have given their consent for
re–appointment. The Statutory Auditors have audited the Accounts of the
Company for the Year ended 31 March 2008 and Audited Accounts together
with the Auditors’ Report thereon are annexed to this report. It is
gratifying to note that there are no qualifying remarks from Statutory
Auditors on the Accounts of the Company.
The shareholders will be required to elect auditors for the current
year and fix their remuneration. The Company has received a written
confirmation from M/s. T.R. Chadha & Company to the effect that their
appointment, if made, would be in conformity with the limits prescribed
in section 224(1B) of the Companies Act, 1956.
The Board recommends the appointment of M/s. T.R. Chadha & Company as
the auditor of the company for the Financial Year 2008–2009 by the
Shareholders in the Ninth Annual General Meeting of the Company.
Internal Auditors
M/s. Ravirajan & Co. Chartered Accountants, Delhi were appointed as
Internal Auditors of the Company for the Financial Year 2007–2008 and
their reports for the year were submitted to the Audit Committee.
SUBSIDIARY COMPANY
PTC India Financial Services Ltd. (PFS) was incorporated as subsidiary
of your Company on 8th September, 2006. PFS is a Non– Banking Financial
Company and is registered with the Reserve Bank of India. PFS has been
formed as the investment arm of your Company to operate in the energy
and energy related infrastructure domain. The main objective is to
encourage investment into the energy sector by mobilizing resources
through PFS’s own resources as well as through borrowed capital and
other such forms of finance. In the last week of December, 2007, your
Company, PTC India Financial Services Limited, GS Strategic Investments
Limited (“Goldman Sachs”) and Macquarie India Holdings Limited
(“Macquarie”) have entered into Agreements, pursuant to which Goldman
Sachs and Macquarie have agreed to subscribe to 20% each of the
aggregate issued share capital of PFS.
PFS has taken 26% stake in Indian Energy Exchange Limited (India’s
first Power Exchange), 26% stake in Varam Bio Energy Pvt. Ltd. and 37%
stake in R.S. India Wind Energy Pvt. Ltd.
Annual Accounts of the subsidiary company
The Audited Accounts for the financial year 2007–2008 of PTC India
Financial Services Limited (PFS), being a subsidiary of your Company ,
had been attached with the Annual Accounts of your Company along with
the statements as per the provisions of section 212 of the Act. A copy
of Balance Sheet, profit and loss account, report of Board of
Directors, report of Auditors of the company and statement of interest
of your Company in PFS is also enclosed.
Investment in other Companies
1. Your Company has earlier executed Equity Subscription Agreement
(ESA) for investment in Athena Energy Ventures Pvt. Ltd. and has
invested Rs. 300 Million (20%). The other investors of this Company are
Athena Power Projects Limited (52%) and IDFC Limited (28%).
2. Your Company has earlier executed Equity Subscription Agreement
(ESA) for investment in Krishna Godavari Power Utilities Limited upto
Rs. 400 Million and has released Rs. 152.5 Million Crores.
3. Teesta Urja Limited is developing 1200 MW Teesta–III Hydro Electric
Project in the State of Sikkim. Your Company has acquired 11% equity in
Teesta Urja Limited.
Directors Responsibility Statement
In pursuance of section 217 (2AA) of the Companies Act 1956, the
Directors make the following responsibility statement that:
1. In the preparation of the Annual Accounts, the applicable
Accounting Standards had been followed by PTC along with proper
explanation relating to material departures;
2. The Directors had selected such Accounting Policies and applied
them consistently and made judgments 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 2008 and of the profit
or loss of the Company for that period;
3. Proper and sufficient care had been taken by the Directors for
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 frauds and other
irregularities and
4. The Annual Accounts had been prepared on a going concern basis.
Corporate Governance
Companys philosophy on the code of governance
Your Company’s endeavor right from the beginning has been to inculcate
good corporate governance practices in its organizational and business
systems and processes. Your Company realizes that good governance is a
reflection of its culture, policies, relationship with stakeholders,
and commitment to values.
Your Company does recognize that in the competitive business
environment freedom of executive management and its ability to respond
to the dynamics of a fast changing business environment would be the
key to success. To adhere to sound corporate governance principles of
transparency and accountability, the Company has taken following
initiatives from time to time:
Composition of Board of Directors with an appropriate mix/balance of
Executive and Non Executive Directors.
Transparency and accountability.
Compliance with all mandatory requirements of the Stock Exchange(s)
applicable rules and regulations.
Timely flow of information to the Board and its Committees for enabling
them to discharge their duties effectively.
Adopting ‘Code of Conduct’ for Directors and Senior Management, and
putting in place ‘Code of Ethics’ and ‘Policy on Prohibition of Insider
Trading’.
Risk Management and Internal Control-regular follow-up & review.
Regular update of PTC website www.ptcindia.com to keep stakeholders
informed.
Your Company’s management, together with the Board of Directors,
continually evaluate processes and implement procedures designed to
maintain strong governance and operation standards. In doing so, Your
Company strives to maintain the highest principles of responsibility
and integrity, and align the interests of management and the Board with
those of our shareholders.
Board of Directors
There were nine meetings of the Board of Directors held during the year
2007- 2008 i.e. on 27th April, 2007, 2 June, 2007, 26th June, 2007,
20th July, 2007, 3 August, 2007, 14th August, 2007, 28th September,
2007 23 October, 2007 and 25th January, 2008. Detailed Agenda Notes
with necessary information were circulated in advance to the Board.
The composition of Board of Directors is given below:-
Sr. Name Category of Director Meetings attended
No
1. Mr. T.N Thakur Chairman & Managing 9
Director / Non–Independent
2. Mr. Shashi Shekhar Whole-time Director NA
Joined w.e.f. 25.01.08 Non-Independent
3. Mr. Deepak Amitabh Whole-time Director NA
joined w.e.f. 25.01.08 Non-Independent
4. Mr. S K Dube Whole Time Director / 5
(Ceased to be Non- Independent
Director w.e.f
06.08.2007)
5. Mr. R S Sharma Non-Executive / 7
Ceased to be Director Promoter NTPC
w.e.f. 20th May, 2008.
6. Mr. S P Sen Non-Executive / 6
Ceased to be Director Promoter NHPC
w.e.f. 8th May, 2008.
7. Mr. M S Verma Non-Executive/Independent 9
8. Mr. G P Gupta Non-Executive/Independent 5
9. Mr. D P Bagchi Non-Executive/Independent 9
10. Mr. Gireesh Pradhan Non-Executive/Independent 1
11. Mr. Pankaj Saran Non-Executive/Independent 0
(Ceased to be Director
Attendance Directorship Membership
at the last in other in Committee
AGM held companies (Audit /
on 28.09. 2007 (including Shareholders
private grievance)
Companies)
Yes 3 Nil
NA 2 Nil
NA 3 Nil
No NA NA
No 4 Nil
No 1 Nil
Yes 7 2
Yes 14 9
Yes 5 5
No 1 2
No NA NA
12. Mrs. Preeti Saran Non-Executive/Independent 1
appointed w.e.f.
28.09.2007
13 Mr. Satnam Singh Non-Executive/Nominee 5
PFC
14 Mr. Amulya Charan Non-Executive / 1
ceased to be a Non- Independent
Director w.e.f.
07.08.2007)
15 Mr. P Abraham Non-Executive/Independent 7
16 Mr. R. G. Yadav Non-Executive / Nominee 8
Promoter POWERGRID
NA Nil Nil
Yes 3 1
No NA NA
Yes 9 3
Yes Nil Nil
Shri I.J. Kapoor and Shri A.B.L. Srivastava both has joined the Board
w.e.f. 01/06/2008 as a nominee Director of NTPC and NHPC respectively.
The Board places on record its warm appreciation of the valuable
contribution made by the outgoing Director as member of the Board.
None of the Directors of the Board is a member of more than 10
Committees and Chairman of more than 5 committees (as specified in
Clause 49), across all the Companies in which he is a Director. The
Non–executive Directors does not have any material shareholding in the
Company.
At the last AGM, shareholders of the Company holding 16.67 % (Approx.)
of the equity share capital were present either in person or by proxy.
An Extra–ordinary General Meeting (EGM) of the Company was held on 5th
December, 2007 at Air–force Auditorium, Dhaula Kua, New Delhi in which
through a special resolution, the limit shareholding of Foreign
Institutional Investors (FIIs) has been raised to 60% from the earlier
40%.
Board Procedure
(A) Decision making process:
With a view to professionalize all corporate affairs and setting up
systems and procedures for advance planning for matters requiring
discussion/decisions by the Board, the Company has laid down
appropriate guidelines for the meetings of the Board of Directors.
These Guidelines seeks to systematize the decision making process at
the meetings of Board, in an informed and efficient manner.
(B) Scheduling and selection of Agenda items for Board /Committee
Meetings:
(i) The meetings are being convened by giving appropriate notice after
obtaining the approval of the Chairman of the Board/Committee. Detailed
agenda, management reports and other explanatory statements are
circulated in advance amongst the members for facilitating meaningful,
informed and focused decisions at the meetings. To address urgent
needs, meetings are also being called at short notice. The Board is
also authorized to pass Resolution by Circulation for all such matters
which are of utmost urgent nature.
(ii) Where it is not practicable to attach any document or the agenda
due to its confidential nature, the same is placed on the table at the
meeting with the approval of the Chairman. In special and exceptional
circumstances, additional or supplemental item(s) on the agenda are
permitted. Sensitive subject matters are discussed at the meeting
without written material being circulated.
(iii) The agenda papers are prepared by the concerned officials and are
submitted to concerned functional Heads for obtaining approval of the
CMD. Duly approved agenda papers are circulated amongst the Board
members by the Company Secretary.
(iv) The meetings are usually held at the Company’s Registered Office
in New Delhi.
(v) Presentations are made at the Board/ Committees covering Finance,
Operations & Business Segments, Human Resources, Marketing etc. of the
Company before taking on record quarterly/annual financial results at
the pre–scheduled Board/Committee Meetings.
(vi) The members of the Board have complete access to all information
of the Company. The Board is also free to recommend inclusion of any
matter in agenda for discussion. Senior management officials are called
to provide additional inputs to the items being discussed by the Board,
as and when necessary.
(C) Recording minutes of proceedings at the Board Meeting.
Minutes of the proceedings of each Board/Committee meeting are recorded
and are duly entered in the minutes book. The minutes of each board
meeting are circulated among the board members in the next Board
Meeting for their confirmation.
(D) Follow–up mechanism
The guidelines laid down for the Board and Committee Meetings
facilitates an effective post meeting follow–up, review and reporting
process for the action taken on decisions of the Board and Committee.
Action Taken Report (ATR) on the areas of concern is presented before
the Board.
(E) Compliance
While preparing the agenda notes, it is ensured that all the applicable
provisions of law, rules, guidelines etc. are adhered to. The Company
ensures compliance of all the applicable provisions of the Companies
Act, 1956, SEBI Guidelines, Listing Agreement, and various other
statutory requirements.
Audit Committee
Pursuant to the requirements of section 292A of the Companies Act, 1956
and the provisions of Clause 49 of the listing Agreement, Audit
Committee has been constituted by the Board of Directors. Presently,
the Audit Committee of the Company consists of S/ Shri M.S. Verma, D.P.
Bagchi, G.P. Gupta and Gireesh B. Pradhan as members of the Audit
Committee. All the members of the Committee including its Chairman are
independent Directors. The Committee has the following
responsibilities:
a. Overseeing the Company’s financial reporting process and the
disclosure of financial information to ensure that the financial
statement is correct, sufficient and credible;
b. Recommending audit fees payable to Statutory Auditors appointed by
the Board.
c. Reviewing with management the periodical financial statements
before submission to the Board, focusing primarily on (i) changes in
accounting policies and practices, (ii) major accounting adjustment
based on management judgment, (iii) qualifications in draft audit
report (if any), (iv) significant adjustments arising out of the audit,
(v) the going concern assumption, (vi) compliance with accounting
standards, (vii) compliance with stock exchanges and legal requirements
concerning financial statements, (viii) any related party transactions
i.e. transactions of the Company of material nature, with promoters or
the management, their subsidiaries or relatives etc that may have
potential conflict with the interest of the company at large;
d. Reviewing with the management, Reports of Auditors, the adequacy of
internal control systems and recommending improvements to the
management;
e. Reviewing the adequacy of internal audit functions;
f. Discussion with internal auditors any significant findings and
follow–up thereon;
g. Reviewing the findings of any internal investigations by the
internal auditors into the matters where there is suspected
irregularity or a failure of internal control systems of a material
nature and reporting the matter to the Board.
The Audit Committee had reviewed the Annual Financial Statements,
before their submission to the Board, as prescribed in section 292 (A)
of the Companies Act, 1956 and the terms of reference of the Committee,
inter–alia, includes the work given in the listing agreement. In the
past, the meetings of the Audit Committee were attended by the Members
of the Committee, Chief Financial Officer of the Company and the
Auditors. The Company Secretary acted as the Secretary of the
Committee. The minutes of the Committee were placed before the Board of
Directors for information. PTC has not denied any personnel access to
the Audit Committee of the company in respect of any matter. There was
no case of alleged misconduct.
The Committee met four times in the last Financial Year. Meetings of
the Committee were held on 27th April, 2007, 20th July, 2007 , 23rd
October, 2007 and 25th January, 2008.
Composition of the Audit Committee
Members of the Committee Meetings held during the year Meetings
in tenure of Director Attended
Mr. M.S. Verma (Chairman) 4 4
Mr. Gireesh B. Pradhan 4 Nil
Mr. D.P. Bagchi 4 4
Mr. G.P. Gupta 4 3
Remuneration Committee
Presently this Committee comprise of S/Shri M.S. Verma as Chairman and
D.P. Bagchi, P. Abraham and Deepak Amitabh as Members which meets as
per the requirement.
The remuneration paid to the Whole–time Directors (including the
remunerations paid at one level below the Director) during the year
2007–2008 is as under:
Sr. no. Director Designation Remuneration
(figures in Rs. million)
1. Mr. T.N. Thakur CMD 8.11
2. Mr. S.K. Dube Director 2.56
(Ceased to be a Director (Operations)
w.e.f. 06.08.07)
3. Mr. Shashi Shekhar Director 1.99
(Joined PTC w.e.f. 29.06.2007
as Executive Director and
elevated to Director w.e.f.
25.01.2008.)
4. Mr. Deepak Amitabh Director 3.6
(Elevated from EVP to Director
w.e.f. 25.01.2008.)
- The above remuneration includes the arrears for the previous year of
Rs. 1.74 Million (including incentive of Rs. 0.70 Million) to Shri T.N.
Thakur, Rs. 1.13 Million (including incentive of Rs. 0.50 Million) to
Shri S.K. Dube and Rs. 0.62 Million (including incentive of Rs. 0.42
Million) to Shri Deepak Amitabh. Since Shri Shashi Shekhar joined the
Company on 29th June, 2007, figures in his case is for the period from
29th June, 2007 to 31st March, 2008.
Note Performance criteria are linked with individual performance as
well as profitability of the Company.
Presently, other Part–time non–executive Directors are entitled/ paid
sitting fee of an amount of Rs. 10,000/– per meeting for Board and
Committees meeting(s). In FY 2007–08, sitting fee was Rs. 7,500 for
Board Meetings and Rs. 5,000/– per meeting for Committee meeting(s) by
the Company.
Investors Grievance Committee
Presently, the Committee is headed by Shri P Abraham and Shri D.P.
Bagchi is the Member of the Committee. The committee meets as per the
requirement. One meeting was held during the year 2007–2008 and
attended by all the members. Shri Rajiv Maheshwari, Company Secretary
of the Company acts as the Compliance Officer of the Company. Three
investor complaints were pending as on 31.03.2008.
Other Committee of the Board of Directors
Presently, Ethics and Compliance Committee comprises of two members
namely Shri P. Abraham as Chairman and Shri D.P. Bagchi as member. Shri
Rakesh Kumar, Sr. Vice President of the Company acts as the Compliance
officer under the ‘Code of Conduct for prevention of Insider Trading
and Code of Corporate Disclosure Practices’ of PTC. One meeting of the
Committee was held during the FY2007–2008. The meeting was attended by
all the members.
Disclosures
There are no material significant transactions with related parties
except those mentioned in the Annual Accounts for the FY 07–08
conflicting with the Company’s interest. There was also no instance of
non–compliance on any matter related to the Capital Markets during the
last years. The information related to the Company is also available at
Company’s web–site www.ptcindia.com. The proceeds of the public issue
has been used for the purpose(s) for which it was raised.
Code of conduct for Directors and Sr. Management
The Company has framed a Code of Conduct for Directors and senior
officers of the Company, which has been complied by the Board members
and senior officers of the Company.
Annual General Meetings
The date and place of last three AGMs
Year/ Date of the Time of the Venue of the Meeting
Meeting Meeting
2006-07 September 03:30 p.m. Pearey Lal Bhawan, ITO,
28, 2007 New Delhi
2005-06 July 18th 2006 09:30 a.m. Air-force Auditorium,Dhaula
Kuan, New Delhi
2004-05 September 28, 2005 11:00 a.m. Pearey Lal Bhawan, ITO,
New Delhi
Four Special resolutions were passed at the 8th AGM. No postal ballots
were used for voting.
General Shareholders Information
Financial Year – PTC follows the financial calendar from 1st April to
31st March.
The shares of the company are listed at:
Bombay Stock Exchange Limited
The National Stock Exchange of India Ltd.
ISIN No. is INE877F01012.
Scrip Code/Script ID – 532524/ PTC
Registered office and address for correspondence
Rajiv Maheshwari,
Company Secretary & Compliance Officer,
PTC India Limited.
2nd Floor, NBCC Towers, 15 Bhikaji Cama Place, New Delhi-110066.
Registrar and Share Transfer agent
M/s. MCS Limited, W-40, Okhla Phase–II, New Delhi. The share transfer
system has been maintained by the RTA of the Company.
The book closures dated of the Company were from 15.09.2007 to
28.09.2007 and the record date for payment of dividend for the FY
2006–07 were closing hours on 14th September, 2007.
Means of communication & website.
Quarterly results were published in the newspaper i.e. Financial
Express in English and Jansatta in Hindi. The relevant information of
the Company is also displayed in its website i.e. www.ptcindia.com.
Acknowledgment
The Board of Directors acknowledge with deep appreciation the
co–operation received from the Government of India, particularly the
Ministry of Power, Ministry of External Affairs, State Electricity
Utilities, State Governments, Regional Power Committees, Central
Electricity Authority, Central Electricity Regulatory Commission and
State Electricity Regulatory Commissions, Power Sector Organizations
viz. Power Grid Corporation of India Ltd., NTPC Ltd., Power Finance
Corporation Ltd., NHPC Ltd. and valuable investors of the Company.
The Board wishes to place on record its appreciation for efforts and
contribution made by the employees at all levels which made possible
the significant achievements by your Company.
For and on behalf of the Board of Directors
Sd/-
(Tantra Narayan Thakur)
Chairman & Managing Director
Place: New Delhi
Date: 21st June, 2008
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