The Directors are pleased to present the Ninety-Third Annual Report on
the business and operations of your Company and the statements of
account for the year ended 31st March, 2012.
1. Financial Results Figures in Rs. crore
FY12 FY11 FY12 FY11
(a) Net Sales / Income from
Other Operations 8,495.84 6,918.48 26,001.40 19,450.76
(b) Operating Expenditure 6,711.21 5,330.30 21,101.18 14,857.99
(c) Operating Profit 1,784.63 1,588.18 4,900.22 4,592.77
(d) Add: Other Income
(including net gain on
exchange) 983.46 493.58 268.76 410.50
(e) Less: Finance costs 514.87 459.80 1,527.09 866.15
(f) Profit before
Depreciation and Tax 2,253.22 1,621.96 3,641.89 4,137.12
(g) Less: Depreciation /
Amortization / Impairment 570.35 510.14 3,134.64 98024
(h) Profit before Tax 1,682.87 1,111.82 507.25 3,156.88
(i) Less: Tax Expenses 513.14 170.33 1,475.54 974.97
(j) Net Profit after Tax 1,169.73 941.49 (968.29) 2,181.91
(k) Less: Minority Interest - - 190.16 196.50
(I) Add: Share of Profit of
Associates - - 70.77 74.19
(m) Net Profit after Tax,
Minority Interest and
Share of Profit of
Associates ' 1,169.73 941.49 (1,087.68) 2,059.60
2. Financial Highlights
2.1 Standalone results
During the year, your Company reported a Profit after Tax (PAT) of Rs.
1,169.73 crore, as against Rs. 941.49 crore for the previous year. The
Operating Revenue was higher at Rs. 8,495.84 crore, as against Rs.6,918.48
crore, an increase of 23%. Operating Revenue was higher mainly on
account of higher fuel cost. The Operating Profit was higher by 12% due
to improved operational performance in Mumbai Operations.
Other Income was higher at Rs. 983.46 crore, as against Rs.493.58 crore in
the previous year, a growth of 99%. This was due to higher dividend
income from coal companies, forex gains (as the Company adopted the
option given in para 46A of AS-11 in the notification issued by
Ministry of Company Affairs) and higher treasury income.
Earnings per share (basic) was at Rs. 4.53 as against Rs. 4.08 in the
2.2 Consolidated results
The Consolidated Operating Revenue which stood at Rs. 26,001.40 crore
grew by 34% as against Rs. 19,450.76 crore for the previous year. PAT was
at Rs. (1,087.68) crore as against Rs. 2,059.60 crore for the previous
year. The increase in the Consolidated Operating Revenue was primarily
on account of strong operational performance and higher coal price
realization in Indonesian Coal Companies.
The Consolidated PAT is lower mainly on account of provisions made for
impairment of Mundra project, reversal of forex gains and charge off of
deferred stripping costs by the Indonesian Coal companies.
The Directors of your Company are pleased to maintain a dividend of
125% (Rs. 1.25 per share) subject to the approval of the shareholders.
4. Existing Businesses
As of 31st March, 2012, The Tata Power Group of Companies had an
installed generation capacity of 5,297 MW based on various fuel
sources: thermal (coal, gas, oil), hydroelectric power, renewable
energy (wind and solar photovoltaic) and waste heat recovery. The
details of the installed capacity are given in Table 1.
Table 1: Details of installed capacity
Fuel Source Location State (MW) (MW)
Trombay Maharashtra 1,580
Maithon Jharkhand 1,050
Mundra Gujarat 800
Thermal - Coal / Jojobera Jharkhand 428
bera Jharkhand 120 4,207
Rithala New Delhi 108
Belgaum Karnataka 81
Lodhivali Maharashtra 40
Thermal - Waste IEL-
Jojobera Jharkhand 120
Heat Recovery Haldia West Bengal 120
Bhira Maharashtra 300
Hydro Khopoli Maharashtra 72 447
Bhivpuri Maharashtra 75
Wind farms Maharashtra,
Tamil Nadu . 375 403
(PV) Gujarat 28
Thus, your Company has 20.58% of MW capacity through non-Green House
Gas (GHG) based generating sources.
Your Company also has businesses of Transmission, Power
Distribution-cum-Retail in Mumbai, and other value added businesses.
Table 2: Details of other businesses
Business Location Key details
Over 1,085 circuit kilometers of Transmission
Lines, connecting generating
Mumbai station in Mumbai Operations to 18 Receiving
Stations in Mumbai.
North Over 1,166 circuit kilometers of transmission
line which transmits surplus power
regions from Eastern / North Eastern region (Siliguri)
to Uttar Pradesh (Mandula).
Mumbai Over 2,200 circuit kilometers of distribution
bution New Delhi Over 10,500 circuit kilometers of distribution
Mumbai Over 2,85,000 customers with sales of over
5,800 MUs in FY12.
Retai' New Delhi Engaged in serving over 1,300,000 customers with
sales of over 7,500 MUs in FY12.
Strategic Mumbai One of the leading suppliers of defence
equipment and solutions amongst
nics Indian Private Sector.
One of the leading service providers for Project
Management, Operations and
Services Mumbai Maintenance (O&M) and specialized services in
the power sector.
5 NEW GENERATION PROJECTS
5.1 Projects Under Construction
Table 3:Details of projects under construction
Fuel Source Location State Capacity Category Total
Thermal - Coal /
Oil / Gas Mundra Gujarat 3,200
nagar Odisha 652
Hydro Dagachhu Bhutan 126 126
Renewables Wind farms Maharashtra,
Rajasthan 150 150
Total 4,128 4,128
5.1.1 Coastal Gujarat Power Limited (CGPL)
CGPL, the Company's wholly owned subsidiary, is implementing the 4,000
MW (800 Rs.5 units) Ultra Mega Power Project (UMPP) at Mundra in
Gujarat. The project, estimated to cost about Rs. 18,000 crore, is
progressing as per schedule. The cumulative progress till the end of
March 2012 was approximately 95% with total capital commitments of 100%
of total equipment ordering and a total actual expenditure of over Rs.
16,000 crore. All major civil, structural, mechanical, electrical and
control & instrumentation work is complete and about 6,500 direct and
indirect workmen are deployed at the site. Commissioning activities
are in full swing in Units 2 to 5, while Unit 1 of 800 MW is in
The turbine erection for other four units is complete and boiler
light-up for Units 2, 3 and 4 has been successfully completed. Unit 2
will be synchronized shortly. Unit 3 steam blowing is expected to start
in May 2012.The last boiler i.e. Unit 5 boiler is expected to light up
in second quarter of FV13.The Power Evacuation System which is being
implemented by Power Grid Corporation of India Limited (PGCIL) is
nearing completion with 2 out of 3 double circuit lines commissioned.
The third and last evacuation line is expected to be commissioned
during first quarter of FY13.
Your Company has continued its emphasis on safety, through programs,
education and sensitization of workers and supervisors with the help of
5.1.2 Kalinganagar, Odisha: 652.5 MW [3 x 67.5 MW (Gas based) 3 x 150
MW (Coal and gas based)]
Both the projects are being executed through Industrial Energy Limited
(IEL), a JV of the Company (74%) with Tata Steel Limited (26%). This
plant is being set up to cater to the power requirements for a 6 MTPA
steel plant for Tata Steel at Kalinganagar in Jajpur district of
CPP1 202.5 MW (3 x 67.5 MW): Order recommendations for Engineering,
Procurement & Commissioning, Steam Generator (SG), Steam Turbine
Generator (STG) and General Civil Works (GCW) packages have been placed
on vendors. The project is progressing as per schedule.
CPP2 450 MW (3 x 150 MW): Applications for 'Consent to Establish' and
'Aviation Clearance' have been submitted. Application for long term
linkage for 2.3 MTPA has been submitted to Ministry of Coal (MoC),
Ministry of Power (MoP) and Central Electricity Authority (CEA).
Recommendation from CEA has been sent to MoP and MoC. As an option, use
of middling's, tailings from Tata Steel, e-auctioned coal and imported
coal is being worked out. Signing of MoU between IEL and Tata Steel
Limited for supply of coal is being pursued. The technical
specifications for various packages are under finalization.
5.1.3 Dagachhu Hydroelectric Power Project, Bhutan
The 126 MW (2 x 63 MW) Dagachhu project is being implemented by
Dagachhu Hydro Power Corporation Limited (a JV of the Company [26%],
Druk Green Power Corporation Limited [59%] and National Pension and
Provident Fund of Bhutan [15%]) in Bhutan. The civil works are being
executed by M/s. Hindustan Construction Company Limited, India. More
than 37% of concreting at weir has been completed and for desalted,
more than 62% of concreting has been completed. The excavation of
connection tunnel has been completed and the tunnel lining is in
progress. For head race tunnel, more than 47% of tunnel excavation has
been completed. Cumulatively around 6.2 kilometers tunneling has been
completed and tunnel lining works have also commenced.
5.1.4 Renewable Energy Projects Wind Power
Your Company is developing wind power projects of over 150 MW in India,
of which 80 MW is proposed to be commissioned during FY13 across
Maharashtra (50 MW) and Rajasthan (30 MW). The Company's new
JV-Cennergi (Pty) Limited has also been selected as a preferred bidder
for two wind power projects totaling 234 MW in South Africa.
Your Company is in the process of acquiring suitable land parcels in
the states of Maharashtra, Rajasthan, Gujarat and Karnataka to develop
solar projects. The Company through Cennergi, is also evaluating
development of solar project in South Africa.
25 MW solar project at Mithapur was successfully commissioned and
Commercial Operation Date (COD) was achieved on 25th January, 2012,
5.2 Projects Under Planning - India
5.2.1 Coastal Maharashtra Project
During the year, your Company has made further progress in the Coastal
Maharashtra project at Dehrand, Maharashtra. Resettlement and
Rehabilitation (R&R) agreement has been signed with Government of
Maharashtra (GoM) in July 2011. The project has all the statutory
clearances for its commencement.
Land acquisition by Maharashtra Industrial Development Corporation
Limited (MIDC) as per Maharashtra Industrial Development (MID) Act
continued during the year. About 70% (692 out of 993 acres) of private
land has been acquired so far. Well structured Community Relations (CR)
activities are in place and are being implemented in the villages
covered for the project.
While your Company is progressing well with the land acquisition,
economic options for coal sourcing and -logistics are under evaluation.
5.2.2 Tiruldih Power Project, Jharkhand
The process of land acquisition for the 1,980 MW (3 x 660 MW) project
has achieved significant progress. More than 300 acres of private land
has been registered in the name of your Company. The entire land
acquisition process is defined to be completed by March 2013. The
Company has successfully extended MoU with the Government of Jharkhand
(GoJ) which is valid for 3 years. Water allocation of 62 cusecs for the
project is expected shortly.
5.2.3 Dugar Hydroelectric JV Project
The consortium of the Company and SN Power Singapore Pte. Limited (SN
Power), a subsidiary of Statkraft, Norway, was awarded the Dugar
hydroelectric project through a competitive bidding process carried out
by the Government of Himachal Pradesh (GoHP). The project is being
developed through a Special Purpose Vehicle (SPV), Dugar Hydro Power
Limited (DHPL). DHPL is a JV between the Company (50% 1 share) and SN
Power (50% -1 share).
Pre-feasibility studies are under progress by the joint project team
set up by your Company and SN Power.
5.2.4 Maithon Expansion : 1320 MW (2 x 660)
Ministry of Environment and Forests (MoEF) has issued Terms of
Reference for environment clearance. Environment Impact Assessment
report along with necessary documents has been submitted for public
hearing. Technical presentation at Jharkhand State Pollution Control
Board (JSPCB) took place successfully. Coal linkage application has
been filed with MoC.
5.2.5 Naraj Marthapur Project, Odisha
The major clearances for the 660 MW Naraj Marthapur project have been
obtained. The environmental clearance has been granted by MoEF, subject
to clearance from National Board of Wild Life for which the process is
on. Proposal for using clean technology is also under discussion for
Naraj Marthapur project.
5.3 Projects Under Planning - International
In spite of robust growth in domestic power demand, multiple
constraints across the entire value chain have made growth in the
country very challenging. Thus, your Company has decided to venture in
international markets that offer a greater potential for growth with
the strategic intent of maximizing returns and minimizing risks.
5.3.1 Sorik Marapi Geothermal Project - Indonesia
The consortium of your Company, Origin Energy Limited (Origin) and PT.
Supraco Indonesia (Supraco) won the Sorik Marapi geothermal concession
in a competitive bid process on 2nd September, 2010.
The project is in the exploration phase. Detailed geosciences studies
(geological, geochemical and geophysical) have been completed. The
preliminary resources assessment report is positive.
Exploratory drilling is expected to commence in Q4 FY13. Sufficient
progress is being made in infrastructure planning and development
required to carry out the exploratory drilling (like issuance of
various permits, land lease/acquisition etc). There has been good
engagement with the local community in the Sorik Marapi area through
numerous activities led by SMGP's Community Relations. The exploration
phase of the project is expected to end in September 2013.
5.3.2 African Power Business - Cennergi
Your Company has formed a 50:50 JV with Exxaro Resources Limited, the
second largest coal producer in South Africa. Cennergi, the JV
company, would develop power generation projects in South Africa,
Botswana, Namibia and other African countries. This company plans to
initially develop renewable energy projects and thereafter, coal fired
and hydro power plants in the countries of interest. Cennergi was
declared successful in two wind projects which were bid in April
2012,ciggregating to 234 MW.
Your Company is actively pursuing business opportunities in other
countries as well and hopes to increase its global footprint in the
6. Key Subsidiaries
6.1 Coastal Gujarat Power Limited
CGPL, the Company's wholly owned subsidiary, is implementing the 4,000
MW (800 x 5 units) UMPP at Mundra in Gujarat. The project, estimated
to cost Rs. 18,000 crore, is progressing as per schedule. While Unit 1 is
under operation, Commissioning activities are in full swing in Units 2
Recent changes in Indonesian coal price regulations have resulted in an
increase in price of Mundra UMPP's coal off-take arrangements with
Indonesian coal companies. In addition to this, there is an
unprecedented increase in global coal prices as compared to the year
2006, when the Company had bid for Mundra UMPP. As per the existing
Power Purchase Agreement (PPA), there is only a partial pass through of
increase in coal price, which is leading to an additional financial
burden. Your Company is of the view that this is an industry wide issue
and not specific to Mundra UMPP alone.
The issue is being represented to the government of the procuring
states and the Central Government in different forums and through
different industry associations. The Company is hopeful of fruitful
resolution of the issue.
Given the circumstances, as a part of its sponsor support obligation to
the project leaders, Tata Power has offered to transfer 75% of the
dividend flow of coal SPV (which holds the ownership of 30% equity
investment in two coal mines in Indonesia) to CGPL or any other
alternate structure/method to support the debt service. Your Company is
in discussions with lenders to formalize a suitable structure as part
of sponsor support obligation.
CGPL, in its Endeavour to become 'Neighbor of Choice', continues to
take initiatives for the local community in the area of livelihood and
income generation, education and health as part of its community
relationship programme. This is done by continuously engaging with
local communities and by partnering with government agencies.
6.2 Industrial Energy Limited (IEL)
IEL commenced operations in May 2009. The 120 MW coal based Unit 5 was
commissioned in FY11 in Jojobera in the existing location of Units 1 to
4. It is also operating a 120 MW co-generation plant (Power House 6) in
Jamshedpur inside the Tata Steel plant. The Company is progressing to
execute a 652.5 MW thermal project in Kalinganagar, Odisha. This plant
would meet the power requirement for Tata Steel Limited.
During FY12, IEL earned revenue pf Rs.433.7 crore .(as against previous
year revenue of Rs. 125.5 crore) and a PAT of Rs.78.0 crore (as against
previous year PAT of Rs. 24.9 crore). The increase in revenue is due to
commissioning of 120 MW Unit 6.
Table 4: Details of thermal power generation for FY12 -IEL
Generation (MUs) Generation Availability (%) Plant Load
FY12 FY11 FY12 FY11 FY12 FY11
IEL 1,574 738 94 93 74.5 70
6.3 Maithon Power Limited (MPL)
MPL, a JV between your Company (74%) and Damodar Valley Corporation
(DVC) (24%), has set up a 1,050 MW (2 x 525 MW) power plant at Maithon
in Jharkhand. Your Company is rendering project management and O&M
services to MPL.
Unit 1 COD was declared on 1st September, 2011 with power sale
commencing from first day of operation. The power has been tied up in a
long term PPA with DVC and a medium term PPA with Tata Power Trading
Company Limited (TPTCL). The provisional tariff order for its power
sale to DVC has been determined by Central Electricity Regulatory
Commission (CERC) in November 2011 till 31st March, 2012. Power sale to
TPTCL, which has back to back PPAs with Tata Power Delhi Distribution
Limited (TPDDL) and BSES Rajdhani Power Limited (BRPL), was guided by
the terms of the respective PPAs.
Unit 2 achieved full load on primary fuel on 23rd March, 2012. Final
testing of all the systems is under progress. Unit 2 is planned to be
declared commercially operational in H1 FY13.
MPL has obtained necessary approvals for additional funding
requirements for the increase in project cost. Your Company has infused
equity of Rs. 987.84 crore and the debt drawn by MPL is Rs. 2,998.46
crore. The operational performance for MPL in FY12 is as follows:
Table 5: Operational performance of MPL forFY12
Generation (MUs) Generation Availability (%) PLF (%)
Unit 1 1,225 65 46
Since Unit 2 COD is yet to be declared, the unit performance is not
shown in the above table.
MPL is also planning to expand by adding another 1,320 MW capacity
consisting of two units of 660 MW each, adjacent to the ongoing 1,050
MW (2 x 525 MW) power plant. Adequate land and water resources are
already in place. Application for environment clearance has been made
and coal linkage by way of tie up with DVC is being worked out.
6.4 Powerlinks Transmission Limited (PTL)
PTL is a JV between your Company (51%) and PGCIL (49%). PTL transmits
power from the 1,020 MW Tata Hydro Electric Power Project in Bhutan and
surplus power from the Eastern/North-Eastern region of India through
its transmission lines between Siliguri (West Bengal) and Mandaula
(Uttar Pradesh), spanning a distance of 1,166 kilometers. The
availability of transmission line was maintained at 99.66% for Eastern
Region in FY12 (previous year availability: 98.62%) and 99.85% for
Northern Region (previous year availability: 99.78%), as against the
minimum stipulated availability of 98%.
During FY12, PTL has earned revenues of Rs. 281.63 crore (as against
previous year revenues of Rs. 288.41 crore) and a PAT of Rs. 112.35 crore
(as against previous year PAT of Rs. 105.68 crore). PTL has paid interim
dividend of Rs. 1.25 per share (previous year interim dividend was Rs. 1.4
per share) and recommended final dividend of Rs. 0.65 per share for FY12
(previous year final dividend was Rs. 0.70 per share).
6.5 Tata Power Delhi Distribution Limited (TPDDL)
TPDDL (formerly North Delhi Power Limited) is a subsidiary of your
Company (51% share) with balance shares held by Delhi Power Company
Limited, a Government of Delhi undertaking. TPDDL is engaged in
distribution of electricity in North and North-West Delhi and services
around 1.3 million consumers spread over 510 square kilometers. The peak
load in this area is about 1,400 MW, with energy consumption of over
7,500 MUs. '
In FY12, TPDDL has earned revenues from operations aggregating to Rs.
5,338.88 crore, a growth of about 30% over the previous year (Rs.
4,119.02 crore). The Company earned PAT of Rs. 338.65 crore in FY12
compared to Rs. 258.18 crore in FY11, reflecting an increase of around
31% over the previous year.
The tariff order for FY12 released by Delhi Electricity Regulatory
Commission (DERC) in August 2011 was made effective from September
2011. However, the tariffs fixed by DERC for FY12 are not fully cost
reflective. In FY12,TPDDL billed its consumers at rates which factored
a power purchase cost of Rs. 4.06 per unit (plus fuel price adjustment
surcharge) against an actual cost of Rs. 5.29 per unit. In FY11, power
purchase cost of Rs. 2.63 per unit was considered as against actual cost
of Rs. 4.26 per unit. The gap in cost recovery in FY11 was because tariff
fixed for FY10 continued in FY11.This was due to the stay order of
Delhi High Court for release of tariff order for FY11 on a PIL filed
The DERC, in its last tariff order, has stated that it shall Endeavour
to recover the past revenue gaps and unrecovered revenue gap for FY12
in the course of forthcoming Multi Year Tariff (MYT) Period
(FY13-FY15). The DERC has also issued a letter reiterating the above
and confirming that it shall allow carrying cost on the unrecovered
revenue gap. Tariff determination process for FY12-FY13 is presently
underway. Therefore, TPDDL's current year revenues include Rs. 1,781.63
crore (previous year Rs. 1,156.43 crore) as income recoverable from
During FY12.TPDDL was bestowed the 'Asian Power Utility of the Year
Award' for 2011, by Asian Power Awards, Singapore for the fifth year in
succession,' Utility of the Year' by India Power Awards,' Best Performing
Utility (Urban)' by Enertia Awards and the' Safety Innovation Award' by
the Institute of Engineers (India).
6.6 Tata Power Trading Company Limited (TPTCL)
TPTCL is in the business of power trading since June 2004 and is the
first company in India to receive a power trading license from CERC.
TPTCL transacted 5,583 MUs during the year as compared to 4,354 MUs in
the previous year and has shown a CAGR of 36% over the past 5 years. It
was ranked the third largest trader with a market share of 10% in
FY12.The gross revenue for FY12 was Rs. 1,926.70 crore as compared to Rs.
1,932.05 crore in the previous year. The PAT increased by 52.78% to Rs.
14.05 crore, as against Rs. 9.15 crore in the previous year.
Electricity traded in the short term power market has gradually
increased to nearly 7% of the generation, of which close to 5% is via
bilateral trading and the balance 2% is through power exchanges. TPTCL
has also diversified its supply sources by entering into long term
power purchase contracts with various power developers for sale of
their power in the long term as well as in the merchant market.
6.7 Trust Energy Resources Pte. Limited (Trust Energy)
Trust Energy, a wholly-owned subsidiary of your Company, was set up in
2008 to manage overseas fuel logistics and coal sourcing, thereby
achieving vertical integration in order to support the Company's
growing power business.
Trust Energy (along with Energy Eastern Pte. Limited [EEPL], a
wholly-owned subsidiary of CGPL) has organized a fleet of five cape
size vessels. EEPL has entered into long-term charters for three cape
size vessels. The ships have started their commercial operations and
are expected to be fully deployed to service the needs of Mundra UMPP,
after 2013. Currently, the fleet is chartered out in the open market.
Trust Energy has been awarded the prestigious Approved International
Shipping (AIS) scheme from the Government of Singapore, which provides
a zero tax incentive, for its shipping income.
6.8 Tata Power Renewable Energy Limited (TPREL)
TPREL is in the business of setting up renewable power projects based
on hydro power (25 MW), wind, solar and biomass. TPREL has
commissioned its first 25 MW Solar Power Project at Mithapur in January
TPREL is developing more solar power projects in Maharashtra,
Rajasthan, Gujarat and other states and has placed orders for 150 MW
wind projects to be set up in Maharashtra and Rajasthan.
TPREL is seeking organic and inorganic growth opportunities with the
goal of building a robust portfolio of renewable energy capacity-
6.9 NELCO Limited (NELCO)
NELCO, established in 1940, is listed on Bombay Stock Exchange Limited
(BSE) and National Stock Exchange of India Limited (NSE).Your Company,
along with its subsidiary, holds 50.10% stake in NELCO.
NELCO's Integrated Security & Surveillance Solutions business (ISSS)
has been active in providing integrated security and surveillance
solutions in the defense sector, government bodies (e.g. Indian
Railways) and other industries. It also provides solutions in the field
of meteorology and has prestigious contracts from important
organizations like Indian
Air Force (IAF) and Indian Meteorology Department (IMD). NELCO is also
a leading VSAT service provider in the country catering to a large
segment of the market. It has a major presence in the BFSI, Education,
Telecom and Oil & Gas sectors due to its innovative solutions. It
offers various solutions on the VSAT network which enables internet
access, bandwidth on demand, IP multicasting and digital streaming. It
has the satellite earth station at Mahape, Navi Mumbai and the same is
augmented continuously to keep it current with the latest technology.
It currently has around 25,000 VSATs deployed across the country,
NELCO has also started offering Managed Services around Managed Data
Center Hosting services, Managed Network services, Remote
Infrastructure Monitoring services, Application Performance Monitoring
to add on to its basic services offering of VSAT communication.
Tatanet Services Limited (Tatanet), a subsidiary of NELCO, holds the
requisite licenses for providing the shared hub VSAT services.
During the 12 months period ended 31st March, 2012, NELCO has posted a
total income of Rs. 123.09 crore and net loss of Rs. 12.75 crore.
6.10 Af-Taab Investment Company Limited (Af-Taab)
Af-Taab is a wholly owned investment subsidiary of your Company. During
FY12, Af-Taab earned an operating income of Rs. 8.80 crore and PAT of Rs.
5.07 crore, as against Rs. 206.65 crore and Rs. 163.08 crore respectively
6.11 Chemical Terminal Trombay Limited (CTTL)
CTTL is a wholly owned subsidiary of your Company offering bulk storage
facility of liquid chemicals and petroleum products. CTTL is also in
the business of supplementing services for coal handling operations and
fly ash disposal management at Trombay generating station. During FY12,
CTTL earned an operating income of Rs. 19.15 crore and PAT of Rs. 5.23
crore, as against Rs. 13.38 crore and PAT of Rs. 3.44 crore respectively
6.12 Tata BP Solar India Limited (Tata BP Solar)
Tata BP Solar, a JV between your Company (49%) and BP Alternative
Energy Holdings Limited (BP) (51%), is a manufacturer of solar cells
and modules. On 27th December, 2011, your Company signed Share Purchase
Agreement with BP to purchase its 51% equity in the company, on
completion of which, your Company will have full ownership.
In FY12, its production of solar cells was 22,538 KW as against 54,482
KW in FY11 and the production of solar modules was 55,977 KW as against
75,194 KW in FY11. During the year, the turnover of the Company was
better by 3% to Rs. 930.54 crore (FY11 Rs. 905.93 crore). Total solar
market in FY12 grew to about 700-800 MW from 80-100 MW in the previous
year. The market is currently highly competitive and fragmented among
7. Investments in Indonesian Coal Companies
Your Company through its subsidiaries Bhira Investments Limited and
Khopoli Investments Limited based in Mauritius and Bhivpuri Investments
Limited based in Cyprus has invested in PT Kaltim Prima Coal, PT
Arutmin Indonesia, Indocoal Resources (Cayman) Limited, PT Indocoal
Kaltim Resources and PT Indocoal Kalsel Resources to acquire a stake of
30% in each of these companies.
The performance of the two Indonesian thermal coal companies, continued
to be robust. The production during calendar year 2011 was 65.63 MT as
against 60.13 MT in 2010. Coal prices showed good recovery in calendar
year 2011. Coal price realization for calendar year 2011 was US$
93.20/tonne as compared to US$ 70.82/tonne in the previous calendar
year. The high price of coal ensured that the profitability of the coal
The total external outstanding debt in the coal SPVs stands at US$ 790
million as on 31st March, 2012. This debt was taken for the acquisition
of a 30% stake in two major Indonesian coal companies viz. PT Kaltim
Prima Coal and PT Arutmin Indonesia and related companies (coal
companies) and for other investments out of coal companies including
the newly formed JV with Exxaro in South Africa. The debt consists of
US$ 450 million of hybrid issue and US$ 340 million of loan with
recourse to your Company.
The equity interest in the two Indonesian coal companies provides a
price hedge against coal prices to the power business, which uses
imported coal, against rising coal prices, besides providing security
of fuel supply through the off-take agreements.
8. Sustainability at Tata Power
Sustainability forms the core of your Company's vision - "To be the
most admired Integrated Power and Energy Company delivering sustainable
value to all stakeholders"
Your Company has always set a standard in adopting sustainable
practices in its business and has developed its sustainability model
with the intent of 'Leadership with Care'. The key elements of the
sustainability model are - Care for our Environment, Care for our
Customers, Care for our Employees and Care for our Community.
Some of the key initiatives for community relations carried out by your
Company are as follows:
i) An Industrial Training Institute has been started at Mulshi
(Maharashtra) to improve employability options for youth in the area.
ii) Skill development trainings are conducted at Maithon (Jharkhand),
Trombay (Maharashtra), Naraj Marthapur (Odisha) and hydro power plant
areas (Maharashtra) to enable youth to undertake self employment.
iii) Improvement of Education Programs has benefited over 19,000
students in Maithon (whole Nirsa block in Jharkhand), Tiruldih and
Jawahar (Thane, Maharashtra).
iv) A rural BPO was set up in Khopoli (Maharashtra) and is currently
providing employment to -400 youth.
v) Nursing courses have been conducted for 35 women in the areas
adjacent to our hydro power plants and all these women have been
vi) Mobile medical services and specialized medical camps organized by
your Company have serviced more than 23,300 patients.
vii) Over 1 million saplings have been planted in our hydro power plant
areas (Maharashtra), Naraj Marthapur (Odisha), Jojobera and Maithon
(Jharkhand) towards a greener environment.
viii) Tata Power Community Development Trust has played a major role in
providing flood relief to the Odisha flood victims in collaboration
ix) Your Company's employees are active volunteers and have contributed
over 6,000 hours for various social and environmental causes.
Safety and health of employees are of prime importance to your Company.
Further, we have also introduced Greenolution wherein employees are
encouraged to carry out green initiatives voluntarily. During the year,
your Company has notched up a number of achievements in relation to
Sustainability. Your Company adopted Global Reporting Initiative (GRI)
guidelines for sustainability reporting and prepared its sustainability
report entitled 'Responsible Growth and Beyond' for FY11 based on GRI
G3 guidelines. This Sustainability Report was externally assured and
accorded A Application Level Check from GRI. Your Company also
submitted its response to The Carbon Disclosure Project (CDP), UK an
independent not-for-profit organization holding the larqest database
for investors. Your Company secured 2nd position in Indian Utilities
sector with Carbon Disclosure Leadership Index (CDLI) of 71.
Care for the Environment addresses our commitment towards resource
conservation, energy efficiency, carbon footprint, renewable power
generation, biodiversity and green buildings. One of our major
initiatives towards sensitizing the community on sustainability is the
Tata Power Club Enerji (the Club), previously known as Tata Power
In FY12, the Club has reached out to 285 schools nationwide, sensitized
over 1.5 million citizens and saved more than 2.48 MUs. The Club has a
strong, sustainable and replicable model to spearhead a movement. It
has developed 25,348 Energy Champions, 26,273 Energy Ambassadors and
1,029 self-sustaining mini energy clubs this year. This energy brigade
is creating a self-sustaining movement on energy conservation across
The Club has been bestowed the Asian Leadership Award for
'Environmental Leadership and Best Corporate Social Responsibility
Practice, 2011'. CMO Asia Awards has recognized the Club as the 'Best
Marketing Campaign of the Year, 2011'at Singapore. The Club has also
been recognized internationally and was bestowed the' Most Innovative
Campaign' award at USA's The Energy Daily's 2010 Leadership Awards.
9. United Nations Global Compact
Your Company has been reporting data since 2006 as per the Global
Compact Initiative taken up by the Secretary General of the United
Nations in 2002. The Global Compact requires businesses to adhere to
ten principles in the areas of human rights, labour standards,
environment and anti-bribery. For the current year, the Company has
submitted response to the Global Compact for its 'Communication on
Progress' on various principles in its business processes.
In your Company, safety is considered of prime importance. Therefore,
M/s, DuPont was engaged over a period of three years to bring about a
cultural change in the safety processes. Significant advancements in
the field of safety have been achieved in FY12 by implementing various
An Apex Safety Committee (ASC), chaired by the Managing Director,
reviews the Company's safety performance on a regular basis and guides
the implementation of detailed action plans through Central Safety
Committees and Site Implementation teams at all sites. Safety
Management System (SMS) has been upgraded to meet the requirement of
British Safety Council (BSC) 5 star SMS model. Several new safety
standards and procedures were introduced to ' strengthen the SMS.
Access control philosophy was introduced for controlling
Regional Apex Safety Committees were introduced to enable greater
participation of line management in safety activities. Dedicated Office
Safety Committees were established to drive improvement in offices.
Several risk-based third party safety audits were conducted on
electrical, fuel and fire protection systems. Electrical safety audits
for customer's premises were introduced to ensure safety of major
customers. Several off-the-job safety measures were implemented to
enhance the safety awareness on Road safety and Home safety amongst
employees' family and amongst school children in the operating
11. Renewable and New Technology
Your Company follows various websites and forums to keep abreast of the
Research and Development (R&D) updates on clean technologies.
Interactions are on with faculty members from the Indian Institute of
Technology (IIT), Bombay, University of Mumbai, Institute of Chemical
Technology (ICT) and various other universities to stay updated on new
technologies in the clean and renewable energy space. Technologies in a
variety of areas like C02 absorption using algae, carbon capture reuse
and storage, fuel cell (telecom tower application), gasification
(biomass, coal), solar (PV, thin-film, concentrated PV and concentrated
thermal), micro-turbine wind energy generation, etc. are being
evaluated. During the year, your Company has continued to expand its
presence in the field of renewable energy. Some key highlights are:
i) Geothermal: Your Company has invested in Geodynamics, a leading
Australian company in enhanced geothermal systems with a view to bring
the learning from the investment to India. Your Company has invested
AU$ 50 million in the project so far. Currently, the fourth injection
well is being drilled. Your Company has impaired the investment based
on current estimates of value.
ii) Solar Concentrated Thermal: A consortium led by IIT, Bombay is
setting up a 1 MW solar concentrated thermal power plant at the
National Solar Centre in Gurgaon, outside of New Delhi. Your Company
will be providing technical manpower for O&M of this power plant.
iii) Floating Solar PV: Sunengy Pvt. Limited is an Australia based
start-up company that has designed a floating concentrated PV system
using Fresnel lenses. Your Company is planning to test a 13.5 kW pilot
unit at Walwhan Lake in Lonavala.
iv) Micro-Wind: Your Company is setting up a test bed of micro wind
turbines for installation and commissioning of selected turbines. This
test bed will help the company determine the most cost-effective forms
of micro-wind energy. Micro turbines of capacities of 2 kW from
Windtronics, 5 kW and 12 kW from We Power and 5 kW from Unitrin have
been installed at this site. Another 2 kW Windtronics turbine has been
installed and commissioned at Tomboy generating station. The turbines
are being studied for understanding their performance in Indian
v) Biomass Gasification System: Your Company plans to set-up a power
generation system utilizing biomass gasification to generate synthetic
gas that is fired in a gas engine to generate power. The fuel source
(biomass) will be grown in a plantation for the purpose of harvesting
in a sustainable manner. The first unit will be 250 KW in capacity and
will need 6 tonne/day of biomass.
vi) C02 capture using algae: Your Company is designing a pilot plant
that can capture ~10 TPD of C02. This will be the first plant of its
kind in India and will have the flexibility to utilize different
solvents so that we can compare the latest C02 capture processes. Most
of the captured C02 will be reused e.g. for carbonation, dry ice
manufacturing or as an algae feed. A part of the captured C02 (1 TPD)
will be fed to algae in a Photo Bio Reactor (PBR) system. The algae
will be harvested and then value added materials like fish food and
neutraceuticals (for human consumption) can be extracted from the
vii) Microwave applications in drying of coal: There are losses in
efficiency due to high moisture content in coal used in coal fired
power plants. In order to reduce these losses and investigate the
possibility of drying of coal using microwave, preliminary studies
along with experiments were carried out. The success of the study will
pave the path for establishing future capacity. This application would
also be useful in the Exergen process for removing the moisture from
12. Corporate Services
Your Company has issued perpetual debentures amounting to Rs. 1,500 crore
in June, 2011.The key features are that these debentures are perpetual
in nature with no fixed maturity or redemption and are callable only at
the option of the Company at the end of the 10th year and annually
thereafter. The coupon (which may be deferred at the Company's option,
subject to certain conditions being met) on the debentures is set at
11.4% p.a., with a step up of 100 bps if the debentures are not called
after 10 years. These debentures rank senior only to share capital of
Your Company arranged a long term loan of Rs. 800 crore from
Infrastructure Development Finance Company Limited (IDFC) for funding
the capital expenditure requirements of its Mumbai Operations. This
loan carries an interest rate of 1.20% p.a. spread over and above 1
year IDFC benchmark rate prevailing on date of each disbursement. Of
this, the Company has availed Rs. 378 crore at an average cost of 11.20%
p.a. in FY12.
TPREL tied up the debt requirement of Rs. 255 crore through a consortium
of domestic lenders consisting of State Bank of India and Export-Import
Bank of India, at an interest rate of 11.25% p.a. (SBI base rate
plus'125 bps) with an interest reset at the end of every 12 months.
12.2 Business Excellence
i) Tata Business Excellence Model (TBEM)
This year, exercising the option given by Tata Quality Management
Services (TQMS) to high scoring Tata companies, of getting assessed
every alternate year, the Company did not participate in the TBEM
external assessment process. Instead, the Company implemented a
detailed internal assessment process across all the divisions in the
Company. The internal assessment process mimicked the external
assessment process, to the extent possible.
ii) Organization Transformation (OT)
Your Company continued its efforts in building leaders. As part of the
structured OT exercise for officers, 'Leher', provided an opportunity
to two hundred officers in the management cadre, across functions,
levels and sites to consolidate their learning and effectively spread
their individual transformations to others in the Company and
enculturise them. The cultural shifts, include taking ownership,
collaborative responsiveness, taking decisions that address the greater
common good, and working on their own individual development plans.
Another OT initiative, 'LASER' (Learn, Apply, Share, Enjoy, Reflect),
aimed at achieving high standards of shop-floor excellence and
strengthening the relationships between front- line officers and
workmen has been implemented. It achieved high levels of success, in
terms of relationship building, improving operational efficiencies, and
improving the workplace. The programme covered all operating sites and
109 projects were taken up with 42 projects having been completed,
yielding an estimated annualized saving of Rs. 1.60 crore.
iii) Structured Problem Solving (SPS)
The SPS programme launched last year in your Company has gathered
momentum and over 400 officers from across sites have been trained on
SPS. SPS attempts to analyse data available from the various processes,
using quality tools, to arrive at solutions for continuous
improvements. Of the 105 SPS projects taken up during the year, 62
projects have been completed, reporting an estimated annualised saving
of Rs. 34 crore.
Sankalp, a programme to bring in operational excellence, delivery
excellence and cost efficiency, using the Total Operational Management
methodology has gained strength across the Company. The Sankalp
programme, which takes up projects that have a major effect on the
Company's profitability, has achieved a saving of Rs. 84 crore accrued
during the year. The key projects taken up in Trombay include
improvement of heat rates of the 500 MW Unit 5 and the 250 MW Unit 8.
v) Business Process Reengineering (BPR)
The BPR efforts in your Company were concentrated in the specific area
of distribution and retail sales in view of the rapid increase in the
number of customers in Mumbai. Some of the projects taken up were SAP
based Customer Relationship Management (CRM) which would provide a
single window for all customer related information and automate
workflows for customer facing processes, SAP based Business
Communication Management to enable customers to use various channels of
communication like interactive voice over telephone, email, SMS and
integrating it with CRM etc.
BPR has also undertaken an exercise to study the existing cost
structure for generation, transmission and distribution and validate
the allocation methodologies.
12.3 Regulatory matters
The business of Tata Power is governed primarily under the Electricity
Act, 2003 (EA 2003) and the regulations framed by the regulatory
commissions under EA 2003. Every year, each regulated business of your
Company is required to file two documents with the concerned regulatory
commission - an Annual Performance Review (APR) for the year gone by
and Annual Revenue Requirement (ARR) for the coming year. The APR
contains details of the actual performance of the business, including
all relevant operational and financial details. The ARR contains the
projected revenue requirement based on demand projections, fuel cost
and plans for operational and capital expenditure.
Of late, regulatory commissions have issued Multi Year Tariff (MYT)
regulations that propose a method to fix tariff for a period of five
years, with a possibility of a mid-term review. Such MYT regime has
been brought by the state regulators of Maharashtra and Jharkhand for a
five year period commencing from 1st April, 2011 to 31st March, 2016.
Under this regime, a projection of the business parameters have to be
made for the five year period. In compliance therefore, this year the
Company, in addition to the APR petition, filed documents called the
Business Plan and Multi Year Tariff Petition for its Mumbai business as
well as two of its units at Jojobera.
12.3.1 Mumbai Operations
i) MERC order for truing up of FY10 and FY11
MERC passed an order in February, 2012 on the Company's truing up
petition for FY10 and FY11. In this order, certain expenditures for
FY10 and FY11 were disapproved by MERC. An appeal has been filed
against such disallowances in the Appellate Tribunal for Electricity
(ATE). Recently, the Company was allowed to recover Fuel Adjustment
Charge (FAC) on ad-hoc basis by MERC.
ii) Changeover of consumers to Tata Power
Your Company has successfully changed over a large number of consumers
from another power distributor. It was contended by the other licensee,
that such changeover is causing financial loss due to loss in cross
subsidy and this loss needs to be recovered. A petition was filed in
MERC, which decided that this would be considered at the time of the
tariff filings of the other distributor. MERC, in its order on tariff
filing of the other distributor, has determined cross subsidy surcharge
for various categories of such changed over consumers. An appeal has
been filed in ATE against such determination of cross subsidy surcharge
in the parallel licensee scenario.
iii) Laying of network in South Mumbai Area
MERC, in its order in February 2010, had directed your Company to lay
distribution network in South Mumbai area for supplying electricity to
the consumers. Brihan Mumbai Electricity Supply and Transport
Undertaking (BEST), which also has a distribution license in this area,
had challenged this Order in ATE under the contention that the Company
is not allowed to lay distribution network in South Mumbai as BEST, a
local authority already has a network in South Mumbai. In February
2011, ATE dismissed the appeal of BEST and confirmed the order of MERC.
BEST then appealed the matter in the Hon'ble Supreme Court and obtained
a stay on the judgment of ATE in March 2011. The Hon'ble Supreme Court
in October 2011 remanded the matter back to ATE for hearing on merits.
ATE, after hearing the case on merits, has passed a judgment in April
2012, dismissed the appeal and upheld the MERC order. The appeal has
been admitted on 10th May, 2012. Pending disposal of the appeal, status
quo as of that date shall be maintained by the parties.
iv) Approval of PPA between Generation and Distribution businesses of
The Generation and Distribution businesses of your Company entered into
a PPA for contracting 458 MW power from various units of its generation
business with distribution business to meet the rising demand due to
change over consumers. The PPA was submitted to MERC for approval under
Regulation 25.1 of the MERC (MYT) Regulations, 2011. MERC, in its
order in October 2011, approved the above PPA at regulated tariffs.
12.3.2 Eastern Region Operations
i) JSERC Tariff Order of FY12 for Jojobera Unit 2 and Unit 3
The Jharkhand State Electricity Regulation Commission (JSERC) has
issued tariff order of Jojobera Unit 2 and Unit 3 for FY12 in August
2011. In its first tariff order for Jojobera Unit 2 and Unit 3 under
Generation Tariff Regulations 2010, JSERC has disapproved certain
revenue proposed by the Company. An appeal has been filed with ATE
against such disallowances and the judgment of ATE on the matter is
ii) MYT Business Plan and Petition of Jojobera Unit 2 and Unit 3
Your Company has filed MYT Business Plan and Petition for Jojobera Unit
2 and Unit 3 for the control period (FY13-FY16) to the JSERC and the
tariff order of the same is expected soon.
iii) CERC Tariff Order for Maithon Power Project
CERC, after considering Petition No. 274/2010 along with Interlocutory
Application Nos. 11/2011 and 14/2011, has passed the tariff order in
November 2011 for sale of 150 MW from 525 MW Unit 1 to DVC for FY12.
Unit .1 of MPL has been commissioned in September 2011.
12.4 Legal matters
12.4.1 Standby Charges
On an appeal filed by your Company, the Supreme Court has stayed the
operation of the ATE order, subject to the condition that the Company
deposits an amount of Rs. 227 crore and submits a bank guarantee for an
equal amount. Your Company has complied with both the conditions.
RInfra has also subsequently filed an appeal before the Supreme Court
challenging the ATE order. Both the appeals have been admitted and are
listed for hearing and final disposal.
12.4.2 Energy Charges and 'Take or Pay' Obligation
MERC directed RInfra to pay Rs. 323.87 crore to your Company towards the
difference between the rate of Rs. 1.77 per kWh paid and Rs. 2.09 per kWh
payable for the energy drawn at 220 kV interconnection and towards its
'Take or Pay' obligation for the years 1998 - 1999 and 1999 - 2000. On
an appeal filed by RInfra, the ATE upheld the Company's contention with
regard to payment for energy charges but reduced the rate of interest.
As per the ATE order, the amount payable works out to Rs. 34.98 crore
(excluding interest), as on 31st May, 2008. As regards the 'Take or
Pay' obligation, the ATE has ordered that the issue should be examined
afresh by MERC after the decision of the Supreme Court in the appeals
relating to the distribution licence and rebates given by RInfra. The
Company and RInfra filed appeals in the Supreme Court. Both the appeals
have been admitted and are listed for hearing and final disposal. The
Supreme Court, vide its order dated 14th December, 2009, has granted
stay against the ATE order and has directed RInfra to deposit with the
Supreme Court a sum of Rs. 25 crore and furnish a bank guarantee for the
balance amount. Pursuant to the liberty granted by the Supreme Court,
the Company has withdrawn the above mentioned sum subject to an
undertaking to refund the amount with interest, in the event the appeal
is decided against the Company.
13. Foreign Exchange Earnings/Outgo
The foreign exchange earnings of your Company during the year under
review amounted to Rs. 631.78 crore (previous year Rs. 117.76 crore),
mainly on account of forex interest, etc. The foreign exchange outflow
during the year was Rs. 2,448.55 crore (previous year Rs. 1,241.25 crore),
mainly on account of fuel purchase of Rs. 2,071.89 crore (previous year
Rs. 1,016.83 crore), repayment of foreign currency loans with interest
thereon, NRI dividends and Foreign Currency Convertible Bonds (FCCB)
interest of Rs. 72.73 crore (previous year Rs. 58.43 crore) and purchase
of capital equipment, components and spares and other miscellaneous
expenses of Rs. 309.49 crore (previous year Rs. 173.85 crore).
14. Disclosure of Particulars
Particulars required by the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given in the prescribed
format as Annexure I to the Directors' Report.
Particulars of Employees: In terms of the provisions of Section 217
(2A) of the Companies Act, 1956 (the Act), read with the Companies
(Particulars of Employees) Rules, 1975, the names and other particulars
of employees are set out in. the Annexure to the Directors' Report.
However, having regard to the provisions of Section 219 (1)(b)(iv) of
the Act, the Annual Report is being sent to all Members of the Company
excluding the aforesaid information. Any Member interested in obtaining
such particulars may write to the Company Secretary at the Registered
Office of your Company.
15. Sub-division of equity shares
At the last Annual General Meeting of the Company, the Members approved
sub-division of the Company's equity shares having a face value of Rs.
10/- each into equity shares having a face value of Rs. 1/- each.
Accordingly, 24,29,47,084 issued equity shares of the Company, having
face value of Rs.10/- each were sub-divided into Rs. 2,42,94,70,840
equity shares having face value of Rs. 1/- each. 27th September, 2011
was fixed as the Record Date for the purpose of the said sub-division.
Corporate action to credit the demat accounts of Members was taken on
28th September, 2011. Those who held their shares in physical form, and
did not opt to receive their holdings in electronic form, were mailed the
share certificate representing their holdings by 10th October, 2011.
Vide General Circular No: 2 / 2011 dated 8th February, 2011, the
Ministry of Corporate Affairs, Government of India, has granted a
general exemption to companies from attaching the Balance Sheet, Profit
and Loss Account and other documents referred to in Section 212 (1) of
the Act in respect of its subsidiary companies, subject to fulfilment
of the conditions mentioned therein. Accordingly, the said documents
are not being attached with the Balance Sheet of the Company. A gist of
the financial performance of the subsidiary companies is contained in
the report. The Annual Accounts of the subsidiary companies are open
for inspection by any Member/Investor and the Company will make
available these documents/details upon request by any Member of the
Company or to any investor of its subsidiary companies who may be
interested in obtaining the same. Further, the Annual Accounts of the
subsidiary companies will be kept open for inspection by any investor
at the Company's Head Office and that of the subsidiary company
concerned and would be posted on the website of the Company.
Mr Banmali Agrawala, Executive Director, resigned from the services of
the Company with effect from close of business hours on 30th November,
2011. The Board has placed on record its appreciation of the valuable
contribution made to your Company by Mr Agrawala.
Mr Cyrus P Mistry was appointed as an Additional Director with effect
from 23rd December, 2011, in accordance with Article 132 of the
Articles of Association of the Company and Section 260 of the Act. Mr
Mistry holds office only up to the date of the forthcoming Annual
General Meeting (AGM) and a Notice under Section 257 of the Act has
been received from a Member signifying his intention to propose Mr
Mistry's appointment as a Director.
Dr R H Patil, Director, resigned from the Board with effect from 20th
March, 2012. The Board has placed on record its appreciation of the
valuable contribution made to your Company by Dr Patil. Dr Patil
expired on 12th April, 2012.
In accordance with the requirements of the Act and the Articles of
Association of the Company, Mr R N Tata, Dr H S Vachha and Mr A K Basu
retire by rotation and are eligible for re-appointment.
M/s. Deloitte Haskins & Sells (DHS), who are the statutory auditors of
the Company, hold office until the conclusion of the ensuing AGM. It is
proposed to re-appoint DHS to examine and audit the accounts of the
Company for FY13. DHS has, under Section 224 (1) of the Act, furnished
a certificate of its eligibility for re-appointment. The Members will
be requested, as usual, to appoint Auditors and to authorize the Board
of Directors to fix their remuneration. In this connection, the
attention of the members is invited to Item No. 6 of the Notice.
Members will also be requested to pass a resolution (vide Item No. 8 of
the Notice) authorizing the Board of Directors to appoint Auditors/
Branch Auditors/ Accountants for the purpose of auditing the accounts
maintained at the Branch Offices of the Company, in India and abroad.
In accordance with the requirement of the Central Government and
pursuant to Section 233B of the Act, the Company carries out an audit
of cost accounts relating to electricity every year.
19. Auditors' Report
The Notes forming part of the Accounts referred to in Auditors' Report
of the Company are self-explanatory and, therefore, do not call for any
further explanation under Section 217 (3) of the Act.
The consolidated financial statements of the Company have been prepared
in accordance with Accounting Standard 21 on Consolidated Financial
Statements, Accounting Standard 23 on Accounting of Investments in
Associates and Accounting Standard 27 on Financial Reporting of
Interest in Joint Ventures, issued by the Council of The Institute of
Chartered Accountants of India.
20. Corporate Governance
To comply with conditions of Corporate Governance, pursuant to Clause
49 of the Listing Agreements with the Stock Exchanges, a Management
Discussion and Analysis Statement, Report on Corporate Governance and
Auditors' Certificate, are included in the Annual Report.
21. Directors' Responsibility Statement
Pursuant to Section 217 (2AA) of the Act, 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
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 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 Act, for safeguarding
the assets of the Company and for preventing and detecting fraud and
iv) They have prepared the annual accounts on a going concern basis.
On behalf of the Directors of the Company, I would like to place on
record our deep appreciation to our Shareholders, Customers, Business
Partners, Vendors, both international and domestic, Bankers, Financial
Institutions and Academic Institutions.
The Directors are thankful to the Government of India and the various
Ministries, the state Governments and the various Ministries, the
Central and State Electricity Regulatory authorities, Corporation and
Municipal authorities of Mumbai and other cities where we are
Finally, we appreciate and value the contributions made by all our
employees and their families for making Tata Power what it is.
On behalf of the Board of Directors,
R N Tata
Mumbai, 22nd May, 2012