DIRECTORS' REPORT-2005-06
The Board of Directors take immense pleasure in presenting the 36
th
Annual Report on the business and operations of the Corporation with the
audited statement of accounts for the year ended March 31, 2006.
I. Financial Performance
Financial Results
For the year ended
March 31, 2006
(Rs. in crores)
For the year ended
March 31, 2005
(Rs. in crores)
Gross income from
Sale of energy
2521 2483
Other income 149 134
Total Income 2670 2617
Operating expenditure 1710 1766
Operating profit 960 851
Finance Charges, Depn.,
Extraordinary items &
prior period adjustments
625 589
Profit before tax 335 262
Provision for Tax
Deferred tax
28
55
22
1
Profit after tax 252 239
Profit
• Profit before tax during the year was at Rs.335 crores as against
Rs. 262 crores during the previous year.
Turnover
• Turnover during the year was Rs. 2521 crores as against Rs. 2483
crores during the previous year. This was on account of higher hydel
generation.
Generation
• Generation during the year was 19889 mus as against 18993 mus during
the previous year on account of higher hydel generation.
Dividend
• A dividend of Rs. 20 per share as in previous years has been proposed.
The total dividend outgo will be Rs.13.26 Crores
Special Reserve
• An amount equivalent to 2.5% of the profit after tax is transferred to a
separate Reserve to meet the contingencies in operation and
maintenance of the plants.
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II. Financial Management
Financial Initiatives
With the regulatory environment prevailing in the State, the company has
been pursuing with various initiatives to reduce the cost of borrowings. The
total savings during the year 2005-06 is Rs.86.36 crores. The details are:
� On account of availment of Short Term Loan during the period at lower
rate of interest, KPCL has saved an amount of Rs.76.58 crores, in
comparison with the rate of interest of Rupee Term Loan and Working
Capital Loan.
� Conversion of Working Capital in to STL & RTL in to FCNR(B) has
resulted in savings of Rs.5.33 crores.
� Savings of Rs.4.45 crores during the currency of the loan on Debt
restructuring of PFC loans amounting to Rs.102.70 crores.
III. Realisation of dues from KPTCL/ESCOMs
a) As part of the reforms in the power sector, GoK vide GO No. EN 131
PSR 2003 Bangalore dated 10.05.2005 ordered for assignment of
PPAs to all the ESCOMs for purchase of power from KPCL w.e.f.
10.06.2005. Accordingly, KPCL has been selling power directly to
ESCOMs w.e.f. 10.06.2005. The total realisation from KPTCL/
ESCOMs during the year was at Rs.2117 crores. The Company has
taken up with the Government of Karnataka, to ensure 100% current
monthly billing payment together with definite time frame for
liquidation of old dues and allocation of outstanding dues of KPTCL
amongst ESCOMs.
b) For the first time in the history of the Company, energy was sold to
other trading agencies outside the State of Karnataka under Open
Access, which realized an amount of Rs.83 crores during the year.
IV. Power Purchase Agreements
The Power Purchase Agreements for the existing hydel stations and RTPS
Units 1 to 7 were approved by KERC with parameters that were adverse to
the Company. The Company approached the Hon’ble High Court of
Karnataka to issue appropriate directions to KERC.
High Court of Karnataka has granted stay on the execution of PPAs and has
heard the parties. It is hoped that the judgement will be delivered soon.
In view of the stay of Hon’ble High Court on revised PPAs the energy bills
on KPTCL/ESCOMs are raised as per the methodology followed prior to
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initialing of PPAs with KPTCL. GOK vide GO dated 10.05.2005 has
directed KPTCL to assign the PPAs in favour of ESCOMs for direct
purchase of power from the Company.
Accordingly, the revenues reported continue to be based on the above
procedure.
V. Corporate Governance
a) Best Practices
♦ To meet the challenges of a competitive scenario in the power sector
♦ Cost consciousness and transparency in transactions
♦ Adaptations to reduce time and cost element in project execution
♦ Benchmarking with the best in India and abroad
♦ Proper budgetary control system
♦ Financial and commercial systems to ensure fair play for stakeholders like
vendors, contractors and lenders.
♦ Importance for obtaining lawful consents, permits and clearances in the
activities. Contractors, suppliers and other business associates are
expected to comply with all relevant legal requirements.
♦ To reflect faithful compliance to the tenets of public governance.
♦ Savings to be obtained through a professional approach in design,
execution and operation & maintenance of projects.
♦ Enhancement of knowledge and skills of employees through training
b) Social contributions
♦ Donations to the Chief Minister’s Relief Fund, social welfare and child
care programmes
♦ Maintaining aesthetic gardens at the Kidwai Oncology Hospital, project
locations, Corporate Office and park with an attractive water fountain in
front of Vidhana Soudha
♦ Supporting Rehabilitation and Resettlement measures
♦ Passing on the benefit of cost cutting in construction, finance and
operations to the consumers
♦ High performance levels to reduce cost and ensure reliable power supply
♦ Adopting people friendly approach including settlement through Lok
adalath. About 150 cases in Kali project involving about Rs. 14 crores
have already been settled. Further, efforts are on to convince the other
landlosers also to go in for similar settlement.
♦ Making available corporation-run schools, hospitals and community
centers for the general public in the project area
♦ Maintaining interior roads near project locations
♦ Strict compliance to environmental laws, regulations and norms
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c) Research and Development
The Corporation has created separate task forces to take up R&D
activities in order to optimize generation from the existing plants through
improvements and also to adopt new technology for higher efficiencies in
operation and maintenance of plants. Some other areas where newer
technologies have been adopted are as follows:
i) Renovation and modernization of existing plants are contemplated on
a continuous basis
ii) The level monitoring of Talakalale Dam with GSM based technology
has been implemented for optimum usage of water resource
iii) Condition monitoring of generator transformers healthiness has been
initiated which will decrease the failure rate
Further, newer construction techniques are also studied for speeding up
construction of future power projects.
d) Board of Directors
Shriyuths:
1. N Dharam Singh - Chairman (upto 13.02.06)
2. HD Kumaraswamy - Chairman (from 13.02.06)
3. HD Revanna - Vice Chairman (upto 13.02.06
& from 03.07.06)
4. KC Reddy
5. LV Nagarajan - Managing Director
6. SM Zafrulla - Technical Director
7. D Vishnuvardhan Reddy - Finance Director
8. M Nellaiappan - Director (HR) (06.04.05 to 13.03.06 &
from 06.04.06)
9. Dilip Rau
10. SV Ranganath - (upto 22.05.06)
11. Sudhakar Rao - (upto 14.09.05 & from 22.05.06)
12. N.Gokul Ram - (from 14.09.05)
13. V Madhu - (upto 14.09.05)
14.Bharat Lal - (from 14.09.05)
15. AK Tripathy
16. HS Mahesh - (upto 03.07.2006)
17. PR Mallikarjuna
18. K Sankappa Shetty
19. V Sreenivasa Murthy
20. SV Nesargi - (26.10.05 to 31.10.05)
The Board places on record its appreciation of the services rendered
by the outgoing/ceased Directors during their tenure.
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e) Meetings of the Board, sub-committees & management committees
pertaining to the financial year
i) Board level
Board : Four
Technical Committee : Fourteen
Audit Committee : Three
Sub Committees –
Board : Two
Tech. Committee : Two
Empowered Committee
(For sourcing of Gas to Bidadi Project) : Three
ii) Management
Management Control & Review : Twenty two
(at corporate office)
Heads of the Departments : One
iii) Audit Committee
Pursuant to Sec. 292 A of the Companies Act, Audit Committee has been
constituted in July 2004 comprising Sriyuths PR Mallikarjuna, K Sankappa
Shetty and V Sreenivasa Murthy as members.
The Audit Committee reviewed the half yearly and 3
rd
quarterly accounts in
its meetings dated 21.01.2006 & 31.03.2006. It also reviewed the budget
proposals for the year 2006-07.
In its meeting on 01.08.06, the Committee reviewed in detail the annual
accounts for the year 2005-06 and recommended the same for consideration
by the Board.
iv) General Body Meetings
Annual General Meetings
Meeting No.
& Date
Held at Special
Resolutions
33 – 29.09.2003
Room No. 645, Chambers of
Principal Secretary, Energy Dept.,
GoK, MS Building,
Bangalore-560 001
Nil
34 – 22.09.2004
Regd. Office, No. 82, Shakti
Bhavan, Race Course Road,
Bangalore-560 001
Nil
35 – 26.09.2005
Room No. 236, Chamber of
Principal Secretary, Energy Dept.,
GoK, 2
nd
Floor, Vikas Soudha,
Bangalore-560 001
Yes, Amendment to the
Memorandum of
Association - inclusion of
provisions for trading
6
VI. Capital Expenditure
The Corporation has incurred an amount of Rs. 692 crores towards capital
expenditure during the year.
VII. Physical Achievements
• Generation of 19889 mus.
• Thermal generation of 9164.73 mus.
• Wind Power Generation of 15.09 mus
• Plant Load Factor (PLF) of 71.17% at Raichur Thermal Power
Station with availability factor of 89.12%
• Capacity addition of 110 mws at ADPH
VIII. Operational Performance
Operational performance in terms of plant availability factor, plant load
factor, forced outages, specific coal and oil consumption per kwh and
auxiliary consumption was maintained at optimum level. The performance
parameters of thermal and major hydel projects for the years are indicated
below:
A. Generation Performance
Generation
2005-2006
(in mus)
2004-2005
(in mus)
Thermal 9165 10731
Hydro + Wind 10724 8262
Total 19889 18993
The hydel generation during the year was more by 2462 mus due to good
inflows into the major reservoirs. However, thermal generation was
maintained at optimum level to meet the demand despite constraints in part
load operation due to grid requirements.
B. Performance of RTPS
Particulars 2005-2006 2004-2005
Generation in mus 9165 10731
Aux. Consumption in mus 790.65 931.8
Aux. Consumption in % 8.63 8.6
Plant Load Factor 71.17 83.33
Coal consumption in (lakh MT) 60.51 69.41
Specific Coal consumption (kg/kwh) 0.66 0.647
Specific Oil consumption (ml/Kwh) 0.736 0.604
Plant Availability Factor 89.12 88.12
Units in operation 7 7
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RTPS continued to operate at high levels of efficiency. The Company has
been found to conform to the Environmental Management System Standard
ISO 14001:2004 for RTPS. The Certificate is for all activities related to Coal
Based Power Generation including Operation & Maintenance along with
support Facilities like Medical & Colony Services.
C. 1) Performance of Major Hydro Stations
Stations Availability
Factor (%)
% Auxiliary
Consumption
Sharavathi 96.85 0.64
Nagjhari 90.74 1.81
Varahi 99.22 2.23
2) Significant performance by minor hydel stations:
Minor Stations 2005-06 2004-05
Availability
Factor in %age
Generation
In mu
Availability
Factor in %age
Generation
in mu
Gerusoppa 95.93 556.39 95.93 437.90
Kadra 96.89 345.92 96.89 231.51
Kodasalli 91.01 331.25 91.01 217.89
Ghataprabha 99.04 122.54 99.04 96.80
D. Station wise generation in mus
Stations 2005-06 2004-05
Raichur Thermal Power Station 9164.73 10730.91
Sharavathi Generating Station 4865.64 3854.66
Gerusoppa Dam Powerhouse 556.39 437.90
Linganamakki Dam Powerhouse 274.62 193.87
Nagjhari Powerhouse 2162.33 1719.95
Supa Dam Powerhouse 357.56 295.99
Kadra Dam Powerhouse 345.92 231.51
Kodasalli Dam Powerhouse 331.25 217.89
Varahi Underground Powerhouse 971.84 974.00
Mani Dam Powerhouse 20.67 22.47
Almatti Dam Powerhouse 598.65 139.21
Ghataprabha Dam Powerhouse 122.54 96.80
Bhadra Dam Powerhouse 76.28 41.40
Kalmala, Sirwar, Ganekal &
Mallapur
25.42 21.70
Kappatagudda Wind Farm 15.09 15.05
Total 19888.94 18993.31
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IX. Capacity Additions
Project
Capacity
in mws
Date of
Commissioning
Almatti Dam Powerhouse – Unit 5 55 6
th
July,2005
Almatti Dam Powerhouse – Unit 6 55 10
th
August, 2005
Total 110
During the year, hydel reservoirs reached the following levels
Reservoir Full level
Minimum
Drawdown
Level
Highest
level
in 2005-06
Date
%
capacity
Linganamakki 1819.00 ft 1715 ft 1819 ft 20.08.05
&
29.08.05
100
Supa 564.00 mtrs 524.30 mtrs 560.90 mtrs 04.11.05 91.03
Mani 594.36 mtrs 565.10 mtrs 591.60 mtrs 06.11.05 83.65
X. On going projects
a) Almatti Dam Power House (290 mws)
The estimated cost of the project is Rs.674.38 crores. It has one unit of 15
MW and five units each of 55 MW. Construction of power house is
completed and all the units are already commissioned. The completed cost
of the project is Rs. 525 crores. The work completion ceremony was held at
ADPH on 25.08.2005. The cumulative generation upto March 2006 is 740
MU. The power house has bagged an award by CEA during 2004-05 for
best executed hydro power project.
b. Bellary Thermal Power Station (1x500 mw)
Implementation of Bellary Thermal Power Project (1x500 MW) with an
estimated completion cost of Rs.2100 crores has been taken up on fast-track
basis through EPC route from 29.12.03. M/s Bharat Heavy Electricals Ltd.
are the EPC contractor. The Contract schedule for implementation of the
Project is 36 months for synchronization and 39 months for commissioning.
The detailed Engineering for manufacture of various equipment including
BTG & auxiliaries and BoP equipment/system has been completed.
Manufacture & Supply of equipment from various units of BHEL and their
sub-vendors are progressively getting completed by September-October
2006. In view of heavy order position with BHEL, they are not in a position
to adhere to their supply schedule particularly from the critical units of
Trichy, Ranipet & Hardwar. This is impeding the progress of the Project.
Top level review meetings are being periodically held to speed up
manufacture & supply of equipment from the critical units to ensure
continuity of erection of components at Site.
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Civil & Structural steel works in BTG Island, Transformer yard, Switch yard
& Water system area are in advanced stage of completion. In addition, the
works on auxiliary plant buildings are also in advanced stage of completion.
The civil works pertaining to BoP equipment/system viz., Ash handling,
Coal handling & Fuel oil handling system are in progress.
The works pertaining to RC Chimney & Natural Draft Cooling Tower are
nearing completion.
The important event of “Boiler Hydro test” was achieved on 11.5.2006.
Focus now is on the next important event of Boiler Light-up scheduled by
28.9.2006.
Erection of major equipment viz., Boiler, ESP, Mills, Fans, Heaters, Switch
gears, Switchyard equipment, Turbine & Condenser are in progress.
Water supply works from Maralihalla to BTPS Plant site including civil
works at Maralihalla, Laying, Jointing & Testing of MS pipeline &
Construction of Raw water pond are in progress. In addition, other non-EPC
works of construction of Ash pond, Railway siding & Marshalling yard and
Roads & Drains in the Plant area are in progress.
Land: Absolute sale deed in respect of 1157 acres of private land and 549.27
acres (VSL land) has been registered on 20.06.06 with the Sub Registrar,
Bellary.
Cumulative financial progress achieved on the Project up to end of June
2006: Rs.1315 crores.
The project is expected to be ready for supply of power to the State grid from
December 2006.
c) Up-rating of Nagjhari Power House (45 mws)
The existing units of 135 mws are planned to be up-rated to 150 mws
capacity. Units 1, 2 & 3 have been up-rated. Presently U-4 is under R, M
& U works. On observing cracks developed in U-4 rotor spiders the rotor
spiders are being replaced for units 4, 5 & 6 with new ones. Unit 4 is likely
to be commissioned by August 2007. Units 5 & 6 are likely to be
commissioned during 2008 & 2009 respectively.
d) Bidadi Combined Cycle Power Plant (1400 mws)
• Bidadi Combined Cycle Power Plant is planned as a state of the art gas
based project at Bidadi near Bangalore, the main load centre. This
project will also provide the anchor load for gas supply to Karnataka.
10
• Treated sewerage water from the BWSSB plant at Vrishabhavathi
valley, Bangalore will be used for the plant. Water supply pipeline
already laid for 700 mws is being shifted in view of construction of
four-lane Bangalore-Mysore Road. The shifting work is in progress.
Studies are in progress for laying second pipeline for catering to 100%
requirement of Bidadi CCPP. KPCL has spent about Rs.27 crores for
land, water supply scheme, compound wall and some works on
marshalling yard. The estimated cost of the project is Rs. 3750 crores.
Environmental clearance has been obtained from MOEF.
• Notification for pre-qualification for EPC works including financing of
EPC cost was issued on 16.6.2003. Bids were opened on 15.9.2003.
Four Bidders were pre-qualified. Bid documents have been issued to
these pre-qualified bidders during June 2004. The schedule for
implementation of power plant will be firmed up based on finalisation
of gas supply bids.
• Bid notification for “Request for Qualification” for supply of natural
gas/Re gasified LNG was issued on 23.05.2003. Techno Commercial
bids received from the following firms were opened on 24.03.2004:
A. M/s. Petronet LNG Limited (ONGC, BPCL) – RLNG
B. M/s. Reliance Industries Limited – NG
C. M/s.Kakinada IOLC (IOC, Petronas & Kakinada Sea Ports) – RLNG
• Since the three pre-qualified bidders did not submit the price bids for
supply of gas on the scheduled date of 30.12.2004, the Board in its adj.
199th meeting held on 9.5.2005 had constituted an empowered
committee comprising Dr. MR Srinivasan, former Chairman, Atomic
Energy Commission of India, Principal Secretary, GoK Energy
Department, Prof. Soundaranayagan, formerly of IISc, Shri AC Bhaskar,
Scientist E of GTRE, Managing Director, Technical Director, Finance
Director, KPCL to explore the options for obtaining gas for Bidadi Combined
Cycle Project. The Committee has submitted the report to the Board and the
same has been accepted.
e) Varahi Hydro Electric Project 2
nd
Stage - (2 x 115 mws)
• Varahi Hydro Electric Project was conceived and designed for
implementation in two stages. First stage comprises of two units of 115
mws each at Varahi Under Ground Power House and these units have
already been commissioned in the year 1989 and 1990 and a provision
for addition of two more units of same capacity has been made for the
second stage. These additional units provide peaking assistance to the
grid.
• Govt. of Karnataka vide GO No. DE89 PPC 2000 dated 28.10.2003 has
allotted the VHEP Stage-II scheme to KPCL for implementation. The
11
estimated cost of the project is Rs. 291.00 crores. Statutory clearances
for the project have been obtained.
• Civil works are entrusted to M/s IHP- SNC consortium and the work is
in progress.
• Bids for EPC of E&M works have been finalised and work awarded to
M/s VA Tech India Ltd. Period of implementation is 28 months from
zero date.
f) Bellary Thermal Power Station - Stage-II (1X500 MWs)
GoK has allotted additional 500 mws project Unit.2 stage-II to KPCL
vide GO. No.DE186PPC1997/15.07.2002. Detailed Project Report is
ready. All statutory clearances are being obtained. The cost of the work
is estimated at about Rs. 2106 crores. The annual energy generation
would be 3504 mus at 80% PLF. The work is likely to be completed in
38/41 months from zero date.
g) Raichur Thermal Power Station - Unit-8 (250mws)
This is an Expansion Power Unit adjacent to existing 7 Units of capacity
1x210 mws. GoK allotted the project to KPCL on 23.06.2003. It is now
proposed to go in for 250 mws unit as BHEL has phased out the 210
series and also the 250 mws unit is more efficient and proven. The
estimated project cost is Rs.925 crores. No additional land & water is
required.
Statutory clearances are obtained/are in process.
Geo-technical and soil investigations are in progress. Planned time of
completion is 28/30 months.
h) Gundia High Head Scheme (400 mws)
The Board of Directors has approved the implementation of the 400
mws Gundia High Head Scheme. Studies are underway for preparation
of Detailed Project Report.
i) Others
• GoK by Order No. DE 35 PSR dated 11.4.2003 has approved the
merger of M/s Visveswaraya Vidyuth Nigam Limited with KPCL.
Formal application along with scheme of merger to the Department
of Company Affairs (DCA) under Sec. 396 of the Companies Act has
been filed on 31.7.2003. Approval of DCA is awaited.
• KPCL in association with Indian Institute of Science has taken up
two bio mass projects at Bethamangala in Kolar district (412 KW) and
Kushalnagar in Kodagu district (107 KW) at a total estimated cost of
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Rs.158 lakhs and Rs.45 lakhs with MNES subsidy support of Rs.64
lakhs and Rs.16.5 lakhs respectively. These units will provide
captive power supply for water supply schemes. All the civil
engineering works have been completed. Assembly and erection of
gasifier and engine are also completed. Formal inauguration of
Bethamangala plant was done by MD, KPCL on 16.06.2006.
• Company has prepared vision 2025 identifying future sites and
expansion projects with possible capacity of about a total of 20000
MWs for four block periods of 5 years. This has been adopted by the
Board and MD authorized to initiate preparatory action.
• Further, Government of India has proposed to setup a 4000 MW Ultra
Mega Project near Tadadi in Uttar Kannada District with equity
participation of about Rs.500 crores by GoK through KPCL.
XI. New Projects
The Corporation has taken up projects in Hydel, Thermal, Combined cycle
power plant, and R,M & U works as under:
Under execution
a) Bellary Thermal Power Station – Stage I 500 mws
b) Uprating of NPH(units 4,5 & 6) 45 mws
Under Tender/award
c) Bidadi Combined Cycle Power Plant 1400 mws
d) Varahi Hydro Electric Project Stage –II 230 mws
e) Bellary Thermal Power Station – Stage II 500 mws
f) RTPS Unit 8 250 mws
Under Preparation
g) Gundia High Head Scheme 400 mws
]
XII. Management of Coal
Coal for RTPS
Coal requirement at RTPS is about 23,000 tonnes per day for operation
of seven units at full load.
Supply linkage of coal is from (i)Singareni Collieries, Andhra Pradesh,
(ii) Western Coalfields, Maharashtra, (iii) Mahanadi Coalfields, Talcher,
Orissa. Coal was also sourced from South Eastern Coalfields Ltd.,
Chattisgarh.
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Coal receipt during the year 2005-2006 was 66.57 lakh tonnes including
imported coal of 1.12 lakh MT as against 70.82 lakh tonnes in 2004-
2005 to ensure PLF at 69.48%. Colliery wise breakup is as below:
Qty. of Coal (Lakh tonnes)
Colliery
Washed Raw Total
WCL 20.57 --- 20.57
SCCL 15.19 14.13 29.32
SECL 0.95 --- 0.95
MCL --- 14.61 14.61
Total 36.71 28.74 65.45
The specific coal consumption for the year 2005-2006 is around 0.645
Kg/Kwh.
As a part of strategy to make continuous improvement in coal
procurement and also meet the MoEF regulation that all power stations
located at a distance of more than 1000 Kms. shall use coal with ash
content less than 34% only, washeries have been established on BOO
basis in SCCL, WCL and MCL areas.
However, washed coal is being received only from SCCL and WCL. As
an alternative to long lead MCL washed coal, washed coal has been
taken from SECL in All-rail route.
The weighted average of ash content at RTPS for the year 2005-2006
was about 30.99%. The entire coal received at RTPS is analysed and
sampled by mechanical process using the Auger Sampling Unit.
Coal for BTPS:
Govt. of India have allotted dedicated coal mines in Wardha Valley of
Maharashtra. A joint venture of KPCL named KEMTA Ltd., is
developing the coal mine. Various steps towards land acquisition,
environment clearances, mining lease are being obtained. Coal is
required at Bellary by December 2006.
XIII. Management of Ash
Fly ash disposal is a major environmental concern in thermal power
stations, KPCL has taken several steps to promote fly ash utilisation as
per MoEF notification. Fly ash is being issued free of cost to SSI units.
Leading cement manufacturers in the country have tied up with KPCL
for lifting fly ash to an extent of about 2500 metric tonnes every day.
Besides several small - scale industries, brick manufacturing units are
also utilising about 300 metric tonnes per day. The operation and
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maintenance of silos and issue of fly ash to users from Units 3,4,5 & 6
has been entrusted to M/s. ARV Cement Society. In respect of Units
1,2, & 7 M/s. ACC has installed the necessary equipment for fly ash
collection at their cost. Such type of arrangement is unique in the
country. Fly ash utilisation at RTPS is rapidly increasing and present
utilisation is 60 to 65% of the ash production. RTPS is one of the
leading power plants in achieving higher utilisation of fly ash in the
country. Further, the users have proposed transport of ash through rail
by having a dedicated siding. Total production of fly ash during 2005-
06 was 15.47 lakh MT and 9.53 lakh MT of fly ash was lifted.
KPCL has established a “ Centre of Fly Ash Utilization Technology and
Environment Conservation” at Raichur Thermal Power Station in
consultation with Central Power Research Institute as consultant under
Indo Norwegian Environment Programme at a cost of Rs. 58 million.
Presently, in the above center RGRHDC (Rajiv Gandhi Rural Housing
Development Corporation) is manufacturing various fly ash products and
are being utilized by them for housing. Value addition to fly ash has
been given through the development of construction materials. This
centre will demonstrate various process technologies for the manufacture
of construction materials like brick, hollow concrete blocks, mosaic tiles
etc., In addition to conducting training programme to raise the
awareness among entrepreneurs, civil contractors, governmental and
other agencies about the potential benefits by using fly ash in the
building material. The Centre would enable fly ash utilisation through
introduction of better ash management techniques, thereby bringing
environmental and socio-economic benefits to Raichur and neighbouring
districts.
XIV. Environmental Safeguard Measures
• Compensatory afforestation programme has been implemented to an
extent of 6500 hectares in hydel projects.
• At Raichur, over an area of 258 ha. around 2.41 lakh seedlings have been
planted as a part of Green belt development.
• In upcoming Bellary Thermal Project afforestation programme is being
implemented in an area of 220 ha. much earlier to the commencement of
civil and electro-mechanical works of the project. Up to date progress
achieved is 1.75 lakh saplings in an area 196 ha.
• Cumulative impact Assessment study in the Sharavathi River basin has
been done by Indian Institute of Science, Bangalore
• Fostering Aqua culture at reservoirs.
• Catchment area treatment for Sharavathi and Kalinadi basins
• Regular monitoring of air and water qualities at RTPS
15
• Providing sewage treatment plants at project colonies
• Zero discharge concept is being implemented for the ash pond water and
effluents at RTPS
• Washeries for coal have been established
• Environment cells are in operation in the projects
• Constitution of Project Level Environmental Committees to review the
environmental stipulations and compliance.
XV. Management initiatives for improvement
i) Deputation to Foreign Countries
• 2 Directors and 4 Executives were sent on deputation to China,
Thailand and Germany to study the complex engineering,
technological advancement, magnitude of the civil and
electromechanical works and excellent rehabilitation and resettlement
measures undertaken, operation & maintenance and also for inspection
of equipments at manufacturer’s site being supplied by M/s. BHEL,
Generator supplying agency. Also 4 Directors visited USA and Europe
for inspection of manufacturer’s works and industrial visits.
ii) Career growth scheme
One hundred employees were promoted to the levels of Executive
Directors, Chief Engineer and Superintending Engineer, Executive
Engineer, Assistant Executive Engineer, Junior Engineer during the
year. 205 employees were upgraded/re-designated as under during the
year:
To the level of EEs & equivalent : 7
To the level of AEEs & equivalent : --
To the level of AEs & equivalent : 14
To the level of AAOs and OMs : 7
Workmen levels : 177
iii) Deputation of employees to other Organisations
The services of the officers of the Corporation are sought by GoK
and other organisations. During the year, services of 97 engineers, 30
non-engineering officers and 37 workmen have been spared on
deputation basis.
iv) Induction
During the year 249 employees were inducted by way of recruitment
(including recruitment for backlog posts)/absorption of Trainees
/Compassionate appointments. This includes 157 Electrical /Mechanical
Engineers.
16
v) Training
Every year the Corporation conducts training programmes for the benefit
of the employees and the company. During the year 2005-06, 45 inhouse
training programmes were conducted. In addition to inhouse
programmes, the Corporation has also nominated employees to 45
external training programmes conducted by various training agencies.
Totally 1149 employees consisting of 1078 corporate and 71 noncorporate cadre benefited from the training. Overall cost of training was
Rs.30 lakhs.
Inhouse training programmes
o Energy Audit & Energy Conservation
o 7 Habits of Highly Effective People
o Executive Effectiveness
o Advanced Power System Protection
o RLA & Life Extension of Generator & Transformer
o Finance Act
o Maintenance of Power Transformers
o Management of Working Capital
o 3 ‘A’s for Change
o Work Place Vitalisation
o Green Productivity
o Quality Cost
o Current Trend in Quality Management
o Team Building & Team Leader Development
o Women Empowerment - Be a Woman of Substance
o Tax Management
o Criticality in Generation Management
o Power System & SCADA
o Circuit Breakers & Transformer Oil
o Indian Electricity Act & Rules
o TPM
o Static Excitation System & Current Problems in Operation of Power
Houses
o Availability based Tariff & Electricity Regulatory Issues
o Access to Success
o Energy Management System
External training programmes:
o NDT Methods, Diagnosis & Execution of Repairs
o Cutting Costs through Efficient Cooling Tower Operation
o National Workshop on Advanced Power System Protection
o National Management Forum-2005
o Seminar-cum-Exposition on Energy Conservation & Industrial Waste
Management
17
o Geographical Information System
o Seminar on Service Tax
o Application of Controlled blasting in Civil Engg. Projects
o National Seminar on Project Management - Emerging Trend
o Krupashraya Samavesha
o National Convention on Corporate Communication - “Beyond Words”
o National Conference on case studies in Geotechnical Engg. -
(GEOPRACTICE-2005)
o Customer Meet at Chennai
o Developing Collaborative Strategies for Financing State Sector Projects
o Testing of Transformer Oil
o National Symposium on “Energy Conservation Measures in Generating
Sector”
o Energy Meters & Relays
o Recent advances in Water Resources Development and Management -
International Seminar
o Power System Protection
o 18
th
KSOGA Conference 2005
o Seminar on “Industrial Security & Future Trends”
o National Symposium on “Energy Conservation measures in Generation
Sector”
o International Congress on Fly Ash
o Emerging Trends in Operation & Maintenance of Hydro Power Stations
o Geophysical Investigations for Engineering Projects
o National Conference on HYDRO 2005
o 49
th
All India Congress of Obstetrics & Gynaecology
o National Seminar on Restoration, Rehabilitation & Reliability Structures -
2005
o Electrical Safety
o Advanced Computer Training
o Conference on Software Testing - Effective Practices
o 5
th
Structural Engineering Convention
o Power Quality Measurement
o International Seminar on “Power Transmission Research Interests &
Challenges”
o International Seminar on “Instrument Transformers”
o National Conference on “Role of Civil Engineers in Disaster Management
& Mitigation”
o Gender Equality & Harassment at work place
o Annual Seminar on “Marketing & Advertising”
o Quality Management in Design, Installation and Effective Maintenance of
Hydro Power Plants
o International HR Confluence 2006
o Seminar on “5
th
Coaltrans India”
o Seminar on MCA-21, E-Filing & Digital Signature
o “Green Productivity” & “Knowledge, Management on Integrated
Management Systems”
18
XVI. Consultancy & Engineering Services Department (CESD)
¾ Ministry of Environment and Forests, Government of India has
accorded Environmental clearance for setting up 1 X 210 MW
Raichur Thermal Power expansion Project as Unit- 8.
¾ Application seeking Consent for establishment of 1 X 500 MW,
Bellary Thermal Power expansion Project has been submitted to
Karnataka State Pollution Control Board.
¾ Tenders have been invited from reputed consultants for conducting
EIA studies for the following proposed six thermal power projects:
1. Chamalapura T.P.S. 500 MW
2. R.T.P.S. – 2 500 MW
3. Kowshika T.P.S. 2x500 MW
4. Kudagi T.P.S, 2x500 MW
5. Nandur T.P.S. 500 MW
6. Ghataprabha T.P.S. 500 MW
¾ New Projects - I. Under Investigation:
At the initiative of the Corporation, and in view of the demand
forecast for the State in future, the Govt. of Karnataka has allotted
following thermal power projects for implementation during the XI
Plan, vide its order No. EN 76 PPC 2006 dated 13.07.2006. These are
under investigation:
Sl.
No
Name of Project Units IC in
MW
District
1 Kudgi T.P.S. 2 X 500 1000 Bijapur
2 Kowshika T.P.S. 2 X 500 1000 Hassan
3 RTPS – II 1 X 500 500 Raichur
4 Nandur T.P.S. 1 X 500 500 Gulbarga
5 Chamalapura T.P.S. 1 X 500 500 Mysore
6 Ghataprabha T.P.S. 1 X 500 500 Belgaum
Total 4000
¾ Ultra mega power project- 4000 MW
Preparatory steps for identifying and setting up of Ultra Mega Power
Station near to the coast of Karnataka by CEA & Power Ministry,
GOI.
¾ Works in progress during the year 2005-06:
Water supply scheme to Soraba Town Water availability study in
Varada River for Karnataka Urban Water Supply and Drainage
Board work has been completed on consultancy basis.
19
¾ Expected new assignments - Preparation of DPRs for Kali stageIII, Aghanashini and other HEPS in Karnataka has been stalled as per
direction of State Government.
XVII. Public Deposits
The Corporation dispensed with accepting the deposits from public. Deposits
from past and present employees were accepted/renewed till September
2005. Highest amount of deposits held during the year were Rs.48.55 crores
and the balance at the end of the year stood at Rs. 2.91 crores. Unclaimed /
Unpaid deposits stood at Rs. 1.19 crores. Unclaimed deposits for over 7 years
amounting to Rs. 1.64 lakhs have been transferred to Investors’ Protection &
Education Fund.
XVIII. Personnel, Industrial Relations and Welfare
Particulars of employees As on
31.3.2006
As on
31.3.2005
Total strength 6437 6453
Corporate 2332 2265
Workmen 4105 4188
Deployment on Construction & Erection 453 556
Deployment on O & M 3215 3270
Deployment on auxiliary service 2639 2627
Entry of employees 249 147
Exit of employees* 265 149
Exit of employees under VRS* 1 524
SC employees- in percentage 14.29 14.21
ST employees- in percentage 3.23 3.09
Handicapped employees in percentage 0.4 0.46
Ex-servicemen 0.68 0.542
Man/mw ratio 1.39 1.42
*Employees retired / VES/resignation/removal taken from 31.03.05 to 31.03.06
Break up under Corporate Cadre as on 31
st
March 2006
A. Engineering Cadre Nos.
Technical Director 1
Executive Director 5
Chief Engineer 11
Superintending Engineer 57
Executive Engineer 257
Asst. Executive Engineer 535
Asst. Engineer 462
Junior Engineer 331
Total 1659
B. Non-Engineering Cadre Nos.
Director (HR) 1
General Manager (CE equivalent) 6
DGM (SE equivalent) 12
AGM (EE equivalent) 49
Pos/AOs/LOs etc. (AEE equivalent) 146
ALOs/Asst. Accounts Officer (AE equivalent) 165
OMs, JPOs, JPROs etc. (JE equivalent) 292
20
Total 671
There were 1058 Graduate Engineers on 31.3.2006. Industrial relations were
cordial during the year.
Vigilance
Continued Vigilance was kept in all project areas.
XIX. Auditors
The C&AG has appointed M/s Singhvi, Dev & Unni, Chartered Accountants,
as the Statutory Auditors for the year 2005-06. The firm visited all
accounting units, verified the records, obtained explanations and finalised the
audit work in a reasonable time.
Cost Audit compliance: Government of India has introduced cost audit for
Generation Companies from financial year 2005-06. Company has appointed
M/s. Rao, Murthy & Associates, Cost Accountants as Cost Auditors for this
year. Cost audit report is expected shortly.
XX. Review by the Comptroller & Auditor General
Comments on working results of the Corporation by the Comptroller and
Auditor General of India, forming part of this will be appended when
received.
XXI. Particulars as per Companies (Particulars of Employees)
Rules 1975 and as amended
None of the employees of the Company was in receipt of remuneration
amounting to Rs.24,00,000 and above per annum or at the rate of
Rs.2,00,000 and above per month during the financial year.
XXII. Subsidiary Company
The Corporation has one Subsidiary Company i.e. KPC Bidadi Power
Corporation (Private) Ltd. which was established to implement the combined
cycle project at Bidadi as a joint venture. The statement as required under
Section-212 of the Companies Act is appended.
XXIII. IT and Computerisation
The Corporation has taken a number of IT initiatives to meet its business
commitments. A few of the initiatives are as under:
a) Networked its various offices by establishing a wide area network
through satellite communication
b) Video Conferencing has been established at Bangalore, Jog,
Ambikanagar, Shakthinagar (RTPS) and Kuditini (BTPS)
c) Integrated Inventory Management System at RTPS & Hydel Projects
21
established
d) Fixed Asset Management System in place
e) Voice and data communication through MPLS circuits of BSNL has
been established at BTPS, RTPS, Bangalore, Jog, and Ambikanagar
and the same at Almatti is under implementation
f) OFC link between Nagjhari Powerhouse and Ambikanagar office
complex established
g) OFC link between Sharavathi generating station and Administrative
office at Jog established
h) KPCL website redesigned
i) All the software required for in –house needs developed by system staff
and are being maintained
j) Applications for recruitment of 200 engineers received on-line through
web and processed in a very short duration
XXIV. Corporate Communications
• Various publications have been brought out
• Media events have been held
• Sports meet and Drama have been held
• Bi-monthly house magazine Shakti Vahini was published
• Various functions and seminars arranged
• Participated in exhibition as a part of Karavali Utsav held at Karwar held
during Nov. 2005 and also participated in the All India level power
sector exhibition held at Ahmedabad
• Corporate films produced and screened
• Corporate Image Advertisements in newspapers and magazines released
on important occasions
XXV. Important Events
♦ May 05 - Least average ‘rake turn-over time’ of 5 hrs. 33 mints.
♦ 20.07.05 – Foundation day celebrations
♦ 23.07.05 – National Seminar on Energy Security
♦ 20.09.05 – BTPS – completion of turbo generator foundation
♦ 27.09.05 – RTPS Unit 6 in continuous operation since this date
♦ 22.11.05 – BTPS - Commencement of condenser erection
♦ Jan. 06 - Maximum coal rakes unloaded in a month: 226 nos.
♦ 21.02.06 - Maximum wagons tippled in a day: 614 nos
♦ 28.02.06 - Rs. 25.00 lakhs donated to Chief Minister’s Relief Fund
♦ 03.03.06 – BTPS - Commencement of turbine erection.
♦ 11.05.06 – BTPS - Boiler Hydro Test
♦ July 06 - KPCL bagged following National Awards conferred by CEA:
- ADPH Unit Nos. 3 & 6 selected as ‘Best Executed Hydro
Power Stations’ for 2004-05 & 2005-06 respectively.
22
- Varahi Underground Power House selected for ‘Best Hydro
Performance’ Award during 2005-06.
♦ 16.08.06 - Linganamakki Dam attained maximum level
♦ 17.08.06 - Mani Dam attained maximum level
XXVI. Directors’ Responsibility Statement
Pursuant to Section 217(2)(AA) of the Companies Act 1956, the Directors
wish to state that to the best of their knowledge:
i) in the preparation of the annual accounts, the applicable accounting standards
had been followed along with proper explanation relating to material departures;
ii) accounting policies have been selected and applied 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 or loss of the company for that period;
iii) proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the company and for preventing and detecting fraud
and other irregularities; and
iv) annual accounts have been prepared on a going concern basis.
XXVII. General
The Board would like to place on record its appreciation:
♦ Government of Karnataka, Government of India and other Agencies such
as CEA, CWC, Registrar of Companies for their assistance, guidance and
cooperation
♦ Financing agencies such as LIC, PFC, SIDBI, IDFC, IDBI, ICICI Bank,
HDFC, State Bank of India, Canara Bank, Syndicate Bank, State Bank of
Mysore, Vijaya Bank, Union Bank of India, Punjab National Bank, Indian
Overseas Bank, Central Bank of India, Federal Bank, Allahabad Bank,
Bank of India, ING-Vysya Bank, State Bank of Patiala, State Bank of
Travancore, Andhra Bank, Corporation Bank, Development Credit Bank,
State Bank of Hyderabad, UCO Bank, United Bank of India, Indian Bank,
Dena Bank, State Bank of Bikaner & Jaipur South Indian Bank, Oriental
Bank of Commerce, Jammu & Kashmir Bank, and Lakshmi Vilas Bank,
for their financial support
♦ the depositors and the general public, for supporting the activities of the
company
♦ the media
♦ Employees’ Unions and Associations, for their collective participation
The Board would also like to place on record its appreciation of the dedicated
services rendered by the employees of the Corporation.
Sd/-
Bangalore (HD Kumaraswamy)
Dated:18.08.2006 Chairman
23
Information pursuant to the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988:
FORM-B
I. Research and Development (R & D)
1) Specific areas in which R & D carried out by the company
KPCL is involved in various R & D programmes in which Renovation &
Modernisation and Uprating of Thermal Plants/Hydel stations is one of the
activities being taken from time to time. Some of the measures undertaken along
with M/s BHEL are:
a) Smart Wall Blowing System
M/s. BHEL have recently developed an intelligent wall blowing system called
Smart Wall Blowing System. KPCL gave an opportunity to BHEL to install SWBS
at RTPS Unit – 3 Boiler to carry out R&D on SWBS. Based on the performance of
the system KPCL has taken up to install smart wall blowing system for other units
of RTPS in phased manner under R&M programmers. Purchase order was released
on M/s BHEL for Rs. 690 lakhs. Work is under progress. (Total estimated cost is
Rs. 850 lakhs)
b) High Performance Mills System (HPMS) for Unit 1 & 2
BHEL has developed modification of coal mills with HPMS system. With The High
Performance Mills System (HPMS) Performance of these mills are superior when
compared to existing mills due to consistency in fineness, reduction in mill rejects,
enhanced output of mills, higher life of rolls & bull ring segments etc. KPCL has
taken up work on up grading of Unit 1 & 2 mills with HPMS system. (Total
estimated cost is Rs. 435 lakhs)
c) RLA study of Unit 1
Remaining life assessment (RLA) and healthiness of the boiler pressure parts,
piping, valves, and turbine and generator components as per the recommendations
of OEM M/sBHEL for trouble free operation was carried out for RTPS unit 1
during major annual overhauling works. (Total estimated cost is Rs. 70 lakhs)
d) Boiler feed pump – Modification with upgraded Design cartridges – RTPS 1
& 2
Modification of Unit -1 Boiler feed pumps with upgraded Design cartridges is taken
up. Purchase order placed on M/s. BHEL. Work is under progress. Total estimated
cost is Rs.475 Lakhs)
Total expenditure : Rs.1830 lakhs
24
The Company is setting Biomass units at Bethmangala & Kushalnagar in Kolar and
Kodagu District respectively. The Projects are being implemented by IISc.
2) Benefits derived as a result of the above R & D
i) R & M of Raichur TPS: Does not arise as modification works are under
progress
ii) R & M of Hydel Stations: Uprating of all units of Sharavathy Generating
Station from 89.5 mws to 103.5 mws has been completed during earlier years.
Three units of Nagjhari Power house has been uprated from 135 mws to 150
mws. The Corporation has created separate task forces to take up R&D
activities in order to optimize generation from the existing plants through
improvements and also to adopt new technology for higher efficiencies in
operation and maintenance of plants.
iii) Renovation and modernization of existing plants are contemplated on a
continuous basis.
iv) The level monitoring of Talakalale Dam with GSM based technology has been
implemented for optimum usage water resource
v) Condition monitoring of Generator transformers healthiness has been initiated
which will decrease the failure rate.
Further, newer construction techniques are also studied for speeding up construction
of ongoing and new power projects.
3) Future Plan of action
R M & U of RTPS & Hydro Stations are taken up under AGSP scheme of GoI with
loan assistance from Power Finance Corporation. Expenditure incurred during the
year 2005-06 is Rs. 21.37 crores.
4) Expenditure on R & D
i) Capital }
ii) Recurring } refer items 1
iii) Total }& 3 above
iv) Total R & D expenditure as a percentage }
of total turnover
II. Energy Conservation, Technology absorption, adaptation and
innovation
1) Efforts are being made for technology absorption, adaptation and innovation:
i) Reduction in Auxiliary consumption & improvement in heat rate is being
constantly given priority;
ii) Performance monitoring units 1 to 3 & unit-5 at RTPS through the online
condenser tube cleaning system; and
iii) Utilisation of fly ash has been given a high priority.
2) In case of imported technology, (imported during the last 5 years reckoned from
the beginning of the financial year) following information may be furnished:
i) Technology imported …. Nil
ii) Year of import ….. not applicable
iii) Has the Technology been fully absorbed. ….. not applicable
25
iv) If not fully absorbed, areas where this has .…. not applicable
not taken place, reasons there for and future
plan of action
III. Foreign Exchange
a) Foreign Exchange Earnings : Nil
b) Foreign Exchange Outgo : 280.08 crores
(Import of - capital goods Rs.231.51 crores;
Import of coal: Rs.47.04 crores;
Spare parts & components Rs.1.49 crores
& Foreign Delegate Fee + Travel expenses
Rs.0.04 crores)
26
KARNATAKA POWER CORPORATION LIMITED
Statement Pursuant to Section 212 of the Companies Act, 1956, relating to
Subsidiary Company
1 Name of the Subsidiary … KPC Bidadi Power Corpn. Pvt. Ltd.
2 Financial year ended … March 31, 2006
3. Holding company’s interest… 100% equity
4. No. of shares held … 50,000 equity shares of Rs.10/- each
fully paid up.
5. The net aggregate of profits or losses for the current financial year of the
subsidiary so far as it concerns the members of the holding company –
a) Dealt with or provided for in the accounts of the holding company… nil
b) Not dealt with or provided for in the accounts of the holding company … nil
6. The net aggregate of profits or losses for previous financial year of the
subsidiary so far as it concerns the members of the holding company
a) Dealt with or provided for in the accounts of the holding company… nil
b) Not dealt with or provided for in the accounts of the holding company… nil
Statement Pursuant to Section 212(5) of the Companies Act, 1956,
relating to Subsidiary Company
1. There has been no change in the holding company’s interest in the subsidiary
between the end of the financial year of the subsidiary and that of the holding
company.
2. There has been no material change which has occurred in respect of the following
in the case of the subsidiary between the end of the financial year of the subsidiary
and that of the holding company.
a) Fixed assets of the subsidiary
b) Investments of the subsidiary
c) Moneys lent by the subsidiary
d) Moneys borrowed by the subsidiary for any purpose other than that of meeting
current liabilities.
Sd/- Sd/- Sd/- Sd/-
Shanthi Priya R Balasubramanian D Vishnuvardhan Reddy LV Nagarajan
GM(Accounts) GM(CA)&Comp. Secretary Finance Director Managing Director