I extend a warm welcome to all.
The Audited Statements of Accounts for the year ended 31st March, 2013 together withthe Auditors' Report and Comments of the C&AG and the Directors' Report have alreadyhave been sent to you and with your permission, I take them as read.
India has an abundant resource of coal and lignite. As per the exploration data, thecoal and lignite reserves as on 1st April, 2013 are 298.91 Billion Tonnes (BT) and 43.22BT respectively, out of which 123.18 BT and 6.18 BT are under proven category. The reportof the Working Group of Coal & Lignite for the XII Five Year Plan projects the coaldemand in India to grow at a CAGR of 7.1% till the year 2016-17 and expected to reach980.5 Million Tonnes (MT) per annum under realistic demand. The report also states thatconsidering a CAGR of 7%, the demand for coal is expected to reach 1373 MT by 2021-22. Asregards lignite, the demand projected at the terminal year of XII & XIII Plan are71.96 MT respectively. Thermal power generation in the country depends mainly on coal andlignite.
The all India installed capacity of power as on 31st July, 2013 is 225,793 Mega Watt(MW). Government of India has drawn up ambitious plans to have 88,537 MW capacityadditions through thermal, hydro and nuclear constitute 12.31% and 5.98% respectively. Thepower generation in the Country has increased manifold over the decades. The demand forpower continues to rise due to growth in population & industrial activities, increasein per-capita usage and rapid urbanization etc., thus widening the gap. The Government ofIndia has taken a number of policy initiatives such as enactment of Electricity Act,20013, bringing out National Electricity Policy initiatives such as enactment ofElectricity Act, 2003, bringing out National Electricity Policy 2006, launching of UltraMega Power Projects and Accelerated Power Development & Reforms Programme etc., inorder to accelerate the growth in the power sector.
Your Company is fully geared up to meet the challenges and utilise the opportunitiesand has drawn up number of ambitious programme for capacity addition of its mining andpower generation.
PERFORMANCE IN THE YEAR 2012-13
I am happy to share with you that your Company has once again surpassed its records setin Overburden Removal, Lignite Production, Generation & Export of Power, SalesTurnover, Profit Before Tax (PBT) and Profit After Tax (PAT) for the year 2012-13.
The highlights of physical and financial performance during the year 2012-13 are asbelow:
Overburden Removal of 1674.85 Lakh Cubic Metre )(LM3),Lignite Production of 262.23 Lakh Tonnes (LT), Power Generation (gross) of 19902.34Million Units (MU), Power Export of 16841.51 MU are the highest ever achieved by theCompany.
Mine-II recorded the highest ever Lignite production of139.44 LT.
TPS-II recorded the highest ever generation and exportand export of Power of 11238.09 MU and 9455.81 MU respectively.
TPS-I Expn. Achieved mote than 90% Plant Load Factor.
The Sales Turnover of Rs. 5590.07 crore registered id thehighest ever achieved by the Company.
The PBT of Rs. 2047.65 crore recorded are the highestever achieved by the Company.
I am ver happy to inform you all that the Board of Directors of your Company haverecommended a final dividend @ 18% (Rs. 1.80 per share) for the financial year 2012-13.
The total dividend for the year 2012-13 including the interim Dividend paid during theyear 2012-13, works out to 28% (Rs. 2.80 per share), involving a cash outflow of Rs..548.31 crore which includes Dividend Distribution Tax payable thereon.
PERFORMANCE IN THE CURRENT YEAR - 2013-14 (April 20130to July 2013)
During the above period your Company has removed Overburden of 575.35 LM3 and produced83.26 LT of Lignite as against 511.11 LM3 and 84.91 LT respectively, registered during thecorresponding period of previous financial year 2012-13. The power generated (gross) andexported during the above period is 7022.16 MU and 5965.93 MU respectively as against6773.51 MU and 5751.45 MU respectively of the corresponding period of the previousfinancial year.
The total sales and profit after tax during the current financial year up 31st July,2013 is corresponding period of the previous 2012-13. The decrease in the profit is onaccount of provision for Rs. 62.05 crore being the Income-tax claimed earlier form one ofthe beneficiaries which is not recoverable as per CERC order and also because ofadditional depreciation to the tune of Rs. 50 crore on account of Exchange rate variation.
The total outstanding amount form the State Beneficiaries as on 31st August 2013 is Rs.2772.05 crore and out of which and amount of Rs. 1921.96 crore is due from TANGEDCO.During the previous year, as on 31st August 2012, the dues outstanding was Rs. 4351.83crore including surcharge. Due to vigorous persuasion and various steps taken throughGovernment of Tamil Nadu and Ministry of Coal, the Company was able to realize a part ofthe dues from TANGEDCO and thus the amount due from TANGEDCO is reduced from Rs. 3496.52crore to Rs. 1921.96 crore as on 31st August 2013.
Your Company presently has a generating capacity of 2740 MW. With the implementation of500 MW of lignite based TPS-II Expansion Project, 1000 MW of Neyveli New Thermal PowerStation (which is the replacement of existing Thermal Station I of 600 MW capacity), 1000MW of coal based power project at Tuticorin, 51 MW wind power project and 10 MW solarpower project, the total power generating capacity would increase to 4701 MW. Besides, itis proposed to consider power projects of 6495 MW capacity during XII/XIII Plan periods.
PROJECTS UNDER CONSTRUCTION
Thermal Power Station-II Expansion (2x250MW)
I am very much pained to inform that the commissioning of the Circulating Fluidized BedCombustion (CFBC) based Units of TPS-II Expansion project could not be commissioned asenvisaged, not with standing the several steps taken by your Company.
The Unit-I which was synchronized earlier is under shutdown since 25th November, 2012for rectification of refractory in Seal pots and also for modification on SuperHeater/Re-Heater coil supports in all the four Fluidized Bed Heat Exchangers (FBHEs).BHEL, the Main Plant Package Contractor has taken up the modification works and hascommitted to commission the Unit-I in December 2013.
With respect to Unit-II, erection of boiler, turbine & generator and auxiliariesincluding electrical and C&I have been completed. Boiler was lighted up 22nd May 2013and chemical cleaning steam blowout operations have been completed As in Unit-I, BHEL hasto carry out the FBHE modification in Unit-II also. This Unit is expected to becommissioned in January 2014.
Members may be aware, that the 250 MW power project with CFBC technology is beingimplemented for the first time in the country. Though stabilization of any new technologytakes a while, it is very much disheartening to note that this getting prolonged. Theproblems now impeding the commissioning of the Units are purely technical in nature andthese are being attended to. I would like to assure the Members that early completion ofthe project has been given utmost priority and the progress of the project is beingreviewed at various levels including at the inter ministerial level. I would like to sharethat in the meeting convened by the Ministry of Heavy Industry, assurances have been givenby BHEL to commission the Units at an early date.
Neyveli New Themal Power Station (2x500 MW)(NNTPS)
Government of India (GOI) has sanctioned the Neyveli New Thermal Power Project (1000MW) at a capital cost of Rs. 5907.11 crore in June 2011 with a commissioning schedule of48 months and 54 months for Unit-I & II respectively, from the date of sanction, Thispower project when commissioned would replace the existing 600 MW TPS-I which is inoperation since 1962. Tenders have been floated for Steam Generator, Steam TurbineGenerator Package, price evaluation has been completed and the order and the order will beplaced shortly. Tender for Balance of Plan Package has been issued and the evaluation ofoffers is in process.
Restructuring of Mines
In order to meet the lignite requirement of NNTPS, your Board of Directors has accordedapproval for Restructuring of Mine-I (including Mine-I Expn.) from 10.5 to 8.0 MTPA, at anaggregate estimated cost of Rs. 1458.17 crore, thus raising the aggregate capacity by 1.5MTPA. Activities to implement this Project have commenced.
Wind Power Plant (51 MW)
I am very happy to inform you that your Company has recently placed and order for avalue of Rs. 332.52 crore for setting up of a wind power farm of capacity 51 MW atKaunnerkulam in the State of Tamil Nadu. The project is scheduled to be commissioned inJune 2014. This will be your Companys first step foraying into the renewable energysector.
Solar P.V. Project (10 MW)
The Board of Directors of your Company has accorded approval for setting up of a 10MWSolar Photo Voltaic project at Neyvelli at an estimated cost of Rs. 85 crore in the firstphase. Tendering activities are in progress to set up the project. It has also beenproposed to set up 15 MW Solar PV Power Project, in the 2nd Phase, as an expansion to theabove proposed 10 MW capacity. The Board has also accorded 'In-principle' approval forsetting up of a 10 MW solar power project in Barsingsar and the details are being workedout.
Coal based Thermal Power Plant (2x500 MW) at Tuticorin
Your Company is presently implementing the coal based thermal power project of 1000 MW(2x500 MW) capacity at Tuticorin, through the Subsidiary Company, NLC Tamilnadu PowerLimited (NTPL) formed in joint venture with TANGEDCO. Hydro test of both the boilers hasbeen completed and the works in Swithyard and Power Transformers and the Coal HandlingSystem are nearing completion. As per the present status of the project, Unit-I isexpected to be commissioned in December 2013 and Unit-II in March 2014.
Coal based Thermal Power Station (3x660 MW) at Ghatampur
Your Company has submitted the proposal to Government of India for sanction forimplementation of coal based thermal power project of 1980 MW (3x660 MW) capacity atGhatampur in the State of Uttar Pradesh, at an estimated cost of Rs. 14.375 crore. As perthe proposal submitted to the Government, the Project is expected to be commissionedwithin 52 months from the date of sanction by the Government.
The above project is proposed to be implemented through the Subsidiary Company, NeyveliUttar Pradesh Power Limited (NUPPL) formed in joint ventures with Uttar Pradesh RajyaVidyut Utpadan Nigam Limited (UPRVUNL) with equity participation of 51% by your Companyand 49% by UPRVUL. The Public Investment Board (PIB) has recommended the above projectproposal with the observation that necessary clearance from Ministry of Environment &Forest (MoE&F) is to be obtained at the earliest. Public hearing for the Project hasbeen completed and necessary application has been filed with MoE&F.
Notifications under Sec. 4 & 6 of the Land Acquisition Act, 1894 have been issuedfor acquisition of land for the project. Government of Uttar Pradesh has allocated 80cu.secs of water for the project. Ministry of Coal has allocated Pachwara South Coal blockin Jharkhand State with a reserve of 279 MT for this project.
MNH Shakti Limited is a Joint Ventures Company (JVC) promoted by Mahanadi CoalfieldsLimited (MCL) holding 70% stake, Hindalco and your Company, each holding 15% stake. TheJVC is implementing a 20.0 MTPA coal mining project at Talabita, Odisha and MCL being themajority stakeholder is piloting the above project.
Bithnok Thermal Power Station (250 MW) with linked Lignite Mine (2.25 MTPA), Rajasthan
Your Company has proposed to set up a Thermal Power Plant of 250 capacity with thelinked lignite mine of 2.25 MTPA capacity at Bithnok in the State of Rajasthan, at andaggregate estimated cost of Rs. 2,298.83 crore. Land acquisition through Government ofRajasthan and diversion of forest land is being pursued. Obtaining environmental clearancefrom (MoE&F) is in process. In this regard Madras School of Economics has prepared aSocial Cost Benefit Analysis Study Report which has been sent to MoE&F for issue ofenvironment clearance for Bithnok Mine project. Power purchase agreement has been signedwith the Discoms.
Barsingsar Thermal Power Station Extension (250 MW) with linked HadLa & PalanaLignite Mine (2.5 MTPA), Rajasthan
Your Company has also proposed to set up a new power plant with a capacity of 250 MW asan extension of the existing power plant linked to the lignite deposits in Hadla &Palana blocks. The aggregate estimated cost of projects is Rs. 2041.78 crore.
Your Company is facing difficulty in progressing with the Palana Mine as the area isthickly populated and hence as a parallel course, it is being planned to expand theexisting Barsingsar Mine along with Hadla Mine. All statutory clearance for the Thermaland Hadla Mine Projects have been obtained.
Sirkali Thermal Power Project (4000 MW), Tamil Nadu
The Board of Directors of your Company has accorded 'in-principle' approval for settingup a coal based power project with an overall capacity of 4000 MW in two phases at Sirkaliin the coastal district of Nagapattinam in State of Tamilnadu. The present cost estimatefor the project is Rs. 14482 crore for phase-I of 1980 MW. Your Company has identifiedThirumullaivasal as the site for locating the power plant. Government of Tamilnadu hasbeen requested to issue "in-principle" approval for land for this project.Ministry of Coal has allocated Jilga-Barpali coal block (396 MT) in the State ofChhattisgarh for this project. Issue of tenders for preparation of Feasibility Report andEIA/EMP report are in process. Other preliminary project activities are in progress.
Devangudi Mine Project (2.0 MTPA)
Your Company has proposed to develop a lignite mine of capacity 2.0 MTPA to exploitDevangudi Lignite Block, situated about 18 Km. from the Neyveli region, at and estimatedcost of Rs. 542.67 crore to cater to the needs of cement, paper, brick and other smallindustries in the neighborhood. Tamilnadu Agricultural University (TNAU), Coimbatore hasbeen assigned to prepare the report on " Technical opinion on large scale acquisitionof agricultural land for mining in Devangudi.
Your Company has floated 'Expression of Interest' (EOI) for acquiring coal assetsabroad and for long-term supplies for the upcoming power plants. The offers received inresponse to the above EOI are under evaluation. Acquisition of coal assets by your Companywould ensure fuel security for the present as well for the future coal based powerprojects.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND GOVERNANCE
The Department of Public Enterprises, Government of India has brought out a newguidelines on Corporate Social Responsibility and Sustainability for Central Public SectorEnterprises (CPSE) to enable creation and distribution of wealth for the betterment of itsstakeholders, though the implementation and integration of ethical systems and sustainablemanagement practices. Under the revised guidelines, CPEs are expected to formulate theirpolices with a balanced emphases on all aspects of CSR and Sustainability - equally withregard to their internal operations, activities and processes, as well as in theirresponse to externalities. Keeping in view of the above broad policy framework on CSR,your Company has spent more than 1% of Profit After Tax for the year 2012-13 on CSRprojects are identified as per the methodology prescribed by DPE and are monitoredperiodically by the Sub-committee constituted by the Board of Directors. As a goodCorporate Citizen, your Company adheres to the corporate governance requirements andcompliances of the same have been detailed in the report of Directors, which is a part ofthe Annual Report sent to Members of the Company.
I am happy to share with the Members that your Company has received the followingawards:
Gold Trophy of 'SCOPE Meritorious Award for EnvironmentalExcellence and Sustainable Development' for the year 2011-12.
India Gandhi Paryavaran Puraskar Award 2009(Organisational Category) instituted by Union Ministry of Environment and Forestsappreciating the outstanding contribution in the area of environment conservation andcreating environment awareness.
'Performance Excellence Award' for the year 2011-12instituted of Industrial Engineering.
'India Power Award 2012' instituted by Council of PowerUtilities for developing the energy sector.
'IPECSR Corporate Governance Award' instituted byInstitute of Public Enterprise for the dedicated service to the society.
'Excellence in Cost Management' under the category of'" Public Manufacturing Organisation (Large)" for the year 2012 instituted bythe institute of Cost Accountants of India.
"Safety and Quality Award" from the Institutionof Engineers-India (IEI)
"Organisation with Best HR Strategy in line withBusiness Award" instituted by the Institute of Public Enterprise in HR LeadershipAwards 2012.
National Level Environment Award 2010-11 for TPS-I Expn.,among coal/lignite based thermal power stations instituted by Ministry of Power,Government of India.
'Golden Peacock Occupational Health & SafetyAward-2013' for TPS-II instituted by Institute of Directors.
Industrial relation scenario was generally cordial during the year excepting certaindisturbances during the month of July 2013 against the disinvestment of shares byGovernment of India. Thrust on participative culture continued during the year and theindustrial relation in various Units and Service Divisions of your Company remainedharmonious and cordial.
I wish to record my thanks to Ministry of Coal and the Government of India for theircontinued support in all our endeavors and to other Ministers and Departments ofGovernment of India. I wish to express my thanks to the Government of Tamilnadu for theirsupport and co-operation. I also wish to thank State Electricity Boards/DISCOMs and othercustomers for their continued support. I wish to place on record appreciation for allexecutives, supervisors and workmen for their hardwork and dedication. I also thankAssociations and recognized Unions for their whole-hearted co-operation in maintaininggood and cordial industrial relations.
I express my sincere thanks to my colleagues on the Board for their valuationcontribution.
Last but not the least, I take this opportunity to express my sincere thanks to allInvestors who have reposed faith in the Company and continued to be its stakeholders.
|Place: Chennai ||B. SURENDER MOHAN |
|Date : 06.09.2013 ||CMAIRMAN-CUM-MANAGING DIRECTOR |