MIRA INFORM REPORT

 

 

Report Date :

13.11.2007

 

IDENTIFICATION DETAILS

 

Name :

TATA POWER COMPANY LIMITED

 

 

Registered Office :

Bombay House, 24, Homi Mody Street, Mumbai – 400 001, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

18.09.1919

 

 

Com. Reg. No.:

11-567

 

 

CIN No.:

[Company Identification No.]

L28920MH1919PLC000567

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMT00252A

 

 

Legal Form :

Subject is a public limited liability company. The company's shares are listed on the Stock Exchanges.

 

 

Line of Business :

Generation, Transmission and Bulk distribution of electrical energy. Energy in bulk is supplied by the companies jointly to industries, distributing licensees and local authorities in Mumbai and surrounding areas.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

Maximum Credit Limit :

USD 218293600

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a part of Tata Group, the country’s premiere industrial house.  Available information indicates high financial responsibility of the company. 

 

Financial position of the company is good.  Business is active. Payments are always correct and as per commitment.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

LOCATIONS

 

Registered Office :

Bombay House, 24, Homi Mody Street, Mumbai – 400 001, Maharashtra, India

Tel. No.:

91-22-56658282  / 56658888

Fax No.:

91-22-56658801 / 56658877

E-Mail :

tec@tata.com

aje@tec.co.in

Website :

http://www.tatapower.com

 

 

Plants :

Thermal Power Stations

v      Trombay Generating Station, Mahul Road, Chembur Road, Mumbai -  

     400 074, Maharashtra

 

v      Jojobera Power Plant, Jojobera, Jamshedpur – 831 016, Bihar

 

v      Wadi Power Plant, Adjoining ACC Wadi, Cement Plant, P. O. Wadi – 585 225, District Gulbarga, Karnataka

 

v      Belgaum Power Plant, Plat Nos. 1234 to 1240 & 1263 to 1297, KIADB Kanbargi Industriaal Area, Auto Nagar, Belgaum – 590 010, Karnataka

 

Hydro Generating Stations

v      Generationg Station Bhira P. O. Bhira, Taluka Mangaon, District Raigad, Maharashtra – 402 308

 

v      Generating Station Bhivpuri, P. O. Bhivpuri Camp, Taluka Karjat, District Raigad, Maharashtra – 410 201

 

v      Generating Station Khopoli, P. O. Khopoli Power House, District Raigad, Maharashtra – 410 204

 

Strategic Electronic Division

v      42/43 Electronic City, Electronic City Post Office, Hosur Road, Bangalore – 561 229, Karnataka

 

Distribution Division

v      Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra

 

 

 

 

 

DIRECTORS

 

Name :

Mr. Ratan N Tata

Designation :

Chairman

 

 

Name :

Mr. F. A. Vandrevala

Designation :

Managing Director

Date of Birth/Age :

17.10.1950

Qualification :

B.Tech (Hons), PG DBM

Experience :

33years

Date of Appointment :

01.11.2001

Other Directorships :

·         The Tata Iron & Steel Company Limited, (Depute Managing Director – New & Allied Businesses)

·         Af-Taab Investment Company Limited

·         Chemical Terminal Trombay Limited

·         NELCO Limited

·         North Delhi Power Limited

·         Power Trading Corporation of India Limited

·         Tata Ceramics Limited

·         Tata Ryerson Limited

·         Tata Teleservices Limited

·         Tata Teleservices (Maharashtra) Limited

·         Videsh Sanchar Nigam Limited

·         Tata Services Limited

 

 

Name :

Mr. A. J. Engineer

Designation :

Director

Date of Birth/Age :

65 years

Qualification :

B.E. (Civil), C. Engg., FIE, AIIA

Experience :

45 years

Date of Appointment :

11.10.1984

Previous Employment :

Indian Explosives Limited (Construction Manager)

 

 

Name :

Mr. Syamal Gupta

Designation :

Director

Date of Birth/Age :

15.04.1934

Qualification :

Mechanical Engineer, Fellow of Imperial College of Science, Technology & Medicine, U.K.

Experience :

47 years

Date of Appointment :

26.02.1998

Other Directorships :

·         Tata Sons Limited

·         Tata International Limited

·         Tata Industries Limited

·         Tata BP Solar India Limited

·         Tata Advanced Materials Limited

·         Tata Elxsi Limited

·         Tata AIG Risk Management Services Limited

·         Graziella Shoes Limited

·         TCE Consulting Engineers Limited

·         Tata AIG Life Insurance Company Limited

·         Tata AIG General Insurance Company Limited

·         India Natural Gas Company Private Limited

 

 

Name :

Mr. R. Gopalakrishnan

Designation :

Director

 

 

Name :

Mr. C. P. Mistry

Designation :

Director

Date of Birth/Age :

04.07.1968

Qualification :

Fellow of the Institution of Civil Engineers, Master of Science in Management (London Business School, 1997), B.E. Civil Imperial College, London (1990), “O” Levels – Cathedral School, “A” Levels –Dulwich School

Date of Appointment :

29.02.1996

Other Directorships :

·         Shapoorji Pallonji & Company Limited

·         Buildbazar.com (India) Private Limited

·         Cyrus Investments Limited

·         Samalpatti Power Company Private Limited

·         Shapoorji Pallonji Finance Limited

·         Shapoorji Pallonji Power Company Limited

·         Shapoorji Pallonji Infrastructure Capital Company Limited

·         Sterling Investment Corporation Private Limited

·         Pallonji Shapoorji & Company Private Limited

·         Afcon Infrastructure Limited

·         Tata Elxsi Limited

·         United Motors (India) Limited

·         Shapoorji Pallonji & Company (Rajkot) Private Limited

 

 

Name :

Dr. H. S. Vachha

Designation :

Director

 

 

Name :

Mr. R. K. Misra

Designation :

Director (LIC Nominee)

 

 

Name :

Mr. S. S. Bhatia

Designation :

Director (State Government Nominee) 

 

 

Name :

Mr. P. K. Kukde

Designation :

Executive Director (Operations)

Date of Birth/Age :

12.06.1943

Qualification :

M.E. (Electrical), University of Roorkee

Experience :

35 years

Date of Appointment :

23.01.2003

Previous Employment :

MSEB, Tech Member (T & D)

Yashmun Engineers Limited

 

 

Name :

Mr. H. S. Vachha

Designation :

Director

 

 

Name :

Mr. S. Ramakrishnan

Designation :

Executive Director (Finance)

Date of Birth/Age :

56 years

Qualification :

B.Tech. (Mech), PG DBA

Experience :

33 years

Date of Appointment :

01/10/2004

Previous Employment :

Tata Teleservices Limited (Managing Director)

 

 

Name :

Mr .N H Mirza

Designation :

Director

 

 

Name :

Mr. Rahul  Asthana

Designation :

Director – State Government

 

 

Name :

Mr. P R Menon

Designation :

Managing director

 

 

Name :

Mr. A J Engineer

Designation :

Director

 

KEY EXECUTIVES

 

Name :

Mr. B. J. Shroff

Designation :

Company Secretary

Address:

Bombay House, 24 Homi Mody Street, Mumbai – 400 001, Maharashtra

 

 

Name :

Mr. Charan Amulya

Designation :

Vice President (Internal Audit and Risk Management)

Date of Birth/Age :

58 years

Qualification :

B.E. (Mech), PG DBA

Experience :

34 years

Date of Appointment :

15/10/2001

Previous Employment:

Information Technology Park Limited (Finance Director)

 

 

Name :

Mr. Rahul Chaudhary

Designation :

Chief Executive Officer (Broadband)

Date of Birth/Age :

44 years

Qualification :

B. E. (ELN), M. Tech., (Management System)

Experience :

25 years

Date of Appointment :

23/08/2001

Previous Employment:

BT Wireless (Programme Director)

 

 

Name :

Mr. S. M. Gurunath

Designation :

Vice President (Business Development & Strategy Group)

Date of Birth/Age :

48 years

Qualification :

B. Tech. (Mechanical)

Experience :

27 years

Date of Appointment :

06/05/2002

Previous Employment :

Enron Corporation (Dabhol Power Company – CEO and SR. VP. Commercial)

 

 

Name :

Mr. A. K. Sardana

Designation :

Chief Executive Officer (NDPL) cum Executive Director

Date of Birth/Age :

46 years

Qualification :

B. E. (Elec), AICWA, PGDM

Experience :

24 years

Date of Appointment :

12/07/2002

Previous Employment :

BSES Limited (V. P. Head of Corp Planning and EPC Business Group)

 

 

Name :

Mr. Mahesh Bhandari

Designation :

Vice President (Regulation)

Date of Birth/Age :

44 years

Qualification :

B. Com., LLB, ACA, MSM (USA), CPA (USA)

Experience :

20 years

Date of Appointment :

09/10/2003

Previous Employment :

Tata Consultancy Services – Executive Vice President

 

 

Name :

Mr. Sunil Wadhwa

Designation :

Chief Finance Officer (North Delhi Power Limited)

Date of Birth/Age :

47 years

Qualification :

ACSI and ACAI, ICSI and ICAI , University of Delhi

Experience :

22 years

Date of Appointment :

02/08/2002

Previous Employment :

Tata Chemicals Limited – Chief Finance Officer 

 

 

Name :

Mr. Grove White G F

Designation :

Executive director  and Chief Operating Officer

Date of Birth/Age :

57  years

Qualification :

B.Sc (Hon), Mechanical Engineering, C. Engineering, MI Mech.E

Experience :

42 years

Date of Appointment :

30.10.2006

Previous Employment :

Eraring Energy Limited  - Managing Director

 

 

Name :

Mr. Mehta A M

Designation :

General Manager

Date of Birth/Age :

56 years

Qualification :

MBBS

Experience :

36 years

Date of Appointment :

16.10.1976

 

 

Name :

Mr. Menon P R

Designation :

Managing director

Date of Birth/Age :

61 years

Qualification :

B Tech

Experience :

36 years

Date of Appointment :

16.10.1976

 

 

Name :

Mr. Sardana A K

Designation :

Chief Executive Officer (NDPL) cum Executive Director

Date of Birth/Age :

48 years

Qualification :

B E (Elec), university of Delhi, ICWAI, PGDM

Experience :

26 years

Date of Appointment :

12.07.2002

Previous Employment :

BSES Limited – V P Head of Corp Planning and EPC Business Group

 

 

Name :

Mr. Ramakrishnan S

Designation :

Executive director

Date of Birth/Age :

58 years

Qualification :

B Tech (Mech) PG DBA, IIM – Ahmedabad

Experience :

24 years

Date of Appointment :

02.08.2002

Previous Employment :

Tata Chemicals Limited – Chief Finance Officer

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders

No. of Shares

Percentage of Holding

Promoter Groups

 

 

Bodies corporate

63766080

32.22

Any other trust

65624

0.03

Public shareholding

 

 

Institutions

 

 

Mutual Funds  / UTI

10252581

5.18

Financial Institutions

1606128

0.81

Central Government / State  Government

166655

0.08

Insurance companies

46804256

23.65

Foreign Institutional Investors

31829059

16.08

Non Institutions

 

 

Bodies corporate

1912

0.94

Individual Shareholders holding nominal share capital upto Rs. 0.100 millions  Individual shareholders holding nominal share capital in excess of Rs. 0.100 millions

38439920

19.44

Trust

60486

0.03

Overseas Corporate Bodies

1208

0.00

Share held by custodians and against which Depository Receipts have been issued

340310

0.17

 

BUSINESS DETAILS

 

Line of Business :

Generation, Transmission and Bulk distribution of electrical energy. Energy in bulk is supplied by the companies jointly to industries, distributing licensees and local authorities in Mumbai and surrounding areas.

 

 

Products :
  • Power
  • Electronic Products
  • Technical Services

 

 

Imports :

 

Products:

Low Sulphur Waxy Residue

Countries:

Europe and U.S.A., Indonesia

 

 

Terms :

 

Purchasing :

L/C, D/A, D/P and also on Credit terms.

 

GENERAL INFORMATION

 

No. of Employees :

2870

 

 

Bankers :
  • State Bank of India
  • Citibank N. A.
  • Standard Chartered Grindlays Bank Limited
  • ICICI Bank Limited
  • IDBI Bank Limited

 

 

Facilities:

SECURED LOAN

31.03.2007

31.03.2006

Debentures

 

 

8.25% Secured, Redeemable, Non-Convertible Debentures (1999-2009)....

926.400

1247.200

10.20% Secured, Redeemable, Non-Convertible Debentures (2001 -2010)

1310.000

1310.000

7.10% Secured, Redeemable, Non-Convertible Debentures (2004-2015)

6000.000

6000.000

Total

8236.400

8557.200

OTHER LOANS AND ADVANCES :

 

 

Term Loan from Infrastructure Development Finance Company Limited....

5040.000

600.000

Loan from Export Import Bank of India**

262.900

302.800

Lease finance-Vehicle loans (secured by hypothecation of specific assets)

3.700

0.000

Total

5306.600

902.800

 

Security

(i) The Debentures mentioned in (a) have been secured by land, moveable and immovable properties in Maharashtra as also receiving stations, sub-stations and godowns in Maharashtra.

 

(ii) The Debentures mentioned in (b) and (c) have been secured by land in Village Takve Khurd (Maharashtra), moveable and immovable properties in and outside Maharashtra, as also all transmission stations/lines, receiving stations and sub-stations in Maharashtra.

 

(iii) The loan from IDFC mentioned in (d) has been secured by a charge on the moveable assets in Maharashtra.

 

(iv) The loan from Export Import Bank of India mentioned in (e) has been secured by receivables (present and future), book debts and outstanding monies.

 

Redemption

The debentures mentioned in (a) are redeemable at par in forty equated quarterly installments commencing from 15th October, 1999.The Company had the call option to redeem the same at the end of 5 years from 24th November, 1999, by giving 30 days prior period notice, which was not exercised. The debentures mentioned in (b) are redeemable at par in three equal instalments commencing from 30th July, 2008. The debentures mentioned in (c) are redeemable at premium in three installments at the end of 9th, 10th and 11th year from 18th October, 2004. The Company has the call option to redeem the same at a premium of 11.20% at the end of five years from 18th October, 2004.

 

UNSECURED LOAN

31.03.2007

31.03.2006

SHORT TERM LOANS AND ADVANCES :

(Rs in millions)

From Banks

 

 

Temporary overdrawn balance in bank current accounts

149.800

172.400

FROM OTHERS -

 

 

Short Term Borrowing from Companies

50.700

50.700

Total

200.500

223.100

OTHER LOANS AND ADVANCES:

 

 

7.875% Euro Notes (2007) (repayable within one year Rs.5312.600 millions -31 st March 2006- Rs Nil)**

5312.600

5421.600

8.500% Euro Notes (201 7)**

2803.200

2883.400

1 % Foreign Currency Convertible Bonds (201 0)

8754.000

8972.000

Commercial Paper 500.00 ! (maximum amount outstanding during the year - Rs. 5000.0 millions – I 3 1st March, 2006 -Rs. Nil)

5000.000

0.000

Sales Tax Deferral (repayable in 2014-2018)

708.300

566.700

Loan from Housing Development Finance Corporation Ltd. (repayable within one year Rs 1 200.000 millions -3 Ist March 2006- Rs. 17.200 millions)

12.000

23.200

Total

22590.100

17866.900

 

 

Banking Relations :

Good

 

 

Auditors :

·         A. F. Ferguson and Company

Chartered Accountants

 

·         S. B. Billimoria and Company

Chartered Accountants

 

·         Deloitte Haskins and Sells

Chartered Accountants

 

 

Joint Ventures:

North Delhi Power Limited

 

 

Parent Company:

Tata Sons Limited, India

 

 

Associates :

Ř       Aerospace Systems Private Limited

Ř       Dynamic Advertising & Research Team Limited

Ř       Nelco Limited

Ř       Panatone Finvest Limited

Ř       Rujuvalika Investments Limited

Ř       Tata BP Solar India Limited

Ř       Tata Ceramic Limited

Ř       Tata Projects Limited

Ř       Tata Services Limited

Ř       North Delhi Power Limited

Ř       Tata Sons Limited

Ř       Tata Teleservices Limited

Ř       The Associated Building Company Limited

Ř       Yashmun Engineers Limited

Ř       Nelito Systems Limited

Ř       Tata BP Solar India Limited

 

 

Subsidiaries :

Ř       Af-Taab Investment Company Limited

Ř       Chemical Terminal Trombay Limited

Ř       Tata Petrodyne Limited (upto 13th March, 2005

Ř       Tata Power Trading Company Limited

Ř       Tata Power Broadband Company Limited

Ř       Duncans North Hydro Power Company Limited

     (Since changed to Alaknanda Hydro Power Company Limited)

Ř       Power links Transmissions Limited (Also a Joint Venture)

Ř       Jamshedpur Power Company Limited

Ř       Tatanet Services Limited

Ř       Maithon Power Limited

Ř       Industrial energy Limited

Ř       Industrial Power utility Private limited

Ř       Industrial Power infrastructure Private Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

22900000

Cumulative Redeemable Preference Shares

Rs.100/- each

Rs.2290.000 millions

300000000

Equity Shares

Rs. 10/- each

Rs. 3000.000 millions

 

 

Total

Rs. 5290.000 millions

 

Issued Capital :

No. of Shares

Type

Value

Amount

203537712

Equity Shares of Rs.10 each [including 230308 shares (31st March, 2006 - 230308 shares) not allotted but held in abeyance, 440270 shares cancelled pursuant to a Court Order and 4804040 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Limited cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay]

Rs. 10/- each

Rs. 2035.400 millions

 

Subscribed & Paid-up Capital:-

197897864

Equity Shares (excluding 230308 shares not allotted but held in abeyance 440270 shares cancelled pursuant to a Court Order and 4804040 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Limited cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay)

Rs. 10/- each

Rs.1979.000 millions

Less:

Calls-in arrears [including Rs. 0.100 millions  (31stMarch,2006 - Rs. 0.100 millions) in respect of the erstwhile The Andhra Valley Power Supply Company Limited and the erstwhile The Tata Hydro-Electric Power Supply Company Limited]

 

Rs. 0.400 million

Add:

Equity Shares forfeited - Amount paid

 

Rs. 0.600 million

 

 

Total

Rs.1979.200 millions

 

Of the above Equity Shares:

(i) 167500 shares are allotted at par as fully paid pursuant to contracts without payment being received in cash.

(ii) 1133790 shares issued as Bonus Shares by capitalization of General Reserve.

(iii) 4963500 shares issued on exercise of the options by the financial institutions for the conversion of part of their loans/subscription to debentures.

 

(iv) 5681818 shares are allotted at premium as fully paid pursuant to contracts without payment being received in cash.

 

(v) 52084832 shares (excluding 47560 shares held in abeyance) have been allotted to the shareholders of

the erstwhileThe Andhra Valley Power Supply Company Limited pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay.

 

(vi) 35097824 shares (excluding 45168 shares held in abeyance) have been allotted to the shareholders of the

erstwhileTheTata Hydro-Electric Power Supply Company Limited pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay.

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2007

31.03.2006

31.03.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

1979.200

1979.200

1979.200

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

52594.200

47823.000

43631.300

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

54573.400

49802.200

45610.500

LOAN FUNDS

 

 

 

1] Secured Loans

13543.000

9460.000

10590.700

2] Unsecured Loans

22790.600

18090.000

18009.400

TOTAL BORROWING

36333.600

27550.000

28600.100

DEFERRED TAX LIABILITIES

57.000

0.000

113.200

Special Appropriation Towards Project Cost

5336.100

5336.100

5336.100

Capital Contributions From Consumers

421.600

418.100

418.100

 

 

 

 

TOTAL

96721.700

83106.400

80078.000

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

38113.600

32148.300

28084.700

Capital work-in-progress

0.000

0.000

4381.900

 

 

 

 

INVESTMENT

35701.500

34121.700

35029.200

DEFERREX TAX ASSETS

0.000

161.500

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
3964.200

4422.600

2970.300

 

Sundry Debtors
14782.200

10582.300

6932.100

 

Cash & Bank Balances
13677.200

9905.500

9796.000

 

Other Current Assets
290.300

180.600

128.700

 

Loans & Advances
7704.000

4639.400

5526.700

Total Current Assets
40417.900

29730.400

25353.800

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
11257.200

7318.100

7068.700

 

Provisions
6315.800

5892.000

5930.000

Total Current Liabilities
17573.000

13210.100

12998.700

Net Current Assets
22844.900

16520.300

12355.100

 

 

 

 

MISCELLANEOUS EXPENSES

61.700

154.600

227.100

 

 

 

 

TOTAL

96721.700

83106.400

80078.000

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

47153.200

45322.400

43175.700

Other Income

3439.900

3256.100

0.000

Net adjustment in respect of previous years

0.000

19.700

0.000

Total Income

50593.100

48598.200

43175.700

 

 

 

 

Profit/(Loss) Before Tax

5860.100

7474.500

7587.900

Provision for Taxation

1107.900

1369.100

2074.300

Profit/(Loss) After Tax

6968.000

6105.400

5513.600

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Interest

668.500

413.200

740.400

 

Export on FOB Basis

374.600

415.600

 

Total Earnings

1043.100

828.800

740.400

 

 

 

 

Imports :

 

 

 

 

Components Stores & Spares

359.400

305.400

4752.000

 

Capital Goods

617.900

99.600

 

 

Fuels

8225.200

4702.200

 

Total Imports

9202.500

5107.200

4752.000

 

 

 

 

Expenditures :

 

 

 

 

Cost of Fuel

6645.800

5832.000

 

Generation , distribution, administration and other expenses

27089.100

23965.100

35587.800

 

Net adjustment in respect of previous years

6157.400

7189.900

 

 

Depreciation / amortization

26.500

0.000

 

 

Interest and Finance charges

2919.200

2783.400

 

 

Provision for Contingencies

1895.000

1652.800

 

 

Other Expenditure

0.000

(300.000)

 

Total Expenditure

44733.000

41123.200

35587.800

 

QUARTERLY RESULTS

 

Year

30.09.2007

30.06.2007

Type

2nd Quarter

1st Quarter

Sales Turnover

13505.600

15114.800

Other Income

1404.000

1063.300

Total Income

14909.600

16178.100

Total Expenditure

10892.100

12590.600

Operating Profit

4017.500

3587.500

Interest

414.000

594.300

Gross Profit

3603.500

2993.200

Depreciation

709.000

714.400

Tax

320.200

239.700

Reported PAT

2574.300

1902.000

 

KEY RATIOS

 

Year

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

0.55

0.53

0.45

Long Term Debt-Equity Ratio

0.50

0.52

0.45

Current Ratio

1.88

2.00

1.66

TURNOVER RATIOS

Fixed Assets

0.81

0.80

0.72

Inventory

11.80

12.36

12.90

Debtors

3.90

5.21

5.56

Interest Cover Ratio

4.06

4.42

3.78

Operating Profit Margin(%)

21.59

22.10

27.50

Profit Before Interest And Tax Margin(%)

15.70

16.00

18.37

Cash Profit Margin(%)

19.97

16.27

18.67

Adjusted Net Profit Margin(%)

14.08

10.18

9.53

Return On Capital Employed(%)

8.65

8.99

9.81

Return On Net Worth(%)

12.03

8.70

7.37

 

LOCAL AGENCY FURTHER INFORMATION

 

HISTORY

Subject was incorporated on 18th September, 1919 at Mumbai in Maharashtra having Company Registration Number 567.

 

Subject was incorporated along with The Andhra Valley Power Supply Company Limited (1916) and The Tata Hydro-Electric Power Supply Company Limited (1910) operate as a single entity viz. Tata Electric Companies.

 

It is India's largest private power supplier, owns 3 hydroelectric and 1 thermal generating station.  It has R and D facilities throughout Mumbai, interconnected as a grid.  It supply power to two licensees in Mumbai as well as over 100 direct bulk customers (textile mills, railways and industrial consumers).  Two client licensees BSES Limited and Bombay Electric Supply and Transport Undertaking (BEST) distribute retail power around 10 millions people in Mumbai. 

 

Tata Group, was founded by Sir Jamsetji Tata in 1868.  Tata Sons Limited, the apex body, oversees management of most Tata Companies.  They have expanded operations across industries to cover steel, commercial vehicles, construction equipments, inorganic chemicals, hotels, management/consultancy services, engineering, electronics, telecom, refrigeration, air conditioning, tea and coffee, commercial printing and food in addition to electricity generation.

 

A pioneer in the Indian power sector, Subject is rated as one of the country’s largest private power utilities. The fully integrated energy company offers turnkey solutions to the industry and other hi-tech segments.

 

The company installed and commissioned India’s first 500 MW unit at its Trombay thermal generating station.  The company has provided economical and reliable power for the last 80 years to the highly industrialised state of Maharashtra and its capital, Mumbai.

 

The company’s main line of business is the generation, transmission and distribution of power.  Modern technology and computer-based systems and management have helped the company to achieve high levels of operational efficiency.  The subsidiaries of the company are Chemical Terminal Trombay Limited, Af-Taab Investment Company Limited, Tata Power Trading Company Limited, Alaknanda Hydro Power Company Limited, Tata Power Broadband Company Limited and Powerlinks Transmission Limited.

 

The hydro-generation plants are in Khopoli, Bhivpuri and Bhira, and the thermal power plants are located in Trombay in Maharashtra, Jojobera in Bihar and Nadi and Belgaum in Karnataka. The Strategic Electronics Division is located at Bangalore in Karnataka and Distribution Division at Mumbai in Maharashtra. 

 

The company commissioned the 81.3 MW power plant at Belgium in March 2001.  The company had signed a power purchase agreement with Karnataka Power Transmission Limited for 12 years from commercial production.  This guarantees purchase by the latter to the extent of 75% of the plant load factor.  The first 120 MW unit of the Jojobera Thermal Station started commercial operation in February 2001 and the construction of the second 120 MW unit is progressing well and commissioned in December 2001.

 

The company integrated its operations with the amalgamation of The Andhra Valley Power Supply Company and The Tata Hydro-Electric Power Supply Company w.e.f. 1st April 2000.  The amalgamation of Jamshedpur Power Company (JAPCOL) was also completed w.e.f. 1st April 2000.

 

On the other hand, it moved into the energy business with the acquisition of 100% equity stake in Tata Petrodyne, a company engaged in Oil and Gas exploration and production.  It has participated in two consortia that have oil and gas exploration, and development rights in the Gulf of Cambay (Gujarat) and the Cauvery basin (Tamil Nadu) sectors.  Consequent to this merger, Chemical Terminal Trombay (CTTL) has become a subsidiary of the company with Subject holding 72%.  CTTL is engaged in the business of storing and handling of oils and chemicals.

 

The third area of operation for the company is communications.  The company is engaged in the completion of the Mumbai fibre optic network project.

 

The Power Business 

 This consists of licensee business, captive power plants (CPP) and independent power plants (IPP) and services. In the licensee business, the company seems confident of capturing 100% of the demand growth. In the CPP, it expects Jojobera III to be operational by 2002 and Wadi II to be operational by 2003. The total CPP generation to touch almost 2,000 million units by 2003. In the IPP, the Belgaum 80 mw project was commissioned in March 2001. In future, TPL has merger and acquisition plans as also tapping the transmission and distribution opportunities. In CPP and IPP business, the company will try to spread itself geographically, balance gestations and SEB dependence to spread its risks. In the services area, TPL has a strategy of core business extension and deploying its expertise to earn fee income. In February,2002 a 24 MW replacement unit was commissioned successfully. It has also completed erection, testing, commissioning and trial operations of power projects in UAE, Malaysia, Saudi Arabia, Kuwait and Algeria. 

 
The Energy Business 

This consists of oil and gas, LNG and coalIn oil and gas, Tata Petrodyne was taken over during the last year. It already has alliances, blocks, and approvals in place and is in an advanced stage of business commencement. In LNG, the company is in a joint venture (JV) led initiative - IndigasIn coal, TPL is participating in private sector coal mining. As the company being is a coal consumer itself, it means cost savings for the company. 

 
The Communication Business 

This consists of Mumbai broadband, Metro broadband and National Highway projects. In Mumbai broadband, the company is implementing a 400-km optic fibre infrastructure. It has a 1,200-km right of way in Mumbai alone for laying the optic fibre cable. TPL has approved a Rs 1400 millions investment plan, which has immediate accrual of returns. In Metro broadband, it has identified Pune, Delhi, Hyderabad and Chennai as the areas where a parallel extension of Mumbai model can be implemented. The estimated resource requirement is to the tune of Rs 3000 millions. In the National Highway, the company plans to establish a busy route highway between Mumbai-Delhi-Hyderabad-Pune-Chennai. The estimated resource requirement is to the tune of Rs 5000 millions. 


The Capex Plans 

In 2002, TPL expects to make an investment close to Rs 1,2000 million out of which Rs 7000 million will be in power business, Rs 1000 million will be in energy business and the balance Rs 4000 million in communication business.  

 
In 2003, the company plans to invest another Rs 5500 million, which will take the total investment to Rs 1,7500 million. In 2004, the cumulative total investment will be close to Rs 2,2500 million out of which Rs 1,2500 will be in power, Rs 2500 million will be in energy and Rs 7500 million in communication business. 

 
In Jan. 2002, the company has signed an agreement with Power Grid Corporation of India Limited for 'Tala Transmission Line' at a estimated cost of Rs.12000 million for Bhutan to Delhi 400 kV transmission line. 

 
Subject has acquired 100% equity stake in Duncans North Hydro Power Company Limited on Dec 15, 2003 thus making it a wholly owned subsidiary of the company. 

 
The company has acquired 100% of the equity in Duncans North Hydro Power Company (DNHPC) during the financial year 2003-04,for the development of 330 MW Shrinagar Hydro electric project located in Uttaranchal. DNHPC has since been renamed as Alaknanda Hydro Power Company Limited.  The 330 MW run of river hydro project at Shrinagar in Uttaranchal being developed by the company through its subsidiary Alaknanda Hydro Power Co Limited continues to be at development stage. During November 2005 the company has sold its entire stake in Alaknanda Hydro Power Co Limited to GVK Hydel Pvt Limited, a GVK Group Company for a consideration of Rs. 31.20 Million. The company has sold its 75MW power plant located at Wadi to ACC. The sale is effective from 1st July 2004. 

 
Subject has also floated a new electricity trading company (Tata Power Trading Company Limited) to undertake trading of electricity. It has applied to CERC for a trading license.


During the financial year 2003-04,construction work have commenced on 120 MW unit at Jojobera. Besides configuring it as a low tariff project, the company is also constructing a 40 Kms transmission line to evacuate power.  The unit is scheduled to be commissioned in October 2005. 

 
In the year 2004-05, the company has added two distribution sub-stations, nine consumer substations with transformer, 36 Ckt. Km of HT/LT Cable network and 10 Ckt.Km of transmission lines. The company has signed a Memorandum of Understanding with Damodar Valley Corporation for implementing the 1000 MW Maithon Right Bank Thermal Power Project through a joint venture company. The company is also planning to set a 1000 MW coal based coastal power plant in Maharashtra. 

 
The company has increased its installed capacity of Sonobuoys by 500 Nos and with this expansion the total installed capacity of Sonobuoys has increased to 1000 Nos.

 
In 2005-2006, the construction of Captive Coal Berth at Trombay is progressing as per schedule. The civil work is expected to be completed before the monsoon and installation of the mechanical items will begin thereafter. During the year the 15 consumer sub-stations, 73 circuit km (Ckt.km) of High Tension/Low Tension cable network and 3 ckt. km of Transmission lines were added. The companies Jojobera Power Plant completed and commissioned 120 MW coal-fired Unit 4 in a record time of 23 months. 

 
The company is also implementing a 250 MW coal based plant at Trombay to meet License Area's future power requirement. The project is scheduled to be commissioned during 2009. The company is in the process of installing 100 MW low capital cost Diesel Generating sets, which have short commissioning period of 10-12 months. The company is actively pursuing setting up an imported coal based 1000 MW power plant in coastal Maharashtra to meet the long-term power requirements of Maharashtra (including Mumbai). 

 
During 2005-2006, the company signed the shareholders agreement with Damodar Valley Corporation (DVC) and holds 74% equity stake in Maithon Power Limited and the balance 25% held by DVC. 

 
The company is setting up a 120 MW power plant for Tata Steel Limited in Jamshedpur. The estimated project cost of the project is Rs.4900 millions which is expected to be completed in 26 months. The company is in discussions with Tata Steel Limited for the expansion projects in various states in India such as Chhatisgarh, Orissa and Jharkhand. 

 
The company sold its shareholding in Alkananda Hydro Power Company during this period. 
 
Consequent to the Expression of interest signed on October 13,2004 by the Company with the Board of Investment Bangladesh, along with two other Tata Group Companies Tata Steel and Tata Chemicals Limited, a joint final proposal was submitted for the consideration of the Bangladesh Government. The company proposed to set up a 480 MW gas based power Plant for meeting the requirement of the steel plant to be set up by Tata Steel and 250-300 MW coal based plant to supply power to the Bangladesh Power Development Board. 

 
The company along with its local partners, have pre-qualified and has been invited to participate in the bidding process for a 290-380 MW Open Cycle Gas Turbine Peaking IPP project in South Africa. The company is participating in the bidding process. 

 
The Bareilly-Mandola portion of the Tala Transmission project(implemented by Powerlinks Tranmission Limited, a joint venture between the company and Power Grid Corporation of India Limited) has been completed three months ahead of the scheduled project completion date of June, 2006.

 

FINANCIAL HIGHLIGHTS

During the year, the Company reported its highest ever Profit after Tax of Rs. 6968.000 millions, a growth of 14.13% as against Rs. 6105.400 millions for the previous year. The Operating Revenue is however higher only by 4% at Rs. 47153.200 millions due to certain adjustments, explained below.

 

The Company has received favourable assessments/orders pertaining to its Mumbai Licence Area (Mumbai LA) relating to previous years and therefore reversed tax provisions aggregating Rs. 1817.400 millions. In accordance with the Regulations, Rs. 2239.400 millions (which includes Rs. 1817.400 millions of tax adjustment) has been considered as a rebate. This rebate has been debited to revenue and consumers in the Mumbai LA will be given a share of this amount as may be decided by the MERC. The impact of these reversals will be incorporated by the MERC in the future tariff order. The drop in Operating Profit and Profit before Tax is essentially due to the above rebate being provided for in the books of account. Without this adjustment, the revenue from Power business registered a growth of 11%uueto higher volume sold coupled with higher recoverable fuel and power purchase costs, recognised as revenue in the Mumbai LA and due to the full year operation of the Jojobera Unit 4 during the year.

 

Consequent to the Company commissioning new wind farms, Minimum Alternate Tax (MAT) is applicable for the year. Earnings per Share (Basic) showed an increase of 17.19 % to Rs. 34.02 as against Rs. 29.03 in the previous year. The Notes to accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comment. The consolidated 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 Interests in Joint Ventures, issued by the Council of the Institute of Chartered Accountants

of India.

 

POWER BUSINESS

Operational Highlights

The Company generated 14269 Million Units (MUs) of power from all its power plants during the year as compared to 13746 MUs in the previous year, an increase of 3.80%.

 

Tata Power Licence Area Business - Mumbai

Trombay Thermal Power Station

The Trombay Thermal Power Station recorded a generation of 9180 MUs during the year as compared to 9185 MUs generated in the previous year. The generation at Trombay was backed down to accommodate higher generation at the Hydro stations on account of good monsoons, thus optimizing the balance between thermal and hydro generation and reducing the pressure of rising fuel cost on the consumers. The 500 MW Trombay Unit 6 achieved an Indian record of continuous operation of 12,405 hours. The Station completed 50 years of operation in December, 2006.

 

Hydro Stations - Bhira, Bhivpuri and Khopoli

The three hydro power plants collectively generated 2138 MUs during the year. This is the highest ever generation by the hydro plants with the previous high being 2024 MUs in the previous year. This year has been significant with the hydro lakes receiving the second highest total inflow of 2,344 million cubic metres (MCM), the previous high being 2,350 MCM in 1927. Maximising hydro generation during the monsoons, helped in minimizing floods and preventing damage to property in Lonavla, Maval and Mulshi areas.

 

Transmission and Distribution

During the year, a Distribution Automation System was commissioned using Code Division Multiple Access (CDMA) technology benefiting all key consumers in Central Mumbai and North Mumbai by enabling automatic restoration of power supply in case of any interruptions.

 

TATA Sales

During the year, the Mumbai LA recorded a sale of 11,218 Mils, as against 10,421 MUs during the previous year. In addition, the Company sold its off peak surplus generation of 286 MUs to Maharashtra State Electricity Distribution Company Limited to meet the growing demand in the rest of Maharashtra. However, to meet the increased demand in the Mumbai LA during peak hours, the Company purchased 872 MUs during the year as against 590 MUs in the previous year. Subsequent to the directives issued by Maharashtra Electricity Regulatory Commission (MERC), the revised Power Purchase Agreement (PPA) between the Company and Brihanmumbai Electric Supply and Transport (BEST) was submitted to MERC for approval in December, 2006. The approval from MERC is awaited. The PPA with Reliance Energy Limited (REL) is awaiting finalization, pending resolution on the issue of allocation of capacity.

 

Tata Power Captive Power Plant/Independent Power Producer Business

Jojobera Thermal Power Station

The Jojobera Thermal Power Station recorded a generation of 2731 MUs during the year as compared to 2375 MUs in the previous year. The generation was higher by 15% due to full year operation of Unit 4 commissioned in November, 2005.

 

Belgaum Power Station

The 81.3 MW Belgaum Independent Power Plant (IPP) generated 189 MUs during the year as compared to 135 MUs in the previous year due to increased demand in Karnataka. The Company continues to earn fixed charges on the installed capacity in line with the PPA with the Karnataka Power Transmission Corporation Limited.

 

Wind Generation

The existing 17 MW wind farm at Supa near Ahmednagar, Maharashtra generated 29 MUs during the year as against 27 MUs generated in the previous year. During the year, the Company successfully commissioned additional wind power capacity of 37.6 MW at Khandke and 7.5 MW at Bramanvel in Maharashtra. An additional capacity of 40.3 MWwill be commissioned during the coming year. With this, the total capacity commissioned will be 102.4 MW.

 

Tata Power - New Generation Projects

Ultra Mega Power Project-Mundra

The Company was successful in winning one of the first two Ultra Mega Power Projects (UMPP) through a competitive bidding process at Mundra. The Letter of Intent for the 4000 MW Mundra project in coastal Gujarat was issued to the Company in December, 2006.

 

The Company has acquired the project special purpose vehicle company - Coastal Gujarat Power Limited (CGPL – initially floated by the Power Finance Corporation), as a wholly owned subsidiary, in April 2007. CGPL has signed PPAs with 7 procurers (distribution licencees) for the sale of contracted capacity. In terms of the bid, the commitment for the commissioning of the units is beginning from the first half of FY 13 to mid of FY 15. The Company is targeting to commission the units well ahead of the commitment. CGPL has also signed a contract for complete Boiler Island scope on an EPC basis with Doosan Heavy Industries and Construction Company Limited, Korea. The contract covers 45% of the total ordering that CGPL has to do under this project. In keeping with its pioneering spirit, the Company brings in the first 800 MW unit to India, thereby ushering India into the era of 800 MW super-critical technology. CGPL is considering funding the project through a debt equity mix of 80:20. CGPL is exploring various options of overseas and domestic debt to meet its funding requirements. CGPL is targeting to achieve financial closure for the project this financial year.

 

 Maithon Joint Venture Project

The Company is implementing a 1050 MW project along with Damodar Valley Corporation (DVC) as its joint venture partner. The Company has a 74% equity stake in the project company-Maithon Power Limited, with the balance 26% being held by DVC. The project has received consents and is progressing as per schedule. The project is expected to achieve financial closure in FY 08. The project site works will commence shortly and the project is expected to be commissioned in the first half of 2011

 

Coastal Maharashtra Project

The Company is actively pursuing setting up a 1600 MW power project intially, going upto 2400 MW in coastal Maharashtra, based on imported coal, to meet the long-term power requirements of Mumbai city, Maharashtra state and other neighbouring states. The Company is actively pursuing land acquisition with the support of Government of Maharashtra (GoM). The Maharashtra Pollution Control Board has issued its 'Consent to Establish' for the project. The clearance from the Ministry of Environment and Forests, New Delhi is awaited.

 

M W Expansion Project at Trombay Thermal Power Station

The 250 MW coal based plant at Trombay, to meet Mumbai LA's future power requirement, is progressing as per schedule. The capital cost of the project is Rs. 9900.000 millions and the project is scheduled to be commissioned in the second half of 2008.

 

Diesel Generation Capacity

In order to meet the growing peak demand requirements of Mumbai city, the Company has imported used DG sets of 100 MW capacity. The project implementation has got delayed because of difficulties in land acquisition but is scheduled to be commissioned in early 2008.

 

Haldia Power Plant

During the year, the Company acquired the 2 x 45 MW (under construction) power plant from Hooghly Met Coke and Power Company Limited (HMC), a 98% subsidiary of Tata Steel Limited (Tata Steel). The project is scheduled for commissioning in late 2007 and would have a capital outlay of Rs. 4100.000 millions. The plant will utilize coke oven gases to generate power, a part of which will be sold under a PPA to the West Bengal State Electricity Distribution Company Limited and the remaining traded through Tata Power Trading Company Limited. The Company will also set up an additional 30 MW plant to be commissioned . in the second half of 2008.

 

Captive Power Plants for Tata Steel

Formation of Industrial Energy Limited (IEL)

Pursuant to the new Captive Power Policy under The Electricity Act, 2003, the Company and Tata Steel have set up IEL as a joint venture company. The Company holds 74% of the equity capital and the balance is held by Tata Steel. All new captive power projects to be developed for meeting power requirements of Tata Steel will be developed by IEL. As on date, IEL is developing the following projects:

 

(A) Unit for Tata Steel Works, Jamshedpur

The 120 MW power plant being constructed at Tata Steel Works in Jamshedpur at a cost of Rs. 4900.000 millions, is progressing as per schedule and targeted for commissioning in the first half of 2008. The power plant will utilize waste blast furnace and coke oven gases to generate power to meet the requirements of the expansion of the steel plant.

 

(B) UnitSatJojobera

A 120 MW coal based unit is being developed at a cost of Rs. 6200.000 millions. The order for the main plant and equipment has been placed and the project is expected to be commissioned in the first half of 2009.

With the commissioning of the two projects, the generating capacity in Jamshedpur will be 667.5 MW.

 

(C) New Captive units

The Company is in discussions with Tata Steel for setting up new Captive Power Plants (CPP) for Tata Steel's various expansion projects in states like Chhattisgarh, Orissa and Jharkhand.

 

Tata Power's acquisition in Indonesian Coal Companies

The Company has signed definitive agreements to purchase 30% equity stake in two major Indonesian coal producers, PT Kaltim Prima Coal and PT Arutmin Indonesia and related associate companies owned by PT Bumi Resources Tbk for a consideration of USD 1.1 billion prior to working capital and other adjustments. The acquisition secures the Company's fuel requirements for the Mundra UMPP and supports the assumptions made in the bidfortheMundra UMPP. The off-take agreement signed by the Company entitles it to purchase about 10.5 million tonnes of coal per annum.

 

The Company will partly finance the transaction with a USD 600 million non-recourse debt to be raised by Special Purpose Vehicles (SPVs) that have been set up in Mauritius and Cyprus for investing in the coal companies. In addition, the SPVs will raise USD 350 million debt which will be guaranteed by the Company. The balance fund requirement will come out of the Company's internal accruals and available cash.

 

Captive Coal Blocks

The Company had applied to the Ministry of Coal, Government of India for 18 coal blocks in the states of Chhattisgarh, Jharkhand, Andhra Pradesh and Orissa in order to obtain competitive Indian coal for power generation. The applications are being pursued with the Ministry of Coal.

 

Tata Power - Distribution, Transmission and Power Trading Businesses

North Delhi Power Limited (NDPL)

The Company's distribution joint venture NDPL posted a revenue of Rs. 20522.000 millions during the year, a growth of 11.15% and a net profit of Rs. 1857.900 millions during the year as compared to Rs. 1125.200 millions in the previous year. The Aggregated Technical and Commercial (AT and C) losses have been reduced from 53.40% to 23.70 % in a period of 4 years and 9 months, as against the regulatory target of 31.10% by the end of 5 years. This has resulted in additional revenues of Rs. 2077.700 millions during the year as against Rs. 1721.600 millions during the previous year, enabling NDPL to have an additional operating profit of Rs. 723.900 millions during the year as against Rs. 553.900 millions in the previous year. NDPL declared a dividend of 16% for FY07. NDPL has won the 'Meritorious Performance for years 2004-2005 and 2005-2006' award instituted by the Central Electricity Authority (CEA) for power distribution in the country.

 

Powerlinks Transmission Limited (Powerlinks)

Powerlinks, the first public-private joint venture in power transmission in India has commenced commercial operation during the year. With the commissioning of this line, four regions namely Northern, Eastern, North-Eastern and Western regions are now in synchronous mode. Powerlinks in its first year of operations has earned revenues of Rs. 1350.100 millions and a profit after tax of Rs. 205.700 millions. Powerlinks has declared a maiden dividend of 1.8% for FY 07. Powerlinks has been felicitated with "ENpower Awards 2006" for being adjudged as "India's Best Corporation" in the category - Project Management for the Transmission and Distribution sector.

 

Tata Power Trading Company Limited (TPTCL)

TPTCL traded 1,205 MUs during the year as compared to 675 MUs in the previous year, thereby resulting in an increase in its revenues by 191% to Rs. 6037.600 millions from Rs. 2077.600 millions in the previous year. Profit after tax also increased to Rs. 38.400 millions as against Rs. 31.800 millions in the previous year. The operations have been expanded to cover the entire country including the North-Eastern states. TPTCL declared a dividend of 20% for the year FY 07 on its equity shares. The trading business has been subject to a capon the profit per traded unit by the Central Electricity Regulatory Commission in the year. This has been contested by major power traders in the country and a final verdict on the same is awaited.

 

Financing

As a step towards meeting its funding requirements, the Company has proposed to make a preferential issue of Equity Shares and Warrants to Tata Sons Limited in accordance with the Chapter XIII of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (SEBI DIP Guidelines). The preferential issue comprises equity shares not exceeding 98,94,000 of Rs. 10 each in FY 08 and warrants not exceeding 1,03,89,000 with an option to subscribe to 1 Equity Share of Rs. 10 each per warrant which option shall be exercisable after 1st April, 2008 but not later than 18 months from the date of issue of the warrants. The Company expects to raise approximately Rs. 12000.000 millions through this issue in FY 08 and FY 09. The above mentioned Equity Shares will be eligible for dividend for FY 07, once the Equity Shares are issued, subscribed and allotted to Tata Sons Limited. The Company is considering various options to meet its funding requirements and is well positioned to raise the required borrowing from the overseas and domestic market. During the year, the Company raised a long-term loan from Infrastructure Development Finance Company Limited of Rs. 4500.000 millions to meet its capex requirements and Commercial Papers of Rs. 5000.000 millions were placed with domestic mutual funds. After the end of financial year, the Company has also finalised a rupee denominated loan of Rs. 3000.000 millions from Asian Development Bank and Indian Renewal Energy Development Agency Limited (IREDA) to fund its new Wind project in Maharashtra.

 

The Company's long-term debt paper continues to be rated high by credit rating agencies. However, the credit rating agencies have put the Company on credit watch with negative implications/ negative outlook/ review for a possible down grade, mainly following the Company's decision to acquire equity in Indonesian coal companies and the execution of the Mundra UMPP. The rating agencies will take a final view as and when the full details of the projects and funding arrangements are finalized. The credit rating agencies also believe that the Company's competitive position, adequate liquidity, favourable debt maturity profile and good access to financial resources mitigate some of the pressure on the ratings.

 

REGULATORY MANAGEMENT

Tariff Order for FY 07

The MERC passed a tariff order in October, 06 in which it disapproved a part of the actual expenditure incurred for the years FY 05 and FY 06. The Company had filed a review and clarification petition with MERC, which was subsequently disposed off by MERC. In the said order, MERC maintained its earlier stand. The Company is of the view, supported by legal opinion, that the aforesaid order can be successfully challenged and has therefore filed an appeal with Appellate Tribunal for Electricity (ATE) against the above order. In light of the appeal, no adjustments, have been made in the accounts for the current year in respect of these items.

 

Multi Year Tariff (MYT) for FY 08 to FY 10

For Tariff determination, MERC has adopted MYT principle for the licensees in Maharashtra. The Company had submitted its Annual Revenue Requirement and Tariff proposal for FY 08 to FY 10. MERC issued Tariff Orders for the Company's Generation, Transmission and Distribution businesses covering the tariff for FY 08 and performance parameters for the years FYOStoFY 10.

 

Standby Charges

The Company and REL filed Appeals before ATE against the Order dated 31st May, 2004 passed by MERC on the sharing of standby charges between the Company and REL for the period from 1st April, 1999 to 31st March, 2004. The ATE set aside the MERC order and had directed the Company to refund a sum of Rs. 3540.000 millions to REL along with interest at the rate of 10% per annum on the amount from 1st April, 2004 till the date of payment.

 

On an appeal filed by the Company, the Supreme Court has stayed the operation of the ATE order. However, the Supreme Court has directed the Company to deposit an amount of Rs. 2270.000 millions and submit a bank guarantee for an equal amount, which the Company has complied with. The date for the hearing is not yet being fixed.

 

Distribution Licence in Mumbai

The ATE vide its order dated 22nd May, 2006 held that the Company has not been granted licence to undertake retail distribution. The Company has filed an Appeal with the Supreme Court against the above ATE order. The hearing has been completed and the judgment is awaited.

 

FOREIGN EXCHANGE EARNINGS/OUTGO

The foreign exchange earnings of the Company during the year under review amounted to Rs. 1043.100 millions (previous year Rs. 828.800 millions), mainly on account of Euro Notes currency swaps, interest earned on Foreign Currency Convertible Bonds (FCCB) funds parked abroad and project exports. The foreign exchange outflow during the year was Rs. 10154.400 millions (previous year Rs. 6479.500 millions), mainly on account of fuel purchase of Rs. 8205.200 millions (previous year Rs. 4702.200 millions), repayment of foreign currency loans with interest thereon, NRI dividends and FCCB interest of Rs. 846.900 millions (previous year Rs. 1299.900 millions) and purchase of capital equipment, components and spares and other miscellaneous expenses of Rs. 1102.300 millions (previous year Rs. 477.400 millions).

 

AWARDS/RECOGNITION

During the year, the Company received various awards and recognitions, significant amongst which are the following:

• Power Line's Expert Choice Award as the "Most Admired Organisation in the Private/Joint Sector."

 

Management Discussion and Analysis

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

 Power Sector in India

Enactment of The Electricity Act, 2003, has brought about various policy and regulatory initiatives. The Government of India (Gol) has finalised and issued the Rural Electrification Policy recently with an objective to provide electricity to all households by 2009. This is in addition to two other important policies viz. the National Electricity Policy and the National Tariff Policy that were issued last year. The National Electricity Plan, which was to be firmed up in 2005 by the Central Electricity Authority, is, however, yet to be finalised. The Central and the State regulatory institutions in the country are seen to be getting more forward looking and have processed various regulatory orders on Annual Revenue Requirement (ARR), Tariff formulation including Multi Year Tariffs, Open Access, Intrastate Availability Based Tariff etc. The Appellate Tribunal for Electricity (ATE) has also become active and functional as a body to address grievances against the orders of Central and State Commissions. The Indian power sector appears to be progressing well on the policy initiative and regulation front. The key to Indian reform is improving efficiencies in the power distribution sector. While the Regulatory Commissions are pressing for faster reduction of Aggregate Technical and Commercial (ATandC) losses, its implementation and results are slow. It is in this regard that the Central Government, the Prime Minister's Office and the Planning Commission have been highlighting this aspect through the Chief Ministers and the Chief Secretaries conferences. This is expected to evolve consensus on the reforms model, particularly on the need to curb commercial losses in the distribution segment of business. As has been the experience, strong political support is needed to achieve the desired results and ensure fiscal sustenance of the sector. In addition to the above, the institutionalisation of the competitive bidding process for capacity addition in generation as well as transmission projects, with the Centre/States offering green-field ventures with key clearances in place would encourage investments, bring competitive tariffs for the benefit of consumers and see quicker execution of projects.

 

With visible progress on the legislative, administrative and policy front, close monitoring of implementation at senior levels of concerned Governments is critical to bridge the burgeoning demand-supply gap and to support 8-10% GDP growth targets of the Indian economy.

 

Generation

This year marked the end of the 10th Five Year Plan. About 21,200 MW of capacity got added in the 10th Plan against a target of 41,100 MW - 52% of target. In comparison, China has installed 1,05,000 MW in 2006. Focused efforts are thus required to implement the targeted 2,12,000 MW by 2012, up from the existing capacity of 1,32,000 MW. The bidding for two of the nine planned Ultra Mega Power Projects (UMPP) viz. Mundra and Sasan was completed early this year. The Company, one of the winning bidders, has already moved ahead with the project. From concept to award, the Gol facilitated the process completion in six months. Similar thus would help expeditious capacity addition. Above all,the participation of major private sector players in the bidding process has vindicated the quest for the Gol's initiative for low tariff ultra mega projects. Successful and timely moves on these projects will greatly help in mitigating the prevailing power shortage in the

country.

 

Encouraged by the success of the UMPP route followed by the Gol, many States are initiating the process of

inviting bids for mini UMPPs (on the lines of the UMPP route). In addition to this, States are also inviting competitive tariff based bids for sourcing their future short-term as well as long-term power requirements. This is an encouraging development for the sector and besides bringing transparency would also make tariffs competitive. Fuel such as coal and gas would also need to be dovetailed in terms of capacity allocations and linkages so that capacity addition programmes can progress smoothly.

 

Transmission

Development of select transmission projects through private sector participation has been initiated. Fourteen transmission projects have been identified for development through tariff based competitive bidding. The bidding process for two of the identified transmission systems has been taken up by the Gol. Power Grid Corporation of India Limited has also been asked by the Gol to study and plan transmission lines for evacuation of power from the proposed UMPPs to the beneficiary States. This is yet another initiative which needs to be dovetailed with the capacity addition programme of generation to harness the benefits of linking energy/fuel based availability in diverse geographical locations to the load-centers in other parts of the country.

 

Distribution and State Electricity Boards

Efficiency improvement in the power distribution sector is fundamental to power reforms. The Gol'sinitiative of Accelerated Power Development and Reform Programme (APDRP) as a vehicle to drive reforms in the distribution sector, has not yielded the much needed impetus to discipline and improved consumer services. This is now being reviewed in order to link performance improvement incentives with investments, fiscal discipline and improved services. Similarly, some States have taken the initiative of performance based franchise model for management of certain geographies which are burdened with dilapidated networks and extensive AT and C losses. In the meanwhile, successful models like the privatisation in Delhi need to be replicated across more States, if sustainable and impactful change needs to be achieved.

 

Rural Electrification

The Rural Electrification Policy seeks to provide electricity to all households by 2009 with a minimum lifeline consumption of 1 unit per household per day by 2012. Allocation to the Rajiv Gandhi Grameen Vidyutikaran Yojana (a National Rural Electrification Programme) has been increased from Rs. 30000.000 millions in FY 07 to Rs. 39830.000 millions in FY 08. The distributed generation concept to meet the power requirement of local rural networks has yet to take-off. The Gol's initiative may be necessary to develop viable Public Private Participation (PPP) based distributed generation models, based on Viability Gap Funding (VGF) options and for their replication in different rural communities. This would take the load off from State Power Utilities, propose self-reliance and self-governance in power in rural communities and would encourage cottage, local agrarian industry in the rural areas.

 

Fuel supply for Power Generation

Recent discoveries of gas in Krishna Godavari and Mahanadi basins along with the development of Coal Bed Methane (CBM) are expected to provide the much needed fuel diversity in the next 2-3 years. Gas utilisation can substitute oil and command a remunerative price in the industrial sector. However, it would need to establish its affordability for the power sector to compete with imported coal. Till then, coal is likely to be the mainstay for power generation. The power sector has shown great interest in acquiring coal mines both in India and abroad to securitize fuel supplies for existing and proposed power projects. The Gol has initiated steps in promoting coal based generation at pitheads by identifying and offering captive coal blocks to the power sector. While this has

received an overwhelming response, there is a lack of clear policy and speed in allocating the coal blocks to various applicants.

 

Renewable Energy

There has been an increased focus on renewable energy. Many utilities as well as private developers are going ahead with plans to develop, wind farms, biofuel based projects and solar projects. To promote renewable energy and encourage its use, some State Commissions have enforced Renewable Purchase Obligations (RPO) on the distribution licensees. These licensees are required to meet a certain portion of their power requirement through renewable energy, which is a laudable initiative. A simple and convenient Clean Development Mechanism (COM) would supplement and boost investment in renewable energy. For renewable energy projects to be viable, Government/Regulatory support such as the present practice of allowing accelerated depreciation, RPOs, higher tariff, etc. would need to continue. To attract large scale investments, the Government could consider permitting trading of tax breaks since new entrants may not have the capacity to fully utilize the tax benefit. Similarly, the Government could enjoin land allocations to encourage large scale

Development of wind farms and solar farms.

 

It is in trade terms with:-

·         Yashmun Engineers Limited

·         Hercules Mechanical Works

·         Leak-Proof Engineering (India) Private Limited

·         Nitin Fire Protection Industries Limited

·         Nand Kishore Khanna and Sons

·         Perfo Mesh

 

Awards:

·         The 2nd Wartsila Mantosh Sondhi Award for outstanding contribution to the Indian Power Sector in 2004.

·         Greentech Environment Excellence Award: Platinum to Jojobera Thermal Power Plant, Jharkand in 2004.

·         Greentech Safety Award: Gold to Trombay Thermal Power Station, Mumbai in 2004.

·         The Power Plant Award, instituted by Electric Power International, to the Trombay Thermal Power Station in 1995.

·         Outstanding Structures of the Year by the American Concrete Institute: Bronze Award to the Trombay Thermal Power Station for the Year 1988-1989.  

 

The company's fixed assets of important value includes:-

·         Goodwill,

·         Land (including land development),

·         Hydraulic Works,

·         Buildings,

·         Railway Sidings,

·         Roads, Crossings, etc.,

·         Plant and Machinery,

·         Transmission Lines,

·         Cable Network, etc.,

·          Furniture, Fixtures and Office Equipments,

·         Technical Know-how and Motor Vehicles,

·         Launches,

·         Barges,

·         Helicopters, etc.

 

PRESS RELEASES

TATA POWER SIGNS MoU WITH GOVERNMENT OF JHARKHAND FOR DEVELOPING PIT HEAD BASED MEGA POWER PROJECTS IN THE STATE

05-Oct-05

 

A benchmark agreement to develop state of Jharkhand as a power supply hub 

Mumbai, October 5, 2005: The Tata Power Company (TPC) today announced signing of the MoU with the Government of Jharkhand as a comprehensive measure to evaluate the setting up of generation capacity at various sites with a potential of around 3000 MW along with captive coal mining facilities and associated distribution circles in the State of Jharkhand. Further to the signing of the MoU, Tata Power will carry out pre-feasibility studies within three months from the date of the MoU to decide the site/s for the proposed power project/s along with captive coal mines.

 

The Agreement signifies the intent of the Government of Jharkhand to utilize the natural resources of the State to aid rapid industrialization for the prosperity and well-being of its people. Towards this end, the Government of Jharkhand has sought to extend comprehensive assistance in the State in areas of generation, transmission linkages and distribution through such incentives as single window clearance, recommendation to the Central Government for allocation of coal blocks and such amenities and clearances like land, water, evacuation of power as may be required to facilitate the project.

 

Speaking on the occasion, Mr. A.J. Engineer, Director, The Tata Power Company Limited said “The MoU marks a benchmark agreement between the Government of Jharkhand and Tata Power towards bridging the gap in the power requirements of the state and the country.The agreement further reiterates the commitment of the Tata Group to the State of Jharkhand and commends the excellent cooperation afforded by the State Government.”

 

Tata Power has an installed power generation capacity of 428 MW in Jharkhand today comprising of three units of 308 MW and the most recent being Unit 4 of 120 MW synchronized on 23rd September 2005.

 

TATA POWER SIGNS JV WITH DVC FOR A MEGA POWER PLANT- MAITHON PROJECT OF 1000 MW

05-Sep-05

First public-private JV in generation after JVs in distribution and transmission

Mumbai, Sept 2, 2005: Tata Power Company Limited (Tata Power) announced the signing of the Shareholders’ Agreement and the Share Purchase Agreement with Damodar Valley Corporation (DVC) for the proposed Mega Power Plant of 1000 MW Right Bank Thermal Power Project being developed by Maithon Power Limited Tata Power will hold 74 % equity in the venture, with the Government of India established Damodar Valley Corporation holding 26 % equity. The estimated capital cost of the project is around Rs. 3,8000 millions and will be funded through a 70:30 debt to equity ratio. Tata Power will contribute approx. Rs. 8400 millions to the equity corpus, with DVC contributing about Rs. 3000 millions.


DVC has already acquired a significant portion of the required land for the project. The financial closure is targeted around June 2006. As per current plans, the project will comprise of two generating units of which the commissioning of the first unit is scheduled for September 2009 and that of the second unit by March 2010. Other requirements of the project are also being pursued.

 
Mr. Adi Engineer, Head - Tata Power, said “As India’s largest private power sector utility, we believe that joint co-operation with the government is essential in meeting the targeted demand for power in the country. This joint initiative marks our first foray into a generation pact with the government. It may be recalled that our successful Joint ventures have been with NDPL in distribution and the 400 kV Bhutan to Delhi (Tala) transmission project in transmission sector.”

 
The Maithon Power Project:

The Maithon Power Project is a Mega Power Plant of 1000 MW, green field coal based generation project located at Maithon in the state of Jharkhand. The site is about 250 km from Jamshedpur and Ranchi and 25km from Asansol. The site is well connected by National Highway 2 and is also located on the rail network of Howrah - Mugal Sarai grand cord line of Eastern Railways. The total land required for the project is about 1200 acres and currently a significant portion of the land has been acquired by DVC. Other requirements of the project are also being pursued. In addition to supplying power to DVC, the project will also supply power to some of the states in the north of India like Delhi, Rajasthan and Haryana.


The Tata Power Company Limited is India’s largest private sector power producer with an installed generation capacity of over 2200 MW. The Company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth. Tata Power has a presence in all the segments of the power sector viz generation (thermal, hydro, solar and wind), transmission and distribution.

 
About Damodar Valley Corporation (DVC):

DVC came into existence on the 7th July 1948 by an Act of Central legislature, as the first multipurpose river valley project of independent India. The members of the Corporation are represented from the Central government, West Bengal government and the Jharkhand government. DVC has over the years prioritized generation, transmission and distribution of power not only within its Command Area in Jharkhand and West Bengal states but also in exporting to other power-deficit states while retaining its priorities in other function viz – irrigation, flood control, soil conservation etc. within its Command Area. DVC is also instrumental in both capacity addition and rural electrification programmes of the Ministry of Power, Government of India.

 

Tata Power inks agreement with international players-Siemens and Doosan Heavy Industries for bidding of Ultra Mega Power Projects

01-Jun-06

Mumbai, 31st May, 2006: The Tata Power Company Limited (TPC), India’s largest private power company, announced the signing of an agreement with international players-Siemens Power Generation, Germany and Doosan Heavy Industries and Construction Company Limited, Korea to bid for the Ultra Mega Power Projects (3,500 to 3,800 MW supercritical steam power plants each).

The EPC consortium of Siemens and Doosan Heavy Industries is a formidable one for the design and construction of power plants based on super critical technology required for such large sized units and will form the basis of Tata Power’s bids for the Ultra Mega Power Projects. This will give impetus to the initiative taken by the Government of India in successfully launching Ultra Mega Power Projects as three experienced players have joined hands.

The Government of India has announced the implementation of several Ultra Mega Power Projects through an International Competitive Bidding process. Tata Power has submitted its Expression of Interest for four Ultra Mega Power Projects, one each in Gujarat, Madhya Pradesh, Maharashtra and Karnataka. Consequently, the Company has received the Request for Qualification documents for the Sasan project in Madhya Pradesh and the Mundra project in Gujarat. This development comes on the back of the recent announcement made by Tata Power to augment its generation capacity by over 4500 MW involving investment of  Rs. 18,0000 millions.

Mr. Adi Engineer, Director-Tata Power said “This agreement is a significant step towards our plans to bid for Ultra Mega Projects by drawing on the expertise of strong international partners like Siemens and Doosan Heavy Industries. The formation of this EPC consortium will help in facilitating an excellent technical solution which is also cost competitive ”

Mr. J. Schubert, Managing Director Siemens Limited said, “Siemens is happy to participate in this important initiative announced by the Government of India in providing large generation capacity to bridge the huge gap in demand and supply of electricity. As a world leader in Power Generation with a strong and long standing presence in India, we have the advantage of combing our global expertise with local strengths.” He added, “This alliance will further strengthen our long association with Tata Power.”

Mr. S. E. Hong, Head of Power Plant Business Group, Doosan Heavy Industries and Construction Company, Limited said, “This surely will be another challenging exposure to Indian power market and highlights Doosan’s technological expertise following Sipat stage-I project (3×660MW). Doosan will bring the benefits of its long standing international experience to the Ultra Mega Project in India.”

 

About Tata Power

The Tata Power Company Limited is India’s largest private sector power producer with an installed generation capacity of 2300 MW. The Company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth. Tata Power has a presence in all areas of power sector

generation (thermal, hydro, solar and wind) transmission and distribution

 

About Siemens:

The Power Generation Group (PG) of Siemens AG is one of the premier companies in the international power generation sector. In fiscal 2005 (which ended September 30), Siemens PG posted sales amounting to approximately EUR8.1 billion and received new orders totaling EUR11 billion. Group profit amounted to EUR951 million. On September 30, 2005, PG had a work force of approximately 33,500 worldwide. Further information at:

http://www.siemens.com/powergeneration

 

Siemens Limited is the flagship of the Siemens Group in India. The Siemens Group is a leading provider of industry and infrastructure solutions in India with a business volume aggregating about Rs 54000 millions. It operates in the core business segments of Energy, Industry and Buildings, Information Technology, Communication, Transportation, Healthcare and Lighting. It has nation-wide Sales and Service network, 17 manufacturing plants, some 500 strong network of channel partners and through its 12 Companies, the Siemens Group employs over 12,000 people.

 

About Doosan Heavy Industries:

Doosan Heavy Industries and Construction Company, Limited, is taking a leading role in meeting the world’s fast growing demand for the electricity.

 

Doosan has large experience with Supercritical technology as EPC contractor with, currently, more than 30 plants and has successfully supplied and completed various types of power plants (Nuclear, Thermal, CCPP, Hydro, etc) with total capacity of approx. 100 GW

 

13.08.2007

Tata Power signs contract with Toshiba Corporation for Turbine Generators for the first 4000 MW Ultra Mega Power Project at Mundr.

 

Brings in world class super-critical technology to India

Mumbai, 10th August, 2007: The Tata Power Company Limited, India’s largest private power company, announced the signing of an EPC contract for supply of five (5) 800 MW Steam Turbine Generators with Toshiba Corporation for the first 4000 MW Ultra Mega Power Project(UMPP) in India to be located at Mundra, Gujarat.

 

Toshiba Corporation’s scope of work includes- the design, manufacture, test and supply of equipment related to the Steam Turbine Generator packages for the five units of 800 MW each. They will also be associated with supervision of commissioning of the turbines. With this contract, Tata Power has taken another step forward in bringing world class technology to India. Just as Tata Power was the first company to usher in the era of 500 MW units in India, it has also notched another first – the 800 MW era.

 

This move further reinforces Tata Power’s commitment to accelerate the pace of the project by not only ordering the equipments quickly but also tying up with world class technology providers like Toshiba and Doosan Heavy Construction Ltd., ahead of schedule. Thereby, increasing the possibility of contributing to the capacity addition within the 11th Five-Year Plan itself.

Mr Prasad R. Menon, Managing Director-Tata Power said “This agreement is a significant step towards our drawing on the technical expertise of a strong international player like Toshiba. This partnership will provide an excellent technical solution for Mundra UMPP which is also cost competitive. ”

Mr. Atsuhiko Izumi, Vice President of Thermal and Hydro Power Systems and Services Division - Toshiba’s Power Systems Company said  “We are very happy to partner with Tata Power for the first 4000 MW Mundra UMPP and support their pioneering effort of bringing 800 MW sized unit based on super-critical technology to the country. Toshiba intends to bring the benefits of its long standing international experience to the Ultra Mega Project in India.”

 

Tata Power recently announced the signing of a contract for complete Boiler Island scope on EPC basis with Doosan Heavy Industries and Construction Co. Ltd., Korea. The contract for complete Boiler Island includes super critical boilers for the 5 units of 800 MW each, based on super critical technology required for such large sized units. Thus, bringing in the first 800 MW Unit to India, thereby ushering India into the era of 800 MW super-critical technology.

 

The Company has also acquired Coastal Gujarat Power Limited, a Special Purpose Vehicle (SPV) formed for Mundra UMPP. The signing of the Share Purchase agreement, Escrow agreement, Hypothecation agreement, and Port Service agreements, by PFC, bankers, procurers and Tata Power, now allows the Company to go ahead with the various project development activities. Coastal Gujarat Power Limited has also signed Power Purchase Agreements (PPAs) with seven procurers (distribution licensees) for the sale of contracted capacity and supply of 4000 MW electricity to these licensees but it delineates responsibility of  procurers and Company for the next important milestone. It also nominated Gujarat Distribution Company as the lead procurer on behalf of all procurers.

 

OTHER INFORMATION:

Contacts

For Power Supply to Consumers in Mumbai
Technopolis Knowledge Park
Nelco Compound
Mahakali Caves Road
Andheri, Mumbai 400 093
Tel: (91 22) 56688357/56688359/56688360/56688554
Fax: (91 22) 5668 8363

 

Call Center
Toll Free No. : 1600-22-7575
Phone No. : (91 22) 2577 4824 / 2577 4825/2577 4830

 

For Power Projects and Related Services
The Tata Power Company Limited
Strategy and Business Development Department
Corporate Center Block A,
34 Sant Tukaram Road, Carnac Bunder,
Mumbai - 400 009
Tel : (91 22) 5665 8733
Fax : (91 22) 5665 8626

 

For Broadband Communication
Tata Power Broadband Company Limited
4th Floor, India-Re House, Sterling Cinema Building, Murzban Road
Mumbai - 400 001
Tel : (91 22) 56658796
Fax : (91 22) 56658787

tatapower@tatapower.com

 

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.39.33

UK Pound

1

Rs.81.70

Euro

1

Rs.57.67

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

8

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

9

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--RESERVES

1~10

8

--CREDIT LINES

1~10

8

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

73

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions