MIRA
INFORM REPORT
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Report Date : |
13.01.2011 |
IDENTIFICATION DETAILS
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Name : |
DPSC LIMITED |
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Registered
Office : |
Centre For Excellence Plot No. X-1, 2 and 3, Block Ep Sectro V, |
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Country : |
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Financials (as
on) : |
31.03.2010 |
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Date of
Incorporation : |
02.07.1919 |
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Com. Reg. No.: |
21-003263 |
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CIN No.: [Company Identification
No.] |
L40105WB1919PLC003263 |
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TAN No.: [Tax Deduction & Collection
Account No.] |
CALD03146D |
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PAN No.: [Permanent Account No.] |
AABCD0340G |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on
the Stock Exchanges |
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Line of Business
: |
Manufacturer of Thermal Power and Electricity Generation. |
RATING & COMMENTS
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MIRA’s Rating : |
A (68) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 4204508 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old and well established company having fine track.
Financial position of the company appears to be sound. Fundamentals are strong
and healthy. Trade relations are reported as fair. Business is active.
Payments are reported to be regular and as per commitments. The company can be considered good for any normal business dealings at
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY
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Name : |
Mr. R.R. Bannergy |
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Designation : |
Accountant |
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Contact No.: |
91-33-23574308 |
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Date : |
12.01.2011 |
LOCATIONS
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Registered Office : |
Centre For Excellence Plot No. X-1, 2 and 3, Block Ep Sectro V, Salt Lake,
Kolkata – 700091, West Bengal, India |
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Tel. No.: |
91-33-23574308 / 4309 / 4310 |
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Fax No.: |
91-33-23577016 |
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E-Mail : |
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Website : |
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Location : |
Owned |
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Factory : |
Post office Sunder Chak, District Burdwan, Kolkata – 713360, West
Bengal, India |
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DIRECTORS
AS ON 26.06.2010
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Name : |
Mr. Hemant Kanoria |
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Designation : |
Chairman |
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Name : |
Mr. Sunil Kanoria |
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Designation : |
Director |
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Name : |
Mr. Amit Kiran Deb |
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Designation : |
Director |
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Name : |
Mr. Nand Gopal Khaitan |
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Designation : |
Director |
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Name : |
Mr. Jyoti Kumar Poddar |
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Designation : |
Director |
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Name : |
Mr. Debi Prasad Patra |
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Designation : |
Managing Director |
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KEY EXECUTIVES
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Name : |
Mr. Saikat Bardhan |
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Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2010
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding
of promoters and Promoter Group |
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1. Promoters |
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a. Indian Promoters |
2420462 |
57.17 |
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b. Foreign Promoters |
-- |
-- |
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2. Persons Acting in Concert |
72417 |
1.71 |
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Sub Total |
2492879 |
58.88 |
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(B) Public
Shareholding |
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1. Institutions |
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Mutual Funds / UTI |
-- |
-- |
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Financial Institutions / Banks |
30158 |
0.71 |
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Insurance Companies |
-- |
-- |
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Foreign Institutional Investors |
-- |
-- |
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Sub Total |
30158 |
0.71 |
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Others |
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a. Bodies Corporate |
1609046 |
38.00 |
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b. Indian Public |
98097 |
0.32 |
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c. Non-Resident Indians |
2899 |
0.07 |
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d. Public Sector Company |
150 |
0.00 |
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e. CM/CC |
639 |
0.02 |
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Sub Total |
1710831 |
40.41 |
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Grand Total |
4233868 |
100.00 |
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BUSINESS DETAILS
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Line of Business : |
Manufacturer of Thermal Power and Electricity Generation. |
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Imports : |
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Products : |
Raw material |
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Countries : |
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Terms : |
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Selling : |
Cash, Credit |
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Purchasing : |
Cash, Credit (30 days) |
Production Status as on : 31.03.2010
Licensed and Installed Capacity and actual production for the year :
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Particulars |
Units |
31.03.2010 |
31.03.2009 |
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Licensed Capacity |
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Not Applicable |
Not Applicable |
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Derated installed capacity (as certified by
the company’s Technical Experts) |
kilpwatt |
42200 |
42200 |
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Actual generation of electrical energy |
Kwh |
206487755 |
206157628 |
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Purchase of Energy |
Kwh |
816440401 |
783006255 |
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Khw |
965834962 |
928549831 |
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Raw material (fuel) consumed –coal (all
indigeneous) |
Tones |
176877 |
171336 |
GENERAL INFORMATION
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Customers : |
Corporate / Government |
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No. of Employees : |
900 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Lodha and Company Chartered Accountant |
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Associates : |
Descon Limited |
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Subsidiary of Associate : |
Descon Soft Limited |
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Holding Company : |
Orbis Power Venture Private Limited |
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Ultimate Holding Company : |
Indian Power Corporate Limited |
CAPITAL STRUCTURE
AS ON 31.03.2010
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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16000 |
10% ‘A’ Cumulative Preference Shares |
Rs.10/- each |
Rs. 1.600 Millions |
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12000 |
10% ‘B’ Cumulative Preference Shares |
Rs.10/- each |
Rs. 1.200 Millions |
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4720000 |
Ordinary Shares |
Rs.10/- each |
Rs. 47.200 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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3153868 |
Ordinary Shares |
Rs.10/- each |
Rs.31.539
Millions |
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72000 |
Ordinary Shares (payment other than in cash) |
Rs.10/- each |
Rs. 0.720
Million |
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1008000 |
Ordinary Shares |
Rs.10/- each |
Rs.10.080
Millions |
Note : of the above Ordinary Shares of Rs. 10/-
each
a)
2420455 (Previous Year
Nil) Shares are held by Orbis Power Venture Private Limited, the Holding
Company; and
b)
72417 (Previous Year Nil)
Shares are held by Indian Power Corporation Limited the Ultimate Holding
Company.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
42.339 |
42.339 |
42.339 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1008.788 |
871.451 |
800.711 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1051.127 |
913.790 |
843.050 |
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LOAN FUNDS |
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1] Secured Loans |
154.375 |
264.045 |
403.418 |
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2] Unsecured Loans |
111.206 |
102.350 |
191.395 |
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TOTAL BORROWING |
265.581 |
366.395 |
594.813 |
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DEFERRED TAX LIABILITIES |
135.415 |
151.110 |
138.130 |
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TOTAL |
1452.123 |
1431.295 |
1575.993 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1111.010 |
1110.338 |
977.791 |
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Capital work-in-progress |
61.158 |
46.198 |
106.380 |
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INVESTMENT |
40.871 |
47.422 |
51.676 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
91.398 |
91.585 |
81.789 |
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Sundry Debtors |
1184.116 |
1071.436 |
850.495 |
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Cash & Bank Balances |
68.155 |
40.562 |
120.584 |
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Other Current Assets |
15.654 |
10.941 |
8.940 |
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Loans & Advances |
67.161 |
55.870 |
75.195 |
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Total
Current Assets |
1426.484
|
1270.394 |
1137.003 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Sundry Creditors |
1018.091 |
906.120 |
NA |
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Other Current Liabilities |
33.040 |
28.774 |
611.160 |
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Provisions |
136.269 |
110.700 |
92.467 |
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Total
Current Liabilities |
1187.400
|
1045.594 |
703.627 |
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Net Current Assets |
239.084
|
224.800 |
433.376 |
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MISCELLANEOUS EXPENSES |
0.000 |
2.537 |
6.770 |
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TOTAL |
1452.123 |
1431.295 |
1575.993 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SALES |
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Income |
4104.680 |
3791.317 |
3198.980 |
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Other Income |
34.641 |
40.981 |
29.180 |
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TOTAL (A) |
4139.320 |
3832.298 |
3228.160 |
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Less |
EXPENSES |
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Energy Purchased |
2902.499 |
2739.427 |
2296.078 |
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Generation, Distribution, Administration and other expenses |
1051.736 |
888.125 |
821.721 |
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Exceptional Items |
54.405 |
0.000 |
0.000 |
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TOTAL (B) |
3899.830 |
3627.552 |
3117.799 |
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
239.490 |
204.746 |
110.361 |
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Less |
FINANCIAL
EXPENSES (D) |
30.086 |
54.331 |
48.119 |
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PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
209.404 |
150.415 |
62.242 |
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Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
53.720 |
46.639 |
35.411 |
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PROFIT BEFORE
TAX (E-F) (G) |
155.684 |
103.776 |
26.831 |
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Less |
TAX (I) |
13.410 |
28.082 |
16.336 |
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PROFIT AFTER TAX
(G-I) (J) |
142.274 |
75.694 |
10.495 |
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Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
267.409 |
199.800 |
43.126 |
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Less |
APPROPRIATIONS |
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|
Dividend |
4.234 |
4.234 |
4.234 |
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Income Tax on Dividend |
0.703 |
0.720 |
0.720 |
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BALANCE CARRIED
TO THE B/S |
400.282 |
267.409 |
199.800 |
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Earnings Per
Share (Rs.) |
33.60 |
17.88 |
2.48 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2010 |
30.09.2010 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
985.750 |
1101.140 |
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Total Expenditure |
|
934.910 |
1041.790 |
|
PBIDT (Excl
OI) |
|
50.840 |
59.350 |
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Other Income |
|
2.800 |
5.710 |
|
Operating
Profit |
|
53.630 |
65.060 |
|
Interest |
|
3.600 |
3.940 |
|
Exceptional
Items |
|
15.260 |
0.000 |
|
PBDT |
|
65.280 |
61.120 |
|
Depreciation |
|
13.500 |
13.740 |
|
Profit
Before Tax |
|
51.780 |
47.370 |
|
Tax |
|
15.350 |
17.420 |
|
Reported PAT |
|
36.430 |
29.960 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
36.430 |
29.960 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
3.43
|
1.97 |
0.32 |
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Net Profit Margin (PBT/Sales) |
(%) |
37.90
|
2.73 |
0.83 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
6.13
|
4.35 |
1.26 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.14
|
0.11 |
0.03 |
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Debt Equity Ratio (Total Liability/Networth) |
|
1.38
|
1.54 |
1.54 |
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|
Current Ratio (Current Asset/Current Liability) |
|
1.20
|
1.21 |
1.61 |
LOCAL AGENCY FURTHER INFORMATION
Sundry Creditors
Details :
|
Particulars |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
Dues to Micro Enterprises and Small Enterprises |
0.077 |
0.334 |
NA |
|
Others |
1018.014 |
905.786 |
NA |
|
|
|
|
|
|
Total |
1018.091 |
906.120 |
NA |
NOTE :
- Represents amount
due to micro enterprises and small enterprises (identified during the
year on the basis information available with the management). No. balance
is outstanding for 45 days or more. Interest in terms of Micro, small and
Medium Enterprises Developments Act, 2006 has either been paid except Rs.
0.007 millions or accrued during the year and remaining unpaid as 31st
March, 2010
- Sundry
Creditors include Rs. 14.832 millions (previous Years Rs. 14.980
millions) being advance from Consumers .
- no amount
was due for deposit as on the Balance Sheet date.
Fixed Assets :
- Land Freehold
- Land Leasehold
- Building
- Plant and Machinery
- Mains, Meters and Transformers
- Vehicles
- Computer
- Furniture
- Computer Software Acquired
REVIEW
OF OPERATIONS :
The Company had yet another successful year of operation, recording substantial improvement in its overall performance with a Pre-tax Profit of Rs.155.684 millions for the year ended 31"' March, 2010 registering a 50 % increase over the profit of Rs 103.776 millions in the previous year. This outcome was facilitated by a satisfactory tariff revision allowed by the Hon'ble West Bengal Electricity Regulatory Commission (WBERC) for the year and improvements in operational efficiencies achieved by the Company.
Despite the subdued economic recovery that took place during the year, sales volume increased by 4 % on a year to year basis. This increase in sales was attributable to increased demand from existing consumers as well as to the addition of new consumers. The Company's relationship with its consumers continued to remain cordial and satisfactory by dint of the quality service rendered to them and reliability of power supplies.
TARIFF
:
The Hon'ble West Bengal Electricity Regulatory Commission (the Commission) issued its Tariff Order for the years 2008-09 to 2010-11 in the end of September 2008. Under the Annual Performance Review (APR) to be carried out at the end of each year by the Commission on the basis of the audited accounts, the Annual Revenue Requirement (ARR) approved for the year under review is subject to further revision on the basis of actual performance and the difference between the revised ARR and actual sales revenue is adjusted against the ARR of subsequent year(s). The Commission has, till date, completed the APR for the years 2006-07 and 2007-08 and made consequential adjustments against the ARRs for 2008-09 and 2009-10, respectively, at the time of approving tariffs for those years. The Company is of the opinion that the revised ARRs approved by the Commission for the years 2006-07 and 2007-08 are not in accordance with the applicable Tariff Regulations framed by the Commission and has hence filed appeals there against in the Appellate Tribunal for Electricity. The Commission is yet to issue the APR Order for 2008-09 and notify the revised tariffs applicable for theyear2010-11.
Projects :
The Company's capital expenditure plans are undertaken with five objectives. These are - ensuring better quality & reliability of supply to its consumers, augmenting power delivery infrastructure to cater to increasing demand, reduction of technical losses, improving its operational efficiencies and developing self sufficiency in generation to meet the emerging challenges of increasing competition in the future.
In furtherance of these objectives, the Company has envisaged short and mid term plans for augmenting and adding to its existing T & D network. Such plans envisage segregation of 33 kV bus and installation of 14 panel 11 kV switchgear at Bankola receiving station, installation of 2"d 7.5 MVA transformer, one 33111 kV transformer and one 33 kV feeder in Gopalpur-Sen Raleigh receiving station, one 33 kV overhead line and additional 33 kV bay along with another 7.5 MVAtransformer at lkra receiving station, besides other routine capital expenditure within a period of one year.
The Company has also proposed construction of a 220133 kV sub station at J.K. Nagar, augmentation of old overhead and underground lines, construction of adequate numbers of transformers and LT network to supply power to Shristinagar, installation of 7.5 MVAtransformer at Haripur and conversion of existing feeders to 33 kV, construction of 33 kV substation at Dhasal, construction of 33111 kV substation at Parbelia, Chalbalpur and Burn Standard Works and construction of adequate numbers of 33 kV feeders and 11 kV feeders to evacuate powerwithin a period of three years. Your Company also proposes to construct a 3311 1 kV substation in Andal area and install a 15 MVAtransformerat Parbelia to cater to future load growth.
The Company has received the in principle approval of the Commission for the preliminary expenditure on the proposed 2 X 250 MW thermal power station at Dishergarh. Work on obtaining the necessary statutory approvals and clearances are progressing satisfactorily while negotiations for lease of land owned by the State Government and Eastern Coalfields Ltd. Are at an advanced stage.
Keeping in view the relatively long period that will be taken to commission the new 500 MW power station, the Company is simultaneously examining the techno-economic feasibility of replacing the existing Dishergarh power station units with a power plant of 8 MW to 10 MW capacity, as also setting up one 60 MW to 80 MW power plant at Chinakuri in addition to the existing units there. Such measures to augment the Company's generation base with cost effective and modern technology are capable of being implemented in a short time span and once commissioned, will enable the Company to not only decrease its dependence on imports of power from other sources but is also expected to enable reduction of its overall tariffs to consumers. Implementation of the two projects are subject to receipt of necessary regulatory approvals, and, in the case of the Chinakuri project, to renegotiation of the existing lease terms of the Chinakuri Power Station with Eastern Coalfields Ltd.
Disinvestments of Company’s Shares by
Majority Of Shareholders :
As reported last year, the proposed disinvestment of shares of the Company by Andrew Yule & Company Limited, Life lnsurance Corporation of lndia Limited, United lndia lnsurance Company Limited, Katras Jherriah Coal Company Limited and The Bengal Coal Company Limited ("the Sellers") was completed during the year through Competitive Bidding Process where MIS. Orbis Power Venture Private Ltd along with Person Acting in Concerts- MIS. Srei Infrastructure Finance Ltd and MIS. lndia Power Corporation Ltd ("the Acquirer") was identified as the qualified highest bidder in the said bidding process with a winning bid of Rs. 710 per share and consequent upon signing of the Share Purchase Agreement and Supplementary Agreement by the Sellers and the acquirer on 28.01.2010, the acquirer has acquired 24,20,455 shares representing 57.17% shares of DPSC Ltd through off market transfer.
Promoter of the Company :
The Acquirer after the above referred acquisition, has made an Open Offer to the shareholders of the Company, in terms of the Securities and Exchange Board of lndia (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the "Regulations"), to acquire additional 20% of the fully diluted equity share capital of the Company at a price of Rs. 7101- per share. The Offer opened on 31" March, 2010 ended on lgth April, 2010. Upon successful completion of the Offer, the aggregate shareholding of the Acquirer stands increased to 91.14% of the paid up equity share capital of the Company as at 30thApril, 2010. MIS. Orbis Power Venture Private Ltd has therefore become the promoter of the Company as defined under Regulation 2(h) of the Regulations and has acquired control and management of the Company, as defined in Regulation 2(c) of the said Regulations.
MANAGEMENT DISCUSSION ANDANALYSIS
FORWARD LOOKING STATEMENTS
Statements in this Management Discussion and Analysis describing the Company's objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include cost of fuel, determination of tariff and such other charges and levies by the regulatory authority, changes in government regulations, tax laws, economic developments within the country and such other factors.
INDUSTRY STRUCTURE AND DEVELOPMENTS :
Power
is an essential requirement for all facets of their life. It has been
recognized as a basic human need and a critical infrastructure on which the
socio-economic development of the country depends. Supply of Power at a
reasonable rate to rural lndia is essential for its overall development. Equally
important is availability of reliable and quality power at competitive rates to
Indian industry to make it globally competitive and to enable it to exploit the
tremendous potential of employment generation. Power is a vital building block
for development of all sectors of the economy and is at the heart of every
aspect of day-to-day lives. However, in
The National Electricity Policy aims at achieving the following objectives:
- Access to Electricity -Available for all households in next five years
- Availability of Power - Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning reserve to be available.
- Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates.
- Per capita availability of electricity to be increased to over 1000 units by 201 2.
- Minimum lifeline consumption of 1 unit/household/day as a merit good byyear2012.
- Financial Turnaround and Commercial Viability of Electricity Sector.
- Protection of consumers' interests.
The existing deficit along with the aforesaid objectives has created a huge scope for investment in the power sector. To achieve the desired objectives, Government of lndia introduced the Ultra Mega Power Projects through Competitive Tariff Based Bidding. These projects have attracted many players to the sector.
While coal based power plants continue to dominate the sector, there is awareness to enlarge the basket of inputs and include renewable energy sources along with gas based projects and hydro projects. Efforts are being made to increase the generating capacity with all such fuels.
Commencement of two Power Exchanges namely; Indian Energy Exchange and National Power Exchange Limited, will lead to truly competitive power market as trading on the Exchanges will aid discovery of true price on the national level and will help in attracting much needed investment in this capital intensive sector.
GENERATION
lndia
has the fifth largest generation capacity in the world with an installed
capacity of 152 GW, which is about 4 percent of global power generation. The
average per capita consumption of electricity in lndia is estimated to be 704
kwh during 2008-09. However, this is fairly low when compared to that of some
of the developed and emerging nations such
TRANSMISSION:
The current installed transmission capacity is only 13 percent of the total installed generation capacity. With focus on increasing generation capacity over the next 8-10 years, the corresponding investments in the transmission sector is also expected to be augmented. The Transmission and Distribution Network in lndia is the third largest in the world covering 5.7 million circuit kilometers (ckt km). To meet the total demand by 2012, a strong transmission network is also necessary. An additional 60,000 ckt km of transmission network is expected by 201 2. Power Grid Corporation of lndia Limited (PGCIL) has to play key role in building up the transmission capacity at the national grid level. Private sector participation in the sector has also been initiated. While the introduction of the power exchanges has initiated the transition of power sector from a monopoly market to a competitive, efficient and liquid market, the growth and widespread use thereof will depend on seamless transmission network across the length and breadth of the country.
DISTRIBUTION:
Distribution
is the most critical segment of the electricity business chain. The real
challenge of reforms in the power sector lies in efficient management of the
distribution sector. While some progress has been made at reducing the
Transmission and Distribution (T&D) losses, these still remain substantially
higher than the global benchmarks, at approximately 33 percent. In order to
address some of the issues in this segment, reforms have been undertaken
through unbundling the State Electricity Boards into separate Generation,
Transmission and Distribution units and privatization of power distribution has
been initiated either through the outright privatization or the franchisee
route; results of these initiatives have been somewhat mixed. While there has
been a slow and gradual improvement in metering, billing and collection
efficiency, the current loss levels still pose a significant challenge for
distribution companies going forward. The privatization of distribution circles
has opened up opportunities for the private sector. Thirteen states are
expected to privatize their distribution circles through competitive bidding
over the next 2-3 years. The larger participation of private players is likely
to see much needed efficiency improvement and reduction in T&D losses.
Government of
RENEWABLE ENERGY:
The
adverse effects of climate change on account of carbon emissions and
utilization of non-renewable fuel sources for generation of power have become
an area of major concern throughout the world. Most of the countries have
recognised the importance of renewable sources in reducing the global warming.
Many countries have imposed the Renewable Power Purchase Obligations on power
generators and distributors. In
TARIFF REGULATIONS:
The Central Electricity Regulatory Commission has notified many regulations during the year, the most important being for the tariff for the period 2009-2014. Noteworthy features of the new tariff regulations are: The post-tax return on equity is increased from 14.0% to 15.5% from 2009-10 onwards. In case of projects commissioned on or after 1st April, 2009, an additional return of 0.5% is to be allowed if such projects are completed within the time specified. The Advance against Depreciation (AAD) has been done away with and the depreciation rate has been increased to 5.28% for a period of 12 years. The Gross Station Heat Rate for coal station has been reduced from 2,450 kcallkwh to 2,425 kcallkwh and for gas based station; it has been fixed at 105% of manufacturers' guaranteed heat rate. Incentive will be provided to the Generator on Plant Availability Factor (PAF) Instead of Plant Load Factor (PLF)
OUTLOOK AND OPPORTUNITIES:
There are significant opportunities in generation sector for coal based plants at pithead or at coastal locations; Natural Gas ICNG based turbines at load centers or near gas terminals; Hydel power potential of 150,000 MW is untapped as assessed by the Government of India and Renewable energy - Solar, Wind, Biogas has unlimited potential. Opportunities are also available in transmission network ventures and in the distribution sector once privatization of distribution starts in full earnest. However, land acquisition, environmental clearances and fuel linkages are not easily available, leading to delayed start of projects. In spite of the drawbacks, investment opportunity of about US$200 \billion is foreseen over the next seven years. The increase in generation capacity planned and the continuing demand-supply gap provide attractive investment opportunities in all the facets of power sector. Power generation from alternate sources like hydel, nuclear and Renewable sources remain untapped to a large extent. These sources need to be explored to reduce dependence on Fossil fuels and to combat the effects of global warming. Power costs remain high due to high Aggregate Technical and commercial (AT&C) losses and low generation efficiencies. These areas need to be addressed to achieve the avowed objective of power for all at affordable cost.
COMPANY:
The
Company has been in the service of people through power generation and
distribution since the pre- independence days and has been guided by its unique
culture comprising 3 D's - Discipline,
Dedication and Devotion. The Company was initially set up to supply power to
Bengal Coal Company Limited and supply of power to the coalfields of the
nationalized coal companies in the Asansol- Raniganj belt in the state of
The Company has two generating stations at Chinakuri (30 MW) and Dishergarh (12.2 MW). It has also two 11 kV
networks, one covering Dishergarh and Chinakuri areas and the other covering Seebpore, Luchipur, Satgram and
Bankola areas. The generating stations supply 30 MW power out of the total requirement of 115 MW (avg.) in the
allotted
licensed area. The Company's generation meets about 19-20% of its system
demand, while the balance 81-80% is sourced from Damodar Valley Corporation
(DVC) and WBSEDCL. The Company has commissioned 33 kV substations at
The Company has short term and mid term future plans for augmentation1 strengthening of the existing T & D network to be better able to serve its existing consumers and provide ready power to emerging load centres in its licensed area. For the discharge of its universal service obligations, the Company is also planning to increase its low voltage distribution network for meeting domestic and commercial loads and further broaden its consumer base.
The Company also proposes construction of a 220133 kV sub station at J.K. Nagar for sourcing additional power from WBSEDCL, thereby establishing connectivity with the State transmission grid and increasing flexibility in the import and export of power.
The Company has received the in principle approval of the State Regulatory Commission for the proposed 2 X 2501300 MW thermal power station at Dishergarh. Work on obtaining the necessary statutory approvals and clearances are progressing satisfactorily while negotiations for lease of land owned by the State Government and Eastern Coalfields Ltd. are at an advanced stage.
INTERNAL CONTROL SYSTEMS:
The Company has adequate internal control
systems and procedures commensurate with the size of the Company, which include
internal audit and review by external firm of Chartered Accountants and
pre-audit of payments by internal team of Accountants. All major payments and
statutory payments pass through the strict scrutiny by pre-audit team before
release of the same to parties. The internal control measures such as defining
the various levels of the authority through delegation of powers, well laid down
purchase procedures, checks and balances in the financial system to safeguard
the Company's assets, budgetary controls and variance analysis are in place.
The procurement and operational maintenance activities are planned well in
advance to avoid any possible risk of late delivery of materials, delay in
attending to maintenance needs etc. The Company stores and maintains all the
relevant data and information as a back up, to avoid any possible risk of
losing important business data. The qualified and independent Audit Committee
of the Board quarterly reviews the internal audit reports and the status of
implementation of actions recommended.
HUMAN RESOURCES:
The Company continued in its endeavor to impart
appropriate and relevant training to its employees to equip them to meet the
challenges that are ahead and to enhance their performance in the best interest
of the Company. The Company has also taken up an exercise on career growth
& planning by identifying potentials & training needs of employees by
engaging professionals in the field. The focus of the training has been to
create high performance culture as well as bringing an improvement in the
organization for meeting consumers' needs. The Company maintained cordial
industrial relations throughout the year under review. The manpower strength of
the Company is 934 at the end of the Financial Year 2009-1 0.
SEGMENT WISE REPORT:
The Company has no separate segments and
hence there is no reporting on the segment wise report.
RISKSAND CGNCERWS:
The Company has systems and practices in
place to help in identifying potential risks and taking measures to mitigate
those risks. The Risk Management framework of the Company addresses all
potential risks including Fuel risks (availability & pricing), Regulatory
Risks (Tariff Regulation, Environment Regulation etc.), Consumer Risks (Revenue
Realization, Transmission Risks), Assets Risks (Natural Calamity etc.), Human
Resource Risks and IT Risks.
The West Bengal Electricity Regulatory
Commission (WBERC) has notified Multi Year Tariff Regulations. It has specified
various operating norms and prescribed controllable and non-controllable
expenses. The Company's Tariff Petition for 2008- 09 to 2010-11 filed pursuant
to these Regulations was considered by WBERC. While framing such norms, the
Commission has been influenced by the prevailing trend of efficiencies achieved
by modern, large capacity power plants leading to setting of performance norms
which the old, small capacity power plants at Dishergarh and Chinakuri are
incapable of achieving. While the Company has put in all the efforts for
efficiently carrying out its operations, technical limitations of the existing
units prevents it from meeting the specified norms, leading to inability to
recover full costs of operations from the tariff revenues. This loss of revenue
remains an area of concern and the short and mid term plans for setting up new
generation capacities, as detailed in the Directors' Report, are aimed at
addressing this risk.
The demand from Eastern Coalfields Ltd., the
main customer of the Company, is relatively stable and registers a nominal
increase in the absence of development of new coalfields. Sales to WBSEDCL are
anticipated to reduce substantially over the next few years with the
progressive strengthening of their transmission network in the licensed area,
enabling them to source cheaper power from the state owned generating company.
However, sales to other consumers maintained an encouraging trend and increased
by 4 % on a year on year basis despite the economic downturn. The establishment
of industrial parks by the State Government in various areas in the licensed
area of the Company is leading to an upsurge in demand, which the Company is
presently unable to cater to fully in the absence of adequate availability of
power from the existing sources. The establishment of the proposed 220133 kV
substation as well as the new generation capacities by the Company coupled with
the substantial investments proposed in augmenting the transmission &
distribution network are aimed at removing this constraint, besides increasing
the competitiveness of its tariffs, thus enabling the Company to cater to the
potential increase in demand in the existing licensed area. In parallel, the
Company is also examining the feasibility of seeking expansion of the existing
licensed area so as to be able to achieve a higher organic growth.
The majority of the power generation plants in the country use coal and gas as fuel. While domestic production and price has remained stable during the year under consideration, increased demand and usage of coal following capacity additions have increased the demand and supply gap, necessitating the import of coal. High dependence on indigenous coal could, therefore, expose the Company to potential availability risks. In respect of imported coal, price volatility in international market, exchange fluctuation risk and transport constraints, coupled with the relatively small coal requirement of the Company due to its small generation capacity, makes import of coal a nonviable option at present. The Company has, therefore, taken necessary steps to maintain adequate supplies of coal from domestic sources to maintain generation at optimal levels.
The Company may face risks through increase in captive power capacity by its consumers. However, the strong and established distribution network with a track record of uninterrupted power supply makes the Company well equipped to meet this challenge.
The
operations of the Company are subject to risks generally associated with power
generation, transmission and distribution businesses and the related
transportation, receipt and storage of fuels and environmental issues.
UNAUDITED
FINANCIAL RESULTS FOR THE QUARTER/ HALF YEAR ENDED 30.09.2010
|
Particulars |
QUARTER ENDED 30.09.2010 (UNAUDITED) |
HALF YEAR ENDED 30.09.2010 (UNAUDITED) |
|
a) Net Sales / Income from Operations |
1098.390 |
2080.407 |
|
b) Other Operating Income |
2.748 |
6.476 |
|
Total Operating Income |
1101.138 |
2086.883 |
|
Expenditure |
|
|
|
(a) (Increase)/decrease in Stock in Trade |
-- |
-- |
|
(b) Consumption of Raw Materials |
31.779 |
156.525 |
|
(b) Purchase of Energy |
890.026 |
1585.028 |
|
(c) Employees Cost |
77.892 |
155.353 |
|
(d) Depreciation |
13.744 |
27.246 |
|
(e) Other Expenditure |
42.096 |
78.802 |
|
Total Expenditure |
1055.537 |
2003.962 |
|
Profit / (Loss) From Operations before other Income Interest & Exceptional Items |
45.601 |
82.931 |
|
Other Income |
5.710 |
8.503 |
|
Profit/(Loss) before Interest and Exceptional items |
51.311 |
91.434 |
|
Interest |
3.938 |
7.537 |
|
Profit / (Loss) after interest before Exceptional items |
47.373 |
83.897 |
|
Deferred Interest |
-- |
-- |
|
Net Profit/(Loss) after exceptional item |
47.373 |
99.154 |
|
Tax Expenses |
17.417 |
32.767 |
|
Net Profit/(Loss) after tax |
29.956 |
66.387 |
|
Paid Up Equity Share Capital ( Face Value of the share Rs.10/- each ) |
42339 |
42339 |
|
Public Share
Holding |
|
|
|
Number of Shares |
296267 |
296267 |
|
Percentage of Shareholding |
7% |
7% |
|
Promoters and Promoter group share holding |
|
|
|
a) Pledged / Encumbered |
|
|
|
- Number of Shares |
-- |
-- |
|
- Percentage of share (as a % of the total shareholding of promoter and promoter group) |
-- |
-- |
|
- Percentage of shares(as a % of the total share capital of the company) |
-- |
-- |
|
b) Non-encumbered |
|
|
|
- Number of Shares |
3937601 |
3937601 |
|
- Percentage of Share (as a % of the total shareholding of promoter and promoter group) |
100% |
100% |
|
- Percentage of Share (as a % of the total share capital of the company) |
93% |
93% |
Note :
1. The above results were reviewed by the audit committee and approved by the Board of Directors of the Company at its meeting held on 12.11.2010
2. Net sales/Income from Operations for the Half year ended 30.09.2010 have been arrived at the basis of Tariff Order issued by the Hon’ble west Bengal Electricity Regulatory Commission (WBERC) for the year 2010-11 on 29.07.2010 which has been Implemented during the current quarter with respective effect from April, 2010. Accordingly, Net Sales/Income form Operations for the quarter ended 30.092010 Includes additional revenue.
3. The Company being
engaged in Generation and Distribution of power in the licensed area in India,
has a single segment in terms of Accounting Slandered (AS) 17 segment Reporting
5. Exceptional item
represents profit on sale of certain long term investments.
6. No Investors
complaints were pending at the beginning of the quarter, no complaints was
received during the quarter and no complaints was lying under solved as on 30th
September 2010.
7. Previous periods
figures have been rearranged / regrouped where necessary
8. The financials
results for the quarter ended 30th September 2010 of the company
have been subjected to a ‘ Limited Review” by the statutory Auditors of the
company.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records 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. 45.16 |
|
|
1 |
Rs. 70.64 |
|
Euro |
1 |
Rs. 58.68 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--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 |
|
68 |
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 |
Capability to overcome financial difficulties seems comparatively below
average. |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.