Directors' report

Break up in Corporate Cadre

Engineering Professionals - 1742 Other Professionals - 640

XVI Public Deposits
The Corporation has stopped accepting the deposits from Public from Nov. 2002. Deposits from past and present employees were accepted/renewed till September 2005. At the end of the year, unclaimed deposits stood at `14.34 lakhs. Unclaimed deposits over 7 years have been transferred to Investors Protection & Education Fund.
XVII Auditors
(i) The C&AG have appointed M/s Ramraj & Company, Chartered Accountants, as the Statutory Auditors for the year 2011-12. The auditors visited all accounting units, verified the records, obtained explanations and finalised the audit work in a reasonable time.

(ii) External Chartered Accountants were appointed during the year 2011-12, in order to strengthen the Internal Audit at RTPS, BTPS and Hydro stations.

(iii)Cost Audit compliance: Government of India has introduced cost audit for Generation Companies from financial year 2005-06. The Company has appointed M/s KPR & Associates, Cost Accountants as Cost Auditors for this year. Cost Auditors have carried cost audit and have furnished their report and the same will be filed with MCA after taking the same on record.
XVIII Review by the Comptroller & Auditor General
Comments on working results of the Corporation by the Comptroller and Auditor General of India, forming part of this will be appended when received.
XIX Particulars as per Companies (Particulars of Employees) Rules 1975 and as amended

None of the employees of the Company was in receipt of remuneration amounting to `60,00,000 and above per annum or at the rate of `5,00,000 and above per month during the financial year.

XX Subsidiary Company and allied activities

The Corporation has two Subsidiary Companies, viz.: (i) KPC Bidadi Power Corporation (Private) Ltd. & (ii) Karnataka EMTA Collieries Ltd. which have been established to implement the combined cycle project at Bidadi as a joint venture and for development of new coal block to be allotted to KPCL respectively. Statements as required under Section-212 of the Companies Act are appended.

XXI IT and Computerization
The Corporation has taken a number of IT initiatives to meet its business commitments.
1. Hardware platform:

• 
  Provided Blade Server with windows 2008 at corporate and major project offices.
  
• 
  Provided Core to Duo/i3 PC’s with Windows 7 and MS office 2010 software and printers up to the level of Executive Engineers and all critical users at corporate and major project offices.
  

2. Connectivity:

• 
  Established OFC connectivity between all major power houses and office complex, Local Area Network and Wide Area Network through MPLS/MLLN circuits of BSNL at corporate and major project offices.
  
• 
  Provided internet and mailing up to the level of Executive Engineers and critical users
  

3. Application Software:

Following Application Software have been developed:

a	Fuel Management System
b	Integrated Inventory Management System
c	Cash & Compilation Management System
d	Salary & Pension
e	Provident Fund
f	Generation Management System
g	Bank Guarantee Management System
h	Human Resource Information System
i	Disciplinary Proceedings System
j	In-house Training System
k	Fixed Asset Management System (Development outsourced and maintenance in-house)
l	Hospital Management System
m	Projects Generation Monitoring System
n	Stores Accounting System(RTPS)
o	Plant Monitoring System(RTPS)
p	Inward and outward
q	Schedule of Rates (under development)
r	On-line submission of applications for recruitment of Engineers
s	Website

4. Other software:

AutoCAD, STAAD, Adobe software are being used extensively at Design offices. Oracle 9i/11g database is used for all application software.

5. 
   E-procurement:
   

Government of Karnataka e-procurement portal is being used for procurement of goods and services as per the transparency act at corporate and major project offices.
XXII Corporate Communications

• 
  Various publications have been brought out
  
• 
  Media Relations: Maintaining goods rapport with print & Electronic media, news papers have published good articles on KPCL progress
  
• 
  House magazine “ Shakthivahini “ being published regularly to maintain internal relations, communication and motivating the hidden talent s of employees
  
• 
  Organized various meetings, functions and seminars, brainstorm session
  
• 
  Corporate film & laser show on KPCL were produced and screened during the annual day and other occasions and was attracted by the public. And Annual Report, Corporate Brochure and occasional brochures were also published
  
• 
  Corporate image building in news paper and magazines released on important occasions.
  
• 
  Develops relevant literature and documents of the company
  
• 
  Enhance the image of KPCL through various sponsorship and financial assistance to educational institutions, associations, hospitals, district festivals, sports personnel, and blind associations/orphanages at community service measures
  
• 
  Constant upgrading the image of the company and maintain cordial relations with opinion makers and pressure groups etc.
  

XXIII Important Events

23.04.2011	Commencement of work of site leveling of Gas based Project at Bidadi
25.05.2011	Celebration of 120^th birth anniversary of Dr. BR Ambedkar at Bangalore
30.06.2011	5MW Solar PV plant at Shivasamudram is allotted to KPCL by NTPC Vidyut Vyapar Nigam Ltd, New Delhi under Jawaharlal Nehru National Solar Mission on tariff bidding basis. The estimated cost of the project is Rs.65 crores with an annual energy generation of 8.32 MU. Supply, erection and commissioning of the above project has been awarded to M/s BHEL on EPC basis through swiss challenge method and the LoA issued on 24.05.2011. Kumari Shoba Karandlaje,  Hon’ble Energy Minister, GoK & Vice-Chairperson, KPCL laid the foundation stone for the project on 30^th June 2011 in the presence of dignitaries of GoK, KPCL & BHEL.
14.07.2011	Loan Agreement between RPCL & PFC for Rs. 5500 crores executed for funding the Super Critical 2x800 MW Yermarus TPS in the presence of Kumari Shobha Karandlaje Minister of Energy GOK, Sri Yogendra Tripathy, MD - KPCL & RPCL and Sri Rajeev Sharma, Director – Projects, PFC.
20.07.2011	KPCL 42^nd Foundation Day Celebration held at Chowdaiah Memorial Hall, Bangalore
15.08.2011	Independence Day Celebrated at Head Office,Bangalore
26.08.2011	Shri DV Sadananda Gowda, Hon’ble Chief Minister, GoK appointed Chairman of the Corporation
09.09.2011	KPCL Gerusoppa Project bagged Safety Award-2010 with silver shield from National Safety Organization Karnataka Division for Best safety maintenance
15.09.2011	151^st birth anniversary of Sir M Visveswaraya celebrated at Bharatiya Vidya Bhavan, Bangalore.
19.09.2011	National Training Centre for Solar Technology inaugurated at KPCL Trade centre building in co-ordination with the Ministry of new and renewable energy, New Delhi, GOI
29.09.2011	Cheque for `34.86 crore handed over to the Hon’ble Chief Minister being Dividend for the year 2010-11 to Govt. of Karnataka.
09.11.2011	Financial closure and execution of documents for equity participation by M/s IFCI Ltd., in Raichur Power Corporation Limited which is implementing the 2x800 MW super critical Thermal Power Plant of Yeramarus Project
23.11.2011	Karnataka Rajyotsava celebrated at Head Office,Bangalore
19.01.2012	Commencement of railway siding works of Gas based Project at Bidadi
27.01.2012	Synchronisation of BTPS 2^nd Unit 1x500 MW with oil
06.02.2012	Sri MR Kamble IAS, appointed as the Managing Director of KPCL
13.03.2012	Sharavathy Generating Station achieved record generation of 23.461 Million Units
22.03.2012	Gerusoppa Hydro Electric Project- 60 MW x 4 bagged National Award – Silver shield for Best performance during the year – 2009-10
25.07.2012	Shri Jagadish Shettar, Hon’ble Chief Minister, GoK appointed Chairman of the Corporation.

XXIV Directors’ Responsibility Statement

Pursuant to Section 217(2)(AA) of the Companies Act 1956, the Directors wish to state that to the best of their knowledge:

1. 
   in the preparation of the annual accounts for the year ending 31^st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;
   

2. 
   accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the corporation for the period under review;
   

3. 
   proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and
   

4. 
   Annual Accounts for the year 2011-12 have been prepared on a going concern basis.
   

XXV General

The Board would like to place on record its appreciation of the following:

• 
  Government of India, Government of Karnataka, the Comptroller & Auditor General of India and other agencies such as CEA, CWC, Registrar of Companies, KERC, and the Statutory Auditors for their assistance, guidance and cooperation;
  
• 
  Commercial Banks such as State Bank of India, Canara Bank, Syndicate Bank, State Bank of Mysore, Vijaya Bank, Union Bank of India, ICICI Bank, IDBI Bank, Bank of Baroda, Punjab National Bank, Indian Overseas Bank, Central Bank of India, Federal Bank, Allahabad Bank, Bank of India, ING-Vysya Bank, State Bank of Patiala, State Bank of Travancore, Andhra Bank, Corporation Bank, State Bank of Hyderabad, UCO Bank, United Bank of India, Indian Bank, Dena Bank, State Bank of Bikaner & Jaipur, South Indian Bank, Oriental Bank of Commerce, Karnataka Bank, Jammu & Kashmir Bank, Lakshmi Vilas Bank, Karnataka State Co-operative Apex Bank, The Dhanalakshmi Bank, Kotak Mahindra Bank, Punjab & Sind Bank, Karur Vysya Bank, Development Credit Bank, Bank of Maharastra, and financing agencies such as LIC, PFC, REC, IDFC, SIDBI, HUDCO, SAIL, ICICI Home Finance, HDFC for their financial support;
  

• 
  KPTCL, ESCOMS, PCKL, SLDC, RLDC and Electrical Inspectorate for their co-operation;
  
• 
  General public, for supporting the activities of the company;
  
• 
  Employees’ Unions and Associations, for their collective participation; &
  
• 
  Media – both electronic & print media for their efforts in spreading the awareness amongst the stake holders.
  

The Board would also like to place on record its appreciation of the dedicated services rendered by the employees of the Corporation.

for & on behalf of the Board of Directors

Sd/-

(Jagadish Shettar)

Chairman

Bangalore

Dated: 30.08.2012

(Disclosure of particulars in the report of Directors) Rules 1988
FORM – B

1. 
   Research and Development (R & D)
   

1. 
   Innovative activities:
   
   1. 
      Testing of transformer oil for condition monitoring in all the KPCL project sites has been done by utilizing mobile testing facility of CPRI, Bangalore.
      
   2. 
      Transformer oil regeneration plant is being utilized to increase the life of the transformer oil and transformer.
      
   3. 
      Replacement of numerical relays in Sharavathy and Nagjhari power houses as a part of renovation and Modernization works.
      
   4. 
      Remote control of Mani Dam Power House from Varahi Under Ground Power House done.
      
   5. 
      Special protection scheme for depleted network in respect of SGS/NPH and VUGPH is being adopted for grid stability.
      
   6. 
      400KV shunt reactors are being provided for station bus at RTPS as per CEA directions to curtail high voltage of the system during off peak hours.
      
   7. 
      In all the power houses and colonies/project areas of the corporation incandescent bulbs have been phased out and are replaced with energy efficient compact fluorescent lights as a measure for energy savings. Also, wherever possible retrofitting of existing tube light fittings are being replaced with T5 and T8 version of fluorescent tubes with electronic ballast.
      
   8. 
      Stress analysis of wye piece of VHEP is being done by M/s CWPRS, Pune for assessing the performance and healthiness of the structure.
      

2. 
   R, M and U and R and M of hydel stations:
   
   1. 
      The corporation has taken up R and D activities i.e., R, M and U of existing generating units through improvements and also to adopt new technology for higher efficiencies in operation and maintenance of plants.
      
   2. 
      Renovation and modernization of existing plants is being completed on a continuous basis.
      
   3. 
      Condition monitoring of generators, healthiness of all stations has been initiated by utilizing the services of CPRI, Bangalore.
      
   4. 
      New construction techniques are being adopted for speeding up constructing of ongoing and new power projects.
      
   5. 
      KPCL intends to provide power supply to its project colonies directly from respective generating stations as per GOI order, by installation of additional infrastructure, there by cost saving and reliability of power supply will be achieved, since ESCOMs are charging commercial rate tariff for the power consumption of KPCL colonies. In this regard, works in respect of Shaktinagar colony and Gerusoppa colony are fully completed.
      
   6. 
      The unit – 4 at Nagjhari power house has been uprated to 150MW from 135MW under R, M and U adding 15MW to the installed capacity. Further, R, M and U of Unit – 5 at NPH has been completed and the unit is under testing/observation. The unit will be put into commercial operation/use shortly. R, M and U of U#6 is being taken up.
      
   7. 
      R and M of existing units 1 and 2 in VUGPH stage II in respect of excitation system, protection and SCADA with state of art technology is being carried out and the works are under progress.
      
   8. 
      The R and M works of 2X12MW capacity river bed units of Bhadra hydro electric project has been taken up and almost all the components of the unit except generator portion are being refurbished/replaced with the components of latest technology for providing efficient operation.
      

3. 
   R, M and U and R and M of thermal stations:
   

• 
  Keeping MDBEP in the idle conditions / standby mode by achieving the required permissive of casing temperature
  

• 
  Stopping hot well make up pump / selecting it on ‘Group selection mode thereby double pumping has been avoided
  

• 
  During cold start ups boiler drum filling through CEP, during non-availability of MDBEP is explored & carried out thus saving aux. consumption.
  

• 
  Layout modification of ACV’s of TDBFPs for running the unit through PRDS and CRH at low load & also enabling the unit start up and synchronization during the non-availability of MDBFP.
  

• 
  During unit overhauling air compressor operation is enabled by interconnection of DMCW SG/TG system.
  

• 
  Modification of LPBP operational scheme to avoid repeated boiler tripping on re-heater protection during turbine trips.
  

• 
  Excavator movement enabled around WT grizzly area for accumulated coal removal during monsoon thus reducing manpower & demurrage charges
  

• 
  Modification of ‘S’ bend chutes in JNT 2 & diamond chutes in crusher house to avoid frequent chute chockages
  

• 
  Explored & implemented alternative routes through PLC logic for coal transportation & thus reducing demurrages & avoiding no coal trips.
  

Routes available

Before modification Single routes	After modification parallel routes
Stacking route	WT – 1 to ABCD bunkers WT – 2 to EFG bunkers
Reclaiming route	WT – 1 to ABCD bunkers WT – 2 to Stacking
By pass route	WT – 1 to ABCD bunkers SCR reclaiming to EFG
ERH	WT - 1 to ABCD bunkers ERH to EFG bunkers
	SCR to ABCD ERH to EFG
	WT - 1 to ABCD bunkers WT – 2 to EFG + SCR
	WT - 1 to ABCD WT – 2 to Stacking ERH to EFG bunkers

• 
  1.8 m ht. RCC wall constructed above pavement level around coat stack yard preventing spreading of coal thereby avoiding environmental pollution.
  

• 
  DMCW make up valve opening & closing logic based on level switch input is modified to input taken from level transmitter for reliability.
  

• 
  Installed Reydisp Evolution Software in Rho3 motor protection relays for HT motors and used to analyze & diagonise the faults in motors and vacuum contactors.
  

• 
  Interconnection of Maralihalla & RWP pipeline & fore bay make up of uni 1 & 2 by gravity flow arrangement is made hence minimizing auxiliary consumption and more reliability in O&M of unit-1 & 2 activities.
  

• 
  On line weather monitoring – weather station equipment/ installed for observing continuous weather status such as wind direction, humidity, temperature, rainfall and other environmental issues.
  

• 
  2 no. additional bottom ash hopper disposal lines for each clinkers grinder established for clearing bottom ash from individual hoppers.
  

• 
  Unit 1-Lifting beam provision with necessary hooking arrangement with suitable stand and maintaining almost equal sizes of fine screen is provided for easy maintenance & to overcome operational problem in lifting & lowering of screens during maintenance operations.
  

• 
  Unit 2-Pyramid type north light structures erected at (power house roof top) in place of doom shape north light structures to avoid water leakages.
  

• 
  Earlier, the raw water pond with a capacity of 0.52 TMC was proposed only for two units. Raw water pond constructed with a minimum area of 112 ha for housing 0.52 TMC of water capacity by increasing the depth of embankment.
  

• 
  Construction of 1200 quarters / non-residential buildings is under progress within the premises of plant itself.
  

• 
  Mills trip on loss of primary air is taken from pressure switches, the same has been modified and trip contacts taken from 2/3 contacts of pressure transmitters for more reliability.
  

• 
  Auto opening of vacuum breaker logic modified to avoid unnecessary reduction in vacuum during turbine trip.
  

4. 
   New proposals:
   
   1. 
      KPCL intends to install additional generating units at Munirabad and Ghataprabha Dam Power Houses by utilizing infrastructure facilities, thereby adding capacity with lesser capital cost as extensions of existing power houses.
      
   2. 
      Matrix turbines are being envisaged for augmentation of generation in Chakra/Savehaklu diversion scheme.
      
   3. 
      Run off river scheme at Cauvery right branch near Shivasamudram comprising of an underground power house of 3X100MW capacity followed by a surface power house of 3X15MW capacity is being envisaged and DPR is under preparation.
      

5. 
   Benefits derived as a result of above R and D are as follows:
   

R, M and U of existing generating units will result in capacity addition at lower capital investments and also result in reducing the failure rate of generating units.

2. Energy Conservation, Technology absorption, Adaptation and Innovation:
a) Reduction in Auxiliary consumption and improvement in heat rate is being constantly given priority.
b) Energy audit has been taken up at RTPS by CII (Confederation of Indian Industries, Hyderabad). Preliminary reports have been submitted on various issues for energy savings, PLF improvement, auxiliary consumption reduction etc. Implementation based on the above report is under process.
c) Maximum utilisation of fly ash has been given top priority.
3. Foreign Exchange
a) Foreign exchange earnings - nil

b) Foreign exchange outgo:

i) Components and spare parts - ` 7.62 crores

ii) Delegate fees - nil

Total: - ` 7.62 crores

******

Karnataka Power Corporation Limited

Statement Pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Company
1 Name of the Subsidiary … KPC Bidadi Power Corpn. Pvt. Ltd.
2 Financial year ended … March 31, 2012
3 Holding company’s interest … 100% equity

4 No. of shares held … 50,000 equity shares of `10/- each

fully paid up.

5 The net aggregate of profits or losses for the current financial year of the subsidiary so far as it concerns the members of the holding company –

1. 
   Dealt with or provided for in the accounts of the holding company: nil
   

b) Not dealt with or provided for in the accounts of the holding company: nil

6. 
   The net aggregate of profits or losses for previous financial year of the subsidiary so far as it concerns the members of the holding company
   

1. 
   Dealt with or provided for in the accounts of the holding company: nil
   

b) Not dealt with or provided for in the accounts of the holding company: nil
7 Statement Pursuant to Section 212(5) of the Companies Act, 1956, relating to Subsidiary Company

1. 
   There has been no change in the holding company’s interest in the subsidiary between the end of the financial year of the subsidiary and that of the holding company.
   

2. 
   There has been no material change which has occurred in respect of the following in the case of the subsidiary between the end of the financial year of the subsidiary and that of the holding company:
   

1. 
   Fixed assets of the subsidiary
   
2. 
   Investments of the subsidiary
   
3. 
   Moneys lent by the subsidiary
   
4. 
   Moneys borrowed by the subsidiary for any purpose other than that of meeting current liabilities.
   

Sd/- Sd/- Sd/- Sd/-

R Nagaraja R Balasubramanian R Nagaraja M.R.Kamble

ED (Finance) GM(CA)& Comp. Secretary Finance Director Managing Director

(Addl. Charge)

Karnataka Power Corporation Limited

Statement Pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Company
1 Name of the Subsidiary … Karnataka EMTA Collieries Ltd.
2 Financial year ended … March 31, 2012
3 Holding company’s interest … 51% equity
4 No. of shares held … 25,500 equity shares of Rs.10/- each

fully paid up

5. 
   The net aggregate of profits or losses for the current financial year of the subsidiary so far as it concerns the members of the holding company –
   

1. 
   Dealt with or provided for in the accounts of the holding company … nil
   

b) Not dealt with or provided for in the accounts of the holding company ..nil

5. 
   The net aggregate of profits or losses for previous financial year of the subsidiary so far as it concerns the members of the holding company
   

1. 
   Dealt with or provided for in the accounts of the holding company … nil
   

b) Not dealt with or provided for in the accounts of the holding company .nil

5. 
   Statement Pursuant to Section 212(5) of the Companies Act, 1956, relating to
   

Subsidiary Company

1. 
   There has been no change in the holding company’s interest in the subsidiary between the end of the financial year of the subsidiary and that of the holding company.
   
2. 
   There has been no material change which has occurred in respect of the following in the case of the subsidiary between the end of the financial year of the subsidiary and that of the holding company:
   

1. 
   Fixed assets of the subsidiary
   
2. 
   Investments of the subsidiary
   
3. 
   Moneys lent by the subsidiary
   
4. 
   Moneys borrowed by the subsidiary for any purpose other than that of meeting current liabilities.
   

Sd/- Sd/- Sd/- Sd/-

R Nagaraja R Balasubramanian R Nagaraja MR.Kamble

ED (Finance) GM(CA)& Comp. Secretary Finance Director Managing Director

(Addl. Charge)