First Annual Report1989-90

(A G OVERNM ENT O F INDIA ENTERPRISES)

HIGHLIGHTS

1. NPTC was incorporated on 23rd October, 1989 with an authorised capital of Rs. 5000 crores2. The Head Office of NPTC is situated in New Delhi. Its Regional Offices will be opened in phases in different

regions of the country on need basis.3. The setting up of the Corporation would :

i) help in pooling all the expertise in this field under one Central Organisation and keeping abreast of thelatest technology development;

ii) bring about economies of scale in the design, construction, maintenance and operation of EHV lines;iii) ensure timely and economical implementation of the massive programme of transmission line construction

in the 8th and 9th plans;iv) provide the institutional mechanism for creation of a communication network in the power sector and the

computer hardware and the software for load despatch, automatic generation control, etc.v) provide missing links which will strengthen the grid and facilitate grid operations with greater security

and reliability;vi) facilitate the growth of the economic exchange of power by taking up construction of the inter-regional

links. This would ultimately lead to the formation of the National Power Grid and ensure better utilisationof the available generation resources;

vii) ensure delivery of the entitled share of power from the central generation;viii) release the central generation companies of the work of the construction of the transmission lines, enabling

them to concentrate on the massive new capacity additions programme in the 8th plan and bring up thesame in the prescribed time schedule.

4. The work relating to transmission lines and associated sub-stations, load despatch and communication facilitiesand buying / selling of power will be transferred from the public sector power utilities to the NPTC in a phasedmanner.

5. A provision of Rs. 4.5 crores was approved for the financial year 1990-91 and Rs. 6 crores for the financial year1991-92 mainly for expenditure on setting up of the Corporate Office.

CONTENTSPage No.

Board of Directors 5

Chairman’s Statement 6

Directors’ Report 12

Balance Sheet 20

Statement of Incidental Expenditure 21

Auditors’ Report 24

Comments of the Comptroller andAuditor General of India 26

Annexures of the Directors’ Report 27

Business Mission 30

R. K. Narayan

P. S. Bami Krishna Swarup

U. V. Bhat M. M. Goyal

T. V. Subramanian

BOARD OF DIRECTORS

R. K. NarayanChairman & Managing Director(From 1.11.1990)

T. V. SubramanianDirector (Finance)(From 28.9.1990)

P. S. Bami(From 9.11.1989)

Krishna Swarup(From 9.11.1989)

M. M. Goyal(From 9.11.1989)

U. V. Bhat(From 9.11.1989)

J. C. Gupta(Till 1.5.1990)

T. L. Shankar(Till 17.4.1990)

Co. SecretaryP.D. Tuteja(From 22.1.1991)

Statutory AuditorsPrem Gupta & Co.Chartered Accountants

BankersCanara, BankOriental Bank of CommerceIndian Overseas BankIndian Bank

Regd. Office10th Floor, Hemkunt Chambers,89, Nehru PlaceNew Delhi - 110 019

This Report was adopted at the FirstAnnual General Meeting of theCompany hald on 31stDecember, 1990

6

Dear Shareholders,

I have great pleasure in welcomingyou to the First Annual General Meet-ing of National Power TransmissionCorporation (NPTC) to present theAnnual Report of the Company to-gether with the Audited Accounts forthe year ended 31st March, 1990.

It was in August, 1989 that theGovernment of India took a decisionto constitute NPTC with the followingobjects :

a) To plan, promote and build anintegrated and efficient powertransmission system network inall its aspects including investi-gations, planning, engineeringand design.

b) To prepare preliminary feasibilityand detailed project reports.

c) To construct, own, operate andmaintain transmission lines,sub-stations, load despatchingand communication facilities andappurtenant works.

d) Wheeling of power generatedat various power stations inaccordance with the policies andobjectives laid down by theCentral Government from time totime.

e) Keeping abreast of Technologydevelopment in the transmission,load despatching and communi-cation system.

CHAIRMAN’S STATEMENT

7

Subsequently, NPTC was incorpo-rated on 23rd October, 1989 under theCompanies Act, 1956 as a Public Lim-ited Company with an authorised capi-tal of Rs. 5000 Crores, wholly ownedby Govt. of India. In the first BoardMeeting of the Company held on 21stNovember, 1989, Shri M.M. Goyal,Joint Secretary (Systems), Deptt. ofPower was empowered as AuthorisedDirector to look after the day-to-dayaffairs of the Company. I assumed thecharge of Chairman and ManagingDirector on 1st November, 1990 andShri T.V. Subramanian joined as Di-rector (Finance) on 28th Sept. 1990.Within a short period of our joining,the Company could obtain the Certifi-cate for Commencement of Businesson 8th November, 1990. The Govt.has also created the posts of Director(Projects) and Director (Operation) forwhich appointments are yet to bemade.

NEED FOR THEORGANISATION

Its Advantages and FutureProspects.

The National Power Grid being the ul-timate goal, the need for a centralagency solely catering to transmissionneeds is dictated by the inadequaciesof the present system to cope with theneeds of the National Power Grid.Inspite of the best efforts of the Cen-tral Agencies and State ElectricityBoards, the growth of the T&D Sys-tem has not been commensurate withthe addition to installed capacity andits utilisation. Developments havebeen handicapped by :

� Too many agencies in the frayeach having transmission develop-ment as more or less secondaryactivity;

� Planning being based on only in-dividual needs and perception ofthe system as a whole being ab-sent militating against the conceptof National Power Grid.

� Indequate appreciation of theneed for T&D augmentationalongwith capacity additions;

� Technical expertise scattered indifferent agencies being not put tooptimum use.

Its Advantages accruing fromformation of NPTC

--- As a single agency it will be re-sponsible for the entire EHV net-work, there will be better co-ordi-nation between generating andpower purchasing agencies.

--- Better grid management is pos-sible because of central schedul-

ing of generation and power flows.This implies better utilisation ofavailable resources by regulatedinterregional exchanges.

--- With inter-connected operation,system strength increases, Fre-quency deviation due to load gen-eration, mismatch, reduces.Amount of reserves to be main-tained by each constituent agencyreduces.

--- By optimising generation, reliabil-ity and system performance in-crease, loss reduction can beachieved by optimal loading oflines.

--- Wide scope for absorption of lat-

The sun rises-And so do the HVDC system on the horizon of country’s power scenario.

8

est technology into a singleorganisation as opposed to eachagency acquiring the same tech-nology independently.

--- Uniform tariff structure will put anend to most of the existing com-mercial disputes.

--- Transmission constraints will bealleviated not only in Central Sec-tor, but also in SEBs System.

--- This will bring about optimalutilisation of power generated byvarious agencies to the ultimatebenefit of the country.

ACTION PLAN OF NPTC :

I would like to divide the action planof the new Corporation on the follow-ing lines :

a) Taking over of the work from theexisting organisations that is,NTPC, NHPC, NEEPCO, NLC,NPC, DVC and BBMB. For this,the performance budget of Dept.of Power for the year 1990-91 in-dicates the Govt. thinking aboutthe modus operandi for transfer of

work relating to transmission, loaddespatch and communication fa-cilitates and buying and selling ofpower from public sector utilitiesetc., in a phased manner asunder :

First Phase

In the first phase, the NPTC wouldtake over the following from the Cen-tral / Centre-State joint ventureorganisations, namely, NTPC, NHPC,NEEPCO, NLC, DVC, BBMB, THDC,NJPC, CEA etc.

(i) Transmission systems and asso-ciated sub-stations presentlyowned and operated by theseorganisations;

(ii) Construction of transmission linesand associated sub-stations pres-ently under execution and plan-ning by these organisations;

(iii) Setting up augmentation of loaddespatching and communicationfacilities at the state-level, regionallevel and then national level;

(iv) Executives and staff engaged in

Transmission line planning, engi-neering and design contracting,procurement, finance, construc-tion, operation and maintenanceetc., on deputation for three years.The executives and staff would begiven option for absorption in theNPTC or reversion to their parentdepartments before expiry of theirdeputation;

(v) All assets and liabilities etc., as-sociated with the transfer of abovementioned works; and

(vi) The NPTC would take up the workof wheeling power from the partici-pating power stations to the ben-eficiary States, charging relevanttransmission charges keeping inview the existing agreements/MOU entered into by various gen-erating organisations with thebeneficiaries. NPTC is very keenon living within the existing normsfor tariff fixation based on reason-able standards of efficiency andthere will not be any increase intariff on account of establishmentcharges which will be more than

Saving the Right-of-way-two double circuit 400 kv Transmission Liners run together.

9

compensated by economies ofscale / rationalisation of tariff struc-ture.

Second Phase

In the second phase, the existingRegional Electricity Boards and theRegional Load Despatch Centres to-gether with the associated communi-cation facilities would be transferredto the NPTC for integrated operationof the regional grid systems and over-all co-ordination between theconstitutent systems.

Third Phase

In the third phase, the NPTC wouldbe made responsible for buying powerfrom the Central generatingorganisations as well as surpluspower from the State ElectricityBoards and other utilities, pooling itand then selling it to different Statesin the country.

b) Follow-up action for transfer ofwork :

With a view to ensuring smoothtransfer of work, NPTC proposes totake up the transfer of work from oneorganisation at a time. In the first in-stance, it is proposed to get the trans-mission lines in operation, under con-struction and projects in pipeline fromNTPC and NHPC as these twoorganisations account for 90% oftransmission line assets at present.Moreover this gives accessibility toNPTC in five regions and immediatelyhelp NPTC for gearing up for the ulti-mate task of developing national grid.Approach paper for such transfers in-dicating the broad steps to be takenfor ensuring smooth change of man-agement have been prepared andsubmitted to both these organisationsand discussions are also being heldat various levels to sort out the issuesinvolved. Draft MOU for taking overthe assets of other organisations likeNEEPCO, NLC, NPC etc. have also

been prepared and submitted to theseorganisations. We have also writtento Electricity Boards/REBs with whomNPTC have to work in very closecoperation, about the NPTC plan ofaction for taking over the transmissionlines and also eliciting their views onpriorities to be accorded by NPTC. Ihave great pleasure in informing thatexcellent response has been receivedfrom Electricity Boards who havegiven us valuable suggestions in thisregard and have also offered the ser-vices of transmission line engineersworking in the State for deploymentin NPTC.

c) Load despatch & communication:

However, for ultimate aim of estab-lishment of national grid, integratedpower system management is veryimportant and there is a dire neces-sity for building state of art Regionaland State Load Despatch Centres.Your company has already been as-signed the job of installation and main-tenance of unified load despatch and

Up in the sky-Men at work on a 400 kv Transmission Tower.

10

communication system for north east-ern and northern regions. The estab-lishment of similar systems in south-ern region as well as upgrading ofsystem already in existence in west-ern region and eastern region havealso to be taken up shortly by theCompany.

d) System Improvement :

In the past, a number of failureshave been reported because of non-availability of redundancy in the powersystem and small imbalance or faultin the system have many times re-sulted in complete break-down ofpower system. Therefore, NPTC isplanning for detailed study of variousregional power system to take reme-dial measures to augment the systemby installation of additional switchingstation and for providing additionalstarting power compensation at exist-ing substations.

e) Inter-regional tie lines:

In order to have optimum utilisationof the national power resources, it willbe necessary to have integrated op-eration of all the regions and to buildup strong inter-regional tie lines. Thecompany has already suggested anumber of such tie lines to CEA inaddition to existing HVDC back-to-back at Vindhyachal between westernregion and northern region and haverequested Dept. of Power/PlanningCommission to make necessary fundsavailable for such tie lines as they willgo a long way to ensure establishmentof the national grid as well as transferof power from one region to other re-gion in case of availability of surpluspower in one region as well as at thetime of emergency.

f) The company is also planningto install time of day metering systemat various generating stations as wellas tie lines in order to work out a tariffsystem based on time of the day, i.e.peaking power or off-peak power aswell as on the basis of frequency andVAR. Establishment of proper meter-ing system will also help in bringingQuietly co-existing-Two circuits of a 400 kv Transmission Lines pass over the country side.

11

operational as well as fiscal disciplinein the operation of the regional grids.It is planned to discuss shortly this is-sue with various generating compa-nies as well as Electricity Boards. Onearea in which the company would liketo immediately concentrate isimprovement in the maintenance man-agement of the transmission systemand therefore may like to introduceuse of helicopters with thermovisioncameras for carrying out on-linemonitoring of the lines as well as main-tenance. The helicopters will also be

useful in carrying out the detailed sur-vey and investigation as well as theerection of new transmission system.

In the end, I would like toemphasise that your Company haveto work in a very close co-ordinationwith all the generating companies aswell as the Electricity Boards and towork very dedicatedly for establish-ment of integrated power system in thecountry in order to make available re-liable and quality power supply in themost economical fashion to various

constituents of Regional ElectricityBoards and, therefore, to the generalpublic of the country.

(R. K. NARAYAN)Chairman & Managing Director

New Delhi31st December, 1990

The Brain of a power system-A load Despatch Centre.

12

To the Members,

I have great pleasure in welcom-ing you on behalf of the Board of Di-rectors to the First Annual GeneralMeeting of National Power Transmis-sion Corporation to present the An-nual Report of the Company togetherwith the Audited Accounts for the yearended 31st March, 1990.

2. PRESENT STATUS

Need for setting up a separateexclusive organisation for planningand construction, operation and maintaining transmission system in orderto ultimately achieve building-up Na-tional Transmission Grid was long felt.In August 1989, the Government ofIndia decided to constitute NPTC forundertaking the programme of layingEHV and HVDC transmission sys-tems and associated sub-stations aswell as construction of load despatchand communication facilities, with aview to transmitting large blocks ofpower from various generatingsources in the central sector to ben-eficiary states. NPTC was subse-quently incorporated on 23rd October,1989 under the Companies Act, as apublic limited company, with anauthorised capital of Rs. 5000 crores,wholly-owned by Government of In-dia. In the First Board Meeting of theCompany held on 21st November,1989, Shri M.M. Goyal, Jt. Secretary(Systems), Department of Power wasempowered as Authorised Director tolook after the day-to-day affairs of theCompany.

I assumed charge as Chairman &Managing Director on 1st November,1990 and Shri T.V. Subramanianjoined as Director (Finance) on 28thSeptember, 1990. On 8th November,1990, the Company obtained theCertificate for Commencement ofBusiness. The Government has alsocreated the posts of Director.(Projects) and Director (Operation) forwhich appointments are yet to bemade. Shri M.M. Goyal as AuthorisedDirector and the other Directors Shri

Krishna Swarup, Member (PS), CEA,Shri U.V. Bhat, JS & FA, Departmentof Power and Shri P.S. Bami, CMD,NTPC, have been managing the ini-tial activities of the Company till theappointment of the full time Directorsand we are really thankful to them forthe efforts put in for establishment ofthe Company.

3. REASONS ANDOBJECTS FOR SETTINGUP THE CORPORATION

The performance budget of De-partment of Power for 1990-91 sub-mitted by Government of India to theParliament explains the reasons andobjects for setting up the Corporationas under :

The setting up of the Corporationwould :

(i) help in pooling all the expertisein this field under one CentralOrganisation and keepingabreast of the latest technologydevelopment;

DIRECTORS’REPORT

Hello there! A micro-wave tower for longdistance communication.

13

(ii) bring about economies of scale inthe design, construction, mainte-nance and operation of EHVlines;

(iii) ensure timely and economicalimplementation of the massiveprogramme of transmission lineconstruction in the 8th and 9thPlans;

(iv) provide the institutional mecha-nism for creation of a communi-cation network in the power sec-tor and the computer hardwareand the software for load des-patch, automatic generation con-trol, etc. (as this involves consid-erable system expertise, theNPTC will be able to take up suchscheme in a cost effective man-ner which will lead to more effi-cient control of the grid operationof real time);

(v) provide missing links which willstrengthen the grid and facilitategrid operations with great secu-rity and reliability;

(vi) would facilitate the growth of theeconomic exchange of power bytaking up construction of the in-ter-regional links. This would ul-timately lead to the formation ofthe National Power Grid and en-sure better utilisation of the avail-able generation resources;

(vii) ensure delivery of the entitledshare of power from the centralgeneration;

(viii) release the central generationcompanies of the load of the con-struction of the transmissionlines, enabling them to concen-trate on the massive new capac-ity additions programme in the8th Plan and bring up the samein the prescribed time schedule.

4. MODUS OPERANDI FORTRANSFER OF WORK

The performance budget of De-partment of Power for the year 1990-91 also indicates the modus operandi

for transfer of work relating to trans-mission lines and associated substa-tions, load despatch and communica-tion facilities and buying and sellingof power from public sector power utili-ties to NPTC in a phased manner asunder :

First Phase

In the first phase, the NPTC wouldtake over the following from the Cen-tral / Centre-State joint ventureorganisations, namely, NTPC, NHPC,NEEPCO, NLC, DVC, BBMB, THDC,NJPC, CEA etc.

(a) Transmission systems and asso-ciated sub-stations presentlyowned and operated by theseorganisations;

(b) Construction of transmissionlines and associated sub-stationspresently under execution andplanning by these organisations;

(c) Setting up/augmentation of loaddespatching and communicationfacilities at the state level, re-gional level and the nationallevel;

(d) Executives and staff engaged inTransmission line planning,engineering and design contract-ing, procurement, finance,contracting, procurement, fi-nance, construction, operationand maintenance etc., on depu-tation for three years. The execu-tives and staff would be givenoption for absorption in theNPTC, or reversion to their par-ent departments before the ex-piry of their deputation;

(e) All assets and liabilities. etc.,associated with the transfer ofabove mentioned works; and

(f) The NPTC would take up thework of wheeling power from theparticipating power stations to thebeneficiary states charging rel-evant transmission chargeskeeping in view the existingagreements/MOU entered into byvarious generating organisationswith the beneficiaries.

Computer panels for RLDC.

14

Second Phase

In the second phase, the existingRegional Electricity Boards and theRegional Load despatch centres to-gether with the associated communi-cation facilities would be transferredto the NPTC for integrated operationof the regional grid systems and over-all co-ordination between the constitu-ent systems.

Third Phase

In the third phase, the NPTC wouldbe made responsible for buying powerfrom the Central generatingorganisations as well as surpluspower from the State ElectricityBoards and other utilities, pool it andthen sell it do different States in thecountry.

5. FOLLOW-UP ACTIONFOR TRANSFER OF WORK

By its very constitution, NPTC hasto work in very close collaboration andco-operation with central power sec-tor organisations and also with theState Electricity Boards, REBs andCentral Electricity Authority. Transferof work will involve take over of hugevolume of assets for a value of Rs.3912 crores and the associated staff.With a view to ensuring smoothchange of work, NPTC proposes totake up the transfer in stages from oneorganisation at a time. To begin with,it is proposed to get the transmissionline assets including lines/sub-stationsin operation, under construction andprojects in the pipeline from NTPC andNHPC. These two organisations ac-count for about 90% of the transmis-sion line assets to be taken over byNPTC and with such transfer, a goodbeginning will be made by NPTC toestablish itself and to gear up theorganisation for its ultimate task ofdeveloping the National Grid. Ap-proach papers for such transfer indi-cating the broad steps to be taken forensuring smooth change of manage-ment has been prepared and submit-ted to NTPC, NHPC and Govt. of

India. Draft Memorandum of Understanding for take over of assets havealso been sent to NEEPCO, NLC andNPC. Other organisations like DVC,NJPC BBMB and CEA have also beeninformed regarding formation of newCorporation with a request to preparenecessary papers and documents tofacilitate transfer of assets/liabilitiesregarding their transmission system atan early date. Simultaneously,circulars have been issued to StateElectricity Boards briefly indicatingNPTC’s plan of action for taking over

the transmission lines and also elicit-ing their views as to the priorities tobe accorded by NPTC for varioustransmission line works with which theStates are concerned. We have re-ceived excellent response from StateElectricity Boards who have given usvaluable suggestions in this regardand also offered the services of trans-mission line engineers working in theStates for deployment by NPTC.

5.1 For ultimate aim of establish-ment of national grid, integrated power

Transmission Tower under Construction

15

system management is a very com-plex subject which need state of arttechnology, adoption of on-line acqui-sition of power system data and its realservices processing by computers.Operating decisions are supported bypresentation of more complete andcoherent comprehensive informationand guidance about the power sys-tem. Real time computers infact havebecome indispensable tool for mod-ern energy management. In this re-gard real challenge of NPTC shall beto build up state of art unified loaddespatch centre and associated com-munication facilities in all the regionsas well as at the national level. In thisregard the following projects are pres-ently under consideration of Govern-ment of India.

(i) Regional Load Despatch Centrebrought for establishing a hierar-chical network of load despatchcentres with one at national level,five at regional level and a num-

ber of centres in different statesand system level.

(ii) National Electricity System Op-eration Organisation (NESOO)for development of load despatchcentres, special operational pro-cedures and guidelines and set-ting up of Load Despatcher Train-ing Simulator with UNDP assis-tance for training of engineers insystem operation.

(iii) Modernisation of SRLDC.

(iv) National Load Despatch Centre(NLDC) to be established in NewDelhi for linking of the five exist-ing Regional Electricity Boardsfor effective communication ofinformation of vital nature likegeneration from major power sta-tions, outages of units etc.

(v) North Eastern Region LoadDespatch Centres (NERLDC);This envisages establishment ofregional load despatch centres in

the North Eastern Regional andon demand display and printingfacilities alongwith a well-knittelecommunication system in theNorth Eastern Region at Shillong.

(vi) Load Despatch Centre in theNorthern Region under unifiedscheme, for establishment ofload despatch and telecommuni-cation facilities within the centraland state communication sys-tems in the Northern Region tobuild up the regional hierarchy.

5.2 Out of the six schemes men-tioned above, five schemes are un-der implementation/supervision ofCentral Electricity Authority. The Gov-ernment of India has already decidedthat North Eastern Regional LoadDespatch Centre will be constructedby NPTC on a management contractbasis on behalf of the CEA and thatNPTC should also maintain the facili-ties such as computer, data acquisi-tion system and telecommunication

16

and also software development andsupport. Similarly, work to start verysoon on load despatch centre andcommunication system for NorthernRegion. Feasibility study for similarsystem for Southern Region is alsounder formulation and there is a needto expedite and implement the sameat the earliest. NPTC have alreadystarted planning for recruitment andtraining of personnel in this technol-ogy which is hardly available atpresent.

6. SYSTEM IMPROVEMENT

NPTC is planning for study indetail of the various regional systemsfrom the reliability and redundancypoint of view, because in the past,

there have been a number of failureswhich have been triggered onbecause of non-availability of redun-dancy in the system and small unbal-anced or fault in the system has re-sulted in complete break-down ofpower system. It would be necessaryto augment the system by putting upadditional switching station of provid-ing additional Static VAR Compensa-tor at the existing sub-stations as wellas to provide some more additional tielines etc.

7. INTER-REGION TIELINES

The Power planning exercises arecarried out on regional basis whichrequires that strong inter-region links

are developed for smooth integratedoperation of regional grid systems. Itis also necessary to gradually, buteffectively integrate the operations ofregional grids to several advantage toour power systems including improvedreliability etc. These, however, in gen-eral are nor receiving adequate prior-ity. Regional concept still dominatesour planning. To accelerate the growthof inter-region links, Govt. had initiatedcentrally sponsored schemes with100% central loan assistance. How-ever, in actual practice, it has beennoticed that pace of implementationof inter-region transmission lines hasbeen far from satisfactory, except incases where they are of direct inter-est to the states such as providing

HVDC station.

17

means for exporting power in the caseof surplus states or import of power inthe case of deficit states. Thisemphasises the need to take up allthe vital transmission system linksnecessary for regional and inter-re-gional operations for constructionunder central sector. Two inter-re-gional projects linking the Northernand Western Regional grid systemsand the Western and SouthernRegional systems were taken up forimplementation by NTPC. One linkbetween Northern and Western regionhas already been commissioned. It isalso proposed to construct additionalinter-regional links connecting East-ern with Southern, Western andNorth-Eastern regions during the 8thPlan period to facilitate exchanges ofpower between them. However, forsmooth operation of the regional gridsand also for enabling inter-regionalpower exchanges, commercial as-pects in terms of tariff for inter systemexchanges would be required to besorted out for preparing healthy re-gional integration and optimization. Toovercome the problems of mismatchof frequencies and to improve the sta-bility of the systems and provide con-trolled assistance in view of powershortage condition, inter-regional linksshould be asynchronous.

8. TRANSMISSION LINEOUTLAY FOR 1990-91 AND8TH PLAN

The present position regarding theoutlays provided for transmission lineprojects in the name of the centralsector organisations is summarisedbelow as per Annexure-I

Performance Budget of the Gov-ernment of India indicates that as andwhen the works get transferred toNPTC, the budgetary provision there-fore will also get transferred. In addi-tion to the provision made in thenames of central sector organisationearmarked for transmission lines, aprovision of Rs. 4.5 crores has beenmade in the budget for 1990-91 and

Rs. 10 crores in 1991-92 for the cor-porate office of the NPTC which ispresently in the process of being es-tablished at Delhi.

9. PROSPECTS FOR THEEIGHTH PLAN :

The annual plan of Department ofPower for 1991-92 recommended forthe Eighth Plan an outlay of Rs. 5490crores for the transmission lineschemes in the central power sector.Against this, the outlay recommendedtentatively by Planning Commissionworks out to Rs. 2675 crores only in-volving a massive cut of Rs. 2815crores. According to theRajadhayaksha Committee on Power,generation projects and transmissionline outlays should be in the ration of2:1, whereas as per tentative recom-mendations of Planning Commission,the outlays for generation and trans-

mission are in the ratio of 6:1. Themassive cut proposed by PlanningCommission is bound to affect thedevelopment of the National Grid foroptimum utilisation of power. ThePlanning commission has also nottaken into acount the requirements forinter-regional and HVDC links whichare intended to facilitate transmissionof surplus power from one region toother for which we have asked for aprovision of Rs. 100 crores for 1991-92. Besides, stringent cuts have alsobeen effected in the case of new trans-mission lines provision of NPTC,Chandrapur HVDC back-to-back,Krishnapur-Moga Transmission sys-tem, Dul Hasti Srinagar line and alsoHVDC back-to-back station for con-necting Southern Region and EasternRegion. This is bound to cause set-back in transmission line programme.The matter has been taken up by us

Load Despatch Computer room.

18

with the Planning Commission for res-toration of cuts and augmentation ofoutlay. NTPC in addition to the inter-regional ties already proposed in the8th Five year Plan, have suggestedsome more lines for optimising theutilisation of the existing generatingsources and work on preparation offeasibility report for the same has al-ready been taken up. Some of theselines envisaged are as in the state-ment enclosed as Annexure-II.

10. ACCOUNTS AND AUDITFOR THE YEAR 1989-90

The accounts for the year 1989-90 mainly deal with incorporation ex-penses and other expenses for set-ting up of the Corporation and the ac-counts have been audited by statu-tory auditors, M/s. Prem Gupta andCo. There is no qualification in theStatutory Auditors’ Report and theComptroller and Auditor General ofIndia has also given a nil commentsreport. The auditors’ reports are an-nexed with the accounts.

11. ORGANISATION STRUC-TURE OF NPTC

Keeping in view the Governmentof India decision that NPTC shouldtake over the transmission line/sub-stations alongwith the associated stafffrom central power sectororganisations, it is necessary to inductexecutives only for the corporate setup of the Company. The posts are tobe filled up as far as possible by re-deployment of the staff to be takenfrom central sector organisations anddirect recruitment is to be resorted toonly where absolutely necessary.Organisation structure proposed to beadopted by NPTC for its corporateoffice/regional/field offices is annexedwith the accounts as Annexure-III. Atraining programme is also beingdrawn up for developing the expertisein areas of load despatch/manage-ment particularly on computer appli-cations/maintenance and software.

12. PARTICULARS OF EM-PLOYEES

The were no employee on rolls ofthe Company drawing Rs. 6000 andabove per month, if employed for thepart of the year or Rs. 72000 andabove per annum if employed for thefull year in the year 1989-90. Accord-ingly the provisions of Section 217(2A) are not attracted.

13. ACKNOWLEDGEMENTS

On behalf of the Board of Direc-tors, I place on record the commend-able efforts put in by the officers ofthe Department of Power and CentralElectricity Authority and CMD, NTPCin bringing up this Company in the ini-tial stages. I am also grateful for theco-operation received from the Plan-ning Commission, Ministry of ProjectImplementation, Regional and StateElectricity Boards, and Ministry ofFinance

For and on behalf of theBoard of Directors

(R. K. NARAYAN)Chairman & Managing Director

New Delhi24th December, 1990

19

ACCOUNTS

20

BALANCE SHEET

As on 31st March, 1990(Rupees)

Schedule As on 31stNo. March, 1990

Sources of Funds

SHAREHOLDERS’ FUND

Capital

1 60,00,000

Application of Funds

FIXED CAPITAL EXPENDITURE

FIXED ASSETS 2

Gross Block 4,63,764

Less : Depreciation to date ---

Net Block 4,63,764

CURRENT ASSETS, LOANS AND ADVANCES 3

Cash and bank balances 14,46,259

Less : CURRENT LIABILITIES AND PROVISIONS 4 3,77,689

Net current assets 10,68,570

Miscellaneous expenditure

(to the extent not written off

or adjusted)

Incorporation Expenses 40,13,880

Incidental Expenditure 4,53,786

for commencement of business (net) 44,67,666

60,00,000

Nil

Contigent Liability

Notes an accounts 5

Schedules 1 to 5 from part of accounts

(T.V. SUBRAMANIAN) (R.K. NARAYAN)DIRECTOR (FINANCE) CHAIRMAN & MANAGING DIRECTOR

As per our report of even dateFor Prem Gupta & Co.Chartered Accountants

Place : New Delhi (P. B. GUPTA)Dated : 9th November, 1990 Partner

21

STATEMENT OF INCIDENTAL EXPENDITURE

FOR COMMENCEMENT OF BUSINESS

For the year ended 31st March, 1990(Rupees)

Expenses

Salaries & Wages 10,962

Advertisement for Recruitment 3,90,625

Legal Expenses 752

Postage 41

Conveyance Expenses 620

Audit fee (Subject to approval of Company Law Board) 5,000

Printing and Stationery 4,739

EDP Consumables 4,015

Entertainment expenses 610

Books & Periodical 2,794

Vehicle Running Expenses 3,399

Furnishing Expenses 30,665

Miscellaneous Expenses 1,180

Total Expenses 4,55,402

Less : Miscellaneous Income 1,616

Excess of expenses over incometransferred to Balance Sheet 4,53,786

(T.V. SUBRAMANIAN) (R.K. NARAYAN)DIRECTOR (FINANCE) CHAIRMAN & MANAGING DIRECTOR

As per our report of even dateFor Prem Gupta & Co.Chartered Accountants

Place : New Delhi (P. B. GUPTA)Dated : 9th November, 1990 Partner

22

Schedule -- 1 As at 31st

Capital March, 1990

(Rupees)

Authorised

5,00,00,000 Equity shares of Rs. 1000/- each : 5000,00,00,000

Issued, subscribed and paid up 11 Equity shares of

of Rs. 1,000/- each fully paid up : 11,000

Share Capital Deposit : 59,89,000

60,00,000

Schedule --- 2Fixed Assets :

(Rupees)

Gross Block Net Block

As at Additions Sale/ As at Depreciation01.04.89 during the adjustments 31.03.90 upto 31.03.90

year during the As atyear 31.03.90

1. Vehicles --- 2,83,714 --- 2,83,714 --- 2,83,7142. EDP & Print room machines --- 1,80,050 --- 1,80,050 --- 1,80,050

TOTAL 4,63,764 4,63,764 4,63,764

Schedule -- 3

Current Assets, Loans & Advances

(Rupees)

Cash balance including postal orders in-hand 2,692Balances with scheduled Banks in current accounts 14,43,567

14,46,259

Schedule -- 4

Current Liabilities & Provisions :

(Rupees)

Sundry creditors 3,77,689

3,77,689

23

Schedule --- 5

Notes on Accounts :

1. Since the Company has not yet commenced business, a Statement of Incidental Expenditure for commence-ment of business has been prepared in lieu of Profit & Loss Account.

2. Since 1989-90 is the first financial year for the Company (incorporated on 23rd October, 1989) previous year’sfigures have not been shown in the accounts.

3. During the year, none of the employees were in receipt of remuneration in the aggregate at the rate of not lessthan Rs. 72,000/- per year if employed for full year or not less than 6,000/- per month if employed for the partof the year.

4. Depreciation on fixed assets is to be provided from the year following that in which the assets become avail-able for use at the rates determined taking into account the prescribed period as per The Electricity (Supply)Act, 1948. In respect of assets, where prescribed period has not been laid down under the aforesaid Act,depreciation is to be provided on straight line method at rates corresponding to the rates laid down under theIncome Tax Act.

5. The depreciation calculated in terms of Section 205(2) (b) of Companies Act, 1956 at straight line rates worksout to Rs. 12,311/- against nil depreciation under The Electricty (Supply) Act. 1948.

(T.V. SUBRAMANIAN) (R.K. NARAYAN)DIRECTOR (FINANCE) CHAIRMAN & MANAGING DIRECTOR

As per our report of even dateFor Prem Gupta & Co.Chartered Accountants

Place : New Delhi (P. B. GUPTA)Dated : 9th November, 1990 Partner

24

AUDITORS’ REPORTTo the Members of “National Power Transmission CorporationLtd.”

We have audited the attached Balance Sheet of National Power Transmission Corporation Limited asat 31st March, 1990 and also statement of Incidential Expenditure for commencement of business inthe nature of pre-operative expenses for the period ended on that date annexed thereto. As Companyis governed by The Electricity (Supply) Act. 1948 the provisions of the said Act read with rules thereun-der have prevailed, wherever the same have been inconsistent with the provisions of the CompaniesAct, 1956.

1. As required by the Manufacturing and other Companies (Auditor’s Report) Order, 1988 issued by theCompany Law Board in terms of the Section 227(4A) of the Companies Act., 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (1) above :

(a) We have obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the company, so faras appears from our examination of these books.

(c) The Balance Sheet and Statement of Incidental Expenditure for commencement of Business dealtwith by this Report are in agreement with the books of account.

In our opinion and to the best of our information and according to the explanations given to us, the saidaccounts read with notes, given in schedule 5, give the information required by the Companies Act,1956 in the manner so required as applicable to Electricity generating companies and give a true andfair view.(a) in case of Balance Sheet of the state of affairs as at 31st, 1990 and(b) in case of Incidental Expenditure for commencement of business, for the period ended on that date.

For Prem Gupta & CompanyChartered Accountants

Place : New DelhiDated : 9th November, 1990

(P. B. Gupta)Partner

25

ANNEXURE TO THE AUDITORS’ REPORT

1. The Company has maintained proper records showing full particulars including quantitative details situation /location so far as practicable of fixed assets. The management carried out physical verification of fixed assetsand no material discrepancy has been noticed on such verification. In our opinion, frequency of verification isreasonable having regard to the size of operation of the Company.

2. None of the fixed assets have been revalued during the period.

3. The Company has not commenced the commercial activities during the period under autidt, hence, the clauserelating to the physical verification of stocks is not applicable.

4. The clause No. : 4, 5 & 6 relating to the physical verification of stocks and of valuation are not applicable as theCompany has not commenced business.

5. The Company has not taken any loan from the companies, firms or other parties, listed in register maintainedunder Section 301 of the Companies Act, 1956. There are no companies under the same management asdefined under Sub-section (1B) of Section 370 of the Companies Act, 1956.

6. The Company has not granted any loan, secured or unsecured, to companies, firms or other parties listed in theregister maintained under Section 370 of the Companies Act, 1956.

7. The Company has not given any loan or advances in the nature of loan.

8. Since the Company has not commenced the business during the period under audit, clauses No. : 9, 10 & 11relating to the internal control procedure for the purchase and determination of stocks are not applicable.

9. The Company has not accepted any deposit from the public under section 58A of the Companies (Acceptanceof Deposit) Rules, 1975.

10. The clause, relating to the maintenance of records, for the sale and disposal of scrap and by-products is notapplicable.

11. Since the paid-up capital of the Company does not exceed Rs. 25 lakhs as at the commencement of thefinancial year concerned and not having an average annual turn-over exceeding Rs. 2 crores for a period ofthree consecutive financial years, the Company is not required to have an internal audit system.

12. Maintenance of cost records has not been prescribed by the Central Government under Section 209(1) (d) ofthe Companies Act, 1956.

13. The clauses relating to the P.F. and E.S.I. are not applicable during the period under audit.

14. According to the information and explanations given to us, there were no disputed amounts payable in respectof income tax, wealth-tax, sales tax, customs duty and excise duty outstanding as at the last date of the finan-cial year concerned for a period of more than six months from the date they became payable.

15. According to the information and explanations given to us, no personal expenses have been charged to rev-enue account, other than those payable under contractual obligation or in accordance with the generally ac-cepted business practice.

16. The clauses relating to system of recording receipts, issues and consumption of materials and stores and ofallocating man-hours to the relating jobs are not applicable to the Company.

For Prem Gupta & CompanyChartered Accountants

Place : New DelhiDated : 9th November, 1990

(P. B. Gupta)Partner

26

Comments of the Comptroller and Auditor General of India under Section 619(4) of theCompanies Act, 1956 on the accounts of National Power Transmission Corporation Lim-ited, New Delhi for the period ended 31st March, 1990.

The Comptroller and Auditor General of India has decided not to review the report of the Auditors on the accounts ofNational Power Transmission Corporation Limited, New Delhi for the period ended 31st March, 1990 and as such hehas no comments to make under Section 619(4) of the Companies Act, 1956.

(Kanwal Nath)Principal Director of Commercial Auditand Ex-Officio Member, Audit Board-III

New DelhiNew DelhiDated : 6th December, 1990

27

ANNEXURE TO THE DIRECTORS’ REPORT Annexure-IPROPOSALS FOR 8TH PLAN AND ANNUAL PLAN 1991-92

OF TRANSMISSION SCHEMES(Rs. Crores)

SL. NAME OF PROJECT/ ORIGINAL/ ANTICI- 1990-91 1991-92 8TH PLAN OUTLAYNO. SCHEME REVISED PATED OUTLAY

COST OF COST OF B.E.* PROPOSEDPROJECTS PROJECTS ---- ---------------- -------------------------------------------

AS PER AS PER R.E.* RECOM- PROPOSED RECOM-91-92 91-92 MENDED MENDED

ANNUAL ANNUALPLAN @ PLAN

(0) (1) (2) (3) (4) (5) (6) (7)

1. NATIONAL THERMAL 2196.26 17618.18 384.40 403.82 2357.18 1448.33POWER CORPORATION LTD. 344.47 248.02

2. NATIONAL HYDRO- 123.94 2955.05 89.10 244.69 1883.82 679.97ELECTRIC POWER 106.81 174.19CORPORATION

3. TEHRI HYDRO 605.00 3.50 105.00 570.00 200.00DEVELOPMENT 22.25CORPORATION LTD.

4. NORTH-EASTERN ELECTRIC 301.38 301.38 65.00 163.00 282.48 200.00POWER CORPORATION 65.00 125.00

5. DAMODAR VALLEY 96.61 257.72 25.68 33.16 120.32 70.32CORPORATION LTD. 25.07 22.93

6. NATIONAL POWER TRANS- 5.00 10.00 220.00 20.00MISSION CORPORATION 4.50 10.00

7. INTER-STATE TRANS- 20.00 20.00 56.42 56.42MISSION LINES 20.61 20.00

CENTRAL ELECTRICITY AUTHORITY1. REGIONAL LOAD 41.09 48.00 9.92 11.18 65.46 5.93

DESPATCH CENTRES 9.61 1.042. NATIONAL ELECTRICITY 3.95 4.17 0.16 0.15 1.00 0.15

SYSTEM OPERATION ORG 0.14(NESOO)

3. MODERNISATION OF SRLDC 1.58 1.32 0.32 1.32 1.301.30

4. NATIONAL LOAD 0.88 0.50 0.90 4.50 4.50DESPATCH CENTRE 0.50 0.90

5. NORTH-EASTERN REG. 0.20 0.20 17.92 15.00LOAD DESPATCH CENTRE 0.20

6. UPGRADATION OF LOAD 6.00 1.00 121.00 100.00DESP. FACILITY-NOR. 0.01 1.00REG. BOARD

TOTAL DOP : 2763.23 21791.96 610.78 993.42 5701.42 2801.92578.02 625.53

NEYVELI LIGNITE 455.30 697.15 144.25 101.92 413.06 287.90CORPORATION 145.24 81.25NUCLEAR POWER 25.00 47.67 221.05 100.00CORPORATION 24.31 25.00

GRAND TOTAL : 780.03 1143.01 6335.53 3189.82747.57 731.78

* Budget Estimate** Revised Estimate@ Anticipated cost includes the cost of new starts

in 8th plan for benefit in 9th plan.

28

ANNEXURE TO DIRECTORS’ REPORTINTER-REGIONAL LINKS

Sl. Name of the Project Capacity PurposeNo.

1. HVDC Back-to-Back at Korba (along with 2x500 MW Inter-link Eastern and Western region400KV D/c line between Korba & Rourkela for facilitating inter-regional

transfer of power

2. HVDC Back-to-Back at Azamgarh (alongwith 2x500 MW Inter-connection Eastern and Northern400 KV D/c line from Biharshariff to Azamgarh) region on asynchronous mode.

Inter-regional transfer of power not onlybetween Eastern and Northern region andconvenient flexibility even for transfer ofpower between Eastern and Western regionvia Northern region and onwards to Southernregion.

3. HVDC Back-to-Back at Gwalior 2x500 MW On account of its geographical location,(alongwith 400 KV D/c line between the Western Region would eventually assumeAuraiya and Gwalior) the role of pooling of surplus power from

various regions as well as “clearing-house”for transfer of power to the otherneighbouring system HVDC Back-to-Backstation at Gwalior, as proposed would provideanother asynchronous tie (besides HVDCback-to-back at Vindhyachal).

4. HVDC Back-to-Back at Hyderabad (alongwith 2x500 MW Another asynchronous tie (in addition to400 KV D/c line between Parli HVDC back-to-back at Chandrapur)and Hyderabad) for inter-connecting Western and Southern

region for transfer of surplus energy.

5. HVDC from Balipara-Talcher- 6000 MW A number of Hydro & Gas Projects are on theCuddapah anvil in the North-Eastern region. Most of the

power will have to be transported out to otherregions mainly the Southern Region.Prima-facie HVDC bipole for point-to-pointtransmission would be required pendingdetailed studies.

Annexure-II

29

BUSINESS MISSION

To undertake the programme of laying theExtra High Voltage (EHV), High VoltageDirect Current (HVDC) transmissionsystem and associated sub-station as wellas constructing load despatch andcommunication facilities in a co-ordinatedand efficient manner with a view to move,large blocks of power from variousgenerating sources under the CentralSector to the load Centres within theregion as well as across the regions withreliability, security and economy.Take over Transmission Work and relatedfacilities of Central and Centre-State jointventure organisations, namely NTPC,NHPC, NEEPCO, NLC, DVC, BBMB, THDC,NJPC, CEA etc.Ultimately achieve building up NationalTransmission Grid.