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Annual Report 2017-18 English
Annual Report 2017-18 English
REPORT 2017-18
CONTENTS
Notice 01
Reference Information 15
Directors’ Profile 19
Directors’ Report 22
Annexure V(a) - Comments of the Statutory Auditors and Managements’ Reply thereto 77
Balance Sheet 93
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Power System Operation Corporation Limited
NOTICE
Notice is hereby given that the 9th Annual General Meeting of the Company will be held on Friday, 28th September,
2018 at 5.30 p.m. at the Registered Office of the Company i.e. B-9, Qutab Institutional Area, Katwaria Sarai, New
Delhi-110 016 to transact the following business:
Ordinary Business:
1. To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended
on 31st March, 2018 together with Reports of the Board of Directors and Auditors thereon.
2. To declare Final Dividend for Financial Year 2017-18, if any.
3. To fix the remuneration of Bansal & Co. LLP and S.K. Patodia & Associates Joint Statutory Auditors appointed by
Comptroller and Auditor General of India for F.Y. 2018-19.
Special Business:
4. To appoint Shri KVS Baba (DIN 07649025) as the Chairman and Managing Director
To consider and if thought fit, to pass with or without modification, the following resolution as an ORDINARY
RESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 149, 152 and any other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment
thereof for the time being in force) Shri KVS Baba (DIN 07649025), who was appointed as Chairman & Managing
Director by the President of India vide Ministry of Power Office Order No. 18/4/2016-PG dated 19th December,
2017 and subsequently appointed as an Additional Director by the Board of Directors with effect from 19th
December, 2017and holds office upto the date of ensuing Annual General Meeting under Section 161 of the
Companies Act, 2013, be and is hereby appointed as the Chairman and Managing Director.”
5. To appoint Ms. Meenakshi Davar (DIN 08032597) as Director (Human Resources)
To consider and if thought fit, to pass with or without modification, the following resolution as an ORDINARY
RESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 149, 152 and any other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment
thereof for the time being in force) Ms. Meenakshi Davar (DIN: 08032597), who was appointed as Director
(Human Resources), by the President of India vide Ministry of Power Office Order No. 18/6/2016-PG dated 22nd
December, 2017 and subsequently appointed as an Additional Director by the Board of Directors with effect
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Annual Report 2017-18
from 22nd December, 2017 and holds office upto the date of ensuing Annual General Meeting under Section 161
of the Companies Act, 2013, be and is hereby appointed as Director (Human Resources).”
6. To appoint Shri Praveen Kumar Agarwal (DIN: 08032530) as Director (Market Operation)
To consider and if thought fit, to pass with or without modification, the following resolution as an ORDINARY
RESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 149, 152 and any other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment
thereof for the time being in force) Shri Praveen Kumar Agarwal (DIN:08032530), who was appointed as Director
(Market Operation), by the President of India vide Ministry of Power Office Order No. 18/10/2016- PG dated 22nd
December, 2017 and subsequently appointed as an Additional Director by the Board of Directors with effect
from 22nd December, 2017, be and is hereby appointed as Director (Market Operation).”
7. To appoint Shri Ranjan Kumar Srivastava (DIN: 07338796) as Director (Finance)
To consider and if thought fit, to pass with or without modification, the following resolution as an ORDINARY
RESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 149, 152 and any other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment
thereof for the time being in force) Shri Ranjan Kumar Srivastava (DIN: 07338796), who was appointed as
Director (Finance), by the President of India vide Ministry of Power Office Order No. 18/7/2016- PG dated 29th
January, 2018 and subsequently appointed as an Additional Director by the Board of Directors with effect from
31st January, 2018 and holds office upto the date of ensuing Annual General Meeting under Section 161 of the
Companies Act, 2013, be and is hereby appointed as Director (Finance).”
8. To appoint Dr. Ruchit Uppal (DIN 08188562) as an Independent Director
To consider and if thought fit, to pass with or without modification, the following resolution as an ORDINARY
RESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 149, 150, 152 and any other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment
thereof for the time being in force) Dr. Ruchit Uppal (DIN 08188562), who was appointed as an Independent
Director by the President of India vide Ministry of Power Office Order No. 20/6/2017-Coord dated 26th July, 2018
and subsequently appointed as an Additional Director – Independent Director by the Board of Directors with
effect from 28th July, 2018 and holds office upto the date of ensuing Annual General Meeting under Section
161 of the Companies Act, 2013, be and is hereby appointed as an Independent Director of the Company for a
period of three years with effect from the date of his initial appointment, i.e. 28th July, 2018.”
9. Maintenance of the Register of members and other Statutory Registers at a place other than the Registered
Office of the Company
To consider and if thought fit, to pass with or without modification, the following resolution as a SPECIAL
RESOLUTION:
“Resolved that pursuant to the provisions of Section 94 of the Companies Act, 2013 (including any amendments
thereto or re-enactment thereof) (the “Act”) and rules make thereunder, consent of the members be and is
hereby accorded to keep and maintain the registers required to be maintained under Section 88 along with
copies of Annual Return prepared under Section 92 and copies of certificates and documents required to be
annexed thereto and other statutory records / registers at the Corporate Office of the Company, i.e. 61, IFCI
Tower, 8th / 9th Floor, Nehru Place, New Delhi – 110 019 instead of the Registered office of the Company, i.e. B-9,
1st Floor, Qutab Institutional Area, Katwaria Sarai, New Delhi – 110 016.
Resolved further that the Board of Directors of the Company be and is hereby authorized to decide to keep the
above mentioned documents and other documents, registers etc. as may be permitted, at such other place as
may be as the Board may decide from time to time.
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Power System Operation Corporation Limited
Resolved further that for the purpose of giving effect to this resolution, Company Secretary be and is hereby
authorised to do all such acts, deeds and things which are necessary for the purpose of giving effect to this
resolution and matters related thereto.”
(Priti Chaturvedi)
Company Secretary
Regd. Office:
Power System Operation Corporation Limited
(CIN: U40105DL2009GOI188682)
1st Floor, B-9, Qutab Institutional Area, Katwaria Sarai,
New Delhi-110 016.
Dated: 28.09.2018
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Annual Report 2017-18
NOTES:
1. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead
of himself / herself and a Proxy need not be a Member of the Company. A Blank Proxy Form is enclosed.
2. In compliance with the Secretarial Standard on General Meetings (SS-2), the relevant details of Shri KVS Baba (DIN
07649025), Chairman & Managing Director, Ms. Meenakshi Davar (DIN 08032597), Director (Human Resources),
Shri Praveen Kumar Agarwal (DIN 08032530), Director (Market Operation), Shri Ranjan Kumar Srivastava (DIN
07338796), Director (Finance) and Dr. Ruchit Uppal (DIN 08188562), Additional Directors, seeking appointment
under aforesaid item nos. 4, 5, 6, 7 & 8, respectively in accordance with applicable provisions of the Articles of
Association of the Company are annexed.
3. None of the Directors of the Company are in any way related with each other.
4. The relevant Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of Special
Business, as set out above is annexed hereto.
5. Shareholders seeking any information with regard to accounts are requested to write to the company.
6. Electronic copy of the Annual Report for the F.Y. 2017-18 has been sent to the members / nominees whose
e-mail ids are registered with the Company.
7. The Board of Directors in its Meeting held on 03.08.2018 had declared Final dividend @ 15.5% on the paid–up
equity share capital of the Company which was shall be paid upon the approval of the members at the Annual
General Meeting.
8. Pursuant to Section 139(5) of the Companies Act, 2013, the Auditors of the Government Company are to be
appointed or re-appointed by the Comptroller and Auditor General of India (C&AG) and in pursuance of Section
142 of the Companies Act, 2013, their remuneration has to be fixed by the Company in the Annual General
Meeting or in such manner as the Company in general meeting may determine. The members of the Company
in their meeting held on 22.09.2017 had authorized the Board of Directors to fix the remuneration of Statutory
Auditors for the F.Y. 2017-18. M/s S.K. Patodia & Associates and Bansal & Co. LLP have been appointed by C&AG
as Joint Statutory Auditors for the F.Y. 2018-19. The Members may authorize the Board to fix an appropriate
remuneration of Statutory Auditors as may be deemed fit by the Board for the F.Y. 2018-19.
9. All documents referred to in the accompanying Notice are open for inspection at the Registered Office of the
Company on all working days (barring Saturday and Sunday) between 11.00 a.m. and 1.00 p.m. prior to the
Annual General Meeting.
10. The Notice of the AGM is also placed on the website of the Company, i.e. www.posoco.in.
11. Annual Depository fee for the F.Y. 2018-19 has been paid to CDSL as well as NSDL.
12. Members are requested to notify immediately any change in their address:
i. To their Depository Participants (DP) in respect of shares held in dematerialized form, and
ii. To the Company at its Registered Office or its Registrar & Share Transfer Agent, Karvy Computershare
Private Limited in respect of their physical shares, if any, quoting their Folio Number.
13. As per the provisions of Sections 101 and 136 of the Companies Act, 2013 read with the Companies (Management
and Administration) Rules, 2014, and Companies (Accounts) Rules, 2014, the service of notice / documents
including Annual Report can be sent by e-mail to its members. Members who have not registered their e-mail
addresses, so far, are requested to register their e-mail addresses, in respect of dematerialized shares with the
Depository through their concerned Depository Participants. Members who hold shares in physical form are
requested to fill the E-Communication Mandate Form and hand over the same for registration of Email address
for receiving notice / documents including Annual Report in future.
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Power System Operation Corporation Limited
EXPLANATORY STATEMENT
ITEM NO. 4
Appointment of Shri KVS Baba (DIN: 07649025) as the Chairman and Managing Director
Shri KVS Baba was appointed as CMD of the Company by the President of India vide Ministry of Power Office Order
No. 18/4/2016-PG dated 19th December, 2017 and assumed charge w.e.f. 19th December, 2017. In terms of Article
40 of the Articles of Association, the Board of Directors are empowered to appoint the Directors appointed by the
President of India as an Additional Director under provisions of the Companies Act, 2013 (the Act) and they will be
appointed by the Shareholders at the succeeding Annual General Meeting (AGM). Approval of the Board of Directors
was obtained vide Resolution passed at the Board Meeting held on 10.01.2018 for appointment of Shri KVS Baba as
an Additional Director w.e.f. 19th December, 2017 as per provisions of Section 161 of the Act to hold office upto the
date of the ensuing Annual General Meeting.
In accordance with the Ministry of Corporate Affairs’ Notification dt. 05.06.2015, the requirement of obtaining
consent to be appointed as a Director (Section 152 of the Companies Act) as well as the requirement regarding
submission of notice signifying the intention for appointment of an individual as a Director along with deposit of
one lakh rupees (as contemplated under Section 160 of the Companies Act, 2013) is exempt for POSOCO, being a
wholly owned Govt. Company.
In accordance with Ministry of Corporate Affairs’ Notification dt. 13.06.2017, the provisions of Section 152 of the
Companies Act, 2013 relating to retirement of Directors by rotation are not applicable to POSOCO, being a wholly
owned Govt. Company.
Shri KVS Baba holds 01 equity share in POSOCO as a Nominee of Ministry of Power, Govt. of India.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 4
as an Ordinary Resolution.
Brief resume of Shri KVS Baba is annexed.
ITEM NO. 5
Appointment of Ms. Meenakshi Davar (DIN:08032597) as Director (Human Resources)
Ms. Meenakshi Davar was appointed as Director (Human Resources) of the Company by the President of India vide
Ministry of Power Office Order No. 18/6/2016- PG dated 22nd December, 2017 and assumed charge with effect from
22nd December, 2017.
In terms of Article 40 of the Articles of Association, the Board of Directors are empowered to appoint the Directors
appointed by the President of India as an Additional Director under provisions of the Companies Act, 2013 (the Act)
and they will be appointed by the Shareholders at the succeeding Annual General Meeting (AGM). Approval of the
Board of Directors was obtained vide Resolution passed at the Board Meeting held on 10.01.2018 for appointment
of Ms. Meenakshi Davar as an Additional Director w.e.f. 22nd December, 2017 as per provisions of Section 161 of the
Act to hold office upto the date of the ensuing Annual General Meeting.
In accordance with the Ministry of Corporate Affairs’ Notification dt. 05.06.2015, the requirement of obtaining
consent to be appointed as a Director (Section 152 of the Companies Act) as well as the requirement regarding
submission of notice signifying the intention for appointment of an individual as a Director along with deposit of
one lakh rupees (as contemplated under Section 160 of the Companies Act, 2013) is exempt for POSOCO, being a
wholly owned Govt. Company.
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Annual Report 2017-18
In accordance with Ministry of Corporate Affairs’ Notification dt. 13.06.2017, the provisions of Section 152 of the
Companies Act, 2013 relating to retirement of Directors by rotation are not applicable to POSOCO, being a wholly
owned Govt. Company.
Ms. Meenakshi Davar holds 01 equity share in POSOCO as a Nominee of Ministry of Power, Govt. of India.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 5
as an Ordinary Resolution.
Brief resume of Ms. Meenakshi Davar is annexed.
ITEM NO. 6
Appointment of Shri Praveen Kumar Agarwal (DIN: 08032530) as Director (Market Operation)
Shri Praveen Kumar Agarwal was appointed as Director (Market Operation) of the Company by the President of India
vide Ministry of Power Office Order No. 18/10/2016- PG dated 22nd December, 2017 and assumed charge with effect
from 22nd December, 2017.
In terms of Article 40 of the Articles of Association, the Board of Directors are empowered to appoint the Directors
appointed by the President of India as an Additional Director under provisions of the Companies Act, 2013 (the
Act) and they will be appointed by the Shareholders at the succeeding Annual General Meeting (AGM). Approval
of the Board of Directors was obtained vide Resolution passed at the Board Meeting held on 10.01.2018 for the
appointment of Shri Praveen Kumar Agarwal as an Additional Director w.e.f. 22nd December, 2017 as per provisions
of Section 161 of the Act to hold office upto the date of the ensuing Annual General Meeting.
In accordance with the Ministry of Corporate Affairs’ Notification dt. 05.06.2015, the requirement of obtaining
consent to be appointed as a Director (Section 152 of the Companies Act) as well as the requirement regarding
submission of notice signifying the intention for appointment of an individual as a Director along with deposit of
one lakh rupees (as contemplated under Section 160 of the Companies Act, 2013) is exempt for POSOCO, being a
wholly owned Govt. Company.
In accordance with Ministry of Corporate Affairs’ Notification dt. 13.06.2017, the provisions of Section 152 of the
Companies Act, 2013 relating to retirement of Directors by rotation are not applicable to POSOCO, being a wholly
owned Govt. Company.
Shri Praveen Kumar Agarwal holds 01 equity share in POSOCO as a Nominee of Ministry of Power, Govt. of India.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 5
as an Ordinary Resolution.
Brief resume of Shri Praveen Kumar Agarwal is annexed.
ITEM NO. 7
Appointment of Shri Ranjan Kumar Srivastava (DIN: 07338796) as Director (Finance)
Shri Ranjan Kumar Srivastava was appointed as Director (Finance) of the Company by the President of India vide
Ministry of Power Office Order No. 18/7/2016- PG dated 29th January, 2018 and assumed charge with effect from
31st January, 2018.
In terms of Article 40 of the Articles of Association, the Board of Directors are empowered to appoint the Directors
appointed by the President of India as an Additional Director under provisions of the Companies Act, 2013 (the
Act) and they will be appointed by the Shareholders at the succeeding Annual General Meeting (AGM). Approval
of the Board of Directors was obtained vide Resolution passed at the Board Meeting held on 06.02.2018 for the
appointment of Shri Ranjan Kumar Srivastava as an Additional Director w.e.f. 31st January, 2018 as per provisions of
Section 161 of the Act to hold office upto the date of the ensuing Annual General Meeting.
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Power System Operation Corporation Limited
In accordance with the Ministry of Corporate Affairs’ Notification dt. 05.06.2015, the requirement of obtaining
consent to be appointed as a Director (Section 152 of the Companies Act) as well as the requirement regarding
submission of notice signifying the intention for appointment of an individual as a Director along with deposit of
one lakh rupees (as contemplated under Section 160 of the Companies Act, 2013) is exempt for POSOCO, being a
wholly owned Govt. Company.
In accordance with Ministry of Corporate Affairs’ Notification dt. 13.06.2017, the provisions of Section 152 of the
Companies Act, 2013 relating to retirement of Directors by rotation are not applicable to POSOCO, being a wholly
owned Govt. Company.
Shri Ranjan Kumar Srivastava holds 01 equity share in POSOCO as a Nominee of Ministry of Power, Govt. of India.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 5
as an Ordinary Resolution.
Brief resume of Shri Ranjan Kumar Srivastava is annexed.
ITEM NO. 8
Appointment of Dr. Ruchit Uppal (DIN: 08188562) as an Independent Director
Dr. Ruchit Uppal was appointed as an Independent Director of the Company by the President of India vide Ministry
of Power Office Order No. 20/6/2017-Coord. dated 26th July, 2018 for a period of three years with effect from the
date of notification of his appointment, or until further orders, whichever is earlier.
In terms of Article 40 of the Articles of Association, the Board of Directors are empowered to appoint the Directors
appointed by the President of India as an Additional Director under provisions of the Companies Act, 2013 (the
Act) and they will be appointed by the Shareholders at the succeeding Annual General Meeting (AGM). Approval
of the Board of Directors was obtained vide Resolution passed at the Board Meeting held on 29.07.2018 for the
appointment of Dr. Ruchit Uppal as an Additional Director w.e.f. 28th July, 2018 as per provisions of Section 161 of
the Act to hold office upto the date of the ensuing Annual General Meeting.
In accordance with the Ministry of Corporate Affairs’ Notification dt. 05.06.2015, the requirement of obtaining
consent to be appointed as a Director (Section 152 of the Companies Act) as well as the requirement regarding
submission of notice signifying the intention for appointment of an individual as a Director along with deposit of
one lakh rupees (as contemplated under Section 160 of the Companies Act, 2013) is exempt for POSOCO, being a
wholly owned Govt. Company.
In accordance with Ministry of Corporate Affairs’ Notification dt. 13.06.2017, the provisions of Section 152 of the
Companies Act, 2013 relating to retirement of Directors by rotation are not applicable to POSOCO, being a wholly
owned Govt. Company.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 5
as an Ordinary Resolution.
Brief resume of Dr. Ruchit Uppal is annexed.
ITEM NO. 9
Maintenance of the Register of Members and other Statutory Registers at a place other than the Registered
Office of the Company
I. In terms of Section 94 of the Companies Act, the registers required to be maintained by the Company under
Section 88 (like the Register of Members and Index of Members) and copies of Annual Return filed under Section
92 shall be kept at the Registered office of the company. The provison to the Section stipulates that the company
can keep the register at any other place within the city, town or village in which the registered office is situated
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Annual Report 2017-18
or any other place in India in which more than 1/10th (one-tenth) of the total members entered in the register
of members reside by passing Special Resolution in the General Meeting. It is pertinent to note that the entire
shares of POSOCO are held by President of India through Secretary, Ministry of Power having its office in New
Delhi.
Certain other Statutory Registers like Register of Directors and KMPs; Register of Contracts or Arrangements in
which Directors are interested, etc. are also required to be kept at the Registered Office of the Company.
The Corporate Office of POSOCO has been set up at IFCI Tower, Nehru Place, New Delhi - 110019. Subsequently,
many of the Departments, including Finance as well as Company Secretariat Department have moved to the
Corporate Office of the company. In view of the requirement of the Companies Act to keep the books of accounts,
as well as other statutory records and Registers at the Registered Office of the Company, approval may be accorded
for keeping the register of members, annual return and other statutory records and registers at the Corporate office
/ other place as may be deemed appropriate by the Board from time to time.
None of the Directors and Key Managerial Personnel of the Company or their relatives are concerned or interested
in the resolution financially or otherwise except to the extent that he or she is a Director and/or Shareholder of the
Company. The Board of Directors of your Company recommends passing of the resolution as set out at Item No. 9
as a Special Resolution.
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Power System Operation Corporation Limited
Form of Proxy
[Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and
Administration) Rules, 2014]
DP ID: ...............................................................................................................................................................................
I/We, being the member (s) of …………. shares of the above named company, hereby appoint
1. Name:
Address Signature:
E-mail ID
Or failing him
2. Name:
Address Signature:
E-mail ID
Or failing him
3. Name:
Address Signature:
E-mail ID
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 9th Annual General Meeting of
the Company, to be held on Friday, the 28th day of September at 5.30 p.m. at B-9, Qutab Institutional Area, Katwaria
Sarai, New Delhi – 110 016 and at any adjournment thereof in respect of such resolutions as are indicated below:
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Annual Report 2017-18
Sl.
Resolution For Against
No.
Ordinary Business
1. To receive, consider and adopt the audited financial statements for
the year ended 31st March, 2018 together with Report of the Board of
Directors and Auditors thereon.
2. To declare Final Dividend for the Financial Year 2017-18, if any.
3. To fix the remuneration of Bansal & Co. LLP and S.K Patodia & Associates
Joint Statutory Auditors for F.Y. 2018-19
Special Business
4. To appoint Shri KVS Baba (DIN: 07649025) as the Chairman and
Managing Director
5. To appoint Ms. Meenakshi Davar (DIN: 08032597) as Director (Human
Resources)
6. To appoint Shri Praveen Kumar Agarwal (DIN: 08032530) as Director
(Market Operation)
7. To appoint Shri Ranjan Kumar Srivastava (DIN: 07338796) as Director
(Finance)
8. To appoint Dr. Ruchit Uppal (DIN: 08188562) as an Independent
Director
9. Maintenance of the Register of Members and other Statutory Registers
at a place other than the Registered Office of the Company.
Note: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered
Office of the Company, not less than 48 hours before the commencement of the Meeting.
2. For the resolutions, please refer to the Notice of the Meeting.
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Power System Operation Corporation Limited
I.
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Annual Report 2017-18
II.
III.
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Power System Operation Corporation Limited
IV.
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Annual Report 2017-18
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Power System Operation Corporation Limited
REFERENCE INFORMATION
(Data as on 01.09.2018)
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Annual Report 2017-18
Dear Members,
It gives me immense pleasure to welcome you to the 9th Annual General Meeting of your Company. Friends, for the
period ending 31st March, 2018, the Directors’ Report and the final accounts of the Company have already been
provided. With your permission, I take them as read.
Indian grid has become the largest national synchronous grid in the world. India is ranked third in terms of electricity
generation, electricity consumption, installed generation capacity and size of transmission system in the world.
The power sector in India has seen a transformational change with progressive policy-level reforms and effective
implementation of the same in the recent years. The tremendous pace of expansion of the generation & transmission
in terms of higher voltages, large footprint, new technologies, large HVDCs, FSCs and STATCOMs have strengthened
the Indian power grid to meet the peak demand of around 176 GW in 2018 supporting the Government of India’s
vision on attaining ‘Power for all’. The non-discriminatory open access at inter-state level has been enabled through
robust and vibrant electricity market with about 50,000 transactions totaling to over 105 BUs in short term market
volumes.
During F.Y. 2017-18, POSOCO went a step beyond what was required and what was envisioned, and stepped into
a new leadership role in the industry. Since its inception as independent government company in 2017, POSOCO
has taken key initiatives to transition from the initial vision of regional grids to a synchronized national grid with
competitive wholesale electricity market. POSOCO has been able to visualize and manifest a successful direction to
benefit all power sector stakeholders.
POSOCO’s initiatives in policy advocacy and market design have lead to laying of emphasis on power system
operation and electricity markets in the draft amendments to Electricity Act, National Electricity Policy & Tariff Policy.
At the regulatory level too, POSOCO played a pivotal role in advancement of concepts of Spinning Reserves, Primary
Response, National Open Access Registry, Gate Closure, Real Time Markets, Fast Response Ancillary Services, Linkage
of Deviation Settlement Mechanism (DSM) price to market discovery process, pilot on five minute scheduling and
settlement etc.
POSOCO recognizes that the successes of both the markets and the reliability process are key to operate a secure
and reliable grid. Together, we have become an internationally respected ISO – our Indian grid operations and
electricity market trends are getting noticed across the world. We are active contributors to the discussions in
international for a such as CIGRE, IEEE, NASPI etc. Internationally, POSOCO is committed to continuing to work
closely with GO15 – the group of the world’s largest energy system operators –to share experiences and learn from
our counterparts around the world.
A number of studies & simulations have been carried out in the recent past to understand various important aspects
of Indian power system & electricity market, especially, for renewable integration. These include inter-alia studies
on flexibility requirement, demand pattern, hydro generation optimization, gas generation optimization, market
behavior analysis, RE integration simulation studies etc. The wisdom gained from archived data & over a decade
of experience has provided useful insights into the past, present and likely future of Indian power system. These
studies have given confidence that the Indian power system is capable of integrating large scale RE in a secure and
reliable manner.
CERC gave the roadmap to operationalize reserves in the country in October 2015 which identified Primary, Secondary
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Power System Operation Corporation Limited
and Tertiary controls as important components for secure grid operation. A total of 3600 MW of Secondary Reserve
Secondary frequency control was earmarked. In December 2017, CERC approved the commissioning of the AGC Pilot
Project between NLDC and NTPC Dadri Stage-II. Automatic Generation Control (AGC) in India was operationalized
in January, 2018 on a pilot basis. Four other locations in Western, Southern, Eastern and North-Eastern regions
have also been identified and implementation of pilot AGC project in those regions is under progress. The full scale
project, planned by 2022, shall enable efficiency and grid security in the India power system, making it ready to
handle the 175 GW of renewables targeted by 2022.
The frequency profile has improved since implementation of Reserve Regulation Ancillary Services (RRAS). The
frequency floats around 70-75 % of time within the Indian Electricity Grid Code (IEGC) mandated operating frequency
band of 49.90-50.05 Hz. Most of the days the average frequency is close to national reference frequency of 50 Hz.
The large-scale penetration of renewable generation and other distributed resources embedded in the distribution
grids increases uncertainty and volatility in power grid operations. Operational challenges include fast ramping,
variability, potential grid instabilities resulting from loss of inertia, loss of visibility and controllability of the behind-
the-meter resources, load stagnation/oversupply, inadequate communication interfaces and operator training.
Reinforcement and expansion of the existing power grids is needed to accommodate the increase in electricity
consumption and RE integration.
Several actions such as bringing flexibility in the conventional generation, frequency control, maintaining generation
reserves, introduction of ancillary services, forecasting, scheduling, deviation settlement mechanism, balancing
mechanism, robust data telemetry and communication systems, establishment of Renewable Energy Management
Centres (REMCs), augmentation and strengthening of Transmission system as well as compliance to Regulations &
Standards by renewable generation will be pivotal for the Indian power sector over next few years.
Your company is live to the several externalities in the system such as pace of generating capacity addition, fuel
security, retirement of old polluting generating units, rollout of RE resources and impact of adverse financial situation
of utilities on the power system security. The impact of climate change leading to adverse weather conditions and/
or natural disasters in many pockets as well as the increasing number of high impact low probability incidents bring
about a need for making the system more resilient. Your company is committed to ensuring that besides reliable
and economic operation, the electricity grid becomes more resilient.
Human capital management and building sustainable institutions is a key priority area for POSOCO. The best
training & certifications to develop domain knowledge and analytical abilities of system operators is being ensured.
Your company is collaborating with the SLDCs in various functional areas, leading to knowledge sharing and overall
development of the sector.
Intel founder Gordon Moore observed in 1965 that, “change has never been this fast, and will never be this slow
again”– an appropriate quote to describe the energy transition that we are now in. POSOCO is well-positioned to
lead the charge in the Indian power sector transition to greater renewable energy penetration, given our quality
resources, experience and technical know how.
On the financial front, your Company recorded a Profit After Tax (including other Comprehensive income) of `4810.03
lakh and gross turnover of `25781.70 lakh during the FY 2017-18. The Board of your Company had recommended
a dividend of 15.5% of the subscribed / paid up capital to the Ministry of Power, which had been paid on your
approval.
Your Company is committed to ensure transparency in its dealings and compliance of applicable laws and regulations
in order to promote ethical conduct and practices throughout the organization. Your Company has complied
with the conditions of Corporate Governance as applicable, issued by the Department of Public Enterprises. The
Company has once again voluntarily opted for Secretarial Audit during the year in order to reinforce confidence of
the stakeholders. A separate section on Corporate Governance furnishing the applicable details forms part of the
Directors’ Report.
Your Company has taken several initiatives in its role as a responsible corporate citizen. The projects undertaken
towards Corporate Social Responsibility (CSR) during the F.Y 2017-18 include establishing smart labs in Govt. Schools
& providing skill development, Awards to encourage excellence in the fields related to Power Systems, etc.
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Annual Report 2017-18
Our employees are our biggest assets. On behalf of the Board of Directors, I thank our employees for their aspiration,
dedication, customer focus, hard work, commitment and teamwork. Specially, I would like to convey my gratitude
to all fellow directors and to the Management for their very useful support. I take this opportunity to express my
gratefulness to the stakeholders who have put their trust in our abilities and extended support to us.
I also take this opportunity to convey my sincere gratitude to the Government of India particularly the Ministry of
Power, Ministry of New and Renewable Energy, the Department of Public Enterprises, Central Electricity Regulatory
Commission, Central Electricity Authority, Regional Power Committees, all stakeholders, the Comptroller and Auditor
General of India (C&AG), Statutory and Secretarial Auditors for their mentoring and support to the Company.
My heartfelt gratitude to each individual, agency and organization, who have contributed to and supported our
accomplishments.
Thank You.
(KVS Baba)
Chairman & Managing Director
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Power System Operation Corporation Limited
DIRECTORS’ PROFILE
(As on 01.09.2018)
KVS Baba
Chairman and Managing Director
Shri KVS Baba (DIN:07649025) is the Chairman and Managing Director of Power System
Operation Corporation Limited (POSOCO). He has rich and diversified experience of about
34 years in Power sector. Prior to the present assignment, he was the Chief Executive Officer
(CEO) of POSOCO. He has also worked in various capacities in NTPC and POWERGRID before
joining POSOCO in 2013. Mr. Baba has extensive experience in the areas of Power System
Planning and Design of EHV Transmission systems, Power System Analysis, Power System
Operation, Power Market Operations, Corporate Planning and Project Management in
Distribution Systems. He has been actively associated with various activities for large scale
grid integration of Renewables including regulatory and policy advocacy. He is passionate about knowledge management,
information dissemination, mentoring and capacity building of young engineers. He has guided various technical reports
on a variety of subjects such as Large Scale Integration of Renewable Energy, Need for Balancing, Deviation Settlement
Mechanism (DSM), Operational Analysis of Hydro, migration to 5-minute scheduling, metering accounting and settlement,
REC Mechanism, National Reference Frequency, Ancillary Services and many others. He has encouraged & strengthened the
Power System modelling capacity of the young engineers in POSOCO. His capacity building and knowledge dissemination
efforts are not only limited to POSOCO but also extend to the State Load Despatch Centers (SLDCs) for whom, he has
taken a number of initiatives either directly or through the Forum of Load Despatchers (FOLD). He is a Certified System
Operator and also obtained Specialist level Certification in Regulatory Framework in Power Sector. He has co-authored
several papers on the electricity sector. He is the Chairman of Indian National Study Committee of CIGRE SC C2. He has
been representing POSOCO in GO15 (formerly Very Large Power Grid Operators of the World). He was appointed as the
Chairman and Managing Director of POSOCO in December, 2017.
Meenakshi Davar
Director (Human Resources)
Ms. Meenakshi Davar (DIN: 08032597) is the Director (Human Resources) in our company.
She is a MBA from University of Hull, UK and a post graduate from University of Delhi. She
is also a Diploma holder in Industrial Psychology. She is a certified trainer of soft skills. Prior
to taking up this assignment, she was Executive Director HR with POWERGRID. She has
spent last 35 years in the HR function, first 9 years in NTPC and then in POWERGRID. She
has handled all areas of HR including Appraisals and Promotions, Training, Establishment,
Policy, Industrial Relations, Manpower Planning and Administration. She is the recipient of
Amity’s Women Achiever Award 2016 in the area of Human Resources. She also received
the ‘Women Persona- InWENA of the Decade’– Public Sector Enterprises Awards 2017 for contribution to the Power Sector
and Public Sector. In March 2018, she was conferred with the Amity Leadership Award. Fame India Magazine in their 2018
issue have rated her as one of the 25 Shaktishali Women in the Country. In August 2018, NHRDN conferred her with the
‘Seasoned HR Professional Award’. In September 2018, she has been awarded with “Women Super Achiever Award for
Excellence in HR” by CMO Asia She joined our Board in December, 2017.
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Annual Report 2017-18
Shri Praveen Kumar Agarwal (DIN: 08032530) is the Director (Market Operation) of Power
System Operation Corporation Limited (POSOCO). Before his appointment, he was holding
the charge of Executive Director, NRLDC, POSOCO. He also holds charge of Chief Information
Security Officer of POSOCO. He has professional experience of 36 years working in NTPC,
POWERGRID and POSOCO in various fields. viz. Power System Operation, Market Operation,
System Logistics and Administrative functions of NRLDC. Apart from these, he has also
handled HVDC, Substation and Transmission line works during his NTPC and POWERGRID’s
tenure. Being CISO of POSOCO, he has pioneered several Cyber Security measures for
POSOCO. He is a Graduate Electrical Engineer from Maulana Azad National Institute of
Technology, Bhopal. He is certified lead auditor of ISO 27001 standards. He has authored several technical papers and
presented them at International forums viz. NASPI, California, USA, IQPC conferences at Kualalampur & Hongkong,
Edinburgh, Scotland, Erice, Italy, etc. He has pioneered implementation of Wide Area Measurement System in India which
got award from NASPI, USA and ISGF, India. He has contributed chapters in book “Synchronised Phasor Measurements for
smart grids” by IET, U.K. and book “Power System Grid operation using Synchrophasor technologies” (under publication) by
Springer publications, USA. He has been member of various working groups namely NASPI, VLPGO, IEEE, GO15,CERC, etc.
through which various recommendations in respect of Synchro- phasors, PMUs, WAMS, Data and network Management,
regulations, etc. He was appointed on our Board in December, 2017.
Shri Ranjan Kumar Srivastava (DIN: 07338796) is the Director (Finance) of our Company.
Prior to joining POSOCO, he was holding the charge of Executive Director (Finance) in Power
Grid Corporation of India Ltd. He has served in NTPC Ltd. & POWERGRID for a period of 33
years in Finance & Accounts functions at various projects, sites and corporate centre. He
has been looking after fund raising, banking operations, project procurement, commercial
functions, compilation of Accounts, Audit etc. He is a post graduate in Physics from BHU,
Varanasi and a Fellow member of Institute of Cost Accountant of India (FICWAI). He joined
our Board in January, 2018.
Ms. Bharati
Government Nominee
Ms. Bharati (DIN: 07925607) is the Government Nominee Director of our Company. She is
currently working as Joint Secretary (Transmission) in the Ministry of Power. She has done
her M.Tech in Energy studies from IIT, Delhi and M.Sc in Physics from IIT, Kanpur. Ms Bharti
joined the Indian Forest Service in 1992. With over 25 years of professional experience in the
field of conservation and management of forest biodiversity, she has worked with Central
and State Governments in India both at field level as well as policy level. She has worked in
the Sikkim Forest Deptt and Science & Technology Department for more than 14 years in
various capacities, including, the first Member Secretary of the State Forest Development
Agency during 2009-2014 and also served as the Member Secretary of the State Biodiversity
Board of Sikkim. During this period, Ms. Bharati led scientific projects on popularization of
Rural Technologies, Remote Sensing & GIS activities and Patent Information Centre. She was also a member of Human &
Institutional Development Core Group, Deptt. of Planning, Govt. of Sikkim. She has done a ‘Certificate Programme in Public
Policy’ from Goldman School of Public Policy, University of California, Berkley, USA, a Certificate Course in Applications of
GIS in Forest Management from IIRS, Dehradun and Masters in Forestry from IGNFA, Dehradun.
Prior to her present assignment as Joint Secretary in Ministry of Power since August, 2017, Ms. Bharati was Director,
MoEFCC, Govt. of India, where she worked in the ‘National Mission for a Green India’ which is one of the eight missions
under the National Action Plan on Climate Change and as Science and Technology Correspondent for United Nations
Convention to Combat Desertification (UNCCD) for India. She was overseeing the functioning of Desertification Cell of
Ministry which is the nodal authority for reporting to this Convention. She has been appointed as a Director on our Board
in September, 2017.
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Power System Operation Corporation Limited
Shri M.A. Inbarasu (DIN: 07884669) is the Government Nominee Director of our Company.
Shri Inbarasu joined the Department of Atomic Energy as Joint Secretary (I&M) in June,
2017. Shri Inbarasu completed B.Tech (Mechanical) from I.I.T Madras and M.Tech (Industrial
Management) from I.I.T Madras in 1998. Shri Inbarasu has an experience of more than 32
years Group A service (IRSME) in Indian Railways since, May 1985. As Nodal officer for
energy conversation, he saved 70 kl of furnace oil per month by curbing malpractices and
carrying out various measures with the help of Petroleum Conservation Research Energy
(PCRA). He has brought and implemented various new information technologies to save
lots of cost and bring efficiency in Indian Railways. He has been appointed as a Director on
our Board in December’ 2017.
Shri Jagdishbhai I. Patel [DIN:02291361] is a B.Sc., ASTM-UT, MBA (Ind.) and has an illustrious
career spanning over 36 years contribution in the areas of Energy Generation, Mining and
Space sectors as an engineering solution providers and strategic planner over business
auxiliary units. Having been Independent Director in Power Grid Corporation of India Ltd.,
Director (Tech.) at Pushpak Trademech Limited, as well as KIA Infrastructure Development
Limited and an active member of Gujarat Chamber of Commerce and Industry (GCCI), he
has served as a member of several institutions such as, District Implementation & Industrial
Management Committee of ITI, Industrial Management Committee of IGTR and has also
served as the President as well as Treasurer at LUB-Gujarat. He is also member of Standing
Committee / Town Planning Committee / Solid Waste Management Committee of AMC. He
was appointed as an Independent Director on the Board of POSOCO in February, 2016.
Dr. Ruchit Uppal (DIN: 08188562) is a Dentist by profession, with his speciality being Oral
and Maxillofacial Surgery. He completed B.D.S. from B.R.S. Dental College, Panchkula in
1998 and MDS – Oral & Maxillofacial Surgery from D.A.V. Dental College, Yamuna Nagar in
2005. He is a member of the Indian Dental Association, Association of Oral and Maxillofacial
Surgeons of India (AOMSI) and Association of Cranio-Maxillo-Facial Surgeons (AOCMF).
Dr Ruchit has 13 years of a wide and varied experience of Government institutions like
P.G.I.M.E.R.—Chandigarh, Government Medical College & Hospital – Chandigarh and
Punjab University – Chandigarh. He was selected as a Govt. of India nominated faculty for
deputation to B.P.K.I.H.S.—Dharan, Nepal. He has always been in the forefront of conducting
Health Check ups & Medical Camps, along with distribution of free medicines, especially for the underprivileged sections
of the society.
He has also been associated with teaching undergraduate and post-graduate students in both government and private
dental colleges. Pursuing his passion for teaching, he now conducts Continuing Dental Education Programmes for students
and practising dentists. Dr. Ruchit currently runs a private practise in Chandigarh, whose USP is Multi-Speciality Dentistry
& Painless Dentistry.
He joined our Board in July, 2018 as an Independent Director.
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Annual Report 2017-18
Directors’ Report
To,
The Members,
I, on behalf of the Board of Directors, present the Ninth Annual Report on the performance of Power System
Operation Corporation Limited (POSOCO) together with the Audited Statement of Accounts, Auditors’ Report and
Review of the Accounts by the Comptroller and Auditor General of India for the Financial Year 2017-18.
The National Load Despatch Centre (NLDC) and the five Regional Load Despatch Centres (RLDCs) of POSOCO are
required to maintain security and reliability and ensuring the integrated operation of the power system in the
region. The Load Despatch Centers discharge their functions in a fair and non – discriminatory manner.
NLDC, POSOCO inter-alia is the Nodal Agency for many responsibilities, like Point of Connection mechanism for
sharing of inter-state transmission charges and losses (PoC), Power System Development Fund (PSDF), implementation
of the Renewable Energy Certificate Mechanism and to at as ESCerts Registry under Perform, Achieve & Trade
Mechanism (PAT). NLDC has also been designated as Nodal Agency for disaster management in the Power Sector.
During the year, a record demand of 176 GW has been met in September 2018 and POSOCO continued to respond
to change with the confidence and focus on grid reliability and operational planning.
POSOCO has taken a leadership role in navigating the trends which have affected the industry: the changing fuel
mix, rising renewables, the proliferation of distributed energy resources, and the need to enhance security and
resilience, to name just a few. The evolution of markets and how we value resource attributes together form a strong
foundation for moving forward.
POSOCO aspires to be a catalyst for a successful energy transition and consequently, a reliable, sustainable and
affordable energy system. By policy advocacy and regulatory support, POSOCO promotes both the grid integration of
renewables and further expansion of the Indian energy market appropriately designed to accommodate distributed
generation and new technologies such as Electric Vehicles and Storage.
CAPEX (REPEX)
Capital expenditure is incurred primarily for activities like replacement / augmentation of the existing SCADA-EMS
systems, renovation and modernization of the Control Centers, adaptation of new technologies like synchrophasors
for Wide Area Measurement System (WAMS) through Phasor Measurement Unit (PMU), development of IT
infrastructure for offline activities, data warehousing and Cyber Security System etc.
The CAPEX therefore can be classified as replacement of existing assets (REPEX) on a periodicity of 5 to 7 years on
rolling basis and addition of new tools for supporting the System Operation and Market Operation functions. The
CAPEX had been approved by CERC for the Control Periods 2009-14 and 2014-19 as part of the annual charges
of the RLDCs and NLDC. The LOA for replacement of SCADA system for all RLDCs were placed in 2012-13 and the
schemes have been completed during F.Y. 2015-16 and F.Y. 2016-17. LOA for replacement of SCADA system of
NLDC has been placed in F.Y. 2017-18 and work is likely to be completed during FY 2018-19. Further, orders for
procurement of IT hardware and software systems required for functioning of Corporate Centre office at Nehru
Place were also placed during the year.
Renewable Energy Management Centres (REMCs) in Northern, Western and Southern region as well as at the National
level are expected to be in operation during F.Y. 2018-19 and F.Y. 2019-20 respectively.
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Power System Operation Corporation Limited
Transmission Licensees towards the services provided to them. Realization of about 95.10% was achieved against
billed revenue of `14265.13 lakh during the year.
Financial Highlights
In ` lakh
Details 2017-18 2016-17
Total Income 25,781.70 22,299.92
Gross Margin 9,291.62 7,213.81
Profit before Interest and Taxes (PBIT) 7,337.55 5,509.33
Profit Before Tax (PBT) 7,208.53 5.480.48
Profit After Tax (PAT)* 4,810.03 3,798.28
Gross Fixed Assets 18,238.50 16,841.00
Net Worth 35,234.60 30,664.81
Dividend Payout
In line with the CERC Order dt. 14.03.2016, payment of Dividend has been restricted to 15.5% of the subscribed /
paid up capital of the Company. Accordingly, Final Dividend @15.5% amounting to `474.92 lakh is proposed to be
paid subject to the approval of the members at the Annual General Meeting.
Reserves
The Company has made appropriation of profit in the following manner by credit to respective reserve account:
a) General Reserve `480 lakh
b) LDC Development Fund `810.58 lakh
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Annual Report 2017-18
asynchronously, which were progressively synchronized from 1991 to 2013 to form a synchronous national grid.
Interconnections with neighbouring countries have also been established during this period which has enlarged
the footprint and also contributed towards harnessing the diversity. F.Y. 2017-18 saw the operationalization of
pilot project on Automatic Generation Control (AGC) by POSOCO in collaboration with NTPC for the first time in
the Indian Power System. As AGC expands to cover more generating plants, the frequency variations are expected
to stabilize close to 50 Hz. All-time best Frequency Variation Index (FVI) of 0.0185 was recorded on 8th June 2018.
Frequency remained within the IEGC band of 49.9 to 50.05 Hz for a record 88.53% of time on 29th April 2018.
Further improvement in frequency control would be brought about with new interventions – technical and regulatory.
POSOCO is in the process of implementing pilot projects on AGC in all other regions which would be operationalized
in near future. CERC has directed POSOCO to carry out pilot projects on Fast Response Ancillary Services (FRAS) with
Hydro stations and on 5-minute scheduling, accounting, metering and settlement. These measures would help in
balancing load and generation more closely and therefore keeping frequency closer to nominal. POSOCO is doing
further work to bring about improvements in this sphere.
Ancillary Services
The regulatory framework for ancillary services was introduced for the first time in India in 2015 and implemented
in April 2016. With the help of in-house development of customized software solution, Reserve Regulation Ancillary
Services (RRAS) has provided a mechanism for tertiary frequency control, besides the congestion management
and optimization at regional & pan-India level, thereby, facilitating integration of renewables. Various challenges
have been experienced in the RRAS implementation such as ‘gate closure’ in the multi-lateral scheduling system,
maintaining adequate reserves quantum and forecasting by the utilities for resource adequacy. In F.Y. 2017-18,
about 4.2 Billion Units (BU) has been despatched in Regulation Up (3619 Nos. of instructions) and about 0.2 BU in
Regulation down (375 Nos. of instructions) from NLDC through RLDCs. Since inception till June, 2018, about 7.8
Billion Units (BU) has been despatched in Regulation Up (6503 Nos. of instructions) and about 0.6 BU in Regulation
down (830 Nos. of instructions) from NLDC through RLDCs.
While RRAS is limited to ISGS thermal stations, hydro generators can provide fast response and peaking support.
Fast Response Ancillary Service (FRAS) from hydro stations was proposed by POSOCO for ‘regulation service’ from
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Power System Operation Corporation Limited
storage/pondage based hydro stations e.g. to handle the hour-boundary frequency spikes. All constraints declared
by the hydro stations would be honored and the total energy delivered over the day would be maintained as declared
by the hydro station. In this direction, CERC, vide order in Petition No. 07/SM/2018 (Suo-Motu) dtd. 16th July, 2018,
gave direction to POSOCO to implement pilot project for FRAS covering all Central sector hydro generating stations
which would help in gaining experience in regard to FRAS.
Operational Feedback
NLDC has submitted Operational Feedbacks on various issues, like network security constraints, incidences of
multiple contingencies in the system, near-miss events, operational experience of +/- 800 kV HVDC, incidences of
tower collapses, oscillations in the grid, uncertainty in load growth, congestion in electricity markets, and operation
of Ancillary services. These feedbacks facilitate CTU/CEA for resolution of the issues after due discussion with the
stakeholders during the Standing Committee on Transmission Planning. Four quarterly operational feedbacks for
F.Y. 2017-18 were issued on 21.07.17, 21.10.17, 21.01.18 and 30.04.18. These are available on POSOCO’s website.
The important issues highlighted in these reports are: Frequent outages of inter-regional HVDCs, constraint in WR-
NR corridor due to skewed generation in WR on account of coal shortage, reverse power order testing of HVDC,
shifting of Rihand generation from NR to WR, important lines under construction from transfer capability and
reliability view point, delayed fault clearances close to 400 kV substations, islanding of part of the system and the
event of complete blackout of critical 400 kV substations. In the recent past, high power corridors such as HVDC
Champa Kurukshetra pole –II along with 765 kV/400 kV substations like 765 kV Orai (PG), 765 kV Aligarh (PG), 400
kV Orai (PG) and associated network/ICTs have been commissioned to strength the inter-regional link and enhance
transfer capability between WR-NR corridor. Reconfiguration/commissioning of lines around 400 kV Vemagiri (PG)
have strengthened the network towards SR.
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Annual Report 2017-18
Transfer Capability
F.Y. 2017-18 has seen improvement in transfer capability between the regions. There was addition of new transmission
lines, HVDC links and generation in various parts of India, which improved the grid interconnection. Southern Region
interconnection got strengthened after commissioning and reconfiguration of new lines at 400kV Vemagiri (PG).
TTC/ATC for import of SR remained unchanged because there was no major evacuation path available downstream
of 765 kV Vemagiri. Northern Region import capability has increased by a total of 1000 MW after the commissioning
of second pole of HVDC Champa-Kurukshetra. However, the Northern Region transfer capability value has seen
frequent fluctuations due to several transmission system outages and coal shortage in some parts of Western
Region.
Grid Incidents/Disturbances
NLDC/RLDCs monitor the cases of tripping and report the trippings as per classification provided in CEA Grid
Standards regulations 2010. The events are analysed and protection related issues are taken up in RPC protection
committee meetings regularly. NLDC reports the monthly record of Grid Disturbance/Grid Incident to CERC on a
regular basis. There have been several cases of complete station outages, a few of which took place at focal points
in the grid. Apart from the incidents related to multiple trippings, this year several cases of outage because of tower
collapse were reported. Prolonged outages due to tower collapse lead to reduction in reliability of transmission
corridors.
During F.Y. 2017-18, no grid incidents of GD-V classification, the most severe, took place. There were 16 incidents
where complete outage at a generating station took place, resulting in generation loss.
Indian power system is becoming more and more complex day by day. During F.Y. 2017-18, a total of 32805 outages
were approved and facilitated by RLDCs and NLDC for various works and installations. Out of this, 1076 outage
requests having impact on All India Grid were received in F.Y. 2017-18 and 100% of these outages were processed
within timelines prescribed by CERC. This number includes outages of lines, bays, elements as well as auto-reclosure
of elements. On the whole, infrastructure augmentation is on across several areas, such as new transmission systems,
Dedicated Freight Corridor, railway lines, National Highways etc. are being built. POSOCO coordinated with various
agencies for outage of transmission lines and concerned shutdowns are being facilitated for speedy completion
of construction work. During F.Y. 2017-18, approximately 17% of the outages processed by NLDC pertained to
construction related activities.
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Power System Operation Corporation Limited
for installation in Indian grid – 2 in Northern Region, 4 in Western Region, 3 in Southern Region and 4 in Eastern
regions, in addition to existing STATCOM at N.P. Kunta (a solar power plant) in Southern Region. During the past year,
STATCOMs have been successfully integrated in Indian grid at Aurangabad, Solapur and Satna in Western region, &
Jeypore and New Ranchi in Eastern Region, taking the total number of STATCOMs in operation to six. Monitoring of
dynamic performance of STATCOMs is being done using nearby phasor measurement units (PMUs).
Review of Transfer Capability and Review of Operational & Long Term Planning
POWERTECH Labs Inc. was awarded consultancy in August 2015 to ‘Review Transmission System Transfer Capability
and Review of Operational & Long Term Planning’ for Indian grid, as per directions of Ministry of Power, Govt.
of India in line with recommendations of Task Force on Power system analysis and contingencies. The studies by
POWERTECH Labs were done under 6 tasks, each covering a significant aspect of power systems in operational or
planning horizon. The reports of all 6 tasks have been delivered, and presented by experts from POWERTECH labs
during March – April 2018 at various fora – Ministry of Power, CERC, CEA, RPCs, CTU and POSOCO. Recommendations
of the consultant are in various stages of implementation.
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Annual Report 2017-18
Implementing Agency for Sharing of Inter-state Transmission Charges & Losses – POC
Mechanism
NLDC has been designated as the Implementing Agency for Sharing of Inter State Transmission Charges and Losses
(PoC Charges and Losses) in accordance the Regulations notified by CERC w.e.f. 1st July 2011. The computations of
Point of Connection (PoC) Charges and Losses are carried out on a quarterly basis.
PoC tariffs are based on load flow analysis and capture utilization of network element by customers. Due to this
framework, a generator is able to pay a single charge for injection or withdrawal based on its location in the grid to
gain access to any customer anywhere in the country. Similarly, a demand entity is also paying just one charge to
get access to any generator in the grid. With the implementation of the PoC transmission pricing mechanism where
transmission charges are differentiated by location, power generators can take a view both on transmission costs of
electricity and transportation costs of fuel.
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Power System Operation Corporation Limited
Cross-border Exchanges
The Indian power system has several interconnections with its neighbouring countries – Bangladesh, Bhutan, Nepal
and Myanmar. Bhutan operates in synchronism with the Indian system while other links are radial in nature. During
F.Y. 2017-18, energy imported from Bhutan was 5611 Million units (MU), while energy exported to Bangladesh,
Nepal and Myanmar was 4809 MU, 2389 MU and 5 MU respectively.
In order to facilitate and promote cross border trade of electricity with greater transparency, consistency and
predictability in regulatory approaches across jurisdictions and minimize perception of regulatory risks; Ministry of
Power, Govt. of India has issued the guidelines on Cross Border Trade of Electricity on 5th December, 2016. POSOCO
gave major contribution, as part of the committee, to CEA towards formulation of Conduct of Business Rules for the
‘Designated Authority’ and ‘Competent Authority’ for cross border trade of electricity.
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Annual Report 2017-18
• CERC (Planning, Coordination and Development of Economic and Efficient Inter-State Transmission
System by Central Transmission Utility and other related matters) Regulations, 2018
These regulations mandate transparent, coordinated consultative process for planning for the development of
inter-State transmission system and associated intra-State transmission systems in an optimal manner. NLDC
and RLDCs have been mandated to provide periodic operational statistics and feedback to Central Transmission
Utility along with supporting analysis and details which have a bearing on the planning process of inter-state
transmission system.
The following Regulations are in draft stage and circulated for stakeholder consultation.
• Draft Central Electricity Regulatory Commission (Cross Border Trade of Electricity) Regulations, 2017
• Draft Central Electricity Regulatory Commission (Grant of Connectivity and General Network Access to the inter-
State transmission system and other related matters) Regulations, 2017
• Terms and Conditions of Tariff for the tariff period commencing from 1st April, 2019 – Consultation Paper
thereof.
• Draft Central Electricity Regulatory Commission (Deviation Settlement Mechanism and related matters) (Fourth
Amendment) Regulations, 2018
• Discussion Paper on “Re-Designing Real Time Electricity Market in India”
• Draft Central Electricity Regulatory Commission (Open Access in inter-State Transmission) (Fifth Amendment)
Regulations, 2018
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Power System Operation Corporation Limited
with Frequency, in the Light of Emerging Markets”. In this Report, the Expert Group deliberated upon “Drivers for
Review of DSM Price Vector”, “Limitations of the Present DSM Price Vector”. Expert Group felt the need to link DSM
price factor with the prices discovered under an organized electricity market which operates close to the real time.
In this direction, draft amendments to Deviation Settlement Mechanism regulations have been initiated by the
Commission.
MoP Committee on “NHPC to become Grid Stabilizer using Hydro Power”
Ministry of Power, GoI felt that a mechanism may be needed for balancing of power required during peak and
off-peak hours. In this direction, a committee was formed by Ministry of Power, Government of India on “NHPC to
become Grid Stabilizer using Hydro Power” to examine the issue on how to use hydro power for peak supply as well
as to explore the possibility of the non-peak supply using coal based power. POSOCO gave active contribution to
the Committee for appropriate institutional, regulatory and legal framework to define the role and the activities that
the aggregator will perform and empower through statutory regulation. Further, the need for suitable regulatory
framework at inter-state level incentivizing peaking and also, the ancillary services by hydro generators was also
emphasized. It was brought out that the tariff design needs to reflect “Value of Water”. For this, suitable multi-part
tariff structure of hydro generation may also be evolved by the respective state commissions (SERCs) in line with the
Central Commission (CERC) Regulations. There is a need for utilities to take effective measures for early completion
of construction works and operationalization of Pumped Storage Plants (PSPs).
Availability of SCADA/EMS systems are being maintained above 99.9% to provide the interruption free data to
the operators. Back-up of each control centres have also been established as a disaster recovery system to take
over system operation from back-up control centre in case of any contingency in Main control centre. Dedicated
communication links have been established amongst control centres i.e. main and back-up, control centres are
connected with other control centres main and back-up system etc.
NLDC SCADA/EMS system is also under Up-gradation and sophisticated power application tools like DSA (Dynamic
Security Assessment) and AGC (Automatic Generation Control) applications are also envisaged in the SCADA up-
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Annual Report 2017-18
gradation project of NLDC. A Dispatcher Training Simulator (DTS) is also included in NLDC SCADA up-gradation
project to train the operators on SCADA and EMS applications at all India level. Notification of Award (NoA) for
replacement of SCADA system of NLDC has been placed in early October, 2017 and system is expected to be
replaced by F.Y. 2018-19 as per NoA.
Wide Area Measurement System (WAMS)
To provide dynamic visibility of the grid, Wide Area Management Systems (WAMS) are being installed nationwide
under the Unified Real Time Dynamic State Measurement (URTDSM) project. This system would provide microscopic
view of the power system. Presently, under the URTDSM project about 1460 PMUs are commissioned and reporting
to the regional control centers. The installation and commissioning of URTDSM system has been done in WRLDC
and NRLDC and work is in progress at other regional and national LDCs. Under a pilot project, around 64 nos. of
PMUs were integrated with National PDC at NLDC which are successfully reporting and being used for grid-events
analysis. Some of the states such as Gujarat, Maharashtra, etc. have also installed PMUs at its substations apart from
URTDSM project. The data of these PMUs is also being utilized by power system operators as an analytical tool for
better system operation. Some of the visualisation available through WAMS system are as follows:
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Power System Operation Corporation Limited
Inverter analog and status data from Solar plants as well as Weather parameters data have been integrated for the
first time in existing SCADA system of Load Despatch Centre (SRLDC).
Mobile Applications
Central Government through Ministry of Power (MoP) under “Digital India” program desired development of mobile
applications to bring more transparency through information dissemination to general public and the information
available in the Portals help all the stakeholders as well. Accordingly, POSOCO facilitated the development of two
applications, named as “Vidyut PRAVAH”- Electricity, Price Availability and Highlights and “MERIT” – Merit Order
Despatch of Electricity for Rejuvenation of Income and Transparency, for the Ministry of Power. These mobile apps
available in play store are being maintained and upgraded by POSOCO from time-to-time.
The Vidyut PRAVAH mobile application provides data pertaining to market price of power from power exchange,
value of current all India demand in GW and all India and State shortage including peak hour and total energy
shortage on near real time basis. The real time data and comparison with previous day/year data is also available.
Data from multiple sources, including the States and Power Exchanges, has been made available through a single
portal for convenience of all.
The MERIT app displays extensive array of information regarding the merit order such as daily state-wise marginal
variable costs of all generators, daily source-wise power purchases of respective states/UTs with source-wise fixed
and variable costs, energy volumes and purchase prices. The app also gives information regarding reasons for
deviation from merit order such as must run conditions, transmission constraints etc.
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Annual Report 2017-18
Experience gained using these information are jointly documented by IMD & POSOCO and published a report
named as “Weather Information Portal for Indian Power System”. The Reference Document was released by Hon’ble
Minister of State (IC) for Power and New & Renewable Energy on 29th August 2018. The document is also available
at the following link:
https://posoco.in/wp-content/uploads/2018/09/Reference-Document-on-Weather-Information-Portal-for-Indian-Power-System.pdf.
The Reference document is a ready reckoner, providing necessary information on all the enlisted tools of the web
portal, such as various weather-related terminologies, available weather forecasts, Weather Doppler Radar, Satellite
images and Meteogram etc. Thus, the document shall provide an insight to Power sector professionals about various
meteorological parameters which would not only help in forecasting electricity demand and generation (esp. from
renewable resources), but would also make the Indian Grid more resilient to the vagaries of weather.
IT Infrastructure
Each Regional and National Load Despatch Centre has a secure IT network which is being maintained at high
availability around 99.9 % throughout the year. A number of IT-tools, Web-sites, web-apps, web-portals etc. have
been developed in-house and through third-party vendors as per the requirements.
E-Office software developed by NIC is under implementation across POSOCO, this software will primarily facilitate
electronic file movement and approval process with the help of digital signatures which will reduce the usage of
papers. Further, it also has a structured document management system and other useful features.
Voice Communication
A hotline voice communication system covering all control centres, sub-stations, generating stations across India
using dedicated wideband communication system has been established. This communication, which is independent
of public communication network, provides express voice communication for day-to-day operation of the grid as
well as during crisis and disaster situations. Control centre operators are able to connect any other control centre,
sub-station/generating stations directly without using public communication network.
Communication Regulation
Central Electricity Regulatory Commission made the maiden Regulations on communication vide L-1/210/2016/
CERC Dated: 15th May 2017. As per regulation 7 (ii) CEA is to formulate and notify technical standards, cyber security
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Power System Operation Corporation Limited
requirements. As per Regulation 7.3(i) NPC is responsible to issue guidelines with the approval of Commission on
“Availability of Communication System” in consultation with RPCs.
Accordingly two committees were formed, one by CEA under Chairmanship of Member (PS) for formulation of
Technical Standards and the other one by NPC under the Chairmanship of Chief Engineer (NPC).
POSOCO is member of both these committees and working closely with CEA and NPC respectively for formulation
of Technical Standards on Communication for Grid Operation and on the formulation of guidelines for calculation
of Communication System Availability. POSOCO is also working on preparation of the interface guidelines as per the
Regulations on Communication for standardizing the interface requirement for data/voice communication.
OTHER FUNCTIONS
Renewable Energy Certificate Mechanism (REC)
The REC Mechanism is a pan-India market based instrument for promotion of generation
from renewable energy sources. CERC has designated NLDC as Central Agency for
implementation of REC Mechanism.
The highlights and the progress of REC Mechanism till August 31, 2018 are as follows:
• During the financial year 2017-18, 63,26,816 number of RECs were issued. 68,54,898 number of RECs were
redeemed, valuing more than ` 2390 Crore
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Annual Report 2017-18
• Further, Further, during the financial year 2018-19 (till August 31, 2018), 24,20,955 number of RECs were issued
and 57,12,588 RECs were redeemed, corresponding to value of transaction of more than ` 585 Crore.
• RE Generators from a total of 20 States have been registered
• 910 projects with capacity of 3974 MW have been Registered by Central Agency
• Solar Renewable Energy (RE) Generators participation commenced from May’12 onwards with current cumulative
capacity of 362 projects and capacity of 742 MW
• More than 4.85 Crore RECs have been issued ( including about 4.02 Crore non-solar+ 83 Lakh solar)
• 88 trading sessions have been held with the value of transactions crossing ` 6296 Crore (1st trading on 30.03.2011
and 88th trading on 31.08.2018)
• In the month of Dec’17, 52 Lakh RECs were traded, amounting to 782 Crore which is the highest trade in any
month since the launch of REC mechanism
• More than 4.27 Crore RECs have been redeemed through Power Exchanges
• More than 17 Lakh RECs have been self-retained by RE Generators
• 29,774 RECs have been procured by voluntary buyers
% Change in
Sl. Item 2014-15 2015-16 2016-17* 2017-18 2017-18 over
previous year
1 RECs Issued 9,624,866 9,733,840 8,195,763 6,326,816 -23
2 RECs Redeemed 3,061,922 4,955,153 6,487,739 16,184,151 149
3 Value of Transaction 502 873 1,085 2,425 124
(` Crore)
*Issuance reduced due to 4th Amendment in REC Regulations.
• Many orders related to REC Mechanism have been passed by the Hon’ble Supreme Court / High Court(s) /
APTEL/ CERC. Hon’ble Supreme Court vide interim order dated 08.05.2017, had stayed the trading of RECs at
Power Exchanges for the months of May’17 and June’17. Subsequently, Hon’ble Supreme Court modified the
stay order dated 08.05.2017 and inter-alia allowed the trading of non-solar RECs at Power Exchanges at Prices
determined through CERC Order dated 30.03.2017 and referred the matter back to APTEL. APTEL vide order
dated 12.04.2018, decided that the trading of RECs (Solar and Non-Solar) shall be carried out as per Hon’ble
CERC order dated 30.03.2017.
Subsequently, trading of RECs (Solar and Non-Solar) has been resumed on 30.05.2018 according to Hon’ble
CERC letter dated 28.05.2018 on Petition No.: 14/SM/2017 and Hon’ble Supreme Court order dated 14.05.2018.
Accordingly, the Non-Solar RECs were traded as two separate instruments, one for Non-Solar RECs issued prior
to 01.04.2017 and other for Non-Solar RECs issued on or after 01.04.2017.
• Since launch of REC Mechanism, CERC has notified four amendments to the REC Regulations. The amendments
are related with the changes in eligibility criteria, self-retention, vintage multiplier concept, validity of REC, etc.
NLDC, as the Central Agency, has actively participated in the consultation process, revised detailed procedures,
modified software, etc. for implementation of the REC Mechanism.
• As per CERC REC Regulations, CERC has appointed compliance Auditors to inquire into and report on the
compliance of REC Regulations by the projects Registered under REC Mechanism. On the basis of compliance
reports, Central Agency has taken the appropriate action against the concerned generators who are violating
the REC Regulations. Compliance Audit Mechanism has ensured the integrity and probity of the REC Mechanism
in the country.
• Creating awareness and dissemination of the ongoing changes in the REC Mechanism to the stakeholders is of
utmost importance for smooth Implementation of the Mechanism. Accordingly, 28 Capacity Building Programs
for the stakeholders have been conducted by NLDC so far.
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Power System Operation Corporation Limited
The trading of ESCerts on Power Exchange(s) commenced on 26.09.2017 and the deadline for Compliance for PAT
Cycle – 1, was extended upto 19.01.2018
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Annual Report 2017-18
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Power System Operation Corporation Limited
is being provided by the NLDC. FOLD is a catalyst for reliable, efficient and economic operation of the bulk of Indian
electric power supply system. Forum of Load Despatchers of India strives to achieve its vision through technical
co-operation, knowledge sharing, regular interaction, active collaboration, mutual respect, cooperation, consensus
building, international benchmarking and promoting ethical, non-discriminatory and fair practices. During FY 2017-
18, three meetings of FOLD were held at New Delhi, wherein CERC Report on bringing Power System Operation
closer to 50Hz, Implementation of AGC pilot and preparation for future, National Open Access Registry, Industry-
Academia collaboration for Load forecasting, Updation of the ‘Report on the Survey of LDCs in India’ which was part
of the ‘Pradhan Committee Report’, etc. were discussed by the FOLD members. Recently initiative was started for
sharing of the best practice(s) adopted at the SLDCs with the other Load Despatcher Centres through FOLD meetings
and Gujarat SLDC made the maiden presentation. Under the capacity building initiative of FOLD, a Workshop (Boot
Camp) for Coal Flexing to support variable renewable energy integration and grid balancing was held at NRLDC,
Delhi during the FY 2017-18. As on August 31, 2018, in the FY 2018-19, four Workshop cum meetings of FOLD have
been held, wherein Telangana, Odisha, Madhya Pradesh, Uttar Pradesh, Manipur, Meghalaya, Punjab and Maharashtra
SLDCs have shared their presentation of best practices.
Workshop for all stakeholders at WRLDC Special Meetings with Generating Stations for implementation of Primary Response
International Cooperation
POSOCO is one of the members of the group of GO15 comprising of 18 large international power grid operators.
POSOCO participated in the GO15 Governing Body (GB) Meeting from 30th – 31st March, 2017 at Tokyo, Japan
and from 26th – 27th September, 2017 at Melbourne, Australia which were attended by high level executives of the
international system operator organizations.
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Annual Report 2017-18
POSOCO actively participates in the CIGRE (International Council on Large Electric Systems) which is one of the
premier organizations on Electric Power Systems, covering their technical, economic, environmental, organizational
and regulatory aspects. POSOCO was represented in the CIGRE Symposium 2017 in Dublin, Ireland from 29th
May – 02nd June, 2018. POSOCO representatives also attended and presented 4 technical papers in the CIGRE
Biennial Session from 26th – 31st August, 2018 which provided a unique opportunity to listen to contributions from
international senior executives as well as experts and specialists through official presentations, panel discussions,
technical meetings and poster sessions.
POSOCO participated in training workshops and conferences on renewable energy. POSOCO was represented at
the Asia Clean Energy Forum (ACEF) held from 04th – 08th June, 2018 at Singapore. CMD, POSOCO accompanied
senior officials of Ministry of Power on USAID's Study tour regarding “Executive Exchange on Coal Flexing to Support
Variable Renewable Energy Integration and Grid Balancing” during 26th – 30th March, 2018. POSOCO has been
actively associated with the activities pertaining to energy cooperation in the SAARC region and the development
of a SAARC Electricity Market. POSOCO representative accompanied senior government officials to Johannesburg,
South Africa on a US Department of Commerce's Commercial Law Development Program (CLDP) study tour to
South Africa from 06th – 12th May, 2018 which focused on exchange of experiences around the development of cross-
border power markets. POSOCO also participated in the 2018 IEEE-PES General meeting from 05th – 09th August,
2018 held at Portland, USA.
A team of executives from POSOCO along with Director (Market Operation) participated in the 47th Session of CIGRE
held at Paris. CIGRE Session is an international leading event for Power System Industry which provides opportunity
to foster engagement and knowledge sharing among power system professionals globally to enable the sustainable
provision of electricity for all.
POSOCO is an active participant in the North American SynchroPhasor Initiative (NASPI) which has the mission to
improve power system reliability and visibility through wide area measurement and control, by fostering the use and
capabilities of synchrophasor technology.
HUMAN RESOURCES
CAPACITY BUILDING
POSOCO is committed to create value proposition for its employees by developing a culture that incubates
innovation and excellence through capacity building and catalyzing. As an organization it focuses on contributing
to an individual’s functional proficiency and encouraging continued professional development. POSOCO employees
have participated at several national and international fora, several papers have been written and presented on wide
ranging topics pertaining to Power System.
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Power System Operation Corporation Limited
Training program on “Greening the Grid” at NRLDC Capacity Building Program at NRLDC
POSOCO is an active participant and member of various international groups/bodies such as IEEE and CIGRE with
the objective of sharing of experiences, best practices and benchmarking System Operation and Market Operation
against the very best across the world. POSOCO has an MoU with LBNL, Berkley, California and active partnership in
the field of renewable energy with USAID and GIZ.
POSOCO participated in several workshops and conference to actively interact with stakeholders and International
bodies. POSOCO has created networks of collaboration with National and International experts to enable India to
integrate renewables effectively with conventional sources and achieve UNFCC goals.
POSOCO organized several capacity building programme on behavioural and Team Building skills apart from
knowledge based programmes to enable all-round development of employees. Programmes on Experiential
Learning, Creative Thinking, Spirituality, Yoga etc. have been organized. POSOCO has robust Industry-academia
relationships with several leading academic institutes in the country.
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Annual Report 2017-18
respective faculties of Power System and promote capability enhancement of faculty as a whole. There are 300 Nos.
of basic level certified system operators and 106 Nos. of specialist level certified system operators in POSOCO.
WELFARE ACTIVITIES
Several welfare Initiatives were organized by POSOCO
throughout the year. This included family get- togethers,
celebration of national festivals etc. POSOCO has focused
extensively on employee health –physical, emotional and
spiritual. Health camps both diagnostic and preventive
were organized throughout the year. Health talks on variety
of topics were also been organized across all the regions.
Hasya kavi Sammelan was organized for employees and
their families. On the occasion of 75th Anniversary of Quit
India Movement, a quiz was organised for the employees. Blood Donation camp organized at SRLDC on occasion of 75th
Senior officials also participated in tree plantation. Anniversary of Quit India Movement
Agrini Samiti, an organization comprising of female employees and spouses of male employees in all RLDCs have
organized events pertaining to women empowerment, social welfare and creating awareness.
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Power System Operation Corporation Limited
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Annual Report 2017-18
RLDCs and NLDC wherein series of Inspirational Talks, seminars, symposia and competition for employees were
organized. Several workshops were also organized throughout the year orienting employees to adopt use of Hindi
in their routine work and especially integrating Technology with encouraging Hindi usage. The minutes of Rajbhasha
meetings and Rajbhasha Karyanvayan samiti are available on www.posoco.in . An e-magazine in Hindi titled “Grid
Sanchalika” is being released quarterly.
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Power System Operation Corporation Limited
awarded, nationally and internationally, for its best growth, adaptability and performance amongst the PSUs.The
Company has also been rated ‘Excellent’ for its performance for most of the years.
POSOCO has been adjudged amongst Top 50 Organisations for following Innovative HR Practices (PSUs) by Asia
Pacific Congress in September’18.
The Company participated in Inter-CPSU Cricket Tournament, held in Delhi in December 2017. POSOCO received 2
man of the match recognitions during the tournament.
POSOCO TT team participated in the inter-CPSU table tennis tourney hosted by SLVNL at NJPC, Rampur [HP] on 13
to 15 Nov. 2017. POSOCO won the bronze medal in the individual doubles event.
The Company won the ISGF Innovation Award for Best Smart Grid Pilot Project in India in March’17. POSOCO has
been conferred the 2016 NASPI Award for Outstanding Utility by North American Synchrophasor Initiative jointly
with POWERGRID (erstwhile Holding Company). POSOCO Team was the Runners up at the state level Round of the
Times Ascent Engineering Mastermind, India’s biggest Inter-Corporate Quiz for Engineers for the 2016.
Team from WRLDC was the winner in Table Tennis in inter- PSU Women employees from SRLDC reached up to Quarter Finals in the
tournaments 20th Inter-CPSU Carom Tournament,2017 under the aegis of PSCB
(Power Sport Control Board.
The Company had been conferred the‘R&D Innovation’ and ‘Best Performing Company’ award by the India Today
Group and the Award for ‘Consistent Growth and Adaptability’ by Governance Now in 2015.
In addition, the Company had earlier been bestowed with the Award for ‘Fastest Growing PSU ‘by the India Today
Group in 2014, CBIP Award for Best System Operator and Governance Now Award for Consistent Growth &
Adaptability in 2014.
POSOCO Team had won the Regional Round of the Times Ascent Engineering Mastermind, India’s biggest Inter-
Corporate Quiz for engineers for the years 2014 and 2015.
Right to Information
In order to promote transparency and accountability, an appropriate mechanism has been set up across POSOCO in
line with ‘Right to Information Act, 2005’. The Company has nominated CPIO/ Appellate Authorities at its Corporate
Office and Regional Load Despatch Centres across the country to provide required information to the citizens under
the provisions of the RTI Act.
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Annual Report 2017-18
Deposits
The Company has not accepted any deposits during the year as defined under the Companies Act, 2013 and the
Rules made thereunder.
Particulars of Employees
As per Notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government Companies are
exempted from compliance with the provisions of Section 197 of the Companies Act, 2013 and corresponding rules
of Chapter XIII. As POSOCO is a Government Company, this information has not been included as a part of the
Directors’ Report.
Corporate Governance
A Report on the Corporate Governance (Annexure-VI), forming part of this report, together with the Certificate
thereon is given at Annexure-VII of this Report. The details regarding the number of Board / Committee meetings
held during the year are contained in the Report on Corporate Governance which forms part of this Report.
Secretarial Audit
The Company has been opting for Voluntary Secretarial Audit since F.Y. 2014-15. The Report on Secretarial Audit by
M/s Agarwal S & Associates, Practicing Company Secretaries for the F.Y. 2017-18 is given at Annexure-VIII of this
Report.
The Secretarial Auditor has made the following observations during the course of Audit:
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Power System Operation Corporation Limited
“Composition of the Board of the Company should be in compliance with the provisions of the Companies Act, 2013
and DPE Guidelines on Corporate Governance and consequential compliances thereof.”
The Management’s Explanation to the observation of Secretarial Auditor is as under:
Power System Operation Corporation Limited (POSOCO) is a Government Company within the meaning of Section
2(45) of the Companies Act. In order to meet the requirement of Section 149 of the Companies Act, read with the
DPE Guidelines, the Company had taken up the matter regarding appointment of one more Independent Director
with the Ministry of Power, Govt. of India. With the appointment of Dr. Ruchit Uppal as an Independent Director w.e.f.
28.07.2018, the Company is compliant with the composition requirement.
Report under The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
POSOCO is committed to prevention of sexual harassment of women at workplace. As per the requirement of The
Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made
thereunder, the Company has constituted Internal Complaints Committees (ICC). 01 complaint was received by the
ICC during the year which was subsequently disposed off.
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Annual Report 2017-18
Secretary, Ministry of Power was appointed as Govt. Nominee Director in POSOCO from 14.08.2017 to 30.08.2017.
Subsequently, Ms. Bharati, Joint Secretary, Ministry of Power was appointed on the Board of the Company w.e.f.
05.09.2017.
Shri Santosh D. Vaidya, then Joint Secretary (MNRE) ceased to be on the Board of POSOCO w.e.f. 11.06.2017.
Subsequently, Shri Jatindra Nath Swain, Joint Secretary (MNRE) was appointed on the Board of the Company w.e.f.
21.07.2017. He ceased to be on the Board of POSOCO w.e.f. 08.01.2018 in view of his elevation as CMD, SECI.
Dr. Ruchit Uppal was appointed as an Independent Director w.e.f. 28.07.2018.
The Board placed on record the contributions made by the Directors and KMPs during their tenure and wished them
good luck in their future roles.
As on 31.03.2018, Shri KVS Baba, Ms. Meenakshi Davar, Shri Praveen Kumar Agarwal, Shri Ranjan Kumar Srivastava,
Ms. Bharati, Shri M.A. Inbarasu and Shri Jagdishbhai I. Patel were on the Board of the Company.
In compliance with the requirements of Section 203 of the Companies Act, 2013, as on 31.03.2018, Shri KVS Baba,
CMD, Shri Ranjan Kumar Srivastava, Director (Finance) & CFO, Ms. Meenakshi Davar, Director (HR), Shri P.K. Agarwal,
Director (Market Operation) and Ms. Priti Chaturvedi, Company Secretary were the Key Managerial Personnel of the
Company.
Acknowledgement
The Board of Directors, with a deep sense of appreciation, extends its sincere thanks to the Ministry of Power,
Department of Public Enterprises, Central Electricity Regulatory Commission, Central Electricity Authority, Regional
Power Committees, State Load Despatch Centres, CTU, Central Generating Companies and other Regional Entities,
Inter-State Transmission Licensees and other concerned agencies & stakeholders for extending their valuable
supportin operating the power system of the country and discharging the other functions assigned to POSOCO
for their patronage and directions.The Directors also take this opportunity to thank the Principal Director of
Commercial Audit and Ex-Officio Member Audit Board-III for the cooperation extended during the year. The Board
also acknowledges the valuable suggestions and guidance received from the statutory auditors during the audit of
accounts of the company for the year under review.
For and on behalf of Power System Operation Corporation Limited
(KVS Baba)
Chairman& Managing Director
Date: 28.09.2018
Place: New Delhi
Annexure-I to Directors’ Report
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Power System Operation Corporation Limited
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Annual Report 2017-18
delivered deeper market and supply insights, more frequently, through a range of publications, presentations and
forums, to meet the information needs of stakeholders in this fast-changing environment.
India’s energy transition is well underway. Variable energy, grid scale storage, the penetration of distributed energy
resources and load shifting capability, together with the general digitalization of the economy and greater consumer
choice, are fundamentally altering how we think about, produce, and use energy.
Intel founder Gordon Moore observed in 1965 that, “change has never been this fast, and will never be this slow
again”– an appropriate quote to describe the energy transition that we are now in. POSOCO is well-positioned to
lead the charge in the Indian power sector transition to greater renewable energy penetration, given our quality
resources, experience and technical knowhow.
Our success begins with our people. Here at POSOCO we ensure that we have the right skills mix along with system
operator basic and specialist level certifications that will enable us to meet the reliability and security standards that
the Indian power sector now expects. Recognition of our success will be through a factual and evidentiary approach
to how we manage the system. We are also acting with a forward-looking holistic approach, grounded in economic
and technology reality, to future-proof our energy system.
The changes wrought by the energy transition are becoming more and more tangible, leading to a new dynamic
within the company. It is time to accelerate. The power grid is a key pillar of the energy policy that supports our
socio-economic prosperity. POSOCO aspires to be a catalyst for a successful energy transition and consequently, a
reliable, sustainable and affordable energy system. By policy advocacy and regulatory support, POSOCO promotes
both the integration of the Indian energy market and the decarburization of our society.
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Power System Operation Corporation Limited
through ancillary services which takes at-least two time blocks to come in full force. In the absence of regulatory
mandate to keep generation reserves, the availability of power to be dispatched under ancillary service becomes
a concern during high demand days and peak time.
3. With the target of achieving 175 GW of RE by 2022, renewable generation capacity in India has increased
manifold over the years. The uncertainty and variability of renewables poses a challenge for system operation
as it creates imbalance between load and generation. Forecasting and balancing of RE is still improving with the
experience but requisite regulatory framework for the same is still absent in some RE rich states. Improvements
in load forecasting and portfolio management by states is also essential for system operation. Flexibility in
generation, transmission, distribution and markets would be key to integrate such large scale RE in the system.
4. Massive investments in generation and transmission in the grid implies that the country is on a ‘high-build’
phase. Needless to mention, this necessitates a large number of construction related outages on the transmission
lines,which is over and above the maintenance related outages. A careful study and coordination with several
utilities is done to ensure that the grid continues to operate in a reliable fashion and economy transactions are
curtailed to the minimum possible extent.
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Annual Report 2017-18
payable for RRAS. With the increase in challenges and complexities for smooth operation of grid, it is required
to provide some more options/products under ancillary services. Steps are being taken to expand the ambit of
ancillary services such as Fast Tertiary Control through Hydro, Secondary Frequency Control, Voltage Control
and Black-start service. After gaining the experience from the current regulated version, a market based model
for providing ancillary services may be considered in future.
• With a vibrant electricity market in the country and the continuous pursuit of the distribution utilities to scout
for the cheaper sources of electricity anywhere in the country, pressure on the transmission network is inevitable.
A few transmission corridors get congested on seasonal basis. In the planning horizon several transmission
lines are envisaged to mitigate this congestion. POSOCO through its operational feedback and discussion
has persuaded several transmission utilities to fast track certain projects, so that the congestion is mitigated
quickly. This process has been very successful and has helped in slowly reducing the congestion in the last three
years.
• Managing power system in natural disasters such as earthquakes and cyclones has been quite challenging. The
cyclones and floods in India was an alarm for the safety and reliability of Indian Grid. The immediate effects of
such natural disasters on the power system are system faults and loads throw off. This leads to high voltages
and frequency in the system which if uncontrolled may lead to cascade failure. The proactive and fast response
from POSOCO has averted cascading failures in both the cases. Such low probability high impact events bring
out the need for aresilient grid and design of such a resilient grid at the planning horizon itself.
• Outage coordination which includes construction related outages on the power system elements and
maintenance related outages at all India level is a paramount task. This is being done by RLDCs/NLDC after a
careful study and coordination with several utilities to ensure reliable and secure grid operation. Nearly 50-80
transmission elements / bay outages at 400 kV level and above are facilitated by RLDCs/NLDC every day.
• The electricity grid managers have a significant and critical role in the energy value chain and hence, need to
be quick in adapting, while also mitigating new risks. One of the key priorities of POSOCO is to implement
framework for reserves along with both primary and secondary frequency controls. Load and generation
forecasting is another thrust area to manage uncertainties on account of load and renewable variations.
POSOCO is focused on improving grid resilience and make self-healing grid to adapt to natural calamities and
climate change phenomena. In view of cross border interconnections, POSOCO role would be pivotal beyond
the countries boundaries. Further, POSOCO would handhold the emerging economies to have a reliable and
secure grid operation alongwith robust electricity market.
• Optimization has to be done by system operator and savings shall accrue to the beneficiaries. Moreover, the
optimization would also help in maintaining national merit order. This optimization process would minimize the
variable costs and constraints such as 55% technical minimum and interregional transfer capability would be
honoured.
• There is a lot of scope for improvement and leap frog in the areas like Interface Meter Adequacy, Sacrosanct
Schedules, 5-minute scheduling and settlement, Real-Time Generation Dispatching, Double Entry Energy
Accounting System, Deviation Settlement Mechanism based on “causer pays” principle, communication and
data telemetry etc.
• Presently, the electricity market in India is a ‘physical’ delivery only market with no financial products.
Forwards and futures contracts may be required to be introduced to enable higher liquidity and depth in the
market.
• The introduction of concept of Distribution System Operators (DSOs) in India will enable optimal integration
and utilization of Distributed Energy Resources (DER), including distributed generation, electric vehicles, storage,
and demand response. Integrated resource planning should include scenario based planning with new products
in transmission access. Qualified Coordinating Agency (QCA)/Aggregators will be new actors in renewable
energy sector who are responsible for metering, data collection /transmission, communication, coordination
with agencies.
• POSOCO would strive for Grid reliability standards to ensure compliance monitoring of Grid with respect to
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Power System Operation Corporation Limited
CEA standards and CERC regulations. POSOCO aims to implement technology upgradations and automation
in the fields of situational awareness tools, IT Automation and Cyber Security tools as per best international
practices.
• Last but not the least, human capital management and building sustainable institutions is a key priority area
for POSOCO. The best training & certifications to develop domain knowledge and analytical abilities of system
operators will be ensured. Forum of Regulators recognized that institutional building of LDCs in India needs fresh
impetus in view of the fast changing energy landscape. Recently, FOR constituted a sub-group to recommend
suitable measures and roadmap for institution building and strengthening of the LDCs.
Risk Management
System operation and electricity market operations entails various risks. The risks envisaged and the measures taken
to alleviate the same are brought out hereunder:
1. The first major risk that POSOCO faces is grid disturbances due to natural calamities and unintended operation of
protective systems. In the past year, POSOCO has faced situations in real time grid operation where multiple line
outagesdue to strong winds, cyclones, earthquake, protective system mis operations and tripping of bulk power
transfer corridors (HVDCs) have threatened grid security and reliability. These multiple outages are generally
not considered in planning horizon, placing enormous challenges to thereal time grid operator. POSOCO has
regularly apprised the system planners (CEA and CTU) and the Central regulator through operational feedbacks
and in some cases have also filed petition.
Quick detection of such unintended operations, taking up with the concerned utilities through discussion in the
Regional Power Committees (RPCs) followed by implementation of remedial measures are the ways in which
POSOCO mitigates this risk. Further tripping of bulk power transfer transmission corridors such as HVDCs poses
risk to secure and reliable grid operation.
2. The second major risk that POSOCO faces is the varying objectives of the electricity market players. The day to
dayoperation of POSOCO is generally governed by the provisions of Electricity Act 2003, CERC Regulations &
Procedures and CEA Regulations & Standards. These statutory documents may still be interpreted differently
by different players and since the RLDCs/NLDC need to take decisions in real time, some parties could feel
aggrieved with the RLDC’s decision and approach the CERC or higher courts leading to commitment of resources
by POSOCO.
POSOCO is informing the policy makers and regulators upfront in such cases and seeking necessary advice.
Further, the decisions are taken in a transparent fashion with due communication to stakeholders. This mitigates
the risk to a large extent.
3. The third major risk that POSOCO faces is on account of business processes which are required to keep pace
with thereforms. With the growth of electricity markets in India, the day to day business processes have become
complex andmore data intensive. New responsibilities are being assigned to POSOCO by the policy makers and
regulators. Information Technology (IT) plays a key role. Since off-the-shelf solutions are rarely available in this
area, solutions either need to be developed in-house or through vendors in a time bound fashion.
Any delays or failure in implementation of such software development projects would affect the reform process and
attract regulatory scrutiny. Such risks are sought to be mitigated through a combination of in house development
of software and through vendors.
Outlook
Indian Power System is one of the largest synchronous grid which has evolved over the years and would continue to
evolve further with increasing footprints and integration of sustainable energy resources. The future grid is expected
to be bigger, robust, smarter and more complex. This would make the job of system operator more challenging
especially in terms of maintaining load-generation balance and frequency control. Automatic Controls in power
system such as primary frequency control, Automatic Generation Control (AGC) along with generation reserves and
flexibility of conventional generation are required for reliable and secure operation of the grid.POSOCO is in the
53
Annual Report 2017-18
process of implementing pilot projects on AGC in all regions which would be operationalized in near future.
A number of measures have also been taken by the regulator in the past years impacting system operation and
market operation which are expected to continue in future as well. CERC has come out with order on Hydro as Fast
Response Ancillary Services (FRAS), Pilot Project on 05-Minute Scheduling, Metering, Accounting and Settlement for
Thermal/Hydro, concept paper on “Re-Designing Real Time Electricity Market in India and Re-designing Ancillary
Services Mechanism in India. Financial products in electricity markets are being debated at present and may become
a reality in future. These new market mechanisms are expected to be rolled out in coming years based on the
stakeholder’s feedback and POSOCO is expected to play key role in implementation of these reforms.
Operation of large grid with complex mechanisms requires automation at every level. The new market mechanism
discussed above would also require automated systems from day one. Hence, there is need to further strengthen
the IT framework in system operations. Advancements in technologies need to be harnessed for further
improvements.
It is important to align the basic practices in states with the practices at inter-state level to reap the benefits of
power sector reforms at inter-state level. There is a need for robust scheduling, accounting, metering and settlement
procedure in all the states and implementation of Intra-state deviation settlement mechanism to control inter-
change by changing generation and load.
Over the last few years, POSOCO has done a lot of work and published a number of reports involving big data
analysis for bringing out improvements in the system operations. This work has been appreciated at levels and
would be major thrust for POSOCO in future as well. Further investment will be done by POSOCO to equip its
manpower with necessary skill sets in this area.
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Power System Operation Corporation Limited
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Annual Report 2017-18
(ii) In respect of Assessment Year 2011-12, the Company filed an appeal with Income Tax Appellate Tribunal(ITAT)
against the order of CIT (Appeals) for disallowing interest on borrowing for ` 31.79 Lakh. Except for the said
amount all other additions made by Assessing Officer (AO-IT Deptt.) have been deleted from income by CIT
(Appeals). AO-IT Deptt. has also filed an appeal with ITAT against the order of CIT (Appeals) for disallowing
the additions made by him i.e. for ` 1,97,333.00 Lakh. The additional tax liability of ` 87,929.16 Lakh shall be
dependent on the order of ITAT. No provision has been made in books of account for this amount pending
adjudication.
(iii) In respect of Assessment Year 2012-13, the Company filed an appeal with Income Tax Appellate Tribunal(ITAT)
against the order of CIT (Appeals) for disallowing the expense of cash rebate to customers for ` 9.16 Lakh.
Except for the said amount all other additions made by Assessing Officer (AO-IT Deptt.) have been deleted from
income by CIT (Appeals). AO-IT Deptt. has also filed an appeal with ITAT against the order of CIT (Appeals) for
disallowing the additions made by him i.e. for ` 1,11,036.00 Lakh. The additional tax liability of ` 48,625.80
Lakh shall be dependent on the order of ITAT. No provision has been made in books of account pending
adjudication.
(iv) In respect of Assessment Year 2013-14 a demand of ` 49,685.56 Lakh has been raised by the assessing officer
under Section 143(3) of the Income Tax Act, 1961. The Company filed an appeal before Ld. CIT (A) against the
assessment order. CIT (A) has issued an order dated 31-10-2016 against the appeal vide which CIT (A) has
deleted all the additions made by A.O. except the additions of ` 131.00 Lakh made on account of expenditure
on CSR activities. Thus no demand pending. AO-IT Deptt. has also filed an appeal with ITAT against the order
of CIT (Appeals) for disallowing the additions in surplus pool Account made by him i.e. for ` 1,23,066.82 Lakh.
The additional tax liability of ` 49,685.56 Lakh shall be dependent on the order of ITAT. No provision has been
made in books of account pending adjudication.
(v) In respect of Assessment Year 2014-15 a demand of ` 69,155.23 Lakh had been raised by the assessing officer
under Section 143(3) of the Income Tax Act, 1961. The Company filed an appeal before Ld. CIT (A) against the
assessment order. CIT (A) had issued an order dated 31-03-2017 against the appeal, vide which CIT (A) has
deleted all the additions made by A.O. except the additions of ` 238.63 Lakh made on account of expenditure
on CSR activities and prior period expenditure of ` 10.18 Lakh.
Against non-allowance of expenditure of Corporate Social Responsibility amounting of ` 238.63 Lakh and Prior
Period Expenses amounting of ` 10.18 lakh by CIT (A), an appeal was filed before ITAT by POSOCO.
An appeal has also been filed by Income tax Department against the deletions made by CIT(A) regarding
surplus in Pool accounts and allowance of Prior Period Expenses amounting `1,59,499.25 lakh and `1,052.85
lakh respectively before ITAT. The additional tax liability of ` 69,155.23 lakh shall be dependent on the order of
ITAT.
(vi) Impact of pending litigation cases on the financial statements – Nil.
(vii) Material foreseeable losses on long term contracts – Nil.
Cash Flows Information
(` in Lakh)
Particulars Year ended March 31st
2018 2017
A) Net cash from (used in) Operating activities 12,645.07 (14,137.57)
B) Net cash from (used in) Investment activities 1,289.84 1,245.78
C) Net Cash from (used in) Financing activities (271.92) (457.55)
D) Net change in Cash and Cash equivalents (A+B+C) 13,662.99 (13,349.34)
E) Cash and cash equivalents at the beginning of the year 20,200.88 33,550.22
F) Cash and cash equivalents at the end of the year (D+E) 33,863.87 20,200.88
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Power System Operation Corporation Limited
(KVS Baba)
Chairman & Managing Director
Date: 28.09.2018
Place: New Delhi
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Annual Report 2017-18
1. Brief outline of the Corporate Social Responsibility (CSR) and Sustainability Policy
POSOCO believes that the true measure of growth and progress is best echoed in the impact that the company makes
to the lives of people. POSOCO has always endeavoured to ensure that the activities taken up under CSR are effective
and positively contribute in bettering the lives of people through environmental sustainability, educational and
health related initiatives. For smooth execution of the activities taken up by the company, a CSR and Sustainability
policy has also been put in place. Activities taken up by the company are in synchronism with the schedule-VII
of the Companies Act 2013. CSR and the Companies (Corporate Social Responsibility Policy) Rules, 2014. CSR and
Sustainability policy of the company is available on company’s website (https://posoco.in/useful-links/csr/).
Salient points of the CSR and Sustainability Policy:
Vision:
Be a model corporate organization that strives hard towards fulfilling its social responsibility through initiatives in
the education, skill development, health and other areas of national importance through sustainable development
practices.
Mission:
POSOCO commits towards creating a community of responsible and educated citizens who are environmentally
conscious, practice social responsibility in their daily lives and inspire others to do the same. POSOCO will endeavor
for upliftment of the underprivileged and marginalized sections of the society through promoting preventive health
care, education including special education, employment enhancing vocational skills, promoting gender equality
and empowering women. POSOCO will also promote innovation, research and excellence in the area of power
systems through collaborations with technology incubators located within academic institutions.
CSR and Sustainability Policy of POSOCO has been framed in accordance with the provisions of the
Companies Act, 2013 and Guidelines by Department of Public Enterprises (DPE) on CSR and Sustainability
which are effective from 1st April, 2014.
Policy mentions allocation of the budget for CSR activities as two percent of the average net profits of the
Company made during the three immediately preceding financial years. CSR budget shall be earmarked
every financial year for implementation of CSR activities.
Administrative set up for CSR mentioning Role of Directors, constitution of Board level CSR Committee and
its functions, constitution of below Board level Management Committee and its functions are part of the
Policy.
The identification of the CSR activities to be undertaken and the activities not allowed under CSR has been
covered.
Mode of execution of the activities covering aspects like selection of the specialized agencies, collaboration
with other Corporations/Companies, allocation of budget in advance etc. have been defined.
Policy cover aspects like monitoring, documentation, reporting also.
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Power System Operation Corporation Limited
• Execution Partner: Foundation for Innovation and Technology Transfer (FITT)- IIT Delhi
• Encouragement under the scheme: 15 candidates
in Masters’ and 15 candidates in Doctoral category
were encouraged under this scheme though prize
money for shortlisted research works. Research
works were shortlisted by a seven member expert
committee comprising of the eminent members
from Industry and Academia.
Details of the awardees for the year 2017-18 and
previous year is available on
https://posoco.in/side-menu-pages/posoco-power-system-awards/.
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Annual Report 2017-18
POSOCO has developed a Park in the Safdarjung Hospital with facilities like sitting space, lighting, shed and
landscaping etc. This park is being utilised by the thousands of poor patients and their attendants visiting
the hospital on daily basis for treatment. Sitting space has been developed to accommodate more than 250
people. Covered sitting space has been provided for approx. 100 and for the rest uncovered sitting space has
been made available. Further, a room has also been built in corner of the park which can accommodate 25-30
people.
An OPD Kiosk has also been developed in the hospital, to facilitate the people visiting the hospitalin getting
speedy appointments.
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Power System Operation Corporation Limited
1 Promoting Research Promoting Local Pan India 33.70 25.79 3.50 29.29 Through
and Studies in the Education agency
field related to
Power Systems in the
engineering institutions
to encourage excellence
in the area
2 Setting up of smart labs Promoting Local Delhi 10.00 10.80 0 10.80 Direct
in govt. schools Education
3 Providing skill Promoting Local Raigad, 33.62 31.98 1.60 33.58 Through
training to improve Education Maharashtra agency
employability
4 Development of Promoting Local Delhi 49.72 45.77 8.10 53.87 Through
infrastructure in preventive agency
Safdarjung Hospital, health
New Delhi to convert care and
an existing open space sanitation
into a Swachh Park with
facilities like sitting
space, lighting and shed
etc. and setting up of
OPD kiosk to facilitate
patients in getting
appointments for the
welfare of patients
Total 127.04 127.54
* Implementing Agencies:
Activity at Sl. 1: The Foundation for Innovation and Technology Transfer (FITT)- IIT Delhi-110016
Activity at Sl. 3: National Skill Development Fund (NSDF), Ministry of Skill Development and Entrepreneurship, Govt. of India,
Shivaji Stadium Annexe Building (2nd Floor), SBS Marg, Connaught Place, New Delhi-110001 and National Skill Development
Corporation (NSDC), A-Block, Clarion Collection, Shaheed Jeet Singh Marg, New Delhi-110016.
Activity at Sl. 4: Power Grid Corporation of India Ltd., Katwaria Sarai, New Delhi-110016
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Annual Report 2017-18
Responsibility Statement:
Implementation and monitoring of CSR and Sustainability Policy is in compliance with the CSR objectives and Policy
of the Company.
(KVS Baba)
Chairman & Managing Director
Date: 28.09.2018
Place: New Delhi
62
Power System Operation Corporation Limited
Technology absorption
1. Decision Support tools for Voltage management in the grid
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Annual Report 2017-18
A tool for geographical visualization of grid voltage through contour and bubble maps has been developed
indigenously by WRLDC team. Another complementary tool developed in house prompts the operator about
the available reactive resources for voltage control. Both the tools are being utilized in real-time for voltage
management in the grid.
2. Online tool for retrieving and trending historical synchrophasor data
A tool for retrieving and trending the archived synchrophasor data from the Historian in real-time has been
developed indigenously. The tool is being used extensively by real-time Operators for localization and
characterization of grid events. The tool can be easily customised for use at other control centres having
synchrophasor data.
3. Real Time and Historical Demand pattern plots
A web based trending application has been developed for overlaying both real time and historical SCADA data
on single timeline. The application helps operators in better operational planning and coordination with the
constituents for load – generation balance.
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Power System Operation Corporation Limited
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Annual Report 2017-18
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Power System Operation Corporation Limited
The LOA for Data Management Software was awarded to M/s Cybuzz SC lnfotech Pvt. Ltd.in Feb’17 for
development and implementation of Data management software at NLDC.
The software was developed and hosted at NLDC. Presently, the Data Management Software is under Annual
maintenance contract.
3. Implementation of Pilot Project on Automatic Generation Control
Roadmap to operationalize reserves in the country was notified by CERC on 13th October 2015 wherein Primary,
Secondary and Tertiary controls were identified as essential components for reliable grid operation. In order
to gain experience and build confidence, a pilot project for implementing secondary reserves through AGC
was initiated by POSOCO with cooperation from NTPC. Dadri Stage-II (2x490MW) of NTPC was selected for the
project. The mock test of the pilot project was successfully conducted on 29th June 2017. CERC in its Order dated
6th December 2017 approved the Commissioning of the AGC Pilot Project at NTPC Dadri Stage-II. From 4th Jan
2018, Dadri Stage-II is under continuous operation as a part of Automatic Generation Control pilot project from
NLDC.
Foreign Exchange earnings and outgo:
(` in lakh)
(KVS Baba)
Chairman & Managing Director
Date: 28.09.2018
Place: New Delhi
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Annual Report 2017-18
Sl. Name and Description of main NIC Code of the % to total turnover of
No. products / services Product/ service the company
1 Revenue from System Operation and Market 35107 78.63%
Operation
NIL
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Power System Operation Corporation Limited
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category-wise Share Holding
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Annual Report 2017-18
ii) Overseas
b) Individuals
i) Individual
shareholders holding
nominal share capital
upto ` 1 lakh
ii) Individual
shareholders holding
nominal share capital
in excess of Rs 1 lakh
c) Others (specify)
Sub-total (B)(2):-
Total Public
Shareholding (B)=(B)
(1)+(B)(2)
C. Shares held by
Custodian for GDRs &
ADRs
Grand Total (A+B+C) NIL 30639994 6 100% 30639994 6 30640000 100%
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Power System Operation Corporation Limited
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs
and ADRs):
Not Applicable. The entire shares (100%) are held by Ministry of Power, Govt. of India.
Sl. For Each of the Top 10 Shareholding at the beginning of the Cumulative Shareholding during the
No. Shareholders year year
No. of shares % of total shares No. of shares % of total shares
of the company of the company
At the beginning of the
year
Date wise Increase/ N.A
Decrease in Share holding
during the year specifying
the reasons for increase /
decrease (e.g. allotment /
transfer/bonus / sweat
equity etc):
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Annual Report 2017-18
72
Power System Operation Corporation Limited
II. KMPs*
Sl. For Each of the Directors Shareholding at the beginning Cumulative Shareholding
No. and KMP of the year during the year
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
1. Shri KVS Baba, CMD
(Pursuant to his elevation as CMD w.e.f.
19.12.2017, ceased to be the CEO w.e.f.
19.12.2017)
At the End of the year
2. Ms. Meenakshi Davar
Director (Human Resources)
At the End of the year
3. Shri Praveen Kumar Agarwal
Director (Market Operations)
At the End of the year NIL
4. Shri Ranjan Kumar Srivastava,
Director (Finance) & CFO
At the End of the year
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Annual Report 2017-18
V. INDEBTEDNESS - NIL
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Power System Operation Corporation Limited
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Annual Report 2017-18
(KVS Baba)
Chairman and Managing Director
Date: 28.09.2018
Place: New Delhi
76
Power System Operation Corporation Limited
The Comments of the Statutory Auditors and Managements’ Reply thereto are given below:
(KVS Baba)
Chairman and Managing Director
Date: 28.09.2018
Place: New Delhi
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Annual Report 2017-18
The preparation of financial statements of Power System Operation Corporation Limited for the year ended 31
March 2018 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act)
is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and
Auditor General of India under section 139 (5) of the Act are responsible for expressing opinion on the financial
statements under section 143 of the Act based on independent audit in accordance with the standards on auditing
prescribed under section 143(10) of the Act.
This is stated to have been done by them vide their Audit Report dated 03.08.2018.
I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial
statements of Power System Operation Corporation Limited for the year ended 31 March 2018 under section
143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working
papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel
and a selective examination of some of the accounting records.
On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to
any comment upon or supplement to statutory auditors’ report under section 143(6)(b) of the Act.
Sd/-
(Raj Kumar)
Principal Director of Commercial Audit &
Ex-officio Member, Audit Board-III,
Place: New Delhi New Delhi
Date: 28 September 2018
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Power System Operation Corporation Limited
2. Board of Directors:
2.1 Size of the Board
POSOCO is a Government Company with in the meaning of Section 2(45) of the Companies Act, 2013. As per
Articles of Association, the composition of the Board of Directors shall be as determined by the Hon’ble President/
Government of India from time to time.
In terms of the Articles of Association of the Company, the strength of our Board shall not be less than three
Directors but no more than fifteen Directors. These Directors may be either whole-time Directors or part-time
Directors or otherwise.
2.2 Composition of the Board
Pursuant to the setting up of POSOCO as a wholly owned Government Company, the CMD and other functional
Directors of POSOCO have been appointed by the Govt. of India. Shri KVS Baba was appointed as the first Chairman
and Managing Director of POSOCO on 19.12.2017. Smt. Meenakshi Davar was appointed as Director (Human
Resources) and Shri Praveen Kumar Agarwal was appointed as Director (Market Operation) on 22.12.2017. Shri
Ranjan Kumar Srivastava was appointed as Director (Finance) w.e.f. 31.01.2018.
Earlier, in accordance with the provisions of the Articles of Association of the Company, CMD (POWERGRID) (the
erstwhile Holding Company) was the non - executive Chairman, there were Nominee directors of the Government
of India and one director had been nominated by POWERGRID from amongst its Independent directors. In addition
to this, one Director from the Board of POWERGRID had been nominated on the Board of POSOCO on part–time
basis.
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Annual Report 2017-18
In accordance with the directives received from the Government, in order to ensure smooth transition, the above
Board continued as an interim arrangement till the appointment of a functional Board in terms of the directives of
Hon’ble President of India setting up POSOCO as an Independent Govt. Company.
The Independent Directors have met the requirements specified under Section 149(6) of the Companies Act regarding
meeting the criteria for independence and none of the Directors of the company are related to each other.
As on 31st March, 2018, Shri KVS Baba, Ms. Meenakshi Davar, Shri Praveen Kumar Agarwal, Shri Ranjan Kumar
Srivastava, Ms. Bharati, Shri M.A. Inbarasu and Shri Jagdishbhai I. Patel were on the Board of the Company.
2.3 Age Limit and Tenure of Directors
The age limit of the Chairman and Managing Director and other whole time Directors is 60 years.
The Chairman and Managing Director and other Whole time Directors are appointed for a period of five years from
the date of taking over the charge or till the date of superannuation of the incumbent or till further orders from
the Govt. of India, whichever is the earliest. On appointment by the Govt. of India, these Directors (excluding Govt.
Nominees) are initially appointed as Additional Directors and the appointment is regularized at the ensuing Annual
General Meeting.
Government Nominee Directors representing the Ministry of Power Government of India retire from the Board after
completion of tenure of three years from the date of appointment (unless their tenure is extended by the Govt. of
India) or so long as they are holding the particular office, whichever is earlier.
Independent Directors are generally appointed by Govt. of India for a tenure of three years and initially co-opted as
Additional Directors and the appointment is regularized at the ensuing Annual General Meeting.
The date of appointment of the Directors, who were in office as on 31st March, 2018 was as follows:
Name of the Director Date of Joining on the Board
Shri KVS Baba, CMD 19.12.2017
Ms. Meenakshi Davar, Director (Human Resources) 22.12.2017
Shri Praveen Kumar Agarwal, Director (Market Operation) 22.12.2017
Shri Ranjan Kumar Srivastava, Director (Finance) 31.01.2018
Ms. Bharati* , Government Nominee
(1)
05.09.2017
Shri M.A. Inbarasu Government Nominee 01.12.2017
Shri Jagdishbhai I. Patel, Independent Director 08.02.2016
*None of the Directors of the Company are in any way related with each other.
*1 The term of Smt. Jyoti Arora, Joint Secretary, Ministry of Power ceased w.e.f. 05.07.2017. Thereafter, Ms. Shalini Prasad, Additional Secretary,
Ministry of Power was appointed as Govt. Nominee Director in POSOCO from 14.08.2017 to 30.08.2017. Subsequently, Ms. Bharati, Joint Secretary,
Ministry of Power was appointed on the Board of the Company w.e.f. 05.09.2017.
Shri Santosh D.Vaidya, JS(MNRE) was appointed on the Board of POSOCO from 24.01.2017 to 11.06.2017. Subsequently, Shri Jatindra Nath Swain,
JS (MNRE) was appointed on the Board of the Company w.e.f. 21.07.2017 – 08.01.2018.
Dr. Ruchit Uppal was appointed as an Independent Director on the Board of POSOCO w.e.f. 28.07.2018 in terms of Ministry of Power’s Order No.
20/6/2017-Coord. Dt. 26.07.2018.
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Power System Operation Corporation Limited
During the financial year ended 31st March, 2018, five Board meetings were held - on 29th June, 22nd September
and 12th December of the year 2017 and 10th January and 6th February of the year 2018. The maximum interval
between any two meetings during this period was 84 days. Details of number of Board meetings attended by
Directors attendance at last AGM, number of other directorship/committee membership (viz. Audit Committee
and Shareholders’ Grievance Committee as per DPE Guidelines) held by them during the F.Y. 2017-18 are tabulated
below:
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Annual Report 2017-18
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Power System Operation Corporation Limited
Attendance
During the financial year ended 31st March, 2018, 04 meetings of the Audit Committee were held-on 29th June,
22nd September and 12th December of the year 2017 and 6th February of the year 2018. Attendance at the Audit
Committee Meetings during the Financial Year 2017-18 was as under:
Name of the member Audit Committee Meetings during the tenure
Held Attended
Shri Jagdishbhai I. Patel – Chairman of Audit Committee 04 04
Ms. Bharati, Member 03 03
Shri Praveen Kumar Agarwal, Member 01 01
Shri Ravi P. Singh – Member (tenure upto 19.12.2017) 03 03
Smt. Jyoti Arora– Member (tenure upto 05.07.2017 ) 01 01
Shri Jatindranath Swain– Member (tenure upto 08.01.2018) 02 01
During the Financial Year 2017-18, one meeting of the CSR Committee was held–on 12th December, 2017. Attendance
at the above meeting was as follows:
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Annual Report 2017-18
During the F.Y. 2017-18, one meeting of the Nomination and Remuneration Committee was held–on 22nd September,
2017. Attendance at the meeting was as follows:
4. Remuneration of Directors
The Board had approved payment of Sitting fee of ` 20,000/- to be paid to the independent Director on the Board
of the Company.
Details of payment made towards sitting fee to the Independent Director on the Board of POSOCO is given below:
Sitting Fees (`) Total^
Board Audit CSR Nomination and R&D
Name of the Director Meeting Committee Committee Remuneration Committee
Committee
Shri Jagdishbhai I. Patel 1,00,000 80,000 20,000 20,000 NIL 2,20,000
^ Excludes GST / Service Tax
The remuneration paid to the whole time Directors during the year 2017-18* is as under:
Sl. Directors’ Designation Salary Benefits Bonus/ Performance Total
No. Name (in `) (in `) Commission Linked (in `)
(in `) Incentive
(in `)
1. Shri. KVS Baba^ Chairman & 9,92,642.32 0.00 0 1,02,723.00 10,95,365.32
Managing Director
2. Ms. Meenakshi Director (Human 9,78,703.00 0.00 0 0 9,78,703.00
Davar Resources)
3. Shri. P. K. Director (Market 11,00,133.00 0 0 92,628.00 11,92,761.00
Agarwal Operation)
4. Shri. R. K. Director (Finance) 5,90,032.00 0.00 0 0 5,90,032.00
Srivastava
* This data pertains to the actual amount received during the tenure as Director.
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Power System Operation Corporation Limited
5. Shareholding Pattern
The entire shares of the Company are held in the name of President of India, through Secretary, Ministry of Power
and their nominees. As on 31.03.2018, the Directors’ Shareholding was as under:
7. Disclosures
I. There were no Related Party Transactions during the year.
II. The CMD and Director (Finance) & CFO have certified the financial statements for the F.Y. 2017-18 which was
placed in the Board meeting held on 03.08.2018.
III. POSOCO does not have any Subsidiary Company.
IV. There are no material individual transactions with related parties which are not in the normal course of
business.
V. There are no material individual transactions with related parties or others, which are not on an arm’s length
basis.
VI. There were no penalties or strictures imposed on the Company by any statutory authorities for non-compliance
on any matter related to applicable Guidelines issued by the Govt. of India, during the last three years.
VII. The Balance Sheet, Profit and Loss Account and Cash Flow Statement for the F.Y. 2017-18 have been prepared
as per the Accounting Standards referred to in Section 133 of the Companies Act, 2013.
VIII. The Board has been reviewing the status of statutory compliances at regular intervals.
IX. POSOCO has complied with the guidelines on Corporate Governance for Central Public Sector Enterprises
issued by Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. POSOCO is non-
compliant w.r.t. composition of Board of Directors due to vacant position of 01 Independent Director during the
financial year.
8. Means of Communication
The Company communicates with its share holders through its Annual Report, General Meeting, Newspapers and
disclosures through website.
Information and latest updates and announcements made by the Company can be accessed at the Company’s
website: https://posoco.in.
85
Annual Report 2017-18
(the erstwhile Holding Company) was being followed in view of the adoption of all the Rules, Policies, Procedures,
Delegation of Powers, Documents, etc. of POWERGRID (erstwhile holding Company) as they stood on 03.01.2017 by
the POSOCO Board.The Board members and Senior Management Personnel of POSOCO have affirmed compliance
with the Code of Business Conduct and Ethics for Board Members and Senior Management Personnel of POSOCO.
Declaration required under Clause 3.4.2 of the Guidelines on Corporate Governance for Central Public
Sector Enterprises
All the members of the Board and Senior Management Personnel have affirmed compliance with the Code of
Business Conduct and Ethics for the financial year ended 31st March, 2018.
(KVS Baba)
Chairman & Managing Director
Place: New Delhi
Date: 28.09.2018
86
Power System Operation Corporation Limited
KVS Baba
(Chairman and Managing Director)
Date: 28.09.2018
Place: New Delhi
87
Annual Report 2017-18
Annexure-I
Non-Mandatory Requirements
1 The Board: The Company was headed by a non-executive Chairman from 01.04.2017 - 18.12.2017 and an
Executive Chairman from 19.12.2017. No person has been appointed as independent director who has been a
Director, in the aggregate, exceeding a period of nine years on the Board of POSOCO.
2 Remuneration Committee: POSOCO Board in its meeting held on 13.08.2014 had constituted a Nomination
and Remuneration Committee in order to meet the compliance requirements under the Companies Act, 2013.
3 Audit qualifications: The financial statement for the F.Y. 2017-18 is qualified. The explanation to the qualification
is given elsewhere in the Directors’ Report.
4 Training of Board Members: Presentation on the following matters was given to the Directors:
• Presentation on the various roles and responsibilities being discharged by POSOCO
• Presentation on the Operational Highlights
• Presentation on Corporate Social Responsibility (CSR) activities taken up/ implemented during F.Y. 2017-18
5 Whistle Blower Policy: POSOCO Board in its Meeting held on 03.01.2017 had inter – alia adopted all the
Rules, Policies, Procedures, DoP, Documents, etc. of POWERGRID (erstwhile holding Company) as they stood on
03.01.2017.
6. Certificate on Corporate Governance: The Certificate on Corporate Governance is being published as an
Annexure to the Directors’ Report.
88
Power System Operation Corporation Limited
The Members,
Power System Operation Corporation Limited.
We have examined the compliance of Guidelines on Corporate Governance for Central Public Sector Enterprise,
2010 as issued by DPE from time to time of your Company.
The Compliance of Guidelines on Corporate Governance is the responsibility of the management. Our examination
was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of
the Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion on financial statements
of the Company.
In our opinion and to the best of our information and according to the explanations given to us by the management,
we certify that, except for the Composition of the Board of Directors, the Company has complied with the DPE
Guidelines on Corporate Governance.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
89
Annual Report 2017-18
To,
The Members,
Power System Operation Corporation Limited.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence
to good corporate practices by Power System Operation Corporation Limited (hereinafter called POSOCO/the
Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the
corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the POSOCO’s books, papers, minute books, forms and returns filed and other records
maintained by the Company and also the information provided by the Company, its officers, agents and authorized
representatives during the conduct of Secretarial audit, we hereby report that in our opinion, the Company has during
the audit period covering the financial period ended on 31st March, 2018 complied with the statutory provisions
listed hereunder and also that the Company has proper Board-processes and Compliance-mechanism in place to
the extent in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by
POSOCO for the financial year ended on 31st March, 2018 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; Not Applicable
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of
Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,
1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation,
2011; Not Applicable
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not
Applicable
(c) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not
Applicable
(d) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with client; Not Applicable
(e) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2009; Not Applicable
(f) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999; Not Applicable
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and Not
Applicable
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable
90
Power System Operation Corporation Limited
(vi) Compliances/ processes/ systems under other applicable Laws to the Company are being verified on the basis
of periodic certificate submitted to the Board of Directors of the Company.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by the Institute of Company Secretaries of India.
(ii) The Listing Agreement (Not Applicable).
(iii) DPE Guidelines on Corporate Guidelines.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations,
Guidelines, Standards, etc. mentioned above subject to the following:
Composition of the Board of the Company should be in compliance with the provisions of the Companies Act, 2013
and DPE Guidelines on Corporate Governance and consequential compliances thereof.
We further report that the Board of Directors of the Company is required to be constituted as per the provisions
of the Companies Act, 2013 and DPE Guidelines. At present, the Board comprises of four functional Directors and
two government nominee director and one Independent Director. The changes in the composition of the Board of
Directors that took place during the period under review were carried out in compliance with the provisions of the
Act.
Generally, adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on
agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information
and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the
minutes, if any.
We further report that there are adequate systems and processes in the Company commensurate with the size
and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and
guidelines.
We further report that during the audit period, there were no specific events/actions having a major bearing on
the Company’s affairs in pursuance of the above referred laws.
This report is to be read with our letter of even date which is annexed as “Annexure A” and forms an integral part
of this report.
91
Annual Report 2017-18
“Annexure A”
To,
The Members,
Power System Operation Corporation Limited.
Sd/-
CS Karishma Singh
Partner
Place: New Delhi CS No. : 26054
Date: August 04, 2017 C.P No. : 16055
92
Power System Operation Corporation Limited
93
Annual Report 2017-18
94
Statement of Changes in Equity for Year ended 31-March-2018
A. Equity Share Capital (Amount In Lakh `)
As at 31-Mar-2018 As at 31-Mar-2017 As at 01-Apr-2016
As per last Balance Sheet 3,064.00 3,064.00 3,064.00
Changes in equity share capital during the year - - -
Closing Balance 3,064.00 3,064.00 3,064.00
B. Other Equity
Retained General Renewable Energy Energy Savings Load Despatch Total
Earnings Reserves Certificate (REC) Certificate (ECRT) Centre Development
Fund* Fund ** (LDCD) Fund***
Balance as on 1st April 2016 5,717.13 3,090.00 1,132.85 - 15,638.00 25,577.98
Changes in accounting policy/prior period errors
Prior Period Adjustments (86.70) - - - - (86.70)
Restated balance at the beginning of the reporting period 5,630.43 3,090.00 1,132.85 - 15,638.00 25,491.28
Total Comprehensive Income for the year 3,798.28 - - - - 3,798.28
Dividends (356.19) - - - - (356.19)
Tax on Dividends (72.51) - - - - (72.51)
Transfer to General Reserve (250.00) 250.00 - - - -
Tranfer to REC Fund (127.20) - 127.20 - - -
Tranfer to ECRT Fund - - - - - -
Transfer to LDC Development Fund (1,530.15) - - - 1,530.15 -
Balance as on 1st April 2017 7,092.66 3,340.00 1,260.05 - 17,168.15 28,860.86
Total Comprehensive Income for the period 4,810.03 - - - - 4,810.03
95
Dividends (118.73) - - - - (118.73)
Tax on Dividends (24.17) - - - - (24.17)
Transfer to General Reserve (480.00) 480.00 - - - -
Tranfer to REC Fund (35.83) - 35.83 - - -
Tranfer to ECRT Fund (61.51) - - 61.51 - -
Transfer to LDC Development Fund (810.58) - - - 810.58 -
Balance as on 31st March 2018 10,371.87 3,820.00 1,295.88 61.51 17,978.73 33,527.99
* Refer Note 2.40. ** Refer Note 2.41. *** Refer Note 2.35
Sd/- Sd/-
(Akhil Bhalla) (Sharwan Kumar Aggarwal)
Partner Partner
M.No. : 505002 M.No. : 513558
Date : 28-Sep-2018
Place : New Delhi
Annual Report 2017-18
Cash Flow Statement for the Year Ended 31st March, 2018
(Amount In Lakh `)
For the year ended For the year ended
Particulars
31st March, 2018 31st March, 2017
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit Before Tax (Including REC Surplus) 7,208.53 5,480.47
Add: Other Comprehensive Income/ (Expense) 37.94 200.79
7,246.47 5,681.26
Adjustment for :
Depreciation 1,954.07 1,704.48
Transfer from Grants in Aid (38.45) (24.20)
Transfer from LDC Development Reserve - -
Transfer from General Reserve - -
Net Loss on Disposal / Write off of Fixed Assets 0.20 27.15
Interest and Finance Charges 129.02 28.85
Interest on Bank Flexi Deposits (2,708.76) (2,885.12)
Provisions made - -
Changes in fair value of financial assets through profit or loss (17.01) -
Provisions Written Back (92.22) (645.11)
Operating profit before Working Capital Changes 6,473.32 3,887.31
Adjustment for :
Increase/(Decrease) in Other Non Current Financial Liabilities 11.56 (157.27)
Increase/(Decrease) in Long Term Provisions (415.23) (231.54)
Increase/(Decrease) in Deferred Tax Adjustment 20.08 106.27
Increase/(Decrease) in Other Non-current Liabilities 708.67 (976.32)
Increase/(Decrease) in Other Current Financial Liabilities (14,788.45) (9,810.25)
Increase/(Decrease) in Other Current Liabilities 8,855.79 13,498.37
Increase/(Decrease) in Short Term Provisions 1,938.70 189.13
(Increase)/Decrease in Trade Receivables (180.16) 381.27
(Increase)/Decrease in Financial Assets (2,912.13) (1,283.33)
(Increase)/ Decrease in Long Term Loans (217.21) 47.61
(Increase)/Decrease Other Non-current Financial Assets - -
(Increase)/Decrease in Other Bank Balances 8,807.42 (18,644.78)
(Increase)/Decrease in Short Term Loans (73.15) 29.81
(Increase)/Decrease in Other Current Assets 125.68 768.71
(Increase)/Decrease in Other Non-current Assets 133.90 992.84
96
Power System Operation Corporation Limited
97
Annual Report 2017-18
98
Power System Operation Corporation Limited
1.6.2 Cost of material consumed, erection charges thereon along with other related expenses incurred for the
projects are shown as CWIP till the date of capitalization.
99
Annual Report 2017-18
1.12 DEPRECIATION
1.12.1 The depreciation/Amortization has been provided on Straight Line Method at the rates and methodology
notified by CERC for the purpose of recovery of RLDC fees and charges. Except for End user devices, such as
Desktop, Laptop etc. which have been depreciated @20% and 25% respectively based on Estimated useful
life as evaluated by management.
1.12.2 Depreciation on addition to/deductions from fixed assets during the year is charged on pro-rata basis.
1.12.3 Assets costing ` 5000/- or less and where the written down value is ` 5000/- or less at the beginning of the
year, are charged to revenue.
1.12.4 Mobile Phones are charged off in the year of Purchase.
1.13 EXPENDITURE
Expenditure of research and development, other than Capital Expenditure, are charged to revenue as and
when incurred.
1.14 DIVIDEND
Dividend paid/payable are recognized in the year in which the related dividends are approved by the
shareholders or Board of Directors as appropriate.
100
Power System Operation Corporation Limited
101
Annual Report 2017-18
102
Power System Operation Corporation Limited
103
Note :- 2.1
Property Plant & Equipment
Amount in Lakh `
Particulars Gross Block Depreciation Net Block
As at Additons Sale / Less: As at Upto Charge Sale / Less: As at As at As at 01-
01-Apr- during Disposal Adjust- 31-Mar- 01-Apr- during Disposal Adjustments 31-Mar- 31-Mar- Apr-2017
2017 the Year during ments 2018 2017 the Year during the during the 2018 2018
the Year during the Year year
year
Land
Free Hold * 431.03 - - - 431.03 - - - - - 431.03 431.03
Annual Report 2017-18
Civil Works**
a) RLDC 1,625.98 274.26 - - 1,900.24 358.57 62.26 - - 420.83 1,479.41 1,267.41
b) Township
Temporary Erection 2.56 7.22 - - 9.78 2.30 5.13 - - 7.43 2.35 0.26
Water Supply Drainage & Sewarage 5.90 - - - 5.90 1.02 0.20 - - 1.22 4.68 4.88
Plant & Machinery
a) RLDC 451.40 78.52 - - 529.92 144.27 26.91 - - 171.18 358.74 307.13
b) ULDC 6,551.45 85.67 - - 6,637.12 1,925.19 809.85 - - 2,735.04 3,902.08 4,626.26
c) Communication 199.30 - - - 199.30 31.64 10.47 - - 42.11 157.19 167.66
Furniture & Fixtures 940.50 35.98 0.50 - 975.98 489.29 61.63 0.04 - 550.88 425.10 451.21
104
Office Equipment 369.91 60.31 0.75 - 429.47 142.44 24.90 0.33 (0.01) 167.02 262.45 227.47
Electronic Data Processing & Word 1,478.26 285.73 34.70 4.09 1,725.20 919.10 186.75 33.71 4.56 1,067.58 657.62 559.16
Processing Machines
Vehicles 0.59 92.14 - - 92.73 0.40 0.60 - - 1.00 91.73 0.19
Construction and Workshop Equipment 1.04 0.17 - - 1.21 0.98 0.01 - - 0.99 0.22 0.06
Electrical Installation 153.52 20.43 - - 173.95 24.64 8.25 - - 32.89 141.06 128.88
Miscellanous Assets/Equipments 11.63 - - - 11.63 9.61 0.07 - 0.01 9.67 1.96 2.02
Grand Total 12,223.07 940.43 35.95 4.09 13,123.46 4,049.45 1,197.03 34.08 4.56 5,207.84 7,915.62 8,173.62
Previous Year 10,058.04 2,714.06 546.82 2.21 12,223.07 3,543.15 1,025.14 516.61 2.23 4,049.45 8,173.62 6,514.90
* Out of the total land amounting ` 431.03 Lakh (Previous Year ` 431.03 lakh) covering an area of 2 Bighas (28800 Sq. ft.) (Previous Year 2 Bighas (28800 Sq. ft.)), title deeds/lease deed/title in respect of freehold land
amounting to ` NIL Lakh (Previous Year ` NIL lakh) covering an area of NIL (Previous Year NIL) and leasehold land amounting to ` NIL lakh (Previous Year ` NIL lakh) covering an area of NIL (Previous Year NIL) are yet
to be executed /passed.
** Buildings are not owned by POSOCO but transferred by Govt. of India (CEA) on as is where is basis and right of operation has been handed over to POSOCO, therefore related expenditure of capital nature are being
capitalised and depreciated as per CERC regulations.
Note: REC depreciation charged during the year ` 1.25 lakh (Previous Year ` 0.10 lakh) is transferred to REC surplus in Other Income, therefore depreciation during the year does not tally with Depreciation figure in
Statement of Profit & Loss.
Note :- 2.1A
Property Plant & Equipment
Amount in Lakh `
Particulars Gross Block Depreciation Net Block
As at Additons Sale / Less: As at Upto Charge Sale / Less: As at As at As at
01-Apr- during Disposal Adjust- 31-Mar- 01-Apr- during Disposal Adjustments 31-Mar- 31-Mar- 01-Apr-
2016 the Year during ments 2017 2016 the year during the during the 2017 2017 2016
the year during the year year
year
Land
Free Hold * - 431.03 - - 431.03 - - - - - 431.03 -
Civil Works**
a) RLDC 1,362.10 263.88 - - 1,625.98 312.67 45.90 - - 358.57 1,267.41 1,049.43
b) Township
Temporary Erection 2.15 0.41 - - 2.56 2.15 0.15 - - 2.30 0.26 -
Water Supply Drainage & Sewarage 5.90 - - - 5.90 0.82 0.20 - - 1.02 4.88 5.08
Plant & Machinery
a) RLDC 314.14 137.26 - - 451.40 122.05 22.22 - - 144.27 307.13 192.09
b) ULDC 5,673.70 1,334.67 456.92 - 6,551.45 1,682.84 675.85 433.50 - 1,925.19 4,626.26 3,990.86
c) Communication 120.58 78.72 - - 199.30 25.28 6.36 - - 31.64 167.66 95.30
Furniture & Fixtures 801.18 163.36 24.04 - 940.50 454.35 58.39 23.44 0.01 489.29 451.21 346.83
105
Office Equipment 350.41 27.89 8.39 - 369.91 128.57 21.56 7.71 (0.02) 142.44 227.47 221.84
Electronic Data Processing & Word 1,321.54 216.40 57.47 2.21 1,478.26 784.92 188.39 51.96 2.25 919.10 559.16 536.62
Processing Machines
Vehicles 0.59 - - - 0.59 0.34 0.06 - - 0.40 0.19 0.25
Construction and Workshop Equipment 0.98 0.06 - - 1.04 0.98 - - - 0.98 0.06 -
Electrical Installation 93.14 60.38 - - 153.52 18.65 5.99 - - 24.64 128.88 74.49
Miscellanous Assets/Equipments 11.63 - - - 11.63 9.53 0.07 - (0.01) 9.61 2.02 2.10
Grand Total 10,058.04 2,714.06 546.82 2.21 12,223.07 3,543.15 1,025.14 516.61 2.23 4,049.45 8,173.62 6,514.90
Previous Year 9,386.74 4,129.30 762.19 2,695.79 10,058.04 6,439.28 535.96 745.09 2,687.03 3,543.15 6,514.90 2,947.46
* Out of the total land amounting ` 431.03 Lakh (Previous Year ` 431.03 lakh) covering an area of 2 Bighas(28800 Sq. ft.) (Previous Year 2 Bighas(28800 Sq. ft.)), title deeds/lease deed/title in respect of freehold land
amounting to ` NIL Lakh (Previous Year ` NIL lakh) covering an area of NIL (Previous Year NIL ) and leasehold land amounting to ` NIL lakh (Previous Year ` NIL lakh) covering an area of NIL (Previous Year NIL ) are
yet to be executed /passed.
** Buildings are not owned by POSOCO but transferred by Govt. of India (CEA) on as is where is basis and right of operation has been handed over to POSOCO, therefore related expenditure of capital nature are being
capitalised and depreciated as per CERC regulations.
Note: REC depreciation charged during the year ` 0.10 lakh is transferred to REC surplus in Other Income, therefore depreciation during the year does not tally with Depreciation figure in Statement of Profit & Loss.
Power System Operation Corporation Limited
Annual Report 2017-18
Note 2.2
Capital Work in Progress
Amount in Lakh `
Note 2.2A
Capital Work in Progress
Amount in Lakh `
106
Note :- 2.3
Intangible Assets
Amount in Lakh `
Particulars Gross Block Depreciation Net Block
As at Additons Sale / Less: As at Upto Charge Sale / Less: As at As at As at
01-Apr- during Disposal Adjust- 31-Mar- 01-Apr- during Disposal Adjustments 31-Mar- 31-Mar- 01-Apr-
2017 the Year during ments 2018 2017 the year during the during the 2018 2018 2017
the year during the year year
year
SCADA Software 2,945.28 10.25 - - 2,955.53 1,946.48 416.12 - - 2,362.60 592.93 998.80
Electronic Data Processing Software 1,672.65 486.86 - - 2,159.51 1,161.19 342.95 - 0.01 1,504.13 655.38 511.46
Grand Total 4,617.93 497.11 - - 5,115.04 3,107.67 759.07 - 0.01 3,866.73 1,248.31 1,510.26
Previous Year 6,053.23 498.05 1,933.35 - 4,617.93 4,361.22 679.80 1,933.35 - 3,107.67 1,510.26 1,692.01
Note: REC depreciation charged during the year ` 0.78 lakh (Previous Year ` 0.36 lakh) is transferred to REC surplus in Other Income, therefore depreciation during the year does not tally with Depreciation figure in
Statement of Profit & Loss.
107
Note :- 2.3A
Intangible Assets
Amount in Lakh `
Particulars Gross Block Depreciation Net Block
As at Additons Sale / Less: As at Upto Charge Sale / Less: As at As at As at
01-Apr- during Disposal Adjust- 31-Mar- 01-Apr- during Disposal Adjustments 31-Mar- 31-Mar- 01-Apr-
2017 the Year during ments 2018 2017 the year during the during the 2018 2018 2017
the year during the year year
year
SCADA Software 4599.07 279.56 1933.35 - 2945.28 3498.75 381.08 1933.35 - 1946.48 998.80 1100.32
Electronic Data Processing Software 1454.16 218.49 - - 1672.65 862.47 298.72 0.00 - 1161.19 511.46 591.69
Grand Total 6053.23 498.05 1933.35 - 4617.93 4361.22 679.80 1933.35 - 3107.67 1510.26 1692.01
Previous Year 20530.91 1403.36 1029.75 14851.31 6053.23 19836.14 405.70 1029.75 14851.31 4361.22 1692.01 694.77
Power System Operation Corporation Limited
Note: REC depreciation charged during the year ` 0.78 lakh (Previous Year ` 0.36 lakh) is transferred to REC surplus in Other Income, therefore depreciation during the year does not tally with Depreciation figure in
Statement of Profit & Loss.
Annual Report 2017-18
Note :- 2.4
Long Term Loans
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Security Deposits 252.83 39.68 34.80
ii) Other Loans
Employees Loans (including Interest Accrued)
a) Secured Considered good 531.76 518.25 533.75
b) Unsecured - Considered good 38.58 48.03 85.03
- Considered doubtful 1.65 1.65 1.65
571.99 567.93 620.43
Less: Provision for Bad & Doubtful Loans 1.65 1.65 1.65
Total 823.17 605.96 653.58
Note :-2.5
Other Non Current Financial Assets
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
– – –
Total – – –
Note :-2.6
Deferred Tax Liabilities (Net)
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Deferred Tax Asset
Employee Benefits-u/s 43B 566.40 901.51 716.87
Provisions 0.48 2.49 2.01
Impact of Prior period Items (155.88) (655.00)
Sub Total (A) 411.00 249.00 718.88
Deferred Tax Liability
Less: Towards Fixed Assets (Net) 1,297.00 1,778.00 1,097.88
Sub Total (B) 1,297.00 1,778.00 1,097.88
Net Deferred Tax Assets/ Liabilities 886.00 1,529.00 379.00
Note :-2.7
Income Tax Assets (Net)
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Advance Tax & TDS 13,508.55 30,866.91 27,931.50
Less : Provision for Taxation 6,453.84 12,092.45 11,253.19
Total 7,054.71 18,774.46 16,678.31
108
Power System Operation Corporation Limited
Note :-2.8
Other non-current assets
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Capital Advances 403.96 346.51 386.41
ii) FERV Recoverable 3,505.32 3,675.53 4,651.86
iii) Other Advances 36.32 - 16.52
Total 3,945.60 4,022.04 5,054.79
Note :-2.9
Trade Receivables
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Debts Outstanding for a period exceeding Six Months
(Unsecured)
Considered Good - 25.64 20.11
Considered Doubtful - - -
ii) Other Debts (Unsecured)
Considered Good 698.93 493.13 879.93
Considered Doubtful - - -
698.93 518.77 900.04
Less: Provision for bad & doubtful debts - - -
TOTAL 698.93 518.77 900.04
Note :-2.10
Cash and Cash equivalents
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
1) Cash and Cash Equivalents
Balance with Banks
- In Current Accounts / Flexi deposit Accounts 23,470.83 10,254.09 23,186.58
- In LDC Development Account 10,392.74 9,946.76 10,363.45
Cash on hand - - -
Drafts/Cheques in Hand - - -
Remmittances in transit
Stamps and Imprest 0.30 0.03 0.19
TOTAL 33,863.87 20,200.88 33,550.22
109
Annual Report 2017-18
Note :-2.11
Other Bank Balances
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
-In Designated Current Accounts / Flexi Deposit accounts 37,245.53 23,397.84 6,000.93
operated & maintained in terms of CERC regulations
-In Current Accounts/Flexi Deposit Accounts(held on account
of Third Parties under )
a) Short Term Open Access Regulation
i) CTU 27,635.46 30,076.56 6,977.87
ii) STU 4,008.05 4,266.98 4,569.78
b) PSDF Disbursement Account 3,198.17 17,039.05 23,360.98
c) PSDF Collection Account 610.08 6,921.24 22,184.37
-In Flexi Deposit accounts -REC 1,674.32 1,611.12 1,574.07
-In Flexi Deposit accounts -REC 133.75 - -
Total 74,505.36 83,312.79 64,668.00
Note :-2.12
Short Term Loans
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Employees Loans including interest accrued
Secured considered good 98.33 102.76 115.58
Unsecured considered good 181.93 87.35 104.34
Total (A) 280.26 190.11 219.92
Note :-2.13
Other Financial Assets
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Unbilled Revenue 5,452.57 3,052.37 1,781.39
ii) Interest accrued but not due
Interest accrued on Flexi Deposits with Bank 667.53 545.23 577.65
Interest accrued on Flexi Deposit with Deposits-In 1.02 7.88 3.54
Designated A/c
Interest accrued on Flexi Deposits-REC 19.31 21.80 25.76
ii) Security Deposits - - -
ii) Others 7.19 21.60 9.61
Total 6,147.62 3,648.88 2,397.95
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Power System Operation Corporation Limited
Note :-2.14
Income Tax Assets (Net)
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Income Tax Refund receivable 4,999.61 - -
TOTAL 4,999.61 - -
Note :-2.15
Other Current Assets
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
A) Advances recoverable in cash or in kind or for value to be
received
a) Employees 7.84 23.79 4.11
b) Others
1) Contractors & Suppliers 264.86 404.13 1,335.63
2) In Designated A/c 82.30 75.82 66.29
3) Contractors & Suppliers- REC - - 4.30
4) Others 288.37 265.30 117.26
Less: Provision for Bad & Doubtful Advances 4.63 4.63 4.88
B) Ind AS prior period Adjustment - 10.42
TOTAL 638.74 764.41 1,533.13
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Annual Report 2017-18
Note :-2.16
Equity Share Capital
Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Equity Share Capital
Authorised Capital 20,000.00 20,000.00 20,000.00
20,00,00,000 (Previous Year 20,00,00,000) equity shares of
` 10/- each
Issued Subscribed and Paid up 3,064.00 3,064.00 3,064.00
3,06,40,000 (Previous Year 3,06,40,000) equity shares of
` 10/-each fully paid up
Total 3,064.00 3,064.00 3,064.00
Further Notes:
1) Reconciliation of Number and Amount of share capital outstanding :
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 1st April, 2016
No.of Shares (` in No.of Shares (` in No.of Shares (` in
Lakh) Lakh) Lakh)
Shares outstanding at the beginning of 3,06,40,000 3064.00 3,06,40,000 3064.00 3,06,40,000 3064.00
the year
Shares Issued during the year NIL NIL NIL NIL NIL NIL
Shares bought back during the year NIL NIL NIL NIL NIL NIL
Shares outstanding at the end of the year 3,06,40,000 3064.00 3,06,40,000 3064.00 3,06,40,000 3064.00
2) The holders of equity shares are entitled to to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.
3) Shareholders holding equity shares of the company :
As at 31-Mar-2018 As at 31-Mar-2017 As at 01-Apr-2016
Note :-2.17
Deferred Income Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Grants in Aid
As per last Balance Sheet 81.29 105.50 129.70
Additions during the year - (0.01) -
Less: Deductions during the year 38.45 24.20 24.20
Closing Balance 42.84 81.29 105.50
Note :-2.18
Long Term Borrowings Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
– – –
Total – – –
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Power System Operation Corporation Limited
Note :-2.19
Other Financial Liabilities Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Deposit/Retention money from Contractors and others 32.48 20.92 178.19
ii) Deposit/Retention money from Contractors and others-on - - -
capital expenditure
Total 32.48 20.92 178.19
Note :-2.20
Long Term Provisions Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
Employee Benefits
As per last Balance Sheet 3,275.90 3,507.44 2,928.39
Additions during the year 592.55 311.14 894.61
Less: Amount paid during the year 1,007.78 27.31 315.56
Less: Unused amount reversed during the year 0.00 515.37 0.00
Closing Balance 2,860.67 3,275.90 3,507.44
Note :-2.21
Other Non Current Liailities Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) FERV Payable to Powergrid Corp. of India Ltd. * 4,378.31 3,675.54 4,651.85
ii) Others 5.90 - -
Total 4,384.21 3,675.54 4,651.85
Note :-2.22
Short Term Borrowings Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
– – –
Total – – –
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Annual Report 2017-18
Note :-2.23
Trade & Other Payables Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
– – –
Total – – –
Note :-2.24
Other Financial Liabilities Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Deposits/Retention money from contractors and others 457.92 625.98 390.70
ii) Deposits/Retention money from contractors and others - 11.56 152.16 506.91
on capital expenditure
iii) Employee related liability 167.09 53.51 20.73
iv) Liability on account of Truing up 398.52 5,049.31 8,633.74
v) Others 1,194.22 2,105.07 3,196.44
vi) Other Liabilities - REC 7.65 1.59 31.84
vii) Other Liabilities - ESCERTS 3.55 - -
viii) Other Liabilities- Third Party (Net) 37,789.26 24,169.37 6,778.43
(Liabilities in respect of Designated accounts operated and
maintained in terms of CERC Regulations)
b) Undisbursed PSDF Grant 3,198.17 17,039.05 23,360.98
c) PSDF Collection Account 612.09 7,425.12 24,613.01
ix) Payable to Power Grid Corporation of India Ltd.* 169.52 2,176.85 1,075.48
Total 44,009.55 58,798.01 68,608.26
*Ceases to be Holding Company w.e.f. 2nd Jan 2017
Note :-2.25
Other Current Liabilities Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
i) Advances from Customers 17,734.93 6,076.83 15,464.02
ii) Liabilities in respect of Third Parties
a) Short Term Open Access Regulation
i) CTU 27,635.46 30,076.56 6,977.87
ii) STU 4,008.05 4,266.98 4,569.78
iii) Other Liabilities - REC 255.71 271.58 155.74
iii) Other Liabilities - ESCERTS 2.75 - -
iv) Statutory Dues 132.90 222.06 167.05
v) Ind AS Prior Period Adjustment - - 81.18
Total 49,769.80 40,914.01 27,415.64
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Power System Operation Corporation Limited
Note :-2.26
Short Term Provisions Amount In Lakh `
Particulars As at As at As at
31-Mar-2018 31-Mar-2017 01-Apr-2016
A) Provision for Employee Benefits
i) Wage Revision Provisions
As per last Balance Sheet 375.03 0.00 0.00
Additions during the year 1,771.31 375.03 0.00
Closing Balance 2,146.34 375.03 0.00
ii) Transmission incentive / special incentive
As per last Balance Sheet 912.74 1,456.00 1,425.75
Additions during the year 1,114.55 938.47 1,095.85
Less: Amount paid during the year 747.24 891.04 971.65
Less: Unused amount reversed during the year 44.02 590.69 93.95
Closing Balance 1,236.03 912.74 1,456.00
iii) Other Employee Benefits (Leave Encashment, Settlement
Allowance, Post retirement medical benefits etc.)
As per last Balance Sheet 525.03 241.19 267.86
Additions during the year 294.88 685.64 0.00
Less: Amount paid during the year 517.26 355.17 26.67
Less: Unused amount reversed during the year 25.74 46.63 0.00
Closing Balance 276.91 525.03 241.19
Total (A) 3,659.28 1,812.80 1,697.19
B) Others
i) Taxation
As per last Balance Sheet 12,092.45 11,253.19 10,939.53
Additions during the year 3,099.52 839.26 2,349.64
Less: Amount Adjusted during the year 8,738.13 0.00 2,035.98
Closing Balance 6,453.84 12,092.45 11,253.19
Balance transferred to Note no. 2.7 -6,453.84 -12,092.45 -11,253.19
ii) Proposed Dividend
As per last Balance Sheet 0.00 474.92 0.00
Additions during the year 118.73 356.19 2,006.92
Less: Amount paid during the year 118.73 831.11 1,532.00
Closing Balance 0.00 0.00 474.92
iii) Dividend Tax
As per last Balance Sheet 0.00 96.68 0.31
Additions during the year 24.17 72.51 408.25
Less:Amount paid during the year 24.17 169.19 311.88
Closing Balance 0.00 0.00 96.68
iv) Corporate Social Responsibility (CSR)
As per last balance sheet - - 0.81
Additions during the year - - -
Less: Amounts paid during the year - - 0.81
Closing Balance - - -
Total (B) - - 571.60
Total (A+B) 3,659.28 1,812.80 2,268.79
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Annual Report 2017-18
Note :-2.27
Revenue from Operations Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
1) Sales of services
Revenue from System and Market Operation (Gross) 14,265.13 18,772.30
Less: Truing up Adjustment (2017-18) 398.52 -
Less: Truing up Adjustment (2016-17) - 5,038.34
Less: Truing up Adjustment (2015-16) - 339.10
Less: Truing up Adjustment (2014-15) - 449.90
Net Revenue 13,866.61 12,944.96
2) Short Term Open Access-Other Charges 2,273.64 2,796.81
3) Registration Money 162.29 153.50
4) Others
a) PRP Income * 2,157.74 1,555.17
b) Wage Revision Income * 1,810.77 375.03
Total 20,271.05 17,825.47
*Refer Note 2.38(ii)
Note :-2.28
Other Income Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
A) Interest from
Indian Banks 2,708.76 2,885.11
Employees Loans and Others 100.72 174.20
Interest Income on Fair Value of Financial Liabilities 132.65 4.50
Interest from IT Assessment 2,002.89 -
Others- Interest 149.09 488.90
Total (A) 5,094.11 3,552.71
B) Others
Consultancy Project Management and Supervision Fees - 0.94
REC Surplus 54.83 198.24
ESCERTS Surplus 94.06 -
Deferred Income (Transferred from Grants-in-aid) 38.45 24.20
Surcharge 25.61 15.50
Liability/Provision no longer required written back 92.22 645.12
Miscellaneous income 111.37 37.74
Total (B) 416.54 921.74
Total (A + B) 5,510.65 4,474.45
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Power System Operation Corporation Limited
Note :-2.29
Employee Benefits Expenses Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
Salaries wages allowances & benefits 9,995.81 8,206.20
Contribution to Provident and other funds 1,135.56 1,849.22
Staff Welfare expenses 710.04 607.88
Total 11,841.41 10,663.30
Note :-2.30
Finance Cost Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
A) Interest on Loan from - -
Others - 3.18
B) Other Borrowing Cost
Guarantee Fee - -
Other finance charges 0.11 0.19
C) Foreign Exchange Rate Variation - -
Less: Recoverable from Beneficiaries at the time of Truing Up - -
D) Finance Cost
Retention Money & Deposits 128.91 25.48
Total 129.02 28.85
Note :-2.31
Depreciation and Amortization Expense Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
Depreciation/Amortization-Tangible Assets 1,195.78 1,025.04
Amortization-Intangible Assets 758.29 679.44
Total 1,954.07 1,704.48
Note :-2.32
Other Expenses Amount In Lakh `
Particulars For the Year Ended For the Year Ended
31-Mar-2018 31-Mar-2017
Repair & Mainenance
Buildings * 388.34 223.81
Plant & Machinery
RLDCs 98.26 26.25
Others 654.69 550.08
System and Market Operation Charges - -
Power charges 474.58 469.12
Training & Recruitment Expenses 397.42 165.30
Communication expenses 109.14 121.58
Travelling & Conveyance expenses (excluding foreign travel) 416.07 407.69
Foreign travel 23.84 33.75
Payment to Auditors
As Statutory Audit Fees 11.73 8.76
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Annual Report 2017-18
* Buildings are not owned by POSOCO but transferred by Govt. of India (CEA) on as is where is basis and right of operation has been handed over
to POSOCO, therefore related expenditure on Repairs & Maintenance on such buildings are charged in POSOCO Books.
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Power System Operation Corporation Limited
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Annual Report 2017-18
is completed and balance if any, in UI Pool account shall be transferred to the Power System Development
Fund."
Thus the UI Accounts would also continue to be maintained by RLDCs till complete settlement. All payments
on account of Congestion Charges and interest, if any, received for late payment are credited to the fund
called “Congestion Charge Account”, maintained and operated by the Regional Load Despatch Centres in
accordance with provisions of Central Electricity Regulatory Commission (Measures to Relieve Congestion in
Real time operation) Regulations.
All payments on account of Congestion revenue received from Power Exchanges as a consequence of market
split in accordance of power Market Regulation and interest if any are credited to the Fund called Congestion
Revenue Account.
All payments on account of Reactive Energy Pool Account are credited to the fund called “Reactive Energy
Account”, maintained and operated by the Regional Load Despatch centers in accordance with provisions of
Central Electricity Regulatory Commission.
These funds are equally matched with fund balance in the bank accounts in the current account and fixed
deposit accounts except for difference due to interest accrued and TDS on interest, which are funded on
refund of TDS by the Income Tax Dept.
As on 31-03-2018, the total balance in these designated bank accounts was amounting to ` 37,245.53 lakh
(Previous Year ` 23,397.84 lakh ) as against the liability in these funds amounting to ` 37,789.26 lakh (Previous
Year ` 24,169.37 lakh). The net difference in the Liability and the designated bank accounts amounting to
`543.73 lakh (Previous Year ` 771.53 lakh) on account of the Interest accrued and TDS on interest.
2.35 Load Despatch Centre Development Fund (LDCD Fund)
The Load Dispatch Centre Development Fund (LDCD Fund) is created in accordance with (CERC Fee & Charges
of Regional Load Dispatch Centre and other related matters) Regulations, 2015.
As per clause 2 of Regulation 12, Chapter 3, the charges on account of return on equity, interest on loan,
depreciation of the Regional load Dispatch Centers and National Load Dispatch Centre including registration
fee and clause no. 1 of regulation 24, Chapter 5, balance amount of other income like short term open
access charges and REC Charges etc. shall be deposited in to the LDCD Fund after meeting the statutory
tax requirements. The fund shall be utilized as per clause 3 of Regulation 12, for creation of new assets, loan
repayment, servicing the capital raised in the form of interest and dividend payment, meeting stipulated
equity portion in asset creation, margin money for raising loan from the financial institutions and funding of
R&D projects and contingency expenses as per clause 2 of regulation 24, Chapter 5.
CERC vide its order dated 30-08-2016 on the petition No. 222/MP/2015 filed by POSOCO has relaxed the
Regulation 12(3) of CERC (Fee & Charges of RLDCs and other related matters) Regulations 2015 to allow
petitioner to utilize the LDCD Fund for funding of expenditure incurred on training for system operators from
SLDC and Corporate Social Responsibility (CSR) activities. Further, CERC vide its order dated 26-12-2016 on
the petition No. 244/TT/2015 filed by POSOCO has relaxed the Regulation 12(3) of CERC (Fee & Charges of
RLDCs and other related matters) Regulations 2015 regarding engagement of consultant for reliable and
secure grid operation.
Addition/Deduction in the LDCD Fund
i) During the current financial year revenue on account of Return on Equity, Interest on Loan, Depreciation
amounting to ` 303.26 lakh (Previous year ` 345.59 lakh) and other income amounting to ` 5,221.78 lakh
(Previous year ` 5,759.29 lakh) comprising mainly of STOA and bank interest income is required to be
deposited in LDCD Fund in terms of CERC Regulation. The fund has been utilized towards Training of ` 115.35
lakh (Previous year ` 22.77 lakh), Security Consultant of ` Nil (Previous year ` 1,024.75 lakh), Corporate Social
Responsibility Exp. of ` 127.54 lakh (Previous year ` 161.37 lakh), Statutory tax requirements of ` 3,099.52 lakh
(Previous year ` 750.00 lakh) , dividend (including dividend tax) of ` 142.90 lakh (Previous year ` 428.70 lakh),
R&D Exp. ` 147.71 lakh (Previous year ` Nil ), Capex of ` 1,081.33 lakh (Previous year ` 2,187.14 lakh) and
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Power System Operation Corporation Limited
Finance Charges of ` 0.11 lakh (Previous year ` Nil) resulting in net accretion by ` 810.58 lakh (Previous year
` 1,530.15 lakh) to the Fund.
A sum of ` 10,392.74 lakh (Previous year ` 9,946.76 lakh) is lying in the designated bank account against LDCD
Fund of ` 17,978.73 lakh (Previous year ` 17,168.15 lakh) as on 31-03-2018.
2.36 The CERC while giving approval under sub-section (4) of section 28 of the Electricity Act 2003, read with the
CERC (Fees and charges of Regional Load Dispatch Centre and other related matters) Regulations for the
RLDCs charges has stated that at present the System Operation is not subject to service tax. Service tax has
been subsumed under GST w.e.f. 01-07-2017. Since GST is replacement of service tax, applicability of GST is
treated in similar manner after taking opinion from independent Chartered Accountant Consultant firm.
2.37 The disclosure regarding MSMED information is as follows: Amount in Lakh `
Particulars Amount
A Amount remaining unpaid to any supplier 23.34
Principal amount 23.34
Interest due thereon Nil
B Amount of interest paid in terms of section 16 of the MSMED Act along with the Nil
amount paid to the suppliers beyond the appointed day.
C Amount of interest due and payable for the period of delay in making payment Nil
(which have been paid but beyond the appointed day during the year) but
without adding the interest specified under the MSMED Act.
D Amount of interest accrued and remaining unpaid. Nil
E Amount of further interest remaining due and payable even in the succeeding Nil
years, until such date when the interest dues as above are actually paid to the
small enterprises, for the purpose of disallowances as a deductible expenditure
under section 23 of MSMED Act.
2.38 i) In exercise of powers conferred u/s 178 of the Electricity Act 2003, the Central Electricity Regulatory
Commission (CERC) notifies the CERC (Fees and Charges of Regional Load Despatch Centre and other
related matters) Regulations for determining of Fees & charges. Accordingly, The CERC has notified
the CERC Regulations (Fees and Charges of Regional Load Dispatch Centre and other related matters)
2015. The CERC had issued orders in the F.Y. 2016-17 under said Regulations against the Petitions filed
by NLDC and RLDCs to bill and recover monthly fees and charges as stated in the said orders for the
control period 2014-19 by NLDC & RLDCs.
Accordingly, in respect of system and market operation charges ` 398.52 lakh for the year 2017-18 has
been de-recognized from the income during the year. The same is transferred to liabilities. The Refund
shall be made as per CERC Regulations by 30th September, 2018.
ii) Human Resource and Operation & Maintenance Expense components of tariff are accounted on the
basis of actual expenditure due. These expenses are accounted for as per Pay Revision circular dated
11th June, 2018 as per DPE Guidelines. The Pay Arrear due are also treated as part of Income of Human
Resource component .These expenses incurred are allowed as per CERC Regulations subject to truing
up after the end of control period i.e. 2014-19. The CERC vide its tariff orders has directed that “Any
additional legitimate HR expenses over and above that approved by the Commission in it’s various
tariff orders may be temporarily met by the petitioner out of the Other Income before transfer to LDC
Development Fund which will be recouped at the time of truing up.” Accountings of these expenditures
are in accordance with the opinion given by the Expert Advisory Committee of the ICAI.
PRP income of ` 2,157.74 Lakh includes ` 1,045.66 lakh for the year 2015-16 for which final order has
been given by the CERC on 31-07-2017. The company has taken an opinion from an independent
consultant firm for recognition of revenue against the order for the year 2015-16. As per the opinion,
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Annual Report 2017-18
performance related incentive for the year 2015-16 can be recognized as income of the year 2017-18.
During the year the Company has changed its accounting policy of recognition of revenue against
Performance Related Pay (PRP) Expenses and Wage Revision Expense (Accounting Policy no. 1.10.2).
Due to such change, Income of ` 1,112.08 lakh for the year 2017-18 and ` 918.45 lakh for the year
2016-17 has been booked in the year 2017-18 and 2016-17 respectively as PRP Income and ` 1,810.77
lakh and ` 375.03 lakh for the year 2017-18 and 2016-17 respectively as Income against Wage Revision
expense.
iii) POSOCO has filed a petition No. 222/MP/2015 for relaxation of Regulation 12(3) of CERC (Fee & Charges
of RLDCs and other related matters) Regulations 2015 (RLDC Fee & Charges Regulation) to delete the
word Depreciation from Regulation 12 and to allow the computation of the same in accordance with
the provisions of Regulation 19 of the RLDC Fees & Charges regulations. As these were allowed in the
earlier RLDC Fee & Charges regulations 2011 for Control Period 2009-14. The CERC vide its tariff order
has disallowed the depreciation as part of income from Fees & Charges.
iv) During the year, old unclaimed Security Deposit, Retention to capital cost and Dead Cheques amounting
to ` 9.31 lakh (Previous Year ` 9.09 lakh) lying since more than 3 Years have been transferred to Other
Miscellaneous Receipts.
v) Total FERV allocated by POWERGRID on IBRD II & III till 31.03.2018 is ` 6,371 lakh (up to Previous year
` 6,541 lakh). The Company has considered FERV of ` (-) 170 lakh (Previous year ` 778.03 lakh) based
on actual payment of IBRD-II & III loan recoverable from constituents in line with regulations of CERC
and the same shall be considered by CERC.
The amount of FERV will be recovered from Constituents till the final payment of Loan by
POWERGRID.
vi) As per Central Electricity Regulatory Commission (Open Access in Inter State Transmission), Regulation
2008, Transmission & Operating Charges are collected for providing Short term Open Access by the
Company which are reimbursable to Long term Beneficiaries. Such Charges remain with the company
for the period up to approx. three Months. Interest earned on Short Open Access (STOA) Bank Account
is being treated as Income of Company & the same is being transferred to LDCD fund as per CERC
Regulation 2015 .The Company sought clarification from CERC regarding treatment followed by the
Company on Interest earned on STOA bank Account. Pending clarification from CERC, the Company has
followed the same treatment as in earlier years.
2.39 Other income includes ` 38.45 Lakh (Previous Year ` 24.20 Lakh) being the amount transferred from Grants-
in-aid received (as per accounting policy note no: 1.4).
2.40 NLDC is required to maintain separate books of account of the REC Mechanism. At the year end, assets,
liabilities and surplus of REC Mechanism based on audited accounts have been merged in the books of
account of the company with the concurrence of Central Electricity Regulatory Commission (CERC).
Surplus before tax of REC Mechanism to the tune of ` 54.83 lakh (Previous Year ` 198.24 lakh including
` 3.72 lakh prior period income) has been accounted for in the books of accounts of the company during the
year. Income Tax provisions of ` 20.28 lakh including ` 1.29 lakh on Prior period income (Previous Year ` 67.32
lakh) has been made against the above surplus. Surplus after provisions of Income Tax amounting to ` 35.83
lakh (Previous Year ` 127.20 lakh) is transferred to REC fund. It shall be utilized only for the expenses allowed
under CERC Regulation, 2015.
2.41 Perform, Achieve and Trade (PAT):
NLDC is required to maintain separate Books of Account of Energy Savings Certificate (ESCerts) from Financial
Year 2017-18. At the end of year, assets, liabilities and surplus of ESCerts based on Audited Financial Statements
have been merged with the Books of Account of POSOCO.
Notified vide Gazette Notification dated 27th May,2016, under National Mission for Enhanced Energy Efficiency
(NMEEE), the scheme of Perform, Achieve and Trade (PAT), is a regulatory instrument to reduce specific energy
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Power System Operation Corporation Limited
consumption in energy intensive industries, with an associated market based mechanism to enhance the cost
effectiveness through certification of excess energy saving which can be traded.
The Perform Achieve and Trade (PAT) is a market based mechanism to reduce the specific energy consumption
in energy intensive industries. This is facilitated through the trading of Energy Saving Certificate (ESCerts)
which are issued to those plants who have over-achieved their targets. Those plants who were under achievers
of their targets are entitled to purchase ES-Certs.
For the trading of ESCerts, Central Electricity Regulatory Commission (CERC) is the Market Regulator and
Bureau of Energy Efficiency is the Administrator. NLDC, operating under POSOCO (Power System Operation
Corporation limited) has been appointed as “Registry” for making Designated Consumers (DCs) as eligible
entities for trading of ESCerts and book-keeping of ESCerts. CERC , by order has prescribed the total revenue
from the fees to be shared in the ratio of 50:50 between the Registry and Administrator.
The CERC, has determined by order, the fees and charges payable to the Registry (NLDC, POSOCO) for
the purpose of meeting the cost and expense towards the management of the Registry and the software
platform.
Surplus before tax of Energy Savings Certificate (ESCert) Mechanism to the tune of ` 94.06 lakh (Previous
Year ` NIL lakh) has been accounted for in the books of accounts of the company during the year. Income
Tax provisions of ` 32.55 lakh (Previous Year ` Nil lakh) has been made against the above surplus. Surplus
after provisions of Income Tax amounting to ` 61.51 lakh (Previous Year ` NIL lakh) is transferred to
Energy Savings Certificate (ESCert) Fund. It shall be utilized only for the expenses allowed under CERC
Regulations.
2.42 Trade receivables, TDS receivables and FERV recoverable are subject to reconciliation, confirmation
and consequential adjustments. The Status of Confirmation of Trade Receivable as at 31st Mar, 2018 is as
under:
Amount in Lakh `
Outstanding Amount as on Amount Confirmed/Received
31-03-2018 31-03-2017 31-03-2018 31-03-2017
698.93 518.77 593.42 470.36
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Power System Operation Corporation Limited
earned leave on superannuation shall be fulfilled by half pay leave to that extent. The liability for the same is
recognized on the basis of actuarial valuation.
Provision for Leave Encashment for the year amounting to ` 721.54 lakh (Previous Year ` 517.51 lakh) has
been made on the basis of actuarial valuation for the employees.
D Description of Risk Exposures:-
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company
is exposed to various risk as follows -
i Salary Increases- Actual Salary increases will increase the Plan’s liability. Increase in salary increase rate
assumption in future valuations will also increase the liability.
Ii Investment Risk- If Plan is funded then assets liabilities mismatch & actual investment return on assets
lower than the discount rate assumed at the last valuation date can impact the liability.
iii Discount Rate- Reduction in discount rate in subsequent valuations can increase the plan’s liability.
iv Mortality & Disability- Actual deaths & disability cases proving lower or higher than assumed in the
valuation can impact the liabilities.
v Withdrawals- Actual withdrawals proving higher or lower than assumed withdrawals and change of
withdrawal rates at subsequent valuations can impact Plan’s liability.
E Actuarial Assumptions:
i Economic Assumptions
The principal assumptions are the discount rate & salary growth rate. The discount rate is generally
based upon the market yields available on Government bonds at the accounting date relevant to currency
of benefit payments for a term that matches the liabilities. Salary growth rate is company’s long term
best estimate as to salary increases & takes account of inflation, seniority, promotion, business plan, HR
policy and other relevant factors on long term basis as provided in relevant Indian accounting standard.
These valuation assumptions are as follows.
ii Demographic Assumption
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Annual Report 2017-18
Sensitivities due to mortality & withdrawals are not material & hence impact of change not calculated.
Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before
retirement & life expectancy are not applicable being a lump sum benefit on retirement.
G The summarized position of various defined benefits recognized in the Statement of Profit and Loss, Statement
of Other Comprehensive Income and Balance Sheet and the present value status are as under :-
a) Expenses recognized in Statement of Profit or Loss Amount in Lakh `
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Power System Operation Corporation Limited
d) Changes in the Present Value of the Defined Benefit obligations: Amount in Lakh `
Year Amount
a) Apr 2018- Mar 2019 303.88
b) Apr 2019- Mar 2020 220.30
c) Apr 2020- Mar 2021 262.06
d) Apr 2021- Mar 2022 335.37
e) Apr 2022- Mar 2023 412.74
f) Apr 2023 – Mar 2024 220.18
g) Apr 2024 onwards 1,008.43
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Annual Report 2017-18
Amounts payable to key managerial personnel does not include provision towards post-employment benefits
and other long term benefits since these amounts have not become payable to them as at the reporting date.
As on 31.03.2018, the Board of Directors were:
i) Mr. K.V.S. Baba Chairman & Managing Director (w.e.f. 19-12-2017)
ii) Ms. Meenakshi Davar Director (w.e.f. 22-12-2017)
iii) Mr. P. K. Agarwal Director (w.e.f. 22-12-2017)
iv) Mr. Ranjan K. Srivastava Director (w.e.f. 31-01-2018)
v) Ms. Bharati Director (Govt. Nominee) (w.e.f. 05-09-2017)
vi) Mr. M. A. Inbarasu Director (Govt. Nominee) (w.e.f. 01-12-2017)
vii) Mr. Jagdishbhai I. Patel Independent Director
viii) Mr. I. S. Jha Chairman (Part time) (till 19-12-2017)
ix) Mr. Ravi P. Singh Director (Part Time) (till 19-12-2017)
x) Ms. Jyoti Arora Govt. Nominee Director (till 05-07-2017)
xi) Mr. Santosh D. Vaidya Govt. Nominee Director (till 11-06-2017)
B) Director’s sitting fee including service tax/GST ` 2.63 lakh (Previous Year ` 3.94 lakh) for independent
directors.
128
Power System Operation Corporation Limited
2.48 Earnings Per Share calculated in accordance with the provisions of IND AS - 33
As at 31.03.2018 As at 31.03.2017
Numerator
Profit after tax as per Profit and Loss Account (Used as 4,713.98 3,667.36
Numerator (Amount in Lakh `) excluding net surplus of
REC & ESCERT).
Denominator
-Number of Equity Shares (Face value of `10/- each) 30640000 30640000
-Number of Shares allotted during the year - -
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Power System Operation Corporation Limited
from income by CIT (Appeals). AO-IT Deptt. has also filed an appeal with ITAT against the order of
CIT (Appeals) for disallowing the additions made by him i.e. for ` 1,97,333.00 Lakh. The additional tax
liability of ` 87,929.16 Lakh shall be dependent on the order of ITAT. No provision has been made in
books of account for this amount pending adjudication.
(iii) In respect of Assessment Year 2012-13, the Company filed an appeal with Income Tax Appellate Tribunal
(ITAT) against the order of CIT (Appeals) for disallowing the expense of cash rebate to customers for
` 9.16 Lakh. Except for the said amount all other additions made by Assessing Officer (AO-IT Deptt.)
have been deleted from income by CIT (Appeals). AO-IT Deptt. has also filed an appeal with ITAT against
the order of CIT (Appeals) for disallowing the additions made by him i.e. for ` 1,11,036.00 Lakh. The
additional tax liability of ` 48,625.80 Lakh shall be dependent on the order of ITAT. No provision has
been made in books of account pending adjudication.
(iv) In respect of Assessment Year 2013-14 a demand of ` 49,685.56 Lakh has been raised by the assessing
officer under section 143(3) of the Income Tax Act, 1961. The company filed an appeal before Ld. CIT
(A) against the assessment order. CIT (A) has issued an order dated 31-10-2016 against the appeal
vide which CIT (A) has deleted all the additions made by A.O. except the additions of ` 131.00 Lakh
made on account of expenditure on CSR activities. Thus no demand pending. AO-IT Deptt. has also
filed an appeal with ITAT against the order of CIT (Appeals) for disallowing the additions in surplus
pool Account made by him i.e. for ` 1,23,066.82 Lakh. The additional tax liability of ` 49,685.56 Lakh
shall be dependent on the order of ITAT. No provision has been made in books of account pending
adjudication.
(v) In respect of Assessment Year 2014-15 a demand of ` 69,155.23 Lakh had been raised by the assessing
officer under section 143(3) of the Income Tax Act, 1961. The company filed an appeal before Ld. CIT
(A) against the assessment order. CIT (A) had issued an order dated 31-03-2017 against the appeal, vide
which CIT (A) has deleted all the additions made by A.O. except the additions of ` 238.63 Lakh made on
account of expenditure on CSR activities and prior period expenditure of ` 10.18 Lakh.
Against non-allowance of expenditure of Corporate Social Responsibility amounting of ` 238.63 Lakh
and Prior Period Expenses amounting of ` 10.18 lakh by CIT (A), an appeal was filed before ITAT by
POSOCO.
An appeal has also been filed by Income tax Department against the deletions made by CIT(A)regarding
surplus in Pool accounts and allowance of Prior Period Expenses amounting ` 1,59,499.25 lakh and
` 1,052.85 lakh respectively before ITAT. The additional tax liability of ` 69,155.23 lakh shall be dependent
on the order of ITAT.
(vi) Impact of pending litigation cases on the financial statements – Nil.
(vii) Material foreseeable losses on long term contracts – Nil.
2.53 Fair value measurement
A number of the Company’s accounting policies and disclosures require the determination of fair value, for
both financial as well as non financial assets and liabilities. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes
place either in the principal market for the asset or liability or in the absence of a principal market, in the most
advantageous market for the asset or liability. The principal market or the most advantageous market must be
accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy Based on the lowest level input that is significant to the fair value measurement
as a whole. The fair value hierarchy is described as below:
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Annual Report 2017-18
Level 1: unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2: Inputs other than prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy.
Employee Loans
The fair value of employee loans is estimated as the present value of future cash flows, discounted at market
rate of interest at the reporting date.
Security Deposits & Retention Money
The fair value of security deposits & retention money is estimated as the present value of future cash flows,
discounted at market rate of interest at the reporting date.
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Power System Operation Corporation Limited
Income
1 Performance Related Pay 2017-18 2016-17 636.72
2 Interest accrued on Bank Flexi Deposit/ Interest 2017-18 2016-17 77.07
from Domestic Banks
3 Performance Related Pay 2017-18 2015-16 4.72
4 Excess Provision written back 2017-18 2016-17 (6.28)
5 Deferred Tax Liability reversal 2017-18 2015-16 15.00
TOTAL 727.23
Amount in Lakh `
Amount in Lakh `
Sl. Period in which Period to which
Particulars Amount
No. expense done expense pertains
Expenditure
- - -
Income
1 Performance Related Pay 2017-18 2016-17 918.44
2 Wage Revision 2017-18 2016-17 375.03
3 Wage Revision (Other Income) 2017-18 2016-17 3.72
TOTAL 1,297.19
Statement showing impact of Prior Period Adjustments and Accounting Policy changes in financials
as at 31.03.2018 on Balance sheets as at 31-03-2017 & 01-04-2016.
Amount in Lakh `
Balance as per original Impact of Errors/
Statements Change in Accounting Balance as per revised
Particulars Policy statement
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Power System Operation Corporation Limited
Statement showing impact of Prior period Adjustments and Accounting Policy Changes on financials
31.03.2018 on Statement of Profit & Loss for the year ended 31-03-2017
Amount in Lakh `
Balance as Impact of
Balance as
per original Errors/Change
Particulars per revised
Statements in Accounting
statement
Policy
Reconciliation of Revenue from Operation (Note 2.27)
4) Others
a) PRP Income (Accounting policy change impact) - 918.44 1,555.17
PRP Income (Prior period Adjustment) 636.73
b) Wage Revision Income (Accounting policy - 375.03 375.03
change impact)
TOTAL - 1,930.20 1,930.20
Reconciliation of Oher Income( Note 2.28)
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Annual Report 2017-18
136
Power System Operation Corporation Limited
The carrying value and fair value of financial instruments by each category as at March 31, 2017 were as
follows:-
Amount in Lakh `
Particulars Financial Financial Financial Total Total fair
assets/ assets/ assets/ carrying value
liabilities at liabilities at liabilities at value
amortised cost FVTPL FVTOCI
Assets
Long Term Loans 605.96 - - 605.96 605.96
Trade Receivables 518.77 - - 518.77 518.77
Cash & Cash equivalents 20,200.88 - - 20,200.88 20,200.88
Other Bank Balances 83,312.79 - - 83,312.79 83,312.79
Short term Loans 190.11 - - 190.11 190.11
Other financial assets 3,648.88 - - 3,648.88 3,648.88
Liabilities
Other Financial Liabilities 58,818.93 - - 58,818.93 58,818.93
The carrying value and fair value of financial instruments by each category as at April 1, 2016 were as
follows:-
Amount in Lakh `
Particulars Financial Financial Financial Total Total fair
assets/ assets/ assets/ carrying value
liabilities at liabilities at liabilities at value
amortised cost FVTPL FVTOCI
Assets
Long Term Loans 653.58 - - 653.58 653.58
Trade Receivables 900.04 - - 900.04 900.04
Cash & Cash equivalents 33,550.22 - - 33,550.22 33,550.22
Other Bank Balances 64,668.00 - - 64,668.00 64,668.00
Short term Loans 219.92 - - 219.92 219.92
Other financial assets 2,397.95 - - 2,397.95 2,397.95
Liabilities
Other Financial Liabilities 68,786.45 - - 68,786.45 68,786.45
137
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138
Power System Operation Corporation Limited
2. Liquidity Risk:
Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or other financial assets. The company's approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking
damage to the company reputation, typically the company ensures that it has sufficient cash on demand to
meet expected operational expenses, servicing of financial obligations.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Amount in Lakh `
As at 31st March, 2018
Carrying Contractual 0-12 1-3 3-5
Amount Cash flows Months Years Years
Non derivative financial liabilities
Other financial liabilities 44,042.03 47,856.73 47,540.73 313.37 2.63
3. Market Risk:
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a
change in the price of a financial instrument. The value of a financial instrument may change as a result
of changes in the interest rates, foreign exchange rates and other market changes that affect market risk
sensitive instruments.
2.59 In Compliance with the Companies Act, POSOCO had included Corporate Social Responsibility (CSR) expenses
out of the profits of the company as a percentage of Profit after Tax. As per Section 135 of the Companies Act,
2013 Company was required to spend ` 127.04 lakh (P.Y. ` 161.00 lakh ), against which an amount of ` 127.54
lakh (P.Y. ` 161.37 lakh) for F.Y. 2017-18 has been spent on CSR activities:
Amount in Lakh `
Sr. Particulars Amount paid Yet to be paid Total
No.
(i) Development of infrastructure at Hospital 40.00 13.87 53.87
(ii) Promoting Research & Studies 27.29 2.00 29.29
(iii) Skill training to improve employability 30.22 3.36 33.58
(iv) Smart Labs in Govt. Schools - 10.80 10.80
Total 97.51 30.03 127.54
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Annual Report 2017-18
2.60 Final dividend @15.5% of Paid up Share Capital amounting to ` 474.92 lakh has been proposed in the Board
Meeting which shall be paid subject to approval of members at the Annual General Meeting.
The Proposed Dividend has not been recognized since the proposed dividend is subject to the approval of
shareholders at the Annual General Meeting.
2.61 Ministry of Corporation Affairs (MCA) has issued the companies (Indian Accounting Standards) Amendment
Rules, 2018 on 28th March, 2018 notifying Ind AS 115, “Revenue from Contracts with customers” which are
applicable for financial statements pertaining to annual periods on or after 1st April, 2018. The company
expects that there will be no material impact on the financial statements.
2.62 Figures have been rounded off to nearest Rupees in Lakh up to two decimal places.
Sd/- Sd/-
(Akhil Bhalla) (Sharwan Kumar Aggarwal)
Partner Partner
M.No. : 505002 M.No. : 513558
Place : New Delhi
Date : 28-Sep-2018
140
Power System Operation Corporation Limited
141
Annual Report 2017-18
142
Power System Operation Corporation Limited
in the Annexure 1, a statement on the matters specified in the paragraph 3 and 4 of the order.
2. In terms of section 143(5) of the Act, we give in Annexure 2, a statement on the directions issued under the
aforesaid section by the Comptroller and Auditor General of India.
3. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit except for the matters described in the Basis for
Qualified Opinion paragraph;
(b) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above,
in our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books;
(c) the balance sheet, the statement of profit and loss including other comprehensive income, the statement
of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the
books of account;
(d) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above,
in our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified
under Section 133 of the Act read with relevant rule issued there under;
(e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company;
(f) Ministry of Corporate Affairs vide notification no. G.S.R. 463(E) dated June 05, 2015 exempted government
Company from the requirement of section 164(2) of the Act. Therefore, section 143(3)(g) of the Act is not
applicable to the Company;
(g) with respect to the adequacy of the internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate report in Annexure 3; and
(h) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i) The Company has disclosed the impact of pending litigation on its financial position in its Ind AS
financial statements. Refer Note No. 2.52 of the Ind AS financial statements;
ii) The Company did not have any long term contracts including derivative contracts for which there were
any material foreseeable losses; and
iii) There were no amount which required to be transferred to the Investor Education and Protection Fund
by the Company.
For J.C. Bhalla & Co. For S.K. Patodia & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.001111N Firm Regn. No.112723W
Sd/- Sd/-
Akhil Bhalla Sharwan Kumar Agarwal
Partner Partner
Membership No.505002 Membership No.513558
143
Annual Report 2017-18
Annexure 1 to Revised Independent Auditors’ Report of even date of the Ind AS financial statement
of Power System Operation Corporation Ltd.
Referred to in paragraph 1 of the Revised Independent Auditors’ Report of even date under the heading “Report on
Other Legal and Regulatory Requirements” to the members of Power System Operation Corporation Ltd. on the Ind
AS financial statements as of and for the year ended March 31, 2018.
1. (a) The Company has maintained proper records showing full particulars including quantitative details and
situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year. As explained to us,
no material discrepancies were noticed on such verification as compared to the book records. In our
opinion the frequency of verification is reasonable having regard to the size of the Company and nature
of its activities.
(c) According to the information and explanation given to us and on the basis of examination of title deeds,
other relevant records, we report that the title deeds of the immovable properties are held in the name
of the Company as at the balance sheet date.
2. According to the information and explanation given to us, the Company does not have any Inventory in
the books. Accordingly, clause 3(ii) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the
Company.
3. According to intimation and explanation given to us, the Company has not granted any loan, secured or
unsecured to companies, firms, limited liability partnership or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, clauses 3(iii)(a), 3(iii)(b) & 3(iii)(c) of the Companies (Auditor’s
Report) Order, 2016 are not applicable to the Company.
4. According to the information and explanations given to us and in our opinion the Company has not advanced
any loan, investment, guarantee or security to any person as specified under section 185 and section 186 of
the Act. Accordingly, clause 3(iv) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the
Company.
5. In our opinion and according to the information and explanations given to us, the Company has not accepted
any deposits from the public under the provisions of Sections 73 to 76 of the Act or other relevant provisions
of the Act and rules framed there under. Accordingly, clause 3(v) of the Companies (Auditor’s Report) Order,
2016 is not applicable to the Company.
6. The Central Government has not prescribed the maintenance of cost records under sub-section (1) of section
148 of the Act. Accordingly, clause 3(vi) of the Companies (Auditor’s Report) Order, 2016 is not applicable to
the Company.
7. (a) According to the information and explanations given to us and on the basis of our verification of records
of the Company, the Company is generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, income tax, sales tax, service tax, customs duty, value added
tax, Cess, Goods and Services tax, Professional Tax and other statutory dues applicable to it. According
to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid
dues were in arrears as at March 31, 2018 for a period of more than six months from the date they
became payable.
(b) According to the information and explanations given to us, there are no dues of provident fund, sales tax,
service tax, customs duty, value added tax, Cess, Goods and Services tax and Professional Tax which have
not been deposited on account of any dispute. Disputed income tax which have not been deposited on
account of matters pending before appropriate authorities is as under:
Sl. Name of the Statue Nature of Amount Amount Period to Forum where Dispute is
No. Dues (` in Lakh) Paid which it pending
(` in Lakh) relates
1 Income Tax Act, 1961 Income Tax 87,929.16 Nil A/Y 2011-12 Income Tax Appellate Tribunal
2 Income Tax Act, 1961 Income Tax 48,625.80 Nil A/Y 2012-13 Income Tax Appellate Tribunal
3 Income Tax Act, 1961 Income Tax 49,685.56 Nil A/Y 2013-14 Income Tax Appellate Tribunal
4 Income Tax Act, 1961 Income Tax 69,155.23 Nil A/Y 2014-15 Income Tax Appellate Tribunal
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Power System Operation Corporation Limited
8. According to the information and explanations given to us, the Company has not taken any loan from financial
institution, bank, government or debenture holders. Accordingly, clause 3(viii) of the Companies (Auditor’s Report)
Order, 2016 is not applicable to the Company.
9. In our opinion and according to the information and explanation given by the management, the Company has not
raised any money by way of initial public offer or further public offer (including debt instruments) and term loan
during the year. Accordingly, clause 3(ix) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the
Company.
10. During the course of our examination of the books of accounts and records carried out in accordance with the
generally accepted auditing practices and according to the information and explanations given to us, no fraud by
the Company or on the Company by its officers or employees has been noticed or reported during the year.
11. In view of exemption given vide notification no. G. S. R. 463(E) dated June 5, 2015, issued by Ministry of Corporate
Affairs, provisions of Section 197 read with Schedule V of the Act regarding managerial remuneration are not
applicable to the Company. Accordingly, paragraph 3(xi) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.
Accordingly, clause 3(xii) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
13. According to the information and explanations given to us and based on our examination of the records of the
Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where
applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by
the applicable accounting standards.
14. According to the information and explanations given to us and based on our examination of the records of the
Company, the Company has not made any preferential allotment or private placement of shares or fully or partly
convertible debentures during the year. Accordingly, clause 3(xiv) of the Companies (Auditors Report) Order, 2016
is not applicable to the Company.
15. According to the information and explanations given to us and based on our examination of the records of the
Company, the Company has not entered into non-cash transactions with directors or persons connected with him.
Accordingly, clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
16. According to the information and explanations given to us the Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act 1934. Accordingly, Clause 3(xvi) of the Companies (Auditor’s Report)
Order 2016 is not applicable to the Company.
For J.C. Bhalla & Co. For S.K. Patodia & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.001111N Firm Regn. No.112723W
Sd/- Sd/-
Akhil Bhalla Sharwan Kumar Agarwal
Partner Partner
Membership No.505002 Membership No.513558
145
Annual Report 2017-18
ANNEXURE – 2
Report under Section 143 (5) of the Companies Act, 2013 in respect of POWER SYSTEM OPERATION CORPORATION
LTD. on the Accounts for the year ended 31st March, 2018.
Sl.
Directions Auditor’s Comments
no.
1. Whether the Company has clear title/lease deeds for freehold Yes, the Company has clear title/lease
and leasehold land respectively? If not, please state the area of deed for Freehold Land.
freehold and leasehold land for which title/lease deeds are not
available.
2. Whether there are any cases of waiver/write off of debts/loans/ According to the information and
interest etc. If yes, the reasons thereof and amount involved. explanations given to us, there are no
cases of waiver / write off of debts /
loans / interest etc.
3. Whether proper records are maintained for inventories lying There are no inventories lying with third
with third parties and assets received as gift/grant(s) from the party and proper records are maintained
Government or other authorities. for assets received as gift/grant(s) from
the Government or other authorities.
For J.C. Bhalla & Co. For S.K. Patodia & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.001111N Firm Regn. No.112723W
Sd/- Sd/-
Akhil Bhalla Sharwan Kumar Agarwal
Partner Partner
Membership No.505002 Membership No.513558
146
Power System Operation Corporation Limited
147
Annual Report 2017-18
and that receipts and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect
on the Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting
to future periods are subject to the risk that the internal financial control over financial reporting may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were operating effectively as at 31
March, 2018, based on the internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls
over Financial Reporting issued by the Institute of Chartered Accountants of India.
For J.C. Bhalla & Co. For S.K. Patodia & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.001111N Firm Regn. No.112723W
Sd/- Sd/-
Akhil Bhalla Sharwan Kumar Agarwal
Partner Partner
Membership No.505002 Membership No.513558
148
Power System Operation Corporation Limited
NOTES
149
Annual Report 2017-18
NOTES
150
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