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Corporate Mission

To excel as a pivotal developmental

financial institution in the power sector

committed to the integrated development

of the power and associated sectors by

channelling the resources and providing

financial, technological and managerial

services for ensuring the development of

economic, reliable and efficient systems

and institutions.

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1

Contents

Chairmans Speech 6

Directors Report 10

Balance Sheet 30

Profit & Loss Account 31

MOU-Key Performance Parameters 54

Auditors Report 55

Comments of the Comptroller

and Auditor General of India 57

Review of Accounts by the Comptrollerand Auditor General of India 58

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Performance at a Glance

PARTICULARS 1997-98 1998-99 1999-2000 2000-01 2001-02

I. RESOURCES

(At the end of the year)(Rs. in Crores)

Equity Capital 1030.45 1030.45 1030.45 1030.45 1030.45

Interest Subsidy Fund 194.16 505.86 732.29 896.22 1093.44

Reserves and Surplus 1449.85 1871.33 2355.61 2779.14 3367.63

Borrowings :

(i) PFC Bonds 2436.53 2008.85 2508.57 3637.06 5027.09

(ii) Foreign Loans 1298.33 1810.74 2281.96 2241.48 2134.71

(iii) Rupee Loan Govt. of India 1281.77 1531.13 1529.13 1513.60

(iv) Term Loans from Banks 90.00 700.00 1425.00 1925.00 3515.00

v) Commercial Paper 135.00

vI) Cash-credit from Banks 170.00

II. FINANCING OPERATIONS

(During the year)(Rs. in Crores)

No. of Loans 58 79 93 155 145

Loans Sanctioned 2922.14 3339.00 6490 7706 8506

Loans Disbursed 2025.71 2467.00 3404 3230 5150

Repayment by Borrowers 473 698 993 1416 1992

III. WORKING RESULTS

(For the year)(Rs. in Crores)

Administrative Expenses 12.41 19.79 28.39 30.79 27.63

Profit before tax 562.47 660.03 738.57 745.97 950.38

Provision for tax 34.80 118.67 116.10 141.83 172.05

Profit after tax 527.67 541.36 622.47 604.13 778.33

IV. NO. OF EMPLOYEES 236 271 272 268 268

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3

Financial Review

900

800

700

600

500

400

300

200

100

0

PROFIT AFTER TAX(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

528 541

622 604

7784500

4000

3500

3000

2500

2000

1500

1000

500

0

NET WORTH(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

2400

2797

32563561

4195

2500

2000

1500

1000

500

0

GROSS INCOME(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

1134

1407

1615

1910

2098

CAPITAL EMPLOYED(in %age)

Share Capital6%

Domestic Loans60%

ForeignCurrrency Loans

13%

Reserves21%

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4

Shri A.A. KhanChairman & Managing Director

Shri Ajay Shankar

Director

Shri V.S. SaxenaDirector (ID&A)

Dr. K.K. GovilDirector (Projects)

Shri R. KrishnamoorthyDirector (F&FO)

Shri Arvind Jadhav

Director

Boardof

Directors

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Senior Executives

Smt. Anita MenonChief Vigilance Officer

Shri S.S. GuptaED (IAD)

Shri Ashok GuptaED (Finance)

Shri P.K. BhargavaED (MS&PR)

Shri M.K. GoelED (Projects)

Shri J.S. Amitabh

Company Secretary

Registered Office :Chandra Lok, 36, JanpathNew Delhi-110 001.Tel. No. (91) (11) 372-2301 to 08Fax: (91) (11) 331-5822Website:http://www.pfcindia.com

AuditorsBubber Jindal & Co.

Chartered AccountantsNew Delhi

BankersReserve Bank of India

Bank of India

State Bank of IndiaVijaya BankCanara Bank

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Gentlemen,

1. It gives me great pleasure to welcome you to the 16th Annual General Meeting of

the Corporation and to share with you the sustained growth achieved by your

Corporation during the year 2001-2002 under various business parameters.

2. Power is a critical component for economic growth and development of the

economy. The projected growth of the Indian economy hinges heavily on the

performance and growth of the power sector. To achieve Mission 2012 : Power

Shri A.A. KhanChairman & Managing Director

Chairmans Speechfor All, it is estimated that 1,00,000 MW of additional capacity and associated

T&D network are to be added, and an investment of the order of Rs.800,000

crores would be needed in the next decade. In this scenario, the role of Financial

Institutions like PFC, is going to be very significant in mobilizing resources, lending

to power utilities and steering the power sector towards making it financially and

commercially viable, on a sustainable basis.

3. In line with this objective, PFC has, in consultation with Ministry of Power, taken

an initiative and moved a preliminary proposal for setting up of India Power Fund

(IPF), with resource size growing according to the needs of sector from Rs.2,500

crores to Rs.25,000 crores, for investment in equity and debt to kick-start the

power projects. Additionally, in order to enlarge its operation, PFC is considering

investment in power sector to the extent of 20% of the total investment during

the 10th Plan Period. Further it is planned actions are in hand to broaden the

PFCs equity base through Initial Public Offer (IPO), and to tap international market

through ADR/GDR.

4. During the year under review, the disbursement of your Corporation have touched

an all-time high of Rs.5,150 crores reflecting a growth of 60% over the last year.

Sanctions have also recorded a quantum jump of 10% at Rs.8,506 crores. This is

despite the continuing unfavourable terrain for Private Power Projects. You willbe further glad to know that by adopting numerous cost-saving measures such as

CMD, PFC receiving award from Vice Presidentof India at the Conference of Chief Executives

of Public Sector Undertakings on4th May, 2002, New Delhi

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pre-mature payment of past high-cost-borrowings by taking advantage of lower

interest-rate-regime on the one hand and enhancement in efficiencies of our

operations on the other, have added to the bottom line posting a growth of 25%

in Profit Before Tax of Rs.963 crores resulting into the net profit of Rs.778 crores

registering the growth of 29%.

5. Your Corporation has been attaching utmost emphasis to the quality client service.

This has remained pivotal point for all Corporate Goals with the objective of

achieving total client satisfaction. Besides, sustained client-service approach

and recovery drive have led to an impressive recovery rate of 98% during the

year enhancing the quality of assets. The Corporation yet again distinguished

itself with the NIL, Non-Performing Assets (NPAs), a unique discriminatory feature

amongst the FIs/Banks. In order to protect the Corporation from the vagaries of

the market uncertainties in future, however, a sensible policy of provisioning

norms, Asset- qualification, Income recognition etc. is being contemplated to be

finalized with the advice of an Advisory Committee consisting of reputed experts.The consistent all round growth in all operational/financial parameters amply

demonstrates that your Corporation has succeeded in creating large reserves of

satisfied clients.

6. You may be aware that the total investments in Power Sector during the 9th Plan

Period was estimated at Rs.1,25,000 crores and PFC had set its disbursement

target at Rs.17000 crores for the Plan period. I am extremely happy to inform

that PFC has made disbursement of Rs.16,525 crores constituting a share of 13.2%

in the total investment in the Power Sector and 20% of the State/Private Sector

outlay during the 9th Plan. In this context I may mention that your corporation is

planning to fund about Rs.43,500 crores during the 10th Plan Period which is an

increase of 160% over the level of PFCs disbursement made in the 9th Plan

Period.

7. The poor financial health of SEBs, and their perceived inability to pay have been

the primary causes for lack of private investment, both domestic and foreign, in

spite of liberalization of Govt. policies. This also has seriously affected SEBs

ability to invest in new generation projects, to upgrade their T&D network and to

undertake system improvement. Unless the health of SEBs improves, majorinvestment from the private sector is unlikely to be realased.

8. Reforms hold the key for most of the problems confronting the sector and to

restore the much-needed viability and credibility into the system. I feel that while

not weakening the drive for generation capacity addition, and strengthening of

transmission system, the need to focus on distribution, which would ensure

sufficient cash flows and help in making the sector viable, is to be given utmost

priority. I may inform that your corporation has been in the forefront of Reforms

& Restructuring of State power sector and is preferred by many States because of

its client-friendly approach. Twenty one States have expressed their willingness

to reform their power sector with the technical and financial assistance of PFC. Suratgarh Super TPS of RRVUNL (5x250 MW)

9th Public Power Utilities Chiefs Meet atThiruvananthapuram on 23rd Jan., 2002

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Your corporation has devised a financial package for Reforming States, which

includes liberal assistance to finance their major investment requirements,

relaxation in certain criteria, grant for technical assistance etc. PFCs financial and

technical assistance is linked to implementation of milestones in Reform

Operational and Financial Action Plan (R-OFAP). PFC has extended financial

assistance in the form of Grants to SERCs during the year 2001-02 and sponsoring

seminar to help them becoming operational.

9. PFC has devised a strategy to accelerate capacity addition in partnership with

State Power Utilities/State Government for execution of the selected project under

a Special Purpose Vehicle (SPV) for which your corporation will take lead for

financial closure of the project. The distribution of power is still the exclusive

domain of the States, and, is the weakest link in the entire electricity supply

chain. The distribution system has become fragile and weak due to lack of proper

investments and unplanned extension of power supply. Owing to this, the level

of T&D losses has reached alarming proportions and made the entire sectorcommercially unviable. Out of total energy generated on an average, only 55% is

billed and only 41% is realized. As a result of this, the gap between average

revenue realization and average cost of supply has tremendously increased leading

to erosion of SEB resources. The annual losses of SEBs have exceeded a level of

Rs.26,000 crores. Hence, Ministry of Power has given the right emphasis by

identifying distribution reform as the key area of focus in the Power Sector Reform

Process. In order to give fillip to Power Sector reforms in the distribution segment,

PFC has been playing an active role in implementation of Accelerated Power

Development and Reform Programme of Government of India. PFC has

committed to give counter-part funding for such loans under the programme.

10. To complete the generation, transmission, R&M and other projects which were

getting delayed due to inadequate funds, PFC had undertaken a programme in

IX Plan Accelerated Generation & Supply Programme of Govt. of India so that

these projects could be completed in time. Under this programme, PFC had

disbursed Rs.9807 crores, and helped in adding 5714 MW of Generation and

11542 MUs through loans subsidised by GOI, its interest subsidy in PFC loans.

Looking at the response and success of the programme, GOI is considering

extension of this programme to X Plan as well.

11. In keeping pace with the market and the changing interest rate scenario,

your corporation continuously monitored and effected downward reduction in

lending rates at frequent intervals to help the borrowers. In addition, to expand

the range of services, a number of new instruments, such as Performance

Guarantees; Take-out financing; Debt refinancing; Debt restructuring; short and

medium term loans to Equipment Manufacturers; buyers line of credit etc. have

been introduced.

Minister of Power visited PFC on 16th September,2002 to review activities of the corporation

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12. My sincere and grateful thanks goes to the Honble Union Minister of Power, the

Honble Union Minister of State for Power, the Secretary (Power), the Special

Secretary (Power) and other officials of Ministry of Power, Ministry of Finance,

Reserve Bank of India, Planning Commission, Central Electricity Authority, officials

of C&AG and other Departments of Govt. of India, World Bank, ADB, KFW,

OECF, ODA, Exim Bank of US, EDC of Canada, Commercial Banks, Financial

Institutions and various other agencies for their continuous support and guidance

to the Corporation. My special thanks and warm appreciation are due to the

borrowers of the Corporation for their close and mutually beneficial relationship

during the year, which I hope will be further strengthened in the coming years.

Finally I would like to place on record my deep appreciation to all the employees

and members of the management team for their hard work, commitment, team

work and devotion for accelerated achievements in performance during the year

under review. I finally believe that with such support a better and brighter future

awaits the corporation and the power sector as a whole which in turn will move

the nation on the path of progress.

Place : New Delhi (A.A. KHAN)

Dated : 26th September, 2002 Chairman & Managing Director

Upstream view of dam under construction atRanganadi HEP of NEEPCO (3x135 MW)

CMD, PFC presenting a dividend cheque of Rs. 211 Crores to Honble Union Minister of Power& Honble Union Minister of State for Power

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Directors ReportTo

The Shareholders,The Board of Directors have pleasure in presenting their Sixteenth Annual Report on the

business and operations of your Corporation and the Audited Statement of Accounts for

the year ended 31st March, 2002.

1. FINANCIAL HIGHLIGHTS

(a) Profitability (Rs. in crores)

Profit before tax 962.57

Add: Prior Period 0.57

Adjustment

Less: Tax adjustment -12.77

Less: Provision for tax -187.99

Add: Deferred tax 15.95

Profit after tax 778.33

Transfer towards provision for Bad & Doubtful Debts u/s 36(1)

(viia)(c) of Income Tax Act, 1961 44.73

Transfer to Special reserve u/s 36(1)

(viii) of Income Tax Act, 1961 323.57

Final Dividend 200.00

Transfer to General Reserve 80.00

Balance carried to Balance Sheet 130.03(b) Lending operation in 2001-02

Loans Sanctioned

Term Loan - Rs. 7050 Crores

Working Capital Loan - Rs. 1456 Crores

Total Rs. 8506 Crores

Loans Disbursed

Term Loan Rs. 3825 Crores

Working Capital Loan Rs. 1325 Crores

Total Rs. 5150 Crores

2.0 FINANCIAL REVIEW

2.1 Revenue

The total income of the Corporation during 2001-02 amounted to

Rs.2098.09 crores compared to Rs. 1909.98 crores in 2000-01 registering

an increase of 9.84 %. Of this, the revenue from the main activity of Term

Lending (including Bills Discounting) was Rs.1997.61 Crores as against

Rs.1751.18 Crores during 2000-01 registering an increase of about 14.07%.

The income by way of investment of surplus funds was Rs.30.16 Crores as

against Rs.74.13 Crores during 2000-01. Under the lease financing,

Consultancy assignments and Exchange gain, the Corporation earned arevenue of Rs. 67.76 Crores during the year as against Rs. 72.98 Crores in

the year 2000-01.Sanjay Gandhi TPS, Birsinghpur of MPSEB

(4x210 MW)

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2.2 Expenses

Interest and other expenses of the Corporation for the year 2001-02

accounted for 92.52% of total expenses. Personnel and establishment

expenses as a proportion of disbursement is 0.5365% in 2001-02.

2.3 Risk Management

The main risk to which the Corporation is exposed are Credit risk, interest

rate risk , liquidity risk and foreign exchange risk. The Corporation has putin place a mechanism to ensure that these risks are monitored carefully

and managed efficiently. During the year, to give more emphasis to risk

management, a new functional unit named Assets Liability & Risk

Management (AL&RM) was set up. The main tasks assigned to the new

unit are to study the requirement of risk management in the Corporation,

market practices and product available for risk mitigation, compliance with

the statutory requirements, if any, etc.

To ensure that a comprehensive risk management strategy is created the

group has initiated the creation of a system for real time evaluation of risk

embedded in loan assets, liabilities, revenue and debt obligation of the

Corporation. The group is also focused on monitoring the liquidity positionand key financial ratios. An exhaustive exercise of assets liability & risk

management for next 10 years provides input for various operational

decision. The group also monitors the movement of various market rates

and initiates action either directly or through advice for mitigating the risks

arising out of these movements. The Corporation has constituted an Asset

Liability Committee (ALCO), a senior management group to monitor the

risk management activities in the Corporation.

PFC was availing the mechanism of Exchange Risk Administration Fund

(ERAF) to manage a part of its exchange rate risk. However, due to

withdrawal of tax benefits under section-10(23E ) and 10(14A)of the Income

Tax Act, 1961 the scheme of ERAF may have to be reviewed and PFC may

have to use more market offered products for hedging exchange risk in

future.

2.4 Disbursement

During the year under report, Disbursements amounting to Rs.5150 Crores

(including working capital loan) were made, which is 60% higher than the

disbursement achieved during the year 2000-01. The cumulative

disbursement till 31st March, 02 stands at Rs.24372 Crores.

2.5 Realisation

The Corporation gives utmost importance to Realisation of its Due towards

Principal, Interest etc. During the year under report, against Rs. 4153.44Crores to be recovered towards Principal, Interest, etc., under Term Loans,

Bills Discounting, Working Capital and Lease Finance Scheme, an amount

of Rs. 4028.21 Crores was actually realised. This works out to Recovery

Rate of 97%. Consistently for the last 4 years, the achievement in Recovery

Rate has been around 97-99%. The Corporation has achieved a Recovery

Rate of 98% in respect of the Principal amount due during the year as

against the MOU (Excellent) Target of 95%.

2.6 Share Capital

The entire paid-up share capital of the Corporation is held by the President

of India and his nominees. During the year there has been no change inthe paid-up share capital of the Corporation, and at the end of March,

2002, it stood at Rs. 1030.45 Crores.

Lakwa Gas based TPS of ASEB (4x15 MW)

A view of 3rd Unit of Bokaro B TPS of DVC

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3.0 BORROWING

3.1 Borrowing from domestic market and credit rating

The Corporation mobilised funds amounting to Rs.4398.05 Crores during

the year 2001-02 as against the total mobilisation of funds of Rs.2230.30

Crores during the year 2000-01 from domestic market. The increase in

mobilisation of funds during the year is thus 97.19% higher than that of

the last year . As against the above mobilisation, the amount of Rs.1390.05

Crores were raised by issue of unsecured, taxable bonds in the nature of

debentures, Rs. 1225.00 Crores by way of long / medium term loans from

banks / FIs, Rs. 1478.00 Crores by way of issue of commercial paper and

Rs.170 Crores by way of taking a line of credit from banks.

PFC in its endeavour to keep the cost of fund at lower threshold had used

the refinancing route to replace the high cost debt with low cost debt.

During the year, the Corporation has prepaid the costlier domestic loans

raised from various banks amounting to Rs. 565.00 Crores and GOI loans

of Rs. 1513.60 Crores resulting into a considerable saving to the extent of

Rs.50.00 Crores approximately for the year in the interest out go of theCorporation.

During the financial year 2001-02 PFCs long term borrowing programme

was awarded the highest rating of AAA & LAAA by CRISIL and ICRA

respectively and PFCs Fixed Deposit Programme has been reaffirmed both

by CRISIL and ICRA.

3.2 Redemption and Status of Unclaimed Amount of Bonds

No amount became due for redemption during the year 2001-02 (previous

year Rs.600 Crores) however balance unclaimed amount of bonds in respect

of redemption as at the end of March 2002 is Rs. 0.925 Crores (previous

year Rs.1.995 Crores). This represents the amount remained unclaimedby the bondholders, as the bondholders had not surrendered their bond

certificates. The bondholders have been individually informed for the

surrender of bond certificates.

3.3 Fixed Deposits

The Corporation has not accepted or renewed any Fixed Deposit from

public during the year. The amount of Rs.1.09 lacs remained unclaimed

as on 31.3.2002 (previous year Rs. 1.25 lacs) as the depositors had not

surrendered their fixed deposit receipts so far. However during the year

an amount of Rs.0.71 lac (including interest of Rs. 0.04 lac) remaining

unclaimed for a period of seven years from the due date of maturity ofpublic deposit has been transferred to Central Govt. Fund called Investor

Education & Protection Fund in terms of Section 205C of the Companies

Act.

4.0 NEW BUSINESS ACTIVITIES

Power Finance Corporation is always looking at augment its core business strengths

as well as retain its dominant position in arena of financing of power sector. With

this in mind the existing Memorandum of Association as well as the Article of

Association were amended to provide for a foray in the following areas of operation:

a) Extending of Financial Assistance to Manufacturers of capital equipment

for power sector ;

b) Finance of all those activities that have a backward and forward linkage to

Gurunanak Dev TPS of PSEB (4x110 MW)

Signing of MoU between PFC & EILon 27-12-2001. Attended byShri A.A. Khan, CMD, PFC and

Shri Keshav Saran, CMD, EIL

A view of Vijayawada TPS of APGENCO(6x210 MW)

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the power sector including but not limited to development of coal and

other mining activities for use as fuel in power projects, development of

other fuel supply lines, laying of railway line, road bridges, ports and

harbours & to meet such other enabling infrastructure facilities that may

be required.

A new Unit called the Commercial & Business Units has been set up which shall

look into the borrowers and shall also interact with them so as to assist them in amanner as required.

The Corporation is also entering into strategic alliances with other organisations

to provide synergy to its operations. Significant among these are the EIL and the

STC who have agreed to work together with PFC for mutual benefit.

A Standing Committee on Policy Affairs has been put in place which shall act as a

think tank and suggest new policies that are to be introduced as also amendments

to be carried out in the existing policies.

During the year the Corporation has introduced five schemes broadening its

customer base and activities. The new schemes include issue of Performance

Guarantees; Scheme of Take out financing; Debt Refinancing Scheme; Debt

Restructuring Scheme; Short/Medium term loans to Equipment Manufacturer.

The Debt Restructuring and Debt Refinancing Schemes aim at reduction in cost

of borrowing of the borrowers thereby enhancing its liquidity. The Term loan

Scheme to Equipment envisages providing funds to the equipment manufacturer

thereby ensuring timely delivery of equipment/machinery to user i.e. SEBs etc.

During the year, the period of WCL is enhanced from 60-120 days. Further, the

response of the borrowers towards WCL was good and a number of SEBs availed

facility during the year.

To meet the challenges posed by various FIs and Banks, the future business strategy

of PFC will have a mix of new products and business areas for both public and

private power projects to include fund and non-fund based facilities.

5.0 DIVIDEND

The Directors are pleased to recommend a dividend for a total amount of

Rs.200.00 Crores (i.e.,19.40% of the paid up share capital) on the subscribed

and paid-up share capital of the Corporation for the year 2001-02.

6.0 LENDING OPERATIONS

During the year under report, financial assistance amounting to Rs. 8506 Crores,

consisting of Rs. 7050 Crores Term Loan , Rs. 1456 Crores working capital weresanctioned, as against Rs. 6861 Crores term loans, Rs. 845 crores. Working Capital

sanctioned during 2000-01. In addition to above, Grant of Rs. 17.34 Crores for

studies and Guarantee of Rs. 3.09 Crores were sanctioned in 2001-02 as against

Rs. 10 Crores Grants and Rs. 1468 Crores guarantees sanctioned in the year

2000-01.

Disbursements during the year 2001-02 were at Rs. 5150 Crores , consisting of

Rs. 3825 Crores for term loan and Rs 1325 Crores for working capital against a

total disbursement of Rs. 3230 Crores in the year 2000-01. In addition to above

Grants of Rs.18.30 Crores for Studies were disbursed in 2001-02 as against

Rs. 3 Crores during 2000-01.

The category-wise Lending Operations and the physical benefits derived out of

the Lending Operations are as per details below: -

Signing of MoU between PFC & STC on26.06.2002. Attended by Shri A.A. Khan,

CMD, PFC and Shri S.M. Dewan, CMD, STC

200

150

100

50

0

DIVIDEND(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

106 108

124.5

150

200

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A. TERM LOANS, LEASING, BILLS DISCOUNTING :

B. The sanctions of Term Loans, Leasing and Bills Discounting and Disbursements

made during the FY 2001-02 and the cumulative upto March, 2002 to various

categories of projects/schemes are summarised below:

2001-02 Cumulative upto March, 2002

Category No. of Sanctions Disbursements No. of Sanctions DisbursementsLoans Rs. Crores Rs. Crores Loans Rs. Crores Rs. Crores

System Improvement 42 1211 769 307 3612 2358& Urban Distribution

Capacitors Installation 1 4 19 64 486 442

Transmission 28 784 326 451 7030 4815

Renovation & Uprating ofHydro Power Projects 6 14 33 64 649 443

Renovation & Modernisationof Thermal Power Stations 15 504 465 165 3899 1977

Hydro Generation 5 1893 959 81 6600 3300

Thermal Generation 10 2593 1249 121 11633 7600

Studies & Computerisation 3 47 6 46 245 102

Sub-Total 110 7051 3826 1299 34154 21037

Leasing - - - 2 285 285

Bills Discounting - - - 7 100 100

Working Capital 35 1456 1325 71 3130 2929

TOTAL 145 8506 5150 1379 37670 24371

C. Guarantee to Projects:Guarantees to fund providers Sanctioned and Executed; project category-wiseduring the FY 2001-02 are as below:

2001-02 Cumulative upto March, 2002

Category No. Sanctions Executed No. Sanctions Executed

Renovation andModernisation ofThermal Power Station - - - 1 284 284

Hydro Generation - - - 1 191 191

Thermal Generation 1 3.09 - 5 1701 926

TOTAL 1 3.09 - 7 2176 1401

D. Grants for Studies:

2001-02 Cumulative upto March, 2002

No. Sanctions Disbursements No. Sanctions DisbursementsRs. Crs. Rs. Crs. Rs. Crs. Rs. Crs.

Model DMS 3 14 16 15 25 18

R&M Thermal 4 1 1 14 3 2

Reform & Restructuring 5 2 1 14 5 2

Institutional Development 7 1 0.11 18 1 1

Total 19 18 18 61 34 23

9000

8000

7000

6000

5000

40003000

2000

1000

0

SANCTIONS(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

29223339

6490

7706

8506

6000

5000

4000

3000

2000

1000

0

DISBURSEMENTS(Rs. in Crores)

97-98 98-99 99-00 00-01 01-02

20262467

34043230

5150

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E. Physical Achievements

The category-wise estimates of physical achievements through projects/schemescompleted during the FY 1999-2000 in which PFC participated in financialassistance are as below: -

Category 2001-02 Cumulative uptoMarch, 2002

Renovation, Modernisation and Life ExtensionHydro (MU/annum addition) 224 6010

Thermal (MU/annum addition) 3253 11600

Total (MU/annum addition) 3477 17610

Transmission and Distribution

HT MVAR Capacitors 750 12502

LT MVAR Capacitors 3 1138

Total Capacitors (MVAR) 753 13640

MVA Transmission transformation capacity 1040 34004

MVA Distribution transformation capacity 12 5995

Total Transformation capacity (MVA) 1052 39999

Ckt. Km. Transmission lines 609 25373

Ckt. Km. Distribution lines 12 5958

Total Ckt. Km. Lines (Ckt. Km.) 621 31331

Generation

Hydro (MW) 857 3558

Thermal (MW) 627 13747

Total Generation (MW) 1484 17305

7.0 ACCELERATED GENERATION AND SUPPLY PROGRAMME (AG&SP):

The Accelerated Generation & Supply Programme (AG&SP) was approved by

GoI in the beginning of the 9th Plan to accelerate the power supply to consumers

and included R&M and Life Extension projects/schemes, completion of on-going

Generation projects, construction of Missing Transmission Links and System

Improvement schemes and Grants for Studies. The programme provides incentives

to State Electricity Boards, State and Central Corporations and State Power

Departments in the form of interest subsidy of 4% on PFCs lending rate to priority

projects, such as Renovation & Modernisation Schemes, Completion of on-going

generation projects, evacuation lines, missing transmission links, installation ofCapacitors and Meters. Additional interest subsidy of 1% is provided to projects

in the North-Eastern Region. There is also a provision of grants under the

Programme for all such studies like RLA/LE, reform & restructuring and DMS that

are considered desirable and necessary by PFC to meet the policy objectives of

the Government of India and PFC under the programme. The programme has

made considerable progress since the time it was conceived in 1997-98 and all

round gradual improvements have been realised during the implementation of

the programme.

During the 9th Plan, the programme has helped in commissioning of new

Generation Capacity of 5859 MW consisting of 5454 MW in the State Sector and

405 MW in the Central Sector. Generation Capacity addition in the State Sectorduring the 9th Plan is 88% of the original targeted capacity.

Work-in-progress at Largi HEP of HPSEB (3x42 MW)

220 kV Deodar s/s-66 kV Capacitor Banks of GEB

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The details of achievements made by AG&S Programme during 9th Plan is

tabulated below:

(All amounts in Rs. crores)

Cumulative1997-98 1998-99 1999-2000 2000-01 2001-02 upto

March2002

Amount Sanctioned- On going Generation

Projects 1372 863 1248 797 3099 7380

- R&M, LE & RefurbishmentScheme 328 781 1050 1658 84 3902

- Augmentation of supply 334 470 507 1188 1019 3518

- Studies 5 11 8 17 40

TOTAL 2034 2119 2816 3651 4219 14839

Amount Disbursed

- On going GenerationProjects 960 1315 1243 584 1461 5563

- R&M, LE & Refurbishment

Schemes 78 209 484 533 458 1763

- Augmentation of supply 234 355 304 449 918 2260

- Studies 2 3 18 23

TOTAL 1272 1879 2033 1569 2855 9609

Generation capacity additionAchieved (in MW) 676 1366 1076 1721 1020 5859

Benefits achieved from R&M,LE and refurbishment(MU/ Annum) 184 1653 2089 3180 3477 10583

8.0 ACCELERATED POWER DEVELOPMENT PROGRAMME (APDP)

Ministry of power has appointed seven (7) public institutions, namely NTPC,PGCIL, ERDA, CPRI, NPC, MECON and WAPCOS, as Advisor-Cum-Consultants(ACC) for the purpose of capacity building exercise covering 63 identifieddistribution circles in the SEB/State Utilities. NTPC and PGCIL have also beendesignated as Chief Co-ordinators to overview the work of the ACCs.

PFC provided grant (under AG&SP/APDP) amounting to Rs.696.75 lakhs to NTPC,

and Rs. 708.08 lakhs to PGCIL as advance for this developmental works. Theexperts of the ACCs are already working in distribution circles and Detailed ProjectReports (DPR) are being prepared to turn circles in to centers under APDP.

During FY 2001-02,PFC sanctioned an amount of Rs.651.08 Crores and disbursedRs. 2901 Crores as counterpart funding for 47 schemes under APDRP comprisingof 15 nos. Sub-transmission & Distribution Circle Schemes, 21 nos.R&M (Thermal)Schemes and 11 nos. R&U Hydro Schemes. The sanction included a backlog of32 schemes, which were sanctioned by APDP Monitoring Committee during FY2000-01 and 15 schemes of current FY sanctioned by PFC in anticipation ofapproval by APDP Monitoring Committee/MoP.

9. FINANCIAL ASSISTANCE FOR POWER SECTOR STUDIES

Power Finance Corporation (PFC) being a developmental financial Institutionprovides technical and financial assistance by strategically providing grants, interest

Bassi Hydro Electric Project of HPSEB (4x15 MW)

A view of Generator Hall of Pong HEP of BBMB

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free and/or concessional loans to carry out such power sector/R&M/Distributionsystem studies. The major studies completed during the current financial year areDevelopment of fuel management system in Anpara & Harduaganj TPS ofUPRVUNL, Preparation of feasibility report for SCADA System of NDMC, ModelDMS at Gangtok of Sikkim Power Dept., RLA & LE study of Faridabad TPSUnit-I(60MW) and Reform based security mechanism for IPPs in MP by CRISIL(jointly funded by PFC & GoMP).

Grants worth of Rs. 18 Crores is sanctioned by PFC during the year 2001-02towards studies in the areas of MDMS, R&M Thermal, Reform & Restructuringand Institutional Development etc. So far PFC has sanctioned Grants worth ofRs. 34 Crores till March, 2002.

10. CAPACITOR INSTALLATION, SYSTEM IMPROVEMENT, URBANDISTRIBUTION AND TRANSMISSION SCHEMES:

The lending operations of PFC has been giving high priority to capacitor installationprogramme with financial support upto 80% of scheme completion cost andrelaxation in eligibility criteria to borrowers. Urban Distribution schemes for theutilities include System Improvement measures such as installation of capacitorsfor reduction in losses and high accuracy electronic meters for large industrialconsumers to improve revenue generation, energy audit etc. and PFC providesfinancial support upto 70% of the project completion cost. Again, apart fromtransmission lines, sub-transmission and R&M of transmission and powerevacuation lines & Missing transmission links are also financed on priority.

Loans worth Rs. 1999 Crores were sanctioned for System Improvement, CapacitorInstallation, Urban Distribution & Transmission schemes/projects againstRs. 2070 Crores sanctioned in 2001-02. An amount of Rs. 1114 Crores weredisbursed during 2001-02 against Rs.598 Crores disbursed in 2000-01.

11.0 RENOVATION, MODERNISATION AND LIFE EXTENSION

11.1 HE Projects

The Corporation accords high priority to financing of R&U schemes andrelaxation is given to utilities in terms & conditions. The scheme also getscovered under AG&S Programme of Govt. of India and in the processutilities get concession in lending rate of PFC.

During the year 2001-02, the Corporation has sanctioned Rs 14 Crores forR&U of Hydro Power Projects and Rs. 33 Crores have been disbursedagainst Rs. 28 Crores disbursement in 2000-01. The cumulative financialsupport provided by PFC for R&U Hydro schemes is Rs. 649 Crores out ofwhich Rs. 443 Crores has already been utilised till 31st March 2002.

11.2 Thermal Project

PFC is providing financial assistance for R&M projects under relaxedconditionalities. PFC is helping utilities by providing Grants, Interest freeloans for R&M and LE studies in order to assess the life of old power plantsand formulate R&M schemes in totality which on implementation maybring older generation units to an acceptable level of efficiency, availabilityand reliability.

PFC is extending Grants/interest free loans for taking up R&M and LE studies.So far, 14 grants worth Rs. 3 Crores are sanctioned and about Rs. 2 Croresare disbursed to SEBs for R&M and LE studies till 31st March 2002.

Loans worth Rs. 504 Crores were sanctioned for R & M and Life Extensionof thermal power plants and an amount of Rs. 464 Crores disbursed during

2001-02. The cumulative financial support provided by PFC for R&M andLife extension of Thermal Power Plants is Rs. 3899 crores out of whichRs. 1977 Crores has already been utilised till 31st March 2002.

220 kV s/s, switchyard at Peddapuram ofAPTRANSCO

Srisailam HEP of APGENCO(7x110 MW +6x150 MW)

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12.0 GENERATION

12.1 Hydroelectric Projects

In order to improve the share of hydro power, which is continuouslydeclining, PFC is pro-actively identifying and providing financial supportto hydro generation projects. Further, hydro generation schemes are priorityschemes and on-going projects where 1st unit is due for commissioningby March2004, are eligible for 4% interest subsidy on PFCs prevailing

lending rates on disbursements made during 9th Plan under GoIs AG&SProgramme. During the year the major projects financed are Almati DamPower House (5x55+1x15MW) of KPCL, Maneri-Bhali HEP Stage-II(4x76MW) of Uttaranchal Jal Vidut Nagam Ltd. and Ranganadi HEP(3x135MW) of NEEPCO in State and Central Sector.

During the year 2001-02, the Corporation has sanctioned loans worthRs. 1893 Crores and an amount of Rs. 959 Crores have been disbursed.The cumulative financial support provided by PFC for Hydro Generationschemes is Rs. 6600 Crores out of which Rs. 3300 Crores has already beenutilised till 31st March 2002.

12.2 Thermal Projects

PFC is providing finance to on-going Thermal Generation projects for theirtimely completion. Thermal generation projects where 1st unit is due forcommissioning by March2002, were eligible for 4% interest subsidy onPFCs prevailing lending rates on disbursements made during 9th Planunder GoIs AG&SP. The Major generation projects sanctioned during theyear are Panipat TPS unit- 6 (1x210MW) of HPGCL, Ramgarh CCGTExtension (75.825MW) and Suratgarh TPS Stage III Unit-5(250MW) ofRRVUNL, Kovilkalappal CCGT (69.65+38.23MW) of TNEB and CCGT atI.P.Estate, New Delhi (2x104.6+1x121.18MW) of Pragati Power.

During the year 2001-02, the Corporation has sanctioned 10 loans worthRs. 2593 Crores and Disbursed an amount of Rs. 1249 Crores.

13.0 PRIVATE SECTOR FINANCING

PFC is supporting private power projects for participating in the private powerdevelopment, and so far has supported 6676 MW of generation capacity throughvarious types of thermal plants including coal, gas/naphtha, furnace oil or DG setbased and hydro plants etc. During the year 2001-02, loans amount to Rs 927.75Crores have been sanctioned to 4 (four) projects covering 1064. MW capacityand loans amounting to Rs 92 Crores have been disbursed. The Corporation hasso far sanctioned loans worth Rs. 5136 Crores and guarantees worthRs. 711.50 Crores out which an amount of Rs. 812 Crores has already beendisbursed till 31st March 2002. During the year, two units of M/s Sanghi IndustriessCaptive DG sets of capacity 11.33 MW each has been commissioned with PFCsfinancial support.

14.0 ENVIRONMENT UPGRADATION

PFC gives lot of importance to environment upgradation activities of existingpower plants. Environment review of existing power plants are conducted andmajor environmental issues are identified and implemented. PFC has also relaxedseveral loan conditonalities to facilitate early implementation of such projects.Loans worth RS. 28.21 Crores were sanctioned for environmental upgradationactivities of state utilities during the year 2001-2002. So far, PFC has sanctionedloans worth Rs.532.96 Crores for various environment related activities.

PFC has also started funding environment friendly projects based on non-

conventional energy resources viz. biomass bagasse etc. PFC has sanctioned loansworth Rs.104.05 Crores for two numbers of biomass based thermal power projectsLANCO Kondapalli TPS

(2x115 MW + 1x125 MW)

Upper Indrawati HEP of OHPCL (4x150 MW)

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during the year. Several biomass and Co-generation project are being appraisedfor possible funding.

Ash utilisation is gaining more focus especially after the Ministry of Environment& Forests notification dated 16.9.1999 regarding 100% utilisation of ash generated

by coal based thermal power stations. PFC is making efforts to catalyse the processof flyash utilisation and also assist coal based power plants to meet the regulatoryrequirement. PFC is in the process of amending its Memorandum of Association

so that ash utilisation projects.

15.0 ENERGY EFFICIENCY AND ENERGY CONSERVATIONPFC endeavours to serve the role of a pivotal developmental financial institutionin the power sector by encouraging its borrowers to take up activities aiming atachieving energy efficiency and energy conservation in the Power Sector.Renovation and Modernisation of Old Power Plants and Transmission Network,Power System Improvement, Distribution Management System(DMS) and

Installation of Capacitors and Meters and priority areas of lending. R&M and LifeExtension activities usually result in efficiency improvement and hence energysaving. PFC is also extending grants and interest free loans to take up DMS studies

aiming at improved distribution management and proper electricity accounting.PFC is also encouraging power utilities to put up plants with energy efficienttechnologies. PFC has also extended financing to Power Projects based on non-

conventional energy resources viz-mass, bagasse etc. during the past year.

16.0 EXTERNALLY AIDED PROJECTS

PFC is making pro-active efforts to ensure that various lines of credit from Mutli-lateral/Bi-lateral funding agencies viz. ADB,KfW, JBIC etc. become available for

the Indian Power Sector. PFC is negotiation with these agencies for the quantumof loans as well as terms and conditions that would be beneficial to the IndianPower utilities in general and projects in particular. A loan worth US $ 150 million

is being negotiated with ADB which is targeted at strengthening T&D systems of

state utilities & R&M activities of old thermal power plants. So far, West Bengal,Assam, Maharashtra, Tamilnadu and Karnataka have been identified as the ADB

loan beneficiaries with KfW is in advance stage for carrying out R&MU of oldhydro stations.

17.0 INSTITUTIONAL DEVELOPMENT OF POWER UTILITIES

PFC has been adopting a proactive and pragmatic approach to encourageimprovement in the financial and operational efficiency of the state power sector.Keeping this in view OFAPs consisting of series of time bound action plan fordifferent functional areas of the utilities are formulated. The OFAPs are formulatedwith active participation of the concerned utility and approved by the respectiveBoard of the Utilities as well as State govt. The implementation of various activities

included in OFAP are monitored quarterly and progress report on the same issought from the utilities. As on March 2002, OFAPs are in place for 10 SEBs,12 SGCs, 1 autonomous body, 3 transmission & distribution companies and5 department run power utilities. OFAPs have been instrumental in bringing abouta perceptible change in quantitative and qualitative performance of SEBsfunctioning.

It was not possible to achieve improvements beyond a limit on the basis of OFAPwithin the existing structure and with a view to take the reform process to itslogical conclusion, PFC facilitates formulation of Reform OFAP. R-OFAP besidesaiming at bringing about efficiency improvements in the state power sector andfocuses on reform/ restructuring activities needed to create an institutional

mechanism for the self sustainability of the sector in the long run. During the year2001-02, R-OFAPs have been entered with DVB, Pragati Power, GSECL andUPPCL.

Side view of Boiler, Mill Bay, ESP and TG Buildingof Unit VI, Stage IV of Panipat TPS of HPGCL

A Panoramic view of Raichur TPS (Unit I&II)of KPCL (6x210 MW)

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PFC is committed to play a catalytic role in the development of the Indian power

sector. For Private Power development, as Escrow to IPPs is not available upfront

in most of the states, PFC along with other FIs have worked out an alternate

security mechanism to facilitate financial closure of IPPs.

18.0 INITIATIVE TOWARDS REFORMS AND RESTRUCTURING

PFC has been actively persuading State Govts. to initiate Reforms and Restructuring

of their power sector in order to make them commercially viable. During theyear 2001-02, PFCs relentless efforts yielded in the commitment of State Govt.

of Mizoram, Nagaland, and Sikkim to reform their power sector with PFCs financial

and technical assistance. In total 17 states have extended commitment to reform

their power sector with the support of PFC. PFC has been encouraging states to

undertake reform and restructuring studies in order to finalise a reform model

that is most suitable to the requirements of the state. Grants are provided by PFC

for these studies.

PFC has been following a policy for providing technical & financial support to

states initiating reforms & restructuring in their power sector, wherein a

comprehensive financial package is offered to state power utilities . In case of

States going in for reforms with PFCs technical and financial assistance, this packagecan be as high as 80% of their total investment needs upto the Xth Plan Period.

The percentage release of ceiling limit to the borrowers is linked to the achievement

of reform milestones as provided in R- OFAP.

19.0 TRAINING PROGRAMME FOR SEBs AND POWER UTILITIES

Pursuing its commitment to ensuring growth and development of Power Sector

in general and State Electricity Boards / Utilities in particular, Power Finance

Corporation continues with its efforts to provide a range of training interventions

to achieve these objectives. Based on detailed consultation and need assessment

six numbers of training programmes were conducted during the year to answer

specific growth needs of the sector on a variety of subject as wide as resourcemobilisation, power sector reforms through reduction in T&D losses, distribution

reforms etc. Special attention was given to states in North Eastern region for

whom an exclusive programme on Commercialisation of Power Sector with

reference to North Eastern States was delivered at Guwahati. Besides attempting

to answer the specific needs of the utilities, these programmes which were attended

by large cross section of senior executives from power sector including State

Electricity Board, Department of Power, etc. provided an excellent platform for

exchange of ideas and experiences sharing. The programme drew excellent

response and set into motion the reform and growth process. PFC engaged Institute

of Chartered Accountants of India to study the existing system of accounting

followed by SEBs and to suggest a new accounting system in line with bestaccounting practices with a view to meet the information requirement of different

stake holders in the changed context of reform and restructuring of the state

power sector.

20.0 CONSULTANCY SERVICES

The Consultancy Services draws on the in-depth understanding of the Power &

financial sector of the Corporation that it has developed over more than a decade

through supporting the institutional development & structured reforms in the

power sector.

The Thrust area for consultancy is to provide support for operationalisation of

new power entities including SERC & to broaden the equity base of the powerentities in an effort towards their commercialisation of operations. During the

year a consultancy assignment from NPCIL was awarded for the formation of

Bansagar Tons HEP Phase-II of MPSEB (2x15 MW)

Release of study on Accounting in Power Sectorby Sh. Suresh P. Prabhu,

the then Honble Union Power Minister

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joint venture for unit 3 & 4 of Kaiga Atomic Power Project which is the first

attempt for setting up a Nuclear Power Plant as Joint Venture Company.

21.0 RESERVATION OF POSTS FOR SC/ST/OBC, EX-SERVICEMEN ANDPHYSICALLY HANDICAPPED PERSONS IN THE SERVICES OFCORPORATION

Necessary and adequate steps were taken during the year to comply with

instructions of Government of India on the subject of reservation in employmentfor SC / ST, other backward classes etc. Exclusive recruitment drives were conductedto fill up the positions reserved for ST and OBC categories in order to eliminatethe backlog which helped us greatly in eliminating the same.

22.0 VIGILANCE

Vigilance Unit functions as a resource to the top management for carrying outinvestigation into complaints, suggesting corrective measures for improving thecontrol systems and compliance of laid down procedures, and also carrying-outpreventive vigilance exercises.

During the year 2001-02, the Vigilance Department functioned as an effective

tool of positive management , laying special emphasis on various aspects ofVigilance functioning-Preventive , Detective and Punitive.

As a part of preventive vigilance function, the Vigilance Unit continuously reviewedproperty return of the employees, ensured job rotation in the sensitive posts andworked towards maintenance of transparency in administration.

Vigilance Unit also organised workshops on Business Environment & Eco Vigilance,Business Ethics in Administration. Participants in these workshops were the officersof this Corporation. Further as part of preventive vigilance, two competition viz.,Poetry Competition and Poster-cum-Slogan Competition were organised withthe objective of involving employees and encouraging them to come out withinnovative ideas and methods in spreading awareness about the ill effects of

corruption.As directed by Central Vigilance Commission (CVC)Vigilance Awareness Weekwas observed from 31st October to 6th November, 2001. A high profile cultureevent was organised on 3rd November, 2001 with the aim of highlighting theharmful effects of corruption and to spread the message about the role each oneof us can play in the fight against corruption.

23.0 OFFICIAL LANGUAGE

It has been a year of multidimensional activities and achievements for OfficialLanguage Implementation. Due to the continuous efforts being made to create aHindi oriented environment in the Corporation, all the competition during the

Vigilance Awareness Week were held in Hindi and a smarika (souvenir) was alsopublished in Hindi. The Corporation was entrusted to organise 90 road shows invarious districts of Delhi and Haryana as a public awareness campaign under theageis of Ministry of Power for Mission 2012-Power of All. All these road showswere organized in Hindi with all the presentations , speeches and printed materialdistributed in Hindi only.

Hindi to English and English to Hindi Dictionary was distributed among all theemployees to help them in their day to day official work in Hindi. To createinterest in Hindi and to add to their knowledge, approximately 90% amount oftotal budget of Library was spent on purchase of Hindi Technical Books. To provideknowledge of the usage of bilingual package Leap Office, computer workshopswere organized.

In addition to all these accomplishments, meetings of Official Language

Implementation Committee were organized regularly. Hindi Day and Hindi

A night view of IB TPS - Stage-I of OPGCL(2x210 MW)

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Year were observed. Various Hindi competitions were organized during the wholeyear and prizes were given to the winners. Prize money for such competitions

was also increased. Several workshops were also organized for the employeeshaving working knowledge in Hindi.

The Corporation received Vidyut Rajbhasha Shield (first prize) for the year 2000-01 and Vidyut Rajbhasha Shield (third prize), for the year 1999-2000 for the

outstanding implementation of Official Language Policy in the Corporation underVidyut Rajbhasha Puraskar Yojna of Ministry of Power.

24.0 AUDITORS

M/s Bubber Jindal & Company, Chartered Accountants, were appointed as

Statutory Auditors of the Corporation for the financial year 2001-02 by Comptroller& Auditor General of India.

25.0 FOREIGN EXCHANGE EARNINGS AND OUTGO

No foreign exchange earned during the year under report and outgo in foreign

exchange was Rs. 125.26 crores, made on account of debt servicing, financial &

other charges, travelling, issue expenses & other miscellaneous expenses.

26.0 PARTICULARS OF EMPLOYEES U/S 217 (2A) OF THE COMPANIES ACT,1956.

During the year 2001-02, none of the employees were in receipt of grossremuneration of Rs. 24 Lakhs per annum or Rs.2.00 Lakhs per month and above.

27.0 HUMAN RESOURCE DEVELOPMENT

Acknowledging the fact that human resources have been the most valuable assetfor the Corporation, Power Finance Corporation continues with its commitment

to ensure their growth. A lean organisation with high employees productivity hasbeen the primary hall-mark of HR culture of the organisation. Their commitment

to excellence once again enabled the Corporation to significantly outperform itsbusiness target as expressed in MoU, entered into with Government of India for

the year. HR productivity rose to a newer peak establishing unparallel benchmark, once again in terms of business and productivity per capita. The growth

needs of the employees were adequately taken care of under the training and

development policy of the Corporation which aims at equipping the employees

with necessary skills and motivational forces to meet the organisational demandsand challenges, satisfactorily.

Industrial Relation during the year under review remained absolutely harmonious

and cordial, thus facilitating achievement of corporate goals.

28.0 GRIEVANCE REDRESSALCorporation has taken necessary and adequate steps for redressal of grievanceboth public and employees related. A well laid out policy has been put into placefor effective and prompt handling of grievance. The guidelines issued by Dept. of

Administrative Reforms and Public Grievances are also being complied with.

Among various measures taken in this regard , the Corporation has developed its

own Citizens Charter providing a measure of transparency in its business transaction, asalso mechanism for quick redressal of public grievance and has published the

same. It has also been placed on Corporations web site to be readily accessibleto clients and members of public who require to interact with us.

29.0 CORPORATE GOVERNANCEPFC is practicing the principles of good Corporate Governance over the pastyears. Corporate Governance is not only restricted to ensuring compliance with

Foundation stone laying ceremony for PFCcorporate office by Shri Suresh P. Prabhu, the thenUnion Power Minister and Smt. Jayawanti Mehta,

Honble Minister of State for Power

Ash Handling System at Santaldih TPS of WBSEB

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regulatory requirements but also meeting the higher standards of transparency,

accountability and integrity in respect of all its activities. The Corporation hascomplied with all the mandatory requirements of Stock Exchange or SEBI or anystatutory authority , on any matter related to debt market and no penalty or

stricture have been imposed on the Corporation by any of the above institutions.

A report in line with the requirement of clause 49 of the Listing Agreement isgiven below along with Auditors Certificate on compliance with the provisions of

Corporate Governance.

I. PFCs Philosophy on Corporate Governance :-

Keeping in view all the significant developments in the domestic and internationalfinancial service sector, the Corporation has adopted various innovativemanagement approach to enhance the overall performance and lay emphasis onimplementation of sound corporate practices. PFC follows principles to ensurethat the decision making process is fair and transparent and the employees of theCorporation subscribe to the Corporate ethics and apply them in their day to dayconduct.

The Corporation seeks fullest commitment of the Management and Board to

improve the practices in respect of good Corporate Governance to set an examplefor the industry in years to come.

II. Board of Directors:

The Board of Directors comprises Six members . There are four Whole-timedirectors including a Chairman and Managing Director and two part-time

government directors. The Board discharges its functions either as a full Board orthrough committees. The Board of Directors and its committees meet at regular

intervals. The Board has constituted five Committees, viz. the Audit Committee,the Loan Committee, the Finance Committee, Executive Committee andManagement Committee.

The following changes have taken place in the Board of Directors of the Corporation

since last report :-1) Shri Arvind Jadhav, Joint Secretary, Ministry of Power was appointed as

Director w.e.f. 31st May, 2002 in place of Shri Ajay Shankar, who ceasedto be Director w.e.f. 31st May, 2002.

2) Shri M. Sahoo, Joint Secretary and Financial Advisor, Ministry of Power,was appointed as Director w.e.f. 16th July, 2002 in place ofShri R. Ramanujam who ceased to be Director w.e.f. 16th July, 2002 .

3) Shri V.S.Saxena was appointed as Director (ID&A) w.e.f. 08.05.2002.

4) Shri T. G. Srinivasan, Member (E&C), CEA, ceased to be Director w.e.f.1st March, 2002.

5) Shri Ajay Shankar, Joint Secretary , Ministry of Power, was re- appointed asDirector w.e.f. 19 th September, 2002 in place of Shri M. Sahoo whoceased to be Director w.e.f. 19th September, 2002 .

The Board places on record its warm appreciation of the valuable contributionmade by the outgoing Directors as members of the Board.

There were 8 meetings of the Board of Directors held during the Year 2001-02i.e. on 30th April 01, 28th June 01, 17th August 01, 5th October 01, 30th October01, 10th Dec 01, 30th Jan 02, 14th March 02.

Shri K. K. Govil, Director ( Projects) and Shri V. S. Saxena, Director ( ID &A) are

also Director on the Board of one more Company , while Shri Arvind Jadhav,

Director and Shri Ajay Shankar, Director are also Director on the Board of twomore Companies.

Ranjeet Sagar Dam HEP, Shahpurkandi of PSEB(4x150 MW)

A view of Turbine Floor of Kolaghat TPS of WBPDCL

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All the Directors were present in all the Board meetings held during the yearexcept few occasions.

The appointment of Directors and payment of their remuneration are decided byPresident of India as per the Articles of Association of the Corporation.

III. Audit Committee :

Pursuant to the requirement of section 292A of the Companies Act, 1956 &

provisions of Clause49 of Standard Listing Agreement, an Audit Committee ofthe Corporation was constituted by the Board of Directors in its 164th Meetingheld on 30th January, 2001.

The Audit Committee has wide and vast powers. The responsibilities of the AuditCommittee include overseeing the financial reporting process to ensure properdisclosure of financial statements, investigate any activity within its powers, seekinformation from any employee, obtain legal or other professional advice,recommending appointment/ removal of external auditors and fixing theirremuneration, reviewing the quarterly, half yearly and annual financial statementsbefore submission to the Board, reviewing adequacy of internal control systemsand adequacy, structure and staffing of the internal audit function, reviewing

findings of internal investigations, discussing the scope of audit with the externalauditors and looking at the reasons of substantial defaults, if any, of non-paymentto stakeholders.

The Committee is Chaired by Dr. K. K. Govil, Director (Projects) and has two parttime director from Ministry of Power as its member. Five meetings of the AuditCommittee were held during the financial year 2001-02.

IV. General Body Meetings :

The Annual General meetings during the last three years were held on 22nd Sept1999, 22nd May 2000 and 21st Aug 2001. There were no special resolutionspassed by the Corporation at the last three AGM of the Corporation or throughpostal ballot at any one of the above meetings. The procedure for postal ballot

are same as given under Section 192Aof the Companies Act,1956.V. Disclosures :

There are no materially significant transactions with related parties i.e. promoters,directors or the management, conflicting with the Corporations interest. Therewere also no instances of non-compliance on any matter related to the CapitalMarkets during the last three years.

VI. Means of Communication :

Important informations like financial performance, operational performance andPress Releases on significant developments in the Corporation that has been madeavailable from time to time to the Press and is also available on the website of theCorporation, viz. www.pfcindia.com and has also been submitted to stock

exchanges. The quarterly financial results are published in English and Hindinewspapers.

VIII. Auditors Certificate :

The Auditors Certificate on compliance of conditions of Corporate Governanceas stipulated in clause 49 of the Listing Agreement is annexed herewith.

VIII. Management Discussion and Analysis Report :

In accordance with the listing Agreement , the Management Discussion andAnalysis report forming part of this report is annexed.

30.0 REPLIES TO THE REPORT/COMMENTS OF AUDITORS

Under Section 217(3) of the Companies Act,1956,the information to the Auditorsobservations are submitted as under:-

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I. On the report of Statutory Auditors

The qualification contained in the audit report is disclosed in the note no.16 andnotes on accounts -Schedule 19 forming part of accounts.

II. On comments of Comptroller and Auditor General of India:

Sl. Comments Replies

No.

1. Profit & Loss Account

Operating Income (Schedule-11) Interest onDeposits - Rs.30.15 crores.

The above has been arrived at after adjustingexcess interest of Rs.5.30 crore accounted forin the previous year due to not consideringreduction of rate of interest of from 10 to 9percent on public deposits by the Governmentof India for the year 2000-01.

This fact has not been disclosed in the accounts.

2 Notes on Accounts ( Schedule 19)

Note No. 26

The Company has not provided for the stampduty liability of Rs.4.02 Crore (based on theprevailing rate) even though the deposit paidtowards the cost of land has been booked underthe Fixed Assets-Land.

3. Note No.20

The break up of deferred tax assets and deferredtax liabilities into major components of therespective balances has not been disclosed inthe above note as required by AS-22.

The Govt. Of India had approved and conveyedthe credit for the interest of Rs 53.05 Croresfor the year 2000-01 calculated @ 10% on theinvestments made by PFC in the PublicDeposits. Accordingly , it was duly consideredand accounted in the Year 2000-01 . In June2001, after finalisation of the Audited Accountsfor the Year 2000-01 Ministry of Powerconveyed the revised statements of interest onPublic Deposit Account , as per Govt. of Indiadecision ., for the reduction of interest on PublicDeposit by 1% , amounting to Rs. 5.30 Croresfor the Year 2000-01 .This was also correctlyconsidered and accounted under its natural

head of income in the Accounts of 2001-02.

In our view, there is no specific disclosurerequirement under the Companies Act andAccounting Standards.

Memorandum of Agreement dated 05.02.2002with Land & Development Office, Ministry ofUrban Affairs, Govt. of India, Clause XIX states,Upon completion of construction of saidbuilding strictly in accordance with the termshereof and to the entire satisfaction of Presidentin all respects and upon issuance of certificatein this behalf by President or nominee and upondue fulfilment and performance of all other

obligations in the part of Power FinanceCorporation Ltd. under this agreement, thePresident shall grant or cause to be granted toPower Finance Corporation Ltd., a lease of thesaid premises herein before described inperpetuity from the date of execution of thesaid lease of land. Accordingly , the liability ofstamp duty shall arise only , upon completionof construction of the said building and fromthe date of execution of the said lease of land.

The break up of deferred tax assets anddeferred tax liabilities in to major componentsis as under:-

Description As on

31.3.02(Rs. in Crores)

a) Deferred Tax Asset:-

(i) Accruals 22.65(Income & Expenditure) (14.22)

(ii) Exchange loss on translation 13.77of foreign currency loans (13.38)

b) Deferred Tax Liabilities :

(i) Depreciation -13.17(-20.12)

(ii) Lease equalisation -12.45(-12.62)

Net Deferred Tax Asset/Liability 10.80(-5.14)

(Figures in bracket represent the balances as on 01.04.2001)

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31.0 DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of annual account ended

March 31, 2002 :

The applicable accounting standard had been followed alongwith proper

explanation relating to material departure if any.

Reasonable and prudent judgement and estimate were made so as to give

a true and fair view of the state of Corporation at 31.03.2002 and of the

profit and loss of the Corporation for the period 2001-02.

Proper and sufficient care was taken for the maintenance of adequate

accounting records in accordance with the provision of Companies Act for

safeguarding the assets of the Corporation and for preventing and detecting

fraud and other irregularities.

The accounts have been prepared on going concern basis.

32.0 MEMORANDUM OF UNDERSTANDING WITH GOVT. OF INDIA

The performance of PFC during 2001-02 against MOU targets qualifies it for

excellent rating for the ninth consecutive year. The Corporation has signed the

MOU for the year 2002-03 on 15th March, 2002 which provides for an increase

of 19% targets for sanctions and 17 % in disbursement towards the corresponding

target in the previous year.

In tandem with the objectives of its formation, the Corporation has set out

ambitious targets for itself in the Xth plan too. In order to augment the existing

generation as well as T&D capacity in the power sector ,the Corporation plans to

play a very crucial role by setting a cumulative target of Rs.43500 Crores in

disbursements during the tenure of the Xth plan as against Rs. 16525 Crores

during the IXth plan.

33.0 ACKNOWLEDGEMENT

The Corporation is grateful for the co-operation and continued assistance extended

by the Central and State Governments, Reserve Bank of India and various

Government agencies, the World Bank, the Asian Development Bank, USAID,

DFID of UK, KfW of Germany, and various international financial institutions/

banks, agencies and investors for their assistance, co-operation, guidance and

help. The Corporation looks forward to their continued support and

encouragement. The Corporation is also thankful to the Comptroller & Auditor

General of India, the Statutory Auditors and the bankers for their valued co-

operation.

The Board of Directors also like to thank its valued clients and customers for theircontinued co-operation and patronage. The Board would also like to express

their deep sense of appreciation to all employees , who are committed to

exemplary professionalism, strong work ethics and excellence in performance.

For and on behalf of

the Board of Directors

Date : 26th September, 2002 (A. A. Khan)

Place: New Delhi Chairman & Managing Director

Shri A.K. Basu, the then Secretary (Power)and Shri A.A. Khan, CMD, PFC at the

MoU-signing ceremony for the year 2002-03signed on 15th March, 2002

17th PFC Foundation Day Celebrations(on 16th July, 2002)

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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Industry Structure and Developments :

Todays Power Development scenario in the Country calls for making concreted efforts forspeeding up the Power developments, than for any other infrastructure activity, which placeson PFC a greater onus to seek for sourcing of more resources, purposeful loan portfoliomanagement, funds management, risk management, and customer network for providingthe needed impetus and for minimising its financial risk. The entire gamete of businessenvironment continues to undergo radical changes that have created compulsion on PFC toassume a higher role. By virtue of its role, functions and obligation as DFI, PFC is increasinglybecoming an integral part of financial sector with underlying objectives of ensuring fastergrowth of Power Sector.

PFC has effective linkages with the entire Power Sector through the State Governments,State power utilities etc. It enjoys the core competency expected of a development FIdedicated to the Power Sector & is effectively organised, to mobilise financial resource, planprofitable investment and create an improved management system to bring about efficientoperation through institutional reforms. PFC has been taking initiative to bring aboutinstitutional improvement and overall development of Power Sector. The initiative includereform studies, provision for grant/interest free loans for reforms related studies, encouragingStates to establish State Energy Regulating Commission organising training, workshop andseminar on the issue relating to Power Sector. The major beneficiary of PFC funding have

been the Power- utilities in the State Sector and the municipal bodies. However, the borrowerprofile has since been enlarged to include central sector, joint sector, private sector powerutilities. The funding criterion is based on the borrowers credit worthiness and project viability.

PFC has indicated its willingness to fund unbundled power entities formed out of reformprocess, provided they conform to credit covenants. There will be no change in the terms ofthe previous loans extended on the strength of either assignment of revenue circles or ofstate government guarantees. The new covenants to be applied for funding transmission anddistribution investments will be entirely on commercial terms. This implies that PFC will havephysical asset cover to the extent of 150 percent of their loan values.

2. Outlook :

To expand the business, Corporation is relaxing its stringent covenants for sanction of termloans / guarantees, revising its rate of interest and processing fee payment at the time of issue

of sanction letter. It is also amending the procedure for premium payable for pre-payment ofloan amount keeping in view the benefits of borrowers at large.

The Corporation is looking forward for achieving the better results by financing more andmore power projects at the lowest level of interest cost and secure implementation of projecttimely and adequately. The revision in procedure for lending money is made keeping in viewall the latest developments across the globe. The change in policy for lending and borrowingby the Corporation is also amended as per the current market scenario. The future policy ofthe Corporation is in tune with the requirement of Developmental Financial Institutions.

3. Internal Control System :

PFC has a proper and adequate system of internal controls to ensure that all assets aresafeguarded and protected against loss from unauthorized use or disposition and that alltransactions of the Corporation are authorized, recorded and reported in time and correctly.

The Internal Control systems are supplemented by an extensive programme of internal audits,reviews by management, and documented policies, guidelines and procedures. The internalcontrol systems are designed to ensure that the financial and other records are reliable, forpreparing financial statements and other data, and for maintaining accountability of assets.

Internal control findings and recommendations are reviewed by the top management andthe Audit Committee of the Board.

4. Human Resources and Industrial Relations :

It is the policy of PFC to lay emphasis on employee growth and productivity in true sense.The employees of the Corporation are carefully chosen and committed to perform in allsituations ensuring unparalleled rise in terms of business and profits, per capita. A very liberaland forward-looking training and development policy have ensured growth and updation of

employees skills , equipping them adequately to meet the organizational challenges.

Industrial relations within the organization continued to be cordial and harmonious.

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AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

The Members,POWER FINANCE CORPORATION LIMITEDNEW DELLHI

We have examined the compliance of conditions of Corporate Governance by Power

Finance Corporation Ltd. for the year ended 31st March, 2002 as stipulated in Clause

49 of the Listing Agreement of the said Corporation with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the

management. Our examination was limited to procedures and implementation thereof,

adopted by the Corporation for ensuring the compliance of the conditions of the Corporate

Governance. It is neither an audit nor an expression of opinion on the financial statements

of the Corporation.

In our opinion and to the best of our information and according to the explanations

given to us, we certify that the Corporation has complied with the conditions of

Corporate Governance as stipulated in the above mentioned listing agreement except

the following :-

1. The conditions as to presence of half of the Board members being non-executive

and Independent Directors is not complied with.

2. That Audit Committee is comprised of one executive and two non-executive

directors as against requirement of three non-executive directors and majority of

them being independent.

The Remuneration of Directors is disclosed in the notes to the financial accounts for the

year ended 31st March, 2002.

As the Corporation is wholly owned by the Government of India, the requirement of

forming investors grievance committee has not been deemed necessary by the

management.

We further state that such compliance is neither an assurance as to the future viability of

the Corporate nor the efficiency or effectiveness with which the management has

conducted the affairs of the Corporation.

For Bubber Jindal & Co.

Chartered Accountants

Sd/-

Place : New Delhi (S. Narayanan)

Dated : 26th September, 2002 Partner

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(Rs. in lacs)

Description Schedule As at As atNumber 31.03.2002 31.03.2001

I. SOURCES OF FUNDS(1) SHAREHOLDERS FUNDS

(a) Capital 1 103045.00 103045.00(b) Reserves & Surplus 2 336762.53 439807.53 277913.83 380958.83

(2) LOAN FUNDS(a) Secured Loans 3 72998.00 108000.00(b) Unsecured Loans 4 1025182.14 1098180.14 823713.97 931713.97

(3) INTEREST SUBSIDY FUND FROM GOI 109343.57 89622.02

Total 1647331.24 1402294.82

II. APPLICATION OF FUNDS(1) FIXED ASSETS 5

(a) Gross Block 39100.87 39133.62

Less : Depreciation 20760.05 16608.23

(b) Net Block 18340.82 22525.39(c) Capital Works in Progress 75.82 0.27

(2) INVESTMENTS 6 600.00 150.00(3) LOANS 7 1649359.98 1329939.60(4) CURRENT ASSETS, LOANS &

ADVANCES 8(a) Cash & Bank Balances 9572.37 54619.29(b) Other Current Assets 7541.85 35606.49(c) Loans & Advances 60676.66 34844.92

77790.88 125070.70

LESS:CURRENT LIABILITIES& PROVISIONS 9(a) Current Liabilities 27257.00 24590.41(b) Provisions 72659.50 50800.73

99916.50 75391.14(5) NET CURRENT ASSETS -22125.62 49679.56(6) MISCELLANOUS EXPENDITURE

(to the extent not written offor adjusted)Deferred Tax Asset (net of liability) 10 1080.24 0.00

Total 1647331.24 1402294.82

ACCOUNTING POLICIES 18

NOTES ON ACCOUNTS 19

Schedules 1 to 19 form integral part of Accounts.

Sd/- Sd/- Sd/-J. S. Amitabh R. Krishnamoorthy A.A. Khan

Company Secretary Director ( F & FO ) Chairman and Managing Director

Signed in terms of our report of even datefor BUBBER JINDAL & COMPANY

Chartered Accountants

Sd/-

Place : New Delhi (A.C. Bubber, FCA)Date : 13th June, 2002 Partner

BALANCE SHEETas at 31st March, 2002

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(Rs. in lacs)

Description Schedule Year ended Year endedNumber 31.03.2002 31.03.2001

INCOME

Operating Income 11 209552.95 189829.19

Other Income 12 256.14 1169.13

Total 209809.09 190998.32

EXPENSES

Interest and other charges 13 105062.43 104487.14

Upfront fees and Issue Expenses 14 1574.41 2212.66

Personnel & Administration Expenses 15 2763.09 3079.35Depreciation 5 4152.12 4164.25

Total 113552.05 113943.40

Profit for the year 96257.04 77054.92

Add: Prior Period adjustments 16 57.64 138.32

Profit before tax & appropriations 96314.68 77193.24

Less:Tax adjustment for the previous years 1277.01 2596.66

Less:Provision for Income Tax 18799.20 14183.44

Add:Deferred Tax 1594.70 0.00

Profit available for appropriations 17 77833.17 60413.14

Earning per share in Rs. (refer note no. 21 of Sch-19) 765.71 605.68

Accounting Policies 18

Notes on Accounts 19

Schedules 1 to 19 form integral part of Accounts.

Sd/- Sd/- Sd/-J. S. Amitabh R. Krishnamoorthy A.A. Khan

Company Secretary Director ( F & FO ) Chairman and Managing Director

Signed in terms of our report of even datefor BUBBER JINDAL & COMPANY

Chartered Accountants

Sd/-Place : New Delhi (A.C. Bubber, FCA)Date : 13th June, 2002 Partner

PROFIT AND LOSS ACCOUNTfor the year ended 31st March, 2002

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(Rs. in lacs)

Description As at As at31.03.2002 31.03.2001

Authorised

20000000 Equity shares

of Rs. 1000 each 200000.00 200000.00

Issued, subscribed and paid up

10304500 Equity shares of

Rs. 1000 each fully paid up 103045.00 103045.00

Total 103045.00 103045.00

(Rs. in lacs)

Description Opening Additions/ Deductions/ ClosingBalances as at Adjustments Adjustments Balance as at

1.4.2001 during the year during the year 31.03.2002

a) Reserve for Bad & doubtful debts u/s36(1)(viia)(c) of Income Tax Act,1961 15787.14 4472.96 0.00 20260.10

b) Special Reserve created u/s 36(1)(viii) of Income Tax Act, 1961 uptoFinancial Year 1996-97 59984.79 0.00 0.00 59984.79

c) Special Reserve created & maintainedu/s 36(1) (viii) of Income Tax Act,1961 56232.39 39169.81 0.00 95402.20

d) Bonds Redemption Reserve 9035.00 0.00 9035.00 0.00

e) General Reserve 81291.91 18565.00 7327.66 92529.25

f) Profit and Loss Account 55582.60 13003.59 0.00 68586.19

Total 277913.83 75211.36 16362.66 336762.53

Notes:-

1) Addition to Special Reserve created & maintained u/s 36(1) (viii) of I.T. Act 1961, includes Rs. 32356.62 lacs created for theyear 2001-02 and enhancement of Rs. 6813.19 lacs (i.e. Rs. 23.90 lacs for 1997-98, Rs. 4718.46 lacs for 1998-99,Rs. 1525.68 lacs for 1999-2000 and Rs. 545.15 lacs for 2000-2001) for bringing it at par with claims of Special Reservesin the Income Tax Returns.

2) Addition to General Reserve includes amounts written back on account of :-

a) Excess dividend tax of Rs. 1530.00 lacs appropriated in the year 2000-01.

b) Bonds Redemption Reserve of Rs. 9035.00 lacs, in terms of circular no. 6/3/2001-CLV dtd. 18.04.02 issued by Deptt. ofCo. Affairs which exempts creation of B.R.R. on privately placed bonds.

3) Deduction from General Reserve is on account of Deferred Tax Liability of Rs. 514.46 lacs created on 01.04.2001 as perA.S. 22 issued by ICAI & transfer of Rs. 6813.19 Lacs to special reserve for earlier years as explained in note no. 1 above.

Schedule No. 1SHARE CAPITAL

Schedule No. 2RESERVES & SURPLUS

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(Rs. in lacs)

Description As at As at31.03.2002 31.03.2001

(A) SECURED REDEEMABLE BONDS

a) 10.5% (Tax Free) Secured

Redeemable Bonds (Non-Cumulative)

2003 - 6th Series (Date of Redemption &

Amount given at S.No. 2 in the notes below) 25000.00 25000.00

b) 10.5% (Tax Free) Secured Redeemable

Bonds (Non-Cumulative) 2004-7th Series

(Date of Redemption & Amount given at

S. No. 3 in the notes below) 30498.00 30500.00

c) 8.85% (Tax Free) Secured Redeemable

Bonds (Non-Cumulative) 2004-8thSeries (Date of Redemption & Amount

given at S.No.4 in notes below) 17500.00 17500.00

(B) LONG TERM LOANS

From Banks

a) State Bank of India - I 0.00 20000.00

b) Punjab National Bank 0.00 0.00 15000.00 35000.00

Total 72998.00 108000.00

Schedule No. 3SECURED LOANS

Notes to Schedule 3(1) All the above Bonds and interest thereon are secured by charge on all movable assets of the Corporation, including bank

balances, receivable, investments and book-debts, both present and future, pertaining to the business of the Corporation,

ranking pari passu.

(2) 10.5% Tax Free Secured Redeemable Bonds 2003-Sixth Series of Rs.8358.00 lacs, Rs.1676.00 lacs, Rs.9664.00 lacs,

Rs.3145.00 lacs and Rs.2157.00 lacs are redeemable at par on the expiry of 7 years from the dates of allotment i.e.

29.03.1996, 06.05.1996, 04.06.1996, 05.07.1996 and 25.07.1996 respectively and/or redeemable at par after the

expiry of 5 years on exercising the put or call option by the Bondholders or by the Corporation.

(3) 10.5% Tax Free Secured Redeemable Bonds 2004 - Seventh Series of Rs.14514.00 lacs, Rs.9764.00 lacs and Rs. 6222.00

lacs redeemable at par on the expiry of 7 years from the dates of allotment i.e. 10.02.97, 10.03.97 and 10.04.1997

respectively and/ or redeemable at par after the expiry of 5 years on exercising the put or call option by the Bondholders

or by the Corporation. During the year, bonds of Rs. 2.00 Lacs are redeemed on excercising the put option by the

Bondholders.

(4) 8.85% Tax Free Secured Redeemable Bonds 2004-Eighth Series of Rs.16589.00 lacs and Rs.911.00 lacs are redeemable

at par on the expiry of 7 years from the dates of allotment i.e. 13.11.1997 and 18.11.1997 respectively and/or redeem-

able at par after the expiry of 5 years on exercising the put or call option by the Bondholders or by the Corporation.

(5) Term Loan from Banks is secured against book debts of the Corporation ranking pari passu with other secured book debtsof the Corporation.

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(Rs. in lacs)

Description As at As at31.03.2002 31.03.2001

(A) BONDS *

a) Guaranteed by the Government of India -

11.5% Bonds 2008 Ist Series 2000.00 2000.00

11.5% Bonds 2010 2nd Series 2000.00 2000.00

11.5% Bonds 2011 3rd Series 2000.00 2000.00

12% Bonds 2012 4th Series 2200.00 2200.00

13% Bonds 2007 5th Series 1450.76 1450.76

13.5% Bonds 2004 6th Series 1000.00 10650.76 1000.00 10650.76

(Repayable serially on 26.12.2008,

3.1.2010, 7.1.2011, 10.2.2012,19.12.2007 and 28.3.2004)

b) Other Bonds -

10.4% Unsecured Tax Free(Non-

Cumulative)2008-I Series (Date of

Redemption & Amount given at

S.No.1 in the notes below) 15050.00 15050.00

8.70% Unsecured Tax Free(Non-

Cumulative) 2009-II Series(Date of

Redemption and amount given at

S.No. 3 in the notes below) 7500.00 7500.00

8.20% Unsecured Tax Free(Non-

Cumulative )2010 - III Series

(Redeemable at par on July 19,2010) 5000.00 5000.00

13.25% Unsecured Taxable(Non-

Cumulative)2005-I Se