Tariff norms, depreciation drag NTPC profit by 5% to Rs 2944 cr
India’s largest power produce NTPC’s net profit dipped by 5 percent to Rs 2,944.03 crore in the fourth quarter ended March, 2014-15 on stringent CER tariff norms and higher depreciation under new accounting rules.
Its net profit in the January-March quarter of the previous fiscal, 2013-14, was Rs 3,093.54 crore. The company’s turnover also declined to Rs 19,314.58 cror in January-March quarter of 2014-15, from Rs 20,939,08 crore in the year-ago period.
NTPC said in a statement that as per power sector regulator Central Electricity Regulatory Commission’s (CERC tariff regulation effective from 2014-15 to 2018-19, the financial incentives are to be based on actual generation of power than on the basis of available generation capacity.
It has linked the financial incentives to power producer with the purchase of electricity by power distribution companies.
In present scenario, as discoms (power distribution firms always have funds crunch to buy electricity, power producer’ generation capacity remains below the installed capacity.
NTPC has filed a petition in the Delhi High Court contesting Regulation 2014 of CERC, said the statement.
Also, NTPC said it has revised its accounting policy for depreciation of certain assets in alignment with Schedule-I of the Companies Act 2013 effective from April 1, 2014.
“Consequently profit for the year ended March 31, 2015 lower by Rs 14.97 crore and fixed assets as at March 31, 201 are lower by Rs 20.44 crore,” the statement said.