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O iJ<L K A S
CONSOLIDATED ANNUAL J\8C©UNTS
FYl 101S-11
GUVNL Corporate Office: Sardar Patel Vidyut BhavanRace CourseVadodara - 390 007.vci.cCIN U40109GJ2004SGC045195vcl.com
Mukund & RohitChartered Accountants
No.8,2nd Floor, Tower E, Avishkar, Old Padra Road, Vadodara - 390 007, Gujarat - India P +91 265 2357845, 2310448, 2313515
office@mukundrohit. com
INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL
STATEMENTS
TO THE MEMBERS OF GUJARAT URJA VIKAS NIGAM LIMITED
Report on th e C onsolidated Ind AS F inancial S ta tem en ts
We have aud ited th e accom panying Consolidated F inancial S ta tem en ts of Gujarat
Urja Vikas Nigam L im ited (hereinafter referred to as “the Holding C om pany”), its
six subsid iaries (the Holding C om pany an d its su bsid ia ries together referred to as
“the G roup”), one associate an d one jo intly controlled en tity of one of its
subsid iaries w hich com prise the Consolidated B alance S heet as a t 3 1 s t M arch,
2017, the C onsolidated S ta tem en t of Profit an d Loss (Including O ther
Com prehensive Incom e),the C onsolidated C ash Flow S ta tem en t, th e C onsolidated
S ta tem en t of C hanges in Equity, for the year th en ended, an d a sum m ary of the
significant accoun ting policies an d o ther explanatory inform ation (hereinafter
referred to a s “the C onsolidated Ind AS Financial S ta tem en ts”).
M anagem ent’s R esp on sib ility for th e C onsolidated Ind AS Financial
S ta tem en ts
The Holding C om pany’s B oard of D irectors is responsib le for th e m a tte rs s ta ted in
Section 134(5) of the C om panies Act, 2013 (“the Act”) w ith respec t to the
p reparation of th ese C onsolidated Ind AS Financial S ta tem en ts th a t give a tru e
an d fair view of the consolidated financial position, consolidated financial
perform ance including o th er com prehensive incom e, consolidated cash flows and
change in equity of th e G roup, its associate an d jo in tly controlled en tity in
accordance w ith the accoun ting principles generally accep ted in India, including
the Indian A ccounting S tan d a rd s (Ind AS) specified u n d e r Section 133 of the Act,
read w ith the re levan t ru le s issu ed thereunder. The respective B oard of D irectors of
the C om panies included in the G roup, of its a ssoc ia teand of th e jo in tly controlled
entityare responsib le for m ain ten an ce of adequate accoun ting records inaccorc
A
w ith the provisions of th e Act for safeguarding of the a sse ts of th e G roup an d for
preventing an d detecting frau d s an d o ther irregularities; selection an d application
of appropria te accoun ting policies; m aking ju d g m en ts a n d estim ates th a t are
reasonable an d p ru d en t; an d design,im plem entation an d m ain ten an ce of adequate
in te rna l financial controls, th a t w ere operating effectively for en su rin g the accuracy
an d com pleteness of th e accounting records, re levant to th e p repara tion and
p resen ta tion of the financial s ta tem en ts th a t give a tru e an d fair view an d are free
from m aterial m issta tem en t, w hether due to fraud or error, w hich have been u sed
for the pu rpose of p rep ara tio n of th e Consolidated Ind AS F inancial S ta tem en ts by
the Board of D irectors of th e Holding Com pany, as aforesaid.
Auditor’s R esp on sib ility
O ur responsibility is to express an opinion on th ese C onsolidated Ind AS Financial
S ta tem en ts b ased on o u r audit.W hile conducting the au d it, we have tak en into
accoun t the provisions of th e Act, the accounting a n d aud iting s tan d a rd s
an d m atte rs w hich are requ ired to be included in th e au d it rep o rt u n d e r the
provisions of th e Act an d theR ules m ade thereunder.
We conducted ou r au d it in accordance w ith th e S tan d a rd s on A uditing specified
u n d e r Section 143(10)of th e Act. Those S tan d a rd s requ ire th a t we comply w ith
ethical requ irem en ts a n d p lan an d perform th eau d it to ob tain reasonable
a ssu ran ce ab o u t w hether th e consolidated Ind AS financial s ta tem en ts are free
from m ateria l m issta tem en t.
An au d it involves perform ing procedures to obtain a u d it evidence ab o u t the
am o u n ts an d the d isclo su res in the consolidated Ind AS financial s ta tem en ts . The
procedures selected depend on the au d ito r’s judgm en t, includ ing th e a ssessm en t of
the risks of m ateria l m iss ta tem en t of the consolidated Ind AS financial s ta tem en ts ,
w hether due to frau d or error. In m aking those risk a sse ssm en ts , the aud ito r
considers in te rn a l financial control relevant to the Holding C om pany’s p reparation
of the consolidated Ind AS financial s ta tem en ts th a t give a tru e a n d fair view in
order to design au d it p rocedu res th a t are appropria te in the c ircum stances, b u t no t
for the pu rpose of expressing an opinion on w hether th e Holding Com pany h a s in
place an adequate in te rn a l financial controls system over financial reporting andfoperating effectiveness of su ch controls. An au d it also inc ludes e v a lu a tir"
approp ria teness of the accoun ting policies u sed an d the reaso n ab len ess of the
accounting estim ates m ade by th e Holding C om pany’s B oard of D irectors, as well
as evaluating th e overall p resen ta tio n of th e consolidated Ind AS financial
sta tem en ts.
We believe th a t th e a u d it evidence obtained by u s an d by th e o th er au d ito rs in
te rm s of th e ir rep o rts referred to in the O ther M atters p a rag rap h below, is sufficient
and appropria te to provide a basis for our aud it opinion on th e consolidated Ind AS
financial s ta tem en ts .
Basis for Q ualified O pinion
1. In case o f Uttar Gujarat Vij Company Limited (“the subsidiary com pany”)
The statutory auditor o f the Company who audited the financial statem ents /
financial information o f the subsidiary has reported that the Company has
changed the method o f accounting regarding writing back balances from
grants/ consumer contribution related to certain depreciable assets from
hitherto 10% on reducing balance basis to 5.28% on straight line basis
prospectively commencing from the current financial year. However, as per
opinion o f the statutory auditor o f the subsidiary Company,the effect o f such
change has to be worked out retrospectively commencing from the date on
which the depreciable assets related to which the grants/ consumer
contribution has been received have been capitalized in the books o f account
and effect o f such change be accounted fo r in the opening balance o f grants/
consumer contribution; amount not determined.
The overall impact o f the above qualification on the profit fo r the year, balance o f grants/ consumer contribution and balance o f equity & reserves as on 31st
March, 2017 is undetermined.
2. In case o f Gujarat State Electricity Corporation Limited (“the subsidiary company”)
(i) Written down value o f old capital spares is not charged to revenue in the year
in which such capital spares are replaced, as required to be complied i
A S 16 “Property, Plant & Equipment”.
3
A s per para no 13 o f the Ind A S 16, wherein parts o f som e item o f PPE may
require replacement at regu lar intervals , and i f the cost o f replacing part o f such
an item, w hen that cost is incurred i f the recognition criteria are met, the carrying
amount o f those parts that are replaced is derecognized in accordance with the
derecognition provisions o f the Ind As 16. Furthermore, as per the Ind AS, i f it is
not practicable fo r an entity to determine the carrying amount o f the replaced part, it may use the cost o f replacement as an indication o f w hat the cost o f the
replaced part w as at the time it w as acquired or constructed.
However, during the year under reference the company has not de-recognised the
WDV o f the old capital sp a res/ “Property, Plant & Equipment” neither the cost o f
the replaced part is taken as an indicator to identify the loss arising from the
derecognition o f an item o f PPE since, the WDV o f old replaced parts could not be
ascertained as the accounting o f capital spares is done in lots at year end and not
as per issue o f individual p a ts / capital spares date-wise, and also fo r w ant o f
details as records as to date o f use o f the capital spares, WDV o f old replaced
parts etc. which are not maintained. The consequential impact o f worn out old
capital spares/ replaced parts, i f any, could not be ascertained.
As per Ind A S 16 “Property, Plant & Equipment”, a property, p lant and equipment
(PPE) are tangible a ssets that (a) held fo r use in the production or supply o f goods
or services fo r rental to others, or for administration purpose, and (b) are expected
to be used during more than one period.
Furthermore, as per Ind A S 2 “Inventory”, Inventories are assets:
a. Held fo r sale in the ordinary course o f business.b. in the process o f production fo r such sale.c. in the form o f materials or supplies to be consumed in the production process
or in the rendering o f services.
During the year under review, it w as observed that the company has capitalized
several items as specified in Ind A S 2 “Inventory”, comprising o f huge number o f
items and most o f which are low value o f recurring nature, requiring replacement
at regular intervals, treating the sam e as “Property, Plant & Equipment " '
o f the Ind A S 16.
In view o f the exact details as to w ant o f each and every item o f additions etc.,it is
not possible to comment on the consequential impact on the profit/loss o f the
Company.
In the absence o f information, the effect o f which cannot be quantified, the
statutory auditors o f the subsidiary company were unable to comment on the
possible impact o f the item stated in the point nos. (i) above, on the financial statem ents o f the company fo r the year ended on 31st March 2017.
Qualified O pinion
In our opinion an d to th e b e st of o u r inform ation an d according to th e explanations
given to u s ,exceptfor the effects o f the matter described in the Basis fo r Qualified
Opinion paragraph above the aforesaid consolidated Ind AS financial s ta tem en ts
give the inform ation requ ired by the Act in the m an n er so requ ired an d give a true
an d fair view in conform ity w ith the accounting princip les generally accepted in
India including Ind AS, of the consolidated s ta te of affairs of th e G roup, its
associate an d jo in tly controlled en tity as a t M arch 31, 2017, an d th e ir consolidated
profit an d com prehensive incom e th e ir consolidated cash flows an d the
consolidated changes in equity for the year ended on th a t date.
Em phasis o f M atter
We draw th e a tten tio n to th e following m atters:
1. In case of D aksh in G u jara t Vij C om pany Limited (“th e su bsid ia ry com pany”),
a) The com pany h a s opted no t to m ake provision in respec t of expected credit
loss (ECL)/lifetime ECL in respec t of am o u n t due a n d receivable from E ssar
Steel India Limited (ESIL), a s the m atte r is sub jud ice a n d pending before
various jud ic iaries.
2. In case of Pasch im G u jara t Vij Com pany Limited (“th e su b sid ia ry com pany”),
a) Security D eposits from LT C onsum ers a t som e divisions & circles are sub ject
to reconciliation w ith Subsid iary records.
5
3. In case of M adhya G u ja ra t Vij Com pany Limited (“th e su bsid ia ry com pany”),
a) The security deposit of consum ers is u p d a ted , to th e ex ten t d iscrepancies
b rough t to th e notice of the com pany, in su bsid ia ry records an d fu rth er
reconciliation of th e sam e w ith th a t a s per books is u n d e r process.
4. In case of G u ja ra t S ta te Electricity C orporation Limited (“the subsid iary
com pany”),
a) As a p a r t of efforts tow ards re s tru c tu re of power sector, th e Com pany h as
been prom oted by erstw hile G ujara t E lectricity B oard (GEB) (now know n
as M /s .G u ja ra t U rja V ikas Nigam Limited w ith effect from 1 /4 /2 0 0 5 ) in
A ugust, 1993; M /s .G u ja ra t U ija Vikas Nigam Limited held 100% equity
sh a res of the C om pany th ro u g h o u t the year u n d e r consideration. The
C om pany h a s en tered into In ter C om pany A greem ents an d Facility
S haring A greem ents w ith M /s.G u ja ra t U ija V ikas Nigam Limited an d its
subsid ia ry com panies for W orking C apital a n d Term Loans an d sharing
of certa in com m on facilities viz. G roup G ratu ity C ontribu tion to LIC. All
su ch a rran g em en ts re su lts in to m ultifaceted re la tion of th e Com pany
w ith M /s .G u ja ra t U rja Vikas Nigam Limited a n d o th er successo r entities
of holding com pany. The financial s ta tem en ts are p rep ared on Going
C oncern Principles an d perform ance of the C om pany for th e year u n d e r
consideration h a s been determ ined after reviewing several long term
a rran g em en ts of the Com pany w ith M /s .G u ja ra t U rja V ikas Nigam
Limited a n d its subsid ia ry Com panies.
b) The G overnm ent of G u jara t in p u rsu a n ce to th e schem e called “G ujarat
E lectricity In d u stry Reorganization T ransfer of G andh inagar Therm al
Power S ta tion Schem e 2003” an d “G u ja ra t E lectricity Industry
R eorganization an d C om prehensive T ransfer Schem e, 2003” h a s
tran sfe rred an d vested all the a sse ts & liabilities an d proceedings of the
specified existing an d u n d e r im plem entation pow er s ta tio n s of G ujarat
Electricity B oard (GEB) to the C om pany w ith effect from 1st April 2005.
In accordance w ith the above referred schem es, the S ta te G overnm ent
h a s notified th e values of the a sse ts an d liabilities a t w hich thesef
u n d ertak in g s are tran sfe rred to an d vested in th e Com pany.
5. F u rth e r em p h asis to be m ade on the following:
a) As per th e financial s ta tem en ts , regarding fly a sh u tilization fund, as
p er notification of MoEF da ted 03 .11 .2009 , th e com pany is requ ired to
m ain ta in a sep ara te accoun t for the am o u n t collected from sale of fly
a sh an d fly a sh based p roducts an d th is am o u n t shou ld be kep t in
sep ara te acco u n t h ead an d shall be utilized only for th e developm ent of
in fra s tru c tu re or facilities, prom otional an d facilitation activities for the
u se of fly a sh u n til 100% fly a sh utilization is achieved. R esultantly , the
com pany h a s achieved 100% utilization of fly a sh a t G andhinagar,
Sikka, W anakbori an d KLTPS an d no sep ara te acco u n t is m ain ta ined a t
the Power s ta tio n s as per notification. D uring th e year, fly a sh
utilization a t Ukai is less th a n 100% an d hence th e com pany h as
tran sfe rred incom e from sale of fly a sh of Rs. 1577.81 lak h s to fly a sh
u tilization reserve fund.
b) As per the financial s ta tem en ts , g ran t received du rin g th e year of Rs.
1000.00 lak h s p e rta in s to S ikka Solar u n it a n d K utch lignite u n it for 1
MW so lar p lan t, Rs. 520.00 lak h s p e rta in s to C h aran k a so lar u n it for
10 MW so lar p la n t an d Rs. 6.99 lak h s p e rta in s to W anakbori biogas
p lan t.
c) As per the financial s ta tem en ts , in accordance w ith the Indian
A ccounting S tan d a rd (Ind AS 36) on “Im pairm en t of A ssets” the
com pany du ring the year carried o u t an exercise of identifying the
a sse ts of S ikka U nit I & 2 an d Ukai u n it 1 & 2, th a t m ay have been
im paired in respec t of cash generating u n it in accordance w ith the said
Ind ian A ccounting S tandard . B ased on the exercise, Rs. 16778.94 lak h s
an d Rs. 16296.15 lak h s h a s been provided for Ukai an d S ikka power
s ta tio n respectively. For the com pany realizable value of S ikka u n it 1 &
2 is Rs. 18906.12 lak h s an d Ukai u n it 1 & 2 is Rs. 39965.11 lakhs,
w hich is b ased on O ptim ised D epreciated R eplacem ent cost (ODRC)
m ethod derived by a professional G overnm ent R egistered valuer.
d) As per th e financial s ta tem en ts , in view of th e ir large n u m b er of
acco u n ts an d in the absence of segregated inform ation, to ta l
o u ts tan d in g d u es to Sm all Scale In d u stria l u n d e rtak in g s a s defined
u n d e r Micro, Sm all an d M edium E n terp rises D evelopm ent Act 2006
have n o t been disclosed separately. B ased on th e details available w ith
the com pany, in respec t of the tran sac tio n s du rin g th e year th e re are no
overdues a s su ch to m icro, sm all an d m edium en terp rises a s a t 3 1 st
M arch 2017 on accoun t of principal am o u n t together w ith in te re st for
delayed paym en t u n d e r th e Act. The com pany h a s n o t received any
claim for in te re s t from any suppliers u n d e r th e “In te res t on Delayed
Paym ents to Sm all Scale an d Ancillary In d u stria l u n d e rtak in g Act,
1993”.
e) As per n o tes to the financial s ta tem en ts , the com pany did n o t have any
long te rm co n trac ts including derivative co n trac ts for w hich there were
any m ateria l foreseeable losses. F u rther, som e b a lan ces of Trade an d
o ther receivables, Trade and o ther payables a n d lo ans are sub jec t to
confirm ation / reconciliation. A djustm ents, if any, will be accoun ted for
on confirm ation / reconciliation of the sam e, w hich will n o t have a
m ateria l im pact.
f) As per the n o tes to the financial s ta tem en ts , th e com pany h a s allowed
reba te of Rs. 337 .13 Lakhs for prom pt paym en t considering the
p aym en ts m ade by GUVNL. GSECL, h a s also charged Delay Paym ent
C harges of Rs. 1682.01 lak h s to GUVNL for delay in paym en t of sale of
power. In te rm s of the am endm ent agreem ent of GSECL an d GUVNL in
respec t of all power s ta tio n s of GSECL, da ted 04 .02 .2017 , the re b a te /
delayed paym en t charges are calcu lated considering th e paym ent m ade
e ither directly or indirectly or by m aking any ad ju s tm en t or th rough
L/C.
g) As per n o tes to the financial s ta tem en ts , a s per Ind AS 8 “A ccounting
Policies, C hanges in A ccounting E stim ates an d E rro rs”, the com pany
h a s reviewed the life of transferred power s ta tio n s an d pow er s ta tions
belonging to th e com pany an d changed th e ir life to 25 years
re su lta n t th e com pany h a s w ithdraw n depreciation of Rs 4025 .95 lakhs
in respec t of som e power s ta tions an d charged Rs 730 .98 lak h s as
depreciation in resp ec t of o ther stations.
O ur opinion is n o t qualified in respec t of th ese m a tte rs referred above in po in ts (1) to (5).
Other M atters
a) We did n o t au d it the financial s ta tem en ts /C o n so lid a ted financial
inform ation of subsid iaries, w hose financial S ta tem en ts/fin an c ia l
inform ation reflect to ta l a sse ts of ? 67 ,20 ,939 .54 lak h s as a t 3 1 s t M arch,
2017, to ta l revenues of ?40 ,36 ,961.43 lak h s an d n e t cash flows am ounting
to ? 1 1,376.18 lak h s for the year ended on th a t da te, a s considered in the
consolidated financial s ta tem en ts . The consolidated financial s ta tem en ts
also include the G roup’s sh are of n e t profit of ? 6 152.32 lak h s for the year
ended 3 1 s t M arch, 2017, a s considered in th e consolidated financial
s ta tem en ts , in respec t of associates& jointly controlled en tities, whose
financial s ta tem en ts /co nso lida ted financial inform ation have n o t been
aud ited by u s . TheseF inancial S ta te m e n ts / C onsolidated F inancial
Inform ationhave been au d ited by o ther au d ito rs w hose rep o rts have been
fu rn ished to u s by th e M anagem ent an d ou r opinion on th e consolidated
financial s ta tem en ts , in so far a s it re la tes to th e am o u n ts an d d isclosures
included in re sp ec t of th ese subsid iaries, jo in tly controlled en tities and
associates a n d o u r rep o rt in te rm s of su b -sec tions (3) an d (11) of Section 143
of the Act, in so far a s it re la tes to the aforesaid subsid ia ries , jo in tly controlled
entities an d assoc ia tes is b ased solely on the rep o rts of th e o ther aud ito rs.
O ur opinion on th e consolidated financial s ta tem en t a n d o u r repo rt on other
Legal an d R egulatory R equirem ents below, is n o t modified in respec t of the
above m a tte rs w ith respec t to our reliance on the w ork done an d the reports
of the o th er au d ito rs an d the financial s ta te m e n ts / financial ii
certified by th e m anagem ent.
Report on O ther Legal and R egulatory R equirem ents
1. As per by the C om panies (Auditor’s Report) Order, 2016 (“the O rder”), issu ed by
the C entral G overnm ent of Ind ia in te rm s of sub-sec tion (11) of section 143 of
the C om panies Act, 2013, the s ta tem en t referred in the section is n o t applicable
to the C onsolidated Ind AS Financial S ta tem en ts of th e Com pany for the year
u n d e r review.
2. As required by Section 143 (3) of the Act, we repo rt th a t:
a) We have sough t a n d ob tained all th e inform ation an d exp lanations w hich to the
b est of ourknow ledge a n d belief were necessary for th e p u rp o ses of o u r au d it of
the aforesaid consolidated Ind As financial sta tem en ts .
b) In our opinion, except for the effect of the m a tte rs described in th e B asis for
Qualified Opinion p a rag rap h above, p roper books of acco u n t a s requ ired by law
relating to p rep ara tio n of the aforesaid consolidated Ind AS financial s ta tem en ts
have been kep t so far as it app ears from o u r exam ination of those books and
the reports of th e o ther aud ito rs .
c) The requ irem en t of dealing w ith the reports on th e acco u n ts of th e b ran ch
offices of th e Holding Com pany, its subsid iaries, its associate an d jo intly
controlled en tity does n o t arise a s the group h a s no b ra n c h es an d hence th is
po in t is n o t applicable for th e year u n d e r review.
d) The C onsolidated B alance Sheet, the C onsolidated S ta tem en t of Profit an d Loss
including O ther C om prehensive Incom e, C onsolidated S ta tem en t of C hanges in
Equity an d th e C onsolidated C ash Flow S ta tem en t dealt w ith by th is Report are
in agreem ent w ith the re levant books of accoun t m ain ta in ed for the purpose of
p reparation of th e consolidated Ind AS financial s ta tem en ts .
e) In our opinion, except for th e effect of the m a tte rs described in th e B asis for
Qualified O pinion p a rag rap h above, the aforesaid consolidated Ind AS financial
s ta tem en ts com ply w ith the A ccounting S tan d a rd s specified u n d e r Section 133
of the Act, read w ith Rule 7 of th e C om panies (Accounts) R ules, 2014.
f) The m a tte rs described in the B asis for Qualified O pinion p a rag rap h above, in
our opinion, m ay n o t have an adverse effect on the functioning of th e G roup, its
associate an d jo in tly controlled entity.
g) The Holding C om pany being a G overnm ent Com pany, in view of th e Notification
No G.S.R. 463(E) da ted 05 .06 .2015 issu ed by Govt, of India; th e provisions of
section 164(2) of th e C om panies Act, 2013 are n o t applicable to the Com pany.
h) W ith respec t to the adequacy of in te rn a l financial con tro ls over financial
reporting of th e G roup, its associate and jo in tly controlled en tity an d the
operating effectiveness of su ch controls, refer to o u r sep ara te report in
“A nnexure A”;
i) W ith respect to th e o th er m a tte rs to be included in th e A uditor’s Report in
accordance w ith Rule 11 of the C om panies (Audit an d A uditor’s) Rules, 2014, in
ou r opinion an d to th e b est of our inform ation an d according to the
exp lanations given to u s :
i. The consolidated Ind AS financial s ta tem en ts disclose the im pact of
pend ing litigations on the consolidated Ind AS financial position of the
G roup, its associate an d jo in tly controlled com pany. Refer Note49to the
consolidated financial s ta tem en ts re la ting to con tingen t liabilities have
no t been provided for.
ii. The G roup, i t ’s associate an d jo in tly controlled en titydid n o t have any
m ateria l foreseeable losses on long-term co n trac ts includ ing derivative
con tracts .
iii. There w ere no am o u n ts w hich were requ ired to be tran sfe rred to the
Investor E ducation an d Protection F u n d by th e G roup, its associate and
jo in tly controlled en tity incorporated in India.
3. As required by C&AG of Ind ia th rough directions / sub-d irec tions issu ed u n d e r
Section 143(5) of th e C om panies Act, 2013, we give o u r rep o rt in th e a ttached
“A nnexure B”.
For M ukund & R ohit Chartered A ccou n tan ts
Place: Gandhinagar Date: 1 7 .1 1 .2 0 1 7
M
Annexure - A to th e Independ en t Auditor’s Report
Report on th e Internal F inancia l C ontrols under Clause (i) o f S u b-section 3 o f
S ection 143 o f th e C om panies A ct, 2 0 1 3 (“th e A ct”)
We have aud ited the in te rn a l financial controls over financial reporting of Gujarat
Urja Vikas Nigam L im ited (hereinafter referred to as “th e Holding Com pany”), its
subsid iaries (the Holding Com pany an d its subsid iaries together referred to as “the
G roup”), its associate an d jo in tly controlled en tity w hich are com panies
incorporated in India, a s of 3 1 s t M arch 2017 in conjunction w ith o u r au d it of the
consolidated Ind AS financial s ta tem en ts of the C om pany for th e year ended on
th a t date.
M anagem ent’s R esp on sib ility for Internal F inancial C ontrols
The respective B oard of D irectors of the Holding Com pany, its Subsid iary
C om panies, its associate & jo intly controlled en tity w hich are com panies
incorporated in India, are responsib le for estab lish ing an d m ain ta in ing in te rna l
financial controls b ased on th e in te rn a l control over financial reporting criteria
estab lished by th e C om pany, considering the essen tia l com ponents of in te rna l
control s ta ted in the G uidance Note on A udit of In te rna l F inancial C ontrols Over
F inancial Reporting issu ed by the In stitu te of C hartered A ccoun tan ts of India
(‘ICAI’). These responsib ilities include the design, im plem entation an d m ain tenance
of adequate in te rn a l financial controls th a t were operating effectively for ensu ring
the orderly an d efficient co nduct of its bu sin ess , including adherence to com pany’s
policies, the safeguard ing of its a sse ts , the prevention a n d detection of frau d s an d
errors, the accuracy a n d com pleteness of the accoun ting records, a n d the tim ely
p reparation of reliable financial inform ation, as requ ired u n d e r th e C om panies Act,
2013.
A uditors’ R esp on sib ility
O ur responsibility is to express an opinion on th e C om pany 's in te rn a l financial
controls over financial reporting based on ou r aud it. We conducted o u r au d it in
accordance w ith th e G uidance Note on A udit of In te rna l F inancial C ontrols over
F inancial Reporting (the “G uidance Note”) and the S tan d a rd s on Auditing,
by ICAI an d deem ed to be p rescribed u n d e r section 143(10) of th e C om panies Act,
2013, to the ex ten t applicable to an au d it of in te rn a l financial controls, bo th
applicable to an au d it of in te rn a l financial controls an d b o th issu ed by th e Institu te
of C harted A ccountan t of India. Those S tan d ard s a n d th e G uidance Note require
th a t we comply w ith e th ical requ irem en ts an d p lan an d perform th e au d it to obtain
reasonab le a ssu ra n ce a b o u t w hether adequate in te rn a l financial controls over
financial reporting w as estab lished an d m ain ta ined an d if su ch contro ls operated
effectively in all m ateria l respects.
O ur au d it involves perform ing p rocedures to obtain au d it evidence ab o u t the
adequacy of the in te rn a l financial controls system over financial reporting an d the ir
operating effectiveness. O ur au d it of in te rna l financial contro ls over financial
reporting included ob ta in ing an u n d e rs tan d in g of in te rn a l financial controls over
financial reporting, a ssess in g the risk th a t a m ateria l w eakness exists, an d testing
an d evaluating the design an d operating effectiveness of in te rn a l control based on
the assessed risk . The p rocedu res selected depend on the au d ito r’s judgm ent,
including th e a sse ssm e n t of the risk s of m ateria l m iss ta tem en t of the Consolidated
Ind AS financial s ta tem en ts , w hether due to fraud or error.
We believe th a t the a u d it evidence we have obtained a n d th e au d it evidence
obtained by th e o th er au d ito rs in te rm s of th e ir repo rts referred to in the O ther
M atters P aragraph below, is sufficient an d appropria te to provide a b asis for our
au d it opinion on th e Holding Com pany, its subsid iaries, its associate & jointly
controlled en tity incorpora ted in India, in te rn a l financial contro ls system over
financial reporting.
M eaning o f Internal F inancia l C ontrols over F inancial R eporting
A C om pany's in te rn a l financial control over financial reporting is a process
designed to provide reasonab le a ssu ran ce regard ing the reliability of financial
reporting an d th e p rep ara tio n of financial s ta tem en ts for ex ternal pu rp o ses in
accordance w ith generally accepted accounting principles. A com pany 's in te rna l
financial control over financial reporting includes those policies a n d procedures
1) P ertain to th e m ain ten an ce of records th a t, in reasonab le detail, accurately
an d fairly reflect th e tran sac tio n s an d d ispositions of th e a sse ts of the
tha t:
com pany;
2) Provide reasonab le a ssu ra n ce th a t tran sac tio n s are recorded a s necessary to
perm it p rep ara tio n of financial s ta tem en ts in accordance w ith generally
accepted accoun ting principles, an d th a t receip ts an d expend itu res of the
com pany are being m ade only in accordance w ith au tho riza tions of
m anagem ent a n d d irecto rs of the com pany; an d
3) Provide reasonab le a ssu ra n ce regarding prevention or tim ely detection of
u n au th o rized acquisition , u se , or d isposition of th e com pany 's a sse ts th a t
could have a m ateria l effect on the financial s ta tem en ts .
Inherent L im itations o f Internal F inancial C ontrols over F inancia l R eporting
B ecause of the in h e ren t lim itations of in te rn a l financial con tro ls over financial
reporting, including th e possibility of collusion or im proper m anagem en t override of
controls, m ateria l m iss ta tem en ts due to error or frau d m ay occur an d n o t be
detected. Also, projections of any evaluation of th e in te rn a l financial controls over
financial reporting to fu tu re periods are sub jec t to the risk th a t th e in ternal
financial control over financial reporting m ay becom e in ad eq u a te because of
changes in conditions, or th a t the degree of com pliance w ith the policies or
p rocedures m ay deteriorate.
Qualified O pinion
According to th e inform ation an d exp lanations given to u s an d b ased on o u r au d it
85 corresponding repo rts of th e au d ito rs of the su bsid ia ry com panies, its associate
an d join tly controlled com pany, the following m ateria l w eaknesses have been
identified in the opera ting effectiveness of the in te rn a l financial controls over
financial reporting a s a t M arch 31, 2017:
A. In case o f Gujarat State Electricity Corporation Limited (“the SubsidiaryCompany”):
a) The Company did not have appropriate internal control system fo r ensuring
timely capitalization o f fixed assets as and w hen the sam e is ready fo r use
due to delayed issue o f completion certificates/ pending acceptance by Power
Procurer or due to delay in receipt o f bills from the vendor fo r bought out items.
This could potentially result into under capitalization and corresponding
impact on the operational results due to lower charges
b) The Company did not have appropriate internal control system fo r ensuring
timely closure o f capital contracts with suppliers and determination o f final
retention am ounts/ liquidated damages to be charges fo r delay. This could
potentially result into over capitalization pending settlem ent o f contracts and corresponding impact on the operational results due to higher charges o f
depreciation.
c) The company did not have an integrated ERP system . Different software
packages used by the company like E-urja for inventory, i-FAAS fo r accounting
etc. are interfaced through manual intervention leaving gaps between them.
The accounting software I-FAAS allows modification o f the Journal vouchers
after their being posted. This could potentially result into impaired financial reporting.
d) The company did not have an appropriate internal control system for
reconciliation o f vendors/contractors accounts pertaining to capital contracts which could potentially result in some changes in the financial statements.
e) The company did not have effective internal audit system so as to cover all major areas w ith extensive scope. This could potentially result into w eak
checks and balances and unreported financial irregularities ultimately
resulting into distorted financial reporting.
f) The company did not have appropriate internal control system over
maintenance o f fixed asset register such as location, identification number,
etc. which could potentially result in material discrepancies on physical verification, which could potentially result in some changes in the financial
statements.
g) The company did not have appropriate internal control system over
maintenance o f item w ise list o f capital spares, classified as “Property, Plant &
equipment” in the fixed asset register and their recognition as ‘Property, Plant
and Equipment”. This could potentially result in overstatement o f gross block
o f fixed assets since the written down value o f old capital spares Co
\5
identified/ w ithdrawn from fixed assets at the time o f replacement o f the
sam e and corresponding impact on the operational results due to depreciation.
B. In case o f Dakshin Gujarat Vij Company Limited (“ the Subsidiary Company ”)
a) Internal control in respect o f movement o f inventories during maintenance and
capital works, material issu ed / received to/from third parties and material
lying with sub-divisions, needs to be reviewed and strengthened. Further, it is
strongly recommended to implement real time integrated ERP software.
A ‘m aterial w eak n ess’ is a deficiency, or a com bination of deficiencies, in in te rna l
financial control over financial reporting, su ch th a t th e re is a reasonab le possibility
th a t a m ateria l m iss ta tem en t of the com pany’s a n n u a l or in terim financial
s ta tem en ts will n o t be p revented or detected on a tim ely basis .
In our opinion, ex cep t for th e e ffec ts /p o ss ib le e ffec ts o f th e m aterial
w eak n esses described above, to th e b est of ou r inform ation a n d according to the
exp lanations given to u s an d based on the consideration of rep o rts of o ther
aud ito rs, a s referred to in the O ther M atters parag rap h , th e G roup, its associate
an d jo in tly controlled en tity h a s , in all m ateria l respec ts , a n adequate in te rna l
financial contro ls system over financial reporting a n d su ch in te rn a l financial
controls over financial reporting w ere operating effectively a s a t 31st M arch 2017 in
case of o ther G roup C om panies, associates & jo intly controlled en tity , b ased on the
in te rna l control over financial reporting crite ria estab lished by th e G roup, its
associate a n d jo in tly controlled entity , considering the essen tia l com ponents of
in te rna l control s ta ted in th e G uidance Note on Audit of In te rna l F inancial Controls
Over F inancial R eporting issu ed by the In stitu te of C hartered A ccoun tan ts of India.
We have considered th e m ateria l w eaknesses identified a n d reported above in
determ ining the n a tu re , tim ing, an d ex ten t of au d it te s ts applied in o u r au d it a s of
M arch 31, 2017 of th e consolidated Ind AS financial s ta tem e n ts of the G roup, its
associate an d jo in tly controlled en tity an d th ese m ateria l w eaknesses does not
affect our opinion on th e consolidated Ind AS financial s ta tem e n ts of the G roup, its
associate an d jo in tly controlled entity.
Other M atters
O ur aforesaid rep o rts u n d e r Section 143(3)(i) of the Act on th e adequacy and
operating effectiveness of the in te rn a l financial contro ls over financial reporting
insofar as it re la tes to six subsid iary com panies, its associate an d one jointly
controlled com pany, w hich are com panies incorporated in India, is b ased on the
corresponding rep o rts of the au d ito rs of su ch com panies incorpora ted in India.
Place: Gandhinagar Date: 1 7 .1 1 .2 0 1 7
For M ukund & R ohit C hartered A ccou ntants R egistration No. 113375W
M. No. 1 0 9 8 0 2
Annexure B to th e Independ en t Auditor’s Report
The A nnexure referred to in o u r report to th e m em bers of G u ja ra t U ijaV ikas Nigam Limited for the year ended M arch 31, 2017:
Report on th e D irec tionsissued by The Com ptroller 8s A uditor G eneral of India u n d e r section 143(5) of C om panies Act, 2013 for the F.Y. 2016-17
Sr.No.D irection s / Sub
D irection sR espon se / R em edial M easures
A. General D irection s
1. W hether theCom pany h a s clear title / lease deeds for freehold an d lease holdrespectively? If no t p lease s ta te the a rea of freehold an d leasehold lan d for w hich title / lease deeds are n o t available?
In respec t of the Holding Com pany, th e title deeds of im m ovable properties reflected in th e financial s ta tem en t are held in the nam e of the Com pany.
In respec t of the Subsid iary C om pany (GETCO), the com pany ho lds title deeds of all freehold lan d s an d lease deeds of all leasehold lands. The com pany h a s acqu ired m ost of the lan d s th rough G overnm ent acqu isition m o d e /o n lease from G overnm ent agencies an d in case of lan d s for w hich acq u is itio n /lease process is going on, copies of com petent au th o rity orders (as proof of ow nership an d possession) in th is regards are available in records.
In respec t of the Subsid iary C om pany (GSECL), th e com pany h a s clear t itle / lease deeds for en tire freehold an d leasehold lan d s except R s.22.85 lak h s being 310 sq .m trs of freehold lan d a t U tran Plant, w hich is in the ow nership of G overnm ent of G ujarat. As p e r th e inform ation an d exp lanations given to u s , reasonab le s tep s have been tak en by th e com pany for getting the title of th ese lands in its favour.
In respec t of the Subsid iary C om pany (PGVCL), following title deeds of lan d are n o t held in th e n am e of the Com pany :
Total No ofCases
Whether lease hold or Free
hold
Gross block and net block
Remarks
06 Free hold Rs. 164.86 Lakhs
For Details, please refer Annexure - 1
In respect of the Subsidiary C om pany (UGVCL),there is no leasehold land w ith the Com pany. The freehold land prio r to u n b u n d lin g of G ujara t Electricity B oard (‘GEB’) name of Gujarat Electricity Board, however p<
u n b u n d lin g schem e; the p u rc h a se of freehold land is in the n am e of the C om pany i.e. UGVCL. th e details of freehold lan d s are annexed in A nnexure” II”.
W hether th e re are any cases of waiver / w ritten off of deb ts / lo a n s / in te re st etc. If, yes, the reaso n s there for an d th e am o u n t involved.
In respec t of the Holding Com pany, th e re are no su ch cases reported during FY 2016-17.
In respec t of the Subsid iary C om pany (PGVCL):1. D uring the financial year 2016-17 to ta l Rs. 133.78 lakhs are waived against the o u ts tan d in g am o u n t of delay paym ent charges (DPC) of w ater w orks an d s tree t light connections as per GoG reso lu tions no N P L /452014 /U O R -40 /M / dated 06 .01 .2015.2. D uring the F.Y. 2016-17 to ta l R s.2.17 lak h s DPC am o u n t is w ritten off in case of w ater W orks G ram P anchayat on the b asis of GoG resolu tion G U V /1 4 /2 6 4 3 /k / d a ted 31 .01 .2017.3. D uring the course of se ttlem en t w ith C onsum ers in Lok- A dalat an d also as p er the ju d g m en t received from the H onh le C ourts, the am o u n t of D ues of Rs. 133.62 lak h s is waived / w ritten off du ring th e financial year 2016-17.4. Moreover the case of M /s S a u ra sh tra P aper B oard an d Mill is settled in Lok-Adalat an d accordingly am o u n t of Rs. 133.28 Lakhs is waived ag a in st DPC u p to M arch -17.5. D uring the financial year 2016-17 , Rs.3.08 Lakhs have been waived ag ainst H ouse B uilding Advance an d in te rest the reo n due to d eath of Em ployee a s per policy laid down by GEB C ircular No. A cctts/H B A /3275 D ated 28 .03.1989.
In respec t of the Subsid iary C om pany (UGVCL), du ring the year the C om pany h a s w ritten off an am o u n t of Rs.29 ,55 ,841 .29 being d u es from consum ers, waiver of DPC charges am ounting to Rs.3 ,44 ,53 ,747 .61 from consum ers of W ater W orks G ram P anchayat b ased on th e G overnm ent of G u ja ra t R esolution no. GUV-14-2642-K d a ted 3 1 s t J an u a ry , 2017.
In respec t of the Subsid iary C om pany (DGVCL), du ring the year, the C om pany h a s waived o u ts tan d in g d u es tow ards energy an d delayed Paym ent charges from consum ers am ounting to Rs. 148.62 lak h s due to cases settled in LokAdalats an d se ttlem en t com m ittee.
In respec t of the S ubsid iary C om pany (MGVCL), du ring the year the Com pany h a s waived off am ounting to Rs.48.85 Lakhs th rough Lok-Adalat 8s Ju risd ic tio n a l C ourt for consum ers.F u rth er, the C om pany h a s also waived off HBA o u ts tan d in g from em ployees am ounting to R s.6 .19 Lakhs due to employee a s per C om pany’s policy.
In respec t of the S ubsid iary C om pany (GETCO), as per GSO 327 Dated: 03-04-1999 of C lause No.21, in case of d ea th of employee, the balance o u ts tan d in g loan am o u n t an d in te re st payable by the employee to th e com pany are waived. Accordingly, du ring the year 2016-17 , principal am o u n t of Rs. 16 ,88,092.00 an d in te re s t am o u n t of Rs. 15,31,855.00 (Total am ount. Rs.32 ,19 ,947 .00 w as waived.)
3. W hether p roper records arem ain ta ined for inventories lying w ith th ird p a rtie s & a sse ts received as gift / g ran t (s) from the Govt, or o ther au thorities .
In respec t of the S ubsid iary C om pany (GSECL), du ring the year 2016-17, there are no cases of w aiver/w rite off of d e b ts / lo a n s /in te re s t etc.In respec t of the Holding C om pany, th is is Not Applicable.
In respec t of the S ubsid iary C om pany (UGVCL), Proper records are m ain ta ined for th e inventories lying w ith th ird p a rtie s an d confirm ations for m ateria l lying w ith them a s on 31-03-2017 have been tak en on record by th e Company. The Com pany h a s n o t received any a sse ts as gift from G overnm ent or o ther au th o ritie s du ring the year 2016-17.
In respec t of the Subsid iary C om pany (PGVCL), in general for inventories lying w ith tran sfo rm er repairing agencies an d fabricators, records are properly m ain ta ined . Labour con tracto rs are also issu ed m ate ria ls a s per th e approved w ork quality only on producing m ateria l requisition , an d after w ork com pletion, ba lance m ateria l is credited in the store an d also the records are m ain ta ined . The C om pany h a s n o t received any gifts from G overnm ent or any o ther au th o ritie s du ring 2016-17.
In respec t of the Subsid iary C om panies (MGVCL, DGVCL an d GETCO) Proper records are m ain ta in ed for inventories lying w ith th ird pa rtie s .F u rth e r, th e S ubsid iary com panies have n o t received any gift from G overnm ent or o ther au tho rities du ring the financial year 2016-17 .
In respec t of th e S ubsid iary C om pany (GSECL), Proper records are m ain ta ined for inventories lying w ith th ird p a rtie s 8s a sse ts received a s gift from Govt, or o ther au thorities.
4 . A repo rt on age- wise analysis ofpending legal /a rb itra tion casesincluding thereaso n s ofpendency an d
In respec t of the Subsid iary C om pany (DGVCL), age-wise analysis of pending legal / a rb itra tio n cases are a s under:
C ourt/ Age w iseNo. o f C ases
Pending
A m ount (Rs.inArbitration A nalysis Lakhs)
r\\J ' A/
existence /effectiveness of a m onitoring m echan ism forexpenditu re on all legal cases (foreign an d local) m ay be given.
5 year 8s above 159 2022.64
3 - 5 year 20 323.57
C ourt 1 - 3 year 32 19886.24C ases Less th a n 1 8 16.85
year
Total 2 1 9 2 2 2 4 9 .3 1
R eason for Pending:D ue to huge b u rd en w ith the cou rts , cases (including C om pany’s cases) are n o t d isposed expeditiously, hence com pany is m aking efforts to settle m axim um n u m b ers of cases to realize revenue th ro u g h Lok-Adalat an d settlem ent com m ittee. The com pany h a s own legal cell for effective m onitoring of pending legal / a rb itra tio n cases an d looking to the size of the com pany, th e system adopted by the com pany is efficient.Legal fees are being paid a s per p rescribed circulars.
In respec t of the S ubsid iary C om pany (MGVCL), n u m b er of pend ing / a rb itra tion cases ind ica ting th e age wise analysis an d reaso n s for th e ir pendency a re a s under:D etails o f Court ca ses filed by con su m ers
Sr.No. Age w ise A nalysis
No o f C ases
Pending
Am ount
(Rs. in Lakhs)
1 5 year 8& above 275 2032.10
2 3 - 5 year 36 151.16
3 1 - 3 year 69 281.37
4 Up to 1 year 32 166.83
Total 4 1 2 2 6 3 1 .4 6
D etails o f Court ca ses filed by em p loyees
There are also few cases w hich are o u ts tan d in g perta in ing to em ployees am ounting to Rs. 14.51 Lakhs. The age wise analysis of su ch cases are a s under:
Pending
1 5 year & above 5 11.61
2 3 - 5 year 1 2.90
Total 6 14 .51
D ue to b u rd en of cases w ith C ourts , legal cases (including C om pany’s cases a s above) are n o t d isposed off expeditiously. The C om pany is m aking efforts to settle m axim um n u m b er of legal cases to realize d isp u ted revenue th ro u g h LOK-ADALAT organized a t various co u rts 8s also by in -house 3-tier S ettlem ent Com m ittee co n stitu ted a t Circle an d Corporate Offices. The C om pany h a s its own legal cell for periodic review an d effective m onitoring of pend ing legal cases.Legal fees / expenditure are pa id a s per the norm s decided by the m anagem ent an d c ircu lated to field office from tim e to tim e. The legal charges are scru tin ized an d approved by the com petent officers a s per th e pow ers delegated a s per the ‘Delegation of Power for Legal Affairs’ of the Com pany. Looking to the size of the C om pany, th e system adopted by th e Com pany is adequate .
5. If th e C om pany is selected ford isinvestm ent, a com plete s ta tu s report in te rm s of valuation of a sse ts (including tangible a sse ts an d land) an d liabilities(includingcom m itted 8sgeneral reserves) m ay be exam ined including the m ode an d p resen t stage of d isinvestm ent process.
Not Applicable.
Sub D irection1. H as the com pany
en tered in toagreem ents w ith franch ise ford istribu tion ofelectricity inselected a re as an d revenue sh arin g
The Subsid iary C om panies, du ring the financial year 2 0 lb - 17, have no t en tered in to an y revenue sharing agreem ent w ith franchise for d is tribu tion of electricity.
agreem ents adequately p ro tec t the financialin te re s t of thecom pany?In th e case of Therm al Power Projects,com pliance of the various Pollution Control Acts an d im pact thereof including u tilization an d d isposal of a sh an d policy of the com pany in th is regard , m ay be checked an dcom m ented upon.
In respec t of the S ubsid iary C om pany (GSECL), the com pany h a s generally com plied w ith the various Pollution control Acts.
As regards fly a sh u tilization fund , a s per notification of MoEF da ted 03 .11 .2009 , the com pany is requ ired to m ain ta in a separa te acco u n t for th e am o u n t collected from sale of fly a sh an d fly a sh b ased p ro d u c ts an d th is am o u n t shou ld be kep t in separa te acco u n t h ead an d shall be utilized only for the developm ent of in fras tru c tu re or facilities, prom otional an d facilitation activities for the u se of fly a sh u n til 100% fly a sh u tilization is achieved. R esultantly , the com pany h a s achieved 100% utilization of fly a sh a t G andhinagar, Sikka, W anakbori an d KLTPS an d no separa te acco u n t is m ain ta ined a t th ose Power s ta tio n s as per notification. D uring th e year, fly a sh utilization a t Ukai is less th a n 100% an d hence the com pany h a s transferred incom e from sale of fly a sh of Rs. 1577.81 lak h s to fly a sh utilization reserve fund.
Does the com pany have a p roper system forreconciliation of q u an tity /q u a lity of coal o rdered an d received an dw hether grade of coal/ m oistu re an d dem urrage etc., are properly recorded in the books of account?
This c lause is applicable is to only G u jara t S tate Electricity C orporation Limited (the S ubsid iary Company).Yes, the said com pany h a s p roper system for reconciliation of q u an tity /q u a lity of coal o rdered a n d received an d grade of co a l/m o istu re an d dem urrage etc., are properly recorded in the books of account.
How m u ch sh are of free power w as due to the S tate G overnm ent an d w hether th e sam e w as ca lcu la ted as per the agreed te rm s an d depicted in the acco u n ts as per accep teda c c o u n t in g n o rm s ?
This c lause is applicable is to only G u jara t S tate Electricity C orporation Limited (the S ubsid iary Company).D uring the year, th e said su bsid ia ry h a s no sh are of free pow er w as due to the S ta te G overnm ent.
5. In th e case of Hydroelectric Projects th e w ater d ischarge is a s per thepolicy/ guidelines issu ed by th e S ta te G overnm ent to m ain ta inbiodiversity. For n o t m ain ta in ing it penaltypaid / payable m ay be reported .
This clause is applicable is to only G u jara t S tate Electricity C orporation Limited (the S ubsid iary Company).Yes, in the case of Hydroelectric Projects the w ater discharge is a s per the policy /guidelines issu ed by the S tate G overnm ent by above m entioned Subsid iary Company.
6. Report on the efficacy of the system of billing and collection of revenue in the com pany.
In respec t of the S ubsid iary C om panies, bills were issu ed to th e consum ers in tim e an d a collection h a s been achieved in tim ely m anner.
In respec t of th e S ubsid iary C om pany (UGVCL), the consum er base com prises of two categories i.e. HT an d LT C onsum ers:
In HT Billing, billing (m eter reading , bill p reparation an d serving the bill) is done from 15th to 18th of the m onth for norm al consum ers. In case of O pen access consum ers, billing is done on 1st of th e n ex t m o n th by Division offices.
D ue to huge n u m b ers of co n su m ers in LT category, LT Billing is b ifurcated in two w ay i.e. m onth ly billing cycle an d bi-m onthly billing cycle. M eter reading in M onthly billing cycle is carried o u t from every 15th to 2 0 th of the m o n th 8s in bi-m onthly billing cycle, m eter read ing is carried ou t from every 2 1 s t of m on th to 10th of succeeding m onth . After collection of m eter read ing da ta , bill p rin ting p rocess is carried o u t a n d bills are served to the consum ers by sub-division offices.
To im prove Collection, the C om pany h a s m ade a rrangem ents w ith post offices, private cash collection agencies, e-gram p a n ch a y a t’s and also provided facility of any tim e paym ent (ATP) kiosks, n e t bank ing facility to facilitate paym ent of bills to th e consum ers. The C om pany also conduct disconnection drive, a rrange LOK ADALAT for pend ing d ispu ted a rrea rs to im prove collection efficiency.
In respec t of the S ubsid iary C om pany (MGVCL), The Com pany com prises Two categories of co n sum ers i.e. HT land LT consum ers:
K~/l IAccoil^ants/ , \ * \ / /
^ 0 0 0 ^ 2 1+
The HT category co n sum ers are billed an d m ain ta ined a t divisional Level. The m eter read ings are collected by D eputy / Ju n io r E ngineers physically visiting the prem ises. Moreover, the high valued co n sum ers connections are equipped w ith AMR b ased m eters, w hich are m onitored regularly from division offices by eng ineers an d also readings are fetched from those m eters for th e m onth ly billing purpose . M eter reading activity, bill p rep ara tio n an d serving of bill is carried ou t regularly from 15th to 18th of the m onth for norm al consum ers. In case of open access consum ers billing is done on the 1st of th e every m on th by division offices.The Billing activity of LT category co n sum ers are m ainly b ifu rcated in Two p a rts , i.e. M onthly billing (Lowtension high valued custom ers) an d Bi-M onthly billing (LT residen tial an d o ther low valued category consum ers). The Billing activity is carried o u t by tra in ed M eter readers. The billing activity of LT co n su m ers are carried o u t betw een 2 0 th an d 10th of the nex t m on th . The bills a re served to the consum ers on the spo t only, by th e m eter readers. Such spot billing m ethod re su lts in to saving in tim e, m oney an d energy an d also en tails early realization of revenue by 5-7 days. Also, the com pany h a s in itia ted th e GPRS m obile b ased spot billing, in w hich th e energy bills are calcu lated au tom atically th ro u g h com puterized program a n d ca lcu la ted bill d a ta are tran sfe rred th ro u g h GPRS b ased servers to mobile PDA of m eter read ers an d a p rin to u t of calcu la ted bill is generated an d served to the consum er on th e spot, w hich en su res the correctness of energy bill calcu lations. As explained by the m anagem ent, the C om pany h a s in itia ted the process of endow ing the m obile PDA GPRS b ased devices of all the su b divisions. Moreover, to e n su re th e co rrectness of m eter readings, every m onth th e m eter read ers are in terchanged w ithin one su b division i.e. if a m eter read er h a s carried ou t the m eter read ing activity in a p a rticu la r a rea th is m onth , th e n in nex t m on th o ther m eter read er will be perform ing the billing activity of th a t p a rticu la r area . This en su res au tom atic cross verification of opening a n d closing m eter readings.To im prove the efficacy of collection of revenue, th e com pany h a s m ade a rran g em en ts in system so th a t any consum er of an y su b division can pay h is energy bill a t any su b division/ division / circle / corporate office. Moreover, com pany h a s provided collection rights to post offices, private cash collection agencies, e-gram panchayats and also has provided facility of any tim e p aym en t (ATP Kiosks and V arious ATMs of B anks). A lso c o m p a n y h a s provided o n lin e paym ent o p tio n s o n its w ebsite a s well a s on various b an k sand payment wallets websites, where consumer
th e ir bills online from any place th ro u g h C redit C ard / D ebit C ard / Net bank ing facilities. Moreover, com pany h a s also provided RTGS/NEFT facilities to its consum ers. The com pany also conducts d isconnection drives, a rranges for LOK-ADALATs for pend ing d isp u ted a rre a rs regularly to im prove collection efficacy.
7. W hether tam p er proof m ete rs have been insta lled for all consum ers? If n o t th en , exam ine how accuracy of billing is ensu red .
The S ubsid iary C om panies have in sta lled tem per proof energy m eters for all the consum ers(excep t for agricu ltu re u n m ete red consum ers) & su ch m eter box is duly sealed by the com pany.
In respec t of the Subsid iary C om pany (PGVCL),after accuracy te s t of energy m eter in m eter te stin g Laboratory, m eter body sea ls are provided an d th ese energy m eters are insta lled in tam p er proof m eter box an d su ch m eter box is duly sealed by the com pany.
In respec t of the S ubsid iary C om pany (UGVCL), th e Com pany is having to ta l 33 ,39 ,854 nos. of C onsum ers a s on 31-03- 2017. O ut of the sam e 31 ,85 ,978 nos. of C onsum ers are m etered an d 1,53,876 nos. of C onsum ers are un-m etered . For all the m etered co n sum ers a s s ta ted above the Com pany h a s insta lled th e sta tic m ete rs an d electro m echanical m eters. For rem ain ing 1,53,876 nos. of consum ers tariff is charged on the basis of co n trac t load w hich is approved by GERC.
In respect of the S ubsid iary C om pany (MGVCL), com pany h a s insta lled 2262594 n u m b ers of tam perproof sta tic m eters o u t of to tal 2980500 n u m b ers of co n sum ers as on 31-03- 2017 (75.92%). The detail of in s ta lla tio n s of tam perproof s ta tic m eters for various categories of consum ers is a s below:
C a te g o r y o f c o n s u m e r
N o. o f Consum
ers
No. of Electro-
M e c h a n ic a l Motors
No. ofElectronic
M e te r s(S ta t ic )
% of static Meters
installation
Residential 2493036 656655 183638173 .bb
GLP 23204 0 23204100.00
LTIndustria landCom m ercial
295298 35436 259862 88.00
Ch:___Xi___
HTIndustria l
1963 0 1963 100.00
PublicLighting
7323 0 7323 100.00
A gricultural 140934 0 115182 81.73
PublicW aterW orks
18749 0 18749 100.00
Total 2980500 692091 2262664 75.92
From the above table, it is c lear th a t tam perproof sta tic m eters have been insta lled for all co n sum ers (100%) in case of co n su m er’s category GLP, LT In d u stria l, HT Industria l, Public Lighting an d Public W ater W orks consum ers. In case of R esidential consum ers, th e p rocess of replacing the existing electro m echanical m ete rs w ith tam perproof m eters is con tinued an d 1836381 Nos. of tam perproof sta tic m eters have been insta lled o u t of to ta l 2493036 Nos. of R esidential consum ers.F u rth er, in case of A gricultural co nsum ers, 25 ,724 Nos. are of the category of AG u n m ete red consum ers, for w hich GERC h a s ordered separa te F lat ra te HP based tariff.
In order to en su re accuracy of billing, com pany h a s tak en the following m easu res :-
1. It is en su red th a t all th e m eters (either S tatic or Electro-M echanical) a re properly h o u sed an d covered by Metal M eter Boxes or by SMC Boxes. Also, th is boxes are sealed w ith a specialized p lastic sea ls to avoid d irect access to th e basic m eters.
2. The com pany’s m eter read ers , who u sed to take regu lar visits of co n su m ers in s ta lla tions during th e ir regu lar spo t billing program s, are in s tru c ted to exam ine an d observe th e physical s ta tu s of m eters especially, for reporting a s to b roken seals, tam pered m eter boxes, fau lty m eters, b u rn t m eters, zero consum ption m eters, over consum ption m eters, locked prem ises etc. on regu lar b asis for reporting to the ir concerned su b divisional head s . On th e basis of m eter readers report, th e corrective actions are im m ediately in itia ted by D eputy Engineer of concerned sub division to en su re accuracy of m etering.
3. The C om pany also a rran g es su rp rise theft checking drives periodically an d th e m eter being checked for tem pering. Sub drives are done twice in a week,
m inim um theft of electricity. Mostly the a reas com prising of h igh loss feeders are targeted.
8. W hether the Com pany recovers an d acco u n ts , the S tate Electricity Regulatory C om m ission (SERC) approved Fuel an d Power P u rchase A djustm ent C ost (FPPCA)?
Yes, the com panies have recovered an d accoun ted Fuel an d Power P urchase A djustm ent cost du ring the financial year2016-17.
In respec t of the S ubsid iary C om pany (UGVCL), based on approval of FPPAC by GERC on quarterly basis , additional charges are levied or reb a tes given in su b seq u en t billing cycles to all consum ers.
In respec t of the Subsid iary C om pany (MGVCL), based on approval of FPPCA form ula by GERC on quarterly basis , the additional FPPCA charges are levied or reba te is given in su b seq u en t billing cycles to all the consum ers.The FPPCA additional charges a re being assessed th rough com puterized system an d are duly debited / refunded in consum ers account. The FPPCA being a tariff item , the additional charges calcu la ted is also accoun ted autom atically along w ith o ther tariff item s in th e books of accounts. Moreover, the additional FPPCA charges are being proportionately calcu lated from its da te of effectiveness
9. W hether the reconciliation of receivables an d payables betw een the generation , d is tribu tion an d tran sm issio n com panies h a s been com pleted. The reaso n s for difference m ay be exam ined.
Yes, the receivables a n d payab les betw een the group com panies have been reconciled a n d duly confirm ed a s on 31 .03 .2017 . T heconfirm ations a re also sough t for am o u n t payable for p u rch ase of pow er from w ind farm an d so lar energy suppliers.
10. W hether the C om pany is supplying pow er to franch isees, if so, w hether the Com pany is no t supplying pow er to franch isees a t below its average cost of p u rch ase .
Not Applicable
11. How m uch tariff roll back su b sid ies have been allowed an d booked in the
In respec t of the S ubsid iary C om pany (PGVCL), there are no tariff roll back subsid ies allowed du rin g the year. However, various subsid ies as received du ring th e year from holding
i ' i1* ■ M lv '*0C i 1 ^ 1 1
com pany (GUVNL) are du ly accounted . D etails for the same
N ^ g O D # '
acco u n ts du ring the year? W hether the sam e is being re im bursed regularly by the S tate G overnm ent shortfall if any m ay be com m ented?
are a s follows:
Sr. No Subsidy R eceivedA m ount
Rs.in Lakhs
1 A griculture (HP based) 43373 .47
2 Tariff C om pensation 43418.21
3 FPPPA Subsidy 66979.43
4 Energy Conservation 1037.93
5 W ater W orks 20779.02
In respec t of the Subsid iary C om pany (UGVCL),the C om pany h a s ra ised FPPPA an d tariff com pensation claim to GUVNL. D uring FY 2016-17 Rs. 144348.00 Lakhs h a s been received from GUVNL.
In respec t of the Subsid iary C om pany (MGVCL), du ring the year, the following tariff su b sid ies have been recognised in the books of acco u n ts as p e r budgetary allocation m ade by GOG as per details a s u n d e r :
Sr. No. Particulars Rs.( in Lakhs)
1 GERC Tariff com pensation 4800.14
2 FPPPA 11247.89
3 W ater W orks 5340.71
4 50% AG subsidy 0.00
5 HP B ased Subsidy 7328.31
6 Prim ary Schools 495.68
Total 2 9 2 1 2 .7 3
The GUVNL, on behalf of MGVCL deals w ith GOG in respect of subsidy claim s(except p rim ary schools) an d the o u ts tan d in g position in GUVNL books as at 3 1 st March, 2017 is as under:
__________ (Rs. in Lakhs)
P a r tic u la rs
o f su b sid y
O p en in g b a la n c e
a s on 1 s t A pril
2016
R eco g n ised in th e b o o k s
d u r in g th eyear
A m o u n t re c e iv e d d u rin g
th e y e a r from
C losing o u ts ta n d in g a s o n 3 1 s t
M arch 2 0 from_&
GOG
GERC Tariff compensation
3191.16 4800.14 5151.10 2840.20
FPPPA 21698.39 11247.89 11247.89 21698.39
Water Works 4141.36 5340.71 5340.71 4141.36
50% AG subsidy
2881.74 0 0 2881.74
HP Based Subsidy
0 7328.31 7328.31 0
Relief to Primary Schools
324.13 495.68 495.68 324.13
Total 32236.78 29212.73 29563.69 31885.82
In respec t of the Subsid iary C om pany (DGVCL), du ring the year, com pany h a s been allocated following subsid ies for A griculture an d W ater W orks (Gram Panchayats) consum ers th ro u g h holding com pany GUVNL:
1. AG-Tariff com pensation- Rs. 4235 .07 lakhs
2. AG- Subsidy of FPPPA- R s.7424 .36 lakhs
3. W ater W orks Subsidy- R s.3903.91 lak h s
However, it is also clarified th a t th e re is no tariff roll back subsid ies received.
12 . Is th e system of evacuation of power com m ensu ra te w ith power available for tran sm issio n w ith the generatingcom pany? If not, loss, if any, claim ed by the generating com pany m ay be com m ented.
This c lause is applicable to G u ja ra t Energy T ransm ission C orporation Ltd. only (The su b sid ia ry Company). In relation to the said subsid iary , tran sm iss io n netw ork is available for evacuation of power from each generating sta tio n s u n d e r norm al operating conditions. In pecu liar grid operating conditions like high renew able energy injection during off peak load conditions, few wind farm s have been asked to b ack down their generation in few ra re cases. Such back down in stru c tio n are being given by SLDC looking in to real tim e loading of associated netw ork e lem ents an d grid security . There are no provisions for com pensating su ch k ind of losses due to back down of generation asked by SLDC to m ain ta in grid stability a n d security .
13 . How m uchtran sm issio n loss in excess of p rescribed norm s h a s been incu rred d u ring the
This clause is applicable to G u ja ra t Energy T ransm ission C orporation Ltd. only (The su bsid ia ry Company). In relation to the said subsidiary,G ERC h a d approved the T ransm ission Loss of 4.1% for the year 2016-17. D uring the year T ransm ission Loss w as 3.85% , w hich is lower
year an d w hether the sam e been properly accoun ted for in the books of accoun ts?
approved by GERC.
14. W hether th e a sse ts con stru c ted an d com pleted on b eh alf of o ther agencies an d h an d ed over to them h a s been properly accoun ted for in the financial sta tem en ts .
This clause is applicable to G u ja ra t Energy T ransm ission C orporation Ltd. only (The su bsid ia ry Com pany).In relation to th e said subsid iary , p roper accoun ting is done in the cases w here the a sse ts co n stru c ted a n d com pleted on behalf of o th e r agencies an d h an d ed over to them .
15. H as the com pany en tered in to revenue sh arin g agreem ents w ith private p a rtie s for extraction of coal a t p itheads a n d it adequately p ro tec ts an d financial in te re st of the com pany?
This clause is applicable is to only G u ja ra t S tate Electricity C orporation Limited (the S ubsid iary Company).No su ch agreem ent h a s been en tered by th e com pany w ith th ird parties for revenue sh arin g du ring th e FY 2016-17.
Place: Gandhinagar Date: 1 7 .1 1 .2 0 1 7
For M ukund&Rohit Chartered A ccou ntants
Vinay PartnerM. No. 1 0 9 8 0 2
3 °
A n n e x u re -IL is t o f T i t le d e e d s n o t h e ld in t h e n a m e o f PGVCL
C irc leS r
No.N a m e o f P re m is e s
S u rv e yNo.
L e a se H o ld O R
F re e H o ld
G ro ss B lo c k A m o u n t
Rajkot City 1 Kuvadva 557 Free Hold 36,55,317.00
Surendranagar 1 D asada ( D hangadgra Division) 1 0 0 9 /6 /1 Free Hold 4,39,532.00
Junagadh 1 Ju n ag ad h Circle City Servey No. 1 Free Hold 41,21,800.00
Devbhumi Dwarka 1 Kham bhaliya 794 Free Hold 31,84,460.002 Okha 62 Free Hold 50,84,868.00
T o ta l r , 6 4 ,8 5 ,9 7 7 .0 0
ANNEXURE ‘II’TO AUDITORS’REPORT
Sr No Name o f o ffices D etails o f land o f w h ich th e accou n t balances have b een transferred as per GOG n o tifica tio n no. G H U-2006-91- G UV-1106-590-K dated 0 3 -1 0 -2 0 0 6 to Com pany and are h e ld in th e nam e o f th e erstw hile GEB. [Rs. in lakhs] - pertain ing to UGVCL
1SABARMATI O & M DIVISION 8.01
2 BAVALA O & M DIVISION 4.89
3GANDHINAGAR O & M DIVISION 2.11
4 KALOL (O & M) DIVISION 0.495 BOPAL (U 86 I) DIVISION 0.006 MODASA O 86 M DIVISION 0.547 IDAR O 86 M DIVISION 2.018 TALOD O 86 M DIVISION 0.36
9HIMATNAGAR 0 8& M DIVISION 0.27
10 MEHSANA O 86 M CIRCLE 0.2411 KADI O 85 M DIVISION 0.51
12MEHSANA O 8& M DIVISION 0.32
13 PATAN O 8& M DIVISION 0.9314 VIJAPUR O 86 M DIVISION 1.47
15VISNAGAR O 86 M DIVISION 0.53
16PALANPUR O 86 M DIVISION 0.00
17 DEESA O 86 M DIVISION 0.81
18SIDHPUR O 86 M DIVISION 0.00
19RADHANPUR 0 8s M DIVISON 0.39
20 DEESA-II DIVISION 0.0021 PALANPUR-II DIVISION U.OH-
GUJARAT URJA VIKAS NIGAM LIMITEDConsolidated Balance Sheet as at 31st March, 2017
( Rs. in Lakhs)Note As atAs at As at
Particulars No 31st March, 2017 31st March, 2016 1st April, 2015
ASSETS %
(1) Non-Current Assets(a) Property, Plant and Equipment 2 44,92,102.78 43,36,286.69 37,09,661.42
(b) Intangible Assets 2 2,847.48 3,668.87 4,630.88
(c) Capital Work-In-Progress 3 7,59,785.14 5,40,404.61 7,50,004.19
(d) Intangible assets under development 4 - 21.86 21.86
(e) Financial Assets(i) Investments 5 1,05,702.15 95,717.76 82,630.34
(ii) Loans 6 17,276.68 16,723.62 16,179.72
(iii) Other Financial Assets 7 18,431.21 14,096.94 12,994.25
(f) Other non-current assets 8 16,984.03 26,562.66 24,033.16
Total Non-Current Assets 54,13,129.46 50,33,483.01 46,00,155.81
(2) Current Assets(a) Inventories 9 2,78,189.68 2,42,509.37 2,63,418.66
(b) Financial Assets(i) Investments 10 - - 116.33
(ii) Trade Receivables 11 3,56,803.67 3,17,677.91 3,21,040.45
(iii) Cash and cash equivalents 12 57,599.19 46,223.01 51,508.02
(iv) Other Bank Balances 13 1,599.01 3,362.65 85.73
(v) Loans 14 2,584.91 3,342.41 3,255.68
(vi) Other Financial Assets 15 5,63,056.41 5,56,769.06 4,32,175.68
(c) Current Tax Assets (net) 16 13,995.07 11,202.93 8,493.03
(d) Other Current Assets 17 33,434.58 36,036.02 47,908.29
(e) Assets classified as held for sale 18 547.56 507.65 532.25
Total Current Assets 13,07,810.08 12,17,631.00 11,28,534.12
Total 67,20,939.54 62,51,114.01 57,28,689.93
EQUITY AND LIABILITIES Equity
(a) Equity Share Capital 19 13,71,460.60 10,75,470.65 8,42,140.13(b) Other Equity 20 5,29,304.48 5,07,845.12 3,96,167.37
19,00,765.08 15,83,315.77 12,38,307.50Non-controlling Interests 8,969.85 8,738.49 8,296.19Total Equity 19,09,734.93 15,92,054.26 12,46,603.70
Deferred Government grants, subsidies & consumercontributions 21 7,17,139.98 6,46,373.38 6,20,506.42
Liabilities(1) Non-Current Liabilities
(a) Financial Liabilities(i) Borrowings 22 14,87,161.25 14,11,927.76 15,08,498.88(ii) Trade Payables 23 85.29 85.29 85.29
(iii) Other Financial Liabilities , ______ 24 4,93,891.67 4,50,412.12 4,00,476.29(b) Provisions 25
26
1,45,570.48 1,26,853.47 1,19,974.09(c) Deferred Tax Liabilities (Net) 1,64,086.56 1,32,062.53 1,05,438.85(d) Other Non Current Liabilities 27 39,794.50 30,351.49 34,865.90
Total Non-Current Liabilities 23,30,589.75 21,51,692.66 21,69,339.30
A_
(2) Current Liabilities(a) Financial Liabilities
(i) Borrowings(ii) Trade payables
(iii) Other Financial liabilities(b) Other current liabilities(c) Provisions(d) Current Tax Liabilities (net)
Total Current Liabilities
Total
282930313233
13,271.685,80,891.179,47,791.591,37,350.04
73,778.4610,391.94
2,27,805.645,37,732.138,88,014.351,21,433.29
74,906.4111,101.89
3,37,372.113,22,928.358,27,277.611,26,062.06
69,905.718,694.68
17,63,474.87 18,60,993.70 16,92,240.51
67,20,939.54 62,51,114.01 57,28,689.93
Significant Accounting Policies and Notes to Financial Statements
1-66
As per our Report of even date attached For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W
(SUJIT GUlATI, Chairman
For and on behalf of the Board
IAS) (PANKAJ JiOSHIJAS)Managing Director
£(CA. S.B. KHYAUAI) Director (Finance ^ DIN:02470485
(PARtHIV* BHATT) Company Secretary
Date : 17.11.2017 Date: 17.11.2017
2 .
GUJARAT URJA VIKAS NIGAM LIMITEDConsolidated Statement of Profit and Loss for the year ended 31st March, 2017
( Rs. in Lakhs )
Particulars Note No. For the year ended 31st March, 2017
For the year ended 31st March, 2016
1 Revenue from operations 34 39,21,175.23 38,34,364.82
II Other Income 35 1,15,786.20 1,14,196.56
III Total Income (l+ll) 40,36,961.43 39,48,561.38
IV EXPENSESCost of Fuel consumed 36 4,84,717.41 5,37,997.03
Purchase of Power 37 24,14,085.38 24,36,513.84
Employee Benefits Expense 38 3,31,095.67 2,38,995.04
Finance Costs 39 1,84,881.34 2,06,716.91Depreciation, Amortization and impairment Expense 3,63,538.47 3,01,811.27
Other Expenses 40 1,44,279.42 1,40,474.51
Total Expenses (IV) 39,22,597.70 38,62,508.61
V Profit Before Exceptional items and Tax (lll-IV) 1,14,363.73 86,052.77VI Exceptional Items 41 -31.06 4,831.63
VII Profit before share of net profits of associate and joint venture accounted for using equity method and tax (V-VI) 1,14,332.67 90,884.40
VIII Share of Profit of Joint Venture _ -2.00IX Share of Profit of Associate 6,152.32 5,052.59
X Profit before tax (VII+VIII+IX) 1,20,484.99 95,934.99
XI Tax Expense: 42(a) Current Tax -25,690.58 -21,043.64
(b) Deferred Tax -34,747.06 -27,132.34
XII Profit for the Year (X-XI) 60,047.34 47,759.01
XIII Other Comprehensive Income (OCI)(a) Items that will not be reclassified to Profit and Loss (i) Re-measurement of the Defined Benefit Plans -13,437.29 -4,249.35
(ii) Equity Instruments through OCI 4,497.35 2,891.31
Less: -- tax impact 2,860.82 460.75(iv) Share of other comprehensive income of associatesaccounted for using the equity method(b) Items that will be reclassified to profit or loss
607.41 -12.83
(i) Financial assets measured through OCI 398.13 -138.43- tax impact -137.78 47.91Total of Other Comprehensive Income (OCI) (Xlll) -5,211.38 -1,000.63
XIV Total Comprehensive Income for the Year (XII+XIII) 54,835.97 46,758.37
Profit for the Year attributable to:-- Owners of Equity 59,839.31 47,487.09- Non Controlling Interests 208.04 271.92
60,047.34 47,759.01Other Comprehensive Income attributable to:-
- Owners of Equity -5,162.30 -988.26- Non Controlling Interests -49.08 -12.37
-5,211.38 -1,000.63/ S '
Total Comprehensive Income for the Year attributable to:-'
, v r \ ' j- Owners of Equity v A i 54,677.01 46,498.83
- Non Controlling Interests 158.96 259.5554,835.97 46,758.37
3
XV Earnings Per Equity Share : 43Basic (in Rs.) 0.48 0.49Diluted (in Rs.) 0.48 0.49
See accompanying Notes to the Financial Statements 1-66
As per our Report of even date attached For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W
(VINAYSEHGAL]
Partner Membership No. 10! Place: Gandhinagar Date: 17.11.2017
(SUJIT GU Chairma
DIN:00177274
/ IAS)
For and on behalf of the Board
(PANKAJ J(jJSHI,IAS) Managing Director
DIN:01532892
(CA. M. B. PARIKH)Executive Director (F&A)
& CFO
UA)Director (Finance)
DIN:02470485
(PARtHlV BHATT) Compaoy Secretary
Place : Gandhinagar Date: 17.11.2017
GUJARAT URJA VIKAS NIGAM LIMITEDConsolidated Cash Flow Statement for the year ended 31st March, 2017
( Rs. in Lakhs)
[A]
Particulars For the year ended For the year ended
31st March, 2017 31st March, 2016
CASH FLOW FROM OPERATING ACTIVITIESNet Profit before tax 1,20,484.99 95,934.99A dju stm en ts to re co n cile p ro fit b efo re ta x to n et cash flow s:
Non-Cash Items 3,63,538.47 3,01,811.27
Non Operating Items 1,23,885.81 1,34,026.62
Exceptional Item 31.06 -4,831.63
Workina capital adjustm ents:(Increase)/ Decrease in Current Assets:Inventories -35,681.39 20,907.45
Trade receivables -45,302.41 -1,476.85
Other financials assets -9,321.54 -1,25,488.03
Other non financial assets 344.60 10,916.76
Increase / (Decrease) in Current Liabilities:Trade Payables 43,159.05 2,14,803.78
Other Financial Liabilities 1,97,639.37 83,951.34
Other Non Financial Liabilities & Provisions 56,386.11 6,986.24
8,15,164.12 7,37,541.94Exceptional Item -31.06 4,831.63
Income tax (paid)/ Refund -29,192.68 -21,330.21
Net cash flows from operating activities (A) 7,85,940.38 7,21,043.36
Investing activitiesPurchase o f property, plant and equipment (including CWIP) -7,79,809.62 -7,02,096.61
Sale/Adj. o f fixed assets 68,318.02 25,288.49
Redemption / Sale / (Purchase) Of Investment 459.70 -6,484.15
Dividend from Associate 1,014.76 1,095.94
Dividend Income 254.12 204.91
Interest received (finance income) -21.59 16.36
Asset not in use -39.91 24.60
Bank Balances not considered as Cash and Cash Equivalents 1,738.27 -3,310.68
Net cash flows used in investing activities (B) -7,08,086.25 -6,85,261.14
Financing activitiesProceeds from Issue o f Shares/Share Application Money 2,61,490.00 2,98,899.96Deferred Govt. Grants, Subsidy & Contributions 1,33,032.51 99,584.58Proceeds / (Repayment) from borrowing (net) -2,54,039.89 -1,86,394.16Interest & financial charges -2,06,960.57 -2,53,157.61Net cash flows from/(used in) financing activities (C ) -66,477.94 -41,067.23
Net increase/ (decrease) in cash and cash equivalents (A+B+C) 11,376.18 -5,285.01
Cash and cash equivalents at the beginning o f the year 46,223.01 51,508.02Cash and cash equivalents at year end 57,599.19 46,223.01
5
Notes:1 ( Rs. in Lakhs)
Cash & Bank Balances consists of the following:Cash & Cash Equivalentsa. Balances w ith Banks 49,577.49 39,485.94b. Cash on hand 522.23 531.65c. Cheques on hand 3,859.16 3,978.47
d. Remittance in Transit 1,113.28 1,311.44e. Deposits w ith banks 2,527.04 915.51Closing Cash 8i Cash Equivalents 57,599.19 46,223.01
2 The above Cash Flow Statement has been prepared under the 'Indirect M ethod' as set out in the Indian
Accounting Standard (Ind AS) 7 " Cash Flow Statement" prescribed under the Companies (Accounting Standards)Rules, 2015.
3 Previous year figures have been regrouped wherever necessary.
As per our Report of even date attached For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W
(VINAYSEHG) Partner
Membership No. 109802 Place: Gandhinagar Date: 17.11.2017
i it g w I t i,(SUJITSCHSjkTI, IAS) Chairman
DIN:00177274
For and on behalf of the Board
(PANK/U JOSHUAS) Managing Director
DIN:01532892
(CA. M. B: PARIKH) Executive Director
(F&A) & CFO
(CA. S.B. KHYA1JA) Director (Finance)
DIN:02470485
(PARTWV BHATT) Company Secretary
Place: Gandhinagar Date : 17.11.2017
GUJARAT URJA VIKAS NIGAM LIMITEDConsolidated Statement of Changes in Equity (SOCIE) for the year ended on 31st March, 2017Equity Share Capital
Particulars
Rs in Lakhs
Total
NonControlling
Interests
Equityattributable to
OwnersBalance as on 1st April, 2015 8,42,140.13 1,250.00 8,40,890.13Changes during the year 2,33,330.52 - 2,33,330.52Balance as on 31st March,2016 10,75,470.65 1,250.00 10,74,220.65Changes during the year 2,95,989.95 - 2,95,989.95Balance as on 31st March,2017 13,71,460.60 1,250.00 13,70,210.60
Other Equity___________________________________________________________ _________________________________________________________ ______________________________________________________________________( Rs. in Lakhs)
Particulars
ShareApplication
Money pending allotment
Reserves and Surplus Item of Other Comprehensive Income
TotalNon
ControllingInterests
Total equity attributable to owners of the
parentContingency
Reserve Fund
Fly ash utilisation
reserve fundCapital Reserve
SecuritiesPremium
RetainedEarnings
Equity Instruments through Other Comprehensive
Income
Financial asset measured at fair value through other comprehensive
Income
Share of OCI of assodate accounted
for using equity method
Balance as at 1st April, 2015 (as previously reported) 50,894.43 12,400.00 . 62,855.88 3,750.00 3,43,605.31 - - 4,73,505.62 7,314.50 4,66,191.12
Impact of Ind AS adjustment to retained earnings - . . (62,855.88) 69,476.52 18,633.00 499.09 - 25,752.73 (264.55) 26,017.28
Capital reserve at the time of acquisition of Associate- GIPCL - - - 2,378.30 ■ - - - 2,378.30 * 2,378.30
Impact of Share of Associates Ind As adjustment to retained earnings 10,854.13 _ 328.11 11,182.23 11,182.23Adjustments for prior period errors . . . . . (1,06,032.31) - - (1,06,032.31) (1,06,032.31)Deferred Tax on Ind AS adjustment opening balance sheet . . . . (1,210.60) (2,192.76) (169.64) - (3,573.00) (3.75) (3,569.25)Restated Balance as at 1st April, 2015 50,894.43 12,400.00 . 3,16,693.05 16,440.24 329.45 328.11 4,03,213.57 7,046.19 3,96,167.37
Addition during the year . . _ . . - - - 182.75 (182.75)Profit for the Year _ 47,759.01 . - - 47,759.01 271.92 47,487.09Share of CDT on dividend received . . _ (207.77) . - - (207.77) (207.77)
Other Comprehensive Income for the Year (net of Tax) _ . . . . (3,588.74) 2,691.45 (90.52) (1283) (1,000.64) (12.37) (988.27)Total Comprehensive Income for the year - . _ . 2,691.45 (90.52) (12.83) 46,550.60 442.30 46,108.30
Less: Shares Issues 50,894.43 . _ . . - - - 50,894.43 -Add: Share application money pending allotment 1,16,463.87 _ _ . - . - - 1,16,463.87 - 1,16,463.87Balance as at 31st March, 2016 1,16,463.87 12,400.00 _ 2,378.30 3,750.00 3,60,655.54 19,131.69 238.93 315.28 5,15,333.61 7,488.49 5,07,845.12
Addition during the year . 1,577.81 _ . . - - - 1,577.81 72.40 1,505.40Profit for the Year _ . 60,047.34 . - - 60,047.34 208.04 59,839.31
Share o f CDT on dividend received _ _ . (223.11) - - (223.11) (223.11)
Other Comprehensive Income for the Year (net of Tax) . _ _ . . (10,093.95) 4,014.82 260.35 607.41 (5,211.37) (49.08) (5,162.29)Transfer from Contingency Reserve 351.77 - - 351.77 - 351.77Total Comprehensive Income for the Year . _ 1,577.81 _ . 4,014.82 26035 607.41 56,542.44 231.36 56 3 H 0 8
Add: Share Application Money pending allotment 81,963.92 _ . . - - 81,963.92 -Less: Shares Issues 1,16,463.87 . _ . . - - - 1,16,463.87 - 1,16,463.87
Less: Reduction During the Year 351.77 . . . - 351.77 - 351.77Balance as at 31st March, 2017 81,963.92 12,048.23 1,577.81 2,378.30 3,750.00 4,10,737.60 23,146.51 499.27 922.69 5,37,024.33 7,719.85 5,29,304.48
As per our Report of even date attached ForMukund & Rohit Chartered Accountants Firm Registration No. 113375W
Place : Gandhinagar Date: 17.11.2017
For and on behalf of the Board
Executive Director (F&A) & CFO
Place : Gandhinagar Date: 17.11.2017
GUJARAT URJA VIKAS NIGAM LIMITED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH. 2017
Corporate information and Critical judgements
Corporate and Group information
Gujarat Urja Vikas Nigam Limited ('GUVNL' or 'the Company') is a wholly owned undertaking of Government of Gujarat, incorporated on 22.12.2004 as a Public Limited Company ; domiciled and incorporated in India having its registered office at "Sardar Patel Vidyut Bhavan", Race Course, Vadodara, Gujarat -390007. The Consolidated Financial Statements relate to the Company and its Subsidiaries as follows:
1. Gujarat State Electricity Corporation Limited engaged in generation of power;2. Gujarat Energy Transmission Corporation Limited engaged in transmission of power;3. Uttar Gujarat Vij Company Limited engaged in distribution of power;4. Dakshin Gujarat Vij Company Limited engaged in distribution of power;5. Paschim Gujarat Vij Company Limited engaged in distribution of power; and6. Madhya Gujarat Vij Company Limited engaged in distribution of power.
The Consolidated Financial Statements also include the Company's Associate viz. Gujarat Industries Power Company Limited and Joint Venture (JV) viz. Mahaguj Collieries Limited (JV of GSECL).
Government of Gujarat restructured Gujarat Electricity Board ("GEB") effective 1st April 2005, as per various administrative and statutory actions to implement the Financial Restructuring Plan of GEB and split the business and activity thereof of Generation, Transmission and Distribution of electricity by demerger of the respective units and vested the same alongwith all its assets and liabilities (relating to the respective units) in various Companies, viz. the Holding Company and subsidiaries on functional basis and the balance (residual) assets were allocated to the Company.
Basis of preparation
1 Statement of Compliance
In accordance with the Notification dated 16th February, 2015 issued by the Ministry of Corporate Affairs, the Group has adopted and prepared the Consolidated Financial Statements as per Indian Accounting Standards (referred to as "Ind AS") notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 (as amended) w.e.f. 1st April, 2016 except in so far as the said provisions are inconsistent with the provision of the Electricity Act, 2003. These are the Group's first Ind AS Financial Statements. The date of transition to Ind AS is 1st April, 2015. The mandatory exceptions and optional exemption availed by the Group on first time adoption have been detailed in Note No. 1(C)(21).
Previous period figures in the Financial Statements have been restated in compliance to Ind AS.
Upto the year ended 31st March, 2016, the Group prepared its Financial Statements under historical cost convention on accrual basis as a going concern, unless otherwise stated and the same complied with the Generally Accepted Accounting Principles (Indian GAAP) arelevant Accounting Standards issued by the Institute of Chartered Accountants of
prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
In accordance with Ind AS 101 "First Time adoption of Indian Accounting Standards", the Group has presented a reconciliation of Shareholders' Equity under Previous GAAP to Shareholders' Equity under Ind AS as at 31st March, 2016 and 1st April, 2015 of the Net Profit as per Previous GAAP and Total Comprehensive Income and Cash Flow under Ind AS for the year ended 31st March, 2016. Refer Note 47 for an explanation of how the transition from previous GAAP to Ind AS has affected the Group's financial position, financial performance and cash flows.
2 Application of new Indian Accounting Standard
All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the issuance of the each individual company's Standalone financial statements are authorized have been considered in preparing these consolidated financial statements.
Standards issued but not yet effectiveIn March 2017, Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to the Ind AS 7 'Statement of Cash flows' and Ind AS 102, 'Share - Based Payment', which are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS -7, 'Statement of Cash flows' and IFRS - 2, 'Share - Based Payment' respectively. These amendments are applicable w.e.f. 1st April, 2017
Amendment to Ind AS 7:The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of consolidated financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Group is evaluating the requirements of the amendment and the effect on the consolidated financial statements.
Amendment to Ind AS 102:The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.
As the Group has not issued any stock options plans presently, hence this amendment has no effect on the consolidated financial statements of the Group.
3 Basis of measurement
The consolidated financial statements have been prepared on the historical cost convention and as per accrual method of accounting except for certain financial instruments that are measured at fair values at the end of each reporting period and defined benefit plans which have been measured at actuarial valuation as required by the relevant Ind AS as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
The consolidated financial statements are presented in Indian Rupees and all values are rounded off to the nearest two decimal lacs except otherwise stated.
All expenses and income are recognized and accounted for on accrual basis. Claims of suppliers/contractors for price variation are accounted for on its acceptance.
4 Fair Value measurement
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. The fair value measurement is based on the presumption 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
All assets and liabilities for which fair value is measured or disclosed in the consolidate financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value m easurem ent is unobservable.
C Principles of Consolidation
1 The consolidated financial statements incorporate the financial statements of the Companyand its subsidiaries (collectively referred as "the Group"). The Group has investments in joint ventures and associates which are accounted using equity method in these consolidated financial statements. Refer Note No.4 for the accounting policy of investment in joint ventures and associate in the consolidated financial statements.
Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control and continue to be consolidated until the date that such control ceases.
The consolidated financial statements are prepared using uniform accounting policies consistently for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company's Standalone Financial Statements except otherwise stated. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the Parent company, i.e., year ended on 31st March
The Consolidated Financial Statements have been prepared by combining the Statements of the company and its subsidiaries on a line-by-line basis by adding
the book values of like items of assets, liabilities, equity, income, expenses and cash flow after eliminating in full intra-group assets, liabilities, equity, income, expenses and cash flow relating to intra-group transactions and unrealized profits. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in the consolidated statement of profit and loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to the consolidated statement of profit and loss or transferred to another category of equity as specified/permitted by applicable Ind AS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under Ind AS 109, or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
2 Non Controlling interests
Non-controlling interests represent the proportion of income, other comprehensive income and net assets in subsidiaries that is not attributable to the Company's shareholders.
Non-controlling interests are initially measured at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of the interest at initial recognition plus the non-controlling interests' share of subsequent changes in equity
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, consolidated statement of changes in equity and balance sheet respectievly.
3 Goodwill on Consolidation
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to such entity.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties, that have joint control of the arrangement, have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in the consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with Ind AS - 105 "Non-current Assets Held for Sale and Discontinued Operations". Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated balance sheet at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture, the Group discontinues recognising its share of further losses. Additional losses are recognized to the extent that the Group has incurred legal or constructive obligation or made payment on behalf of the associate or joint venture.
An investment in an Associate or a Joint Venture is accounted for using the equity method from the date on which the investee becomes an Associate or a Joint Venture. On acquisition of the investment in an Associate or a Joint Venture, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised directly in equity as capital reserve in the period in which the investment is acquired.
After application of the equity method of accounting, the Group determines whether there is any objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment in an associate or a joint venture and that event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. If there exists such an objective evidence of impairment, then Group recognise impairment loss with respect to the Group's investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with Ind AS 36 'Impairment of Assets' as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of the investment subsequently increases. ^ r c f T ^
'J /irtered
Disclosures
Significant Accounting policies and Notes to these Consolidated Financial Statements are intended to serve as a means of informative disclosure and a guide for better understanding of the consolidated position of the Group. Recognizing this purpose, only such policies and notes from the individual financial statements have been disclosed which fairly represent the needed disclosures. Lack of homogeneity and other similar considerations made it desirable to exclude some of them, which in the opinion of the management, could be better viewed when referred from the respective Standalone Financial Statements.
Significant accounting policies
Property, Plant & EquipmentProperty, Plant & Equipment (PPE) comprises of Tangible Assets and Capital Work- in- Progress. PPE are stated at cost after reducing accumulated depreciation. The cost of PPE comprises of its purchase price or its construction cost or any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management and decommissioning costs. Directly attributable costs are capitalized until the asset is ready for use and includes borrowing cost capitalised upto the commissioning of the asset.
Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital Work in Progress".
Works under erection / installation /execution (including such work pertaining to a new project) are shown as Capital Work in Progress.
In case of fixed assets for new projects, extension or renovation and modernization, the related expenses and interest cost upto Commercial Operation Date (COD) as per Power Purchase Agreement, attributable to such projects or expansions or renovation and modernization are capitalized. Expenses incurred during project implementation and on trial run are treated as incidental expenditure during construction and are accordingly capitalized.
Property Plant & Equipments also includes service equipments, at the time of initial recognition the Company classifies these items as inventory. Subsequently these items are classified either in Property, Plant and Equipment through Capital Work in Progress or capitalised as service equipment.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to w orking cond ition fo r its intended use, and estim ated costs o f d ism antling and rem oving the item and restoring the site on which it is located. PPE are stated at cost, net of tax/duty credit availed, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Directly attributable costs are capitalised until the asset is ready for use in accordance with the Company's accounting policy of capitalisation. (Refer note 18 - Critical AccountingJudgements and key source of estimation uncertainty.)
Buildings held for use in the supply of goods or services or for administrative purposes are stated in the Balance Sheet at cost less accumulated depreciation and impairment losses, if any.
As the frequency and the
the same being regularmovement of the replacement of failed transformers is high aongoing process in distribution network, the cost of re
transformer is not capitalized and simultaneously the cost of failed transformer is not withdrawn from the asset account as per the policy followed since the time of erstwhile GEB. The same is included under the head Inventories in Current Assets.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Subsequent costs relating to day to day servicing of the item are not recognised in the carrying amount of an item of Property, Plant and Equipment; rather these costs are recognised in Statement of Profit & Loss as incurred.
An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the PPE. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sale proceeds and the carrying amount of the PPE and is recognised in the Statement of Profit and Loss.
Depreciation
Depreciation of these PPE commences when the assets are ready for their intended use.
The Company, being engaged in electricity business, is covered under the Electricity Act, 2003 and provisions of the Electricity Act supersede the provisions of the Companies Act, 2013. Accordingly, the Company charges depreciation on straight line method at the rates prescribed in GERC (MYT) Regulations or the Central Electricity Regulatory Commission (CERC), as applicable.
The depreciation on assets transferred under the transferred scheme of GOG has been charged as per the rates specified in the GERC MYT regulations from the date of transferred scheme as clarified by GERC petition no. 1651/2016 dated 26.05.2017.
The depreciation rates of Property, Plant and Equipment are as follows:
Asset Description PercentageBuildings 3.34%Plant & Machinery 5.28% to 9.50%Hydraulic Works 5.28%Other Civil Works 3.34%Lines & Cable Net Work 5.28%Vehicles 9.50%Furniture-Fix & Elect-Light & Fan Installations 6.33%Computers 15%Leasehold Land 3.34%Office Equipments 6.33%Other Assets Not covered above 5.28%
Depreciation on additions/deletions to PPE during the year is provided for on pro-rata basis with reference to the date of additions/deletions except low value items not exceeding Rs.5,000/- which are fully depreciated at the time of addition. Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. The depreciation methods, residual values, etc. are reviewed on annual basis and if necessary, changes in estimates are accounted for prospectively.
Lease Hold land including development cost is amortized as per the rate notified b
Capital spares mostly capable of being used in the power stations with near identical or similar technology using similar plants and machineries and are expected to be used during more than one accounting period. These spares are, therefore, depreciated fully over the residual useful life of the plant.
Intangible Assets
Intangible Assets with finite useful life are recognized only if it is probable that future economic benefits that are attributable to the assets will flow to the enterprise and the cost of assets can be measured reliably. The Intangible Assets are recorded at cost and are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets under development includes the cost of assets.
An Intangible Asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between net disposal proceed and carrying amount of the asset, are recognized in the Statement of Profit and Loss when the asset is derecognized.
The Group provides amortization on Straight Line Method after considering an estimated useful life which ranges from 3 to 6 years.
Investment Property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Investment property is de-recognised upon disposal or when Investment property is permanently withdrawn from its current use and no future economic benefits are expected from its disposal. Any gain or loss arising from de-recognition of the Property is measured as the difference between the net disposal proceeds and the carrying amount and is recognised in the Statement of Profit and Loss when the asset is de-recognised.
Investment properties, other than free hold land, are depreciated using straight line method over their estimated useful lives.
Impairment of Tangible and Intangible Assets
The Company reviews at each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the Cash Generating Unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the reporting period, there is an indication th a t there is a change in the previously assessed impairment loss, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
Non-Current Assets held for Sale
The Company classifies Non-Current Assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use of the assets and actions required to complete such sale indicate that it is unlikely that significant chan the plan to sell will be made or that the decision to sell will be withdrawn. Also, sue
are classified as held for sale only if the management expects to complete the sale within one year from the date of classification.
Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Property, Plant and Equipment and intangible assets are not depreciated or amortized once classified as held for sale.
6 Government Grant and Consumer Contributions
Government Grants (including Subsidies) are not recognized until there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the Grant.
Grants that compensate the Company for the cost of an asset and contributions by consumers towards items of property, plant and equipment, which require an obligation to provide electricity connectivity to the consumers are initially set up as deferred income and recognized in profit or loss on a systematic basis over the period and in proportions of depreciation expense of the assets. Grants that compensate the Company for expenses incurred are recognized over the period in which the related costs are incurred and shown separately.
7 Revenue Recognition
Revenue is recognized when no significant uncertainty as to the measurability or collectability exists. Revenue is measured at the fair value of the consideration received or receivable.
Revenue from Sale of Power and TransmissionRevenue from Sale of Power and Transmission is recognized on accrual basis of energy supplied in accordance with the tariff orders awarded by the Gujarat Electricity Regulatory Commission (GERC) as applicable to the consumers.
Surplus power, if any is sold through bilateral transactions or by putting bids in Power Exchanges on day to day basis and the same is accounted on acceptance of bids. Revenue recognised in excess of billing has been reflected under "other financial assets" as unbilled revenue.
Other Revenue from Power related ActivitiesRebate for Prompt Payment towards purchase of power (net), Interest on Ul Pool Account, Cash Discount and CDM Benefit from renewable energy are recognised on cash basis.
Meter charges, recoveries from theft of power/malpractices, wheeling charges recoveries are recognized on accrual basis.
Dividend IncomeDividend Income is accounted in the year in which the right to receive the dividend isestablished.
Interest IncomeInterest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Penalty and Liquidated DamagesPenalty for delay in supply of materials is recovered as per the terms of purchase order at the time of accounting the purchases whereas refund of penalty is accounted when the order is fully executed by the supplier and the refund is approved by the competent authority.
Liquidated Damages and Penalties in relation to purchase of power and completion of projects are accounted on actual recovery.
Other Income
Income from sale of scrap, sale of fly ash, interest income, income on O & M contract, Carbon Emission Reduction (CERs) and other incomes are recognized on accrual basis except when ultimate realization of such income is uncertain
Claims lodged with the Insurance Company in respect of risks covered are accounted for as and when the claim is received.
Income received in respect of delayed payment charges is accounted for in the subsequent bill, upon realization of the delayed payment made by the consumer.
Income on O&M Contract and Carbon Emission Reduction (CERs) are accounted for on accrual basis.
Income from sale of scrap are accounted for on the basis of actual realization.
Other Incomes are recognized on accrual basis except when ultimate realization of such income is uncertain.
Miscellaneous charges from consumers are recognized on cash basis except when ultimate realization of such income is certain.
Amount in respect of unclaimed Security Deposit, Earnest Money Deposit and Misc. Deposit of suppliers and contractors which is pending for more than three years and which, as per policy of management, is not payable, is considered as income.
8 Inventories
Inventories are valued at cost or net realizable value whichever is lower. The basis of determining the value of each class of inventory is as follows:
The inventories of the Company have been valued on following basis:
(a) Consumables, Stores and Spares - At cost (Weighted Average Method)
(b) Scrap - At cost or Net Realizable Value determined on the basis of realization made in the past period whichever is lower.
(c) Coal and Oil - Lower of grade based purchase cost plus freight and other fuel related cost on monthly weighted average basis or Net Realisable Value (NRV).
(d) Scrap/Obsolete Assets - Estimated cost or Net Realisable Value, whichever is less
Inventory consists of stock of items which are used interchangeably for capital expenditure or for regular repairs and maintenance purposes. Since ultimate use of such stock item indeterminate at the initial recognition, the Company classifies such items as in
These items are classified subsequently either in Property, Plant and Equipment through Capital Work in Progress / as service equipment or expense in the Statement of Profit and Loss as and when it is so used.
The cost of inventories is on the weighted average method formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location a condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
9 Functional and Presentation Currency
The Financial Statements are prepared in Indian Rupee (INR) which is functional as well as presentation Currency of the Company.
Transactions in currencies other than the Company's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated using closing exchange rate prevailing on the last day of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognized in the Statement of profit and loss in the period in which they arise.
10 Employee Benefits
Employee Benefits include salaries, wages, provident fund, gratuity, leave encashment, compensated absences and retirement benefits.
Short Term Employee BenefitsShort-Term Employee Benefits expected to be paid in exchange for the services rendered by the employees are recognized as an expense during the period employee renders services. These benefits include remuneration, bonus, incentives, etc.
Long Term Employee Benefits Defined Contribution PlansRetirement benefits in the nature of employer's contribution towards Contributory Provident Fund, Employee's Pension Scheme and Group Insurance Scheme (EDLI), etc. are charged as an expense on accrual basis and paid / deposited with the appropriate authorities during the year.
Defined Benefit PlansThe Group has maintained a Group Gratuity Cum Life Assurance Policy with M/s. Life Insurance Corporation of India (LIC) managed by a separate Trust, towards which it annually contributes a sum based on the actuarial valuation made by M/s. LIC. The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The year's liability is estimated on the basis of actuarial valuation made by LIC using the Projected Unit Credit Method and is charged to the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in Other Comprehensive Income and in the Balance Sheet.
P
Other Long Term Employee BenefitsOther Long Term Employee Benefits comprise of leave encashment. The leave benefits are recognized based on the present value of defined obligation and the year's liability is estimated on the basis of actuarial valuations made by LIC using the Projected Unit Credit Method and is charged to the Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service ('past service cost' or 'past service gain') or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any. excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
11 Leases
Leases (including lease arrangements for land) are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets.
Operating Lease (The Company as Lessee): Lease payments under an operating lease are recognized as expense in the statement of profit and loss, on a straight-line or other systematic basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Lessor's expected inflationary cost increases, such increases are recognised in the year in which such liability accrues.
12 Taxes on Income
Income Tax Expense represents the sum of Current Tax and Deferred Tax.
Current and Deferred Tax are recognized in Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income or directly in equity.
Current TaxTax currently payable is based on taxable profit for the year. Taxable profit differs from Profit Before Tax' as reported in the Statement of Profit and Loss because of items of
income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted at the Balance Sheet date.
Deferred TaxDeferred Tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred Tax Liabilities (DTL) are generally recognized for all taxable temporary differences. Deferred Tax Assets (DTA) are generally recog
deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of Deferred Tax Assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.
Deferred Tax Liabilities and Deferred Tax Assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted as at the Balance Sheet date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
Borrowing Costs
Borrowing Costs specifically identified to the acquisition or construction of qualifying assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss. The borrowing cost incurred on common funds borrowed generally and used for the purpose of obtaining a qualifying asset, is apportioned on rational basis to capital work in progress for the year. All other borrowing costs are recognized as expense in the period in which they are incurred.
Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
Contingent Liabilities are disclosed in the financial statements by way of Notes to Accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
Provisioning for Bad & Doubtful debts is made by class/group wise debtors based on periodic review of Debtors as well as considering decisions of Lok Adalats held during the year.
Contingent Assets are not recognized but disclosed in the financial statements when aninflow of economic benefits is probable.
15 Material Prior Period Errors
Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest period presented, the opening balances of assets, liabilities and equity for the earliest period presented, are restated.
16 Earnings Per Share
Basic Earnings Per Share is computed by dividing the profit / (loss) by the weighted average number of equity shares outstanding during the year.
Diluted Earnings Per Share is computed by adjusting the figures used in the determination of basic EPS to take into account:
After tax effect of interest and other financing costs associated with dilutive potential equity shares.
The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares into equity shares.
17 Segment Reporting
In accordance with Ind AS 108, the operating segments used to present segment information are identified on the basis of internal reports used by the Group's Management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Group's 'Chief Operating Decision Maker' or 'CODM' within the meaning of Ind AS 108.
Events Occurring after balance sheet dateMaterial adjusting events (that provides evidence of condition that existed at the balance sheet date) occurring after the balance sheet date are recognized in the financial statements. Non adjusting events (that are indicative of conditions that arose subsequent to the balance sheet date) occurring after the balance sheet date that represents material change and commitment affecting the financial position are disclosed in the reports of the Board of Directors.
18 Financial Instruments
Financial Assets and Financial Liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially recognised and measured at fair value, except when the effect is immaterial. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liab ilities, as appropria te , on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the Statement of Profit and Loss.
Financial Assets
Cash and Cash EquivalentsThe Group considers all highly liquid financial instruments which are readily convertible jfvto known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
Financial Assets at amortized costFinancial assets are subsequently measured at amortized cost using the Effective Interest Method (EIR), except when the effect of applying it is immaterial, if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at fair value through Other Comprehensive Income (FVTOCI)Financial Assets (including investments) are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group has made an irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value of equity investments not held for trading.
Financial Assets at fair value through Profit or LossFinancial Assets (including investments) are subsequently measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition.
Impairment of Financial AssetsThe Group assesses at each balance sheet date whether a financial asset or a group of financial asset is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Group recognizes lifetime expected losses for all contract assets and all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.
Derecognition of Financial AssetsThe Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in Statement of Profit and Loss.
Financial Liabilities and Equity Instruments Classification as Debt or EquityDebt and Equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Cash and cash equivalents consist of balances with banks which are unrestricted forwithdrawal and usage.
Financial Liabilities at amortized costFinancial Liabilities are subsequently measured at amortized cost using the effective interest m ethod (EIR), except w hen the e ffect o f applying it is im m ateria l. For trade and o ther payables m aturing w ith in one year from the balance sheet date, the carrying amr
approximate fair value due to the short maturity of these instruments.
Equity InstrumentsAn equity instrument is a contract that evidences residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received.
Derecognition of Financial LiabilitiesThe Group derecognizes Financial Liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the statement of Profit and Loss.
19 Power Purchase
Power purchased from IPPs is accounted (net of infirm power, wherever applicable) on the basis of Power Purchase Agreements entered into with the respective parties.
Power purchased from Central Sector is accounted on the basis of tariff determined by Central Electricity Regulatory Commission (CERC) through various orders.
Power purchased from Renewable Sources and Traders (Bilateral) is accounted on the basis of contracts entered into with the respective parties.
Need based power is purchased by putting bids in Power Exchanges on day to day basis and the same is accounted on acceptance of bids.
The energy accounts in few cases are delayed for settlement due to complexity in transactions involved in power sector. The Company receives receivable / payable claims for past period due to delayed settlement. The Company accounts such claims in the year of receipt as per prevailing practice followed.
20 Critical Accounting Judgments and Key Sources of Estimation Uncertainty
In the course of applying the policies outlined in all notes under Note 1 above, the management of the Company are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future periods.
Critical Judgments in applying Accounting PoliciesFollowing are the critical judgements, apart from those involving estimations, that the Management have made in the process of applying the Company's Accounting Policies and that have significant effect on the amounts recognized in the Financial Statements.
(a) Useful life of Property, Plant and Equipment1Estimated useful life of Property, Plant and Equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of industry and known technological advances) and the leyeT. of S ' maintenance expenditures required to obtain the expected future cash flows fi? asset.
Financial Assets at amortized costFinancial assets are subsequently measured at amortized cost using the Effective Interest Method (EIR), except when the effect of applying it is immaterial, if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at fair value through Other Comprehensive Income (FVTOCI)Financial Assets (including investments) are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group has made an irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value of equity investments not held for trading.
Financial Assets at fair value through Profit or LossFinancial Assets (including investments) are subsequently measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition.
Impairment of Financial AssetsThe Group assesses at each balance sheet date whether a financial asset or a group of financial asset is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Group recognizes lifetime expected losses for all contract assets and all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.
Derecognition of Financial AssetsThe Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in Statement of Profit and Loss.
Financial Liabilities and Equity Instruments Classification as Debt or EquityDebt and Equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Financial Liabilities at amortized costFinancial Liabilities are subsequently measured at amortized cost using the effective interest method (EIR), except when the effect of applying it is immaterial. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the Short maturity of these instruments.
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Cash and cash equivalents consist of balances with banks which are unrestricted forwithdrawal and usage.
Equity InstrumentsAn equity instrument is a contract that evidences residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received.
Derecognition of Financial LiabilitiesThe Group derecognizes Financial Liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the statement of Profit and Loss.
Power Purchase
Power purchased from IPPs is accounted (net of infirm power, wherever applicable) on the basis of Power Purchase Agreements entered into with the respective parties.
Power purchased from Central Sector is accounted on the basis of tariff determined by Central Electricity Regulatory Commission (CERC) through various orders.
Power purchased from Renewable Sources and Traders (Bilateral) is accounted on the basis of contracts entered into with the respective parties.
Need based power is purchased by putting bids in Power Exchanges on day to day basis and the same is accounted on acceptance of bids.
The energy accounts in few cases are delayed for settlement due to complexity in transactions involved in power sector. The Company receives receivable / payable claims for past period due to delayed settlement. The Company accounts such claims in the year of receipt as per prevailing practice followed.
Critical Accounting Judgments and Key Sources of Estimation Uncertainty
In the course of applying the policies outlined in all notes under Note 1 above, the management of the Company are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future periods.
Critical Judgments in applying Accounting PoliciesFollowing are the critical judgements, apart from those involving estimations, that the Management have made in the process of applying the Company's Accounting Policies and that have significant effect on the amounts recognized in the Financial Statements.
(a) Useful life of Property, Plant and Equipment1Estimated useful life of Property, Plant and Equipment is based on a number of factors including the effects of obsolescence, demand, com petition and other economic factors (such as the stability of industry and known technological advances) and the le maintenance expenditures required to obtain the expected future cash flows f asset.
Useful life of the assets of the generation/transmission/distribution of electricity business is determined by the CERC/GERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.
The Company reviews at the end of each reporting date the useful life of property, plant and equipment, other than the assets of generation/transmission/distribution of electricity business which are governed by CERC/GERC Regulations, and are adjusted prospectively, if appropriate.
(b) Evaluation of directly attributable costs2The Company capitalizes the directly attributable costs to bring the Property, Plant and Equipment into the location and condition necessary for it to be capable of operating in the manner intended by the management. In assessing the directly attributable costs other than borrowing costs, the management has exercised judgement to evaluate a number of factors including the resources applied for direct construction related activity, enabling activities, ordinary operations of the Company, level of construction related activity compared to company's operating activity, consideration of the costs charged to external parties for similar works undertaken as well as experience of group companies engaged in distribution business. Based on this assessment and particularly considering experience across the group companies engaged in distribution business, the management estimates a capitalisation rate of directly attributable costs to be applied on the expenditures on the relevant assets. The management reviews this capitalization rate on a periodic basis and any change in the rate is applied prospectively.
(c) Evaluation of indicators for impairment of Property, Plant and Equipment2The evaluation of applicability of indicators for impairment of assets require assessment of external factors (significant decline in asset's value, economic or legal environment, market interest rates, etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset, etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.
(d) Regulatory Deferral Accounts1Ind AS - 114 "Regulatory Deferral Accounts" permits the Company to apply the requirements of this standard in its first Ind AS Financial Statements if and only if it conducts rate-regulated activities and recognised amounts that qualify as Regulatory Deferral Account Balances in its financial statements in accordance with its previous GAAP. As the Company had consistently elected not to recognise the Regulatory Deferral Balances in its previous GAAP, the requirement of IND AS 114 does not apply to the Company.
(e) Security deposits2Considering the historical experience and practical expediency, the Company has exercised its judgement on timing of settlement of security deposit collected from the customers and has accordingly classified the undiscounted value of security deposit as non-current liability.
(f) Impairment of Trade receivables2The Company estimates the credit allowance as per practical expedient based on historical credit loss experience as enumerated in Note-11.
(g) Impairment of Investments2At the end of each reporting period, the Company reviews the carrying amounts of its investments when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(h) Deferred Tax Assets2Deferred Tax Assets (DTA) are recognised for unused tax losses / credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
(i) Government grants & Consumer Contributions 12The grants i.e. revenue subsidies are not recognized until there is reasonable assurance that the Company will receive the grants and will comply with the conditions attached to them. Management judgement is required to determine when reasonable assurance is attained, based on historical experience of receipts including the quantum of aggregation, approved budget estimates of Government of Gujarat, likely timing and consideration of claim acceptance/rejection Based on this assessment, the Company judges that in the case of revenue subsidies, there is reasonable assurance of complying with the conditions and receiving the subsidies as approved in the budget estimates of every year and the remaining subsidies which are receivable/claimable would be recognized when reasonable assurance is attained.
The Company is required to recognise grants/consumer contribution that compensate the cost of assets to profit or loss on a systematic basis considering the amount of periodic consumption of the assets. This is based on the assessment of the present status of, and expected future benefits from the assets. The Company has in the current year made a change in the method of recognizing grants and consumer contributions that compensate the cost of an asset in the Statement of Profit and Loss from the reducing balance method followed hitherto to straight line method and consequentially the rates at which grant/consumer contribution is recognised in income. The change is made as the straight-line method and the rates of grant recognition will more accurately reflect the pattern of usage and the expected benefits of such grants/consumer contributions and provide greater consistency with the depreciation methods/charge on the assets used by the Company. The Company has determined that the change in method and consequential rates of grant recognition in proportion of depreciation expense is a change in accounting estimate and is to be applied prospectively.
(j) Defined Benefit Obligation (DBO)2Management's estimate of Defined Benefit Obligation (DBO) is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation o f fu tu re salary increases. Variation in these assumptions may significantly impact the Defined Benefit Obligation amount and the annual defined benefit expenses.
(k) Contingent Liabilities2In the normal course of business, Contingent Liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the Notes but are not recognised. Potential liabilities that are remote are neither recognized nor disclosed as contingent'liability. The management decides whether the matters needs to be classified as 'rer 'possible' or 'probable' based on expert advice, past judgments, experiences etc.
1 Critical Accounting Judgments2 Key Sources of Estimation uncertainty
21 First-time adoption - Mandatory exceptions and Optional exemptions
Overall principle:The Company has prepared the Opening Balance Sheet as per Ind AS as of 1st April, 2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS and applying Ind AS in the measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below.
Property, Plant and Equipment & Intangible AssetsInd AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment and Intangible Assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure all of its Property, Plant and Equipment and Intangible Assets at their previous GAAP carrying value. There is no decommissioning liability.
BorrowingsInd AS 101 permits that if it is impracticable for an entity to apply retrospectively the Effective Interest Method in Ind AS 109 'Financial Instruments', the fair value of financial liability at the date of transition to Ind AS shall be the new amortised cost of that financial liability at the date of transition to Ind AS.
The Borrowings outstanding as at the transition date consists of loans drawn more than ten years back, some drawls with multiple tranches in different financial years with varying interest rates. In some cases, the rate of interest on the loans are fixed in nature and drawl of the loans have been made in multiple instalments with each drawl to be treated as a separate transaction for the purpose of computing the amortised cost. In case of some loans, the drawl period stretches beyond 3-4 years. Implementing the requirement of amortised cost retrospectively is impracticable and also the amount is expected to be immaterial and hence the Company has not amortised the transaction costs as an adjustment of interest expense of the term of the related loan w.e.f. the transition date to Ind AS i.e. 1 April, 2015.
Designation of previously recognised Financial Instruments Designation of Investment in Equity InstrumentsInd AS 101 allows an entity to designate investments in equity instruments at FVTOCI on the basis of the facts and circumstances at the date of transition to Ind AS.
Measurement of Financial Assets and Financial LiabilitiesThe Company has also elected the option under Ind AS 101 by not applying the requirement of Ind AS 109 in case of employee loans and other deposits, both given and taken which requires that these shall be recognized initially at fair value and subsequently at amortized cost, as the Company considers it impracticable to apply it retrospectively and also the amount is expected to be immaterial. Hence as per the exemption, the fair value of the financial asset at the date of transition to Ind AS shall be the new amortized cost financial asset at the date of transition to Ind AS.
EstimatesAn entity's estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.
Derecognition of Financial Assets and Financial LiabilitiesThe Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1st April, 2015 (the transition date).
Impairment of Financial AssetsThe Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk as at the date that financial instruments were initially recognised in order to compare it with the credit risk as at the transition date.
However, as permitted by Ind AS 101, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition.
Business Combinations
As permitted by IndAS 101; IndAS 103 Business Combinations has not been applied to acquisitions of businesses under IndAS that occurred before 1 April 2015. Using this exemption the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under IndAS, is considered as their deemed cost at the date of the acquisition.
9
GUJARAT URJA VIKAS NIGAM LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE NO. 2PROPERTY, PLANT AND EQUIPMENT
(Rs. in Lakhs)
Particulars /Assets
TANGIBLE ASSETS INTANGIBLE ASSETS
Free Hold Land
Lease Hold Land
Land & Land Rights
BuildingsHydraulic
WorkOther Civil
WorkPlant &
MachineryLines & Cable
Net WorksFurniture &
FixturesComputers
OfficeEquipments
Vehicles
Cap. Exp. Resulting in assets not belonging
to the Company
Cap. Spares at Gen. Stations
Total Softwares Total
GROSS BLOCKAt 1st April 2015 (Deemed Cost) 6,242.95 4,726.14 42,589.84 1,25,103.53 60,333.02 1,31,933.02 17,01,714.74 15,37,634.18 6,848.33 929.48 18,833.08 1,274.46 233.99 71,264.66 37,09,661.41 4,630.88 4,630.88Additions 6,113.08 885.84 14,795.05 31,955.40 18,159.63 28,703.87 5,08,624.33 3,20,697.34 8,975.17 17.22 2,569.94 573.90 18,713.24 9,60,784.00 - -
Deduction/Adjustments (Refer note 2.5) 190.67 _ 62.16 225.71 0.96 313.51 2,420.79 2,692.57 11.43 1.81 20.40 96.77 . 19,018.44 25,055.22 _ -
At 31st March 2016 12,165.36 5,611.98 57,322.73 1,56,833.21 78,491.68 1,60,323.38 22,07,918.28 18,55,638.95 15,812.07 944.89 21,382.61 1,751.59 233.99 70,959.46 46,45,390.19 4,630.88 4,630.88Additions -15.77 62.59 11,480.03 11,553.33 344.76 16,917.24 2,90,724.81 2,66,504.36 1,109.08 25.01 4,461.45 439.53 - 9,735.33 6,13,341.75 146.37 146.37
Deduction/Adjustments (Refer note 2.5) 4.73 . 3.48 176.95 158.43 208.71 27,593.71 7,002.32 7.90 _ 801.67 79.16 . 80,694.79 1,16,731.85 -
At 31stMarch 2017 12,144.86 5,674.57 68,799.28 1,68,209.59 78,678.02 1,77,031.91 24,71,049.38 21,15,140.99 16,913.26 969.90 25,042.39 2,111.96 233.99 - 51,42,000.09 4,777.25 4,777.25
ACCUMULATED DEPRECIATIONAt 1st April 2015 - - - - - - - - - - - - ■ -Chargefor the Year - 180.29 - 5,900.94 5,066.08 5,726.59 1,53,162.09 1,22,248.98 916.27 62.00 3,375.62 180.23 17.32 12,636.67 3,09,473.08 962.01 962.01Deductio n/Ad j ustments - - - 33.19 1.91 -1.91 14.80 328.50 0.70 - -8.69 1.07 - - 369.58 - -At 31st March 2016 - 180.29 5,867.75 5,064.17 5,728.50 1,53,147.29 1,21,920.48 915.57 62.00 3,384.30 179.15 17.32 12,636.67 3,09,103.50 962.01 962.01Chargefor the Year - 226.25 - 6,697.64 5,733.88 6,552.13 1,79,480.50 1,38,442.12 1,214.84 46.59 3,555.59 241.32 17.31 15,577.67 3,57,785.84 967.76 967.76Deduction/Adjustments - - - 14.72 32.26 0.95 19,670.73 1,412.77 6.47 - • 669.61 45.27 - 28,214.34 50,067.13 -Impairment for the year - - - - - - 33,075.10 - - - - - - - 33,075.10 - -At 31st M arch 2017 - 406.54 - 12,550.67 10,765.78 12,279.68 3,46,032.16 2,58,949.82 2,123.94 108.60 6,270.29 375.20 34.63 6,49,897.31 1,929.77 1,929.77
Net BlockAt IstApril, 2015 6,242.95 4,726.14 42,589.84 1,25,103.53 60,333.02 1,31,933.02 17,01,714.74 15,37,634.18 6,848.33 929.48 18,833.08 1,274.46 233.99 71,264.66 37,09,661.41 4,630.88 4,630.88At 31st March 2016 12,165.36 5,431.69 57,322.73 1,50,965.46 73,427.51 1,54,594.88 20,54,770.99 17,33,718.48 14,896.50 882.88 17,998.31 1,572.44 216.66 58,322.78 43,36,286.69 3,668.87 3,668.87At 31st M arch 2017 12,144.86 5,268.03 68,799.28 1,55,658.91 67,912.23 1,64,752.23 21,25,017.22 18,56,191.17 14,789.32 861.30 18,772.10 1,736.76 199.36 44,92,102.78 2,847.48 2,847.48
2.1 The company upto FY 2013-14 has been charging depreciation on Fixed assets at the rates specified in Schedule - XIV of the Companies Act, 1956. Since Schedule - II permits adoption of different useful life, GUVNL being the holding company and with a view to harmonize the provision for depreciation in its Consolidated Financial Statements, effective from 1st April, 2014 the Company has adopted the useful life/ depreciation rates specified by Gujarat Electricity Regulatory Commission ( Multi Year Tariff) Regulations.
2.2 Upon first-time adoption of Ind AS, the Company has elected to measure all its Property, Plant and Equipment and Intangible Assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to IND AS i.e. 1st April, 2015.2.3 The capital spares are re-classified and re-grouped to Plant & Machinery. Accordingly, during the year capital spares of Rs.80,694.79 lakhs (P.Y. 19018.44 lakhs) are transferred to Plant and Machinery and accordingly depreciation of Rs.28214.34 lakhs is transfer to appropriate head of depreciation.2.4 It includes cost of assets sold, retired from active use and discarded assets.2.5 Refer note 48 for impairment of assets2.7 Certain immovable properties, which have been transferred to subsidiaries are held in the name of GEB erst or Vadodara Mahanagar Seva Sadan (VMSS). The procedure for the registration and /or transfer in the name of the subsidiaries is under process.
2.8 Certain premises of MGVCL have been given on lease for which no information is available w.r.t its gross block, depreciation block and net block. Hence, the disclosures for such leased out properties of MGVCL have not been given separately as requin2.9 Consequent upon unbundling of erstwhile GEB, various land and buildings of Group Companies are shared/used by the Group other than the owner. User changes thereof are not recovered or provided for in absence of any mechanism for its d» ascertained.
k
Revised Schedule III.the same cannot be
ON
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 Capital Work-in-Progress______________________________________________________________________________________________________( Rs. in Lakhs)
ParticularsAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
Capital Work-in-Progress 7,02,823.88 5,09,195.37 6,68,281.65Interest Charges to be Capitalised 693.80 551.78 344.81Provision for completed works 652.69 522.41 1,192.39Provision for unbilled capital works 55,614.77 30,135.05 80,185.35
Total 7,59,785.14 5,40,404.61 7,50,004.19
The Company has evaluated the directly attributable cost capitalisation rate for the current financial year ended 31 March 2017 and applied this to the expenditure on the relevant assets and the total expenditure thus capitalized during the current financial year is Rs. 87,765.75 Lakhs (P.Y. Rs.120,746.94 Lakhs).Capital Work-In-Progress includes major renovation of GETRI Building completed in the next Financial Year.
Intangible assets under Developm ent ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Intangible asset under development - 21.86 21.86Total - 21.86 21.86
Investm ents ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Investm ent in Equity Instrum ents (at Fair Value through Other Com prehensive Incom e)
Quoted, Non-Trade
-Gujarat State Petronet Limited (GSPL)1,68,50,000 (31 March 2016:1,68,50,000,1 April 2015:1,68,50,000) Equity Shares of Rs.10/- each, fully paid-up.
27,136.93 23,188.93 20,937.30
-Gujarat Gas Company Limited (GGCL)53,289 (31 March 2016: 53,289,1 April 2015: 50,000) Equity Shares of Rs.10/- each, fully paid-up.
408.99 292.85 495.45
Un-quoted, Non-Trade- Gujarat Power Corporation Limited (GPCL)19,30,013 (31 March 2016:19,30,013,1 April 2015:19,30,013) Equity Shares of Rs.100/-- Gujarat State Energy Generation Limited (GSEG)
3,963.11 3,963.11 4,060.66
2,90,03,636 (31 March 2016: 2,90,03,636,1 April 2015: 2,90,03,636) Equity Shares of 1,373.04 939.84 -Rs.10/- each, fully paid-up.- Power Exchange of India Limited (PEIL)25,00,000 (31 March 2016: 25,00,000,1 April 2015: 25,00,000) Equity Shares of Rs.10/- each, fully paid-up
- - -
- Kalupur Commercial Co-Operative Bank Limited(300 (31 March 2016: 300,1 April 2015: 700) equity share of Rs. 25 each/-, fully paid up)
0.08 0.08 0.18
- Saraswat Co Operative Bank Limited(2,500 (31 March 2016: 2,500,1 April 2015: 2,500) equity share of Rs. 25 each, fully paid up)
0.25 0.25 0.25
T o ta l(A ) 32,882.40 28,385.05 25,493.84
Investm ent in Associate and Jo int V enture Com panies
Quoted-Gujarat Industries Power Company Limited (GIPCL) (Associate Company)(405,90,279 (31 March 2016: 405,90,279, 1 April 2015: 405,90,279) equity share of Rs. 10 each, fully paid up)
60,008.91 54,568.22 50,750.98
Unquoted-Mahaguj Collieries Limited (MGCL) (Joint Venture ComRany) 2.00 2.00 2.00
Less: Share of Losses in Joint Venture(20,000 (31 March 2016:20,0001 April 2015:20,000) equity, share of Rs. 10 ea^h, fully paid
1__________ __-2.00 -2.00
60,008.91 54,568.22 50,752.98
24
Investm ent in Governm ent securities (Q uoted)((at Fair Value through Other Com prehensive Incom e
12,810.84 12,764.48 6,383.52
(OCI))PARTICULARS No. o f Units Rate Cost (Rs. in
lakhs)8.28% Gol 2027 11,36,000 96.64 1,097.838.24% Gol 2027 15,00,000 96.64 1,446.159.38% AP SDL 2023 15,00,000 102.34 1,535.109.99% RAJ SDL 2028 5,00,000 107.82 539.109.67% Jharkhand SDL 2024 8,80,000 104.31 917.939.16% RAJ SDL 2028 1,08,000 108.08 116.738.57% UP SPECIAL SDL 10,00,000 102.52 1,025.208.75% TN SDL 2022 20,00,000 102.68 2,053.608.58% UP Special SDL 2024 5,00,000 102.18 510.908.96% RAJSTHAN SPECIAL 10,00,000 104.59 1,045.90SDL 20248.32% CHHATISHGARH SDL 15,00,000 100.97 1,514.559.99% RAJ SDL SPL 2,17,000 114.78 249.07Total Cost 12,052.06
Total (C) 12,810.84 12,764.48 6,383.52Total 1,05,702.15 95,717.76 82,630.34
Aggregate Cost of unquoted investm ents 5,175.74 5,175.74 5,175.74Aggregate Cost o f quoted investm ent 24,334.41 24,686.43 18,170.23Aggregate M arket V alue of quoted investm ent 82,197.17 69,229.58 62,284.48
Com panies other than A ssociate and Jo int Venture: Share Capital Share Prem ium TotalGujarat State Petronet Ltd. 1,685.00 - 1,685.00Gujarat Power Corporation Ltd. 1,930.01 - 1,930.01Gujarat State Energy Generation Ltd. 2,900.36 90.04 2,990.40Gujarat Gas Co. Ltd. 5.00 - 5.00Power Exchange Of India Ltd. 250.00 - 250.00
Total Investm ent 6,770.38 90.04 6,860.41
B The latest Audited Financials of Gujarat Power Company Limited available with the Company is for 31 March 2016. For calculation of Fair Value as at 31 March 2017 the Company has considered latest Audited Balance Sheet of GPCL i.e. for 31 March 2016.
C The NAV of GSEG for the Year ended 1st April 2015 and PEIL for the Year ended 31 March 2017, 31 March 2016 and 1 April 2015 is negative and hence the Fair Value of such investment is nil.
D Details of SubsidiariesPrincipal activity Place of
IncorporationProportion of ow nership interest/ voting rights held by
the Com panyNam e of Com pany and principal
place of
business
As at31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Gujarat State Electricity Corporation Ltd. Generation of Power
India 100.00% 100.00% 100.00%
Gujarat Energy Transmission Corporation Ltd. Transmission of Power
India 98.05% 97.99% 97.79%
Dakshin Gujarat Vij Company Ltd. Distribution of Power
India 100.00% 100.00% 100.00%
Madhya Gujarat Vij Company Ltd. Distribution of Power
India 100.00% 100.00% 100.00%
Paschim Gujarat Vij Company Ltd. Distribution of Power
India 100.00% 100.00% 100.00%
Uttar Gujarat Vij Company Ltd. Distribution of Power
India 100.00% 100.00% 100.00%
E Details of Associate
Nam e of Com pany
Principal activity Place of Incorporation and principal
place of business
Proportion of ow nership interest/ voting rights held by the Com pany
As at31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Gujarat Industries Power Company Ltd. Generation of India 26.84% 26.84% 26.84%Power
Equity accounted Associate viz. GIPCL:Net Assets as at date of acquisition 12,970.65 12,970.65 12,970.65Less: Acquisition Cost 10,592.35 10,592.35 10,592.35Capital Reserve 2,378.30 2,378.30 2,378.30Capital Reserve taken to O ther Equity as per Equity 2,378.30 2,378.30 2,378.30m ethod in Ind AS
Carrying am ount of investm ent at the year end 60,008.91 54,568.22 50,750.98Net Assets as at date of acquisition 12,970.65 12,970.65 12,970.65Post acquisition share profits as at the date of 47,038.26 41,597.57 37,780.33financial statem ents
ii. The Group has invested Rs. 10592.35 Lacs in Gujarat Industries Power Co. Ltd. (GIPCL) from 1988-89 to 2005-06. The Group owns 26.84% which makes it
Associate as per Ind AS 28 "Investments in Associates and Joint Ventures in Consolidated Financial Statements" as of 31 March 2017.
F Details of Joint Venture
Nam e of Com pany
Principal activity Place of Incorporation and principal
place of business
Proportion of ow nership interest/ voting rights held by the Com pany
As at31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Mahaguj Collieries Limited Mining and agglomeration of
hard coal
Mumbai, India 40% 40% 40%
ii. Gujarat State Electricity Company Limited (GSECL), the wholly owned subsidiary of GUVNL, is a Company covered under the Companies Act, 2013. GSECL has entered into a Joint Venture (JV) operation with MAHAGENCO viz. Mahaguj Collieries Limited for allocation of captive coal mining block in state Orissa and sharing of coal in ratio of 40:60 from extractable reserves. As per requirements of Section 129(3) of the Companies Act, 2013, GSECL is required to prepare Consolidated Financial Statements (CFS) subject to exemption granted under Rule 6 of the Companies (Accounts) Rules, 2014 vide Notification 742 (E) dated 27.07.2016. As per exemption granted, GSECL may not prepare the CFS provided that its Holding Company i.e. GUVNL prepares the CFS in compliance with the applicable Accounting Standards. GSECL has availed of this exemption and hence GUVNL needs to consolidate the Joint Venture in the CFS. GUVNL has consolidated its wholly owned subsidiary GSECL as per applicable Ind AS 110 and Ind AS 28 as is applicable to GSECL's interest in JV.
Based on audited accounts of Mahaguj Colleries Ltd (MGCL) the assets and liabilities are as under:-(Rs. in lakhs)
As at As at As atParticulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
ASSETSNon Current AssetsProperty, plant & Equipments 1.15 1.12 1.75Other non current assets 5,440.70 5,440.70 5,440.70
Current AssetsFinancial AssetsCash and cash equivalents 1.64 2.17 4.60Other Current assets 0.04 0.34 3.16
EQUITY AND LIABILITIESNon Current LiabilitiesFinancial Liabilities
Borrowings 5,644.23 5,552.31 5,439.87
Other Financial liabilities 0.04 0.15 0.14
Current Liabilities
Financial LiabilitiesTrade payables 0.30 5.57 0.31Other Current liabilities 1.35 1.64 4.90Share in Net assets of Joint venture -80.95 -46.14 2.00Share in Profit for the year of Joint venture -34.82 -48.14 -
The share in the Net worth (Net losses) of the Joint Venture is Rs.(80.95) lakhs as at 31st March, 2017 and Rs. (46.14) as,af 31st March investment in the Joint Venture is Rs.2 Lakhs; however the share in net assets is restricted to the amount Of carrying value c Company does not have any Obligation for the liability of Joint Venture. Accountants I
6 Loans ( Rs. in Lakh s)A s at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Secured Considered GoodLoans & Advances to Staff 17,245.57 16,673.69 16,148.19
Total (A) 17,245.57 16,673.69 16,148.19Unsecured Considered Doubtful
Loan to Joint Venture Company 2,252.45 2,215.06 2,173.70Less: Provision for Loss -2,252.45 -2,215.06 -2,173.70
Unsecured Considered Good - - 0Other Loans And Advances 31.11 49.93 31.53
Total (B) 31.11 49.93 31.53
Total (A+B) 17,276.68 16,723.62 16,179.72
A Loans to staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been taken.
7 Other Financial Assets________________________________________________________________________________________________________________ ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Secured Considered Good
Interest Accrued But Not Due on Staff Loans 4,414.78 4,020.93 4,186.35Other Recoverables 1,082.81 1,059.38 412.47Bank deposits with more than 12 months maturity 34.61 36.46 27.41Interest Accrued & Due on Staff Loans 130.26 119.85 93.15Unsecured Considered GoodDeposits with Others 9,860.52 6,183.07 5,928.29Deposit with Government and Local bodies 15.66 1.00 0.67Deposits with banks for more than 12 months 400.81 373.59 348.88Amount recoverable from employees / ex-employees 159.81 119.70 113.88Income accrued but not due 2,331.95 2,182.96 1,883.14
Total 18,431.21 14,096.94 12,994.25
Other Non-Current Assets ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Capital Advances to Suppliers / Contractors 14,369.46 23,940.88 21,307.47
Other Deposits 143.99 83.26 83.26
Prepayments - Leasehold Land 2,470.58 2,538.52 2,642.43Total 16,984.03 26,562.66 24,033.16
32.
9 Inventories ( Rs. in Lakhs )
ParticularsAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
STORES, SPARES 8< LOOSE TO O LS;Stock of materials at stores Materials at Site (O&M)Materials in Transit Materials pending Inspection Other Materials Accounts FuelMaterial Stock pending Investigation Less: Provision for stock pending investigation
1,72,434.727,088.95
684.172,434.36
43,553.2851,983.61
1,072.00-1,061.40
1,42,650.297,081.81
617.41848.33
39,974.5651,330.43
950.87-944.33
1,54,366.398,729.74
117.834,689.06
42,835.7152,672.06
784.29-776.43
Total 2,78,189.68 2,42,509.37 2,63,418.66
For basis of valuation refer Note No.7
10 Current Investm ents_________________________________________________________________________________________________________________ ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
In Governm ent Securities - Quoted-182 DTB at cost - - 116.33
Total - - 116.33
Aggregate Cost of quoted investm ent - - 112.88Aggregate M arket V alue of quoted investm ent - - 116.33
11 Trade Receivables____________________________________________________________________________________________________________________ ( Rs. in Lakhs )As at As at As at
Particulars 31st March, 2017 31st M arch, 2016 1st April, 2015
Unsecured Considered GoodTrade Receivables 3,66,124.09 3,29,540.30 3,33,490.19Trade receivables for misc. receipts from consumers 31,288.49 22,438.83 15,909.77Less : Prov. for Doubtful Dues -28,322.95 -22,256.91 -16,113.39
Le ss: Unposted Receipts. -156.82 -788.30 -57.57
Less : Doubtful E D -14,173.74 -13,479.55 -12,990.74
(A) 3,54,759.07 3,15,454.36 3,20,238.27
Considered DoubtfulDues from PDC 1,08,547.52 1,01,056.85 96,382.30
Less : Doubtful E D & TSE -732.59 -766.78 -766.78Less : Prov. for Doubtful Dues -1,05,060.50 -97,347.59 -94,094.38
(B) 2,754.44 2,942.49 1,521.15
Less : Deferred ED & TSE from Consumers (C) -709.85 -718.95 -718.96Total (A+B+C) 3,56,803.67 3,17,677.91 3,21,040.45
33
A The age of receivables at the end of the reporting period is as follows:( Rs. in lakhs )
ParticularsAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
Less than or equal to 6 monthsMore than 6 months but less than or equal to 1 YearMore than one Year
2,09,391.9094,881.9252,529.86
1,91,848.3676,692.0549,137.50
1,80,268.1778,579.7562,192.52
Total 3,56,803.67 3,17,677.91 3,21,040.45
B The Company assesses expected credit loss to be provided for from its customers by using a practical expedient as permitted under Ind AS 109 i.e.
expected credit loss allowance as computed based on historical credit loss experience and the ageing of the receivable balances.C Generally, the credit period on sale of electrical energy is upto 15-30 days in case of Distribution Companies and 30-60 days in case of Other Group
Companies. Delay Payment Surcharge is charged at agreed rate as per contractual terms on the overdue balance.D As there are large number of Consumers for Four Distribution companies, it is impracticable to obtain confirmation of all balances. Further, since there is
a stringent recovery mechanism of consumers due as per GERC Regulations, the outstanding balances are considered good and recoverable; except those provided for.
12 Cash and Cash Equivalents____________________________________________________________________________________________________________( Rs. in La k h s )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Balances with Banks 49,577.49 39,485.94 44,177.40Cash on hand (refer note 51) 522.23 531.65 309.75Cheques on hand 3,859.16 3,978.47 5,467.53Remittance in Transit 1,113.28 1,311.44 734.91Deposits with banks 2,527.04 915.51 818.43
Total 57,599.19 46,223.01 51,508.02
Other Bank Balances ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Deposit with Banks(remaining maturity of more than 3 months but less than 12 months)
1,599.01 3,362.65 85.73
Total 1,599.01 3,362.65 85.73
A Deposit w ith Banks includes:
a. Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak Dal.b. Amount payable to M/s. Octal Suppliers Pvt. Ltd. kept in 'Corporate Liquid Term Deposit' Account with State Bank of as per decision of the Hon'ble High Court of Gujarat.
India, Industrial Finance Branch
3 / f
14 Loans ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Loans and Advances to Em ployeeSecured Considered Good
Loans & Advances to Staff 2,455.79 3,140.91 3,042.87Unsecured considered goodOther loans and advances 129.12 201.50 212.81
Total 2,584.91 3,342.41 3,255.68
A Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been taken.
15 Other Financial Assets________________________________________________________________________________________________________________ ( Rs. in Lakhs )
As at As at As atParticulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Unsecured Considered GoodInterest Accrued But Not Due on Staff Loans 4,477.05 4,023.26 3,631.71Interest Accrued & Due on Staff Loans 1,019.16 1,034.11 811.66Advances to Staff 691.75 672.14 537.82Amount recoverable from Staff 272.86 295.29 281.44Recoverable from Govt. Dept. 3,590.95 4,577.55 2,256.41Less: Provision made for doubtful recoveries -22.50 -22.50 -
Fuel related Claims and Receivables 877.46 5,465.98 764.71Receivables from supplier and Contractors 4,199.72 2,687.74 871.10Subsidy Receivable from Government 4,66,363.46 4,66,363.46 3,58,737.15Grant Receivable 63.43 148.26 -Unbilled Revenue 72,285.97 63,857.59 56,945.80Deposits 5,744.50 4,909.76 4,916.41Interest Accrued But Not Due on Others 270.76 192.56 162.77Other income accrued and due - - 31.55Other recoverables 2,334.94 2,117.85 2,227.16Loan to others 886.90 446.00 -
Total 5,63,056.41 5,56,769.06 4,32,175.68
Current Tax Assets (Net) ( Rs. in Lakhs )
As at As at As atParticulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Current Tax AssetsTax Refund Receivable 87,874.56 76,455.04 74,986.24
Current Tax LiabilityIncome Tax Payable -73,879.49 -65,252.11 -66,493.21
Total 13,995.07 11,202.93 8,493.03
Other Current Assets ( Rs. in L a k h s )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Unsecured Considered GoodPrepaid Expenses 2,320.75 3,453.40 9,543.11Other recoverables 116.90 594.03 34.63Other Deposits 265.83 284.65 257.30Postage stamp 8i stamped agreements on hand 61.13 58.02 55.44Advances for 08iM Supplies/Works 7,684.24 6,418.52 29,050.65Assets not in use 5,519.11 530.60 443.07
Electricity Duty & Tax on sale of Electricity 51.99 - 65.40
Balance with appellate authority 401.70 - -
Electricity Duty Recovered in Advance by Govt, of Gujarat 6,613.53 12,501.65 6,286.44
Advance to IPP against Power Purchase 10,000.00 10,000.00 -
Material issued on loan - 1,853.15 1,643.21
Pre-Payments Leasehold Land 105.25 103.91 103.36
Receivables from Gujarat Energy Training & Research Institute 294.14 238.10 425.68Total 33,434.58 36,036.0 47,908.29
18 Assets classified as held for sale
19
A
B
C
ParticularAs at
31st M arch, 2017As at
31st M arch, 2016
As at
1st April, 2015
Obsolete/scraped assets 547.56 507.65 532.25Total 547.56 507.65 532.25
Equity Share Capital
Equity Share Capital consist o f the follow ing: ( Rs. in Lakhs )
ParticularAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
Share Capital
Equity Share Capital Authorised Share Capital2000,00,00,000 (31 March 2016: 2000,00,00,000, 1 April 2015: 1000,00,00,000) Equity Shares of Rs. 10/- each
20,00,000.00 20,00,000.00 10,00,000.00
Issued Share Capital*1453,42,45,195 (31 March 2016: 1191,93,45,195,1 April 2015: 893,30,29,563 ) of Rs. 10/- each
14,53,424.52 11,91,934.52 8,93,302.96
Subscribed 81 Paid up*1371,46,05,995 (31 March 2016: 1075,47,06,495, 1 April 2015: 842,14,01,295) of Rs. 10/- each fully paid
13,71,460.60 10,75,470.65 8,42,140.13
Total 13,71,460.60 10,75,470.65 8,42,140.13
A Reconciliation of num ber of shares outstanding at the beginning and at the end of reporting period is as under:
ParticularsNo. o f Shares Share Capital (Rs.
in Lakhs)As at 1st A pril,2015 8,42,14,01,295 8,42,140.13Additions/(Reductions) 2,33,33,05,200 2,33,330.52As at 31st March,2016 10,75,47,06,495 10,75,470.65As at 1st A pril,2016 10,75,47,06,495 10,75,470.65
Additions/(Reductions) 2,95,98,99,500 2,95,989.95As at 31st M arch,2017 13,71,46,05,995 13,71,460.60
Shares in the Com pany held by Shareholders holding m ore than 5% is as under:
ParticularsNo. o f shares Extent o f Holding
As at 31st M arch, 2017
Governor of Gujarat
13,71,46,05,995 | 100.00%
As at 31st March, 2016 10,75,47,06,495 | 100.00%
As at 1st April, 2015 8,42,14,01,295 | 100.00%
D Right, preferences and restrictions attached to shares :The Company has only one class of equity shares having par value of Rs. 10 each and is entitled to one vote per share.
20A
Other Equity( Rs. in Lakhs )
Particulars As at31st M arch, 2017
As at31st March, 2016
As at1st April, 2015
Share Application Money pending allotmentContingency Reserve FundFly ash utilisation Reserve FundCapital ReserveSecurities PremiumRetained EarningsEquity Instruments through Other Comprehensive Income Reserve for financial asset measured at fair value through OCi Share of OCI of associate accounted for using equity method
81,963.9212,048.23
1,577.812,378.303,750.00
4,10,737.6023,146.51
499.27922.69
1,16,463.8712,400.00
2,378.303,750.00
3,60,655.5419,131.69
238.93315.28
50,894.4312,400.00
2,378.303,750.00
3,16,693.0516,440.24
329.45328.11
™ V 5,37,024.33 5,15,333.61 4,03,213.57
Out of Above: \1 7Equity belonging to the Non Controlling interests (refer SOCIE) 7,719.85 7,488.49 7,046.19
Equity belonging to the Ow ners 5,29,304.48 5,07,845.12 3,96,167.37
B Particulars relating to Other EquityParticulars As at
31st M arch, 2017As at
31st M arch, 2016Share Application M oney pending allotm entOpening Balance 1,16,463.87 50,894.43Add: Increase during the year 81,963.92 1,16,463.87Less: Shares Issued -1,16,463.87 -50,894.43Balance at the year end 81,963.92 1,16,463.87
Contingency Rreserve Fund 12,400.00 12,400.00Opening balance 0.00 0.00Less: Transferred to retained earning -351.77 0.00Balance at the year end 12,048.23 12,400.00
Fly ash utilisation Reserve Fund 0.00 0.00Opening balance 0.00 0.00Add: Increase during the year through sales 1,577.81 0.00Balance at the year end 1,577.81 0.00
Capital Reserve 2,378.30 2,378.30Opening balance 0.00 0.00Add: Transferred to retained earning 0.00 0.00
Balance at the year end 2,378.30 2,378.30
Securities Prem iumOpening balance 3,750.00 3,750.00Add: Transferred to retained earning 0.00 0.00Balance at the year end 3,750.00 3,750.00
Retained EarningsOpening Balance 3,60,655.54 3,16,693.05Add: Net profit after tax transferred from Statement of Profit & Loss 53,895.02 42,708.42Add: Other Comprehensive income arising from remeasurement of defined benefit obligation -10,093.95 -3,588.74Add: Share of profit of associate and Joint venture 6,152.32 5,050.59Less: Share of CDT on dividend received from Associate -223.11 -207.77Add: Transfer from contingency reserve fund 351.77 0.00Balance at the year end 4,10,737.60 3,60,655.54
Equity Instrum ents through O ther Com prehensive Incom e
Opening Balance 19,131.69 16,440.24
Add: Increase /(Decrease) during the year 4,014.82 2,691.45Balance at the year end 23,146.51 19,131.69
Reserve for Financial Asset m easured at fair value through OCIOpening Balance 238.93 329.45Add: Increase/ (Decrease) during the year 260.35 -90.52
Balance at the year end 499.27 238.93
Share of OCI of Associate accounted for using Equity Method
Opening Balance 315.28 328.11
Add: Increase /(Decrease) during the year 607.41 -12.83
Balance at the year end 922.69 315.28
Total Other Equity 5,37,024.33 5,15,333.61
C Share Application M oney pending allotm entThe Company has issued 8,196,39,200 Equity Shares of Rs.10 each to Governor of Gujarat, the existing Shareholder, for cash at par i.e. at Rs.10/- per share, on rights basis on 20.04.2017. The Company received the Share Application Money from Govt, of Gujarat during the Months of February & March, 2017 and accordingly has complied with the provisions of the Companies Act, 2013 w.r.t. issue of Shares.
D Contingency ReserveAs per provisions of the GERC MYT Regulations read with Tariff orders passed by GERC, M/s GETCO makes an appropriation to the Contingency Reserve to meet with certain exigencies. Investments in securities authorised under Indian Trust Act, 1882 was made against such reserve.
37
E Fly ash utilisation Reserve Fund
As per notification of MoEF Dt. 03.11.2009, the M/s GSECL is required to maintain a separate Account for the amount collected from sale of fly ash and
fly ash based products and this amount should be kept in separate Account head and shall be utilized only for the development of infrastructure or
facilities, promotional and facilitation activities for the use of fly ash until 100% fly ash utilization is achieved.
As such the Company is maintaining a separate Account and deposits the amount received from sale of fly ash and fly ash based products and utilizing
the same regularly for O&M for the Fly ash utilisation & development of infrastructure facilities. Resultantly, the Company has achieved 100% utilization
of fly ash at Gandhinagar, Sikka, Wanakbori and KLTPS. So no separate account is maintained at there Power Station's as per notification.
During the year, fly ash utilisation at Ukai is less than 100 % and hence income from sale of fly ash of Rs. 1577.81 Lakhs is transferred to fly ash
utilisation Reserve Fund.
F Capital Reserve
Capital Reserve is the reserve due to equity method of accounting of Associate-M/s G IPCLat the time of acquisition of Associate.
G Securities Prem iumSecurities premium is the share of securities premium of the Non-controlling interests.
H Equity Instrum ents through O ther Com prehensive Incom eThe Company has elected to recognise changes in the fair value of certain investments in equity securities in Other Comprehensive Income. This reserve
represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through Other Comprehensive
Income. The Company transfers amounts from this Reserve to Retained Earnings when the relevant equity securities are disposed.
I Reserve for Financial asset m easured at fair value through OCIThe Company has elected to recognise changes in the fair value of certain investments in debt securities in Other Comprehensive Income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant debt securities are derecognised.
21 Deferred Governm ent Grant, Subsidies and Consum er Contribution__________________________________________________________________ ( Rs. in Lakhs )
Particulars
As at31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Government Grants, Subsidies towards Capital Assets Consumers' contribution towards capital assets
2,81,352.754,35,787.23
2,44,519.584,01,853.80
2,43,696.943,76,809.48
Total 7,17,139.98 6,46,373.38 6,20,506.42
A Particulars relating to Deferred G overnm ent Grants, Subsidies and Contributions_____________________________________________________( Rs. in Lakhs )
ParticularAs at
31st M arch, 2017
As at
31st M arch, 2016
Governm ent Grants, Subsidies tow ards Capital
AssetsOpening balanceAdd : Received during the year
2,44,519.5860,809.20
2,43,696.9428,180.52
Less : Transferred to Statement of Profit and Loss -23,976.02 -27,357.88
Closing Balance 2,81,352.75 2,44,519.58
Consum ers' Contribution tow ards Capital Assets
Opening balanceAdd : Received/transferred during the year
4,01,853.8072,223.32
3,76,809.4871,404.05
Less : Transferred to Statement of Profit and Loss -38,289.89 -46,359.73
Closing Balance 4,35,787.23 4,01,853.80Total 7,17,139.98 6,46,373.38
3 ^
22 Borrowings ( Rs. in Lakhs )
ParticularsAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
Secured
(a) Term Loans(i) From Banks 8,15,146.80 11,66,151.77 12,19,417.08
(ii) From Financial Institutions 3,21,248.34 75,473.85 58,166.46(b) Deferred Paym ent G uarantee - 19.11
Unsecured (a) Bonds8% Series-X - - 8,598.008% Series-IX - - 3084.018.95% Series-VIII - - 19402.81(b) Term Loans
(i) From Banks - 23,000.00 9,000.00(ii) From Financial Institutions 2,70,302.99 63,786.71 1,10,737.64
(c)Loans from Related Party - Govt, o f Gujarat
(i) Loan for Power Purchase 9,800.00 10,150.00 10,500.00(ii) State Government Loan under APDRP 5,440.71 6,545.79 7,650.87(iii) Loan from Asian Development Bank 26,460.30 30,467.33 34,816.35(iv)Term Loan from Govt, of Gujarat - Foreign currency loans 37,562.10 34,752.32 25,106.55(v) Kisan Hit Urja Shakti Yojna (KHUSHY) Loan 1,200.00 1,600.00 2,000.00
Total 14,87,161.25 14,11,927.76 15,08,498.88Note:
A Bonds are secured by way of Guarantee of Govt, of Gujarat
B
23
M ATURITY PROFILE OF SECU RED & UN SECURED ( Rs. in Lakhs )
Particulars 2017-18 2018-19 2019-20 2020-21 8. After
SECURED LOANS
Term Loan from BanksTerm Loan from Financial Institutions
1,32,545.2640,250.25
1,55,467.8663,890.65
1,42,137.9032,474.42
5,17,541.052,24,883.27
UNSECURED LOANS
Govt, of Gujarat (Related Party)Loan for Power Purchase Loan From ADB KHUSHY LoanLoan from Financial Institutions
1,455.086,379.39
400.0093,538.03
1,455.086,379.39
400.0088,596.70
1,455.086,379.39
400.0071,529.00
12,330.5551,263.62
400.001,10,177.29
TO TA L 2,74,568.01 3,16,189.68 2,54,375.79 9,16,595.78
Trade Payables ( Rs. in La k h s )As at As at As at
Particulars 31st M arch, 2017 31st March, 2016 1st April, 2015
Amount owing to Licensees 85.29 85.29 85.29Total 85.29 85.29 85.29
3-3
Other Financial Liabilities ( Rs. in La kh s)As at As at As at
Particulars 31st March, 2017 31st March, 2016 1st April, 2015
Deposits for Electrification & Service connection 550.60 811.59 901.17Staff Welfare Schemes 1,197.77 1,130.50 1,042.36Security deposit from consumers 4,77,228.49 4,33,875.59 3,84,328.11Staff Related Liabilities 14,914.80 14,594.44 14,204.64
Total 4,93,891.67 4,50,412.12 4,00,476.29
Long-term provisions ( Rs. in Lakhs )As at As at As at
Particulars 31st March, 2017 31st March, 2016 1st April, 2015
Provision for Employee BenefitsProvision for Leave Encashment 1,14,987.33 87,931.31 78,604.51Gratuity 30,583.15 38,922.16 41,369.58
Total 1,45,570.48 1,26,853.47 1,19,974.09
26 Deferred Tax Liabilities ( Net)The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet:
( Rs. in Lakhs )As at As at As at
Particulars 31st March, 2017 31st March, 2016 1st April, 2015
Deferred Tax Assets 2,32,166.51 2,09,990.23 1,78,733.75Deferred Tax Liabilities -3,96,253.07 -3,42,052.76 -2,84,172.60
Total 1,64,086.56 1,32,062.53 1,05,438.85
As at 31st March, 2017 ( Rs. in La kh s)Recognized in
Particulars Opening BalanceRecognized in
profit and lossOther
ComprehensiveClosing Balance
IncomeDeferred Tax Asset on account of: - -
Employee Benefits 34,850.17 (471.52) 3,343.34 37,721.99
Provision for Doubtful Debts 20,926.91 2,660.90 - 23,587.81
Deferred Income on government grant 19,652.25 7,326.03 - 26,978.29Carried forward of unused Tax Losses 3,811.44 1,021.88 - 4,833.31Unabsorbed Depreciation 54,868.12 (5,684.22) - 49,183.90MAT 75,769.40 13,996.31 - 89,765.71Others 111.93 (16.46) - 95.47
Deferred Tax Assets 2,09,990.21 18,832.93 3,343.34 2,32,166.48
Deferred Tax Liabilities
Property, Plant and Equipment 3,39,535.31 53,580.00 - 3,93,115.31
Financial Assets at FVTOCI 2,517.43 - 620.30 3,137.74
Others - - - -Deferred Tax Liabilities 3,42,052.74 53,580.00 620.30 3,96,253.05
Net Deferred Tax Asset/(Liability)Amounts recognised in Balance Sheet (Refer Note A below) (1,32,062.53) (34,747.06) 2,723.04 (1,64,086.57)
As at 31st March, 2016_________________________________________________________________________________________________________ (Rs. in lakhs)
Particulars O pening BalanceRecognized in
Profit and Loss
Recognized in Other
Com prehensive
Incom e
Closing Balance
Deferred Tax Asset on account of:Employee Benefits 32,823.00 1,363.48 663.69 34,850.17Provision for Doubtful Debts 19,238.14 1,688.77 - 20,926.91Deferred Income on government grant 16,662.66 2,989.59 - 19,652.25Carried forward of unused Tax Losses 1,643.71 2,167.73 - 3,811.44Unabsorbed Depreciation 44,452.13 10,415.99 - 54,868.12MAT 63,786.29 11,983.10 - 75,769.40Others 127.81 (15.88) - 111.93Deferred Tax Assets 1,78,733.74 30,592.78 663.69 2,09,990.21
Deferred Tax LiabilitiesProperty, Plant and Equipment 2,81,737.77 57,797.54 3,39,535.31Financial Assets at FVTOCI 2,362.40 - 155.03 2,517.43Others 72.42 (72.42) - -
Deferred Tax Liabilities 2,84,172.60 57,725.12 155.03 3,42,052.74Am ounts recognised in Balance Sheet (refer note A below) (1,05,438.85) (27,132.34) 508.66 (1,32,062.53)In Holding Company GUVNLand Subsidiary Companies viz UGVCL, DGVCLand MGVCL due to uncertainty of earnings sufficient taxable income to utilise such deferred tax asset, the recognition of the same has been restricted to the extent of Deferred Tax Liabilities.
Other Non Current Liabilities_________________________________________________________________________________________________________( Rs. in Lakhs )
Particulars
As at31st M arch, 2017
As at
31st M arch, 2016
As at
1st A pril, 2015
Deposits for Electrification & Service connection 39,794.50 30,351.49 34,865.90Total 39,794.50 30,351.49 34,865.90
Short Term Borrowings__________________________________________________________________ _______________________________________ ( Rs. in Lakhs )
ParticularsAs at
31st M arch, 2017As at
31st M arch, 2016As at
1st April, 2015
Loans repayable on Dem and SecuredCash Credit From Banks Loan for Working Capital
12,330.45941.22
26,748.3631,032.28
20,033.273,755.84
UnsecuredShort Term Bills Discounting by IPPs from Banks 1,70,025.00 3,13,583.00
Total 13,271.68 2,27,805.64 3,37,372.11
Cash Credit Limit is secured against hypothecation charge in favour of UCO Bank Consortium on the Stocks and Book Debts of the Holding Company and its six Subsidiary Companies ranking pari-passu.
Trade Payables ( Rs. in Lakhs )
Particulars
As at
31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Trade Payable for FuelLiability for O 8i M Supplies / WorksLiability for Purchase of PowerOther
55,649.0215,549.94
5,09,281.39410.83
32,371.7610,669.52
4,94,284.23406.62
24,635.767,987.17
2,89,711.06594.36
Total 5,80,891.17 5,37,732.13 3,22,928.35
Dues to M SM ED and interest on Delayed Paym ents:Based on the details available regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" there are no dues to micro, small and medium enterprises as at 31st March, 2017 on account of principal amount together with interest for delayed payment under the Act (Previous Y e a r: Nil).No claim has been received for interest from any suppliers under the "Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings
Act, 1993".
30 Other Financial Liabilities ( Rs. in Lakhs )
Particulars
As at31st M arch, 2017
As at31st M arch, 2016
As at1st April, 2015
Current m aturities of Long Term Debt: Secured:Term Loans From Banks 1,32,545.26 1,87,371.29 2,18,432.94Loan from Financial Institutions 40,250.25 63,546.10 12,977.49Deferred Payment Guarantee - 19.11 119.85Interest Accrued and Due on Loans from REC 89.31 - -
Unsecured: Public Bonds
8% Series-X 8,598.00 6,448.508% Series-IX - 3,084.01 2,313.008.95% Series-Vltl - 19,402.81 14,552.09Term Loan from Banks - 24,000.00 2,000.00Govt, of Gujarat (Related Party)
Loan for Power Purchase 1,455.08 1,455.08 1,105.08Loan from Asian Development Bank 6,379.39 5,597.55 4,349.02
KHUSHY Loan 400.00 400.00 400.00Loan from Financial Institutions 93,538.03 75,833.47 1,06,866.02
Interest accrued but not due on Loans 21,948.48 19,608.18 20,835.55Interest accrued but not due on Bonds - 177.52 310.32Interest Accrued and Due on Loans from Banks 5,640.27 5,497.23 6,680.69Interest payable on consumers security Deposit 29,045.36 28,058.76 25,954.87Interest accrued but not due 394.78 1,863.55 2,323.39Liability for OStM Supplies/Works 14,755.68 13,421.11 14,462.99
Staff Related Liabilities 1,784.76 1,506.75 827.13
Staff Retirement cum Death Benefit Scheme 562.34 596.73 530.51Unclaimed amount relating to Bonds 684.40 405.03 372.20Deposits & Retentions from Suppliers / Contractors 2,29,895.81 1,98,431.36 1,94,836.92Outstanding liability for expenses 1,28,767.64 60,964.99 52,191.67
Grant Unallocated 21.86 76.94 451.88Liability for Interest Received— Outside Parties 11.70 11.11 10.58
Corpus Fund of Bal Urja Rakshak Dal 47.37 44.64 41.75
Board of Trustees-—CPF 1,435.80 369.80 970.32Liability for Capital Supplies / Works 78,883.13 58,333.68 50,049.66Liabilities for Deposits 409.60 382.66 246.21Staff Welfare Scheme 845.91 843.91 798.10E.M.D From Suppliers / Contractors 2,067.61 3,311.83 3,563.94Dev. Charges & Financial Participation from Consumers 72.58 147.49 965.41
Deposits for Electrification & Service connection 1,05,556.13 71,541.15 61,807.47
Deposits from Others 3,178.93 2,557.98 1,921.30Deposits for Execution of Works 2,827.66 2,117.37 2,041.51
Other Liability 44,289.83 27,956.65 15,001.69Liabilities for Consumers Contribution-Refundable (Payment due within one year) - 472.61 501.71Compounding offence 6.62 7.89 15.82
Total 9,47,791.59 8,88,014.35 8,27,277.61
Other Current Liabilities ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Statutory Liabilities 3,686.66 3,621.77 3,081.98Other Payables 23.05 276.94 16.55Subsidy/Grants received in advance 6,730.42 919.87 1,326.38Advance Received from Consumers 295.75 4,947.37 1,312.18Advances received 137.84 30.08 185.36Income Received in Advance 1,22,424.39 1,06,707.23 1,15,440.29Grant under APDR Scheme - 1,000.00 -Deposits 2,282.33 1,925.03 1,596.19Other Liability 1,645.20 1,931.97 3,023.54
Tax on Electricity Duty payable to State Govt. 57.13 73.03 76.58Payable to Gujarat Energy Training & Research Institute 67.27 - 3.00
Total 1,37,350.04 1,21,433.29 1,26,062.06
Short Term Provisions ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Provision for Em ployee BenefitsProvision for Gratuity 15,150.30 20,608.03 19,432.01Provision for Leave Encashment 9,689.27 11,795.13 10,812.23Provision for Bonus 189.90 142.55 35.37OtherProvision for Delayed Payment Charges 2,904.78 2,904.78 2,904.78Provision for Losses Pending Investigation 1,520.88 1,510.34 1,510.34Liquidated Damages Payable 44,323.32 37,945.58 35,210.97
Total 73,778.46 74,906.41 69,905.71
Current Tax Liabilities (Net) ( Rs. in Lakhs )As at As at As at
Particulars 31st M arch, 2017 31st M arch, 2016 1st April, 2015
Current Tax LiabilityWealth Tax payable 1.74 1.74 4.18
Income Tax Payable 67,318.14 58,400.65 40,335.47
Current Tax AssetsWealth Tax Refund Receivable 1.61 1.61 1.61Tax Refund Receivable 56,926.32 47,298.88 31,643.36
Total 10,391.94 11,101.89 8,694.68
34 Revenue from Operations_____________________________________________________________________________________________________ ( Rs. in Lakhs )
Particulars
For the year ended
31st M arch, 2017
For the year
ended31st M arch, 2016
Incom e from O perating ActivityRevenue from Sale of PowerResidential General Purpose 5,43,918.45 5,20,957.97General Lighting Purpose 14,978.48 13,929.01Non-residential General Purpose & LT Medium Demand 7,56,692.51 7,13,200.95HT Industrial 16,89,872.12 15,71,228.89Public Lighting 15,783.84 14,406.71Traction Railways 3,607.06 39,549.72
Irrigation Agricultural 3,92,709.60 4,70,875.72Public water works and sew.pumps 76,012.06 79,668.86Revenue from Sale of Electrical Energy 1,029.93 22,382.51Inter state sale of Power 5.54 6.33Sale of Power through Power Exchanges & Bilateral Agreements 20,516.27 50,996.93Supply in Bulk-Licensee 1,300.07 1,433.84Sub Total 35,16,425.93 34,98,637.44
Electricity DutyElectricity Duty Assessed 3,77,547.86 3,80,177.19Less: Electricity Duty Assessed (Contra) -3,77,547.86 -3,80,177.19Sub Total - -
Sale of ServicesRevenue from Transmission Charges 31,211.16 25,770.25
Parallel operation charge 2,837.68 2,948.04
SLDCfees & charges 922.09 463.32Net Unscheduled Interchange Income 27,337.92 16,360.93
Sub Total 62,308.85 45,542.53
Incom e from Other O perating A ctivityMeter Charges / Service line charges 22,809.07 21,623.00Recoveries for theft of power / Malpractices 18,675.04 17,724.69Wheeling Charges Recoveries 989.26 1,393.95
Delayed payment charges from consumers 8,615.01 7,782.71
Cross Subsidy Surcharge 50,141.15 23,409.93
Addl. Surcharge - OA Consumers 3,031.50 2,763.24
Agriculture Subsidy 1,10,000.00 1,10,000.00
Misc. Charges from Consumers 74,948.55 61,026.27
Misc. Revenue* 5,977.65 4,709.75
Rebate for Prompt Payment 41,500.04 29,676.53Penalties received from Suppliers (Net of Refund) 97.80 189.31
Liquidated Damages 1,127.58 3,599.57
CDM Benefit from Renewable Energy Sources 292.91 -
Supervision Income from O&M activity 529.43 471.23
Sale of Fly Ash 3,704.38 5,814.67
Reactive Charges Income from CPPs 1.09 -3,42,440.46 2,90,184.84
Total 39,21,175.23 38,34,364.82
* None of the items individually account for more than 1% of total revenue or Rs.10,00,000 whichever is higher
Other Income ( Rs. in Lakhs )For the year ended For the year
Particulars 31st M arch, 2017 ended
31st March, 2016
Interest Incom e
Interest on Staff Loans and Advances 2,125.24 2,341.38Interest on Advances to Others 225.93 1,647.21Interest Income from Fixed Deposits 3.97 13.52Interest Income from Investments 1,043.98 806.00Interest from Banks (on delayed remittance by bank) 0.73 1.74
Dividend Incom e- From Investments 254.12 204.91
Other Non Operating Incom eGain on sale of Fixed Assets (Net of Loss) 266.87 513.12Penalties Received from Suppliers & Contractors 4,767.90 1,362.92Deferred Income towards Govt. Grants/ Subsidies and Consumer Contribution towards Cost of Capital Assets 62,265.92 73,717.62
Provision no longer required 310.41 286.94Grant for energy conservation 3,159.08 666.25Revenue Subsidies and Grants 19.42 47.00Income from Sales -Stores, Scrap etc.. 667.00 787.23Gain on Foreign Exchange Fluctuation 1,029.68 1.79Capital Gain on Investment in Securities 26.75 -Delay payment charges 7,705.69 13,420.97Miscellaneous Income* 31,879.58 18,375.64
Recovery of Reactive charges 33.90 2.30Total 1,15,786.20 1,14,196.56
* None of the items individually account for more than 1% of total revenue or Rs.10,00,000 whichever is higher
Cost of Fuel consum ed ( Rs. in Lakhs )
For the year ended For the yearParticulars 31st March, 2017 ended
31st M arch, 2016
M aterials/Fuel Consum ed-Coal 4,50,777.83 4,51,668.87-Oil 7,404.88 7,200.54-Gas 12,650.45 66,339.47-Water 11,761.63 9,656.15-Lime 5.60 2.21
Other Fuel related cost 717.89 1,769.58
Lubricant and consumable 1,145.62 1,028.93Station supplies 253.50 331.27
Total 4,84,717.41 5,37,997.03
37 Purchase of Power ( Rs. in Lakhs )
ParticularsFor the year ended 31st M arch, 2017
For the year ended
31st M arch, 2016From Central SectorNuclear Power Corporation of India Ltd. 71,615.49 78,402.35NTPC Ltd. 6,41,025.57 5,03,612.41Sardar Sarovar Narmada Nigam Ltd 10,283.03 6,848.33Sub Total 7,22,924.09 5,88,863.08
From Private SectorCLP India Pvt Ltd. 52,948.44 68,474.25Essar (Vadinar) Ltd. 1,65,203.20 1,55,126.14ACB India Ltd. 29,828.41 30,393.08Adani Power Ltd. 3,79,152.77 3,84,210.18Coastal Gujarat Pvt. Ltd. 2,71,238.04 2,99,384.55Sub Total 8,98,370.86 9,37,588.20
From State Sector
Gujarat Industries Power Company Ltd. 1,04,838.10 98,183.29Gujarat State Energy Generation Ltd. (Hazira) 29,400.58 21,586.12Gujarat Mineral Development Corporation (GMDC) 30,611.96 25,461.84GPPC Pipavav 40,133.28 64,536.67Bhavnagar Energy Company Ltd. 2,366.50 -Sub Total 2,07,350.41 2,09,767.93
From Other
Wind Farms 1,84,755.12 1,55,624.38Purchase of Solar Power 1,86,435.18 1,86,138.79Purchase of Power from Non-Renewable Sources - 1,51,516.24Purchase of Power from Renewable Sources 1,206.14 1,556.16Purchase of Power from Others 5,019.88 4,862.78Captive Power Plants 0.34 123.54Power Exchange of India Ltd. 2,768.08 -India Energy Exchange 11,126.38 -Short Term Purchase of Power 65.61 -Sub Total 3,91,376.74 4,99,821.88
W heeling / Transm ission Charges:Power Grid Corporation Ltd. 1,82,279.90 1,44,267.29DSM / Ul Charges 11,783.40 16,097.44
Others - 40,100.00
Reactive Energy charges - 8.01Sub Total 1,94,063.29 2,00,472.75
Total 24,14,085.38 24,36,513.84
38 Em ployee Benefits Expense_____________________________________________________________________________________________________ ( Rs. in Lakhs )
ParticularsFor the year ended 31st M arch, 2017
For the year ended
31st M arch, 2016
Salaries and Allowances 3,13,837.67 2,53,345.60
Contribution to PF 8i Other Trusts 28,822.42 27,118.73
Staff Welfare Expenses 6,321.75 7,421.14
Retirement and other Benefits 37,847.23 24,495.673,86,829.07 3,12,381.14
Less : Directly attributable cost capitalised (refer note l.(D ) (20) (b)) -55,733.40 -73,386,10Total 3,31,095.67 2,38,995.04
39 Finance Cost ( Rs. in Lakhs )
Particulars
For the year ended
31st M arch, 2017
For the year
ended
31st M arch, 2016Interest ExpenseInterest on State Government Loans 5,373.04 5,997.56Interest on Bonds 668.18 3,175.68Interest on Cash Credit and Working Capital 67,038.85 97,635.06Interest on Rural Electrification Corporation Loans and Power Finance Corporation 6,785.92 7,135.70Interest on NABARD Loans 17,501.33 18,388.65Interest on Term Loans 6,369.71 9,928.58Interest on Other loans 68,974.01 70,544.68Interest to Consumers on Security Deposits etc. 31,777.91 30,394.54
Interest on Income Tax 373.74 376.39
Other Borrowing CostGuarantee Fees / Charges 367.55 547.47
Bill Discounting 1,627.22 3,354.92Loss on Foreign Exchange Fluctuation - 1,699.08Bank Charges, Commission and Others 940.18 975.80
Total (A) 2,07,797.63 2,50,154.11
Less : Directly attributable cost capitalised (refer note l.(D ) (20) (b)) -22,916.29 -43,437.21Total (B) -22,916.29 -43,437.21
Total To ta l(A -B ) 1,84,881.34 2,06,716.91
t
40 Other Expenses ( Rs. In Lakhs )
ParticularsFor the year ended 31st M arch, 2017
For the year ended
31st M arch, 2016Repairs & M aintenanceBuilding and Civil Works 7,336.24 5,996.83Plant and Machinery 37,669.33 36,504.17Sub Station Maintenance under Contract 12,609.43 10,171.63Lines, Cable Network etc. 16,337.09 16,438.48Others 3,729.44 4,380.82Le ss: Directly attributable cost capitalised
Adm inistrative & General Expenses
Rent, Rates and Taxes (Refer Note 44) 2,466.46 2,429.69Insurance 1,488.19 1,340.98Testing Charges 123.30 102.06Telephone & Postage Expenses 1,947.91 1,733.91Liquidated Damages 81.69 2,812.50Remuneration to collection agencies 1,898.83 1,705.48Legal & Professional Fees 2,943.55 2,546.70Auditors' Remuneration 96.61 90.37Technical Fees 87.71 60.90Travelling & Conveyance 15,589.30 14,594.50Fees & Subscription, Books & Periodicals 817.17 643.18Printing & Stationery 1,083.85 1,120.29Computer Expenses 98.30 111.55Expenses on Computer Billing & EDP Charges 394.41 313.44Advertisement 125.58 95.68Electricity Charges 2,132.07 2,052.24Water Charges 171.47 157.88Corporate Social Responsibilities 615.47 1,018.51Waiver of Delayed Payment Charges 48.14 53.84Security Expenses 3,336.04 3,140.76Freight Expense 2,301.64 2,328.81Expenditure on Training to Staff 447.84 352.84
Loss on Sale of Assets (Net) 29.24 35.39Discount to Consumers for Timely Payment of Bills 397.24 1,048.16Expenses for Energy Conservation 1,581.48 41.96Energy Conservation Expenses for Ujala Scheme 480.41 -
Directors fees 2.76 2.60GERC License Fees 205.33 180.15Other Administration & general Expenses 10,237.22 8,995.73DSM Expenditure 677.58 87.64
Bad & Doubtful debts write-off 8,083.72 14,093.80
Miscellaneous Expenses* 7,218.53 6,664.10
Miscellaneous Losses & Write-offs 2,160.13 955.50Other Property Related Expense 134.53 93.86Losses/expenses on account of Flood, Cyclone, Fire etc. 204.34 6,390.64
Provision for-Bad & Doubtful debts 6,176.65 4,839.39-MGCL(against loans & advance given) 47.93 41.36
Less : Fabrication charges absorbed -1,147.48 -1,362.85
Less : Directly attributable cost capitalised (refer note l.(D ) (20) (b)) -8,187.25 -13,930.98Total Total (A-B) 1,44,279.42 1,40,474.51
* None of the items individually account for more than 1% of total revenue or Rs.lO,00,000 whichever is higher
A
41
42
A
Payment to Auditors (Fees excluding applicable tax)_______________________________________________________________________________ Rs. In Lakhs
Particulars
For the year ended
31st M arch, 2017
For the year
ended31st M arch, 2016
Audit Fees 78.80 82.62Certifications 1.25 1.25Other Services, Taxation matters / Tax Audit 0.75 0.75Out-of-pocket & Other Expenses 3.12 2.80
Total 83.92 87.42
Exceptional item s ( Rs. in La k h s )For the year ended For the year
Particulars 31st M arch, 2017 ended
31st M arch, 2016Losses on account of Flood, Cyclone, Fire etc. -31.06 4,831.63
Total -31.06 4,831.63
Tax Expense ( Rs. in L a k h s )For the year ended For the year
Particulars 31st M arch, 2017 ended31st M arch, 2016
Current Tax 25,374.34 20,867.68Deferred Tax 34,747.06 27,132.34Earlier Years 316.25 175.96
Total 60,437.65 48,175.98
Reconciliation of Current Tax
Particulars
For the year ended 31st M arch, 2017
For the year ended
31st M arch, 2016
Profit Before Tax 1,20,484.99 95,934.99
Current tax expense calculated using MAT tax rate at 21.342% (Previous year - 21.342%) Add:
25,713.91 20,474.45
(Income) / expense (net) not (taxable) / deductible -1,603.43 -488.35
Adjustment of tax on prior period 371.21 314.53
Provision for doubtful debts 724.71 567.05
Tax impact on Transition Adjustment 167.94 -
Others - -Current Tax Expense 25,374.34 20,867.67The base tax rate used for the year ended 31st March, 2017 and year ended 31st March, 2016 reconciliations given above is at the MAT tax rate of 18.50% (plus surcharge 12% and cess 3%) payable by corporate entities in India on taxable book profits under the Indian Tax Law.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
43 Earnings per Equity share____________________________________________________________________________________ ___________________ (Rs. In Lakhs)
ParticularsYear ended 31st
March, 2017Year ended 31st
March, 2016
Profit After Tax for the year attributable to Owners of equityWeighted average number of Equity shares Basic
DilutedBasic and Diluted earnings per Equity Shares (Rs.) Basic
DilutedFace value per Equity Share (Rs.)
59,839.3112,55,42,00,26212,59,22,86,772
0.480.48
10.00
47,487.099,64,03,51,4849,67,35,19,562
0.490.49
10.00
44 Lease
Operating LeasesThe Group does not have any non-cancellable operating lease commitments.The Group companies have taken various premises under operating lease or leave and license agreement. The lease term in respect of such premises are on the basis of individual agreements entered into with the respective land lords. The lease payments are recognised in the Statement of Profit and Loss under 'Rent, Rates and Taxes' in Note 40.
45 Employee Benefit Plans A Defined Contribution Plans:
Group has certain defined Contribution Plans. Group Companies makes contribution towards Employees' Provident Fund, Employees' Pension Scheme and Employees' Death Linked Insurance Scheme. Contributions are made at specified percentage of salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Group Companies is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards Defined Contribution Plan is Rs.21180.56 Lakhs (31 March 2016 Rs. 19217.56 Lakhs).
B Other Long Term Benefit PlanThe Group Companies accounts for leave encashment on the basis of actuarial valuation carried out by Life Insurance Corporation of India at each year end. Liability for the Current Year of Rs.35,478.05 Lakhs (previous year Rs. 19,492.88 Lakhs) has been charged to statement of Profit & LOSS. Leave obligation as at 31st March, 2017,31st March, 2016 and 1st April, 2015 is Rs. 1,24,676.59 Lakhs, Rs. 99.726.43 Lakhs and Rs. 89,416.74 Lakhs respectively.
Group has a Staff Voluntary Retirement-Cum-Death Benevolent Fund Scheme wherein an employee can become a member voluntarily. A monthly contribution is to be made by the members. Upon retirement employee will be eligible to get an amount equivalent to his total "Contribution" along with simple interest at a specified rate from the date of joining the scheme or Rs. 10,000/- whichever is higher. In case of death of an employee, the nominee of the member shall be eligible to get a determined amount of compensation out of the fund, if the employee was the member of the scheme. The charge to the statement of Profit and loss for the year ended is Rs. 727.84 Lakhs (P.Y. Rs. 774.83 lakhs). The balance of such fund as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 is Rs. 16,169.56 Lakhs, Rs.15,831.66 Lakhs and Rs. 15,437.89 Lakhs respectively.
C Defined Benefits Plan GratuityGroup provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The Gratuity Plan Is a funded plan and the Company makes contributions to LIC. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
The Holding Company makes annual contribution to the gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust. The liability in respect of plan is determined on the basis of an actuarial valuation.
D Risk ExposureThese plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Rate Risk and Salary Risk.Investment Risk The Present value of the Defined Benefit Obligation is calculated using the discount rate determined by LIC of India
as the fund is being managed under Gratuity Assurance PlanInterest Risk A decrease in the interest rate will increase the plan liability while increase in interest rate will decrease the plan
liabilitySalary Risk The present value of obligation is calculated by reference to future salary.
No other post-retirement benefits are provided to these employees.
Assumptions (Current Period)Particulars For the year ended For the year ended
31st March, 2017 31st March, 2016
Expected Return on Plan Assets 8.50% 9.50%
Rate of Discounting 8.00%
Rate of Salary Increase 10.00%
Rate of Employee Turnover 1 to 3 % Depending on Age
Mortality Rate During Employment LIC (2006-08) ultimate
Mortality Rate After Employment N.A.
Rs. In Lakhs
Particulars For the year ended 31st March, 2017
For the year ended 31st March, 2016
Gratuity1) Reconciliation in Present Value of Obligations (PVO) - Defined Benefit Obligation:Opening Defined Benefit Obligation 1,37,834.15 1,32,132.06
Current Service Cost 4,843.52 4,653.40
Interest Cost 11,026.73 10,571.57
Remeasurement (gains)/losses:Actuarial gains and losses arising from experience adjustments 13,141.61 4,511.12
Benefits paid -14,885.86 -14,033.01
Closing Defined Benefit Obligation 1,51,960.15 1,37,834.14
Current Obligation 15,150.30 20,608.03
Non-Current Obligation 1,36,809.84 1,17,226.12
II) Change in Fair Value of Assets:Opening fair value of plan assets 78,304.91 71,330.48
Expected return on plan assets 7,098.43 5,731.56
Remeasurement Gain (Loss):Actual Gain / Loss -740.01 -815.53
Excess Return on Plan Assets (excluding amounts included in net interest expense) 444.33 1,077.31
Contributions by the Employer 36,010.97 15,014.12
Benefits paid -14,885.86 -14,033.01
Closing Fair Value of Plan Assets 1,06,232.77 78,304.92
III) Funded Plans in deficit:Present value of funded defined benefit obligation 1,51,960.15 1,37,834.14
Fair Value of planned assets at end of year 1,06,232.77 78,304.92
Funded status Funded Funded
Net liability arising from Defined Benefit Obligation 45,727.37 59,529.22
IV) Service CostCurrent Service Cost 4,843.52 4,653.40Net Interest Expense 3,917.33 4,825.88Expenses to be recognised in Statement of Profit or Loss 8,760.85 9,479.28Components of defined benefit costs recognised in Employee Benefit ExpensesRemeasurement on the net defined benefit liability:Actuarial (gains) / losses arising from experience adjustments 13,141.61 4,511.12Actuarial (gains) / losses arising from changes in financial assumption 740.01 815.53Return on Plan Assets excluding amount included in net interest cost -444.33 -1,077.31Expenses to be recognised in Other Comprehensive Income 13,437.29 4,249.34Total Expense (Provision for the period) 22,198.14 13,728.62
V) Category of assets as at 31st March:-Life Insurance Corporation of India 1,06,232.77 78,304.92Total Gratuity 1,06,232.77 78 /30 4.92
Rs. In Lakhs
Experience Adjustment On Plan Liabilities - Loss/(Gain)
As on 31st March,2017 As on 31st March,2016
13,437.294,249.35
f
Maturity Analysis of Projected Benefit Obligation are as under:_________________________________________________ ___________________ Rs. In Lakhs
GratuityAs at
31st March, 2017As at
31st March, 2016
GratuityLess than 1 Year 15,150.30 20,608.03
One to Three Years 24,772.46 19,611.63
Three to Five Years 21,950.34 30,692.27
More than Five Years 90,087.05 66,922.22
Sensitivity Analysis for GratuityRs. In Lakhs
Significant actuarial assumptionsAs at
31st March, 2017As at
31st March, 2016
Discount Rate- Impact due to increase of 50 basis points -4,955.81 -4,187.34
- Impact due to decrease of 50 basis points 5,799.91 8,064.10
Salary increase- Impact due to increase of 50 basis points 5,402.55 8,713.77- Impact due to decrease of 50 basis points -4,014.48 -6,822.87
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
46 Operating Segment
A The Group's operations fall under segment namely "Generation, Transmission, Distribution and Bulk Purchase & Sale (Trading) of Power", taking into account the different risks and returns, the organization structure and the internal reporting systems.
B Information about major customersThe Group is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.
C Information about geographical areas:Segment revenue from "Sale of Power" represents revenue generated from external customers which is fully attributable to the Company's Country of domicile i.e. India.All assets are located in the Company's Country of domicile.
D Information about products and services:The Group derives revenue from sale of power. The information about revenues from and external customers about each product is disclosed in Note no. 34 of the Financial Statements.
47 Financial instruments Disclosure
A Capital ManagementThe Group’s objective when managing capital is to:1. Safeguard its ability to continue as going concern so that the Company is able to provide benefits for stakeholders; and2. Maintain an optimal capital structure to reduce the cost of capital.
Gearing RatioThe gearing ratio at end of the reporting period is as follows.
Particulars As at31 March, 2017
As at31 March, 2016
As at1 April, 2015
Debt 17,61,729.26 18,01,235.18 18,78,062.87Total Equity 26,26,874.91 22,38,427.64 18,67,110.11Debt to Equity Ratio 0.67 0.80 1.011. Debt is defined as all Long Term Debt outstanding + Current Maturity outstanding in lieu of Long Term Debt2. Equity is defined as Equity Share Capital + Other Equity + Deferred government grant and consumer contribution.
»
B Categories of Financial Instruments
As at31 March, 2017
As at31 March, 2016
As at1 April, 2015
3,56,803.6757,599.19
1,599.0119,861.59
5,81,487.62
32,882.4012,810.84
60,008.91
15,00,432.935,80,976.47
14,41,683.25
3,17,677.9146,223.01
3,362.6520,066.03
5,70,866.00
28,385.0512,764.48
54,568.22
16,39,733.405,37,817.42
13,38,426.48
3,21,040.4551,508.02
85.7319,435.40
4,45,169.93
25,493.846,383.52
50,750.982.00
18,45,870.993,23,013.64
12,27,753.90
Financial Assets
Particulars
Measured at amortised cost(a) Trade and other Receivables(b) Cash and cash equivalents(c) Other Bank balances(d ) Loans(e) Other Financial Assets Measured at FVTOCI(a) Investments in Equity Instruments (designated on transition date)(b) Investment in Gol Special Bonds Accounted under Equity Method(a) Associate- GIPCL(b) Joint Venture- MGCL
Financial LiabilitiesMeasured at amortised cost(a) Borrowings(b) Trade Payables(c) Other Financial Liabilities
C Financial Risk Management objectives
The Group's principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations, routine and capital expenditure. The Group's principal financial assets include loans, advances, trade and other receivables and cash and cash equivalents that derive directly from its operations.
The Group's activities expose it to a variety of financial risks viz regulatory risk, interest rate risk, credit risk, liquidity risk etc. The Group s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Group's senior management oversees the management of these risks. It advises on financial risks and appropriate financial risk governance framework for the Group's.
Regulatory RiskThe Group's substantial operations are subject to regulatory interventions, introduction of new laws and regulations including changes in competitive framework. The rapidly changing regulatory landscape poses a risk to the Group's.Regulations are framed by Central / State Regulatory Commission as regard to Standard of Performance for utilities, Terms & Conditions for determination of tariff, obligation of Renewable Energy purchase, grant of Open Access, Deviation Settlement Mechanism, Indian Electricity Grid Code / Gujarat Grid Code, Power Market Regulations etc. Moreover, the State / Central Government are notifying various guidelines and policy for growth of the sector. These Policies / Regulations are modified from time to time based on need and development in the sector. Hence the policy / regulation is not restricted only to compliance but also have implications for operational performance of utilities, Return on Equity, revenue, competitiveness, scope of supply as consumer of 1 MW and above have an option to select the supplier, ceiling on trading margins, Regulatory charges, market etc.
To protect the interest of Utilities, State Utilities are actively participating in the process of framing of Regulations. ARR is regularly filed 8< FPPPA is levied on quarterly basis for any increase/decrease in power purchase cost.
Foreign exchange riskThe Subsidiary Company GETCO is exposed to foreign exchange risks arising from various currency exposures, primarily with respect to the USD and EUR. Foreign exchange risks arise from future commercial transactions and recognized assets and liabilities, when they are denominated in a currency other than Indian Rupee.
The Subsidiary Company GETCO's exposure with regards to foreign exchange risk which are not hedged is given below. However, these risks are not significant to the company's operation. ________________________________________________________________________________________________
N ature o f transactions Currency A s at 31 M arch, A s at 31 M arch, A s at 1 A pril, 2015Loan USD 60981693.36 54065064.78 40082677.25Interest and commitment charges payable USD 284228.21 166646.40 86810.00Interest and commitment charges payable EURO 3614.00 0.00 0.00
Interest Rate Risk managementInterest Rate Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's
exposure to the risk of changes in market interest rates is negligible as primarily to the Group's long-term debt obligations with fixed interest rates.
Credit Risk management
Credit Risk arises from cash and cash equivalents and deposits with banks as well as customers including receivables. Credit risk management considers available reasonable and supportive forward-looking information including indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes, government directives, market interest rate).
The concentration of credit risk is limited due to the fact that the customer base is large and revenue for the year ended 31st March, 2017 and 31st March, 2016.
Bank balances are held with reputed and creditworthy banking institutions.
Liquidity Risk managementLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are required to be settled by
delivering cash or another financial asset. The Group manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and
availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. The management prepares annual budgets for
detailed discussion and analysis of the nature and quality of the assumption, parameters etc. Daily and monthly cash flows are prepared, followed and monitored
at senior levels to prevent undue loss of interest and utilize cash in an effective manner.
The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Group may be required to pay.
Particulars Less than 1 yearBetween 1 and 4
yearsMore than 4 years Total
As at 31st March, 2017Non - Current Financial Liabilities
Borrowings - 10,51,744.19 4,35,417.06 14,87,161.25Trade Payables - - 85.29 85.29Other Financial Liabilities - 16,663.18 4,77,228.49 4,93,891.67
- 10,68,407.37 9,12,730.85 19,81,138.22Current Financial Liabilities
Borrowings 13,271.68 - - 13,271.68Trade Payables 5,80,891.17 - - 5,80,891.17Other Financial Liabilities 9,47,791.59 - - 9,47,791.59
15,41,954.44 - - 15,41,954.44Total Financial Liabilities 15,41,954.44 10,68,407.37 9,12,730.85 35,23,092.65
As at 31st March, 2016Non - Current Financial Liabilities
Borrowings - 10,53,992.50 3,57,935.26 14,11,927.76Trade Payables - - 85.29 85.29Other Financial Liabilities - 16,536.55 4,33,875.58 4,50,412.13
- 10,70,529.04 7,91,896.13 18,62,425.18Current Financial Liabilities
Borrowings 2,27,805.64 - - 2,27,805.64Trade Payables 5,37,732.13 - - 5,37,732.13Other Financial Liabilities 8,88,014.35 - - 8,88,014.35
16,53,552.12 - - 16,53,552.12Total Financial Liabilities 16,53,552.12 10,70,529.04 7,91,896.13 35,15,977.30
The Company has access to Cash Credit facilities as described below, of which Rs.2,44,228.33 Lakhs were unused at the end of the reporting period ( as at 31st
March, 2016 Rs.2,29,885.13 Lakhs). The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
Secured Cash Credit Facility, reviewed annually and payable at call:Particulars As at 31st March, 2017 As at 31st March, 2016
Amount used 13,271.67 27,614.87Amount unused 2,44,228.33 2,29,885.13
D Fair Value measurementFair Value of the Company's financial assets on a recurring basis:Some of the Company's financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined.
i. Financial assets at fair value through other comprehensive income (FVTOCI)Financial Assets/ Financial Liabilities Fair Value as at Fair Value hierarchy Valuation technique(s) and key input(s)
31st March, 2017
31st March, 2016
1st April, 2015
Investment in Equity Instruments (unquoted) 5,336.48 4,903.28 4,061.09 Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
Investment in Equity Instruments (quoted) 27,545.92 23,481.77 21,432.75 Level 1 Quoted bid prices from Stock exchange - NSE / BSE
Investment in Government Securities 12,810.84 12,764.48 6,383.52 Level 1 Quoted bid prices from Stock exchange - NSE / BSE
ii. Financial Assets and Liabilities at amortised costThe fair value of cash and cash equivalent, other bank balances, trade receivables, loans, other financial assets, current borrowings, trade payables, other financial liabilities approximates their carrying amounts, due to their short-term nature.
48 Disclosure under Indian Accounting Standard 3 6 - Impairment of AssetsIn accordance with the Indian Accounting Standard (Ind AS-36) on "Impairment of Assets" the Company during the year carried out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard.Based on the exercise, Rs. 16778.94 Lakhs and Rs. 16296.15 Lakhs has been provided for Ukai and sikka power station respectively in Subsidiary GSECL. For the company realisable value of SIKKA unit 18i2 is Rs. 18906.12 Lakhs and UKAI unit 1&2 is Rs. 39965.11 Lakhs which is based on Optimised Depreciated Replacement Cost (ODRC) method derived by a professional government registered valuer.
r
*55
49 Contingent Liabilities, Contingent Assets and commitments (to the extent not provided for):
A Contingent Liabilities not provided for:_______________(Rs. In Lakhs)
ParticularsAs at 31st March,
2017As at
31st March, 2016As at
31st March, 2015
1. Claims against the erstwhile GEB & the Company not acknowledged as debts:
1. Purchase 157.67 133.95 144.88
II. Leasing Finance availed by erstwhile GEB 1,703.00 1,703.00 1,703.00
III. Power Purchase 78,921.00 72,444.00 1,02,456.00
IV. Stamp Duty on mortgage deed for loans availed by erstwhile GEB from LIC 1,108.00 1,108.00 1,108.00
V, Employees 74,188.50 63,880.00 58,537.00
VI. Disputed matters of Income Tax, Service Tax, VAT & etc. (including against erstwhile GEB) 83,076.38 38,165.75 29,400.35
VII. Claims against Companies not acknowledged as debts 42,492.06 39,659.04 17,943.41
VIII.Demand raised by Irrigation Department, Water Reservation Charges & Interest 1,69,790.58 53,014.00 56,452.18
IX. Facility Management Charges 1,742.39 958.00 -
2. Other money for which the Companies are contingently liable
i. Letter of Credit 1,51,799.35 96,063.50 88,686.83
ii. Guarantees issued by Banks & others on behalf of the Company 29,775.16 41,830.68 18,043.99
Associate
1. Claims against the Company not acknowledged as debts
i. Fuel Cost & Transportation Charge 156.34 156.34 120.38
ii. Employees 0.27 0.27 0.27
iii.Disputed matters of Income Tax & Property Tax 712.00 741.58 737.08
iv. Claims against Company w.r.t. Mine Development 2,638.21 2,638.21 2,003.54
v.Demand for Water Reservation Charges & Interest from Narmada Water Resources and Water Supply Dept. 199.55 206.30 208.04
vi. Claims against Companies not acknowledged as debts 201.76 542.68 365.32
vii. Purchase 1.08 786.52 785.85
Joint Venture
1. Claims against the Company not acknowledged as debts
i. Claims against Company by M/s. AMPL regarding Development of Coal Block 15,991.60 12,695.60 12,695.60
Tota 6,54,654.90 4,26,727.42 3,91,391.72
Share of the Company in Contingent liabilities of Associate- M/s GIPCL and Joint Venture - M/s MGCL are stated at their proportionate values. In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute. No reimbursement is expected.
B A Contingent Asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are currently outstanding. The
inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances.
C Commitments
Capital Commitments:
Particulars As at 31st March, 2017
As at31st March, 2016
As atApril 1,2015
SubsidiariesA. Capital CommitmentsB. Other Commitments
3,95,110.743,304.06
5,15,294.293,517.86
1,56,941.622,979.35
AssociateA. Capital CommitmentsB. Other Commitments
8,274.49910.41
19,296.33910.41
6,977.471,591.41
Joint Venture
__________Q
A. Capital Commitments
B. Other Commitments -rei i a _____ ___; -
i Auoou 4nts I
The Company's pending litigations comprise of claims against the Company and proceedings pending with Tax / Statutory/ Government Authorities. The Company
has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever
applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future
cash outflows in respect of the above are determinable only on receipt of judgments/decisions pending with various forums/ authorities.
50 CSR Expenditure____________________________________________________________________________________________ ___________________ (Rs. in lakhs)
ParticularsFor the Year ended For the Year ended31st March, 2017 31st March, 2016
The CSR expenditure comprises the following:
a) Gross amount required to be spent by the Company during the year 1642.12 1555.46
b) Amount spent during the year 615.47 1018.51
For the year ended 31-03-2017 For the year ended 31-03-2016Particulars In Cash Yet to be paid in Total In Cash Yet to be paid in Total
cash cash(i) Construction/acquisition of any asset 150.26 - 150.26 209.43 - 209.43(ii) On purpose other than (i) above 465.21 - 465.21 809.08 - 809.08
Total 615.47 - 615.47 1,018.51 - 1,018.51
d) For CSR amount which has remained unspent during the year, suitable reasons would be provided in the Directors' Report.
51 Specified Bank Notes (SBNs)Details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016 is as provided below:
(in Rs.)
Particulars SBNs
OtherDenomination
Notes TotalClosing cash in hand as on 8th November, 2016 20,21,70,500 3,36,50,363 23,58,20,863Add: Permitted receipts 6,67,72,75,000 3,67,00,71,520 10,34,73,85,020Add: Non Permitted receipts * 33,500 - -Less: Permitted payments - 1,92,40,061 1,92,45,061Less: Amount deposited in banks 6,87,50,33,500 3,51,75,79,261 10,39,26,12,761Add: Amount withdrawn from bank - 12,93,000 12,93,000Closing cash in hand as on 30th December, 2016 44,45,500 16,81,95,561 17,26,41,061
* It includes amount collected at hospitals & guest houses etc. Situated at projects/stations of the Company which are mostly located in remote areas. Further, employees of the Company have drawn imprest/staff advance prior to 8 November 2016 for meeting official expenditure subsequently deposited the same in the bank. This disclosure has been added so as to arrive at the closing cash in hand as on 30 December 2016.
52 The Company has a system of physical verification of Inventory every year, Fixed assets and Capital Stores in a phased manner to cover all items over a period of three years. Adjustment differences, if any, are carried out on completion of reconciliation.
53 The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. Further, some balances of Trade and other receivables, Trade and other payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, will be accounted for on confirmation/reconciliation of the same, which will not have a material impact.
54 Grants/Consumer Contributions that compensate the cost of depreciable assets:With effective from 1 April 2016 the Company changed its method of computing the grants/consumer contributions received against depreciable assets to be
recognised in Statement of profit or loss from reducing balance method to the straight-line method and consequentially the rates at which grant is recognised in
the Statement of Profit and Loss. The rate applied for grant recognition is equivalent to rate of depreciation charge on the assets which is currently at 5.28%. The
change is made as this will more accurately reflect the pattern of usage and the expected benefits of such grants/consumer contributions and provide greater
consistency with the depreciation methods on the assets used by the Company. The Company has determined that the change to recognize grants in proportion of
the depreciation expense is a change in accounting estimate and is to be applied prospectively.
The net book value of grants and consumer contributions received against assets acquired prior to 1 April 2016 will be depreciated using the straight-line method In
proportion to the depreciation rate of 5.28% prospectively. As a result of the change, the grants/consumer contributions recognised in the Statement of Profit and
Loss decreased by Rs. 15917.17 Lakhs in the current financial year and the deferred grants/consumer contribution increased by the like amount.
55 Sundry receivable by Subsidiary GETCO
Amount Receivable from Sundry Debtors for wheeling charges includes an amount aggregating to Rs. 36577.08 lakhs (P.Y. Rs. 36577.08 Lakhs) for period 2006 to
2011, due from M/s Essar Steel Limited. This is under litigation in the court of law. The honorable High Court, Gujarat has passed order in favor of GETCO and
currently matter is pending with honorable Supreme Court. The Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 has been initiated against M/s Essar Steel Limited. The CIRP has been approved by the Honorable National Company Law Tribunal, Ahmedabad and it is ongoing.
GETCO has filed its claim with the designated Resolution Professional. Management is of the view that above amount is good and recoverable.
56 Foreign Currency Loan by GETCO
During the year, GETCO has taken Foreign Currency Loan from Asian Development Bank (ADB) amounting to USD 83.94 lakhs (P.Y. USD 139.82
Loan is In progress. Interest and commitment charges for fy 2016-17 amounting to u sd 7.73 lakhs (p .y . u sd 4.09 lakhs! is shown under Capital Work Foreign currency fluctuation Gain / (loss) as On 31.03.2017 is RS. 1019.51 lakhs (P.Y. (Rs. 1699.08 lakhs)). Foreign currency fluctuation Gain Other Non-Operating Income.
57 Capital Work In Progress by GETCO
(i) The subsidiary company GTECO has provided General Establishment Charges (GEC) and Head Office Supervision Charges (HOSC) on amount of Rs. 4813.07 lakhs from current year on the expenditure recorded under the head unbilled capital work in progress.(ii) The rates of HOSC have been fixed as @ 5% for Construction division & @ 17% for Transmission division, these are loaded on the cost of Material and labour incurred during the year.(iii) In case of used transformers withdrawn from fixed assets and are being used in capital projects, the same are shown as CWIP at Net Value and accordingly General Establishment Charges (GEC) and Head Office Supervision Charges (HOSC) forthe year are allocated on it.(iv) Management of the subsidiary company GTECO has issued circular to proportionately load borrowing costs @ 5.349% (Previous Year 6.125%) on the value of opening CWIP and net additions during the year. During the year, the company has capitalized Rs.15380.07 lakhs towards the interest on the funds for meeting capital expenditure requirement. The circles and divisional offices are also instructed not to load borrowing costs in cases where the works have been suspended for one year or more as of 31/03/2017. Such loading is subject to adjustments if any.
58 Deviation Settlement MechanismThe Deviation Settlement Mechanism (DSM ) receivables/payables have been accounted as provided by State Load Dispatch Centre (SLDC).
59 Supplementary bill issued to M/s. Essar Steel India Limited by DGVCL:M/s. Essar Steel India Limited (ESIL) violated terms and conditions of the Minutes of Meeting (MOM) dated 01.02.2010 among Principal Secretary, Energy and Petrochemical Department (E&P Department), Government of Gujarat (GOG), GUVNL, GETCO, Chief Electrical Inspector, Essar Group & Bhander Power Ltd., the Company, has therefore, issued supplementary bill of Rs.2311.02 crores to ESIL as per the conditions of the MoM for 2020.99 MUs during F.Y 2011-12. Subsequently, as per directives of E&P Department vide their letter dated 05.01.2012, the revised supplementary bills of Rs. 192.59 crores for 168.42 MUs was issued to ESIL till the case of total claim of original supplementary bill is finally settled for breach of said MoM.
During FY 2011-12, pending final settlement of the total claim as shown above and considering the provisions of Accounting Standard-9 relating to Revenue Recognition issued by the Institute of Chartered Accountants of India (ICAI) and also as ESIL paid the amount of Rs.192.59 crores of revised supplementary bills, revenue to the extent of Rs.192.59 crores was recognised in the books and recognition of balance Revenue of Rs.2118.43 crores was deferred till the final settlement is made by the E&P department, GOG, or appropriate judicial forum.
In this regard, ESIL filed appeal under Section 127 of the Electricity Act before the Chief Electrical Inspector. The Chief Electrical Inspector passed order dated 01.11.2013 for revising bill for 25.23 MUs and for refunding the balance amount. Aggrieved by the order passed by the Chief Electrical Inspector, the Company challenged the order vide SCA No. 2859/2014 on 19.02.2014 before the Hon'ble High Court, Gujarat.
The Hon'ble High Court of Gujarat has passed judgement on 22.01.2015 directing the refund of the excess amount paid by M/s. ESIL pursuant to the revised supplementary bills over and above the quantity of unauthorized power used by M/s. ESIL. Aggrieved by the order, the Company challenged the judgement vide LPA no. 465/15 & LPA no. 466/15. The High Court of Gujarat allowed the aforesaid LPAs filed by the Company and passed order in favour of the Company on 17.7.2015. Accordingly, order passed by the Chief Electrical inspector dated 01.11.2013 as well as the judgement and order dated 22.01.2015 passed by the learned single Judge have been quashed and set aside.
M/s. ESIL has challenged the aforesaid order and filed SLP Civil no.27920/2015 before Hon'ble Supreme Court which is pending. Hence the Contingent liabilities Is disclosed under Note No. 49 which includes the amount of Rs. 19258.54 lakhs of the SLP filed by M/s. ESIL.
Further to above, as indicated under Note No. 27, the amount of Cross Subsidy Surcharge of Rs. 402.04 crore Includes an amount of Rs. 180.99 crores which has been contested by M/s. ESIL as not payable by filing petition before GERC. M/s. ESIL had earlier filed petition in the matter before the Central Electricity Regulatory Commission who dismissed the petition on grounds that dispute raised falls within the jurisdiction of GERC.
Further pursuant to approval by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 02.08.2017 for initiation of bankruptcy proceeding against M/s. ESIL in two petitions filed by M/s. ESIL's Lenders i.e. State Bank of India (SBI) and Standard Chartered Bank, DGVCL has filed its claim before the National Company Law Tribunal ( NCLT). At this stage the proceedings are pending before NCLT for resolution of the issue.
The subject matter is subjudice and pending before various judiciaries and considering the same Company has preferred not to make provision for expected credit loss (ECL)/lifetime ECLon the due and outstanding amount in accordance with IND AS 109 on "Financials Instruments".
60 Property Plant and Eqiupment and Depreciation by GSECL"A Change in Accounting Estimate" as per Indian Accounting Standard (IND AS 8) "Accounting Policies, Changes in Accounting Estimates and Errors" means an
adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset, that results from the assessment of the present
status of, and expected future benefits and obligations associated with, assets and liabilities. During the year, the company had approached Hon'ble GERC through
a clarification petition in the matter of GERC order dated 31.03.2017 and clarification about the date from which the useful life of the transferred assets is to be
considered and depreciation of transferred stations under FRP. The petition, thereafter was disposed with the clarification that the useful life is to be taken w.e.f.
01.04.2005 in respect of the assets transferred under the FRP/ transfer scheme. In light of the legal limits placed by the GERC m yt Regulations 2016 and GERC order
on the use of the asset, which is an important factor on in determining the useful life, there was a change in useful life of the asset in terms of Clause above.
As per Ind AS 8, changes in accounting estimates result from new information or new developments. The GERC clarification perition no. 1651/2017 dated
26.05.2017, has made available the date of commencement of useful life, which is to be taken w.e.f 01.04.2005. In view of the aforesaid facts, the company is of the
opinion that the change in useful life from 35 years (in the earlier financial statements as per Indian GAAP) to 25 years under the current financial statements prepared under Ind AS, In light of the newly available information are treated as change in accounting estimate and the effect of change in an
is recognised prospectively . To bring uniformity , the company has also reviewed the life of new power plants and changed their life to
company has withdrawn depreciation of Rs 4025.95 lakhs and charged Rs 730.98 lakhs depreciation
61 Captive Mining by GSECLNominated authority, Ministry of Coal, Govt. Of India, declared the GSECL as Allottee of the Gare Palma Sector I Coal Mine, in Raigarh District, Chattisgarh and
Allotment Agreement was signed on 30th March, 2015 and all the allotment conditions as per Allotment Agreement were completed by the Company on
24/04/2015. GSECL has submitted Bank Guarantee of Rs. 297 crores to the Nominated Authority, Ministry of Coal, GOI as per the allotment conditions. GSECL has
incurred pre-operative expenditure of Rs. 9772.49 lakhs for the same upto March, 2017 which includes payment of Rs. 65.14 Crores made to prior allottee of the
mine and Rs. 25 crores made to MOC as upfront fee as per allotment agreement. Finalization of tender for Mining Developer and Operator is under process.
»
^ 3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62 Related Party Disclosures
A Name of Related Parties and description of relationship:Name of Related Parties Nature of Relationship
Shri Sujit Gulati, IAS (27.07.2016 to 31.03.2017)Shri Pankaj Joshi, IAS (23.09.2016 to 31.03.2017)Smt. Shahmeena Husain, IAS (01.04.2016 to 13.10.2016) Shri S B Khyalia (01.04.2016 to 31.03.2017)Shri M B Parikh (01.04.2016 to 31.03.2017)Shri Parthiv Bhatt (01.04.2016 to 31.03.2017)
Key Management Personnel (KMP) Key Management Personnel (KMP) Key Management Personnel (KMP) Key Management Personnel (KMP) Key Management Personnel (KMP) Key Management Personnel (KMP)
B The following transactions were carried out with the Related Parties in ordinary course of business during the year:
(Rs. in lakhs)Nature of Transaction KMP Total
Transactions during the vear
Remuneration paid to KMP: 95.91(70.93)
95.91(70.93)
Shri Sujit Gulati, IAS -
Shri Pankaj Joshi, IAS 12.74 12.74
Smt. Shahmeena Husain 9.16(16.08)
9.16(16.08)
Shri S B Khyalia 29.04(11.06)
29.04(11.06)
Shri M B Parikh 26.42(26.24)
26.42(26.24)
Shri Parthiv Bhatt 18.55(17.54)
18.55(17.54)
Perquisites paid to KMP: 3.76(2.68)
3.76(2.68)
Shri Sujit Gulati, IAS "
Shri Pankaj Joshi, ias_
“
Smt. Shahmeena Husain 0.90 0.90(1.59) (1.S9)
Shri S B Khyalia 2.86 2.86(1.09) (1.09)
Shri M b parikh - ■
Shri Parthiv Bhatt_
“
Note : Previous Year figures are mentioned in brackets.The Company has not paid any remuneration to Chairman, Shri Sujit Gulati, IAS as he occupies the position of Addl. Chief Secretary, Energy & Petrochemicals Dept., Govt, of Gujarat and is therefore drawing salary from Govt, of Gujarat.
GUJARAT URJA VIKAS NIGAM LIT/ITED
63 First time Ind As adoption - RecorriliationEffect of Ind AS adoption on the drlance sheet as at March 31,1016 and April 1, 2015_____ ____________________________________________________ _____________________________________ ( to- in Lakhs)
Particulars Note No As at 31st IVIa rch. 2016 As at 1st April, 2015 (Date of transition)Effect of
AS per Ind AS AS per Ind ASPrevious GAAP transition to Ind Previous GAAP transition to
AS Ind AS
ASSETS
(1) Non-Current Assets(a) Property, Plant and Equipmait 1,2 & 3(d) 43,34,430.89 1,855.80 43,36,286.69 37,07,504.34 2,157.02 37,09,661.43(b) Intangible Assets 3.66B.86 - 3,668.87 4,630.SS - 4,630.88(c) Capital work-in-progress 2 5,40,274.45 130.16 5,40,404.61 7,50,023.67 -19.48 7,50,004.19(d) Intangible assets under deveopment 21.86 - 21.86 21.S6 - 21.86(e) Financial Assets
(i) Investments 3 71,203.62 24,514.13 95,717.76 53,087.61 29,542.73 82,630.34(ii) Loans 16,723.62 - 16,723.62 16,179.72 - 16,179.72(iii) Other Financial Assets 3 14,095.94 - 14,096.94 12,913.24 81.00 12,994.25
(f) Other non-current assets 3(d) & 7 26,200.43 362.24 26,562.66 23,567.01 466.15 24,033.16
(2) Current Assets(a) Inventories 2(d) 2,47,615.49 -5,105.12 2,42,509.37 2,67,559.37 -4,140.71 2,63,418.66(b) Financial Assets
(i) Investment 3(b) - - - 112.S8 3.45 116.33(ii) Trade Receivables 3,17,677.91 - 3,17,677.91 3,21,040.45 - 3,21,040.45(iii)Cash and cash equivalent! 3(d) 46,223.88 -0.87 46,223.01 51,509.85 -1.84 51,508.02(iv) Other Bank Balances 3,362.65 - 3,362.65 85.73 - 85.73(v) Loans 3,342.40 - 3,342.41 3,255.69 - 3,255.68(vi) Other Financial Assets 2 5,56,820.44 -51.39 5,56,769.06 4,31,884 46 291.22 4,32,175.68
(b) Current Tax Assets (net) 11,271.55 -68.72 11,202.93 8,644.40 -151.37 8,493.03(d) Other Current Assets 2, 3(d) &7 35,995.86 40.17 36,036.02 47,869.24 39.05 47,908.29
Assets classified as held for sale 507.55 - 507.65 532.25 - 532.2562,29,438.59 21,675.39 62,51,114.01 57,00,422.66 28,267.22 57,28,689.94
EQUITY AND LIABILITIESEquity
(a) Equity Share Capital 10,75,470.55 - 10,75,470.65 8,42,140.13 - 8,42,140.13(b) Other Equity 8 6,05,613.09 -98,767.97 5,07,845.12 4,69,339.57 -73,172.19 3,96,167.37
Non-controlling Interests 5 9,101.38 -362.89 8,738.49 8,564.50 -268.30 8,296.19
Deferred Government Grants, 5it»sidies & Consumer Contribitions 4 6,52,285.04- -5,911.67 6,46,373.38 6,27,131.50 -6,625.09 6,20,506.42
Liabilities
(1) Non-Current Liabilities(a) Financial Liabilities
(i) Borrowings 3(d) 14,14,148.58 -2,220.92 14,11,927.76 15,10,674.83 -2,175.95 15,08,498.88(ii) Trade Payables 85.29 - 85.29 85.29 - 85.29
(iii) Other Financial Liabilities 4,50,412.12 - 4,50,412.12 4,00,476.29 - 4,00,476.29(b) Provisions 1,25,853.47 - 1,26,853.47 1,19,974.08 - 1,19,97409(c) Deferred Tax Liabilities (Net) 2 & 6 8,664.87 1,23,397.56 1,32,062.53 3,712.68 1,01,726.17 1,05,438.85(d) Other Non Current Liabilities 30351.49 30,351.49 34,865.00 ~ 34,865.90
(2) Current Liabilities(a) Financial Liabilities
(i) Borrowings(ii) Trade Payables
(iii) Other Financial Liabilities(b) Other Current Liabilities(c) Provisions(d) Current Tax Liabilities (net)
22
3(d)3(d)
2.27.805.65 5,37,678.62 8,82,525.951.21.433.66
74,906.74 11,101.89
53.515,488.38
-0.38-0.33
2,27,805.645,37,732.138,88,014.351,21,433.29
74,906.4111,101.89
3,37,372.113,22,917.698,18,503.871,26,061.96
69,907.588,694.68
10.668,773.73
0.07-1.87
3,37,372.113,22,928.358,27,277.611,26,062.06
69,905.718,694.68
62,29,438.59 21,675.39 62,51,114.01 57,00,422.66 28,267.22 57,28,689.93
1 Reclassification of LandUnder Previous GAAP, leasehold land was shown as part of fixed assets, whereas under Ind AS all leases are considered as operating leases and therefore are shown as prepayments. Consequently, as on the transition date 1st April, 2015 an amount of Rs.2,746.35 Lakhs has been decapitalized and shown as prepayments under Ind AS. Similarly, an amount of Rs.2642.42 Lakhs has been shown as prepayments as at 31st March, 2016. This reclassification has no impact on equity. Further out of total prepayments, current amount of Rs. 103.92 lakhs has been bifurcated as on transition date and as at 31st March, 2016 under Current.
2 Prior period items and Change in Policy:2a Under Previous GAAP, prior period items were reflected as part of Current Year expense or income in the Statement of Profit & Loss. Under Ind AS, material prior period items are adjusted to
the period to which they relate and in case they relate to the period earlier than period presented, these are adjusted against opening equity of the earliest period presented. There is a prior
period adjustment of Rs. 4743. 92 lakhs as reflected in the Audited Financial Statements of the Financial Year ended 31 March 2016, which need to be adjusted in the transition balance sheet. 2b Further an error of Rs. 9,096.25 lakhs determined during the year is adjusted by various Assets and Liabilities and a corresponding impact in equity.2c Deferred tax of Rs. 98,153.17 lakhs and Rs 1,20,068.20 lakhs as at 1st April, 2015 and 31st March, 2016 respectively is an error recognised in the financial year ended as at 31st March, 2017
and reflected in the respective years.2d As per Ind AS 16 PPE, items such as spare parts, stand by equipment and servicing equipment needs to be recognised as property, plant and equipment, accordingly the Company has
identified certain stock of items that falls within the meaning of servicing equipment which needs to be capitalised. The total gross addition to PPE from inventory is Rs. 7,028.98 Lakhs (net
Rs. 4,140.71 Lakhs as on 1 April 2015 and Rs. 4862.01 Lakhs as on 31 March 2016). Depreciation of Rs. 244.12 Lakhs has been provided on this addition for the year 2015-16. With respect to
the same Rs.4140.71 lakhs and Rs.5106.71lakhs has been reduced from inventory as on 1 April 2015 and as on 31 March 2016 respectively.
3 Revaluation of investments3a Under the Previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under the Ind AS, investments in equity instruments of
Companies other than Associate and Joint venture are measured at fair value. As at the transition date, the Company has made irrevocable choice to account for these investments at fair
value through Other Comprehensive Income (OCI), resulting in increase in Total Equity by Rs. 18,633 Lakhs and Rs. 21,524.32 Lakhs as at 1st April, 2015 and 31st March, 2016 respectively.3b Fair Value of Investment in Government Securities
Under the Previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under the Ind AS, investments in government securities are measured at fair value. As at the transition date, the Company measures its investments at fair value through other comprehensive income (OCI), resulting in increase in total equity by Rs. 495.64 Lakhs and Rs. 360.66 as at 1st April, 2015 and 31st March, 2016 respectively.The investment in short term quoted government securities is to be measured at fair value through other comprehensive income (OCI), resulting in increase in total equity by Rs. 3.45 Lakhs at 1st April, 2015.
3c Under the Previous GAAP, associate had been accounted under Equity method. Under Ind AS the Equity method has been accounted based on fair value of Associate. The impact of the change due to the same is increase in value of associate by Rs.10,412.09 Lakhs as at 1st April, 2015 and Rs.2,629.15 lakhs as at 31st March, 2016 respectively. Hence , the i nvestments have increased with the same amount. Further, as Ind AS requires the Capital reserve on acquisition of Associate to be disclosed separately under Other Equity; the Other equity ancf the investments have been increased by the amount of Rs.2,378.30 lakhs as at 1st April, 2015 and 31st March, 2016.
<ss10
3d Under the Previous GAAP, Joint venture had been proportionately consolidated. Under Ind AS, in case of loss in Joint venture, entity's share of loss is recognised only to the extent of entity's carrying value of investment. Hence, the impact of the same is reduction of investment by Rs 2 Lakhs as at 31st March, 2016 underlnd AS.Further; on transition to Ind AS, such investments in joint venture is consolidated using equity method as per Ind AS 28,'Investments in Associates and Joint Ventures. The proportionately consolidated amounts of assets and liabilities of joint ventures under the previous GAAP which will be reduced from the respective assets and liabilities; were as below:
Particulars As at 31” March, 2016
As at l" April, 2015
Share Capital 2.00 2.00Reserves & Surplus -48.13 -Unsecured Loans 2,220.92 2,175.95Trade payables 2.23 0.12Other Current Liabilities 0.38 0.14Provisions 0.33 1.87Total 2,177.73 2,180.08
Tangible Assets 0.45 0.70Other Non-Current Assets 2,176.28 2,176.28Cash and Cash Equivalents 0.87 1.84Other Current Assets 0.14 1.26Total 2,177.73 2,180.08
4 Government grant under Financial Restructuring Plan (FRP)4a Under previous GAAP, Government Grants received under FRP as promoter's contribution are treated as Capital Reserve forming part of 'Shareholders' Fund'. In view of this, the entire
'Capital Grant under FRP' amounting to Rs. 62,855.88 Lakhs shown as Capital Reserve as on 31 March, 2015 has been transferred to Retained Earnings This has no impact on Total Equity.4b In Subsidiary Company GSECL, as per IGAAP grants received for fixed assets was adjusted against the cost of fixed assets. As per Ind AS such grants received for assets should be set up as
deferred income and recognised in Statement of Profit or Loss on a systematic basis over the useful life of such assets. At the transition date carrying value of grant as on 1st April, 2015, i.e. if it had been deferred and transferred to profit or loss on a systematic basis, should be recognised as deferred income in the books. As the Company has elected to continue with the carrying value of its other Property Plant 8 Equipment (PPE) recognised as of 1st April, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 'First -time Adoption of Indian Accounting Standards', there wouldn’t be any impact on fixed asset. Company had received solar grant from GEDA of 1500 lakhs for 10 MW ash dyke at GTPS in 2012-13. The Company had capitalised the fixed asset at net amount of Rs. 841.00 lakhs (after reducing 1500 lakhs from cost of asset). If such grant had not been adjusted against fixed asset and deferred from the beginning its carrying value would be Rs. 1271.34 lakhs on the basis of recognising in Statement of Profit and Loss over useful life of such asset. Thus, Rs. 1271.34 lakhs has been recognised as deferred government grant with a corresponding decrease in retained earnings at the date of transition. Government grant of Rs. 1271.34 lakhs and Rs. 1195.12 lakhs has been recognised as at 1st April,2015 and as at 31st March, 2016 respectively.
4c In IGAAP, government grants received under FRP as promoter's contributions were treated as other non current liability. As per Ind AS 20, Government grants shall be recognised in Statement of Profit or Loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. Thus, in the instant case entire Capital grant under FRP amounting to Rs. 7,896.43 lakhs and Rs. 7,106.79 lakhs as of 31 March, 2015 and 31 March, 2016 respectively, given that there are no specific conditions attached to the grant, will be transferred to Retained Earnings thereby increasing Retained Earnings by Rs. 7,633.22 lakhs and Rs. 7,370 lakhs as of 1st April, 2015 and 31st March 2016 respectively.
5 Non Controlling InterestsThe Non controlling interest share has reduced due to impact of Ind AS adjustments by Rs.268.30 lakhs and Rs.362.89 as of 1st April, 2015 and 31st March 2016 respectively.
6 Deferred taxDeferred tax has been recognised on account of adjustments made due to application of Ind AS. These adjustments have resulted in increase in deferred tax liability and corresponding decrease in equity by Rs. 3,697.82 Lakhs as at 1st April, 2015 and by Rs. 3,426.41 Lakhs as at 31st March, 2016.
7 Other Current AssetsLeasehold land of Rs.2,746.35 lakhs and Rs.2,642.43 as at 1st April, 2015 and 31st March, 2016 respectively will be reclassified as prepayments per Ind AS 17 on Leases. Such prepayment - lease hold land is reflected in Other non-current assets at Rs. 2,642.43 lakhs and Rs.2,538.52 lakhs as at 1st April, 2015 and 31st March, 2016 respectively and in Other current assets at Rs. 103.92 lakhs.
8 Reconciliation of Total Equity as at April 1, 2015 and March 31,2016( Rs. in Lakhs)
Particular Note No.As at 31st
March, 2016As at 1st
April, 2015Total Equity (Shareholders' Funds) under Previous GAAPAdjustments:
16,91,185.12 13,20,044.19
FRP Grant: transferred from Capital Reserve to Retained Earnings 4(a) -62,855.88 -62,855.88FRP Grant: transferred from Retained Earnings to Capital Reserve 4(a) 62,855.88 62,855.88FRP Grant: transferred from Deferred Government Grant to Retainedearnings 4(c)
7,106.79 7,896.43
Government grant recognised 4(b) -1,195.12 -1,271.34Equity instruments measured at fair value 3(a) 21,524.32 18,633.00
Financial asset measured at fairvaluethrough other comprehensive income3(b)
360.66 499.09Depreciation on capitalisation of Inventory Prior period adjustments:
2(d) -244.12
- Deferred tax 2(c) -1,20,068.20 -98,153.17- Others 2(a) & 2(b) -5,961.04 -7,879.13Removal of impact of Joint venture as per previous GAAP 3(d) 48.13 -Impact of Joint venture as per Ind AS 3(d) -2.00 *Impact of Associate as per Ind AS 3(c) 2,629.15 10,412.09Others (Including tax on above) -3,329.43 -3,577.46Total adjustment to equity -99,130.86 -73,440.50Total equity under Ind AS 15,92,054.26 12,46,603.69
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9 Effect of Ind AS adoption on the Statement of Profit and Loss for the year ended 31st March, 2016 ( Rs. in Lakhs )Effect of
Particulars Note No. Previous GAAP transition to Ind As per Ind AS P8iLAS (CFS)
Revenue from operations 12 38,34,382.82 -18.00 38,34,364.82Other Income 12,13,15,16 1,15,979.17 -1,782.61 1,14,196.56Total Income 39,50,361.99 -1,800.61 39,48,561.38
EXPENSESCost of Fuel consumed 12 5,35,917.74 2,079.29 5,37,997.03Purchase of Power 12 24,36,503.17 10.67 24,36,513.84Employee Benefits Expense 11,12,15 2,43,286.08 -4,291.04 2,38,995.04Finance Costs 12 2,06,716.66 0.25 2,06,716.91Depreciation, Amortization and impairment Expense 14,15 3,01,309.15 502.12 3,01,811.27Other Expenses 12,15 1,39,969.69 504.82 1,40,474.51Total Expenses 38,63,702.50 -1,193.88 38,62,508.61
Profit Before Exceptional items and Tax 86,659.49 -606.73 86,052.77Exceptional Items 4,831.63 - 4,831.63Prior period Items 12 -4,923.09 4,923.09 -Profit before share of net profits of associate and joint venture and tax 86,568.04 4,316.36 90,884.40
Share of Profit of Joint Venture 17 . -2.00 -2.00Share of Profit of Associate 18 5,048.66 3.93 5,052.59
Profit before tax 91,616.70 4,318.29 95,934.99
Tax Expense:(a) Current Tax 12 -20,974.93 -68.71 -21,043.64(b) Deferred Tax 12 -4,952.19 -22,180.16 -27,132.34
Profit for the Year (X-XI) 65,689.52 -17,930.59 47,759.01
Other Comprehensive Income (OCI)(a) Items that will not be reclassified to Profit and Loss(i) Re-measurement of the Defined Benefit Plans - -4,249.35 -4,249.35(ii) Equity Instruments through OCI 15 - 2,891.31 2,891.31Less:- tax impact - 460.75 460.75(iv) Share of other comprehensive income of associates accounted for using the equity method _ -12.83 -12.83(b) Items that will be reclassified to profit or loss - -(i) Financial assets measured through OCI 16 -138.43 -138.43- tax impact - 47.91 47.91Total of Other Comprehensive Income (OCI) (XIII) - -1,000.63 -1,000.63
Total Comprehensive Income for the Year (XII+XIII) 65,689.52 -18,931.22 46,758.37
(Tn
10 Reconciliation o f total comprehensive income for the year ended March 31,2016_________ ( Rs. in Lakhs)
Particulars Note
For the year ended 31st March 2016
Profit as per previous GAAP 65,689.52Adjustments:Effect of remeasurement of post employee benefits 11 4,249.35Effect of adjustment of Prior Period Items 12 1,918.09Deferred income of government grant 13 -713.42Deferred tax expense 12 -22,180.15Others 4.46Depreciation on capitalisation of Inventory 14 -244.12Impact of Joint venture 17 46.13Impact of Associate 18 -1,010.86Total effect of transition to Ind AS -17,930.51Profit as per Ind AS 47,759.01Remeasurements of Defined Benefit Plans ( net of tax) 11 -3,588.74Change in Fair Value of equity instrument (net of tax) 15 2,600.93Impact of Associate 18 -12.83Total Comprehensive Income under Ind AS 46,758.37
11 Remeasurement of Post Employment Benefit ObligationUnder In AS 19 " Employee Benefits" Remeasurement i.e. actuarial gains and losses of defined benefit plan amounting to Rs. 4,249.35 lakhs (net of tax Rs 3,588.74 lakhs) have been recognised in Other Comprehensive Income (OCI). This has resulted in increase in Other Comprehensive Income by Rs. 3,588.74 Lakhs and increase of Employee Benefit Expense by Rs.4,249.35 Lakhs for year ended 31st March, 2016.
12 Prior period errorsThe prior period adjustment of Rs.1918.09 lakhs is adjusted in the P&L statement for the year ended 31st March, 2016 out of total prior period expense. Further, deferred tax expense of Rs.22180.15 lakhs has been recognised under Ind AS.
13 Deferred Income transferred to Retained Earning
Under Ind AS Capital grant under FRP was transferred to Retained Earnings on transition date but as per IGAAP the grant was deferred on systematic basis over the period. The amount which was deferred to profit and loss statement of Rs. 789.72 lakhs will be reduced from Other Income. Further, Rs.76.22 lakhs is the Deferred government grant charged to P&L statement in proportion to charge of the depreciation of asset to which the grant pertains recognised under Ind AS in Subsidiary GSECL.
14 Depreciation on capitalisation of InventoryDepreciation of Rs. 244.12 Lakhs has been provided on inventory that has been capitalised to PPE as per requirement of Ind AS 16.
15 Impact of revaluation of investmentsThe Company has irrevocably elected to present the changes in fair value of equity instruments of companies other than Joint venture, measured at fair value in Other Comprehensive Income (OCI), as at April 1 2015. Subsequent fair value changes have been recognized in Other Comprehensive Income (OCI). This has resulted in increase in Other Comprehensive Income by Rs. 2,891.31 Lakhs during year ended 31st March, 2016 (net of tax Rs.290 lakhs ).
16 Measurement of Financial Asset through Other Comprehensive IncomeThe Company has measured investment in government securities at fair value in Other Comprehensive Income (OCI), as at April 1 2015. Subsequent fair value changes have been recognized in Other Comprehensive Income (OCI). This has resulted in decrease in other comprehensive income by Rs. 138.43 Lakhs (net of tax of Rs. 90.52 Lakhs) during year ended 31st March, 2016.
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I
17 Impact of Joint venture
Proportionate Loss of Joint venture of Rs.48.14 lakhs which was added under Previous GAAP is reversed as under Ind AS Joint venture is consolidated as per Equity method of accounting. Further, the Joint venture proportionate share as required under Ind AS is restricted to the value of investment and hence loss of Rs 2 lakhs has been recognised.Statement of Profit & Loss
(Rs. In Lakhs)
ParticularsFor the year ended 31*
March, 2016
For the year
ended 31st March, 2015
Other Income 0.06 0.11Total Revenue 0.06 0.11
Employee Benefits Expense 37.76 50.91Depreciation 0.25 0.50Other Expenses 10.18 8.07Total Expenses 48.19 59.48
Loss before exceptional item and tax -48.13 -59.37Exceptional items - -Loss before Tax -48.13 -59.37Tax Expenses - -Loss for the period -48.13 -59.37
18 Impact of Associate
The share in profit of associate has increased by Rs 3.93 lakhs due to impact of adoption of Ind AS by the associate for the year ended 31st March, 2016. Further, Dividend income of Rsl,014 lakhs has been adjusted for the year. The share in Other comprehensive income of Associate of Rs(12.83) Lakhs has been adjusted in OCI for the year ended 31st March, 2016.
64 Additional Information on Consolidated Financial Statements under Schedule III of the Companies Act, 2013.
Particulars
Net Assets i.e. Total Assets minus Total Liabilities
Share in Profit or Loss
A s% o f Consolidated
Net Assets
Amount (Rs. in Lakhs)
As % of Consolidated Profit or Loss
Amount (Rs. in Lakhs)
ParentGujarat Urja Vikas Nigam Ltd. 7 7 .19% 14,74,139.80 19.93% 11,965.15
SubsidiaryGujarat State Electricity Corporation Ltd. 6 .69% 1,27,801.10 6.29% 3,775.19
Gujarat Energy Transmission Corporation Ltd. 9 .26% 1,76,670.08 17.75% 10,655.48
Dakshin Gujarat Vij Company Ltd. 2.47% 47,129.34 15.48% 9,294.47
Madhya Gujarat Vij Company Ltd. 1.60% 30,561.00 13.12% 7,880.37
Paschim Gujarat Vij Company Ltd. -1.49% (28,393.60) 6.11% 3,668.90
Uttar Gujarat Vij Company Ltd. 1.15% 21,899.27 11.08% 6,655.46
AssociateGujarat Industries Power Company Limited 3.14% 60,008.91 10.25% 6,152.32
Joint VentureMahaguj Collieries Limited 0.00% (80.95) 0.00% -
Particulars
Share in Other Comprehensive Income Share in Total Comprehensive Income
As % of Consolidated
Net Assets
Amount (Rs. in Lakhs)
As % of Consolidated Profit or Loss
Amount (Rs. in Lakhs)
ParentGujarat Urja Vikas Nigam Ltd. -57.67% 3,005.30 27.30% 14,970.46
SubsidiaryGujarat State Electricity Corporation Ltd. 5.83% -303.97 6.33% 3,471.22
Gujarat Energy Transmission Corporation Ltd. 48.24% -2,513.82 14.85% 8,141.66
Dakshin Gujarat Vij Company Ltd. 30.41% -1,584.77 14.06% 7,709.69
Madhya Gujarat Vij Company Ltd. 33.34% -1,737.36 11.20% 6,143.01
Paschim Gujarat Vij Company Ltd. 44.66% -2,327.39 2.45% 1,341.51
Uttar Gujarat Vij Company Ltd. 6.85% -356.77 11.49% 6,298.69
AssociateGujarat Industries Power Company Limited -11.66% 607.41 12.33% 6,759.73
Joint VentureMahaguj Collieries Limited 0.00% - 0.00% *
AI
65 Statenent O f Management:The Cirrent Assets, Loans and Advances are good and recoverable and are approximately of the values as shown, if realized in the ordinary course of business unless and to the extent stated other vise in the Accounts. Subject to the notes and the method of accounting followed by the Company, provision for all known liabilities is adequate. There are no contingent liabilities excep those stated in the notes.Balame Sheet, Statement of Profit & Loss and Cash Flow Statement read together with the Notes to the Accounts, are drawn up so as to disclose the information required under the Compinies Act, 2013 as well as give a true and fair view of the state of affairs of the Company as at the end of the year and results of the Company for the year under review.
In theopinion of the management the realizable value of Current Assets, Inventory, Loans, Trade receivables and Trade payables in the ordinary course of business are not less than the value at whch they are stated in the books of accounts.
66 Apprival o f Financial StatementsThe Gnsolidated Financial Statements were approved for issue by the Board of Directors on 17th November, 2017.
As p<r o u r R epo rt of even date attached For N u k u n d & Rohit C h a re re d Accountants F irm R e gistra tio n No. 113375W
(VINAY S EH G A I P arti er M e n b e rsh ip No. ll
For and on behalf of the Board
Ul(S U JIT G U LA T l IAS)
Executive D irector (F& A) & CFO
b - ' H(PA N KA J JO SH U A S) (CA. S.B. KHYA1IM anaging Director D irector (Financ
DIN:01532892 DIN:02470485
( P ^ T F tIV BHATT)Compainy Secretary
Plac: : G a n d h in a g a r Dat< : 1 7 .1 1 .2 0 17
P la c e : Gandhinagar D a t e : 17.11.2017
GUJARAT URJA VIKAS NIGAM LIMITED
Form AOC-I(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of financial statements of Subsidiary / Associate / Joint Venture Companies
PART "A" : Subsidiaries(Rs. in lakhs)
Sr. No. Name of SubsidiaryDate since Subsidiary acquired
ReportingCurrency
Share Capital Reserves and Surplus
Total Assets Total Liabilities Investments Turnover Profit before Taxation
Provision For Taxation
Profit After Taxation
ProposedDividend
Percentage (%) of
Shareholding1 Gujarat State Electricity
Corporation limited (GSECL)01-04-2005 INR 1,91,059.74 3,65,122.16 17,27,075.07 11,70,893.17 11,143.09 7,90,590.81 27,195.25 5,559.02 3,832.75 - 100%
2 Gujarat Energy Transmission Corporation Limited (GETCO)
01-04-2005 INR 64,024.35 4,05,800.77 19,70,825.53 15,01,000.41 12,811.09 2,70,959.54 28,478.85 5,218.26 10,655.47 - 98.05%
6 Madhya Gujarat Vij Company Limited (MGVCL)
01-04-2005 INR 36,925.71 1,19,576.02 4,08,533.97 2,52,032.24 0.03 5,12,564.08 10,384.57 2,504.21 7,880.36 - 100%
4 Dakshin Gujarat Vij Company Limited (DGVCL)
01-04-2005 INR 35,484.51 1,28,501.29 5,34,051.42 3,70,065.62 - 11,15,756.59 12,214.17 2,919.70 9,294.47 - 100%
5 Paschim Gujarat Vij Company Limited (PGVCL)
01-04-2005 INR 3,83,702.96 57,051.88 11,80,693.82 7,39,938.98 - 12,75,516.96 11,761.54 3,754.18 3,668.90 * 100%
3 Uttar Gujarat Vij Company Limited (UGVCL)
01-04-2005 INR 45,516.40 1,69,943.10 5,65,920.31 3,50,460.81 - 9,16,203.99 8,730.69 2,075.23 6,655.46 - 100%
PART "B": Assodate/Joint Venture
Sr. No. Name of Associate / Joint Venture
LatestAuditedBalanceSheet
Date on which Associate or Joint
Venture was associated or
acquired
Shares of Assodate/Joint Venture held by the company on the year end Profit/Loss for the year
Description of how there is significant influence
Reason why the associate / joint venture is not consolidated
No. of shares Amount of Investment in
Associate (Rs. in lakhs)
Extent of Holding %
Net worth as per latest Balance Sheet (Rs. in
lakhs)
Net worth attributable to
Shareholding as per latest Balance Sheet (Rs. in lakhs)
Profit for the year as per
latest Statement of Profit and Loss (Rs. in
lakhs)
Considered in Consolidation (Rs. in lakhs)
Not Considered in Consolidation
1 Gujarat Industries Power Company Limited (GIPCL)
31-03-2017 30-03-1989 4,05,90,279 10,592.35 26.84% 2,23,610.64 60,008.91 22,923.95 6,152.32 Associate (Note-1 8.2)
2 Mahaguj Collieries Limited 31-03-2017 01-11-2006 50,000 2.00 40.00% (202.39) (80.95) (87.04) (34.82) Joint Venture of Subsidiary Company GSECL
Note1 There is significant influence due to percentage(%) of Share Capital.2 Net worth attributable to Shareholding as per latest Balance Sheet
Net Worth of GIPCL as above 2,23,610.64Add: Proposed Dividend including Corporate Dividend Tax by GIPCLNet Worth after above adjustment 2,23,610.64GUVNL’s group share in above Net Worth 60,008.91Net worth attributable to Shareholding as per latest Balance Sheet 60,008.91
3 The share in the Net loss for the year of the Joint Venture of Rs.(34.86) lakhs is restricted to the amount of carrying value of investments as the Company does not have any obligation for the liability of Joint Venture.
As per our report of even date attached For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W
(VINAY SEHGAL)' Partner Membership No. 1(
For and on behalf of the Board of Directors
(SUJIT GULA11, IAS) Chairman DIN:00177274
(CA. M. B. PARIKH) Executive Director (F&A) & CFO
(CA. S.B. KHYALIA) Director (Finance) DIN:02470485
Place: Gandhinagar Date: 17.11.2017
Place: Gandhinagar D ate: 17.11.2017