GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
CONTENTS Page No. l Board of Directors 2 l Notice of Adjourned Annual General Meeting 3 l Notice 4 l Board’s Report 7 l Addendum to Board Report 91 l C & AG Comments on Standalone Financial Statements 102 l Independents Auditor’s Report on Standalone Financial Statements 104 l Standalone Balance Sheet 117 l Standalone Statement of Profit & Loss 119 l Standalone Cash Flow Statement 120 l Statement of Changes in equity 122 l Notes to Standalone Financial Statements 124 l C & AG Comments on Consolidated Financial Statements 187 l Independent Auditor’s Report on Consolidated Financial Statement 191 l Consolidated Balance Sheet 230 l Consolidated Statement of Profit & Loss 232 l Conslidated Cash Flow Statement 234 l Consolidated Statement of Changes in equity 236 l Notes to Consolidated Financial Statements 238 l Form AOC. - 1 : Statements Containing Salient Features 355
of Financial Statements of Subsidiary Companies / Associate Company l Proxy Form 357
1 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
BOARD OF DIRECTOR Smt. Sunaina Tomar, IAS (DIN 03435543) Chairman (w.e.f 10.01.2020) Shri Pankaj Joshi, IAS (DIN 01532892) Managing Director (up to 30.08.2019) Chairman (up to 16.12.2019) Smt. Shahmeena Husain, IAS (DIN 03584560) Managing Director (w.e.f 30.08.2019) Ms. Mona Khandhar, IAS (DIN 06803015) Woman Director (up to 31.08.2019) Shri Roopwant Singh, IAS (DIN 06717937) Govt. Nominee Director (up to 15.06.2020) Shri Milind Torawane, IAS (DIN 03632394) Govt. Nominee Director (w.e.f 15.06.2020) Shri S.B. Khyalia(DIN 02470485) Director (Finance) (upto 01.11.2019) Now on Deputation to GPCL Shri K. M. Bhuva (DIN 07808731) Director (Technical) (up to 29.04.2020) Shri N. N. Misra (DIN 00575501) Independent Director (up to 31.10.2020) Shri R. C. Dhup (DIN 08275424) Independent Director (up to 23.12.2020)
ADG OF POLICE (SECURITY) JOINT EXECUTIVE DIRECTOR COMPANY SECRETARY Shri Anupam Singh Gahlaut, IPS Shri H. R. Chaudhari, IPS Shri Parthiv K. Bhatt
BANKERS SR. EXECUTIVES UCO Bank Syndicate Bank (Now Canara Bank) 1. Shri K. P. Jangid, GM (Comm.) State Bank of India Indian Bank 2. Dr. Nilesh Munshi, GM (HR) Bank of Baroda Allahabad Bank (Now Indian Bank) 3. Smt. SailajaVachhrajani, GM (IPP) Dena Bank (now Bank of Baroda) Central Bank of India 4. Shri S.Sen, GM (F&A) & CFO Vijaya Bank (now Bank of Baroda) Bank of India 5. Shri H.M Patel, I/c. GM (IT) Union Bank of India Indian Oversease Bank 6. Shri P.M. Patel, I/c. CE (Tech) Canara Bank Karur Vysya Bank
STATUTORY AUDITORS SECRETARIAL AUDITORS COST AUDITORS M/s. DGSM & Co. M/s. Niraj Trivedi M/s. Y. S.Thaker Chartered Accountants, Practicing Company Secretary Cost Accountants, Vadodara Vadodara Vadodara
REGISTERED OFFICE SUBSIDIARY COMPANIES Sardar Patel Vidyut Bhavan, 1. Gujarat State Electricity Corporation Limited Race Course, 2. Gujarat Energy Transmission Corporation Limited Vadodara: 390 007. 3. Uttar Gujarat Vij Company Limited Phone No. 0265-2310582-86, 4. Dakshin Gujarat Vij Company Limited Fax: 0265-2337918 5. Paschim Gujarat Vij Company Limited Website: www.guvnl.com 6. Madhya Gujarat Vij Company Limited CIN : U40109GJ2004SGC045195 ASSOCIATE COMPANY Gujarat Industries Power Company Ltd., JV OF Subsidiary Company GSECL Mahaguj Collieries Limited 2 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
NOTICE OF ADJOURNED SIXTEENTH ANNUAL GENERAL MEETING TO SHAREHOLDERS
Notice is hereby given that the Adjourned Sixteenth Annual General Meeting of the Members of Gujarat Urja Vikas Nigam Limited will be held (at shorter notice under Section 101(1) of the Companies Act, 2013, pursuant to consent received from all the members) on Wednesday, the 20th January, 2021 at 11.00 A.M. at the Conference Room, Energy & Petrochemicals Dept., Block No. 5, 5th Floor, Sachivalaya, Gandhinagar – 382010 (pursuant to consents received from all the members under Section u/s 96(2) (Proviso) of the Companies Act, 2013) to transact the following business of Original Annual General Meeting held on 30th December, 2020:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements including Consolidated Financial Statements of the Company for the financial year ended 31st March, 2020, together with the Boards’ Report, the Report of Auditors’ thereon and the Comments of the Comptroller & Auditor General of India, in terms of Section 143(6) of the Companies Act, 2013.
By Order of the Board
Date : 16-01-2021 Parthiv Bhatt Place : Vadodara Company Secretary
REGISTERED OFFICE: Sardar Patel Vidyut Bhavan, Race Course, Vadodara – 390 007 CIN : U40109GJ2004SGC045195
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be a member of the Company. The instrument appointing the proxy should, however, be deposited at the registered office of the Company not less than forty-eight hours before the commencement of the Meeting.
3 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
NOTICE
Notice is hereby given that the Sixteenth Annual General Meeting of the Members of Gujarat Urja Vikas Nigam Limited will be held (at shorter notice under Section 101(1) of the Companies Act, 2013, pursuant to consent received from all the members) on Wednesday, the 30th December, 2020 at 1.00 P.M. at the Conference Room, Energy & Petrochemicals Dept., Block No. 5, 5th Floor, Sachivalay, Gandhinagar – 382010 (pursuant to consents received from all the members under Sectionu/s 96(2) (Proviso) of the Companies Act, 2013) to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements including Consolidated Financial Statements of the Company for the financial year ended 31st March, 2020, together with the Boards’ Report, the Report of Auditors’ there on and the Comments of the Comptroller & Auditor General of India, in terms of Section 143(6) of the Companies Act, 2013.
2. To take note of appointment and to authorize the Board of Directors of the Company to fix the remuneration payable to Statutory Auditors of the Company appointed by the Comptroller and Auditor General of India (C & AG), New Delhi, for the Financial Year 2020-21, in terms of the provisions of Section 139(5) read with Section 142 of the Companies Act, 2013 and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution.
“RESOLVED THAT the appointment of M/s. DGSM & Co., Chartered Accountants, Vadodara made by the Comptroller and Auditor General of India, (C&AG), New Delhi, pursuant to Section 139(5) of the Companies Act, 2013, to audit the accounts including consolidated accounts of the Company for the Financial Year 2020-21 be and is hereby noted AND THAT pursuant to Section 139(5) read with Section 142 of the Companies Act, 2013, the Board of Directors of the Company be and is hereby authorized to decide and fix the remuneration and other terms and conditions including out of pocket expenses, to the Statutory Auditors appointed by the Comptroller and Auditor General of India,(C & AG), for the financial year 2020-21.”
SPECIAL BUSINESS
3. To consider and if thought fit, to pass, with or without modification/s, the following resolution as an Ordinary Resolution relating to ratification of remuneration of the Cost Auditors for the Financial Year 2020-21:
4 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications or re-enactment thereof, for the time being in force), the remuneration of M/s Santosh Jejurkar & Associates., Cost Accountants, Vadodara (Firm Registration No.102697) as Cost Auditors of the Company whose appointment and remuneration has been recommended by the Audit Committee and approved by the Board to conduct the audit of the Cost Accounts / Records maintained by the Company in respect of Electricity Industry for the Financial Year ending 31st March, 2021 (i.e. Financial Year 2020-21) at the remuneration of Rs. 50,000/- (Rupees Fifty Thousand Only) plus applicable GST be and is hereby ratified and approved.”
“RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committee thereof) be and is here by authorized to do all such acts, deeds, matters and things and take all such steps as may be necessary, proper and expedient to give effect to this resolution.”
By Order of the Board
Date : 24-12-2020 Parthiv Bhatt Place : Vadodara Company Secretary
REGISTERED OFFICE: Sardar Patel Vidyut Bhavan, Race Course, Vadodara – 390 007 CIN : U40109GJ2004SGC045195
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be a member of the Company. The instrument appointing the proxy should, however, be deposited at the registered office of the Company not less than forty-eight hours before the commencement of the Meeting. 2. A Statement pursuant to Section 102(1) of the Companies Act, 2013, relating to the Special Business to be transacted at the Meeting is annexed hereto. 5 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
ANNEXURE TO THE NOTICE
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013
Item no 3
As per the provisions of Section 148 of the Companies Act, 2013 and as required under the Companies (Audit and Auditors) Rules, 2014, the proposal for appointment of M/s Santosh Jejurkar & Associates, Cost Accountants, Vadodara was placed before the 55th Meeting of the Audit Committee held on 05-08- 2020 and as recommended by the Audit Committee, the Board of Directors of your Company has at its 100th Meeting held on 5th August, 2020 considered the recommendation and approved the said proposal for appointment of M/s Santosh Jejurkar & Associatesas Cost Auditorto conduct the audit of the Cost Accounts / Records maintained by the Company in respect of Electricity Industry for the Financial Year ending 31st March, 2021 (i.e. Financial Year 2020-21) at the remuneration of 50,000/- (Rupees Fifty Thousand only) plus applicable GST, however, that their remuneration shall be subject to the ratification by the Members as required under the provisions of sub-section (3) of Section 148 of the Companies Act, 2013.
Hence, as per the provisions of Section 148(3) of the Companies Act, 2013, the remuneration of the Cost Auditor is required to be ratified by the Members of the Company. Hence, this Resolution.
None of the Directors and Key Managerial Personnel of the Company and their respective relatives is, in any way, concerned or interested, financially or otherwise, in passing of the Resolution set out at Item No. 3.
The Board commends the Resolution for approval of the Members as Ordinary Resolution. By Order of the Board
Date : 24-12-2020 Parthiv Bhatt Place : Vadodara Company Secretary
REGISTERED OFFICE: Sardar Patel Vidyut Bhavan, Race Course, Vadodara – 390 007 CIN : U40109GJ2004SGC045195
6 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
BOARDS’ REPORT
To,
The Members of
GUJARAT URJA VIKAS NIGAM LIMITED.
Your Directors are pleased to present the 16th ANNUAL REPORT together with Audited Stand Alone and Consolidated Financial Statements for the 16th Financial Year ended 31st March, 2020.
STANDALONE FINANCIAL PERFORMANCE:
The Company was operationalized w.e.f. FY 2005-06. The Company has continued its efforts to sustain the performance and growth momentum over the years. The Company’s financial performance for the year under review along with previous year’s figures is summarized below: ( in Lakhs)
Sr. No. Particular FY 2019-20 FY 2018-19
1 Total Income 46,39,907.37 44,90,952.06 2 Total Expenditure Before Depreciation, Interest & Tax 46,17,482.19 44,84,784.72 3 Profit Before Depreciation, Interest & Tax 22,425.19 6,167.34 4 Depreciation and Amortization Expenses 615.64 585.60 5 Finance Costs 1,680.01 2,010.81 6 Profit Before Tax 20,129.54 3,570.93 7 Tax Expenses 9,489.96 770.00 8 Profit After Tax 10,639.58 2,800.93
The Company is in the business of bulk purchase and sale of power. During the year, the Company sold 93,862.41 MUs as compared to 98,695.19 MUs in the previous year to its own Distribution Subsidiary Companies viz. MGVCL, PGVCL, DGVCL, UGVCL and through bilateral arrangements and by putting bids in Power Exchange (IEX & PXI) on day-do-day basis for and on behalf of 4 DISCOMs.
DIVIDEND
The Company being in consolidation phase and to conserve the resources of the Company for future development, your Directors do not recommend any dividend on Equity Shares for the Financial Year 2019-20.
7 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
TECHNICAL PERFORMANCE:
For the year ended For the year ended Sr. 31st March, 2020 31st March, 2019 Particulars No. MUs Amount MUs Amount ( in Lakhs) ( in Lakhs)
1 Purchase of Power 93,862.41 45,99,648.73 98,695.19 44,76,498.62 2 Sale of Power 93,862.41 45,69,242.37 98,695.19 44,08,614.43
The company earned total revenue from Sale of Power to the tune of 45,69,242.37 Lakhs as against 44,08,614.43 Lakhs in the previous year. Correspondingly, total expenditure incurred on Purchase of Power is 45,99,648.73 lakhs as against 44,76,498.62 lakhs in the previous year. The increase in revenue from sale of power to the tune of 1,60,627.94 Lakhs (3.64%) and increase in expenditure on Purchase of Power to the tune of 1,23,150.11 Lakhs (2.75%) is attributable to increase in realization & cost per unit.
The per unit power purchase cost has increased to 4.90 as compared to 4.54 in the previous year. While the per unit realization has gone up to 4.87 as compared to 4.47 in the previous year.
THE AMOUNTS, IF ANY, PROPOSED TO BE CARRIED TO ANY RESERVES IN BALANCE SHEET:
The Company has earned Profit Before Tax (PBT) of 20,129.54 Lakhs as against 3,570.93 Lakhs in the previous year showing an increase by 16,558.61 Lakhs (i.e. up by 463.71%). Since the Income Tax Act, 1961 provides for payment of Minimum Alternate Tax (MAT) on book profit, a provision of 9489.96 Lakhs has been made towards MAT liability (Previous Year: 770.00 Lakhs). This leaves a Profit After Tax (PAT) of 10,639.58 Lakhs (as against 2,800.93 Lakhs in the previous year) which has been transferred to Retained Earnings.
The Company inherited a loss of 73724 Lakhs from erstwhile GEB. Now as a result of making Profit for 15 consecutive years, the Company has accumulated profit (Retained Earnings) of 38,638.37 Lakhs (Previous Year: 27,960.53 Lakhs).
SHARE CAPITAL
The authorized capital of the Company as on 31/03/2020 is 30,000 Crores divided into 3000 Crore equity shares of 10 each. The issued capital of the Company as on 31/03/2020 stood at 23505,75,84,950/- and subscribed and paid up equity share capital of your Company stood at 22347,81,19,950/- and share application money as on 31/03/2020 stood at 1157,94,65,000/- During the year 2019-20, 2575589900 no. of equity shares of 10/- each were allotted to Govt. of Gujarat on Rights basis at par against capital contribution to GUVNL for Capital Infusion in Subsidiary Companies/ 8 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 implementation of Govt. Schemes pursuant to various Govt. of Gujarat Resolutions including equity shares of 10/- each worth 50,00,00,000/- allotted to Govt. of Gujarat as a consideration other than cash for transfer of equity shares of subsidiary company GETCO held by Govt. of Gujarat in favor of GUVNL.
Further after the close of Financial Year 2019-20, the 1639161300 no. of equity shares of 10/- each were allotted to Govt. of Gujarat on Rights basis at par against capital contribution to GUVNL for Capital Infusion in Subsidiary Companies/implementation of Govt. Schemes pursuant to various Govt. of Gujarat Resolutions/ letters. The Paid up Capital as on 30-11-2020 stood at 239869732950/- divided into 23986973295 equity shares of 10/- each.
During the year under review, the Company has not bought back any of its securities, nor issued any shares as Sweat Equity or Bonus Shares or shares with differential voting rights nor granted any Stock Option Scheme to the employees.
SUBSIDY RECEIVABLE FROM GOVT. OF GUJARAT (GoG):
The outstanding Subsidy Receivable from GoG as on 31st March, 2020 of 2,07,842.38 Lakhs has reduced by 1,34,299.19 Lakhs compared to 3,42,141.57 Lakhs as on 31st March, 2019 due to receipt of past years’ subsidy in the current year. The break-up of outstanding subsidy receivable amounting to 2,07,842.38 Lakhs is summarised as under:
Sr. No. Subsidy Amount ( in Lakhs)
A. GERC Tariff Compensation of Ag. Consumers 14,353.88 B. FPPPA Subsidy of Ag. Consumers 1,52,915.11 C. 50% Relief to Ag. Consumers in Elect. Bills 40,573.39 TOTAL 2,07,842.38
INVESTMENT IN SUBSIDIARY COMPANIES:
During FY 2019-20, GUVNL has invested 3,30,815.73 Lakhs in six Subsidiary Companies. The details of investments made with Share Premium in Subsidiary Companies are shown as under:
9 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Sr. Name of Subsidiary Share Capital Premium Total No. Companies ( in Lakhs) ( in Lakhs) ( in Lakhs)
1. GSECL 19,126.55 44,856.79 63,983.34 2. GETCO 4,270.71 32,295.96 36,566.67 3. DGVCL 3,116.63 25,118.46 28,235.09 4. MGVCL 1,981.59 14,059.80 16,041.39 5. PGVCL 1,02,706.51 55,463.64 1,58,170.15 6. UGVCL 3,626.37 24,192.72 27,819.09 TOTAL 1,34,828.36 1,95,987.37 3,30,815.73
MAINTENANCE OF COST RECORDS:
The Company is required to maintain cost records as specified by the Central Govt. under Sub-section (1) of Section 148 of the Companies Act, 2013. Accordingly, the Company is maintaining requisite Cost records and accounts.
SUBSIDIARY/ASSOCIATE COMPANIES:
The Company has following Subsidiary Companies:
1. Gujarat State Electricity Corp. Ltd. - engaged in the generation of electricity
2. Gujarat Energy Transmission Corp. Ltd. - engaged in the transmission of electricity
3. Uttar Gujarat Vij Company Ltd. - engaged in the distribution of electricity
4. Dakshin Gujarat Vij Company Ltd. - engaged in the distribution of electricity
5. Paschim Gujarat Vij Company Ltd. - engaged in the distribution of electricity
6. Madhya Gujarat Vij Company Ltd. - engaged in the distribution of electricity
Further the Company has one Associate Company viz. Gujarat Industries Power Company Limited. The Subsidiary Company GSECL has one Joint Venture Company viz. Mahaguj Collieries Ltd.
HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY DURING FY 2019-20.
The Performance highlights of the Subsidiaries and Associate included in the Consolidated Financial Statement of the Company for F.Y. 2019-20 are covered in the separate statement in prescribed form AOC-1 containing salient features of the financial statements of Subsidiaries i.e. GSECL, GETCO, MGVCL, 10 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
DGVCL, PGVCL, UGVCL and Associate Company GIPCL and Joint Venture of subsidiary company GSECLviz MGCL provided in the Annual Report. However brief highlights of performance of Subsidiaries/ Associate and JV of subsidiary company are as under:
Subsidiaries ( in Lakhs)
Sr. Name of Share Reserves Total Total Invest- Turnover Profit Provision Profit No. Subsidiary Capital and Liabilities Assets ments before For After Surplus Taxation Taxation Taxation
1 Gujarat State Electricity Corporation limited (GSECL) 2,17,108.45 5,70,924.92 21,67,478.30 21,67,478.30 10,585.54 9,63,735.85 14,043.17 2,970.02 11,073.15 2 Gujarat Energy Transmission Corporation Limited (GETCO) 75,445.19 6,27,449.35 26,07,127.28 26,07,127.28 13,041.89 3,88,326.08 1,28,566.08 53,654.44 74,911.64 3 Madhya Gujarat Vij Company Limited (MGVCL) 44,113.14 2,10,276.47 7,05,466.70 7,05,466.70 - 14,04,363.61 14,899.39 1,891.58 13,007.81 4 Dakshin Gujarat Vij Company Limited (DGVCL) 44,532.15 1,76,892.12 5,40,700.15 5,40,700.15 - 6,41,895.43 12,632.35 6,143.97 6,488.38 5 Paschim Gujarat Vij Company Limited (PGVCL) 7,34,332.46 1,69,493.16 16,51,518.21 16,51,518.21 - 17,64,355.02 18,891.99 (3,765.22) 22,657.21 6 Uttar Gujarat Vij Company Limited (UGVCL) 59,259.45 2,68,462.40 7,63,504.22 7,63,504.22 - 12,90,103.15 13,899.08 2,239.02 11,660.06
11 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Associate/Joint Venture ( in Lakhs)
Shares of Associate/Joint Sr. Name of Associate / Venture held by the company Profit / Loss for the year No. on the year end Joint Venture Description of how there Net worth as Net worth Profit for the Considered in is per latest attributableto year as per Consolidation significant Balance Sheet Shareholding latest influence as per latest Statement of Balance Sheet Profit and Loss 1 Gujarat Industries Power Company Limited (GIPCL) 2,74,807.15 73,748.17 24,798.38 6,654.98 Associate 2 Mahaguj Collieries 5,419.83 2,167.93 (166.44) (66.58) Joint Limited Venture of Subsidiary Company GSECL
Further, the Audited Financial statements and related information of the Subsidiary Companies, where applicable, will be made available to any member upon request. The Financial Statements of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies/JV of Subsidiary. The Annual Report of Subsidiary Companies and Associate Company/JV of Subsidiary are also available on the web site of the respective subsidiary/associate Company.
CONSOLIDATED FINANCIAL RESULTS OF GUVNL AND ITS SIX SUBSIDIARIES, ASSOCIATE- M/S. GIPCL AND JOINT VENTURE (OF GSECL) – M/S. MGCL.
As per the provisions of Section 129(3) of the Companies Act, 2013, every Company having one or more Subsidiaries, shall in addition to its Standalone Financial Statement has to prepare Consolidated Financial Statements of the Company and all its Subsidiaries in the same form and manner as that of its own which shall also be laid before the Annual General Meeting of the Company along with its Standalone Financial Statements w.e.f. 01/04/2014.
Accordingly, GUVNL has prepared the Consolidated Financial Statements for current FY 2019-20 by
12 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 consolidating the Annual Accounts of its six Subsidiaries, one Associate M/s. Gujarat Industries Power Company Ltd. (GIPCL) and Joint Venture (of GSECL) – M/s. Mahaguj Collieries Ltd. (MGCL) as per the principles of Consolidation.
This is the 15th year post operationalization of the Companies. The performance of GUVNL and its Subsidiary Companies (Sector as a whole) has sustained momentum. The Sector continued to undertake various measures to improve the financial health as well as the internal efficiencies. Resultantly, the Sector has recorded Profit after Tax before Non-Controlling Interest & Share of Net Profits of Associate and Joint Venture of 2,21,883.17 Lakhs for FY 2019-20 as against corresponding figure of 90,057.00 Lakhs for FY 2018-19.There is an increase in profits by 1,31,826.17 Lakhs i.e. by 146.38%.
The sectoral performance of last two years are summarized as under: ( in Lakhs)
Particulars FY % of Total FY % of Total 2019-20 Income 2018-19 Income
A INCOME: 1 Revenue from Operations 52,63,462.87 97.57% 49,71,935.08 97.44% 2 Other Income 1,30,927.11 2.43% 1,30,404.54 2.56% TOTAL INCOME: 53,94,389.98 100 % 51,02,339.62 100 % B EXPENSES: 1 Cost of Fuel Consumed 6,73,866.15 12.49% 8,92,736.67 17.50% 2 Purchase of Power 33,59,336.31 62.27% 30,78,749.64 60.34% 3 Employee Benefit Expenses 3,70,429.42 6.87% 3,38,372.31 6.63% 4 Finance Costs 1,48,389.18 2.75% 1,65,960.39 3.25% 5 Depreciation 4,08,429.70 7.57% 3,65,183.95 7.16% 6 Other Expenses 2,15,129.32 3.99% 1,75,644.56 3.44% TOTAL EXPENSES: 51,75,580.09 95.94% 50,16,647.51 98.32% Profit Before Exceptional items and Tax 2,18,809.89 4.06% 85,692.11 1.68% 7 Exceptional items -3,073.28 -4,364.89 8 Profit Before share of Net Profits of Associate and Joint Venture 2,21,883.17 90,057.00 9 Share of Profit of Joint Venture 0 0 10 Share of Profit of Associate 6,654.98 6,836.11 11 Profit Before Tax 2,28,538.15 96,893.11 12 Tax Expenses 72,623.06 -2,753.51 13 Profit for the Year 1,55,915.09 99,646.62 13 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of section 129 of the Companies Act, 2013 and in accordance with the applicable Accounting Standards, the Audited Consolidated Financial Statements for F.Y. 2019-20 are provided in the Annual Report.
SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE/JV COMPANIES:
Pursuant to provisions of section 129(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement in prescribed form AOC-1 containing salient features of the financial statements of Subsidiaries i.e. GSECL,GETCO,MGVCL,DGVCL,PGVCL,UGVCL, Associate Company GIPCL and Joint Venture Company (of subsidiary company GSECL) viz. Mahaguj Collieries Limited for the F.Y. 2019-20 is provided in the Annual Report.
INDUSTRY OVERVIEW:
The economic growth of the country is very closely linked with Power Sector. Availability of quality power at reasonable rates is essential for sustained socio economic development. However, being highly capital intensive in nature, mobilizing adequate financial resources at competitive cost for developing generation, transmission and distribution infrastructure has always been a challenge for the Power Sector. The data of Nation as a whole with respect to gap between demand and supply is given in following table:
Energy Energy Energy Shortage/Surplus Requirement Availability Fiscal Year (Million units) (Million units) (Million units) (%)
2015-16 1114408 1090851 23557 -2.1 2016-17 1142929 1135334 7595 -0.7 2017-18 1213325 1204697 8629 -0.7 2018-19 1274595 1267526 7070 -0.6 2019-20 1291010 1284444 6566 -0.5
Source: - LGBR - Central Electricity Authority
POWER SUPPLY POSITION IN THE STATE:
The total generating capacity of the State from various conventional sources at the beginning of the year 2019-20 was 18,900 MW. The total installed conventional power generating capacity of the State at the end of financial year 2019-20 is as under:
14 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(In MW) Capacity as on 31.3.2019 During FY 2019-20 Capacity Fuel / Sector State as on Pvt. Central Capacity Capacity GSECL Owned 31.3.2020 Sector Sector de-rated added IPP
Coal/Lignite 4000 1250 5405 3012 1140 1353 13880 Gas 970 1354 1147 424 - - 3895 Nuclear - - - 559 - - 559 Hydro 547 - - 232 - - 779 Total 5517 2604 6552 4227 1140 1353 19113
During the year FY 2019-20, conventional capacity to the tune of 1353 MW was added, the details of which is as under:
Sr. Capacity / GUVNL’s Generating Station Fuel No. share (MW) 1 GSECL Wanakbori Extension (Unit 8) Coal 800 2 NTPC Khargone (Unit 1) Coal 123 3 NTPC Lara (Unit 1) Coal 78 4 NTPC Gadarwara (Unit 1) Coal 152 5 Adani Power Mundra (additional capacity–bid 1) Imported Coal 200 Total 1353
During the year FY 2019-20, conventional capacity to the tune of 1140 MW has become unavailable for generation, the details of which are as under:
Sr. Generating Station Fuel Capacity (MW) Remarks No.
1 Kutch Lignite Thermal Power Lignite 140 Completion of useful life Station(Unit1-2) 2 Adani Power Mundra Ltd. – Imported Coal 1000 Termination of PPA - Bid 2 PPA dated 02.02.2007 Hon’ble Supreme Court Judgment dated 2.07.2019 Total 1140
15 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
The details of Renewable Capacity in the State at the end of FY 2019-20 are as under: (In MW)
Sr. Renewable Source As on Addition As on No. 31.3.2019 during year 31.3.2020 1 Wind 6034 1470 7504 2 Solar (incl. Rooftop) 2440 518 2958 3 Biomass & Co-generation 77 5 82 4 Mini / Small Hydel 61.3 1 62.3 TOTAL 8612 1994 10606
* Including Wheeling / private generators
POWER PURCHASE:
For meeting the demand of power in the State, power is purchased from all the available sources. The details of power purchased during the year 2018-19 and 2019-20 is as under: (In Million units)
Sr. No. Name of Agency 2018-19 2019-20
1 NPC 3272 3804 2 NTPC 23283 21494 3 SSNNL (Hydro) 91 639 TOTAL CENTRAL SECTOR (1 to 3) 26646 25937 4 GSEG 365 603 5 GIPCL – SLPP 3085 2953 6 GIPCL – Gas Based 60 136 7 GMDC 957 547 8 GSECL 22835 18355 9 GPPC 480 522 TOTAL STATE SECTOR (4 to 9) 27782 23116 10 Essar Power Gujarat Ltd - 4326 11 CLP India (erstwhile GPEC)* 285 - 12 Adani - Mundra Power Project 10067 11052 13 ACB India Ltd 1405 1270 14 Coastal Gujarat Pvt. Ltd – Mundra UMPP 12091 11705 TOTAL IPPs (10 to 14) 23848 28353 16 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
15 Solar 1959 2702 16 Wind 7560 8218 17 Other Renewable 210 253 18 Power Exchanges & others 8560 1750 19 Coal Tolling arrangement 2123 3353 20 Purchase from DISCOMs 7 180 TOTAL OTHERS (15 to 20) 20419 16456 21 TOTAL POWER PURHCASE 98695 93862
* CLP India (GPEC) - PPA tenure completed in Dec-2018
SUPPLY / DEMAND SCENARIO:
In the end of Mar-2020, the country witnessed nationwide lockdown to mitigate the impact of unprecedented COVID-19 pandemic. Consequentially, State witnessed considerable reduction in Power Demand due to shutting down of majority of industries, offices and commercial establishments.
The installed capacity from conventional sources in the State at the end of FY 2019-20 is 19,113 MW (as on 31.3.2020) against the peak level demand of 18,424 MW in FY 2019-20 (Source: SLDC)
Conventional Capacity to the tune of 829 MW is planned to be added in next two financial years (i.e. by Mar-2022) to cater the power demand in the State. Moreover, GUVNL shall be tying up Renewable Capacity from time to time to meet its Renewable Purchase Obligation (RPO) requirement.
Distribution / Sale of Power:
The bulk power purchased by GUVNL has been supplied to Subsidiary Distribution Companies to meet their power requirement and to M/s GACL under long term sale agreement. The details of power supplied during the year 2018-19 and 2019-20 are as under:- (In Million Units) Sr. Name of Company 2018-19 2019-20 No. 1 DGVCL 21042 20860 2 UGVCL 27325 25779 3 PGVCL 38254 35536 4 MGVCL 11826 11307 5 GACL 241 200 6 Others 7 180 TOTAL 98695 93862 17 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Activity of Power Trading during the year:
As a part of strategic cost reduction measures, GUVNL undertakes purchase of power from short term market when rate of power available in market is competitive to available own generating stations. Moreover, after meeting power requirement of all the consumers, if any surplus power is available for disposal, GUVNL undertakes sale of this power in short term market in order to ensure optimum utilization of generation station and reduce power purchase cost.
During FY 2019-20, GUVNL purchased 1744 Million Units at an average rate of 3.53/unit from Power Exchanges as against 8529 Million Units at an average rate of 4.58/unit during FY 2018-19 from Power Exchanges & DEEP Portal, Govt. of India. Moreover, during low demand scenario of FY 2019-20, GUVNL sold power to the tune of 181 Million Units through Power Exchanges at an average rate of 4.14/unit.
In addition, GUVNL has taken various measures to ensure adequate fuel availability to gas based generating stations for continuous & uninterrupted power supply by its Distribution Companies to the consumers of State.
Augmentation of Renewable Energy Sources:
(a) Renewable Energy framework
In order to align with the national ambitious target of achieving 175 GW Renewable Energy by 2022, Gujarat has been making continuous efforts for Renewable augmentation for smooth transition to clean energy source.
State has been rolling out the Renewable Energy Policies from time to time enabling a conducive framework for development. Following Policies & Guidelines are being notified by State Government for providing impetus to development of Renewable Energy projects: l Gujarat Solar Power Policy 2015 (extended vide G.R. dated 09.07.2020) l Gujarat Wind Power Policy 2016 l Small Hydel Policy 2016 l Gujarat Waste to Energy Policy 2016 l Gujarat Wind – Solar Hybrid Policy 2018 l Policy for Development of Small Scale Distributed Solar Projects 2019 l Policy for allocating land, for development of Solar Projects in the vicinity of existing GETCO substations
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l SURYA – Surya Urja Rooftop Yojana 2019 l Policy for allotment of Government Waste-land for development of Wind / Solar / Wind-Solar Hybrid Parks – 2019 l Amendment to Gujarat Solar Policy 2019 for MSMEs
State has added 1994 MW Renewable capacity during the year FY 2019-20. As on 31.03.2020, State is having operational Renewable capacity of 10,606 MW.
(b) Power tie up through competitive bidding – Wind & Solar
(i) In accordance with directives of Hon’ble GERC and adhering the guidelines notified by Ministry of Power, GUVNL has been tying up new capacity from Wind & Solar projects only through Competitive Bidding Process followed by e-reverse auction.
(ii) During FY 2019-20, GUVNL has tied up 1441 MW capacity from Renewable sources through competitive bidding and executed long term Power Purchase Agreements – (1250 MW - Grid connected Solar power and 190.6 MW - Grid connected Wind power) l Raghanesda Solar Park – 600 MW capacity tied up at 2.65 – 2.70 / unit (in May-2019 & August- 2019) l Wind Projects – 190.6 MW capacity tied up at 2.80/ unit. (May-2019) l Dholera Solar Park – 300 MW capacity tied up at 2.75 / unit. (in May-2019 & August-2019) l Non-park Solar projects – bidding for 350 MW capacity concluded with tariff discovered at 2.61- 2.64/unit – PPA executed in July-2020
(iii) During FY 2019-20, GUVNL has also invited tender for procurement of 700 MW power from Projects to be set up at Dholera Solar Park, Gulf of Khambhat region, Gujarat. Bidding process has concluded in August – 2020.
(c) Procurement of power from Waste to Energy Projects
(i) During FY 2019-20, GUVNL has executed a PPA for purchase of 14.9 MW power from Municipal Solid Waste (MSW) based Project proposed to be set up at Vadodara, Gujarat.
(ii) GUVNL is having total tie up capacity of 67.2 MW from Municipal Solid Waste (MSW) based Projects as on 31.03.2020.
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(d) Renewable Purchase Obligation (RPO)
GUVNL has achieved RPO of 13% against the RPO of 14.30% stipulated by Hon’ble Gujarat Electricity Regulatory Commission for FY 2019-20.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS DURING FY 2019-20
(i) Hon’ble GERC vide tariff order dated 24.04.2019 has determined Retail Tariff to be recovered by GUVNL’s Distribution companies from its consumers during FY 2019-20 (with effect from 1.05.2019)
(ii) Hon’ble GERC vide order dated 29.04.2019 & 25.09.2019 has determined Additional Surcharge to be recovered by Distribution Companies from Consumers opting to purchase power from other than local Distribution Company in order to mitigate their fixed cost burden
(iii) Hon’ble GERC vide Notification No. 2/2019 dated 30.09.2019 has notified GERC (Consumer Grievances Redressal Forum and Ombudsman) Regulations 2019 superseding earlier GERC Regulations No. 2/ 2011 dated 7.04.2011 in the matter.
(iv) Hon’ble GERC vide Notification No. 1/2020 dated 16.01.2020 has notified GERC (Electricity Supply Code and Related matters) (Second Amendment) Regulations 2020.
(v) Hon’ble GERC vide Notification no. 2/2020 dated 23.01.2020 has notified GERC (Net Metering Rooftop Solar PV Grid Interactive Systems) (Second Amendment) Regulations, 2020
(vi) Hon’ble CERC has notified Framework for Real-Time Market for Electricity wherein Power Exchanges (Indian Energy Exchange & Power Exchange of India Ltd.) will facilitate real time trading of electricity through double side closed bid auction. The real-time market would enable purchase or sell of electricity across the country with trade facility on one hour advance basis. Real time market has been implemented w.e.f 1st June 2020.
ANY OTHER SIGNIFICANT MATTER HAVING BEARING ON THE PERFORMANCE OF THE COMPANY UP TO THE DATE OF REPORTING
(i) Energy & Petrochemicals Dept., Govt. of Gujarat vide GR dated 1.12.2018 has issued Policy directive for revival and rehabilitation of 3 stressed imported coal based power projects in state of Gujarat based on recommendations of High Power Committee and directed GUVNL to amend the existing Power Purchase Agreements for allowing actual fuel cost to these projects subject to approval of Regulatory Commission.
During FY 2020-21, Energy & Petrochemicals Dept., Govt. of Gujarat vide Government Resolution (GR) dated 12.06.2020 has revoked above GR dated 1.12.2018 considering the subsequent 20 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
developments, changed market trend of Indonesian coal price and in order to safeguard the interest of consumers and issued new guidelines dated 12.06.2020 to ensure that benefit of reduced coal price from time to time is passed on to consumers.
(ii) Hon’ble Supreme Court vide judgment dated 02.07.2019 has decided that PPA dated 02.02.2007 between GUVNL & M/s Adani Mundra Power Ltd. for purchase of 1000 MW capacity from Mundra Power Plant stands terminated with effect from 04.01.2010. GUVNL has filed a Curative Petition before Hon’ble Supreme Court, which is sub-judice as on date. Consequentially, off-take of power under this PPA has been discontinued.
Moreover, Adani Power Mundra Ltd. has filed a petition before Central Electricity Regulatory Commission (CERC) seeking compensation for energy supplied during past period. The matter is sub-judice.
(iii) In accordance with Govt. of Gujarat GR dated 1.12.2018, GUVNL has signed Supplemental PPA with Adani Power for PPA dated 06.02.2007 (Bid 1 PPA) which was approved by Central Electricity Regulatory Commission vide order dated 12.04.2019.
Since, M/s Adani Power Mundra Ltd. by claiming compensation for past period losses has violated the fundamental condition of Govt. of Gujarat GR dated 1.12.2018 regarding absorption of past losses by Project Developers, GUVNL has filed a petition before Central Electricity Regulatory Commission (CERC) seeking recall of order dated 12.04.2019 granting approval to Supplementary PPA between GUVNL & Adani (for PPA dated 06.02.2007). The matter is sub-judice.
(iv) In accordance with Govt. of Gujarat GR dated 1.12.2018, GUVNL has signed Supplemental Agreement with M/s Essar Power Gujarat Ltd. on 1.03.2019 and filed petition before GERC for approval. Hon’ble GERC vide order dated 27.04.2020 has approved the Supplemental PPA with certain modifications which has been challenged by Essar Power Gujarat Ltd. before Appellate Tribunal and thus Supplemental PPA has not materialized as on date.
(v) Ministry of Environment and Forest & Climate Change, Govt. of India has notified Environment Protection Amendment Rules 2015 which mandates all thermal power plants to comply with revised emission norms. Further, Ministry of Power vide notification dated 30.05.2018 has held that compliance towards above is of nature of Change in Law. Central Electricity Regulatory Commission vide notification dated 25.08.2020 has notified Terms and Conditions of Tariff Regulations 2020 (First Amendment) for allowing the capital cost & other cost incurred towards compliance to revised emission norms as a pass through. Appropriate Regulatory Commission shall have to approve the cost incurred towards compliance to revised environment norms on case to case basis. 21 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(vi) Ministry of New & Renewable Energy, Govt. of India vide notification dated 13.08.2020 has conveyed that lockdown due to COVID 19 pandemic be treated as an event of Force Majeure and all Renewable Projects under implementation as on 25.03.2020 shall be given blanket time extension of 5 months for completion of projects.
PROGRESS OF VARIOUS GOVT. SCHEMES:
1. ELECTRIFICATION UNDER TRIBAL AREA SUB-PLAN
Electrification of Agriculture Wells and Petaparas in Tribal Areas under Tribal Area Sub-Plan Scheme is being carried out by DISCOMs. For electrification of AG Wells under Tribal Area, State Government is providing Share capital for HT/LT lines, Transformer Centers and Service connection charge. Applicant has to pay Registration Charge, Security deposit, agreement fee and test report fee only. For Electrification of Petaparas under Tribal area, demand from minimum 10 applicants in a group is necessary.
Share Capital of 27921.00 lakhs was given to GUVNL for the year 2019-20 to electrify 17,300 No. of wells and 02 Nos. of petaparas. Against this, 17,783 wells and 03 No. of petaparas were electrified at an expenditure of 27921.17 lakhs.
2. AGRICULTURE CONNECTION (Share Capital)
State Govt. desires to electrify more wells to clear back log of huge pending Agriculture applications under Normal scheme (including Darkzone). However, for release of such connection to Agriculture applicants, huge financial resources are required by DISCOMs. As the cost of HT, LT line and Transformer center etc. are not being recovered from the applicants under Normal scheme (including Darkzone), therefore to reduce the financial burden on DISCOMs, state Government is providing financial assistance to DISCOMs through GUVNL in the form of share capital contribution.
During the year 2019-20, it was planned to electrify 95,381 No. of Agriculture Wells at an outlay of 1,44,315.00 lakhs under Agriculture Well (Normal & Dark Zone) Scheme. Against this, 94,168 No. of AG Wells have been electrified at an expenditure of 1,44,345.22 lakhs.
3. SCSP AG SCHEME (SHARE CAPITAL)
Electrification of Agriculture wells of SC Farmers under SCSP AG scheme is being carried out by DISCOMs. The certificate of caste issued by Social Welfare Department must be enclosed with the application. For electrification of AG Wells , State Government is providing Share capital for HT/LT lines, Transformer Centers and Service connection charge. Applicant has to pay Registration Charge,
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Security deposit, agreement fee and test report fee only.
Provision of 2090 lakhs, to electrify 1190 No. of Ag. wells under SCSP Ag. Scheme, was made for the year 2019-20. Against this, 1221 No. of Ag. wells have been electrified at an expenditure of 2091.54 Lakhs.
4. KUTIR JYOTI SCHEME
In this Scheme, ST Beneficiaries of Tribal area will get electricity connection free of cost with one point wiring and LED/CFL bulb for residential purpose. The BPL family or family whose maximum annual income is 1,50,000 for urban area and 1,20,000 for Rural area is eligible to avail Single phase lighting connection. List of beneficiaries will be provided by Prayojana Adhikari. 100% Gant is provided by State Government under KutirJyoti scheme.
Grant of 782.00 lakhs was given to GUVNL to electrify 17,090 No. of Household connections for the year 2019-20. Against this, 18,483 No. of Household connections were given at an expenditure of 782.02 lakhs.
5. ZUPDA VIJLIKARAN SCHEME
In this Scheme Beneficiaries will get electricity connection with one point wiring and one LED/CFL Bulb in the Huts for residential purpose. The BPL family or family whose maximum annual income is 1,50,000 for urban area and 1,20,000 for Rural area is eligible to avail Single phase lighting connection. List of beneficiaries will be provided by Nagarpalika / Municipal Corporation/TDO. Huts build on land of Gram Panchayat / Government / Nagarpalika/Municipal Corporation can be covered but beneficiaries will not right to be owner of land. 100% Grant is provided by State Government.
Grant of 2,288.50 lakhs was given to electrify 39,510 No. of household connections for the year 2019-20. Against this, 46,243 No. of household connections were given at an expenditure of 2,288.65 lakhs.
6. SCHEDULE CAST SUB PLAN SCHEME
Applicable to Schedule Caste Beneficiaries residing in urban & rural areas, without income limit. The expenditure of erection of LT lines should be covered under the scheme. If the numbers of applications are more than 20 Nos. then expenditure of HT lines and Transformer can also be covered under the scheme. All Charges including infrastructure cost provided under this scheme from State Govt. Grant. The certificate of caste issued by Social Welfare Department must be submitted with the application.
Grant of 285.00 lakhs was given for the year 2019-20 for electrification of 5,370 No. of household 23 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
connection of SC beneficiaries. Against this 6,581 No. of household connections of SC beneficiaries were electrified at an expenditure of 285.48 lakhs.
7. SAGARKHEDU SARVANGI VIKAS YOJANA
Humidity and the saline atmosphere of the Coastal area cause corrosion of Conductors, corrosion of Poles, failure of Disk and Pin insulators, corrosion of Distribution Boxes, service lines, etc. which in turn affect the quality of power supply. Therefore to improve the infrastructure and uplift the life of the people living in the coastal belt, State Government has declared “Sagarkhedu Sarvangi Vikas Yojana” This Scheme is a 12 point Programme, Energy Development is one of them. This Scheme covers 15 Coastal Districts namely Valsad, Navsari, Devbhumi Dwarka, Gir Somnath, Surat, Bharuch, Anand, Ahmedabad, Jamnagar, Junagadh, Porbandar, Kutchh, Bhavnagar, Rajkot and Amreli comprising of 42 Talukas. Under this scheme activities such as Strengthening of Distribution line, Strengthening of Transmission Line with Replacement of Conductors, Erection of new 66 KV Substations are carried out. Due to these activities people residing in coastal belt get benefit such as noticeable reduction in line faults, availability of quality power supply at adequate Voltage, reduction In losses to the Industries in coastal area, reduction in accidents due to breakage of Conductors, reduction in Transformer failure and reduction in burning of electric motors, reduction in maintenance cost of lines, reduction in Transmission and distribution losses. The state government is also providing financial fund assistance for electrification of Ag. wells in coastal area of PGVCL in this scheme.
During the year 2019-20, 42,216.09 lakhs have been spent for strengthening of distribution line with replacing Conductors, poles, insulators, distribution boxes, service lines, etc, Strengthening of Transmission lines and creation of new 66 KV sub stations & AG wells under PGVCL’s coastal area, against the contribution of 42,200.00 lakhs received from the State Govt. in the form of share capital and grant.
8. KISAN HEET URJA SHAKTI YOJANA (KHUSY)
KHUSY is a High Voltage Distribution System of installing smaller size of Distribution Transformers and there by reduction of LT Lines up to negligible level by converting it into HV Line.
In rural area the existing distribution systems consists of 11KV Lines with lengthy 3 Ph 4 wire LT lines, in this system, the Line Losses are very high, Voltage profile and reliability are also unsatisfactory.
So, to improve Voltage profile in rural area the small capacity of Distribution Transformers are to be installed by extending 11KV Line as possible as nearer to the load and Distribution Transformer of the capacity of 10, 16 KVA are erected and supply is released to consumer through a short length of
24 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
LT Lines preferably through insulated overhead cables known as Aerial Bunched Cable (ABC)/PVC Cable.
In Order to ensure pilferage free system, one of several remedial measures is reducing LT line (System) being exposed to theft. The whole idea is to have Less LT system and gradually move on to LT Less system. Even the short LT Lines are to be laid using ABC/PVC Cables.
During the year 2019-20, it was planned to install 6,048 small capacity transformers at an estimated cost of 7,500 lakhs under Kisan Heet Urja Shakti Yojna (KHUSY) - HVDS, to improve the voltage profile and reducing the LT line losses in PGVCL area. Against this, 6,471 Small capacity transformers at a cost of 7,508.40 lakhs have been installed.
9. DISTRIBUTION INFRASTRUCTURE SHIFTING SCHEME (DISS):-
It is essential to shift/replace the distribution lines & related infrastructure in Municipal Corporation, Municipality, Urban development authority, Rural areas if it is obstructing during road widening or obstructing to the existing roads in order to provide the essential service of continuous & reliable power supply. During the year 2019-20, 11042.64 lakhs have been spent for Shifting of Distribution Infrastructures like 11 KV or 22 KV HT line, LT line& related infrastructure like Transformer Centers, Poles or replacement of over head lines by underground cable/Aerial Bunched Cable, etc.
10. SARDAR KRUSHI JYOTI YOJANA
The Scheme Objective is to improve and enhance public services and facilities through reliable & quality power supply by replacing the old / deteriorated conductors along with associated materials wherever required in Agriculture Feeders in the State. During the year 2019-20, 13757.78 lakhs have been spent under this scheme.
11. GRID CONNECTED SOLAR MICRO GRID FOR AGRICULTURE PUMPS SETS (SKY) SCHEME:-
For the upliftment of the farmers, to increase use of Renewable energy through distributed energy sources and to provide electricity to the farmers during the day time, the Energy and Petrochemical Department of the GoG introduced the Surya Shakti KisanYojna (SKY) in June-2018. Under this scheme, Solar PV systems are provided to farmers. Farmer can meet their daily requirement of Electricity for irrigation through solar generation. Farmers can also earn additional income by injecting the surplus energy to the grid. Farmers can get power supply up to 12 hours during day time FY 2019-20, total 1574 consumers have been covered on 30 feeders with an expenditure of 17488.36 lakhs. Aggregate total Capacity of SPV System is 36 M.W.
25 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
12. 3- PHASE POWER SUPPLY TO SIMSHALA:-
Presently, Simshala connections are released from nearby Agriculture feeder through Special Designed Transformers (SDTs), i.e., for 8 hrs 3-phase and for remaining hrs single phase power supply is provided.
To maintain the technical stability of the power system, the electricity supply is provided to agriculture sector by forming various groups. Accordingly, agricultural feeders are provided power supply during day and night on rotation basis.
As reliability of Power supply in JGY/ CPS (Continuous Power Supply) is better compared to Agriculture Feeder, it is proposed to provide power supply to Simshala from nearby JGY/ CPS (Continuous Power Supply) feeder by shifting them from Agriculture feeder. Such connections will be catered power supply through LT ABC/ HT ABC or HVDS to avoid theft and prevent accidents.
Fund of 6.67 Cr is allotted during FY 2019-20, which was utilized for giving 3-ph power supply to 54 nos. of Simshalas.
AWARDS/PRIZES:
The State of Gujarat and GUVNL & Subsidiary Companies received various awards/prizes for outstanding achievements in the Energy Sector. The details of F.Y. 2019-20 further to the details already given in the last Annual Report are given here under. l Subsidiary Company GETCO received IPPAI Power Award 2019-Trophy & Certificate for “Best State Transmission Utility - Public” given by Shri Harry Dhaul, Director General of IPPAI on 07-12-2019. l Subsidiary Company PGVCL received IPPAI Power Award 2019-Trophy for Runner Up in the top performing distribution utility category given by IPPAI – 20th IPPAI Retreat held at Goa on 07-12- 2019. l Gujarat SLDC received IPPAI Power Award 2019-Certificate for “Heterogeneous Communication scheme between Control Centre and strategic data Centre nodes synchro phasor analytics addressing integration challenges for power transmission system with use of Phasor Measurement Unit (PMU) data (Wide Area Monitoring System (WAMS) Optimal Wind Generation Forecase (WGF)-Real Time (RT) daa integration” given by IPPAI – 20th IPPAI Retreat held at Goa on 07-12-2019. l Gujarat SLDC received IPPAI Power Award 2019-Certificate for “Best State Load Dispatch Centre- SLDC” given by IPPAI-20th IPPAI Retreat held at Goa on 07-12-2019.
26 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
l Subsidiary Company DGVCL received Outstanding State DISCOM supporting green energy uptake- Trophy & Certificate for “taking initiatives to promote use of renewable energy” given by Indian Federation of Green Energy-New Delhi on 16-12-2019. l Subsidiary Company GETCO received CBIP Awards -Trophy & Certificate for “Best State Transmission Utility – Public” given by CBIP New Delhi, Shri Rattan Lal Katara, Hon’ble Minister of State, Ministry of Jalshakti on 19-02-2020. l Subsidiary Company UGVCL received CBIP Awards-Trophy & Certificate- winner in Best State Performing Power Distribution Utility category given by CBIP New Delhi on 19-02-2020. l Subsidiary Company PGVCL received 4th ISGF Innovation Awards-2020-Certificate for “AMR for High Tension (HT) Consumer” given by ISGF, New Delhi on 06-03-2020. l Subsidiary Company PGVCL received 4th ISGF Innovation Awards-2020-Certificate for GPRS based Spot Billing System- “A path from manual billing to Online Billing “given by ISGF, New Delhi on 06-03- 2020. l GUVNL- GPRD Cell received SKOCH Digital India & e-Governance Award 2020 (SKOCH Order of Merit) - Certificate for “Geo Urja Easy Survey Mobile App” given by SKOCH Group, New Delhi on 30-07-2020. l Subsidiary Company GETCO received SKOCH Digital India & e-Governance Award 2020 (SKOCH Order of Merit)- Certificate for Communication Highway-Optical Fiber Ground Wire given by SKOCH Group, New Delhi on 30-07-2020. l Subsidiary Company PGVCL received SKOCH Digital India & e-Governance Award 2020 (SKOCH Order of Merit)- Certificate for Flashpoint and Query & Response given by SKOCH Group, New Delhi on 30-07-2020 l Subsidiary Company PGVCL received SKOCH Digital India & e-Governance Award 2020 (SKOCH Order of Merit)- Certificate for Managerial Tool of 41 Activities given by SKOCH Group, New Delhi on 30-07-2020. l Subsidiary Company PGVCL received SKOCH Digital India & e-Governance Award 2020 (SKOCH Order of Merit)- Certificate for Big Data Analysis by PGVCL given by SKOCH Group, New Delhi on 30-07-2020.
27 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
BRIEF DETAILS OF E-URJA PROJECT & INITIATIVES TAKEN FOR VARIOUS IT ACTIVITIES: l Implemented On-line Portal for Rooftop Solar PV system for residential segment under the Sustainable Rooftop Implementation for Surya Gujarat Scheme. l Integration of Surya Gujarat Portal with e-Urja, CEI Portal and Torrent power ERP, MNRE SPIN Portal. l Implement payment portal for “Surya Gujarat” yojna. l In-house software developed and implemented for on-line recruitment exam and conducted exam for the post of CFM/COA held at Gandhinagar TPS. l Tender Process Management System (TPMS) is successfully implemented for all Discoms. l GUVNL Management Dashboard is under development and is in implementation phase. l Renewal of Oracle Annual Technical Support (ATS) for e-Urja up to 24-02-2022 for smooth operation of existing e-Urja system. l Tender floated for Renewal of Oracle Annual Technical Support (ATS) for R-APDRP project. l LOI is issued for Renewal of e-Urja Maintenance support up to 05-08-2021. l Implementation of auto email and SMS feature for HT Energy Bill. l Implemented relief declared by GOG under COVID-19, fix charge relief for LT and demand charge HT Consumers. l New Energy bill Print format (as per 10 X 15) is Developed for DISCOMs. l Asset Management module is developed in IFAS (in house Accounting Software) and deployed and implemented across all DISCOMS. l In GETCO and GSECL asset audited by CAG using IFAS Asset Management software.
GETRI ACTIVITIES:
Gujarat Energy Training and Research Institute (GETRI), an ISO 9001: 2015 Institution, located at Vadodara, is an autonomous institute promoted by Gujarat Urja Vikas Nigam Limited (GUVNL) and its group companies and registered under Bombay Public Trust Act. This Institute has been established with a view to provide a platform for continuous development of employees by imparting various training, supported by research and documentation of best practices needed in the modern era.
28 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
To provide training at the GUVNL’s subsidiary Companies’ door steps, GETRI has 12 training units called Gujarat Energy Knowledge Centre (GEKCs) across Gujarat, which include 10 Centres for Distribution, one for Transmission and one for Generation, located at Surat, Vadodara, Vallabh Vidyanagar, Sabarmati, Mahesana, Rajkot, Jamnagar, Porbandar, Bhuj, Bhavnagar, Vadodara (GETCO) and Wanakbori (Power Station) respectively.
GETRI is well equipped with Hi-Tech infrastructural facilities for conducting different courses on technical as well as management subjects covering the needs of Thermal, Hydro, Transmission & Distribution Systems, and Energy related fields of the Indian Power and allied Energy sectors. The Institute is furnished with a well stocked Library housing national journals and reference materials; it has fully air conditioned modern classrooms, computer lab, conference hall and auditorium with latest teaching aids, Wi-Fi enabled campus, well-furnished residential hostel for executives with modern lodging and boarding facilities, gymnasium and playground.
GETRI activities / achievements during Year 2019-20 are as under:- l GETRI has trained total 84,511 employees of GUVNL & its Subsidiary Companies achieving total training Man-days of 1,13,172. l GETRI has organized 4 batches of “Induction Training” for newly recruited JE(VS) and MT promoted to JE, of DISCOMs in which 107 engineers were trained. GETRI has also organized 3 batches of Refresher Training Programs for Junior Engineers of DISCOMs in which 75 engineers were trained. l GEKCs of GSECL & DISCOMs cumulatively conducted 57 batches of Induction Training for 3898 class-III & IV employees. l 1,854 Man-days were achieved by deputing GUVNL and Companies’ employees for external training programmes conducted by various renowned Institutions/ organizations in the power sector like ESCI, NPTI, RECIPMT, PGCIL, HLTC, IEEMA, ISGF, Power Line, CPRI, ABB, GIDM, BEE, BIS, GERMI, TATA POWER, CII, CBIP, ERDA, PDPU, SPIPA, BMA etc. l Training programmes on “Safety” were conducted at GETRI and all GEKCs. 507 employees of GSECL (in 15 programmes conducted), 1966 employees of GETCO (in 123 Safety training sessions conducted) and 1070 employees of 4 DISCOMs (in 35 programmes conducted) were trained in the year.
Apart from the regular announced training programmes, GETRI conducted a few need of- the-hour training programmes.
29 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Training Details during Year 2019-20:
No. of No. of No. of Sr. Training Particulars No. Training Employees Training Programmes Trained Man-day 01 GETRI 260 6,964 15,191 02 External Training 142 748 1,854 03 GEKC Wanakbori 81 2,879 7,070 04 GEKC GETCO 452 7,531 8,444 05 GEKCs DISCOMs 1,543 58,119 73,222 06 Other in-house trainings (i.e. Corporate, Power Stations, Zone, Circle, Division etc. level) 144 8,270 7,391 TOTAL 2,622 84,511 1,13,172
HUMAN RESOURCES:
Company endeavors to provide an environment so that each employee is motivated to contribute his / her best to achieve the Company’s Goals/Objectives. The Company has taken series of proactive HR initiatives including need based training and development programmes with special emphasis on developing competencies of employees and thereby enhancing organizational effectiveness. The number of employees working in GUVNL as on 01-04-19 were 287, during the year 24 employees were added and 28 employees reduced and number of employees as on 31-03-20 were 283.
INDUSTRIAL RELATIONS DURING THE YEAR:
The overall Industrial Relations under GUVNL and its subsidiary companies remained harmonious and no major incidence of industrial unrest occurred during the whole year.
STAFF WELFARE ACTIVITIES:
Employee Welfare plays an important role to cultivate the qualities of greater involvement and deeper unity amongst the employees and also works as motivation to the employees. GUVNL has taken utmost care and given ample importance in the field of welfare activities. Apart from Statutory Welfare Provisions, the Company has given due importance to the non-statutory welfare activities. A good number of welfare activities have continued to be handled in GUVNL even for subsidiary companies for the sake of synergy, coordination and functional needs. A number of staff welfare activities were carried out during the year like sports, AIESCB tournaments, Grant to Employees Organization for cultural programmes, Inter Company
30 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Music Competition, Inter Company Drama Competition, Loans to cooperative Society, Staff Voluntary Retirement cum death Benevolent Fund Scheme, Merit Awards to the employees and their family members for their bright performance in the field of Education, Sports and Fine Arts, Sports Complex at Vidyutnagar colony, Vadodara, Gymnasium at Corporate office, Colony and GETRI etc.
The Summary of Sexual harassment compliant received and disposed of during the year 2019-2020.
No. of Compliant received: Nil No. of Compliant disposed of: Nil
DIRECTORS :
A. Changes in Directors and Key Managerial Personnel
The changes among the Directors and Key Managerial Personnel during the year and up to the date of reportare as under:
Ms. Mona Khandhar, IAS (DIN 06803015) was transferred and posted as Minister (Economic & Commerce) at EoI, Tokyo, Japan by the Government. Consequently, she tendered her resignation dated 31-08-2019 as Director from the Board of Directors of the Company which was accepted by the Board with effect from 31st August, 2019.
The Finance Department, Government of Gujarat vide OFFICE ORDER No. JNV/10/2011/720764/A dated 1st October, 2019 nominated/appointed Shri Roopwant Singh, IAS (DIN 06717937) on the Board of the Company as Nominee Director representing Finance Department, Govt. of Gujarat vice Shri Milind Torawane,IAS. The Board vide Circular Resolution passed on 15-10-2019 appointed Shri Roopwant Singh, IAS (DIN 06717937) Secretary (Expenditure), Finance Dept., Government of Gujarat as a Nominee Director representing Finance Dept., Government of Gujarat w.e.f. 01-10- 2019 vice Shri Milind Torawane, IAS (DIN 03632394).
The Government of Gujarat vide Notification No. AIS/35.2019/53/G dated 12th December, 2019 issued by the General Administration Department, appointed Smt. Sunaina Tomar, IAS as Principal Secretary, Energy & Petrochemicals Department vice Shri Pankaj Joshi, IAS transferred as Addl. Chief Secretary, Finance Department, Govt. of Gujarat. Consequently, Shri Pankaj Joshi, IAS, Chairman has tendered his resignation w.e.f. 16-12-2019 from the Board of Directors of the Company.
The Govt. of Gujarat vide Notification No. AIS/35.2019/30/G dated 30.08.2019 appointed Smt. Shahmeena Husain, IAS as Managing Director of the Company vice Shri Pankaj Joshi, IAS transferred as Principal Secretary, Energy & Petrochemicals Department, Govt. of Gujarat. Accordingly
31 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Smt. Shahmeena Husain, IAS (DIN 03584560) was appointed as an Additional Director and also as Managing Director w.e.f. 30-08-2019 vide Board Resolution passed at the 96th Board Meeting held on 17-09-2019.
Smt. Shahmeena Husain, IAS(DIN 03584560) has been appointed as Managing Director of the Company with effect from 30th August, 2019 vide Board Resolution passed on 17th September, 2019. She was regularized as Director at 15th Annual General Meeting held on 30-12-2019, continuing as the Managing Director of the Company.
The Govt. of Gujarat vide E&P Dept., Govt. of Gujarat Order No. GUV-13-2012-2059-K dated 25th October, 2019 deputed Shri S.B.Khyalia (DIN-02470485), Director (Finance), GUVNL as Managing Director, Gujarat Power Corporation Limited, Gandhinagar and accordingly he relinquished the charge of Director (Finance), GUVNL on 01-11-2019. The Board at its 97th meeting held on 11-11-2019 accepted the consequent resignation of Shri S. B. Khyalia from the Board of Directors of GUVNL w.e.f. 01-11-2019 to comply with formalities of cessation as Board member during the period of deputation as per aforesaid Govt. Order as may be amended by Govt. from time to time.
The Finance Department, Government of Gujarat vide OFFICE ORDER No. JNV/10/2011/720764/A dated 8th June, 2020 issued by Finance Department, Government of Gujarat nominated Shri Milind Torawane, IAS (DIN 03632394) Secretary (Economic Affairs), Finance Dept., Government of Gujarat as a Nominee Director representing Finance Dept., Government of Gujarat w.e.f. 15-06-2020 pursuant to Section 161(3) of the Companies Act, 2013 and in terms of Article 70 of the Articles of Association of the Company vice Shri Roopwant Singh, IAS (DIN 06717937).
The Govt. of Gujarat vide Notification No. AIS/35.2019/53/G dated 12th December, 2019 of the General Administration Department, Government of Gujarat appointed Smt. Sunaina Tomar, IAS as Principal Secretary (now Additional Chief Secretary), Energy & Petrochemicals Department vice Shri Pankaj Joshi, IAS transferred as Addl. Chief Secretary, Finance Department, Govt. of Gujarat. Accordingly the Board at its 98th meeting held on 20-12-2019 noted the nomination/appointment of Smt. Sunaina Tomar, IAS (DIN 03435543) as Chairman of the Company with effect from 10th January, 2020.
In terms of the Energy & Petrochemicals Dept., Govt. of Gujarat Order No. GUV-13-2017-221-K dated 8th March, 2019, the term of Shri K. M. Bhuva (DIN 07808731) as Director (Technical) on the Board of Directors of Gujarat Urja Vikas Nigam Ltd. ended on 28.04.2020. In view of same, Shri K. M. Bhuva tendered his resignation as Director(Technical) from the Board of Directors of the Company with effect from 29-04-2020 which was accepted by the Board w.e.f. 29-04-2020 vide circular resolution passed on 13-05-2020.
32 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Further, as per the E&P Dept. Govt. of Gujarat vide letter No. GUV-1108-3747-K dated 05-10-2018, GUVNL appointed following two Independent Directors for a first term of two years as under:
Sr. Company Name of Independent Date of Term of Date of expiry No. Director Appointment Appointment of term
Shri N. N. Misra 1 GUVNL DIN 00575501 01.11.2018 2 Years 31.10.2020 Shri R. C. Dhup DIN 08275424 24.12.2018 2 Years 23.12.2020
The first term of two years of aforesaid Independent Directors has expired/will expire as aforesaid and a Company being wholly owned Govt. of Gujarat Company, a proposal has been submitted well in advance to the Govt. of Gujarat for renewal of the term and the approval of the Govt. is awaited as on the date of this report.
B. Declaration of Independent Directors :
Pursuant to the provisions of Section 149(6)/(7) of the Companies Act, 2013 and the relevant Rules, the Company has received necessary declarations from Independent Directors Shri N. N. Misra (DIN-00575501) and Shri R. C. Dhup (DIN- 08275424) for the FY 2019-20 confirming that they meet the criteria of independence as prescribed under the Act.
Further the Ministry of Corporate Affairs, Govt. of India issued two notifications on 22/10/2019 regarding inclusion of name of Independent Directors in the database of Independent Directors to be maintained by the Indian Institute of Corporate Affairs (IICA) and clearance of proficiency test by the Independent Directors. The said notifications are effective from 01/12/2019.
Both the existing IDs of GUVNL have already registered their names in the database maintained by the Institute IICA. Shri N. N. Misra is exempted from passing proficiency test while Shri R. C. Dhup has already passed the online proficiency test.
C. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors including Independent Directors pursuant to the provisions of the Act.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.
33 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board reviewed the performance of the individual directors and Independent Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of directors. The same was discussed in the Board meeting, at which the performance of the Board, its committees and individual directors was also discussed.
D. Policy on Directors’ Appointment etc.
The Company being a Government Company, the provisions of Section 134(3)(e) of the Companies Act, 2013 are not applicable in view of the Notification No. GSR-163(E) dated 05-Jun-2015 issued by the Ministry of Corporate Affairs, Govt. of India.
E. Meetings of the Board and Committees there of
As requiredunder Clause-9 of the Secretarial Standard-1 (SS-1), the details of the number and date of Meetings of Board of Directors and Committees of the Board held during the Financial Year 2019- 20 and the attendance of Directors is as under:
34 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
During 2019-20, During 2019-20, During 2019-20, During 2019- Total Five (5) Total Five (5) Total One (1) 20, Total Two Board Meetings Audit meeting of (2) CSR were held as Committee Independent Committee under: Meetings were Directors was Meetings held as under: held as under: were held as Name of Director / under: Member of Committee 29.06.2019 29-06-2019 27-03-2020 11-11-2019 17.09.2019 17-09-2019 20-12-2019 11.11.2019 11-11-2019 20.12.2019 20-12-2019 21.03.2020 21-03-2020 Meeting held Meeting held Meeting held Meeting held during tenure/ during tenure / during tenure / during tenure / Attended Attended Attended Attended
Smt. Sunaina Tomar, IAS (w.e.f 10.01.2020) 1/1 ------Shri Pankaj Joshi, IAS (up to 16.12.2019) 3/3 ------Smt. Shahmeena Husain, IAS (Appointed on 30.08.2019) 4/4 - -- 2/2 Ms. Mona Khandhar, IAS (up to 31.08.2019) 1/1 ------Shri Milind Torawane, IAS (up to 01.10.2019) 2/0 2/0 - -- Shri Roopwant Singh, IAS (Appointed 01.10.2019) 3/2 3/3 -- - Shri N. N. Misra (Appointed 1-11-2018) 5/4 5/4 1/1 2/1 Shri R. C. Dhup (Appointed 24-12-2018) 5/5 5/5 1/1 -- Shri S. B. Khyalia (up to 01.11.2019) 2/2 - -- -- Shri K. M. Bhuva 5/5 - - 2/2
35 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:
Since the company is engaged in power trading business, the provisions relating to above details are not applicable to the Company. However brief details of energy conservation measures taken through Discoms are given hereunder for information.
For the year 2019-20, a total budget provision of 3500.00 lacs was made under Energy Conservation Programme.
HVDS is Conversion of Low Voltage Distribution System(LVDS) into High Voltage Distribution System(HVDS) by installing smaller size of Distribution Transformers and thereby reduction of LT Lines up to negligible level by converting it into HV Line.
To improve Voltage profile in rural area the small capacity of Distribution Transformers are to be installed by extending 11KV Line as nearer to the load as possible and Distribution Transformer of the capacity of 10, 16 KVA are erected and supply is released to consumer through a short length of LT Lines preferably through insulated overhead cables known as Aerial Bunched Cable (ABC)/PVC Cable. In Order to ensure pilferage free system, one of several remedial measures is reducing LT line (System) being exposed to theft. The whole idea is to have Less LT system and gradually move on to LT Less system. Even the short LT Lines are to be laid using ABC/PVC Cables.
During the year 2019-20, Total 1939 Nos. of small capacity transformers installed at the expenditure of 2471.74 lacs.
Further, under Energy conservation a special fund is being allocated for IEC (Information, Education & Communication) purpose for public awareness activities like seminars, raily, urja rangoli, slogan/drawing competitions etc. During the year 2019-20, Expenditure of 1028.61 Lacs has been booked against IEC activity.
RESEARCH AND DEVELOPMENT:
The Company has started a Research & Development (R&D) Cell in the campus of IIT, Gandhinagar during F.Y. 2017-18. The details of Revenue Expenditure & Capital Expenditure incurred on Research & Development (R&D) Cell during the year is as under:
36 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Amount Particulars ( in Lakhs)
Capital Expenditure Computers and related Equipments 78.28 Less: Depreciation for the year 1.33 Total Capital Expenditure: 76.95 Revenue Expenditure: Employee Benefits 100.60 Material Consumed 5.16 Administrative and Misc. Expenses 50.66 Depreciation 3.62 Total Revenue Expenditure: 160.05 Total Research and Development Expenditure: 236.99
Technology Absorption and Research & Development l The Gujarat Power Research and Development (GPRD) is an initiation by Government of Gujarat for Gujarat Urja Vikas Nigam Limited (GUVNL) and its subsidiary Companies namely GSECL, GETCO, DGVCL, MGVCL, UGVCL and PGVCL by Energy and Petrochemical Department of Govt of Gujarat vide resolution no: BJT-2015-4915-k1 dated 25.11.2016. l Govt of Gujarat allots financial grant every year for R&D work. Grant of 500 lacs is allotted for research activities in the FY 2019-20. l The GPRD Cell is engaged in Research and Development activities in the Electricity utility area like energy efficiency of power network, Power quality and Power reliability, renewable energy for environmental benefits, improving customer services and safety, IT enabled applications, exploring energy storage, Electric Vehicles etc l During the years 2019-20, 27 nos of projects of 381.58 Lacs were project costs are approved by various committees of GPRD Celland research activities taken on hand by GPRD Cell.
The Key projects of GPRD Cell are as under:
1. GeoUrja
2. Air Break Switch With Earthing Facility Fiber Reinforced Polymer Mounting Channel(ABEB)
3. Maintenance Free, Eco-Friendly, Ready Capsule, Pipe-In-Cage (Pic)Type Earthing
37 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
4. LoRa WAN ( Long Range Wide Area Network
5. Smart Feeder Monitoring System (SFMS) for Power Distribution
6. Watch Dog Transformer(WDT)
7. Patents: The GPRD Patents list:
Sr. No. Name of Research Projects patented
1 Online testing setup for HT consumer metering system 2 Stone less dropout fuse 3 Conductor stringing device 4 Remotely communicable and operable air break switch assembly with earthing facility and fault passage indicator 5 Air break switch with earthing facility and fiber reinforced polymer mounting channel 6 Watch Dog Transformer 7 Dynamic capacitor bank system for volt ampere reactive compensation of feeder 8 Remotely controllable capacitor bank system for volt ampere reactive compensation of feeder
Moreover, 5 research papers of GPRD Cell have been published in various publications.
8. Awards :
Sr. No. Award Name Type Of Award Received Award For.
1 Skoch Award Certificate Solar Energy Data Management System With Meter Console And Watch Dog Transformer 2 Skoch Award Certificate Smart Energy Management For The Grid Connected Solar Agriculture Prosumers And Consumers 3 ISGF Award Certificate Iot Based Monitoring And Controlling Of Distributed Solar 2020 Energy Resources With Grid Support Through Sky
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, there was no foreign exchange earnings or outgo.
38 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
DIRECTORS’ RESPONSIBILITY STATEMENT:
To the best of knowledge, belief and according to the information received, the Board of Directors confirm as under for the financial year 2019-20 in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDIT COMMITTEE:
The Audit Committee was constituted on the terms of reference as prescribed under Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its powers) Rules, 2014. There were Two meetings held during the Financial Year 2019-20. The recommendations made by the Audit Committee during the year were accepted by the Board. The Composition of Audit Committee as on 31-03-2020 was as under:
1 Shri Roopwant Singh, IAS Chairman 2 Shri N. N. Misra Member 3 Shri R. C. Dhup Member 4 Smt. Shahmeena Husain, IAS Invitee
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company has constituted a ‘Corporate Social Responsibility’ (CSR) Committee In accordance with Section 135 read with the Companies (CSR Policy) Rules, 2014. The Annual Report on Corporate Social Responsibility activities is attached as Annexure-1 which forms part of this Report. The CSR Policy adopted 39 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 by the Company is posted on the Company’s website at www.guvnl.com.
VIGIL MECHANISM (WHISTLE BLOWER POLICY):
As required under the provisions of Section 177(9) of the Companies Act, 2013, the Company has established a Vigil Mechanism (Whistle Blower Policy). All employees of the Company and Directors on the Board of the Company are covered under the Mechanism. The Vigil Mechanism (Whistle Blower Policy) of the Company is available on the website of the Company at www.guvnl.com.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY:
Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board of Directors has constituted Nomination and Remuneration Committee. The Ministry of Corporate Affairs, Govt. of India has vide Notification No. GSR-163(E) dated 05-Jun-2015 modified the application of provisions of Section 178 for Government companies so as to apply the same with regard to appointment of ‘senior management’ and other employees. The Board has on the recommendation of the Committee formulated Remuneration Policy for senior management and other employees.
The Composition of Nomination and Remuneration Committee as on 31-03-2020 was as under:
1 Shri Roopwant Singh, IAS FD Nominee Director, Chairman 2 Shri N. N. Misra Independent Director, Member 3 Shri R. C. Dhup Independent Director, Member
RISK MANAGEMENT:
The elements of risk threatening the Company’s existence are very minimal. However, as required by Section 134(3)(n) of the Companies Act, 2013, the Company has framed Risk Management Policy to identify various elements of risk and steps taken to mitigate the same. As an enterprise engaged in trading of electricity and a holding Company of six subsidiary companies engaged in the business of generation, transmission and distribution, the Company has always had a systems-based approach to Business Risk Management. The risk management includes identifying types of risks and their assessment, risk handling and monitoring and reporting. The Risk Management framework primarily focuses on following elements: l Risk to Company’s assets and properties l Employees related risks l Risks associated with non-compliance of statutory enactments l Risk of Inflation and Cost Structure 40 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
l Credit Risk l Liquidity Risk l Operational Risk l Regulatory Risk l Network Risk l Fuel availability and price fluctuation Risk l Risk of monsoon failure l Risk of compensation to third parties due to electrical accidents and burning of crop l Risk of dependence on Government of Gujarat for share capital contribution, grants and subsidies
EXTRACT OF ANNUAL RETURN:
The information required to be disclosed pursuant to Section 134(3)(a) of the Companies Act, 2013 with respect to extract of Annual Return pursuant to the provisions of Section 92 read with Rule-12 of the Companies (Management and Administration) Rules, 2014 is furnished in Form MGT-9 as Annexure-2 and attached to and forming part of this Report.
RELATED PARTY TRANSACTIONS:
All transactions entered with related parties for the year were on arm’s length basis and were in the ordinary course of business. The Company has adopted a Related Party Transactions Policy and Procedure. All related party transactions were placed before the Audit Committee. Omnibus approval was obtained for transactions which are of repetitive nature.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to financial statements commensurate with the size and nature of its business.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:
In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, an ‘Internal Complaints Committee’ has been constituted in the Company for redressal of complaints against sexual harassment of women employees. During the year under review, the Company had received Nil complaint. 41 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
AUDITORS:
[A] STATUTORY AUDITORS AND THEIR REPORT:
As your Company is a Govt. Company, M/s. DGSM & Co., Chartered Accountants, Vadodara were appointed as the Statutory Auditors of the Company by the Comptroller and Auditor General of India, New Delhi, (C&AG) to audit the accounts of the Company for the Financial Year 2019-20. They have audited the Financial Statements(Stand Alone and Consolidated) for the year ended 31-March-2020 and submitted their Report.
There were no qualifications, reservations or adverse remarks made by the Auditors (Stand Alone and Consolidated) in their Report except as mentioned hereunder in case of Consolidated Financial Statements. The Notes to the Financial Statements are self-explanatory and therefore, do not call for any further comments.
In the Auditors’ Report on Consolidated Financial Statements, the Auditors have reproduced the qualifications/ emphasis, if any, of the respective Subsidiary Companies which do not call for any comments in the Directors’ Report of the Company. However as a prudent practice, the qualifications of Statutory Auditors of Subsidiary Companies reproduced in the Auditors’ Report on Consolidated Financial Statements viz. GSECL, GETCO and UGVC La long with management replies of respective subsidiary company are reproduced as Annexure- 3(i), 3(ii) and 3(iii).
The C&AG of India has appointed M/s. DGSM & Co., Chartered Accountants, Vadodara as Statutory Auditors (Stand Alone and Consolidated) for F.Y. 2020-21. Their remuneration is to be decided by the Members as per section 142 of the Companies Act,2013. An item of ordinary business has been included in the notice of ensuing Annual General Meeting in this regard.
[B] C&AG’S COMMENTS:
The Comptroller & Auditor General of India (C&AG) have conducted supplementary audit under Section 143 of the Companies Act, 2013 of the Financial Statements(Stand Alone and Consolidated) of the Company for the year ended on 31-March-2020.
The C&AG has issued three Comments on Stand Alone Financial Statements for F.Y. 2019-20 vide Letter No. AMG-III,Hq-II/A/cs/GUVNL/2019-20/ow369 dated 03.12.2020, a copy of which is placed in this Annual Report. As required by the provisions of Section 134(3)(f), the management reply by the Board is furnished as Annexure-4 and attached to and forming part of this Report.
Further Comments of C&AG on Consolidated Financial Statements are awaited as on the date of this
42 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 report. The said comment(s) upon receipt from C&AG along with the management reply by the Board as required by the provisions of Section 134(3)(f), will be circulated to the menebers as an Addendum to Boards’ Report separately.
The Subsidiary Companies viz. GETCO, MGVCL, DGVCL and PGVCL have received comments from C&AG. As a prudent practice, the C&AG Comments of Subsidiary Companies alongwith management reply of the Board of respective subsidiary company are reproduced as Annexure 5(i) to 5(iv).
[C] COST AUDITOR:
In terms of the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Cost Audit) Rules, 2014, the Board of Directors appointed M/s Y S Thakar & Co., Cost Accountants, Vadodara as Cost Auditors for the Financial Year 2019-20 for auditing the cost accounting records relating to Electricity Industry product. The Cost Audit Report for the Financial Year 2019-20 was filed / uploaded on the MCA Portal on 9-10-2020 within stipulated time.The Board of Directors on recommendation of Audit Committee appointed M/s Santosh Jerurkar & Associates,Cost Accountants, Vadodaraas a Cost Auditor for the F.Y. 2020-21. As required under the Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Directors recommend their remuneration for the Financial Year 2020- 21 for your ratification.
[D] SECRETARIAL AUDITOR:
In terms of the provisions of Section 204 of the Companies Act, 2013, the Company has appointed M/s. Niraj Trivedi, Practicing Company Secretaries, Vadodara for conducting Secretarial Audit for the Financial Year 2019-20. M/s. Niraj Trivedi, Practicing Company Secretaries, Vadodara have issued Secretarial Audit Report (Form MR-3) for the Financial Year 2019-20 which is attached as Annexure-6 and is forming part of this Report. There were no adverse comments, qualifications or reservations or adverse remarks in the Secretarial Audit Report. The observations made by Secretarial Auditors are self-explanatory and therefore, do not call for any further comments.
OTHER DISCLOSURES: a) There was no unpaid or unclaimed dividend declared and paid and therefore, no disclosure is required to be made pursuant to the provisions of Section 125 of the Companies Act, 2013. b) There was no change in the nature of business of the Company during the year. c) No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this Report except as stated elsewhere in this report. 43 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 d) The Company is engaged in the trading of power which is covered under the exemption provided under Section 186(11) of the Companies Act, 2013 read with Notification No. GSR-163(E) dated 05-June-2015 issued by the Ministry of Corporate Affairs, Govt. of India. Accordingly, details of loan given, investment made or guarantee or security provided by the Company are not required to be reported. e) The Company has six subsidiary companies, one Associate Company and one Subsidiary Company GSECL has a Joint Venture Company as per the details given elsewhere in this report. f) The Company being a Government Company is exempted as per Gazette notification dated 05/06/ 2015 issued by the Ministry of Corporate Affairs, Govt. of India, to furnish information as required under Section 197 of the Companies Act, 2013 read with the Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. g) During the year under review, the Company has neither accepted nor renewed any deposits covered/ as defined under Chapter-V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. h) There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013. i) No Significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operations in future except as stated elsewhere in this report. j) The Company has complied with the applicable Secretarial Standards.
ACKNOWLEDGEMENT:
Your Directors place on record their appreciation for the valuable guidance, support and assistance received from the Ministry of Power, Govt. of India, Government of Gujarat, GERC and other Central and State Govt. Authorities/Departments, Banks, Financial Institutions, GSFS, GPCL,GIPCL and for the valuable services rendered by the employees of the GUVNL and its Subsidiary Companies.
For and on behalf of the Board
Date: 24-12-2020 Sd/- Place: Vadodara Sunaina Tomar, IAS Chairman (DIN - 03435543) 44 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure -1
Annual Report on Corporate Social Responsibility (CSR) activities for the Financial Year 2019-20.
1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
‘Corporate Social Responsibility (CSR) Policy of Gujarat Urja Vikas Nigam Limited (GUVNL)’ encompasses the Company’s philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially relevant programs for welfare and sustainable development of the community at large.
This Policy shall apply to all CSR initiatives and activities taken up by the Company at the Company’s areas of operations and also within the State of Gujarat and in any other parts of the country, for the benefit of the different segments of the society provided that the preference shall be given to the local areas and areas where the Company operates for undertaking the CSR activities.
In alignment with vision of the Company, GUVNL, through its CSR initiatives, shall continue to enhance value creation in the society and in the community in which it operates, through its services, conduct and initiatives, so as to promote sustained growth for the society and community.
The CSR Projects and Programmes undertaken will be within the broad frame work of Schedule VII of the Companies Act, 2013 and will be identified and funds allocated, on a yearly basis, as per the need assessment specific to the location, target beneficiary and agency partnering for the implementation.
The CSR Policy may be accessed on the Company’s website: http://www.guvnl.com
2. The Composition of the CSR Committee
1. Shri Pankaj Joshi, IAS, Managing Director …. Chairman up to 17-09-2019
2. Smt. Shahmeena Husain,IAS …. Chairperson (w.e.f. 17-09-2019)
3. Shri N. N. Misra, Independent Director …. Member (w.e.f. 01-11-2018)
4. Shri S. B. Khyalia, Director (Finance) …. Member (up to 01-11-2019)
5. Shri K. M. Bhuva, Director (Technical) …. Member (up to 29-04-2020)
6. Shri R. C. Dhup, Independent Director …. Member (w.e.f. 05-08-2020)
45 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
3. Average net profit of the Company for last three financial years
Average Net Profit (2016-17 to 2018-19) 10594.58 Lakhs
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) 211.89 Lakhs
5. Details of CSR spent during the financial year:-
a) Total amount to be spent for the financial year … 211.89 Lakhs
b) Amount unspent, if any … 74.64 Lakhs
c) Manner in which the amount spent during the financial year as given below:
(1) (2) (3) (4) (5) (6) (7) (8)
Sr. CSR Project Sector in Projects or Amount Amount Cumulative Amount No. or activity which the programs outlay spent on the expenditure spent: Direct identified project is (1) Local (budget) projects or upto the or through covered area or project or programs reporting implementing other programs (1) Direct period agency (2) specify wise (Rs.) expenditure the state on projects and district or programs where (2) Overhead projects or (Rs.) programs was undertaken
1. Construction Promotion Vadodara 80 Lakhs 40.55 Lakhs 40.55 Lakhs Through of drawing subsidiary hall, Library of No company etc. at Vidyut Education overheads MGVCL Board Vidyalaya.
2. Misc. Civil Promotion Vadodara 50 Lakhs 20.99 Lakhs 20.98 Lakhs Through works etc. at subsidiary Vidyut Board of No company Vidyalaya. Education overheads MGVCL
46 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
3. Contribution Promotion Mehsana 25 Lakhs 25.00 25 Lakhs Through to Gujarat of Gujarat Power education, Lakhs Power Education & Scientific Education & Research Research Research Foundation etc. Foundation
4. Contribution Promotion Vadodara 10.00 Lakhs 10.00 Lakhs 10.00 Lakhs Through to Vidyut of Vidyut Board Board Education Vidyalaya, Vidyalaya, Vadodara Vadodara towards maintenance corpus of the School 5. Contribution Promoting Vadodara 35.00 Lakhs 35.00 Lakhs 35.00 Lakhs Through to Gujarat education No Gujarat CSR CSR Authority including overheads Authority in ‘GCSRA special Special Children’s education, Fund’ for especially “Project for among Special special Children” children implementation at Osmosis Play Centre , Chhani, Vadodara
6. Providing 7 Promotion Vadodara 5.71 Lakhs 5.71 Lakhs 5.71 Lakhs Through AC Machines of No subsidiary for Auditorium Education overheads company of Vidyut MGVCL Board Vidyalaya AND Providing street lights etc.for School security at Vidyut Board Vidyalaya. 205.71 137.25 137.25 Total Lakhs Lakhs lakhs 47 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
6. In case, the Company has failed to spend two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not/ short spending the amount in its Boards’ report:
The financial year 2019-20 was the 6th year for CSR activities under the Companies Act, 2013. The Company has spent 137.25 Lakhs during F.Y. 2019-20 against the stipulated 2% amount of 211.89 Lakhs for F.Y. 2019-20. Infact, there is no unspent amount as such for F.Y. 2019-20 but due to the reasons given below contribution of 74.64 Lakhs to CM Relief Fund for spending on COVID-19 related activities is not booked under CSR.
The Company has contributed 74.64 Lakhs during F.Y. 2019-20 to the Chief Ministers’ Relief Fund, Gujarat for spending on Covid-19 pandemic related Disaster Management activities. The Ministry of Corporate Affairs (MCA), Govt. of India had issued clarification dated 23-03-2020 on spending of CSR Funds for COVID-19. Accordingly Company contributed 74.64 Lakhs to CM Relief Fund with approval of CSR Committee and the Board with special objective in the situation for Disaster Relief for spending on COVID-19 affected areas and considered the same as part of CSR. Subsequently, on 10-04-2020, MCA issued Covid-19 related Frequently Asked Questions (FAQs) on CSR wherein it was clarified that CM Relief Fund or State Relief Fund for COVID-19 is not included in Schedule VII of the Companies Act, 2013 and therefore, any contribution to such funds shall not qualify as admissible CSR expenditure.
GUVNL has represented to the Govt. of Gujarat vide letter dated 28-07-2020 to take up the matter with Ministry of Corporate Affairs, Govt. of India so that contributions made to CM Relief Fund for COVID-19 by GUVNL and Subsidiary Companies (especially between 23-03-2020 to 10-04-2020) are allowed as Corporate Social Responsibility (CSR) expenditure under schedule VII of the Companies Act, 2013. Response to the said representation is awaited.
The Board of Directors at its meeting held on 29-09-2020 decided that in view of the clarification issued by Ministry of Corporate Affairs, Govt. of India vide General Circular No. 15/2020, dated 10th April 2020 and considering the fact that response to the GUVNL representation to the Govt. of Gujarat is awaited, the Contribution made by the Company to the CM Relief Fund, Gujarat for the F.Y. 2019-20 for spending on Covid-19 related activities may not be booked as CSR Spending for the F.Y. 2019-20 and the same be considered as Contribution/donation to CM Relief Fund under Section 181 of the Companies Act, 2013.
GUVNL being a Govt. Utility has adopted an approach of supplementing Govt. Schemes and initiatives. This creates a very narrow space for identification and implementation of activities.
48 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
The Company is in the process of exploring various options for CSR activities that can deliver the maximum impact to society. The Company plans accelerating the pace of its CSR spend in coming years through structured programmes and projects.
7. Responsibility statement, of the CSR Committee, that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company duly signed by Director and Chairperson of the CSR Committee.
The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
Sd/- (Shahmeena Husain, IAS) Managing Director
Place: Vadodara and Date: 26-10-2020 Chairman CSR Committee (DIN - 03584560)
49 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure-2
FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March-2020
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
I CIN:- U40109GJ2004SGC045195 II. Registration Date 22-12-2004 III. Name of the Company GUJARAT URJA VIKAS NIGAM LIMITED IV. Category/Sub-Category of the Company Public Limited Company, Govt. Company V. Address of the Registered office and contact details Registered & Corporate Office, Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390007. VI. Whether listed company No VII. Name, Address and Contact details of Registrar and Transfer Agent, if any NOT APPLICABLE
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
Sr. Name and Description of NIC Code of the % to total turnover of No. main products / services Product/ service the company
1 Purchase & Sale of Power 35109 100%
50 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –
Sr. Name and Address of the CIN/GLN Holding/ % of shares Applicable No. Company Subsidiary/ held Section Associate
1 Gujarat State Electricity Corpn. U40100GJ1993SGC019988 Subsidiary 100% 2(87) Ltd., Vidyut Bhavan, Race Course, Vadodara : 390 007 2 Gujarat Energy Transmission U40100GJ1999SGC036018 Subsidiary 100% 2(87) Corpn. Ltd., Sardar Patel Vidyut Bhavan, Race Course, Vadodara : 390 007 3 Madhya Gujarat Vij Co. Ltd., U40102GJ2003SGC042907 Subsidiary 100% 2(87) Sardar Patel Vidyut Bhavan, Race Course, Vadodara : 390 007 4 Dakshin Gujarat Vij Co. Ltd., U40102GJ2003SGC042909 Subsidiary 100% 2(87) Urja Sadan, Nana Varachha Road, Kapodara, SURAT : 395006. 5 Uttar Gujarat Vij Co. Ltd., U40102GJ2003SGC042906 Subsidiary 100% 2(87) Visnagar Road, Mehsana : 384001 6 Paschim Gujarat Vij Co. Ltd., U40102GJ2003SGC042908 Subsidiary 100% 2(87) Paschim Gujarat Vij Seva Sadan, Off. Nana Mava Main Road, Laxminagar, Rajkot: 360004. 7 Gujarat Industries Power Co. Ltd., L99999GJ1985PLC007868 Associate 26.84% 2(6) P.O. Petrochemicals : 391346 Dist. Vadodara, Gujarat
51 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category-wise Share Holding:
No. of Shares held at the No. of Shares held at the end of the % Category of beginning of the year (01-April-2019) year (31-March-2020) Change Shareholders during Demat Physical Total % of Demat Physical Total % of the Total Total year Shares Shares
A. Promoters (1) Indian a) Individual/HUF 0 0 0 0 0 0 0 0 0 b) Central Govt. 0 0 0 0 0 0 0 0 0 c) State Govt(s) 0 19772222095 19772222095 100 0 22347811995 22347811995 100 0 d) Bodies Corp. 0 0 0 0 0 0 0 0 0 e) Banks / FI 0 0 0 0 0 0 0 0 0 f) Any Other…. 0 0 0 0 0 0 0 0 0 Sub-total (A) (1):- 0 19772222095 19772222095 100 0 22347811995 22347811995 100 0 (2) Foreign 0 0 0 0 0 0 0 0 0 a) NRI Individuals 0 0 0 0 0 0 0 0 0 b) Other Individuals 0 0 0 0 0 0 0 0 0 c) Bodies Corp. 0 0 0 0 0 0 0 0 0 d) Banks / FI 0 0 0 0 0 0 0 0 0 e) Any Other…. 0 0 0 0 0 0 0 0 0 Sub-total (A) (2):- 0 0 0 0 0 0 0 0 0 Total Shareholding of Promoter (A) =(A)(1)+(A)(2) 0 19772222095 19772222095 100 - 22347811995 22347811995 100 0 B. Public Shareholding 1. Institutions 0 0 0 0 0 0 0 0 0 a) Mutual Funds 0 0 0 0 0 0 0 0 0 b) Bank / FI. 0 0 0 0 0 0 0 0 0 c) Central Govt. 0 0 0 0 0 0 0 0 0 d) State Govt. 0 0 0 0 0 0 0 0 0 e) Venture Capital Fund. 0 0 0 0 0 0 0 0 0 f) Insurance Companies 0 0 0 0 0 0 0 0 0 g) FIIS 0 0 0 0 0 0 0 0 0 h) Foreign Venture Capital Fund. 0 0 0 0 0 0 0 0 0
52 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
i) Others (Specify) 0 0 0 0 0 0 0 0 0 Sub-total (B)(1):- 0 0 0 0 0 0 0 0 0 2. Non- Institutions a) Bodies Corp. i) Indian 0 0 0 0 0 0 0 0 0 ii) Overseas 0 0 0 0 0 0 0 0 0 b) Individuals i) Individual shareholders holding nominal share capital in excess of 1. lakhs 0 0 0 0 0 0 0 0 0 ii) Individual shareholders holding nominal share capital in excess of 1. lakhs 0 0 0 0 0 0 0 0 0 c) Others (specify) 0 0 0 0 0 0 0 0 0 Sub-total (B)(2):- 0 0 0 0 0 0 0 0 0 Total Public Shareholding (B)=(B)(1)+ (B)(2) 0 0 0 0 0 0 0 0 0 C. Shares held by Custodian for GDRs & ADRs 0 0 0 0 0 0 0 0 0 Grand Total (A+B+C) 0 19772222095 19772222095 100 - 22347811995 22347811995 100 0
(ii) Shareholding of Promoters:
Shareholding at the beginning of Shareholding at the end of the year % change Shareholder’s the year (01/04/2019) (31/03/2020) in share Name holding No. of % of total % of No. of % of total % of during Shares Shares of Shares Shares Shares of Shares the the Pledged/ the Pledged / year company encumbered company encumbered to total to total shares shares
H. E. Governor of Gujarat and his Nominees 19772222095 100 0 22347811995 100 0 0
Total 19772222095 22347811995
53 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(iii) Change in Promoters’ Shareholding (please specify, if there is no change):
Shareholding at the beginning of Cumulative Shareholdingduring the year Particulars the year (01/04/2019) No. of Shares % of total shares No. of Shares % of total shares of the Company of the Company
At the beginning of the year 19772222095 100 19772222095 100 H.E.Governor of Gujarat and his nominees Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease, e.g. allotment/transfer/bonus/sweat equity etc.: Increase by way of allotment on: 16-04-2019 397609700 0.00 20169831795 0.00 29-07-2019 930840000 0.00 21100671795 0.00 26-08-2019 50000000 0.00 21150671795 0.00 09-12-2019 1088473600 0.00 22239145395 0.00 17-01-2020 108666600 0.00 22347811995 0.00 At the End of the year 22347811995 100 22347811995 100 (31/03/2020)
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Shareholding at the beginning of Cumulative Shareholding during the year (01/04/2019) the year For Each of the top 10 Shareholders No. of Shares % of total shares No. of Shares % of total shares of the Company of the Company
At the beginning of the year Date-wise Increase/Decrease in Shareholding during the year specifying the reasons for increase/ Not Applicable decrease(e.g. allotment/transfer/ bonus/sweat equity etc.) At the End of the year (or on the date of separation, if separated during the year)
54 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(v) Shareholding of Directors and Key Managerial Personnel:
For Each of the Shareholding at the Cumulative Shareholding Directors and KMP beginning of the year during the year and (01-Apr-2019) Increase / As on 31-March-2020 Date Reason Decrease No. of % of total No. of % of total Name Shares shares of Shares shares of the the Company Company
DIRECTORS 00 00 00 00 00 00 00 KEY MANAGERIAL PERSONNEL 00 00 00 00 00 00 00 Note : None of the Directors and KMP hold any Equity Shares in the Company.
V. INDEBTEDNESS (AS ON 31-MARCH-2020):
Indebtedness of the Company including interest outstanding/accrued but not due for payment ( in Lakhs) Secured Loans Indebtedness at the beginning Unsecured excluding Deposits Total of the financial year Loans deposits Indebtedness
i) Principal Amount 25,454.94 14,498.49 0.00 39,953.43 ii) Interest Accrued and Due 2.33 0.00 0.00 2.33 iii) Interest accrued but not Due 0.00 284.13 0.00 284.13 Total (i+ii+iii) 25,457.27 14,782.62 0.00 40,239.89 Change in Indebtedness during the financial year
l Addition 0.00 0.00 0.00 0.00
l Reduction (2,653.28) (2,024.88) 0.00 (4,678.16) Net Change (2,653.28) (2,024.88) 0.00 (4,678.16) Indebtedness at the end of the financial year i) Principal Amount 22,803.99 12,566.22 0.00 35,370.21 ii) Interest Accrued and Due 0.00 0.00 0.00 0.00 iii) Interest Accrued but not Due 0.00 191.52 0.00 191.52 Total (i+ii+iii) 22,803.99 12,757.74 0.00 35,561.73
55 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (F.Y.2019-20)
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
( in Lakhs) Name of MD/WTD/Manager Total Sr. Particulars of Shri Pankaj Smt. Shri S. B. Shri K. M. Amount No. Remuneration Joshi, IAS MD Shahmeena Khyalia Bhuva In Lakhs Up to 30-08-19 Husain, IAS Director Director MD (Finance) (Technical) w.e.f. 30-08-19 (upto 01.11.2019)
1. Gross salary a) Salary as per 12.80 15.16 20.70 8.78 57.44 provisions contained in section 17(1) of the Income-tax Act, 1961 b) Value of perquisites 1.27 1.30 2.06 0.86 5.49 u/s 17(2) Income-tax Act, 1961 c) Profits in lieu of Nil Nil Nil Nil Nil salary under section 17(3) Income tax Act, 1961 2. Stock Option 0 0 0 0.00 3. Sweat Equity 0 0 0 0.00 4. Commission - as % of profit - others, specify… 0 0 0 0.00 5. Others, please specify 0 0 0 0.00 Total (A) 14.07 16.46 22.76 9.64 62.93
Ceiling as per the Not applicable as Section 197 of Companies Act, 2013 shall not apply to Government Act Companies.
56 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
B. Remuneration to other directors (F.Y. 2019-20)
Name of Directors Total Sr. Particulars of Amount Independent no. Remuneration Other Non-Executive Directors Rs. Directors
Shri N. N. Shri Smt. Shri Shri Shri Milind Ms. Mona Misra R.C.Dhup Suniana Pankaj Roopwant Torawane, Khandhar, Tomar, Joshi, IAS Singh, IAS IAS (Upto IAS IAS (wef (up to 01.01.19) 10.01.20) 16.12.19)
1 Independent Directors l Fee for attending Board/ committee meetings in 30000 30000 0 0 0 0 0 60000 l Commission 0 0 0 0 0 0 0 0 l Others, please specify 0 0 0 0 Total (1) 30000 30000 0 0 0 0 0 60000 2 Other Non- Executive Directors - - 0 0 0 0 0
l Fee for attending board / committee meetings - - 0 0 0 0 0
l Commission - - 0 0 0 0 0
l Others, please specify 0 0 0 0 0 Total (2) 0 0 0 0 0 Total (B)=(1+2) 30000 30000 0 0 0 0 0 60000 Total Managerial Remuneration 0 0 0 0 0 0 0 Overall Ceiling Not applicable as Section 197 of Companies Act, 2013 shall not apply as per the Actto Government Companies.
57 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
B. Remuneration to Key Managerial Personnel other than MD/ MANAGER / WTD: ( in Lakhs) Key Managerial Personnel Sr. Particulars of Remuneration Total no. Company GM(F&A) & CEO Secretary CFO (April 19 to (April 19 to March 20) March 20) 1. Gross salary a) Salary as per provisions contained in section 0 26.96 28.55 55.51 17(1) of the Income-tax Act, 1961 b) Value of perquisites u/s 17(2) Income-tax 0 0 0 0 Act, 1961 c) Profits in lieu of salary under section 17(3) 0 0 0 0 Income-tax Act, 1961 2. Stock Option 0 0 0 0 3. Sweat Equity 0 0 0 0 4. Commission - as % of profit - others, specify.. 0 0 0 0 5. Others, please specify 0 0 0 0 Total 0 26.96 28.55 55.51
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type Section of the Brief Details of Authority Appeal made, Companies Description Penalty / [RD / NCLT/ if any (give Act Punishment/ COURT] Details) Compounding fees imposed
There were no penalties / punishment / compounding of offences for breach of any section of Companies Act against the Company or its Directors or other officers in default, if any, during the year.
For and on behalf of the Board
Sd/- Date: 24-12-2020 Sunaina Tomar, IAS Place: Vadodara Chairman (DIN - 03435543)
58 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 3(i)
GUJARAT STATE ELECTRICITY CORPORATION LIMITED
GSECL Board’s explanation pursuant to Section 134(3)(f) of the Companies Act, 2013 on qualification made by the Statutory Auditors in their Audit Report on the Financial Statements for the FY 2019-20:
Sr. Auditors’ Qualifications Response / Remedial Measures No
1. The company recognizes replaced items of Capital spares are required to be maintained and Property, Plant and Equipment (PPE) as addition replaced as and when required at irregular of PPE. However, carrying amount of old parts interval. Depreciation on plant & machinery is which are replaced, not derecognized from PPE. charged as per the applicable rates, whereas This is not in accordance with Ind AS – 16 depreciation on capital spares is charged over “Property, Plant and Equipment”. The effect of useful life of the Plant & Machinery. Therefore non-compliance of Ind AS – 16 is not Plant and machinery as well as capital spares ascertainable. are depreciated on regular basis as specified under IND AS-16 At the time of replacement of capital spares, original cost for the whole equipment may be available but the cost of damaged spares parts cannot be determined because the same were purchased in lot along with group of machineries. As such, depreciation charged up to the date of replacement is also not ascertainable. The replaced spares has not utility and therefore market value is not available. Negligible value is considered for these specified spares. This practice is commonly adopted by all the Companies engaged in generation of power. Therefore, the company has also adopted the same since beginning.
Further to state that Fixed assets are normally being installed for more than 15 to 20 years and polices regarding treatment of fixed assets & the related capital spares and its depreciation are 59 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
being consistently followed since the inception of the company and any sudden change after completion of substantial period of usage of fixed assets may distort the profitability statement of the company.
Capital spares that can be used only in relation to specific assets are to be discarded only when the specific fixed assets is disposed off. In other word such spares are an integral part of fixed assets which also get depreciated over a period of useful life of assets.
And when the related assets are discarded, the WDV of related capital spares is also to be written off. Hence in a broader sense the WDV of fixed assets would be considered rather than considering WDV of the capital spares at the time of replacement..
Depreciation is being continually charged on the capital spares even though replaced during any of the year of the useful life of the assets instead of writing off WDV in to the profit and loss account in the year of replacement Hence expense are just postponed during the residual life of the fixed assets Thus. Profitability will get set off at the end of life of the relevant fixed assets. Hence true and fair view of the profitability of all respective years remains intact.
2. The company recognizes capital spares as PPE While treating the item as capital or revenue and other spares as inventory based on pre- company has to see its usefulness and benefits defined code system and not in accordance with to be derived over a period of time. Company requirement of Ind AS – 2 ‘Inventories’ and Ind – has treated spares as capital in nature and AS 16 ‘Property, Plant and Equipment’. The effect classified as property plant and equipment whose
60 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
of such non-compliance of Ind AS - 2 and Ind benefits are enduring in nature and met the AS -16 is not ascertainable definition of property plant and equipment. While the routine operation and maintenance spares are classified under the inventory and charged to revenue as and when consumed for maintenance purpose and accordingly pre- defined code in e urja system is assigned.
3. Balances under the group of Other financial Balance under other financial assets is mainly assets, other current assets, other current related to deposit given to railways authority, financial liabilities and trade payables are subject Irrigation department, other government to confirmation and effect on these balances on department for land acquisition & depository work account of adjustment, if any required upon such and loans and advances given to employees confirmation are not determinable. which all are highly secured.
Balance under other current assets is related to the advances given to coal supplier which are regularly adjusted on receipt of coal.
Balance under other financial liabilities mainly belongs to Staff Retirement cum Death Benefit Scheme, staff welfare scheme and current liability belongs to loans from Banks and financial institution, retention in form of LD and provision for expenses. Bank Balances and dues to SECL and WCL are reconciled on regular basis. For other balances it is customary of the company to write letter to parties for confirmation.
61 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 3(ii)
GUJARAT ENERGY TRANSMISSION CORPORATION LIMITED
GETCO Board’s explanation pursuant to Section 134(3)(f) of the Companies Act, 2013 on qualification made by the Statutory Auditors in their Audit Report on the Financial Statements for the FY 2019-20:
Sr. Audit Qualifications Management Reply No
1. The Company has reversed revenue from In accordance with MYT framework, GETCO had transmission charges amounting to 12,629 filed petition for True-up of FY 2018-19 and Lakhs on the basis of debit note received from determination of tariff for FY 2020-21 before the Holding Company, M/s. Gujarat Urja Vikas GERC in the year FY 2019-20. GERC has Nigam Ltd., (GUVNL) vide GERC’s Tariff Order undertaken True-up of expenses of GETCO for dated 26-03-2020, Case No. 1837 of 2019, which FY 2018-19. In the True-up exercise, GERC has clearly states that it is effective from 1st April, arrived at a revenue surplus of 132.94 Crore. 2020. However, the Company has given the It is to mention that the determination of revenue effect of the same during the Financial Year surplus/deficit to be recovered and the mode and 2019-2020. The impact of the said surplus timing of recovery are two distinct aspects. The amounting to 12,629 Lakhs has already been former determines the surplus/deficit revenue considered / adjusted by GERC while charged by GETCO to its consumers based on determining the tariff for financial year 2020- difference between actual and rate determined 2021. Hence, the profit for the financial year based on MYT framework and the latter as to 2019-2020 is understated to that extent and how that is to be made good to the consumer. liabilities of GUVNL as on March 31st, 2020 is overstated to that extent. The implementation of tariff w.e.f. 1st April 2020 is with respect to applicability of revised transmission charges. Whereas, the credit amount is with respect to surplus amount recovered by GETCO in previous year FY 2018- 19 for which effect was given in the year FY 2019- 20, upon receipt of the order determining the same.
It is to mention that under the regulatory regime, the treatment for revenue surplus / loss pursuant 62 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
to True up exercise is to be given as per the provisions of Multi Year Tariff Regulations. Whereas, for finalization of Accounts, the treatment for such gain/loss is to be given following the provisions of Accounting Standards.
As per the Regulatory provisions, the surplus / loss of previous year i.e. FY 2018-19 is to be adjusted in the tariff of ensuing year i.e. FY 2020- 21. While as per Accounting Standards, any losses/gain on account of variation in price adjustment of the year is to be accounted upon determination of the same. As per the Standards, such variable price/revenue adjustments, even where such gain/loss of respective year is determined after completion of such financial year but before finalization of accounts, the same needs to be accounted for.
In case of GETCO, the surplus for FY 2018-19 was recognized vide Order dated 26.3.2020 i.e. before finalization of Accounts for FY 2019-20. Accordingly, as per the prudent accounting practice, such surplus amount was accounted for and necessary credit adjustment was given in FY 2019-20 i.e. immediately upon determination of the same before finalization of accounts. To reiterate, price adjustment i.e. revenue surplus was determined as of the year end, only the timing of recovery of such surplus is effective from 1st April 2020.
Since, as per MYT Regulations, the recovery of the determined revenue surplus of FY 2018-19 is to be given in FY 2020-21, GUVNL has, in order to meet with regulatory requirements, has 63 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
already reversed the concerned Debit Note in the current FY 2020-21 for the equivalent amount. This is akin to the regular accounting practice for accrual of liability or unbilled revenue where they are recognised based on accrual concept and reversed in the subsequent period when actually invoiced/billed and accounted, so as to ensure no duplication.
2. The vendor-wise details of liabilities for the supply The account code no. 42100 – Liability for Supply of Capital Materials reflected in the Account Code of Capital Materials is maintained since GEB era 42100 amounting to 16,631.33 Lakhs as on and in unbundling of GEB’s regime also. GETCO March 31st, 2020 are maintained in an MS Excel is reconciling the accounts of the Parties for their Sheet and the vendor-wise Ledger Accounts are supplies the booking and recording of the not maintained by the Company which are also transactions and payments for their outstanding not reconciled with the subsequent payments balances and due payments with actual made to the vendor/s. Hence, we are unable to verification of Invoices, payment vouchers etc. comment on the correctness of the vendor-wise Auditors’ point that account is manually outstanding balance as on March 31st, 2020. maintained, is not true as GETCO is maintaining the same in Excel since we are not keeping Subsidiary / Control ledger. However, GETCO may initiate to explore the possibility of maintaining vendor-wise ledgers within the system framework and apprise the auditor in next audit of FY 2020-21.
3. The Other Financial Liabilities which are not GETCO carries out the activity of construction bifurcated into Current and Non-Current Liability of Transmission Lines and Substations through as required by IND-AS 1 (Presentation of Labour Contracts, Civil Contracts as well as Financial Statements) are as follows:- through engineering, procurement and commissioning contracts (EPC Contracts). As a. Deposits received from Suppliers / per the terms of the contracts, the completion Contractors amounting to 20,884.90 Lakhs period of majority of the contacts are either b. Retention Money received from Suppliers / completed or to be completed in the year 2020- Contractors amounting to 58,739.47 Lakhs 21. There are possibilities of extension of the
64 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Hence, the impact, if any, for not arriving at the Completion period due to Right of Way issues fair value measurement of the Non-Current as well as other Ground level issues. However, portion of such deposits/Retention Money as per as of now exact payback period/ time frame of IND-AS 109 (Financial Instruments) on the this Retention Money and Security Deposit financials as of March 31st, 2020, could not be cannot be ascertained/determined and hence ascertained. GETCO has classified the same as Current Liability.
4. The Company has not capitalised Borrowing It is to mention that during the last 3 years, Costs to the projects grouped under Capital Work GETCO has been consistently striving to reduce in Progress in the financial year 2019-2020 its borrowings and interest cost. The same can (except Capitalisation of Borrowing Costs be visible from the Borrowings of GETCO (except pertaining to KFW projects). Due to the non- CC balance) as on 31.3.2017 was 8969.02 capitalisation of Borrowing Costs to the Capital crores which has now reduced to 5080.52 Work in Progress (except Capitalisation of crores as on 31.3.2020. Further the interest cost Borrowing Costs pertaining to KFW projects) in on borrowings has also reduced from 742.53 the financial year 2019-2020 as per IND-AS 23 crores as on 31.3.2017 to 453.04 crores as on (Borrowing Costs), the impact on profitability of 31.3.2020. Further in FY 2017-18, 2018-19 and the Company and the Capital Work in Progress 2019-20, the major debt funding for CAPEX is on the financials as of March 31st, 2020 could done from loan from KfW, whose interest is not be ascertained. capitalized on dedicated projects.
Further we would also like to draw to kind attention to the Cash Flow Statement wherein it can be referred, on an overall basis, that the company had generated sufficient Cash Flow from Operations to fund the Investing activities as well as pay down the loans on net basis.
Further we would also like to mention the fact the substantially all of the projects for which term loans were taken from banks have been commissioned and hence there is no interest capitalization on such commissioned projects in FY 2019-20. 65 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 3(iii)
UTTAR GUJARAT VIJ COMPANY LIMITED
UGVCL Board’s explanation pursuant to Section 134(3)(f) of the Companies Act, 2013 on qualification made by the Statutory Auditors in their Audit Report on the Financial Statements for the FY 2019-20:
Qualification Board’s Explanation
We draw attention to note No. 40 to the Ind AS GUVNL, the Holding Company, on behalf of all financial statements wherein the Company has DISCOM’s has obtained opinion on the said subject changed the method of accounting regarding writing matter from M/s. Khimji Kunverji & Co., LLP, back balances from grants/consumer contribution Mumbai, a well-known and reputed professional CA related to certain depreciable assets from hitherto Firm. They have also confirmed the correctness of 10% on reducing balance basis to 5.28% on straight the treatment given by DISCOMs including UGVCL. line basis prospectively commencing from the The said Opinion was shared with Statutory Auditor. financial year 2016/17. However, in our opinion the Further, the same was also submitted by GUVNL effect of such change has to be worked out to C&AG with a request to consider the same for retrospectively commencing from the date on which the ongoing observation taken by Statutory Auditor the depreciable assets related to which the grants/ of UGVCL and by C&AG in case of other group consumer contribution has been received have been companies. capitalized in the books of account and effect of such The accounting treatment followed by UGVCL is a change be accounted for in the opening balance of considered decision taken by GUVNL and all the grants/ consumer contribution. DISCOMs. Also, all four DISCOMs have followed Non accounting of the above effect has resulted into the same accounting treatment during the FY 2016- understatement of balance of grants/consumer 17, FY 2017-18, FY 2018-19 and FY 2019-20. contribution as on 31st March, 2020 by 18,934.82 UGVCL has, therefore, changed the method of lakhs and overstatement of balance of ‘Retained recognizing grants as income from Reducing Earnings’ by like amount. Had the above been Balance Method (RBM) to Straight Line Method accounted for, the balance of grants/consumer (SLM). The change in the rates is consequential to contribution would have been 1,66,292.7 lakhs and the change, i.e. from 10% RBM to 5.28% SLM. balance of ‘Retained Earnings’ would have been The change in the method and consequentially the 15,353.51 lakhs as on 31st March, 2020 as against rates is to exactly match the depreciation method the reported figures of 1,47,357.84 and 34288.33 and the rates where there was a mismatch. This lakhs respectively. 66 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
change is not a change in the principle of recognition of grants but only a change in the method, as permissible and in compliance with the relevant Indian Accounting Standards (Ind AS) as applicable. Given that it is a change in estimate, the effect of the same is required to be given prospectively and not retrospectively as contended by Statutory Auditor. Hence, the treatment given by the Company, as opined the above-mentioned eminent CA Firm, is correct and in compliance with the applicable Indian Accounting Standards (Ind – AS).
For and on behalf of the Board,
Sd/- Shahmeena Husain, IAS Date: 19-12-2020 Chairperson Place: Gandhinagar (DIN – 03584560)
67 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 4
GUJARAT URJA VIKAS NIGAM LIMITED
Management Reply to the Comments of the Comptroller and Auditor General of India received from AG Office, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Standalone Financial Statements of Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31st March, 2020.
C&AG’s Comments Board’s Explanation
A. Comment on Financial Position The National Company Law Tribunal (NCLT) has treated IL&FS & its 348 Group Companies as a 1. Other Financial Liabilities (Note 23) composite entity for the purpose of Resolution Plan Deposits and retentions from Suppliers/ to be drawn by the newly constituted Board of Contractors 1,21,145.52 lakh. IL&FS at the behest of Govt. of India. Therefore, GUVNL has withheld the dues of 6 Wind Generating The above does not include 182.57 crore withheld Companies of the same IL&FS Group. IL&FS by GUVNL from monthly power purchase bills of six started defaulting on the interest payments to the separate IL&FS Group wind power Companies from PF Trust and was referred to NCLT. Logically, November 2018 to 14th October 2019 with whom GUVNL being the parent Company did not release the Company is having Power Purchase the dues to the Wind Generating Companies (who Agreements (PPA). The Company has been belongs to the same group) because its own CPF transferred to its CPF Trust to set-off losses to its Trust’s investments are at stake and 100% recovery CPF Trust due to non-receipt of interest and principal is doubtful at this point of time. amount against investment made in three IL&FS group companies that defaulted on interest GUVNL firmly believes that IL&FS Group is required payments due on 30th September 2018 and to “equitably set-off” the money due to GUVNL’s onwards. CPF Trust from its 3 Group Companies (viz. IL&FS As the matter is sub-judice in NCLT, the set off of Transportation Network Limited, Infrastructure receivable and payable is not admissible. This Leasing & Financial Services Limited and IL&FS resulted in understatement of Deposits & Retentions Financial Services Limited) from any money due from suppliers (other Financial Liability) by 182.57 to any of the Companies of IL&FS Group from crore and consequent Understatement of GUVNL. Recoverable from CPF Trust (Other Financial Therefore, GUVNL is legally entitled to withhold any Assets). 68 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
payment from the payment of electricity generated and supplied by IL&FS Wind Generating Companies, pending final Resolution at NCLT. It would be unfair, unjust, un-equitable and illegal if GUVNL is required to pay the claims of the Wind Generating Companies, while IL&FS Group Companies are not discharging their obligations to pay to GUVNL’s PF Trust - the amount due towards investment made as financial creditors.
IL&FS Wind Generating Companies approached Hon’ble GERC, but without any success. At the same time, they also approached National Company Law Appellate Tribunal (NCLAT), New Delhi. During hearing of this matter, Hon’ble NCLAT has rejected / dismissed their claims on the withheld dues and allowed them to withdraw their applications vide its Order dt. 23.10.2019.
GUVNL withheld the principal and its interest dues totaling to 18256.66 lakhs from IL&FS Wind Generating Companies and thereafter subsequently had transferred the same to CPF Trust. The Resolution proceedings are presently going on in NCLT. After all, GUVNL had retained this amount on behalf of the CPF Trust towards recovery of the investments. Therefore, it was a logical decision and conclusion to transfer the same to the Trust, pending final Resolution plan of NCLT.
Therefore, there is no understatement of Deposits& Retentions from suppliers (other Financial Liability) by 182.57 crore and consequent Understatement of Recoverable from CPF Trust (Other Financial Assets).
69 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
2. Balance Sheet As per the laid down procedure, GUVNL had Non-Current AssetsInvestments intimated GSECL about the share capital (Note 3) investment of 48833.34 lakhs vide letter Dt. 2, 59, 017.46 Crore 06.12.2019. GSECL had opened the Rights Issue on 26.03.2020 to which GUVNL subscribed & paid The above includes 488.33 crores being share the share capital money on or before 31.03.2020. application money paid towards issue of Equity Therefore, GUVNL had completed all formalities Shares on right basis to Gujarat State Electricity with regard to the share capital investment in Corporation Limited (GSECL) as on 31st March, GSECL on or before 31.03.2020. Accordingly, the 2020. Company has shown this entire amount as As per the Guidance note on Division II IndAS Investment in GSECL in the Financial Statements of Schedule III to the Companies Act 2013, any FY 2019-20. GSECL subsequently allotted the shares application money paid towards securities where to GUVNL in the next financial year FY 2020-21. security has not been allotted on the date of Balance GUVNL has shown this as Investment in equity Sheet shall be disclosed as a separate line item shares, though unallotted as of the Balance Sheet under other non-current financial assets. date, on “substance over form basis”, given the As the equity shares have not been allotted on the Company’s view that share allotment is a secretarial balance sheet date, inclusion of share application compliance. Given the relationship of the entities money in Investment resulted in understatement of (i.e. Holding and Subsidiary), history of such capital Non-Current Other Financial Assets and infusion every year and the lack of problems overstatement of Investments by 488.33 crore. surrounding minimum subscription, etc., share allotment by GSECL is a mere secretarial compliance.
The Guidance Note on Division-II IndAS Schedule- III to the Companies Act, 2013 states that the application money paid towards securities which have not been allotted on the date of the Balance Sheet is to be shown separately. However, this Guidance Note is recommendatory in nature and not mandatory. Division-II of IndAS Schedule-III is mandatory which does not have such a requirement.
70 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Therefore, there is no understatement of Non- Current Other Financial Assets and overstatement of Investments by 488.33 crore.
B. Comment on Disclosures GUVNL in the earlier years (upto FY 2017-18) had charged / allocated e-Urja expenditure amongst its 3. Notes to Financial Statements Subsidiaries as a matter of its charging policy which Related party Disclosures (Note 44B) was reviewed in FY 2018-19 and the practice was Allocation of e-Urja Expenses 2026.98 lakhs discontinued the Policy to change the expenditure A reference is invited to the above Note No. 44B, or to bear the same by the holding Company was which discloses allocation of e-Urja expenses. The based on consideration of commercial aspects and Company was allocating the “E-Urja expenses” to is not an accounting policy. its Group Companies based on number of registered However, based on C&AG’s observations in the users in the respective Company until FY 2017-18. FY 2018-19, the Company once again reviewed However, the Company stopped this practice from its allocation / charging policy and decided to revert 2018-19 and started recognizing the entire back to its original allocation policy followed upto expenditure in its books of accounts. However, in FY 2017-18. This position of charging / allocating FY 2019-20, the Company reverted to it’s previous expenditure is a matter of ongoing consideration policy which was followed until 2017-18. by the Company and hence no separate disclosure The Company should have disclosed this change was made in the Books of Accounts. The Financial in accounting treatment in reference to previous Statements continues to represent faithful Financial years in its Notes to financial statements. The Notes Position, Financial Performance and Cash Flows are therefore deficient to that extent. of the Company.
For & On behalf of the Comptroller and For & On behalf of Gujarat Urja Vikas Nigam Limited, Auditor General of India.
Sd/- Sd/- (H. K. Dharmadarshi) (Sunaina Tomar, IAS) Principal Accountant General (Audit-II), Chairperson (DIN: 03435543) Gujarat
Dated: 03-12-2020 Dated: 24-12-2020 Place: Ahmedabad Place: Vadodara
71 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 5(i)
GUJARAT ENERGY TRANSMISSION CORPORATION LIMITED
Management Reply to the comment of the Comptroller and Auditor General of India under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of Gujarat Energy Transmission Corporation Limited, Vadodara for the year ended March 31st, 2020.
Sr. Comment Reply No
A. Comments on Financial Position C&AG’s comment is on the financial position i.e. Balance Sheet, particularly on Subsidies and Balance Sheet Consumer Contributions with reference to Note Equity and Liabilities No. 64 which states that the Company has
Deferred Government Grants, Subsidies and changed the method of computing the grants/ Consumer Contribution (Note No. 19) consumer contribution received against 1973.49 crore depreciable assets to be recognized in Statement of Profit and Loss from Reducing Balance A reference is invited to Note no. 64 of the Method to the Straight Line Method and Financial Statement, which stated that with effect consequently the rates at which grant is st from 01 April 2016, the Company has changed recognized in the Statement of Profit and Loss. the method of computing the grants/consumer It may be noted that this is a repeat comment contribution received against depreciable assets pertaining to Financial Statements of the to be recognized in statement of profit and loss Company for FY 2016-17, FY 2017-18 and FY from reducing balance method to the straight line 2018-19. method and consequently the rates at which grant is recognized in the statement of profit and At the outset, it may be noted that, the subject loss. matter of the comment has no impact on the profitability of the Company for FY 2019-20. Also, The Company has determined that the change the subject matter of the comment would not to recognize grants in proportion of the have any impact on the profitability of the depreciation expenses is a change in accounting Company in the future financial years also. estimates and is to be applied prospectively. As informed and explained in the earlier years, As per Accounting Standard (AS)-12, Grants the change in the method of recognition of
72 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
related to depreciable assets are treated as deferred grants to income is a change on account deferred income which is recognized in the profit of more experience and circumstances as and loss statement on a systematic and rational obtained currently to reduce the mismatch and it basis over the useful life of the asset. Indian does not and cannot obviate the mismatch Accounting Standard (Ind AS) - 20 also state that entirely, which would still continue, albeit a lower grants related to depreciable assets are usually one. The change in the method is a change in recognized in profit or loss over the periods and accounting estimate in compliance with Ind AS in the proportions in which depreciation expenses 8 –Accounting Policies, Changes in Accounting on those assets is recognized. Estimates and Errors, just akin to a change in the method of depreciation is or would be. As The above change in method was made by the per requirements of the Ind AS, every method or Company as there was a mismatch of the grants accounting estimate can change on account of recognized in the Statement of Profit and Loss new developments, circumstances, and more versus the related depreciation expenses. Thus, experience. The earlier method of recognizing the Company has changed the method of deferred income i.e. Reducing Balance Method recognized of deferred income in order to align (RBM) or Written Down Value Method (WDV) the recognition of deferred income with the was selected and applied basis the facts and related depreciation expenses. As the provision circumstances as obtained at the time of such for treatment of deferred income to be recognized selection and application, which was found to be in the profit and loss statement on a systematic in compliance with the Accounting Standards at and rational basis over the useful life of the asset the time in all the audits by different auditors over are same in AS 12 and Ind AS - 20, the change a period of more than 10 years including was not mandated by Ind AS - 20. Hence, the supplementary audit by the Hon’ble office of Company changed the method in order to correct C&AG. an error. Having said the above, with reference to Hon’ble Since the assets related to which grants/consumer C&AG office’s communication for obtaining an contribution received have been capitalized in independent opinion, during FY 2019-20, the books of accounts, the effect of such change GUVNL, the Holding Company, on behalf of should be worked out retrospectively and Subsidiary Companies has obtained an accounted for in the opening balance of Deferred independent opinion from eminent professional Government Grants, Subsidies and Consumer CA Firm having partners some of whom have Contribution towards capital assets by 403.57 been past presidents of ICAI, as well as have crore as at 31st March 2017. served extensively on various ICAI Committees Disclosure of the above facts in Note no. 64 including EAC. The Firm has also opined on the 73 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
instead of giving accounting effect does not subject matter which has been shared with C&AG suffice the purpose. Office. The independent opinion obtained buttresses the Company’s (and the Group’s) Despite being pointed out in previous years position that the change in the method is not a (2016-17, 2017-18 and 2018-19), no corrective correction of error and hence the Company’s action has been taken by the Company during accounting treatment is correct. The Company 2018-19. has also given adequate disclosure in this regard under Note No.64 of the Audited Annual Accounts of FY 2019-20.
Thus, given the Company’s position, that the accounting and treatment is found to be correct backed by sufficient disclosures hence no further corrective action is required to be taken.
B. Comment on Disclosure In this regard, it is to mention that for allotment of land for substations, following process and Notes to the Financial Statements procedures are undertaken; The above does not disclose the claim of 1. Application to the Office of collector for 111.68 crore being differential cost of land allotment of land. demanded by Surat Municipal Commissioner (SMC). The company had paid initial cost of 2.Verification of site for substation and 30.64 crore as per Jantri rate for land at five documents by collector office. sites under SMC and constructed substations, 3. Issuance of demand notice for initial payment The Land Disposal committee in final valuation (Jantri Rate) of Land by collector office to had finalized the cost of land at 142.32 crore. GETCO. Accordingly, SMC, raised claim of 111.68 crore on account of differential cost of land. The 4. Approval of initial land cost at GETCOs end at company has taken up the matter to reduce the the Jantri rate. rate with various Government authorities but no 5. Payment of land cost by GETCO at Jantri Rate. directive has been received till date. The Notes to the Financial Statements are deficient to the 6. Possession of the Land by GETCO for building extent of non-disclosure of the above material substations. fact. It is to mention that after the possession of the
74 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
land, GETCO starts the work for building of the substations. Generally, it takes 2-3 years for finalizing the allotted land value by District/State land valuation committee and till such time substations in normal course are completed. Further there are cases where the valuation of the land as determined by District/State land valuation committee is not in line with the budget/ expectation of GETCO. In such cases, the company has to represent to Higher Offices including Government of Gujarat (GoG) for reconsidering the value of the allotted land. Due to this uncertainty in the land valuation and considerable time involved in the process including GETCOs representation to GoG for reconsidering the land valuation, GETCO has to account for land as and when the payment is made to the beneficiary or approval by the Board of Directors to pay the differential amount (Value determined by Land Valuation Committee less Jantri Value paid), whichever is earlier.
Accordingly, in the present case, as the management has not approved land cost and asked GETCO to take this at Govt. level for consideration, GETCO has not made any provision of liability.
Further, Hon’ble GERC while approving the Tariff considers expenditure of GETCO on payment basis, any notional or provisional entry may not be considered by GERC in approving the tariff and will lead to a mismatch between the Land cost shown in the books of accounts and Land cost approved by GERC. And in case, where
75 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Land cost is approved by GERC on Provisional basis, there will be increase in transmission tariff without actual expenditure incurred by GETCO in that respective financial year.
We take into cognizance the auditors observation and from FY 2020-21 and onwards, GETCO will appropriately disclose its accounting policy for booking/accounting differential cost of land (Value Determined by Valuation Committee less Value paid by GETCO) as and when GETCO Management finally accept and approves the same for the differential payment sought by the Government authorities for the land provided to GETCO, which is after making all out efforts and representations upto the Highest Government level for bringing the reduction in the land value as it will attain finality thereafter.
However, for such pending representations/ attempts of GETCO on acceptance and approval of differential land value so demanded, GETCO will disclose all such pending demands of Government Authorities as Contingent Liability from FY 2020-21 and onwards.
76 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 5(ii)
MADHYA GUJARAT VIJ COMPANY LIMITED
Management Reply to the comment of the Comptroller and Auditor General of India received from AG Office, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of the Madhya Gujarat Vij Company Limited, Vadodara for the year ended March 31st, 2020.
Comment of the Comptroller and Management Reply Auditor General of India
A.Comments on Financial Position C&AG’s comment is on the financial position i.e.
1. Balance Sheet Balance Sheet, particularly on Subsidies and Subsidies & Consumer Contribution Consumer Contributions with reference to Note no. (Note-17)- 46 which state that the Company has changed the 1309.21 Crore method of computing the grants/consumer contribution received against depreciable assets to A reference is invited to note no 46 of the financial be recognized in Statement of Profit and Loss from statements which state that the Company has reducing balance method to the straight line method changed the method of computing the grants/ and consequently the rates at which grant is consumer contribution received against depreciable recognized in the Statement of Profit and Loss. It assets to be recognized in Statement of Profit and may be noted that this is a repeat comment Loss from reducing balance method to the straight line method and consequently the rates at which pertaining to Financial Statements of the Company grant is recognized in the Statement of Profit and for FY 2016-17, FY 2017-18 and FY 2018-19. Loss. At the outset, it may be noted that, the subject The Company has determined that the change to matter of the comment has no impact on the recognize grants in proportion of the depreciation profitability of the Company for FY 2019-20. Also, expenses is a change in accounting estimates and the subject matter of the comment would not have is to be applied prospectively. As per AS-12, Grants any impact on the profitability of the Company in related to depreciable assets are treated as deferred the future financial years also.
income which is recognised in the Profit and Loss As informed and explained in the earlier years, the Statement on a systematic and rational basis over change in the method of recognition of deferred the useful life of the asset. As per paragraph 17 of grants to income is a change on account of more Ind AS 20, grants related to depreciable assets are experience and circumstances as obtained usually recognised in Profit or Loss over the periods currently to reduce the mismatch and it does not
77 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
and in the proportions in which depreciation expense and cannot obviate the mismatch entirely. We would on those assets is recognized. like to reiterate that a mismatch would still continue,
The above change in method was made by the albeit a lower one. The change in the method is a Company as there was a mismatch of the grants change in accounting estimate in compliance with recognized in the Statement of Profit and Loss Ind AS 8 –Accounting Policies, Changes in versus the related depreciation expense. Thus, the Accounting Estimates and Errors, just akin to a Company has changed the method of recognition change in the method of depreciation is or would of deferred income in order to align the recognition be. Per requirements of the Ind AS, every method of deferred income with the related depreciation or accounting estimate can change on account of expense. As the provision for treatment of deferred new developments, circumstances, and more income to be recognized in the Profit and Loss experience. The earlier method of recognizing Statement on a systematic and rational basis over deferred income i.e., Reducing Balance Method the useful life of the asset are same in AS-12 and (RBM) or Written Down Value Method (WDV) was Ind AS 20, the change was not mandated by Ind AS selected and applied basis the facts and 20. Hence, the Company changed the method in circumstances as obtained at the time of such order to correct an error. selection and application, which was found to be in Since the depreciable assets related to which grants/ compliance with the Accounting Standards at the consumer contribution received have been time in all the audits by different auditors over a capitalized in the books of accounts, the effect of period of more than 10 years including the such change should be worked out retrospectively supplementary audit by the Hon’ble office of C&AG. and accounted for in the opening balance of Having said the above, with reference to Hon’ble Deferred Government Grants, Subsidies and C&AG office’s communication for obtaining an Consumer contribution. independent opinion, during the FY 2019-2020; This has resulted in overstatement of retained GUVNL, the Holding Company, on behalf of earnings and understatement of balances of subsidiary companies has obtained an independent Government Grants, Subsidies and Consumer opinion from eminent professional CA Firm having contribution towards Capital Assets by 207.59 partners some of whom have been past presidents Crore as at 31st March 2017. of ICAI, as well as have served extensively on Disclosure of the above facts in note No.46 instead various ICAI Committees including EAC. The Firm of giving accounting effect does not suffice the has also opined on the subject matter which has purpose. been shared with C&AG Office. The independent Despite being pointed out in the years 2016-17, opinion obtained buttresses the Company’s (and the 2017-18 and 2018-19, no corrective action has been Group’s) position that the change in the method is taken by the company during F.Y.2019-20. not a correction of error and hence the Company’s 78 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
accounting treatment is correct. The Company has also given adequate disclosure in this regard under Note no.46 of the Audited Annual Accounts F.Y 2019-20.
Thus, given the Company’s position and treatment is found to be correct and hence no further corrective action required to be taken.
2. Balance Sheet MGVCL would like to state that the miscellaneous Liabilities deposit from consumer generally arises due to ex- Other Non-Current Liabilities party finalization of temporary connections i.e. (Note-22) 92.73 Crore arrears and other charges are being adjusted / recovered from consumer deposit. The above includes 17.69 crore on account of Initially such deposit received from temporary ‘Miscellaneous deposit from consumers’ was being consumers is grouped under “Other Current balance amount refundable to the consumer after Financial Liabilities”. adjusting from deposit for temporary connection. As Whereas, while making finalization of temporary it is to be refunded to the consumer on demand, connections; if the party has abstained from the same should be classified as Other Current appearance or not traceable as per our records and Financial Liabilities instead of Other Non-Current the refund of the said amount has not been claimed; Liabilities. then after, such amount payable on finalization is Thus, incorrect classification resulted in transferred to separate Account and classified under overstatement of “Other Non-Current Liabilities” and “Other Non-Current Liabilities” for better control and understatement of “Other Current Financial segregation of liability payable to consumers. Liabilities” by 17.69 crore. However, the Audit observation has been noted and corrective action will be taken from next financial years.
For & On behalf of the Comptroller and Auditor For & On behalf of Madhya Gujarat Vij Company General of India Limited (MGVCL)
Sd/- Sd/- (H. K. Dharmadarshi) (Shahmeena Husain, IAS) Principal Accountant General (Audit-II), Gujarat Chairperson (DIN:03584560) Place: Ahmedabad Place: Vadodara Dated: 27.11.2020 Dated: 19.12.2020 79 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 5(iii)
DAKSHIN GUJARAT VIJ COMPANY LIMITED
Management Reply to the comment of the Comptroller and Auditor General of India received from AG Office, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of the Dakshin Gujarat Vij Company Limited, Vadodara for the year ended March 31st, 2020.
(A) Comments on Financial Position
Comments of the Comptroller and Auditor Management Reply General of India
1. Balance Sheet C&AG’s comment is on the financial position i.e. Balance Sheet, particularly on Subsidies and Equity and Liabilities Consumer Contributions with reference to Note no. Deferred Government Grants, Subsidies & 19 which state that the Company has changed the Contributions (Note No. 19) 1730.83 crore method of computing the grants / consumer contribution received against depreciable assets to A reference is invited to the Comments of the be recognized in Statement of Profit and Loss from Comptroller and Auditor General (C&AG) of India reducing balance method to the straight line method under section 143(6) of the Companies Act, 2013 and consequently the rates at which grant is on the Financial Statements of the Company for the recognized in the Statement of Profit and Loss. It year ended 31st March 2017, 31st March 2018, 31st may be noted that this is a repeat comment March 2019. pertaining to Financial Statements of the Company With effect from 01st April 2016, the Company has for FY 2016-17, FY 2017-18 and FY 2018-19. changed the method of computing the grants/ At the outset, it may be noted that, the subject consumer contribution received against depreciable matter of the comment has no impact on the assets to be recognized in Statement of Profit and profitability of the Company for FY 2019-20. Also, Loss from reducing balance method to the straight the subject matter of the comment would not have line method and consequently the rates at which any impact on the profitability of the Company in grant is recognized in the Statement of Profit and the future financial years also. Loss. The Company has determined that the change to recognize grants in proportion of the depreciation As informed and explained in the earlier years, the expenses is a change in accounting estimates and change in the method of recognition of deferred is to be applied prospectively. grants to income is a change on account of more 80 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
As per Accounting Standard-12, Grants related to experience and circumstances as obtained currently depreciable assets are treated as deferred income to reduce the mismatch and it does not and cannot which is recognised in the Profit and Loss Statement obviate the mismatch entirely, which would still on a systematic and rational basis over the useful continue, albeit a lower one. The change in the life of the asset. Indian Accounting Standard-20 also method is a change in accounting estimate in state that, grants related to depreciable assets are compliance with Ind AS 8 –Accounting Policies, usually recognised in Profit or Loss over the periods Changes in Accounting Estimates and Errors, just and in the proportions in which depreciation expense akin to a change in the method of depreciation is or on those assets is recognised. would be. Per requirements of the Ind AS, every method or accounting estimate can change on The above change in method was made by the account of new developments, circumstances, and Company as there was a mismatch of the grants more experience. The earlier method of recognizing recognized in the Statement of Profit and Loss deferred income i.e., Reducing Balance Method versus the related depreciation expense. Thus, the (RBM) or Written Down Value Method (WDV) was Company has changed the method of recognition selected and applied basis the facts and of deferred income in order to align the recognition circumstances as obtained at the time of such of deferred income with the related depreciation selection and application, which was found to be in expense. As the provision for treatment of deferred compliance with the Accounting Standards at the income to be recognised in the Profit and Loss time in all the audits by different auditors over a Statement on a systematic and rational basis over period of more than 10 years including the the useful life of the asset are same in AS-12 and supplementary audit by the Honorable C&AG office. Ind AS 20, the change was not mandated by Ind AS 20. Hence, the Company changed the method in Having said the above, with reference to Hon’ble order to correct an error. C&AG office’s communication for obtaining an independent opinion, during FY 2019-20, GUVNL, Since the depreciable assets related to which grants/ the Holding Company, on behalf of Subsidiary consumer contribution received have been Companies has obtained an independent opinion capitalized in the books of accounts, the effect of from eminent professional CA Firm having partners such change should have been worked out some of whom have been past presidents of ICAI, retrospectively and accounted for in the opening as well as have served extensively on various ICAI balance of Deferred Government Grants, Subsidies Committees including EAC. The Firm has also and Consumer contribution. opined on the subject matter which has been shared This has resulted in overstatement of retained with C&AG Office. The independent opinion earnings and understatement of balances of obtained buttresses the Company’s (and the Deferred Government Grants, Subsidies and Group’s) position that the change in the method is 81 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Consumer Contribution towards Capital Assets by not a correction of error and hence the Company’s 293.44 crore as at 31st March 2017. accounting treatment is correct. The Company has also given adequate disclosure in this regard under Disclosure of the above facts in Note no. 19.1 Note No.19.1 of the Audited Annual Accounts of instead of giving accounting effect does not FY 2019-20. suffice the purpose. Thus, given the Company’s position, that the Despite being pointed out in the year 2016-17 and accounting and treatment is found to be correct 2017-18, no corrective action has been taken by the backed by sufficient disclosures hence no further Company during 2018-19. corrective action is required to be taken.
For & On behalf of the Comptroller and Auditor For & On behalf of Dakshin Gujarat Vij Company General of India Limited,
Sd/- Sd/- (H.K. Dharmadarshi) (Shahmeena Husain, IAS) Principal Accountant General (Audit-II), Gujarat Chairperson (DIN:03584560)
Place: Ahmedabad Place: Ahmedabad Dated: 27.11.2020 Dated: 19.12.2020
82 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 5(iv)
PASCHIM GUJARAT VIJ COMPANY LIMITED
Managements Reply to the comment of the Comptroller and Auditor General of India under section 143(6)(b) of the Companies Act, 2013 on the Financial Statements of the Paschim Gujarat Vij Company Limited, Rajkot for the year ended on 31st March, 2020.
Sr. Comment Management Reply No
1. Balance Sheet : C&AG’s comment is on the financial position i.e. Balance Sheet, particularly on Subsidies and Deferred Government Grants, Subsidies & Consumer Contributions with reference to Note Consumer Contribution (Note No. 18) No. 48 which states that the Company has 2537.71 crore changed the method of computing the grants/ A reference is invited to Note no. 48 of the consumer contribution received against financial statements, which state that with effect depreciable assets to be recognized in Statement from April,2016 the Company has changed the of Profit and Loss from Reducing Balance method of computing the grants/consumer Method to the Straight Line Method and contribution received against depreciable assets consequently the rates at which grant is to be recognized in statement of profit and loss recognized in the Statement of Profit and Loss. from reducing balance method to the straight line It may be noted that this is a repeat comment method and consequently the rates at which pertaining to Financial Statements of the grant is recognized in the statement of profit and Company for FY 2016-17, FY 2017-18 and FY loss. 2018-19.
The Company determined that the change to At the outset, it may be noted that, the subject recognize grants in proportion of the depreciation matter of the comment has no impact on the expenses is a change in accounting estimates profitability of the Company for FY 2019-20. Also, and is to be applied prospectively." the subject matter of the comment would not have any impact on the profitability of the As per Accounting Standard (AS) - 12, Grants Company in the future financial years also. related to depreciable assets are treated as deferred income which is recognized in the profit As informed and explained in the earlier years, and loss statement on a systematic and rational the change in the method of recognition of
83 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
basis over the useful life of the asset. Indian deferred grants to income is a change on account Accounting Standard (Ind AS)- 20 also state that of more experience and circumstances as grants related to depreciable assets are usually obtained currently to reduce the mismatch and it recognized in profit or loss over the periods and does not and cannot obviate the mismatch in the proportions in which depreciation expenses entirely, which would still continue, albeit a lower on those assets is recognized. one. The change in the method is a change in accounting estimate in compliance with Ind AS The above change in method was made by the 8 –Accounting Policies, Changes in Accounting Company as there was a mismatch of the grants Estimates and Errors, just akin to a change in recognized in the Statement of Profit and Loss the method of depreciation is or would be. As versus the related depreciation expenses. Thus, Per requirements of the Ind AS, every method the Company has changed the method of or accounting estimate can change on account recognized of deferred income in order to align of new developments, circumstances, and more the recognition of deferred income with the experience. The earlier method of recognizing related depreciation expenses. As the provision deferred income i.e. Reducing Balance Method for treatment of deferred income to be recognized (RBM) or Written Down Value Method (WDV) in the statement of profit and loss on a systematic was selected and applied basis the facts and and rational basis over the useful life of the asset circumstances as obtained at the time of such is same in AS. 12 and Ind AS - 20, the change selection and application, which was found to be was not mandated by Ind AS - 20. Hence, the in compliance with the Accounting Standards at Company changed the method in order to correct the time in all the audits by different auditors over an error. a period of more than 10 years including Since the depreciable assets related to which supplementary audit by the Hon’ble office of grants/consumer contribution received have C&AG. been capitalized in the books of accounts, the Having said the above, with reference to Hon’ble effect of such change should have been worked C&AG office’s communication for obtaining an out retrospectively and accounted for in the independent opinion, during FY 2019-20, opening balance of Deferred Government GUVNL, the Holding Company, on behalf of Grants, Subsidies and Consumer Contribution. Subsidiary Companies has obtained an This has resulted in overstatement of retained independent opinion from eminent professional earnings and understatement of balances of CA Firm having partners some of whom have Deferred Government Grants, Subsidies and been past presidents of ICAI, as well as have Consumer Contribution towards capital assets served extensively on various ICAI Committees by 356.20 crore as at 31st March 2017. including EAC. The Firm has also opined on the 84 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Disclosure of the above facts in the Note subject matter which has been shared with C&AG no.48 instead of giving accounting effect Office. The independent opinion obtained does not suffice the purpose. buttresses the Company’s (and the Group’s) position that the change in the method is not a Despite being pointed out in 2016-17, 2017-18 correction of error and hence the Company’s and 2018-19, no corrective action has been taken accounting treatment is correct. The Company by the Company. has also given adequate disclosure in this regard under Note No.48 of the Audited Annual Accounts of FY 2019-20.
Thus, given the Company’s position, that the accounting and treatment is found to be correct backed by sufficient disclosures hence no further corrective action is required to be taken.
2. Balance Sheet : Present practice of the company is that the Current Liabilities adjustments given in the consumer account are Other Current Liabilities (Note No. 26) accounted in the respective month of adjustment 67,175.68 lakhs and same practice is being followed by PGVCL since past so many years. Also the said practice The above does not include 257.8l Lakh being is being uniformly followed across all DISCOMs. amount payable to M/s Gokul Agro Resources Limited on account of decision (January 2020) It is pertinent here to note that there is wide of GERC to revise the bills and refund the excess spread network of PGVCL spread among 246 monthly energy charges recovered during June sub-division offices and 45 Division offices. So, 2015 to December 2016. it is difficult to consider adjustment of such transactions in books of accounts of respective This resulted in understatement of Other Current financial year itself. Liabilities by 257.81 Lakh and overstatement of Other Equity (Retained Earnings) to the same However, the valuable suggestion of CAG is extent. noted and we hereby assure that in future the effect of major such transactions will be given in the financial statement of respective year.
85 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Annexure 6
FORM NO. MR - 3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 31st MARCH, 2020
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
To, The Members GUJARAT URJA VIKAS NIGAM LIMITED CIN- U40109GJ2004SGC045195 Sardar Patel Vidyut Bhavan,Race course, Vadodara- 390007, Gujarat, India.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by GUJARAT URJA VIKAS NIGAM LIMITED (CIN:U40109GJ2004SGC045195) (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the GUJARAT URJA VIKAS NIGAM LIMITED books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and considering the relaxations granted by the Ministry of Corporate Affairs (MCA) warranted due to the spread of the COVID – 19 pandemic, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2020 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2020 according to the provisions of ;
(i) The Companies Act, 2013 (“the Act”) and the rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force); 86 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force); - Not applicable during the audit period under review.
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force); - Not applicable during the audit period under review.
(iv) Foreign Exchange Management Act, 1999 (FEMA) and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment (FDI), Overseas Direct Investment (ODI) and External Commercial Borrowings (ECB)(including any statutory modification(s) or re-enactment(s) thereof, for the time being in force); - Not applicable during the audit period under review.
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)(including any statutory modification(s) or re-enactment(s) thereof, for the time being in force):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011- Not applicable during the audit period under review;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015- Not applicable during the audit period under review;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018- Not applicable during the audit period under review;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014- Not applicable to the Company during the audit period under review;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008- Not applicable to the Company during the audit period under review;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Com panies Act and dealing with client- Not applicable to the Company during the audit period under review;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009- Not applicable to the Company during the audit period under review;
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018- Not applicable to the Company during the audit period under review; and 87 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
(vi) Other applicable laws: Based on the information provided and the representation made by the Company and its officers and also on the review of the compliance reports taken on record by the Board of Directors of the Company, in our opinion, adequate systems and processes exist in the Company to monitor and ensure compliances under other applicable Acts including Electricity Act, 2003, Gujarat Electricity Industry (Recognition and Regulation) Act, 2003 and Gujarat Electricity Duty Act, 1958.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015- Not applicable to the Company during the audit period under review.
During the year under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.Further,for short spending of amount on Corporate Social Responsibility activities as per Section 135 of the Act, the Company will ensure to specify the reasons for short spending the amount in its Board Report pursuant to the provisions of Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014.
We further report that:
The company is a Government Company under the provisions of the Act and is a holding Company of six subsidiary companies.
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executive Directors and Independent Directors. The Changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act and as per the directives issued by the Government of Gujarat from time to time.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of unanimously and/or requisite majority. There were no dissenting views by any member of the Board of Directors during the period under review.
We further report that there are adequate systems and processes in the Company commensurate with 88 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period, following major events have happened which are deemed to have major bearing on the company’s affairs in pursuance of the above laws, rules, regulations, guidelines, standards etc.
1. The Company during the financial year 2019-2020, has allotted 2,57,55,89,900 (Two Hundred Fifty Seven Crore Fifty Five Lakh Eighty Nine Thousand Nine Hundred) Equity shares of 10 each fully paid up on right basis on following dates.
Sr. No Type of Securities Date of Allotment No of Securities Amount per share
1. Equity Shares 16/04/2019 39,76,09,700 10 2. Equity Shares 29/07/2019 93,08,40,000 10 3. Equity Shares 26/08/2019 5,00,00,000 10 4. Equity Shares 09/12/2019 1,08,84,73,600 10 5. Equity Shares 17/01/2020 10,86,66,600 10
Place: Vadodara Signature:-______Sd/-______Date: 02-12-2020 Name of PCS : Niraj Trivedi Practicing Company Secretary C.P. No. : 3123 P.R No. : 1014/2020 UDIN : F003844B001371430
89 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
This report is to be read with our letter of same date which is annexed as “Annexure A” and forms an integral part of this report.
Annexure A To, The Members GUJARAT URJA VIKAS NIGAM LIMITED CIN- U40109GJ2004SGC045195 Sardar Patel Vidyut Bhavan, Race Corse, Vadodara-390007 Gujarat, India.
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
Signature:-______Sd/-______Name of PCS : Niraj Trivedi Place: Vadodara Practicing Company Secretary Date: 02-12-2020 C.P. No. : 3123 P.R No. : 1014/2020 UDIN : F003844B001371430 90 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
ADDENDUM TO BOARDS’ REPORT FOR F.Y.2019-20
To, The Members of GUJARAT URJA VIKAS NIGAM LIMITED.
CIRCULATION OF COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA (C&AG) ON THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR FY 2019-20 ALONGWITH MANAGEMENT REPLIES TO THE COMMENTS.
As stated in the Boards’ Report dated 24-12-2020 circulated to the members and laid before the Annual General Meeting held on 30-12-2020, Comments of C&AG on Consolidated Financial Statements were awaited as on the date of the aforesaid Boards’ Report.
The Comments of C&AG on Consolidated Financial Statements comment(s) for the FY 2019-20 are received on 13-01-2021 and the said comments along with management replies to each comment are attached herewith.
For and on behalf of the Board
Sd/- Date: 16-01-2021 SunainaTomar, IAS Place: Vadodara Chairman (DIN - 03435543)
91 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Management Reply to the Comments of the Comptroller and Auditor General of India received from AG Office, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31st March, 2020.
C&AG’s Comments Management Reply
A. Comment on Financial Position C&AG’s comment is on the financial position i.e. Balance Sheet, particularly on Subsidies and 1. Balance Sheet Consumer Contributions with reference to Note No. Equity and Liabilities 64 which states that the Company has changed Deferred Government Grants, Subsidies & the method of computing the grants/ consumer Contributions (Note No. 20) - 9051.02 crore contribution received against depreciable assets to A reference is invited to Note no. 64 of the Financial be recognized in Statement of Profit and Loss from st Statements, which stated that with effect from 01 Reducing Balance Method to the Straight Line April 2016, the Group Companies have changed the Method and consequently the rates at which grant method of computing the grants/consumer is recognized in the Statement of Profit and Loss. contribution received against depreciable assets to It may be noted that this is a repeat comment be recognized in Statement of Profit and Loss from pertaining to Standalone Financial Statements of reducing balance method to the straight line method DGVCL, MGVCL, PGVCL & GETCO for FY 2016- and consequently the rates at which grant is 17, FY 2017-18 and FY 2018-19. recognized in the Statement of Profit and Loss. At the outset, it may be noted that, the subject The Company has determined that the change to matter of the comment has no impact on the recognize grants in proportion of the depreciation profitability for FY 2019-20. Also, the subject matter expenses is a change in accounting estimates and of the comment would not have any impact on the is to be applied prospectively. profitability in the future financial years also. As per Accounting Standard-12, Grants related to As informed and explained in the earlier years, the depreciable assets are treated as deferred income change in the method of recognition of deferred which is recognised in the Profit and Loss Statement grants to income is a change on account of more on a systematic and rational basis over the useful experience and circumstances as obtained life of the asset. Indian Accounting Standard-20 also currently to reduce the mismatch and it does not state that, grants related to depreciable assets are and cannot obviate the mismatch entirely, which usually recognised in Profit or Loss over the periods would still continue, albeit a lower one. The change and in the proportions in which depreciation expense in the method is a change in accounting estimate on those assets is recognised. 92 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
The above change in method was made by the in compliance with Ind AS 8 –Accounting Policies, Group Companies as there was a mismatch of the Changes in Accounting Estimates and Errors, just grants recognized in the Statement of Profit and Loss akin to a change in the method of depreciation is or versus the related depreciation expense. Thus, the would be. Per requirements of the Ind AS, every Company has changed the method of recognition method or accounting estimate can change on of deferred income in order to align the recognition account of new developments, circumstances, and of deferred income with the related depreciation more experience. The earlier method of recognizing expense. As the provision for treatment of deferred deferred income i.e. Reducing Balance Method income to be recognised in the Profit and Loss (RBM) or Written Down Value Method (WDV) was Statement on a systematic and rational basis over selected and applied basis the facts and the useful life of the asset are same in AS 12 and circumstances as obtained at the time of such Ind AS 20, the change was not mandated by Ind AS selection and application, which was found to be in 20. Hence, the Company changed the method in compliance with the Accounting Standards at the order to correct an error. time in all the audits by different auditors over a period of more than 10 years including Since the depreciable assets related to which grants/ supplementary audit by the Hon’ble office of C&AG. consumer contribution received have been capitalized in the books of accounts, the effect of Having said the above, with reference to Hon’ble such change should have been worked out C&AG office’s communication for obtaining an retrospectively and accounted for in the opening independent opinion, during FY 2019-20, GUVNL, balance of Deferred Government Grants, Subsidies the Holding Company, on behalf of Subsidiary and Consumer contribution. Companies has obtained an independent opinion from eminent professional CA Firm having partners This has resulted in overstatement of retained some of whom have been past presidents of ICAI, earnings and understatement of balances of as well as have served extensively on various ICAI Deferred Government Grants, Subsidies and Committees including EAC.The Firm has also Consumer Contribution towards Capital Assets by opined on the subject matter which has been shared 1450.15 crore as at 31st March 2017. with C&AG Office. The independent opinion Disclosure of the above facts in Note no. 64 obtained buttresses the Group’s position that the instead of giving accounting effect does not change in the method is not a correction of error suffice the purpose. and hence the Company’s accounting treatment is correct. The Group has also given adequate Despite being pointed out in the year 2016-17, 2017- disclosure in this regard under Note No.64 of the 18 and 2018-19, no corrective action has been taken CFS of FY 2019-20. by the Company during 2019-20.
93 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Thus, given the Group’s position, that the accounting treatment is found to be correct as per the opinion of the independent Chartered Accountant Firm, backed by sufficient disclosures, no further corrective action is required to be taken.
2. Balance Sheet The National Company Law Tribunal (NCLT) has Equity and Liabilities treated IL&FS & its 348 Group Companies as a Liabilities composite entity for the purpose of Resolution Plan Current Liabilities to be drawn by the newly constituted Board of IL&FS Other Current at the behest of Govt. of India. Therefore, GUVNL Financial Liabilities (Note No. 29) has withheld the dues of 6 Wind Generating Deposits and retentions from Suppliers/ Companies of the same IL&FS Group. IL&FS Contractors - 3389.28 crore started defaulting on the interest payments to the PF Trust and was referred to NCLT. Logically, The above does not include 182.57 crore withheld GUVNL being the parent Company did not release by GUVNL from monthly power purchase bills of six the dues to the Wind Generating Companies (who separate IL&FS Group wind power Companies from belongs to the same group) because its own CPF November 2018 to 14 October 2019 with whom the Trust’s investments are at stake and 100% recovery Company is having Power Purchase Agreements is doubtful at this point of time. (PPA). The amount has been transferred to its CPF Trust to set-off loss to its CPF Trust due to non- GUVNL firmly believes that IL&FS Group is required receipt of interest and principal amount against to “equitably set-off” the money due to GUVNL’s investment made in three IL&FS group companies CPF Trust from its 3 Group Companies (viz. IL&FS that defaulted on interest payments due on 30th Transportation Network Limited, Infrastructure September 2018 and onwards. Leasing & Financial Services Limited and IL&FS Financial Services Limited)from any money due to As the matter is sub-judice in NCLT, the set off of any of the Companies of IL&FS Group from GUVNL. receivable and payable is not admissible. This resulted in understatement of Deposits & Retentions Therefore, GUVNL is legally entitled to withhold any from suppliers (Other Financial Liability) by 182.57 payment from the payment of electricity generated crore and consequent understatement of and supplied by IL&FS Wind Generating Recoverable from CPF Trust (Other Financial Companies, pending final Resolution at NCLT. It Assets). would be unfair, unjust, un-equitable and illegal if
94 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
GUVNL is required to pay the claims of the Wind Generating Companies, while IL&FS Group Companies are not discharging their obligations to pay to GUVNL’s PF Trust - the amount due towards investment made as financial creditors.
IL&FS Wind Generating Companies approached Hon’ble GERC, but without any success. At the same time, they also approached National Company Law Appellate Tribunal (NCLAT), New Delhi. During hearing of this matter, Hon’ble NCLAT has rejected / dismissed their claims on the withheld dues and allowed them to withdraw their applications vide its Order dt. 23.10.2019.
GUVNL withheld the principal and its interest dues totaling to 18256.66 lakhs from IL&FS Wind Generating Companies and thereafter subsequently had transferred the same to CPF Trust. The Resolution proceedings are presently going on in NCLT. After all, GUVNL had retained this amount on behalf of the CPF Trust towards recovery of the investments. Hence, it was a logical decision and conclusion to transfer the same to the Trust, pending final Resolution plan of NCLT.
Therefore, there is no understatement of Deposits & Retentions from suppliers (other Financial Liability) by 182.57 crores and consequently no understatement of recoverables from CPF Trust (Other Financial Assets).
B. Comment on Disclosure This comment is on non-disclosure of claim raised 3. Notes to the Financial Statements by Surat Municipal Commissioner on GETCO towards differential cost of land. The above does not disclosed the claim of 111.68
95 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
crore being differential cost of land demanded by For allotment of land for substations, following Surat Municipal Commissioner (SMC). The process and procedures are usually undertaken by company had paid initial cost of 30.64 crore as GETCO: per Jantri rate for land at five sites under SMC and 1. Application to the Office of Collector for allotment constructed substations. The Land Disposal of land. committee in final valuation had finalized the cost at 2.Verification of site for Substation and documents 142.32 crore. Accordingly SMC, raised claim of by Collector’soffice. 111.68 crore on account of differential cost of land. The company has taken up the matter to reduce 3.Issuance of Demand Notice for initial payment the rate with various Government authorities but no (Jantri Rate) of Land by Collector’soffice to GETCO. directive has been received till date. The Notes to 4. Approval of initial land cost at GETCO’s end at the Financial Statements are deficient to the extent the Jantri rate. of non-disclosure of the above material fact. 5.Payment of land cost by GETCO at Jantri Rate.
6.Possession of land by GETCO for building Substations.
After possession of land, GETCO starts the work for building the substations. Generally, it takes 2-3 years for finalizing the allotted land value by District/ State Land Valuation Committee. Till such time, the substations in normal course are completed. There are cases where the valuation of the land as determined by District/State Land Valuation Committee are not in line with the budget/ expectation of GETCO. In such cases, GETCO represents to higher Offices including Government of Gujarat (GoG) for reconsidering the value of allotted land. Due to this uncertainty in land valuation and considerable time involved in the process, GETCO accounts for land as and when the payment is made to the beneficiary or as per approval by its Board to pay the differential amount (value determined by Land Valuation Committee less Jantri Value paid), whichever is earlier.
96 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
Accordingly, in the present case, the management has not approved the land cost and has asked GETCO to take up this at Govt. level for consideration. However, no directives have been received by GETCO till date from Govt. of Gujarat. The accounting treatment is also in accordance with the prevailing policies and accepted accounting policies. Therefore, no disclosures were made by GETCO.
The audit observations have been noted and suitable disclosures would be made from the next Financial Year onwards.
4. Notes to the Consolidated Financial Subsidiary Company - GSECL has opted for Statements exemption to the preparation of Consolidated Contingent Liabilities, Contingent Assets and Financial Statements (CFS) of GSECL & its Joint Capital Commitments (Note No. 49) Venture M/s. Mahaguj Collieries Ltd. (MGCL) as per Joint Venture the requirements of Section 129(3) of the Claims against the Company not acknowledged Companies Act, 2013.The relevant extract of Para as Debt – 159.91 crore 1.1 of Significant Accounting Policies of GSECL’s Standalone Financial Statements in this respect is Above includes 159.91crore being the Contingent reproduced as under: Liability towards Claims against the GSECL (holding 40 per cent share in M/s Maha Gujarat Collieries “The Company does not have any subsidiary or Limited) by M/s AMPL regarding development of associates. The Company has entered into a Joint Coal Block. Venture (JV) operation with MAHAGENCO viz. Mahaguj Collieries Limited for development of As per paragraph 4.1 of Significant Accounting captive coal mining block in state Orissa. As per Policies inter-alia states that the Consolidated requirements of Section 129(3) of the Companies Financial Statements have been prepared by Act, 2013, every company is required to prepare combining the financial statements of the Company Consolidated Financial Statements (CFS) subject and its subsidiaries on a line-by-line basis by adding to exemption granted under Rule 6 of the Companies together the book values of the like items after (Accounts) Rules, 2014 vide Notification 742 (E) eliminating in full intra-group assets,liabilities, etc. dated 27.07.2016. The Company is eligible for such
97 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
As per the Financial Statements of GSECL for the an exemption, considering that GUVNL, our holding year ended 31st March 2020, the share of the company and the shareholders, shall file CFS in Company in Contingent Liabilities of MGCL compliance with applicable accounting standards (including interest) is 222.28 crore. and they have no objection to this.
This has resulted in understatement of Contingent Hence these financial statements are standalone Liabilities by 62.37crore. financial statements and do not require any consolidated financial statements.”
Therefore, instead of GSECL consolidating their JV in their Accounts, GUVNL has done the same in accordance with the aforestated provisions of the Companies Act, 2013 and rules there under. At the time of consolidation, GUVNL has complied with Para 4.1 and Para 4.5 of Significant Accounting Policies of CFS. Accordingly,GUVNL in the CFS has considered the share of Contingent Liability as reflected in the audited Standalone Financial Statements of MGCL. Further, the matter relating to Contingent Liability has also been appropriately disclosed in Note 49 of CFS based on the disclosure made by MGCL in its audited Standalone Financial Statements.
MGCL has disclosed 399.79 crores as Contingent Liability in its Accounts. Therefore, GUVNL has taken 40% of 399.79 crores i.e. 159.92 crores. Because GUVNL has consolidated GSECL’s Joint Venture with its own Standalone Accounts, Contingent Liability has been shown as per the Accounts of MGCL.
On the other hand, according to GSECL, the Contingent Liability on this account is 222.28 crores which includes interest liability of 62.37 crores. But, the same is not recognised by MGCL
98 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
as the Joint Venture’s interest liability. Therefore, when the Joint Venture’s Audited Accounts does not include interest element, the same has been excluded at the time of stating Contingent Liabilities in CFS. Further, all facts of this case have been disclosed in detail in CFS in Note No. 53.
This liability stated in the Notes is of Contingent nature and does not have any impact on the profitability or True & Fair view of the Consolidated Financial Statements.
For & On behalf of the Comptroller and Auditor For & On behalf of Gujarat Urja Vikas Nigam Limited General of India
Sd/- Sd/- (Sunaina Tomar, IAS) (H. K. Dharmadarshi) Chairperson (DIN: 03435543) Principal Accountant General (Audit-II), Gujarat Place: Vadodara Place: Ahmedabad Date: 16-01-2021 Dated: 13.01.2021
99
GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
STANDALONE FINANCIAL STATEMENTS F.Y. 2019-20
101 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE STANDALONE FINANCIAL STATEMENTS OF GUJARAT URJA VIKAS NIGAM LIMITED, VADODARA FOR THE YEAR ENDED 31st MARCH 2020.
The preparation of financial statements of the Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31st March 2020 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 29th September 2020.
I, on the behalf of the Comptroller and Auditor General of India, have conducted a Supplementary audit of the financial statements of Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31st March 2020 under Section 143 (6) (a) of the Companies Act, 2013. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records.
Based on my supplementary audit, I would like to highlight the following significant matters under Section 143 (6) (b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report:
A. Comments on Financial Position
1. Other Financial Liabilities (Note 23) Deposits and retentions from Suppliers / Contractors 1,21,145.52 lakh
The above does not include 182.57 core withheld by GUVNL from monthly power purchase bills of six separate IL&FS Group wind power Companies from November 2018 to 14 October 2019 with whom the Company is having Power Purchase Agreements (PPA). The amount has been transferred to its CPF Trust to set-off loss to its CPF Trust due to non-receipt of interest and principal amount against investment made in three IL&FS group companies that defaulted on interest payments due on 30th September 2018 and onwards.
As the matter is sub-judice in NCLT, the set off of receivable and payable is not admissible. This resulted in understatement of Deposits & Retentions from suppliers (Other Financial Liability) by 182.57 core and consequent understatement of Recoverable from CPF Trust (Other Financial Assets)
102 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
2. Balance Sheet
Non-Current Assets Investments (Note 3) 259017.46 crore
The above includes 488.33 crore being share application money paid towards issue of equity share on tight basis to Gujarat State Electricity Corporation Limited (GSECL) as on 31st March, 2020.
As per the Guidance note on Division II Ind As Schedule III to the Companies Act 2013, any application money paid towards securities where security has not been allotted on the date of Balance Sheet shall be disclosed as a separate line item under other non-current financial assets.
As the equity shares have not been allotted on the balance sheet date, inclusion of share application money in Investments resulted in understatement of Non-current Other Financial Assets and overstatement of Investments by 488.33 crore.
B. Comment on Disclosures
3. Notes to the Financial Statements Related Party Disclosures (Note 44B) Allocation of e-Urja Expenses 2026.98 lakh
A reference is invited to the above note no. 44 B, which discloses allocation of e-Urja expenses. The Company was allocating the “E-Urja expenses” to its group Companies based on number of registered users in the respective Company until FY 2017-18. However, the Company stopped this practice from 2018-19 and stated recognizing the entire expenditure in its books of accounts. However, in FY 2019-20, the Company reverted to it’s previous policy which was followed until 2017-18.
The Company should have disclosed this change in accounting treatment in reference to previous years in its Notes to financial statements. The above notes are therefore deficient to that extent.
For and on behalf of the Comptroller and Auditor General of India
Sd/- (H.K. Dharmadarshi) Principal Accountant General (Audit-II), Gujarat
Place: Ahmedabad Date: 03-12-2020 103 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Head Office 8th Floor, Times Square, Nr. Pariseema, C G Road, Navrangpura, Ahmedabad. (O) +91 79 2640 7795 96 (E) [email protected] (W) www.dgsm.co.in
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GUJARAT URJA VIKAS NIGAM LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of GUJARAT URJA VIKAS NIGAMLIMITED, which comprise the Balance Sheet as at 31st March, 2020, the Statement of Profit and Loss including the statement of Other Comprehensive Income, Statement of Changes in Equity, and Statement of Cash Flows for the year then ended, and Notes to the Financial Statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March,2020 and its profit including other comprehensive income, its cash flows & the changes in equity for the year ended on that date.
Basis for Opinion
We have conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics' issued by the Institute of Chartered Accountants of India together with the Ethical requirements
104 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 that are relevant to our audit of the financial statements under the provision of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Codes of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended 31st March, 2020. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Information other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position, financial performance including changes in equity, other comprehensive income and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were
105 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view andare free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operation, or has no realistic alternative but to do so.Those Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of the users taken onthe basis of these standalone financial statements.
As a Part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: v Identify and assess the risk of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control. v Obtain an understanding of internal control relevant to the audit in order to design audit procedure that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate Internal Financial Controls System in place and the operating effectiveness of such controls. v Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. v Conclude on the appropriateness of management's use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events or
106 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainly exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. v Evaluate the overall presentation, structure and content of the standalone financial statements including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit finding, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charge with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were most significance in the audit of the standalone financial statements for the year ended 31st March, 2020 and are therefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine the matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
As required by Section 143 (3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of 107 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
the Act is not attached since the Company has no branches and the point is not applicable to the Company for the year under review. d) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement dealt withby this Report are in agreement with the books of account. e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended. f) The Company being a Government Company, in view of Notification No. G.S.R 463 (E) dated 5th June, 2015 issued by Government of India, the provision of Section 164(2) of the Companies Act, 2013 are not applicable to the Company. g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone financial statements and the operating effectivenessof such controls, refer to our separate Report in “Annexure B”. h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of ourinformation and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in itsstandalone financial statements –Refer Note 39 to the standalone financial statements;
ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv) As required by C & AG of India through directions/sub-directions issued under Section 143(5)of the Companies Act, 2013, we give our report in the attached “Annexure C". DGSM & Co. Chartered Accountants Registration No.101606W Sd/- CA. ABHINAV MALAVIYA Place: Vadodara Partner Membership No. 144245 Date: 29.09.2020 UDIN:20144245AAAALW1828 108 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 Annexure A to the Independent Auditor's Report
The Annexure referred to in our report to the members of Gujarat Urja Vikas Nigam Limited for the year ended March 31st, 2020, we report that:
I.
(a) The Company has compiled the Property, Plant and Equipment register in respect of Assetspurchased / constructed as well as assets of erstwhile GEB transferred to the Company underthe Notification dated 03/10/2006 issued by Government of Gujarat showing particularsincluding quantitative details & situation of fixed assets.
(b) As informed to us, the Property, Plant and Equipment have been physically verified by the management during the year. According to the information & explanation given to us, nomaterial discrepancy was noticed on such verification.
(c) As per the information and explanations provided to us, the title deeds of immovableproperties reflected in financial statement are held in the name of the Company.
II. The Company does not hold any inventory of goods. Accordingly sub-clauses (a), (b) & (c) of clause (ii) are not applicable.
III. In our opinion and according to the information & explanations given to us, the Company has not granted loans, secured or unsecured to Companies, firms, LLP or other parties covered in register maintained under section 189 of the Companies Act 2013, and therefore, the provisions of clauses (iii)(a) & (iii)(b) of the Order are not applicable to the Company.
IV. In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees, and security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
V. Based on our scrutiny of Company's record and according to the information and explanation provided by the management, in our opinion, the Company has not accepted any loans or deposits, which are “Deposits” within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit's) Rules, 2014.
VI. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1)(d) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. 109 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
VII. In respect of Statutory Dues:
(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Service tax, Goods and Service Tax, Cess and any other material statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no statutory dues were outstanding, as at 31st March, 2020 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanation given to us, there are no dues of Income Tax or Sales Tax or Wealth Tax or Service Tax or duty of customs or value added tax or cess, which have not been deposited on account of any dispute except as under:
Forum where Sr. Nature of the Amount Nature of the Statute Period dispute is No Dispute (in Rs.) pending
1 Income Tax Act,1961 Recomputed MAT 81,02,36,539 AY 2017-18 CIT (A), Baroda and interest u/s 234B & 234C
VIII. In our opinion and according to the information and explanations given by the management the Company has not defaulted in repayment of loans or borrowing to a Financial Institution, Bank, Government or dues to debenture holders.
IX. Based on our audit procedures and as per the information and explanations given by the management, Company has not raised money by initial public offer or further public offer (including debt instruments) and term loans during the period covered by our audit report.
X. In our opinion and according to the information and explanations given by the management, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
XI. The Company being a Government Company, in view of the Notification No. G.S.R 463 (E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, the provisions of section 197 read with Schedule V to the Companies Act, 2013 are not applicable to the Company. So the question of reporting on the same does not arise.
XII. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of
110 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Companies (Auditor's Report) Order, 2016 are not applicable.
XIII. All transactions with related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements, as required by the applicable accounting standards at Note 44 of standalone Ind AS financial statements.
XIV. Based on our examination of records and information provided to us by the management, wereport that the Company has issued shares on right basis during the year under review and the requirement of section 62(1)(a) of the Companies Act, 2013 have been complied with and theamount raised have been used for the purposes for which the funds were raised.
XV. Based on our examination of records and information provided to us by management, the Company has not entered into any non-cash transactions with directors or persons connected with him.
XVI. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934. Therefore, the provisions of clause 3(xvi) of Companies (Auditor's Report) Order, 2016 are not applicable. DGSM & Co. Chartered Accountants Registration No.101606W
Sd/- CA. ABHINAV MALAVIYA Place: Vadodara Partner Date: 29.09.2020 Membership No. 144245 UDIN:20144245AAAALW1828
111 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 Annexure - B to the Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the Internal Financial Controls with reference to financial statements of Gujarat UrjaVikas Nigam Limited (“the Company”) as of 31st March 2020 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial controlsbased on the internal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the orderly and efficient conduct of its business,including adherence to Company's policies, safeguarding of its assets, prevention and detection of fraudsand errors, accuracy and completeness of the accounting records, and timely preparation of reliablefinancial information, as required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls with reference tofinancial statements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standardson Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act,2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining anunderstanding of internal financial controls with reference to financial statements, assessing the risk thata material weakness exists and testing and evaluating the design and operating effectiveness of internalcontrol based on the 112 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 assessed risk. The procedures selected depend on the auditor's judgment, includingthe assessment of the risks of material misstatement of the standalone Ind AS financial statements,whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A Company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements includes those policies and procedures that
1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
3) Provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the Company's assets that could have a material effect on thefinancial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls with reference to financial statements were operating effectively as at 31st March
113 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
DGSM & Co. Chartered Accountants Registration No.101606W
Sd/- CA. ABHINAV MALAVIYA Partner Place: Vadodara Membership No. 144245 Date: 29.09.2020 UDIN:20144245AAAALW1828
114 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 Annexure C to the Independent Auditor's Report
The Annexure referred to in our report to the members of Gujarat UrjaVikas Nigam Limited for the year ended March 31st, 2020:
Sr. No Directions / Sub Directions Response / Remedial Measures
1. Whether the Company has system in place Yes, the Company has a well laid out advanced toprocess all accounting transactions through IT system in place to process all accounting IT system? If yes, the implications of processing transactions through the same. of accounting transactionsoutside the IT system on the integrity of theaccounts along with the financial implication,if any, may be stated.
2. Whether there is any restructuring of nexisting No. loans or cases of waiver/write off ofdebts/ans/ interest etc. made by a lender tothe Company due to the Company's inabilityto repay the loan? If yes, the financial impactmay be stated
3. Whether funds received/receivable for specific Yes. schemes from Central/State Agencies were properly accountedfor/utilized as per its term and conditions? List the cases of deviation
4. Adequacy of steps to prevent encroachment of Not Applicable idle land owned by Company may beexamined. In case land of the Company isencroached, under litigation, not put to usedeclared or surplus, details may be provided
5. Whether land acquisition involved in setting up Not Applicable new projects, report whether settlementof dues done expeditiously and in atransparent manner in all cases. The case ofdeviation may please be detailed.
115 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
6. Whether the Company has an effectivesystem Yes. for recovery of revenue as percontractual terms and the revenue isproperly accounted for in the books ofaccounts in compliance with the applicable Accounting Standards.
7. How much cost has been incurred onabandoned Not Applicable projects and out of this howmuch cost has been written off?
DGSM & Co. Chartered Accountants Registration No.101606W
Sd/- CA. ABHINAV MALAVIYA Partner Place: Vadodara Membership No. 144245 Date: 29.09.2020 UDIN:20144245AAAALW1828
116 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
st Balance Sheet as at 31 March, 2020 ( in Lakhs)
Note As at As at Particulars No. 31st March,2020 31st March,2019
ASSETS
(1) Non-Current Assets (a) Property, Plant and Equipment 2 4,080.19 4,521.19 (b) Intangible Assets 2 231.96 232.14 (c) Capital Work-In-Progress 2 3,989.27 - (d) Financial Assets (i) Investments 3 25,90,174.57 22,62,812.56 (ii) Loans 4 113.63 144.44 (iii) Other Financial Assets 5 1,455.50 1,472.64 Total Non-Current Assets 26,00,045.11 22,69,182.98
(2) Current Assets (a) Financial Assets (i) Trade Receivables 6 56.08 3,114.52 (ii) Cash and cash equivalents 7 1,979.96 3.54 (iii) Bank Balances other than mentioned in 8 54.22 51.42 cash and cash equivalents (iv) Loans 9 42.76 45.12 (v) Other Financial Assets 10 12,39,871.80 8,47,965.21 (b) Current Tax Assets (net) 11 - 4,043.31 (c) Other Current Assets 12 73,388.58 13,117.53 Total Current Assets 13,15,393.40 8,68,340.63
Total 39,15,438.51 31,37,523.61
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 13 22,34,781.20 19,77,222.21 (b) Other Equity 14 1,75,255.15 91,997.35 Total Equity 24,10,036.35 20,69,219.56
Deferred Government Grants 15 86.50 11.84
117 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Liabilities (1) Non-Current Liabilities (a) Financial Liabilities (i) Borrowings 16 10,633.96 12,566.23 (ii) Trade Payables 17 - Dues of Micro and Small Enterprises - - - Dues of Other than Micro and Small Enterprises 85.29 85.29 (iii) Other Financial Liabilities 18 779.37 731.84 (b) Provisions 19 1,284.40 1,168.53 (c) Deferred Tax Liabilities (Net) 20 - - Total Non-Current Liabilities 12,783.03 14,551.89 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 21 22,803.99 25,454.94 (ii) Trade payables 22 - Dues of Micro and Small Enterprises - 0.13 - Dues of Other than Micro and Small Enterprises 9,81,969.40 6,11,797.54 (iii) Other Financial liabilities 23 4,86,779.92 4,00,237.29 (b) Other current liabilities 24 36.18 47.74 (c) Provisions 25 129.93 16,202.68 (d) Current Tax Liabilities (net) 26 813.21 - Total Current Liabilities 14,92,532.63 10,53,740.32
Total 39,15,438.51 31,37,523.61
Significant Accounting Policies and Notes to 1-53 Financial Statements
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Sd/- Sd/- Chartered Accountants (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- Sd/- Sd/- (CA. ABHINAV MALAVIYA) (SHUBHADEEP SEN) (PARTHIV BHATT) Partner General Manager (F&A) & CFO Company Secretary Membership No. 144245
Place : Vadodara Place : Vadodara Date : September 29, 2020 Date : September 29, 2020 118 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 Statement of Profit and Loss for the year ended 31st March, 2020 ( in Lakhs) Note For the year ended For the year ended Particulars st st No. 31 March, 2020 31 March, 2019 I Revenue from operations 27 46,38,114.95 44,86,753.40 II Other Income 28 1,792.42 4,198.66 III Total Income (I+II) 46,39,907.37 44,90,952.06 IV EXPENSES Purchase of Power 29 45,99,648.73 44,76,498.62 Employee Benefit Expenses 30 14,827.71 3,609.33 Finance Costs 31 1,680.01 2,010.81 Depreciation and Amortization Expense 2 615.64 585.60 Other Expenses 32 3,005.75 4,676.77 Total Expenses (IV) 46,19,777.83 44,87,381.13 V Profit Before Tax (III-IV) 20,129.54 3,570.93 VI Tax Expense: 33 (a) Current Tax 9,489.96 770.00 (b) Deferred Tax - - VII Profit for the Year (V-VI) 10,639.58 2,800.93 VIII Other Comprehensive Income (OCI) (a) Items that will not be reclassified to Profit and Loss (i) Re-measurement of the Defined Benefit Plans 38.26 (19.03) (ii) Equity Instruments through OCI (3,453.73) 2,606.36 Total of Other Comprehensive Income (OCI) (VIII) (3,415.47) 2,587.33 IX Total Comprehensive Income for the Year (VII+VIII) 7,224.12 5,388.26 X Earnings Per Equity Share (Refer Note No. 34): Basic (in ) 0.05 0.02 Diluted (in ) 0.05 0.02 See accompanying Notes to the Financial Statements 1-53
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Sd/- Sd/- Chartered Accountants (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W Chairperson Managing Director DIN: 03435543 DIN:03584560 Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Vadodara Place : Vadodara Date : September 29, 2020 Date : September 29, 2020 119 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 Cash Flow Statement for the Year Ended 31st March, 2020 ( in Lakhs) For the year ended For the year ended Particulars 31st March, 2020 31st March, 2019
[A] CASH FLOW FROM OPERATING ACTIVITIES Profit Before Tax 20,129.54 3,570.93 Adjustments for: Depreciation and Amortization Expense 615.64 585.60 Remeasurement of Defined Benefit Plan 38.26 (19.03) Dividend Income (1,342.81) (1,237.14) Interest Income (10.03) (661.19) Deferred income (3.62) (2.29) Finance Cost 1,680.01 2,010.81 (Profit)/Loss on Sale of Fixed Assets (Net) 0.37 3.44 Operating Profit/(Loss) before changes in Working Capital 21,107.35 4,251.14
Adjustment for Increase)/Decrease in Operating Assets Trade Receivables 3,058.44 (3,075.89) Loans and Other Financials Assets (3,91,847.24) (2,21,674.93) Other non Financial Assets (60,271.42) 1,482.61
Adjustment for Increase/(Decrease) in Operating Liabilities Trade Payables 3,70,171.74 74,331.80 Other Financial Liabilities 86,884.11 (8,079.18) Other Non-Financial Liabilities & Provisions (15,968.43) 9,556.72 Cash Flow from operations after changes in Working Capital 13,134.55 (1,43,207.72) Net Direct Taxes (Paid)/Refunded (4,633.44) (2,421.97) Net Cash Flow from/(used in) Operating Activities 8,501.11 (1,45,629.69) [B] CASH FLOW FROM INVESTING ACTIVITIES Purchase of PPE including Capital Advances & CWIP (4,362.66) (699.86) Sale of PPE (0.08) 5.82 Investment in Subsidiary Companies (3,25,815.73) (2,70,343.82) Dividend Income 1,342.81 1,237.14 Interest Received 0.99 615.32 Bank Balances not considered as Cash and Cash Equivalents (2.80) (2.64) Net Cash Flow from/(used in) Investing Activities (3,28,837.47) (2,69,188.04)
120 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
[C] CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Shares/Share Application Money 3,28,592.67 2,76,709.20 Deferred Government Grants 78.28 - (Repayment)/Proceeds from Borrowings (refer Note 37 (c) committed credit facilities under liquidity risk) (4,583.22) 23,520.03 Interest & Finance Expenses (1,774.95) (2,102.03) Net Cash Flow from/(used in) Financing Activities 3,22,312.78 2,98,127.20 Net Increase/ (Decrease) in Cash and Cash Equivalents 1,976.42 (1,16,690.53) Cash & Cash Equivalents at beginning of period (see Note 1) 3.54 1,16,694.07 Cash and Cash Equivalents at end of period (see Note 1) 1,979.96 3.54 Notes : 1 Cash and Cash equivalents comprise of: Cash on Hand 1.38 2.19 Balance with Banks 1,978.58 1.35 Deposits with Banks (with maturity less than 3 months) - - Cash and Cash equivalents 1,979.96 3.54 Effect of Unrealised foreign exchange (gain)/loss (Net) - - Cash and Cash equivalents as restated 1,979.96 3.54 2 The Cash Flow Statement has been prepared under the ‘Indirect Method’ set out in Indian Accounting Standards (Ind AS) - 7 “Statement of Cash Flows” 3 Figures of the previous year have been regrouped / reclassified wherever necessary.
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Sd/- Sd/- Chartered Accountants (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Vadodara Place : Vadodara Date : September 29, 2020 Date : September 29, 2020
121 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Statement of Changes in Equity for the year ended on 31st March, 2020
Equity Share Capital Amount Particulars ( in Lakhs) Balance as on 31st March, 2018 16,22,754.99 Changes during the year 3,54,467.22 Balance as on 31st March, 2019 19,77,222.21 Changes during the year 2,57,558.99 Balance as on 31st March, 2020 22,34,781.20
Other Equity ( in Lakhs ) Reserves Item of Other and Share Comprehensive Surplus Application Income Money Particulars Equity Retained Total pending Instruments Earnings allotment through Other Comprehensive Income
Balance as at 31st March, 2018 25,178.63 1,17,518.99 21,669.49 1,64,367.11 Profit for the Year 2,800.93 2,800.93 Other Comprehensive Income for the Year (net of Tax) (19.03) 2,606.36 2,587.33 Total Comprehensive Income for the Year 2,781.90 2,606.36 5,388.26 Add: Share Application Money pending allotment 39,760.97 39,760.97 Less: Shares Issued (1,17,518.99) (1,17,518.99)
Balance as at 31st March, 2019 27,960.53 39,760.97 24,275.85 91,997.35
122 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Profit for the Year 10,639.58 10,639.58 Other Comprehensive Income for the Year (net of Tax) 38.26 (3,453.73) (3,415.47)
Total Comprehensive Income for the Year 10,677.84 (3,453.73) 7,224.12 Add: Share Application Money pending allotment 1,15,794.65 1,15,794.65 Less: Shares Issued (39,760.97) (39,760.97)
Balance as at 31st March, 2020 38,638.37 1,15,794.65 20,822.12 1,75,255.15
As per our Report of even date attached For and on behalf of the Board For DGSM & Co. Sd/- Chartered Accountants Sd/- (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W (SUNAINA TOMAR, IAS) Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Vadodara Place : Vadodara Date : September 29, 2020 Date : September 29, 2020
123 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Note: 1 CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
A Corporate information
Gujarat UrjaVikas Nigam Limited ('GUVNL' or 'the Company') is a wholly owned undertaking of Government of Gujarat domiciled and incorporated in India having its registered office at "Sardar Patel Vidyut Bhavan", Race Course, Vadodara, Gujarat -390007.
Govt. 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 of Generation, Transmission and Distribution of electricity by demerger of the respective units and vested the same along with all its assets and liabilities (relating to the respective units) in various Companies, viz. Gujarat State Electricity Corporation Ltd., Gujarat Energy Transmission Corporation Ltd., Dakshin Gujarat Vij Company Ltd., Madhya Gujarat Vij Company Ltd., Paschim Gujarat Vij Company Ltd. and Uttar Gujarat Vij Company Ltd. on functional basis and the balance (residual) assets were allocated to the Company.
In terms of the Financial Restructuring Plan of GEB, Govt. of Gujarat notified the values of assets and liabilities as on 01.04.2005, vested in the said six subsidiary companies as well as the Company on 3rd October 2006. The Company is engaged in the business of purchase and sale of electricity (including bulk purchase and sale), hold shares in other companies, and acquire and hold residual assets and liabilities of erstwhile GEB.The principle place of business is at the registered office at "Vidyut Bhavan", Race Course, Vadodara, Gujarat -390007.
B Recent Accounting Pronouncements
On 24th July 2020, the Ministry of Corporate Affairs (MCA) has issued amendments to certain Ind AS. The amendments are effective from annual reporting periods beginning on or after 1st April, 2020. However, with respect to Ind AS 116, in case a lessee has not yet approved the financial statements for issue before the issuance of the amendments, then the same may be applied for annual reporting periods beginning on or after 1st April 2019.
Following are the Indian Accounting Standards which have been amended on various issues with effect from April 1st, 2020. The following amendments are relevant to the company:
a) Ind AS 1, Presentation of Financial Statements and Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Error: Refined definition of term 'material'
b) Ind AS 103, Business Combinations: Revised definition of a 'business' and introduction of an
124 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
optional concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business
c) Ind AS 109, Financial Instruments: Modification to some specific hedge accounting requirements to provide relief to the potential effects of uncertainty caused by the interest rate benchmark (IBOR) reform
d) Ind AS 107, Financial Instruments Disclosure: Additional disclosures pertaining to interest rate benchmark reforms.
e) Ind AS 116, Leases: Practical expedient which permits lessees not to account for COVID-19 related rent concessions as a lease modification.
None of these amendments are expected to have any material effect on the Company's financial statements.
C Significant Accounting Policies
1. Statement of Compliance
These financial statements are prepared in accordance with Indian Accounting Standards ("Ind AS"), under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended except in so far as the said provisions are inconsistent with the provisions of the Electricity Act, 2003.
2. Basis of Measurement
These financial statements are prepared in accordance with Ind ASs, under the historical cost convention on the accrual basis except for certain assets and liabilities which are measured at fair value/amortized cost/net present value at the end of each reporting period; as explained in the accounting policies below. These accounting policies have been applied consistently over all periods presented in these financials statements.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company's operating cycle and other criteria set out in Ind AS-1 'Presentation of Financial Statements' and Schedule III to the Companies Act, 2013.
125 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
The Financial Statements are presented in Indian Rupees and all values are rounded off to the nearest two decimal lacs except otherwise stated.
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 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 measurement is unobservable.
3. Property, Plant & Equipment (including Capital Work in progress)
(a) Property, Plant & Equipment
Property, Plant & Equipment (PPE) comprises of Tangible Assets. 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 in accordance with the Company's accounting policy.
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.
126 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
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 the 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.
(b) Capital Work in progress
Capital work-in-progress includes the cost incurred on PPE that are not yet ready for the intended use and is capitalized whenever ready for use. All directly attributable expenditures are allocated to the projects on pro rata basis to the accretion made to respective projects.
4. Depreciation
Depreciation of these PPE commences when the assets are available 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 thedepreciation rates, the methodology and the residual value as prescribed in GERC (MYT) Regulations, 2016.
Therates/range of depreciation of Property, Plant and Equipment are as follows: Asset Description Rates/Range Buildings 3.34% Plant & Machinery 5.28% to 9.50% Lines & Cable Net Work Upto 5.28% Vehicles 9.50% Furniture-Fix & Elect-Light & Fan Installations 6.33% Computers 15% Office Equipments 6.33%
127 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions/deletions, except low value items not exceeding 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 estimated useful life, residual values and depreciation method are reviewed on an annual basis and if necessary, changes in estimates are accounted for prospectively.
5. 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.
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 proceeds and carrying amount of the asset are recognized in the Statement of Profit and Loss when the asset is derecognized.
The Company amortizes Computer Software on straight line method as per the methodology and residual value in accordance with GERC (MYT) Regulations, 2016.
6. 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 that there is a change in the previously assessed impairment loss, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
7. 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
128 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
complete such sale indicate that it is unlikely that significant changes to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such assets 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.
8. Government Grant
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 are initially set up as Deferred Income and recognized in the Statement of Profit and 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 recognizedin the Statement of Profit and Loss over the period in which the related costs are incurred and shown separately.
9. Investments in Subsidiary and Associate
Investments in Subsidiaries and Associates are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and written down immediately to its recoverable amount. On disposal of investments in Subsidiaries and Associate, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
10. Revenue Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Revenue is measured at the transaction price of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties.
129 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Contract assets are recognized when there is right to consideration in exchange for goods or services that are transferred to a customer and when that right is conditioned on something other than the passage of time. Contract assets are classified as unbilled receivables (only act of invoicing is pending) as per contractual terms.
Revenue from Sale of Power
Energy sales are accounted on the basis of billing on Bulk Supply Tariff (BST) agreements entered into with the Distribution Companies viz. Dakshin Gujarat Vij Co. Ltd., Madhya Gujarat Vij Co. Ltd., Paschim Gujarat Vij Co. Ltd. and Uttar Gujarat Vij Co. Ltd. and the contracts entered into with the Licensees viz. Kandla Port Trust and Traders.
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.
Other Revenue from Power related Activities
Rebate (Cash Discount) for Prompt Payment towards purchase of power (net), Cash Discount and CDM Benefit from renewable energy are recognised on cash basis.
Dividend Income
Dividend Income is accounted in the year in which the right to receive the dividend is established.
Penalty and Liquidated Damages
Penalty 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
Interest on investment is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Claims lodged with the Insurance Company in respect of risks covered are accounted for as and when the claim is received.
Other Incomes are recognized on accrual basis except when ultimate realization of such income is uncertain. 130 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
11. Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. a. Leases as Lessee (Assets taken on lease)
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
i. Lease Liabilities:
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components, except for leases where the company has elected to use practical expedient not to separate non-lease payments from the calculation of the lease liability and ROU asset where the entire consideration is treated as lease component.
131 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
ii. Right-of-use Assets:
The Company recognises right-of-use (ROU) assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of use assets are subject to impairment. If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Modifications to a lease agreement beyond the original terms and conditions are generally accounted for as a re-measurement of the lease liability with a corresponding adjustment to the ROU asset. Any gain or loss on modification is recognized in the Statement of Profit and Loss. However, the modifications that increase the scope of the lease by adding the right to use one or more underlying assets at a price commensurate with the stand-alone selling price are accounted for as a separate new lease. In case of lease modifications, discounting rates used for measurement of lease liability and ROU assets is also suitably adjusted.
iii. Short-term leases and leases of low-value assets:
The Company applies the short-term lease recognition exemption to its short-term leases of Property, Plant and Equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term or another systematic basis if that basis is more representative of the pattern of the lessee's benefit. b. Leases as Lessor (assets given on lease)
When the company acts as lessor, it determines at the commencement of the lease whether it is a finance lease or an operating lease. Rental income from operating lease is recognised on a straight- line basis over the term of the relevant lease except where another systematic basis is more representative of the time pattern of the benefit derived from the asset given on lease. 132 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
12. Employee Benefits
Employee Benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment, compensated absences and retirement benefits.
Short Term Employee Benefits
Short Term Employee Benefits expected to be paid in exchange for services rendered by the employees are recognized undiscounted during the period employee renders services. These benefits include remuneration, bonus, incentives, etc.
Long Term Employee Benefits
Defined Contribution Plans
Retirement benefit plans in the form of provident fund, pension fund and superannuation schemes are charged as an expense on an accrual basis when employees have rendered the service.
Defined Benefit Plans
The Company 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.
Re-measurement 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.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.
Other Long Term Employee Benefits
Other Long Term Employee Benefitscomprise 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
133 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
actuarial valuations made by LIC using the Projected Unit Credit Method and is charged to the Statement of Profit and Loss.
13. Taxes on Income
Income Tax Expense represents the sum of Current Tax and Deferred Tax.
Current Tax
Tax 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 Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred Tax
Deferred 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 recognized for all 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 by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company 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. 134 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Current and deferred tax for the year
Current and deferred tax are recognized in Statement of profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
14. 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.
15. Events Occurring After The Reporting Period
Material adjusting events (that provides evidence of condition that existed at the end of reporting period) occurring after the end of reporting period are recognized in the financial statements. Non adjusting events (that are indicative of conditions that arose subsequent to the end of reporting period) occurring after the end of reporting period that represents material change and commitment affecting the financial position are disclosed in the financial statements.
16. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company 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.
Contingent Assets are not recognized but disclosed in the financial statements when an inflow of economic benefit is probable.
17. Material Prior Period Errors
Material prior period errors are corrected retrospectively by restating the comparative amounts for
135 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
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.
18. 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.
19. Segment Reporting
In accordance with IndAS 108, the operating segments used to present segment information are identified on the basis of internal reports used by the Company's Management to allocate resources to the segments and assess their performance. The Board of Directors is collectively the Company's 'Chief Operating Decision Maker' or 'CODM' within the meaning of IndAS 108.
20. Financial Instruments
Financial Assets and Financial Liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially 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 liabilities, as appropriate, 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 Equivalents
The Company considers all highly liquid financial instruments which are readily convertible into known 136 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 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. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Financial Assets at amortized cost
Financial 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 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 businesswhose 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 Company 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 Loss
Financial 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 Assets
The Company assesses at each balance sheet date whether a financial asset or a group of financial asset is impaired. IndAS 109 requires expected credit losses to be measured through a loss allowance. The Company 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 months 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.
137 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Derecognition of Financial Assets
The Company 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 the Statement of Profit and Loss.
Financial Liabilities and Equity Instruments
Classification as Debt or Equity
Debt and Equity instruments issued by the Company 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 cost
Financial liabilities are subsequently measured at amortized cost using the effective interest method.
Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received.
Derecognition of Financial Liabilities
The Company derecognizes Financial Liabilities when and only when, the Company'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.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or where appropriate, a shorter period, to the net carrying amount on initial recognition.
138 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
21. Power Purchase
Purchase of Power from Generation Subsidiary M/s. Gujarat State Electricity Corporation Ltd. (GSECL) is accounted on the basis of GERC Tariff Order as applicable from time to time for the power stations transferred under the Financial Restructuring Plan approved by Govt. of Gujarat and for the existing power stations with GSECL prior to unbundling, as per the provisions of respective Power Purchase Agreements (PPAs).
Power purchased from Independent Power Producers(IPPs) are 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.
Surplus power of DISCOMs is purchased by the Company for trading.
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.
22. 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.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.
139 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Critical Judgments in applying Accounting Policies
Following are the critical judgements andestimations 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 Equipment1
Estimated 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 level of maintenance expenditures required to obtain the expected future cash flows from the asset.
(b) Evaluation of indicators for impairment of Property, Plant and Equipment2
The 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.
(c) Regulatory Deferral Accounts1
Ind 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 recognize the Regulatory Deferral Balances in its previous GAAP, the requirement of IndAS 114 does not apply to the Company.
(d) Impairment of Trade receivables2
The Company estimates the credit allowance as per practical expedient based on historical credit loss experience as enumerated in Note-6.
(e) Impairment of Investments2
At 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, impairment loss is accounted for.
140 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
(f) Deferred Tax Assets2
Deferred 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.
(g) Defined Benefit Obligation (DBO) 2
Management'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 of future salary increases. Variation in these assumptions may significantly impact the Defined Benefit Obligation amount and the annual defined benefit expenses.
(h) Contingent Liabilities2
In 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 crystallizing 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 'remote', 'possible' or 'probable' based on expert advice, past judgments, experiences etc.
1 Critical Accounting Judgments
2 Key Sources of Estimation uncertainty
141 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 - 5.64 5.35 685.21 110.03 174.74 471.37 585.60 100.76 956.21 615.64 TOTAL GRAND 4,753.33 3,989.27 4,312.14 5,134.35 5,709.54 5,878.63 1,566.49 - - - - - 0.35 1.72 0.30 2.02 0.19 2.21 Total 232.14 231.96 233.81 234.16 234.16 - - - - 0.35 1.72 0.30 2.02 0.19 2.21 232.14 231.96 233.81 234.16 234.16 Softwares INTANGIBLE INTANGIBLE ASSETS 5.64 5.35 684.86 110.03 174.74 469.65 585.31 100.76 954.19 615.45 TOTAL 4,521.19 4,080.19 4,900.54 5,475.38 5,644.47 1,564.29 - - 9.70 12.13 11.60 64.82 40.42 19.97 21.12 50.68 71.80 105.35 149.05 155.50 156.03 220.85 Vehicles - - 9.01 9.90 6.52 90.64 16.31 21.18 19.68 40.87 192.78 262.24 110.90 110.58 212.47 303.11 Office Equipments 5.64 5.35 86.37 15.01 82.01 554.62 171.14 463.45 552.59 507.35 3,481.88 2,989.26 3,566.22 4,034.47 4,043.84 1,054.59 Computers - - 0.45 3.00 0.80 2.49 94.00 92.92 30.70 13.48 106.68 230.35 227.80 228.60 121.12 134.60 TANGIBLE TANGIBLE ASSETS Fixtures Furniture& ------1.56 1.56 3.44 1.88 3.44 3.44 1.88 1.88 Cable Lines Lines & Networks NOTES TO THE FINANCIAL STATEMENTSFINANCIALTHE NOTESTO - - 7.08 0.05 3.46 0.04 37.43 34.88 242.82 211.41 378.20 105.01 385.23 388.70 142.41 177.28 Plant & Machinery ------48.38 17.44 17.44 65.82 83.26 390.10 372.66 455.92 455.92 455.92 Buildings March 2019 March March2020 March2020 March2019 March2020 March2020 March 2019 March 2019 March March 2018 March 2018 March st st st st st st st st st st PARTICULARS PARTICULARS /ASSETS Block Net 31 At 31 At Progress In Work Capital 31 At 31 At GROSS BLOCK GROSS 31 At Additions Deduction/Adjustments 31 At Additions Deduction/Adjustments 31 At DEPRECIATION ACCUMULATED 31 At Year the for Charge Deduction/Adjustments 31 At Year the for Charge Deduction/Adjustments 31 At NOTE NO. 2 PROPERTY, PLANT AND EQUIPMENTAND PLANT PROPERTY, NO. 2 NOTE
142 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
NOTES TO THE FINANCIAL STATEMENTS
3 Investments ( in Lakhs)
Particulars As at As at 31st March, 2020 31st March, 2019 Investment in Equity Instruments Investment in Subsidiary Companies (Un-quoted) (at cost)
231,90,64,356 (31st March 2019: 212,77,98,823) Equity Shares of 10/- each in Gujarat State Electricity Corporation Ltd.(GSECL), fully paid-up. 5,78,792.29 5,14,808.95 75,44,51,865 (31st March 2019: 71,17,44,788) Equity Shares of 10/- each in Gujarat Energy Transmission Corp.Ltd. (GETCO), fully paid-up. 4,01,378.32 3,64,811.65 44,11,31,395 (31st March 2019: 40,99,65,078) Equity Shares of 10/- each in Dakshin Gujarat Vij Company Ltd. (DGVCL), fully paid-up. 1,92,266.75 1,64,031.66 44,53,21,532 (31st March 2019: 42,55,06,616) Equity Shares of 10/- each in Madhya Gujarat Vij Company Ltd. (MGVCL), fully paid-up. 1,82,239.07 1,66,197.68 734,33,24,585 (31st March 2019: 631,62,59,458) Equity Shares of 10/- each in Paschim Gujarat Vij Company Ltd. (PGVCL), fully paid-up. 9,05,839.73 7,47,669.58 59,25,94,466 (31st March 2019: 55,63,30,800) Equity Shares of 10/- each in Uttar Gujarat Vij Company Ltd. (UGVCL), fully paid-up. 2,93,433.52 2,65,614.43 Total (A) 25,53,949.68 22,23,133.95
Investment in Associate Company (Quoted) (at cost) 3,83,84,397 (31st March 2019: 3,83,84,397) Equity Shares of 10/- each in Gujarat Industries Power Co. Ltd. (GIPCL), fully paid-up. 9,092.35 9,092.35 Total (B) 9,092.35 9,092.35
Investment in Other Companies (at Fair Value through Other Comprehensive Income)
Quoted, Non-Trade 1,13,50,000 (31st March 2019: 1,13,50,000) Equity Shares of 10/- each in Gujarat State Petronet Ltd. (GSPL), fully paid-up. 19,573.08 21,479.88 2,66,445 (31st March 2019: 2,66,445) Equity Shares of 2/- each in Gujarat Gas Co. Ltd. (GGCL), fully paid-up. 615.09 394.61
Un-quoted, Non-Trade 19,30,013 (31st March 2019: 19,30,013) Equity Shares of 100/- each in Gujarat Power Corporation Ltd. (GPCL), fully paid-up. 4,014.10 4,426.06 2,90,03,636 (31st March 2019: 2,90,03,636) Equity Shares of 10/- each in Gujarat State Energy Generation Ltd. (GSEG), fully paid-up. 2,829.99 4,285.73 25,00,000 (31st March 2019: 25,00,000) Equity Shares of 10/- each in Power Exchange of India Ltd. (PXIL), fully paid-up 100.28 -
Total (C) 27,132.54 30,586.26
Total 25,90,174.57 22,62,812.56
143 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Aggregate Cost of Unquoted investments 25,59,120.09 22,28,304.36 Aggregate Cost of Quoted investment 10,232.35 10,232.35 Aggregate Market Value of Quoted investment 39,341.98 49,165.79 A. Share Share Subsidiary Companies: Total Capital Premium
Gujarat State Electricity Corporation Ltd. 2,31,906.44 3,46,885.85 5,78,792.29 Gujarat Energy Transmission Corporation Ltd. 75,445.19 3,25,933.13 4,01,378.32 Dakshin Gujarat Vij Company Ltd. 44,113.14 1,48,153.61 1,92,266.75 Madhya Gujarat Vij Company Ltd. 44,532.15 1,37,706.92 1,82,239.07 Paschim Gujarat Vij Company Ltd. 7,34,332.46 1,71,507.27 9,05,839.73 Uttar Gujarat Vij Company Ltd. 59,259.45 2,34,174.07 2,93,433.52 Sub-Total 11,89,588.82 13,64,360.86 25,53,949.68 Associate Company: Gujarat Industries Power Co.Ltd. 3,838.44 5,253.91 9,092.35 Other Companies: Gujarat State Petronet Ltd. 1,135.00 - 1,135.00 Gujarat Power Corporation Ltd. 1,930.01 - 1,930.01 Gujarat State Energy Generation Ltd. 2,900.36 90.04 2,990.40 Gujarat Gas Co. Ltd. 5.00 - 5.00 Power Exchange Of India Ltd. 250.00 - 250.00
Sub-Total 6,220.38 90.04 6,310.41 Total Investment 11,99,647.64 13,69,704.81 25,69,352.45 B. The latest Audited Financials of Gujarat Power Company Limited (GPCL) available with the Company is for 31st March 2019. For calculation of Fair Value as at 31st March 2020 the Company has considered latest available Audited Balance Sheet of GPCL i.e. for 31st March 2019. C. Details of Subsidiaries Place of Proportion of ownership interest/ Name of Company Incorporation and voting rights held by the Company principal place of As at 31st As at 31st business March, 2020 March, 2019 Gujarat State Electricity Corporation Ltd. India 100.00% 100.00% Gujarat Energy Transmission Corporation Ltd. India 100.00% 98.27% Dakshin Gujarat Vij Company Ltd. India 100.00% 100.00% Madhya Gujarat Vij Company Ltd. India 100.00% 100.00% Paschim Gujarat Vij Company Ltd. India 100.00% 100.00% Uttar Gujarat Vij Company Ltd. India 100.00% 100.00% 144 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
D. Government of Gujarat (GOG) which held stake in GETCO of 1,25,00,000 equity shares aggregating to 1250.00 Lakhs of face value of equity share capital has been transferred to the Company, to make GETCO a wholly owned subsidiary of the Company. The Company has issued it’s own Equity Shares as consideration against the stake transferred by GOG at a determined fair value. E. Details of Associate
Place of Proportion of ownership interest/ voting Incorporation rights held by the Company (includes Name of Company and principal shareholding through Subsidiary) place of As at 31st As at 31st business March, 2020 March, 2019 Gujarat Industries Power Company Ltd. India 26.84% 26.84% F. The Net Asset Value of Power Exchange Of India Ltd. (PXIL) for the year ended 31st March, 2020 is positive (Negative for 31st March, 2019) and hence the Fair Value of such investment is 100.28 Lakhs for the year ended 31st March, 2020 (Nil for 31st March, 2019). 4. Loan ( in Lakhs) As at 31st As at 31st Particulars March, 2020 March, 2019 Secured Considered Good Loans to Staff 113.63 144.44 Total 113.63 144.44 A. Loans to staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been given. 5. Other Financial Assets ( in Lakhs) As at 31st As at 31st Particulars March, 2020 March, 2019 Secured Considered Good Interest Accrued But Not Due on Staff Loans 161.74 179.48 Unsecured Considered Good Deposit with Others 1,293.76 1,293.16 Total 1,455.50 1,472.64 6. Trade Receivables ( in Lakhs) Particulars As at 31st As at 31st March, 2020 March, 2019 Unsecured Considered Good Trade Receivables 56.08 3,114.52 Total 56.08 3,114.52 145 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
6.1 The age of receivables at the end of the reporting period is as follows: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Less than or equal to 6 months 56.08 3,114.52 More than 6 months but less than or equal to 1 Year - - More than one Year - - Total 56.08 3,114.52
6.2 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.
6.3 Generally, the credit period on sale of electrical energy is upto 60 days. Delay Payment Surcharge is charged at agreed rate as per contractual terms on the overdue balance.
7. Cash and Cash Equivalents ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Balances with Banks 1,978.58 1.35 Cash on hand 1.38 2.19 Total 1,979.96 3.54 8. Bank Balances other than mentioned in cash and cash equivalents ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Fixed Deposit with Bank (with maturity more than 3 months) 54.22 51.42 Total 54.22 51.42
A. Deposir with Bank represents Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak Dal 54.22 Lakhs. 9. Loans ( in Lakhs) st As at 31st Particulars As at 31 March, 2020 March, 2019 Loans and Advances to Employees Secured Considered Good Loans & Advances to Staff - Interest Bearing* 30.79 38.83 Unsecured considered good Other Loans and Advances to Staff 11.97 6.29 Total 42.76 45.12 146 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
A. *Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been given.
10. Other Financial Assets ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Unsecured Considered Good Interest Accrued But Not Due on Staff Loans & others 488.96 471.14 Recoverable from Staff 6.75 1.44 Recoverable from Others 28.47 6.63 Inter Company Receivable 10,29,763.42 5,21,430.47 Subsidy Receivable from Government (Refer Note No. 43) 2,07,842.39 3,24,588.53 Loan to Others (Refer Note No. 46) 655.73 655.73 Deposits 740.50 772.90 Receivable from Gujarat Energy Training & Research Institute (GETRI) 345.59 38.37 Total 12,39,871.80 8,47,965.21
11. Current Tax Assets (Net) ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Current Tax Assets Tax Refund Receivable - 41,426.47 Current Tax Liability Income Tax Payable - -37,383.16 Total - 4,043.31
12. Other Current Assets ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Unsecured Considered Good Prepaid Expenses 592.80 608.57 Advances to Vendors 858.20 858.20 Electricity Duty Recovered in Advance by Govt. of Gujarat 57,262.25 7,448.58 Assets not in use 1.81 2.17 Advance to IPP against Power Purchase 6,800.00 4,200.00 Gratuity Asset (Refer Note No.35E) 7,873.52 -
Total 73,388.58 13,117.53
147 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
13. Equity Share Capital
A. Equity Share Capital consist of the following: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Share Capital Equity Share Capital Authorised Share Capital 3000,00,00,000 (31st March 2019: 3000,00,00,000) Equity Shares of 10/- each 30,00,000.00 30,00,000.00 Issued Share Capital *2350,57,58,495 (31st March 2019: 2016,98,31,795) of 10/- each 23,50,575.85 20,16,983.18 Subscribed & Paid up Share Capital *2234,78,11,995 (31st March 2019: 1977,22,22,095) of 10/- each fully paid 22,34,781.20 19,77,222.21 Total 22,34,781.20 19,77,222.21
B. Reconciliation of number of shares outstanding at the beginning and at the end of reporting period is as under :
Share Capital Particulars No. of Shares ( in Lakhs)
As at 1st April, 2018 16,22,75,49,895 16,22,754.99 Additions/(Reductions) 3,54,46,72,200 3,54,467.22 As at 31st March, 2019 19,77,22,22,095 19,77,222.21 As at 1st April, 2019 19,77,22,22,095 19,77,222.21 Additions/(Reductions) 2,57,55,89,900 2,57,558.99 As at 31st March, 2020 22,34,78,11,995 22,34,781.20
C. Shares in the Company held by Shareholders holding more than 5% is as under:
As at 31st March, 2020 Particulars No. of Shares Extent of Holding Governor of Gujarat 22,34,78,11,995 100.00% As at 31st March, 2019 Particulars No. of Shares Extent of Holding Governor of Gujarat 19,77,22,22,095 100.00%
148 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
D. Shares issued for consideration otherwise than for cash
The Company has issued 5,00,00,000 fully paid up Equity Shares of 10 each to its shareholder - Government of Gujarat amounting to 5000 Lakhs during the year, as consideration for the transfer of stake held by GOG in GETCO. Refer Note No. 3D for additional details.
E. Rights, preferences and restrictions attached to shares :
The Company has only one class of equity shares. For all matters submitted to vote on a poll in a shareholders’ meeting of the Company every holder of an equity share as reflected in the records of the Company on the date of the shareholders’ meeting shall have voting right in proportion to his share in the paid up Equity Share Capital of the Company. Any dividend declared by the company shall be paid to each holder of Equity shares in proportion to the number of shares held to total equity shares outstanding as on that date. In the event of liquidation of the Company, all preferential amounts if any shall be discharged by the Company. The remaining assets of the Company shall be distributed to the holders of equity shares in proportion to the number of shares held to the total equity shares outstanding as on that date.
14. Other Equity
A. Other Equity consist of the following: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Share Application Money pending allotment 1,15,794.65 39,760.97 Retained Earnings 38,638.37 27,960.53 Other Comprehensive Income 20,822.12 24,275.85 Total 1,75,255.15 91,997.35
B. Particulars relating to Other Equity : ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Share Application Money pending allotment Opening Balance 39,760.97 1,17,518.99 Add: Increase during the year 1,15,794.65 39,760.97 Less: Shares Issued (39,760.97) (1,17,518.99) (A) 1,15,794.65 39,760.97 Retained Earnings Opening Balance 27,960.53 25,178.63 Add: Net profit after tax transferred from Statement of Profit & Loss 10,639.58 2,800.93 Add: Other Comprehensive Income arising from remeasurement of defined benefit obligation 38.26 (19.03) (B) 38,638.37 27,960.53 149 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Other Comprehensive Income Opening Balance 24,275.85 21,669.49 Add: Increase / Decrease during the year (3,453.73) 2,606.36 (C) 20,822.12 24,275.85
Total 1,75,255.15 91,997.35 a. Share Application Money pending Allotment The Company had received advance from the existing shareholder - the Governor of Gujarat for equity share subscription on a rights basis. This amount has been approved for share allotment on rights basis in March 2020 and also alloted subsequent to the year end, in April 2020.
15. Defferred Government Grants ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Government Grants, Subsidies towards Capital Assets 86.50 11.84 Total 86.50 11.84 a. Particulars relating to Deferred Government Grants, Subsidies and Contributions ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Government Grants, Subsidies towards Capital Assets Opening Balance 11.84 14.14 Add : Received during the year 78.28 - Less : Transferred to Statement of Profit and Loss 3.62 2.29 Closing Balance 86.50 11.84 The Government Grants received are in capital nature of Research & Development related Expenditures of R&D Cell. There are no unfulfilled conditions or contingencies attached to these grants.
16. Borrowings ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Loans from Related Party - Govt. of Gujarat Unsecured Loan for Power Purchase 8,750.00 9,100.00 Loan from Asian Development Bank (No.1803) 1,883.96 3,466.23 Total 10,633.96 12,566.23
150 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
A Maturity Profile of Secured & Unsecured Loans ( in Lakhs) FY 2023-24 Particulars onwards FY 2020-21 FY 2021-22 FY 2022-23 upto last instalment Govt. of Gujarat a. Loan for Power Purchase (10% p.a.—Repayment in Yearly instalment of 3,50,00,000/- upto FY 2046-47) (26 Nos. of Instalments Due after the Balance Sheet Date) 350.00 350.00 350.00 8,050.00 b. ADB—1803 (11.36% p.a.—Repayment in Yearly instalment upto FY 2023-24) (4 Nos. of Instalments Due after the Balance Sheet Date) 1,582.26 627.99 627.99 627.99 Total 1,932.26 977.99 977.99 8,677.99
B The Company has not executed the Transfer Agreements in respect of following loans availed from Banks, Financial Institutions, etc. though the loans are apportioned amongst all the Subsidiary Companies: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Govt. of Gujarat 17,584.57 21,856.41 Total 17,584.57 21,856.41
17. Trade Payable ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Micro and Small Enterprises (Refer Note 22A) Others Amount owing to Licensees 85.29 85.29 Total 85.29 85.29
18. Other Financial Liabilities ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Staff Voluntary Retirement cum Death Benefit 779.37 731.84 Total 779.37 731.84
151 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
19. Long Term Provisions ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Provision for Employee Benefits Gratuity - - Provision for Leave Encashment 1,284.40 1,168.53 Total 1,284.40 1,168.53
20. Deferred Tax Liabilities (Net) The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Deferred Tax Assets - - Deferred Tax Liabilities - - Total - -
Deferred Tax Asset / Liability is worked out as under : 2019-20 ( in Lakhs) Recognized Opening Recognized in in Other Particulars Closing Balance profit and loss Comprehensive Balance Income
Deferred Tax Liability on account of: Depreciation (862.18) (71.76) - (933.95) Fair value of Investment at FVTOCI - - - - Deferred Tax Asset on account of: Employee Benefits 467.20 26.23 - 493.43 Carried forward of unused Tax Losses - - - - Carried forward of unused Tax Credits 11,287.79 (3,542.68) - 7,745.11 Net Deferred Tax Asset/ (Liability) 10,892.81 (3,588.21) - 7,304.60
152 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 2018-19 ( in Lakhs) Recognized Opening Recognized in in Other Particulars Closing Balance profit and loss Comprehensive Balance Income Deferred Tax Liability on account of: Depreciation (689.75) (172.44) - (862.18) Fair value of Investment at FVTOCI - - - - Deferred Tax Asset on account of: Employee Benefits 503.53 (36.32) - 467.20 Carried forward of unused Tax Losses - - - - Carried forward of unused Tax Credits 11,704.03 (416.23) - 11,287.79 Net Deferred Tax Asset/ (Liability) 11,517.80 (624.99) - 10,892.81 Amounts recognised in Balance Sheet (Refer note A below) - - - -
A. Due to uncertainty about taxable income in foreseeable future, Deferred Tax Assets has been restricted to the extent of Deferred Tax Liabilities. 21. Short Term Borrowings ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Loans repayable on Demand Secured Cash Credit From Banks 22,803.99 25,454.94 Total 22,803.99 25,454.94
Cash Credit Limit is secured by hypothecation charge in favour of UCO Bank Consortium on the Stocks and Book Debts of the Company and its six Subsidiary Companies ranking pari-passu. 22. Trade Payables ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Micro and Small Enterprises Others - 0.13 Others Liability for Purchase of Power 9,79,641.10 6,11,313.31 Others 2,328.31 484.23 Total 9,81,969.40 6,11,797.67
153 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
A The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as below: ( in Lakhs) Trade Payables - Total outstanding dues of Micro & Small As at 31st As at 31st Enterprises March, 2020 March, 2019
Principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year - 0.13
Interest paid by the Company in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year; - -
Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006 - -
Interest accrued and remaining unpaid as at end of each accounting year - -
Further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise - -
B No interest during the year has been paid to Micro and Small Enterprise on delayed payments. Further Interest Accrued during the year and remaining unpaid is not provided in the books as the management is of the opinion that due to contractual terms they will not be required to pay the same.
154 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
23 Other Financial Liability ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Current maturities of Long-term Debt: Unsecured: Govt. of Gujarat (Related Party) Loan for Power Purchase 350.00 350.00 Loan from Asian Development Bank (No.1803) 1,582.26 1,582.26 Interest Accrued But Not Due on Loans 191.52 284.13 Interest Accrued and Due on Loans from Banks - 2.33 Liability for O & M Supplies / Works 41.97 114.21 Liability for Capital Supplies / Works 126.77 253.54 Staff Related Liabilities 47.53 2.27 Staff Retirement cum Death Benefit Scheme 10.99 15.56 Unclaimed amount relating to Bonds 261.80 264.30 Inter Company Payable 3,48,356.61 2,75,037.17 Deposits & Retentions from Suppliers / Contractors (Refer Note No. 47) 1,21,145.52 1,20,786.66 Deposits for Electrification & Service connection 10.11 10.11 Outstanding liability for expenses 12,070.42 871.43 Grants Unallocated 872.54 91.35 Corpus Fund of Bal Urja Rakshak Dal 55.32 52.51 Board of Trustees----CPF 752.29 502.37 Other Liability 899.92 12.61 Staff Welfare Schemes 4.34 4.47 Total 4,86,779.92 4,00,237.29
24 Other Current Liability ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Statutory Liabilities 34.93 46.49 Tax on Electricity Duty payable to State Govt. 1.25 1.25 Total 36.18 47.74
155 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
25 Short Term Provisions ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Provision for Employee Benefits Provision for Gratuity - 16,050.34 Provision for Leave Encashment 129.93 152.34 Total 129.93 16,202.68
26 Current Tax Liabilities (net) ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Current Tax Liability Income Tax Payable 46,837.03 - Current Tax Assets Tax Refund Receivable -46,023.81 - Total 813.21 -
27 Revenue from Operations ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Income from Operating Activity Sale of Power to Subsidiaries : Dakshin Gujarat Vij Company Ltd (DGVCL) 12,89,831.32 12,00,168.22 Madhya Gujarat Vij Company Ltd (MGVCL) 5,40,410.96 5,34,019.67 Paschim Gujarat Vij Company Ltd (PGVCL) 15,47,243.17 15,41,798.68 Uttar Gujarat Vij Company Ltd (UGVCL) 11,75,450.03 11,21,815.07 Sub Total 45,52,935.48 43,97,801.63
Sale of Power to Others: Sale of Power through Power Exchanges & Bilateral Agreements 16,306.89 10,812.79 Sub Total 16,306.89 10,812.79 Total Revenue from Sale of Power to Licensees, Subsidiaries and Others 45,69,242.37 44,08,614.43
156 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Income from Other Operating Activity Rebate (Cash Discount) for Prompt Payment 68,544.99 77,927.21 Liquidated Damages 243.55 178.62 CDM Benefit from Renewable Energy Sources 84.04 33.14 Total 46,38,114.95 44,86,753.40
28 Other Income ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Interest Income Interest on Staff Loans and Advances 18.38 22.48 Interest on Advances to Others 10.03 267.98 Interest Income from Fixed Deposits - 393.21 Dividend Income - From Associate 1,113.15 1,036.38 - From other Investments 229.66 200.76 Other Non Operating Income Grants received for R & D Expenses (Refer Note No.42) 156.42 178.16 Deferred Income (Refer Note No.42) 3.62 2.29 Penalties received from Suppliers (Net of Refund) 52.11 36.88 Miscellaneous Income* 209.04 2,060.51 Total 1,792.42 4,198.66 * None of the items individually account for more than 1% of total revenue.
29 Purchase of Power ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Purchase of Power From Central Sector Nuclear Power Corporation of India Ltd. 1,51,189.34 90,612.24 NTPC Ltd. 7,30,527.24 7,17,985.43 Sardar Sarovar Narmada Nigam Ltd 13,097.67 1,862.13 Sub Total 8,94,814.26 8,10,459.80
157 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
From Private Sector CLP India Pvt Ltd. - 43,915.94 Essar (Vadinar) Ltd. 1,44,840.87 - ACB India Ltd. 26,346.07 30,999.53 Adani Power Ltd. 4,22,558.82 4,11,479.94 Coastal Gujarat Pvt. Ltd. 3,39,037.69 3,35,605.25 Sub Total 9,32,783.45 8,22,000.67 From State Sector Gujarat Industries Power Company Ltd. 1,00,976.83 98,180.66 Gujarat State Energy Generation Ltd. (Hazira) 42,342.00 45,748.59 Gujarat Mineral Development Corporation (GMDC) 13,422.55 21,265.11 Gujarat State Electricity Corporation Ltd. 9,40,693.24 11,44,910.81 GPPC Pipavav 49,566.13 61,593.39 Sub Total 11,47,000.75 13,71,698.56 From Other Wind Farms 3,05,405.36 2,74,106.96 Purchase of Solar Power 2,03,179.96 1,97,495.85 Purchase of Power from Renewable Sources 13,740.84 10,146.70 Purchase of Power from Non-Renewable Sources 3,64,441.00 63,411.06 Captive Power Plants 126.88 666.14 Power Exchange of India Ltd. 35.80 2,489.98 India Energy Exchange 61,564.93 2,97,426.82 Short Term Purchase of Power 1,06,211.92 1,55,658.72 Purchase of Power from DISCOMs 7,418.57 191.01 Sub Total 10,62,125.26 10,01,593.22 Wheeling / Transmission Charges: Power Grid Corporation Ltd. 2,44,269.26 2,06,187.15 Gujarat Energy Transmission Corporation Ltd. 3,18,655.76 2,64,559.21 Sub Total 5,62,925.02 4,70,746.37 Total 45,99,648.73 44,76,498.62
158 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
30 Employee Benefit Expenses ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Salaries and Allowances 3,024.40 2,750.80 Contribution to PF Trust 280.02 327.18 Staff Welfare Expenses 533.13 491.11 Retirement and other Benefits (Refer Note No.48) 10,990.16 40.24 Total 14,827.71 3,609.33
(a) Defined contribution to Provident Fund, Employees Pension Scheme and Employees Death Linked Insurance: ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
EDLI Admn. Charges 0.02 0.02 Company's Contribution to Provident Fund 221.00 255.80 CPF Inspection & Audit Charges 4.00 4.55 Pension Contribution for Company's Employees on deputation 20.59 33.02 Company's Contribution to Pension Fund 34.43 33.80 Total 280.05 327.20
31 Finance Cost ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Interest Expense Interest on State Government Loans 1,420.65 1,640.87 Interest on Cash Credit and Working Capital - 0.67 Interest on Other loans 52.31 49.47 Discount to Consumers for Timely Payment of Bills 52.96 145.86 Other Borrowing Cost Bank Charges and Commission 144.11 173.93 Others 9.97 - Total 1,680.01 2,010.81
159 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
32 Other Expenses ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Repairs & Maintenance Office Equipments 112.76 3,167.81 Others 16.24 10.48 Administrative & General Expenses Rent, Rates and Taxes 260.00 409.23 Insurance 5.75 7.61 Telephone & Postage Expenses 13.02 16.52 Audit Fees 8.85 9.44 Travelling & Conveyance 80.94 90.25 Printing & Stationery 28.05 34.32 Expenses on Computer Billing & EDP Charges 19.18 14.51 Advertisement 51.14 124.46 Electricity Charges - 0.04 R & D Expenses (Refer Note No. 42) 156.42 178.16 Legal & Professional Fees 628.07 470.60 Donation to CM Relief Fund 74.64 - Expenditure on Training to Staff 3.00 3.48 Loss on Sale of Assets (Net) 0.37 3.44 Corporate Social Expenditure (Refer Note No.40) 137.25 37.35 Expenses for Energy Conservation - 15.99 Miscellaneous Losses & Write-offs - 2.46 Miscellaneous Expenses* 33.64 27.33 Other Administration & General Expenses 1,376.43 53.28 Total 3,005.75 4,676.77
32.1 During the year, an expenditure of 781.85 Lakhs (Previous year 235.16 lakhs) has been incurred towards Energy Conservation and 79.71 Lakhs (Previous year NIL) towards Surya Gujarat Scheme, both of which has been set off against the grant received from Govt. of Gujarat for this purpose. * None of the items individually account for more than 1% of total revenue.
160 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
32.2 Auditor's Remuneration ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Statutory Audit Fees 7.50 7.50 Taxes on Statutory Audit Fees 1.35 1.35 Total 8.85 8.85
Figures for FY 2018-19 includes 0.59 Lakhs (incl. Taxes) paid for FY 2017-18.
33 Tax Expense ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Current Tax - Current year 3,530.00 770.00 - Earlier years 5,959.96 - Deferred Tax (Refer Note 20) - - Total 9,489.96 770.00
33.1 Reconciliation of Current Tax ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Profit Before Tax 20,129.54 3,570.93 "Current Tax expense calculated using MAT tax rate at 17.47% (Previous year - 21.55%) 3,517.03 769.49 Add: Other Comprehensive Expense 6.69 (4.10) Adjustment of tax on prior period - - Others 6.29 4.61 Current Tax Expense 3,530.00 770.00
The base tax rate used for the year ended 31st March, 2020 and year ended 31st March, 2019 reconciliations given above is at the MAT tax rate of 17.47% (Previous Year: 21.55%) payable by corporate entities in India on taxable book profits under the Indian Tax Law.
On 20th September, 2019, vide the Taxation Laws (Amendment) Ordinance 2019, the Government of India
161 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 inserted Section 115BAA in the Income Tax Act, 1961 which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective 01st April 2019 subject to certain conditions. However, the Company having a significant amount of MAT credit entitlement at its disposal, has not exercised the option permitted under Section 115BAA. In view of the above, there is no impact of the new tax rate on the financial results for the year 2019-20.
33.2 Unrecognised Deferred Tax Assets ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Unused Tax Losses - - Unused Tax Credits 7,745.11 11,287.79
34 Earnings per Equity share ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Profit After Tax for the year attributable to equity shareholders 10,639.58 2,800.93 Weighted average number of Equity shares Basic 21,17,67,82,287 17,87,88,00,487 Diluted 21,29,30,53,953 17,89,35,76,477 Basic and Diluted earnings per equity shares ( ) Basic 0.05 0.02 Diluted 0.05 0.02 Face value per equity share ( ) 10.00 10.00
35 Employee Benefit Plans
A Defined Contribution Plans:
The Company has certain defined Contribution Plans. The Company makes contribution towards Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme as per the provisions of Employees Provident Fund & Misc. Provisions Act, 1952. Contributions are made at specified percentage of salary as per regulations. PF contributions are made to a registered Provident Fund Trust administered by Employees Provident Fund Organisation (EPFO). The obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation. The expense recognised during the period towards Defined Contribution Plan is 280.05 Lakhs (31st March 2019 : 327.20 Lakhs).
B Other Long Term Benefit Plan The Company accounts for leave encashment on the basis of actuarial valuation carried out by Life 162 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Insurance Corporation of India at each year end. Liability for the Current Year of 210.99 Lakhs (31st March 2019 : 69.83 Lakhs) has been charged to statement of Profit & Loss. Leave obligation as at 31st March, 2020 and 31st March, 2019 is 1414.33 Lakhs and 1320.87 Lakhs respectively.
The Company 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 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 42.97 Lakhs (31st March 2019 : 37.22 Lakhs). The balance of such fund as at 31st March, 2020 and 31st March, 2019 is 790.37 Lakhs and 747.40 Lakhs.
C Defined Benefits Plan
Gratuity
The Company 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 maintains a target level of funding to be done over a period of time based on estimations of expected gratuity payments.
The 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 Exposure
These 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 Plan. Interest Risk A decrease in the interest rate will increase the plan liability while increase in interest rate will decrease the plan liability. Salary Risk The present value of obligation is calculated by reference to future salary.
163 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
The principal assumptions used for the purposes of the actuarial valuations were as follows:. Assumptions (Current Period) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Expected Return on Plan Assets 7.50% 8.00% Rate of Discounting 7.25% 7.50% 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. ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
I) Reconciliation in present value of obligations (PVO) - defined benefit obligation: Opening defined benefit obligation 1,959.43 2,016.73 Current Service Cost 43.97 45.83 Past service cost, including losses/(gains) on curtailments - - Interest Cost 142.06 151.25 Remeasurement (gains)/Iosses: Actuarial gains and losses arising from changes in financial assumptions & experience adjustments -6.66 8.83 Benefits paid 201.33 263.22 Closing defined benefit obligation 1,937.46 1,959.43 Current obligation 201.08 288.10 Non-Current obligation 1,736.39 1,671.33 II) Change in fair value of assets: Opening fair value of plan assets 1,943.29 1,970.24 Expected return on plan assets 145.75 157.62 Remeasurement gain (loss): Actuarial gains and losses including Excess Return on plan assets (excluding amounts included in net interest expense) 31.60 -10.20 Contributions by the employer 20.43 88.84 Benefits paid 201.33 263.22 Closing fair value of plan assets 1,939.73 1,943.29
164 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
III) Reconciliation of Present value of obligation and fair value of assets: Present value of funded defined benefit obligation 1,937.46 1,959.43 Fair Value of plan assets at end of year 1,939.73 1,943.29 Funded status Funded Funded Net liability arising from defined benefit obligation -2.27 16.14 IV) Service Cost Current Service cost 43.97 45.83 Past service cost and (gain)/Ioss from settlements - - Net Interest expense -3.94 -6.41 Total Expenses to be recognised in P&L A/c 40.03 39.43 Components of defined benefit costs recognised in Employee Benefit expenses Remeasurement on the net defined benefit liability: Actuarial (gains) / losses arising from experience adjustments, changes in demographic assumptions and changes in financial assumptions including Excess Return on plan assets (excluding amounts included in net interest expense) -38.26 19.03 Total Expenses to be recognised in OCI -38.26 19.03 Total Expense (Provision for the Period) 1.77 58.46
V) Category of assets as at 31 st March: -Life Insurance Corporation 1,939.73 1,943.29
Total 1,939.73 1,943.29
On Plan On Plan Experience Adjustment Liabilities Assets Loss/(Gain) Loss/(Gain)
As on 31st March, 2020 -6.66 As on 31st March, 2019 8.83 As on 31st March, 2018 587.71 As on 31st March, 2017 89.19 As on 31st March, 2016 -41.26
165 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Maturity Analysis of Projected Benefit Obligation are as under: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Less than 1 year 201.08 288.10 One to Three Years 199.55 321.92 Three to Five Years 335.93 236.07 More than Five Years 1,200.90 1,113.34 Total 1,937.46 1,959.43
Sensitivity Analysis: ( in Lakhs) As at 31st As at 31st Significant actuarial assumptions March, 2020 March, 2019 Discount Rate - Impact due to increase of 50 basis points -72.90 -76.74 - Impact due to decrease of 50 basis points 76.87 81.86 Salary increase - Impact due to increase of 50 basis points 76.78 81.36 - Impact due to decrease of 50 basis points -73.47 -76.97
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.
E GEB Employees’ Group Gratuity Trust (“the Trust”) is an exempted Gratuity Trust under the Income Tax Act, 1961 established to manage the Gratuity obligations of the employees of GUVNL and its Subsidiary Companies. GUVNL, the Holding Company is managing the same for and on behalf of itself and its six Subsidiary Companies. The Trust has an arrangement with M/s. Life Insurance Corporation of India (LIC) for the fund management based on actuarial determination of liability and the funds to be contributed.
Given the above structure and arrangement among GUVNL Group Companies, the overall Gratuity
166 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Liability or Asset (as the case may be) of the GUVNL Group, is reflected in GUVNL Books. The individual subsidiary Company(s) reflect the expense in its books and the Liability / Asset to / from GUVNL, given the above arrangement alongwith the disclosures in compliance with the applicable Ind AS 119 – Employee Benefits.
The following is the position of Gratuity related Asset / Liability reflected in the books of GUVNL, as pertaining to individual companies: ( in Lakhs) Asset / (Liability) - Net Company pertaining to: As at 31st As at 31st March, 2020 March, 2019 Gujarat Urja Vikas Nigam Limited 2.27 (16.14) Gujarat State Electricity Corporation Limited 589.36 (671.97) Gujarat Energy Transmission Corporation Limited 1,786.49 (3,382.86) Dakshin Gujarat Vij Company Limited 1,004.15 (2,087.15) Madhya Gujarat Vij Company Limited 1,032.50 (2,126.68) Paschim Gujarat Vij Company Limited 2,126.04 (4,740.72) Uttar Gujarat Vij Company Limited 1,332.71 (3,024.83) Total 7,873.52 (16,050.34)
36 Operating Segment
A The Company’s operations fall under single segment namely “Purchase and Sale of Power”, taking into account the different risks and returns, the organization structure and the internal reporting systems.
B Information about major customers
Company’s significant revenues (more than 95%) are derived from sales to Subsidiary Distribution Company. The total sales to such companies amounted to 45,52,935.48 Lakhs in 2019-20 and 43,97,801.63 Lakhs in 2018-19.
C Information about geographical areas:
Segment revenue from “Sale of Power” represents revenue generated from Subsidiary and 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 Company derives revenue from sale of power. The information about revenues from Subsidiary and external customers about each product is disclosed in Note No. 27 of the Financial Statements.
167 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
37 Financial instruments Disclosure A Capital Management The Company’s objective when managing capital is to: 1. Safeguard its ability to continue as going concern so that the Company is able to provide maximum return to shareholders and benefits for other stakeholders; and 2. Maintain an optimal capital structure to reduce the cost of capital.
Gearing Ratio
The gearing ratio at end of the reporting period is as follows: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Debt 12,566.23 14,498.49 Total Equity 24,10,036.35 20,69,219.56 Debt to Equity Ratio 0.01 0.01
1. Debt is defined as all Long Term Debt outstanding + Current Maturity outstanding for such Long Term Debt. 2. Equity is defined as Equity Share Capital + Other Equity
B Categories of Financial Instruments ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Financial Assets Measured at amortised cost (a) Trade and other receivables 56.08 3,114.52 (b) Cash and cash equivalents 1,979.96 3.54 (c) Other Bank balances 54.22 51.42 (d) Loans 156.39 189.56 (e) Other Financial Assets 12,41,327.30 8,49,437.85 Measured at cost (a) Investments in Equity Instruments of Subsidiaries and Associates (designated on transition date) 25,63,042.03 22,32,226.30 Measured at FVTOCI (a) Investments in Equity Instruments 27,132.54 30,586.26 Financial Liabilities Measured at amortised cost (a) Borrowings 33,437.95 38,021.17 (b) Trade Payables 9,82,054.70 6,11,882.96 (c) Other Financial Liabilities 4,87,559.29 4,00,969.14 168 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
C Financial Risk Management Objectives
The Company’s principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations, routine and capital expenditure. The Company’s principal financial assets include loans, advances, trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company’s activities expose it to a variety of financial risks viz regulatory risk, interest rate risk, credit risk, liquidity risk etc. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s senior management oversees the management of these risks. It advises on financial risks and appropriate financial risk governance framework for the Company.
Regulatory Risk
The Company’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 Company.
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 & FPPPA is levied on quarterly basis for any increase/decrease in power purchase cost.
Interest Rate Risk Management
Interest 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 Company’s exposure to the risk of changes in market interest rates is negligible as primarily to the Company’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-
169 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
looking information including indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes, government directives, market interest rate).
Major customers, being the Group Companies, Credit risk is negligible.
Liquidity Risk Management
Liquidity risk is the risk that the Company 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 Company 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 Company’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 Company 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 Company may be required to pay.
( in Lakhs)
Between 1 Particulars Less than 1 More than 5 Total year and 5 years years
As at 31st March, 2020 Non - Current Financial Liabilities Borrowings - 3,283.96 7,350.00 10,633.96 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 779.37 - 779.37 - 4,063.33 7,435.29 11,498.63 Current Financial Liabilities Borrowings 22,803.99 - - 22,803.99 Trade Payables 9,81,969.40 - - 9,81,969.40 Other Financial Liabilities 4,86,779.92 - - 4,86,779.92 14,91,553.31 - - 14,91,553.31 Total Financial Liabilities 14,91,553.31 4,063.33 7,435.29 15,03,051.94
170 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
As at 31st March, 2019 Non - Current Financial Liabilities Borrowings - 4,866.23 7,700.00 12,566.23 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 731.84 - 731.84 - 5,598.07 7,785.29 13,383.37 Current Financial Liabilities Borrowings 25,454.94 - - 25,454.94 Trade Payables 6,11,797.54 - - 6,11,797.54 Other Financial Liabilities 4,00,237.29 - - 4,00,237.29 10,37,489.77 - - 10,37,489.77
Total Financial Liabilities 10,37,489.77 5,598.07 7,785.29 10,50,873.14
The Company has access to Committed Credit facilities as described below, of which 2,11,596.01 Lakhs (as at 31st March, 2019: 2,05,145.06 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets
Secured Committed Credit Facility, reviewed annually and payable at call: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 Amount used 22,803.99 25,454.94 Amount unused 2,11,596.01 2,05,145.06
D Fair Value measurement Fair 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. Financial assets at fair value through other comprehensive income (FVTOCI) Fair Value as at st st Fair Value Valuation technique(s) Particulars 31 31 March, March, hierarchy and key input(s) 2020 2019 Investment in Equity 6,944.37 8,711.78 Level 3 Valuation techniques for which the Instruments (unquoted) lowest level input that is significant to the fair value measurement is unobservable Investment in Equity 20,188.16 21,874.48 Level 1 Quoted bid prices from Stock exchange- Instruments (quoted) NSE / BSE
171 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Financial Assets and Liabilities at amortised cost
The 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. 38 Disclosure under Indian Accounting Standard 36 – Impairment of Assets
In 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, no impairment loss is required as at 31.03.2020. 39 Contingent Liabilities, Contingent Assets and commitments (to the extent not provided for): ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 1. Claims against the erstwhile GEB & the Company not acknowledged as debts: I. Purchase 130.12 130.12 II. Leasing Finance / Taking over of Licensee by erstrwhile GEB 1,577.00 1,731.53 III. Power Purchase 91,480.00 64,391.00 IV. Stamp Duty on mortgage deed for loans availed by erstwhile GEB from LIC - 1,198.32 V. Employees 680.50 730.50 VI. Disputed demand of Income Tax against erstwhile GEB Not Ascertainable Not Ascertainable VII. Disputed demand of Income Tax / GST (Service Tax) against the Company 8,102.37 9,154.99 2. Guarantees I. Corporate Guarantees given by the Company to Consortium Banks for and on behalf of Subsidiary Companies - a. For Working Capital Facilities 4,89,590.00 4,89,590.00 II. Comfort Letter issued to GSFS by the Company for and on behalf of Subsidiary Companies: a. For Term Loans to Gujarat State Electricity Corporation Ltd. 76,101.85 97,907.41 b. For Term Loans to Gujarat Energy Transmission Corporation Ltd. 1,67,176.47 1,81,705.88 3. Letters of Credit 1,64,285.97 1,39,364.00 Total 9,99,124.28 9,85,903.75
172 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
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:
Estimated amount of contracts remaining to be executed on capital account: ( in Lakhs)
st st Particulars As at 31 As at 31 March, 2020 March, 2019 A. Capital Commitments Estimated amount of Contract remaining to the executed on capital accounts (Net of Advances) 356.21 Nil Total 356.21 Nil
40 CSR Expenditure ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
CSR expenditure comprises of the following: a) Gross amount required to be spent by the Company during the year 211.89 277.23 b) Amount spent during the year 137.25 37.35 ( in Lakhs) For the year ended 31st March, 2020 For the year ended 31st March, 2019 Particulars In Cash Yet to be Total In Cash Yet to be Total paid in cash paid in cash
C) (i) Construction/ acquisition of any asset 71.54 - 71.54 8.50 - 8.50 (ii) On purpose other than (i) above 65.71 - 65.71 28.85 - 28.85 Total 137.25 - 137.25 37.35 - 37.35 173 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20 d) For CSR amount which has remained unspent during the year, suitable reasons would be provided in the Directors’ Report.
41. Quantitative information in respect of Purchase and Sale of Power
For the year ended 31st March, 2020 For the year ended 31st March, 2019 Particulars Amount Amount MUs MUs ( in Lakhs) ( in Lakhs)
Purchase of Power 93,862.41 45,99,648.73 98,695.19 44,76,498.62 Sale of Power 93,862.41 45,69,242.37 98,695.19 44,08,614.43
42 Research & Development Expenditure The details of Revenue Expenditure & Capital Expenditure incurred on Research and Development is as under:
For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Capital Expenditure : Computers and related Equipments 78.28 - Less: Depreciation for the year 1.33 - Total Capital Expenditure (Net of Depreciation) : 76.95 - Revenue Expenditure : Employee Benefits 100.60 137.39 Material Consumed 5.16 3.14 Administrative and Misc. Expenses 50.66 37.64 Depreciation 3.62 2.29 Total Revenue Expenditure : 160.05 180.45 Total Research and Development Expenditure : 236.99 180.45
43 Subsidy Receivable from Government of Gujarat The Company has reviewed the status of subsidies receivable as of 31st March, 2020 of 2,07,842.39 Lakhs (31st March, 2019 : 3,24,588.53 Lakhs) in accordance with its policy on financial instruments and does not expect any credit loss.
174 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
44 Related Party Disclosures A Name of Related Parties and description of relationship:
Name of Related Parties Nature of Relationship
Gujarat State Electricity Corporation Limited Subsidiary Company Gujarat Energy Transmission Corporation Limited Subsidiary Company Dakshin Gujarat Vij Company Limited Subsidiary Company Madhya Gujarat Vij Company Limited Subsidiary Company Paschim Gujarat Vij Company Limited Subsidiary Company Uttar Gujarat Vij Company Limited Subsidiary Company Gujarat Industries Power Company Limited Associate Company Shri Pankaj Joshi, IAS (02.11.2019 to 16.12.2019) Chairman Smt. Sunaina Tomar, IAS (10.01.2020 to 31.03.2020) Chairperson Shri Pankaj Joshi, IAS (01.04.2019 to 01.11.2019) Key Management Personnel (KMP) Smt. Shahmeena Husain, IAS (30.08.2019 to 31.03.2020) Key Management Personnel (KMP) Ms. Mona Khandhar, IAS (01.04.2019 to 31.08.2019) Woman Director Shri N N Misra (01.04.2019 to 31.03.2020) Independent Director Shri R C Dhup (01.04.2019 to 31.03.2020) Independent Director Shri Milind Torawane, IAS (01.04.2019 to 01.10.2019) Director Shri Roopwant Singh, IAS (01.10.2019 to 31.03.2020) Director Shri S B Khyalia (01.04.2019 to 01.11.2019) Key Management Personnel (KMP) Shri K M Bhuva (01.04.2019 to 31.03.2020) Key Management Personnel (KMP) Shri Shubhadeep Sen (01.04.2019 to 31.03.2020) Key Management Personnel (KMP) Shri Parthiv Bhatt (01.04.2019 to 31.03.2020) Key Management Personnel (KMP)
B The following transactions were carried out with the related parties in ordinary course of business during the year: Subsidiary Associate Nature of Transaction KMP Total Company Company
Transactions during the year Sale of Power 45,52,935.48 - - 45,52,935.48 (43,97,801.63) - - (43,97,801.63) Dakshin Gujarat Vij Company Limited 12,89,831.32 - - 12,89,831.32 (12,00,168.22) - - (12,00,168.22)
175 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Madhya Gujarat Vij Company Limited 5,40,410.96 - - 5,40,410.96 (5,34,019.67) - - (5,34,019.67) Paschim Gujarat Vij Company Limited 15,47,243.17 - - 15,47,243.17 (15,41,798.68) - - (15,41,798.68) Uttar Gujarat Vij Company Limited 11,75,450.03 - - 11,75,450.03 (11,21,815.07) - - (11,21,815.07)
Allocation of General Insurance Premium 1,554.07 - - 1,554.07 (1,625.51) - - (1,625.51) Dakshin Gujarat Vij Company Limited 198.16 - - 198.16 (208.09) - - (208.09) Madhya Gujarat Vij Company Limited 206.03 - - 206.03 (215.29) - - (215.29) Paschim Gujarat Vij Company Limited 377.71 - - 377.71 (399.01) - - (399.01) Uttar Gujarat Vij Company Limited 234.59 - - 234.59 (239.35) - - (239.35) Gujarat Energy Transmission Corporation Limited 346.00 - - 346.00 (362.37) - - (362.37) Gujarat State Electricity Corporation Limited 191.57 - - 191.57 (201.40) - - (201.40)
Allocation of Interest 4,093.66 - - 4,093.66 (9,214.71) - - (9,214.71) Dakshin Gujarat Vij Company Limited 124.94 - - 124.94 (162.45) - - (162.45) Madhya Gujarat Vij Company Limited 248.42 - - 248.42 (299.31) - - (299.31) Paschim Gujarat Vij Company Limited 1,097.41 - - 1,097.41 (1,280.76) - - (1,280.76) Uttar Gujarat Vij Company Limited 492.20 - - 492.20 (386.46) - - (386.46) Gujarat Energy Transmission Corporation Limited 2,130.69 - - 2,130.69 (7,085.74) - - (7,085.74)
176 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Purchase of Excess Electricity 7,418.57 - - 7,418.57 (191.01) - - (191.01) Paschim Gujarat Vij Company Limited 3,832.12 - - 3,832.12 (114.60) - - (114.60) Uttar Gujarat Vij Company Limited 3,586.45 - - 3,586.45 (76.40) - - (76.40)
Transmission Charges 3,18,655.76 - - 3,18,655.76 (2,64,559.21) - - (2,64,559.21) Gujarat Energy Transmission Corporation Limited 3,18,655.76 - - 3,18,655.76 (2,64,559.21) - - (2,64,559.21)
Purchase of Electricity 9,40,693.24 1,00,976.83 - 10,41,670.07 (11,44,910.81) (98,180.66) - (12,43,091.47) Gujarat State Electricity Corporation Limited 9,40,693.24 - - 9,40,693.24 (11,44,910.81) - - (11,44,910.81) Gujarat Industrial Power Company Limited - 1,00,976.83 - 1,00,976.83 - (98,180.66) - (98,180.66)
Rebate (Cash Discount) on Prompt 7,596.55 - - 7,596.55 Payment of Transmission Charges (7,479.42) - - (7,479.42) Gujarat Energy Transmission Corporation Limited 7,596.55 - - 7,596.55 (7,479.42) - - (7,479.42)
Rebate (Cash Discount) on Prompt 17,501.33 972.18 - 18,473.51 Payment of Power Purchase (22,276.09) (1,029.05) - (23,305.14) Gujarat Industrial Power Company Limited 972.18 - 972.18 - (1,029.05) - (1,029.05) Gujarat State Electricity Corporation Limited 17,501.33 - - 17,501.33 (22,276.09) - - (22,276.09)
Dividend Income - 1,113.15 - 1,113.15 - (1,036.38) - (1,036.38) Gujarat Industrial Power Company Limited - 1,113.15 - 1,113.15 - (1,036.38) - (1,036.38)
177 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Allocation of e-Urja Expenses 2,026.98 - - 2,026.98 - - - - Dakshin Gujarat Vij Company Limited 273.36 - - 273.36 - - - - Madhya Gujarat Vij Company Limited 262.07 - - 262.07 - - - - Paschim Gujarat Vij Company Limited 487.83 - - 487.83 - - - - Uttar Gujarat Vij Company Limited 316.59 - - 316.59 - - - - Gujarat Energy Transmission Corporation Limited 449.90 - - 449.90 - - - - Gujarat State Electricity Corporation Limited 237.23 - - 237.23 - - - -
Remuneration paid to KMP / Directors: - - 112.94 112.94 - - (168.15) (168.15) Shri Pankaj Joshi, IAS - - 12.80 12.80 - - (32.27) (32.27) Smt. Shahmeena Husain, IAS - - 15.16 15.16 - - - - Shri S B Khyalia - - 20.70 20.70 - - (37.65) (37.65) Shri K M Bhuva - - 8.78 8.78 - - (33.32) (33.32) Shri M B Parikh ------(8.04) (8.04) Shri Parthiv Bhatt - - 26.96 26.96 - - (28.83) (28.83) Shri Shubhadeep Sen - - 28.55 28.55 - - (28.04) (28.04) Perquisites paid to KMP / Directors: - - 4.19 4.19 - - (10.79) (10.79) Shri Pankaj Joshi, IAS - - 1.27 1.27 - - (3.21) (3.21) Smt. Shahmeena Husain, IAS - - 1.30 1.30 - - - - 178 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Shri S B Khyalia - - 2.06 2.06 - - (3.74) (3.74) Shri K M Bhuva - - 0.86 0.86 - - (3.31) (3.31) Shri Shubhadeep Sen ------(0.53) (0.53)
Incidental Charges paid to KMP / Directors: - - 0.82 0.82 - - (1.02) (1.02) Shri Sujit Gulati, IAS ------(0.02) (0.02) Shri Raj Gopal, IAS ------(0.14) (0.14) Shri Pankaj Joshi, IAS - - 0.14 0.14 - - (0.28) (0.28) Smt. Sunaina Tomar, IAS - - 0.04 0.04 - - - - Smt. Shahmeena Husain, IAS - - 0.12 0.12 - - - - Shri Milind Torawane, IAS - - 0.02 0.02 - - (0.14) (0.14) Shri Roopwant Singh, IAS - - 0.06 0.06 - - - - Ms. Mona Khandhar, IAS - - 0.02 0.02 - - (0.10) (0.10) Shri N N Misra - - 0.08 0.08 - - (0.08) (0.08) Shri R C Dhup - - 0.08 0.08 - - (0.04) (0.04) Shri S B Khyalia - - 0.12 0.12 - - (0.30) (0.30) Shri K M Bhuva - - 0.14 0.14 - - (0.18) (0.18) Sitting Fees paid to Independent Directors: - - 0.60 0.60 - - (0.30) (0.30) Shri N N Misra - - 0.30 0.30 - - (0.20) (0.20) Shri R C Dhup - - 0.30 0.30 - - (0.10) (0.10) 179 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Balance as at:
Subsidiary Associate Receivable / Payable KMP Total Company Company
Receivables 10,29,763.42 - - 10,29,763.42 (5,21,430.47) - - (5,21,430.47) Gujarat State Electricity Corporation Limited 4,15,464.28 - - 4,15,464.28 (54,300.88) - - (54,300.88) Gujarat Energy Transmission Corporation Limited 6,14,299.14 - - 6,14,299.14 (4,67,129.59) - - (4,67,129.59) Paschim Gujarat Vij Company Limited ------Payables 3,48,356.61 15,325.08 - 3,63,681.69 (2,75,037.17) (15,406.48) - (2,90,443.66) Gujarat State Electricity Corporation Limited ------Dakshin Gujarat Vij Company Limited 76,215.88 - - 76,215.88 (71,866.27) - - (71,866.27) Uttar Gujarat Vij Company Limited 1,25,424.86 - - 1,25,424.86 (1,03,221.25) - - (1,03,221.25) Madhya Gujarat Vij Company Limited 89,438.19 - - 89,438.19 (67,948.40) - - (67,948.40) Paschim Gujarat Vij Company Limited 57,277.68 - - 57,277.68 (32,001.25) - - (32,001.25) Gujarat Industrial Power Company Limited - 15,325.08 - 15,325.08 - (15,406.48) - (15,406.48) Note : Previous Year figures are mentioned in brackets.
a As an annual closing procedure, Inter - Subsidiary Company balances' duly reconciled have been transferred by all Subsidiary Companies to the debit / credit of the Company’s account (GUVNL) and are reflected in the above balances as appearing in Other Current Financial Assets (Note No.10) / Other Current Financial Liabilities (Note No.23).
b The Company has not paid any remuneration to Chairman, Shri Pankaj Joshi, IAS and Chairperson Smt. Sunaina Tomar, IAS as they occupied the position of Addl. Chief Secretary, Energy & Petrochemicals Dept., Govt. of Gujarat and were therefore drawing salary from Govt. of Gujarat.
180 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
45 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.
46 “Loan to Others” reflected in Note No.10: Other Financial Assets is the amount recoverable from M/s. Federation of Gujarat Industries (FGI), Baroda, for conducting Switch Global Expo-2016 event, for which the Company has initiated legal recovery process. The Company assesses full recovery of this amount and hence has considered this amount to be good and recoverable.
47 Govt. of Gujarat implemented the “UJALA GUJARAT” Scheme which entailed promotion of replacement of conventional bulbs with energy efficient bulbs in order to save energy. This scheme was implemented jointly by GUVNL and its Distribution subsidiaries (DISCOMs) along with the executing agency M/s. Energy Efficient Services Limited (EESL). EESL has made claims under the scheme, which have been only partially paid and an amount of 1771.11 Lakhs (previous year 1771.11 Lakhs) has been retained from the total claims, which would be released after complete reconciliation and submission of all related information by EESL. The amount retained is reflected in Note No.23: Other Financial Liability as “Deposits and Retention from Suppliers/Contractors”.
48 GEB’s Contributory Provident Fund Trust (GEB’s CPF Trust) is an exempted PF Trust (U/s 17 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952) which is responsible for all Provident Fund compliances and also manages the Provident Fund accumulations of all employees of GUVNL & its six Subsidiary Companies. The Trust which is a separate entity had invested a portion of its corpus amounting to 16510.00 Lakhs in 3 IL&FS Group Companies (viz. M/s. IL&FS Transport Network Ltd., M/s. Infrastructure Leasing & Financial Services Ltd. and M/s. IL&FS Financial Services Ltd.) in accordance with the investment pattern / guidelines issued by Ministry of Labour & Employment, New Delhi. Due to sudden financial crisis, the IL&FS Group Companies stopped payment of interest to the Trust in 2018. Thereafter, the entire IL&FS Group was referred to National Company Law Tribunal (NCLT) under Insolvency & Bankruptcy Code (IBC), 2016.
As a result, full recovery of principal and interest from IL&FS became doubtful for GEB’s CPF Trust. Therefore, GUVNL being the parent establishment of the Trust has withheld a total amount of 18256.66 Lakhs (towards principal and interest) from monthly power purchase bills of 7 IL&FS Group Companies (from November, 2018 onwards) with whom the Company is having Power Purchase Agreements (PPA). Subsequently, GUVNL has transferred this entire retained amount of 18256.66 Lakhs to GEB’s CPF Trust in March, 2020. As on date, NCLT resolution proceedings are in progress and its ultimate result is awaited.
Similarly, the Trust had also invested a portion (total 17397.60 Lakhs) of its corpus in M/s. Punjab
181 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
State Industrial Development Corporation Ltd., M/s. Punjab Finance Corporation Ltd., M/s. Reliance Capital Ltd., M/s. Reliance Home Finance Ltd., and M/s. Dewan Housing Finance Ltd. in accordance with the investment pattern / guidelines issued by Ministry of Labour & Employment, New Delhi. But, due to financial crisis in these organisations, they have stopped payment of interest / repayment of principal to the Trust. Therefore, GUVNL has provided 10946.00 Lakhs towards dues on account of interest and principal considering the future uncertainty regarding full recovery of the same from these Companies. As on date, the resolution proceedings for these Companies are in progress before different Forums, as reflected in Note No.30 : Employee Benefit Expenses.
49 The Company enters into Power Purchase Agreements (PPAs) with various power generators to procure power as per agreed contractual terms. Contractual issues arising between the Company and the power generators are addressed on an ongoing basis including if the matters have to be enforced through Regulatory forums and Courts. Certain contractual issues had arisen between the power generators and the Company in the earlier years which have progressed through various stages of grievance redressal. and contract enforcement through our justice system and is still under dispute. The Company has reviewed the progress of all such disputed / contested matters and has assessed the provision as of the year end based on best judgement basis as reflected in Note No.22.
50 COVID-19 virus, a global pandemic has affected the world economy including India leading to significant decline and volatility in the financial markets and decline in economic activities.
On 24th March 2020, Government of India ordered a complete nationwide lockdown of 21 days as a precautionary measure against the COVID-19 pandemic, which was extended twice till 30th May, 2020.
The Company is engaged in the business of bulk purchase and sale of electricity. Since electricity has been categorised as an “Essential Service”, the Company was in position to supply its services throughout the lockdown period to all its consumers.
Estimation of Uncertainties:
The Company believes that it has taken into account all the known impacts arising from COVID-19 pandemic in the preparation of the Standalone Financial Statements. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and external sources of information. However, the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration. The Company will continue to monitor any material changes in the future economic conditions and the impact thereof on the Company, if any. The eventual outcome of the impact of the COVID-19 pandemic on the Company’s business may be different from that estimated as on the date of approval of these Standalone Financial Statements. 182 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
Property, Plant and Equipment:
The Company has estimated recoverable amount of the cash generating units and has determined it to be greater than the carrying amount. Reasonable sensitivities in key assumptions consequent to the change in estimated future economic conditions on account of possible effects relating to COVID19 is unlikely to cause the carrying amount to exceed the recoverable amount of the cash generating unit.
Investments, Loans and Advances & Other Assets:
In assessing the recoverability of Company’s assets such as investments, loans, advances and other financial and non-financial assets, the Company has considered internal and external information upto the date of approval of these Standalone Financial Statements. The Company has performed sensitivity analysis on the assumptions used basis the internal and external information / indicators of future economic conditions and expects to recover the carrying amount of the assets.
Trade Receivables:
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. In assessing the recoverability of trade receivables, the Company has considered subsequent recoveries, past trends, and internal and external information available upto the date of issuance of these financials. Based on assessment done by the Company, there is no allowance for credit losses required based on the subsequent recovery of these receivables.
Revenue:
The Company’s revenue from sale of electricity to its consumers has downward impact due to lockdown. Since this situation is likely to prevail in Financial Year 2020-21, the Company is in process of identification of loss in revenue due to disruption of supply of electricity to these consumers.
Employee and Other Costs:
The Company is making payments of salaries and wages to all employees on its payrolls as also the contract workers during the time of lockdown. Further, the Company is also incurring various other costs, including fixed costs during the period of full/partial lockdown. This may impact the profitability levels of the Company.
Going Concern:
The management has evaluated the various financial ratios, expected ageing and maturities of assets and liabilities and the various internal and external information available. The management does not
183 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 STANDALONE FINANCIAL STATEMENTS 2019-20
see any risks to Company’s ability to continue as a going concern and expects that Company will be able to meet its liabilities in the foreseeable future, as and when the same fall due.
51 Previous year figures have been reclassified and regrouped wherever necessary to confirm to current year’s classification.
52 Approval of Financial Statements
The Standalone Financial Statements were approved for issue by the Board of Directors on September 29, 2020.
53 Statement of Management:
a) The Current 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 wise 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 except those stated in the notes.
b) Balance 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 Companies 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.
As per our Report of even date attached For and on behalf of the Board Gujarat Urja Vikas Nigam Ltd. For DGSM & Co. Chartered Accountants Firm Registration No. 101606W Sd/- Sd/- (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Vadodara Place : Vadodara Date : September 29, 2020 Date : September 29, 2020 184
GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
CONSOLIDATED FINANCIAL STATEMENTS F.Y. 2019-20
186 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF GUJARAT URJA VIKAS NIGAM LIMITED, VADODARA FOR THE YEAR ENDED 31st MARCH 2020.
The preparation of Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited for the year ended 31st March 2020 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) read with Section 129(4) of the Act are responsible for expressing opinion on the financial statements under Section 143 read with Section 129(4) of the Act based on independent audit in accordance with the Standards on Auditing prescribed under Section 143 (10) of the Act. This is stated to have been done by them vide their Audit Report dated 10 November 2020.
I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited for the year ended 31st March 2020 under Section 143(6)(a) read with Section 129(4) of the Act. We conducted a supplementary audit of the financial statements of Gujarat State Electricity Corporation Limited, Gujarat Energy Transmission Corporation Limited, Uttar Gujarat Vij Company Limited, Madhya Gujarat Vij Company Limited, Dakshin Gujarat Vij Company Limited and Paschim Gujarat Vij Company Limited but did not conduct supplementary audit of the financial statements of associate company Gujarat Industries Power Company Limited for the year ended on that date. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records.
Based on my supplementary audit, I would like to highlight the following significant matters under Section 143(6)(b) read with Section 129(4) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the Consolidated Financial Statements and the related Audit Report.
A. Comment on Financial Position 1. Balance Sheet Equity and Liabilities Deferred Government Grants, Subsidies & Contributions (Note No. 20) - 9051.02 crore
A reference is invited to Note no. 64 of the Financial Statements, which stated that with effect from 01st April 2016, the Group Companies have changed the method of computing the grants/consumer contribution
187 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 received against depreciable assets to be recognized in Statement of Profit and Loss from reducing balance method to the straight line method and consequently the rates at which grant is recognized in the Statement of Profit and Loss.
The Company has determined that the change to recognize grants in proportion of the depreciation expenses is a change in accounting estimates and is to be applied prospectively.
As per Accounting Standard-12, Grants related to depreciable assets are treated as deferred income which is recognised in the Profit and Loss Statement on a systematic and rational basis over the useful life of the asset. Indian Accounting Standard-20 also state that, grants related to depreciable assets are usually recognised in Profit or Loss over the periods and in the proportions in which depreciation expense on those assets is recognised.
The above change in method was made by the Group Companies as there was a mismatch of the grants recognized in the Statement of Profit and Loss versus the related depreciation expense. Thus, the Company has changed the method of recognition of deferred income in order to align the recognition of deferred income with the related depreciation expense. As the provision for treatment of deferred income to be recognised in the Profit and Loss Statement on a systematic and rational basis over the useful life of the asset are same in AS-12 and Ind AS 20, the change was not mandated by Ind AS 20. Hence, the Company changed the method in order to correct an error.
Since the depreciable assets related to which grants/consumer contribution received have been capitalized in the books of accounts, the effect of such change should have been worked our retrospectively and accounted for in the opening balance of Deferred Government Grants, Subsidies and Consumer contribution.
This has resulted in overstatement of retained earnings and understatement of balances of Deferred Government Grants, Subsidies and Consumer Contribution towards Capital Assets by 1450.15 crore as at 31st March 2017.
Disclosure of the above facts in Note no. 64 instead of giving accounting effect does not suffice the purpose.
Despite being pointed out in the year 2016-17, 2017-18 and 2018-19, no corrective action has been taken by the Company during 2019-20.
2. Balance Sheet Equity and Liabilities Liabilities Current Liabilities 188 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Other Current Financial Liabilities (Note No. 29) Deposits and retentions from Suppliers / Contractors - 3389.28 crore
The above does not include 182.57 crore withheld by GUVNL from monthly power purchase bills of six separate IL&FS Group wind power Companies from November 2018 to 14th October 2019 with whom the Company is having Power Purchase Agreements (PPA). The amount has been transferred to its CPF Trust to set-off loss to its CPF Trust due to non-receipt of interest and principal amounts against investment made in three IL&FS group companies that defaulted on interest payments due on 30th September 2018 and onwards.
As the matter is sub-judice in NCLT, the set off of receivable and payable is not admissible. This resulted in understatement of Deposits & Retentions from suppliers (Other Financial Liability) by 182.57 core and consequent understatements of Recoverable from CPF Trust (Other Financial Assets).
B. Comments on Disclosure
3. Notes to the Financial Statements
The above does not disclose the claim of 111.68 crore being differential cost of land demanded by Surat Municipal Commissioner (SMC). The company has paid initial cost of 30.64 crore as per Jantri rate for land at five sites under SMC and constructed substations. The Land Disposal committee in final valuation had finalized the cost of land at 142.32 crore. Accordingly SMC, raised claim of 111.68 crore on accounts of differential cost of land. The company has taken up the matter to reduce the rate with various Government authorities but no directive has been received till date. The Notes to the Financial Statements are deficient to the extent of non-disclosure of the above material fact.
4. Notes to the Consolidated Financial Statements Contingent Liabilities, Contingent Assets and Capital Commitments (Note No. 49) Joint Venture Claims against the Company not acknowledged as Debt - 159.91 crore
Above includes 159.91 crore being the Contingent Liability towards Claims against the GSECL (holding 40 per cent share in M/s Maha Gujarat Collieries Limited) by M/s AMPL regarding development of Coal Block.
Paragraph 4.1 of Significant Accounting Policies inter-alia state that Consolidated Financial Statements have been prepared by combining the financial statements of the Company and its subsidiaries on a line- by-line basis by adding together the book values of the like items after eliminating in full intra-group assets, liabilities etc. 189 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
As per the Financial Statements of GSECL for the year ended 31st March 2020, the share of the Company in Contingent Liabilities of MGCL (including interest) is 222.28 crore
This has resulted in understatement of Contingent Liabilities by 62.37 crore
For and on behalf of the
Comptroller and Auditor General of India
Sd/-
(H. K. Dharmadarshi)
Principal Accountant General (Audit-II), Gujarat
Place : Ahmedabad
Date : 13.01.2021
190 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Head Office 8th Floor, Times Square, Nr. Pariseema, C G Road, Navrangpura, Ahmedabad. (O) +91 79 2640 7795 96 (E) [email protected] (W) www.dgsm.co.in
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GUJARAT URJA VIKAS NIGAM LIMITED
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of GUJARAT URJA VIKAS NIGAM LIMITED, which comprise the Balance Sheet as at 31st March, 2020, the Statement of Profit and Loss including the statement of Other Comprehensive Income, Statement of Changes in Equity, and Statement of Cash Flows for the year then ended, and Notes to the Financial Statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of their consolidated state of affairs of the Company as at 31st March, 2020, and its consolidated profit including other comprehensive income, its consolidated cash flows & consolidated changes in equity for the year ended on that date.
Basis for Opinion
We have conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the 'Code of Ethics' issued by the Institute of Chartered Accountants of India together with the Ethical requirements
191 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 that are relevant to our audit of the financial statements under the provision of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Codes of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements.
Basis of Qualified Opinion
1. In case of Gujarat State Electricity Corporation Limited (“the subsidiary company”)
a. The company recognises replaced items of Property, Plant and Equipment (PPE) as addition of PPE. However, carrying amount of old parts, which are replaced, not derecognised from PPE. This is not in accordance with Ind AS - 16 “Property, Plant and Equipment”. The effect of non- compliance of Ind AS - 16 is not ascertainable.
b. The company recognizes capital spares as PPE and other spares as inventory based on predefined code system and not in accordance with requirement of Ind AS - 2 'Inventories' and Ind AS - 16 'Property, Plant and Equipment'. The effect of such non-compliance of Ind AS - 2 and Ind AS - 16 is not ascertainable.
c. Balances under the group of other financial assets, other current financial liabilities and trade payables are subject to confirmation and adjustment, if any, required upon such Confirmation is not determinable.
2. In case of Uttar Gujarat Vij Company Limited (“the subsidiary company”)
We draw attention to note No.40 to the financial statements wherein the Company has changed the method of 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 financial year 2016/17. However, in our opinion the effect of 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 of account and effect of such change be accounted for in the opening balance of grants/ consumer contribution.
Non accounting of the above effect has resulted into understatement of balance of grants/ consumercontribution as on 31st March, 2020 by 18,934.82 lakhs and overstatement of balance of 'Retained Earnings' by like amount. Had the above been accounted for, the balance of grants/ consumercontribution would have been 1,66,292.7 lakhs and balance of 'Retained Earnings' would have been 15,353.51 lakhs as on 31st March, 2020 as against the reported figures of 1,47,357.84 and 34,288.33 lakhs respectively.
192 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
3. In case of Gujarat Energy Transmission Corporation Limited (“the subsidiary company”)
i) The vendor-wise details of liabilities for the supply of Capital Materials reflected in the Account Code 42100 amounting to 16,631.33 Lakhs as on March 31st, 2020 are maintained in an MS Excel Sheet and the vendor-wise Ledger Accounts are not maintained by the Company which are also not reconciled with the subsequent payments made to the vendor/s. Hence, we are unable to comment on the correctness of the vendor-wise outstanding balance as on March 31st, 2020.
ii) The Other Financial Liabilities which are not bifurcated into Current and Non-Current Liability as required by IND-AS 1 (Presentation of Financial Statements) are as follows: -
a) Deposits received from Suppliers/Contractors amounting to 20,884.90 Lakhs;
b) Retention Money received from Suppliers/Contractors amounting to 58,739.47 Lakhs.
Hence, the impact, if any, for not arriving at the fair value measurement of the Non-Current portion of such deposits/Retention Money as per IND-AS 109 (Financial Instruments) on the financialsas of March 31st, 2020, could not be ascertained.
iii) The Company has not capitalised Borrowing Costs to the projects grouped under Capital Work in Progress in the financial year 2019-2020 (except Capitalisation of Borrowing Costs pertaining to KFW projects). Due to the non-capitalisation of Borrowing Costs to the Capital Work in Progress (except Capitalisation of Borrowing Costs pertaining to KFW projects) in the financial year 2019-2020 as per IND-AS 23 (Borrowing Costs), the impact on profitability of the Company and the Capital Work in Progress on the financials as of March 31st, 2020 could not be ascertained.
Emphasis of Matter
We draw attention to the following matters in the notes to Ind AS financial statements -
1. In case of Gujarat State Electricity Corporation Limited (“the subsidiary company”)
We draw attention to note no. 23 to the financial statements in respect of recognition of deferred tax assets on unabsorbed depreciation, unused tax losses and unused tax credit for the reason stated in the said note.
Our opinion is not modified in respect of these matters.
2. In case of Gujarat Energy Transmission Corporation Limited (“the subsidiary company”)
i) Attention is invited to Note No. 63 forming part of Notes to Financial Statements, with respect to
193 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
the reconciliation to be done between the Government grants/Consumer contribution received towards the Capital Assets and the individual Capital Assets created from such Government grants/Consumer contribution which has not been done by the Company in the financials as of March 31st, 2020.
Further, the Customer-wise details of the Consumer contribution towards Capital Assets amounting to 1,60,943.36 Lakhs as on March 31st, 2020 is not maintained by the Company.
As the Company is not able to individually identify the assets created, the impact of systematic allocation of grants against the depreciation of such assets as per IND-AS 20 (Accounting for Government Grants and Disclosure of Government Assistance) cannot be ascertained in the financialsas on March 31st, 2020. ii) As required by the Principal Accountant General (E&RSA), Gujarat, the Company has not obtained an opinion from the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) with respect to the effect of the prospective/retrospective accounting treatment for change in recognition of grants in proportion to the depreciation expense which was effective from April 1st, 2016. In the absence of such EAC opinion, the impact, if any, on the financials of the Company as on March 31st, 2020 could not be ascertained. iii) The Depreciation and Amortization Expenses of the current financial year 2019-2020 includes depreciation of previous years amounting to 1,716.52 Lakhs, charged in the current year, having an impact on financials of 2019-2020 to that extent. Also, the negative Net Block of Fixed Assets amounting to 157.91 Lakhs appearing in the Fixed Assets Register has been accounted for in the books of accounts as on March 31st, 2020. However, the same has not been updated in the Fixed Assets Register maintained by the Company as on March 31st, 2020. Hence, the amount of Property, Plant and Equipment as per the books of accounts as on March 31st, 2020 and as per the Fixed Assets Register maintained by the Company as on March 31st, 2020, is unreconciled to that extent. iv) Attention is invited to Point (iv) of Note No. 49 forming part of Notes to Financial Statements, relating to Impairment Analysis done by the Managementof under constructed projects in Capital Work in Progress and reasons for not impairing under construction projects which have beenheld up due to various issues like land acquisition problems, Right of Way problems, Permission/ Approvals from Forest Authorities, Court cases, Land & Crop compensation, Farmers/Villagers protest, Police Protection etc. The said analysis reveals that there is an impairment of 382.03 Lakhs only and the recoverable value of all other assets in CWIP are more than the carrying value as on March 31st, 2020. 194 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Further, the Company doesnot have a system to conduct the physical verification of the CWIP to determine the actual stage of completion of the project/s as on March 31st, 2020.
Thus, the impact of the same, if any, on the financial statements as on March 31st, 2020 could not be ascertained.
v) It is highlighted that due to the COVID-19 Pandemic induced restrictions on physical movement and strict timelines, our entire Audit team could only visit the Corporate Office and the State Load Despatch Centre (SLDC) Unit of the Company in Vadodara and could not visit all the other Circles/Divisions and Other Units of the Company, toundertakee the required audit procedures as prescribed under the ICAI issued Sstandards on Auditing, including but not limited to :
l Inspection, observation, Examination and Verification of the original documents of invoices at Circle/Division/Unit level, legal title deeds of immovable properties and other files;
l Physical verification of Cash, including adequate internal controlsthereof;
l Physical Verification of Inventories, PPE (Property, Plant and Equipment) and the status of Capital Work in Progress as on March 31st, 2020;
l Any other processes which required the physical presence of the Audit team.
However, we modified our audit procedures and obtained all information, supporting documents and other inputs pertaining to all Circles/Divisions/Units of the Company at the Corporate Office at Vadodara,by verifying the hard copies of the proforma files provided to us by each Circles/ Divisions/Units and also verified the scanned copies of the sample invoices, agreements, etc. provided to us by all Circles/Divisions/Units of the Company.
Our opinion is not modified with respect to these matters.
3. In case of Paschim Gujarat Vij Company Limited (“the subsidiary company”)
(i) Note 32(a) of the accompanying Standalone Financial Statements, in relation to security deposits obtained from Consumers other than HT Consumers are subject to reconciliation with subsidiary records and consequent adjustments, if any, that may be required;
(ii) Note 48 of the accompanying Standalone Financial Statements, in relation to significant accounting policy and the accounting treatment adopted by the company with regard to grant / subsidies and consumer contributions received by the company towards depreciable assets;
195 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(iii) Note 47 of the accompanying Standalone Financial Statements, in relation to the management evaluation of COVID-19 impact on the operations and assets of the Company.
Our opinion is not modified in respect of this matter.
4. In case of Madhya Gujarat Vij Company Limited (“the subsidiary company”)
We draw your attention to Note 48 to the financial statements which explain the managements’ assessment that the extent, to which COVID-19 pandemic will impact the Company’s operations and financial results, is dependent on future developments, which are highly uncertain.
Our opinion is not modified in respect of this matter.
5. In case of Dakshin Gujarat Vij Company Limited (“the subsidiary company”)
We draw attention to the following matters in the notes to Ind AS financial statements
1. Refer Note – 19.1 of Ind AS financial statements, the Company has adopted Ind AS for the first time in the Financial Year 2016-17. Ind AS 20 and AS 12 on Government grants in Indian Accounting Standards (Ind AS) and Previous GAAP at hindsight are in-principle the same in relation to initial recognition of grants as well as recognition of grants in Profit& Loss statement. Both Ind AS 20 and AS 12 require / mandate a systematic basis of recognizing grants. Grants related to depreciable assets are usually recognized in Profit& Loss statement over the periods and in the proportions in which depreciation expense on those assets is recognized. It is pertinent to note that neither Ind AS nor GAPP lay down any emphasis on what the systematic basis should be or give any indicative guide on the said criteria.
The Company has adopted a uniform policy to treat the Consumer Contribution and Capital Grant as deferred credit and to be transferred as Deferred Income on Reducing Balance Method (WDV Method) since its inception as a deliberated and uniform decision based on the facts and circumstances assessed at that time and the same has been reviewed and considered by the different Auditors of the Company since inception and have noted it to be in compliance with the erstwhile GAAP requirements.
However, the WDV Method of recognizing Grants though in compliance with AS-12 as well as Ind AS 20, results in a variation in the depreciation expense recognized and the amount of grant recognized in profit & Loss Statement every year. Further, the company recognizes the government grants through compliance with their conditions and meeting the envisaged obligations. Hence, they should therefore be recognized in Profit& Loss statement over the
196 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 periods in which the entity recognizes as expenses the related costs for which the grant is intended to compensate. The Company noted, based on its own experience and considering prudent basis of allocating depreciation on a similar levels every year, that using the same method of recognizing grants would reduce the variation of depreciation and grants recognized during any year and the SLM method fulfills the requirement of Ind AS 20 i.e. a systematic basis of recognizing grants and is also the method used to depreciate assets, and accordingly the Company, has changed the method of recognizing Grants in the Statement of Profit & Loss w.e.f. 01.04.2016 to match with the method used to depreciate the assets against which the grants were received. Also, the company considers it apt to apply straight line depreciation since it results in a constant charge over the useful life since the assets’ residual values will not undergo change.
Further, it is also to be noted that the selection of WDV method was neither error/omission nor a misstatement from a failure to use or misuse of reliable information. The para 48 and para 34 of Ind AS 8 also pointed out that corrections of errors are distinguished from changes in method of recognizing Grants into P&L Account from WDV Method to SLM. Further, the depreciation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Also, the depreciation method applied to an asset shall be reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method shall be changed to reflect the changed pattern (Para 61 of Ind AS 16). Such a change shall be accounted for as a change in an accounting estimate in accordance with Ind AS 8. Under Ind AS 16 it has to be considered as a change in accounting estimate to be applied prospectively and not retrospectively.
It is to further state that since capital grants are linked to the assets, it is to consider how a change in depreciation method would be regarded i.e., a change in accounting policy or a change in estimate as well as its accounting treatment. Here, the change in the method of depreciation would be considered as a change in accounting estimate under Ind – AS 8 and all changes in accounting estimates are to be applied prospectively and not retrospectively.
We would further draw the attention to para 35 of Ind AS 8, “When it is difficult to distinguish a change in an accounting policy from a change in an accounting estimate, the change is treated as a change in an accounting estimate.”
GUVNL on behalf of DISCOMs, although the cited accounting treatment given is well supported by the relevant provisions of the Accounting Standard(s), have still decided to consult and 197 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
obtain an independent opinion from an eminent professional CA Firm and the captioned firm has also opined endorsing the views of the Company in the subject matter.
In view of above, Deferred Govt. Grants, Subsidies and Consumer Contribution and retained earnings are correctly accounted in the Financial Statements in compliance with Ind AS requirements and that there is no over-statement of retained earnings and under-statement of balance of Deferred Govt. Grant & Subsidies and Consumer contribution towards Capital Assets.
If the Company had applied the above change in method retrospectively as was pointed as per the objection raised by CAG auditors, the balances of retained earnings would have been decreased and the balance of Deferred Government grants, Subsidies and Consumer contributions would have been increased by 29,344.70 Lakhs as at 31st March, 2020.
2. Refer Note 42A.I. which describe the uncertainty related to the outcome of certain disputes and law-suits filed against the Company. The impact (if any) of these disputes/law-suits on the financial statements of the Company could not be ascertained.
3. Refer Note 47 with reference to implications of Covid-19 pandemic. The outbreak of Coronavirus (Covid-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Company has evaluated the impact of this pandemic on its business operations and based on its review and current indicators of future economic conditions, there appears to be a downward impact on the business of the company going forward amidst the continuity of the Covid-19 pandemic and the industry in which the Company operates continues to see a sluggish outlook in most part of the year 2020-21.
4. The impact of coronavirus on the Company’s business will depend on future developments that cannot be reliably predicted, including actions to contain or treat the disease and mitigate its impact on the economies of the affected countries, among others. A definitive assessment of the impact is not possible in view of the high uncertain economic environment and the scenario is still evolving. The Company has evaluated its liquidity position and recoverability and carrying values of its assets and changes in financial risks such as credit risk, liquidity risk and other price risk, and changes in objectives, policies and processes for managing those risks are expected. Evaluation of management’s assessment around going concern revolves around at a minimum involve, evaluation of reliability of cash flow forecast prepared by the management considering change in economic environment, management’s plan for future actions and assessing its feasibility in the circumstances.
5. In view of Company’s assessment check on the operations of the company, there appears to 198 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
be a loss in revenue of the company in the short term scenario say for the year 2020-21 due to disruption of supply of electricity mainly to commercial and industrial units.
6. Refer Note 49 of the Ind AS Financial Statements which states that balances in respect of Trade Receivables, Trade Payables, Loans and Advances as at 31.03.2020 are subject to reconciliation and confirmation. Also, Security Deposit from Consumers are subject to reconciliation with Subsidiary records.
Our opinion is not modified in respect of the above matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended 31st March, 2020. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Information other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Consolidated Financial Statements and our auditor's report thereon.
Our opinion on the Consolidated Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the other information report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance to initiate actions applicable in the applicable laws and regulations.
Responsibility of Management and those Charged with Governance for the Ind AS Consolidated Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Consolidated Financial Statements that give a 199 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 true and fair view of the consolidated financial position, financial performance including consolidated changes in equity, consolidated other comprehensive income and consolidated cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view andare free from material misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operation, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of the users taken onthe basis of these Consolidated Financial Statements.
As a Part of an audit in accordance with SAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also: l Identify and assess the risk of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentionalomission, misrepresentations, or the override of internal control. 200 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 l Obtain an understanding of internal control relevant to the audit in order to design audit procedure that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate Internal Financial Controls System in place and the operating effectiveness of such controls. l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. l Conclude on the appropriateness of management's use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainly exists, we are required to draw attention in our auditor's report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. l Evaluate the overall presentation, structure and content of the Consolidated Financial Statements including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit finding, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charge with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,related safeguards.
From the matters communicated with those charged with governance, we determine those matters thatwere most significance in the audit of the Consolidated Financial Statements for the year ended 31st March, 2020 and are therefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine the matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
201 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Report on Other Legal and Regulatory Requirements
1. The Company is governed by the provisions of the Electricity Act, 2003 read with rules and the regulations issued thereunder. Section 1(4) (d) of the Companies Act 2013 also provides that the Electricity Act will apply to the extent the provisions of the Companies Act are in consistent with the provisions of the Electricity Act, 2003. Accordingly, the Consolidated financial statements of the Company for the year 2019-20 are compiled & reported.
2. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act, 2013, the statement referred in the section is not applicable to the Consolidated Financial Statements for the year under review.
3. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act is not attached since the Company has no branches and the point is not applicable to the Company for the year under review.
d) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, Consolidated Statement of Changes in Equity and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the Consolidated Financial Statements.
e) In our opinion, the aforesaid Consolidated Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.
f) The matters described in the Basis for Qualified Opinion paragraph, Emphasis of Matter paragraph and report on adequacy of internal financial controls with reference to financial statement of the Group above, in our opinion, may not have an adverse effect on the functioning of the Group except in case of Gujarat State Electricity Corporation Limited, as per the Statutory Auditor of the Company who have audited financial statement, may have an adverse effect on the functioning of the Company. 202 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
g) The Company being a Government Company, in view of Notification No. G.S.R 463 (E) dated 5th June, 2015 issued by Government of India, the provision of Section 164(2) of the Companies Act, 2013 are not applicable to the Company.
h) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these Consolidated Financial Statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
i) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Consolidated Financial Statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associate and jointly controlled company. Refer respective Notes to the Consolidated Financial Statements relating to contingent liabilities have not been provided for.
ii) The Group, it's associate and jointly controlled entity did not have any material foreseeable losses on long-term contracts including derivative contracts.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Group, its associate and jointly controlled entity incorporated in India.
iv) As required by C & AG of India through directions/sub-directions issued under Section 143(5) of the Companies Act, 2013, we give our report in the attached “Annexure C".
DGSM & Co. Chartered Accountants Registration No.101606W
Sd/- CA. ABHINAV MALAVIYA Partner Place: Ahmedabad Membership No. 144245 Date: 10.11.2020 UDIN:20144245AAAAPH4357
203 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 Annexure - A to the Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the Internal Financial Controls with reference to financial statements of Gujarat Urja Vikas Nigam Limited (“the Company”) as of 31st March 2020 in conjunction with our audit of the Consolidated Ind AS Financial Statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. 204 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A Company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements includes those policies and procedures that
1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls with reference to financial statements were operating effectively as at 31st March 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
However, in case of Dakshin Gujarat Vij Company Limited,(“the Subsidiary Company”), in our opinion internal control in respect of movement of inventories during maintenance and capital works, material issued/received to/from third parties and material lying with sub-divisions, needs to be reviewed and
205 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 strengthened. Further, we recommend for implementation of real time integrated ERP software.
We have considered the matter reported above in determining the nature, timing and extent of audit tests applied in our audit of the financial statements of the Company and does not affect our opinion on the financial statements of the Company.
In case of Gujarat Energy Transmission Corporation Limited
Qualified Opinion
According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31st, 2020:
a. The Company does not have a system of tagging the Fixed Assets which in our opinion is major material weakness.
b. The Company does not have system to provide reconciliation between the individual capital assets created from the Grant received from Government and consumer contribution received towards capital assets as on March 31st, 2020. As a result, the impact of systematic allocation of grants against the depreciation of such assets cannot be ascertained as on March 31st, 2020.
c. The company does not have a system to conduct the physical verification of Capital Work in Progress (CWIP) to determine the actual stage of completion of the project as on March 31st, 2020. Thus, the impact of the same is not ascertainable as on March 31st, 2020.
d. The company does not have its Disaster Recovery Site set up anywhere except in case of SLDC, a unit of the Company, which has its DR Site at Gandhinagar. The Company is completely dependent on GUVNL its holding company in case of a system breakdown.
e. The Company does not have a documented “Restoration Plan” hence in case of a system crash the Company would be completely dependent on GUVNL for restoration of its operation.
f. Out of the systems existing in GETCO i.e. E-Urja & i-FAS, in case of i-FAS, the Company does not have a system wherein the User and Project Team perform User Acceptance Testing (UAT) in the testing environment and only upon obtaining satisfactory results for the UAT, the system is allowed to be migrated to production.
As a result any wrong codification on live date would not give the desired results and would impact the entire i-FAS system which in our opinion is a major control failure.
g. During the year the Company has not conducted any System audit by any external firm / agency which would certify that the information security management system existing in the Company is as per Information Security Management System Standards.
h. The Company does not have a formal documented Business Continuity Plan (BCP) & Disaster 206 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Recovery Plan (DRP) plan that addresses all core processes, technologies i.e. applications, Critical servers, backup sites existing within the Company.
i. The Company that does not have a Crisis Management Team (CMT) which is formed with personnel from management and each areas being part of the team. As on date the Company does not have any SOP and documented plan for declaring a disaster which can be distributed to the Crisis Management Team (CMT) and members of CMT members so that their tasks can be assigned in there is any kind of disaster.
j. Though a Fire Drill was conducted in July 2019, the Company does not have a practice of scheduling Fire Drills, which in our opinion, is an important activity and should be adhered to.
A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material aspects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31st, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31st, 2020 Standalone Financial Statements of the Company (GETCO), and these material weaknesses have affected our opinion on the Standalone Financial Statements of the Company and we have issued a qualified opinion on the Standalone Financial Statements. DGSM & Co. Chartered Accountants Registration No.101606W Sd/- CA. ABHINAV MALAVIYA Partner
Place: Ahmedabad Membership No. 144245 Date: 10.11.2020 UDIN:20144245AAAAPH4357
207 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 Annexure B to the Independent Auditor's Report
The Annexure referred to in our report to the members of Gujarat Urja Vikas Nigam Limited for the year ended March 31st, 2020:
Report on the Direction issued by the Comptroller & Auditor General of India under section 143(5) of Companies Act, 2013 for the FY 2019-20.
Impact on Sr. Directions / Sub Accounts No Directions Response / Remedial Measures and Financial Statements
1 Whether the Company In case of Holding Company, Yes, the Company has has system in place a well laid out advanced IT system in place to process toprocess all accounting all accounting transactions through the same. transactions through IT In case of Subsidiary Company, Gujarat State NIL system? If yes, the Electricity Corporation Limited, All the accounting implications of processing transactions are processed through IT system. of accounting transactions In case of Subsidiary Company, Gujarat Energy outside the IT system on Transmission Corporation Limited, The company is the integrity of the having IT system in place for processing all accounting accounts along with the transactions. Based on our verification, no accounting financial implication, if transaction is being recorded / processed other than through the IT system in place. any, may be stated. In case of Subsidiary Company, Dakshin Gujarat Vij Company Limited, According to information and explanation provided to us, the company has system in place to process accounting transactions through IT system. We have reviewed the design, implementation and operating effectiveness of company's basic IT Controls including application, access control on a test check basis that are critical to financial reporting. However, company has used different software/ modules for various business activities/financial transactions which needs to be interlinked and integrated for effective internal control. 208 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
- IFAS (i-Financial Accounting System) web base operating system along with Fixed Assets Register.
- IAS (Inventory Accounting System) in In-house developed web application and MAGNUM Software
- Customer Billing in the Utility Billing Application
- Pay Rolls and Payment to Vendors in E-Urja Module
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, The company is having IT system in place for processing all accounting transactions. Based on our verification, no accounting transaction is being recorded / processed other than through the IT system in place.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Yes, the Company processes all the accounting transactions through IT System.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, Yes, the Company has in place ERP Software package to process all accounting transactions.
2 Whether there is any In case of Holding Company, No. restructuring of an In case of Subsidiary Company, Gujarat State existing loans or cases of NIL Electricity Corporation Limited, No waiver/write off of debts / loans / interest etc. made In case of Subsidiary Company, Gujarat Energy by a lender to the Transmission Corporation Limited, According to the Company due to the information and explanations given to us, there is no Company's inability to restructuring of an existing loan and there are no cases repay the loan? If yes, the of waiver / write off of debt / loan / interest made by a financial impact may be lender to the company due to company's inability to stated repay the loan. 209 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of Subsidiary Company, Dakshin Gujarat Vij Company Limited, No
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, According to the information and explanations given to us, there is no restructuring of an existing loan and there are no cases of waiver / write off of debt / loan / interest made by a lender to the company due to company's inability to repay the loan.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, No, there is no any restructuring of existing loan or cases of waiver / write off of debts / loans / interest etc. due to the Company's inability to repay the loan.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, There are no cases of restructuring of loans or waiver of debts / loan / interest etc. during the year.
3 Whether funds received/ In case of Holding Company, Yes. receivable for specific In case of Subsidiary Company, Gujarat State NIL schemes from Central/ Electricity Corporation Limited, Yes. State Agencies were properly In case of Subsidiary Company, Gujarat Energy accounted for/utilized as Transmission Corporation Limited, According to the per its term and information and explanation given to us, the Company conditions? has received the funds from Central Government / State List the cases of Government through GUVNL towards Capital Grant deviation. and Equity Contribution for development of transmission infrastructure in specified schemes and the same has been properly accounted for / utilized as per the terms and conditions of sanction and no deviation is found.
In case of Subsidiary Company, Dakshin Gujarat
210 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
explanations given to us, Grants received during the year for specific schemes from Central / State Agencies were properly accounted for / utilised as per the terms and conditions. However, following table shows the factual representation of grants which are pending to be utilized as at 31.03.2020:
Particulars in Lakhs
Solar Home light Grant 584.47
Solar AG pump set 2857.25
Surya Gujarat grant 1523.00
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, To the best of our knowledge and according to the information and explanations given to us, Government of Gujarat (GoG) disburses Capital Grant and subsidies in the form of different scheme for the distribution network infrastructural development in the rural and urban areas.
Every year Government gives targets for implementation of various schemes. On the basis of data derived from MIS reports obtained from technical department of MGVCL, amount for physical targets achieved under various schemes are finalized. Accordingly, scheme wise Certificates for Grant Utilization are prepared and submitted to the Holding Company GUVNL for necessary submission with GoG.
During the year company has properly accounted for and utilized the funds received in the form of Grant / Subsidies as per its terms and condition and no deviation is found in our observation so far.
211 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Yes, the funds received for specific schemes from Central / State agencies have been properly accounted for and utilized as per its terms and conditions.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, During the year, the Company has properly accounted for and utilized funds received by it under various applicable schemes from Central / State agencies.
4 Adequacy of steps to In case of Holding Company, Not applicable prevent encroachment of idle land owned by Company may be examined. In case land of the Company is encroached, under litigation, not put to use declared or surplus, details may be provided
5 Whether land acquisition In case of Holding Company, Not applicable involved in setting up new projects, report whether settlement of dues done expeditiously and in a transparent manner in all cases. The case of deviation may please be detailed.
6 Whether the Company In case of Holding Company, Yes. has an effective system for recovery of revenue as 212 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
per contractual terms and the revenue is properly accounted for in the books of accounts in compliance with the applicable Accounting Standards.
7 How much cost has been In case of Holding Company, Not applicable. incurred on abandoned projects and out of this how much cost has been written off?
B. Sector Specific Consideration
1 Has the company entered In case of Subsidiary Company, Dakshin Gujarat Vij into agreements with Company Limited, No, During the financial year 2019- franchise for distribution of 20, company has not entered into any revenue sharing electricity in selected agreement with franchise for distribution of electricity. areas and revenue In case of Subsidiary Company, Madhya Gujarat Vij sharing agreements Company Limited, The company has neither entered adequately protect the into any agreements with franchise for distribution of financial interest of the electricity nor for revenue sharing. company? In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, In past, efforts were made to engage franchisee for distribution of electricity for high loss areas by giving advertisement. However, no agency came forward and hence no such agreement has been made.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, The Company has not entered into any agreement with franchisees for distribution of electricity.
213 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
2 Report on the efficacy of In case of Subsidiary Company, Dakshin Gujarat Vij the system of billing and Company Limited, During the course of Audit on collection of revenue in sample basis, we have noticed that bills were issued to the company. the consumers in time and collections have been generally received in timely manner.
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, The Company comprises two categories of consumers i.e. HT and LT consumers:
The HT category consumers are billed and maintained at divisional level. The meter readings are collected by the Deputy / Junior Engineers physically visiting the premises. Moreover, the high valued consumers connections are equipped with AMR based meters, which are monitored regularly from division offices by engineers and also readings are fetched from those meters for the monthly billing purpose. Meter reading activity, bill preparation and serving of bill is carried out regularly from 15th to 18th of the month for normal consumers. In case of open access consumers, billing is done on the 1st of the every month by division offices.
The billing activity of LT category consumers are mainly bifurcated in two parts, i.e. monthly billing (low tension high valued customers) and bi-monthly billing (LT residential and other low valued category consumers). The billing activity is carried out by trained meter readers. The billing activity of LT consumers are carried out between 20th and 10th of the next month. The bills are served to the consumers on the spot only, by the meter readers. Such spot billing method results into saving in time, money and energy and also entails early realization of revenue by 5-7 days. Also, the company has initiated the GPRS mobile based spot billing, in which the energy bills are calculated automatically 214 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
through computerized program and calculated bill data are transferred through GPRS based servers to mobile PDA of meter readers and a print out of calculated bill is generated and served to the consumer on the spot, which ensures the correctness of energy bill calculations. As explained by the management, the company has initiated the process of endowing the mobile PDA GPRS based devices of all the Sub- Divisions. Moreover, to ensure the correctness of meter readings, every month the meter readers are interchanged within one Sub-Division, i.e. if a meter reader has carried out the meter reading activity in a particular area this month, then in next month other meter reader will be performing the billing activity of that particular area. This ensures automatic cross verification of opening and closing meter readings.
To improve the efficacy of collection of revenue, the company has made arrangements in system so that any consumer of any sub division can pay his energy bill at any sub division / division / circle / corporate office. Moreover, company has provided collection rights to post offices, private cash collection agencies, e-gram panchayats and also has provided facility of any time payment (ATP Kiosks and various ATMs of Banks). Also company has provided online payment options on its website as well as on various banks and payment wallets websites, where consumers can pay their bills online from any place through Credit Card / Debit Card / Net banking facilities. The Company also conducts disconnection drives, arranges for the LOK-ADALATs for pending disputed arrears regularly to improve collection efficacy.
215 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, On random verification we have noticed that bills were issued to the consumers and a collection has been achieved in timely manner.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, The consumer base comprises of two categories i.e. HT and LT Consumers:
In HT Billing, billing (meter reading, bill preparation and serving the bill) is done from 15th to 18th of the month for normal consumers. In case of Open access consumers, billing is done on 1st of the next month by Division offices.
Due to huge numbers of consumers in LT category, LT Billing is bifurcated in two way i.e. monthly billing cycle and bi-monthly billing cycle. Meter reading in Monthly billing cycle is carried out from every 15th to 20th of the month & in bi-monthly billing cycle, meter reading is carried out from every 21st of month to 10th of succeeding month. After collection of meter reading data, bill printing process is carried out and bills are served to the consumers by sub-division offices.
To improve Collection, the Company has made arrangements with post offices, private cash collection agencies, e-gram panchayat’s and also provided facility of net banking to facilitate payment of bills to the consumers. The Company also conduct disconnection drive, arrange LOK ADALAT for pending disputed arrears to improve collection efficiency.
3 Whether tamper proof In case of Subsidiary Company, Dakshin Gujarat Vij meters have been Company Limited, As per the information and installed for all explanation provided to us, company has installed consumers? If not temper proof energy meters for all the Consumers 216 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 then, examine how except for agriculture unmetered consumers. accuracy of billing is The company has considered all installed meters as ensured. tamper proof energy meters since all meter-boxes are duly sealed.
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, Company has installed 31,58,331 numbers of tamper proof static meters out of total 32,69,003 numbers of consumers as on 31-03-2020 (96.61%).The details of installations of tamperproof static meters for various categories of consumers is as below:
Category No No. of No. of % of of of Electro- Electronic Static consumer Consumers Mechanical Meters Meters Meters (Static) Installa- tion
Residential 26,93,137 84,854 26,08,283 96.85%
GLP 24,881 - 24,881 100.00% LT Industrial and Commercial 3,37,387 - 3,37,387 100.00%
HT Industrial 2,292 - 2,292 100.00%
Public Lighting 8,577 - 8,577 100.00% Agriculture 1,78,873 - 1,53,055 85.57% Public Water Works 23,856 - 23,856 100.00%
Total 32,69,003 84,854 31,58,331 96.61%
From the above table, it is clear that tamperproof static meters have been installed for all consumers (100%) in case of consumer's category GLP, HT Industrial, Public Lighting and Public Water Works consumers. In
217 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
case of Residential consumers, the process of replacing the existing electro mechanical meters with tamperproof meters is continued and 26,08,283 Nos. of tamperproof static meters have been installed out of total 26,93,137 Nos. of Residential consumers.
Further, in case of Agricultural consumers, 25,818 Nos. are of the category of AG unmetered consumers, for which GERC has ordered separate Flat rate HP based tariff.
In order to ensure accuracy of billing, company has taken the following measures:-
1. It is ensured that all the meters (either Static or Electro-Mechanical) are properly housed and covered by Metal Meter Boxes or by SMC Boxes. Also, this boxes are sealed with a specialized plastic seals to avoid direct access to the basic meters.
2. The company’s meter readers, who used to take regular visits of consumers installations during their regular spot billing programs, are instructed to examine and observe the physical status of meters especially for reporting as to broken seals, tampered meter boxes, faulty meters, burnt meters, zero consumption meters, over consumption meters, locked premises etc. on regular basis for reporting to their concerned sub divisional heads. On the basis of meter readers report, the corrective actions are immediately initiated by the Deputy Engineer of concerned sub division to ensure accuracy of metering.
3. The Company also arranges surprise theft checking drives periodically and the meter
218 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
installations are being checked for tampering. Sub-divisional theft drives are done twice in a week, to ensure the minimum theft of electricity. Mostly the areas comprising of high loss feeders are targeted.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Yes, the company has installed meters for all consumers except “unmetered agricultural consumers”. The meters are installed after accuracy test of energy meter in meter testing laboratory, meter body seals are provided and these energy meters are installed in tamper proof meter box and such meter box is duly sealed by the Company.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, The Company is having total 36,89,883 nos. of Consumers as on 31-03-2020. Out of the same 35,37,854 nos. of Consumers are metered and 1,52,029 nos. of Consumers are un-metered. For all the metered consumers as stated above the Company has installed the static meters and electro mechanical meters. For remaining 1,52,029 nos. of consumers tariff is charged on the basis of contract load which is approved by GERC.
4 Whether the Company In case of Subsidiary Company, Dakshin Gujarat Vij recovers and accounts, Company Limited, Yes. the State Electricity In case of Subsidiary Company, Madhya Gujarat Vij Regulatory Commission Company Limited, Yes, based on approval of FPPCA (SERC) approved Fuel formula by GERC on quarterly basis, the additional and Power Purchase FPPCA charges are levied or rebate is given in Adjustment Cost subsequent billing cycles to all the consumers. (FPPCA)?
219 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
The FPPCA additional charges are being assessed through computerized system and are duly debited / refunded in consumers account. The FPPCA being a tariff item, the additional charges calculated is also accounted automatically along with other tariff items in the books of accounts. Moreover, the additional FPPCA charges are being proportionately calculated from its date of effectiveness.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Yes, the company has recovered and accounted Fuel and Power Purchase Adjustment cost during the financial year 2019-20.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, Based on approval for FPPAC by GERC on quarterly basis, the company recovers and accounts the same in subsequent billing cycles to all consumers.
5 Whether the reconciliation In case of Subsidiary Company, Dakshin Gujarat Vij of receivables and Company Limited, Yes. The receivables and payable payables between the between DGVCL & fellow subsidiary companies and generation, distribution Holding company is reconciled and duly confirmed as and transmission on 31.03.2020. companies has been completed. The reasons In case of Subsidiary Company, Madhya Gujarat Vij for difference may be Company Limited, The receivables and payables examined. between the generation, transmission and distribution companies has been reconciled and confirmed by each of the associate companies.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Yes, The receivables and payable between PGVCL & fellow subsidies / holding companies are reconciled and duly confirmed as on 31.03.2020. 220 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, The receivables and payables between the generation, transmission and distribution companies has been reconciled and confirmed by each of the associate company. The confirmations are also sought for amount payable for purchase of power from wind farm and solar energy suppliers.
6 Whether the Company is In case of Subsidiary Company, Dakshin Gujarat Vij supplying power to Company Limited, Not Applicable franchisees, if so, whether In case of Subsidiary Company, Madhya Gujarat Vij the Company is not Company Limited, The company has no franchisees supplying power to for distribution of power. franchisees at below its average cost of purchase. In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, Not Applicable.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, The Company has no franchisees for distribution of power.
7 How much tariff roll back In case of Subsidiary Company, Dakshin Gujarat Vij subsidies have been Company Limited, During the year, following subsidies allowed and booked in the have been recognised in the books of accounts based accounts during the year? on the allocation given by the Holding Company Whether the same is GUVNL: being reimbursed 1. AG-Tariff compensation - 4244.35 Lakhs regularly by the State 2. AG- Subsidy of FPPPA - 16662.94 Lakhs Government shortfall if 3. Water Works Subsidy - 7836.93 Lakhs any may be commented? The claim of the subsidy has been made by GUVNL, Holding Company on behalf of all the distribution companies. The claim of subject subsidy is reported and presented in the books of GUVNL itself and hence we are not able to comment on the short fall of the subsidy, if any. 221 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of Subsidiary Company, Madhya Gujarat Vij Company Limited, During the year, the following tariff subsidies have been recognized in the books of accounts as per budgetary allocation made by GoG as per details as under: Amount Sr. No Particulars ( in Lakhs) 1 GERC Tariff compensation 4,916.58
2 FPPPA Subsidy 23,420.11 3 Water Works Subsidy 9,041.06
4 H. P. Based Subsidy 6,257.72 Total 43635.47
The GUVNL, on behalf of MGVCL deals with the GoG in respect of subsidy claims. The claim of subject subsidies are reported and presented in the books of GUVNL itself and hence we are not able to comment on the short fall of subsidy, if any.
In case of Subsidiary Company, Paschim Gujarat Vij Company Limited, During the year, following subsidies have been recognised in the books of accounts based on the allocation given by the Holding Company GUVNL:
Amount Subsidy Received Sr. No ( in Lakhs) 1 Agriculture (HP based) 39541.62 2 Tariff Compensation 46146.18
3 FPPPA Subsidy 149520.13
4 Energy Conservation 32.20
5 Water Works 23783.85 6 Research & Development 19.90
222 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
The claim of the subsidy has been made by GUVNL, Holding company on behalf of all the distribution companies. The claim of subject subsidy is reported and presented in the books of GUVNL itself and hence we are not able to comment on the short fall of the subsidy, if any.
In case of Subsidiary Company, Uttar Gujarat Vij Company Limited, During the year, Company has been allocated following subsidies for Agriculture and Waterworks (Gram Panchayats) consumers through Holding Company GUVNL:
Amount Particulars ( in Lakhs) Agriculture - Tariff Compensation 62,924.76
Agriculture subsidy for FPPPA 1,90,635.97
HP based Subsidy 50,583.49
Waterworks (Gram Panchayats) 28,259.59
Total 3,32,403.81
The claim of the subsidy has been made by the GUVNL, Holding Company on behalf of all the distribution companies. The claim of subject subsidy is reported and presented in the books of GUVNL itself and hence, we are not able to comment on the shortfall of the subsidy, if any.
8 Is the system of In case of Subsidiary Company, Gujarat Energy evacuation of power Transmission Corporation Limited, GETCO commensurate with transmission network is available for evacuation of power available for power from each generating stations under normal transmission with the operating conditions. In peculiar grid operating generating Company? If conditions like high renewable energy injection during not, loss, if any, claimed off peak load conditions, few wind farms have been asked to back down their generation in few rare cases. 223 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
by the generating Such back down instruction are being given by SLDC company may be looking in to real time loading of associated network commented. elements and grid security. There are no provisions for compensating such kind of losses due to back down of generation asked by SLDC to maintain grid stability and security.
9 How much transmission In case of Subsidiary Company, Gujarat Energy loss in excess of Transmission Corporation Limited, As per prescribed norms has information and explanation provided to us, been incurred during the transmission loss during the year 2019-2020 was year and whether the 3.68%, which is lower than the target submitted by the same been properly Company. As per information and explanation given to accounted for in the books us, such transmission losses are already considered / of accounts? accounted while finalizing the revenue from transmission charges for financial year 2019-2020.
10 Whether the assets In case of Subsidiary Company, Gujarat Energy constructed and Transmission Corporation Limited, Proper completed on behalf of accounting is done in the cases where the assets other agencies and constructed and completed don behalf of other agencies handed over to them has and handed over to them. been properly accounted for in the financial statements?
11 In cases of Thermal In case of Subsidiary Company, Gujarat State Impact Power Projects, Electricity Corporation Limited, The company has taken into compliance of the various generally complied with the various Pollution Control account in Pollution Control Acts and Acts and there is no financial impact thereof during the the financial the impact thereof year. statements including utilization and As per the information and explanation given to us, disposal of ash and the during the year 100% fly ash utilization is achieved in policy of the company in all thermal power stations (TPS) except in Ukai and this regard, may be Bhavnagar Lignite TPS. As per the MoEF notification,
224 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
11 checked and commented the company has transferred 1,314.82 lakhs related upon. to fly ash sale income of Ukai and Bhavnagar Lignite TPS to Fly Ash Utilization Reserve Fund.
12 Has the company entered In case of Subsidiary Company, Gujarat State Nil into revenue sharing Electricity Corporation Limited, No agreements with private parties for extraction of coal at pitheads and it adequately protects the financial interest of the company?
13 Does the company have In case of Subsidiary Company, Gujarat State Nil a proper system of Electricity Corporation Limited, Yes reconciliation of quantity / quality of coal ordered and received and whether grade of coal / moisture and demurrage etc., are properly recorded in the books of accounts?
14 How much share of free In case of Subsidiary Company, Gujarat State Nil power was due to the Electricity Corporation Limited, During the year under State Government and audit, no share of free power was due to the State whether the same was Government. calculated as per the agreed terms and depicted in the accounts as per accepted accounting norms?
225 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
15 In the case of In case of Subsidiary Company, Gujarat State Nil Hydroelectric Projects, Electricity Corporation Limited, As per information the water discharge is as and explanation given to us, there is no discharge of per policy / guidelines water by the company in case of Hydroelectric Projects. issued by the State Government to maintain biodiversity. For not maintaining it penalty paid / payable may be reported.
DGSM & Co. Chartered Accountants Registration No.101606W
Sd/- CA. ABHINAV MALAVIYA Partner Place: Ahmedabad Membership No. 144245 Date: 10.11.2020 UDIN:20144245AAAAPH4357
226 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 Annexure – I Details of clear title / lease deed for freehold and leasehold property. 1. Balance Transferred from erstwhile Gujarat Electricity Board (GEB) on 01st April, 2005 Government of Gujarat, vide notification NO. GHU-2006-91-GUV-1106-590-K dated 3rd October 2006 notified the final opening Balance Sheet of the 7 Companies as on 1st April 2005, whereby certain assets and liabilities of the erstwhile Gujarat Electricity Board (GEB) has been transferred to the Company, DGVCL. As informed to us, the company has received value of Land & Land Rights of 31.11 Lakhs and Building of 421.81 Lakhs as on 1st April 2005 vide the said notification. As informed to us, the procedure for the registration and/or transfer in the name of the company is still in progress and hence, we are unable to comment on the title deed of the subject properties. 2. Land and Land Rights Purchased/Acquired on or after 01st April, 2005 The management of the company has provided following documents in respect of Land & Land Rights Purchased/Acquired by the company after 01st April, 2005 –
Name of Divisions in which Amount Remarks Land & Land Rights Reflected ( In Lakhs)
Bardoli (O & M) 13.55 Land Allotment Order by Collector for Construction of office Building
Ankleshwar Industrial 35.59 Land Allotment Letter from GIDC Vapi (O & M) 15.58 Land Allotment Order by Collector for Construction of office Building
Surat City Circle 850.00 Land Allotment letter from Collector
Surat Urban 39.09 Land Allotment Order by Collector for Construction of office Building
Rander 325.55 Land Possession Receipts from Surat Municipal Corporation
Rander 226.35 Land Allotment Letter from Surat Municipal Corporation
Piplod 411.56 Land Allotment letter from Collector
Vapi Industrial Division 26.41 Lease deed from GIDC Kadodara (O & M) 301.36 Land Allotment Order by Collector for Construction of office Building 227 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
However, as informed to us, the company does not have any registered sale deed/transfer deed/ conveyance deed in respect of aforesaid Land and Land Rights and hence, we are unable to comment on the title deed of the subject properties.
3. Buildings Constructed / Acquired on or after 01st April, 2005
As per the information and explanation provided by the management, all the existing buildings of the company are constructed (not purchased) on the land either acquired/purchased by the company itself or allotted by erstwhile GEB (now GUVNL) and its group companies.
Annexure-II
List of Title Deeds not held in the name of PGVCL.
Sr. No Cirlce Name of Premises Survey No. Lease Hold Gross Block or Amount Free Hold ( in Lakhs)
1 S'nagar Div Store 3347/1 Free Hold 160.68 2 Rajkot City Mahila College Sub Division 1263 Free Hold 59.03
3 Botad Circle Office 861 Free Hold 150.50
228 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Sub Annexure-II to Annexure “C” to Auditor's Report Details of land of which the account balances Sr. No Name of Offices have been transferred as per GoG Notification No. GHU-2006-91-GUV-1106-590-K dated 03.10.2006 to Company (UGVCL) and are held in the name of the erstwhile GEB. ( in lakhs)
1. Sabarmati O&M Division 8.01 2. Bavala O&M Division 4.89 3. Gandhinagar O&M Division 2.11
4. Kalol O&M Division 0.49
5. Modasa O&M Division 0.54 6. Idar O&M Division 2.01 7. Talod O&M Division 0.36 8. Himmatnagar O&M Division 0.27
9. Mehsana O&M Circle 0.24 10. Kadi O&M Division 0.51 11. Mehsana O&M Division 0.32 12. Patan O&M Division 0.93
13. Vijapur O&M Division 1.47 14. Visnagar O&M Division 0.53 15. Deesa O&M Division 0.81 16. Radhanpur O&M Division 0.39 17. Palanpur-II Division 0.84
Sub Annexure-III to Annexure “C” to Auditor's Report (GETCO) Gross Block Particulars Number as on 01.04.2019 ( in Lakhs) Leasehold In the name of GETCO 13 10,112.34 Land In the name of Others 5 5,096.17
Freehold In the name of GETCO 50 20,641.18 Land In the name of Others 63 19,801.07
229 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
st Consolidated Balance Sheet as at 31 March, 2020 ( in Lakhs)
Note As at As at Particulars No. 31st March, 2020 31st March, 2019
ASSETS
(1) Non-Current Assets (a) Property, Plant and Equipment 2 62,79,293.24 56,44,230.15 (b) Intangible Assets 2 1,095.09 1,441.03 (c) Capital Work-In-Progress 3 6,55,187.59 9,45,601.36 (d) Intangible Assets Under Development 4 75.28 75.28 (e) Financial Assets (i) Investments 5 1,23,407.03 1,22,584.51 (ii) Loans 6 11,013.71 11,323.05 (iii) Other Financial Assets 7 44,017.32 30,336.21 (f) Other non-current assets 8 21,996.87 16,020.67 Total Non-Current Assets 71,36,086.13 67,71,612.26 (2) Current Assets (a) Inventories 9 4,13,428.47 3,86,277.97 (b) Financial Assets (i) Trade Receivables 10 3,98,989.63 3,35,883.53 (ii) Cash and cash equivalents 11 19,653.65 35,761.20 (iii) Other Bank Balances 12 4,126.21 3,028.07 (iv) Loans 13 3,754.94 5,356.53 (v) Other Financial Assets 14 3,12,788.10 4,31,882.57 (c) Current Tax Assets (net) 15 44,977.92 46,796.26 (d) Other Current Assets 16 1,34,352.99 75,430.93 (e) Assets classified as held for sale 17 13,824.85 6,398.12 Total Current Assets 13,45,896.77 13,26,815.18 Total 84,81,982.90 80,98,427.44 EQUITY AND LIABILITIES Equity (a) Equity Share Capital 18 22,34,781.20 19,77,222.21 (b) Other Equity 19 8,83,148.27 6,75,566.03 Non-controlling Interests 0.00 10,376.19 Total Equity 31,17,929.48 26,63,164.43 Deferred Government grants, subsidies & consumer contributions 20 9,05,101.60 8,53,064.03 230 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Liabilities (1) Non-Current Liabilities (a) Financial Liabilities (i) Borrowings 21 9,18,633.52 14,08,647.34 (ii) Trade Payables 22 - Dues to Micro and Small Enterprises - - - Dues to other than Micro and Small Enterprises 85.29 85.29 (iii) Other Financial Liabilities 23 6,96,416.26 6,23,382.61 (b) Provisions 24 1,50,974.31 1,42,989.49 (c) Deferred Tax Liabilities (Net) 25 1,95,802.86 1,70,680.98 (d) Other Non Current Liabilities 26 2,99,543.17 2,42,213.63 Total Non-Current Liabilities 22,61,455.42 25,87,999.34 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 27 24,019.48 35,563.42 (ii) Trade payables 28 - Dues to Micro and Small Enterprises 1,014.09 1,322.95 - Dues to other than Micro and Small Enterprises 10,53,177.64 7,04,147.27 (iii) Other Financial liabilities 29 9,86,541.08 10,71,633.29 (b) Other current liabilities 30 1,18,013.81 1,54,217.77 (c) Provisions 31 14,730.29 27,314.81 (d) Current Tax Liabilities (net) 32 - 0.12 Total Current Liabilities 21,97,496.40 19,94,199.64
Total 84,81,982.90 80,98,427.44 Significant Accounting Policies and Notes to 1-71 Financial Statements
As per our Report of even date attached For and on behalf of the Board For DGSM & Co. Chartered Accountants Firm Registration No. 101606W Sd/- Sd/- (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Chairperson Managing Director DIN: 03435543 DIN:03584560 Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 10, 2020 Date : November 10, 2020 231 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Consolidated Statement of Profit and Loss for the year ended 31st March, 2020
( in Lakhs)
Note For the year ended For the year ended Particulars st st No. 31 March, 2020 31 March, 2019 I Revenue from operations 33 52,63,462.87 49,71,935.08 II Other Income 34 1,30,927.11 1,30,404.54 III Total Income (I+II) 53,94,389.98 51,02,339.62 IV EXPENSES Cost of Fuel consumed 35 6,73,866.15 8,92,736.67 Purchase of Power 36 33,59,336.31 30,78,749.64 Employee Benefits Expense 37 3,70,429.42 3,38,372.31 Finance Costs 38 1,48,389.18 1,65,960.39 Depreciation, Amortization and impairment Expense 2 4,08,429.70 3,65,183.95 Other Expenses 39 2,15,129.32 1,75,644.56 Total Expenses (IV) 51,75,580.09 50,16,647.51 V Profit Before Exceptional items and Tax (III-IV) 2,18,809.89 85,692.11 VI Exceptional Items 40 (3,073.28) (4,364.89) VII Profit before share of net profits of associate and joint venture accounted for using equitymethod and tax (V-VI) 2,21,883.17 90,057.00 VIII Share of Profit of Joint Venture - - IX Share of Profit of Associate 6,654.98 6,836.11 X Profit before tax (VII+VIII+IX) 2,28,538.15 96,893.11 XI Tax Expense: 41 (a) Current Tax 39,875.19 13,251.91 (b) Deferred Tax 32,748.58 (16,005.43) XII Profit for the Year (X-XI) 1,55,915.09 99,646.62 XIII Other Comprehensive Income (OCI) (a) Items that will not be reclassified to Profit and Loss (i) Re-measurement of the Defined Benefit Plans (33,750.68) (25,198.39) (ii) Equity Instruments through OCI (4,457.48) 2,672.36 Less: - tax impact 7,808.77 6,387.34
232 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(iii) Share of other comprehensive income of associates accounted for using the equity method (476.95) (421.08) (b) Items that will be reclassified to profit or loss (i) Financial assets measured through OCI 521.04 35.83 - tax impact (182.07) (12.52) Total of Other Comprehensive Income (OCI) (XIII) (30,537.36) (16,536.46) XIV Total Comprehensive Income for the Year (XII+XIII) 1,25,377.73 83,110.16 Profit for the Year attributable to: - Owners of Equity 1,55,915.09 99,034.02 - Non Controlling Interests 0.00 612.60 1,55,915.09 99,646.62 Other Comprehensive Income attributable to: - Owners of Equity (30,537.36) (16,466.22) - Non Controlling Interests (0.00) (70.25) (30,537.36) (16,536.46) Total Comprehensive Income for the Year attributable to: - Owners of Equity 1,25,377.73 82,567.81 - Non Controlling Interests 0.00 542.35 1,25,377.73 83,110.16 XV Earnings Per Equity Share : 42 Basic (in ) 0.74 0.56 Diluted (in ) 0.73 0.56 See accompanying Notes to the Financial Statements 1-71
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Sd/- Sd/- Chartered Accountants (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W Chairperson Managing Director DIN: 03435543 DIN:03584560 Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 10, 2020 Date : November 10, 2020 233 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Consolidated Cash Flow Statement for the year ended 31st March, 2020 ( in Lakhs)
For the year ended For the year ended Particulars 31st March, 2020 31st March, 2019
[A] CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax 2,28,538.15 96,893.11 Adjustments to reconcile profit before tax to net cash flows: Non-Cash Items 4,09,349.21 3,65,368.91 Non Operating Items 61,917.74 84,191.00 Remeasurement of Defined Benefit Plan (33,750.68) (25,198.39) Operating Profit/(Loss) before changes in Working Capital 6,66,054.42 5,21,254.62 Working capital adjustments: (Increase)/ Decrease in Non Current / Current Assets: Inventories (27,150.50) (1,05,900.91) Trade receivables (63,225.76) (21,093.52) Other financials assets 1,07,546.92 12,359.03 Other non financial assets (63,320.56) (3,445.81) Increase / (Decrease) in Non Current / Current Liabilities: Trade Payables 3,48,721.51 67,002.60 Other Financial Liabilities 87,427.64 (58,766.27) Other Non Financial Liabilities & Provisions 16,525.89 2,13,154.13 10,72,579.57 6,24,563.88 Cash Flow from operations after changes in Working Capital Income tax (paid)/ Refund (38,057.43) (33,159.83) Net cash flows from operating activities (A) 10,34,522.13 5,91,404.05
[B] CASH FLOW FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (including CWIP) (7,78,661.44) (8,19,301.96) Sale/Adj. of fixed assets 18,362.62 1,329.82 Dividend from Associate 1,177.12 1,095.94 Dividend Income 339.67 297.01 Interest received (finance income) 3,147.00 5,139.44 Asset not in use (4,353.46) 9,280.16 Bank Balances not considered as Cash and Cash Equivalents (1,159.17) 10,423.10 Net cash flows used in investing activities (B) (7,61,147.65) (7,91,736.49)
234 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
[C] CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Shares/Share Application Money 3,28,592.67 2,76,709.20 Changes on account of Business combination (refer note 65) - 2,400.00 Deferred Govt. Grants, Subsidy & Contributions 1,37,926.84 1,65,816.27 Principal payment of Lease liabilities (29.69) - Proceeds / (Repayment) from borrowing (net) (5,87,620.29) (1,89,874.33) Interest & financial charges (1,68,351.57) (1,94,319.57) Net cash flows from/(used in) financing activities (C ) (2,89,482.04) 60,731.58 Net increase/ (decrease) in cash and cash equivalents (A+B+C) (16,107.56) (1,39,600.86) Cash and cash equivalents at the beginning of the year 35,903.27 1,75,504.12 Cash and cash equivalents at year end 19,795.72 35,903.27 Notes: 1 Cash & Bank Balances consists of the following: Cash & Cash Equivalents a. Balances with Banks 16,441.69 22,725.63 b. Cash on hand 79.89 1,164.08 c. Cheques on hand 1,155.21 5,798.64 d. Remittance in Transit 2,050.39 4,652.97 e. Deposits with banks 68.54 1,561.95
Closing Cash & Cash Equivalents 19,795.72 35,903.27 2 The Cash Flow Statement has been prepared under the ‘Indirect Method’ set out in Indian Account ing Standards (Ind AS) - 7 “Statement of Cash Flows” 3 Figures of the previous year have been regrouped / reclassified wherever necessary.
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Sd/- Sd/- Chartered Accountants (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Firm Registration No. 101606W Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- (CA. ABHINAV MALAVIYA) Sd/- Sd/- Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 144245 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 10, 2020 Date : November 10, 2020
235 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Consolidated Statement of Changes in Equity (SOCIE) for the year ended on 31st March, 2020
Equity Share Capital ( in Lakhs) Non Controlling Equity attributable Particulars Total Interests to Owners
Balance as on 1st April, 2018 16,22,754.99 1,250.00 16,21,504.99 Changes during the year 3,54,467.22 - 3,54,467.22 Balance as on 31st March, 2019 19,77,222.21 1,250.00 19,75,972.21 Changes during the year 2,57,558.99 (1,250.00) 2,58,808.99 Balance as on 31st March, 2020 22,34,781.20 - 22,34,781.20
236 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 - 6.10 277.77
(225.27) (241.96) 2,858.05 2,400.00 1,314.82
parent 99,034.47 39,760.97 39,760.97 (5,376.18) 87,607.53
(16,465.81) (30,537.36) 1,17,518.99 1,55,915.09 1,15,794.65
Total equity Total 6,65,717.26 6,75,566.77 1,26,450.60 8,83,148.27 owners of theof owners attributable to attributable ( ( in Lakhs) ------0.00 0.00 0.00 (0.00) Non 125.01 612.60 667.36 Sd/- (70.25) Sd/- 8,458.83 9,126.19 9,126.18 Interests Controlling - - DIN:03584560 (PARTHIV BHATT) 6.10 Managing Managing Director Company Secretary Company 277.77 (225.27) (241.96) 2,983.05 2,400.00 1,314.82 3,750.00 Total
99,647.08 39,760.97 39,760.97 (SHAHMEENA HUSAIN,IAS) 88,274.89 (16,536.06) (30,537.36) 6,74,176.09 1,17,518.99 6,84,692.96 1,55,915.09 1,26,450.60 1,15,794.65 8,83,148.28
------Income
773.71 OCI of OCI equity method Share of Share (421.08) (421.08) (476.95) (476.95) for for using 1,671.74 1,250.66 associate accounted ------23.31 23.31 287.31 310.62 338.97 338.97 649.59 other asset ensive Place : Gandhinagar Income through Financial fair fair value compreh- measured measured at Date Date : November 10, 2020 ------Sd/- Sd/- Other Equity ensive Income 2,400.59 2,400.59 through Chairperson 31,813.77 34,214.35 29,756.87 Compreh- (4,457.48) (4,457.48) DIN: 03435543 Item of Other Comprehensive Other of Item Instruments For For and on behalf of the Board (SHUBHADEEP SEN) ------(SUNAINA (SUNAINA TOMAR, IAS) 6.10 General Manager (F&A) & CFO (225.27) (241.96) 99,647.08 80,889.03 Retained Earnings (18,538.87) (25,941.90) 3,98,064.46 4,78,953.25 1,55,915.09 1,29,731.23 6,08,684.03 ------Premium 3,750.00 3,750.00 3,750.00 Securities ------on 2,400.00 2,400.00 nation Capital Combi- Reserve Business account of account 1,03,000.39 1,05,400.39 1,05,400.39 ------Capital 2,378.30 2,378.30 2,378.30 Reserve Reserves and Surplus ------fund 277.77 Fly ash Fly reserve 3,642.91 2,983.05 2,983.05 6,625.96 1,314.82 1,314.82 7,663.02 utilisation ------Fund Reserve 12,048.23 12,048.23 12,048.23 Contingency ------Share Money pending 39,760.97 39,760.97 39,760.97 allotment 1,17,518.99 Application 1,17,518.99 1,15,794.65 1,15,794.65 March, 2019 March, 2020 April, 2018 April, st st st Particulars Balanceat1 as during year the Addition Year for the Profit Share of CDT on dividend received Share in other reserve of associate Income Comprehensive Other Tax) of (net Year forthe account on of Changes Add: Business combination ComprehensiveIncome Total theyear for money application Add: Share pending allotment Issues Shares Less: Year the Less:During Reduction Balance as at 31 during year the Addition Year for the Profit Share of CDT on dividend received Share in other reserve of associate Income Comprehensive Other Tax) of (net Year forthe ComprehensiveIncome Total the Year for Add: Money Share Application pending allotment of to due acquisition Change Interest Non-Controlling Issues Shares Less: Year the Less:During Reduction Balance as at 31 As per our Report of even date attached ForDGSM &Co. Chartered Accountants Firm Registration No. 101606W Sd/- (CA. ABHINAV MALAVIYA) Partner Membership No. 144245 Place : Gandhinagar Date : November 10, 2020 Other Equity Other 237 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st March, 2020 1. Corporate Information and Significant Accounting Policies:
A. 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:
(a) Gujarat State Electricity Corporation Limited engaged in generation of power;
(b) Gujarat Energy Transmission Corporation Limited engaged in transmission of power;
(c) Uttar Gujarat Vij Company Limited engaged in distribution of power;
(d) Dakshin Gujarat Vij Company Limited engaged in distribution of power;
(e) Paschim Gujarat Vij Company Limited engaged in distribution of power; and
(f) 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 along with 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.
B. Recent Accounting Pronouncements:
On 24th July 2020, the Ministry of Corporate Affairs (MCA) has issued amendments to certain Ind AS. The amendments are effective from annual reporting periods beginning on or after 1st April, 2020. However, with respect to Ind AS 116, in case a lessee has not yet approved the financial statements for issue before the issuance of the amendments, then the same may be applied for annual reporting periods beginning on or after 1st April 2019. 238 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Following are the Indian Accounting Standards which have been amended on various issues with effect from April 1st, 2020. The following amendments are relevant to the Group:
(a) Ind AS 1, Presentation of Financial Statements and Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Error: Refined definition of term 'material'.
(b) Ind AS 103, Business Combinations: Revised definition of a 'business' and introduction of an optional concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business.
(c) Ind AS 109, Financial Instruments: Modification to some specific hedge accounting requirements to provide relief to the potential effects of uncertainty caused by the interest rate benchmark (IBOR) reform.
(d) Ind AS 107, Financial Instruments Disclosure: Additional disclosures pertaining to interest rate benchmark reforms.
(e) Ind AS 116, Leases: Practical expedient which permits lessees not to account for COVID-19 related rent concessions as a lease modification.
None of these amendments are expected to have any material effect on the Company's financial statements.
C. Significant Accounting Policies
1. Statement of Compliance
These financial statements are prepared in accordance with Indian Accounting Standards ("Ind AS"), under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended except in so far as the said provisions are inconsistent with the provisions of the Electricity Act, 2003.
2. 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.
239 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
As the operating cycle cannot be identified in normal course due to the special nature of industry, the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilities have been classified as current or non-current as per the Group's operating cycle and other criteria set out in Ind AS-1 'Presentation of Financial Statements” and Schedule III to the Companies Act, 2013.
The consolidated financial statements are presented in Indian Rupees ( ) which is the presentation currency of the Group and all values are rounded to the nearest lacs (up to two decimals) except when otherwise indicated.
Claims of suppliers/contractors for price variations are accounted for on its acceptance.
3. 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 measurement is unobservable.
4. Principles of Consolidation
4.1. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (collectively referred as “the Group”). The Group has investments in joint venture and associate which are accounted using equity method in these consolidated financial statements. Refer Note No. 4 for the accounting policy of investment in joint venture and associate in the consolidated financial statements.
240 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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 Parent'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 Parent'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, 2020.
The Consolidated Financial Statements have been prepared by combining the financial statements of the company and its subsidiaries on a line-by-line basis by adding together 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 Parent's ownership interests in subsidiaries that do not result in the Parent losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Parent'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 Parent 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 241 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
accounted for as if the Parent 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.
4.2. Non-Controlling Interest
Non-controlling interests represent the proportion of income, other comprehensive income and net assets in subsidiaries that is not attributable to the Parent'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, respectively.
4.3. 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.
4.4. 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.
242 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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. 243 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
4.5. 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.
5. Significant Accounting Policies
5.1. Property, Plant & Equipment
Property, Plant & Equipment (PPE) comprises of Tangible Assets. PPE are stated at cost, duty credit availed, if any, after reducing accumulated depreciation and accumulated impairment losses, if any; until the date of the Balance Sheet. The cost of PPE comprises of its purchase price or its construction cost (net of applicable tax credit, if any), 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 in accordance with the Group's accounting policy.
Transition to Ind AS: On transition to lnd AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1st April 2015, measured as per the previous GAAP, and use the "carrying value" as the deemed cost of such property, plant and equipment.
In case of PPE for new projects, extension or renovation and modernization, the related expenses and interest cost up to 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.
Land and 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. Freehold land is not depreciated.
Capital Spares which can be used only in connection with an item of tangible assets and whose use is not of regular nature are capitalized at cost, as property plant and equipment and depreciated over the residual useful life of the plant. 244 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Property Plant & Equipments also includes service equipments, at the time of initial recognition the Group 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 working condition for its intended use, and estimated costs of dismantling and removing 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 Group's accounting policy of capitalisation. (Refer note 18 - Critical Accounting Judgements and key source of estimation uncertainty.)
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 Group 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.
Capital Work-in-Progress
Capital work -in - progress includes the cost incurred on PPE that are not yet ready for the intended use and is capitalized whenever ready for use. All directly attributable expenditures are allocated to the projects on pro rata basis to the accretion made to respective projects. However, directly attributable expenditure of Corporate Office and field offices are allocated to Capital work – in – progress at the predetermined rate having regard to amount of directly attributable expenditure incurred during the year.
Depreciation
Depreciation of these PPE commences when the assets are ready for their intended use.
The Group, 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 Group charges depreciation on straight line method at the rates the methodology and the residual 245 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 value as prescribed in GERC (MYT) Regulations or the Central Electricity Regulatory Commission (CERC), 2016.
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 rates/range of depreciation of Property, Plant and Equipment are as follows:
Asset Description Rates/Range Buildings 3.34% Plant & Machinery 5.28% to 9.50% Hydraulic Works 5.28% Other Civil Works 3.34% Lines & Cable Net Work Upto 5.28% Vehicles 9.50% Furniture-Fix & Elect-Light & Fan Installations 6.33% Leasehold Land 3.34% Office Equipments 6.33% Other Assets Not covered above 5.28% Computers 15%
In case of a subsidiary GETCO, Useful Life of the Assets as specified in GERC, MYT Regulations, 2016 is as under; Asset Description Useful Life AC and DC sub-station 35 years Gas Insulated Sub-station (GIS)/Hybrid sub-station 35 years Transmission line (including HVAC and HVDC) 35 years
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 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 estimated useful lives, residual values and depreciation method are reviewed on an annual basis and if necessary, changes in estimates are accounted for prospectively. 246 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of GETCO, depreciation on subsequent expenditure on PPE arising on account of capital improvement is provided for prospectively over the remaining useful life. Additional Capital expenditure arising due to finalization of bills on the assets which were put to commercial use in earlier years are depreciated retrospectively from the date of commercial put to use.
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.
5.2. 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 amortizes Intangible assets on straight line method as per the methodology and residual value in accordance with GERC (MYT) Regulations, 2016.
5.3. Impairment of Tangible and Intangible Assets
The Group reviews at each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group 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 that there is a change in the previously assessed impairment loss, the recoverable amount is reassessed, and the asset is reflected at the recoverable amount.
5.4. Exploration and Evaluation expenditures
Exploration and evaluation expenditure incurred after obtaining the legal right i.e. allotment of mine
247 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
block, to explore are capitalised as exploration and evaluation assets and stated at cost less impairment. The exploration and evaluation assets are classified into tangible and intangible assets according to the nature of the assets.
Exploration and evaluation assets are transferred to property, plant and equipment when the technical feasibility and commercial viability has been determined. Exploration and evaluation assets are assessed for impairment indicators at least annually. Exploration and evaluation expenditure incurred prior to obtaining the legal right to explore are expensed as incurred.
Exploration and evaluation expenditure include costs associated with acquisition of licenses and rights to explore; costs of surveys and studies; expenses of geologists; exploratory drilling; activities in relation to determining technical feasibility and commercial viability of extracting a mineral resource.
5.5. Non-Current Assets held for Sale
The Group 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 changes to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such assets 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.
5.6. Government Grant and Consumer Contributions
Government Grants (including Subsidies) are not recognized until there is reasonable assurance that they will be received, and the Group will comply with the conditions associated with the Grant.
Grants that compensate the Group 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 Group for expenses incurred are recognized over the period in which the related costs are incurred and shown separately.
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5.7. 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 is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Revenue is measured at the transaction price of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties.
Contract assets are recognized when there is right to consideration in exchange for goods or services that are transferred to a customer and when that right is conditioned on something other than the passage of time. Contract assets are classified as unbilled receivables (only act of invoicing is pending) as per contractual terms.
Revenue from Sale of Power and Transmission
Revenue from sale of power (including Deviation Settlement Mechanism (Unscheduled Interchange) is recognised on accrual basis for energy supplied in accordance with the tariff orders awarded by 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 Activities
Rebate for Prompt Payment towards purchase of power (net), Interest on UI Pool Account, Cash Discount and CDM Benefit from renewable energy are recognised on cash basis.
Wheeling charges recoveries are recognized on accrual basis.
Miscellaneous Revenue from Consumers
Bills raised for theft of energy on consumer are recognized in full as soon as assessment order is received from the competent authority of the respective Company.
Meter rent, recoveries from theft of power / malpractices are recognized on accrual basis. Miscellaneous charges from consumers are recognized on cash basis except when ultimate realization of such income is certain. 249 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Dividend Income
Dividend Income is accounted in the year in which the right to receive the dividend is established.
Interest Income
Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Penalty and Liquidated Damages
Penalty 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.
Insurance Claims
Claims lodged with the Insurance Company in respect of risks covered are accounted for as and when the claim is received.
Other Income
Income from 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.
Income from sale of scrap are accounted for on the basis of actual realization.
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.
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, in the opinion of management, is not payable, is considered as income.
Discount received is recognised as other income.
Other Incomes are recognized on accrual basis except when ultimate realization of such income is uncertain.
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5.8. 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:
(a) Consumables, Stores and Spares, Surplus Material - 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).
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 items are indeterminate at the initial recognition, the Group classifies such items as inventory. 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.
5.9. Business Combinations
Business combinations through common control transactions are accounted on a pooling of interest method. As per pooling of interest method:
i. The assets and liabilities of the combining entities are shown at their carrying amounts.
ii. No adjustments are made to reflect fair values or recognise any new assets or liabilities except the only adjustment that are made are to harmonise accounting policies.
iii. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.
The consideration for the business combination can be of securities, cash or other assets. Securities are recorded at nominal value. In determining the value of the consideration, assets other than cash are considered at their fair values. The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. The difference, if any, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and presented separately from other capital reserves with disclosure of its nature and purpose in the notes. 251 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
5.10. Foreign Exchange Transactions
Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date.
Gains/ losses arising on settlement as also on translation of monetary items are recognised in the Statement of Profit and Loss. However, if the Gains / losses pertains to PPE; they are capitalised till the time the assets are put to commercial use. Any Gains/losses that arise after the projects are commercially put to use are recognised in the Statement of Profit and Loss. Further the gains that arise on foreign exchange difference are adjusted upto the extent of losses that were capitalized earlier in the projects.
5.11. Employee Benefits
Employee Benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment, compensated absences and retirement benefits.
(a) Short Term Employee Benefits
Short-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.
(b) Long Term Employee Benefits
i. Defined Contribution Plans
Retirement 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.
ii. Defined Benefit Plans
The 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. 252 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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.
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 Group 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 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.
For defined retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. Remeasurement, comprising actuarial gains and losses and the effect of the changes to the asset ceiling (if applicable), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur and consequently recognised in retained earnings and is not reclassified to profit or loss. The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.
iii. Other Long-Term Employee Benefits
Other 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.
5.12. Lease
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the 253 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
(A) Leases as Lessee (Assets taken on lease)
The Group applies a single recognition and measurement approach for all leases, except for short- term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
(i) Lease Liabilities:
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components, except for leases where the company has elected to use practical expedient not to separate non-lease payments from the calculation of the lease liability and ROU asset where the entire consideration is treated as lease component.
(ii) Right-of-use Assets:
The Group recognises right-of-use (ROU) assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
254 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of use assets are subject to impairment. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Modifications to a lease agreement beyond the original terms and conditions are generally accounted for as a re-measurement of the lease liability with a corresponding adjustment to the ROU asset. Any gain or loss on modification is recognized in the Statement of Profit and Loss. However, the modifications that increase the scope of the lease by adding the right to use one or more underlying assets at a price commensurate with the stand-alone selling price are accounted for as a separate new lease. In case of lease modifications, discounting rates used for measurement of lease liability and ROU assets is also suitably adjusted.
(iii) Short-term leases and leases of low-value assets:
The Group applies the short-term lease recognition exemption to its short-term leases of Property, Plant and Equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low- value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight- line basis over the lease term or another systematic basis if that basis is more representative of the pattern of the lessee's benefit.
(B) Leases as Lessor (assets given on lease)
When the Group acts as lessor, it determines at the commencement of the lease whether it is a finance lease or an operating lease. Rental income from operating lease is recognised on a straight- line basis over the term of the relevant lease except where another systematic basis is more representative of the time pattern of the benefit derived from the asset given on lease.
5.13. Taxes on Income
Income Tax Expense represents the sum of Current Tax and Deferred Tax.
(a) Current Tax:
Tax currently payable is based on taxable profit for the year. Taxable profit differs from 'Profit Before 255 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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.
(b) Deferred Tax:
Deferred 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 recognized for all 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 Group 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 Group will pay normal income tax during the specified period.
(c) Current and Deferred Tax for the Year:
Current and deferred tax are recognized in Statement of profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
256 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
5.14. 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. Capitalisation of Borrowing Cost is suspended when there is no active development or active development is interrupted.
Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
5.15. 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 (when the effect of the time value of money is material).
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. Contingent liabilities are possible obligations that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Group. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably the obligations are disclosed as a contingent liability, unless the probability of outflow of economic benefits 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 recognised but disclosed in financial statements when an inflow of economic benefits is probable.
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5.16. 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.
5.17. 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:
(i) After tax effect of interest and other financing costs associated with dilutive potential equity shares.
(ii) 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.
5.18. 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.
5.19. Events occurring after Reporting Period
Material 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 financial statements.
5.20. Exceptional Items
Management considers Exceptional items as those material items which derive from events or transactions that fall within the ordinary activities of the Group and which individually or, if of a similar type, in aggregate, need to be disclosed by virtue of their size or incidence.
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5.21. 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 liabilities, as appropriate, 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.
(A) Financial Assets
i. Cash and Cash Equivalents
The Group considers all highly liquid financial instruments which are readily convertible into 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. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
ii. Financial Assets at amortised cost
Financial 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.
iii. Financial Assets at Fair Value through Other Comprehensive Income
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. 259 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
iv. Financial Assets at Fair Value through Profit or Loss
Financial 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.
v. Impairment of Financial Assets
The 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.
Further for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Group has used a practical expedient as permitted under Ind AS 109 i.e. expected credit loss allowance as computed based on historical credit loss experience
vi. Derecognition of Financial Assets
The 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.
(B) Financial Liabilities and Equity Instruments
i. Classification as Debt and Equity
Debt 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.
ii. Financial Liabilities at Amortized Cost
Financial Liabilities are subsequently measured at amortized cost using the effective interest
260 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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.
iii. Equity Instruments
An 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. net of direct issue costs.
iv. Derecognition of Financial Liabilities
The 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.
v. Effective Interest Method:
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
5.22. 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 Group receives receivable / payable claims for past period due to delayed settlement. 261 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
The Group accounts such claims in the year of receipt as per prevailing practice followed.
5.23. Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the course of applying the policies outlined in all notes under Note 1 above, the management 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 Judgements in applying Accounting Policy
Following are the critical judgements, apart from those involving estimations, that the Management have made in the process of applying the Group's Accounting Policies and that have significant effect on the amounts recognized in the Financial Statements.
a. Useful life of Property, Plant and Equipment1
Estimated 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 level of maintenance expenditures required to obtain the expected future cash flows from the 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 Group 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 costs 2
The Group 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 262 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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 Group, level of construction related activity compared to Group'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 Equipment2
The 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 Accounts1
Ind AS - 114 “Regulatory Deferral Accounts” permits the Group 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 Group 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 Group. e. Security Deposits2
Considering the historical experience and practical expediency, the Group 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 or current liability as the case may be. f. Impairment of Trade Receivables2
The Group estimates the credit allowance as per practical expedient based on historical credit loss experience as enumerated in Note-11.
263 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 g. Impairment of Investments2
At the end of each reporting period, the Group 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 Assets2
Deferred 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 and Consumer Contributions12
The grants i.e. revenue subsidies are not recognized until there is reasonable assurance that the Group 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 Group 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 Group 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 Group recognizes grants and consumer contributions that compensate the cost of an asset in the Statement of Profit and Loss on the basis of straight line method and consequentially the rates at which grant/consumer contribution is recognised in income. j. Defined Benefit Obligation (DBO)2
Management'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 of future salary increases. Variation in these assumptions may 264 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
significantly impact the Defined Benefit Obligation amount and the annual defined benefit expenses. k. Contingent Liabilities
In the normal course of business, Contingent Liabilities may arise from litigation and other claims against the Group. 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 'remote', 'possible' or 'probable' based on expert advice, past judgments, experiences etc.
1Critical Accounting Judgments
2 Key Sources of Estimation uncertainty
265 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 20,768.06 43,560.92 13,065.45 16,391.33 8,06,831.64 9,39,312.74 3,59,531.60 4,02,522.66 61,45,386.49 69,31,450.07 10,64,409.40 79,52,298.55 12,85,778.89 16,71,910.22 56,45,671.18 62,80,388.33 Grand Grand Total ( in Lakhs) - - - - 440.36 292.37 638.31 Total 5,061.24 5,501.60 5,793.97 2,961.03 1,099.54 4,060.57 4,698.88 1,441.03 1,095.09 - - - - 440.36 292.37 638.31 5,061.24 5,501.60 5,793.97 2,961.03 1,099.54 4,060.57 4,698.88 1,441.03 1,095.09 Intangible AssetIntangible Computer Softwares e e Previous GAAP carrying tely as required under Revised under required as tely 20,768.06 43,560.92 13,065.45 16,391.33 B erst or Vadodara Mahanagar B erst Vadodara or Total 8,06,391.28 9,36,351.71 3,58,432.06 4,01,884.35 61,40,325.25 69,25,948.47 10,64,117.03 79,46,504.58 12,81,718.32 16,67,211.34 56,44,230.15 62,79,293.24 Schedule - XIV of the Companies the of XIV - Schedule es is under process. under is es ross block, depreciation block and block depreciation block, ross ------mpany and with a view to harmonize to view a with and mpany ) Regulations. ) 55.28 16.39 71.67 18.35 90.02 233.99 233.99 233.99 162.32 143.97 not to the in Assets in Cap. Exp.Cap. Resulting belonging Company 73.02 55.98 58.68 48.13 489.09 182.42 574.05 247.11 762.48 276.13 990.48 2,404.47 2,820.54 2,946.98 2,058.06 1,956.50 Vehicles April, 2014 the Company has adopted the useful the adopted has Company the 2014 April, st 82.90 lakhs) is capitalised during the year. the during capitalised is lakhs) 82.90 37.62 33.51 256.88 478.56 257.59 1,383.24 6,726.05 2,817.43 9,285.89 2,643.11 7,979.77 18,307.96 19,434.32 19,875.26 11,895.49 10,148.43 Computers Rs. 35.98 39.84 45.84 & 899.74 107.99 1,276.73 3,702.04 1,353.07 5,015.27 1,333.60 6,303.03 17,789.81 19,030.56 19,822.31 14,015.29 13,519.28 Fittings Fixtures Electrical Furniture- 689.54 254.82 310.09 207.59 2,238.37 1,325.57 3,557.87 1,632.45 4,880.23 1,586.75 6,259.39 9,952.04 9,643.63 Office ments Equip- 13,283.44 14,832.27 15,903.02 41.25 220.83 367.51 Civil 1,377.18 7,921.14 8,697.94 84.17 lakhs (P.Y. lakhs 84.17 Other 23,754.71 17,857.29 19,611.79 27,491.68 35,822.11 Works 1,94,219.49 2,17,753.37 2,34,233.48 1,90,261.69 1,98,411.37 Rs. 3.61 2.43 Tangible AssetTangible 677.19 185.59 5,394.63 6,123.26 Works 78,238.56 13,715.81 91,950.76 14,020.76 14,707.48 20,099.68 26,037.35 71,851.08 79,256.98 Hydraulic 1,05,294.33 566.08 3,305.14 1,304.46 2,001.82 Cable Lines & 22,98,439.11 Networks 24,33,293.11 4,05,781.91 3,36,364.32 3,91,656.68 1,47,675.91 5,37,330.77 1,65,377.90 7,02,142.59 28,35,769.88 31,70,829.74 24,68,687.15 15,956.76 36,239.96 10,279.92 14,743.88 Plant Plant & NOTES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 27,60,707.23 31,01,068.06 3,24,862.67 6,50,679.33 4,75,772.99 1,83,773.67 6,49,266.74 2,07,199.35 8,41,722.21 34,09,973.97 40,24,413.34 31,82,691.13 Machinery 73.82 226.29 738.90 193.20 7,237.29 7,803.56 1,81,317.53 14,608.57 28,231.13 19,355.55 26,519.02 34,129.38
Building 1,95,699.81 2,23,192.04 1,69,180.79 1,89,062.66 ------90.03 90.03 Use- 1,971.94 1,971.94 1,881.91 Assets Right Right of - 0.01 0.01 177.94 631.93 362.97 994.89 734.37 5,685.28 5,825.53 2,567.33 1,729.26 Land Land 11,510.80 13,900.19 10,515.91 12,170.93 Leasehold ------9,538.64 2,588.88 Land 94,483.55 12,454.65 Rights 1,06,938.20 1,13,887.96 1,06,938.20 1,13,887.96 Land and The company upto FY 2013-14 has been charging depreciation on fixed assets at the rates specified in specified rates the at assets fixed on depreciation charging been has 2013-14 FY upto company The co holding the being GUVNL life, useful different of adoption permits II - Schedule Since 1956. Act, 1 from effective Statements, Financial Consolidated its in depreciation for provision the Tariff Year Multi ( Commission Regulatory Electricity Gujarat by specified rates depreciation life/ The Company has elected to measure all its Property, Plant and Equipment and Intangible 2015. Assets April, 1st i.e. AS at IND to transition of th date the on cost deemed its as amount assets. discarded and use active from retired sold, assets of cost includes It of GE name the in held are to subsidiaries transferred been have which properties, immovable Certain subsidiari the of name the in transfer /or and registration the for procedure The (VMSS). Sadan Seva g its w.r.t available is information no which for lease on given been have MGVCL of premises Certain separa given been not have of MGVCL properties out leased such for disclosures the Hence, block. net III. Schedule to amounting GETCO,depreciation subsidiary of case In March 2019 March 2020 March 2018 March 2019 March 2020 March 2020 st st st st st March 2019 st st st Particular/ AssetsParticular/ At At 31 At 31 At 31 At 31 At 31 GROSS BLOCK At 31st March 2018 Additions Deduction/Adjustments Additions Deduction/Adjustments ACCUMULATED DEPRECIATION Charge for the Year Deduction/Adjustments Charge for the Year Deduction/Adjustments NET BLOCK At 31 At 31 2.1 2.2 2.3 2.4 2.5 2.6 NOTE NO. 2 PROPERTY, AND PLANT EQUIPMENT 266 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
2.7 Depreciation, Amortisation and Impairment Expenses includes following in case of subsidiary GSECL: ( in Lakhs)
For the year ended March 31st, Particulars 2020 2019
Depreciation on Tangible Assets 1,11,889.75 98,987.01 Written Down of Capital Work in Progress (Refer Note 3) - 4,384.59 Amortization / Written Down of Intangible Assets (Refer Note 4) - 10.05 Impairment for Asset Held for Sale (Refer Note 17) 5,991.20 1,340.79 Total 1,17,880.95 1,04,722.45
3 Capital Work-in-Progress ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019
Capital Work-in-Progress 6,37,969.60 9,23,794.06 Provision for Unbilled Capital Works 6,423.40 10,373.52 Exploration and Evaluation assets (Refer Note 53) 10,482.21 10,461.86 Interest Charges to be Capitalised 312.39 971.91 Total 6,55,187.59 9,45,601.36
A The Company has evaluated the directly attributable cost capitalisation rate for the current financial year ended 31st March 2020 and applied this to the expenditure on the relevant assets and the total expenditure thus capitalized during the current financial year is 99,354.86 lakhs (P.Y 107,387.77 lakhs).
B The individual entities have capitalised the borrowing costs as per their respective rate of capitalisation ranging from 7% to 9%.
4 Intangible Assets Under Development ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019
Intangible Assets Under Development 75.28 75.28 Total 75.28 75.28
267 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Particulars ( in Lakhs)
Gross Carrying Value As at 1st April, 2018 75.28 Additions/(Deductions) - As at 31st March, 2019 75.28 Additions/(Deductions) - As at 31st March, 2020 75.28 Amortisation & Impairment As at 1st April, 2018 - Additions/(Deductions) - As at 31st March, 2019 - Additions/(Deductions) - As at 31st March, 2020 - Net Carrying Value As at 31st March, 2019 75.28 As at 31st March, 2020 75.28
5 Investments
As at As at Particulars 31st March, 2020 31st March, 2019
Investment in Equity Instruments (at Fair Value through Other Comprehensive Income) Quoted, Non-Trade - Gujarat State Petronet Limited (GSPL) 29,057.83 31,968.38 1,68,50,000 (P.Y. 1,68,50,000) Equity Shares of 10/- each, fully paid-up - Gujarat Gas Company Limited (GGCL) 615.09 394.61 2,66,445 (P.Y. 2,66,445) Equity Shares of 2/- each, fully paid-up Un-quoted, Non-Trade - Gujarat Power Corporation Limited (GPCL) 4,014.10 4,426.06 19,30,013 (P.Y. 19,30,013) Equity Shares of 100/- each, fully paid-up - Gujarat State Energy Generation Limited (GSEG) 2,829.99 4,285.73 2,90,03,636 (P.Y. 2,90,03,636) Equity Shares of 10/- each, fully paid-up
268 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
- Power Exchange of India Limited (PEIL) 100.28 - 25,00,000 (P.Y.25,00,000) Equity Shares of 10/- each, fully paid-up - Kalupur Commercial Co-Operative Bank Limited 0.05 0.05 200 (P.Y. 200) equity share of 25 each/-, fully paid up Total (A) 36,617.34 41,074.81 Investment in Associate and Joint Venture Companies Quoted - Gujarat Industries Power Company Limited (GIPCL) (Associate Company) 73,747.80 68,988.85 405,90,279 (P.Y. 405,90,279) equity share of 10 each, fully paid up Unquoted - Mahaguj Collieries Limited (MGCL) (Joint Venture Company) 2.00 2.00 Less: Share of Losses in Joint Venture -2.00 -2.00 20,000 (P.Y. 20,000) equity share of 10 each, fully paid up Total (B) 73,747.80 68,988.85 Investment in Government securities (Quoted) (at Fair Value through Other 13,041.89 12,520.85 Comprehensive Income (OCI)) PARTICULARS No. of Units Rate Cost
( in Lakhs) 8.28% GoI 2027 11,36,000 96.64 1,097.83 8.24% GoI 2027 15,00,000 96.41 1,446.15 9.38% AP SDL 2023 15,00,000 102.34 1,535.10 9.99% RAJ SDL 2028 5,00,000 107.82 539.10 9.67% Jharkhand SDL 2024 8,80,000 104.31 917.93 9.16% RAJ SDL 2028 1,08,000 108.08 116.73 8.57% UP SPECIAL SDL 10,00,000 102.52 1,025.20 8.75% TN SDL 2022 20,00,000 102.68 2,053.60 8.58% UP Special SDL 2024 5,00,000 102.18 510.90 8.96% RAJSTHAN SPECIAL 10,00,000 104.59 1,045.90 8.32% CHHATISHGARH SDL 15,00,000 100.97 1,514.55 9.99% RAJ SDL SPL 2,17,000 114.78 249.07 Total Cost 12,052.06 Total (C) 13,041.89 12,520.85 Total 1,23,407.03 1,22,584.51 269 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Aggregate Market Value of quoted investment 62,969.36 73,743.52 Aggregate Cost of unquoted investments 5,172.46 5,172.46 Aggregate Cost of quoted investment 22,284.41 22,284,41 Aggregate amount of Impairment in value of investment 2.00 2.00
A. ( in Lakhs) Share Companies other than Associate and Joint Venture: Share Capital Premium Total
Gujarat State Petronet Ltd. 1,685.00 - 1,685.00 Gujarat Power Corporation Ltd. 1,930.01 - 1,930.01 Gujarat State Energy Generation Ltd. 2,900.36 90.04 2,990.40 Gujarat Gas Co. Ltd. 5.00 - 5.00 Power Exchange Of India Ltd. 250.00 - 250.00 Total Investment 6,770.37 90.04 6,860.41
B. The latest Audited Financials of Gujarat Power Company Limited available with the Company is for 31st March 2020. For calculation of Fair Value as at 31st March 2020 the Company has considered latest Audited Balance Sheet of GPCL i.e. for 31st March 2020.
C. The Net Asset Value of Power Exchange Of India Ltd. (PXIL) for the year ended 31st March, 2020 is positive (Negative for 31st March, 2019) and hence the Fair Value of such investment is 100.28 Lakhs for the year ended 31st March, 2020 ( Nil for 31st March, 2019).
D. Details of Subsidiaries i Proportion of ownership Place of interest/ voting rights held Principal Incorporation Name of Company by the Company activity and principal place of As at 31st As at 31st business March, 2020 March, 2019
Gujarat State Electricity Corporation Ltd. Generation of India 100.00% 100.00% Power Gujarat Energy Transmission Corporation Ltd. Transmission of India 100.00% 98.27% Power Dakshin Gujarat Vij Company Ltd. Distribution of India 100.00% 100.00% Power
270 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Madhya Gujarat Vij Company Ltd. Distribution of India 100.00% 100.00% Power Paschim Gujarat Vij Company Ltd. Distribution of India 100.00% 100.00% Power Uttar Gujarat Vij Company Ltd. Distribution of India 100.00% 100.00% Power ii. Government of Gujarat (GOG) which held stake in GETCO of 1,25,00,000 equity shares aggregating to 1250.00 Lakhs of face value of equity share capital has been transferred to the Company, to make GETCO a wholly owned subsidiary of the Company. The Company has issued it’s own Equity Shares as consideration against the stake transferred by GOG at a determined fair value. iii. In previous year, 7 shares of subsidiary GSECL of 10/- each were issued to the promotors of the demerged company BECL acquired by subsidiary GSECL through business combination under common control. E. Details of Associate i. ( in Lakhs)
Place of Proportion of ownership Principal Incorporation interest/ voting rights held Name of Company activity and principal by the Company place of st As at 31st business As at 31 March, 2020 March, 2019 Gujarat Industries Power Company Ltd. Generation of India 26.84% 26.84% Power
Equity accounted Associate viz. GIPCL: Net Assets as at date of acquisition 12,970.65 12,970.65 Less: Acquisition Cost 10,592.35 10,592.35 Capital Reserve 2,378.30 2,378.30 Capital Reserve taken to Other Equity as per Equity method in Ind AS 2,378.30 2,378.30
Carrying amount of investment at the year end 73,747.80 68,988.85 Net Assets as at date of acquisition 12,970.65 12,970.65 Post acquisition share profits as at the date of financial statements 60,777.15 56,018.20 ii. The Group has invested 10,592.35 Lakhs 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 31st March 2020. 271 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
F. Details of Joint Venture i. Place of Proportion of ownership Principal Incorporation interest/ voting rights held Name of Company activity and principal by the Company place of st st business As at 31 As at 31 March, 2020 March, 2019 Mahaguj Collieries Limited Mining and Mumbai, India 40% 40% agglomeration of hard coal 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 of 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 has not prepared the CFS because 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 has consolidated the Joint Venture in the CFS. Further, 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. Further, disclosures in regard to this JV are as under: iii. Based on audited Account of MahaGuj Collieries Ltd (MGCL) the assets and liability as on 31st March, 2020 is as under: ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019
ASSETS Non Current Assets Property, plant & Equipments 1.60 0.62 Other non current assets 5,440.70 5,440.70 Current Assets Financial Assets Cash and cash equivalents 1.17 23.18 Other Current assets 0.10 0.09 272 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
EQUITY AND LIABILITIES Non Current Liabilities Financial Liabilities Other Financial liabilities 0.17 0.15 Current Liabilities Financial Liabilities Trade payables - Dues to Micro Enterprises & Small Enterprises - - - Others 48.31 25.04 Other Current liabilities 7.11 9.20 Share in Net assets of Joint venture 2,155.19 2,172.08 Share in Profit for the year of Joint venture (92.94) (107.70) iv. The share in the Net worth of the Joint Venture is 2,155.19 lakhs (P.Y. 2,172.08 lakhs) and in curent year loss is 92.94 lakhs (P.Y. 107.70 lakhs). The investment in the Joint Venture is 2 Lakhs; however the share in net assets is restricted to the amount of carrying value of investments as the Company does not have any obligation for the liability of Joint Venture. v. Ministry of Coal, Government of India has allotted the Machhakata & Mahanadi coal block in Odisha jointly to GSECL and MSPGCL for the captive coal mining under Government Dispensation Route. The coal produced from the block was to be shared between GSECL and MSPGCL in the ratio of 40% and 60% respectively. The Joint Venture Company in the name of “Mahaguj Collieries Limited” (MGCL) was incorporated on 01-11-2006 by MSPGCL and GSECL for development of Coal Block and M/s Adani Enterprises Ltd. (AEL) was appointed as MDO.
The Hon’ble Supreme Court vide its order dated 24-09-2014 cancelled the allocated coal block. Subsequent to cancellation of the Coal Block, the MDO M/s Adani Enterprises Ltd. raised a claim of Rs. 39,979 Lakhs against MGCL for the expenditure incurred by them for the project. M/s AEL invoked the Arbitration Proceeding due to denial of claim by MGCL along with application u/s 17 for interim relief of 4,470 Lakhs to the Arbitral Tribunal on 10.05.2017. The Arbitral Tribunal passed the First Interim Award on 01.02.2018 and directed MGCL to pay to M/s. AEL a sum of 3,279.60 Lakhs which was challenged by MGCL in the Bombay High Court. The Bombay High Court admitted the case and in its common order dtd 25.02.2019 set aside the order of the Arbitration Tribunal. vi. During the year company has made the provision for 74.91 Lakhs (P.Y. 111.45 Lakhs) against long term loans & advance given to MahaGuj Collieries Ltd for development of Machhakata and Mahanadi coal block which has been de allocated as per the order of Hon’ble Supreme Court.
273 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
6 Non-Current Loans ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019 Secured Considered Good Loans & Advances to Staff 10,993.64 11,310.73 Total (A) 10,993.64 11,310.73 Unsecured Considered Good Other Loans And Advances 20.07 12.32 Total (B) 20.07 12.32 Loans which have significant increase in credit risk Loans & Advances - - Total (C) - - Loans which are Credit Impaired Loan to Joint Venture Company 2,503.03 2,428.12 Less: Provision for Loss (refer note 5F(v)) (2,503.03) (2,428.12) Total (D) - - Total (A+B+C+D) 11,013.71 11,323.05
A. Loans to staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been given.
7. Other Non-Current Financial Assets ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Secured Considered Good Interest Accrued But Not Due on Staff Loans & Others 12,510.72 11,582.83 Interest Accrued & Due on Staff Loans 494.67 481.95 Other Recoverables 143.20 - Unsecured Considered Good Loans Recoverable from consumers for SKY scheme 17,783.28 7,305.90 Deposits with Others 8,972.77 9,266.40 Deposit with Government and Local bodies 2,466.22 127.52 Other Bank Balances* 1,182.10 1,182.10 Deposits with banks for more than 12 months 426.98 365.94 Other Loans & Advances 37.37 23.57 Total 44,017.32 30,336.21
274 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
*GSECL has 1,182.10 lakhs (P.Y. 1,182.10 Lakhs) deposited in separate Bank Account maintained with Dena Bank towards invokation of Bank Guarantee of M/s. Shapoorji Pallonji Company Pvt. Ltd, the said amount is not available for utilization as the arbitration proceeding is ongoing. Proceedings can be utilized only after final verdict of Arbitration.
8. Other Non-Current Assets ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Capital Advances to Suppliers / Contractors 20,320.73 12,962.41 Other Deposits 954.79 732.71 Prepayments - Leasehold Land 721.35 2,325.55 Total 21,996.87 16,020.67
9 Inventories ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
STORES, SPARES & LOOSE TOOLS Stock of materials at stores 2,57,785.84 1,98,195.38 (net of provision for non moving stock of 197.67 lakhs (P.Y. 33.54 lakhs)) Materials at Site (O&M) 6,947.30 9,588.77 Materials in Transit 12,094.03 45,025.79 Materials pending Inspection 4,965.66 9,072.35 Other Materials Accounts 31,404.02 24,498.09 Fuel 1,00,238.10 99,903.80 Material Stock pending Investigation 967.29 966.85 Less: Provision for stock pending investigation (973.77) (973.06) Total 4,13,428.47 3,86,277.97 For basis of valuation refer Note No. 1(C)(5.8) of Significant Accounting Policies.
275 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
10 Trade Receivables ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Secured Considered Good Trade Receivables for Sale of Power 2,427.87 2,287.89 Total (A) 2,427.87 2,287.89 Unsecured Considered Good (Good to the extent of security deposit received from the respective Consumers) Trade Receivables for Sale of Power 4,32,797.96 3,44,104.94 Trade Receivables for Misc. Receipts from Cons. 2,722.93 3,350.97 Less: Allowance for bad and Doubtful Debts (44,123.78) (19,439.05) Less: Doubtful E D (20,488.67) (19,028.60) Total (B) 3,70,908.44 3,08,988.26 Significant Increase in Credit Risk Dues from Non Consumers and Unconnected Consumers 31,856.42 32,367.07 Less: Allowance for bad and Doubtful Debts (6,001.49) (24,579.50) Total (C) 25,854.93 7,787.57 Less: Unposted Receipts (201.60) (359.79) Total (D) (201.60) (359.79) Credit Impaired Dues from Permanently Disconnected Consumers 1,02,906.42 1,02,746.76 Less: Allowance for bad and Doubtful Debts (1,02,906.42) (85,567.15) Total (E) - 17,179.60 Total (A+B-C+D+E) 3,98,989.63 3,35,883.53
Receivables have been secured to the extent of security deposit as reflected note no. 23 as well as bank guarantee received from the respective Consumers.
A The Group 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.
B Generally, the credit period on sale of electrical energy is upto 10-25 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. 276 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20
C In case of Distribution Companies, GOG vide GR no. GUV-2016-3170-K-1-2842 dated 12.10.2017 has declared Amnesty Scheme-2017 effective from 25.04.2018 to 31.12.2018, which was subsequently extended with further amendments vide GR no.GUV-2016-3170-k-1 dated 19.02.2019 upto 31.05.2019 for various categories of consumers as one time settlement of their outstanding dues. Under this Scheme, the Company has waived off Principal dues amounting to 9,354.47 Lakhs (P. Y. 21,103.16 lakhs).
D Trade Receivable for sale of power in case of Distribution Companies includes the Provision for unbilled revenue in respect of the bills issued upto 31st March, 2020 amounting to 2,51,284.53 Lakhs (P.Y. 3,39,697.17 Lakhs).
E In case of Distribution Companies, Cash Credit Limit is secured against 1st hypothecation charge in favour of Consortium Bank Members on the Stocks and Book Debts.
11 Cash and Cash Equivalents ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Balances with Banks 16,441.69 22,725.63 Cash on hand 79.89 1,164.08 Cheques on hand 1,155.21 5,798.64 Remittance-in-Transit 2,050.39 4,652.97 Deposits with Banks 68.54 1,561.95 Less: Provision for Remittance in Transit (142.06) (142.06) Total 19,653.65 35,761.20
12 Other Bank Balances ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Deposit with Banks (remaining maturity of more than 3 months but less than 12 months) 4,126.21 3,028.07 Total 4,126.21 3,028.07
277 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
A Deposit with Banks includes:
(i) 2712.69 lakhs for fixed Deposit receipts with State Bank of India, IFB, Vadodara carrying the interest rate of 6.70% p.a.
(ii) 0.34 lakhs for fixed Deposit receipts with State Bank of India, IFB, Vadodara carrying the interest rate of 6.70% p.a.
(iii) 855.20 lakhs for fixed Deposit receipts with State Bank of India, IFB, Vadodara carrying the interest rate of 4.60% p.a.
(iv) 2.90 lakhs for fixed Deposit receipts with State Bank of India, IFB, Vadodara carrying the interest rate of 6.40% p.a.
(v) 37.00 lakhs for fixed Deposit receipts with State Bank of India, OPR, Vadodara carrying the interest rate of 5.50% p.a
(vi) 3.86 lakhs for fixed Deposit receipts with State Bank of India, OPR, Vadodara carrying the interest rate of 5.00% p.a
(vii) 54.22 lakhs for fixed Deposit with Allahabad Bank on behalf of Bal Urja Rakshak Dal, carrying the interest rate of 6.50% p.a.
13 Current Loans ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Loans and Advances to Employee Secured Considered Good Loans & Advances to Staff-Interest Bearing 2,769.63 4,335.18 Unsecured considered good Other loans and advances 985.31 1,021.35 Loans which have significant increase in credit risk - - Loans which are credit impaired - -
Total 3,754.94 5,356.53
A Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been given.
278 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
14 Other Current Financial Assets ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Unsecured Considered Good Interest Accrued But Not Due on Staff Loans & Others 1,515.55 2,123.23 Interest Accrued & Due on Staff Loans 710.65 928.42 Advances to Staff 136.03 142.62 Recoverables from Staff 677.45 109.71 Fuel related Claims and Receivables 909.32 1,753.98 Loans Recoverable from Consumers for SKY Scheme 4,475.81 1,582.53 ED Receivable from Government 93.21 - Interest Receivable from consumers for SKY Scheme loans 46.45 - Subsidy Receivable from Government 2,07,858.13 3,25,969.71 Unbilled Revenue 57,158.43 79,635.74 Deposits 2,174.83 2,500.85 Other recoverables 36,232.22 16,388.75 Less: Provision made for doubtful recoveries (201.28) (22.50) Loan to others (refer note 62) 655.73 655.73 Receivable from Gujarat Energy Training & Research Institute (GETRI) 345.59 113.80
Total 3,12,788.10 4,31,882.57
15 Current Tax Assets (Net) ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Current Tax Assets Tax Refund Receivable 2,39,203.61 2,08,406.22
Current Tax Liability (1,94,225.69) (1,61,609.95) Income Tax Payable Total 44,977.92 46,796.26
279 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
16 Other Current Assets ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Unsecured Considered Good Prepaid Expenses 4,524.42 4,636.46 Postage stamp & stamped agreements on hand 119.53 74.92 Advances for O&M Supplies/Works 56,756.98 54,851.58 Balance with Appellate Authority 820.02 610.77 Electricity Duty Recovered in Advance by Govt. of Gujarat 57,428.04 10,891.38 Advance to IPP against Power Purchase 6,800.00 4,200.00 Pre-Payments Leasehold Land - 107.46 Gratuity Asset (Refer Note No. 43) 7,873.52 - Goods and Service Tax - Tax deducted at Source 30.48 58.36
Total 1,34,352.99 75,430.93
17 Assets classified as held for sale ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Obsolete/scraped assets 13,824.85 6,398.12 Total 13,824.85 6,398.12
( in Lakhs)
As at As at Description of Assets held for sale 31st March, 2020 31st March, 2019
Plant and Machinery 11,870.01 6,056.66 Hydraulic Works 405.93 50.86 Lines and Cables 123.91 110.17 Buildings & Civil Work 1,339.03 102.14 Vehicles 4.78 5.48 Furniture & Fixtures 1.26 2.18 Office Equipments 7.12 20.44 Others 72.82 50.18 Total 13,824.85 6,398.12
280 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Utran 135 MW & Kutch Lignite (KLTPS) Unit 1 & 2 Power Stations have been decommissioned and hence assets related to such power stations are classified as held for sale. These assets will be sold through e- auction and sale is expected to be completed by next year.
Based on Valuation Report of Independent Valuer, Fair value of KLTPS Unit 1 & 2 is 10,951.86 Lakhs and the difference between Fair Value & Carrying Value is recognised as Impairment Loss for 5,991.20 Lakhs during F.Y. 2019-20. Further based on bids received for sale through E-auction of assets of Utran 135 MW in previous year, Fair Value of Assets held for sale of Utran 135 MW was considered as 1,152 Lakhs and the difference between Fair Value & Carrying Value was recognised as Impairment Loss for 1,340.79 Lakhs during the F.Y. 2018-19. The same has been shown under the head Depreciation, Amortization and Impairment Expenses in Note No. 2(i)
18 Equity Share Capital
A Equity Share Capital consist of the following: ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Share Capital Equity Share Capital Authorised Share Capital 3000,00,00,000 Equity Shares of 10/- each 30,00,000.00 30,00,000.00 Issued Share Capital 2350,57,58,495 (P.Y. 2016,98,31,795) of 10/- each 23,50,575.85 20,16,983.18 Subscribed & Paid up 2234,78,11,995 (P.Y. 1977,22,22,095) of 10/- each fully paid 22,34,781.20 19,77,222.21 Total 22,34,781.20 19,77,222.21
B Reconciliation of number of shares outstanding at the beginning and at the end of reporting
period is as under: ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
As at 1st April, 2018 16,22,75,49,895 16,22,754.99 Additions/(Reductions) 3,54,46,72,200 3,54,467.22 As at 31st March, 2019 19,77,22,22,095 19,77,222.21 As at 1st April, 2019 19,77,22,22,095 19,77,222.21 Additions/(Reductions) 2,57,55,89,900 2,57,558.99 As at 31st March, 2020 22,34,78,11,995 22,34,781.20
281 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
C Shares in the Company held by Shareholders holding more than 5% is as under:
As at 31st March, 2020 Particulars No. of shares Extent of Holding
Governor of Gujarat (including its nominees) 22,34,78,11,995 100%
As at 31st March, 2020 Particulars No. of shares Extent of Holding Governor of Gujarat (including its nominees) 19,77,22,22,095 100%
D. Right, Preferences and Restrictions attached to shares :
The Company has only one class of equity shares. For all matters submitted to vote on a poll in a shareholders’ meeting of the Company every holder of an equity share as reflected in the records of the Company on the date of the shareholders’ meeting shall have voting right in proportion to his share in the paid up Equity Share Capital of the Company. Any dividend declared by the company shall be paid to each holder of Equity shares in proportion to the number of shares held to total equity shares outstanding as on that date. In the event of liquidation of the Company, all preferential amounts if any shall be discharged by the Company. The remaining assets of the Company shall be distributed to the holders of equity shares in proportion to the number of shares held to the total equity shares outstanding as on that date. 19 Other Equity A Other Equity consist of the following: ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Share Application Money pending allotment 1,15,794.65 39,760.97 Contingency Reserve Fund 12,048.23 12,048.23 Fly ash utilisation Reserve Fund 7,663.02 6,625.96 Capital Reserve 2,378.30 2,378.30 Capital Reserve on account of Business Combination 1,05,400.39 1,05,400.39 Securities Premium - 3,750.00 Retained Earnings 6,08,684.03 4,78,953.25 Equity Instruments through Other Comprehensive Income 29,756.87 34,214.35 Reserve for financial asset measured at fair value through OCI 649.59 310.62 Share of OCI of Associate accounted for using equity method 773.71 1,250.66 Total 8,83,148.28 6,84,692.72 282 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Out of Above: Equity belonging to the Non Controlling interests (refer SOCIE)* 0.00 9,126.69 Equity belonging to the Owners 8,83,148.27 6,75,566.03
*The share of Non-Controlling Interest is 254.08, since the above figures are in lakhs the same is not getting reflected.
B Particulars relating to Other Equity ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Share Application Money pending allotment Opening Balance 39,760.97 1,17,518.99 Add: Increase during the year 1,15,794.65 39,760.97 Less: Shares Issued (39,760.97) (1,17,518.99) Balance at the year end 1,15,794.65 39,760.97
Contingency Reserve Fund Opening balance 12,048.23 12,048.23 Less: Transferred to retained earning - - Balance at the year end 12,048.23 12,048.23
Fly ash utilisation Reserve Fund Opening balance 6,625.96 3,642.91 Add: Increase during the year through sales 1,314.82 2,983.05 Less: Utilisation (277.77) - Balance at the year end 7,663.02 6,625.96
Capital Reserve Opening balance 2,378.30 2,378.30 Add: Transferred to retained earning - - Balance at the year end 2,378.30 2,378.30
Capital Reserve on account of Business Combination Opening balance 1,05,400.39 1,03,000.39 Add: Changes on account of Business combination - 2,400.00 Balance at the year end 1,05,400.39 1,05,400.39
283 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Securities Premium Opening balance 3,750.00 3,750.00 Add: Transferred to retained earning (3,750.00) - Balance at the year end - 3,750.00
Retained Earnings Opening Balance 4,78,953.25 3,98,064.46 Add: Net profit after tax transferred from Statement of Profit & Loss 1,55,915.09 99,646.62 Add: Other Comprehensive income arising from remeasurement of defined benefit obligation (25,941.90) (18,538.87) Add: Share in other reserve of Associate - 6.10 Less: Share of CDT on dividend received from Associate (241.96) (225.27) Balance at the year end 6,08,684.03 4,78,953.25
Equity Instruments through Other Comprehensive Income Opening Balance 34,214.35 31,813.77 Add: Increase / (Decrease) during the year (4,457.48) 2,400.59 Balance at the year end 29,756.87 34,214.35
Reserve for Financial Asset measured at fair value through OCI Opening Balance 310.62 287.31 Add: Increase / (Decrease) during the year 338.97 23.31 Balance at the year end 649.59 310.62
Share of OCI of Associate accounted for using Equity Method Opening Balance 1,250.66 1,671.74 Add: Increase / (Decrease) during the year (476.95) (421.08) Balance at the year end 773.71 1,250.66
Total Other Equity 8,83,148.79 6,84,692.72
C Share Application Money pending allotment
The Company had received advance from the existing shareholder - the Governor of Gujarat for equity share subscription on a right basis. This amount has been approved for share allotment on right basis in March 2020 and also allotted subsequent to the year end, in April 2020.
284 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
D Contingency Reserve
As per provisions of 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. During the year, as there is sufficient fund for Contingencies, no appropriation is made to the Contingency Reserve Fund. (PY. Nil).
E Fly ash utilisation Reserve Fund
As per Notification of MoEF dated 03.11.2009, the company 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 utilizes the same regularly for O&M for the Fly ash utilisation & development of infrastructure facilities. The Company has achieved 100% utilization of fly ash during the year at Gandhinagar, Wanakbori, Sikka and Kutch Lignite TPS and hence no separate account is required to be maintained for these TPS.
During the year, fly ash utilisation at Ukai and Bhavnagar Lignite TPS is less than 100 % and hence 1,314.82 Lakhs (P.Y. 2,983.05 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 GIPCL at the time of acquisition of Associate.
G Capital Reserve on account of Business Combination
Capital Reserve on account of Business Combination is due to acquisition by Subsidiary- GSECL
H Securities Premium
Till previous year, securities premium is the share of securities premium of the Non-controlling interests.
I Equity Instruments through Other Comprehensive Income
The Company has elected to recognise changes in the fair value of certain investments in equity 285 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
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.
J Reserve for Financial Asset measured at fair value through OCI
The 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.
20 Deferred Government Grant, Subsidies and Consumer Contribution ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Government Grants, Subsidies towards Capital Assets 3,12,754.16 3,06,758.02 Consumers' contribution towards Capital Assets 5,92,347.44 5,46,306.01 Total 9,05,101.60 8,53,064.03
A Particulars relating to Deferred Government Grants, Subsidies and Contributions ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019
Government Grants, Subsidies towards Capital Assets Opening balance 3,06,758.02 2,79,324.65 Add : Received during the year 37,584.08 57,206.97 Less : Transferred to Statement of Profit and Loss (31,587.92) (29,773.59) Closing Balance 3,12,754.17 3,06,758.02 Consumers' Contribution towards Capital Assets Opening balance 5,46,306.01 4,86,545.19 Add : Received/transferred during the year 1,00,342.53 1,08,609.31 Less : Transferred to Statement of Profit and Loss (54,301.10) (48,848.48) Closing Balance 5,92,347.44 5,46,306.01 Total 9,05,101.60 8,53,064.03 Refer Note No. 65 286 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
21 Borrowings ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Secured (a) Term Loans (i) From Banks 5,25,846.54 9,36,961.83 (ii) From Financial Institutions 1,70,889.23 2,27,149.73 Unsecured (a) Term Loans (i) From Financial Institutions 35,524.28 11,350.96 (ii) From Gujarat State Financial Services 1,23,943.30 1,65,444.88 (b) Loans from Related Party - Govt. of Gujarat (i) Loan for Power Purchase 8,750.00 9,100.00 (ii) State Government Loan under APDRP 2,125.47 3,230.55 (iii) Loan from Asian Development Bank 13,071.23 17,420.25 (iv) Term Loan from Govt. of Gujarat - Foreign currency loans 38,483.47 37,589.13 (v) Kisan Hit Urja Shakti Yojna (KHUSHY) Loan - 400.00 Total 9,18,633.52 14,08,647.34
A MATURITY PROFILE OF SECURED & UNSECURED LOANS For Financial Year 2019-2020 ( in Lakhs)
2023-24 & Particulars 2020-21 2021-22 2022-23 After
SECURED LOANS Term Loan from Banks 67,592.05 1,30,797.14 1,36,142.35 2,58,907.05 Term Loan from Financial Institutions 4,046.81 3,151.13 29,870.21 1,37,867.88 UNSECURED LOANS Govt. of Gujarat (Related Party) Loan for Power Purchase 350.00 350.00 350.00 8,050.00 State Government Loan under APDRP 1,105.08 913.23 879.35 332.89 Loan From Asian Development Bank 4,349.01 3,394.74 3,394.74 6,281.74 Term Loan from Govt. of Gujarat - Foreign currency loans 2,482.80 2,483.00 2,483.00 33,517.47 Kisan Hit Urja Shakti Yojna (KHUSHY) Loan 400.00 - - -
287 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Loan from Financial Institutions - 7,600.00 7,600.00 20,324.28 Loan from Gujarat State Financial Services 1,19,335.02 70,563.27 17,129.30 36,250.73 TOTAL 1,99,660.77 2,19,252.52 1,97,848.95 5,01,532.05
In respect of Parent GUVNL,
In case of Loan for Power Purchase Interest Rate is 10% p.a. and repayment to be done in Yearly instalment upto FY 2046-47 (26 Nos. of Instalments Due after the Balance Sheet Date)
In case of Loan from ADB - 1803 Interest Rate is 11.36% p.a. and repayment to be done in Yearly instalment upto FY 2023-24 (4 Nos. of Instalments Due after the Balance Sheet Date)
Common loans raised by GUVNL:
The Holding Company, GUVNL (erstwhile GEB) raised fund by issue of bonds as well as borrowing from Banks, Financial Institutions, GoG and other Public Sector Undertakings for common usages of GUVNL and its subsidiaries which are engaged in generation, transmission and distribution. The repayment and interest of these borrowings are reimbursed by such subsidiary companies to GUVNL. Facilities Sharing Agreement between Bank, GUVNL and its subsidiaries have been executed. Consequently, the part amount of loan outstanding from Banks and Financial Institutions are disclosed under the head ‘Long Term Borrowings / Short Term Borrowings’ and maturity pattern, terms of repayment and security as disclosed below are as per the information provided by GUVNL.
Details of Securities given of above Secured Loans is as follows:
In respect of subsidiary GETCO, Balance Rate of Interest No of Instalment / Term Loans outstanding as on Inst. Amount as on 31.03.2020 Type 31.3.2020
State Bank of India TL - II (Sanctioned Limit 400 Cr.) (Term Loan is secured by hypothecation 7.50% 13,000.00 13/ Quarterly 1,000.00 / mortgage charge on Upcoming assets of Substations along with its associated transmission lines covered under Amreli Circle, Palanpur Circle and Transmission Lines covered under Anjar Circle and Palanpur Circle)
288 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
State Bank of India TL - III (Sanctioned Limit 400 Cr.) (Term Loan is secured by hypothecation 7.50% 5,455.09 6/ Quarterly " 5-1000.00 " / mortgage charge on Upcoming Last-455.09 assets of Substations along with its associated transmission lines covered under Palanpur Circle, Navsari Circle, Anjar Circle, Bharuch Circle, Amreli Circle, Nadiad Circle, Surendranagar Circle, Jamnagar Circle and Transmission Lines covered under Palanpur Circle, Navsari Circle, Anjar Circle)
State Bank of India TL - IV (Sanctioned Limit 2000 Cr.) (Term Loan is secured by 7.50% 73,897.37 15/ Quarterly " 14-5000.00 " hypothecation / mortgage charge on Upcoming assets of Substation Last-3897-37 along with its associated transmission lines and Transmission Lines covered under Mehsana, Amreli, Anjar, Bharuch, Gondal, Himmatnagar, Jambuva, Jamnagar, Nadiad, Surendranagar, Jamnagar, Junagadh & Palanpur Circle)
State Bank of India TL - V (Sanctioned Limit 305 Cr.) (Term Loan is secured by hypothecation 7.50% 17,861.00 22/ Quarterly " 21-847.00 " / mortgage charge on Upcoming assets of Substation along with its Last-74.00 associated transmission lines and Transmission Lines covered under Mehsana, Amreli, Gondal, Jambuva, Nadiad, Surendranagar, Junagadh & Palanpur Circle)
289 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Rural Electrification- (Sanctioned Limit 3808.08 Cr.) (Term loan is to be secured by hypothecation of existing assets long with its associated transmission lines 8.10% 1,51,351.75 22/ Quarterly 6,879.63 covered under Amreli Circle, Anjar Circle, Bharuch Circle, Gondal Circle, Himmatnagar Circle, Jambuva Circle, Jamnagar Circle, Mehsana Circle, Nadiad Circle, Navsari Circle and Surendranagar Circle)
In respect of subsidiary GSECL,
(A) Banks (Secured Loan) ( in Lakhs) Instalment Interest Outstanding Maturity Period Name of FI/Banks Amount Rates Amount (in Quarters) (Per Quarter) (i) SBI - Unit no. 6 of Ukai TPS Mortgage against Movable and Immovable Property of Unit no. 6 of Ukai TPS 31.03.2020 7.50% 46,300.00 8 5,700.00 31.03.2019 8.25% 92,578.72 16 5,700.00
(ii) SBI - Corporate Loan Mortgage against Movable and Immovable Property of Unit 1 to 7 of Wanakbori TPS, Unit 1 to 5 of Ukai TPS, Kadana & Ukai Hydro Power Stations 31.03.2020 7.50% 63,500.00 12 5,250.00 31.03.2019 8.25% 1,06,271.26 20 5,250.00
290 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(iii) SBI - Unit no. 8 of Wanakbori TPS Mortgage against Movable and Immovable Property of Unit no. 8 of Wanakbori TPS 31.03.2020 7.50% 1,55,423.42 38 6,190.00 31.03.2019 8.25% 1,58,739.67 42 6,190.00
(iv) SBI - Unit no. 3 & 4 of Sikka TPS Mortgage against Movable and Immovable Property of Unit no. 3 & 4 of Sikka TPS 31.03.2020 7.50% 75,126.31 36 5,487.50 31.03.2019 8.25% 1,19,893.80 44 5,487.00
(v) Dena Bank - Unit no. 3 of Dhuvaran GBPS Mortgage against Movable and Immovable Property of Unit no. 3 of Dhuvaran GBPS 31.03.2020 - - - - 31.03.2019 8.30% 5,663.48 23 375.00
(vi) Canara Bank - Unit no. 3 of Dhuvaran GBPS Mortgage against Movable and Immovable Property of Unit no. 3 of Dhuvaran GBPS 31.03.2020 - - - - 31.03.2019 8.35% 7,498.28 7 500.00 (vii) Bank of Baroda - Unit no. 3 of Dhuvaran GBPS Mortgage against Movable and Immovable Property of Unit no. 3 of Dhuvaran GBPS 31.03.2020 - - - - 31.03.2019 8.30% 10,300.41 23 875.00 291 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(viii) Bank of Baroda - Unit no. 8 of Wanakbori TPS Mortgage against Movable and Immovable Property of Unit no. 8 of Wanakbori TPS 31.03.2020 7.55% 15,009.48 36 1,875.00 31.03.2019 8.30% 31,884.48 44 1,875.00
(ix) Vijaya Bank - Unit no. 3 of Dhuvaran GBPS Mortgage against Movable and Immovable Property of Unit no. 3 of Dhuvaran GBPS 31.03.2020 - - - - 31.03.2019 8.40% 5,287.88 7 375.00
(x) Corporation Bank - Unit no. 8 of Wanakbori TPS Mortgage against Movable and Immovable Property of Unit no. 8 of Wanakbori TPS 31.03.2020 - - - - 31.03.2019 8.20% 7,742.34 44 33.62
(xi) SBI- Unit No. 1 & 2 of Bhavnagar Lignite TPS Mortgage against Movable and Immovable Property of Unit No. 1 & 2 of Bhavnagar Lignite TPS 31.03.2020 7.65% 1,25,136.62 73 77.24 31.03.2019 8.25% 1,96,040.02 77 73.17
(xii) Bank of India- Unit No. 1 & 2 of Bhavnagar Lignite TPS Mortgage against Movable and Immovable Property of Unit
292 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
No. 1 & 2 of Bhavnagar Lignite TPS 31.03.2020 - - - - 31.03.2019 8.50% 75,505.31 77 28.16
(xiii) Vijaya Bank- Unit No. 1 & 2 of Bhavnagar Lignite TPS Mortgage against Movable and Immovable Property of Unit No. 1 & 2 of Bhavnagar Lignite TPS 31.03.2020 - - - - 31.03.2019 8.65% 20,390.16 77 7.60
(xiv) Canara Bank- Unit No. 1 & 2 of Bhavnagar Lignite TPS Mortgage against Movable and Immovable Property of Unit No. 1 & 2 of Bhavnagar Lignite TPS 31.03.2020 - - - - 31.03.2019 8.35% 20,227.01 77 7.60
(xv) Dena Bank-Unit No. 1 & 2 of Bhavnagar Lignite TPS Mortgage against Movable and Immovable Property of Unit No. 1 & 2 of Bhavnagar Lignite TPS 31.03.2020 - - - - 31.03.2019 8.30% 34,761.04 77 12.96 Total Borrowings (A) 31.03.2020 4,80,495.83 31.03.2019 8,92,783.85
293 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(B) Financial Institutions (Unsecured Loan) ( in Lakhs)
Instalment Gujarat State Financial Services Interest Outstanding Maturity Period Rates Amount (in Months) Amount
(i) GSFS-9 31.03.2020 7.00% 8,000.00 8 1,000.00 31.03.2019 7.75% 20,000.00 20 1,000.00 (ii) GSFS-1780 (885) 31.03.2020 7.00% 32,777.78 20 1,638.89 31.03.2019 7.75% 52,444.44 32 1,638.89 (iii) GSFS-1780 (100) 31.03.2020 7.00% 5,740.74 31 185.18 31.03.2019 7.75% 7,962.96 43 185.18 (iv) GSFS-300-100 31.03.2020 7.00% 9,583.33 36 208.33 31.03.2019 7.75% 10,000.00 48 625.00 (v) GSFS-300-200 31.03.2020 7.00% 20,000.00 48 416.67 31.03.2019 - - - - (vi) GSFS-286 31.03.2020 - - - - 31.03.2019 7.75% 7,500.00 3 2,500.00 Total Borrowings (B) 31.03.2020 76,101.85 31.03.2019 97,907.40 Total Borrowings (A+B) 31.03.2020 5,56,597.68 31.03.2019 9,90,691.26
In respect of Subsidiary PGVCL,
Some of the assets viz. Plant and Machinery, Hydraulic works, lines and cables, furniture and fixtures and office equipments are given as security to the Banks for the loans raised by Holding Company i.e. GUVNL. Charges created in respect of these assets as well as charges in respect of loan from Power Finance Corporation (PFC), Bank of Baroda & Bank of India availed by the PGVCL are as under :
294 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Name of the Bank in whose Amount for which the Location at which the assets are in favour charges is created charge is created existence and on which the ( in lakhs) charge is created
Loans Allocated by GUVNL UCO Bank Consortium 71,400.00 Current Assets Loans Availed by PGVCL Power Finance Corporation 30,535.00 Charge on the asset which are acquired out of the term loan. Bank of India 15,000.00 Charge on the asset which are acquired out of the term loan.
In respect of Subsidiary UGVCL,
Loan from PFC is secured against 1st hypothecation of assets constructed or under construction, under the new financed assets under RAPDRP-A and SCADA-A projects. As per PFC letter no. 04:06:R-APDRP: 2016-17:Vol-V:G15/45526 dated 03.02.2017 and letter no. 04:06:R-APDRP:G15:2018-19/058176 dated 01.08.2018, as the loan is to be converted into grant as the project is successfully completed within the extension provided by the PFC, the re-payment made till date against this loan has been considered as repayment towards Loan’s Principal Amount.
In respect of Subsidiary MGVCL,
Loan from Bank of Baroda outstanding 2,729.30 Lakhs, (P.Y. 3,996.62 Lakhs) is secured against hypothecation charge on movable assets of projects under NEF scheme. Outstanding amount repayable in 29 monthly instalments of 95.25 Lakhs each. Rate of interest 8.50% p.a. Loan from PFC under R- APDRP Scheme, outstanding 5,925.90 Lakhs (P.Y. 6,484.30 Lakhs) is secured against charge of Plant and Machinery and lines and cables of Anand & Nadiad City Division of MGVCL.
As per terms of R-APDRP Part-A, the loan of MGVCL of 5,554.55 Lakhs will be converted into capital grant on fulfilment of stipulated conditions. If conditions are not fulfilled, the loan is repayable in remaining 29 monthly instalments over a period of 3 years an average of 191.54 Lakhs each. The current outstanding of R-APDRP Part-A loan amounts to 2,330.32 Lakhs (P.Y. 2330.32 Lakhs)
As per terms of SCADA Part-A, the loan of MGVCL of 277.99 Lakhs (P.Y. 689.35 Lakhs) may be converted into capital grant on fulfilment of stipulated conditions. If conditions are not fulfilled, the loan is repayable in 40 monthly instalments over a period of 4 years at an average of 17.52 Lakhs each starting from January 2017.
295 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
As per terms of R-APDRP of Part-B Scheme, the loan of MGVCL of 1,105.20 Lakhs will be converted into Grant upto 50% on fulfilment of stipulated conditions. The loan will be repaid in 140 monthly instalments over a period of 14 years at an average of 7.62 Lakhs. Further 1,525.00 Lakhs disbursed for Additional Anand & Dahod town and SCADA under RAPDRP -Part B, it will be converted into Grant upto 50% on fulfillment of stipulated conditions. The loan will be repaid in 150 monthly installments over a period of 15 years at an average of 10.17 Lakhs, starting from March-2021; if conditions are not fulfilled, starting from June 2021. The current outstanding of R-APDRP Part-B and new loan amounts to 2,372.44 Lakhs (P.Y. 2,487.94 Lakhs) and outstanding of SCADA under R-APDRP Part-B loan amounts to 945.14 Lakhs (P.Y. 976.69 Lakhs). Rate of Interest 9% p.a.
In respect of subsidiary DGVCL,
Loan from PFC Financial Institution, outstanding 4,032.70 lakhs as on 31.03.2020 ( 4,320.40 as on 31.03.2019) mentioned at Note above, is secured against charges on the (A) The whole R-APDRP movable properties of the newly finance assets under the project comprising of Hardware, Software, Bandwidth Charges, Implemention cost, GIS Survey Cost, System Metering Cost etc. created / to be created out of the above loans to be installed at 11 Towns namely Surat, Jambusar, Bardoli, Rajpipala, Navsari, Vyara, Vapi, Valsad, Billimora, Bharuch and Ankleshwar under the Company,includig its movable plant & machinary, machinary spares, tools and accessories, plant turbine and other various equipments, both present and future as well as on the existing movable assets comprising PV Modules, Lamps Lead Acid Battary, control Electronics, Module mounting Hardware, Battery Box interconnecting wires/cables, swithches etc of solar Generating Equipments of Rajpipala (O & M) division of the Company.(B) The Whole of the movable properties of the newly financed assets to be created at Surat, jambusar, Vyara, Vapi, Valsad, Billimora and Bharuch including movable plant & machinery, machinery spares, tools and accessories,spares and material at above mentioned project sites both present and future and the entire existing assets (Over head lines of 13.2 KV to 66 KV ) at Rajpardi-Sub Division pf Rajpipla O & M Division, Bharuch Circle. (C) The whole of the movable assets of the R-APDRP (SCADA) project site, present and future and the existing assets at Rajpipla- 1 subdivision of Rajpipla O & M division ( overhead lines on RCC support-11 Kv), Bharuch Circle and deed of undertaking given by Goverment of Gujarat.
As per the PFC letter no. 02:10: R-APDRP (P-A):2009: Utilities dated, 11.07.2013, The financial assistance as availed from PFC towards the R-APDRP project as loan along with the interest thereon shall be converted into the grant once the establishment of the required system is achieved and verified by an independent agency appointed by the Ministry of Power (MoP). No conversion to grant will be made in case the projects are not completed within the period of 5 years. Till the completion of the project, the said financial assistance is treated as loan and accordingly the interest has been accrued and accounted. The moratorium period of the said loan is of 5 years. 296 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Furthermore the work of R-APDRP Part B SCADA has been completed in Nov-17 and as per the Office Memorandum No. 26.01.2015-IPDS (Vol – IV) – Part (1), Government of India, Ministry of Power Dtd: 24.06.2019, the time limit extension for conversion of Part A- Scada has been extended.
Registration of Charge on Assets
The Group has, under a scheme of transfer, acquired the properties, which are subjected to charges created by the erstwhile GEB. As per the provisions of the Companies Act, the group is required to register the charges in respect of all such assets with the Registrar of Companies. Due to the common funds for all the operations of erstwhile GEB, funds were raised against the charge over all its assets. The Group, therefore has not registered the charge on these properties with the Registrar of Companies, Gujarat.
Secured and Unsecured Loans:
The loans which were raised by erstwhile G.E.B. from State Goverment (loan under APDRP) relating to generation, transmission and distribution activities and were used for common purposes are continued in the books of GEB / (now GUVNL) on behalf of all transferee companies and the same have been apportioned under FRP Notification dated 3rd October, 2006, amongst all transferee companies and the same loans have been accounted by the Company as “loans allocated by GUVNL” in separate accounts. The repayments and interest thereon are reimbursed by the subsidiaries to GUVNL.
In light of above note, the said loans are reclassified and regrouped either as secured loans or unsecured loans and shown as Non current borrowings under Non-current liabilities and current borrowings under current liabilities as per repayment schedule given by GUVNL.
Default in payment of Interest and Principal on Term Loans from Banks in respect of erstwhile BECL: Default for the year ended March 31st, 2019 a Interest Default ( in Lakhs)
Amount Date of Delay Month Due Date ( in Lakhs) Payment (In Days)
Apr-18 921.66 01-05-2018 27-07-2018 86 1,164.13 01-05-2018 30-07-2018 89 452.22 01-05-2018 31-07-2018 90 2,538.00 May-18 385.28 01-06-2018 24-08-2018 83 1,760.93 01-06-2018 29-08-2018 88
297 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
536.74 01-06-2018 30-08-2018 89 190.03 01-06-2018 01-09-2018 91 2,872.98 Jun-18 777.88 01-07-2018 30-08-2018 59 1,063.90 01-07-2018 01-09-2018 61 808.13 01-07-2018 11-09-2018 71 2,649.91 Jul-18 761.87 01-08-2018 30-08-2018 28 1,045.47 01-08-2018 01-09-2018 30 809.47 01-08-2018 11-09-2018 40 2,616.80 Aug-18 804.65 01-09-2018 11-09-2018 9 804.65 b Principal Default ( in Lakhs)
Amount Delay Period Due Date Date of ( in Lakhs) Payment (In Days)
Quarter 1 of F.Y. 18-19 7,313.00 30-06-2018 01-09-2018 62
22 Trade Payables ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Micro and Small Enterprises (refer note 28A) - - Others Amount owing to Licensees 85.29 85.29 Total 85.29 85.29
23 Other Non-Current Financial Liabilities ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Staff Welfare Schemes 666.91 652.56 Security Deposit from Consumers 6,59,811.92 5,97,224.56 Lease Liability (Refer Note No. 57) 292.22 -
298 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Deposits for Electrification & Service connection 1,123.96 55.60 Staff Voluntary Retirement cum Death Benefit Scheme 15,603.64 15,615.97 Liabilities towards SKY scheme 18,917.62 9,833.91 Total 6,96,416.26 6,23,382.61
24 Long-Term Provisions ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Provision for Employee Benefits Provision for Leave Encashment 1,50,974.31 1,42,989.49 Total 1,50,974.31 1,42,989.49
25 Deferred Tax Liabilities (Net) The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet: ( in Lakhs)
As at As at 31st March, 2020 31st March, 2019
Deferred Tax Liabilities 5,83,714.45 5,16,363.80 Deferred Tax Assets 3,87,911.59 3,45,682.82 Total 1,95,802.86 1,70,680.98
As at 31st March, 2020 ( in Lakhs) Recognized in Opening Recognized in Closing Particulars Other Balance profit and loss Comprehensive Balance Income
Deferred Tax Liabilities Property, Plant and Equipment 5,16,199.99 67,168.98 - 5,83,368.97 Fair value of Investment at FVTOCI 163.80 - 181.68 345.48 Deferred Tax Liabilities 5,16,363.80 67,168.98 181.68 5,83,714.45 Deferred Tax Asset on account of: Employee Benefits 30,390.74 (9,071.16) 7,808.77 29,128.35 Provision for Doubtful Debts 16,072.75 1,040.77 - 17,113.51 Deferred Government grant 19,045.69 (3,387.06) - 15,658.63
299 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Carried forward of unused Tax Losses 33,921.81 (8,643.49) - 25,278.32 Unabsorbed Depreciation 1,26,924.98 26,366.24 - 1,53,291.22 MAT Credit 1,13,611.04 25,158.70 - 1,38,769.73 Carried forward of unused Tax Credits 1,443.77 3,017.97 - 4,461.74 Others 640.24 (61.97) - 578.27 Deferred Tax Assets 3,42,051.02 34,420.00 7,808.77 3,84,279.79 Adjustment for Deferred tax asset not recognised in previous year 3,631.80 3,631.80 Amounts recognised in Balance Sheet 3,45,682.82 34,420.00 7,808.77 3,87,911.59 Net Deferred Tax Liability 1,70,680.98 1,95,802.86 Amounts not recognised in Balance Sheet (Refer Note A below) -
As at 31st March, 2019 ( in Lakhs) Recognized in Opening Recognized in Closing Particulars Other Balance profit and loss Comprehensive Balance Income
Deferred Tax Liabilities Property, Plant and Equipment 4,53,525.69 62,674.30 - 5,16,199.99 Fair value of Investment at FVTOCI (120.50) - 284.30 163.80 Deferred Tax Liabilities 4,53,405.19 62,674.30 284.30 5,16,363.80 Deferred Tax Asset on account of: - Employee Benefits 33,665.66 (9,934.04) 6,659.12 30,390.74 Provision for Doubtful Debts 25,093.77 (9,021.02) - 16,072.75 Carried forward of unused Tax Losses 8,491.73 25,430.09 - 33,921.81 Unabsorbed Depreciation 54,404.47 72,520.51 - 1,26,924.98 MAT Credit 1,12,517.80 1,093.24 - 1,13,611.04 Deferred Government grant 26,111.31 (7,065.62) - 19,045.69 Carried forward of unused Tax Credits - 1,443.77 - 1,443.77 Others 58.85 581.39 - 640.24 Deferred Tax Assets 2,60,343.58 75,048.32 6,659.12 3,42,051.02 Adjustment for Deferred tax asset not recognised in previous year 3,631.41 3,631.80 Net Deferred Tax Liability 1,93,061.61 (12,374.02) (6,374.82) 1,74,312.78 Amounts not recognised in Balance Sheet (Refer Note A below) 300 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
A In Holding Company GUVNL and Subsidiary Company DGVCL due to uncertainty about earnings sufficient taxable income in forseeable future to utilise such deferred tax asset, recognition of the same has been restricted to the extent of Deferred Tax Liabilities. Further additionally in case of Subsidiary MGVCL and UGVCL, the Company had net deferred Tax Assets on account of unabsorbed depreciation and Unused Tax Credit as at the year ended 31st March 2019 and in the absence of reasonable certainty and convincing evidence of sufficient future taxable income, net deferred tax asset was not recognized in the previous financial year.
26 Other Non Current Liabilities ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Deposits for Execution of Job/Works 2,78,036.62 2,26,001.03 Deposits for Electrification & Service connection 21,472.06 16,212.59 Other Liabilities 34.49 - Total 2,99,543.17 2,42,213.63
27 Short Term Borrowings ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Loans repayable on Demand Secured Cash Credit From Banks 24,019.48 35,563.42 Total 24,019.48 35,563.42
A 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.
28 Trade Payables ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Trade payables - Micro, Small and Medium Enterprises 1,014.09 1,322.95 - Others 10,53,177.64 7,04,147.27 10,54,191.73 7,05,470.22
301 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Trade payables - O & M Supplies / Works 3,527.16 2,456.68 - Fuel 67,212.48 90,300.61 - Purchase of Power 9,81,123.80 6,12,228.70 - Others 2,328.29 484.24 Total 10,54,191.73 7,05,470.22
A DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES
The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro
and Small Enterprises are as below: ( in Lakhs)
Trade Payables - Total outstanding dues of Micro & As at As at st st Small Enterprises 31 March, 2020 31 March, 2019 Principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year 1,014.09 1,322.95 Interest paid by the Company in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year; - - Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006 - - Interest accrued and remaining unpaid as at end of each accounting year - - Further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise - -
No interest during the year has been paid to Micro and Small Enterprise on delayed payments. Further Interest Accrued during the year and remaining unpaid is not provided in the books as the management is of the opinion that due to contractual terms they will not be required to pay the same.
302 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
29 Other Current Financial Liabilities ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Current maturities of Long Term Debt: Secured: Term Loans From Banks 67,592.05 1,30,670.06 Loan from Financial Institutions 4,046.81 32,403.35
Unsecured: Govt. of Gujarat (Related Party) (i) Loan for Power Purchase 350.00 350.00 (ii) Loan from Asian Development Bank 4,349.02 4,349.02 (iii) Loan from Asian Development Bank - Foreign Currency 2,482.80 2,278.13 (iv) KHUSHY Loan 400.00 400.00 (v) Loan under APDRP Scheme 1,105.08 1,105.07 (vi) Loan from Gujarat State Financial Services 1,19,335.02 1,14,168.41 Interest Accrued & Due on Loan for SKY Scheme 716.86 24.81 Interest accrued but not due on Loans 19,356.42 20,584.15 Interest Accrued and Due on Loans from Banks 715.62 6,897.99 Liability for Stale Cheques 629.26 825.58 Interest payable on consumers security Deposit 33,962.59 28,830.58 Liability for O&M Supplies/Works 24,287.18 44,786.64 Staff Related Liabilities 1,009.79 628.18 Staff Retirement cum Death Benefit Scheme 1,017.48 875.56 Unclaimed amount relating to Bonds 262.39 264.89 Deposits & Retentions from Suppliers / Contractors 3,38,928.69 3,56,672.64 Pending utilisation of Grant received (net off expenditure) for solar energy pump set/solar home light/Sky Scheme/ Surya Gujarat Scheme) 4,119.23 5,449.20 Payable to Gujarat Energy Training & Research Institute 178.77 - Deposits for Electrification & Service connection 37,265.69 40,471.33 Current Maturity of Lease Liability (Refer Note No. 57) 5.85 - Outstanding liability for expenses 1,96,935.64 1,59,218.01 Grant Unallocated 872.54 91.35
303 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Loan under SKY scheme 2,968.61 1,484.56 Corpus Fund of Bal Urja Rakshak Dal 55.32 52.51 Board of Trustees----CPF 752.29 541.02 Liability for Capital Supplies / Works 42,656.65 55,180.41 Amount payable to EESL 871.44 1,566.22 Staff Welfare Scheme 844.31 753.00 Liquidated Damages 63,739.95 51,267.31 Deposits for execution of Job Works 5,402.69 4,549.85 Other Liability 9,325.02 4,893.45 Total 9,86,541.08 10,71,633.29
A DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES
The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as below: ( in Lakhs)
Trade Payables - Total outstanding dues of Micro & As at As at st st Small Enterprises 31 March, 2020 31 March, 2019 Principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year 5,934.60 13,245.61 Interest paid by the Company in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006, Along with the amount of the payment made to the supplier beyond the appointed day during each accounting year; - - Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act, 2006 - - Interest accrued and remaining unpaid as at end of each accounting year - - Further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise - -
304 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
No interest during the year has been paid to Micro and Small Enterprise on delayed payments. Further Interest Accrued during the year and remaining unpaid is not provided in the books as the management is of the opinion that due to contractual terms they will not be required to pay the same.
30 Other Current Liabilities ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Statutory Liabilities 9,496.32 7,962.99 Subsidy/Grants received in advance 2,937.85 3,981.52 Advances received 1,804.67 5,906.09 Income Received in Advance 1,02,512.70 1,35,131.68 Other Liability 1,151.15 921.20 Tax on Electricity Duty payable to State Govt. 74.52 314.30 Payble to Gujarat Energy Training & Research Institute (GETRI) 36.60 - Total 1,18,013.81 1,54,217.77
31 Short Term Provisions ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Provision for Employee Benefits Provision for Gratuity - 16,050.34 Provision for Leave Encashment 13,935.92 10,440.02 Provision for Bonus 361.37 561.45 Provision for CSR as per Ministry of Environment & Forest (Refer Note 48) 433.00 263.00 Total 14,730.29 27,314.81
32 Current Tax Liabilities (Net) ( in Lakhs) As at As at Particulars 31st March, 2020 31st March, 2019
Current Tax Liability Wealth Tax payable - 1.74 Current Tax Assets Tax Refund Receivable - -1.61 Total - 0.12 305 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
33 Revenue from Operations ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019 Income from Operating Activity Revenue from Sale of Power Residential General Purpose 6,93,564.86 6,15,082.04 General Lighting Purpose 19,142.66 16,837.50 Non-residential General Purpose & LT Medium Demand 9,74,451.29 8,77,917.51 HT Industrial 24,09,931.87 23,42,042.97 Public Lighting 15,426.66 14,614.42 Traction Railways 567.49 723.83 Irrigation Agricultural 6,20,846.88 6,50,137.56 Public water works and sew.pumps 1,21,837.17 99,891.20 Revenue from Sale of Electrical Energy 940.49 781.14 Sale of Power through Power Exchanges & Bilateral Agreements 16,306.89 10,812.79 Supply in Bulk-Licensee 555.56 656.66 Less: Cash discount -141.22 -358.29 Sub Total 48,73,430.58 46,29,139.33
Electricity Duty Electricity Duty Assessed 5,14,832.49 4,72,222.23 Less: Electricity Duty Assessed (Contra) -5,14,832.49 -4,72,222.23 Sub Total - -
Sale of Services Revenue from Transmission Charges 58,512.47 46,736.61 Parallel operation charge 11,735.01 5,486.91 SLDC fees & charges 1,446.53 405.50 Net Unscheduled Interchange Income 16,112.74 8,275.60 Sub Total 87,806.76 60,904.62
Income from Other Operating Activity Meter Charges / Service line charges 75.93 22.37 Recoveries for theft of power / Malpractices 15,187.01 15,561.34 Wheeling Charges Recoveries 349.28 47.28 306 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Delayed payment charges from consumers 25,427.69 21,288.49 Operation & Maintenance charges 2,091.69 3,232.22 Cross Subsidy Surcharge 40,466.54 14,979.89 Addl. Surcharge - OA Consumers 2,601.32 4,893.41 Agriculture Subsidy 1,00,833.33 1,10,000.00 Misc. Charges from Consumers 23,898.06 22,398.09 Rebate (Cash Discount) for Prompt Payment 43,469.40 48,192.34 Liquidated Damages 243.55 178.62 CDM Benefit from Renewable Energy Sources 84.04 33.14 Supervision Income from O&M activity 2,039.76 661.99 Connectivity Charges for Solar 1,674.47 - Sale of Fly Ash 5,317.15 5,905.74 Less: Transferred to Fly Ash Utilisation Reserve (1,314.82) (2,983.05) Reimbursement of O&M Expenses 4,063.56 - Reactive Charges Income 733.65 1,393.00 Supervision Income from execution of Deposit work 1,536.67 - Income from trading activity 33,447.25 36,086.25 Sub Total 3,02,225.53 2,81,891.12 Total 52,63,462.87 49,71,935.08
Deviation Settlement Mechanism charges (UI) (Underdrawal/Overdrawal charges) have been accounted as provided by SLDC following the Deviation Settlement Mechanism (DSM).
34 Other Income ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Interest Income Interest on Staff Loans and Advances 1,525.27 2,063.13 Interest on Advances to Others 676.13 2,474.36 Interest on - IT Refund 1.70 - Interest Income from Fixed Deposits 43.43 441.14 Interest Income from Investments 1,062.08 1,211.42 Dividend Income - From Investments 339.67 297.01
307 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Other Non Operating Income Deferred Income 85,889.27 78,622.07 Grant for energy conservation 292.96 225.38 Grant received for R & D Expenses (refer note 50) 395.88 208.16 Income from Sales -Stores, Scrap etc. 924.94 1,503.08 Gain on Foreign Exchange Fluctuation 20.94 355.08 Penalties received from supplier/contractor 12,737.67 4,177.47 Provision no longer required 10,695.38 21,399.21 Miscellaneous Income 16,321.78 17,427.04 Total 1,30,927.11 1,30,404.54
35 Cost of Fuel consumed ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Materials/Fuel Consumed -Coal 5,59,655.73 7,73,380.02 -Oil 12,162.42 12,375.03 -Gas 55,679.40 55,875.50 -Water 13,300.44 15,875.16 Other Fuel related cost 733.16 363.92 Cost of Trading activity 30,705.83 32,948.84 Lubricants and Consumables 1,629.18 1,918.20 Total 6,73,866.15 8,92,736.67
Gujarat Power Corporation Limited (GPCL) has been granted mining lease vide Industries and Mines Department, Government of Gujarat Order Number ''MCR-1093-(G-11)1318-CHH-1" dated ''04th June 1998"s for Ghogha-Surkha Lignite Mine in Bhavnagar District of the Gujarat State for supplying Lignite at erstwhile BECL. Lignite supply from the Mine was started from August 2018.
The Fuel Supply Agreement between GPCL and the GSECL for its BLTPS plant is under finalisation. During the F.Y. 2019-20, GSECL has considered the cost of lignite supplied from GPCL on the basis of the bills raised by GPCL for supply of lignite to BLTPS during F.Y. 2019-20. Change, if any, in the rate of lignite will be accounted for in the year of finalisation of fuel supply agreement.
308 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
36 Purchase of Power ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
From Central Sector Nuclear Power Corporation of India Ltd. 1,51,189.34 90,612.24 NTPC Ltd. 7,30,527.24 7,17,985.43 Sardar Sarovar Narmada Nigam Ltd 13,097.67 1,862.13 Sub Total 8,94,814.26 8,10,459.80 From Private Sector CLP India Pvt Ltd. - 43,915.94 Essar (Vadinar) Ltd. 1,44,840.87 - ACB India Ltd. 26,346.07 30,999.53 Adani Power Ltd. 4,22,558.82 4,11,479.94 Coastal Gujarat Pvt. Ltd. 3,39,037.69 3,35,605.25 Sub Total 9,32,783.45 8,22,000.67 From State Sector Gujarat Industries Power Company Ltd. 1,00,976.83 98,180.66 Gujarat State Energy Generation Ltd. (Hazira) 42,342.00 45,748.59 Gujarat Mineral Development Corporation (GMDC) 13,422.55 21,265.11 GPPC Pipavav 49,566.13 61,593.39 Sub Total 2,06,307.51 2,26,787.75 From Other Wind Farms 3,11,946.02 2,81,564.22 Purchase of Solar Power 2,24,150.93 2,12,097.32 Purchase of Power from Non-Renewable Sources 3,64,441.00 63,411.06 Captive Power Plants 126.88 666.14 Power Exchange of India Ltd. 35.80 2,489.98 Unscheduled Interchange Expense 12,684.36 - India Energy Exchange 61,564.93 2,97,426.82 Short Term Purchase of Power 1,06,211.92 1,55,658.72 Sub Total 10,81,161.83 10,13,314.26 Wheeling / Transmission Charges: Power Grid Corporation Ltd. 2,44,269.26 2,06,187.15 Sub Total 2,44,269.26 2,06,187.15
Total 33,59,336.31 30,78,749.64
309 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
37 Employee Benefits Expense ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Salaries and Allowances 3,60,054.08 3,38,179.50 Contribution to PF & Other Trusts 33,288.25 35,533.68 Staff Welfare Expenses 5,794.20 6,566.60 Retirement and Other Benefits (refer Note 59) 44,908.29 31,169.26
Less : Directly attributable cost capitalised (refer note 1(C)(5.1)) (73,615.40) (73,076.73) Total 3,70,429.42 3,38,372.31
38 Finance Cost ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Interest Expense Interest on State Government Loans 4,765.61 5,239.48 Interest on Bonds 21,853.72 22,270.66 Interest on bank loan 17,156.40 30,062.35 Interest on Rural Electrification Corporation Loans and Power Finance Corporation 18,787.23 23,844.96 Interest on Term Loans 52,982.31 69,857.14 Interest on Other loans 1,957.64 1,163.94 Interest to Consumers on Security Deposits etc. 37,438.47 31,978.76 Interest on Income Tax 145.81 38.44
Other Borrowing Cost Loss on Foreign Exchange Fluctuation 5,541.73 2,531.18 Bank Charges, Commission and Others 994.62 911.39 Others 9.97 - Total (A) 1,61,633.53 1,87,898.31 Less : Directly attributable cost capitalised (refer note 1(C)(5.1)) (13,244.34) (21,937.92) Total 1,48,389.18 1,65,960.39
310 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
A Interest on PFC loan given for RAPDRP Project (as per the terms of the RAPDRP project), may be partially converted into Grant by GOI on meeting the conditions of conversion from Loan to Grant and will be treated as forgivable loan to that extent. In view of above, the total fund disbursed by PFC is treated as Borrowings and interest liability is shown under the head "Other Financial Liabilities".
39 Other Expenses ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Repairs & Maintenance Building and Civil Works 7,688.64 9,766.56 Plant and Machinery 61,850.27 49,977.22 Sub Station Maintenance under Contract 19,829.59 17,028.21 Lines, Cable Network etc. 19,684.02 19,030.96 Others 4,328.21 4,941.62 Administrative & General Expenses Rent, Rates and Taxes 2,911.69 3,610.95 Insurance 4,250.73 1,882.25 Testing Charges 508.08 466.00 Telephone & Postage Expenses 1,475.93 1,656.05 Remuneration to collection agencies 1,192.42 1,305.07 Legal & Professional Fees 1,259.14 1,649.02 Loss on sale of PPE (net of gain) 1,980.42 545.53 Auditors' Remuneration 96.66 98.74 Fee to Auditors for other works 0.03 0.06 Consultancy Charges 1,295.24 919.30 Technical Fees 225.76 140.94 Other Professional fees and expenses 2,090.28 3,644.85 Donation to CM Relief Funds 838.30 - Travelling & Conveyance 20,879.60 18,847.53 Printing & Stationery 2,612.85 2,502.27 Expenses on Computer Billing & EDP Charges 692.01 483.91 Advertisement 899.13 971.07 Entertainment Expense 27.74 32.54 Electricity Charges 1,507.51 1,743.83 Water Charges 610.79 591.12 Corporate Social Responsibilities 1,162.21 1,101.42 311 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Waiver of Delayed Payment Charges 1,954.20 4.52 Guest House Expenses 312.75 303.00 Security Expenses 10,040.60 9,637.95 Freight Expense 2,007.59 1,958.79 Expenditure on Training to Staff 508.16 589.19 Expenses for Energy Conservation 133.70 98.12 R & D Expenses 371.57 193.45 Energy Conservation Expenses for Ujala Scheme 5.88 14.60 Directors fees 7.30 7.02 Other Administration & general Expenses 14,390.79 12,293.36 Miscellaneous Expenses* 1,089.35 1,195.50 Miscellaneous Losses & Write-offs 4,100.24 2,694.72 Provision for -Bad & Doubtful debts 32,805.07 16,090.45 Less : Directly attributable cost capitalised (refer note 1(C)(5.1)) (12,495.12) (12,373.12) Total (A-B) 2,15,129.32 1,75,644.56
* None of items individually account for more than 1% of Total Revenue.
A During the year, an expenditure of 781.85 Lakhs (P. Y. 235.16 lakhs ) incurred towards Energy Conservation activities has been set off against the grant received from Govt. Of Gujarat for this purpose.
B Payment to Auditors (Fees excluding applicable tax) ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Audit Fees 80.45 80.45 Certifications 1.38 2.38 Out-of-pocket & Other Expenses 3.79 2.85
40 Exceptional items ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Profit on sale of assets considered as held for sale (3,073.28) (4,364.89) Total (3,073.28) (4,364.89)
312 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
41 Tax Expense ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Current Tax 33,914.81 14,153.30 Deferred Tax 32,748.58 (16,005.43) Earlier Years 5,960.38 (901.38) Total 72,623.77 (2,753.50)
A Reconciliation of Current Tax ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Profit Before Tax 2,28,538.15 96,893.11 Current Tax Expense calculated using applicable tax rate 39,930.19 20,678.93 Add: Remeasurement of Defined Benefit Obligations (5,896.92) (5,377.84) MAT related adjustments - (924.82) Adjustments recognized in the current year in relation to the current tax of prior years 366.49 (877.35) Provision for Doubtful Debts and unascertained liabilities (1,584.24) (651.89) Tax impact on Transition Adjustment 404.92 494.61 Others 694.38 811.68 Current Tax Expense 33,914.81 14,153.30
Applicable Tax Rate- Normal 34.94% 34.61% Applicable Tax Rate- MAT 17.47% 21.34%
On 20th September, 2019, vide the Taxation Laws (Amendment) Ordinance 2019, the Government of India inserted Section 115BAA in the Income Tax Act, 1961 which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective 01st April 2019 subject to certain conditions. However, the Group is having significant amount of unabsorbed depreciation on account of additional depreciation and MAT credit entitlement at its disposal. Hence, the group has not exercised the option permitted under Section 115BAA. In view of the above, there is no impact of the new tax rate on the financial results for the year 2019-20.
313 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
42 Earnings per Equity Share ( in Lakhs) For the year For the year Particulars ended 31st ended 31st March, 2020 March, 2019
Profit After Tax for the year attributable to equity shareholders 1,55,915.09 99,646.62 Weighted average number of Equity shares Basic 21,17,67,82,287 17,87,88,00,487 Diluted 21,29,30,53,953 17,89,35,76,477 Earnings per Equity Share ( ) Basic 0.74 0.56 Diluted 0.73 0.56 Face Value per Equity Share ( ) 10.00 10.00
43 Employee Benefit Plans
A. Defined Contribution Plans:
The Group has certain defined contribution plans. The Group 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 Employees Provident Fund Organization (EPFO). The obligation of the group is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expenses recognised during the period towards defined contribution plan is 29,817.04 Lakhs (P.Y 31,976.88 Lakhs)
B. Other Long Term Benefit Plan:
The Group 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 24,933.97 Lakhs (P.Y. 24,127.62 Lakhs) has been charged to statement of Profit & Loss. Leave obligation as at 31st March, 2020 and 31st March, 2019 is 164,910.24 Lakhs and 153,429.49 Lakhs respectively.
The 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 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 544.07 Lakhs (P.Y. 628.91 Lakhs). The
314 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
balance of such fund as at 31st March, 2020 and 31st March, 2019 is 16,316.18 Lakhs and 16,269.28 Lakhs respectively.
C. Defined Benefit Plan
Gratuity
The Group 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 Group makes contributions to LIC. The Group maintains a target level of funding to be done over a period of time based on estimations of expected gratuity payments. Scheme is managed through own Gratuity Trust. The liability for gratuity is recognised on the basis of actuarial valuation.
D. Risk Exposure:
These plans typically expose the Group 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 Plan. Interest Risk A decrease in the interest rate will increase the plan liability while increase in interest rate will decrease the plan liability. Salary Risk The present value of obligation is calculated by reference to future salary.
No other post-retirement benefits are provided to these employees.
In respect of the above plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at 31st March, 2020 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method .
315 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
The principal assumptions used for the purposes of the actuarial valuations were as follows:.
Assumptions (Current Period)
Particulars For the year ended on 31st March
2020 2019 Expected Returns on Plan Assets 7.50% 8.00% Rate of Discounting 7.25% 7.50% Rate of Salary Increase 10% 10% Rate of Employee Turnover 1 to 3% Depending on Age
( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Gratuity I) Reconciliation in Present Value Obligations (PVO) - defined Benefit Obligation Opening Defined Benefit Obligation 2,36,216.38 2,08,770.34 Current Service Cost 11,760.23 10,044.98 Interest Cost 17,125.69 15,657.78 Remeasurement gain/(losses): Actuarial (Gains)/ Losses arising from experience adjustments, changes in demographic assumptions and Financial Assumptions 37,330.62 24,150.76 Benefits paid -23,993.61 -22,407.48 Closing Defined Benefit Obligation 2,78,439.31 2,36,216.37 Current Obligation 23,593.94 20,745.16 Non- Current Obligation 2,54,845.36 2,15,471.20
II) Change in Fair Value of Assets: Opening Fair Value of Plan Assets 2,20,166.04 2,02,417.47 Expected return on Plan Assets 16,512.46 16,193.39 Remeasurement Gain/(Loss): Acturial gains and losses including excess return on Plan Assets (excluding amounts included in Net Interest Expense) 3,579.94 -1,047.63 Contributions by Employer 70,048.00 25,010.28 Benefits Paid -23,993.62 -22,407.48 Closing Fair Value of Plan Assets 2,86,312.83 2,20,166.04
316 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
III) Reconciliation of Present Value Obligations and Fair Value Assets: Present Value of Funded Defined Benefit Obligation 2,78,439.31 2,36,216.38 Fair Value of Plan Assets at end of Year 2,86,312.83 2,20,166.04 Funded Status Funded Funded Net Liability arising from defined benefit obligation -7,873.51 16,050.34
IV) Service Cost: Current Service Cost 11,760.23 10,044.98 Past Service Cost and Gain/(Loss) from Settlements - - Net Interest Expense 565.23 -545.91 Total Expenses recognised In Statement of Profit and Loss 12,325.46 9,499.07 Components of defined benefit costs recognised in Employee Benefit expenses Remeasurement on the net defined benefit liability: Actuarial (gains) / losses arising from experience adjustments, changes in demographic assumptions and changes in financial assumptions including Return on Plan Assets excluding amount included in net interest cost 33,750.68 25,198.39 Total Expense to be recognised in OCI 33,750.67 25,198.39 Total Expenses (Provision for Period) 46,076.13 34,697.46
V) Category of assets as at 31st March: Life Insurance Corporation 2,86,312.83 2,20,166.04 Total Gratuity 2,86,312.83 2,20,166.04
( in Lakhs)
On Plan Liabilities On Plan Assets Experience Adjustment Loss/ (Gain) Loss/ (Gain)
As on 31st March, 2020 37,330.62 3,579.94 As on 31st March, 2019 24,150.76 -1,047.63 As on 31st March, 2018 51,235.15 2,464.57 As on 31st March, 2017 13,584.16 444.33 As on 31st March, 2016 4,828.21 1,077.31
317 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Maturity Analysis of Projected Benefit Obligation are as under: ( in Lakhs)
As at As at Gratuity 31st March, 2020 31st March, 2019
Less than one year 23,593.94 20,745.17 One to Three Years 35,860.98 29,089.81 Three to Five Years 33,785.60 48,376.69 More than Five Years 1,85,198.79 1,38,004.70 Total 2,78,439.31 2,36,216.37
Sensitivity Analysis for Gratuity ( in Lakhs)
As at As at Significant Acturial Assumptions 31st March, 2020 31st March, 2019
Discount Rate Impact due to increase of 50 basis point -12,940.13 -12,915.20 Impact due to decrease of 50 basis point 13,645.69 13,847.66 Salary Increase Impact due to increase of 50 basis point 13,458.16 13,689.24 Impact due to decrease of 50 basis point -12,905.71 -12,892.05
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.
E. GEB Employees’ Group Gratuity Trust (“the Trust”) is an exempted Gratuity Trust under the Income Tax Act, 1961 established to manage the Gratuity obligations of the employees of GUVNL and its Subsidiary Companies. GUVNL, the Holding Company is managing the same for and on behalf of itself and its six Subsidiary Companies. The Trust has an arrangement with M/s. Life Insurance Corporation of India (LIC) for the fund management based on actuarial determination of liability and the funds to be contributed.
Given the above structure and arrangement among GUVNL Group Companies, the overall Gratuity 318 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Liability or Asset (as the case may be) of the GUVNL Group, is reflected in GUVNL Books. The individual subsidiary Company(s) reflect the expense in its books and the Liability / Asset to / from GUVNL, given the above arrangement alongwith the disclosures in compliance with the applicable Ind AS 119 – Employee Benefits.
The following is the position of Gratuity related Asset / Liability reflected in the books of GUVNL, as pertaining to individual companies: ( in Lakhs) Asset / (Liability) - Net Company pertaining to: As at As at 31st March, 2020 31st March, 2019
Gujarat Urja Vikas Nigam Limited 2.27 (16.14) Gujarat State Electricity Corporation Limited 589.36 (671.97) Gujarat Energy Transmission Corporation Limited 1,786.49 (3,382.86) Dakshin Gujarat Vij Company Limited 1,004.15 (2,087.15) Madhya Gujarat Vij Company Limited 1,032.50 (2,126.68) Paschim Gujarat Vij Company Limited 2,126.04 (4,740.72) Uttar Gujarat Vij Company Limited 1,332.71 (3,024.83) Total 7,873.52 (16,050.34)
44 Segment Reporting
A Operating Segment
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 Customers
The Group is not reliant on revenues from transactions with any single external consumer and does not receive 10% or more of its revenues from transactions with any single external consumer.
C Information about Geographical Areas
Segment Revenue from “Sale of Power” represents revenue generated from external customers which is fully attributable to the Group’s country of Domicile i.e. India.
All assets are located in the Group’s Country of Domicile.
D Information about Products and Services:
The Group derives revenue from Sale of Power. The information about revenues from external 319 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
customers about each product is disclosed in Note No.33 of the Financial Statements. 45. Financial Instrument Disclosure A Capital Management
The Group’s objective when managing capital is to:
1. Safeguard its ability to continue as going concern so that the Group is able to provide maximum return to shareholders and benefits for other stakeholders and;
2. Maintain an optimal capital structure to reduce the cost of capital.
The Group’s Financial Management Committee reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital, risks associated with each class of capital requirements and maintenance of adequate liquidity.
Gearing Ratio
The gearing ratio at end of Reporting Period is as follows:
As at As at Particulars 31st March, 2020 31st March, 2019
Debt ( in Lakhs) 11,18,294.31 16,94,371.38 Total Equity ( in Lakhs) 40,23,031.08 35,05,852.27 Debt to Equity Ratio 0.28 0.48
1. Debt is defined as all Long Term Debt outstanding + Short Term Debt outstanding in lieu of Long Term Debt. 2. Equity is defined as Equity Share Capital + Other Equity + Deferred Government Grant and Consumer Contribution.
B Categories of Financial Instruments ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019 Financial Assets Measured at Amortised Cost (a) Trade and other Receivables 3,98,989.63 3,35,883.53 (b) Cash and Cash Equivalents 19,653.65 35,761.20 (c) Other Bank Balances 4,126.21 3,028.07 (d) Loans 14,768.65 16,679.58 (e) Other Financial Assets 3,56,805.42 4,62,218.77 320 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Measured at FVTOCI (a) Investments in Equity Instruments 36,617.34 41,074.81 (b) Investment in GOI Special Bonds 13,041.89 12,520.85
Accounted Under Equity Method (a) Associate- GIPCL 73,747.80 68,988.85 (b) Joint Venture- MGCL - -
Financial Liabilities Measured at Amortised Cost (a) Borrowings 9,42,653.00 14,44,210.76 (b) Trade Payables 10,54,277.03 7,05,555.52 (c) Other Financial Liabilities 16,82,957.34 16,95,015.89
C Financial Risk Management Objectives
The Group’s principal financial liabilities comprise of 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.
Regulatory Risk
The 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.
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
321 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 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 & FPPPA is levied on quarterly basis for any increase/decrease in power purchase cost.
Foreign Exchange Risk
The 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.
As at As at Nature of Transactions Currency 31st March, 2020 31st March, 2019
Loan from Government of Gujarat- KfW EURO 4,27,74,626.00 1,46,08,253.00 Loan from Government of Gujarat-Asian Development Bank (ADB) USD 5,43,42,088.34 5,76,35,550.94 Interest charges payable - ADB USD 3,65,025.96 5,57,551.38 Interest and commitment charges payable - KfW Loan EURO 1,86,362.00 57,547.00
Interest Rate Risk Management
Interest 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). 322 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
The concentration of credit risk is limited due to the fact that the customer base is large. None of the customers accounted for more than 10% of the receivables and revenue for the year ended 31st March, 2020 and 31st March, 2019.
Bank balances are held with reputed and creditworthy banking institutions.
Liquidity Risk Management
Liquidity 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. ( in Lakhs) Less than 1 Between 1 and More than Particulars Total year 5 years 5 years As at 31st March, 2020 Non - Current Financial Liabilities Borrowings - 7,78,964.39 6,29,682.95 14,08,647.34 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 14,334.34 6,82,081.92 6,96,416.26 - 7,93,298.73 13,11,850.17 21,05,148.90
Current Financial Liabilities Borrowings 24,019.48 - - 24,019.48 Trade Payables 10,54,191.73 - - 10,54,191.73 Other Financial Liabilities 9,86,541.08 - - 9,86,541.08 20,64,752.30 - - 20,64,752.30 Total Financial Liabilities 20,64,752.30 7,93,298.73 13,11,850.17 41,69,901.19
323 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
As at 31st March, 2019 Non - Current Financial Liabilities Borrowings 10,12,113.47 3,96,533.87 14,08,647.34 Trade Payables - 85.29 85.29 Other Financial Liabilities 13,473.14 6,09,909.47 6,23,382.61 - 10,25,586.61 10,06,528.63 20,32,115.24 Current Financial Liabilities Borrowings 35,563.42 - - 35,563.42 Trade Payables 7,05,470.22 - - 7,05,470.22 Other Financial Liabilities 10,71,633.29 - - 10,71,633.29 18,12,666.93 - - 18,12,666.93 Total Financial Liabilities 18,12,666.93 10,25,586.61 10,06,528.63 38,44,782.18
The deposit for electrification and service connections are transferred to Consumers’ Contribution on finalization of their bills.
The balances under the head Security Deposits from the consumer are subject to reconciliation with the balances as per subsidiary records. As per the practice followed by the Group, interest on Security Deposits is provided only for balances of Security Deposit of regular consumers.
The Group has access to committed credit facilities as described below, of which 233.480.51 lakhs were unused at the end of the reporting period (P.Y. 221,936.58 lakhs). The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets. ( in Lakhs)
Secured Cash Credit Facility, reviewed annually and As at As at st st payable at call 31 March, 2020 31 March, 2019
Amount Used 24,019.49 35,563.42 Amount Unused 2,33,480.51 2,21,936.58
D Fair Value Measurement
Fair value of Group’s Financial Assets on a recurring basis: Some of Group’s Financial Assets are measured at fair value at end of each reporting period. The following table gives information about how the fair values of these financial assets are determined.
324 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
(a) Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI) ( in Lakhs) Fair Value as at Valuation technique(s) and Key Finacial Assets/ Fair Value st st input(s) Financial Liabilities As at 31 As at 31 Hierarchy March, 2020 March, 2019
Investment in Equity Instruments 29,672.91 32,362.98 Level 1 Quoted bid prices from Stock ex (Quoted) change - NSE/BSE
Investment in Government 13,041.89 12,520.85 Level 1 Quoted bid prices from Clearing Securities Corporation of India Ltd.
Investment in Equity Instruments 6,944.42 8,711.83 Level 3 Valuation techniques for which the (Unquoted) lower level input that is significant to the fair value measurement is unobservable.
(b) Financial Assets and Liabilities at Amortised Cost
The carrying amounts of Cash and Cash Equivalent, Other Bank Balances, Trade Receivables, Loans and Other Financial Assets, Current Borrowings, Trade Payables, Other Financial Liabilities are considered to be the same as their fair values, due to their short term nature.
46 Disclosure under Indian Accounting Standard 36- Impairment of Assets
In accordance with the Indian Accounting Standard (Ind AS-36) on “Impairment of Assets” the Group 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, no Impairment Loss is required as on 31st March, 2020 (P.Y. Nil).
47 The subsidy claims on Government of Gujarat are made by Gujarat Urja Vikas Nigam Limited (GUVNL), the Holding Company on behalf of our Group including all other Distribution Subsidiaries. The subsidy receivable balances are recorded, reflected and presented as such in GUVNL’s Standalone Financial Statements. Subsidies being Government Grants are recognised as revenue in the Statement of Profit or Loss in accordance with the accounting policy on Government Grants as stated in Note to the Financial Statements.
The Holding Company has reviewed the status of subsidies receivable as of 31st March, 2020 of 207,842.39 Lakhs (P.Y. 324,588.53 Lakhs) in accordance with its policy on Financial Instruments and does not expect any credit loss.
325 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
48 Disclosures pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets” by Subsidiary GSECL
Nature of Provisions
Provision for CSR as per Ministry of Environment & Forest: As per the condition laid down by Ministry of Environment & Forest vide letter no. J-13011/39/2008-IA.II(T) dated 10.02.2010, the Subsidiary Company GSECL needs to incur a sum of 170.00 Lakhs as CSR recurring expenditure till the operation of the Plant located at Padva Village, Bhavnagar District, Gujarat. ( in Lakhs) Provision for CSR as Particulars per Ministry of Environment & Forest
Balance as at 01-04-2018 263.00 Additional provision during the year 170.00 Provision used/reversed during the year - Additional provision for unwinding of interest and change in discount rate - Balance as at 31-3-2020 433.00
49 Contingent Liabilities, Contingent Assets and Capital Commitments (to the extent not provided for)
A Claims against the Group/ disputed Demands not acknowledged as Debt: ( in Lakhs)
Year ended Year ended Particular 31st March, 2020 31st March, 2019
1. Contingent Liabilities not provided in respect of: Purchase 130.12 130.12 Leasing Finance availed by erstwhile GEB 1,577.00 1,731.53 Power Purchase 91,480.00 64,391.00 Stamp Duty on Mortgage deed for Loans availed by erstwhile GEB from LIC - 1,198.32 Employees 65,596.50 97,150.50 Disputed matters of Income Tax, Service Tax, VAT, Property Tax, Excise Duty, etc. (including against erstwhile GEB) 1,34,164.71 1,08,262.43 Claims against Companies not acknowledged as Debts (Legal Matters) & Others 94,810.01 86,838.06
326 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Demand raised by Irrigation Department, Water Reservation Charges & Interest 1,92,057.43 1,85,038.99 2. Other Money for which the Companies are Contingently Liable: Letter of Credit 1,64,285.97 1,40,495.97 Guarantee issued by Banks & others on behalf of the Group 42,119.40 37,754.41 Associate 1. Claims against company not acknowledged as Debt: Contractual claims against Vendors 1,517.27 3,582.31 Water Reservation Charges- Demand due to Irregular drawal of Water contested 236.48 236.17 Employees - 0.27 Property Tax- Demand by Local Authority under discussion 48.45 44.02 Claims pending against the Company in case of Land 113.26 129.71 Disputed matters of Income Tax, Service Tax, Excise Duty 941.67 1,045.80 Joint Venture 1. Claims against company not acknowledged as Debt: Claims against Company by M/s. AMPL regarding Development of Coal Block 15,991.60 15,991.60 Total 8,05,069.86 7,44,021.21
The Group’s pending litigations comprise of claims against the Group and proceedings pending with Tax/ Statutory/ Government Authorities. The Group has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed contingent liabilities, wherever applicable, in its Financial Statements. The Group does not expect the outcome of these proceedings to have material impact on its financial position. Future cash outflows in respect of the above are determinable only of receipt of judgements. decisions pending with various forums/ authorities.
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, except the Contingent Asset disclosed by Subsidiary Company GSECL:
327 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Contingent Assets ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Coal Claims related to its Quality 21,017.59 26,796.40 Court related Matter- Not Honouring Contractual Obligation by Vipulkumar 595.89 595.89
C Capital Commitments ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
A. Capital Commitment Estimated amount of Contract remaining to the executed on capital accounts (Net of Advances) 1,96,656.35 2,40,121.70 Total 1,96,656.35 2,40,121.70 B. Other Commitments Other commitments 5,630.80 4,525.15 Total 5,630.80 4,525.15 Associate A. Capital Commitments 11,595.34 1,080.06 B. Other Commitments 171.85 - Joint Venture A. Capital Commitments - - B. Other Commitments - -
49 CSR Expenditure ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019 a) Gross amount required to be spent by the Group during the Year 1,938.64 2,364.16 b) Amount spent during the Year 1,162.21 1,101.42
328 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 c) ( in Lakhs) For Year Ended on 31st March, 2020 Particulars Paid Yet to be Paid Total
(i) Construction/ Acquisition of any Asset 159.31 - 159.31 (ii) On purpose other than (i) above 1,002.90 - 1,002.90 Total 1,162.21 - 1,162.21 ( in Lakhs) For Year Ended on 31st March, 2019 Particulars Paid Yet to be Paid Total
(i) Construction/ Acquisition of any Asset 122.43 - 122.43 (ii) On purpose other than (i) above 954.31 24.68 978.99 Total 1,076.74 24.68 1,101.42 d) For CSR amount which has remained unspent during the year, suitable reasons would be provided in Director's Report.
50 Research & Development Expenditure as per GUVNL
The details of Revenue and Capital Expenditure incurred on Research and Development is as under: ( in Lakhs)
As at As at Particulars 31st March, 2020 31st March, 2019
Capital Expenditure: Computer and related Equipment 78.28 - Less: Depreciation for the year 1.33 - Total Capital Expenditure (Net of Depreciation) : 76.95 - Revenue Expenditure: Employee Benefits 100.60 137.39 Material Consumed 5.16 3.14 Administrative and Misc. Exp 50.66 37.64 Depreciation 3.62 2.29 Total Revenue Expenditure 160.05 180.45 Total Research and Development Expenditure : 236.99 180.45
Research and Development Grant related income is disclosed under Note No. 34. 329 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
51. Foreign Currency Loan a. Loan from ADB-2778-IND: The Availment of Foreign Currency Loan from Asian Development Bank (ADB) by the subsidiary company GETCO is Complete. The Total Loan availed from ADB for Loan no. 2778-IND amounts to USD 656.16 lakhs. Interest and commitment charges for the year 2019-20 amounting to USD 15.14 lakhs (P.Y. USD 16.75 lakhs ) is shown under Finance Cost.
Foreign currency fluctuation Gain / (Loss) related to ADB Loan no. 2778-IND for the FY 2019-20 is Loss of 3,409.47 lakhs (P.Y. 2,531.18 lakhs). Foreign currency fluctuation Loss is accounted under the Finance Cost as the projects are completed in F.Y. 2016-17. b. Loan from KfW: During the year, GETCO has taken Foreign Currency Loan from KfW amounting to Euro 281.66 lakhs (P.Y. Euro 108.80 lakhs). The Total Loan availed from kfW is Euro 427.75 lakhs. The Availment of Loan is in progress. Interest and commitment charges for the year 2019-20 amounting to Euro 5.05 lakhs (P.Y. Euro 3.06 lakhs) is shown under Capital Work In Progress.
Foreign currency fluctuation loss related to KfW Loan for the FY 2019-20 is 1987.73 lakhs (P.Y. Gain of 395.03 lakhs), Out of which Foreign Exchange Loss of 1974.28 lakhs (P.Y. Gain of 395.03 lakhs) is capitalized to the projects which are under implementation stage and the balance of Foreign Exchange Loss of 13.40 lakhs (P.Y. NIL) is related to projects which are commercially put to use in FY 2019-20 and the same is expensed out and shown under the head Finance Cost.
52. Capital Work in Progress by GETCO
(i) The subsidiary company GETCO has provided General Establishment Charges (GEC) and Head Office Supervision Charges (HOSC) on amount of 5,370.39 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) The company has proportionately loaded NIL borrowing costs (Previous Year 4.29%). During the year, the company has capitalized borrowing cost of 2,455.44 lakhs for meeting capital expenditure requirement related to KfW Projects.
(iv) The Management has reviewed the under constructed projects under CWIP and has carried out the internal analysis as per requirements of IND AS-36 (Impairment of Assets) of the under constructed projects and has impaired projects of 382.03 lakhs which are abandoned and dropped due to reasons like non availability of Land, projects practically not feasible etc. The management has also
330 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
analysed that it will recover entire cost of under constructed projects in CWIP and the recoverable value is more than the carrying value of all projects in CWIP even though some of the under construction projects have held up due to various issues like land acquisition problems, Right of Way problems, Permission / approvals from Forest authorities, Court cases, Land & Crop compensation, Farmers / villagers protest, Police Protection etc.,. Further, the Company expects to generate revenue from these projects once such projects are commercially ready to use in the near future and as it operates under regulated tariff regime.
53. Captive Mining by GSECL
Ministry of Coal, Government of India has allotted the Machhakata & Mahanadi coal block in Odisha jointly to GSECL and MSPGCL for the captive coal mining under Government Dispensation Route. The coal produced from the block was to be shared between GSECL and MSPGCL in the ratio of 40% and 60% respectively. The Joint Venture Company in the name of “Mahaguj Collieries Limited” (MGCL) was incorporated on 01-11-2006 by MSPGCL and GSECL for development of Coal Block and M/s Adani Enterprises Ltd. (AEL) was appointed as MDO.
The Hon’ble Supreme Court vide its order dated 24-09-2014 cancelled the allocated coal block. Subsequent to cancellation of the Coal Block, the MDO M/s Adani Enterprises Ltd. raised a claim of 39,979 Lakhs against MGCL for the expenditure incurred by them for the project. M/s AEL invoked the Arbitration Proceeding due to denial of claim by MGCL along with application u/s 17 for interim relief of 4,470 Lakhs to the Arbitral Tribunal on 10.05.2017. The Arbitral Tribunal passed the First Interim Award on 01.02.2018 and directed MGCL to pay to M/s. AEL a sum of 3,279.60 Lakhs which was challenged by MGCL in the Bombay High Court. The Bombay High Court admitted the case and in its common order dtd 25.02.2019 set aside the order of the Arbitration Tribunal.
54. Regarding outstanding dues of M/s. Essar Steel India Limited In case of subsidiary 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 Group, has therefore, issued supplementary bill of 231,102.44 lakhs to ESIL as per conditions of MoM for 2020.99 MUs.This was subsequently revised to 19,258.54 lakhs for 168.42 MUs as per directives of E&P Department till case of total claim of original supplementary bill is finally settled for breach of said MoM, which was paid by M/s. ESIL. Accordingly, revenue to the extent of 19,258.54 lakhs was recognized in the books in F.Y 2011-12 and recognition
331 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 of balance Revenue of 211,843.90 lakhs was deferred till the final settlement is made by the E&P department, GOG, or appropriate judicial forum.
Further to above, DGVCL has filed its claim (of a recurring nature) for 588,228.20 Lakhs under Insolvency and Bankruptcy Code, 2016 (IBC) initiated against M/s Essar Steel Limited. This includes the amount of Cross subsidy surcharge relating to respective financial years till F.Y 2016-17 which was accounted in books as receivable which has been contested by M/s. ESIL as not payable by filing petition before GERC. Besides this claim which has been accounted in books as receivable, the Company also has other legal claims, which was not recognized and reflected in receivables as per the Company’s accounting policy in compliance with Ind AS.
During F.Y 2017-18, notwithstanding the legal tenability of the DGVCL’s claims and litigation and without prejudice to the Company’s rights to recover the aforementioned claims, based on the facts and circumstances as of the date of issue of financial statements, the Company has impaired the entire receivable of 44,040.40 lakhs from M/s. ESIL as irrecoverable in compliance with Ind AS 109 on “Financial Instruments”.
The NCLT (National Company Law Tribunal) vide order dated 08.03.2019 has approved Resolution Plan which was challenged before NCLAT by corporate creditors / operational creditors including DGVCL. The NCLAT vide its judgement dated 04.07.2019 has decided to distribute realized amount in an equitable manner amongst all majority creditors providing almost equal share of 60% to financial and operational creditors with admitted claim of 1.00 crore or more. The judgement of NCLAT has been challenged by aggrieved parties before the Hon’ble Supreme Court. On 22.07.2019, Hon’ble Supreme Court had ordered “status quo” as it agreed to hear the appeal filed by aggrieved parties against the NCLAT order. DGVCL has filed an “Impleadment Application” on 29th July, 2019 vide no. 114274/19 and accordingly DGVCL joined as respondent in Civil Appeal No-24417 of 2019 and also it has filed a Writ Petition vide no. 1246 of 2019 challenging relevant provisions of IBC (Amendment) Act, 2019.
This Civil Appeal was heard by Hon’ble Supreme Court and it delivered judgement vide dated 15th November, 2019 allowing the appeal of Committee of Creditors of ESIL and set aside the Order of NCLT. Being aggrieved from the judgement of the Hon’ble Supreme Court in Civil Appeal, DGVCL has once again filed Review Petition before Hon’ble Supreme Court bearing review petition Diary No. 240 of 2020 in Civil Appeal No. 8766-8767 of 2019. The said review petition has been dismissed by the Hon’ble Supreme Court by its Order dated 25th August, 2020. However, Contingent liabilities are disclosed under note no. 42 which includes the amount of 19,258.54 lakhs of the SLP filed by M/s. ESIL. 332 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
In case of subsidiary GETCO,
Trade receivables includes amount Receivable for wheeling charges in financial year 2016-17, an amounting to 36,577.09 lakhs for period 2006 to 2011, due from M/s Essar Steel Limited. The subsidiary company GETCO went into the process of Corporate Insolvency Resolution Process and accordingly GETCO has submitted claim of 82,718.13 lakhs (Invoice amount of 36,577.09 lakhs and Delayed Payment Surcharge of 46,141.04 lakhs as on 2nd August, 2017) to the IRP appointed for M/s Essar Steel. However, IRP admitted the claim of GETCO at a notional value of 1 to ensure participation of GETCO in Corporate Resolution Process and the remaining amount was not admitted because of pending dispute with respect to this claim before various authorities.
Accordingly, while preparation of Financial Statements of FY 2017-18, GETCO relooked at the outstanding dues of M/s Essar Steel considering the initiation of CIRP process against M/s Essar Steel and reviewed the provisions of IND AS 109. As per Ind AS109, GETCO is required to assess the recoverability of all its receivables considering not only the legal position in terms of validity of the claim, but more importantly the probability of recoverability of the amount from trade receivables considering its financial situation/state of affairs, willingness of the party as well as the capability of the party to pay its outstanding dues for making necessary provisions. Accordingly, in FY 2017-18, GETCO has written off the dues of M/s Essar Steel for 36,577.09 lakhs in the Books of Accounts.
GETCO has filed an Interlocutory Application before National Company Law Tribunal (NCLT), Ahmedabad Bench not to approve the Resolution Plan submitted by the Resolution Professional as the plan does not provide any pay-out to GETCO for outstanding transmission charges. NCLT vide its order dtd 4th March, 2019, stated that Resolution Professional have to include GETCO’s entire claim in Information Memorandum instead of notional amount of 1. The Adjudicating Authority (NCLT) has also suggested that 15% of total Resolution Value offered by Arcelor may be segregated for meeting with claims of Operational Creditor.
GETCO has other legal claims including delayed payment charges of 49,813.99 lakhs up to 31st March 2018, which have not been recognized and reflected in receivables as per the Company’s accounting policy in compliance with Ind AS. The Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 (IBC) had been initiated against M/s Essar Steel Limited. The CIRP had been approved by the Honourable National Company Law Tribunal, Ahmedabad and it is ongoing. GETCO has filed its claim with the designated Resolution Professional. The Management has and is assessing the progress and status of proceedings with various forums including NCLT, NCLAT and other courts. Further, the Management also considered the provisions of IBC as well as the broader experience of the insolvency proceedings. Notwithstanding the legal tenability of the 333 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Company’s claims and litigation and without prejudice to the Company’s rights to recover the aforementioned claims, the Management noted based on the facts and circumstances as of the date of issue of previous year financial statements, the receivable to be irrecoverable in its likelihood. Hence, the Company had written off the entire receivable of 36,577.08 lakhs in the previous year financial statements.
The same was shown under the head Exceptional Items in Statement of Profit & Loss in FY 2017-18.
The order of the NCLT was challenged by GETCO and other Operational creditors in NCLAT (Appellate). NCLAT vide its order dtd 4th July, 2019 upheld the order of NCLT in providing GETCO’s entire claim in the Total claim of the Operational creditors. Accordingly, the total list of Operational creditors was revised to 19,719.21 crores in which GETCO’s claims were also included. The order of the NCLAT was challenged by the Financial Creditors in the Supreme Court. Further Ministry of Law and Justice made an amendment to the IBC 2016 on 6th August, 2019 to provide for priority of the payment out of the proceeds from the resolution process in favour of the secured and financial creditors to the complete exclusion of the Operation creditors. Accordingly, GETCO on 14th August, 2019 filed a writ petition in Supreme Court against Union of India through the Secretary Ministry of Law and Justice for quashing the provisions of sections 2, 5, 6, 8 and 9 of the IBC (Amendment) Act, 2019 (Act 26 of 2019), inter alia, providing for the priority of the claim contained in Section 53 of the IBC to be applicable for approval of the resolution plan.
Supreme Court vide its order dtd 15th November, 2019 stated that the resolution professional was correct in only admitting the claim at a notional value of 1 due to the pendency of disputes with regard to these claims. So vide the aforesaid order of Supreme Court, the claim of GETCO stood at Notional Value of 1. Further, GETCO has received 1 from Arcellor Mittal on 16.12.2019. Further GETCO has also filed review petition on 27.1.2020 (Diary no. 3373/2020) against the order of the Supreme Court dated 15.11.2019 in Civil Appeal Diary No. 24477 of 2019 which was dismissed by the Hon’ble Supreme Court. 55. Fixed Assets and Depreciation
Consequent upon unbundling of business of GEB, various Lands & Buildings of Group companies are shared/used by companies other than the owners. User charges thereof are not recovered or provided in absence of any mechanism or its determination and thus same cannot be quantified.
The Group has received the Gross Fixed Assets as well as accumulated depreciation from erstwhile GEB vide the Notification by Government. Accordingly the Opening Net Block of all Fixed Assets has been restated as on 31.03.2005. Further, the depreciation has been accounted for subsequent years as per the Depreciation Policy. 334 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
As per Para 15 of Ind AS 105 “Non-Current Assets Held for Sale and Discontinued Operations” an Entity shall measure a non-current asset (or Disposal Group) classified as held for sale at lower of its carrying amount and fair value less costs to sell. However, the Group has not determined the fair value less costs to sell for assets retired from active use as the management is of the opinion that the fair value of the same is higher the Net Book Value due to very old assets and upward trend in Scrap rates. As a result of this, Group has not recognised any expected loss, if any, in the Statement of Profit and Loss. Discarded assets are treated as ‘assets classified as held for sale’ on and from the date of approval by competent authority.
Land held under lease is amortised as per the rate notified by the GERC.
56. Long Term Contracts
The Group did not have any Long term contracts including Derivative Contracts for which there were 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 any material impact.
57. Lease
(a) Ind AS 116 “Leases” Introduces a single lessee accounting model which requires a lessee to recognise “Right of Use” asset and it replaces Ind AS 17 “Leases” with effect from 1st April, 2019. A lessee, under Ind AS 116, recognises “Right of Use” asset representing it’s right to use the underlying asset and a “Lease Liability” representing it’s obligation to make lease payments.
(b) Pursuant to Ind AS 116 “Leases” becoming mandatory, effective from 1st April, 2019, the Group adopted Ind AS 116 “Leases” and applied the standard to all lease arrangements / contracts which existed on 1st April 2019, using the “Modified Retrospective Approach”. Comparatives as at and for the year ended 31st March, 2019 have not been retrospectively adjusted and therefore, are continued to be reported in accordance with the accounting policy with respect to “Leases” included in the financial statements for the financial year ended on 31st March, 2019.
(c) The Subsidiary Company’s GSECL and UGVCL has entered into dry lease arrangements for “E- Vehicles” during the year. The Company has considered such “E-Vehicles” as low value items, and hence, has opted for the exemption not to recognize right-of-use assets and lease liabilities for such lease arrangements having low value underlying asset.
(d) In respect of Lease Arrangements, which are cancellable without any significant penalty either by lessor or lessee by giving appropriate notice as per respective agreements, do not create enforceable 335 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
rights and obligations between the parties and thus, do not constitute a contract. Accordingly, the Group does not apply Ind AS 116 on such Lease Arrangements.
(e) There is no effect of this adoption on the profit before tax, profit for the year, earnings per share and cash flows.
(f) The following is the summary of practical expedients elected on initial application:
1. Applied the exemption, not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.
2. Applied the exemption, not to recognize right-of-use assets and liabilities for leases for which the underlying asset is of low value.
3. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
4. Applied the practical expedient to exempt the assessment of which transactions are leases. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.
A. The details of Right of Use Assets is included in Property, Plant and Equipment (Note 2) held as Lessee:
( in Lakhs)
Particular/ Assets Amount
Opening Balance as on 01-04-2019 - Additions during the year 1,971.95 Depreciation recognized during the year 90.03 Net Carrying Value as on 31-03-2020 1,881.91
Above additions in Right of Use Assets amounting to 1,971.95 includes operating leases for lease agreements entered before 01.04.2019 on Net Carrying Value.
336 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
B. Amount recognised in Statement of Profit & Loss for Year ended on 31st March, 2020 ( in Lakhs)
Particular Amount
Depreciation recognised in Statement of Profit and Loss 90.03 Expenses relating to short term Lease (Lease more than 30 days) 28.08 Expenses relating to Lease of low value assets, excluding short term 18.47 Additions/ Regrouped to ROU Assets during the year 1,857.01 Total cash outflow for Leases 73.41 Net Carrying Amount of ROU at end of Year 1,827.84
58 Related Party Disclosures
A. Name of Related Party and description of relationship:
Name of Related Party Nature of Relationship
Gujarat Industries Power Company Limited Associate Company Mahaguj Collieries Limited Joint Venture Company of GSECL
Gujarat State Financial Services Limited Government Related Entity Gujarat Water Supply & Sewage Board Government Related Entity
Shri Pankaj Joshi, IAS (02.11.2019 to 16.12.2019) Chairman Smt. Sunaina Tomar, IAS (10.01.2020 to 31.03.2020) Chairman Shri Pankaj Joshi, IAS (01.04.2019 to 01.11.2019) Key Management Personnel (KMP) Smt. Shahmeena Husain, IAS (30.08.2019 to 31.03.2020) Key Management Personnel (KMP) Ms. Mona Khandhar, IAS (01.04.2019 to 31.08.2019) Woman Director Shri N N Misra (01.04.2019 to 31.03.2020) Independent Director Shri R C Dhup (01.04.2019 to 31.03.2020) Independent Director Shri Milind Torawane, IAS (01.04.2019 to 01.10.2019) Director Shri Roopwant Singh, IAS (01.10.2019 to 31.03.2020) Director Shri S B Khyalia (01.04.2019 to 01.11.2019) Key Management Personnel (KMP) Shri K M Bhuva (01.04.2019 to 31.03.2020) Key Management Personnel (KMP)
337 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Shri Shubhadeep Sen (01.04.2019 to 31.03.2020) Key Management Personnel (KMP) Shri Parthiv Bhatt (01.04.2019 to 31.03.2020) Key Management Personnel (KMP)
Gujarat State Electricity Corporation Limited Shri Sujit Gulati (Upto 16.07.2018) Chairman Shri Raj Gopal (07.08.2018 to 01.02.2019) Chairman Shri Pankaj Joshi Nominee Director (upto 01.11.2019) Smt. Sunaina Tomar (w.e.f. January 10, 2020) Chairman Shri N.K. Jha Independent Director Shri P.H. Rana Independent Director Shri H.P. Desai Independent Director Shri V.T. Rajpara Independent Director Shri I.P. Gautam Nominee Director Smt. Mona Khandhar Nominee Director Shri Milind Torawane Nominee Director Shri K. M. Bhuva Nominee Director Shri. Sanjeev Kumar Nominee Director Smt. Shahmeena Husain Nominee Director (w.e.f. 15.11.2019) & Key Management Personnnel of Holding Company Shri R. M. Bhadang Key Management Personnel (KMP) Shri V. P. Jani Key Management Personnel (KMP) Shri P. R. Dahake (Upto 31.07.2019) Key Management Personnel (KMP)
Gujarat Energy Transmission Corporation Limited Shri B. B. Chauhan, Managing Director (till 31.7.2020) Key Management Personnel (KMP) Shri Nimesh A. Patel, General Manager (F&A) Key Management Personnel (KMP) Shri Nishant Shrivastava, Company Secretary Key Management Personnel (KMP)
Paschim Gujarat Vij Company Limited Shri Bhavin Pandya (Upto 04.09.2019) Key Management Personnel (KMP)
338 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Smt. Shweta Toetia (From 04.09.2019) Key Management Personnel (KMP) Shri Kintu Kumar Malkan Key Management Personnel (KMP) Shri Hardik Chauhan (From 02.12.2019 ) Key Management Personnel (KMP)
Uttar Gujarat Vij Company Limited Shri Varun Nath Maira, IAS (Retd.) Key Management Personnel (KMP) Shri B. A. Shah, IAS Key Management Personnel (KMP) Shri Swaroop P, IAS Key Management Personnel (KMP) Shri Mahesh Singh, IFS Key Management Personnel (KMP) Shri R. B. Kothari CFO Shrl N. M. Joshi CS
Madhya Gujarat Vij Company Limited Shri T. Y Bhatt, IAS Key Management Personnel (KMP) Shri M. R. Kothari, IAS Key Management Personnel (KMP) Shri Rajesh Manjhu, IAS Key Management Personnel (KMP) Shri J. H. Modi CFO Shri Sourav Nandy CFO Shri K. R. Shah CFO Shri V. M. Chavan CS
Dakshin Gujarat Vij Company Limited Shahmeena Husain, IAS Chairman Shri Yogesh K. Choudhary, IAS (w.e.f 17.12.2019) Key Management Personnel (KMP) Ms. Kshipra S. Agre, IAS (25.09.2019 to 17.12.2019) Key Management Personnel (KMP) Shri M. R. Kothari, IAS (07.09.2019 to 25.09.2019) Key Management Personnel (KMP) Ms. Ardra Agarwal, IAS (Upto 07.09.2019) Key Management Personnel (KMP) Shri N. A. Dave Key Management Personnel (KMP) Shri V. H. Vora Key Management Personnel (KMP)
339 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
B. The following transactions were carried out with the related parties in ordinary course of business during the year: ( in Lakhs) Government Associate Related KMP Total Nature of Transaction Company Entity 1 Transactions during the year Purchase of Electricity - 1,00,976.83 - 1,00,976.83 - (98,180.66) - (98,180.66) Gujarat Industrial Power Company Limited - 1,00,976.83 1,00,976.83 - (98,180.66) (98,180.66) Rebate (Cash Discount) on Prompt Payment 972.18 - 972.18 of Power Purchase - (1,029.05) - (1,029.05) Gujarat Industrial Power Company Limited - 972.18 972.18 - (1,029.05) (1,029.05) Loan Received 20,000.00 - - 20,000.00 (10,000.00) - - (10,000.00) Gujarat State Financial Services Limited 20,000.00 - - 20,000.00 (10,000.00) - - (10,000.00) Loan Repayment 41,805.56 - - 41,805.56 (54,803.70) - - (54,803.70) Gujarat State Financial Services Limited 41,805.56 - - 41,805.56 (54,803.70) - - (54,803.70) Water Charges 6,314.61 - - 6,314.61 (7,442.69) - - (7,442.69) Gujarat Water Supply & Sewage Board 6,314.61 - - 6,314.61 (7,442.69) - - (7,442.69) Interest 6,538.17 - - 6,538.17 (10,059.41) - - (10,059.41) Gujarat State Financial Services Limited 6,538.17 - - 6,538.17 (10,059.41) - - (10,059.41)
340 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Remuneration (Salary and Perquisites) paid to - - 572.66 572.66 KMP/ Directors: - - (767.30) (767.30) Shri Pankaj Joshi, IAS - - 14.07 14.07 - - (35.48) (35.48) Smt. Shahmeena Husain, IAS - - 16.47 16.47 - - - - Shri S B Khyalia - - 22.76 22.76 - - (41.39) (41.39) Shri K M Bhuva - - 9.64 9.64 - - (36.63) (36.63) Shri M B Parikh ------(8.04) (8.04) Shri Parthiv Bhatt - - 26.96 26.96 - - (28.83) (28.83) Shri Shubhadeep Sen - - 28.55 28.55 - - (28.57) (28.57) Shri P. R. Dahake - - 13.56 13.56 - - (100.99) (100.99) Shri V. P. Jani - - 29.34 29.34 - - (31.99) (31.99) Shri R. M. Bhadang - - 26.13 26.13 - - (25.11) (25.11) Shri B.B. Chauhan - - 40.09 40.09 - - (41.38) (41.38) Shri Nimesh A. Patel - - 30.56 30.56 - - (28.61) (28.61) Shri Nishant Shrivastava - - 18.79 18.79 - - (20.23) (20.23) Smt. Shweta Teotia - - 5.76 5.76 - - - - Shri Bhavin Pandya - - 11.45 11.45 - - (21.09) (21.09) 341 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Shri Kintu Kumar Malkan - - 28.33 28.33 - - (30.23) (30.23) Shri Sudhir Bhatt ------(4.94) (4.94) Shri Hardik Chauhan - - 2.82 2.82 - - - - Shri Varun Nath Maira, IAS (Retd.) - - 7.27 7.27 - - (20.81) (20.81) Shri B. A. Shah, lAS ------(2.78) (2.78) Shri Swaroop P, IAS ------(15.20) (15.20) Shri Mahesh Singh, IFS - - 30.12 30.12 - - (2.07) (2.07) Shri R. B. Kothari - - 31.20 31.20 - - (33.68) (33.68) Shri N. M. Joshi - - 28.29 28.29 - - (30.57) (30.57) Shri T. Y. Bhatt, IAS - - 6.49 6.49 - - - - Shri M. R. Kothari, IAS - - 4.03 4.03 - - - - Shri Rajesh Manjhu, IAS - - 9.96 9.96 - - (21.69) (21.69) Shri J. H. Modi - - 5.93 5.93 - - - - Shri K. R. Shah - - 47.21 47.21 - - (38.79) (38.79) Shri Sourav Nandy - - 1.11 1.11 - - - - Shri V. M Chavan - - 11.68 11.68 - - (1.35) (1.35) 342 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Shri K. M. Antani ------(45.96) (45.96) Shri Yogesh Choudhary - - 2.92 2.92 - - - - Ms. Ardra Agarwal,IAS - - 5.83 5.83 - - (12.72) (12.72) Shri N. A. Dave - - 29.50 29.50 - - (31.59) (31.59) Shri V. H. Vora - - 25.86 25.86 - - (26.57) (26.57)
The Group has not paid any remuneration to Chairman Shri Pankaj Joshi, IAS and Chairperson Smt. Sunaina Tomar, IAS as they occupied the position of Addl. Chief Secretary, Energy & Petrochemicals Dept., Govt. of Gujarat and were therefore drawing salary from Govt. of Gujarat. ( in Lakhs) Government Associate Related KMP Total Nature of Transaction Company Entity Incidental Charges paid to KMP / Directors: - - 1.52 1.52 - - (2.86) (2.86) Shri Sujit Gulati, IAS ------(0.06) (0.06) Shri Raj Gopal, IAS ------(0.20) (0.20) Shri Pankaj Joshi, IAS - - 0.20 0.20 - - (0.54) (0.54) Smt. Sunaina Tomar, IAS - - 0.08 0.08 - - - - Smt. Shahmeena Husain, IAS - - 0.20 0.20 - - - - Shri Milind Torawane, IAS - - 0.08 0.08 - - (0.14) (0.14)
343 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Shri Roopwant Singh, IAS - - 0.06 0.06 - - - - Ms. Mona Khandhar, IAS - - 0.02 0.02 - - (0.18) (0.18) Shri N N Misra - - 0.08 0.08 - - (0.08) (0.08) Shri R C Dhup - - 0.08 0.08 - - (0.04) (0.04) Shri S B Khyalia - - 0.18 0.18 - - (0.38) (0.38) Shri K M Bhuva - - 0.28 0.28 - - (0.36) (0.36) Shri I. P. Gautam IAS ------(0.36) (0.36) Shri Nirmal Jha - - 0.08 0.08 - - (0.04) (0.04) Shri P. H. Rana - - 0.02 0.02 - - - - Shri V.T. Rajpara - - 0.14 0.14 - - (0.08) (0.08) Shri Sanjeev Kumar ------(0.08) (0.08) Shri P. R. Dahake - - 0.02 0.02 - - (0.32) (0.32) Sitting Fees paid to Independent Directors: - - 2.65 2.65 - - (1.20) (1.20) Shri N N Misra - - 0.30 0.30 - - (0.20) (0.20)
344 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Shri R C Dhup - - 0.30 0.30 - - (0.10) (0.10) Shri Nirmal Jha - - 0.20 0.20 - - (0.10) (0.10) Shri V. T. Rajpara - - 0.35 0.35 - - (0.20) (0.20) Shri Anish Sugathan - - 0.70 0.70 - - (0.20) (0.20) Shri Nirav Shah - - 0.25 0.25 - - (0.20) (0.20) Shri Vasant Gandhi - - 0.55 0.55 - - (0.20) (0.20) Balance as at :
Payables 86,090.77 15,325.08 - 1,01,415.85 (1,05,874.55) (15,406.48) - (1,21,281.03) Gujarat State Financial Services Limited 76,101.85 - 76,101.85 (97,907.41) - (97,907.41) Gujarat Industrial Power Company Limited - 15,325.08 - 15,325.08 - (15,406.48) - (15,406.48) Gujarat Water Supply and Sewage Board 9,988.92 - - 9,988.92 (7,967.14) - - (7,967.14) Note: Previous Year figures are mentioned in brackets.
345 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
59. GEB’s Contributory Provident Fund Trust (GEB’s CPF Trust) is an exempted PF Trust (U/s 17 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952) which is responsible for all Provident Fund compliances and also manages the Provident Fund accumulations of all employees of the Group. The Trust which is a separate entity had invested a portion of its corpus amounting to 16510.00 Lakhs in 3 IL&FS Group Companies (viz. M/s. IL&FS Transport Network Ltd., M/s. Infrastructure Leasing & Financial Services Ltd. and M/s. IL&FS Financial Services Ltd.) in accordance with the investment pattern / guidelines issued by Ministry of Labour & Employment, New Delhi. Due to sudden financial crisis, the IL&FS Group Companies stopped payment of interest to the Trust in 2018. Thereafter, the entire IL&FS Group was referred to National Company Law Tribunal (NCLT) under Insolvency & Bankruptcy Code (IBC), 2016.
As a result, full recovery of principal and interest from IL&FS became doubtful for GEB’s CPF Trust. Therefore, GUVNL being the parent establishment of the Trust has withheld a total amount of 18256.66 Lakhs (towards principal and interest) from monthly power purchase bills of 7 IL&FS Group Companies (from November, 2018 onwards) with whom the Company is having Power Purchase Agreements (PPA). Subsequently, GUVNL has transferred this entire retained amount of 18256.66 Lakhs to GEB’s CPF Trust in March, 2020. As on date, NCLT resolution proceedings are in progress and its ultimate result is awaited.
Similarly, the Trust had also invested a portion (total 17397.60 Lakhs) of its corpus in M/s. Punjab State Industrial Development Corporation Ltd., M/s. Punjab Finance Corporation Ltd., M/s. Reliance Capital Ltd., M/s. Reliance Home Finance Ltd., and M/s. Dewan Housing Finance Ltd. in accordance with the investment pattern / guidelines issued by Ministry of Labour & Employment, New Delhi. But, due to financial crisis in these organisations, they have stopped payment of interest / repayment of principal to the Trust. Therefore, GUVNL has provided 10946.00 Lakhs towards dues on account of interest and principal considering the future uncertainty regarding full recovery of the same from these Companies. As on date, the resolution proceedings for these Companies are in progress before different Forums, as reflected in Note No.37 : Employee Benefit Expenses.
60 The Holding Company GUVNL, enters into Power Purchase Agreements (PPAs) with various power generators to procure power as per agreed contractual terms. Contractual issues arising between the Holding Company and the power generators are addressed on an ongoing basis including if the matters have to be enforced through Regulatory forums and Courts. Certain contractual issues had arisen between the power generators and the Holding Company in the earlier years which have progressed through various stages of grievance redressal. and contract enforcement through our justice system and is still under dispute. The Holding Company has reviewed the progress of all such
346 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
disputed / contested matters and has assessed the provision as of the year end based on best judgement basis as reflected in Note No.28.
61 Govt. of Gujarat implemented the “UJALA GUJARAT” Scheme which entailed promotion of replacement of conventional bulbs with energy efficient bulbs in order to save energy. This scheme was implemented jointly by GUVNL and its Distribution subsidiaries (DISCOMs) along with the executing agency M/s. Energy Efficient Services Limited (EESL). EESL has made claims under the scheme, which have been only partially paid and an amount of 1,771.11 Lakhs (previous year 1,771.11 Lakhs) has been retained from the total claims, which would be released after complete reconciliation and submission of all related information by EESL. The amount retained is reflected in Note No.23: Other Financial Liability as “Deposits and Retention from Suppliers/Contractors”.
62 “Loan to Others” reflected in Note No.14: Other Financial Assets is the amount recoverable from M/ s. Federation of Gujarat Industries (FGI), Baroda, for conducting Switch Global Expo-2016 event, for which the Parent Company has initiated legal recovery process. The Parent Company assesses full recovery of this amount and hence has considered this amount to be good and recoverable.
63 Secured and Unsecured Loans by GETCO
(i) As per Clause 3(2) of the Gujarat Electricity Industrial (Reorganization & Regulation) Act and Comprehensive Transfer Scheme 2003 if the assets of the undertaking transferred are subject to security document in favour of third party (Lender) for any financial obligation or arrangement by Erstwhile GEB and the said loans are required to be apportioned to different transferees the Govt. may by order do so and on such apportionment the Security will be applicable to that apportioned liabilities only by operation of Law.
(ii) The loans which were raised by Erstwhile GEB from Bonds, Banks, PFC, REC, LIC, Financial Institutions and other Lenders against the Security of the assets relating to Generation, Transmission and Distribution activities and were used for common purposes are continued in the Books of GEB / (now GUVNL) on behalf of all transferee companies and the same have been apportioned under FRP Notification dated 3rd October, 2006 based on their purpose and usage amongst all transferee companies and the same loans have been accounted by the Company as “Loans allocated from GUVNL – Lender Wise” in separate accounts. The repayments and interest thereon are reimbursed by the Company to GUVNL. The Outstanding balance of such loan is only from Asian Development Bank (ADB) having outstanding loan balance of 2,819.90 lakhs (P.Y. 3,389.95 lakhs) @ 10.00% p.a. in the accounts of GETCO.
(iii) The Company during the F.Y. 2020-21, has made prepayment of the loans of Rural Electrification 347 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Corporation Limited amounting to 110,074.00 lakhs. The same has been treated as Non Adjusting Event occurring after the reporting period and is disclosed appropriately.
64 Adhering to the Significant Accounting Policy adopted by the Group, Grant / Subsidy and Consumer’s contributions related to depreciable assets i.e. Property, Plant and Equipment are initially recognised as “Deferred Income” and recognised in the Statement of Profit and Loss on a systematic basis over the period and in the proportion in which depreciation expenses on those assets are recognised. The above referred accounting policy being followed was in compliance with the previous GAAP i.e. AS – 12, Indian GAAP as well as the current GAAP being followed i.e. Ind AS 20 Indian Accounting Standards (Ind AS) on ‘Government Grants’. The deferred income recognised in the Consolidated Statement of Profit or Loss was determined based on Reducing Balance Method (Written Down Value) (RBM / WDV) upto financial year ended 31st March 2015, which was changed w.e.f. 1st April 2016 to Straight Line Method in order to further align / match the grant income recognition to the depreciation being charged in the Consolidated Statement of Profit and Loss. The rate applied for grant recognition is equivalent to rate of depreciation charge on the assets which is 5.28%.
The change was made based on the Group’s experience over the years and the circumstances obtained at the time of change. The Group determined such change of method as change in accounting estimate based on the consideration of the relevant Ind AS, particularly para 34, 35 and 48 of Ind AS 8 on ‘Accounting Policies, Changes in Accounting Estimates and Errors’ which was disclosed in the critical judgements and notes to consolidated financial statements in the year of change. The Group applied such a change in estimate prospectively in compliance with Ind AS 8.
The office of C&AG, Ahmedabad vide their letter provided the audit comment on the financial position i.e. Balance Sheet as at 31.03.2019 particularly Equity and Liabilities in relation to Deferred Government Grants, Subsidies and Consumer Contributions and stated that the Group changed the method in order to correct an error and such change should have been worked out retrospectively. Similar comments were also issued for Financial Years 2016-17 and 2017-18 by C&AG office. The Group had provided explanation of its view, that such:
i. a change is not a correction of prior period error as the WDV method selected earlier, was an informed and deliberated decision which was noted to be in compliance with the accounting standards in the earlier financial years even by all statutory auditors of the concerned group Companies; and
ii. it is a change in estimate which has to be worked out prospectively.
Pursuant to the above referred comments by the C&AG Office in respect of accounting treatment given by the Group, Gujarat Urja Vikas Nigam Limited (GUVNL), the parent Company, decided to 348 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
consult and obtain an opinion from a reputed, prestigious and independent professional firm of Chartered Accountants. Accordingly, the parent Company GUVNL obtained the opinion from such a Firm (the Firm) on the accounting treatment given by the Group. The Firm has provided the opinion vide Letter dt. 1st September, 2020 and concluded that the change in estimates cannot be considered as correction of Prior Period Error and impact of such change in the estimate need to be considered prospectively. GUVNL has shared the Firm’s expert opinion with Office of C&AG vide Letter dt. 14th September 2020.
Given this view, the Group has continued to recognise the change in method of computing Grant / Consumer Contribution received against depreciable asset to be recognised in the Consolidated Statement of Profit and Loss from Reducing Balance Method to Straight Line Method as not a correction of prior period error but a “Change in Estimate” and accordingly continued to apply prospectively in terms of provisions of Ind AS-8 “Accounting Policies, change in Accounting Estimates and Errors”.
If the Group had applied the above change in method retrospectively, the balances of the Government grants and Consumer contributions as at 31st March, 2020 would have been higher by 145,015.03 lakhs. The above information is only for comparative purpose and has no impact on these financial statements.
65 Legal Ownership(Titles) of Immovable Properties
The immovable properties, which have been transferred to group Companies are held in the name of erstwhile GEB, the procedure for the registration and / or transfer in the name of the respective Companies is under process.
66 Borrowing Cost
As per Ind AS 23-Para 6 and 6A “Borrowing Cost” Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are to be capitalized as part of such assets. However it is not possible for the Group to directly arrive at cost to be charged to qualifying asset and hence it has adopted the weighted average rate of borrowing of loans directly availed by the Group. The amount of Borrowing Cost capitalized during the year amounts to 13.244.35 lakhs (P.Y. 21,937.92 lakhs).
67 Additional information on Consolidated Financial Statements under Schedule III of the Companies Act, 2013
349 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Net Assets i.e. Total Assets Share in Profit or Loss minus Total Liabilities Particulars As a % of Amount As a % of Amount Consolidated ( In Lakhs) Consolidated ( In Lakhs) Net Assets Profit or Loss
Parent Gujarat Urja Vikas Nigam Limited 77.30% 24,10,036.35 6.82% 10,639.59 Subsidiary Gujarat State Electricity Corporation Limited 25.27% 7,88,033.37 7.10% 11,073.14 Gujarat Energy Transmission Corporation Limited 22.54% 7,02,894.43 48.05% 74,911.55 Paschim Gujarat Vij Company Limited 28.99% 9,03,825.62 14.53% 22,657.21 Uttar Gujarat Vij Company Limited 10.51% 3,27,721.85 7.48% 11,660.06 Madhya Gujarat Vij Company Limited 7.10% 2,21,424.31 4.16% 6,488.41 Dakshin Gujarat Vij Company Limited 8.16% 2,54,389.43 8.34% 13,007.63 Associate Gujarat Industries Power Company Limited 2.37% 73,747.80 4.27% 6,654.98 Joint Venture Mahaguj Collieries Limited 0.00% - 0.00% - Eliminations -83.54% (25,86,213.22) -0.76% (1,177.47)
Total 98.70% 30,95,859.93 100.00% 1,55,915.09
Share in Share in Other Comprehensive Income Total Comprehensive Income Particulars As a % of Amount As a % of Amount Consolidated ( In Lakhs) Consolidated ( In Lakhs) Net Assets Profit or Loss
Parent Gujarat Urja Vikas Nigam Limited 11.18% 3,415.47 5.76% 7,224.12 Subsidiary Gujarat State Electricity Corporation Limited 10.96% 3,347.69 6.16% 7,725.45 Gujarat Energy Transmission Corporation Limited 15.64% 4,775.79 55.94% 70,135.76 Paschim Gujarat Vij Company Limited 24.59% 7,507.95 12.08% 15,149.25 Uttar Gujarat Vij Company Limited 14.31% 4,370.48 5.81% 7,289.58 Madhya Gujarat Vij Company Limited 9.38% 2,864.88 2.89% 3,623.53 Dakshin Gujarat Vij Company Limited 13.90% 4,245.80 6.99% 8,761.83
350 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Associate Gujarat Industries Power Company Limited 1.56% 476.95 4.93% 6,178.03 Joint Venture Mahaguj Collieries Limited 0.00% - 0.00% - Eliminations -1.53% (467.65) -0.57% (709.83)
Total 100.00% 30,537.36 100.00% 1,25,377.73
68. COVID-19
COVID-19 virus, a global pandemic has affected the world economy including India leading to significant decline and the volatility in the financial markets and the decline in economic activities.
The Group is engaged in the “Generation, Transmission, Distribution and Bulk Purchase & Sale (Trading) of Electricity”. Since electricity has been categorised as an “Essential Service”, the Group was in position to supply its services throughout lockdown period to all its consumers except to commercial and industrial consumers in case of whom, there was drastic reduction of demand due to lockdown situation.
Estimation of Uncertainties:
The Group believes that it has taken into account all the known impacts arising from COVID-19 pandemic in the preparation of the Consolidated Financial Statements. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group, as at the date of approval of the financial statements has used internal and external sources of information. However, the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration. The Group will continue to monitor any material changes in the future economic conditions and the impact thereof on the Group, if any. The eventual outcome of the impact of the COVID-19 pandemic on the Group’s business may be different from that estimated as on the date of approval of these Consolidated Financial Statements.
Property, Plant and Equipment:
The Group has estimated recoverable amount of the cash generating units and has determined it to be greater than the carrying amount. Reasonable sensitivities in key assumptions consequent to the change in estimated future economic conditions on account of possible effects relating to COVID19 is unlikely to cause the carrying amount to exceed the recoverable amount of the cash generating unit.
351 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Capital Work-in-Progress:
There is impact on activities related to ongoing projects which have been hampered and may result into delays in implementation of these projects. However, the group expects that the ongoing projects will be resumed and that the projects will remain commercially viable, taking into account the availability of resources.
Investments, Loans and Advances & Other Assets:
In assessing the recoverability of Group’s assets such as investments, loans, advances and other financial and non-financial assets, the Group has considered internal and external information up to the date of approval of the financial statements. The Group has performed sensitivity analysis on the assumptions used based on the internal and external information / indicators of future economic conditions and expects to recover the carrying amount of the assets.
Inventories:
The Group has evaluated the adequacy of provision on its carrying amount of inventory on account of COVID 19. However, based on the assessment made, no additional provision is required to the carrying amount of inventory, as it has been moving in the ordinary course post the year end.
Trade Receivables:
The Group determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. In assessing the recoverability of trade receivables, the Group has considered subsequent recoveries, past trends, and internal and external information available upto the date of issuance of the financials. Based on assessment done by the Group, there is no allowance for credit losses required based on the subsequent recovery of these receivables.
Revenue:
The Group’s revenue from “Generation, Transmission, Distribution and Bulk Sale of Power” has downward impact due to lockdown mainly in commercial and industrial units. Since this situation will likely prevail in Financial Year 2020-21, the Group is in process of identification of loss in revenue due to disruption of supply of electricity to these units.
Employee and Other Costs:
The Group is making payments of salaries and wages to all employees on its payrolls as also the
352 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
contract workers during the time of lockdown. Further, the Group is also incurring various other costs, including fixed costs during the period of full/partial lockdown. This may impact the profitability levels of the Group.
However, the subsidiary company GETCO is making payments of salaries and wages to all employees on its payrolls as also the contract workers during the time of lockdown. It is to mention that Ministry of Finance, Government of India vide its notification no. 1/1/2020-E-II (B) dtd 23.04.2020 has decided not to pay additional Dearness Allowance (DA) to the Central Government Employees due from 01.01.2020. Further, it was also decided that additional instalments of DA due from 01.07.2020 to 01.01.2021 shall also not be paid. However the DA at current rates shall continue to be paid. Further, the rates of DA as effective 01.01.2020, 01.07.2020 and 01.01.2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 01.07.2021. No arrears from the period 01.01.2020 to 30.06.2021 shall be paid.
Contracts and Commitments (If Any):
The Group has binding purchase contracts with few of the suppliers for raw materials, power, etc. The Group has evaluated the impact of disruptions of business operations on those contracts.
Going Concern:
The management has evaluated the various financial ratios, expected ageing and maturities of assets and liabilities and the various internal and external information available. The management does not see any risks to Group’s ability to continue as a going concern and expects that Group will be able to meet its liabilities in the foreseeable future, as and when the same fall due.
69 Statement of Management a. The current assets, loans and advances are good and recoverable and are approximately of the values, if realized in the ordinary course of business unless and to the extent stated otherwise in the accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary. There are no contingent liabilities except those stated in notes. b. Consolidated Balance Sheet, Consolidated Statement of Profit & Loss and Consolidated Cash Flow Statement read together with the schedules to the accounts and notes thereon, are drawn up so as to disclose the information required to the Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Group as at the end of year and results of the Group for the year under review.
353 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
70 Previous Year figure have been regrouped, recasted and restated wherever necessary for comparative purpose.
71 Approval of Financial Statements
The Consolidated Financial Statements were approved for the issue by the Board of Directors on November 10, 2020
As per our Report of even date attached For and on behalf of the Board
For DGSM & Co. Chartered Accountants Sd/- Sd/- Firm Registration No. 101606W (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN, IAS) Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- Sd/- Sd/- (CA. ABHINAV MALAVIYA) (SHUBHADEEP SEN) (PARTHIV BHATT) Partner General Manager (F&A) & CFO Company Secretary Membership No. 144245 Place : Gandhinagar Place : Gandhinagar Date : November 10, 2020 Date : November 10, 2020
354
GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Note 1 There is significant influence due to percentage (%) of Share Capital. 2 Net Worth attributable to Shareholding as per latest Balance Sheet ( in Lakhs) Net Worth of GIPCL as above 2,74,807.15 Add: Proposed Dividend including Corporate Dividend Tax by GIPCL - Net Worth after above adjustment 2,74,807.15 GUVNL's group share in above Net Worth 73,748.17 Net worth attributable to Shareholding as per latest Balance Sheet 73,748.17
3 The share in the Net loss for the year of the Joint Venture of (66.58) 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 and on behalf of the Board
For DGSM & Co. Chartered Accountants Firm Registration No. 101606W Sd/- Sd/- (SUNAINA TOMAR, IAS) (SHAHMEENA HUSAIN,IAS) Chairperson Managing Director DIN: 03435543 DIN:03584560
Sd/- Sd/- Sd/- (CA. ABHINAV MALAVIYA) (SHUBHADEEP SEN) (PARTHIV BHATT) Partner General Manager (F&A) & CFO Company Secretary Membership No. 144245
Place : Gandhinagar Place : Gandhinagar Date : November 10, 2020 Date : November 10, 2020
356 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20 Form No. MGT-11 PROXY FORM
GUJARAT URJA VIKAS NIGAM LIMITED
Regd. Office: Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390007.
Name of the Member/s :
Address :
E-mail Id :
Folio No. :
I/We, being a Member/s of ______equity shares of Gujarat Urja Vikas Nigam Limited, Vadodara hereby appoint,
1. Name:
Address:
E-mail Id: Signature: ,or failing him/her
2. Name:
Address:
E-mail Id: Signature: ,or failing him/her
3. Name:
Address:
E-mail Id: Signature: ,or failing him/her
as my/our proxy to attend and vote for me/us and on my/our behalf at the SIXTEENTH ANNUAL GENERAL MEETING of the Company to be held on Wednesday, the 30th December, 2020 at Registered Office and any adjournment thereof in respect of such resolutions as are indicated below:
357 GUJARAT URJA VIKAS NIGAM LIMITED 16TH ANNUAL REPORT 2019-20 CONSOLIDATED FINANCIAL STATEMENTS 2019-20
Resolutions
Ordinary Business
1 Adoption of Audited Financial Statements including Consolidated Financial Statements of the Company for the financial year ended 31st March, 2020, together with the Board’s Report, the Report of Auditors’ thereon and the Comments of the Comptroller & Auditor General of India, in terms of Section 143(6) of the Companies Act, 2013.
2 To take note of appointment and to authorize the Board of Directors of the Company to fix the remunerationpayable to StatutoryAuditors of the Company appointed by the Comptroller and Auditor General of India (C & AG), New Delhi, for the Financial Year 2020-21, in terms of the provisions of Section 139(5) read with Section 142 of the Companies Act, 2013
Special Business
3 Ratification of remuneration of Cost Auditors appointed for F.Y. 2020-21 – Ordinary Resolution.
Affix Signed this ______day of ______2020. Revenue Stamp Signature of Shareholder & Sign
Signature of Proxy holder/s
Note : This form of Proxy in order to be effective should be duly completed and deposited at the Regis tered Office of the Company, not less than 48 hours before the commencement of the Meeting.
358