Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 BOARD OF DIRECTOR Shri Sujit Gulati, IAS (DIN 00177274) Chairman (up to 16.07.2018) Shri Raj Gopal, IAS (DIN 02252358) Chairman (up to 31.01.2019) 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 Milind Torawane, IAS (DIN 03632394) Govt. Nominee Director (up to 01.10.2019) Shri Roopwant Singh, IAS (DIN 06717937) Govt. Nominee Director (w.e.f 01.10.2019) Shri S.B. Khyalia (DIN 02470485) Director (Finance) (up to 01.11.2019) Now on Deputation to GPCL Shri K. M. Bhuva (DIN 07808731) Director (Technical) Shri N. N. Misra (DIN 00575501) Independent Director (w.e.f 01-11-2018) Shri R. C. Dhup (DIN 08275424) Independent Director (w.e.f 24-12-2018) I/c ADG OF POLICE (SECURITY) : COMPANY SECRETARY Shri Manoj Sashidhar, IPS Shri Parthiv K. Bhatt BANKERS SR. EXECUTIVES UCO Bank Canara Bank 1. Shri K.P. Jangid, GM (Comm.) State Bank of India Allahabad Bank 2. Dr. Nilesh Munshi, GM (HR) Bank of India Syndicate Bank 3. Smt. Sailaja Vachhrajani, GM (IPP) Central Bank of India Bank of Baroda 4. Shri S. Sen, GM (F&A) & CFO Union Bank of India Indian Oversease Bank 5. Shri Sourav Guha Thakurta, GM (IT) Dena Bank (now Bank of Baroda) Karur Vysya Bank 6. Shri R.B. Patel, I/C CE (TECH) Vijaya Bank (now Bank of Baroda) Indian Bank STATUTORY AUDITORS SECRETARIAL AUDITORS COST AUDITORS M/s. Mukund & Rohit M/s. Sandip K. Shukla 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 15th Annual Report 2018-19
NOTICE
Notice is hereby given that the Fifteenth 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 Monday, the 30th December, 2019 at 4.00 P.M. at the Conference Room of the Company, Third Floor, Sardar Patel Vidyut Bhavan, Race Course Circle, Vadodara – 390 007, 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, 2019, 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.
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 2019-20, 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 2019-20 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 2019-20."
3 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 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 Y S Thakar & Co., Cost Accountants, Vadodara (Firm Registration No.000318) 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, 2020 (i.e. Financial Year 2019-20) at the remuneration of Rs. 50,000/- (Rupees Fifty Thousand only) plus applicable GST; Out-of-pocket expenses at actual (subject to 10% of professional fees i.e. Rs. 5,000/-) and Rs. 5000/- (plus applicable GST) for conversion and uploading Cost Audit Report in XBRL format be and is hereby ratified and approved."
"RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committee thereof) be and is hereby 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."
4. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution relating to appointment of Smt. Shahmeena Husain, IAS as Director (continuing as Managing Director) :
"RESOLVED THAT pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, and Rules made thereunder (including any statutory modifications or reenactment thereof for the time being in force) Smt. Shahmeena Husain, IAS (DIN 03584560) who was appointed as an Additional Director by the Board with effect from 30th August, 2019 to hold office up to the date of this Annual General Meeting in terms of Section 161 of the Companies Act, 2013, be and is hereby
4 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
appointed as a Director (continuing as Managing Director) of the Company, not liable to retire by rotation."
By Order of the Board
Date : 20-12-2019 Parthiv Bhatt Place : Gandhinagar 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
5 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 Y S Thakar & Co., Cost Accountants, Vadodara was placed before the 49th Meeting of the Audit Committee held on 22-02-2019 and as recommended by the Audit Committee, the Board of Directors of your Company has at its 93rd Meeting held on 22nd February, 2019 considered the recommendation and approved the said proposal for appointment of M/s Y S Thakar & Co., Cost Accountants, Vadodara as Cost Auditor 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, 2020 (i.e. Financial Year 2019-20) at the remuneration of Rs. 50,000/- (Rupees Fifty Thousand only) plus applicable GST; Out-of-pocket expenses at actual (subject to 10% of professional fees i.e. Rs. 5,000/-) and Rs. 5000/- (plus applicable GST) for conversion and uploading Cost Audit Report in XBRL format, 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. Item no 4 The Government of Gujarat vide Notification No. AIS/35.2019/30/G dated 30.08.2019 appointed Smt. Shahmeena Husain, IAS (DIN 03584560) as Managing Director of the Company vice Shri Pankaj Joshi, IAS transferred as Principal Secretary, Energy & Petrochemicals Department, Govt. of Gujarat. Smt. Shahmeena Husain, IAS took charge of the post of Managing Director on 30-08- 2019.
6 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Accordingly, under the provisions of Section 161 of the Companies Act, 2013 and in terms of the Article 77 of the Articles of Association of the Company, the Board has vide Resolution passed on 17th September,2019 appointed Smt. Shahmeena Husain, IAS (DIN 03584560) as an additional director with effect from 30th August, 2019 to hold office up to the date of the next Annual General Meeting. Smt. Shahmeena Husain, IAS has also been appointed as Managing Director of the Company with effect from 30th August, 2019 vide Board Resolution passed on 17th September,2019. On her appointment as Director at this Annual General Meeting, she will continue to be the Managing Director of the Company. Smt. Shahmeena Husain is a senior IAS officer of 1997 batch. She has held various important positions in the Government. She has long, rich and varied experience of administration in various areas. Your Directors, therefore, recommend the resolution for your approval. Pursuant to the Notification No. G.S.R. 163 (E) dated 05-Jun-2015 of the Central Government, the provisions of Section 160 of the Companies Act, 2013 are not applicable to the Company and therefore, no notice under the said Section is required. The above appointment of Smt. Shahmeena Husain, IAS as a Director on the Board of the Company requires approval of the members in the General Meeting. None of the Directors and Key Managerial Personnel of the Company and their relatives except Smt. Shahmeena Husain, IAS is, in any way, concerned or interested, financially or otherwise, in this Resolution. The Board commends the Ordinary Resolution set out in Item No.4 of the Notice for approval of the Members.
By Order of the Board Date : 20 -12-2019 Place : Gandhinagar
REGISTERED OFFICE: Parthiv Bhatt Sardar Patel Vidyut Bhavan, Company Secretary Race Course, Vadodara – 390 007 CIN : U40109GJ2004SGC045195 7 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
BOARDS' REPORT To, The Members of GUJARAT URJA VIKAS NIGAM LIMITED.
Your Directors are pleased to present the 15th ANNUAL REPORT together with Audited Stand Alone and Consolidated Financial Statements for the 15th Financial Year ended 31st March, 2019.
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 2018-19 FY 2017-18 1 Total Income 44,90,952.06 37,84,218.52 2 Total Expenditure Before Depreciation, Interest & Tax 44,84,784.72 37,65,620.81 3 Profit Before Depreciation, Interest & Tax 6,167.34 18,597.71 4 Depreciation and Amortization Expenses 585.60 175.99 5 Finance Costs 2,010.81 2,547.06 6 Profit Before Tax 3,570.93 15,874.66 7 Tax Expenses 770.00 3,270.00 8 Profit After Tax 2,800.93 12,604.66 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 2018-19.
OPERATIONS AND STATE OF COMPANY'S AFFAIRS:
• Standalone Financial Performance:
• The Company is in the business of bulk purchase and sale of power. During the year, the Company sold
8 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
98,695.19 MUs as compared to 89,480.29 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.
• The company earned total revenue from Sale of Power to the tune of Rs. 44,08,614.43 Lakhs as against Rs. 37,12,738.88 Lakhs in the previous year. Correspondingly, total expenditure incurred on Purchase of Power is Rs. 44,76,498.62 lakhs as against Rs. 37,60,111.52 lakhs in the previous year. The increase in revenue from sale of power to the tune of Rs. 6,95,875.55 Lakhs (18.74%) and increase in expenditure on Purchase of Power to the tune of Rs. 7,16,387.10 Lakhs (19.05%) is attributable to increase in scale of operations of the Company.
• The per unit power purchase cost has increased to Rs. 4.54 as compared to Rs. 4.20 in the previous year. While the per unit realization has gone up to Rs. 4.47 as compared to Rs. 4.15 in the previous year.
Technical Performance : For the year ended For the year ended Sr. No. 31st March, 2019 31st March, 2018 Particulars Amount Amount MUs MUs (Rs. Lakhs) (Rs. Lakhs) 1. Purchase of Power 98,695.19 44,76,498.62 89480.29 37,60,111.52 2 Sale of Power 98,695.19 44,08,614.43 89480.29 37,12,738.88
The amounts, if any, proposed to be carried to any reserves in balance Sheet :
• The Company has earned Profit Before Tax (PBT) of Rs. 3,570.93 Lakhs as against Rs. 15,874.66 Lakhs in the previous year showing a decrease by Rs. 12,303.73 Lakhs (i.e. a down of 77.51%). Since the Income Tax Act, 1961 provides for payment of Minimum Alternate Tax (MAT) on book profit, a provision of Rs. 770.00 Lakhs has been made towards MAT liability (Previous Year: Rs. 3270.00 Lakhs). This leaves a Profit After Tax (PAT) of Rs. 2,800.93 Lakhs (as against Rs. 12,604.66 Lakhs in the previous year) which has been transferred to Retained Earnings.
• The Company inherited a loss of Rs. 73724 Lakhs from erstwhile GEB. Now as a result of making Profit for 14 consecutive years, the Company has accumulated profit (Retained Earnings) of Rs. 27,960.53 Lakhs (Previous Year: Rs. 25,178.63 Lakhs).
9 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
SHARE CAPITAL
The authorized capital of the Company as on 31/03/2019 is Rs. 30,000 Crores divided into 3000 Crore equity shares of Rs. 10 each. The issued capital of the Company as on 31/03/2019 stood at Rs. 20169,83,17,950/- and subscribed and paid up equity share capital of your Company stood at Rs. 19772,22,20,950/- and share application money as on 31/03/2019 stood at Rs. 397,60,97,000/-. During the year 2018-19, 3544672200 no. of equity shares of Rs.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.
Further after the close of Financial Year 2018-19, the 1378449700 no. of equity shares of Rs.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 as well as towards consideration for transfer of equity shares held by Govt. of Gujarat in subsidiary company GETCO to the name of the Company pursuant to various Govt. of Gujarat Resolutions/letters. The Paid up Capital as on 30-11-2019 stood at Rs. 21150,67,17,950/- divided into 21150671795 equity shares of Rs. 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, 2019 of Rs. 3,24,588.53 Lakhs has reduced by Rs. 17,553.04 Lakhs compared to Rs.3,42,141.57 Lakhs as on 31st March, 2018 due to receipt of additional subsidy during current year. The break-up of outstanding subsidy receivable amounting to Rs.3,24,588.53 Lakhs is tabulated as under : Sr. No. Subsidy (? in Lakhs) 1. GERC Tariff Compensation of Ag. Consumers 56,154.59 2. FPPPA Subsidy of Ag. Consumers 2,25,458.63 3. Water Works (Gram Panchayats) Subsidy 2,401.92 4. 50% Relief to Ag. Consumers in Elect. Bills 40,573.39 TOTAL 3,24,588.53 10 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
INVESTMENT IN SUBSIDIARY COMPANIES:
During FY 2018-19, GUVNL has invested Rs. 2,70,343.82 Lakhs in six Subsidiary Companies. The details of investments made with Share Premium in Subsidiary Companies are shown as under:
Sr. Name of Subsidiary Share Capital Premium Total No. Companies (? in lakhs) (? in lakhs) (? in lakhs) 1. GSECL 8,689.60 24,415.40 33,105.00 2. GETCO 2,811.77 25,039.23 27,851.00 3. DGVCL 3,016.24 23,405.00 26,421.24 4. MGVCL 2,373.27 15,371.74 17,745.01 5. PGVCL 1,07,009.17 30,598.15 1,37,607.32 6. UGVCL 3,746.90 23,867.35 27,614.25 TOTAL 1,27,646.95 1,42,696.87 2,70,343.82
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 2018-19.
11 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
The Performance highlights of the Subsidiaries and Associate included in the Consolidated Financial Statement of the Company for F.Y. 2018-19 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, DGVCL, PGVCL, UGVCL and Associate Company GIPCL and Joint Venture of subsidiary company GSECL viz 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)
Reserves Profit Provision Profit Sr. Name of Share Total Total Invest- and Turnover before For After No. Subsidiary Capital Assets Liabilities ments Surplus Taxation Taxation Taxation 1. Gujarat State Electricity Corporation limited (GSECL) 212,779.88 502,507.62 2,231,662.30 1,516,374.80 12,056.93 1,161,079.00 3,522.93 360.22 37,244.14
2. Gujarat Energy Transmission Corporation Limited (GETCO) 72,424.48 528,767.52 2,364,124.52 1,762,932.54 12,520.85 314,303.54 61,912.28 12,032.83 35,493.88
3. Madhya Gujarat Vij Company Limited (MGVCL) 42,550.56 159,209.18 506,037.36 304,277.98 -- 614,568.77 6,296.31 444.28 3,313.28
4. Dakshin Gujarat Vij Company Limited (DGVCL) 40,996.51 176,396.02 632,746.61 415,353.97 -- 1,276,952.98 4,323.24 396.49 3,926.75
5. Paschim Gujarat Vij Company Limited (PGVCL) 631,625.95 98,880.28 1,484,973.39 754,467.16 -- 1,713,052.14 6,305.66 (901.38) 7,466.20
6. Uttar Gujarat Vij Company Limited (UGVCL) 55,633.08 236,980.09 700,284.50 407,671.33 -- 1,218,253.66 5,166.87 94.53 3,661.50
12 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 Associate/Joint Venture Shares of Associate / Joint Venture held by the Profit / Loss for the year company on the year end Description of Sr. Name of Associate / Net worth Net worth Profit for the Considered in how there is No. Joint Venture as per latest attributable to year as per Consolidation significant Balance Sheet Shareholding latest (? in lakhs) influence (? in lakhs) as per latest Statement of Balance Sheet Profit and Loss (? in lakhs) (? in lakhs) 1. Gujarat Industries Power 257,073.92 68,988.84 25,473.33 6,836.11 Associate Company Limited (GIPCL) (Note - 1 & 2) 2. Mahaguj Collieries Limited 5,419.83 2,167.93 (166.44) (66.58) Joint 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 GIPCL AND JOINT VENTURE OF SUBSIDIARY COMPANY GSECL viz 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 alongwith its Standalone Financial Statements w.e.f. 01/04/2014. Accordingly, GUVNL has prepared the Consolidated Financial Statements for current FY 2018-19 by 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. The Board of Directors of Subsidiary Company GSECL in its meeting held on August 13, 2018 decided for merger of Bhavnagar Energy Company Limited (BECL) with the company. BECL (a subsidiary of Gujarat Power Corporation Limited) is a Government of Gujarat (GOG) undertaking and engaged in the activity of 13 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 generation of electricity from lignite. The primary reason for merger was availing benefit of economies of scale, synergy and tax benefits. For this purpose, Government of Gujarat notified the Gujarat Electricity Reform (Transfer of Generation Undertakings) Scheme, 2018 under Gujarat Electricity Industry (Reorganization and Regulation) Act, 2003, on 27 August, 2018 for merger of BECL with the GSECL effective from April 01, 2018 (acquisition date). As per Ind AS – 103: Business Combinations, the financial information in the Financial Statements in respect of prior period is required to be 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. In view of this, previous year's figures of CFS have been restated considering the audited financial statements of BECL for the year ended March 31, 2018. This is the 14th 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 Rs. 90,002.05 Lakhs for FY 2018-19 as against corresponding figure of Rs. 1,29,033.40 Lakhs for FY 2017-18.There is a decrease in profits by Rs. 39,031.35 Lakhs i.e. by 30.25%, primarily due to the merger of BECL. The sectoral performance of last two years are summarized as under : (? In Lakhs) FY % of Total FY % of Total Particulars 2018-19 Income 2017-18 Income A INCOME : 1 Revenue from Operations 49,71,935.08 97.44% 42,87,686.66 97.71% 2 Other Income 1,30,404.54 2.56% 1,00,647.72 2.29% TOTAL INCOME : 51,02,339.62 100.00% 43,88,334.39 100.00% B EXPENSES : 1 Cost of Fuel Consumed 8,92,736.67 17.50% 7,24,449.90 16.51% 2 Purchase of Power 30,78,749.64 60.34% 24,45,237.53 55.72% 3 Employee Benefit Expenses 3,38,372.30 6.63% 3,42,136.77 7.80% 4 Finance Costs 1,66,015.35 3.25% 1,87,352.05 4.27% 5 Depreciation 3,65,183.95 7.16% 3,29,511.33 7.51% 6 Other Expenses 1,75,644.56 3.44% 1,97,810.85 4.51%
14 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
TOTAL EXPENSES : 50,16,702.46 98.32% 42,26,498.42 96.31% Profit Before Exceptional items and Tax 85,637.16 1.68% 1,61,835.96 3.69% 7 Exceptional items -4,364.89 32,802.56 8 Profit Before share of Net Profits of Associate and Joint Venture 90,002.05 1,29,033.40 9 Share of Profit of Joint Venture - - 10 Share of Profit of Associate 6,836.11 4,456.11 11 Profit Before Tax 96,838.16 1,33,489.52 12 Tax Expenses -2,808.46 76,175.02 13 Profit for the Year 99,646.62 57,314.49
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. 2018-19 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. 2018-19 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:
15 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Energy Energy Energy Shortage / Surplus Fiscal Year Requirement Availability (Million units) (Million units) (Million units) (%) 2014-15 1068923 1030785 38138 -3.6 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
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 2018-19 was 19555 MW. The total installed conventional power generating capacity of the State at the end of financial year 2018-19 is as under: (In MW) Capacity as on 31.3.2018 During FY 2018-19 Capacity as Fuel / Sector State Pvt. Central Capacity Capacity GSECL on 31.3.2019 Owned IPP Sector Sector de-rated added Coal/Lignite 4000 1250 5405 3012 - - 13667 Gas 970 1354 1802 424 655 - 3895 Nuclear - - - 559 - - 559 Hydro 547 - - 232 - - 779 Total 5517 2604 7207 4227 655 - 18900 During the year FY 2018-19, capacity to the tune of 655 MW has been de-rated owing to completion of PPA life: Sr. No Generating Station Fuel Capacity (MW) 1 CLP India (erstwhile GPEC) Gas 655 The details of Renewable Capacity in the State at the end of FY 2018-19 are as under: (In MW)
Renewable Source As on 31.3.2018 Addition As on 31.3.2019 Sr. No during year 1 Wind 5575 459 6034 2 Solar (incl. Rooftop) 1648 792 2440 3 Biomass 41.2 40 81.2 4 Mini / Small Hydel 21.6 32 53.6 TOTAL 7286 1323 8609 * Including Wheeling / private generators
16 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 2017-18 and 2018-19 is as under : (In Mus)
Sr. No. Name of Agency 2017-18 2018-19 1 NPC 1831 3272 2 NTPC 22087 23283 3 SSNNL (Hydro) 146 91 TOTAL CENTRAL SECTOR (1 to 3) 24065 26646 4 GSEG 189 365 5 GIPCL – SLPP 2895 3085 6 GMDC 1131 957 7 GSECL 21620 22349 8 GPPC 167 480 9 BECL (BLTPS) 394 486* TOTAL STATE SECTOR (4 to 9) 26397 27722 10 Essar Power Gujarat Ltd 2464 - 11 CLP India (erstwhile GPEC) 425 285 12 Adani - Mundra Power Project 8023 10068 13 ACB India Ltd 1410 1405 14 Coastal Gujarat Pvt. Ltd – Mundra UMPP 11689 12091 TOTAL IPPs (10 to 14) 24012 23848 15 Solar 1590 1959 16 Wind 6451 7560 17 Other Renewable 46 210 18 Power Exchanges & others 6268 10743 19 Purchase from DISCOMs 652 7 TOTAL OTHERS (15 to 18) 15007 20479 20 TOTAL POWER PURCHASE 89480 98695 *Pursuant to approval of Govt. of Gujarat dated 27.08.2018, Bhavnagar Energy Company Ltd. (BECL) has been merged with GSECL w.e.f 01.04.2018. The power station is titled as Bhavnagar Lignite Thermal Power Station (BLTPS). 17 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 2017-18 and 2018-19 are as under : (In Mus)
Sr. No Name of Company 2017-18 2018-19 1 DGVCL 19391 21042 2 UGVCL 23871 27325 3 PGVCL 34065 38254 4 MGVCL 11320 11826 5 GACL 182 241 6 Others 652 7 TOTAL 89480 98695
Activity of Power Trading during the year :
During FY 2018-19, GUVNL purchased 8529 Million Units at an average rate of Rs. 4.58/unit under short term arrangement through Power Exchanges & DEEP e-bidding Portal, Govt. of India as against 5647 Million Units at an average rate of Rs. 4.06/unit during FY 2017-18.
It is to mention that 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. During FY 2018-19, power has also been purchased from short term market in order to meet the intermittent generation loss due to non-availability of power from various projects under long term Power Purchase Agreements (PPAs) due to fuel related issues.
GUVNL has taken measures to ensure availability of adequate power for continuous & uninterrupted power supply by its Distribution Companies to the consumers of State. Supply / Demand Scenario :
The installed capacity from conventional sources in the State at the end of FY 2018-19 is 18900 MW (as on 31.3.2019) against the peak level demand of 18221 MW in FY 2018-19 (Source: SLDC). Conventional Capacity to the tune of 1983 MW is planned to be added in next two financial years (i.e. by Mar-2021) 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. 18 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Augmentation of Renewable Energy Sources :
Recognizing the significance of pollution free Renewable Power & need of long term energy security, State has been rolling out the Renewable Energy Policies from time to time enabling a conducive framework for development of Renewable Projects.
State has already announced following Policies & Guidelines for providing impetus to development of Renewable Energy projects :
• Solar Power Policy 2015
• Waste to Energy Policy 2016
• Small Hydel Policy 2016
• Wind Power Policy 2016
• Wind Solar Hybrid Policy 2018
• Repowering of Wind Projects Policy 2018
• Waste Land allocation Policy for Wind, Solar, Hybrid Projects 2019
• SURYA – Surya Urja Rooftop Yojana 2019
• Scheme for development of Solar Projects in vicinity of existing Sub-stations of GETCO, 2019
• Policy for Development of Small Scale Distributed Solar Projects 2019 Renewable sector - Initiatives & achievements :
(a) Power tie up through competitive bidding – Wind & Solar :
GUVNL has been tying up new capacity from Wind & Solar capacity only through competitive bidding process.
In Dec-18, GUVNL has successfully concluded procurement of 500 MW grid connected Solar Power through Competitive Bidding and signed long term PPAs at a competitive tariff of Rs. 2.44/unit.
In Feb-19, GUVNL successfully concluded competitive bidding for procurement of 500 MW Grid connected Solar Power and signed long term PPAs at competitive tariffs of Rs. 2.55 – 2.67 / unit.
During FY 2018-19, GUVNL has initiated tendering process for procurement of solar power from projects to be set up at Raghanesda Solar Park, Banaskantha District and Dholera Solar Park, Patan District. The tendering process for selection of bidders through competitive bidding and reverse auction has been
19 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 completed and PPAs would be signed soon.
During FY 2018-19, GUVNL has also initiated tendering process for procurement of Grid connected Wind Power wherein capacity to the tune of 202.6 MW has been tied up through competitive bidding at tariff of Rs. 2.80/unit in Aug-19.
(b) Waste to Energy Projects :
During FY 2018-19, GUVNL has executed two PPAs totaling to 22.4 MW capacity for purchase of power from Municipal Solid Waste (MSW) based Projects proposed to be set up at Jamnagar & Rajkot.
As on 31.03.2019, GUVNL is having total tie up capacity of 63.8 MW from Municipal Solid Waste (MSW) based Projects.
(c) Renewable Purchase Obligation (RPO) :
GUVNL has achieved RPO of 12.04% against the RPO of 12.70% stipulated by Hon'ble GERC for FY 2018-19.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS DURING FY 2018-19.
(i) Hon'ble GERC vide tariff order dated 31.03.2018 has determined Retail tariff to be recovered by GUVNL's Distribution companies from its consumers during FY 2018-19
(ii) Hon'ble GERC vide order dated 31.03.2018 & 29.09.2018 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 dated 1/2018 dated 21.04.2018 has notified GERC Procurement Of Energy From Renewable Sources (Second Amendment) Regulations, 2018 stipulating the Renewable Purchase Obligation (RPO) trajectory for period from FY 2017-18 to FY 2021-22.
(iv) Hon'ble GERC vide Notification dated 1/2019 has notified Forecasting, Scheduling, Deviation Settlement and Related Matters of Solar and Wind Generation Sources Regulations, 2019.
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
20 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
approval of Regulatory Commission.
(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. Consequentially, off-take of power under this PPA has been discontinued. 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 Rs. 22736.00 lakhs was given to GUVNL for the year 2018-19 to electrify 14,300 Nos. of wells and 07 Nos. of petaparas. Against this, 14,842 wells and 06 Nos. of petaparas were electrified at an expenditure incurred of Rs. 22736.19 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). To minimize the burden on the financial of DISCOMs, state Government has provided financial assistance to DISCOMs through GUVNL in the form of share capital contribution.
During the year 2018-19, it was planned to electrify 95,632 Agriculture Wells at an outlay of Rs.1,48,073.20 lakhs under Agriculture Well (Normal & Dark Zone) Scheme. Against this, 94,522 AG Wells have been electrified at an expenditure of Rs. 1,48,075.97 lakhs.
3. SCSP AG SCHEME (SHARE CAPITAL)
Electrification of Agriculture wells of SC Farmers under SCSP AG scheme is being carried out by
21 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
DISCOMs. The certificate of caste issued by Social Welfare Department must be enclosed with the application. The expenditure of erection of HT- LT lines should be totally covered under the scheme. Applicant has to pay only Registration Charge, Security Deposit, Agreement Fee and Test report fee. Under this scheme Guidelines are as per the TASP Scheme.
Provision of Rs.1400 lakhs, to electrify 774 AG Wells under SCSP Ag. Scheme, is made for the year 2018-19. Against this, 911 wells have been electrified at an expenditure of Rs. 1400.36 Lakhs.
4. KUTIR JYOTI SCHEME
In this Scheme Beneficiaries of Tribal area will get connection free of cost with one point wiring, meter and LED/CFL bulb in the Huts. The BPL family or family whose maximum annual income is Rs.1,50,000 for urban area and Rs.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 Kutir Jyoti scheme.
Grant of Rs. 500.00 lakhs was given to GUVNL to electrify 8,500 Nos. of Household connections for the year 2018-19. Against this, 13,336 Nos. of Household connections were given at an expenditure of Rs.500.52 lakhs.
5. ZUPDA VIJLIKARAN SCHEME
In this Scheme Beneficiaries will get connection with one point wiring, meter and one LED/CFL Bulb in the Huts. The BPL family or family whose maximum annual income is Rs.1,50,000 for urban area and Rs.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 Rs. 2,340.00 lakhs was given to GUVNL to electrify 37,250 Nos. of household connections for the year 2018-19. Against this, 48,351 Nos. of household connections were given at an expenditure of Rs.2,340.03 lakhs.
6. SCHEDULE CAST SUB PLAN SCHEME
Applicable to Schedule Caste Beneficiaries residing 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 22 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 Rs. 360.00 lakhs was given to GUVNL for the year 2018-19 for electrification of 5,400 Nos. of house hold connection of SC beneficiaries. Against this, 7,252 Nos. of house hold connections of SC beneficiaries were electrified at an expenditure of Rs.361.44 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.
During the year 2018-19, Rs. 42,515.64 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 Rs. 42,500.00 lakhs received from the State Govt. in the form of share capital and grant.
8. RESTRUCTURED ACCELERATED POWER DEVELOPMENT AND REFORMS PROGRAMME. (RAPDRP) UNDER XITH PLAN
The RAPDRP schemes are to be implemented in towns during XI Five year plan as per GoI order dated:
23 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
19.09.2008. The RAPDRP scheme is divided in to three parts i.e. Part-A, Part-B and Part C. The provision under RAPDRP for nation as whole, towards Part A is Rs. 10,000 Crs, Part B Rs. 40,000 Crs and Part C Rs. 1177 Crs. during the 11th Five Year Plan. The nodal agency for implementing RAPDRP is Power Finance Corporation Limited (PFC), New Delhi.
The subsidiary companies of Gujarat Urja Vikas Nigam Ltd i.e. Dakshin Gujarat Vij Company Limited – DGVCL, Madhya Gujarat Vij Company Limited – MGVCL, Paschim Gujarat Vij Company Limited – PGVCL, Uttar Gujarat Vij Company Limited – UGVCL are entitled for Part A and Part B.
The part-A consists of converting existing system in to IT base, including consumer indexing, DTR metering etc. This part is to be implemented within 5 years to avail the benefit of loan as a grant; otherwise it will be treated as loan only as per PFC letter dated: 11.7.2013.
Total scheme include Data center, Disaster Recovery center, Customer care center, GPS survey, Consumer Indexing, AMR for DTR&HT consumers, GPRS Modem, Hand Held Equipment, Computers, Printers, Servers for Data Center & disaster center , Server at sub division for AMR, Upgradation of existing Network, connectivity Softwares for new applications as mentioned above etc.
Accordingly all the four DISCOMs have submitted their proposals for part A of RAPDRP to Nodal Agency, PFC, GoI, New Delhi amounting to Rs.24.62 Crores, Rs. 72.01 Crores (including Data Center cost and Disaster Recovery cost), 68.52 Crores and Rs. 28.29 Crores respectively. The PFC in turn released Amount of Rs.193.10 Crores against total amount of Rs.193.10 Crore under Part-A by end of 2018-19. Closure proposal considering actual work done worth Rs. 193.10 Cr. has been approved by PFC.
The Part-B consists of renovation, modernization and strengthening of 11 KV system including Reconductoring, load bifurcation, feeder separation, HVDS, Replacement of Electro Magnetic energy meters with temper proof electronic meters along with strengthening of weak sub transmission system if required. The loan shall be converted to grant up to 50% if target of AT&C loss is achieved in the project areas and the project is completed within stipulated time, otherwise it will be treated as a part of central assistance to State.
The DPR of the Part – B projects for 62 towns were submitted by all DISCOMs DGVCL, MGVCL, PGVCL and UGVCL amounting to Rs.154.83 Crores, Rs. 159.60 Crores, 447.58 Crores and Rs.87.79 Crores sanctioned respectively by M/s PFC. Amount of Rs. 203.62 Crores released by PFC & Rs.600.00 Cr.
24 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
arranged by DISCOMs, by borrowing from Bank of Baroda. Closure proposal considering actual work done worth Rs. 849.80 Cr. has been submitted to PFC and same has been approved by PFC.
Detail Project Report of 6 Towns (out of 84 towns selected under Part-A) are sanctioned by PFC at an estimated cost of Rs. 138.51 Crores for SCADA Part-A. Amount of Rs. 44.50 Crore have been released by PFC. Expenditure incurred under SCADA Part-A is amounting to Rs.36.19 Crore by end of 2018-19.
The Part C is to be implemented by MOP / PFC.
9. KISAN HEET URJA SHAKTI YOJANA ( KHUSY)
KHUSY is a High Voltage Distribution System of installing smaller size of Distribution Transformers and thereby 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 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 2018-19, it was planned to install 6,466 small capacity transformers at an estimated cost of Rs. 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, 6,426 Small capacity transformers at a cost of Rs. 7,507.04 lakhs have been installed.
10. 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 2018-19, Rs.8163.68 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 overhead lines by underground cable/Aerial Bunched Cable, etc.
25 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
11. SARDAR KRUSHI JYOTI YOJANA
The Project Objectives 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 2018-19, Rs.10003.86 lakhs have been spent under this scheme.
12. 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 Kisan Yojna (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 2018-19, against the revised budget provision of Rs. 22,830.00 lakhs, total 1927 consumers have been covered on 51 feeders with an expenditure of Rs. 22,841.89 lakhs. Aggregate total Capacity of SPV System is 42.86 M.W. AWARDS/PRIZES :
The State of Gujarat and GUVNL & Subsidiary Companies received various awards/prizes for outstanding achievements in the Energy Sector. The details of 2018-19 are given hereunder.
• Subsidiary Company UGVCL received SKOCH Order of Merit -Silver (For Project of Web Based application of Power Management System - Certificate-Skoch Award-Silver) given by SKOCH Group, New Delhi on 23.06.18.
• Subsidiary Company UGVCL received SKOCH Order of Merit –Silver (For Project of e-Gram Certificate – Skoch Award –Silver) given by SKOCH Group, New Delhi on 23.06.18.
• Subsidiary Company UGVCL received SKOCH Order of Merit – Silver (For Project of Web Based application of AT&C Losses System Certificate-Skoch Award –Silver) given by SKOCH Group, New Delhi on 23.06.18.
• Subsidiary Company PGVCL received SKOCH ORDER OF MERIT (For Off-grid Solar Water Pumping System for Irrigation Purpose - Certificate) given by SKOCH Group, New Delhi on 23.06.2018.
26 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• Subsidiary Company PGVCL received SKOCH ORDER OF MERIT (For GPRS (General Packet Radio Service) Billing - Certificate) given by SKOCH Group, New Delhi on 23.06.2018.
• Subsidiary Company PGVCL received SKOCH Award (For GPRS (General Packet Radio Service) Billing - Certificate) given by SKOCH Group, New Delhi on23.06.2018.
• Subsidiary Company UGVCL received 6th Annual Integrated Rating of State Distribution Utilities (For Operational & Financial Performances - A+ Rating) given by Ministry of Power, New Delhi on July 2018.
• Subsidiary Company DGVCL received 6th Annual Integrated Rating of State Distribution Utilities (For Operational & Financial Performances A+ Rating) given by Ministry of Power, New Delhi on July 2018.
• Subsidiary Company PGVCL received 6th Annual Integrated Rating of State Distribution Utilities (For Very High Operational and Financial Performance Capability - A+ Rating) given by Ministry of Power, New Delhi on July 2018.
• Subsidiary Company MGVCL received 6th Annual Integrated Rating of State Distribution Utilities (For Very High Operational and Financial Performance Capability - A+ Rating) given by Ministry of Power, New Delhi on July 2018.
• Subsidiary Company GSECL's
1. Ukai TPS received SKOCH Award-2018 (For Installation of Pollution Control Systems for Environmental Conservation - Bronze Award Certificate) given by SKOCH Group, New Delhi on 19.09.2018.
2. Gandhinagar TPS, Wanakbori TPS, Sikka TPS and Utran GBPS received SKOCH Award-2018 (For Environmental Conservation - Award Certificate) given by SKOCH Group, New Delhi on 19.09.2018.
• Subsidiary Company PGVCL received Skoch Award (For AG DSM: Top Environment Projects in India - Certificate) given by SKOCH Group, New Delhi on 19.09.2018.
• Govt. of Gujarat received Power Excellence Award 2018 by ICC (For Best State Power Utility Award wherein Gujarat ranked FIRST among all Indian states based on the findings of ICC Power Rating Report - Trophy & Certificate) given by Indian Chamber of Commerce - New Delhi, at 12th India Energy Summit & Awards 2018 held in Delhi on 14.11.2018.
• Subsidiary Company MGVCL received 6th Innovation with Impact Awards for DISCOMs 2018 Jointly ranked 2nd along with UGVCL under the category of UDAY Performance Award in the country -Trophy &
27 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Certificate given by Indian Chamber of Commerce - New Delhi, at 12th India Energy Summit & Awards 2018 held in Delhi on 14.11.2018.
• Subsidiary Company UGVCL received 6th Innovation with Impact Awards for DISCOMs 2018 Jointly ranked 2nd along with MGVCL under the category of UDAY Performance Award in the country -Trophy & Certificate given by Indian Chamber of Commerce - New Delhi, at 12th India Energy Summit & Awards 2018 held in Delhi on 14.11.2018.
• Subsidiary Company UGVCL received Power Awards 2018 (19th IPPAI Retreat 2018) Joint winner of Best Performing Distribution Company along with MGVCL - Trophy & Certificate given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018.
• Subsidiary Company MGVCL received Power Awards 2018 (19th IPPAI Retreat 2018) Joint winner of Best Performing Distribution Company along with UGVCL - Trophy & Certificate given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018.
• Subsidiary Company PGVCL received Power Awards 2018 (19th IPPAI Retreat 2018) (For Innovation in Techno Commercial category for Smart Village Pilot Project carried out by PGVCL is duly validated - Trophy & Certificate) given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018.
• Subsidiary Company PGVCL received Power Awards 2018 (19th IPPAI Retreat 2018) (For Innovation in Techno Commercial category for Electrification done by PGVCL at Shiyalbet Island is duly validated - Trophy & Certificate) given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018.
• Gujarat SLDC received Power Awards 2018 (19th IPPAI Retreat 2018) Runner-up (For Best State Load Dispatch Centre (SLDC) - Trophy & Certificate) given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018.
• Gujarat SLDC received Power Awards 2018 (19th IPPAI Retreat 2018) (For Innovation in Techno Commercial category for implementation of various advanced technologies by SLDC is duly validated - Trophy & Certificate) given by Independent Power Producers Association of India's 19th IPPAI Retreat 2018 held at Belgundi, Belagavi, Karnataka on 24.11.2018. 28 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• GUJARAT STATE received PRAKASHmay 12th Enertia Awards 2018, WINNER of the award for “Top Investment Friendly & Infra Excellent State in Sustainable Energy & Power” for being “Overall Leader in the Power & Energy Sector - with 100% Urban & Rural Access to ALL, 24x7 Delivery and being a State with Surplus – Promoting RE Access” - Trophy & Certificate given by Falcon Media & Enertia Foundation at Energy International organized at Surat by The Southern Gujarat Chamber of Commerce & Industry and Southern Gujarat Chamber Trade & Industries Development Centre on 01.12.2018.
• Subsidiary Company DGVCL received PRAKASHmay 12th Enertia Awards 2018 WINNER of the prestigious award for being “Best Performing Utility in the sector - Power Distribution” for keeping its Distribution Losses (AT&C Losses) below the 10% level, DGVCL has sustained its leadership as amongst India's top PSE DISCOMs - Trophy & Certificate given by Falcon Media & Enertia Foundation at Energy International organized at Surat by The Southern Gujarat Chamber of Commerce & Industry and Southern Gujarat Chamber Trade & Industries Development Centre on 01.12.2018.
• Gujarat SLDC received SKOCH ORDER-OF-MERIT (For Skoch Energy Bronze award for Energy Accounting & Scheduling Software - Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Gujarat SLDC received SKOCH ORDER-OF-MERIT (For Top 20 Energy Projects in India- Automatic Demand Management System(ADMS) - Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Gujarat SLDC received SKOCH ORDER-OF-MERIT (For 20 Energy Projects in India- Energy Accounting & Scheduling Software - Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Gujarat SLDC received SKOCH ORDER-OF-MERIT (For Top 20 Energy Projects in India-Wide Area Monitoring System(WAMS) using Phasor Measurement Unit (PMU) data and its Analytics – Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Gujarat SLDC received SKOCH ORDER-OF-MERIT (For Top 20 Energy Projects in India Real-time Data Capturing of Renewable Energy Generation – Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Subsidiary Company GSECL's Ukai TPS, Wanakbori TPS and Sikka TPS received SKOCH ORDER-OF- MERIT 2018 (For Qualifying amongst 'Top 20' Energy Projects - Award Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Subsidiary Company PGVCL received SKOCH ORDER OF MERIT (For AG DSM: Leadership Award in 29 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Energy – Certificate) given by Skoch Group, New Delhi on 05.12.2018.
• Subsidiary Company DGVCL received National Energy Conservation Awards 2018 (Winner - Second Prize in the Electricity Distribution Companies (DISCOMs) Sector in appreciation of achievements in Energy Conservation for year 2018 - Trophy & Certificate) given by Bureau of Energy Efficiency - Ministry of Power, Govt. of India on 14.12.2018.
• Subsidiary Company PGVCL received CBIP AWARD 2019 (For Best Performing Power Distribution Utility - Trophy & Certificate) given by SCOPE Convention Centre, New Delhi on 04.01.2019.
• Gujarat SLDC received ISGF Innovation Awards 2019 (For Gold Award for Best Smart Grid project in India by Utility for Wind Energy Generating and Forecasting -Trophy & Certificate) given by India Smart Grid Forum (ISGF) on 15.03.2019.
• Subsidiary Company PGVCL received SKOCH Corporate Excellence Award-2019 (For AG DSM: Top Performing Nomination - Certificate) given by SKOCH Group, New Delhi on 29.06.2019.
• Subsidiary Company PGVCL received SKOCH Corporate Excellence Award-2019 (For Risk Management: Top Performing Nomination – Certificate) given by SKOCH Group, New Delhi on 29.06.2019.
• Subsidiary Company DGVCL received SKOCH Corporate Excellence Award-2019 (For Solarization in agriculture sector under Suryashakti Kisan Yojana - Certificate) given by SKOCH Group, New Delhi on 29.06.2019.
• Subsidiary Company UGVCL received PTC Excellence Award (For PTC Excellence Award for Best DISCOM -Trophy & Certificate) given by PTC India Limited (formerly Power Trading Corporation of India Limited) New Delhi on 15.07.2019.
• Gujarat SLDC received Best SLDC in Wind Energy Integration 2018-19 (For Best SLDC in Wind Energy Integration 2018-19 - Trophy) given by Indian Wind Power Association (IWPA) on 16.07.2019.
• Subsidiary Company DGVCL received 7th Annual Integrated Rating of State Distribution Utilities (For “Very High Operational and Financial Performance Capability” A+ Rating) given by Ministry of Power, New Delhi – unveiled the ratings at Power Ministers Conference held at Kevadia in Narmada on 12.10.2019.
• Subsidiary Company UGVCL received 7th Annual Integrated Rating of State Distribution Utilities (For
30 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
“Very High Operational and Financial Performance Capability” A+ Rating) given by Ministry of Power, New Delhi – unveiled the ratings at Power Ministers Conference held at Kevadia in Narmada on 12.10.2019.
• Subsidiary Company MGVCL received 7th Annual Integrated Rating of State Distribution Utilities (For “Very High Operational and Financial Performance Capability” A+ Rating) given by Ministry of Power, New Delhi – unveiled the ratings at Power Ministers Conference held at Kevadia in Narmada on 12.10.2019.
• Subsidiary Company PGVCL received 7th Annual Integrated Rating of State Distribution Utilities (For “Very High Operational and Financial Performance Capability” A+ Rating) given by Ministry of Power, New Delhi - unveiled the ratings at Power Ministers Conference held at Kevadia in Narmada on 12.10.2019.
• Gujarat received 7th Innovation with Impact Awards for DISCOMs 2019 Gujarat was ranked 1st amongst Indian States in Power utility in 13th India Energy Summit 2019 at New Delhi-Trophy & Certificate given by Indian Chamber of Commerce, Kolkata on 07.11.2019.
BRIEF DETAILS OF E-URJA PROJECT & INITIATIVES TAKEN FOR VARIOUS IT ACTIVITIES :
• Integration of CM Dash board with e-Urja Data.
• Surya Shakti Kisan Yojna (SKY) integration with e-Urja and SEDM Software.
• GEDA portal integration with e-Urja Billings and CRM for solar roof top PV system.
• Tender has been floated & bids are received for procurement of new ERP software under IPDS scheme of GOI.
• Renewal of Oracle Annual Technical Support (ATS) up to 24-02-2020 for smooth operation of existing e-Urja system.
• Renewal of e-Urja Maintenance support is under process up to 05-08-2020 to run the existing e-Urja application efficiently,
• 'SmartGrid' pilot project was successfully implemented at UGVCL & it was declared Go-live from 27.02.2019.
• Implementation of Video Conferencing for GUVNL & its subsidiaries has been carried out.
• Implementation of Anti- APT (Advance Persistent Threat) solution has been carried out for GUVNL and
31 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
its Subsidiaries.
• Implementation of Mobile Application for GUVNL Electricity bill payment for all Discoms.
• Implementation of Mobile Application for Power Complaint Redressal System for all Discoms.
• Online portal for Solar Roof Top payment has been implemented for all Discoms.
• Implementation of new web based cash collection system has been carried out for e-gram, Post- offices and other private agencies, through seamless integration with e-Urja
• Implementation of Vigilance Installation checking Mobile application 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.
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. The Institute is coming up with a new 500 MW/ 660 MW/ 800 MW Thermal Power Plant Training Simulator for imparting specialized training to thermal power plant operation personnel.
GETRI activities/achievements during Year 2018-19 are as under :
32 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• GETRI has trained total 87,137 employees of GUVNL & its Subsidiary Companies achieving total training Man-days of 1,24,273.
• GETRI has organized 4 batches of “Induction Training” for newly recruited JE(VS) and MT promoted to JE, of DISCOMs in which 112 engineers were trained.
• GETRI has organized 1 batch of “Induction Training” for newly recruited JE(VS) of GETCO in which 77 engineers were trained.
• GETRI has organized 1 batch of “Induction Training” for newly recruited JE(VS) of GSECL in which 73 engineers were trained.
• GEKCs of DISCOMs cumulatively conducted 31 batches of Induction Training for 1,066 Junior Assistants and 43 batches of Induction Training for 1,446 Electrical Assistants.
• Eighth batch of Executive Certificate Programme in Power Management for 25 Engineers of all group Companies was conducted at PDPU.
• Total 29 National Training Programmes for C&D employees were conducted by four DISCOMs.
• 3,151 Man-days were achieved by deputing GUVNL and Companies' employees for external training programmes conducted by various renowned Institutions like ESCI, NPTI, CIRE, PMI, CII, CBIP, ERDA, MSU, PDPU, SPIPA, BMA etc.
• Training programmes on “Safety” were conducted at GETRI and all GEKCs. 719 employees of GSECL (in 25 programmes conducted), 1964 employees of GETCO (in 215 programmes conducted) and 1543 employees of 4 DISCOMs (in 45 programmes conducted) were trained in the year.
• 5 batches of customized training program on “Demand Side Management and Efficiency Management” were conducted for DISCOM engineers.
• 61 officers of GUVNL and subsidiary companies were trained during the one day training programme on “Insolvency and Bankruptcy Code- 2016 & NCLT Issues”
• 74 officers of DISCOMs participated in the one day training program on Online Application form in Forest Dept.- Govt. of Gujarat.
• GIZ, New Delhi conducted a Training of Trainers Program for 22 DISCOM Grid Engineers on Roof Top Solar Photo Voltaic Power Plants.
• USAID and MOP-GOI conducted a one day workshop on “Pilot Coal Flexing Project” for GUVNL, GSECL
33 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
& GETCO engineers. 91 officers were trained in the two programs conducted.
• Training programmes on understanding of ISO 17025 were conducted for Hi-Tech Lab engineers/ Staff of DISCOMs.
• 26 officers from GUVNL and subsidiary companies attended the three days training on Behavioural Skill conducted by RECIPMT
• Central Electricity Authority has certified GETRI as Category-I Training Institute in the fields of Thermal Generation, Transmission and Distribution. Training Details during Year 2018-19 :
No. of No. of No. of Sr. No Training Particulars Training Employees Training Programmes Trained Man-day 01 GETRI 293 8360 17,781 02 External Training 147 766 3,151 03 GEKC Wanakbori 61 1680 5,708 04 GEKC GETCO 267 7004 7,004 05 GEKCs DISCOMs 1,526 61955 82,701 06 Other in-house trainings (i.e. Corporate, P.S, Zone, Circle, Division etc. level) 268 7372 7,929.5 TOTAL 2,562 87,137 1,24,274.5 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 01-04-18 were 335, during the year 15 employees were added and 52 employees reduced and number of employees as on 31-03-19 were 298. 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.
34 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 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. DIRECTORS :
A. Changes in Directors and Key Managerial Personnel
Since the last 14th Annual General Meeting held on 29-12-2018 and subsequent to the changes reported in the last year Boards' Report, the changes among the Directors and Key Managerial Personnel are as under :
Shri N.N. Misra (DIN 00575501) and Shri R.C.Dhup (DIN 08275424) were appointed to the office of Director and also as Independent Director by the members at their 14th Annual General Meeting held on 29-12-2018 for a first term of two years w.e.f. 01-11-2018 and 24-12-2018 respectively.
Shri Raj Gopal, IAS (DIN- 02252358) Chairman tendered his resignation dated 1st February, 2019 from the Board of Directors of the Company on account of his retirement on superannuation on 31-01- 2019.
The Govt. of Gujarat E&P Department vide order No. GUV-13-2017-221-K dated 8th March, 2019 accorded approval for continuation of appointment of Shri K.M. Bhuva, on post-retirement contractual basis as Director (Tech.), GUVNL (whole time Director) for a period of one year w.e.f. 29.04.2019 i.e. up to 28.04.2020 or until new regular incumbent is available for the said post or until further orders, whichever is earlier. Accordingly the Board vide Circular Resolution passed on 02-05- 35 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
2019 approved continuation of Shri K.M.Bhuva (DIN 07808731), as Director (Technical) as per the aforesaid Govt. Order.
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 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) will hold office as an Additional Director till the date of ensuing AGM. The Notice convening the Meeting includes an item under Special Business relating to her appointment to the office of Director (continuing as Managing Director). Your Directors recommend her appointment to the office of Director and on her appointment she will continue as Managing Director.
In view of Govt. of Gujarat Notification No. AIS/35.2019/30/G dated 30.08.2019, Shri Pankaj Joshi , IAS tendered his resignation dated 30-08-2019 from the post of the Managing Director of the Company. However, Shri Pankaj Joshi, IAS continued as Director on the Board of Company. The Board placed on record its sincere appreciation for the valuable services rendered by Shri Pankaj Joshi, IAS during his tenure as Managing Director of the Company.
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).
36 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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;
The Govt. of Gujarat vide Resolution No. GUV-1108-1336-K dated 2nd November, 2019 nominated / appointed Shri Pankaj Joshi, IAS, Principal Secretary, E&P Dept., Govt. of Gujarat as Chairman of the Company until further Orders. Accordingly the Board at its 97th meeting held on 11-11-2019 noted the nomination/appointment of Shri Pankaj Joshi, IAS (DIN 01532892) as Chairman of the Company with effect from 2nd November, 2019.
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.
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 2018-19 confirming that they meet the criteria of independence as prescribed under the Act.
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.
37 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 thereof
As required under 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 2018-19 and the attendance of Directors is as under:
38 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
During 2018-19, During 2018-19, During 2018-19, During 2018-19, Total Eight (8) Total One (1) Total One (1) Total Two (2) Board Meetings Audit Committee meeting of CSR Committee were held as Meeting was Independent Meetings were under: held as under: Directors was held as under: held as under: Name of Director / 18.06.2018 22.02.2019 26-03-2019 13-07-2018 Member of Committee 24.08.2018 26-10-2018 19.09.2018 01.11.2018 03.12.2018 24.12.2018 22.02.2019 26.03.2019 Meeting held Meeting held Meeting held Meeting held during tenure / during tenure / during tenure / during tenure / Attended Attended Attended Attended Shri Sujit Gulati, IAS 1/1 ------Shri Raj Gopal, IAS 5/5 ------Shri Pankaj Joshi, IAS 8/8 -- -- 2/2 Ms. Mona Khandhar, IAS 8/5 ------Shri Milind Torawane, IAS 8/6 1/1 -- -- Shri S.B. Khyalia 8/7 -- -- 2/2 Shri K.M.Bhuva 8/8 ------Shri N.N.Misra 5/4 1/1 1/1 -- Shri R.C.Dhup 2/2 1/1 1/1 -- 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.
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 2018-19, a total budget provision of Rs.3500.00 lacs was made under Energy Conservation Programme.
HVDS is Conversion of Low Voltage Distribution System(LVDS) into High Voltage Distribution 39 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 2018-19, Total 2669 Nos. of small capacity transformers installed under KHUSY at the expenditure of Rs. 3,064.78 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 2018-19, Expenditure of Rs.435.23 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 & Capital expenditure incurred on R&D Cell during the financial year 2018-19 is as under:
Particulars Amount (? in Lakhs) Capital Expenditure Computers and related Equipments 0.00 Less: Depreciation for the year 0.00 Total Capital Expenditure : 0.00 Revenue Expenditure: Employee Benefits 137.39 Material Consumed 3.14 Administrative and Misc. Expenses 37.64 Depreciation 2.29 Total Revenue Expenditure : 180.45 Total Research and Development Expenditure : 180.45
40 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
FOREIGN EXCHANGE EARNINGS AND OUTGO: During the year under review, there was no foreign exchange earning or outgo. 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 2018-19 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 was one meeting held during the Financial Year 2018-19 The recommendations made by the Audit Committee during the year were accepted by the Board. The Composition of Audit Committee as on 31-03-2019 was as under :
1 Shri Milind Torawane, IAS Chairman 2 Shri N.N.Misra Member 3 Shri R.C.Dhup Member 4 Shri S.B. Khyalia 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
41 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Responsibility activities is attached as Annexure-1 which forms part of this Report. The CSR Policy adopted 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 31-03-2019 was as under:
1 Shri Milind Torawane, 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: • Risk to Company's assets and properties
42 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• Employees related risks • Risks associated with non-compliance of statutory enactments • Risk of Inflation and Cost Structure • Credit Risk • Liquidity Risk • Operational Risk • Regulatory Risk • Network Risk • Fuel availability and price fluctuation Risk • Risk of monsoon failure • Risk of compensation to third parties due to electrical accidents and burning of crop • 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:
43 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. AUDITORS: [A] STATUTORY AUDITORS AND THEIR REPORT: As your Company is a Govt. Company , M/s. Mukund & Rohit, 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 2018-19. They have audited the Financial Statements (Stand Alone and Consolidated) for the year ended 31-March-2019 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 and UGVCL along with management replies of respective subsidiary company are reproduced as Annexure-3(i) and 3(ii). The C&AG of India has appointed M/s. DGSM & Co., Chartered Accountants, Vadodara, Chartered Accountants, Vadodara as Statutory Auditors (Stand Alone and Consolidated) for F.Y. 2019-20. 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-2019. 44 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
The C&AG has issued three Comments on Stand Alone Financial Statements for F.Y. 2018-19 vide Letter No. ES-I/A/cs/GUVNL/2018-19/ow660 dated 02-12-2019, 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 C&AG has issued two Comments on Consolidated Financial Statements vide Letter No. ES-I/HQ II/A/cs/GUVNL/2018-19/ow714 dated 17-12-2019, 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-5 and attached to and forming part of this Report. 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 6(i) to 6(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 2018-19 for auditing the cost accounting records relating to Electricity Industry product. The Cost Audit Report for the Financial Year 2018-19 was filed / uploaded on the MCA Portal on 4-10-2019 within stipulated time. The Board of Directors on recommendation of Audit Committee appointed M/s Y S Thakar & Co, Cost Accountants, Vadodara as a Cost Auditor for the F.Y. 2019-20. 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 2019-20 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. Sandip.K.Shukla , Practicing Company Secretaries, Vadodara for conducting Secretarial Audit for the Financial Year 2018-19. M/s. Sandip.K.Shukla, Practicing Company Secretaries, Vadodara have issued Secretarial Audit Report (Form MR-3) for the Financial Year 2018-19 which is attached as Annexure-7 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.
45 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 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 June 05, 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.
46 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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
sd/- sd/- Shri K.M. Bhuva Smt. Shahmeena Husain, IAS Date : 20-12-2019 Director (Technical) Managing Director Place : Gandhinagar DIN : 07808731 DIN : 03584560
47 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure - 1
Annual Report on Corporate Social Responsibility (CSR) activities for the Financial Year 2018-19.
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 w.e.f. 04-11-2019
48 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
3. Average net profit of the Company for last three financial years Average Net Profit (2015-16 to 2017-18) ? 13861.73 Lakhs 4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) ? 277.23 Lakhs 5. Details of CSR spent during the financial year:- a) Total amount to be spent for the financial year … ? 277.23 Lakhs b) Amount unspent, if any … ? 239.88 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 spent Cumulative Amount spent : No. or activity which the programs outlay on the projects expenditure Direct or identified project is (1) Local are (budget) or programs upto the through covered or other project or (1) Direct reporting implementing (2) specify programs expenditure on period agency the state and wise (?) projects or district where programs projects or (2) Overhead programs (?) was undertaken 1. Contribution to Promoting Vadodara 14 Lakhs 1.61 Lakhs 13.10 Lakhs Through L i f e l i n e Health Care No Lifeline Foundation for sponsoring Life overheads Foundation S u p p o r t Ambulance 2. Contribution to Promoting Vadodara 8.50 Lakhs 8.50 Lakhs 8.50 Lakhs Through V i d y u t B o a r d education V i d y a l a y a , Vidyut Board Vadodara towards Vidyalaya, m a i n t e n a n c e corpus of the Vadodara School 3. Contribution to Ahmedabad 6.24 Lakhs 6.24 Lakhs 6.24 Lakhs Through G u j a r a t C S R Promoting A u t h o r i t y i n employment No overheads Gujarat ' G C S R A enhancing CSR Authority Vocational Skill vocational Training Fund' for skills
49 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Project at CIPET, Ahmedabad
4. Contribution to Promoting Ahmedabad 21 Lakhs 21.00 Lakhs 21.00 lakhs Through the Armed Forces Flag Measures for No overheads Armed Forces Fund benefit of Armed force Flag Fund veterans, Authorities War Widows and their dependents Total 49.74 Lakhs 37.35 Lakhs 48.84 lakhs
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 2018-19 was the 5th year for CSR activities under the Companies Act, 2013. The Company could spend Rs. 37.35 Lakhs during F.Y. 2018-19 against the stipulated 2% amount of Rs. 277.23 Lakhs for F.Y. 2018-19. Against the short spending of Rs. 239.88 Lakhs during F.Y. 2018-19, the CSR Committee has identified some CSR projects for which spending may be in the F.Y. 2019-20 onwards by the Company. 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. 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/- Smt. Shahmeena Husain, IAS Managing Director & Date : 20/12/2019 Chairman CSR Committee Place : Gandhinagar DIN : 3584560 50 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure-2
FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31-March-2019
[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: Sl. Name and Description of NIC Code of the % to total turnover No. main products / services Product/ service of the company 1 Purchase & Sale of Power 35109 100% III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES : Sl. Name and Address CIN/GLN Holding/ % of shares Applicable No of the 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 98.27% 2(87) Corpn. Ltd., Sardar Patel Vidyut Bhavan, Race Course, Vadodara : 390 007 51 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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
VI. 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 beginning of the year (01-April-2018) end of the year (31-March-2019) % Change Category of during Shareholders Demat Physical Total % of Demat Physical Total % of the year Total Total 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 16227549895 16227549895 100 0 19772222095 19772222095 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 16227549895 16227549895 100 0 19772222095 19772222095 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
52 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Total Shareholding of Promoter (A) = (A)(1) + (A)(2) 0 16227549895 16227549895 100 - 19772222095 19772222095 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 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 Rs. 1. lakhs 0 0 0 0 0 0 0 0 0 ii) Individual shareholders holding nominal share capital in excess of Rs. 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 16227549895 16227549895 100 0 19772222095 19772222095 100 0 (ii) Shareholding of Promoters:
Shareholding at the beginning Shareholding at the end % change of the year (01/04/2018) of the year (31/03/2019) in share Sr. Shareholder's holding No. Name No. of % of total % of Shares No. of % of total % of Shares during Shares Shares of Pledged / Shares Shares of Pledged / the year the company encumbered the company encumbered to total to total shares shares 1 H.E.Governor of Gujarat 16227549895 100 0 19772222095 100 0 0 and his Nominees Total 16227549895 19772222095
53 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
(iii) Change in Promoters' Shareholding (please specify, if there is no change):
Shareholding at the beginning Cumulative Shareholding of the year (01/04/2018) during the year Particulars % of total shares % of total shares No. of Shares No. of Shares of the Company of the Company At the beginning of the year 16227549895 100 16227549895 100 H.E. Governor of Gujarat and his nominees Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease, e.g. allotment/ transfer/bonus/sweat equity etc.: Increase by way of allotment on: 20-04-2018 1175189900 0.00 17402739795 0.00 23-07-2018 188011400 0.00 17590751195 0.00 18-09-2018 573933000 0.00 18164684195 0.00 11-10-2018 70989400 0.00 18235673595 0.00 16-03-2019 1536548500 0.00 19772222095 0.00 At the End of the year 19772222095 100 19772222095 100 (31/03/2019)
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Shareholding at the beginning Cumulative Shareholding For Each of the of the year (01/04/2018) during the year 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/decrease (e.g. Not Applicable 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 15th Annual Report 2018-19
(v) Shareholding of Directors and Key Managerial Personnel:
For Each of the Shareholding at the Cumulative Shareholding beginning of the year during the year and Sr. Directors (01-Apr-2018) and KMP Increase / As on 31-March-2019 No. Date Reason Name No. of % of total Decrease No. of % of total Shares Shares Shares Shares of the of the company company 1. DIRECTORS 00 00 00 00 00 00 00 KEY MANAGERIAL 00 00 00 00 00 00 00 PERSONNEL Note : None of the Directors and KMP hold any Equity Shares in the Company. V. INDEBTEDNESS (AS ON 31-MARCH-2019) : Indebtedness of the Company including interest outstanding/accrued but not due for payment (Rs. In Lakhs)
Secured Loans Unsecured Total Particular Deposits excluding Loans Indebtedness deposits Indebtedness at the beginning of the financial year (01-Apr-18) i) Principal Amount 2.65 16430.75 0.00 16433.40 ii) Interest due but not paid 0.94 0.00 0.00 0.94 iii)Interest accrued but not due 0.00 376.74 0.00 376.74 Total (i+ii+iii) 3.59 16807.49 0.00 16811.08 Change in Indebtedness during the financial year • Addition 25453.68 0.00 0.00 25453.68 • Reduction 0.00 (2024.87) 0.00 (2024.87) Net Change 25453.68 (2024.87) 0.00 23428.81 Indebtedness at the end of the Financial Year (31-March-19) i) Principal Amount 25454.94 14498.49 0.00 39953.43 ii) Interest due but not paid 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) 25457.27 14782.62 0.00 40239.89 55 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (F.Y.2018-19) A. Remuneration to Managing Director, Whole-time Directors and/or Manager : ( Rs. In Lakhs) Name of MD/WTD/Manager Sr. Total Shri Pankaj Joshi, Shri S.B. Khyalia Shri K.M. Bhuva No. Particulars of Remuneration Amount IAS MD Director Director ? In Lakhs (Finance) (Technical) 1. Gross salary a) Salary as per provisions contained 32.27 37.65 33.32 103.24 in section 17(1) of the Income-tax Act, 1961 b) Value of perquisites u/s 17(2) 3.21 3.74 3.31 10.26 Income-tax Act, 1961 c) Profits in lieu of salary under 0.00 0.00 0.00 0.00 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 0 0 0 0.00 - as % of profit - others, specify… 5. Others, please specify 0 0 0 0.00 Total (A) 35.48 41.39 36.63 113.50 Ceiling as per the Act Not applicable as Section 197 of Companies Act, 2013 shall not apply to Government Companies. B. Remuneration to other directors (F.Y.2018-19) Name of Directors Independent Directors Other Non-Executive Directors Sr. Particulars of Shri N.N. Shri R.C. Shri Sujit Shri Raj Shri Milind Ms. Mona Total No. Remuneration Misra Dhup w.e.f. Gulati, IAS Gopal, IAS Torawane, Khandhar, Amount w.e.f. 24-12-2018 (up to (07.08.18 IAS IAS ? 01-11-2018 16.07.18) to 31.01.19) 1. Independent Directors • Fee for attending Board/ committee meetings in ? 20000 10000 0 0 0 0 30000
56 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• Commission 0 0 0 0 0 0 0 • Others, please specify 0 0 0 Total (1) 20000 10000 0 0 0 0 30000 2. Other Non-Executive Directors - - 0 0 0 0 • Fee for attending board / committee meetings - - 0 0 0 0 • Commission - - 0 0 0 0 • Others, please specify 0 0 0 0 Total (2) 0 0 0 0 Total (B)=(1+2) 20000 10000 0 0 0 0 30000 Total Managerial Remuneration 0 0 0 0 0 0 Overall Ceiling as per Not applicable as Section 197 of Companies Act, 2013 shall not apply to the Act Government Companies. C. Remuneration to Key Managerial Personnel other than MD/ MANAGER / WTD: (Rs. In Lakhs) Key Managerial Personnel Sr. Company GM (F&A) Particulars of Remuneration CEO Total No. Secretary & CFO (April 18 to (April 18 to March 19) March 19) 1. Gross salary a) Salary as per provisions contained in section 0 28.83 28.04 56.87 17(1) of the Income - tax Act, 1961 b) Value of perquisites u/s 17(2) Income-tax 0 0 0.53 0.53 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 28.83 28.57 57.40 57 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of the Brief Details of Penalty / Authority Appeal made, Companies Act Description Punishment / [RD / NCLT / if any Compounding fees COURT] (give Details) 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/- sd/- Date : 20-12-2019 Shri K.M. Bhuva Smt. Shahmeena Husain, IAS Place : Gandhinagar Director (Technical) Managing Director DIN : 07808731 DIN : 03584560
58 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 3(i) GUJARAT STATE ELECTRICITY CORPORATION LIMITED Sr. GSECL Management Reply/Compliance No. Statutory Auditors' Qualifications a. The company recognises 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 derecognised 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 are ascertainable. 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 being consistently followed since the inception of the company and any sudden change after
59 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. b. 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 to defined code system and not in accordance with be derived over a period of time. Company has requirement of Ind AS – 2 'Inventories' and Ind – treated spares as capital in nature and classified as property plant and equipment whose benefits
60 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
AS 16 'Property, Plant and Equipment'. The are enduring in nature and met the definition of effect of such non-compliance of Ind AS - 2 and property plant and equipment. While the Ind AS -16 is not ascertainable. 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. c. Balances under the group of Other financial Balance under other financial assets is mainly assets, other current financial liabilities and related to deposit given to railways authority, trade payables are subject to confirmation and Irrigation department, other government adjustment, if any, required upon such department for land acquisition & depository confirmation are not determinable. work and loans and advances given to employees which all are highly secured.
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 15th Annual Report 2018-19
Annexure 3(ii) 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 2018-19:
Statutory Auditors' Qualification Board's Explanation We draw attention to note No.39 to the Ind AS The accounting treatment followed by UGVCL is a financial statements wherein the Company has considered decision taken by GUVNL for all the changed the method of accounting regarding DISCOM's and all four DISCOM's have followed the writing back balances from grants/ consumer same accounting treatment during the FY 2016-17, contribution related to certain depreciable assets FY 2017-18 and FY 2018-19. from hitherto 10% on reducing balance basis to 5.28% on straight line basis prospectively Further we reiterate the fact, that UGVCL has commencing from the financial year 2016/17. changed the method of recognizing grants as However, in our opinion the effect of such change income from reducing balance method (RBM) to has to be worked out retrospectively commencing straight line method (SLM). The change in the rates from the date on which the depreciable assets is consequential to the change i.e., 10% RBM to related to which the grants/ consumer contribution 5.28% SLM. The change in the method and has been received have been capitalized in the consequentially the rates is to exactly match the books of account and effect of such change be depreciation method and the rates where there was accounted for in the opening balance of grants/ a mismatch. This change is not a change in the consumer contribution. principle of recognition of grants but only a change Non accounting of the above effect has resulted into in the method, as permissible and in compliance understatement of balance of grants/ consumer with the relevant Indian Accounting Standards (Ind st contribution as on 31 March, 2019 by Rs. 18,934.82 AS) as applicable. Given that it is a change in lakhs and overstatement of balance of 'Retained estimate, the effect of the same is required to be Earnings' by like amount. Had the above been given prospectively not retrospectively. Hence the accounted for, the balance of grants/ consumer treatment given by the Company is correct and in contribution would have been Rs.1,55,433.77 lakhs compliance with the applicable Indian Accounting and balance of 'Retained Earnings' would have been Standards (Ind – AS). Rs. 8,063.93 lakhs as on 31st March, 2019 as against the reported figures of Rs.1,36,498.95 and Rs.26,998.75 lakhs respectively. For and on behalf of the Board, sd/- Date : 03-Dec-2019 Smt. Shahmeena Husain, IAS Place : Ahmedabad Chairperson 62 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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, 2019. C & AG's Comments Management Reply (A) Comments on Profitability GUVNL had hitherto procured transmission services 1. Statement of Profit and Loss, Expenses, for wind energy from Wind Turbine Generators Purchase of Power (Note 29) (WTGs) and was charged by its supplier – GETCO based on the relevant GERC tariff order. GUVNL Wheeling / Transmission Charges ?4707.46 crore based on its understanding at that time accepted The above includes ?716.09 crore which was paid the billing(s) made by GETCO and made payments excess by the GUVNL to GETCO though oversight, on for these transmission charges to them. account of transmission charges from year 2009-10 During FY 2018-19, it has become known and to 2017-18. understood that wheeling of wind energy from Ind-AS-8 inter-alia states that Prior period errors are certain WTGs commissioned prior to 11th August, omissions from, and misstatements in, the entity's 2009 is covered by a different charge mechanism as financial statements for one or more prior periods compared to WTGs commissioned after that date. arising from a failure to use, or misuse of, reliable The Company i.e. GUVNL and the supplier i.e. information. Such errors include the effects of GETCO, both understood, agreed and accepted the mathematical mistakes, mistakes in applying same charge mechanism for WTGs (commissioned a c c o u n t i n g p o l i c i e s , o v e r s i g h t s o r prior to 11th August 2009). Therefore, transmission misinterpretations of facts, and fraud.” charges of ?716.09 crores upto 31st March 2018 was Further Para 42 of IND AS 8 states that an entity shall determined to have been charged by GETCO and correct material prior period errors retrospectively accepted by the Company in variance with the in the first set of financial statements approved for applicable tariff. issue after their discovery by restating the Further, recovery of excess amount paid to GETCO comparative amounts for the prior period(s) (on account of transmission charges) is because of presented in which the error occurred. mutual settlement between both GUVNL and As this was an error relating to the prior period, the GETCO. This settlement is regarding invoices being effect of the same should have been worked out billed by GETCO and the same being accepted by retrospectively and accounted for in the opening GUVNL at particular tariff rate(s), in the earlier
63 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 balance of retained earnings. This has resulted in years. The invoicing once accepted and not Understatement of retained earnings and disputed, irrespective of the reason, and even paid Overstatement of profit by ? 716.09 crore. for is subject to legal process of recovery including the statute of limitations whereby any claim, however valid it may be, is time barred after a prescribed time period. Here, GUVNL noted that there was over invoicing both in terms of charging by GETCO and GUVNL in accepting the same. In the instant case, since the supplier (GETCO) is a subsidiary of the Company (GUVNL), the Company could settle the matter internally and recover such charges in full. Otherwise, GUVNL's claim may not have been legally tenable and remediable. IndAS 8: Accounting Policies, Changes in Accounting Estimates and Errors, deals with errors in the preparation and presentation of Financial Statements. It may be emphasized here that, the Financial Statements have to be prepared reflecting the transactions and events between parties as has occurred in the manner i.e. prices / invoices as accepted and not what should have been accepted because they are bilateral and not unilateral. The Financial Statements of earlier years faithfully represented the transactions as they occurred between the parties i.e. the pricing/billing as accepted in those years, even if such pricing/billing may be not in line with what it should have been. It was never an error of Financial Statement preparation and presentation. The Company has determined that the recovery of the differential amounts through Debit Notes is reflective of an understanding of the relevant facts
64 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
including the legal position of such claims by both parties in the current year. Accordingly, the Company has raised Debit Notes for the differential amounts in the current year amounting to ?836.11 crores (including ?716.09 crores upto 31st March 2018). Moreover, the amount of ?716.09 crores pertaining to earlier years amount to only 1.60% of GUVNL's total expenditure of ?44873.81 crores. The amount in absolute figure may appear substantial but in terms of percentage, is not so. The transaction w.r.t. recovery from GETCO for past years does not qualify as a mistake in applying accounting policies or error or oversight or misinterpretation of facts or fraud. The events leading to such recovery crystalized during the current FY 2018-19 and was therefore given effect to in the current year's Accounts. GUVNL in the earlier years had charged/allocated (B) Comments on Disclosure the “e-Urja expenditure” to its Group Companies as 2. Notes to Financial Statements a matter of its charging policy. The Company in the The Company was allocating “E-Urja expenses” to current year reviewed its allocation/charging policy its group companies based on number of registered and based on a consideration of various factors had users in the respective company. However, the decided not to charge/allocate the e-Urja Company had stopped the allocation of E-URJA expenditure to the Group Companies from the expenses to its group companies from 2018-19 and current year onwards. It is important to note here started recognizing the entire expenditure in its that, the earlier decision to charge was not based books of accounts. The Company should have on any legally binding contractual agreement but disclosed this change in accounting treatment in its based on the Company's review of various factors Notes to financial statements. The notes are like quantum of such expenditure, feasibility of therefore, deficient to that extent. allocation, consideration of commercial expediency, materiality aspect, etc. Considering these aspects, the Company did not opt for any
65 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
disclosure in the Books of Accounts. The position of charging or not charging is a matter of an ongoing consideration by the Company. The Financial Statements therefore represents faithfully the financial position, financial performance and cash flows of the Company and reflect the economic substance of transactions, other events and conditions as having taken place. 3. Notes to Financial Statements There are many important factors and points which GUVNL through PF trust caters to the Provident needs to be mentioned / clarified to understand the Fund requirements of GUVNL and its subsidiary issue in the correct perspective: Companies. The trust is an exempted PF trust in i. Condition No. 28 of Appendix – A of Section 27 accordance with the section 17 of the Employees AA of Employees Provident Fund & Provident Fund and Miscellaneous Provisions Act, Miscellaneous Provisions Act, 1952 1952 (i.e. Act). As per the Condition no 28 of categorically states that “the Employer is liable Appendix-A of section 27 AA of the Act, “In the event to make good a loss which the Trust incurs as a of any loss to the trust as a result of any fraud, result of any fraud, defalcation, wrong defalcation, wrong investment decision etc. the investment decisions”. employer shall be liable to make good the loss” i.e It may be noted here that, the investment in the employer shall be required make good any loss IL&FS Group Companies were not at all wrong that may be caused to the Provident Fund due to investment decisions. Moreover, the decision theft, burglary, defalcation, misappropriation or to invest in these Group Companies were in any other reason. accordance with the prescribed guidelines of The trust, held ? 165.10 crore in various instruments Ministry of Labour and Employment. st of IL& FS and its group companies as on 31 March ii. Infact, IL&FS Group has been a very reputed & 2019, out of which ?130.10 crore were in unsecured renowned Group in which almost all exempted instruments. PF Trusts of our country alongwith Pension, The IL&FS group started defaulting in interest Gratuity, Superannuation Trusts & most payments which were due on 30 September 2018 importantly the main Regulator and the largest and onwards. IL& FS submitted (January 2019) PF Investor viz. Employees Provident Fund resolution framework under Insolvency and Organization (EPFO), New Delhi have invested Bankruptcy Code 2016 for realization and their corpus for the last 20-25 years. Even in distribution of sale proceeds of its assets. distant history, there has not been any single 66 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
The Company should have made the disclosure of instance of delay or default by any of the IL&FS the material facts in the Notes to financial Group Companies. Moreover, the entire Group statements that IL&FS group had started defaulting has always carried an impression of being a in interest payments which were due on 30 semi Govt. entity. As a result of this strong September 2018 and onwards and proceedings background, it used to attract thousands of under Insolvency and Bankruptcy Code 2016 had crores of investment from across the Country in been commenced. Therefore, in the event of its Group Companies for the last 20-25 years. default by the IL&FS in respect of interest and Also, since the advent of Credit Rating regime, principal payments, the Company will be required IL&FS Group has commanded highest to make good the loss. The notes to the financial Long/Short Term Credit Ratings in the last statements of the Company are deficient to the several years, thus never creating any doubt above extent. amongst the investors about any crisis looming in the Company/Group. In this backdrop, therefore it was a shock for the entire Nation when the entire Group of IL&FS (which included as many as 348 Companies) suddenly collapsed and was referred to NCLT. The Central Govt. was therefore quick enough to dissolve its “Board” and initiate immediate action of appointing fresh “Board of Directors” to chart out its Resolution Plan in September, 2018 with the noble objective of protecting the investors' money. Now, even after a year, the Resolution Plan is still in full swing. Not only the newly constituted “Board” of IL&FS but also the Central Govt. has taken many more initiatives to protect the investors' interest and come out with a sustainable resolution plan. However, several news items with just too many contradictions have intermittently played spoil sport. So far, Govt. of India has not come out with any clear cut conclusion or message or communication for the investors regarding future outcome/roadmap of their investments. 67 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
iii. Going by the present reports in the matter, it is too early to conclude that our PF Trust alongwith other PF, Pension, Gratuity Trusts and most importantly EPFO etc. will incur any loss in their investments either on account of principal or interest. Neither, there has been any information/communication from IL&FS Board / Ministry of Finance / Govt. of India in this regard. iv. As a further information in this context, it may be informed here that, the Employees/PF Members of our PF Trust has not suffered any loss of interest since GEB's CPF Trust has paid an interest rate of 8.70% p.a. to its Members for FY 2018-19 against the Statutory required interest rate of 8.65% (as declared by EPFO). v. However, considering the gravity of the issue, the Board has already resolved that, “GUVNL being the Parent Company, in accordance with the provisions of the EPF & MP Act, 1952 and the conditions of “Exemption” transfer an amount equivalent to the amount of interest and repayment due from the three IL&FS Group Companies upto 31st March, 2019 to GEB's CPF Trust in order to mitigate the cash flow/interest shortfall constraint(s) faced by the Trust.” vi. Condition 28 of Appendix A of Section 27AA2 of the EPF & MP Act, 1952 refers to loss on account of wrong investment decision and not to loss on account of a particular investment becoming doubtful (for an investment decision taken in accordance with the prescribed guidelines under the Act).
68 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
vii. Further, since Govt. of India has initiated all around efforts to conclude the Resolution process in the best interest of the investors and with special emphasis on retirement funds like PF, Pension, Superannuation, Gratuity etc. there are reasonable/fair chances that the investments alongwith interest may not turn bad at all and would be returned to the PF Trust in full alongwith interest. The default of IL&FS is an event which is not having any financial implications on GUVNL's Financial Statements for FY 2018-19. It is also not certain whether there will be any financial implications on the Company at all. Therefore, an event without having any financial implications on the Financial Statements for FY 2018-19 need not be disclosed. Normally, as a matter of accounting practice, disclosures are made when the amount of financial implication(s) are either crystalised or certain or can be estimated. Since in this case the matter is under active consideration of resolution by Government of India, GUVNL did not note reasons for any permanent loss and hence no disclosure was made by the Company. For & on behalf of the For & on behalf of the Board of Directors, Comptroller & Auditor General of India Gujarat Urja Vikas Nigam Limited,
sd/- sd/- sd/- Shri K.M. Bhuva Smt. Shahmeena Husain, IAS ( H.K. Dharmadarshi) Director (Technical) Managing Director Accountant General (E&RSA), Gujarat DIN : 07808731 DIN : 03584560 Place : Ahmedabad Place : Gandhinagar Date : 02-12-2019 Date : 20-12-2019
69 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 Annexure 5
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, 2019.
C & AG's Comments Management Reply
CONSOLIDATED BALANCE SHEET C&AG's comment is on the financial position i.e. Deferred Government Grants, Subsidies and Balance Sheet, particularly Equity and Liabilities in Consumer Contribution (Note 20) relation to Deferred Government Grants, Subsidies Consumer contribution towards Capital Assets and Consumer Contributions. At the outset, it may ?3,06,7.58 crore be pointed out here that, the subject matter of the comment has no impact on the profitability of the With effect from 01 April 2016, the Company has Group for FY 2018-19. Also, the subject matter of changed the method of computing the the comment does not / would not have any impact grants/consumer contribution received against on the profitability of the Group in the future depreciable assets to be recognized in statement of financial years also. profit and loss from reducing balance method to the straight line method and consequently the rates at It is emphasized here that, Deferred Government which grant is recognized in the statement of profit Grants, Subsidies and Consumer Contributions is a and loss. The Company has determined that the deferred income and not a deferred liability, as can change to recognize grants in proportion of the be noted from Balance Sheet presentation where depreciation expenses is a change in accounting this is reflected right before liabilities are presented. estimates and is to be applied prospectively." Deferred Government Grants are a part of the Group's Net Worth as this is already earned and any As per Accounting Standard (AS)-12, Grants related income recognition through Statement of Profit & to depreciable assets are treated as deferred Loss each year, only has the ultimate impact of income which is recognized in the profit and loss reducing Deferred Government Grants' balance and statement on a systematic and rational basis over increasing the Retained Earnings. There is no the useful life of the asset. Indian Accounting change in the Net Worth of the Group. Hence, there Standard (IndAS) -20 also state that grants related to is no impact on the financial position in terms of the depreciable assets are usually recognized in profit Net Worth of the Group. or loss over the periods and in the proportions in which depreciation expenses on those assets is However, having said the above, as communicated recognized. earlier, C&AG's contention that the change in
70 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
The above change in method was made by the method of recognition of Grants in Profit & Loss Company as there was a mismatch of the grants Statement from Reducing Balance Method (WDV) recognized in the Statement of Profit and Loss to Straight Line Method (SLM) was to correct an versus the related depreciation expenses. Thus, the error. This infact is completely in contradiction to Company has changed the method of recognized of the audited financial statements of the earlier years deferred income in order to align the recognition of noting compliance with the relevant accounting deferred income with the related' depreciation standards in each year. expenses. As the provision for treatment of The Grants recognized is an income for the Group deferred income to be recognized in the profit and which have been deferred to be recognized over the loss statement on a systematic and rational basis period of the related depreciable assets on a over the useful life of the asset are same in AS - 12 systematic basis as per the applicable Accounting and Ind AS - 20, the change was not mandated by Standards. The grants were and are being Ind AS - 20. Hence, the Company changed the recognized in the Statement of Profit & Loss based method in order to correct an error. on a systematic method as accepted to be relevant Since the depreciable assets related to which and compliant with Accounting Standard–AS 12 grants/consumer contribution received have been including the new Accounting Standard–IndAS 20. capitalized in the books of accounts, the effect of This compliance with Accounting Standards was such change should be worked out retrospectively noted by the auditors including C&AG in each year. and accounted for in the opening balance of Even, the current method used as a systematic Deferred Government Grants, Subsidies and basis, has been noted by the auditors as well as by Consumer Contribution towards capital assets by C&AG to be in compliance with Accounting ?1260.80 crore '. Standards and hence has no impact on the profitability of the Group. C&AG's view is that the change in the method (although the changed method is in compliance with the accounting standards), needs to be applied retrospectively, as the changed method is a correction of an error. This change is not a change in Accounting Policy but a change in Method i.e. a change in Accounting Estimate. It may be further pointed out that, as per IndAS, the use of reasonable estimates is an essential part of the
71 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
preparation of Financial Statements and does not undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not a correction of an error. Hence, the Company is of the firm view that the change from WDV Method to SLM Method for recognition of Govt. Grants is perfectly appropriate in terms of generally accepted Accounting Principles - both IndAS and previous GAAP & therefore cannot be construed as a correction of error by any means. Notwithstanding our view as above, based on C&AG's comment in FY 2016-17 & FY 2017-18, the Group has inserted a detailed disclosure in the Notes to the Financial Statements of FY 2018-19 indicating the impact of the change on the financial statements, if the Group was to adopt C&AG's view. As can be noted from the disclosure, there is no impact on the profitability of the Group nor there is any impact on the Net Worth of the Group. There are many important factors and points which B. Notes on Consolidated Financial Statements needs to be mentioned / clarified to understand the GUVNL through PF trust caters to the Provident issue in the correct perspective: Fund requirements of GUVNL and its subsidiary i. Condition No. 28 of Appendix – A of Section 27 Companies. The trust is an exempted PF trust in AA of Employees Provident Fund & accordance with the section 17 of the Employees Miscellaneous Provisions Act, 1952 Provident Fund and Miscellaneous Provisions Act, categorically states that “the Employer is liable 1952 (Le. Act). As per the Condition no 28 of to make good a loss which the Trust incurs as a Appendix-A of section 27 AA of the Act, "In the event result of any fraud, defalcation, wrong of any loss to the trust as a result of any fraud, investment decisions”.
72 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 defalcation, wrong investment decision etc. the It may be noted here that, the investment in employer shall be liable to make good the loss" i.e IL&FS Group Companies were not at all wrong the employer shall be required make good any loss investment decisions. Moreover, the decision that may be caused to the Provident Fund due to to invest in these Group Companies were in theft, burglary, defalcation, misappropriation or any accordance with the prescribed guidelines of other reason. Ministry of Labour and Employment. The trust, held ?165.10 crore in various instruments ii. Infact, IL&FS Group has been a very reputed & of IL& FS and its group companies as on 31st March renowned Group in which almost all exempted 2019, out of which ?130.10 crore were in unsecured PF Trusts of our country alongwith Pension, instruments. Gratuity, Superannuation Trusts & most The IL&FS group started defaulting in interest importantly the main Regulator and the largest payments which were due on 30 September 2018 PF Investor viz. Employees Provident Fund and onwards. IL& FS submitted (January 2019) Organization (EPFO), New Delhi have invested resolution framework under Insolvency and their corpus for the last 20-25 years. Even in Bankruptcy Code 2016 for realization and distant history, there has not been any single distribution of sale proceeds of its assets. instance of delay or default by any of the IL&FS Group Companies. Moreover, the entire Group The Company should have made the disclosure of has always carried an impression of being a the material facts in the Notes to financial semi Govt. entity. As a result of this strong statements that IL&FS group had started defaulting background, it used to attract thousands of in interest payments which were due on 30 crores of investment from across the Country in September 2018 and onwards and proceedings its Group Companies for the last 20-25 years. under Insolvency and Bankruptcy Code 2016 had Also, since the advent of Credit Rating regime, been commenced. Therefore, in the event of IL&FS Group has commanded highest default by the IL&FS in respect of interest and Long/Short Term Credit Ratings in the last principal payments, the Company will be required several years, thus never creating any doubt to make good the loss. The notes to the financial amongst the investors about any crisis looming statements of the Company are deficient to the in the Company/Group. above extent. In this backdrop, therefore it was a shock for the entire Nation when the entire Group of IL&FS (which included as many as 348 Companies) suddenly collapsed and was referred to NCLT.
73 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
The Central Govt. was therefore quick enough to dissolve its “Board” and initiate immediate action of appointing fresh “Board of Directors” to chart out its Resolution Plan in September, 2018 with the noble objective of protecting the investors' money. Now, even after a year, the Resolution Plan is still in full swing. Not only the newly constituted “Board” of IL&FS but also the Central Govt. has taken many more initiatives to protect the investors' interest and come out with a sustainable resolution plan. However, several news items with just too many contradictions have intermittently played spoil sport. So far, Govt. of India has not come out with any clear cut conclusion or message or communication for the investors regarding future outcome/roadmap of their investments. iii. Going by the present reports in the matter, it is too early to conclude that our PF Trust alongwith other PF, Pension, Gratuity Trusts and most importantly EPFO etc. will incur any loss in their investments either on account of principal or interest. Neither, there has been any information/communication from IL&FS Board / Ministry of Finance / Govt. of India in this regard. iv. As a further information in this context, it may be informed here that, the Employees/PF Members of our PF Trust has not suffered any loss of interest since GEB's CPF Trust has paid an interest rate of 8.70% p.a. to its Members for FY 2018-19 against the Statutory required interest
74 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
rate of 8.65% (as declared by EPFO). v. However, considering the gravity of the issue, the Board has already resolved that, “GUVNL being the Parent Company, in accordance with the provisions of the EPF & MP Act, 1952 and the conditions of “Exemption” transfer an amount equivalent to the amount of interest and repayment due from the three IL&FS Group Companies upto 31st March, 2019 to GEB's CPF Trust in order to mitigate the cash flow/interest shortfall constraint(s) faced by the Trust.” vi. Condition 28 of Appendix A of Section 27AA2 of the EPF & MP Act, 1952 refers to loss on account of wrong investment decision and not to loss on account of a particular investment becoming doubtful (for an investment decision taken in accordance with the prescribed guidelines under the Act). vii. Further, since Govt. of India has initiated all around efforts to conclude the Resolution process in the best interest of the investors and with special emphasis on retirement funds like PF, Pension, Superannuation, Gratuity etc. there are reasonable/fair chances that the investments alongwith interest may not turn bad at all and would be returned to the PF Trust in full alongwith interest. The default of IL&FS is an event which is not having any financial implications on Group's Financial Statements for FY 2018-19. It is also not certain whether there will be any financial implications on the Group at all. Therefore, an event without
75 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
having any financial implications on the Financial Statements for FY 2018-19 need not be disclosed. Normally, as a matter of accounting practice, disclosures are made when the amount of financial implication(s) are either crystalised or certain or can be estimated. Since in this case the matter is under active consideration of resolution by Government of India, GUVNL did not note reasons for any permanent loss and hence no disclosure was made by the Group.
For & on behalf of the For & on behalf of the Board of Directors, Comptroller & Auditor General of India Gujarat Urja Vikas Nigam Limited,
Sd/- sd/- sd/- ( H.K. Dharmadarshi) Shri K.M. Bhuva Smt. Shahmeena Husain, IAS Accountant General (E&RSA), Gujarat Director (Technical) Managing Director DIN : 07808731 DIN : 03584560 Place : Ahmedabad Date : 17-12-2019 Place : Gandhinagar Date : 20.12.2019
76 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 6(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 31, 2019. Sr. Comment Reply No. A. COMMENT ON FINANCIAL POSITION C&AG's comment is on the financial position i.e. 1. Balance Sheet Balance Sheet, particularly Equity and Liabilities in Equity and Liabilities relation to Deferred Government Grants, Subsidies Deferred Government Grants, Subsidies & and Consumer Contributions. At the outset, it may Consumer Contribution (Note No.19) : - be pointed out here that, the subject matter of the ?1804.19 crore comment has no impact on the profitability of the With effect from 01 April 2016, the Company Company for FY 2018-19. Also, the subject matter of has changed the method of computing the the comment does not/would not have any impact grants/consumer contribution received against on the profitability of the Company in the future depreciable assets to be recognized in financial years also. statement of profit and loss from reducing It is emphasized here that, Deferred Government balance method to the straight line method and Grants, Subsidies and Consumer Contributions is a consequently the rates at which grant is deferred income and not a deferred liability, as can recognized in the statement of profit and loss. be noted from Balance Sheet presentation where The Company has determined that the change this is reflected right before liabilities are presented. to recognize grants in proportion of the Deferred Government Grants are a part of the depreciation expenses is a change in Company's Net Worth as this is already earned and accounting estimates and is to be applied any income recognition through Statement of Profit prospectively.” & Loss each year, only has the ultimate impact of As per Accounting Standard AS-12, Grants reducing Deferred Government Grants' balance and related to depreciable assets are treated as increasing the Retained Earnings. There is no deferred income which is recognized in the change in the Net Worth of the Company. Hence, profit and loss statement on a systematic and there is no impact on the financial position in terms
77 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 rational basis over the useful life of the asset. of the Net Worth of the Company. Indian Accounting Standard (Ind AS) 20 also However, having said the above, as communicated state that grants related to depreciable assets earlier, C&AG's contention that the change in are usually recognized in profit or loss over the method of recognition of Grants in Profit & Loss periods and in the proportions in which Statement from Reducing Balance Method (WDV) depreciation expenses on those assets is to Straight Line Method (SLM) was to correct an recognised. error. This in fact is completely in contradiction to The above change in method was made by the the audited financial statements of the earlier years Company as there was a mismatch of the grants noting compliance with the relevant accounting recognized in the Statement of Profit and Loss standards in each year. versus the related depreciation expenses. Thus, The Grants recognized is an income for the the Company has changed the method of Company which have been deferred to be recognition of deferred income in order to align recognized over the period of the related the recognition of deferred income with the depreciable assets on a systematic basis as per the related depreciation expenses. As the provision applicable Accounting Standards. The grants were for treatment of deferred income to be and are being recognized in the Statement of Profit recognized in the profit and loss statement on a & Loss based on a systematic method as accepted to systematic and rational basis over the useful life be relevant and compliant with Accounting of the asset are same in AS-12 and Ind AS 20, Standard–AS 12 including the new Accounting the change was not mandated by Ind AS 20. Standard–IndAS 20. This compliance with Hence, the Company changed the method in Accounting Standards was noted by the auditors order to correct an error. including C&AG in each year. Even, the current Since the depreciable assets related to which method used as a systematic basis, has been noted grants/ consumer contribution received have by the auditors as well as by C&AG to be in been capitalized in the books of accounts, the compliance with Accounting Standards and hence effect of such change should be worked out has no impact on the profitability of the Company. retrospectively and accounted for in the C&AG's view is that the change in the method opening balance of Deferred Government (although the changed method is in compliance Grants, subsidies and Consumer contribution with the accounting standards), needs to be applied towards capital assets by Rs. 403.57 crore as at retrospectively, as the changed method is a
78 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
31 March 2017. correction of an error. This change is not a change in Despite being pointed out in previous years Accounting Policy but a change in Method i.e. a (2016-17 and 2017-18), no corrective action change in Accounting Estimate. It may be further has been taken by the Company during 2018- pointed out that, as per IndAS, the use of 19. reasonable estimates is an essential part of the preparation of Financial Statements and does not undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not a correction of an error. Hence, the Company is of the firm view that the change from WDV Method to SLM Method for recognition of Government Grants is perfectly appropriate in terms of generally accepted Accounting Principles - both IndAS and previous GAAP & therefore cannot be construed as a correction of error by any means. Notwithstanding our view as above, based on C&AG's comment in FY 2016-17 & FY 2017-18, the Company has made a detailed disclosure in the Notes to the Financial Statements of FY 2018-19 indicating the impact of the change on the financial statements, if the Company was to adopt C&AG's view. As can be noted from the disclosure, there is no impact on the profitability of the Company nor is there any impact on the Net Worth of the Company.
79 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 6(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 31, 2019. Comment of the Comptroller Management Reply and Auditor General of India A. Comments on Financial Position C&AG's comment is on the financial position i.e. 1. Equity and Liabilities Balance Sheet, particularly Equity and Liabilities in Deferred Government Grants, Subsidies and relation to Deferred Government Grants, Contribution Subsidies and Consumer Contributions. At the outset, it may be pointed out here that, the subject (Note No.17) ?1321.71 crore matter of the comment has no impact on the A reference is invited to the Comments of the profitability of the Company for FY 2018-19. Also, Comptroller and Auditor General (C&AG) of India the subject matter of the comment does under Section 143(6) of the Companies Act, 2013 not/would not have any impact on the profitability on the financial statements of the Company for the of the Company in the future financial years also. year ended 31 March 2017 and 31 March 2018. It is emphasized here that, Deferred Government The Company has changed the method of Grants, Subsidies and Consumer Contributions is a computing the grants/consumer contribution deferred income and not a deferred liability, as can received against depreciable assets to be be noted from Balance Sheet presentation where recognized in Statement of Profit and Loss from this is reflected right before liabilities are reducing balance method to the straight line presented. Deferred Government Grants are a part method and consequently the rates at which grant of the Company's Net Worth as this is already is recognized in the Statement of Profit and earned and any income recognition through Loss. The Company has determined that the Statement of Profit & Loss each year, only has the change to recognize grants in proportion of the ultimate impact of reducing Deferred Government depreciation expenses is a change in accounting Grants' balance and increasing the Retained estimates and is to be applied prospectively." Earnings. There is no change in the Net Worth of As per paragraph No. 8.4 of AS-12, Grants related the Company. Hence, there is no impact on the to depreciable assets are treated as deferred
80 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 income which is recognized in the Profit and Loss financial position in terms of the Net Worth of the Statement on a systematic and rational basis over Company. the useful life of the asset. As per paragraph 17 of However, having said the above, as communicated Ind AS 20, grants related to depreciable assets earlier, C&AG's contention that the change in are usually recognized in Profit or Loss over the method of recognition of Grants in Profit & Loss periods and in the proportions in which Statement from Reducing Balance Method (WDV) depreciation expense on those assets is to Straight Line Method (SLM) was to correct an recognized. error. This in-fact is completely in contradiction to The above change in method was made by the the audited financial statements of the earlier Company as there was a mismatch of the grants years noting compliance with the relevant recognized in the Statement of Profit and Loss accounting standards in each year. versus the related depreciation expense. Thus, the The Grants recognized is an income for the Company has changed the method of recognition Company which have been deferred to be of deferred income in order to align the recognized over the period of the related recognition of deferred income with the related depreciable assets on a systematic basis as per the depreciation expense. As the provision for applicable Accounting Standards. The grants were treatment of deferred income to be recognized in and are being recognized in the Statement of Profit the Profit and Loss Statement on a systematic and & Loss based on a systematic method as accepted rational basis over the useful life of the asset are to be relevant and compliant with Accounting same in AS-12 and Ind AS 20, the change was not Standard–AS 12 including the new Accounting mandated by Ind AS 20. Standard–IndAS 20. This compliance with Hence, the Company changed the method in Accounting Standards was noted by the auditors order to correct an error. including C&AG in each year. Even, the current Since the depreciable assets related to which method used as a systematic basis, has been noted grants/consumer contribution received have been by the auditors as well as by C&AG to be in capitalized in the books of accounts, the effect of compliance with Accounting Standards and hence such change should be worked out retrospectively has no impact on the profitability of the Company. and accounted for in the opening balance of C&AG's view is that the change in the method Deferred Government Grants, Subsidies and (although the changed method is in compliance Consumer contribution. with the accounting standards), needs to be This has resulted in overstatement of retained applied retrospectively, as the changed method is
81 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 earnings and understatement of balances of a correction of an error. This change is not a change Deferred Government Grants, Subsidies and in Accounting Policy but a change in Method i.e. a Consumer Contribution towards Capital Assets by change in Accounting Estimate. It may be further ?207.59 crore as at 31 March 2017. pointed out that, as per IndAS, the use of Despite being pointed out in the years 2016-17 and reasonable estimates is an essential part of the 2017-18, no corrective action has been taken by preparation of Financial Statements and does not the Company during the FY 2018-19. undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not a correction of an error. Hence, the Company is of the firm view that the change from WDV Method to SLM Method for recognition of Govt. Grants is perfectly appropriate in terms of generally accepted Accounting Principles - both IndAS and previous GAAP & therefore cannot be construed as a correction of error by any means. Notwithstanding our view as above, based on C&AG's comment in FY 2016-17 & FY 2017-18, the Company has inserted a detailed disclosure in the Notes to the Financial Statements of FY 2018-19 indicating the impact of the change on the financial statements. As can be noted from the disclosure, there is no impact on the profitability of the Company nor is there any impact on the Net Worth of the Company. For and on behalf of the Board of Directors, sd/- Place : Vadodara Smt. Shahmeena Husain, IAS Date : 18-12-2019 Chairperson DIN : 03584560 82 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 6(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 31, 2019. Comment of the Comptroller Management Reply and Auditor General of India 1) Balance Sheet, Equity and Liabilities, C&AG's comment is on the financial position i.e. Deferred Government Grants, Subsidies and Balance Sheet, particularly Equity and Liabilities in Contribution (Note No.17) ? 1612.12 crore relation to Deferred Government Grants, Subsidies and Consumer Contributions. At the With effect from 01 April 2016, the Company has outset, it may be pointed out here that, the subject changed the method of computing the matter of the comment has no impact on the grants/consumer contribution received against profitability of the Company for FY 2018-19. Also, depreciable assets to be recognized in Statement the subject matter of the comment does of Profit and Loss from reducing balance method not/would not have any impact on the profitability to the straight line method and consequently the of the Company in the future financial years also. rates at which grant is recognized in the Statement of Profit and Loss. The Company has determined It is emphasized here that, Deferred Government that the change to recognize grants in proportion Grants, Subsidies and Consumer Contributions is a of the depreciation expenses is a change in deferred income and not a deferred liability, as can accounting estimates and is to be applied be noted from Balance Sheet presentation where prospectively. this is reflected right before liabilities are presented. Deferred Government Grants are a part As per Accounting Standard-12, Grants related to of the Company's Net Worth as this is already depreciable assets are treated as deferred income earned and any income recognition through which is recognised in the Profit and Loss Statement of Profit & Loss each year, only has the Statement on a systematic and rational basis over ultimate impact of reducing Deferred Government the useful life of the asset. Indian Accounting Grants' balance and increasing the Retained Standard-20 also state that, grants related to Earnings. There is no change in the Net Worth of depreciable assets are recognised in Profit or Loss the Company. Hence, there is no impact on the over the periods and in the proportions in which financial position in terms of the Net Worth of the depreciation expense on those assets is Company.
83 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 recognized. However, having said the above, as communicated The above change in method was made by the earlier, C&AG's contention that the change in Company as there was a mismatch of the grants method of recognition of Grants in Profit & Loss recognized in the Statement of Profit and Loss Statement from Reducing Balance Method (WDV) versus the related depreciation expense. Thus, the to Straight Line Method (SLM) was to correct an Company has changed the method of recognition error. This in-fact is completely in contradiction to of deferred income in order to align the the audited financial statements of the earlier recognition of deferred income with the related years noting compliance with the relevant depreciation expense. As the provision for accounting standards in each year. treatment of deferred income to be recognised in The Grants recognized is an income for the the Profit and Loss Statement on a systematic and Company which have been deferred to be rational basis over the useful life of the asset are recognized over the period of the related same in AS-12 and Ind AS 20, the change was not depreciable assets on a systematic basis as per the mandated by Ind AS 20. Hence, the Company applicable Accounting Standards. The grants were changed the method in order to correct an error. and are being recognized in the Statement of Profit Since the depreciable assets related to which & Loss based on a systematic method as accepted grants/ consumer contribution received have been to be relevant and compliant with Accounting capitalized in the books of accounts, the effect of Standard–AS 12 including the new Accounting such change should have been worked out Standard–IndAS 20. This compliance with retrospectively and accounted for in the opening Accounting Standards was noted by the auditors balance of Deferred Government Grants, Subsidies including C&AG in each year. Even, the current and Consumer contribution. method used as a systematic basis, has been noted by the auditors as well as by C&AG to be in This has resulted in overstatement of retained compliance with Accounting Standards and hence earnings and understatement of balances of has no impact on the profitability of the Company. Deferred Government Grants, Subsidies and Consumer Contribution towards Capital Assets by C&AG's view is that the change in the method ?293.44 crore as at 31 March 2017. (although the changed method is in compliance with the accounting standards), needs to be Despite being pointed out in the year 2016-17 and applied retrospectively, as the changed method is 2017-18, no corrective action has been taken by a correction of an error. This change is not a change the Company during 2018-19. in Accounting Policy but a change in Method i.e. a change in Accounting Estimate. It may be further pointed out that, as per IndAS, the use of
84 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
reasonable estimates is an essential part of the preparation of Financial Statements and does not undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not a correction of an error. Hence, the Company is of the firm view that the change from WDV Method to SLM Method for recognition of Govt. Grants is perfectly appropriate in terms of generally accepted Accounting Principles - both IndAS and previous GAAP & therefore cannot be construed as a correction of error by any means. Notwithstanding our view as above, based on C&AG's comment in FY 2016-17 & FY 2017-18, the Company has inserted a detailed disclosure in the Notes to the Financial Statements of FY 2018-19 indicating the impact of the change on the financial statements. As can be noted from the disclosure, there is no impact on the profitability of the Company nor is there any impact on the Net Worth of the Company. For & On behalf of the Board of Directors, For & On behalf of the Comptroller & Dakshin Gujarat Vij Company Limited, Auditor General of India sd/- sd/- Smt. Shahmeena Husain, IAS H.K.Dharmadarshi Chairperson (DIN:03584560) Principal Accountant General (E&RSA),Gujarat Place: Vadodara Place: Ahmedabad Dated: 18.12.2019 Dated: 13.12.2019
85 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 6(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, 2019 Sr. Comment Management Reply No. 1 Comments on Financial Position: C&AG's comment is on the financial position i.e. Balance Sheet Balance Sheet, particularly Equity and Liabilities in relation to Deferred Government Grants, Subsidies Deferred Government Grants, Subsidies & and Consumer Contributions. At the outset, it may Consumer Contribution (Note-18) - ? 2400.33 be pointed out here that, the subject matter of the crore comment has no impact on the profitability of the With effect from 1 April 2016 the Company has Company for FY 2018-19. Also, the subject matter changed the method of computing the of the comment does not/would not have any grants/consumer contribution received against impact on the profitability of the Company in the depreciable assets to be recognized in future financial years also. Statement of Profit and Loss from reducing It is emphasized here that, Deferred Government balance method to the straight line method Grants, Subsidies and Consumer Contributions is a and consequently the rates at which grant is deferred income and not a deferred liability, as can recognized in the Statement of Profit and Loss. be noted from Balance Sheet presentation where The company determined that the change to this is reflected right before liabilities are recognize grants in proportion of the presented. Deferred Government Grants are a part depreciation expenses is a change in of the Company's Net Worth as this is already accounting estimate and to be applied earned and any income recognition through prospectively. Statement of Profit & Loss each year, only has the As per Accounting Standardard-12, Grants ultimate impact of reducing Deferred Government related to depreciable assets are treated as Grants' balance and increasing the Retained deferred income which is recognized in the Earnings. There is no change in the Net Worth of Profit and Loss Statement on a systematic and the Company. Hence, there is no impact on the rational basis over the useful life of asset. financial position in terms of the Net Worth of the Indian Accounting Standard -20 also state that Company. 86 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 grants related to depreciable assets are usually However, having said the above, as communicated recognized in profit or loss over the period and earlier, C&AG's contention that the change in in the proportion in which depreciation method of recognition of Grants in Profit & Loss expenses on those assets is recognized. Statement from Reducing Balance Method (WDV) The above change in method was made by the to Straight Line Method (SLM) was to correct an Company as there was a mismatch of grants error. This infact is completely in contradiction to the audited financial statements of the earlier recognized in the statement of Profit and Loss years noting compliance with the relevant versus the related depreciation expenses. accounting standards in each year. Thus, the company has change the method of recognition of deferred income in order to align The Grants recognized is an income for the the deferred income with related depreciation Company which have been deferred to be expense. As the provision for treatment of recognized over the period of the related deferred income to be recognized in the depreciable assets on a systematic basis as per the Statement of Profit and Loss on systematic and applicable Accounting Standards. The grants were rational basis over the useful life of asset is and are being recognized in the Statement of Profit same in AS-12 and Ind AS-20, the change was & Loss based on a systematic method as accepted not mandated by Ind AS-20. Hence, the to be relevant and compliant with Accounting company changed the method in order to Standard–AS 12 including the new Accounting correct an error. Standard–IndAS 20. This compliance with Accounting Standards was noted by the auditors Since the depreciable assets related to which including C&AG in each year. Even, the current grants/consumer contribution received have method used as a systematic basis, has been noted been capitalized in the books of accounts, the by the auditors as well as by C&AG to be in effect of such change should have been worked compliance with Accounting Standards and hence out retrospectively and accounted for in the has no impact on the profitability of the Company. opening balance of Deferred Government C&AG's view is that the change in the method Grants, Subsidies and Consumer contribution. (although the changed method is in compliance This has resulted in overstatement of retained with the accounting standards), needs to be earnings and understatement of balances of applied retrospectively, as the changed method is a Deferred Government Grants, Subsidies and correction of an error. This change is not a change in Consumer contribution towards Capital assets Accounting Policy but a change in Method i.e. a by Rs. 356.20 Crore as at March 2017. change in Accounting Estimate. It may be further
87 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Despite being pointed in the year 2016-17 and pointed out that, as per IndAS, the use of 2017-18, no corrective action has been taken reasonable estimates is an essential part of the by the Company during 2018-19. preparation of Financial Statements and does not undermine their reliability. An estimate may need revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience. By its nature, the revision of an estimate does not relate to prior periods and is not a correction of an error. Hence, the Company is of the firm view that the change from WDV Method to SLM Method for recognition of Govt. Grants is perfectly appropriate in terms of generally accepted Accounting Principles - both IndAS and previous GAAP & therefore cannot be construed as a correction of error by any means. Notwithstanding our view as above, based on C&AG's comment in FY 2016-17 & FY 2017-18, the Company has inserted a detailed disclosure in the Notes to the Financial Statements of FY 2018-19 indicating the impact of the change on the financial statements, if the Company was to adopt C&AG's view. As can be noted from the disclosure, there is no impact on the profitability of the Company nor is there any impact on the Net Worth of the Company.
For and on behalf of the For and on behalf of the Board Comptoller and Auditor General of India sd/- H.K. Dharmadarshi) sd/- sd/- Principal Accountant General Smt. Shahmeena Husain,IAS Ms. Shweta Teotia,IAS (E & R S A), Gujarat Director (DIN : 03584560) Managing Director (DIN : 08556856) Place : Ahmedabad Place : Vadodara Date : 13.12.2019 Date : 18-12-2019 88 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Annexure 7
SANDIP K SHUKLA M.COM., LL.B., FCS, AICWA, CAIIB, ACIS (UK), IPR – Geneva PRACTISING COMPANY SECRETARIES
2nd Floor, City Complex, Opp: Golden Silver Apartment, Subhanpura, Vadodara-390023 Email: [email protected] [email protected] (M) 9825087084 (O) 6535803 (R) 2397682 FORM NO. MR – 3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2019
[Pursuant to Section 204(1) of the Companies Act, 2013 read with Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014]
To, The Members, Gujarat Urja Vikas Nigam Limited, Sardar Patel Vidyut Bhavan, Race Course, Vadodara – 390007. I 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) (hereafter 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 my opinion thereon. Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of the Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March,
89 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
2019 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 : I have examined the books, papers, minutes books, forms and returns filed and other records maintained by the Company having its registered office at Sardar Patel Vidyut Bhavan, Race Course, Vadodara - 390007 for the financial year ended on 31st March, 2019 according to the provisions of: (i) The Companies Act, 2013 (“the Act”) and the Rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made there under: - NOT APPLICABLE (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under: - NOT APPLICABLE (iv) Foreign Exchange Management Act, 1999 and the applicable rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings: - NOT APPLICABLE (v) The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act). NOT APPLICABLE - The Company being an unlisted Company. (vi) The other following laws to the extent specifically applicable to the Company: (1) Electricity Act, 2003 (2) Gujarat Electricity Industry (Re-organisation and Regulation) Act, 2003 I have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India: (Effective from 1st July, 2015 as amended from time to time) (ii) The Listing Agreement NOT APPLICABLE - The Company being an unlisted Company. During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, standards etc mentioned above. 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. It was observed that there was a vacancy of Independent Directors for more than 3 months and in absence of duly constituted Audit 90 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Committee during the intervening period, omnibus approval for related party transactions were directly obtained from the Board of Directors. It has been clarified by the management that the Company being wholly owned Government of Gujarat Company, appointment of Independent Directors was made on the basis of recommendation from the State Government when received. I further report that (i) The Company is a holding Company of six subsidiary companies. The company is a Government Company under the provisions of the Act. (ii) 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. During the year, the Govt. of Gujarat vide letter No. GUV-1108-3747-K dated 05-10-2018 approved to appoint Independent. Directors on the Board of GUVNL for the term of two years and accordingly Shri N.N.Misra (DIN 00575501) and Shri R.C.Dhup (DIN 08275424) were appointed as Independent Directors w.e.f. 01-11-2018 and 24-12-2018 respectively. 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. There were no dissenting views on any matter. I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. I further report that during the audit period, specific events/ actions having a major bearing on the Company's affairs are as under: 1. During the F.Y. 2018-19, the Company has allotted 3544672200 Equity Shares of Rs.10/- each for cash, at par on rights basis u/s 62 of the Companies Act, 2013. Place: Vadodara SANDIP K SHUKLA Date: 03.12.2019 COMPANY SECRETARIES FCS No: 2386 C.P No: 3335 This report is to be read with our letter of even date which is annexed as Annexure and forms an integral part of this report. 91 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
SANDIP K SHUKLA M.COM., LL.B., FCS, AICWA, CAIIB, ACIS (UK), IPR – Geneva PRACTISING COMPANY SECRETARIES
2nd Floor, City Complex, Opp: Golden Silver Apartment, Subhanpura, Vadodara-390023 Email: [email protected] [email protected] (M) 9825087084 (O) 6535803 (R) 2397682
Annexure To, The Members, Gujarat Urja Vikas Nigam Limited, Sardar Patel Vidyut Bhavan, Race Course, Vadodara – 390007.
Our Secretarial Audit Report (F Y 2018-19) 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's 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. Place: Vadodara SANDIP K SHUKLA Date: 03.12.2019 COMPANY SECRETARIES FCS No: 2386 C.P No: 3335 92 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
93 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
STANDALONE FINANCIAL STATEMENTS F.Y. : 2018-19
94 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF GUJARAT URJA VIKAS NIGAM LIMITED (STANDALONE) FOR THE YEAR ENDED 31 MARCH 2019 The preparation of Standalone financial statements of Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31 March 2019 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 17 September 2019. I, on 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 31st March 2019 under Section 143 (6) (a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records. 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 Profitability 1. Statement of Profit and Loss, Expenses, Purchase of Power (Note 29) Wheeling/Transmission Charges ? 4707.46 crore The above includes ? 716.09 crore which was paid excess by the GUVNL to GETCO though oversight, on account of transmission charges from year 2009-10 to 2017-18. Ind-AS-8 inter-alia states that Prior period errors are omissions from, and misstatements in, the entity's financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information. Such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.”
95 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Further Para 42 of IND AS 8 states that an entity shall correct material prior period errors retrospectively in the first set of financial statements approved for issue after their discovery by restating the comparative amounts for the prior period(s) presented in which the error occurred. As this was an error relating to the prior period, the effect of the same should have been worked out retrospectively and accounted for in the opening balance of retained earnings. This has resulted in Understatement of retained earnings and Overstatement of profit by ? 716.09 crore. (B) Comments on Disclosure 2. Notes to Financial Statements The Company was allocating “E-Urja expenses” to its group companies based on number of registered users in the respective company. However, the Company had stopped the allocation of E-URJA expenses to its group companies from 2018-19 and started recognizing the entire expenditure in its books of accounts. The Company should have disclosed this change in accounting treatment in its Notes to financial statements. The notes are therefore, deficient to that extent. 3. Notes to Financial Statements GUVNL through PF trust caters to the Provident Fund requirements of GUVNL and its subsidiary Companies. The trust is an exempted PF trust in accordance with the section 17 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (i.e. Act). As per the Condition no 28 of Appendix- A of section 27 AA of the Act, “In the event of any loss to the trust as a result of any fraud, defalcation, wrong investment decision etc. the employer shall be liable to make good the loss” i.e the employer shall be required make good any loss that may be caused to the Provident Fund due to theft, burglary, defalcation, misappropriation or any other reason. The trust, held ? 165.10 crore in various instruments of IL& FS and its group companies as on 31st March 2019, out of which ?130.10 crore were in unsecured instruments. The IL&FS group started defaulting in interest payments which were due on 30 September 2018 and onwards. IL& FS submitted (January 2019) resolution framework under Insolvency and Bankruptcy Code 2016 for realization and distribution of sale proceeds of its assets. The Company should have made the disclosure of the material facts in the Notes to financial statements that IL&FS group had started defaulting in interest payments which were due on 30 September 2018 and
96 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 onwards and proceedings under Insolvency and Bankruptcy Code 2016 had been commenced. Therefore, in the event of default by the IL&FS in respect of interest and principal payments, the Company will be required to make good the loss. The notes to the financial statements of the Company are deficient to the above extent.
For and on behalf of the Comptroller and Auditor General of India sd/- H.K. Dharmadarshi Accountant General (E & R S A), Gujarat
Place: Ahmedabad Date: 02-12-2019
97 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Mukund & Rohit No. 8, 2nd Floor, Tower -E, Avishkar, Chartered Accountants Old Padra Road, Vadodara - 390 007, Gujarat - India. +91 265 2357845, 2310448, 2313515 email : [email protected]
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 NIGAM LIMITED, which comprise the Balance Sheet as at 31st March, 2019, 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, 2019, 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
98 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 requirements 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, 2019. 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 financial statements 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, 99 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 standalone financial statements that give a true and fair view and are 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 on the 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:
• 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 from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control.
100 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
• 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, 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 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.
• 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, 2019 and are therefore the key audit matters. We describe these matters in our auditor's report unless law 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
101 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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 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 with by 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 effectiveness of 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 11 102 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its standalone 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".
For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Place: Gandhinagar Partner Date: 17-09-2019 Membership No. 109802 UDIN: 19109802AAAAKH4539
103 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 31, 2019, we report that:
I.
(a) The Company has compiled the Property, Plant and Equipment register in respect of Assets purchased / constructed as well as assets of erstwhile GEB transferred to the Company under the Notification dated 03/10/2006 issued by Government of Gujarat showing particulars including 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, no material discrepancy was noticed on such verification.
(c) As per the information and explanations provided to us, the title deeds of immovable properties 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
104 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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.
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, 2019 for a period of more than six months from 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:
Sr. Name of Nature of Amount Forum where Period No. the Statute the Dispute (? in lakhs) dispute is pending 1 Bombay Stamp Act Stamp Duty on 1,198.32 Demand Pertaining Chief Controller of Mortgage Deed to erstwhile GEB Revenue Authority, Gandhinagar 2 Income Tax Act, 1961 Recomputed MAT 4,572.70 A.Y. 2015-16 ITAT, Ahmedabad and interest u/s 234B & 234C 3 Income Tax Act, 1961 Recomputed MAT 4,369.82 A.Y. 2016-17 CIT (A), Baroda and interest u/s 234B & 234C 4 Finance Act, 1994 & Service Tax Demand 212.46 A.Y. 2013-14 to CESTAT, CGST Act, 2017 & Penalty 2017-18 Ahmedabad 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
105 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 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, we report 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 the amount 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.
For Mukund & Rohit Vinay Sehgal Chartered Accountants Partner Registration No. 113375W Membership No. 109802 UDIN: 19109802AAAAKH4539 Place : Gandhinagar Date : 17-09-2019 106 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 Urja Vikas Nigam Limited (“the Company”) as of 31st March 2019 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 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 107 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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.
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 108 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Partner Place : Gandhinagar Membership No. 109802 Date : 17-09-2019 UDIN : 19109802AAAAKH4539
109 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 31, 2019:
Sr. Directions / Sub Directions Response / Remedial Measures No. 1. Whether the Company has system in place to Yes, the Company has a well laid out advanced IT process all accounting transactions through system in place to process all accounting IT system? If yes, the implications of transactions through the same. processing of accounting transactions outside the IT system on the integrity of the accounts along with the financial implication, if any, may be stated. 2. Whether there is any restructuring of an No existing loans or cases of waiver/write off of debts/loans/interest etc. made by a lender to the Company due to the Company's inability to repay the loan? If yes, the financial impact may be stated 3. Whether funds received/receivable for Yes specific schemes from Central/State Agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. 4. Adequacy of steps to prevent encroachment Not Applicable 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 involved in setting up new projects, report whether settlement Not Applicable
110 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
of dues done expeditiously and in a transparent manner in all cases. The case of deviation may please be detailed.
6. Whether the Company has an effective Yes system for recovery of revenue as 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 incurred on abandoned projects and out of this how Not Applicable much cost has been written off?
For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Place : Gandhinagar Partner Date : 17-09-2019 Membership No. 109802 UDIN: 19109802AAAAKH4539
111 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
BALANCE SHEET AS AT 31st MARCH, 2019 ( ? in Lakhs ) Note As at As at Particulars No. 31st March, 2019 31st March, 2018 ASSETS
(1) Non-Current Assets (a) Property, Plant and Equipment 2 4,521.19 4,430.90 (b) Intangible Assets 2 232.14 232.08 (c) Financial Assets (i) Investments 3 22,62,812.56 19,89,862.39 (ii) Loans 4 144.44 161.96 (iii) Other Financial Assets 5 1,472.64 1,473.70 Total Non-Current Assets 22,69,182.98 19,96,161.03
(2) Current Assets (a) Financial Assets (i) Trade Receivables 6 3,114.52 38.63 (ii) Cash and cash equivalents 7 3.54 1,16,694.07 (iii) Other Bank Balances 8 51.42 48.78 (iv) Loans 9 45.12 57.23 (v) Other Financial Assets 10 8,47,965.21 6,26,213.72 (b) Current Tax Assets (net) 11 4,043.31 2,391.33 (c) Other Current Assets 12 13,117.53 14,599.60 Total Current Assets 8,68,340.63 7,60,043.35
Total 31,37,523.61 27,56,204.39
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 13 19,77,222.21 16,22,754.99 (b) Other Equity 14 91,997.35 1,64,367.11 Total Equity 20,69,219.56 17,87,122.10
Deferred Government Grants 15 11.84 14.14
112 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Liabilities (1) Non-Current Liabilities (a) Financial Liabilities (i) Borrowings 16 12,566.23 14,498.49 (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 18 731.84 691.80 (b) Provisions 19 1,168.53 1,173.03 (c) Deferred Tax Liabilities (Net) 20 - - Total Non-Current Liabilities 14,551.89 16,448.61 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 21 25,454.94 2.65 (ii) Trade payables 22 - Dues of Micro and Small Enterprises 0.13 - - Dues of Other than Micro and Small Enterprises 6,11,797.54 5,37,465.86 (iii) Other Financial liabilities 23 4,00,237.29 4,08,461.84 (b) Other current liabilities 24 47.74 108.81 (c) Provisions 25 16,202.68 6,580.38 (d) Current Tax Liabilities (net) 26 - - Total Current Liabilities 10,53,740.32 9,52,619.54 Total 31,37,523.61 27,56,204.39 Significant Accounting Policies and Notes to Financial Statements 1-51 As per our Report of even date attached For and on behalf of the Board For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SMT. SHAHMEENA HUSAIN, IAS CA. S.B. KHYALIA Chairman Managing Director Director (Finance) DIN:01532892 DIN:03584560 DIN:02470485
VINAY SEHGAL SHUBHADEEP SEN PARTHIV BHATT Partner General Manager (F&A) & CFO Company Secretary Membership No. 109802
Place : Gandhinagar Place : Gandhinagar Date : September 17, 2019 Date : September 17, 2019 113 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2019 ( ? in Lakhs ) Note For the year ended For the year ended Particulars No. 31st March, 2019 31st March, 2018 I Revenue from operations 27 44,86,753.40 37,82,014.76 II Other Income 28 4,198.66 2,203.76 III Total Income (I+II) 44,90,952.06 37,84,218.52 IV EXPENSES Purchase of Power 29 44,76,498.62 37,60,111.52 Employee Benefit Expenses 30 3,609.33 3,674.84 Finance Costs 31 2,010.81 2,547.06 Depreciation and Amortization Expense 2 585.60 175.99 Other Expenses 32 4,676.77 1,834.45 Total Expenses (IV) 44,87,381.13 37,68,343.86 V Profit Before Tax (III-IV) 3,570.93 15,874.66 VI Tax Expense : 33 (a) Current Tax 770.00 3,270.00 (b) Deferred Tax - - VII Profit for the Year (V-VI) 2,800.93 12,604.66 VIII Other Comprehensive Income (OCI) (a) Items that will not be reclassified to Profit and Loss (i) Re-measurement of the Defined Benefit Plans (19.03) (556.12) (ii) Equity Instruments through OCI 2,606.36 3,955.58 Total of Other Comprehensive Income (OCI) (VIII) 2,587.33 3,399.46 IX Total Comprehensive Income for the Year (VII+VIII) 5,388.26 16,004.12 X Earnings Per Equity Share (Refer Note No. 34) : Basic (in ?) 0.02 0.08 Diluted (in ?) 0.02 0.08 See accompanying Notes to the Financial Statements 1-51
As per our Report of even date attached For and on behalf of the Board For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SMT. SHAHMEENA HUSAIN, IAS CA. S.B. KHYALIA Chairman Managing Director Director (Finance) DIN:01532892 DIN:03584560 DIN:02470485 VINAY SEHGAL Partner SHUBHADEEP SEN PARTHIV BHATT Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : September 17, 2019 Date : September 17, 2019 114 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2019 ( ? in Lakhs ) For the year ended For the year ended Particulars 31st March, 2019 31st March, 2018 [A] CASH FLOW FROM OPERATING ACTIVITIES Profit Before Tax 3,570.93 15,874.66
Adjustments for : Depreciation and Amortization Expense 585.60 175.99 Dividend Income (1,237.14) (1,208.23) Interest Income - - Differed Income (2.29) (1.14) Finance Cost 2,010.81 2,547.06 (Profit) / Loss on Sale of Fixed Assets (Net) 3.44 0.13 Operating Profit / (Loss) before changes in Working Capital 4,931.36 17,388.47
Adjustment for (Increase) / Decrease in Operating Assets Trade Receivables (3,075.89) 1,268.32 Loans and Other Financials Assets (2,21,720.80) 66,427.28 Other non Financial Assets 1,482.07 2,151.55
Adjustment for Increase / (Decrease) in Operating Liabilities Trade Payables 74,331.80 29,190.09 Other Financial Liabilities (8,093.28) 88,386.95 Other Non-Financial Liabilities & Provisions 9,537.69 (39,693.11) Cash Flow from operations after changes in Working Capital (1,42,607.04) 1,65,119.55 Net Direct Taxes (Paid) / Refunded (2,421.97) (5,822.02) Net Cash Flow from / (used in) Operating Activities (1,45,029.01) 1,59,297.53 [B] CASH FLOW FROM INVESTING ACTIVITIES Purchase of PPE including Capital Advances & CWIP (685.21) (2,675.46) Sale of PPE 5.82 18.30 Investment in Subsidiary Companies (2,70,343.82) (3,15,644.67) Dividend Income 1,237.14 1,208.23 Bank Balances not considered as Cash and Cash Equivalents (2.64) 35.80 Net Cash Flow from / (used in) Investing Activities (2,69,788.71) (3,17,057.82) 115 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
[C] CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Shares / Share Application Money 2,76,709.20 2,86,849.46 Deferred Government Grants - 15.28 Proceeds from Borrowings - - (Repayment) / Proceeds from Borrowings (refer note 37(c) committed credit facilities under liquidity risk) 23,520.03 (15,802.18) Interest & Finance Expenses (2,102.03) (2,639.32) Net Cash Flow from / (used in) Financing Activities 2,98,127.20 2,68,423.24 Net Increase / (Decrease) in Cash and Cash Equivalents (1,16,690.53) 1,10,662.96 Cash & Cash Equivalents at beginning of period (see Note 1) 1,16,694.07 6,031.11 Cash and Cash Equivalents at end of period (see Note 1) 3.54 1,16,694.07 Notes : 1 Cash and Cash equivalents comprise of : Cash on Hand 2.19 0.93 Balance with Banks 1.35 26,693.14 Deposits with Banks (with maturity less than 3 months) - 90,000.00 Cash and Cash equivalents 3.54 1,16,694.07 Effect of Unrealised foreign exchange (gain) / loss (Net) - - Cash and Cash equivalents as restated 3.54 1,16,694.07 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 Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SMT. SHAHMEENA HUSAIN, IAS CA. S.B. KHYALIA Chairman Managing Director Director (Finance) DIN:01532892 DIN:03584560 DIN:02470485 VINAY SEHGAL Partner SHUBHADEEP SEN PARTHIV BHATT Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : September 17, 2019 Date : September 17, 2019 116 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON 31st MARCH, 2019
Equity Share Capital Particulars Amount (? in Lakhs) Balance as on 31st March,2017 13,71,460.60 Changes during the year 2,51,294.39 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
Other Equity ( ? in Lakhs ) Reserves and Item of Other Share Application Comprehensive Income Particulars Surplus Total Money pending Equity Instruments Retained Earnings allotment through Other Comprehensive Income Balance as at 31st March, 2017 13,130.09 81,963.92 17,713.91 1,12,807.92 Profit for the Year 12,604.66 12,604.66 Other Comprehensive Income for the Year (Net of Tax) (556.12) 3,955.58 3,399.46 Total Comprehensive Income for the Year 12,048.54 3,955.58 16,004.12 Add: Share Application Money pending allotment 1,17,518.99 1,17,518.99 Less : Shares Issued (81,963.92) (81,963.92) Balance as at 31st March, 2018 25,178.63 1,17,518.99 21,669.49 1,64,367.11
117 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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
As per our Report of even date attached For and on behalf of the Board For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SMT. SHAHMEENA HUSAIN, IAS CA. S.B. KHYALIA Chairman Managing Director Director (Finance) DIN:01532892 DIN:03584560 DIN:02470485 VINAY SEHGAL Partner SHUBHADEEP SEN PARTHIV BHATT Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : September 17, 2019 Date : September 17, 2019
118 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Note : 1 CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES A Corporate information Gujarat Urja Vikas 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 alongwith 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 Application of new Indian Accounting Standard The Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, 2019 has notified the new Ind AS and certain amendments to existing Ind ASs. They shall come into force on April 1, 2019 and therefore, the company shall apply the same with effect from that date. Recent Accounting Pronouncements: a) Ind AS-116 – Leases: The Standard replaces the existing Ind AS 17 “Leases”. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognise assets and will replace the existing leases standard, Ind AS 17 “Leases” w.e.f. April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on balance sheet lessee accounting model for lessees. A lessee recognises right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements as prescribed in Ind AS 17. The effect on the Financial statements on adoption of Ind AS 116 is being evaluated by the Company.
119 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
b) Other Amendments : Several other Indian Accounting Standards have been amended on various issues with effect from April 1, 2019. The following amendments are relevant to the company. i. Ind AS 12 “Income Taxes”- Income tax consequences of dividend and uncertainty over income tax treatments; ii. Ind AS 19 “Employee Benefits”- Accounting for plan amendment, curtailment or settlement; iii. Ind AS 23 “Borrowing Costs”- Accounting treatment for specific borrowings post capitalization of corresponding qualifying asset; iv. Ind AS 28 “Investments in Associates and Joint Ventures”- Application of Ind AS 109 “Financial Instruments” to long-term interests in associates and joint ventures to which the equity method is not applied but that in substance form part of the net investment in the associate or joint venture. v. Ind AS 103 “Business Combination” - Re-measurement of previously held interests when an entity obtains control of a business that is a joint operation; vi. Ind AS 109 “Financial Instruments”- Measurement of prepayment features with negative compensation in case of debt instruments; vii. Ind AS 111 “Joint Arrangements”- Non-remeasurement of previously held interests when an entity obtains joint control of a business that is a joint operation; 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 120 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 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 and Capital Work- in- Progress. PPE are stated at cost after reducing accumulated depreciation. The cost of PPE comprises of its purchase price or its construction cost or any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management and decommissioning costs. Directly attributable costs are capitalized until the asset is ready for use and includes borrowing cost capitalised 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. 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.
121 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 the depreciation rates, the methodology and the residual value as prescribed in GERC (MYT) Regulations, 2016. 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% Lines & Cable Net Work Upto 5.28% Vehicles 9.50% Furniture-Fix & Elect-Light & Fan Installations 6.33% Computers 15% Office Equipments 6.33% Depreciation on additions/deletions to PPE during the year is provided for on pro-rata basis with reference to the date of additions/deletions except low value items not exceeding Rs. 5,000/- which are fully depreciated at the time of addition. Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life. 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 122 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 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 recognized in 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 123 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 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 where as 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.
124 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 11. 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. 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. 12. Taxes on Income Income Tax Expense represents the sum of Current Tax and Deferred Tax.
125 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 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. 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. 13. 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. 14. Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized when the Company has a present obligation (legal or constructive) as a 126 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 15. Material Prior Period Errors Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest period presented, the opening balances of assets, liabilities and equity for the earliest period presented, are restated. 16. Earnings Per Share Basic Earnings Per Share is computed by dividing the profit / (loss) by the weighted average number of equity shares outstanding during the year. Diluted Earnings Per Share is computed by adjusting the figures used in the determination of basic EPS to take into account: - After tax effect of interest and other financing costs associated with dilutive potential equity shares. The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares. 17. 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. 18. 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
127 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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 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 business 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 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.
128 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. 19. 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. 129 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Power purchased from Renewable Sources and Traders (Bilateral) is accounted on the basis of contracts entered into with the respective parties. Need based power is purchased by putting bids in Power Exchanges on day to day basis and the same is accounted on acceptance of bids. The energy accounts in few cases are delayed for settlement due to complexity in transactions involved in power sector. The Company receives receivable / payable claims for past period due to delayed settlement. The Company accounts such claims in the year of receipt as per prevailing practice followed. 20. Critical Accounting Judgments and Key Sources of Estimation Uncertainty In the course of applying the policies outlined in all notes under Note 1 above, the management of the Company are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 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. Critical Judgments in applying Accounting Policies Following are the critical judgements and estimations that the Management have made in the process of applying the Company's Accounting Policies and that have significant effect on the amounts recognized in the Financial Statements. (a) Useful life of Property, Plant and 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
130 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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. (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
131 NOTES TO THE FINANCIAL STATEMENTS
NOTE NO. 2 PROPERTY, PLANT AND EQUIPMENT ( ? in Lakhs ) TANGIBLE ASSETS INTANGIBLE ASSETS GRAND Plant & Lines & Furniture Office PARTICULARS /ASSETS Buildings Computers TOTAL Machinery Cable EquipmentsVehicles TOTAL Softwares TOTAL Networks & Fixtures Gujar GROSS BLOCK 15 At 31st March 2017 392.07 347.64 3.44 228.79 969.90 138.91 139.03 2,219.78 233.81 233.81 2,453.59
Additions 63.86 30.56 - 3.77 2,596.33 17.29 21.80 2,733.60 - - 2,733.60 th a AnnualR
Deduction / Adjustments - - - 2.21 - 45.30 5.33 52.84 - - 52.84 t UrjaVik At 31st March 2018 455.92 378.20 3.44 230.35 3,566.22 110.90 155.50 4,900.54 233.81 233.81 5,134.35 Additions - 7.08 - 0.45 554.62 110.58 12.13 684.86 0.35 0.35 685.21 Deduction / Adjustments - 0.05 - 3.00 86.37 9.01 11.60 110.03 - - 110.03
132 At 31st March 2019 455.92 385.23 3.44 227.80 4,034.47 212.47 156.03 5,475.38 234.16 234.16 5,709.54 eport 2018-19 as Nig ACCUMULATED DEPRECIATION At 31st March 2017 30.61 68.79 1.60 61.10 108.60 26.21 32.07 328.97 0.82 0.82 329.79 Charge for the Year 17.77 36.23 0.28 33.20 62.54 11.65 13.41 175.08 0.90 0.90 175.99 Deduction / Adjustments - - - 1.39 - 27.97 5.06 34.41 - - 34.41 am Limit At 31st March 2018 48.38 105.01 1.88 92.92 171.14 9.90 40.42 469.65 1.72 1.72 471.37 Charge for the Year 17.44 37.43 - 30.70 463.45 16.31 19.97 585.31 0.30 0.30 585.60 Deduction / Adjustments - 0.04 - 2.49 82.01 6.52 9.70 100.76 - - 100.76 At 31st March 2019 65.82 142.41 1.88 121.12 552.59 19.68 50.68 954.19 2.02 2.02 956.21 ed
Net Block At 31st March 2018 407.54 273.19 1.56 137.44 3,395.08 101.00 115.08 4,430.90 232.08 232.08 4,662.98 At 31st March 2019 390.10 242.82 1.56 106.68 3,481.88 192.78 105.35 4,521.19 232.14 232.14 4,753.33 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
3. Investments ( ? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Investment in Equity Instruments Investment in Subsidiary Companies (Unquoted) (at cost)
212,77,98,823 (31 March 2018: 204,09,02,859) Equity Shares of ?10/- each in Gujarat State Electricity Corporation Ltd., fully paid-up. 5,14,808.95 4,81,703.95 71,17,44,788 (31 March 2018: 68,36,27,120) Equity Shares of ?10/- each in Gujarat Energy Transmission Corporation Ltd., fully paid-up. 3,64,811.65 3,36,960.65 40,99,65,078 (31 March 2018: 37,98,02,649) Equity Shares of ?10/- each in Dakshin Gujarat Vij Company Ltd., fully paid-up. 1,64,031.66 1,37,610.42 42,55,06,616 (31 March 2018: 40,17,72,934) Equity Shares of ?10/- each in Madhya Gujarat Vij Company Ltd., fully paid-up. 1,66,197.68 1,48,452.67 631,62,59,458 (31 March 2018: 524,61,67,796) Equity Shares of ?10/- each in Paschim Gujarat Vij Company Ltd., fully paid-up. 7,47,669.58 6,10,062.26 55,63,30,800 (31 March 2018: 51,88,61,696) Equity Shares of ?10/- each in Uttar Gujarat Vij Company Ltd., fully paid-up. 2,65,614.43 2,38,000.18 Total (A) 22,23,133.95 19,52,790.13
Investment in Associate Company (quoted) (at cost) 3,83,84,397 (31 March 2018: 3,83,84,397) Equity Shares of ?10/- each in Gujarat Industries Power Co. Ltd., 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 (31 March 2018: 1,13,50,000) Equity Shares of ?10/- each in Gujarat State Petronet Ltd., fully paid-up. 21,479.88 21,355.03 2,66,445 (31 March 2018: 53,289) Equity Shares of ?2/- (PY Rs. 10/-) each in Gujarat Gas Co. Ltd., fully paid-up. 394.61 442.41
Un-quoted, Non-Trade 19,30,013 (31 March 2018: 19,30,013) Equity Shares of ?100/- each in Gujarat Power Corporation Ltd., fully paid-up. 4,426.06 4,156.84 2,90,03,636 (31 March 2018: 2,90,03,636) Equity Shares of ?10/- each in Gujarat State Energy Generation Ltd., fully paid-up. 4,285.73 2,025.63 25,00,000 (31 March 2018: 25,00,000) Equity Shares of ?10/- each in Power Exchange of India Ltd., fully paid-up. - - Total (C) 30,586.26 27,979.90 Total 22,62,812.56 19,89,862.39
133 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Aggregate Cost of unquoted investments 22,28,304.36 19,57,960.54 Aggregate Cost of quoted investment 10,232.35 10,232.35 Aggregate Market Value of quoted investment 49,165.79 58,953.53 A. Subsidiary Companies: Share Capital Share Premium Total
Gujarat State Electricity Corporation Ltd. 2,12,779.88 3,02,029.07 5,14,808.95 Gujarat Energy Transmission Corporation Ltd. 71,174.48 2,93,637.17 3,64,811.65 Dakshin Gujarat Vij Company Ltd. 40,996.51 1,23,035.15 1,64,031.66 Madhya Gujarat Vij Company Ltd. 42,550.56 1,23,647.12 1,66,197.68 Paschim Gujarat Vij Company Ltd. 6,31,625.95 1,16,043.63 7,47,669.58 Uttar Gujarat Vij Company Ltd. 55,633.08 2,09,981.35 2,65,614.43 Sub-Total 10,54,760.46 11,68,373.49 22,23,133.95 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 10,64,819.27 11,73,717.44 22,38,536.71 B. The latest Audited Financials of Gujarat Power Company Limited (GPCL) available with the Company is for 31 March 2018. For calculation of Fair Value as at 31 March 2019 the Company has considered latest availabe Audited Balance Sheet of GPCL i.e. for 31 March 2018. C. Details of Subsidiaries Place of Proportion of ownership interest / Incorporation voting rights held by the Company Name of Company and principal place of As at 31st As at 31st business March, 2019 March, 2018 Gujarat State Electricity Corporation Ltd. India 100.00% 100.00% Gujarat Energy Transmission Corporation Ltd. India 98.27% 98.19% 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%
134 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
D. Pursuant to Letter No. GET-13-2018-3921-K dated 07.06.2019 of Govt. of Gujarat, the Board of Directors of GUVNL in its Board Meeting held on 29.06.2019 has approved transfer of shares of Subsidiary Company M/s. GETCO held by Govt. of Gujarat amounting to ?5000.00 Lakhs (including Premium of ?3750.00 Lakhs) to GUVNL to make GETCO a wholly owned Subsidiary Company of GUVNL. E. Details of Associate Proportion of ownership Place of interest / voting rights held Incorporation by the Company (includes Name of Company and principal shareholding through Subsidiary) place As at 31st As at 31st of business March, 2019 March, 2018 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 31 March 2019 and 31 March 2018 is negative and hence the Fair Value of such investment is Nil. 4. Loans ( ? in Lakhs ) As at 31st As at 31st Particulars March, 2019 March, 2018 Secured Considered Good Loans to Staff 144.44 161.96 Total 144.44 161.96 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, 2019 March, 2018 Secured Considered Good Interest Accrued But Not Due on Staff Loans 179.48 179.94 Unsecured Considered Good Deposit with Others 1,293.16 1,293.76 Total 1,472.64 1,473.70 6. Trade Receivables ( ? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Unsecured Considered Good Trade Receivables 3,114.52 38.63 Total 3,114.52 38.63
135 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
6.1. The age of receivables at the end of the reporting period is as follows: ( ? in Lakhs ) As at As at Particulars 31st March, 2019 31st March, 2018 Less than or equal to 6 months 3,114.52 38.63 More than 6 months but less than or equal to 1 Year - - More than one Year - - Total 3,114.52 38.63 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) As at As at Particulars 31st March, 2019 31st March, 2018 Balances with Banks 1.35 26,693.14 Cash on hand 2.19 0.93 Fixed Deposits with Banks (with maturity less than 3 months) - 90,000.00 Total 3.54 1,16,694.07 8. Other Bank Balances ( ? in Lakhs) As at As at Particulars 31st March, 2019 31st March, 2018 Fixed Deposit with Bank (with maturity more than 3 months) 51.42 48.78 Total 51.42 48.78 A. Deposit with Bank represents Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak Dal ?51.42 Lakhs. 9. Loans ( ? in Lakhs ) As at As at Particulars 31st March, 2019 31st March, 2018 Loans and Advances to Employee Secured Considered Good Loans & Advances to Staff - Interest Bearing* 38.83 44.84 Unsecured considered good Other Loans and Advances to Staff 6.29 12.39 Total 45.12 57.23 136 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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) As at 31st As at 31st Particulars March, 2019 March, 2018 Unsecured Considered Good Interest Accrued But Not Due on Staff Loans & others 471.14 425.91 Recoverable from Staff 1.44 1.44 Recoverable from Others 6.63 Inter Company Receivable 5,21,430.47 2,82,942.81 Subsidy Receivable from Government (Refer Note No. 43) 3,24,588.53 3,42,141.57 Loan to Others (Refer Note No. 47) 655.73 636.36 Deposits 772.90 65.62 Receivable from Gujarat Energy Training & Research Institute (GETRI) 38.37 - Total 8,47,965.21 6,26,213.72 11. Current Tax Assets (Net) (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Current Tax Assets Tax Refund Receivable 41,426.47 39,004.50 Current Tax Liability Income Tax Payable -37,383.16 -36,613.16 Total 4,043.31 2,391.33 12. Other Current Assets ( ? in Lakhs ) As at 31st As at 31st Particulars March, 2019 March, 2018 Unsecured Considered Good Prepaid Expenses 608.57 2,155.67 Advances to Vendors 858.20 858.20 Electricity Duty Recovered in Advance by Govt. of Gujarat 7,448.58 3,490.50 Assets not in use 2.17 1.63 Advance to IPP against Power Purchase 4,200.00 8,093.59 Total 13,117.53 14,599.60 137 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
13. Equity Share Capital A. Equity Share Capital consist of the following: ( ? in Lakhs )
As at 31st As at 31st Particulars March, 2019 March, 2018 Share Capital Equity Share Capital Authorised Share Capital 3000,00,00,000 (31 March 2018: 2000,00,00,000) Equity Shares of ? 10/- each 30,00,000.00 20,00,000.00 Issued Share Capital *2016,98,31,795 (31 March 2018: 1740,27,39,795) of ? 10/- each 20,16,983.18 17,40,273.98 Subscribed & Paid up Share Capital *1977,22,22,095 (31 March 2018: 1622,75,49,895) of ? 10/- each fully paid 19,77,222.21 16,22,754.99 Total 19,77,222.21 16,22,754.99 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, 2017 13,71,46,05,995 13,71,460.60 Additions / (Reductions) 2,51,29,43,900 2,51,294.39 As at 31st March, 2018 16,22,75,49,895 16,22,754.99 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 C. Shares in the Company held by Shareholders holding more than 5% is as under: As at 31st March, 2019 Extent of Particulars No. of Shares Holding Governor of Gujarat 19,77,22,22,095 100.00% As at 31st March, 2018 Extent of Particulars No. of Shares Holding Governor of Gujarat 16,22,75,49,895 100.00% 138 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
D. 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) As at 31st As at 31st Particulars March, 2019 March, 2018 Share Application Money pending allotment 39,760.97 1,17,518.99 Retained Earnings 27,960.53 25,178.63 Other Comprehensive Income 24,275.85 21,669.49 Total 91,997.35 1,64,367.11 B. Particulars relating to Other Equity (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Share Application Money pending allotment Opening Balance 1,17,518.99 81,963.92 Add : Increase during the year 39,760.97 1,17,518.99 Less : Shares Issued (1,17,518.99) (81,963.92) (A) 39,760.97 1,17,518.99 Retained Earnings Opening Balance 25,178.63 13,130.09 Add: Net profit after tax transferred from Statement of Profit & Loss 2,800.93 12,604.66 Add: Other Comprehensive income arising from remeasurement of defined benefit obligation (19.03) (556.12) (B) 27,960.53 25,178.63 Other Comprehensive Income Opening Balance 21,669.49 17,713.91 Add: Increase during the year 2,606.36 3,955.58 (C) 24,275.85 21,669.49 Total 91,997.35 1,64,367.11 139 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 a. Share Application Money pending allotment The Company has issued 39,76,09,700 Equity Shares of ?10 each to Governor of Gujarat, the existing Shareholder, for cash at par i.e. at ?10/- per share, on rights basis on 16.04.2019. The Company received the Share Application Money from Govt. of Gujarat during the month of March, 2019 and accordingly has complied with the provisions of the Companies Act, 2013 w.r.t. issue of Shares. 15. Deferred Government Grants ( ? in Lakhs)
As at 31st As at 31st Particulars March, 2019 March, 2018 Government Grants, Subsidies towards Capital Assets 11.84 14.14 Total 11.84 14.14 a. Particulars relating to Deferred Government Grants, Subsidies and Contributions ( ? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Government Grants, Subsidies towards Capital Assets Opening Balance 14.14 - Add : Received during the year - 15.28 Less : Transferred to Statement of Profit and Loss 2.29 1.14 Closing Balance 11.84 14.14
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 )
As at 31st As at 31st Particulars March, 2019 March, 2018 Loans from Related Party - Govt. of Gujarat Unsecured Loan for Power Purchase 9,100.00 9,450.00 Loan from Asian Development Bank (No.1803) 3,466.23 5,048.49 Total 12,566.23 14,498.49
140 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
A. MATURITY PROFILE OF SECURED & UNSECURED LOANS FY 2022-23 Particulars FY 2019-20 FY 2020-21 FY 2021-22 onwards upto last instalment Govt. of Gujarat a. Loan for Power Purchase (10% p.a.---Repayment 350.00 350.00 350.00 8,400.00 in Yearly instalment of ? 3,50,00,000/- upto FY 2046-47) (28 Nos. of Instalments Due after the Balance Sheet Date) b. ADB---1803 (11.36% p.a.---Repayment in Yearly 1,582.26 1,582.26 627.99 1,255.98 instalment upto FY 2023-24) (5 Nos. of Instalments Due after the Balance Sheet Date) Total 1,932.26 1,932.26 977.99 9,655.98 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: As at 31st As at 31st Particulars March, 2019 March, 2018 Govt. of Gujarat 21,856.41 26,128.26 Total 21,856.41 26,128.26 17. Trade Payables ( ? in Lakhs)
As at 31st As at 31st Particulars March, 2019 March, 2018 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 ) As at 31st As at 31st Particulars March, 2019 March, 2018 Staff Voluntary Retirement cum Death Benefit 731.84 691.80 Total 731.84 691.80
141 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
19. Long Term Provisions (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Provision for Employee Benefits Provision for Leave Encashment 1,168.53 1,173.03 Total 1,168.53 1,173.03 20. Deferred Tax Liabilities (Net) The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet: ( ? in Lakhs)
As at 31st As at 31st Particulars March, 2019 March, 2018 Deferred Tax Assets - - Deferred Tax Liabilities - - Total - - Deferred Tax Asset / Liability is worked out as under: (? in Lakhs) Recognized Opening Recognized in in Other Closing Particulars Balance profit and loss Comprehensive Balance Income 2018-19 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) - - - - 142 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Recognized Opening Recognized in in Other Closing Particulars Balance profit and loss Comprehensive Balance Income 2017-18 (? in Lakhs) Deferred Tax Liability on account of : Depreciation (513.12) (176.63) - (689.75) Fair value of Investment at FVTOCI (6,130.43) - 6,130.43 - Deferred Tax Asset on account of : Employee Benefits 439.74 63.78 - 503.53 Carried forward of unused Tax Losses - - - - Carried forward of unused Tax Credits 16,851.60 (5,147.57) - 11,704.03 Net Deferred Tax Asset/ (Liability) 10,647.79 (5,260.42) 6,130.43 11,517.80 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) As at 31st As at 31st Particulars March, 2019 March, 2018 Loans repayable on Demand Secured Cash Credit From Banks 25,454.94 2.65 Total 25,454.94 2.65 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) As at 31st As at 31st Particulars March, 2019 March, 2018 Micro and Small Enterprises Others 0.13 - Others Liability for Purchase of Power 6,11,313.31 5,36,828.62 Others 484.23 637.24 Total 6,11,797.67 5,37,465.86 143 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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) As at 31st As at 31st Trade Payables - Total outstanding dues of Micro & Small Enterprises March, 2019 March, 2018 Principal amount and the interest due thereon remaining unpaid to 0.13 - any supplier at the end of each accounting year
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. 144 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
23. Other Financial Liability (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 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 284.13 376.74 Interest Accrued and Due on Loans from Banks 2.33 0.94 Liability for O & M Supplies / Works 114.21 1.54 Liability for Capital Supplies / Works 253.54 380.32 Staff Related Liabilities 2.27 0.69 Staff Retirement cum Death Benefit Scheme 15.56 18.39 Unclaimed amount relating to Bonds 264.30 306.80 Inter Company Payable 2,75,037.17 2,82,393.15 Payable to Gujarat Energy Training & Research Institute - 182.33 Deposits & Retentions from Suppliers / Contractors (Refer Note No. 48) 1,20,786.66 1,20,474.51 Deposits for Electrification & Service connection 10.11 10.11 Outstanding liability for expenses 871.43 1,105.63 Grants Unallocated 91.35 82.43 Corpus Fund of Bal Urja Rakshak Dal 52.51 50.19 Board of Trustees----CPF 502.37 1,129.18 Other Liability 12.61 11.72 Staff Welfare Schemes 4.47 4.92 Total 4,00,237.29 4,08,461.84 24. Other Current Liability (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Statutory Liabilities 46.49 107.56 Tax on Electricity Duty payable to State Govt. 1.25 1.25 Total 47.74 108.81
145 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
25. Short Term Provisions (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Provision for Employee Benefits Provision for Gratuity 16,050.34 6,358.95 Provision for Leave Encashment 152.34 221.44 Total 16,202.68 6,580.38 26. Current Tax Liabilities (net) (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 Current Tax Liability Income Tax Payable - - Current Tax Assets Tax Refund Receivable - - Total - - 27. Revenue from Operations (? in Lakhs)
For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Income from Operating Activity Sale of Power to Subsidiaries : Dakshin Gujarat Vij Company Ltd (DGVCL) 12,00,168.22 10,36,920.97 Madhya Gujarat Vij Company Ltd (MGVCL) 5,34,019.67 4,74,493.98 Paschim Gujarat Vij Company Ltd (PGVCL) 15,41,798.68 12,61,127.57 Uttar Gujarat Vij Company Ltd (UGVCL) 11,21,815.07 9,14,276.20 Sub Total 43,97,801.63 36,86,818.71 Sale of Power to Others : Sale of Power through Power Exchanges & Bilateral Agreements 10,812.79 25,920.16 Sub Total 10,812.79 25,920.16 Total Revenue from Sale of Power to Licensees, 44,08,614.43 37,12,738.88 Subsidiaries and Others
146 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Income from Other Operating Activity Rebate (Cash Discount) for Prompt Payment 77,927.21 68,589.70 Liquidated Damages 178.62 196.14 CDM Benefit from Renewable Energy Sources 33.14 463.43 Miscellaneous Income - 26.61 Total 44,86,753.40 37,82,014.76 "On March 28, 2018, Ministry of Corporate Affairs (""MCA"") has notified Ind AS 115: Revenue from Contract with Customers applicable from 1st April 2018. The management has evaluated the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers and accounted for the same pursuant to Ind AS 115. The Company has used the cumulative effect method and therefore the comparative information has not been restated and continues to be reported under Ind AS 18 and Ind AS 11.The Standard is applied to contracts remaining in force as at 1st April, 2018. The application of the standard does not have any significant Impact on the retained earnings as at 1st April, 2018 or on these financial statements." 28. Other Income (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Interest Income Interest on Staff Loans and Advances 22.48 26.74 Interest on Advances to Others 267.98 490.50 Interest Income from Fixed Deposits 393.21 50.78 Dividend Income - From Associate 1,036.38 1,036.38 - From other Investments 200.76 171.85 Other Non Operating Income Grants received for R & D Expenses 178.16 136.52 Deferred Income 2.29 1.14 Penalties received from Suppliers (Net of Refund) 36.88 103.23 Miscellaneous Income* 2,060.51 186.61 Total 4,198.66 2,203.76 * None of the items individually account for more than 1% of total revenue.
147 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
29. Purchase of Power (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Purchase of Power From Central Sector Nuclear Power Corporation of India Ltd. 90,612.24 51,269.55 NTPC Ltd. 7,17,985.43 6,01,736.73 Sardar Sarovar Narmada Nigam Ltd. 1,862.13 2,960.23 Sub Total 8,10,459.80 6,55,966.51 From Private Sector CLP India Pvt Ltd. 43,915.94 59,419.76 Essar (Vadinar) Ltd. - 82,695.58 ACB India Ltd. 30,999.53 31,595.07 Adani Power Ltd. 4,11,479.94 2,42,497.59 Coastal Gujarat Pvt. Ltd. 3,35,605.25 3,07,218.12 Sub Total 8,22,000.67 7,23,426.12 From State Sector Gujarat Industries Power Company Ltd. 98,180.66 95,021.92 Gujarat State Energy Generation Ltd. (Hazira) 45,748.59 32,791.43 Gujarat Mineral Development Corporation (GMDC) 21,265.11 26,595.04 Gujarat State Electricity Corporation Ltd. 11,44,910.81 9,91,860.92 GPPC Pipavav 61,593.39 39,862.63 Bhavnagar Energy Company Ltd.* - 22,786.78 Sub Total 13,71,698.56 12,08,918.72 From Other Wind Farms 2,74,106.96 2,43,098.94 Purchase of Solar Power 1,97,495.85 1,82,077.67 Purchase of Power from Renewable Sources 10,146.70 1,568.32 Purchase of Power from Non-Renewable Sources 63,411.06 - Captive Power Plants 666.14 33.06 148 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Power Exchange of India Ltd. 2,489.98 8,439.74 India Energy Exchange 2,97,426.82 2,04,478.10 Short Term Purchase of Power 1,55,658.72 31,572.15 Purchase of Power from DISCOMs 191.01 19,372.07 Sub Total 10,01,593.22 6,90,640.06 Wheeling / Transmission Charges : Power Grid Corporation Ltd. 2,06,187.15 1,88,363.68 Gujarat Energy Transmission Corporation Ltd. 2,64,559.21 2,92,796.43 Sub Total 4,70,746.37 4,81,160.11 Total 44,76,498.62 37,60,111.52 *The Government of Gujarat has notified Gujarat Electricity Reform (Transfer of Generation Undertakings) Scheme, 2018 (the Scheme) under Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003, on 27 August, 2018 for merger of M/s. Bhavnagar Energy Company Limited (BECL) with Generation Subsidiary Company M/s. Gujarat State Electricity Corporation Ltd. (GSECL) effective from 01 April, 2018 (acquisition date). Accordingly, current year's purchase of Power from BECL has been included in Power Purchase from GSECL. 30. Employee Benefit Expenses (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Salaries and Allowances 2,750.80 3,244.98 Contribution to PF Trust 327.18 281.99 Staff welfare expenses 491.11 88.34 Retirement and other Benefits 40.24 59.53 Total 3,609.33 3,674.84
149 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
(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, 2019 March, 2018 EDLI Admn. Charges 0.02 0.03 Company's Contribution to Provident Fund 255.80 200.09 CPF Inspection & Audit Charges 4.55 3.99 Pension Contribution for Company's Employees on deputation 33.02 41.37 Company's Contribution to Pension Fund 33.80 36.54 Total 327.20 282.02 31. Finance Cost (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Interest Expense Interest on State Government Loans 1,640.87 1,861.10 Interest on Cash Credit and Working Capital 0.67 238.51 Interest on Other loans 49.47 47.10 Discount to Consumers for Timely Payment of Bills 145.86 116.28 Other Borrowing Cost Bank Charges and Commission 173.93 284.07 Total 2,010.81 2,547.06 32. Other Expenses (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Repairs & Maintenance Office Equipments 3,167.81 116.61 Others 10.48 10.34 Administrative & General Expenses Rent, Rates and Taxes 409.23 307.65 Insurance 7.61 6.47 Telephone & Postage Expenses 16.52 19.65
150 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Audit Fees 9.44 8.93 Travelling & Conveyance 90.25 102.78 Printing & Stationery 34.32 32.20 Expenses on Computer Billing & EDP Charges 14.51 15.46 Advertisement 124.46 86.80 Electricity Charges 0.04 0.40 R & D Expenses (Refer Note No. 42) 178.16 136.52 Legal & Professional Fees 470.60 517.17 Donations - 300.00 Expenditure on Training to Staff 3.48 2.59 Loss on Sale of Assets (Net) 3.44 0.13 Corporate Social Expenditure (Refer Note No.40) 37.35 108.60 Expenses for Energy Conservation 15.99 - Miscellaneous Losses & Write-offs 2.46 18.16 Security Expenses - 0.03 Miscellaneous Expenses* 27.33 19.90 Other Administration & General Expenses 53.28 24.08 Total 4,676.77 1,834.45
32.1 During the year, an expenditure of ?235.16 Lakhs (Previous year ?56.59 lakhs) has been incurred towards Energy Conservation and NIL (Previous year ?0.01 Lakhs) towards Ujala 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. 32.2 Auditor's Remuneration (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Statutory Audit Fees 7.50 7.00 Taxes on Statutory Audit Fees 1.35 1.26 Total 8.85 8.26
151 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
33. Tax Expense (? in Lakhs)
For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Current Tax 770.00 3,270.00 Deferred Tax (Refer Note 20) - - Total 770.00 3,270.00
33.1. Reconciliation of Current Tax (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Profit Before Tax 3,570.93 15,874.66 "Current Tax expense calculated using MAT tax rate at 21.55% (Previous year - 21.34%)" 769.49 3,387.91 Add : Other Comprehensive Expense (4.10) (118.68) Adjustment of tax on prior period - - Others 4.61 0.78 Current Tax Expense 770.00 3,270.00
The base tax rate used for the year ended 31st March, 2019 and year ended 31st March, 2018 reconciliations given above is at the MAT tax rate of 21.55% (Previous Year: 21.34%) payable by corporate entities in India on taxable book profits under the Indian Tax Law. 33.2. Unrecognised Deferred Tax Assets (? in Lakhs)
Particulars AS at 31st AS at 31st March, 2019 March, 2018
Unused Tax Losses - - Unused Tax Credits 11,309.26 11,704.03
152 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
34. Earnings per Equity share (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Profit After Tax for the year attributable to equity shareholders 2,800.93 12,604.66 Weighted average number of Equity shares Basic 17,87,88,00,487 15,37,84,15,302 Diluted 17,89,35,76,477 15,42,46,74,538 Basic and Diluted earnings per equity shares (?) Basic 0.02 0.08 Diluted 0.02 0.08 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 ?327.20 Lakhs (31st March 2018 : ?282.02 Lakhs). B. Other Long Term Benefit Plan The Company 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 ?69.83 Lakhs (31st March 2018 : ?259.71 Lakhs) has been charged to statement of Profit & Loss. Leave obligation as at 31st March, 2019 and 31st March, 2018 is ?1320.87 Lakhs and ?1,394.47 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
153 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
member of the scheme. The charge to the statement of Profit and loss for the year ended is ?37.22 Lakhs (31st March 2018 : ?36.55 Lakhs). The balance of such fund as at 31st March, 2019 and 31st March, 2018 is ?743.40 Lakhs and ?710.18 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 does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments. The 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. 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, 2019 March, 2018 Expected Return on Plan Assets 8.00% Rate of Discounting 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. 154 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 I) Reconciliation in present value of obligations (PVO) - defined benefit obligation: Opening defined benefit obligation 2,016.73 1,397.95 Current Service Cost 45.83 16.92 Past service cost, including losses / (gains) on curtailments - 39.16 Interest Cost 151.25 111.84 Remeasurement (gains) / Iosses : Actuarial gains and losses arising from changes in financial assumptions & experience adjustments 8.83 587.71 Benefits paid 263.22 136.85 Closing defined benefit obligation 1,959.43 2,016.73 Current obligation 288.10 395.38 Non - Current obligation 1,671.33 1,621.35 II) Change in fair value of assets : - Opening fair value of plan assets 1,970.24 1,361.62 Expected return on plan assets 157.62 108.93 Remeasurement gain (loss) : Actuarial gains and losses including Excess Return on plan assets (excluding amounts included in net interest expense) -10.20 31.59 Contributions by the employer 88.84 604.95 Benefits paid 263.22 136.85 Closing fair value of plan assets 1,943.29 1,970.24 III) Reconciliation of Present value of obligation and fair value of assets : Present value of funded defined benefit obligation 1,959.43 2,016.73 Fair Value of plan assets at end of year 1,943.29 1,970.24 Funded status Funded Funded Net liability arising from defined benefit obligation 16.14 46.48
155 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
IV) Service Cost Current Service cost 45.83 16.92 Past service cost and (gain) / Ioss from settlements - 39.16 Net Interest expense -6.41 2.72 Total Expenses to be recognised in P&L A/c 39.43 58.80 Components of defined benefit costs recognised in Employee Benefit expenses Re-measurement 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) 19.03 556.12 Total Expenses to be recognised in OCI 19.03 556.12 Total Expense (Provision for the Period) 58.46 614.92 V) Category of assets as at 31 st March : -Life Insurance Corporation 1,943.29 1,970.24 Total 1,943.29 1,970.24
On Plan On Plan Experience Adjustment Liabilities Assets Loss / (Gain) Loss / (Gain) As on 31st March, 2019 8.83 As on 31st March, 2018 587.71
Maturity Analysis projected Benefit obligation are as under : As at 31st As at 31st Particulars March, 2019 March, 2018 Less than 1 year 288.10 395.38 One to Three Years 321.92 555.40 Three to Five Years 236.07 201.55 More than Five Years 1,113.34 864.40 Total 1,959.43 2,016.73
156 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Sensitivity Analysis : As at 31st As at 31st Significant actuarial assumptions March, 2019 March, 2018 Discount Rate - Impact due to increase of 50 basis points -76.74 -60.61 - Impact due to decrease of 50 basis points 81.86 64.87 Salary increase - Impact due to increase of 50 basis points 81.36 65.31 - Impact due to decrease of 50 basis points -76.97 -61.55
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. 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 ?43,97,801.63 Lakhs in 2018-19 and ?36,86,818.71 Lakhs in 2017-18. 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.
157 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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) As at 31st As at 31st Particulars March, 2019 March, 2018 Debt 14,498.49 16,430.75 Total Equity 20,69,219.56 17,87,122.10 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) As at 31st As at 31st Particulars March, 2019 March, 2018 Financial Assets Measured at amortised cost (a) Trade and other receivables 3,114.52 38.63 (b) Cash and cash equivalents 3.54 1,16,694.07 (c) Other Bank balances 51.42 48.78 (d) Loans 189.56 219.19 (e) Other Financial Assets 8,49,437.85 6,27,687.42 Measured at cost (a) Investments in Equity Instruments of Subsidiaries and Associates (designated on transition date) 22,32,226.30 19,61,882.48 Measured at FVTOCI (a) Investments in Equity Instruments 30,586.26 27,979.90 Financial Liabilities Measured at amortised cost (a) Borrowings 38,021.17 14,501.14 (b) Trade Payables 6,11,882.83 5,37,551.16 (c) Other Financial Liabilities 4,00,969.14 4,09,153.64 158 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 159 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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). 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) Less than Between 1 More than Particulars Total 1 year and 5 years 5 years 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
160 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
As at 31st March, 2018 Non - Current Financial Liabilities Borrowings - 5,820.50 8,677.99 14,498.49 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 691.80 - 691.80 - 6,512.30 8,763.28 15,275.58 Current Financial Liabilities Borrowings 2.65 - - 2.65 Trade Payables 5,37,465.86 - - 5,37,465.86 Other Financial Liabilities 4,08,461.84 - - 4,08,461.84 9,45,930.35 - - 9,45,930.35 Total Financial Liabilities 9,45,930.35 6,512.30 8,763.28 9,61,205.93 The Company has access to Committed Credit facilities as described below, of which ?2,05,145.06 Lakhs (as at 31st March, 2018 : ?2,30,600.00 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) As at 31st As at 31st Particulars March, 2019 March, 2018 Amount used 25,454.94 - Amount unused 2,05,145.06 2,30,600.00 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 Financial Assets/ Fair Value 31st March, 31st March, Valuation technique(s) and key input(s) Financial Liabilities hierarchy 2019 2018 Investment in Equity 8,711.78 6,182.47 Level 3 Valuation techniques for which the lowest Instruments (unquoted) level input that is significant to the fair value measurement is unobservable Investment in Equity 21,874.48 21,797.43 Level 1 Quoted bid prices from Stock exchange - Instruments (quoted) NSE / BSE 161 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 31.03.2019. 39. Contingent Liabilities, Contingent Assets and commitments (to the extent not provided for) : A. Contingent Liabilities not provided for : (? in Lakhs) As at 31st As at 31st Particulars March, 2019 March, 2018 1. Claims against the erstwhile GEB & the Company not acknowledged as debts: I. Purchase 130.12 130.29 II. Leasing Finance / Taking over of Licensee by erstrwhile GEB 1,731.53 1,703.00 III. Power Purchase 64,391.00 64,391.00 IV. Stamp Duty on mortgage deed for loans availed by erstwhile GEB from LIC 1,198.32 1,198.52 V. Employees 730.50 730.50 VI. Disputed demand of Income Tax against erstwhile GEB Not Not Ascertainable Ascertainable VII. Disputed demand of Income Tax / GST (Service Tax) against the Company 9,154.99 4,572.70 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. 97,907.41 1,14,111.11 b. For Term Loans to Gujarat Energy Transmission Corporation Ltd. 1,81,705.88 2,68,235.29 3. Letters of Credit 1,39,364.00 1,51,533.00 Total 9,85,903.75 10,96,195.41 162 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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)
As at 31st As at 31st Particulars March, 2019 March, 2018 A. Capital Commitments Estimated amount of Contract remaining to the executed on capital accounts (Net of Advances) Nil Nil Total Nil Nil
40. CSR Expenditure (? in Lakhs) For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 The CSR expenditure comprises the following: (a) Gross amount required to be spent by the Company during the year 277.23 244.56 (b) Amount spent during the year 37.35 108.60 (? in Lakhs) For the year ended 31-03-2019 For the year ended 31-03-2018 Particulars Yet to be Yet to be In Cash Total In Cash Total paid in cash paid in cash (c) (i) Construction/acquisition of any asset 8.50 - 8.50 17.11 - 17.11 (ii) On purpose other than (i) above 28.85 - 28.85 91.49 - 91.49 Total 37.35 - 37.35 108.60 - 108.60
163 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 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 31-03-2019 For the year ended 31-03-2018 Amount Amount Particulars MUs MUs (? in Lakhs) (? in Lakhs) Purchase of Power 98,695.19 44,76,498.62 89,480.29 37,60,111.52 Sale of Power 98,695.19 44,08,614.43 89,480.29 37,12,738.88
42. Research & Development Expenditure The details of Revenue Expenditure & Capital Expenditure incurred on Research and Development is as under: (? in Lakhs)
For the Year For the Year Particulars ended 31st ended 31st March, 2019 March, 2018 Capital Expenditure : Computers and related Equipments - 15.28 Less : Depreciation for the year - 1.14 Total Capital Expenditure (Net of Depreciation) : - 14.14 Revenue Expenditure : Employee Benefits 137.39 105.70 Material Consumed 3.14 0.58 Administrative and Misc. Expenses 37.64 30.24 Depreciation 2.29 1.14 Total Revenue Expenditure : 180.45 137.67 Total Research and Development Expenditure : 180.45 151.81
Research and Development grant related income is disclosed under Note No. 28. 43. Subsidy Receivable from Government of Gujarat The Company has reviewed the status of subsidies receivable as of 31st March, 2019 of ?3,24,588.53 Lakhs (31st March, 2018 : ?3,42,141.57 Lakhs) in accordance with its policy on financial instruments and does not expect any credit loss.
164 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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 Sujit Gulati, IAS (01.04.2018 to 16.07.2018) Chairman Shri Raj Gopal, IAS (07.08.2018 to 31.01.2019) Chairman Shri Pankaj Joshi, IAS (01.04.2018 to 31.03.2019) Key Management Personnel (KMP) Ms. Mona Khandhar, IAS Woman Director Shri N N Misra (01.11.2018 to 31.03.2019) Independent Director Shri R C Dhup (24.12.2018 to 31.03.2019) Independent Director Shri Milind Torawane, IAS Director Shri S B Khyalia (01.04.2018 to 31.03.2019) Key Management Personnel (KMP) Shri K M Bhuva (01.04.2018 to 31.03.2019) Key Management Personnel (KMP) Shri Shubhadeep Sen (10.08.2018 to 31.03.2019) Key Management Personnel (KMP) Shri Parthiv Bhatt (01.04.2018 to 31.03.2019) Key Management Personnel (KMP)
B. The following transactions were carried out with the related parties in ordinary course of business during the year: (? in lakhs) Subsidiary Associate Nature of Transaction KMP Total Company Company Transactions during the year Sale of Power 43,97,801.63 - - 43,97,801.63 (36,86,818.71) - - (36,86,818.71) Dakshin Gujarat Vij Company Limited 12,00,168.22 - - 12,00,168.22 (10,36,920.97) - - (10,36,920.97) Madhya Gujarat Vij Company Limited 5,34,019.67 - - 5,34,019.67 (4,74,493.98) - - (4,74,493.98) 165 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Paschim Gujarat Vij Company Limited 15,41,798.68 - - 15,41,798.68 (12,61,127.57) - - (12,61,127.57) Uttar Gujarat Vij Company Limited 11,21,815.07 - - 11,21,815.07 (9,14,276.20) - - (9,14,276.20) Allocation of E-Urja Expenses - - - - (1,894.92) - - (1,894.92) Dakshin Gujarat Vij Company Limited - - - - (258.12) - - (258.12) Madhya Gujarat Vij Company Limited - - - - (252.00) - - (252.00) Paschim Gujarat Vij Company Limited - - - - (497.09) - - (497.09) Uttar Gujarat Vij Company Limited - - - - (255.61) - - (255.61) Gujarat Energy Transmission Corporation - - - - Limited (442.36) - - (442.36) Gujarat State Electricity Corporation Ltd. - - - - (189.74) - - (189.74) Allocation of General Insurance Premium 1,625.51 - - 1,625.51 (1,583.40) - - (1,583.40) Dakshin Gujarat Vij Company Limited 208.09 - - 208.09 (203.24) - - (203.24) Madhya Gujarat Vij Company Limited 215.29 - - 215.29 (210.86) - - (210.86) Paschim Gujarat Vij Company Limited 399.01 - - 399.01 (377.55) - - (377.55) Uttar Gujarat Vij Company Limited 239.35 - - 239.35 (233.52) - - (233.52) Gujarat Energy Transmission Corporation 362.37 - - 362.37 Limited (350.44) - - (350.44) Gujarat State Electricity Corporation Limited 201.40 - - 201.40 (207.80) - - (207.80)
166 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Allocation of Interest 9,214.71 - - 9,214.71 (6,531.93) - - (6,531.93) Dakshin Gujarat Vij Company Limited 162.45 - - 162.45 (199.96) - - (199.96) Madhya Gujarat Vij Company Limited 299.31 - - 299.31 (350.20) - - (350.20) Paschim Gujarat Vij Company Limited 1,280.76 - - 1,280.76 (4,590.57) - - (4,590.57) Uttar Gujarat Vij Company Limited 386.46 - - 386.46 (965.88) - - (965.88) Gujarat Energy Transmission Corporation 7,085.74 - - 7,085.74 Limited (425.32) - - (425.32) Gujarat State Electricity Corporation Limited ------Purchase of Excess Electricity 191.01 - - 191.01 (19,372.07) - - (19,372.07) Dakshin Gujarat Vij Company Limited - - - (371.61) - - (371.61) Madhya Gujarat Vij Company Limited - - - (879.16) - - (879.16) Paschim Gujarat Vij Company Limited 114.60 - - 114.60 (9,366.56) - - (9,366.56) Uttar Gujarat Vij Company Limited 76.40 - - 76.40 (8,754.75) - - (8,754.75) Transmission Charges 2,64,559.21 - - 2,64,559.21 (2,92,796.43) - - (2,92,796.43) Gujarat Energy Transmission Corporation 2,64,559.21 - - 2,64,559.21 Limited (2,92,796.43) - - (2,92,796.43) Purchase of Electricity 11,44,910.81 98,180.66 - 12,43,091.47 (9,91,860.92) (95,021.92) - (10,86,882.84) Gujarat State Electricity Corporation 11,44,910.81 - - 11,44,910.81 Limited (9,91,860.92) - - (9,91,860.92)
167 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Gujarat Industrial Power Company - 98,180.66 - 98,180.66 Limited - (95,021.92) - (95,021.92) Rebate (Cash Discount) on Prompt 7,479.42 - - 7,479.42 Payment of Transmission Charges (6,504.56) - - (6,504.56) Gujarat Energy Transmission Corporation 7,479.42 - - 7,479.42 Limited (6,504.56) - - (6,504.56) Rebate (Cash Discount) on Prompt 22,276.09 1,029.05 - 23,305.14 Payment of Power Purchase (20,802.21) (994.78) - (21,796.99) Gujarat Industrial Power Company Limited - 1,029.05 - 1,029.05 - (994.78) - (994.78) Gujarat State Electricity Corporation Limited 22,276.09 - - 22,276.09 (20,802.21) - - (20,802.21) Dividend Income - 1,036.38 - 1,036.38 - - - - Gujarat Industrial Power Company Limited - 1,036.38 - 1,036.38 - 1,036.38 - 1,036.38
Remuneration paid to KMP / Directors : - - 168.15 168.15 - - (136.17) (136.17) Shri Sujit Gulati, IAS ------Shri Pankaj Joshi, IAS - - 32.27 32.27 - - (27.31) (27.31) Shri S B Khyalia - - 37.65 37.65 - - (30.02) (30.02) Shri K M Bhuva - - 33.32 33.32 - - (25.67) (25.67) Shri M B Parikh - - 8.04 8.04 - - (30.90) (30.90) Shri Parthiv Bhatt - - 28.83 28.83 - - (22.27) (22.27) Shri Shubhadeep Sen - - 28.04 28.04 - - - 168 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Perquisites paid to KMP / Directors : - - 10.79 10.79 - - (7.52) (7.52) Shri Sujit Gulati, IAS ------Shri Raj Gopal, IAS ------Shri Pankaj Joshi, IAS - - 3.21 3.21 - - (2.26) (2.26) Shri S B Khyalia - - 3.74 3.74 - - (2.96) (2.96) Shri K M Bhuva - - 3.31 3.31 - - (2.30) (2.30) Shri M B Parikh ------Shri Parthiv Bhatt ------Shri Shubhadeep Sen - - 0.53 0.53 - - -
Incidental Charges paid to KMP / Directors: - - 1.28 1.28 - - (1.46) (1.46) Shri Sujit Gulati, IAS - - 0.02 0.02 - - (0.13) (0.13) Shri Raj Gopal, IAS - - 0.14 0.14 - - - - Shri Pankaj Joshi, IAS - - 0.28 0.28 - - (0.29) (0.29) Shri Sanjeev Kumar, IAS ------(0.01) (0.01) Shri Milind Torawane, IAS - - 0.14 0.14 - - (0.14) (0.14) Ms. Mona Khandhar, IAS - - 0.10 0.10 - - (0.05) (0.05) 169 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Shri R N Singh ------(0.27) (0.27) Shri Bimal N Patel ------(0.12) (0.12) Shri P J Mathew ------(0.03) (0.03) Shri N N Misra - - 0.08 0.08 - - - - Shri R C Dhup - - 0.04 0.04 - - - - Shri S B Khyalia - - 0.30 0.30 - - (0.29) (0.29) Shri K M Bhuva - - 0.18 0.18 - - (0.13) (0.13)
Sitting Fees paid to Independent Directors: - - 0.30 0.30 - - (0.75) (0.75) Shri R N Singh ------(0.35) (0.35) Shri Bimal N Patel ------(0.35) (0.35) Shri P J Mathew ------(0.05) (0.05) Shri N N Misra - - 0.20 0.20 - - - - Shri R C Dhup - - 0.10 0.10 - - - -
170 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
Balance as at: Subsidiary Associate Receivable / Payable KMP Total Company Company Receivables 5,21,430.47 - - 5,21,430.47 (2,82,942.81) - - (2,82,942.81) Gujarat State Electricity Corporation Limited 54,300.88 - - 54,300.88 - - - - Gujarat Energy Transmission Corporation 4,67,129.59 - - 4,67,129.59 Limited (2,71,911.54) - - (2,71,911.54) Paschim Gujarat Vij Company Limited - - - - (11,031.27) - - (11,031.27) Payables 2,75,037.17 15,406.48 - 2,90,443.66 (2,82,393.15) (17,726.02) - (3,00,119.17) Gujarat State Electricity Corporation Limited - - - - (93,248.99) - - (93,248.99) Dakshin Gujarat Vij Company Limited 71,866.27 - - 71,866.27 (52,632.12) - - (52,632.12) Uttar Gujarat Vij Company Limited 1,03,221.25 - - 1,03,221.25 (82,741.08) - - (82,741.08) Madhya Gujarat Vij Company Limited 67,948.40 - - 67,948.40 (53,770.96) - - (53,770.96) Paschim Gujarat Vij Company Limited 32,001.25 - - 32,001.25 - - - - Gujarat Industrial Power Company Limited - 15,406.48 - 15,406.48 - (17,726.02) - (17,726.02)
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 / Other Current Financial Liabilities. b. The Company has not paid any remuneration to Chairmen, Shri Sujit Gulati, IAS and Shri Raj Gopal, 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. 171 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
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. The Company had entered into a Power Purchase Agreement (PPA) with power supplier M/s. Adani Power (Mundra) Ltd. in the year 2007, wherein certain contractual issues had arisen between them and the Company. These issues were redressed in various forums in favour of the Company which finally was appealed by the supplier in the Hon'ble Supreme Court of India in 2011. The Hon'ble Supreme Court has passed judgment on 2 July 2019 in favour of the supplier whereby the supplier is entitled to approach CERC for determination of compensatory tariff and other charges to be payable by the Company. The management has reviewed the judgment and provisions made in past and based on it’s considered opinion has made a preliminary assessment and estimation of the potential tariff, if any payable. Based on the information as available currently and considering the relevant variable factors, the compensation is estimated @ 70 paise per unit of electricity supplied by the supplier in the earlier years and accordingly the provision is enhanced by ?38,558.09 Lakhs in the current year.
47. “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 a full recovery of this amount and hence has considered this amount to be good and recoverable.
48. 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) alongwith 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".
49. Previous year figures have been reclassified and regrouped wherever necessary to confirm to current year’s classification. 50. Approval of Financial Statements The Standalone Financial Statements were approved for issue by the Board of Directors on September 17, 2019. 172 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
51. 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 For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W
PANKAJ JOSHI, IAS SMT. SHAHMEENA HUSAIN, IAS CA. S.B. KHYALIA Chairman Managing Director Director (Finance) DIN:01532892 DIN:03584560 DIN:02470485
VINAY SEHGAL SHUBHADEEP SEN PARTHIV BHATT Partner General Manager (F&A) & CFO Company Secretary Membership No. 109802
Place : Gandhinagar Place : Gandhinagar Date : September 17, 2019 Date : September 17, 2019
173 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
174 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19
CONSOLIDATED FINANCIAL STATEMENTS F.Y. : 2018-19
175 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (6) (b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF GUJARAT URJA VIKAS NIGAM LIMITED FOR THE YEAR ENDED 31 MARCH 2019 The preparation of Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited for the year ended 31 March 2019 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 11 November 2019. 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 31 March 2019 under section 143(6) (a) read with Section 129(4) of the Act. We conducted a supplementary audit of the financial statements of (1) Gujarat state Electricity Corporation Limited, (2) Gujarat Energy Transmission Corporation Limited, (3) Uttar Gujarat Vij Company Limited, (4) Madhya Gujarat Vij Company Limited and (5) 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 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: COMMENTS ON FINANCIAL POSITION Consolidated Balance Sheet Deferred Government Grants, Subsidies and Consumer Contribution (Note 20) Consumer contribution towards Capital Assets ?3,06,7.58 crore 176 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 With effect from 01 April 2016, the Company has changed the method of computing the grants/consumer contribution 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 (AS) -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 assets. Indian Accounting Standards (Ind AS) - 20 also state that grants related to depreciable assets are usually recognized in profit or loss over the periods and in the proportions in which depreciation expenses on those assets is recognized. The above changed in method was made by the Company as there was a mismatch of the grants recognized in the Statement of Profit and Loss versus the related depreciation expenses. Thus, the Company has changed the method of recognized of deferred income in order to align the recognition of deferred income with the with the related depreciation expenses. As the provision for treatment of deferred income to be recognized in the profit and loss statement on a systematic and rational basis over the useful life of the assets are same in 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 be worked out retrospectively and accounted for in the opening balance of Deferred Government Grants, Subsidies and Consumer Contribution towards capital assets by ?1260.80 crore. B. Notes on Consolidated Financial Statements GUVNL through PF trust caters to the Provident Fund requirement of GUVNL and its subsidiary Companies. The trust is an exempted PF trust in accordance with the section 17 of the Employees Provident Fund Miscellaneous Provision Act, 1952 (i.e. Act). As per the Condition no 28 of Appendix-A of section 27 AA of the Act, '' in the event of any loss to the trust as a result of any fraud, defalcation, wrong investment decision etc. The employer shall be liable to make good the loss '' i.e. the employer shall be required make good any loss that may be caused to the Provident Fund due to theft, burglary, defalcation, misappropriation or any other reason. The trust held `165.10 crore in various instruments of IL& FS and its group companies as on 31 March 2019, out of which `130.10 crore were in unsecured instruments. 177 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 The IL&FS group started defaulting in interest payments which were due to on 30 September 2018 and onwards. IL&FS submitted (January 2019) resolution framework under Insolvency and Bankruptcy Code 2016 for realization and distribution of sale proceeds of its assets. The Company should have made the disclosure of the material facts in the Notes to financial statements that IL&FS group had started defaulting in interest payments which were due on 30 September 2018 and onwards and proceedings under Insolvency and Bankruptcy Code 2016 had been commenced. Therefore, in the event of default by the IL&FS in respect of interest and principal payments, the Company will be required to make good the loss. The notes to the financial statements of the Company are deficient to the above extent.
For and on behalf of the Comptroller and Auditor General of India sd/- H.K Dharamdarshi Principal Accountant General (E&RSA), Gujarat
Place: Ahmedabad Date: 17-12-2019
178 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Mukund & Rohit No. 8, 2nd Floor, Tower -E, Avishkar, Chartered Accountants Old Padra Road, Vadodara - 390 007, Gujarat - India. +91 265 2357845, 2310448, 2313515 email : [email protected]
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 (hereinafter referred as “the Holding Company”), its six subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associate and jointly controlled entities, which comprise the consolidated Balance Sheet as at 31st March, 2019, the consolidated Statement of Profit and Loss including the statement of Other Comprehensive Income, consolidated Statement of Changes in Equity, and consolidated Statement of Cash Flows for the year then ended, and consolidated 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, except for the effects of the matter described in the basis for Qualified Opinion 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, 2019, of consolidated profit including other comprehensive income, and 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 179 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 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 pre- defined 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 are not determinable.
2. In case of Uttar Gujarat Vij Company Limited (“the subsidiary company”)
We draw attention to note No.39 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.
180 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Non accounting of the above effect has resulted into understatement of balance of grants/ consumer contribution as on 31st March, 2019 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/ consumer contribution would have been ? 1,55,433.77 lakhs and balance of 'Retained Earnings' would have been ? 8,063.93 lakhs as on 31st March, 2019 as against the reported figures of ? 1,36,498.95 and ? 26,998.75 lakhs respectively.
Emphasis of Matter
We draw the attention to the following matters :
1. In case of Gujarat State Electricity Corporation Limited (“the subsidiary company”)
a. Note no. 2.2 in respect of no impairment is required to be recognized for Bhavnagar Lignite Thermal Power Station cash generating unit for the reason stated in the said note.
b. Note no. 24 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.
c. Note no. 47 in respect of accounting of merger of Bhavnagar Energy Company Limited with the Company as per – 103 “Business Combination” pending order of Ministry of Corporate Affairs for the reasons stated in the said note.
2. In case of Paschim Gujarat Vij Company Limited (“the subsidiary company”)
a. Security Deposit from LT Consumers at some division & Circles are subject to reconciliation with Subsidiary records. Our opinion is not qualified in respect of this matter.
3. In case of Dakshin Gujarat Vij Company Limited (“the subsidiary company”)
Refer note – 17.1 of financial statement, w.e.f. 01st April, 2015 the company has changed the method of computing Grants/ Consumer contributions 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 is also changed w.e.f. 01st April, 2015. The company has given effect of such changes w.e.f FY 2016-17 prospectively which was duly accepted by the Statutory Auditor.
During CAG audit of FY 2016-17 and FY 2017-18, CAG Auditor has raised a query and contended that the effect of the same is to be given retrospectively and objected the prospective effect given by the company.
181 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 The management is of the strong view that such change is considered as change in estimate only which is in line with provisions of previous GAAP and currently followed by the company and accordingly, the subject effect given by the company prospectively is correct.
If the effect of the same is worked out as per the objection raised by CAG auditors, the balance of retained earnings would have increased and balance of Deferred Govt Grants, Subsidies and consumer contribution towards capital assets would have decreased by ? 29344.70 lakhs as at 31st March 2019.
4. In case of Gujarat Energy Transmission Company Limited(“the subsidiary company”)
a. Attention is drawn to Note No. 61 in respect of the reconciliation between the individual capital assets created from the grant received from government and consumer contribution towards capital assets has not been done by the Company as on March 31, 2019. As the Company is not able to individually identify those assets created, the impact of systematic allocation of grants against the depreciation of such assets as required by Ind-AS 20- “Government Grants” cannot be ascertained as on March 31, 2019.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the financial year ended 31st March, 2019. 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 consolidation 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. 182 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Responsibilities of Management and Those Charged with Governance for 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 true and fair view of the consolidated financial position, consolidated financial performance including consolidated changes in equity, 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 () 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 consolidation financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the directors of the holding company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for assessing the ability of the Group and of its associates and jointly controlled entities 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 Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for overseeing the financial reporting process of the Group and of its associates and jointly controlled entities.
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 183 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 on the basis of these consolidated 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:
• 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 from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control.
• 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, 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.
• 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
184 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 business activities within the Group and its associates and jointly controlled entities to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
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 consolidated financial statements for the year ended 31st March, 2019 and are therefore the key audit matters. We describe these matters in our auditor's report unless law 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
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 2018-19 are complied & 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 of the Company for the year under review. 185 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 3. As required by Section 143 (3) of the Act, we report that:
a) We have sought and except for the matters described in the Basis of Qualified Opinion Paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b) In our opinion, except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
c) The requirement of dealing with the reports on the accounts of the branch offices of the Holding Company, its subsidiaries, its associate and jointly controlled entity does not arise as the group has no branches and hence this point is not applicable 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, except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, 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.
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 internal financial controls over financial reporting of the Group,
186 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 its associate and jointly controlled entity and the operating effectiveness of such controls, refer to our separate report in “Annexure A”;
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 Note 49 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.
4. 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 B'.
For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Place : Gandhinagar Partner Date : 11-11-2019 Membership No.109802 UDIN: 19109802AAAAQT1954
187 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 2019 in conjunction with our audit of the consolidated 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 188 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 consolidated 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 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 189 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Disclaimer of Opinion
In case of Gujarat State Electricity Corporation Limited (“the Subsidiary Company”), The documents related to system of internal financial controls over financial reporting of the Company is under preparation and hence same were not made available to us to enable us to determine if the Company has established adequate internal financial control over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2019.
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 2019, 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 strengthened. Further, we strongly 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. For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Place : Gandhinagar Partner Date : 11-11-2019 Membership No.109802 UDIN: 19109802AAAAQT1954
190 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 31, 2019:
Report on the Direction issued by the Comptroller & Auditor General of India under section 143(5) of Companies Act, 2013 for the F.Y 2018-19 Sr. Directions / Sub Directions Response / Remedial Measures no. 1. Whether the Company has system in In respect of Holding Company, Yes, the Company has a place to process all accounting well laid out advanced IT system in place to process all transactions through IT system? If yes, accounting transactions through the same. the implications of processing of In respect of subsidiary company Madhya Gujarat Vij accounting transactions outside the IT Company Limited, The company is having IT system in system on the integrity of the accounts place for processing all accounting transactions. Based on along with the financial implication, if our verification, no accounting transaction is being any, may be stated. recorded / processed other than through the IT system in place.
In respect of subsidiary company Dakshin Gujarat Vij Company Limited, 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.
IFAS (i-Financial Accounting System) web base operating system
IAS (Inventory Accounting System) in In-house developed
191 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 web application and MAGNUM Software
Customer Billing in the Utility Billing Application
Pay Rolls and Payment to Vendors in E-Urja Module
Fixed Asset register maintained manually in Microsoft Excel
In respect of subsidiary company Paschim Gujarat Vij Company Limited, the company processes all the accounting transactions through IT system.
In respect of subsidiary company Uttar Gujarat Vij Company Limited, the Company has in place ERP software package to process all accounting transactions.
In respect of subsidiary company Gujarat Energy Transmission Corporation 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 respect of subsidiary company Gujarat State Electricity Corporation Limited, All the accounting transactions are processed through IT system.
2. Whether there is any restructuring of In respect of Holding Company, No. an existing loans or cases of waiver / In respect of subsidiary company Madhya Gujarat Vij write off of debts / loans / interest etc. Company Limited, According to the information and made by a lender to the Company due explanations given to us, there is no restructuring of an to the Company's inability to repay the existing loan and there are no cases of waiver / write off of loan? If yes, the financial impact may debt / loan / interest made by a lender to the company due be stated to company's inability to repay the loan.
In respect of subsidiary company Dakshin Gujarat Vij Company Limited, No.
192 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
In Respect of Subsidiary Company Paschim Gujarat Vij Company Limited, The waiver / write off of debts / loans / interest are underneath:
During the course of settlement with Consumers in Lok- Adalat, Amnesty Scheme-2017 and also as per the judgment received from the Hon'ble Courts, the amount of Dues of ? 8315.72 Lakhs is waived / written off during the financial year 2018-19.
During the financial year 2018-19, ? 3.57 Lakhs waived against House Building Advance and interest thereon due to death of Employee as per policy laid down by GEB Circular No. Acctts/HBA/3275 Dated 28.03.1989.
In respect 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.
In respect of subsidiary company Gujarat Energy Transmission Corporation 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 respect of subsidiary company Gujarat State Electricity Corporation Limited, No.
3. Whether funds received / receivable In respect of Holding Company, Yes. for specific schemes from Central / In respect of subsidiary company Madhya Gujarat Vij State Agencies were properly Company Limited, To the best of our knowledge and accounted for / utilized as per its term according to the information and explanations given to us, and conditions? List the cases of Government of Gujarat (GoG) disburses Capital Grant and
193 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 deviation. 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 finalised. Accordingly, scheme wise Certificates for Grant Utilisation are prepared and submitted to the Holding Company GUVNL for necessary submission with GoG.
During the year company has properly accounted for and utilised 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.
In respect of subsidiary company Dakshin Gujarat Vij Company Limited, According to information and explanation given 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, in respect of SKY Project, the amount of ? 419.00 lakhs is pending to be utilised as on 31.03.2019 which is reflected under the head “Other Current Financial Liability” in the IND AS financial statement.
In respect of subsidiary company Paschim Gujarat Vij Company Limited, Yes, the funds received for specific schemes from central/state agencies have been utilized and accounted as per its terms and conditions.
In respect of subsidiary company Uttar Gujarat Vij
194 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Company Limited, the Company has properly accounted for and utilized funds received by it under various applicable schemes from Central/ State agencies.
In respect of subsidiary company Gujarat Energy Transmission Corporation Limited, According to information and explanation given to us, the company has received the funds from Central Govt. / State Govt.(through GUVNL) towards Capital Grant and Equity Contribution for development of transmission infrastructure in specified schemes and the same has been properly accounted for/ utilized as per terms & conditions of sanction and no deviation is found.
In case of subsidiary company Gujarat State Energy Corporation Limited, Yes.
4. Adequacy of steps to prevent Not Applicable 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 involved in Not Applicable 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 has an effective Yes system for recovery of revenue as per contractual terms and the revenue is properly accounted for in the books of 195 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 accounts in compliance with the applicable Accounting Standards.
7. How much cost has been incurred on Not Applicable abandoned projects and out of this how much cost has been written off?
B. Sector Specific Consideration
1. Has the company entered into In respect of subsidiary company Madhya Gujarat Vij agreements with franchise for Company Limited, The company has neither entered into distribution of electricity in selected any agreements with franchise for distribution of electricity areas and revenue sharing agreements nor for revenue sharing.
adequately protect financial interest of In respect of subsidiary company Dakshin Gujarat Vij the company? Company Limited, No, During the financial year 2018-19, company has not entered into any revenue sharing agreement with franchise for distribution of electricity.
In respect of subsidiary company Paschim Gujarat Vij Company Limited, In past, efforts were taken to engage franchisee for high loss areas by giving advertisement. However, no agency came forward and hence no such agreement has been made.
In respect of subsidiary company Uttar Gujarat Vij Company Limited, The Company has not entered into any agreement with franchisees for distribution of electricity.
2. Report on the efficacy of the system of In respect of subsidiary company Madhya Gujarat Vij billing and collection of revenue in the Company Limited, The Company comprises two categories company. 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
196 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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 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
197 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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.
In respect of subsidiary company DGVCL, During the course of Audit on sample basis, we have noticed that bills were issued to the consumers in time and collections have been generally received in timely manner.
In respect 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 respect 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
198 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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 any time payment (ATP) kiosks, net banking facility 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 meters have In respect of subsidiary company Madhya Gujarat Vij been installed for all consumers? If not Company Limited, Company has installed 28,27,095 then, examine how accuracy of billing is numbers of tamperproof static meters out of total ensured. 31,71,931 numbers of consumers as on 31-03- 2019(89.12%). The details of installations of tamperproof static meters for various categories of consumers is as below: Category of No. of No. of No. of % of consumer Consu- Electro Electronic Static mers -Mech- Meters Meters anical (Static) Install- ation Residential 26,30,978 2,87,559 23,43,419 89.07% GLP 24,554 - 24,554 100.00%
199 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 LT Industrial 3,17,951 31,262 2,86,689 90.16% and Commercial HT Industrial 2,222 - 2,222 100.00% Public Lighting 8,206 - 8,206 100.00% Agriculture 1,65,792 26,015 1,39,777 84.31% Public Water 22,228 - 22,228 100.00% Works Total 31,71,931 3,44,836 28,27,095 89.12%
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 case of Residential consumers, the process of replacing the existing electro mechanical meters with tamperproof meters is continued and 23,43,419 Nos. of tamperproof static meters have been installed out of total 26,30,978 Nos. of Residential consumers.
Further, in case of Agricultural consumers, 26,015 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
200 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 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 respect of subsidiary company Dakshin Gujarat Vij Company Limited, As per the information and explanation provided to us, company has installed temper proof energy meters for all the Consumers except for agriculture unmetered consumers.
The company has considered all installed meters as tamper proof energy meters since all meter-boxes are duly sealed.
In respect 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.
201 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 In respect of subsidiary company Uttar Gujarat Vij Company Limited, The Company is having total 35,66,659 nos. of Consumers as on 31-03-2019. Out of the same 34,14,260 nos. of Consumers are metered and 1,52,399 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 1,52,399 nos. of consumers tariff is charged on the basis of contract load which is approved by GERC.
4. Whether the Company recovers and In respect of subsidiary company Madhya Gujarat Vij accounts, the State Electricity Company Limited, Yes, based on approval of FPPCA Regulatory Commission (SERC) formula by GERC on quarterly basis, the additional FPPCA approved Fuel and Power Purchase charges are levied or rebate is given in subsequent billing Adjustment Cost (FPPCA)? cycles to all the consumers.
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 respect of subsidiary company Dakshin Gujarat Vij Company Limited, Yes.
In respect 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 2018-19.
In respect of subsidiary company Uttar Gujarat Vij Company limited, Based on approval for FPPAC by GERC on quarterly basis, the company recovers and accounts the
202 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 same in subsequent billing cycles to all consumers.
5. Whether the reconciliation of In respect of subsidiary company Madhya Gujarat Vij receivables and payables between the Company Limited, The receivables and payables between ge n e rat i o n , d i st r i b u t i o n a n d the generation, transmission and distribution companies transmission companies has been has been reconciled and confirmed by each of the associate completed. The reasons for difference companies.
may be examined. In respect of subsidiary company Dakshin Gujarat Vij Company Limited, Yes. The receivables and payable between DGVCL & fellow subsidiary companies and Holding company is reconciled and duly confirmed as on 31.03.2019.
In respect 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 31.03.2019.
In respect 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 supplying In respect of subsidiary company Madhya Gujarat Vij power to franchisees, if so, whether the Company Limited, The company has no franchisees for company is not supplying power to distribution of power franchisees at below its average cost of In respect of subsidiary company Dakshin Gujarat Vij purchase. Company Limited, Not Applicable
In respect of subsidiary company Paschim Gujarat Vij Company Limited, Not Applicable.
In respect of subsidiary company Uttar Gujarat Vij
203 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Company Limited, The Company has no franchisees for distribution of power.
7. How much tariff roll back subsidies In respect of subsidiary company Madhya Gujarat Vij have been allowed and booked in the Company Limited, During the year, the following tariff accounts during the year? Whether the subsidies have been recognized in the books of accounts as same is being reimbursed regularly by per budgetary allocation made by GoG as per details as the State Government shortfall if any under: may be commented? (? in Lakhs) Sr.No Particulars Amount 1 GERC Tariff compensation 10,278.67 2 FPPPA Subsidy 21,464.49 3 Water Works Subsidy 8,145.47 4 H.P. Based Subsidy 7,387.46 5 Relief to Primary Schools 700.92 Total 47977.01
The GUVNL, on behalf of MGVCL deals with the GoG in respect of subsidy claims (except primary schools). The claim of subject subsidies (except Primary Schools) is 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 respect of subsidiary company Dakshin 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:
1. AG-Tariff compensation ? 6517.57 lakhs
2. AG- Subsidy of FPPPA- ?14943.29 Lakhs
3. Water Works Subsidy- ?7636.75 Lakhs
The claim of the subsidy has been made by GUVNL, Holding
204 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 respect of subsidiary company Paschim Gujarat Vij Company Limited, There is no tariff roll back subsidies allowed during the year. However, various other subsidies as mentioned underneath are received during the year from holding company (GUVNL) are duly accounted. Sr. Subsidy Received Amount No ? in Lakhs 1 Agriculture (HP based) 43428.19 2 Tariff Compensation 91502.67 3 FPPPA Subsidy 125878.17 4 Energy Conservation 69.64 5 Water Works 22339.75 6 Research & Development 4.22 In respect 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 Particulars Amount (? in Lakhs) Agriculture - Tariff Compensation 93747.56 Agriculture subsidy for FPPPA 157739.83 HP based Subsidy 54068.35 Waterworks (Gram Panchayats) 24184.68 Total 329740.42
GUVNL: The claim of the subsidy has been made by the GUVNL, Holding Company on behalf of all the distribution
205 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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 evacuation of power In respect of subsidiary company Gujarat Energy commensurate with power available Transmission Corporation Limited, transmission network for transmission with the generating is available for evacuation of power from each generating company? If not, loss, if any, claimed by stations under normal operating conditions. In peculiar the generating company may be grid operating conditions like high renewable energy commented. injection during off peak load conditions, few wind farms have been asked to back down their generation in few rare cases. Such back down instruction are being given by SLDC looking in to real time loading of associated network 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 loss in excess In respect of subsidiary company Gujarat Energy of prescribed norms has been incurred Transmission Corporation Limited, The Company has during the year and whether the same submitted to GERC the transmission loss of 3.80 % for the been properly accounted for in the financial year 2018-2019 in the tariff petition. During the books of accounts? year 2018-19, transmission loss was 3.92 %, which is slightly on a higher side than the target submitted to GERC. As per information and explanation given to us, such transmission losses are already considered / accounted while finalizing the revenue from transmission charges for financial year 2018-2019.
10. Whether the assets constructed and In respect of subsidiary company Gujarat Energy completed on behalf of other agencies Transmission Corporation Limited, Proper accounting is and handed over to them has been done in the cases where the assets constructed and properly accounted for in the financial completed don behalf of other agencies and handed over statements? to them.
206 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 11. In cases of Thermal Power Projects, In respect of subsidiary company Gujarat State Electricity compliance of the various Pollution Corporation Limited, The company has generally complied Control Acts and the impact thereof with the various Pollution Control Acts and there is no including utilization and disposal of ash financial impact thereof during the year.
and the policy of the company in this As per the information and explanation given to us, during regard, may be checked and the year 100% fly ash utilization is achieved in all thermal commented upon. power stations (TPS) except in Wanakbori, Ukai and Bhavnagar Lignite TPS. As per the MoEF notification, the company has transferred ? 2,983.05 lakhs related to fly ash sale income of Wanakbori, Ukai and Bhavnagar Lignite TPS to Fly Ash Utilization Reserve Fund.
12. Has the company entered into revenue In respect of subsidiary company Gujarat State Electricity sharing agreements with private Corporation Limited, No. parties for extraction of coal at pitheads and it adequately protects the financial interest of the company?
13. Does the company have a proper In respect of subsidiary company Gujarat State Electricity system of reconciliation of quantity / Corporation Limited, Yes. 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 power was due In respect of subsidiary company Gujarat State Electricity to the State Government and whether Corporation Limited, During the year under audit, no share the same was calculated as per the of free power was due to the State Government. agreed terms and depicted in the accounts as per accepted accounting norms?
207 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
15. In the case of Hydroelectric Projects, In respect of subsidiary company Gujarat State Electricity the water discharge is as per policy / Corporation Limited, As per information and explanation guidelines issued by the State given to us, there is no discharge of water by the company Government to maintain biodiversity. in case of Hydroelectric Projects For not maintaining it penalty paid / payable may be reported.
For Mukund & Rohit Chartered Accountants Registration No. 113375W
Vinay Sehgal Place : Gandhinagar Partner Date : 11-11-2019 Membership No.109802 UDIN: 19109802AAAAQT1954
208 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 1stApril 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 Amount in which Land & Land (?In Lakhs) Remark Rights Reflected 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
209 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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.
210 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Annexure – II
List of title deeds not held in the name of PGVCL
Sr. Circle Name of Survey No. Lease Hold Gross Block No. Premises OR Amount Free Hold (?in Lakhs)
1. S'nagar Div Store 3347/1 Free Hold 160.68 2. Rajkot City Mahila Collage 1263 Free Hold 59.03 Sub Division 3 Botad Circle Office 861 Free Hold 152.88 Total 372.58
211 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Sub Annexure – II to Annexure “C” to Auditor's Report
Sr. No Name of offices Details of land of which the account balances have been transferred as per GOG notification no. GHU- 2006-91-GUV-1106-590-K dated 03-10-2006 to Company 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 HIMATNAGAR 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 DIVISON 0.39
17 PALANPUR-II DIVISION 0.84
212 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2019 ( ? in Lakhs ) Note As at As at Particulars st st No. 31 March, 2019 31 March, 2018 ASSETS (1) Non-Current Assets (a) Property, Plant and Equipment 2 56,44,230.66 52,03,973.55 (b) Intangible Assets 2 1,441.03 2,110.25 (c) Capital Work-In-Progress 3 9,45,601.36 9,28,748.09 (d) Intangible Assets Under Development 4 75.28 75.28 (e) Financial Assets (i) Investments 5 1,22,584.50 1,14,776.41 (ii) Loans 6 12,838.28 14,691.24 (iii) Other Financial Assets 7 23,228.51 23,249.87 (f) Other non-current assets 8 15,603.34 15,030.88 Total Non-Current Assets 67,65,602.96 63,02,655.58 (2) Current Assets (a) Inventories 9 3,86,284.24 2,80,377.06 (b) Financial Assets (i) Trade Receivables 10 3,34,507.44 3,20,838.50 (ii) Cash and cash equivalents 11 35,903.27 1,75,504.12 (iii) Other Bank Balances 12 4,210.17 14,949.06 (iv) Loans 13 4,007.48 4,096.84 (v) Other Financial Assets 14 4,36,887.06 4,46,670.92 (c)Current Tax Assets (net) 15 46,796.26 26,888.65 (d) Other Current Assets 16 75,434.46 74,475.71 (e) Assets classified as held for sale 17 6,398.12 11,313.39 Total Current Assets 13,30,428.50 13,55,114.25 Total 80,96,031.46 76,57,769.83 EQUITY AND LIABILITIES Equity (a) Equity Share Capital 18 19,77,222.21 16,22,754.99 (b) Other Equity 19 6,75,566.53 6,65,717.26 Non-controlling Interests 10,376.20 9,708.83 Total Equity 26,63,164.94 22,98,181.08 Deferred Government grants, subsidies & consumer contributions 20 8,53,064.03 7,65,869.83
213 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Liabilities (1) Non-Current Liabilities (a)Financial Liabilities (i) Borrowings 21 14,08,647.34 15,69,957.84 (ii) Trade Payables 22 (A) Dues to Micro and Small Enterprises - - (B) Dues to other than Micro and Small Enterprises 85.29 85.29 (iii) Other Financial Liabilities 23 6,23,768.48 5,41,659.58 (b) Provisions 24 1,42,989.49 1,31,463.78 (c) Deferred Tax Liabilities (Net) 25 1,70,680.98 1,93,061.63 (d) Other Non Current Liabilities 26 21,660.55 17,517.45 Total Non-Current Liabilities 23,67,832.13 24,53,745.58 (2) Current Liabilities (a) Financial Liabilities (i) Borrowings 27 35,563.42 16,852.95 (ii) Trade payables 28 (A) Dues to Micro and Small Enterprises 577.06 180.73 (B) Dues to other than Micro and Small Enterprises 7,03,246.65 6,38,286.90 (iii) Other Financial liabilities 29 12,58,070.66 12,79,910.25 (b) Other current liabilities 30 1,87,197.64 1,83,038.21 (c) Provisions 31 27,314.81 21,704.19 (d) Current Tax Liabilities (net) 32 0.12 0.12 Total Current Liabilities 22,11,970.36 21,39,973.35 Total 80,96,031.46 76,57,769.83 Significant Accounting Policies and Notes to Financial Statements 1- 75
As per our Report of even date attached For and on behalf of Board For Mukund & Rohit Chartered Accountants (PANKAJ JOSHI, IAS) (SHAHMEENA HUSAIN, IAS) Firm Registration No. 113375W Chairman Managing Director DIN : 01532892 DIN:03584560 (VINAY SEHGAL) Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 11, 2019 Date : November 11, 2019
214 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Consolidated Statement of Profit and Loss for the year ended 31st March, 2019 ( ? in Lakhs ) Note For the year ended For the year ended Particulars st st No. 31 March, 2019 31 March, 2018 I Revenue from operations 33 49,71,935.08 42,87,686.66 II Other Income 34 1,30,404.54 1,00,647.72 III Total Income (I+II) 51,02,339.62 43,88,334.39 IV EXPENSES Cost of Fuel consumed 35 8,92,736.67 7,24,449.90 Purchase of Power 36 30,78,749.64 24,45,237.53 Employee Benefits Expense 37 3,38,372.30 3,42,136.77 Finance Costs 38 1,66,015.35 1,87,352.05 Depreciation, Amortization and impairment Expense 2 3,65,183.95 3,29,511.33 Other Expenses 39 1,75,644.56 1,97,810.85 Total Expenses (IV) 50,16,702.46 42,26,498.42 V Profit Before Exceptional items and Tax (III-IV) 85,637.16 1,61,835.96 VI Exceptional Items 40 (4,364.89) 32,802.56 VII Profit before share of net profits of associate and joint venture accounted for using equity method and tax (V-VI) 90,002.05 1,29,033.40 VIII Share of Profit of Joint Venture - - IX Share of Profit of Associate 6,836.11 4,456.11 X Profit before tax (VII+VIII+IX) 96,838.16 1,33,489.52 XI Tax Expense: 41 (a) Current Tax 13,196.97 32,714.04 (b) Deferred Tax (16,005.43) 43,460.98 XII Profit for the Year (X-XI) 99,646.62 57,314.49 XIII Other Comprehensive Income (OCI) (a) Items that will not be reclassified to Profit and Loss (i) Re-measurement of the Defined Benefit Plans (25,198.40) (48,765.49) (ii) Equity Instruments through OCI 2,672.36 5,520.33 Less: - tax impact 6,387.34 14,372.07
215 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 (iv) Share of other comprehensive income of associates accounted for using the equity method (421.08) 749.05 (b) Items that will be reclassified to profit or loss (i) Financial assets measured through OCI 35.83 (325.82) - tax impact (12.52) 113.85 Total of Other Comprehensive Income (OCI) (XIII) -16,536.47 -28,336.00 XIV Total Comprehensive Income for the Year (XII+XIII) 83,110.15 28,978.49 Profit for the Year attributable to: - Owners of Equity 99,034.02 56,632.87 - Non Controlling Interests 612.60 681.62 99,646.62 57,314.49 Other Comprehensive Income attributable to: - Owners of Equity (16,466.22) (28,193.87) - Non Controlling Interests (70.25) (142.14) -16,536.47 -28,336.00 Total Comprehensive Income for the Year attributable to: - Owners of Equity 1,66,220.30 28,439.01 - Non Controlling Interests (83,110.15) 539.48 83,110.15 28,978.49 XV Earnings Per Equity Share : 42 Basic (in ?) 0.56 0.37 Diluted (in ?) 0.56 0.37 See accompanying Notes to the Financial Statements 1- 75 As per our Report of even date attached For and on behalf of Board For Mukund & Rohit Chartered Accountants (PANKAJ JOSHI, IAS) (SHAHMEENA HUSAIN, IAS) Firm Registration No. 113375W Chairman Managing Director DIN : 01532892 DIN:03584560 (VINAY SEHGAL) Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 11, 2019 Date : November 11, 2019 216 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Consolidated Cash Flow Statement for the year ended 31st March, 2019 ( ? in Lakhs ) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 [A] CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax 96,838.16 1,33,489.52 Adjustments to reconcile profit before tax to net cash flows: Non-Cash Items 3,65,368.91 3,66,211.66 Non Operating Items 84,245.97 1,53,984.84 Operating Profit/(Loss) before changes in Working Capital Working capital adjustments: (Increase)/ Decrease in Non Current / Current Assets: Inventories (1,05,907.18) 25,525.48 Trade receivables (19,717.42) (71,359.09) Other financials assets 13,113.94 1,14,756.39 Other non financial assets (3,035.53) (48,815.45) Increase / (Decrease) in Non Current / Current Liabilities: Trade Payables 65,356.09 70,251.64 Other Financial Liabilities 1,28,056.97 2,17,759.43 Other Non Financial Liabilities & Provisions 240.46 (50,111.99) 6,24,560.37 9,11,692.43 Cash Flow from operations after changes in Working Capital Income tax (paid)/ Refund (33,104.88) (55,957.69) Net cash flows from operating activities (A) 5,91,455.48 8,55,734.74 [B] CASH FLOW FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (including CWIP) (8,41,236.33) (7,73,800.96) Sale/Adj. of fixed assets 1,329.82 26,242.16 Redemption / Sale / (Purchase) Of Investment 0.01 6.37 Dividend from Associate 1,095.94 1,095.94 Dividend Income 297.01 254.42 Interest received (finance income) 5,139.43 2,419.75 Asset not in use 9,280.15 (1,472.18) Bank Balances not considered as Cash and Cash Equivalents 10,423.10 (11,066.04) Net cash flows used in investing activities (B) (8,13,670.86) (7,56,320.54)
217 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
[C] CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Shares/Share Application Money 2,76,709.20 2,86,849.46 Changes on account of Business combination (refer note 65) 2,400.00 18,400.00 Deferred Govt. Grants, Subsidy & Contributions 1,65,816.27 1,43,940.13 Proceeds / (Repayment) from borrowing (net) (1,89,874.33) (2,21,554.96) Interest & financial charges (1,72,436.62) (2,13,595.04) Net cash flows from/(used in) financing activities (C ) 82,614.52 14,039.59 Net increase/ (decrease) in cash and cash equivalents (A+B+C) (1,39,600.86) 1,13,453.79 Cash and cash equivalents at the beginning of the year 1,75,504.12 62,050.33 Cash and cash equivalents at year end 35,903.27 1,75,504.12 Notes: 1 Cash & Bank Balances consists of the following: Cash & Cash Equivalents a. Balances with Banks 22,725.63 75,184.81 b. Cash on hand 13.73 636.21 c. Cheques on hand 6,948.99 6,604.35 d. Remittance in Transit 4,652.97 2,271.57 e. Deposits with banks 1,561.95 90,807.18 Closing Cash & Cash Equivalents 35,903.27 1,75,504.12 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 Mukund & Rohit Chartered Accountants Firm Registration No. 113375W (PANKAJ JOSHI, IAS) (SHAHMEENA HUSAIN, IAS) Chairman Managing Director DIN : 01532892 DIN : 03584560 (VINAY SEHGAL) Partner (SHUBHADEEP SEN) (PARTHIV BHATT) Membership No. 109802 General Manager (F&A) & CFO Company Secretary
Place : Gandhinagar Place : Gandhinagar Date : November 11, 2019 Date : November 11, 2019 218 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Consolidated Statement of Changes in Equity (SOCIE) for the year ended on 31st March, 2019 Equity Share Capital ( ? in Lakhs )
Particulars Total Non Equity Controlling attributable Interests to Owners
Balance as on 1st April, 2017 10,75,470.65 1,250.00 10,74,220.65 Changes during the year 2,95,989.95 - 2,95,989.95
Balance as on 31st March, 2018 13,71,460.60 1,250.00 13,70,210.60 Changes during the year 3,54,467.22 - 3,54,467.22
Balance as on 31st March, 2019 17,25,927.82 1,250.00 17,24,677.82
219 Other Equity ( ? in Lakhs ) Reserves and Surplus Item of Other Share Comprehensive Income Total equity Application Fly ash Capital Reserve Equity Instru-Financial assetShare of OCI Non Contingency ments throughmeasured atof associate attributable Particulars Money fair value Total Controlling utilisation Capital on account ofSecurities Retained Other Compre- accounted Reserve through other for using to owners pending Business Earnings hensive Incomecomprehensive Interests Fund reserve Reserve Premium equity method of the parent allotment fund Combination Income Balance as at 31st March, 2017 81,963.92 12,048.23 1,577.81 2,378.30 - 3,750.00 4,10,737.60 23,146.51 499.28 922.69 5,37,024.33 7,719.85 5,29,304.48 Changes in Opening balance on - - - - 84,600.39 - (32,218.09) - - - 52,382.30 - 52,382.30 account of merger of BECL C ONSOLID
(refer note 63) Gujar Restated Balance as at 81,963.92 12,048.23 1,577.81 2,378.30 84,600.39 3,750.00 3,78,519.52 23,146.51 499.28 922.69 5,89,406.64 7,719.85 5,81,686.79 1st April, 2017 Addition during the year - - 2,065.10 ------2,065.10 199.49 1,865.60 Profit for the Year ------57,314.50 - - - 57,314.50 681.62 56,632.88 15 Share of CDT on dividend received ------(223.11) - - - (223.11) - (223.11) A a
Share in other reserve of associate ------(6.10) - - - (6.10) - (6.10) TED FINANCIALS th t UrjaVik
Other Comprehensive Income for ------(37,540.34) 8,667.25 (211.97) 749.05 (28,336.01) (142.14) (28,193.87) AnnualR the Year (net of Tax) Transfer from Contingency Reserve ------Add: Changes on account of Business - - - - 18,400.00 - - - - - 18,400.00 - 18,400.00 combination (refer note 63) Total Comprehensive Income - - 2,065.10 - 18,400.00 - 19,544.95 8,667.25 (211.97) 749.05 49,214.39 738.98 48,475.41 for the year Add: Share application money 1,17,518.99 ------1,17,518.99 - 1,17,518.99 220 pending allotment eport 2018-19 Less: Shares Issues 81,963.92 ------81,963.92 - 81,963.92 as Nig
Less: Reduction During the Year ------T
Balance as at 31st March, 2018 1,17,518.99 12,048.23 3,642.91 2,378.30 1,03,000.39 3,750.00 3,98,064.46 31,813.77 287.31 1,671.74 6,74,176.09 8,458.83 6,13,334.96 A Addition during the year - - 2,983.05 ------2,983.05 125.01 2,858.05 TEMENT 2018-19 Profit for the Year ------99,646.82 - - - 99,646.82 612.60 99,034.22 Share of CDT on dividend received ------(225.27) - - - (225.27) - (225.27) Share in other reserve of associate ------6.10 - - - 6.10 - 6.10 Other Comprehensive Income for ------(18,538.86) 2,400.59 23.31 (421.08) (16,536.05) (70.25) (16,465.80) am Limit the Year (net of Tax) Transfer from Contingency Reserve ------Add: Changes on account of Business - - - - 2,400.00 - - - - - 2,400.00 - 2,400.00 combination (refer note 63) Total Comprehensive Income - - 2,983.05 - 2,400.00 - 80,888.78 2,400.59 23.31 (421.08) 88,274.65 667.36 87,607.29 for the Year Add: Share Application Money 39,760.97 ------39,760.97 - 39,760.97 pending allotment Less: Shares Issues 1,17,518.99 ------1,17,518.99 - 1,17,518.99 Less: Reduction During the Year ------ed Balance as at 31st March, 2019 39,760.97 12,048.23 6,625.96 2,378.30 1,05,400.39 3,750.00 4,78,953.25 34,214.35 310.62 1,250.66 6,84,692.72 9,126.19 6,23,184.23 As per our Report of even date attached For and on behalf of the Board For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W (PANKAJ JOSHI, IAS) (SHAHMEENA HUSAIN, IAS) (SHUBHADEEP SEN) (PARTHIV BHATT) Chairman Managing Director General Manager (F&A) & CFO Company Secretary DIN: 02252358 DIN : 03584560 (VINAY SEHGAL) Partner Place : Gandhinagar Place : Gandhinagar Membership No. 109802 Date : November 11, 2019 Date : November 11, 2019 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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: 1. Gujarat State Electricity Corporation Limited engaged in generation of power; 2. Gujarat Energy Transmission Corporation Limited engaged in transmission of power; 3. Uttar Gujarat Vij Company Limited engaged in distribution of power; 4. Dakshin Gujarat Vij Company Limited engaged in distribution of power; 5. Paschim Gujarat Vij Company Limited engaged in distribution of power; and 6. Madhya Gujarat Vij Company Limited engaged in distribution of power. The Consolidated Financial Statements also include the Company's Associate viz. Gujarat Industries Power Company Limited and Joint Venture (JV) viz. Mahaguj Collieries Limited (JV of GSECL). Government of Gujarat restructured Gujarat Electricity Board (“GEB”) effective 1st April 2005, as per various administrative and statutory actions to implement the Financial Restructuring Plan of GEB and split the business and activity thereof of Generation, Transmission and Distribution of electricity by demerger of the respective units and vested the same alongwith all its assets and liabilities (relating to the respective units) in various Companies, viz. the Holding Company and subsidiaries on functional basis and the balance (residual) assets were allocated to the Company. B Application of new Indian Accounting Standard The Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, 2019 has notified the new Ind AS and certain amendments to existing Ind ASs. They shall come into force on April 1, 2019 and therefore, the company shall apply the same with effect from that date.
221 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Recent Accounting Pronouncements : a) Ind AS-116 – Leases : The Standard replaces the existing Ind AS 17 “Leases”. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognise assets and Ind AS 116 will replace the existing leases standard, Ind AS 17 “Leases” w.e.f. April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It introduces a single, on balance sheet lessee accounting model for lessees. A lessee recognises right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements as prescribed in Ind AS 17. The effect on the Financial statements on adoption of Ind AS 116 is being evaluated by the Group. b) Other Amendments : Several other Indian Accounting Standards have been amended on various issues with effect from April 1, 2019. The following amendments are relevant to the company (i) Ind AS 12 “Income Taxes”- Income tax consequences of dividend and uncertainty over income tax treatments; (ii) Ind AS 19 “Employee Benefits”- Accounting for plan amendment, curtailment or settlement; (iii) Ind AS 23 “Borrowing Costs”- Accounting treatment for specific borrowings post capitalization of corresponding qualifying asset; (v) Ind AS 28 “Investments in Associates and Joint Ventures”- Application of Ind AS 109 “Financial Instruments” to long-term interests in associates and joint ventures to which the equity method is not applied but that in substance form part of the net investment in the associate or joint venture. (v) Ind AS 103 “Business Combination” - Re-measurement of previously held interests when an entity obtains control of a business that is a joint operation; (vi) Ind AS 109 “Financial Instruments”- Measurement of prepayment features with negative compensation in case of debt instruments; (vii) Ind AS 111 “Joint Arrangements”- Non-remeasurement of previously held interests when an entity obtains joint control of a business that is a joint operation;
222 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. 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 and all values are rounded off to the nearest two decimal lacs except otherwise stated. 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
223 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 - 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 ventures and associates which are accounted using equity method in these consolidated financial statements. Refer Note No.4 for the accounting policy of investment in joint ventures and associate in the consolidated financial statements. Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control and continue to be consolidated until the date that such control ceases. The consolidated financial statements are prepared using uniform accounting policies consistently for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company's Standalone Financial Statements except otherwise stated. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the Parent company, i.e., year ended on 31st March, 2019. The Consolidated Financial Statements have been prepared by combining the financial
224 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company. When the Group loses control of a subsidiary, a gain or loss is recognised in the consolidated statement of profit and loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to the consolidated statement of profit and loss or transferred to another category of equity as specified/permitted by applicable Ind AS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under Ind AS 109, or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture. 4.2. Non Controlling interests Non-controlling interests represent the proportion of income, other comprehensive income and net assets in subsidiaries that is not attributable to the Company's shareholders. Non-controlling interests are initially measured at the non-controlling interests' proportionate
225 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 share of the recognised amounts of the acquiree's identifiable net assets. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of the interest at initial recognition plus the non-controlling interests' share of subsequent changes in equity Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, consolidated statement of changes in equity and balance sheet respectievly. 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. 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
226 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. 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
2272 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 and Capital Work- in- Progress. PPE are stated at cost after reducing accumulated depreciation. The cost of PPE comprises of its purchase price or its construction cost or any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management and decommissioning costs. Directly attributable costs are capitalized until the asset is ready for use and includes borrowing cost capitalised upto the commissioning of the asset. 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 1 April 2015, measured as per the previous GAAP, and use the "carrying value" as the deemed cost of such property, plant and equipment. 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. In case of PPE for new projects, extension or renovation and modernization, the related expenses and interest cost upto Commercial Operation Date (COD) as per Power Purchase Agreement, attributable to such projects or expansions or renovation and modernization are capitalized. Expenses incurred during project implementation and on trial run are treated as incidental expenditure during construction and are accordingly capitalized. 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 228 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. 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. 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 value as prescribed in GERC (MYT) Regulations or the Central Electricity Regulatory Commission (CERC), 2016.
229 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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% 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 depreciation methods, residual values, etc. are reviewed on annual basis and if necessary, changes in estimates are accounted for prospectively.
Leasehold land is amortised over the period of lease. 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
230 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 charges depreciation on Computer Software 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 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 includes 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. 231 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 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 for expenses incurred are recognized over the period in which the related costs are incurred and shown separately.
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
232 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 and Transmission is recognized on accrual basis of energy supplied in accordance with the tariff orders awarded by the Gujarat Electricity Regulatory Commission (GERC) as applicable to the consumers.
Surplus power, if any is sold through bilateral transactions or by putting bids in Power Exchanges on day to day basis and the same is accounted on acceptance of bids. Revenue recognised in excess of billing has been reflected under "other financial assets" as unbilled revenue.
Other Revenue from Power related 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.
Meter charges, recoveries from theft of power/malpractices, 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, wheeling charges recoveries are recognized on accrual basis. Miscellaneous charges from consumers are recognized on cash basis except when ultimate realization of such income is certain.
Dividend Income
Dividend Income is accounted in the year in which the right to receive the dividend is established.
233 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 scrap, sale of fly ash, interest income, income on O & M contract, Carbon Emission Reduction (CERs) and other incomes are recognized on accrual basis except when ultimate realization of such income is uncertain
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 considered as a financing transaction and hence the same is recognised as other income.
Other Incomes are recognized on accrual basis except when ultimate realization of such income is uncertain.
5.8. Inventories
Inventories are valued at cost or net realizable value whichever is lower. The basis of
234 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 determining the value of each class of inventory is as follows :
The inventories of the Group have been valued on following basis :
(a) Consumables, Stores and Spares - At cost (Weighted Average Method)
(b)Scrap - At cost or Net Realizable Value determined on the basis of realization made in the past period whichever is lower.
(c) Coal and Oil - Lower of grade based purchase cost plus freight and other fuel related cost on monthly weighted average basis or Net Realisable Value (NRV).
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
235 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 reserve and presented separately from other capital reserves with disclosure of its nature and purpose in the notes.
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.
Exchange differences arising on monetary items that, in substance, form part of the Group net investment in a foreign operation (having a functional currency other than Indian Rupees) are accumulated in Foreign Currency Translation Reserve.
5.11. 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 the services rendered by the employees are recognized as an expense during the period employee renders services. These benefits include remuneration, bonus, incentives, etc.
Long Term Employee Benefits
Defined Contribution 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.
236 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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.
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 bene?ts of a plan are changed or when a plan is curtailed, the resulting change in bene?t that relates to past service ('past service cost' or 'past service gain') or the gain or loss on curtailment is recognised immediately in pro?t or loss. The Group recognises gains and losses on the settlement of a defined bene?t plan when the settlement occurs.
Re-measurements of the net de?ned bene?t liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any. excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the de?ned benefit obligation at the beginning of the annual period to the then-net defined bene?t 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 pro?t 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 Company's defined benefit plans. Any surplus resulting from this calculation is
237 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 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. Leases
Leases (including lease arrangements for land) are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets.
Operating Lease (The Company as Lessee): Lease payments under an operating lease are recognized as expense in the statement of profit and loss, on a straight-line or other systematic basis over the lease term.
5.13. 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 Group's current tax is calculated using tax rates that have been enacted or substantively enacted at the Balance Sheet date.
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
238 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Company will pay normal income tax during the specified period.
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.
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
239 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
Contingent Liabilities are disclosed in the financial statements by way of Notes to Accounts, unless possibility of an outflow of resources embodying economic benefit is remote. 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 can not be estimated reliably the obligations are disclosed as a contingent liabilities, 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 recognized but disclosed in the financial statements when an inflow of economic benefits is probable.
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:
240 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 After tax effect of interest and other financing costs associated with dilutive potential equity shares.
The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares into equity shares.
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 the 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 reports of the Board of Directors.
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.
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 241 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Loss.
Financial Assets
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.
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 model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets at fair value through Other Comprehensive Income (FVTOCI)
Financial Assets (including investments) are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group has made an irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value of equity investments not held for trading.
Financial Assets at fair value through Profit or 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.
242 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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 Company 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
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.
Financial Liabilities and Equity Instruments
Classification as Debt or 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.
Financial Liabilities at amortized cost
Financial Liabilities are subsequently measured at amortized cost using the effective interest method (EIR), except when the effect of applying it is immaterial. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
243 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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.
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.
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. The Group accounts such claims in the year of receipt as per prevailing practice followed.
244 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 5.23. 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 are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future periods.
Critical Judgments in applying Accounting Policies
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 245 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Equipment into the location and condition necessary for it to be capable of operating in the manner intended by the management. In assessing the directly attributable costs other than borrowing costs, the management has exercised judgement to evaluate a number of factors including the resources applied for direct construction related activity, enabling activities, ordinary operations of the 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 deposits 2
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.
246 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 (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.
(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 & Consumer Contributions 1 2
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
247 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 significantly impact the Defined Benefit Obligation amount and the annual defined benefit expenses.
(k) 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 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.
1 Critical Accounting Judgments
2 Key Sources of Estimation uncertainty
248 NOTE NO. 2 PROPERTY, PLANT AND EQUIPMENT (? in Lakhs)
TANGIBLE ASSETS INTANGIBLE ASSETS
Cap. Exp. Particulars /Assets Resulting in Grand Total Plant & Lines & Cable Furniture & Office Free Hold Lease Hold Hydraulic Other Civil Land & Land Buildings Computers Vehicles assets not Total Softwares Total Machinery Net Works Fixtures Equipments Land Land Work Work Rights belonging to the Company GROSS BLOCK C At 1st April 2017(Deemed Cost) 1,70,959.7928,86,386.84 21,15,005.82 16,994.13 15,463.09 10,908.23 2,127.68 12,144.86 5,640.17 78,685.08 1,77,031.91 71,081.42 233.99 55,62,663.01 4,847.73 4,847.73 55,67,510.74 ONSOLID
Additions 11,075.06 2,77,608.14 3,30,238.00 821.08 2,897.23 2,624.81 344.57 358.16 45.11 519.78 17,295.28 10,899.12 - 6,54,726.35 283.99 283.99 6,55,010.34 Gujar Deduction/Adjustments 717. 3 2 62,926.92 11,950.71 2 5.40 5 2. 3 5 249.60 67.77 - - 966.31 1 07. 71 - - 77,064.09 - - 7 7,064.09 At 31st March 2018 1,81,317.54 3 1,01,068.06 2 4,33,293.11 1 7,789.82 18,307.97 1 3,283.44 2 ,404.47 1 2,503.02 5,685.28 7 8,238.56 1 ,94,219.49 81,980.53 233.99 61,40,325.27 5,131.72 5 ,131.72 61,45,456.99
Additions 14,608.58 3,24,862.67 4,05,781.92 1,276.73 1,383.23 2,238.36 489.10 394.06 5,825.53 13,715.81 23,754.70 12,060.58 - 8,06,391.26 440.36 440.36 8,06,831.62
Deduction/Adjustments 226. 2 9 15,956.76 3,305.14 3 5.97 256. 8 8 689.55 73.01 - 0 . 0 1 3.61 2 20. 83 - - 20,768.05 - - 2 0,768.05 15 At 31st March 2019 1,95,699.83 3 4,09,973.97 2 8,35,769.89 1 9,030.57 19,434.32 1 4,832.26 2 ,820.55 1 2,897.09 11,510.80 9 1,950.75 2 ,17,753.36 94,041.12 233.99 6 9,25,948.48 5,572.08 5 ,572.08 69,31,520.56 A a
TED FINANCIALS th ACCUMULATED DEPRECIATION t UrjaVik AnnualR At 1st April 2017(Deemed Cost) 12,669.32 3,54,611.63 2,58,849.74 2,133.08 4,376.47 2,078.81 379.20 - 404.16 10,772.85 12,280.04 - 34.63 6,58,589.93 1,965.32 1,965.32 6,60,519.70 Charge for the Year 6,785. 7 7 1,69,523.62 1 ,35,916.89 1 ,257. 63 2,398. 7 3 1,527.1 0 217.56 - 227. 7 7 4,395.28 7 ,394. 2 5 - 2 0. 65 3,29,665.26 1,056.15 1 ,056.15 3,30,696.52 Deduction/Adjustments 108. 5 9 48,400.24 3,109.95 5.39 4 9. 1 5 170.78 51.60 - - 461.37 6 5. 8 7 - - 52,422.94 - - 5 2,422.94 Impairment for the year 9.0 4 37.97 - 3 16. 7 2 - 122.73 2 8. 89 - - 0.72 3 . 3 6 - - 519.43 - - 519.43 At 31st March 2018 19,355.54 4 ,75,772.98 3 ,91,656.68 3 ,702.03 6,726.05 3,557.87 574.05 - 631.93 1 4,707.47 1 9,611.79 - 55.28 9,36,351.69 3 ,021.47 3 ,021.47 9,39,312.72
Charge for the Year 7,237.29 1,83,773.68 1,47,675.90 1,353.08 2,817.45 1,632.45 247.13 - 362.97 5,394.63 7,921.16 - 16.39 3,58,432.11 1,109.58 1,109.58 3,59,541.69 Deduction/Adjustments 73.82 10,279.92 2,001.82 39.85 257.58 310.10 58.69 - 0.01 2.43 41.25 - - 13,065.48 - - 13,065.48
249 Impairment for the year ------eport 2018-19
At 31st March 2019 26,519.01 6,49,266.74 5,37,330.76 5,015.26 9,285.91 4,880.22 762.49 - 994.89 20,099.68 27,491.69 - 71.67 12,81,718.32 4,131.04 4,131.04 12,85,788.93
as Nig
T Net Block At 31st March 2018 1,61,962.0026,25,295.07 20,41,636.43 14,087.78 11,581.91 9,725.57 1,830.42 12,503.02 5,053.35 63,531.08 1,74,607.70 81,980.53 178.70 52,03,973.55 2,110.25 2,110.25 52,06,144.27 A TEMENT 2018-19 At 31st March 2019 1,69,180.8127,60,707.22 22,98,439.13 14,015.31 10,148.40 9,952.04 2,058.07 12,897.09 10,515.91 71,851.08 1,90,261.66 94,041.12 162.32 56,44,230.66 1,441.03 1,441.03 56,45,731.63
2.1 The company upto FY 2013-14 has been charging deprecia tion on fix ed asse ts at the r a t es specified in Schedule - XIV of the Companies Act, 1956. Since Schedule - II permits adoption of different useful life, GUVNL being the holding company and with a view to harmonize the provision for depreciation in its Consolidated Financial Statements, effective from 1st April, 2014 the Company has adopted the am Limit useful life/ depreciation rates specified by Gujarat Electricity Regulatory Commission ( Multi Year Tariff ) Regulations. 2.2 The Company has elected to measure all its Property, Plant and Equipment and Intangible Assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to IND AS i.e. 1st April, 2015. 2.3 It includes cost of assets sold, retired from active use and discarded assets. 2.4 Certain immovable properties, which have been transferred to subsidiaries are held in the name of GEB erst or Vadodara Mahanagar Seva ed Sadan (VMSS). The procedure for the registration and /or transfer in the name of the subsidiaries is under process. 2.5 Certain premises of MGVCL have been given on lease for which no information is available w.r.t its gross block, depreciation block and net block. Hence, the disclosures for such leased out properties of MGVCL have not been given separately as required under Revised Schedule III. 2.6 In case of subsidiary GETCO, depreciation amounting to ? 82.90 lakhs have been capitalised. Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Depreciation, Amortization and Impairment Expenses includes following in case of subsidiary GSECL :
Particulars For the year ended March 31, 2019 2018 Depreciation on Tangible Assets 98,987.01 92,560.77 Impairment of Tangible Assets - 519.43 Written Down of Capital Work in Progress (Refer Note 3) 4,384.59 - Amortization / Written Down of Intangible Assets (Refer Note 4) 10.05 24.89 Impairment for Asset Held for Sale (Refer Note 17) 1,340.79 - Total 1,04,722.45 93,105.09
250 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
3. Capital Work-in-Progress ( ? in Lakhs) Particulars As at As at 31st March,2019 31st March, 2018 Capital Work-in-Progress 9,23,794.06 8,88,480.29 Exploration and Evaluation assets (refer note 55) 10,461.86 10,281.30 Interest Charges to be Capitalised 971.91 833.61 Provision for unbilled capital works 10,373.52 29,152.89 Total 9,45,601.36 9,28,748.09
A The Company has evaluated the directly attributable cost capitalisation rate for the current financial year ended 31 March 2019 and applied this to the expenditure on the relevant assets and the total expenditure thus capitalized during the current financial year is ?107,387.77 lakhs (P.Y ?91,816.44 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) Particulars As at As at 31st March, 2019 31st March, 2018 Intangible Assets Under Development 75.28 75.28 Total 75.28 75.28 5. Investments (? in Lakhs) Particulars As at As at 31st March, 2019 31st March, 2018 Investment in Equity Instruments (at Fair Value through Other Comprehensive Income) Quoted, Non-Trade - Gujarat State Petronet Limited (GSPL) 31,968.38 31,777.53 1,68,50,000 (P.Y. 1,68,50,000 ) Equity Shares of ?10/- each, fully paid-up. - Gujarat Gas Company Limited (GGCL) 394.61 442.41 2,66,445 (P.Y. 53,289, ) Equity Shares of
251 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 ?2/- each (P.Y. ?10/- each), fully paid-up. Un-quoted, Non-Trade - Gujarat Power Corporation Limited (GPCL) 4,426.06 4,156.84 19,30,013 (P.Y. 19,30,013) Equity Shares of ?100/- each, fully paid-up. - Gujarat State Energy Generation Limited (GSEG) 4,285.73 2,025.63 2,90,03,636 (P.Y. 2,90,03,636) Equity Shares of ?10/- each, fully paid-up. - Power Exchange of India Limited (PEIL) 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) 41,074.81 38,402.45 Investment in Associate and Joint Venture Companies Quoted - Gujarat Industries Power Company Limited (GIPCL) (Associate Company) 68,988.84 63,888.94 (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) 68,988.84 63,888.94 Investment in Government securities (Quoted) ((at Fair Value through Other Comprehensive Income (OCI)) 12,520.85 12,485.02 PARTICULARS No. of Units Rate Cost (? in lakhs) 8.28% GoI 2027 11,36,000 96.64 1097.83 8.24% GoI 2027 15,00,000 96.41 1446.15 9.38% AP SDL 2023 15,00,000 102.34 1535.10
252 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 1025.20 8.75% TN SDL 2022 20,00,000 102.68 2053.60 8.58% UP Special SDL 2024 5,00,000 102.18 510.90 8.96% RAJSTHAN SPECIAL 10,00,000 104.59 1045.90 SDL 2024 8.32% CHHATISHGARH SDL 15,00,000 100.97 1514.55 9.99% RAJ SDL SPL 2,17,000 114.78 249.07 Total Cost 12052.06 Total (C) 12,520.85 12,485.02 Total 1,22,584.50 1,14,776.41 Aggregate Market Value of quoted investment 73,743.52 83,996.34 Aggregate Cost of unquoted investments 5,172.46 5175.69 Aggregate Cost of quoted investment 22,284.41 24337.86 Aggregate amount of Impairment in value of investment 2.00 2.00
A (? in Lakhs) Companies other than Associate and Joint Venture: Share Capital Share 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 31 March 2018. For calculation of Fair Value as at 31 March 2019 the Company has considered latest Audited Balance Sheet of GPCL i.e. for 31 March 2018. C The Net Asset Value of Power Exchange Of India Limited for the Year ended 31 March 2019 and 31 March 2018 is negative and hence the Fair Value of such investment is nil.
253 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
D Details of Subsidiaries i.
Place of Proportion of ownership interest / voting rights held by the Company Principal Incorporation Name of Company activity and principal As at As at st place of business 31st March, 2019 31 March, 2018
Gujarat State Electricity Corporation Ltd. Generation India 100.00% 100.00% of Power Gujarat Energy Transmission Transmission India 98.27% 98.19% Corporation Ltd. of Power Dakshin Gujarat Vij Company Ltd. Distribution India 100.00% 100.00% of Power Madhya Gujarat Vij Company Ltd. Distribution India 100.00% 100.00% of Power Paschim Gujarat Vij Company Ltd. Distribution India 100.00% 100.00% of Power Uttar Gujarat Vij Company Ltd. Distribution India 100.00% 100.00% of Power ii. Pursuant to Letter No.GET-13-2018-3921-K dated 07.06.2019 of Govt. of Gujarat, the Board of Directors of GUVNL in its Board Meeting held on 29.06.2019 has approved transfer of shares of Subsidiary Company M/s. GETCO held by Govt. of Gujarat amounting to ?5000.00 Lakhs (including Premium of ?3750.00 Lakhs) to GUVNL to make GETCO a wholly owned Subsidiary Company of GUVNL. iii. 7 shares of subsidiary GSECL of ?10/- each have been issued to the promotors of the demerged company BECL acquired by subsidiary GSECL through business combination under common control. The details of the same are given in Note No.65.
254 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 E Details of Associate (? in Lakhs) i. Place of Proportion of ownership interest / Principal Incorporation voting rights held by the Company Name of Company activity and principal As at As at place of business 31st March, 2019 31st March, 2018 Gujarat Industries Power Company Ltd. Generation India 26.84% 26.84% of 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 68,988.84 63,888.94 Net Assets as at date of acquisition 12,970.65 12,970.65 Post acquisition share profits as at the date of financial statements 56,018.19 50,918.29 ii. The Group has invested ?10592.35 Lacs in Gujarat Industries Power Co. Ltd. (GIPCL) from 1988-89 to 2005-06. The Group owns 26.84% which makes it Associate as per Ind AS 28 "Investments in Associates and Joint Ventures in Consolidated Financial Statements” as of 31 March 2019. F Details of Joint Venture Place of Proportion of ownership interest / Principal Incorporation voting rights held by the Company Name of Company activity and principal As at As at place of business 31st March, 2019 31st March, 2018 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 255 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. iii. Based on un-audited Account of MahaGuj Collieries Ltd (MGCL) the assets and liability as on 31st March, 2019 is as under: (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 ASSETS Non Current Assets Property, plant & Equipments 0.62 0.78 Other non current assets 5,440.70 5,440.70 Current Assets Financial Assets Cash and cash equivalents 23.18 4.03 Other Current assets 0.09 0.05 EQUITY AND LIABILITIES Non Current Liabilities Financial Liabilities Other Financial liabilities 0.15 0.15 Current Liabilities Financial Liabilities Trade payables - Dues to Micro Enterprises & Small Enterprises - - - Others 25.04 0.30 Other Current liabilities 9.20 25.28 Share in Net assets of Joint venture 2,172.08 2,167.93 Share in Profit for the year of Joint venture (107.70) (66.58)
256 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 iv. The share in the Net worth of the Joint Venture is ?2,172.08 lakhs (P.Y. ?2,176.93 lakhs) and in curent year loss is ?107.70 lakhs (P.Y. ?66.58 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 had 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. During the year GSECL has made the provision for ? 111.45 lakhs (P.Y. ?64.22 Lakhs) against long term loans & advance given to MahaGuj Collieries Ltd as well as ? NIL (P.Y. ? 2.00 Lakhs) for investment on share capital for development of Machhakata and Mahanadi coal block which has been de-allocated as per the order of Hon’ble Supreme Court. 6 Loans (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Secured Considered Good Loans & Advances to Staff 12,802.40 14,644.50 Total (A) 12,802.40 14,644.50 Unsecured Considered Doubtful Loan to Joint Venture Company 2,428.12 2,316.67 Less: Provision for Loss (refer note 5 F (v)) (2,428.12) (2,316.67) Unsecured Considered Good Other Loans And Advances 35.88 46.74 Total (B) 35.88 46.74 Total (A+B) 12,838.28 14,691.24 257 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Financial Assets (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Secured Considered Good Interest Accrued But Not Due on Staff Loans 12,278.17 11,587.52 Interest Accrued & Due on Staff Loans 481.95 322.54 Unsecured Considered Good Deposits with Others 9,597.04 11,102.36 Deposit with Government and Local bodies 127.52 29.98 Deposits with banks for more than 12 months 365.94 50.15 Other recoverable 377.88 - Amount recoverable from employees / ex-employees - 157.32 Total 23,228.51 23,249.87 8 Other Non-Current Assets (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Capital Advances to Suppliers / Contractors 12,958.88 11,675.63 Other Deposits 318.91 936.32 Prepayments - Leasehold Land 2,325.55 2,418.93 Total 15,603.34 15,030.88 9 Inventories (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 STORES, SPARES & LOOSE TOOLS; Stock of materials at stores 1,98,228.92 1,82,048.93 (net of provision for non moving stock of ?33.54 lakhs (P.Y. ?50.72 lakhs)) Materials at Site (O&M) 9,588.77 8,325.25
258 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Materials in Transit 45,025.79 27,900.64 Materials pending Inspection 9,072.35 5,089.58 Other Materials Accounts 24,498.09 28,985.87 Fuel 99,903.80 29,587.78 Material Stock pending Investigation 780.30 917.67 Less: Provision for stock pending investigation (813.78) (2,478.67) Total 3,86,284.24 2,80,377.06 For basis of valuation refer Note No. 5.8 of significant accounting policies.
10 Trade Receivables ( ? in Lakhs )
As at As at Particulars st st 31 March, 2019 31 March, 2018 Unsecured Considered Good (Good to the extent of security deposit received from the respective Consumers) Trade Receivables 3,73,963.54 3,47,262.57 Trade receivables for misc. receipts from consumers 1,538.67 4,441.25 Significant increase in Credit Risk Trade Receivables 5,232.57 5,298.93 3,80,734.78 3,57,002.75 Less : Prov. for Doubtful Dues (28,949.51) (25,780.19) Less : Unposted Receipts (359.79) (317.76) Less : Doubtful Electricity Duty (19,028.60) (15,229.69) (A) 3,32,396.88 3,15,675.11 Credit Impaired Dues from Permanently Disconnected Consumers 1,02,746.76 1,19,603.90 Less : Provision for Doubtful Dues (1,00,636.19) (1,12,998.08) (B) 2,110.56 6,605.82 Less : Deferred ED & TSE from Consumers (C) - (1,442.43) Total (A+B+C) 3,34,507.44 3,20,838.50
259 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 *Receivables have been secured to the extent of security deposit as reflected note no. 19 as well as bank guarantee received from the respective Consumers. A The age of receivables at the end of the reporting period is as follows: (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Less than or equal to 6 months 2,91,523.54 2,67,235.29 More than 6 months but less than or equal to 1 Year 48,485.91 38,673.84 More than one Year 40,725.33 51,093.62 Total 3,80,734.77 3,57,002.75 B 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. C 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. D 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 ? 21,103.16 lakhs. E 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,2019 amounting to ?293,698.62 Lakhs (P.Y. ?275,287.07 Lakhs). F 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 st st 31 March, 2019 31 March, 2018 Balances with Banks 22,725.63 75,184.81 Cash on hand 13.73 636.21 Cheques on hand 6,948.99 6,604.35 Remittance-in-Transit 4,652.97 2,271.57 Deposits with Banks 1,561.95 90,807.18 Total 35,903.27 1,75,504.12 260 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 12 Other Bank Balances (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Deposit with Banks (remaining maturity of more than 3 months but less than 12 months) 4,210.17 14,949.06 Total 4,210.17 14,949.06
A Deposit with Banks includes:
a. Deposit with Bank represents Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak Dal.
b. GETCO has deposited ?2,838.90 Lakhs at the Interest Rate of 7% p.a.; ?2.50 lakhs at the interest rate of 6.7% and ?0.20 Lakhs at the Interest Rate of 6.4% p.a. with State Bank of India, IFB Branch, Vadoadara.
c. GSECL has ?1182.10 lakhs (P.Y. ?1182.10 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.
13 Loans (? in Lakhs)
As at As at Particulars st st 31 March, 2019 31 March, 2018 Loans and Advances to Employee Secured Considered Good Loans & Advances to Staff 505.95 1,226.04 Unsecured considered good Other loans and advances to staff 2,337.56 1,804.28 Other loans and advances 1,163.97 1,066.52 Total 4,007.48 4,096.84
A Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which the loans have been given.
261 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
14 Other Financial Assets (? in Lakhs)
As at As at Particulars st st 31 March, 2019 31 March, 2018 Unsecured Considered Good Interest Accrued But Not Due on Staff Loans 1,040.91 987.03 Interest Accrued & Due on Staff Loans 928.42 918.56 Amount recoverable from Staff 109.71 106.82 Fuel related Claims and Receivables 1,753.98 841.04 Subsidy Receivable from Government 3,25,969.71 3,43,258.93 Unbilled Revenue 79,635.74 83,477.02 Deposits 5,064.37 5,385.06 Interest Accrued But Not Due on Others 386.97 250.16 Other recoverables 21,250.21 10,559.11 Less: Provision made for doubtful recoveries (22.50) (22.50) Loan to others (refer note 66) 655.73 636.36 Receivable from Gujarat Energy Training & Research Institute (GETRI) 113.80 273.32 Total 4,36,887.06 4,46,670.92
15 Current Tax Assets (Net) (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Current Tax Assets Tax Refund Receivable 2,08,406.22 1,78,925.44 Current Tax Liability Income Tax Payable (1,61,609.95) (1,52,036.79) Total 46,796.26 26,888.65
262 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 16 Other Current Assets (? in Lakhs)
As at As at Particulars st st 31 March, 2019 31 March, 2018
Unsecured Considered Good Prepaid Expenses 4,636.46 3,854.50 Postage stamp & stamped agreements on hand 74.92 60.71 Advances for O&M Supplies / Works 54,855.11 59,414.02 Balance with Appellate Authority 610.77 417.66 Electricity Duty Recovered in Advance by Govt. of Gujarat 10,891.38 6,414.63 Advance to IPP against Power Purchase 4,200.00 4,207.24 Pre-Payments Leasehold Land 107.46 106.95 Goods and Service Tax - Tax deducted at Source 58.36 -- Total 75,434.46 74,475.71 17 Assets classified as held for sale ( ? in Lakhs )
As at As at Particulars st st 31 March, 2019 31 March, 2018
Obsolete/scraped assets 6,398.12 11,313.39 Total 6,398.12 11,313.39
As at As at Description of Assets held for sale st st 31 March, 2019 31 March, 2018 Plant and Machinery 6,056.66 9,987.78 Hydraulic Works 50.86 416.66 Lines and Cables 110.17 179.78 Buildings & Civil Work 102.14 652.39 Vehicles 5.48 6.77 Furniture & Fixtures 2.18 1.26 Office Equipments 20.44 17.85 Others 50.18 50.88 Total 6,398.12 11,313.39
263 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Utran 135 MW & Ukai 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. In respect of all such assets of the Company classified as “Assets classified as held for sale”, the management is of the opinion that the NRV of the same is higher than their net carrying value (except Utran 135 MW) due to very old assets and upward trend in the scrap market. In view of this the Company does not recognise any loss in the Statement of Profit & Loss. Based on bids received for sale through E-auction of assets of Utran 135 MW, Fair Value of Assets held for sale of Utran 135 MW is considered as ? 1,152 Lakhs and the difference between Fair Value & Carrying Value is recognised as Impairment Loss for ? 1,340.79 Lakhs during the year. The same has been shown under the head Depreciation, Amortization and Impairment Expenses in note no. 2.1. 18 Equity Share Capital A Equity Share Capital consist of the following: (? in Lakhs) As at As at Particular st st 31 March, 2019 31 March, 2018 Share Capital Equity Share Capital Authorised Share Capital 3000,00,00,000 (P.Y. 2000,00,00,000) Equity Shares of ? 10/- each 30,00,000.00 20,00,000.00 Issued Share Capital 2016,98,31,795 (P.Y. 1740,27,39,795) of ? 10/- each 20,16,983.18 17,40,273.98 Subscribed & Paid up 1977,22,22,095 (P.Y. 1622,75,49,895) of ? 10/- each fully paid 19,77,222.21 16,22,754.99 Total 19,77,222.21 16,22,754.99 B A Reconciliation of number of shares outstanding at the beginning and at the end of reporting period is as under: Share Capital Particular No. of Shares (? in Lakhs) As at 1st April,2017 13,71,46,05,995 13,71,460.60 Additions/(Reductions) 2,51,29,43,900 2,51,294.39 As at 31st March,2018 16,22,75,49,895 16,22,754.99 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 19,77,222.21 264 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 C Shares in the Company held by Shareholders holding more than 5% is as under: Particulars As at 31st March, 2019 No. of shares Extent of Holding Governor of Gujarat (including its nominees) 19,77,22,22,095 100% Particulars As at 31st March, 2018 No. of shares Extent of Holding Governor of Gujarat (including its nominees) 16,22,75,49,895 100% 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 st st 31 March, 2019 31 March, 2018 Share Application Money pending allotment 39,760.97 1,17,518.99 Contingency Reserve Fund 12,048.23 12,048.23 Fly ash utilisation Reserve Fund 6,625.96 3,642.91 Capital Reserve 2,378.30 2,378.30 Capital Reserve on account of Business Combination 1,05,400.39 1,03,000.39 Securities Premium 3,750.00 3,750.00 Retained Earnings 4,78,953.25 3,98,064.46 Equity Instruments through Other Comprehensive Income 34,214.35 31,813.77 Reserve for financial asset measured at fair value through OCI 310.62 287.31 Share of OCI of associate accounted for using equity method 1,250.66 1,671.74 Total 6,84,692.72 6,74,176.09 Out of Above: Equity belonging to the Non Controlling interests (refer SOCIE) 9,126.19 8,458.83 Equity belonging to the Owners 6,75,566.53 6,65,717.26
265 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 B Particulars relating to Other Equity (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Share Application Money pending allotment Opening Balance 1,17,518.99 81,963.92 Add: Increase during the year 39,760.97 1,17,518.99 Less: Shares Issued (1,17,518.99) (81,963.92) Balance at the year end 39,760.97 1,17,518.99 Contingency Rreserve 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 3,642.91 1,577.81 Add: Increase during the year through sales 2,983.05 2,065.10 Balance at the year end 6,625.96 3,642.91 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 1,03,000.39 - Changes in Opening balance on account of merger of BECL (refer note 63) - 84,600.39 Add: Changes on account of Business combination (refer note 63) 2,400.00 18,400.00 Balance at the year end 1,05,400.39 1,03,000.39 Securities Premium Opening balance 3,750.00 3,750.00 Add: Transferred to retained earning - - Balance at the year end 3,750.00 3,750.00
266 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Retained Earnings Opening Balance 3,98,064.46 4,10,737.60 Changes on account of Business combination (refer note 63) - (32,218.09) Add: Net profit after tax transferred from Statement of Profit & Loss 92,810.71 52,858.38 Add: Other Comprehensive income arising from remeasurement of defined benefit obligation (18,538.86) (37,540.34) Add: Share of profit of Associate and Joint Venture 6,836.11 4,456.11 Add: Share in other reserve of Associate 6.10 (6.10) Less: Share of CDT on dividend received from Associate (225.27) (223.11) Add: Transfer from Contingency Reserve Fund - - Balance at the year end 4,78,953.25 3,98,064.46 Equity Instruments through Other Comprehensive Income Opening Balance 31,813.77 23,146.51 Add: Increase / (Decrease) during the year 2,400.59 8,667.25 Balance at the year end 34,214.35 31,813.77 Reserve for Financial Asset measured at fair value through OCI Opening Balance 287.31 499.28 Add: Increase / (Decrease) during the year 23.31 -211.97 Balance at the year end 310.62 287.31 Share of OCI of Associate accounted for using Equity Method Opening Balance 1,671.74 922.69 Add: Increase / (Decrease) during the year -421.08 749.05 Balance at the year end 1,250.66 1,671.74 Total Other Equity 6,84,692.72 6,74,176.09 C Share Application Money pending allotment The Company has issued 39,76,09,700 Equity Shares of ?10 each to Governor of Gujarat, the existing Shareholder, for cash at par i.e. at ?10/- per share, on rights basis on 16.04.2019. The Company received the Share Application Money from Govt. of Gujarat during the Month of March, 2019 and accordingly has complied with the provisions of the Companies Act, 2013 w.r.t. issue of Shares.
267 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Dt. 03.11.2009, M/s GSECL is required to maintain a separate Account for the amount collected from sale of fly ash and fly ash based products and this amount should be kept in separate Account head and shall be utilized only for the development of infrastructure or facilities, promotional and facilitation activities for the use of fly ash until 100% fly ash utilization is achieved. As such the Company is maintaining a separate Account and deposits the amount received from sale of fly ash and fly ash based products and utilizing the same regularly for O&M for the Fly ash utilisation & development of infrastructure facilities. The Company has achieved 100% utilization of fly ash at Gandhinagar, Sikka, Ukai and KLTPS and hence no separate account is maintained for these TPS. During the year, fly ash utilisation at Wanakbori is less than 100 % and hence income from sale of fly ash of ?2983.05 Lakhs (P.Y. ?2065.10 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 acqisition by Subsidiary- GSECL as explained in Note No.63. H Securities Premium 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 securities in Other Comprehensive Income. This reserve represents the cumulative gains and losses 268 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 st st 31 March, 2019 31 March, 2018 Government Grants, Subsidies towards Capital Assets 3,06,758.02 2,79,324.64 Consumers' contribution towards Capital Assets 5,46,306.01 4,86,545.19 Total 8,53,064.03 7,65,869.83 A Particulars relating to Deferred Government Grants, Subsidies and Contributions (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Government Grants, Subsidies towards Capital Assets Opening balance 2,79,324.65 2,56,034.05 Add : Received during the year 57,206.97 50,132.35 Less : Transferred to Statement of Profit and Loss (29,773.60) (26,841.76) Closing Balance 3,06,758.02 2,79,324.64 Consumers' Contribution towards Capital Assets Opening balance 4,86,545.19 4,35,787.22 Add : Received/transferred during the year 1,08,609.31 93,807.78 Less : Transferred to Statement of Profit and Loss (48,848.48) (43,049.81) Closing Balance 5,46,306.01 4,86,545.19 Total 8,53,064.04 7,65,869.83
269 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 21 Borrowings (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Secured (a) Term Loans (i) From Banks 9,36,961.83 9,66,742.22 (ii) From Financial Institutions 2,27,149.73 2,56,754.35 Unsecured (a) Term Loans (i) From Financial Institutions 11,350.96 3,005.88 (ii) From Gujarat State Financial Services 1,65,444.88 2,69,612.99 (b) Loans from Related Party - Govt. of Gujarat (i) Loan for Power Purchase 9,100.00 9,450.00 (ii) State Government Loan under APDRP 3,230.55 4,335.34 (iii) Loan from Asian Development Bank 17,420.25 21,768.54 (iv) Term Loan from Govt. of Gujarat - Foreign currency loans 37,589.13 37,488.51 (v) Kisan Hit Urja Shakti Yojna (KHUSHY) Loan 400.00 800.00 Total 14,08,647.34 15,69,957.84
A MATURITY PROFILE OF SECURED & UNSECURED LOANS ( ? in Lakhs )
Particulars 2019-20 2020-21 2021-22 2022-23 & After SECURED LOANS Term Loan from Banks 1,30,670.05 1,63,696.00 1,59,651.00 6,13,614.83 Term Loan from Financial Institutions 32,403.35 31,140.39 28,821.81 1,67,187.53 UNSECURED LOANS Govt. of Gujarat (Related Party) Loan for Power Purchase 350.00 350.00 350.00 8,400.00 State Government Loan under APDRP 1,105.08 1,105.08 964.49 1,160.98
270 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Loan From Asian Development Bank 4,349.01 4,348.96 3,394.69 9,676.61 Term Loan from Govt. of Gujarat - Foreign currency loans 2,278.13 2,278.00 2,278.00 33,033.13 Kisan Hit Urja Shakti Yojna (KHUSHY) Loan 400.00 400.00 - - Loan from Financial Institutions - - - 11,350.96 Loan from Gujarat State Financial Services 1,14,168.41 1,08,887.00 55,255.88 1,302.00 TOTAL 2,85,724.03 3,12,205.43 2,50,715.87 8,45,726.04
22 Trade Payables (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Micro and Small Enterprises (refer note 28A) - - Others Amount owing to Licensees 85.29 85.29 Total 85.29 85.29
23 Other Financial Liabilities ( ? in Lakhs ) As at As at Particulars st st 31 March, 2019 31 March, 2018 Liability for Deposit of work - 100.60 Staff Welfare Schemes 51.21 456.78 Security Deposit from Consumers 5,97,224.56 5,25,177.80 Staff Retirement cum Death Benefit Scheme 15,615.97 15,924.40 Liabilities towards SKY scheme 10,876.74 - Total 6,23,768.48 5,41,659.58 24 Long-term provisions (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Provision for Employee Benefits Provision for Leave Encashment 1,42,989.49 1,31,463.78 Total 1,42,989.49 1,31,463.78
271 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Particulars st st 31 March, 2019 31 March, 2018 Deferred Tax Assets 3,32,509.17 2,60,343.59 Deferred Tax Liabilities 5,03,190.16 4,53,405.22 Total 1,70,680.98 1,93,061.63
As at 31st March, 2019 (? in Lakhs) Recognized in Opening Recognized in Closing Particulars Other Compreh- Balance profit and loss Balance ensive Income Deferred Tax Asset on account of: - - Employee Benefits 33,665.66 (9,934.04) 6,659.11 30,390.74 Provision for Doubtful Debts 25,093.77 (9,021.02) 16,072.75 Deferred Income on Government Grant 26,111.31 (7,065.61) 19,045.70 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 1,12,517.80 1,093.24 1,13,611.04 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 75,048.33 6,659.11 3,42,051.02 Deferred Tax Liabilities - Property, Plant and Equipment 4,53,525.69 62,674.30 - 5,16,199.99 Financial Assets at FVTOCI (120.50) 284.30 163.80 Others - - - - Deferred Tax Liabilities 4,53,405.19 62,674.30 284.30 5,16,363.80 Net Deferred Tax Asset / (Liability) (1,93,061.61) 12,374.03 6,374.81 (1,74,312.77) Adjustment for Deferred tax asset not recognised in previous year 3,631.41 3,631.41 Amounts recognised in Balance Sheet (1,93,061.61) 16,005.44 6,374.81 (1,70,681.36) Amounts not recognised in Balance Sheet (Refer Note A below) - 272 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 As at 31st March, 2018 (? in Lakhs) Recognized in Opening Recognized in Closing Particulars Other Compreh- Balance profit and loss Balance ensive Income Deferred Tax Asset on account of: - - Employee Benefits 37,721.99 -15,281.48 11,225.15 33,665.66 Provision for Doubtful Debts 23,587.81 1,505.96 25,093.77 Deferred Income on Government Grant 26,978.29 -866.98 26,111.31 Carried forward of unused Tax Losses 4,833.31 3,658.41 8,491.73 Unabsorbed Depreciation 49,183.90 5,220.57 54,404.47 MAT 89,765.71 22,752.09 1,12,517.80 Carried forward of unused Tax Credits - - - Others 95.47 -36.63 58.85 Deferred Tax Assets 2,32,166.48 16,951.94 11,225.15 2,60,343.58 Deferred Tax Liabilities Property, Plant and Equipment 3,93,115.31 60,410.38 - 4,53,525.69 Financial Assets at FVTOCI 3,137.73 2.55 (3,260.78) (120.50) Others - - - - Deferred Tax Liabilities 3,96,253.04 60,412.93 (3,260.78) 4,53,405.19 Amounts recognised in Balance Sheet (refer Note A below) (1,64,086.56) (43,460.99) 14,485.93 (1,93,061.61) 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 2018 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 st st 31 March, 2019 31 March, 2018 Deposits for Electrification & Service connection 21,660.55 17,517.45 Total 21,660.55 17,517.45
273 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 27 Short Term Borrowings (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Loans repayable on Demand Secured Cash Credit From Banks 35,563.42 16,852.95 Total 35,563.42 16,852.95 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 st st 31 March, 2019 31 March, 2018 Trade payables - Micro, Small and Medium Enterprises 577.06 180.73 - Others 7,03,246.65 6,38,286.90 7,03,823.71 6,38,467.63 Trade payables - Fuel 90,300.61 99,020.74 - Purchase of Power 6,12,344.35 5,37,966.32 - Others 1,178.75 1,480.57 Total 7,03,823.71 6,38,467.63 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: Trade Payables - Total outstanding dues of As at As at Micro & Small Enterprises 31st March, 2019 31st March, 2018 Principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year 577.06 180.73 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
274 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
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. 29 Other Financial Liabilities (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Current maturities of Long Term Debt: Secured: Term Loans From Banks 1,30,670.06 1,52,317.36 Loan from Financial Institutions 32,403.35 30,988.41 Unsecured: Govt. of Gujarat (Related Party) (i) Loan for Power Purchase 350.00 350.00 (ii) Loan from Asian Development Bank 4,349.02 4,349.76 (iii) Loan from Asian Development Bank - Foreign Currency 2,278.13 2,142.22 (iv) KHUSHY Loan 400.00 400.00 (v) Loan under APDRP Scheme 1,105.07 1,105.37 Loan from Financial Institutions - 11.83 Loan from Financial Institutions- Gujarat State Financials Services 1,14,168.41 1,41,333.41 Interest accrued but not due on Loans 26,440.72 24,371.74 Interest Accrued and Due on Loans from Banks 1,066.23 9,556.48 Interest payable on consumers security Deposit 28,830.58 27,878.47
275 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Liability for O&M Supplies / Works 47,243.32 36,505.70 Liabilities towards SKY scheme 441.73 - Staff Related Liabilities 656.81 544.33 Staff Retirement cum Death Benefit Scheme 875.57 887.98 Unclaimed amount relating to Bonds 264.89 307.39 Deposits & Retentions from Suppliers / Contractors 4,10,420.30 3,81,405.33 Outstanding liability for expenses 1,59,218.14 2,01,324.36 Grant Unallocated 1,938.56 7,863.94 Corpus Fund of Bal Urja Rakshak Dal 52.51 50.19 Board of Trustees----CPF 541.02 1,129.18 Liability for Capital Supplies / Works 55,180.41 71,448.61 Amount payable to EESL 1,566.22 304.84 Staff Welfare Scheme 1,323.53 879.50 Liabililty for deposit of work 1,79,541.97 1,26,957.40 Liability for pending utilisation of grant for solar energy pump set and solar home light (net of expenditure) 4,351.95 5,784.98 Deposits for execution of Job Works 52,293.58 42,508.76 Other Liability 98.58 7,202.74 Total 12,58,070.66 12,79,910.25 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: Trade Payables - Total outstanding dues of As at As at Micro & Small Enterprises 31st March, 2019 31st March, 2018 Principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year 13,245.61 7,009.61 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 276 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. 30 Other Current Liabilities ( ? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Statutory Liabilities 7,965.18 9,527.03 Subsidy/Grants received in advance 634.53 218.19 Advances received 5,906.09 4,748.65 Income Received in Advance 1,35,131.68 1,25,842.48 Deposits for Electrification & Service connection 36,157.34 41,446.57 Other Liability 1,088.53 1,178.28 Tax on Electricity Duty payable to State Govt. 314.30 77.01 Total 1,87,197.64 1,83,038.21 31 Short Term Provisions ( ? in Lakhs ) As at As at Particulars st st 31 March, 2019 31 March, 2018 Provision for Employee Benefits Provision for Gratuity 16,050.34 6,360.43 Provision for Leave Encashment 10,440.02 11,514.16 Provision for Bonus 561.45 777.82 Provision for CSR as per Ministry of Environment & Forest (Refer Note 68) 263.00 147.00 Others Provision for Delayed Payment Charges - 2,904.78 Total 27,314.81 21,704.19
277 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 32 Current Tax Liabilities (Net) ( ? in Lakhs ) As at As at Particulars st st 31 March, 2019 31 March, 2018 Current Tax Liability Wealth Tax payable 1.74 1.74 Current Tax Assets Wealth Tax Refund Receivable -1.61 -1.61 Total 0.12 0.12
33 Revenue from Operations ( ? in Lakhs )
For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Income from Operating Activity Revenue from Sale of Power Residential General Purpose 6,15,082.04 5,91,626.83 General Lighting Purpose 16,837.50 16,313.62 Non-residential General Purpose & LT Medium Demand 8,77,917.51 8,18,470.81 HT Industrial 23,42,042.97 19,91,000.19 Public Lighting 14,614.42 14,748.45 Traction Railways 723.83 658.29 Irrigation Agricultural 6,50,137.56 4,00,046.38 Public water works and sew.pumps 99,891.20 78,674.04 Revenue from Sale of Electrical Energy 781.14 907.90 Inter state sale of Power - - Sale of Power through Power Exchanges & Bilateral Agreements 10,812.79 25,920.16 Supply in Bulk-Licensee 656.66 1,479.67 Less: Cash discount (358.29) (130.74) Sub Total 46,29,139.33 39,39,715.61 Electricity Duty Electricity Duty Assessed 4,72,222.23 4,21,252.04 Less: Electricity Duty Assessed (Contra) (4,72,222.23) (4,21,252.04) Sub Total - -
278 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Sale of Services Revenue from Transmission Charges 46,736.61 48,142.85 Parallel operation charge 5,486.91 4,995.29 SLDC fees & charges 405.50 574.83 Net Unscheduled Interchange Income 8,275.60 15,660.47 Sub Total 60,904.62 69,373.44 Income from Other Operating Activity Meter Charges / Service line charges 22.37 23,985.79 Recoveries for theft of power / Malpractices 15,561.34 11,618.71 Wheeling Charges Recoveries 47.28 316.88 Delayed payment charges from consumers 21,288.49 17,330.85 Cross Subsidy Surcharge 14,979.89 28,139.65 Addl. Surcharge - OA Consumers 4,893.41 7,869.29 Agriculture Subsidy 1,10,000.00 1,10,000.00 Misc. Charges from Consumers 22,398.09 21,235.75 Misc. Revenue 3,232.22 2,828.36 Rebate (Cash Discount) for Prompt Payment 48,192.34 40,875.30 Liquidated Damages 178.62 196.14 CDM Benefit from Renewable Energy Sources 33.14 463.45 Supervision Income from O&M activity 661.99 557.85 Sale of Fly Ash 2,922.69 4,271.51 Reactive Charges Income 1,393.00 1,196.79 Income from trading activity 36,086.25 7,711.30 Sub Total 2,81,891.12 2,78,597.61 Total 49,71,935.08 42,87,686.66
The Deviation Settlement Mechanism charges (UI) (underdrawal/Overdrawal charges) have been accounted as provided by SLDC following the Deviation Settlement Mechanism (DSM). On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers applicable from 1st April 2018. The management has evaluated the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers and accounted for the same pursuant to Ind AS 115.
279 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 The Company has used the cumulative effect method and therefore the comparative information has not been restated and continues to be reported under Ind AS 18 and Ind AS 11.The Standard is applied to contracts that remaining in force as at 1st April, 2018. The application of the standard does not have any significant Impact on the retained earnings as at 1st April, 2018 or on these financial statements.
34 Other Income ( ? in Lakhs )
For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018
Interest Income Interest on Staff Loans and Advances 2,063.13 2,426.51 Interest on Advances to Others 2,474.35 147.01 Interest Income from Fixed Deposits 441.14 58.67 Interest Income from Investments 1,211.42 1,073.28 Dividend Income - From Investments 297.01 254.42 Other Non Operating Income Gain on sale of PPE (Net of Loss) - 19.63 Deferred Income towards Govt. Grants/ Subsidies and Consumer Contribution towards Cost of Capital Assets 78,622.07 69,891.58 Grant for energy conservation 225.38 237.64 Grant received for R & D Expenses (refer note 52) 208.16 136.52 Income from Sales -Stores, Scrap etc. 1,503.09 1,279.37 Gain on Foreign Exchange Fluctuation 355.08 4.13 Provision no longer required 21,399.21 1,111.29 Penalties received from supplier / contractor 4,177.47 4,441.42 Miscellaneous Income 17,427.04 19,566.25 Total 1,30,404.54 1,00,647.72
280 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 35 Cost of Fuel consumed (? in Lakhs ) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Materials/Fuel Consumed -Coal 7,73,380.02 6,62,761.15 -Oil 12,375.03 10,137.15 -Gas 55,875.50 27,435.04 -Water 15,875.16 15,663.28 -Lime 152.64 1.14 Other Fuel related cost 211.29 1,014.07 Cost of Trading activity 32,948.84 5,722.50 Lubricants and Consumables 1,400.50 1,410.60 Station Supplies 517.70 304.97 Total 8,92,736.67 7,24,449.90 36 Purchase of Power (? in Lakhs) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 From Central Sector Nuclear Power Corporation of India Ltd. 90,612.24 51,269.55 NTPC Ltd. 7,17,985.43 6,01,736.73 Sardar Sarovar Narmada Nigam Ltd. 1,862.13 2,960.23 Sub Total 8,10,459.80 6,55,966.51 From Private Sector CLP India Pvt Ltd. 43,915.94 59,419.76 Essar (Vadinar) Ltd. - 82,695.58 ACB India Ltd. 30,999.53 31,595.07 Adani Power Ltd. 4,11,479.94 2,42,497.59 Coastal Gujarat Pvt. Ltd. 3,35,605.25 3,07,218.12 Sub Total 8,22,000.67 7,23,426.12
281 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
From State Sector Gujarat Industries Power Company Ltd. 98,180.66 95,021.92 Gujarat State Energy Generation Ltd. (Hazira) 45,748.59 32,791.43 Gujarat Mineral Development Corporation (GMDC) 21,265.11 26,595.04 GPPC Pipavav 61,593.39 39,862.63 Bhavnagar Energy Company Ltd. - - Sub Total 2,26,787.75 1,94,271.01 From Other Wind Farms 2,81,564.22 2,50,610.96 Purchase of Solar Power 2,12,097.32 1,88,076.02 Captive Power Plants 666.14 33.06 Power Exchange of India Ltd. 2,489.98 8,439.74 India Energy Exchange 2,97,426.82 2,04,478.10 Short Term Purchase of Power 1,55,658.72 31,572.15 Purchase of Power from Non-Renewable Sources 63,411.06 - Sub Total 10,13,314.26 6,83,210.03 Wheeling / Transmission Charges: Power Grid Corporation Ltd. 2,06,187.15 1,88,363.86 Sub Total 2,06,187.15 1,88,363.86 Total 30,78,749.64 24,45,237.53 37 Employee Benefits Expense ( ? in Lakhs ) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Salaries and Allowances 3,38,179.50 3,29,029.15 Leave Encashment 21,727.04 25,698.12 Contribution to PF & Other Trusts 35,533.68 28,373.62 Staff Welfare Expenses 6,566.59 5,411.34 Retirement and Other Benefits 9,442.22 12,805.55 4,11,449.03 4,01,317.78 Less : Directly attributable cost capitalised (refer note 1.(D) (5.1)) (73,076.73) (59,181.01) Total 3,38,372.30 3,42,136.77
282 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 38 Finance Cost (? in Lakhs) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Interest Expense Interest on State Government Loans 5,239.48 5,451.67 Interest on Bonds 22,270.66 21,334.03 Interest on Cash Credit and Working Capital 30,062.35 30,729.01 Interest on Rural Electrification Corporation Loans and Power Finance Corporation 23,844.96 24,578.81 Interest on NABARD Loans - 10,484.61 Interest on Term Loans 69,857.14 79,252.18 Interest on Other loans 1,163.94 5,060.62 Interest to Consumers on Security Deposits etc. 31,978.76 30,810.55 Interest on Income Tax 93.40 954.60 Discount to Consumers for Timely Payment of Bills - - Other Borrowing Cost Loss on Foreign Exchange Fluctuation 2,531.18 51.99 Bank Charges, Commission and Others 911.39 1,333.78 Total (A) 1,87,953.26 2,10,041.83 Less : Directly attributable cost capitalised (refer note 1.(D) (5.1)) (21,937.92) (22,689.78) Total 1,66,015.35 1,87,352.05 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 ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Repairs & Maintenance Building and Civil Works 9,766.56 5,914.84 Plant and Machinery 49,977.22 46,618.09
283 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Sub Station Maintenance under Contract 17,028.21 15,704.82 Lines, Cable Network etc. 19,030.96 16,365.64 Others 4,941.62 4,247.21 Administrative & General Expenses Rent, Rates and Taxes (Refer Note 43) 3,610.95 3,126.76 Insurance 1,882.25 1,992.63 Testing Charges 466.00 368.15 Telephone & Postage Expenses 1,656.05 1,791.51 Remuneration to collection agencies 1,305.07 1,635.16 Legal & Professional Fees 1,649.02 1,713.54 Loss on sale of PPE (net of gain) 545.53 - Auditors' Remuneration 98.74 97.94 Fee to Auditors for other works 0.06 1.11 Consultancy Charges 919.30 707.57 Technical Fees 140.94 206.56 Other Professional fees and expenses 3,644.85 2,535.71 Travelling & Conveyance 18,847.53 17,048.07 Printing & Stationery 2,502.27 2,142.88 Expenses on Computer Billing & EDP Charges 483.91 504.97 Advertisement 971.07 774.48 Entertainment Expense 32.54 34.18 Electricity Charges 1,743.83 1,591.96 Water Charges 591.12 539.42 Corporate Social Responsibilities 1,101.42 825.29 Waiver of Delayed Payment Charges 4.52 92.04 Guest House Expenses 303.00 166.26 Security Expenses 9,637.95 7,923.36 Freight Expense 1,958.79 1,727.96 Expenditure on Training to Staff 589.19 760.32 Expenses for Energy Conservation 98.12 104.57 R & D Expenses 193.45 136.52 Energy Conservation Expenses for Ujala Scheme 14.60 0.01
284 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Directors fees 7.02 12.89 GERC License Fees - - Other Administration & general Expenses 12,293.36 10,362.78 Miscellaneous Expenses 1,195.50 7,711.08 Miscellaneous Losses & Write-offs 2,694.71 2,447.12 Bad & Doubtful debts write-off 10,041.97 5,730.66 Provision for -Bad & Doubtful debts 6,048.48 44,092.45 Less : Directly attributable cost capitalised (refer note 1.(D) (5.1)) (12,373.12) (9,945.65) Total (A-B) 1,75,644.56 1,97,810.85
A During the year, an expenditure of ?235.16 Lakhs ( Previous year ?56.59 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 ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Audit Fees 83.33 82.36 Certifications 2.38 1.38 Other Services, Taxation matters / Tax Audit 2.28 2.19 Out-of-pocket & Other Expenses 3.27 3.27
40 Exceptional items ( ? in Lakhs)
For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Bad debts written off (refer note 61) - 36,577.09 Profit on sale of assets considered as held for sale (4,364.89) (3,774.52) Total (4,364.89) 32,802.56
285 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 41 Tax Expense (? in Lakhs) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Current Tax 14,098.35 32,531.20 Deferred Tax (16,005.43) 43,460.98 Earlier Years (901.38) 182.84 Total (2,808.46) 76,175.02
A Reconciliation of Current Tax (? in Lakhs) For the year ended For the year ended Particulars st st 31 March, 2019 31 March, 2018 Profit Before Tax 96,838.16 1,33,489.52 Current Tax Expense calculated using applicable tax rate 20,667.20 28,489.33 Add: (Income) / Expense (net) not (taxable) / deductible (13,358.28) 12,076.17 MAT related adjustments (924.82) - Adjustment of tax on prior period (877.35) 296.54 Provision for Doubtful Debts and unascertained liabilities (651.89) 854.23 Tax impact on Transition Adjustment 213.39 213.76 Others 9,030.10 (9,398.82) Current Tax Expense 14,098.35 32,531.21 Applicable Tax Rate : Normal - 34.61% Applicable Tax Rate : MAT - 21.342% 42 Earnings per Equity share (? in Lakhs) year ended year ended Particulars st st 31 March, 2019 31 March, 2018 Profit After Tax for the year attributable to Owners of Equity 99,646.62 56,632.87 Weighted average Number of Equity Shares Basic 17,87,88,00,487 15,37,84,15,302 Diluted 17,89,35,76,477 15,42,46,74,538 Basic & Diluted earnings per Equity Shares (?) Basic 0.56 0.37 Diluted 0.56 0.37 Face Value Per Share (?) 10.00 10.0
286 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 43 Lease A Operating Leases The Group does not have any non-cancellable operating lease commitments. The Group has taken various premises under operating lease or leave and license agreement. The lease term in respect of such premises are on the basis of individual agreements entered into with the respective land lords. The lease payments are recognised in the Statement of Profit and Loss under Rent’ in Note 38. 44 Employee benefit plans A Defined Contribution plans: The Group has certain defined contribution plans. Group Companies makes contribution towards Employees’ Provident Fund, Employees’ Pension Scheme and Employees’ Death Linked Insurance Scheme. Contributions are made at specified percentage of salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Group is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is ?31976.88 Lakhs (P.Y. ?24919.11 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 ?24127.62 Lakhs (P.Y. ?28438.10 Lakhs) has been charged to statement of Profit & Loss. Leave obligation as at 31st March, 2019 and 31st March, 2018 is ?153429.49 Lakhs and ?142969.39 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 ?628.91 Lakhs (P.Y.
287 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 ?662.10 lakhs). The balance of such fund as at 31st March, 2019 and 31st March, 2018 is ?16265.28 Lakhs and ?16424.09 Lakhs respectively. C Defined Benefits 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 does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments. Scheme is managed through own Gratuity Trust. The liability for gratuity is recognized 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, longevity 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, 2019 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 . The principal assumptions used for the purposes of the actuarial valuations were as follows:- 288 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Assumptions (Current Period) Particulars For the year ended 31st March 2019 2018 Expected Return on Plan Assets 8.00% Rate of Discounting 7.50% Rate of Salary Increase 10.00% Rate of Employee Turnover 1 to 3 % Depending on Age
( ? in Lakhs ) Particulars As on As on 31.03.2019 31.03.2018 Gratuity I) Reconciliation in present value of obligations (PVO) – defined benefit obligation: Opening defined benefit obligation 2,08,770.34 1,51,960.14 Current Service Cost 10,044.98 6,946.12 Past service cost, including losses / (gain) on curtaiments - 2,255.97 Interest Cost 15,657.78 12,156.81 Remeasurement (gains)/losses: - - Actuarial gains and losses arising from experience adjustments 24,150.76 51,235.15 Benefits paid -22,407.48 -15,783.86 Closing defined benefit obligation 2,36,216.37 2,08,770.33 Current obligation 20,745.16 22,110.35 Non-Current obligation 2,15,471.20 1,86,659.99 II) Change in fair value of assets : Opening fair value of plan assets 2,02,417.47 1,06,232.77 Expected return on plan assets 16,193.39 8,498.63 Remeasurement gain (loss) : Excess Return on plan assets (excluding amounts included in net interest expense) including actuarial (gains) / losses arising
289 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 from experience adjustments -1,047.63 2,464.57 Contributions by the employer 25,010.28 1,01,005.36 Benefits paid -22,407.48 -15,783.86 Closing fair value of plan assets 2,20,166.04 2,02,417.48 III) Funded plans in deficit: Present value of funded defined benefit obligation 2,36,216.38 2,08,770.33 Fair Value of planned assets at end of year 2,20,166.04 2,02,417.47 Funded status Funded Funded Net liability arising from defined benefit obligation 16,050.34 6,352.87 IV) Service Cost Current Service cost 10,044.98 6,946.12 Past service cost and (gain)/loss from settlements - 2,255.97 Net Interest expense -545.91 3,652.83 Total Expenses tobe recognised in P&L A/c 9,499.07 12,854.92 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 24,150.76 51,235.14 Return on Plan assets 1,047.63 -2,464.57 Total Expenses to be recognised in OCI 25,198.39 48,770.57 Total Expense (Provision for the Period) 34,697.46 61,625.49 V) Category of assets as at 31st March: Group Gratuity Cash Accumulation Scheme (Traditional Fund) -Life Insurance Corporation 2,20,166.04 2,02,417.47 Net Current Assets Total Gratuity 2,20,166.04 2,02,417.47
290 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 (? in Lakhs) Experience Adjustment On Plan On Plan Liabilities Assets - Loss / (Gain) - Loss/(Gain) As on 31st March, 2019 24,150.76 - As on 31st March, 2018 51,235.15 - As on 31st March, 2017 13,141.61 - Maturity Analysis of Projected Benefit Obligation are as under: (? in Lakhs)
Gratuity As at 31st As at 31st March, 2019 March, 2018 Gratuity Less than 1 year 20,505.41 21,816.86 One to Three Years 29,089.80 41,040.82 Three to Five Years 48,376.69 29,585.21 More than Five Years 1,38,004.71 1,16,033.96 Sensitivity analysis for Gratuity (? in Lakhs)
Significant Actuarial Assumptions As at 31st As at 31st March, 2019 March, 2018 Discount Rate - Impact due to increase of 50 basis points (12,915.19) (8,578.85) - Impact due to decrease of 50 basis points 13,847.66 9,248.39 Salary increase - - - Impact due to increase of 50 basis points 13,689.25 9,226.56 - Impact due to decrease of 50 basis points (12,892.06) (8,637.78)
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. 291 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 45 Segment reporting
Operating Segment
A The Group’s operations fall under segment namely “Generation, Transmission, Distribution and Bulk Purchase & Sale (Trading) of Power”, taking into account the different risks and returns, the organization structure and the internal reporting systems.
B Information about major customers
The Group is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.
C Information about geographical areas:
Segment revenue from "Sale of Power" represents revenue generated from external customers which is fully attributable to the 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 customers about each product is disclosed in Note no.33 of the financial statements.
46 Financial instruments 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 stakeholders 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 committee 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 the reporting period is as follows:
292 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Net debt 16,94,371.38 15,26,730.32 Total equity 35,05,852.77 30,54,342.08 Net debt to equity ratio 0.48 0.50 1. Debt is defined as all long term debt outstanding + current maturities 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 st st 31 March, 2019 31 March, 2018 Financial assets Measured at fair value through Profit or Loss (FVTPL) (mandatorily measured) - - Measured at amortised cost (a) Trade and other receivables 3,34,507.44 3,20,838.50 (b) Cash and cash equivalents 35,903.27 1,75,504.12 (c) Bank 4,210.17 14,949.06 (d) Loans 16,845.76 18,788.09 (e) Other financial assets 4,60,115.57 4,69,920.79 Measured at FVTOCI (a) Investments in equity instruments (designated on transition date) 41,074.81 38,402.45 (b) Investment in Gol Special Bond 12,520.85 12,485.02 Accounted under Equity Method (a) Associate- GIPCL 68,988.84 63,888.94 (b) Joint Venture - MGCL - - Financial liabilities Measured at amortised cost (a) Borrowings 14,44,210.76 15,86,810.79 (b) Trade Payables 7,03,909.01 6,38,552.92 (c) Other Financial Liabilities 18,81,839.13 18,21,569.84 Financial Guarantee Contracts
293 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 C Financial Risk Management Objectives The Group’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations, routine and projects 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 ovesees the management of these risks. It advises on financial risks and the 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 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 while 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. 294 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Nature of transactions Currency As at 31st As at 31st March, 2019 March, 2018 Loan from KfW EURO 1,46,08,253.00 37,28,352.00 Loan from ADB USD 5,76,35,550.94 6,09,29,013.54 Interest and commitment charges payable - ADB USD 5,57,551.38 3,77,418.46 Interest and commitment charges payable - KfW Loan EURO 57,547.00 41,979.00
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 in negligible as primarily to the Group’s long-term debt obligations with fixed interest rates. Credit Risk Management Credit risk arises from cash and cash equivalents and deposits with banks as well as customers including receivables. Credit risk management consideRs. available reasonable and supportive forward-looking information including indicators like external credit rating (as far as available), macro-economic information (such as regulatory changes, government directives, market interest rate). The concentration of credit risk is limited due to the fact that the customer base is large. None of the customers accounted for more than 10% of the receivables and revenue for the year ended 31st March, 2018and 31st March, 2017. 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 the 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.
295 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 Between and More than Particulars Total 1 year 5 years 5 years As at 31st March, 2019 Non - Current Financial Liabilities Borrowings - 9,21,004.56 4,87,642.78 14,08,647.34 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 16,141.17 6,07,627.31 6,23,768.48 - 9,37,145.73 10,95,355.38 20,32,501.11 Current Financial Liabilities Borrowings 35,563.42 - - 35,563.42 Trade Payables 7,03,823.71 - - 7,03,823.71 Other Financial Liabilities 12,58,070.66 - - 12,58,070.66 19,97,457.79 - - 19,97,457.79 Total financial liabilities 19,97,457.79 9,37,145.73 10,95,355.38 40,29,958.90 As at 31st March, 2018 Non - Current Financial Liabilities Borrowings - 11,27,230.14 4,42,727.70 15,69,957.84 Trade Payables - - 85.29 85.29 Other Financial Liabilities - 16,475.55 5,25,184.04 5,41,659.58 - 11,43,705.69 9,67,997.03 21,11,702.72 Current Financial Liabilities Borrowings 16,852.95 - - 16,852.95 Trade Payables 6,38,467.63 - - 6,38,467.63 Other Financial Liabilities 12,79,910.25 - - 12,79,910.25 19,35,230.83 - - 19,35,230.83 Total Financial Liabilities 19,35,230.83 11,43,705.69 9,67,997.03 40,46,933.54
296 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 The Group has access to Cash Credit facilities as described below, of which ?221,936.59 Lakhs were unused at the end of the reporting period (as at 31st March, 2018 ?250,980.78 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 As at As at annually and payable at call: 31st March, 2019 31st March, 2018 Amount used 35,563.41 6,519.22 Amount unused 2,21,936.59 2,50,980.78 D Fair value measurement Fair value of the Group’s financial assets on a recurring basis: Some of the Group’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. (a) Financial assets at fair value through other comprehensive income (FVTOCI) Fair value as at Financial assets/ st st Fair value Valuation technique(s) As at 31 As at 31 financial liabilities hierarchy and key input(s) March, 2019 March, 2018 Investment in Equity Instruments 32,362.98 32,219.93 Level 1 Quoted bid prices from Stock (quoted) exchange-NSE / BSE Investment in Governement 12,520.85 12,485.02 Level 1 Quoted bid prices from Stock Securities exchange-NSE / BSE Investment in Equity Instruments 8,711.83 6,182.52 Level 3 Valuation techniques for which (unquoted) the lowest 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, 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.
47 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 297 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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, and as per Accounting policy the Subsidiary Company GSECL has carried Impairment test for the year under consideration and ? Nil lakhs (PY ?519.43 lakhs) is recognised as impairment loss. 48 The subsidy claims on Government of Gujarat are made by Gujarat Urja Vikas Nigam Limited (GUVNL), the Holding Cpmpany 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 1 (D) (7) to the financial statements. The Holding Company has reviewed the status of subsidies receivable as of 31st March, 2019 of ?324,588.53 Lakhs (31st March, 2018 : ?342,141.57 Lakhs) in accordance with its policy on financial instruments and does not expect any credit loss. 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 Particulars st st 31 March, 2019 31 March, 2018 A. Contingent Liabilities not provided in respect of : I. Purchase 130.12 130.29 II. Leasing Finance availed by erstrwhile GEB 1,731.53 1,703.00 III. Power Purchase 64,391.00 64,391.00 IV. Stamp Duty on mortgage deed for loans availed by erstwhile GEB from LIC 1,198.32 1,198.52 V. Employees 97,150.50 89,259.50 VI. Disputed matters of Income Tax, Service Tax, VAT, Property Tax, Excise Duty, etc. (including against erstwhile GEB) 1,07,958.77 73,029.30 VII. Claims against Companies not acknowledged as debts (Legal Matters) & Others 86,838.06 84,268.89
298 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 VIII.Demand raised by Irrigation Department, Water Reservation Charges & Interest 1,85,038.99 1,76,788.13 2. Other money for which the Companies are contingently liable i. Letter of Credit 1,40,495.97 1,52,597.20 ii. Guarantees issued by Banks & others on behalf of the Company 37,754.41 38,870.21 Associate 1. Claims against the Company not acknowledged as debts i. Fuel Cost & Transportation Charge 156.34 156.34 ii. Employees 0.27 0.27 iii. Disputed matters of Income Tax, Excise duty, Serice tax & Property Tax 1,089.82 814.24 iv. Claims against Company w.r.t. Mine Development 2,638.21 2,638.21 v. Demand for Water Reservation Charges & Interest from Narmada Water Resources and Water Supply Dept. 236.17 235.89 vi. Claims in case of land acquisition 132.56 193.72 vii. Others 787.76 5,178.25 Joint Venture 1. Claims against the Company not acknowledged as debts A i. Claims against Company by M/s. AMPL regarding Development of Coal Block 15,991.60 15,991.60 Total 7,43,720.39 7,07,444.56 B 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 the contingent liabilities, wherever applicable, in its financial statements. The Group does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of the above are determinable only on receipt of judgments / decisions pending with various forums / authorities. 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
299 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 be measured due to uncertainties that surround the related events and circumstances, except the Contingent asset disclosed by Subsidiary Company GSECL:
Contingent Assets (? in Lakhs) As at As at Particulars st 31st March, 2019 31 March, 2018 Coal Claims related to its Quality 26,796.40 16,692.00 Court related Matter - Not Honouring Contractual Obligation by Vipulkumar 595.89 595.89 Total 27,392.29 17,287.89 C Capital Commitments (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 A. Capital Commitments Estimated amount of Contract remaining to be executed on capital accounts (Net of Advances) 2,40,121.71 3,37,091.42 Total 2,40,121.71 3,37,091.42 B. Other Commitments Other Commitments 4,525.15 4,007.31 Total 4,525.15 4,007.31 Associate A. Capital Commitments 1,080.06 7,535.24 B. Other Commitments - 2,581.84 Joint Venture A. Capital Commitments - - B. Other Commitments - -
50 CSR Expenditure (? in Lakhs) As at As at Particulars st 31st March, 2019 31 March, 2018 The CSR expenditure comprises the following: a) Gross amount required to be spent by the Group during the year 2,364.16 2,115.37 b) Amount spent during the year 1,101.42 825.32
300 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 c) For the year ended 31-03-2019 For the year ended 31-03-2018 Particulars In Cash Yet to be Total In Cash Yet to be Total paid in paid in cash cash (i) Construction / acquisition of any asset 122.43 - 122.43 149.46 - 149.46 (ii) On purpose other than (i) above 954.31 24.68 978.99 601.61 74.25 675.86 Total 1,076.74 24.68 1,101.42 751.07 74.25 825.32 d) For CSR amount which has remained unspent during the year, suitable reasons would be provided in the Directors' Report. 51 The Group 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. 52 Research & Development Expenditure as per GUVNL The details of Revenue Expenditure & Capital Expenditure incurred on Research and Development is as under: (? in Lakhs) As at As at Particulars st st 31 March, 2019 31 March, 2018 Capital Expenditure : Computers and related Equipments - 15.28 Less: Depreciation for the year - 1.14 Total Capital Expenditure (Net of Depreciation) : - 14.14 Revenue Expenditure : Employee Benefits 137.39 105.70 Material Consumed 3.14 0.58 Administrative and Misc. Expenses 37.64 30.24 Depreciation 2.29 1.14 Total Revenue Expenditure : 180.46 137.67 Total Research and Development Expenditure : 180.46 151.81
301 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Research and Development grant related income is disclosed under Note No. 34. 53 Foreign Currency Loan During the year, GETCO has taken Foreign Currency Loan from Asian Development Bank (ADB) amounting to USD Nil (P.Y. USD 31.58 lakhs). Availment of Loan 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 2018-19 amounting to USD 16.75 lakhs (P.Y. USD 11.25 lakhs) is shown under Finance Cost. Foreign currency fluctuation Gain / (loss) related to ADB Loan no. 2778-IND as on 31.03.2019 is ?2531.81 lakhs (P.Y. (?51.99 lakhs)). Foreign currency fluctuation Loss is accounted under the Finance Cost as the projects are completed in FY 2016-17. Also during the year, GETCO has taken Foreign Currency Loan from KfW amounting to Euro 108.80 lakhs (P.Y. Euro 37.28 lakhs). Availment of Loan is in progress. Interest and commitment charges for the year 2018-19 amounting to Euro 3.06 lakhs (P.Y. Euro 0.63 lakhs) is shown under Capital Work In Progress. Foreign currency fluctuation Gain / (loss) related to KfW Loan as on 31.03.2018 is ?395.03 lakhs (P.Y. ?135.95 lakhs)).Foreign currency fluctuation Gain is capitalized/adjusted to the extent to Foreign Exchange Loss capitalized in previous years. The same is adjusted/capitalized to the dedicated projects funded by KfW as the project are under implementation stage. The amount left after adjusting the previous years Foreign Exchange Loss is shown as Gain of Foreign Exchange Fluctuation under the head Other Income. Further there is Foreign currency fluctuation Gain / (loss) of ? 78.36 lakhs as on 31.03.2019 related to Capital Works. The same is booked as Gain of Foreign Exchange Fluctuations and is shown under the head Other Income. 54 Capital Work In Progress by GETCO The subsidiary company GETCO has provided General Establishment Charges (GEC) and Head Office Supervision Charges (HOSC) on amount of ?5712.18 lakhs from current year on the expenditure recorded under the head unbilled capital work in progress. 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. In case of used transformers withdrawn from fixed assets and are being used in capital projects, the same are shown as CWIP at Net Value and accordingly General Establishment Charges (GEC) and
302 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Head Office Supervision Charges (HOSC) for the year are allocated on it. The company has proportionately loaded borrowing costs @ 4.29% (Previous Year 4.83%) on the value of opening Capital Work in Progress. During the year, the company has capitalized ?5711.05 towards the interest on the funds for meeting capital expenditure requirement. 55 Captive Mining by GSECL a 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 Group in the name of “Mahaguj Collieries Limited” (MGCL) has been 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 has cancelled the allocated coal block. Subsequent to cancellation of the Coal Block, the MDO M/s Adani Enterprises Ltd. has raised a claim of ?399.79 Crores against MGCL for the expenditure incurred by them for the project. M/s AEL has invoked the Arbitration Proceeding due to denial of claim by MGCL. with application U/s 17 for interim relief of ?44.70 Crores to the Arbitral Tribunal on 10th May, 2017. The Arbitral Tribunal has passed the first Interim Award and directed MGCL to pay to M/s. AEL a sum of ?3279.60/- Lakhs which is 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. b Nominated authority, Ministry of Coal, Govt. Of India, declared the GSECL as Allottee of the Gare Palma Sector I Coal Mine, in Raigarh District, Chattisgarh and Allotment Agreement was signed on 30th March, 2015 and all the allotment conditions as per Allotment Agreement were completed by the Group on 24/04/2015. GSECL has submitted Bank Guarantee of ?29,700 Lakhs to the Nominated Authority, Ministry of Coal, GOI as per the allotment conditions. GSECL has incurred pre-operative expenditure of ?10,281.00 Lakhs (P.Y. ?9,772.49 Lakhs) for the same upto March, 2018 which includes payment of ?6,514 Lakhs made to prior allottee of the mine and ?2,500 Lakhs made to MOC as upfront fee as per allotment agreement. Finalization of tender for Mining Developer and Operator is under process. 56 Regarding outstanding dues of M/s. Essar Steel India Limited: 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 303 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Department), Government of Gujarat (GOG), GUVNL, GETCO, Chief Electrical Inspector, Essar Group & Bhander Power Ltd., the Group, has therefore, issued supplementary bill of ?2311.02 crores to ESIL as per the conditions of the MoM for 2020.99 MUs during F.Y 2011-12. Subsequently, as per directives of E&P Department vide their letter dated 05.01.2012, the revised supplementary bills of ?192.59 crores for 168.42 MUs was issued to ESIL till the case of total claim of original supplementary bill is finally settled for breach of said MoM. During FY 2011-12, pending final settlement of the total claim as shown above and considering the provisions of Accounting Standard-9 relating to Revenue Recognition issued by the Institute of Chartered Accountants of India (ICAI) and also as ESIL paid the amount of ?192.59 crores of revised supplementary bills, revenue to the extent of ?192.59 crores was recognized in the books and recognition of balance Revenue of ?2118.43 crores was deferred till the final settlement is made by the E&P department, GOG, or appropriate judicial forum. In this regard, ESIL filed appeal under Section 127 of the Electricity Act before the Chief Electrical Inspector. The Chief Electrical Inspector passed order dated 01.11.2013 for revising bill for 25.23 MUs and for refunding the balance amount. Aggrieved by the order passed by the Chief Electrical Inspector, the Group challenged the order vide SCA No. 2859/2014 on 19.02.2014 before the Hon’ble High Court, Gujarat. The Hon’ble High Court of Gujarat has passed judgment on 22.01.2015 directing the refund of the excess amount paid by M/s. ESIL puRs. uant to the revised supplementary bills over and above the quantity of unauthorized power used by M/s. ESIL. Aggrieved by the order, the Group challenged the judgment vide LPA no. 465/15 & LPA no. 466/15. The High Court of Gujarat allowed the aforesaid LPAs filed by the Group and passed order in favour of the Group on 17.7.2015. Accordingly, order passed by the Chief Electrical Inspector dated 01.11.2013 as well as the judgement and order dated 22.01.2015 passed by the learned single Judge have been quashed and set aside. M/s. ESIL has challenged the aforesaid order and filed SLP Civil No.27920/2015 before Hon’ble Supreme Court which is pending. Hence the Contingent liabilities are disclosed under note No. 50 which includes the amount of ?19258.54 lakhs of the SLP filed by M/s. ESIL. Further to above, the amount of Cross subsidy surcharge relating to respective financial yeaRs. till F.Y 2016-17 has been assessed and accounted in books as receivable during relevant years. which has been contested by M/s. ESIL as not payable by filing petition before GERC. M/s. ESIL had earlier filed petition in the matter before the Central Electricity Regulatory Commission who dismissed the
304 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 petition on grounds that dispute raised falls within jurisdiction of GERC. Besides this claim which has been accounted in books as receivable, the Group also has other legal claims which are of a recurring nature, which have not been recognized and reflected in receivables as per the Group’s accounting policy in compliance with Ind AS. The Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 (IBC) has been initiated against M/s Essar Steel Limited. The CIRP has been approved by the Honorable National Group Law Tribunal, Ahmedabad and it is ongoing. The Group has filed its claim with the designated Resolution Professional for ? 5882.28 crores (including interest component of ?2204.06 crores ) for period upto 01.08.2017 and the same is of a recurring nature. The Management has assessed the progress and status of CIRP including the number of bidde? and the bid amounts and the likely recovery of the Group’s dues. 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 Group’s claims and litigation and without prejudice to the Group’s rights to recover the aforementioned claims, the Management notes based on the facts and circumstances as of the date of issue of these financial statements, the receivable to be irrecoverable. Hence, the Group has impaired the entire receivable of ?440.40 crores as irrecoverable in these financial statements in compliance with Ind AS 109 on “Financial Instruments”. Accordingly the Balance of Trade Receivable is reduced to that extent. 57 Fixed Assets and Depreciation: (i) 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 for its determination and thus same cannot be quantified. (ii) 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. 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 the lower of its carrying amount and fair value less costs to sell. However, the Group has not determined the fair value less cost to sell for assets retired from active use as the management is of the opinion that the fair value of the same is higher than the Net Book Value due to very old assets and upward trend in
305 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 scrap rates. As a result of this, Group has not recognized 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. (iii) Land held under lease is amortized as per the rate notified by the GERC. 58 Long Term Contracts 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.
59 The Group has assessed applicability of Appendix C of Ind AS – 17 “Leases” with respect to its power purchase agreement (PPA) for its power generation plants. In assessing the applicability, judgement is required to evaluate the right to use the asset the underlying asset, substance of the transactions and other significant terms and conditions of the arrangements to conclude whether the arrangement meets the criteria under Appendix C. The Group has noted and considered the provisions of the Electricity Act, 2003, terms of its Power Purchase Agreement, power sector as organized in Gujarat, the nature and extent of regulation of the power sector etc. The Group has specifically considered the nature of the arrangement in terms of the PPA entered and it notes that Gujarat Urja Vikas Nigam Limited (GUVNL), the holding Group, is purchasing power for four distribution licensees - Madhya Gujarat Vij Group Limited (MGVCL), Uttar Gujarat Vij Group Limited (UGVCL), Dakshin Gujarat Vij Group Limited (DGVCL) and Paschim Gujarat Vij Group Limited (PGVCL). The Group notes that all these distribution licensees are fellow subsidiaries i.e. all are subsidiaries of GUVNL and all of the entities including the Group are Gujarat State Government PSUs. The Group has particularly noted from the PPA that the power procurer - GUVNL is authorized by the distribution licenses to execute the PPA with the Group and this is a joint procurement arrangement involving multiple procedures Based on the above factors, the Group concluded that the PPAs entered into are not arrangements that contain a lease.
60 Balance in respect of trade payables, trade receivables, loans and advances (debit / credit) as at 31.03.2019 have been taken as shown in the books of accounts and are subject to confirmation and reconciliation. The deposit for electrification and service connections are transferred to Consumers ’ Contribution on finalization of their bills. 306 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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. 61 Exceptional Item: Amount Receivable from Trade Receivables for wheeling charges includes an amount aggregating to ?36577.08 lakhs (P.Y. ?36577.08 Lakhs) for period 2006 to 2011, due from M/s Essar Steel Limited. This is under litigation in the court of law. The Honorable High Court, Gujarat has passed order in favor of GETCO and currently matter is pending with Honorable Supreme Court. The Group has other legal claims including delayed payment charges of ?49813.99 lakhs up to 31st March 2018, which have not been recognized and reflected in receivables as per the Group’s accounting policy in compliance with Ind AS. The Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 (IBC) has been initiated against M/s Essar Steel Limited. The CIRP has been approved by the Honorable National Group Law Tribunal, Ahmedabad and it is ongoing. GETCO has filed its claim with the designated Resolution Professional. The Management has assessed the progress and status of CIRP including the number of bidders and the bid amounts and the likely recovery of the Group’s dues. 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 Group’s claims and litigation and without prejudice to the Group’s rights to recover the aforementioned claims, the Management notes based on the facts and circumstances as of the date of issue of these financial statements, the receivable to be irrecoverable in its likelihood. Hence, the Group has written off the entire receivable of ?36577.08 lakhs in previous year financial statements. The same is shown under the head Exceptional Items in Statement of Profit & Loss. 62 Related Party Disclosures A Name of related parties and description of relationship: Name of Related Parties 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 & Sewerage Board Government Related Entity Shri Sujit Gulati, IAS (01.04.2018 to 16.07.2018) Chairman
307
Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Gujarat Energy Transmission Corporation Limited Shri B.B. Chauhan, Managing Director 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) Dakshin Gujarat Vij Company Limited Ms. Ardra Agarwal, IAS Key Management Personnel (KMP) Shri N.A. Dave Key Management Personnel (KMP) Shri V.H. Vora Key Management Personnel (KMP) Madhya Gujarat Vij Company Limited Shri Rajesh Manjhu, IAS Key Management Personnel (KMP) Shri K. R. Shah CFO Shri K. M. Antani CS Shri V. M. Chavan CS Paschim Gujarat Vij Company Limited Shri Bhavin Pandya (Till 04.09.2019) Key Management Personnel (KMP) Smt. Shweta Teotia (From 04.09.2019) Key Management Personnel (KMP) Shri Kintu Kumar Malkan Key Management Personnel (KMP) Shri Sudhir Bhatt (Till 22.11.2018) Key Management Personnel (KMP) Uttar Gujarat Vij Company Limited 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
309 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 B The following transactions were carried out with the related parties in ordinary course of business during the year: (? in lakhs) Government Nature of Transaction Associate KMP Total related Entity Loan Received 10,000.00 10,000.00 20,000.00 20,000.00 Gujarat State Financial Services Limited 10,000.00 10,000.00 20,000.00 20,000.00 Loan Repayment 1,41,333.12 1,41,333.12 (1,29,820.25) (1,29,820.25) Gujarat State Financial Services Limited 1,41,333.12 1,41,333.12 (1,29,820.25) (1,29,820.25) Water Charges 7,442.69 7,442.69 (6,458.11) (6,458.11) Gujarat Water Supply and Sewearage Board 7,442.69 7,442.69 (6,458.11) (6,458.11) Interest 10,059.41 10,059.41 (10,362.91) (10,362.91) Gujarat State Financial Services Limited 10,059.41 10,059.41 (10,362.91) (10,362.91) Remuneration paid to KMP / Directors: 735.69 - 735.69 (585.98) - (585.98) Shri Sujit Gulati, IAS ------Shri Pankaj Joshi, IAS 32.27 32.27 (27.31) (27.31) Shri S B Khyalia 37.65 37.65 (30.02) (30.02) Shri K M Bhuva 33.32 33.32 (25.67) (25.67)
310 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Shri M B Parikh 8.04 8.04 (30.90) (30.90) Shri Parthiv Bhatt 28.83 28.83 (22.27) (22.27) Shri Shubhadeep Sen 28.04 28.04 - Shri Pradip Ramakrishna Rao Dahake 100.99 - 100.99 (47.68) - (47.68) Shri V. P. Jani 31.99 - 31.99 (24.24) - (24.24) Shri R. M. Bhadang 25.11 - 25.11 (1.72) - (1.72) Shri M. B. Kaka - - - (16.68) - (16.68) Shri M. B. Kaka - - - (10.00) - (10.00) Shri M. B. Kaka - - - (21.66) - (21.66) KMP - Shri B.B. Chauhan 41.38 - 41.38 (28.34) - (28.34) KMP - Shri Nimesh A. Patel 28.61 - 28.61 (23.85) - (23.85) KMP- Shri Nishant Shrivastava 20.23 - 20.23 (15.50) - (15.50) Ms. Ardra Agarwal,IAS 12.72 - 12.72 (11.75) - (11.75) Shri N.A. Dave 31.59 - 31.59 (22.76) - (22.76) Shri V.H. Vora 26.57 - 26.57 (20.17) - (20.17) Shri Rajesh Manjhu, IAS 21.69 - 21.69 (17.74) - (17.74)
311 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Shri K. R. Shah 38.79 - 38.79 (29.76) - (29.76) Shri K. M. Antani 45.96 - 45.96 (24.24) - (24.24) Shri V.M Chavan 1.35 - 1.35 - - - Shri Bhavin Pandya-Managing Director 21.09 21.09 - - Shri J J Gandhi- I/c Managing Director - - - (3.23) - (3.23) Shri H R Suthar- Managing Director (till 31.1.2018) - - - (12.98) - (12.98) Shri Kintu Kumar Malkan- GM (F&A) & CFO 30.23 - 30.23 (23.33) - (23.33) Shri Sudhir Bhatt- Company Secretary 4.94 - 4.94 (27.95) - (27.95) Shri Swaroop P, IAS 15.20 - 15.20 - - - Shri Mahesh Singh, IFS 2.07 - 2.07 - - - Shri B.A. Shah, lAS 2.78 - 2.78 (17.07) - (17.07) Shri R.B. Kothari 33.68 - 33.68 (25.21) - (25.21) Shri N.M. Joshi 30.57 - 30.57 (23.95) - (23.95) Perquisites paid to KMP / Directors: 10.79 - 10.79 (7.52) - (7.52) Shri Sujit Gulati, IAS ------Shri Raj Gopal, IAS ------
312 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Shri Pankaj Joshi, IAS 3.21 - 3.21 (2.26) - (2.26) Shri S B Khyalia 3.74 - 3.74 (2.96) - (2.96) Shri K M Bhuva 3.31 - 3.31 (2.30) - (2.30) Shri M B Parikh ------Shri Parthiv Bhatt ------Shri Shubhadeep Sen 0.53 0.53 - Incidental Charges paid to KMP / Directors: 2.86 - 2.86 (2.46) - (2.46) Shri Sujit Gulati, IAS 0.06 - 0.06 (0.25) - (0.25) Shri Raj Gopal, IAS 0.20 - 0.20 - - - Shri Pankaj Joshi, IAS 0.54 - 0.54 (0.45) - (0.45) Shri Sanjeev Kumar, IAS 0.08 - 0.08 (0.09) - (0.09) Shri Milind Torawane, IAS 0.14 - 0.14 (0.14) - (0.14) Ms. Mona Khandhar, IAS 0.18 - 0.18 (0.07) - (0.07) Shri R N Singh - - - (0.27) - (0.27) Shri Bimal N Patel - - - (0.12) - (0.12)
313 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Shri P J Mathew - - - (0.03) - (0.03) Shri N N Misra 0.10 - 0.10 - - - Shri R C Dhup 0.04 - 0.04 - - - Shri S B Khyalia 0.38 - 0.38 (0.37) - (0.37) Shri K M Bhuva 0.36 - 0.36 (0.31) - (0.31) Shri I. P. Gautam IAS 0.36 - 0.36 (0.09) - (0.09) Shri Nirmal Jha 0.04 - 0.04 - - - Shri V T Rajpara 0.06 - 0.06 - - - Shri Pradip Ramakrishna Rao Dahake 0.32 - 0.32 (0.27) - (0.27) Sitting Fees paid to Independent Directors: 1.20 - 1.20 (4.36) - (4.36) Shri R N Singh - - - (0.35) - (0.35) Shri Bimal N Patel - - - (0.35) - (0.35) Shri P J Mathew - - - (0.05) - (0.05) Shri N N Misra 0.25 - 0.25 (0.37) - (0.37) Shri R C Dhup 0.10 - 0.10 - - -
314 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Shri P. H. Rana - - - (0.89) - (0.89) Shri H. P. Desai - - - (1.15) - (1.15) Shri Nirmal Jha 0.10 - 0.10 - - - Shri Anish Sugathan 0.20 - 0.20 - - - Shri Nirav Shah 0.20 - 0.20 - - - Shri Vasant Gandhi 0.20 - 0.20 - - - Shri Ajay Pandey - - - (0.60) - (0.60) Shri B A Prajapati - - - (0.60) - (0.60) Shri V T Rajpara 0.15 - 0.15 - - - Balances: Payable 2,87,580.43 2,87,580.43 (3,89,756.76) (3,89,756.76) Gujarat State Financial Services Limited 2,79,613.29 2,79,613.29 (3,82,346.41) (3,82,346.41) Gujarat Water Supply and Sewearage Board 7,967.14 7,967.14 (7,410.35) (7,410.35)
Previous Year figures are mentioned in brackets. The Company has not paid any remuneration to Chairmen, Shri Sujit Gulati, IAS and Shri Raj Gopal, 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.
315 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 63 Business Combination by Subsidiary GSECL
63.1 The Board of directors of the company in its meeting held on August 13, 2018 decided for merger of Bhavnagar Energy Company Limited (BECL) with the company. BECL (a subsidiary of Gujarat Power Corporation Limited) is a wholly owned Government of Gujarat (GOG) undertaking and engaged in the activity of generation of electricity from lignite. The primary reason for merger was availing benefit of economies of scale, synergy and tax benefits.
For this purpose, the Government of Gujarat notified Gujarat Electricity Reform (Transfer of Generation Undertakings) Scheme, 2018 (the Scheme) under Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003, on 27 August, 2018 for merger effective from April 01, 2018 (acquisition date) of BECL with the Company.
The company has filed form INC 28 on September 10, 2018 with Registrar of Companies for registration of the copy of gazette notified by GOG. However, the said form was not taken on record by the Registrar and referred the matter to Ministry of Corporate Affairs (MCA). Consequently, the Company filed a petition on March 11, 2019 with MCA for approval of the scheme of said merger of BECL with the company u/s 230-232 and 237 of the Companies Act, 2013. The matter was heard on August 30, 2019 by MCA and directed the company to file affidavite on the facts of merger. The matter is pending before MCA.
Pending the Order of MCA, the Company has accounted merger of BECL in accordance with Ind AS - 103 "Business Combination" considering the control has been obtained over BECL by the company.
63.2 Accounting treatment
As per the scheme, the Company is required to issue 1 equity share to each shareholder of BECL against total number of equity shares of BECL held by each of such shareholders as on to the date of notification of the scheme. Issue of equity shares by the company to the shareholders of BECL is the consideration for shareholders of BECL in respect of transfer of BECL and extinguishment of their rights as shareholder of BECL. Accordingly, the company has issued 7 equity share of ? 10/- to shareholders of BECL (1 equity share to each shareholder).
Business combination involves entities under common control (both the companies are controlled by Government of Gujarat), and hence the business combination has been accounted for using the pooling of interest method in accordance with Appendix C of Ind AS - 103 "Business Combinations"
316 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 63.3 Net identifiable assets acquired on acquisition date ( ? in Lakhs ) Assets acquired on acquisition date 4,58,601.27 Liabilities assumed on acquisition date 4,49,544.69 Net identifiable assets acquired on acquisition date 9,056.58 63.4 Consideration paid and capital reserve created ( ? in Lakhs ) Total share capital as on 27 August, 2018 1,05,400.39 Consideration paid by issue of equity shares 0.0007 Capital reserve accounted for 1,05,400.39 On 01 April, 2017 84,600.39 During the year 2017 - 18 18,400.00 During the year 2018 - 19 2,400.00 63.5 Loss of BECL on acquisition date ( ? in Lakhs) Net identifiable assets acquired on acquisition date 9,056.58 Capital reserve on acquisition date 1,03,000.39 Net loss of BECL 93,943.81 63.6 Recognition of BECL Loss ( ? in Lakhs ) Directly in retained earnings on April 01, 2017 32,218.09 Recognised in statement of profit and loss for the year ended on March 31, 2018 61,725.72 Total 93,943.81 As per Ind AS - 103, the financial information in the financial statements in respect of prior period is required to be 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. In view of this, previous year figures have been restated considering the audited financial statements of BECL for the year ended on March 31, 2018. To restate the figures of previous year following steps have been taken: - capital reserve and loss of BECL on 31st March, 2017 have been identified and accounted on 01st April, 2017 - statement of profit and loss for the year 2017 - 18 restated - equity share capital issued during the year 2017 - 18 have been accounted as capital reserve for the year ended on 31st March, 2018 - balance sheet as on 31st March, 2018 have been restated considering the cumulative effect 317 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Equity share capital issued by BECL during the year 2018 - 19 has also been accounted for as capital reserve. 64 The Holding Company GUVNL, had entered into a Power Purchase Agreement (PPA) with power supplier M/s. Adani Power (Mundra) Ltd. in the year 2007, wherein certain contractual issues had arisen between them and the Company. These issues were redressed in various forums in favour of the Holding Company which finally was appealed by the supplier in the Hon'ble Supreme Court of India in 2011. The Hon'ble Supreme Court has passed judgment on 2 July 2019 in favour of the supplier whereby the supplier is entitled to approach CERC for determination of compensatory tariff and other charges to be payable by the Holding Company. The management has reviewed the judgment and provisions made in past and based on it’s considered opinion has made a preliminary assessment and estimation of the potential tariff, if any payable. Based on the information as available currently and considering the relevant variable factors, the compensation is estimated @ 70 paise per unit of electricity supplied by the supplier in the earlier years and accordingly the provision is enhanced by ?38,558.09 Lakhs in the current year in Holding company. 65 Upto 31st March, 2016 the Company was computing the grants/consumer contributions received against depreciable assets to be recognised in Statement of Profit or Loss based on reducing balance method. With effect from 1 April 2016, the Company changed its method from reducing balance method to the straight-line method and consequentially the rates at which grant would be recognised in the Statement of Profit and Loss. The rate applied for grant recognition was equivalent to rate of depreciation charge on the assets which was at 5.28%. The change was made as this would more accurately reflect the pattern of usage and the expected benefits of such grants/consumer contributions and provide greater consistency with the depreciation methods on the assets used by the Company. The Company assessed based on the principles of Ind AS, such a change to recognize grants in proportion of the depreciation expense as a change in accounting estimate. A change in accounting estimate has to be applied prospectively from the period of change as per Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" and cannot be applied retrospectively. If the Company had applied the above change in method retrospectively, the balances of the Government grants and Consumer contributions as at 31st March, 2019 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. 66 “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 Company has initiated legal recovery process. The Company assesses a full recovery of 318 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 this amount and hence has considered this amount to be good and recoverable. 67 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) alongwith 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". 68 Disclosures pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets” by Subsidiary GSECL (? in lakhs) Particulars Provision for CSR as per Ministry of Environment & Forest Balance as at 01-04-2018 - Additional provision during the year 170.00 Provision used/reversed during the year 54.00 Additional provision for unwinding of interest and change in discount rate - Balance as at 31-3-2019 116.00 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, erstwhile BECL was required to incurred ?840.00 Lakhs as one time capital cost for Corporate Social Responsibility program. Against this ?350.75 Lakh has been expended till 31.03.2019. Further as per the condition, the Company needs to incur ?170.00 Lakhs per year as CSR recurring expenditure till the operation of the Plant located at Padva Village, Bhavnagar District, Gujarat. The Company has expended ?54.00 Lakhs during the year and provided for recurring expenditure for Balance Amount of ?116.00 Lakhs towards CSR. 69 During the year, GSECL has written back various liabilities amounting to ?15,295.11 Lakhs ( P.Y. ?860.84 Lakhs) which is no more payable. 70 GSECL has planned to close down 2 units, each of 70 MW capacity, at Kutch Lignite TPS w.e.f. 01.01.2020. This will result into non recovery of return on equity of ?3,200 Lakhs Per Year.
319 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 71 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 favor 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 loans with GETCO as on 31.3.2019 is ?3389.95 lakhs (P.Y. ?3960.00 lakhs) @ 10.00% p.a. (iii) The Company during the F.Y. 2019-20, has made prepayment of the loans of Corporation Bank and Syndicate bank amounting to ?3000.00 lakhs and ?18538.45 lakhs respectively. Further the company has also preponed the installments for the period 1st July, 2019 to 31st March, 2022 amounting to ?75675.88 lakhs due to Rural Electrification Corporation Limited. The same has been treated as Non Adjusting Event occuring after the reporting period and is disclosed appropriately. 72 Additional Information on Consolidated Financial Statements under Schedule III of the Companies Act, 2013.
Net Assets i.e. Total Assets Share in Profit or Loss minus Total Liabilities Particulars As % of Amount As % of Amount Consolidated (? in Lakhs) Consolidated (? in Lakhs) Net Assets Profit or Loss Parent Gujarat Urja Vikas Nigam Ltd. 77.11% 20,53,683.73 1.77% 1,764.55 Subsidiary Gujarat State Electricity Corporation Limited 7.46% 1,98,676.35 37.32% 37,184.58
320 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19
Gujarat Energy Transmission Corporation Ltd. 9.12% 2,43,006.54 35.62% 35,493.88 Dakshin Gujarat Vij Company Limited 2.00% 53,360.86 3.94% 3,926.75 Madhya Gujarat Vij Company Limited 1.34% 35,562.06 3.33% 3,313.28 Paschim Gujarat Vij Company Limited -0.64% (17,163.35) 7.49% 7,466.20 Uttar Gujarat Vij Company Limited 1.01% 26,998.74 3.67% 3,661.50 Associate Gujarat Industries Power Company Limited 2.59% 68,988.84 6.86% 6,836.11 Joint Venture Mahaguj Collieries Limited 0.00% - 0.00% -
Share in Other Share in Total Comprehensive Income Comprehensive Income Particulars As % of Amount As % of Amount Consolidated (? in Lakhs) Consolidated (? in Lakhs) Net Assets Profit or Loss
Parent
Gujarat Urja Vikas Nigam Ltd. -15.65% 2,587.33 5.24% 4,351.88
Subsidiary
Gujarat State Electricity Corporation Limited 16.40% (2,711.71) 41.48% 34,472.87
Gujarat Energy Transmission Corporation Ltd 24.61% (4,070.44) 37.81% 31,423.44
Dakshin Gujarat Vij Company Limited 15.86% (2,622.84) 1.57% 1,303.91
Madhya Gujarat Vij Company Limited 12.92% (2,136.84) 1.42% 1,176.45
Paschim Gujarat Vij Company Limited 27.56% (4,557.56) 3.50% 2,908.63
Uttar Gujarat Vij Company Limited 15.74% (2,603.32) 1.27% 1,058.18
Associate
Gujarat Industries Power Company Limited 2.55% (421.08) 7.72% 6,415.03
Joint Venture
Mahaguj Collieries Limited 0.00% - 0.00% -
321 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 73 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 the notes. b. Balance Sheet, Statement of Profit & Loss and Cash Flow statement read together with the schedules to the accounts and notes thereon, 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 statement of affairs of the Group as at the end of the year and results of the Group for the year under review.
74 Previous year figure have been regrouped, recast and restated wherever necessary for comparative purpose. 75 Approval of Financial Statements The Consolidated Financial Statements were approved for issue by the Board of Directors on 11th November, 2019.
As per our Report of even date attached For and on behalf of the Board
For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SHAHMEENA HUSAIN, IAS DIN: 02252358 Chairman Managing Director DIN:03584560
VINAY SEHGAL SHUBHADEEP SEN PARTHIV BHATT Partner General Manager (F&A) & CFO Company Secretary Membership No. 109802
Place : Gandhinagar Place : Gandhinagar Date : November 11, 2019 Date : November 11, 2019
322 Form AOC-I (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of financial statements of Subsidiary / Associate / Joint Venture Companies PART “A” : Subsidiaries (? in Lakhs)
Date since Percentage (%)C Reporting Reserves and Profit befoPrero vision FoPrr ofit After Proposed Sr. No. Name of SubsidiarySubsidiary Share Capital Total AssetTos tal LiabilitiesInvestmentsTurnover of ONSOLID Currency Surplus Taxation Taxation Taxation Dividend Gujar acquired Shareholding
1 Gujarat State Electr01-04-2005icity INR 2,12,779.885,02,50722,.6231,662.3015,16,374.8012,056.9311,61,079.003,522.93 360.22 37,244.14 - 100% Corporation limited (GSECL)
2 Gujarat Energy Transmi01-04-2005ssion INR 72,424.485,28,76723,.5264,124.5217,62,932.5412,520.853,14,303.5461,912.2812,032.8335,493.88 - 98.27% 15
A
Corporation Limited (GETCO) a TED FINANCIALS th - 3 Madhya Gujarat Vij Company t UrjaVik 01-04-2005INR 42, 550.561, 59,209 .185,06,037 .363,04,277 .98 - 6, 14,568 .77 6,296.31 444.28 3,313.28 100% AnnualR Limited (MGVCL)
4 Dakshin Gujarat Vij01-04-2005 Company INR 40,996.511, 76,396 .026,32,746 .614,15,353 .97 - 12, 76,952 .98 4,323.24 396.49 3,926.75 - 100% Limited (DGVCL)
5 Paschim Gujarat Vij01-04-2005 Company INR 6,31,625.9598,880.2814,84,973.397,54,467.16 - 17,13,052.146,305.66 (901.38) 7,466.20 - 100% Limited (PGVCL)
323 6 Uttar Gujarat Vij Company -
01-04-2005INR 55,633.082,36,980.097,00,284.504,07,671.33 - 12,18,253.665,166.87 94.53 3,661.50 100% eport 2018-19 Limited (UGVCL) as Nig T A
PART “B” : Associate/Joint Venture (? in Lakhs) TEMENT 2018-19
Shares of Associate/Joint Venture held by the companProfit/Ly onoss the for ytheear y endear
Latest Date on which Amount of Extent ofNet worth asN etpe worr thPr ofit forConsi the derNeotd i nConsi dered Reason why
No. of Description of am Limit Audited Associate or Investment Joint Venture shares Holding l%atest Balanceattribu tableye taro as Consolper idainti Conon (?sol idation the associate / Balance in issociate how there is Sr. No. Name of Associate / was associated Sheet (? in lakhs) Sheet (? inShare lakhs)holdingla astes t in lakhs) joint venture is Joint Venture or acquired significant per latest BalStaanctemeen t of not influence Sheet (? inP lakhs)rofit and Loss consolidated
(? in lakhs)
1 Gujarat Industries31-03-2019 Power 30-03-1989 4,05,90,279 10,592.35 26.84% 2,57,073.92 68,988.84 25,473.33 6,836.11 - Associate -
Company Limited (GIPCL) (Note-1 & 2) ed
31-03-2018 20,000 2 Mahaguj Collieries Limited01-11-2006 2.00 40.00% 5,419.83 2,167.93 (166.44) (66.58) - Joint Venture - of Subsidiary Company GSECL Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 Note : 1 There is significant influence due to percentage(%) of Share Capital. 2 Net worth attributable to Shareholding as per latest Balance Sheet Net Worth of GIPCL as above 2,57,073.92 Add: Proposed Dividend including Corporate Dividend Tax by GIPCL - Net Worth after above adjustment 2,57,073.92 GUVNL's group share in above Net Worth 68,988.84 Net worth attributable to Shareholding as per latest Balance Sheet 68,988.84 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 of Directors
For Mukund & Rohit Chartered Accountants Firm Registration No. 113375W PANKAJ JOSHI, IAS SHAHMEENA HUSAIN, IAS DIN: 02252358 Chairman Managing Director DIN:03584560
VINAY SEHGAL SHUBHADEEP SEN PARTHIV BHATT Partner General Manager (F&A) & CFO Company Secretary Membership No. 109802
Place : Gandhinagar Place : Gandhinagar Date : November 11, 2019 Date : November 11, 2019
324 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 FIFTEENTH ANNUAL GENERAL MEETING of the Company to be held on Monday, the 30th December, 2019 at Registered Office and any adjournment thereof in respect of such resolutions as are indicated below : Resolutions Ordinary Business 1 Adoption of Audited Financial Statements including Consolidated Financial Statements of the Company for the financial year ended 31st March, 2019, together with the Board's Report, the Report of
325 Gujarat Urja Vikas Nigam Limited 15th Annual Report 2018-19 CONSOLIDATED FINANCIAL STATEMENT 2018-19 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 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 2019-20, 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. 2019-20 – Ordinary Resolution 4 Appointment of Smt. Shahmeena Husain,IAS (DIN 03584560) as Director (continuing as Managing Director) – Ordinary Resolution
Affix Signed this ______day of ______2019. Revenue Stamp & Sign Signature of Shareholder across
Signature of Proxy holder/s
Note : This form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
326