About Us
The Ceylon Electricity Board (CEB) is a corporate body CEB is located in some of the most scenic and establish in terms of Parliament No.17 of 1969 as the salubrious locations in the country. As such, the successor to the Department of Government Electrical environmental dimensions imply a mandatory Undertakings. It is a national institution charged with requirement that the activities of the CEB should the responsibility of generating, transmitting and maintain a clean, green and sustainable environment. distributing electrical energy to reach all categories of consumers nationwide. As a national body serving a The affordability criteria highlight two aspects, firstly very vital function, revenue is collected according to a that the supply of electrical energy should be within the government approved tariff structure. reach of the people of our country at an affordable price irrespective of where they live, so that the people To carry out its role, the CEB has acquired a large base could make use of it to facilitate socio economic of physical assets, including generating stations, development. Secondly, our planning process, substation complexes, transmission lines and implementation strategies, distribution methodologies distribution networks located in all parts and r evenue collection activities should be geared to of the country. It also has a significant human resource provide electricity at an affordable price to the customer base to operate, maintain and plan the system. while ensuring that all these processes guarantee the availability, reliability and quality of the product while It is the responsibility of the CEB to make optimal use of adhering to acceptable environmental norms. the physical and human resources available through the application of pragmatic and time tested managerial This poses a major challenge to all the employees of the tools and methods taking into account the ultimate CEB to function with great commitment and zeal to objective of the CEB to achieve its goals. discharge their duties at optimal efficiency and cut down waste. It is also important to realize that we It is the duty of the CEB to provide reliable electricity to should be able to generate sufficient funds to the entire nation at internationally competitive prices successfully meet the aforementioned objectives and effectively and efficiently through a meaningful indeed to adequately meet the development needs of partnership with skilled and motivated employees using the future. appropriate state of the art technology for the socioeconomic development of the country in an economically sustainable manner while meeting acceptable environmental standards and a satisfactory rate of return on investments.
The availability, reliability and quality dimensions highlight the degree to which the CEB should orient its functions to the satisfaction of the customer and to serve the Nation. These are also the major concerns of the commercial and industrial sectors which have to be internationally competitive in order to provide employment opportunities and contribute to the economic and social development of our people and of our country. Much of the physical infrastructure of the Contents
9 Corporate Information
12 2010 in Perspective
18 Organization Chart
20 Chairman's Review
22 General Manager's Review
26 Operations Review
32 Generation Division
35 Transmission Division
44 Projects Division
55 Distribution Division 01
74 Distribution Division 02
88 Distribution Division 03
96 Distribution Division 04
104 Asset. Management & Centralized Services Division
112 Finance Division
114 Financial Review
118 Consolidated Income Statement
119 Consolidated Balance Sheet
120 Group Statement of Changes in Equity
124 Consolidated Cash-flow Statement
125 Notes to the Financial Statements
162 Auditor General's Report
177 Replies to the Auditor General's Report The Vision Quality Enrich Life through Power
The Mission Service to the nation To develop and maintain an efficient, coordinated and economical system of electricity supply to the whole of Sri Lanka, while adhering to our core values: Efficiency and effectiveness
Quality
Service to the nation Commitment Efficiency and effectiveness
Commitment
Safety
Professionalism Safety
Sustainability
Professionalism In June 2010, the Ministry of Power and Energy announced a fifteen-point Agenda for the Ministry, which also aimed at realization of the mission of the Board. The relevant programmes from this Agenda are described below. Sustainability
CEB Annual Report 2010 5 Enrich life th 1 Nanwamu Lanweema Under this initiative by the Ministry of Power and income groups and for those who receive Samurdhi Energy, Ceylon Electricity Board will be revamped to be benefits. A loan up to Rs. 30,000 is provided by CEB to a financially stable and technically sound entity within meet the cost of the connection, which will be the next 5 years. It is planned to generate new revenue recovered through the monthly electricity bill in 60 streams, minimize expenditure, improve efficiency, instalments. eliminate any corruption, meet operational costs and reduce debt. Ceylon Electricity Board intends not to be a burden on the national economy, and be a capable 4 Grama Shakthi entity, proud of it's achievements and respected by the Renewable energy technologies will be set up in rural public. and other locations, where the extension of the national grid would not be feasible economically. All off-grid households will be provided with an option of 2 Vidulamu Lanka renewable energy generation to reap the benefit of The aim of this program is to ensure that every electricity by 2012. This programme is in the primary Sri Lankan will have access to Electricity by 2012.This purview of Sustainable Energy Authority, and the CEB program will work towards developing infrastructure Transmission Division and the Distribution Divisions will and facilities in remote locations to have access to the provide the information required for this programme to national grid or to find alternative means of power the Sustainable Energy Authority. generation, enabling every household in Sri Lanka to have an electricity supply. This will increase productivity and immensely improve the living standards of 12% of 5 Viduli Saraya Sri Lankan population, who currently do not have A dynamic and customer oriented National Consumer electricity in their households. Under this program, Call Centre will be in operation to handle all inquiries, before the end of year 2012, majority of the villages in support services, customer support and breakdown Sri Lanka would have electricity from the national grid. reporting. This is developed to provide customers with a During the next two years 4,593 rural electrification reliable and efficient service to the consumers. The Call projects are planned for, and will be completed in order Centres would include voice recording facilities and the to fulfil this target. Any remaining villages would have back office support. In addition Divisional Distribution electricity through the off-grid solutions under the Control Centres, monitoring execution of the services, Grama Shakthi Program. additional breakdown repair vans and new consumer service centres will be established. A new website will also compliment the Viduli Saraya programme. CEB has 3 Viduli Athwela already established short-code telephone number 1987 Under this program, CEB will take steps to support low for the consumers to make complaints related to their income households through micro financing to obtain electricity supplies. The call centre of CEB which was in connections to the national grid. A concessionary micro operation since 2006 is now connected to this number financing scheme is formulated for those who need and customer complaints are handled more efficiently electricity, but cannot afford the high connection costs, by co-ordinating all customer service centres in Sri Lanka to be financed and provided with connections to enjoy through this Call Centre. the benefits of electricity. A loan scheme has been already been introduced by CEB. This has been especially directed towards the low
6 CEB Annual Report 2010 rough Power 6 Jana Balaya 9 Sampath Seva In order to protect the rights of the consumers and to A new Division was created in September 2010, to take cover all consumer categories, a network of Consumer care of the assets of the CEB, so that the maximum Service Societies will be established by 2012. Many benefit is obtained from these assets. This Division will Consumer Service Societies had been established in provide other services to the public and the businesses Divisions for each of the Consumer Service Centres, so that these assets are utilized to the maximum, thus with a view to provide an important interface between generating additional revenues to CEB. the consumer and us. 10 Lanka Jananee 7 Jana Hitha Through the establishment of a state-owned subsidiary, Under this program, CEB will take steps to achieve fair, CEB expects to utilize local engineering skills to develop affordable and conservation-friendly consumer tariff. and expand the transmission network and to develop CEB and the Public Utilities Commission of Sri Lanka new renewable energy sources such as Wind Power, (under whose purview such tariff determinations are) Biomass, Solar, Dendro, Wave Power etc. This will had been in consultation in relation to the tariff enable local engineers to explore new opportunities and structures of various consumer categories. A road map secure state support to discover and implement for tariff reforms had been formulated by the innovative ideas of saving costs and to utilize alternative Commission on the above lines, in consultation with the energy generation sources for a sustainable growth in Government. In July 2010, CEB filed its revenue the future. Initial steps have been taken to establish a requirements with the Commission in order to CEB-owned company to develop renewable energy determine tariffs for the period 2011-2015. Due to the sources and to utilize the Sri Lankan engineering skills policy of uniform national electricity tariffs, the for transmission system development. Commission is expected to determine the tariffs on the basis of the licensee revenue requirements and cost reflective methodology as specified by law. 11 Supiri Viduli Jala CEB will introduce Net Metering, which will encourage the private and state sector institutions to generate their 8 Manawa Jawaya own power and sell the additional power generated Effort of the workforce is the key to upgrade our back to the grid using Wind, Solar, Dendro and Biomass services and quality of the services. CEB is expected to technologies. Introduction of Pre-paid meters will help work towards having a dedicated, efficient and consumers control their energy bills. Other smart grid uncorrupted work force to ensure to have a concepts such as automatic meter reading, time-of-the conspicuous change in service standard to the use tariff, communicating with the customers, customer consumer. The performance of the activities of CEB will load control will also be introduced gradually. be evaluated to achieve efficient and profitable performance.
CEB Annual Report 2010 7 CEB Environmental Policy
Broadlands Power Project: Dam site CEB will manage all its business activities in a manner, which cares for the natural and man-made environment and contribute to sustainable development. By means of openness in dealing with environmental issues, we intend to create confidence in our activities on the part of the public, customers, authorities, employees, and owners. We will actively pursue a policy of incorporating and integrating environmental considerations into our activities. Corporate Information
Legal Form A body corporate established in Sri Lanka under an Act of Parliament No. 17 of 1969 as amended by Act Nos. 31 of 1969, 29 of 1979, 32 of 1988 and 20 of 2009.
M embers of the Board Mr. E. A. S. K. Edirisinghe (Chairman) Resigned 2010.02.11 Mr. Tissa M. Herath (Chairman) from 2010.02.18 to 2010.05.04 Mr. Vidya Amarapala (Chairman) from 2010.05.10
Mr. K. A. Ranaweera (Vice-Chairman) (Resigned2010.05.10) Mr. P.L.D. Premaratne (Vice Chairman) from 2010.05.25
Mr. B. A. Galwatta (Resigned 2010.04.29) Mr. H. P. Cashian Herath (Resigned 2010.05.10) Mr. S. K. Attygalle (Resigned 2010.05.05) Mr. R. V. D. Piyatilake (Resigned 2010.05.10) Dr. R. H. S. Samaratunga (Resigned 2010.05.10)
Mr. P.R. Gunawardene from 2010.05.10 Mr. Amila P. Jayasinghe from 2010.05.10 Dr. B.M.S. Batagoda from 2010.05.19 Dr. Y.D. Nihal Jayatillake from 2010.05.19 Mr. Tilak Collure from 2010.05.19 resigned 2010.08.09 Mr. W.D. Jayasinghe from 2010.08.13
Secretary to the Board Mr. P.A.J.P.K. Perera until 2010.10.02 Mrs. Mihiri Senaratne from 2010.10.01
General Manager Mrs. B. Jayaweera Corporate Information
Corporate Management Additional General Manager (Generation) Mr. K. S. P. Jayawardena Additional General Manager (Corporate Strategy) from 2010.09.01 Mr. B. N. I. F. A. Wickramasuriya Additional General Manager (Transmission) Until 2010.09.05 Mr. R. J. Gunawardana from 2010.09.01 Mr. R.H.R. Lokubalasuria Additional General Manager Distribution Division 1 Until 2010.09.19 Mr. M. G. Liyanage from 2010.09.09 Mr. E. G. Abayasekara Additional General Manager Distribution Division 2 Until 2010.09.08 Mr. F. K. Mohideen from 2010.09.06 Mr. R. J. Gunawardana Additional General Manager Distribution Division 3 Until 2010.09.08 Mr. E. G. Abayasekara from 2010.09.09 Mr. F. K. Mohideen Additional General Manager Distribution Division 4 Until 2010.08.31 Mr. B. N. I. F. A. Wickramasuriya from 2010.09.20 Mr. D. G. C. Ratnapala Additional General Manager Projects & Centralized Services Until 2010.09.19 Mr. D. G. C. Ratnapala Additional General Manager Asset Management & Centralized Services From 2010.09.20 Mr. M. G. Liyanage Additional General Manager Projects From 2010.09.01 Mr. W.J.L.S. Fernando Finance Manager Mr. W. D. A. S. Perera Head Office No. 50, Sir Chittampalam
A Gardiner Mawatha, Colombo 2
Telephone (011) 232 4471 (8 lines)
Fax (011) 244 9572 web site: www.ceb.lk
Auditors The Auditor General
Independence Square
Colombo 7
Bankers Peoples' Bank
No. 75, Sir Chittampalam
A Gardiner Mawatha, Colombo 2 2010 in Perspective
MW GWh 1200 1600 2000 2400 2010 inPerspective 400 800 100 0 2000 4000 6000 8000 00 1.6% Hotel 0 2008 ElectricitySales2008-2010 Maximum Demand 2008-2010 Industri
1,922 200 31.0 Salesby
8 8,417 % al Purpose General 18.9 Street Lamps % T LECO ariff 14.1 2009 200 `
1,868 2010 % and
9 8,441 Domest Religious 34.4 ic % and 201 2010
0 9,268 1,955 e 2010 in Perspective v i
12,000 t 10,000
8,000
h 4
1 c 1 6,000 2 W 7 0 8 ` , G 9 8 0 , , 1 9 4,000 9
2,000 e - 2008 2009 2010
Gross Generation 2008-2010 p
CEB Thermal 13% s CEB Hydro 46% r CEB Wind IPPIPP Thermal Thermal 0% 3434%% e
Small Power Producers 7% P Generation Mix 2010
6,000 n
5,000 i
4,000
5 4
h CEB Hydro 3 0 7 6 6 2 3,000 9 8 , W
7 , 7 , , 5
5 CEB Thermal 5
G 5 5 1 9 8 5 9
3 , 7
8 6 , 4 , 0 1 8 3 4 4 5 0 1 , 9
2,000 9 , , 4 3 3
1,000 1
- 2006 2007 2008 2009 2010 Hydro and Thermal Generation by CEB 0
CEB Annual Report 2010 13 2 2010 in Perspective
Rs. Million 2010 inPerspective 1 1 1 0 2 4 Rs./kWh 2 4 6 8 0 0 0 0 0 0 0 , , , , , , , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - 0 0 0 0 0 0 0 1 13 15
1 7 9 . . . . . 00 00 00 00 00 Revenue byT 1 2 Hotel Indu , 2005 0 953 33 0 Street Lamps 8 111,287 LECO and , strial 10 R 17 e 4 v
2006 , 74 e A n verage SellingPrice 3 u ariff Categor e
2
2007 2 0 0 0 0
9 110,518 Purpose General 8 36 - 2 ,
2008 616 0 1 . y (Rs.Million) 0
2009 Domes 2 Religi 0 31 1
0 121,862 , 365 tic 2010 ous and 2010 in Perspective
Million Losses Percentage 2010 inPerspective 1 2 3 4 5 , , , , , 000 000 000 000 000 10 15 20 25 % % % % 15 10 , , , , , 000 000 000 000 000 0 5 % % 21 % % 2000 . 35 % Number ofConsumerAccounts 2008-2010 CEB Generation 19 . 0 69 . System EnergyLosses2008-2010 61 % 20 19 % 2002 07 . 20 Share ofLossesin2010
Annual Report 3,866,987 % 18 T . ransmis 44 % 3 . 17 1 2004 1 . 20 1 % 1 sion % 08
4,088,900 17 . 27 Distribut % 16 9 2006 . . 78 58 % % 20 15 ion . 09 4,280,168 67 % 14 2008 2010 . 13 99 T otal % . 50 14 % . 59 2010 % 13
4,480,423 2010 . 50 15 % 16 CEB 100 10 20 30 40 50 60 70 80 90 0 % % % % % % % % % % %
Annual Report Percentage Colombo 99% 10
75 80 85 90 95 Hambantota 99% 0 % % % % % % Kalutara 98%
Puttalam 96%
Nuwara Eliya 94%
Galle 94% 83 20 Matara 94% . 0 08 2010 Matale 91% Electrification ofHouseholds2010 %
Percentage Households Electrified Kegalle 91%
Kurunegala 89%
Kandy 87%
Anuradhapura 87% 85 200 Badulla 87% .
4 Ampara 83% % 9 Ratnapura 82%
Polonnaruwa 73%
Monaragala 73%
Trincomalee 68% 88
20 Jaffna 64% . 0 10 Batticaloa 58% % Vavuniya 45%
Mannar 36%
Kilinochchi 1%
Mullaithivu 1% %
800 0 8% 8 . 6 higher than the average sale price of Rs. 13.09 per kWh
700 % 7% 0 5 .
600 5 6% in the previous year. % 7 3 . % 4
500 % 5% 9 1 6 % . 5 9 . 3 1 3 . 400 % 4% As a result of the above, the profit before taxation 3 6 5 . 2 %
300 % 3%
8 was Rs. 4,859 million. 2 5 5 . % . 1 9 1 %
200 9 2% 5 . 6 0 . 100 0 1% During 2010, twelve small renewable energy plants 0 0% 0 2 3 4 6 7 8 0 1 5 9 of a total capacity of 33 MW were connected to 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 the Grid. The total installed capacity of Small Power Installed Producers reached 213 MW by the end of the year, Capacity(MW) Contribution of small-scale
Energy (GWh) Renewable Energy to the Grid while producing 724 GWh during the year.
% Energy contribution to the demand Consumer/Employee ratio increased from 283 to Total energy storage in hydro reservoirs reached an 292. This was an increase of 3.1% over the all-time high of 1,167 GWh on 10th December, previous year. The number of employees stood at 2010. 15,363 by the end of 2010.
Gross energy generation increased by 8.4%. Total gross energy generated by the end of 2010 was 10,714 GWh. Total energy sold increased by 9.8% to 9,268 GWh. Energy procured from Independent Power Producers had decreased by 2.3%
The total number of electricity customer accounts increased by 4.7%. The number of customer accounts at the end of 2010 stood at 4,480,423.
The Billed Revenue increased by 9.3% from Rs. 110,518 million in 2009 to Rs. 121,862 million in 2010.
System Losses reduced from 14.59% in 2009 to 13.50% in 2010.
Direct costs of CEB decreased from Rs. 118,186 billion in 2009 to Rs. 116,168 billion.
The maximum demand of the system increased by 4.6 % in 2010 to reach 1,955 MW.
The average sale price in 2010, based on the billed sales, was Rs. 13.15 per kWh, which was 3.13%
CEB Annual Report 2010 17 18 CEB Annual Report 2010 CEB Annual Report 2010 19 Chairman's Review Vidya Amarapala - Chairman CEB
Ceylon Electricity Board which powered the nation for extend the grid to every village in the country and reach over 4 decades was running at a loss for almost a 96% of the household by the end of 2012. This decade by 2010. The cumulative loss of CEB during this program was supplemented by the Viduli Athwela period was Rs.117 billion. 2010 was a challenging year program which provided concessionary loan for the for the CEB as it took firm steps to change the fate of poor who could not afford to meet the upfront grid the CEB. With the introduction of the new program connection costs. The Grama Shakthi program was under the directions of the Hon. Minister of Power and introduced to provide renewable energy technologies to Energy Patali Champika Ranawaka CEB emerged as an remaining 4% of the households in Sri Lanka where it institution that is no longer indebted to any entity, state was not financially, technically and environmentally or otherwise by the end of 2010. feasible to extend the grid. The CEB played the lead role in implementing the Vidulamu Lanka program and was The power sector development program introduced by able to provide new electricity connections to 58,202 the Hon. Minister was based on the Triple E concept: households located in remote areas. We worked with Economy, Energy and Environment. The Triple E the Samurdhi program and LECO for implementing the program consisted of targets for the three different Viduli Athwela program in the year 2010 and was able sectors. The Energy sector target was to provide quality to establish the lending mechanism, give loans and uninterrupted power at an affordable price. The connected 259 households to the national grid. The Economy related target was to provide optimum CEB helped the Sri Lanka Sustainable Energy Authority economic benefits to the nation by supplying reliable to identify the off-grid communities for the uninterrupted energy services at the least economic cost implementation of the Grama Shakthi program. For while ensuring non-dependence on imported fuels. The providing high quality service for electricity consumers, environment related target was to provide sustainable the Viduli Saraya program was successfully implemented energy services with minimum environmental impact in 2010 and established the central Call Centre in CEB and achieving carbon neutral growth by 2020. Head Office ( Four digit phone number 1987 ) to attend to the consumer complaints. In addition, initial steps For achieving these targets a program named 'Power were taken for introducing Smart Metering to the Lanka' was introduced. The 'Power Lanka' program had system And the “Net Metering” was also introduced to following components: Electricity for all; providing high domestic & industrial customers to promote Renewable quality service for electricity consumers and Nanwamu energy in to the CEB grid, in keeping with “EEE” Lanvima. concept.
The 'Electricity for all' by 2012 program included three For the first time in Sri Lanka, CEB initiated a process for sub programs. The Vidulamu Lanka program was to strengthening electricity consumers to educate them on
20 CEB Annual Report 2010 the rights and the responsibilities. This program was expansion and renewable energy, the CEB under named “Jana Balaya” and by implementing it, the CEB Ministry of Power and Energy's Lanka Jananee program empowered the consumers and assist them to organize to steps to establish CEB subsidiary company 'Sri Lanka them under Electricity Consumer Societies. Another very Energies Pvt Ltd'. important program, for protecting the consumers was the announcement of Janahitha Consumer Tariff Policy. “Nangwamu Lanvima” The program, which is targeted The tariff policy was designed to protect the low energy towards a brighter CEB is a 5 year program. CEB in 5 consuming low income groups by providing electricity to years will minimize expenditure, improve efficiency, them at an affordable price and to provide reliable eliminate corruption, having new revenue streams, power supply to high end consumers at a cost reflective meeting the operational costs, financially stable, price so that CEB will be financially sustainable. Further technically sound, relaxed debt burden, and not be a together with the Sri Lanka Sustainable Energy burden to the national economy. Authority CEB designed the Supiri Pahan program to provide energy efficient bulbs to the low end consumers As usual, there were resistances from the parties with to manage the demand during the night peak. vested interests against the Nangwamu Lanvima program as they lost their opportunities for corruption. Under the Nanwamu Lanvima program the 'Manawa Despite the conspiracies from in and out, the people Jawaya' program was designed to improve the who were committed to march towards a brighter CEB performance of the CEB. This included three sub rallied around the program and made sure that concrete programs Manawa Jawaya, Sampath Sewa and Lanka steps were taken for benefit of the CEB. Foundation is Jananee. For implementing the Manawa Jawaya sub now laid and I wish the CEB capitalize on this very program, the Corporate Branch was established. The important program introduced by Hon. Patali Champika Manawa Jawaya program is to strengthen of the CEB Ranawaka The Minister of Power and Energy and workforce by introducing 5S, ISO 9001 and ISO prosper in the near future as a proud organization 14001standards. The Balance Score Card and MBO which is respected by every Sri Lankan. (Management by Objectives) schemes were introduced for measuring the performance of the different sections and the employees of the CEB which enables decision Vidya Amarapala making, manage by results, promote accountability, Chairman CEB distinguish between program success and failure, allow for organizational learning and improvement, justify budget requests, optimize Investments, provide means of performance comparison, Fulfill mandates, and establish catalysts for change. The solid foundation is now laid for future action.
The "Sampath Sewa" asset management program was to open non-core revenue streams for CEB utilizing the already available asset base of over Rs. 600billion. This includes providing services to Communications industry, advertisements, and tourist Industry. For getting the optimum use of the local engineers for transmission
CEB Annual Report 2010 21 General Manager’s Review Mrs. B. Jayaweera - General Manager
CEB is the only integrated electricity utility in Sri Lanka, Enhanced Consumer Services which is engaged in all aspects of electricity utility Consumers are now able to organize themselves and industry. Ceylon Electricity Board under the powers bring their views on our services through the Consumer conferred to it by law, undertakes Generation, Societies, and such societies are expected to be Transmission & Distribution of Electricity throughout the established in all Areas in the near future. The country. Lanka Electricity Company (Pvt.) Ltd. (LECO), relationships with the bulk supply consumers are also where CEB holds major share, undertakes distribution of improved through regular meetings with their Area electricity in the Western and Southern coastal areas of Engineers. the country. CEB presently has a workforce of more than 15,000 employees, which includes more than Many consumer services are now made more efficient 1,000 professionally-qualified executives. This staff through establishment of E-City, and this concept is presently serves a consumer base of nearly 4½ million being extended to all Areas. We are of the firm view consumers. that the value addition Created by these enhanced services will fully justify the tariff we charge, and create Electricity for all a better customer perception on the CEB in overall One of the main objectives of Ceylon Electricity Board is to provide electricity to all by 2012. In its journey along Distribution Loss Reduction this path, 88% of the households in Sri Lanka had Although the level of electricity distribution loss of CEB accessibility to mains electricity by the end of 2010. In 9 network, in comparison to other regional electricity districts, the level of electrification exceeded 90% of the utilities, is satisfactory, we are continuing to make heavy households. We are hopeful that this objective will be investments to bring this to the minimum. Loss - realized well before that time, and in the future we reduction programs are undertaken by all Distribution would be called upon to focus more on improvements Divisions and many novel measures are adopted to of service quality, improvement of power quality and in minimize the non-technical and technical losses of the general, to provide more value to our customers. notwork. However , the counter-measures to combat non-technical losses is presently facing a setback due to Rural Electrification programs and rehabilitation of the lenient (and some cases un-preditble) legislative conflict-affected areas were able to attract more funds regime established by the new Sri Lanka Electricity Act. through the Government; and it is heartening to see Despite this, we dare continuing with the downward that these works are in progress in all corners of the trend of the level of system energy losses, which now country. stands at 12.97%.
22 CEB Annual Report 2010 Distribution Automation Electricity Generation With the aim of improving the reliability of the Heavy dependence on Thermal Generation continued Distribution network, automation of the functions of during the year and the total energy generated through distribution network operations is undertaken. This is of Thermal sources stood at 4,995 GWh. The first-ever coal particular importance in a network where the majority fired Power Plant at Puttalam commenced of the lines consist of bare overhead conductors. The commissioning at the end of 2010. This added a new measures under these automated functions aim at dimension to the fuel mix of CEB's Generation. The reduction of failures and speedier restoration of failures. total installed capacity at the end of the year stood at Such Distribution Control Centers monitoring and 2,818 MW which generated 10,714 GWh, crossing the coordinating these activities are now established in 10 billion unit mark for annual generation for the first Colombo and North Western Province. Establishment of time in the history. such centers is being pursued in all the provinces at the Meeting the demand of the future present. Construction of Upper Kotmale Hydro Power Project of Human Resources 150MW is planned to be completed by end next year. During the year, CEB has taken many measures to Furthermore, several medium scale Hydro Power improve the work environment of the employees and to Projects have also been planned for construction and establish a proud and content employee base. We have the initial work has already begun for Broadlands this as one of the core values of Ceylon Electricity Board. (35 MW), Moragolla (27 MW) and Uma Oya (100 MW) These were achieved through improved HR Hydro Power Plants. As regards the future Thermal Management Processes and through the use of additions, Second stage of Puttalam Coal Power Project productivity enhancement measures engaging the started construction in October 2010 and it will add employees themselves. Monetary incentives through another 600 MW to the network by 2013. The Project payments on account of bonuses and un-availed leave Agreements related to Trincomalee Coal Power Plant were continued to be available during this year as well. were concluded by the end of 2010 and incorporation of the Joint Venture Company with NTPC Ltd. of India is CEB's Organizational Structure was re-aligned during due in early 2011. This Project is expected to be the latter part of the year, to meet the needs of the commissioned by 2017. In addition to these Generation system growth and the operational and managerial Expansion Options, CEB has entered into an MOU with requirements. Under this reorganization, two new Power Grid Corporation India Ltd. for an Divisions were created as Corporate Strategy and Asset interconnection between India and Sri Lanka through a Management & Centralized Services, while all Projects 500kV HVDC Link. This interconnection would provide were consolidated under one Division. for transfer of electricity between the countries Productivity Improvement and Quality according to system requirements. Management Electricity Tariff Many units in CEB have won awards for quality Ceylon Electricity Board made the first filing of revenue management and productivity improvements at national requirements under the new Sri Lanka Electricity Act No. and provincial levels for the steps taken on their own 20 of 2009. CEB also participated in the first-ever public initiative. From next year, CEB will provide active consultation for tariff determination conducted by the guidance and training for all units in CEB to achieve Public Utilities Commission of Sri Lanka and the tariff higher standards of quality management and determination was announced by the end of the year. productivity improvement. However, this tariff determination identified a subsidy
CEB Annual Report 2010 23 Finances requirement to the sector of Rs. 11 billion on its way to The financial situation of the Board significantly full cost reflectivity of the tariff by year 2015. improved during 2010. There was a decrease in the negative retained profits from Rs.112, 875 million to Energy Conservation Rs.106, 957 million over the year. The favorable weather With the available traditional energy sources fast prevailed throughout the period was the main becoming scarce, to give maximum priority to energy contributory factor for this situation. Consequently the conservation, energy saving programs have been cost of sales has declined by 0.9% due to the impact of launched with special reference to the conservation of these factors. This is indicative that major factor electricity. The future strategy to achieve energy contributing to the financial woes of the Board is the efficiency will include, use of waste energy in dual cycle cost of electricity generation, and induction of lower-cost processes, achieving fuel efficiency in thermal generation options is the only remedy. This is very much generation, replacement of inefficient equipment in significant due to the present consumer concerns on the hydro stations, reduction of losses in electricity lines and level of electricity tariff. equipment as well as Demand Side Management and promotion of energy efficient appliances. In addition, good financial management policies and decisions also helped to record the profit for the year. Implementation of renewable energy technologies such A reduction in finance cost by 30% compared to the as the Solar, Wind and Biomass has been given higher previous year was mainly due to timely payment to priority in the energy policies of Sri Lanka. Very attractive Independent power producers that saved the penal tariff rates for renewable energy have been offered to interest, and reduction of interest rates of term loans and the private sector to encourage development of mini- overdraft. hydro, wind, Dendro and biomass plants. Transmission Capacity Enhancements With development of new load centers and Mrs. B. Jayaweera establishment of large power plants away from such General Manager load centers necessitates enhancement of the existing transmission capacities. In addition, with the dawn of peace in the north and east, CEB was called upon to re- establish the Transmission interconnection to the north, and also to provide mains electricity to many locations in these areas, which hitherto did not enjoy the benefits of electricity. These challenges were assumed by the CEB and two transmission projects are now in progress to connect the grid from Vavuniya to Chunnakam through Kilinochchi. The fruition of this interconnection would be in 2013. In addition, a 250 km transmission line would connect Trincomalee and Veyangoda through Habarana, connecting the load centers to power from 500 MW Trincomalee Power Plant. In addition, many Transmission capacity enhancements are taking place in the rest of the network to cater for the upcoming suburban load centers.
24 CEB Annual Report 2010 Our Network
Chunnakam
CEB Transmission Network 2010
Kilinochchi 220 kV 132 kV
Veyangoda 220 kV/ 132 kV Grid Substation Kotugoda Vavuniya Aniyakanda Kerawalapitiya Hydro Power Plant AES Kelaniya Kelanitissa Trincomalee Biyagama CPPL Kolonnawa APPL Thermal Power Plant Sapugaskanda Maradana
Havelock Town Aturugiriya Anuradhapura Sri Jayewardenepura Oruwala Dehiwela Pannipitiya Ratmalana
Puttalam Habarana ACE Coal Panadura Horana Puttalam Heladhanavi Pannala Valachchenai
Matugama Madampe
Bowatenna Bolawatte Kurunegala Ukuwela Ampara Veyangoda Kiribathkumbura Victoria Kotugoda Randenigala Kegalle Inginiyagala Rantembe Thulhiriya Kotmale Badulla Polpitiya Laxapana Sitawaka Wimalasurendra Kosgama New Lax Nuwara Eliya Canyon ACE Balangoda Horana Samanala Wewa Ratnapura Kukule Matugama
Deniyaya Embilipitiya Ambalangoda ACE
Galle Hambantota
Matara
Total Installed Capacity (CEB Hydro Power) 1207 MW
Total Installed Capacity (CEB Thermal Power) 548 MW
Total Installed Capacity (CEB Wind Power) 3 MW
Number of Hydro Power Stations 16
Number of Thermal Power Stations 6
Number of 220kV Grid Substations 7
Number of 132 kV Grid Substations 48
Total length of 220 kV transmission lines 484 route-km
Total length of 132kV transmission lines 1711 route-km Total length of 132kV UG Cables 41 km Operations Review
CORPORATE STRATEGY DIVISION Hierarchical Structure for Corporate The Corporate Strategy Division was established in Strategy Division of CEB September 2010, under the new organizational The Corporate Strategy Division's arm related to structure adopted by the Board in August 2010. The internal strategy of CEB has three Branches. The Corporate Strategy Division of CEB is to have two major Corporate Strategy and Regulatory Affairs Branch will arms, one arm concentrating on the Board's group engage in developing corporate values, cultures, goals strategy and the other concentrating on CEB's internal and overseeing licensees meeting the CEBs licensing strategy. CEB Group Strategy arm is expected to be requirements. The Business and Operational Strategy developed later. Branch will focus on business development activities of licensees and monitoring target achievements and CEB's internal strategy arm acts as the apex Division for productivity improvement processes. The Functional such units of Licensed and other business functions Strategy and Process Development Branch will engage within CEB. Its primary role is envisaged to be to elevate in the development of functional strategies, policy and CEB's stature to a dignified, viable enterprise in process development activities. Sri Lanka through business development strategies. In achieving this, it is expected to: Balanced Score Card Since the brain storming sessions held in May 2010, Prepare Corporate Business Plan and Business identification and implementation of new strategies to Targets achieve the mission of CEB was in progress. Since its inception, the new Division was engaged in this task. In Assist each licensee/non-licensee to develop their this exercise, the CEB has identified the Balanced Score business plans and action plans Card (BSC) as a tool for that purpose and the initial work for adopting BSC within CEB had commenced in Propose powers to be devolved to licensees with 2010. accountability placed on them
Monitor target achievements and review action plans
Develop performance based incentive schemes
Develop broad policies in the areas of engineering, finance, HR, ICT and Marketing
Assist licensees to develop processes within the broad policy framework
Standardization of best processes and practices
Overseeing and assisting the licensees meeting the licensing requirements
26 CEB Annual Report 2010 Corporate Strategy and Regulatory Affairs Branch The Sri Lanka Electricity Act No. 20 of 2009 (SLEA) has announced by the PUCSL imposes a gap of Rs. 11 billion come into force on 8th April, 2009. This Act provides between the revenue requirements of CEB for year for regulation of Generation, Transmission, Distribution, 2011 and the revenues realized under the announced Supply and use of electricity in Sri Lanka. Under SLEA, tariff. three types of Licenses are issued by the Public Utilities Commission of Sri Lanka, (PUCSL) constituted under Act The staff of CEB actively participated in the process of No. 35 of 2002. These Licenses are for: building their capacities for such regulatory requirements. Generation of electricity The Regulatory Affairs Branch was placed under the Transmission of electricity newly-created Corporate Strategy Division in September 2010 and was re-designated as Corporate Strategy and Distribution and Supply of electricity Regulatory Affairs Branch. In addition to the Regulatory Affairs, as stated above, the new unit will be responsible Under the Section 9(2) of the SLEA, Ceylon Electricity for coordinating the strategy formulation matters with Board has been identified as the sole party to be eligible the Divisions. Furthermore, the Statistical Unit was also to be issued with a transmission license, under which assigned to this Branch during the year 2010. procurement and sale of electricity in bulk is to be performed.
Generation and Distribution licenses have been issued to independent power producers, CEB and few retail distributors. The SLEA imposes a general prohibition for a single party to have two or more of the above types of licenses. However, a statutory exemption has been provided for CEB to hold all three types of licenses.
The Regulatory Affairs Branch co-ordinates among the respective Divisions, as well as with the PUCSL, the matters arising from and related to Generation, Transmission and Distribution licenses issued to the Ceylon Electricity Board.
Ceylon Electricity Board made its first multi-year filing of revenue requirements under the SLEA in July 2010. According to the Tariff Methodology specified by the PUCSL in July 2010, the Licensees were required to file their revenue requirements for the period 2011-2015. After following the statutory consultative process, the new electricity tariffs were announced by the PUCSL to be effective from January 2011. The Electricity Tariffs so
CEB Annual Report 2010 27 HUMAN RESOURCES OF CEB CEB continued to provide a conducive working The Age Analysis of the CEB shows that about 2,164 environment for all the employees to encourage a spirit employees will retire from service during next 5 years. of autonomy, creativity and responsibility. CEB is proud 14.08% employees are above 55 years of age and of its employee achievements, given the limited 17.61% within 51-55 years of age. This shows that CEB resources at their disposal and the tremendous is an aging organization and it needs careful career constraints under which they work. The Following succession plan to meet the anticipated shortage of functions continued to be carried out by the Personnel skilled and professional human resources. Branch of the CEB while other HR functions were 3000 carried out by the HR units of the respective Divisions. 2500 s e e
y 2000 o
Recruitment of employees to permanent cadre of l p
m 1500
CEB E
f o
. 1000 o N Promotions of employee in cadres which are 500 subjected to restrictions 0 5 0 5 0 5 0 5 0 2 6 5 5 4 4 3 3 ------< 6 1 6 1 6 1 5 Formulations of HR policies of CEB 5 5 4 4 3 3 2
Age Range (Yrs) HR administration of all employees of Branches Age Analysis of CEB staff under the Chairman and the General Manager
The total number of employees in CEB as at the end of The service analysis graph shows that there is a well 2010 was 15,366 and 826 personnel was recruited experienced staff in the CEB with many years of service during the year, while 600 Employees left the experience. About 42.5% employees have more than employment due to retirement, resignation, etc. 20 years experience. Consumer employee ratio has been increased during the year 2010 up to 292 from 283. 3500
3000
s 2500 e e y o l
p 2000 m E
f
o 1500
. o N 1000
500
0 0 4 9 4 9 3 5 9 - - 3 Distribution of CEB Employees 1 1 2 2 < - - - - 3 6 > 0 5 0 5 1 1 2 2 Service Range (Yrs) Service Analysis of CEB staff
28 CEB Annual Report 2010
Generation Division
Laxapana Complex The Generation Division of the Ceylon Electricity Board Laxapana Power Complex, having a total installed is responsible for the operation and maintenance of capacity of 335 MW, comprises of five main generating Thermal and Hydro power plants owned by the CEB. stations at four locations. These include the first major CEB's Generation assets consist of 16 large hydro hydro power station in Sri Lanka, i.e. Old Laxapana power plant, totalling to an installed capacity of 1,205 Generating Station, which was built on a pioneering MW and four large oil-fired Thermal power plants proposal of the visionary engineer, late totalling to an installed capacity of 548 MW. Mr. D.J. Wimalasurendra. These Power Stations are situated in cascade in two contributory streams of The Generation Division is organized under four Kelani River; Wimalasurendra and Old Laxapana plants Generation Complexes, viz: Mahaweli, Laxapana, fed by Kehelgamu Oya, and Canyon and New Laxapana Thermal and Other Hydro. Generation Projects Branch Plants fed by Maskeliya Oya, while Samanala Power under Generation Division undertakes rehabilitation of Station at Polpitiya is finally supplied with water from Generation Assets, which are diagnosed as to having both these streams. reached the end-of-life due to aging and reduced reliability. The total Power Generation of the Laxapana Complex was 1,779.5 GWh during the year 2010, which Specialized technical support for major repairs of the accounts for 17.8% of the total generation of the Power Plants is provided by Hydro and Thermal Assets network. Management Units of the Generation Division. These units continuously monitor the condition of the Total
Generation Assets and implement corrective action to Power Station Generation (GWh) enhance the operational life of the Generation Assets. Old Laxapana 349.2 Meanwhile, the Dam Safety, Environment and Civil New Laxapana 597.7
Structures Maintenance Branch of the Generation Canyon 174.7 Division undertakes Maintenance and Continuous Samanala 501.6 monitoring of Dams, Reservoirs, Power Station Tunnels Wimalasurendra 156.3 and other related structures contributing to generation Total 1,779.5 of electricity.
All maintenance activities of the Power Stations are Mahaweli Complex carried out by the four complexes, while the plants are Mahaweli Complex comprises of Kotmale, Victoria, dispatched by the System Control Centre operated by Randenigala, Rantambe, Ukuwela, Bowatanna and the Transmission Division. All major Hydro and Thermal power plants owned by the CEB have achieved high Nillambe Power Stations. The total installed capacity of levels of availability during the year. the Complex is 666 MW. Mahaweli Complex had generated 2,445 GWh during the year 2010, which accounts for 22.8% of the total generation of the Average Cost of generation of network. In addition to the planned maintenance CEB Power Plants (Rs/kWh) activities of power stations, replacement of the defective excitation system with Brushless Excitation of Hydro Plants 1.17 two generators at Kotmale Power Station, and the Thermal Plants 15.77 Procontic Control System at Randenigala Power Station were in progress during the year.
32 CEB Annual Report 2010 3,510 Total Generation 16% Power Station (GWh) Kotmale 583.36 Victoria 971.25
Randenigala 428.12 1,928 9% Rantambe 213.21 Ukuwela 171.19 Bowatenna 63.81 Nillamb e 14.24 16,441 Total 2,445.20 75%
Other Hydro Complex Fuel / Rs. Million This Complex comprises of Samanalawewa, Kukule, Spares / Rs. Million Inginiyagala, and Udawalawe hydro power stations and Others / Rs. Million Hambantota Wind Power Station. The installed capacity Expenditure on Fuel and Spares of the Complex is 213 MW. Other Hydro Complex Thermal Complex generated 767 GWh during the year 2010, which accounts for 7.2% of the total generation of the network. It is to note that the operating patterns of Inginiyagala and Udawalawe are solely dependent on Total the irrigation water releases, and hence the low plant Power Station Generation (GWh ) factors attributed to these stations.
Kelanitissa Fiat GT 27.09 Generation Power Station Kelanitissa Fr.V GTT (5 Nos.) 26.18 (GWh)
Samanalawewa 374.91 Kelanitissa CCPP-GT 369.85 Kukuleganga 350.38
Inginiyagala 23.11 Kelanitissa CCPP-ST 123.44 Udawalawe 15.43 Wind (Hambantota) 2.99 Sapugaskanda-A 360.42 Total 766.88 Sapugaskanda-B 480.35
Total 1,394.23 Thermal Complex Thermal Complex comprises of Kelanitissa GT, Kelanitissa CCGT, Sapugaskanda-A and Sapugaskanda- Generation Projects B Power Stations. The total installed capacity of the The Generation Projects Branch of the Generation Complex is 540 MW. Thermal Complex generated Division is responsible for undertaking the management 1,394 GWh during the year 2010, which accounts to and administration of plant rehabilitation projects 13% of the total generation of the network. coming under the purview of the Generation Division
CEB Annual Report 2010 33 and handling of all foreign purchases of goods and At the end of December 2010, 35% of the project services for the Generation Division. scope was completed including 99% of Design and 30% of manufacturing. Rehabilitation of Ukuwela Power Station
CEB entered into a contract with consortium of Rehabilitation of Old Laxapana Mitsubishi Corporation, Japan and Indo East Power Station Engineering and Construction (Lanka) Pte Ltd for Under this Project, it is planned to replace Generator, rehabilitation works of Ukuwela Power Station, initially Turbine and all associated equipment of Old Laxapana commissioned in 1976. Under this rehabilitation project, Power Station Stage-1 (3 x 8.33 MW) plants to improve Turbines, Generators and their associated equipment reliability, efficiency and life of the plants. The contract will be replaced and/or rehabilitated in order to achieve was awarded to Voith Hydro, Austria at total cost of better efficiency and reliability of the plant at a total Rs.4,200 million. Funding 85% of the project cost is by cost of Rs. 1,800.0 million. About 85% of this cost is Unicredit Bank Austria AG on Export Credit terms and funded by the JBIC on export credit basis and the Loan balance 15% is funded by Hatton National Bank. The Agreement between Ministry of Finance and JBIC was Project works started in May 2010 and scheduled to be signed in February 2008. In terms of the Agreement, completed by the end June 2013. the Contract is in force from April 2008, and the works will be completed by the end April 2011. By the end December 2010, 10% of the scope was completed, including design and manufacturing. In November 2010, works on Ukuwela Unit-2 was completed and put in to the commercial operation. All Indent Unit materials and parts required for Unit-1 were imported During the year 2010, 199 orders for spares and by the end 2010 and assembling of the stator of Unit-1 services have been placed, and bought spares and is in progress. During the progress of the works, all services required for maintenance of Power Plants milestones were achieved satisfactorily. As at the end of from foreign sources. During the year Rs. 2,100 December 2010, 91% of the works have been completed. million worth consignments have been delivered to CEB. Rehabilitation of Wimalasurendra and New Laxapana Power Stations Under this Project, 2 x 50 MW New Laxapana and 2 x 25 MW Wimalasurendra Power Plants will be refurbished and modernized. Under this contract, the Generator, Turbine Control and Auxiliaries will be rehabilitated or replaced at a cost of Rs. 6,500 million. Alstom Hydro France is the contractor for project and 85% of the contract value is provided by Credit Agricole CIB, France on Export Credit terms and balance 15% is funded by Hatton National Bank. The Project works started in February 2008 and scheduled to be completed by April 2013.
34 CEB Annual Report 2010 Transmission Division
2000 Transmission Division plans, develops, operates and maintains the whole of the transmission assets of the 1500 CEB, while providing services to other Divisions of CEB W
in certain areas of activities. M
n i
d 1000 n a m e
Mission of the Transmission Division D
The mission of the Division is to provide reliable, quality 500 electricity in bulk by means of effective and efficient planning, development and operation of the 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 3 3 3 3 3 3 3 3 3 3 3 3 transmission network through a productive partnership 3 3 3 3 3 3 3 3 3 3 3 : : : : : : : : : : : : : : : : : : : : : : : : 0 1 2 3 4 5 6 7 8 9 0 2 3 4 5 6 7 8 9 0 1 2 3 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 with skilled and motivated employees using appropriate Time technology for the socio-economic development of Sri Daily Generation Curve 2010.03.17 Lanka in a sustainable manner, while meeting acceptable environmental standards and earning a Year 2010 commenced with a total hydro storage of satisfactory rate of return. 975 GWh, which was 77.5% of the total storage, compared to 48% in 2009. Due to dry spell that Objectives of Transmission Division prevailed during the first quarter of the year, total hydro The operational objectives of the Division are to: storage reached lower levels. The minimum-recorded storage level was 465 GWh (37% of total storage) on Reduce un-served energy due to generation and 17th April 2010. During the third and fourth quarter, transmission failure to 0.15% of distribution due to the unusual heavy rains, the hydro storage demand reached a maximum of 1,167 GWh on 10th December 2010, which is 93.7% of the total storage. As a result, Reduce the number of transmission line failure to thermal generation from CEB and IPP plants for the year 10 per 100 km circuit length per year 2010 was only 46.6% of the demand. The corresponding thermal generation for 2009 was 60%. Maintain transmission voltage variations within + CEB hydro generation during the year was 4,988.5 5% and -10% of 132 kV and 220 kV at all times GWh, which amounts to 46.6% of total generation.
In the year 2010, the recorded maximum peak was Operational Activities 1,954.7 MW on 17th March, which is an increase of The Division operates 220 kV and 132 kV grids, 4.6% compared to the year 2009. The total energy embracing all power stations, and dispatches all generated for the year was 10,713 GWh which is an electricity supplied to the grid through its System increase of 8.4 % compared to the year 2009. The total Control Centre. The System Control Centre plans and hydro storage reached 1,121 GWh (89% of full storage) carries out the operation of generation and transmission by the end of the year. system in order to maximize reliability, quality and operational economy. Archiving the generation and Reliability transmission data and the preparation of regular The goal of the Protection Development Section of the management information is also carried out by the Transmission Design and Environment Branch is to Division. develop a coordinated and reliable protection system for the Transmission Network from the Power Stations to
CEB Annual Report 2010 35 the Distribution system to the highest international Kotugoda extension under GCGSS Project standard. Key tasks of the Section are to define and Upper Kotmale Hydro Power Project maintain the required protection philosophy, identifying protection rehabilitation and development requirements In order to replace the defective line protection relays at of the system. This Section is entrusted with managing Kotmale PS, Victoria PS, Randenigala PS and Biyagama protection development work under new transmission GSS relevant design checks, drawing preparations and projects. Protection scheme modifications were also setting calculations were carried out by the Protection done as a part of the network extensions under new Development Section. projects. This Section also carries out failure analysis of any total or partial failures occurring in the transmission Construction design reviews were carried out for network, and remedial or preventive measures are Beliatta Grid Substation Project Lot B and Lot A and implemented to improve the system reliability Greater Colombo Grid Substation Kotugoda Extension performance. Project.
Failure Analysis Preparation of Tender Document were carried out No total failures occurred during the year. One major mainly during the year 2010 for Kilinochchi-Chunnakam partial failure occurred on 28th November 2010 and few Transmission Project–Lot B and Lot A, Vavuniya- of minor partial failures occurred during the year. These Kilinochchi Transmission Project - Lot B and Lot A, failures were analysed and remedial measures were Transmission System Strengthening Project–Lot A1 and proposed. Improvement in the system performance has Lot A2, Transmission System Strengthening Project-Lot been observed due to the implementation of remedial B, Transmission System Strengthening in the Eastern and preventive measures. Tripping of private power Province Project-Lot A and Lot B, Augmentation of Grid plants were also analysed in order to decide payment substations for Absorption of Renewable Energy Project, issues. North East Power Transmission Development Project - Lot A, Lot B and Lot C, New Galle Transmission Project Development Works Development Project Lot A, Lot B, National System The ground work for the implementation of 220 kV Control Centre Modernization Project - Package B. Protection Development Project (Part C of Rehabilitation Preparation of revised cost estimates were carried out of Electricity Supply Jaffna Division Transmission Line for Colombo Outer Circular Road Crossings ( at Project) has been done. Under this project, old Biyagama – Kelanitissa 220kV Line, Polpitiya – protection relays/schemes in the CEB's 220 kV network Kolonnawa Line 3 and 4, Polpitiya –Kolonnawa Line1 is to be replaced. During the year the bid documents and 2, Biyagama – Pannipitiya 220kV, Biyagama – were finalized and tenders invited. Sapugaskanda P/S 132kV, Biyagama – Kotugoda 220kV). During the year 2010, the Protection Development Section assisted the following completed and on-going The total system failure and major partial failures projects on design, commissioning and integration of that occurred during the year were analyzed and the projects into the existing system. remedial measures were proposed. Due to implementation of such remedial and preventive Puttalam Coal Power Project measures, subsequent improvement in the system Colombo city Electricity Distribution Development performance was observed. Project
36 CEB Annual Report 2010 Forced outages of private power plants were also 2 km of 220 kV underground cables. It also has 54 Grid analyzed in order to determine payment commitments. Substations in operation at the end of the year 2010.
Transmission Assets Procurement of spares, equipment and tools for the transmission division and disposal of unserviceable transmission assets are the other main functions of Transmission Assets. During the year 2010, 28 major procurements were successfully completed. Maintenance Material Plan and Procurement Plan for year 2011 were also completed. In addition, major rehabilitation and expansion program including computerizing the inventory and operation activities at Kotugoda Transmission store is underway to address the issues at hand. Operation and Maintenance of the Transmission Network Operation and Maintenance Branch attends to routine maintenance and outages of Grid Substations and 132/220 kV transmission lines. In addition, special maintenance activities such as on-load tap changer maintenance and 132/220 kV circuit breaker overhauls were also done by this Branch.
System Control Operations The System Control Branch is responsible for the Canyon-New Laxapana132 coordination and operation of the 220kV and 132kV kV Single Circuit Tower grid system embracing all power stations. The operation
The Asset Management Branch in the Transmission of the generation and transmission system is planned Division is responsible to achieve the maximum and carried out by system control branch to maximize commercial benefit of plant and equipment in the the reliability, quality and operational economy. This Transmission Network. It involves in setting of branch collects records and archives data pertaining to maintenance policy and procedures, monitoring plant the CEB generation and transmission system and performance and scheduling maintenance work in an provides information to the management on regular effective manner to assure operational effectiveness and basis. maximize the economic life of the assets. Planning for asset replacement at the end of their useful lives is also an important asset management function. The high voltage Transmission Network comprises of 1,704.2 km of 132 kV plus 47.6 km of 132 kV underground cables and 484 km of 220 kV overhead transmission lines plus
CEB Annual Report 2010 37 Generation Planning In addition, the feasibility study for Moragolla Hydro Power Project funded by Kuwait Fund for Arab Economic Development was completed by the Central Engineering Consultancy Bureau (CECB). The Environmental Impact Assessment is for this project is in progress. Securing of Asian Development Bank funds for Detailed Engineering Design of the Moragolla Hydro Power Project was also initiated.
Transmission Planning Long term transmission development studies are carried out as a 10 year rolling plan in order to accommodate the new requirements and demand in the transmission system. The main objectives of the transmission planning process are formulation of the set of Proposed Reservoir/Dam Site of transmission developments required to ensure a reliable Moragolla Hydro Power Project and stable power system for the planning period of interest, and the estimation of investment cost required The Long Term Generation Expansion Plan of CEB is to implement these transmission developments. prepared by the Generation Planning section, under the Transmission and Generation Planning Branch. It is an The Long Term Transmission Development Plan annual rolling plan. As the first step, the branch 2008-2016 identifies sixty six transmission development prepares the National Demand Forecast. From the projects for the period 2008-2016. Funds have been generation planning studies, economically optimal plant arranged for several projects of high priority. They additions at least cost are selected from given thermal include the implementation of a new System Control and hydro power generation expansion candidates in Centre, construction of eleven new gird substations (viz: order to meet the forecast electricity demand within New Galle, Polonnaruwa, Vavunativu, Monaragala, expected reliability level and environmental factors. Mahiyangana, Pallekele, Naula, Maho, Beliatta, According to the latest generation expansion planning Chunnakkam, Kilinochchi), addition of ten new 132 kV studies, for the period of 2010-2025, it is envisaged transmission lines (Ambalangoda-Galle, Rantambe- that approximately 4,200MW addition to the system in Mahiyangana-Ampar-Vavunativu, Medagama- the next 15 years is required. Monaragala, Kotmale-New Anuradhapura, Habarana- Valachchenai, Galle-Matara, Puttalam-Maho, Ukuwela- Generation Planning Unit implements and acts as the Pallekele, Vavuniya-Kilinochchi and Kilinochchi- CEB counterpart in implementing various studies Chunnakkam) and augmentation of fourteen 132/33 kV ranging from basic desk studies to detailed feasibilities grid substations ( at Ampara, Valachchenai, Panadura, for proposed generation projects. Kurunegala, Horana, Matara, Veyanogda, Habarana, Ukuwela, Wimalasurendra, Nuwara Eliya, Badulla, Energy Diversification Enhancement Project Phase I Balangoda and Ratnapura). (feasibility study of use of LNG as a generation fuel) was successfully completed under the Japan International Cooperation Agency (JICA) funding.
38 CEB Annual Report 2010 Transmission Designs Independent Power Producers (IPP) Preliminary work required for implementing the Non-Conventional Renewable Energy Plants planned transmission developments are carried out by the Transmission Design Unit of the Transmission Eleven independent Private Power Producers with a total Design and Environment Branch. This consist of of 582 MW supplying thermal power to the CEB, and identifying suitable transmission line corridors and land 90 Non-Conventional Renewable Energy projects with a for substations, prepare conceptual designs and total capacity of 213 MW are connected to the National drafting tender documents for transmission projects. Grid by the end 2010. During the implementation stage, review of Independent Power Producers construction drawings and examination of technical Installed compliance of the materials and equipment are carried Power Plant Capacity out. In addition Transmission Design Unit plays the role (MW) of internal consultants of Transmission Division for AES (Kelanitiss a) 163.5 Heladhanavi 100 design activities when requested. ACE Power (Embilipitiya) 100 Colombo Power (Pvt) Ltd. 60
The work carried out by Transmission Design Section in Asia Power 51 year 2010 is summarized below: Lakdhanavi 22.5 ACE Power (Matara) 20 ACE Power (Horana) 20 Construction design reviews of Beliatta Grid Substation Nothern Power 30 Project and Greater Colombo Grid Substation Kerawalapitiya 270 Aggreko 15 Kotugoda Extension Project. Preparation of Tender Document, of Kilinochchi-Chunnakam Transmission Total 852 Project, Vauniya-Kilinochchi Transmission Project, Energy Purchases Branch effects all payments to Private Transmission System Strengthening Grid Substation Power Producers who have entered into Power Purchase Project, Transmission System Strengthening Agreements and are in commercial operation. Transmission Lines Project, Transmission System Strengthening Eastern Province Project, Augmentation Non-Conventional Renewable of Grid substations for Absorption of Renewable Energy Plants Energy Project. Preparation of preliminary designs of Non-Conventional Renewable Energy Plants below transmission line re-routing for Colombo Outer Circular capacities of 10 MW are paid in two tariff categories viz: Road Crossings. (Biyagama–Kalanitissa 220kV Line, Polpitiya–Kolonnawa Line 3 and 4, Polpitiya– Cost Based Technology specific Three Tier Tariff Kolonnawa Line 1 and 2, Biyagama–Pannipitiya 220kV, Avoided Cost Based Tariff Biyagama–Sapugaskanda P/S 132kV, Biyagama–Kotugoda 220kV) Mini Hydro Power Development Energy Purchase During the year 2010, three mini hydro power projects of total capacity 3.7 MW were connected to the grid. The total Energy Purchase Branch is responsible for purchases of grid-connected installed capacity of 84 mini hydro power electricity from Private Power Producers to meet the plants reached 170 MW by the end of the year. The total system demand at the optimum cost. Two major types energy generated by these was 642 GWh and for the year of power plants are administrated under this Branch. 2009 the corresponding amount was 524 GWh. By the end
CEB Annual Report 2010 39 of 2010, CEB has entered in to 61 Standardized Power Environment Unit Purchase Agreements for an aggregate capacity of 119MW. The key function of the Environment Unit is to monitor and assist in the implementation of the Environmental Wind Power Development Policy of CEB. The Unit is the foca point for most During the year 2010, four wind power projects of total environmental activities of CEB. The main capacity 30 MW have been connected to the grid. The responsibilities of the Environment Unit includes the total generation was 50 GWh. By the end of the year, CEB environmental approval process for has entered in to 8 Standardized Power Purchase Transmission/Generation Projects of CEB, preparation of Agreements (SPPA) for an aggregate capacity of 119MW. Environmental Safeguard documents (EIA/IEE Reports) SPPA's have been signed for 8 plants of total capacity under the National Environment Act and/or the 92MW. The construction of some of the above wind guidelines of funding agencies (if applicable), obtaining plants are in progress. the relevant environmental approvals for said projects, and conducting environmental awareness programmes Biomass Power Development for CEB and it's stakeholders. Biomass Power plants consist of three main categories i.e. Dendro, Municipal Waste and Agricultural and A brief overview of the EIA/IEE Processes carried out by Industrial Waste. With regard to Biomass Power Environment Unit in year 2010 is given below: Projects, there are two Agricultural and Industrial waste power plants of total capacity of 11MW have been Environmental approval for the following transmission connected to the grid. The total generation was 32GWh lines have been obtained or renewed. and the same for the year 2009 was 23GWh. By the end of the year, CEB has entered in to 08 Standardized Puttlam–Maho 132kV Transmission Line Project Power Purchase Agreements (SPPA) for an aggregate (42km) capacity of 37MW. Galle–Ambalangoda 132kV Transmission Line Energy Marketing Project (40km) The Energy Marketing Branch was re-activated in year 2010, in keeping line with the regulatory transactions IEE reports under National Environmental Act for between the transmission and distribution licenses. The following transmission projects have been prepared and Energy Marketing Branch prepared the submission of submitted to the relevant Project approving Agencies. revenue requirement of the Transmission Division, required under the Tariff Methodology specified by the Habarana - Sampur 220kV Transmission Line Public Utilities Commission of Sri Lanka. Project (90km)
Until the requisite metering equipment is procured for Habarana - Veyangoda 220kV Transmission Line metering across the boundaries of the distribution Project (140km) licensees, it has been decided to use the available meters (with necessary estimates) for issuing the All the Environmental safeguard documents required transaction notes for the Distribution Licensees. Energy under ADB guidelines for the following Projects have Marketing Branch prepared the Energy Trading Report been prepared and submitted to the Asian Development for the year 2010 based on the Energy delivered to the Bank: CEB Divisions by the Transmission Division.
40 CEB Annual Report 2010 Sustainable Power Sector Support II Project telephone systems and to provide congestion free,reliable communication. The DCN system comprises Conflict Affected Divisions Emergency Project of switching stations, point-to-point backbone network and point-to-multipoint access network. Various Communications components of the microwave communication network The Communications Branch is responsible for providing belong to public telecommunication equipment family communications requirements within the CEB except for and are not specific to power system communications, Public Switched Telephone Network (PSTN) connections unlike PLC which is specific to power utility and data links leased out by the Information Technology communications. The future of mobile radio Branch. In general, CEB requires communication services communication would be determined by several factors to fulfil the following needs: like user preferences, CEB administrative structure, technological development, availability of cheaper Operational Voice/Data mobile communication options etc. The Distribution Protection signalling Divisions, who are the main users of this system may Maintenance Voice/data have different approaches towards their voice Administrative Voice communications requirements for power supply Data Communication maintenance work.
In order to meet the above communications needs, the The Services section within the Communications Branch CEB has, over the time, commissioned several types of works in collaboration with the other sections of the communication networks, each to address a specific Branch and with the System Control Centre (SCC) and type of communication requirement. Currently, the provides the necessary information such as real time following communication technologies are in operation. SCADA, Tele-protection, and administrative voice Power Line Carrier (PLC) based Party Line signalling around the clock. All necessary Telephone System (PLTS) and Supervisory Control reconfigurations, augmentations, expansions and And Data Acquisition System (SCSADA) maintenance of computer systems, Remote terminal Fiber optic based PLTS, SCADA and administrative Units, fiber optic equipment etc are done under this voice systems section. Digital Microwave Communication (DCN) System The Systems section within the Communications Branch VHF and UHF Radio communication system, and carries out communications services for power stations, Leased links Area offices Consumer service Centres, Grid Sub Stations etc through communications units at Digital Bearer Section within the Communications Anuradhapura, Kandy, Laxapana, Colombo, Branch ensures proper operation of the DCN and the Samanalawewa, and Galle. During the year 2010, VHF and UHF Radio communication systems. The optical fibre communication network was expanded Microwave Communication Network of the CEB is a making use of HV transmission lines based on corporate communication network, intended to provide OPGW/ADSS/UG cabling media, with the intension of administrative telephony and data services between using the network for CEB internal requirement. offices, power stations and other locations by averting the usage of public
CEB Annual Report 2010 41 of covering some areas in the Division 2 Kandy suburbs. Therefore, a signal coverage study was carried out in the area and installed a new UHF repeater at Hantana to provide a better quality of service with wider coverage for the Division. Furthermore, the following important tasks were carried out during the year 2010:
Puttalam coal Power Plant integration into the micro SCADA system in the SCC
Veyangoda 220 kV integration into the micro SCADA system in the SCC, thus saving configuring cost
Veyangoda 220 kV line 1 and 2 inclusion into the Kotugoda 220 kV Grid Sub Station Diagram in the micro SCADA system
Wiring and configuration of Kelanitissa GIS to integrate with the micro SCADA system
SCADA configuration and point to point testing at Athurugiriya, Ratnapura, Thulhiriya, Puttalam, Chilaw, Kelanitissa GIS, Kukule and Matugama Grid Substations.
DCN Tower at Southern system line inclusion into the micro Gongala, Deniyaya SCADA flow diagram
Progress made in 2010 Integration of Aniyakanda, Pannala, Bolawatta, In 2010, a project to replace four numbers of point to Katunayake, Deniyaya and Ambalangoda GSSs into point backbone links of the DCN was successfully the SCADA system implemented and taken over at the total cost of nearly 23 Million Rupees which was 100% funded by the New MIMIC controller and Remote Terminal Units Telecommunications Regulatory Commission of Sri Lanka wiring and updating of the SCADA system (TRCSL). The TRCSL funding was granted as a compensation of migrating into 7/8 GHz and 17/18 GHz Designing, fabricating and installation of VHF frequency bands by vacating 1.8 GHz and 2.0 GHz dipole antennas for Galle, Matara, Weligama and bands which had earlier been licensed for the CEB. The Tangalle VHF repeater stations 1.8/2.0 GHz bands are allocated for 3G and 3.5G mobile communications technology throughout the world. Configuration and installation of suitable Line Matching Units for Old Anuradhapura–Habarana The VHF repeater at Primrose in Kandy was not capable PLC links
42 CEB Annual Report 2010 Configuration and installation of suitable Line also introduced to Mahaweli Complex and Matching Units for Puttalam–Old Anuradhapura implementation was nearing completion by the end of PLC links the year. Action was also initiated to upgrade and improve the CEB website by expanding its functionality Design, fabrication and implementation of a new to support services such as on-line payments, billing user friendly MIMIC display system to display the inquiries etc. power system frequency and the time for the System Control Centre Human Resources: Transmission Division Information Technology Human resources management activities of the Division The bidding documents for modernization of the are carried out by the Corporate and Regulatory National System Control Centre Project which is being Relations Branch. The Transmission division has a total funded by Asian Development Bank under the Clean of 1,200 employees, consisting of 205 executives Energy and Access Improvement Project were prepared and 995 non-executives. 57 persons were recruited with the assistance of the consultants, PB Power, UK. and assigned to this division by the board during the Under this project, a new System Control Centre will be year. 24 persons were promoted to higher grades or set up in Sri Jayawardenepura and an country-wide fibre placed on their respective higher salary scales in optic network will be implemented using the conformity with CEB recruitment and promotion transmission grid for providing the communications procedure. channels for voice and SCADA, replacing most of the Power Line Carrier links. Contract for installation of External training opportunities were provided for the Optical Ground Wire (OPGW) was advertised in staff both locally and abroad, depending on the skills December 2010 whilst the bidding documents for the development needs. The subjects covered in the training setting up of system control centre and SCADA network abroad were planning, communication, operation and were compiled. maintenance of substations and transmission lines. 53 persons participated in local external training programs/ Implementation of a Human Resources Information seminars/ workshops and 50 persons participated in System in Transmission, Distribution Division-4 and foreign training programs/seminars/workshops etc. Personnel Branch was commenced with the aim to The persons who attended such training programs were extend it to other divisions subsequently. A Contract required to transfer the knowledge gained by them in was awarded to a joint venture of two leading ICT the training to the other staff of the CEB. Transmission companies who have implements HR systems in many division facilitated 13 persons to attend to witness government and private organizations in Sri Lanka and factory acceptance tests of various transmission line and abroad. Various modules of this system were in the grid substation equipments. deployment stage by the end of the year. The Division has a vibrant Welfare Society with official Implementation of the Finance and Material patronage. During the year, it provided various services Management System within the Distribution Division 4 to its members while facilitating cordial personal was completed. A new service provisioning module relationships among different categories of staff. having enhanced functionality to meet the unique requirements of distribution job costing and inventory control was also developed. The finance system was
CEB Annual Report 2010 43 Projects Division
Upper Kotmale Hydro Power Project Installed Capacity 150 MW (75 MW x 2 Units) Annual Energy 409 GWh Plant Factor 31 %
Foreign cost (JICA Loan) JPY 37,817 Million Local Cost (by CEB) LKR 8,548 Million Expected Date of Commissioning December 2011
Project Implementation The Upper Kotmale Hydropower Project is a run of river hydropower project, which has the main aim of meeting the projected electricity demand increase in Sri Lanka by constructing a hydropower plant of installed capacity of 150 MW with an annual expected energy generation of 409 GWh. The Project is being implemented with adequate environmental and social impacts mitigation.
The project mainly consists of:
A dam located close to the town of Talawakelle with a height of 35.5 m and a crest length of 180 m. It will have a gross storage of 2.5 MCM with an effective capacity of 0.8 MCM with a surface area of 0.25 km2 (60 acres). Full supply level for the reservoir will be 1,194 metres above mean sea level (msl), the minimum operating level will be 1190m msl and the normal tail water level 703 m msl.
A headrace tunnel 4.5 m / 5.8 m in diameter lined and unlined and 12.89 km in length, running north from the dam towards the Pundal Oya Falls before turning to the northwest towards the existing Kotmale dam and reservoir. (The maximum gross head between the reservoir and the powerhouse will be 491m). The penstock formed by an underground incline shaft starting with a diameter of 4.5 m and An upstream surge tank 12 m in diameter and 98 reducing to 1.45 m. It will be 793 m in length, m high with a restricted opening, located on the consisting of one lane of 745 m and two lanes of crest of the power house. 48 m.
44 CEB Annual Report 2010 An underground powerhouse located at Niyamgamdora, (2 km upstream of the confluence of Puna Oya and Kotmale Oya) with dimensions of 66.3 m Length x 18.8 m Width x 36.5m Height to house two units of 77,000 kW turbines, two vertical axis three phase 88,000 kVA generators, two 3-phase, transformers and a 220 kV Gas Insulator Switchgear (GIS) substation.
An outdoor switchyard, 36.5 m wide and 130 m long, located at Niyamgamdora, to connect the Power House to a 220 kV double circuit transmission line.
220 kV double circuit transmission line of 18 km length to transmit power generated to existing Kotmale Substation and the associated switch yard extensions.
The works of the project have been divided in to 5 Lots for the convenience of project management and have been awarded to 5 contractors as the details given below.
CEB Annual Report 2010 45 Present Status
Contract amo unt Amount paid Name of the Date of Contract Lot LKR JPY LKR JPY Contractor awar d period % % millio n millio n millio n millio n Consultancy 76 J -Power 2003.11.15 66 1 2,01 7 50 4 76 1, 519 75 Service Month s
Lot 1: Preparatory Maeda 33 2005.07.27 6,328 697 5,377 85 607 87 Works Corporation months
Maeda - Lot 2: Main Civil 54 Nishimatsu 2006.12.06 4,120 7,318 2,718 66 4,761 65 Works Months JV Lot 3: Hydro Mech. Kurimoto 42 2007.11.29 569 1,994 223 39 1,421 71 Equipment Ltd. Months
Lot 4: Electro Mitsubishi 36 2008.06.20 585 7,973 42 7 3,988 50 Mech. Equipment Corporation Months Lot 5 Transmission Kindon 22 2009.10.06 576 853 308 53 299 35 Line Corporation Months 12,839 20,850 9,172 71 12,595 60
Physical Progress of the Project as of end of December 2010
Item Descriptio n % Completed Lot 1 Preparatory works 94 Lot 2 Main Civil Wor ks 80
Lot 3 Hydr o Mechanical Equipment 85
Lot 4 Electro Mechanical Equipment 66
Lot 5 Transmission Line 67 Overall Progress of the Project 79
46 CEB Annual Report 2010 Broadlands Hydropower Project Puttalam Coal Power Project Broadlands Hydropower Project is a run-of-river type The first coal power plant in Sri Lanka is being project, planned to be built on the Kelani River, with the constructed under the Stage I of Puttalam Coal Power object of harnessing the hydro potential downstream of Project. Under this stage, construction of one turbine the existing Polpitiya power station of Laxapana Hydro generator unit of installed capacity of 300 MW is Complex. The project will have an installed capacity of implemented. The implementing authority of the Project 35 MW and expects to generate 126 GWh of electrical is Ceylon Electricity Board. Project is located in the energy annually. The main work sites of the project are village of Norochcholai at the southern end of Kalpitiya located about 90km north-east of Colombo, near the peninsula. It comes under the Divisional Secretary area town Kithulgala. The main components included in the of Kalpitiya. It occupies an area of 93 ha. (228 acres) project are Main dam, Diversion dam, Headrace and is planned to be extended with the addition of two tunnel, Diversion Tunnel, Surface Power Station, Switch more 300 MW units under the Stage II, at the same Yard and transmission Line. location.
The Cabinet approval for project implementation on Construction of the first power plant of 300MW started Design Build Basis was granted in 2006 by securing in July 2007. The Contractor for the project is China funds arranged by the successful contractor. After the National Machinery and Equipment Import and Export successful evaluation of the bids China National Electric Corporation of the Peoples Republic of China. Total Equipment Corporation (CNEEC) was selected as the project cost is US$455 million. Out of this amount, successful bidder and contract agreement signed with US$300 is a soft loan of 2perecnt interest and the them in end of 2010. balance US$155 is a commercial loan at the interest of 6percent interest. The scope of this Phase I of the The total project cost is USD 82 million. The funding Project covers construction of four main structures. agencies are Industrial and Commercial Bank of China (ICBC) and People's Bank of Sri Lanka (PBSL). The Financial Agreements are to be signed shortly. Construction works of the project is expected to commence towards the end of first quarter of year 2011 and planned to complete within four years.
Tender formalities to appoint a Project Consultant are also in progress. The prior notification of the project for CDM registration has been already made and arrangements are being made to appoint a Consultant to assist CEB in the registration process. The Environment clearance for the project has been extended until 8th November 2012. Land acquisition works and preparations for resettlement of people are in progress. Socio Economic Survey has been completed and preparation of Resettlement Action Plan is in progress.
CEB Annual Report 2010 47 3 Transmission Line and Sub Station The 220kV Transmission Line for Phase I is from Norochcholai to Veyangoda is 117 km in length. This is a Double Conductor, Double Circuit line. Under the second phase of the Project, an additional 220kV Transmission Line up to Anuradhapura and also a new Grid Substation at Chilaw will be constructed. 4 CEB Housing Compound This compound consists of dormitories, detached houses, a Club House, etc. with all requisite amenities. The fuel for the power plant is high quality low-sulphur bituminous coal. It will be procured from Indonesia through Lanka Coal Company Pvt Ltd. The coal requirement for the Phase I is estimated to be 650,000 MT per annum. The sulphur content of the design coal is kept low to ensure the sulphur dioxide emissions are minimized. However, as an additional precaution, a Flue Gas Desulphurization unit (FGD), which could absorb 90 % of the sulphur dioxide, has been installed to ensure the maximum protection of the environment. 99.2% of the particulate matter generated as a result of burning the coal will be arrested by an Electrostatic Precipitator. Therefore, any concern about carbon particles destroying the vegetation around the Plant should not arise.The Power Plant (Phase I) will annually deliver 2200 GWh of energy to the national grid. The contract for 1 Power Plant Phases II and III (now called Phase II) was signed in June The Power Plant consists of a 300MW generator run by 2009. The total cost of this Phase II is estimated at US$ a steam driven turbine and all the associated 891 million. Work had commenced in October 2010 Plant/Equipment such as Boiler, Coal Conveying Belts, and the first unit under Phase II unit is expected to come Pulverizes, Crushers, Demineralised water producers etc. into operation in mid 2013 and the second unit by the end of 2014. 2 Jetty for Coal Handling A 500m long Jetty/Trestle capable of berthing two Trincomalee Coal Power Project Barges carrying coal (5000MT each) at one given time, Following the requirements of CEB's Long-term Two cranes capable of unloading 650 MT of Coal per Generation Plans, establishment of a 2x250 MW Coal- hour, a Conveyer belt to carry Coal to the Stock Yard fired Power Plant in Trincomalee, Sri Lanka has which could carry 1500 MT of Coal per hour, Sampling commenced in late 2006. This power plant will be devices, a Coal stock yard that could accommodate developed and operated by a Joint Venture Company 750,000 MT of coal which is the requirement for 900 (JVC) between CEB and NTPC Ltd of India as per the MW (when all 3 units are in operation) for 3 months. Memorandum of Agreement (MOA) signed between
48 CEB Annual Report 2010 CEB, NTPC and the Government of Sri Lanka in The Route Survey works on Sampoor-New Habarana December 2006.The estimated Project Cost for the 220kV (90 km) line is complete, and the Survey works power plant is US$ 500 million (Rs. 65,000 Million), on New Habarana-Veyangoda 220kV (146 km) line is in which is to be funded by equity share of NTPC and progress. The Initial Environmental Studies on Sampoor GOSL/CEB, amounting to 30% of the Project cost. The to New Habarana line and New Habarana to Veyangoda balance 70% of the funds is to be secured through are in progress. international commercial lending.
The location of the power plant has been identified in Muttur, Trincomalee District. This land, extending to 1,200 acres is in the possession of CEB and the 500 acre plot demarcated for the power plant will be leased to the JVC under a Land Lease Arrangement. The terms and condition of the lease Agreement are being finalized with the Land Commissioner General. Securing the land requirements for the New Habarana The Hon. AG's Clearance on Joint Venture Agreement GSS (from Forest Department) and paddy lands (from and the Power Purchase Agreement (PPA) has been private owners) for Veyangoda GSS are in progress. received. The BOI Agreement has also been finalized with the BOI. However, the Hon AG's clearance for the Transmission Projects Implementation Agreement (IA) is outstanding since July Many projects were able to be streamlined in Year 2010 2010. Signing of these agreements is expected during for the implementation around the country, especially February and March 2011. Coal supply to the project is those covering the Northern and Eastern parts after expected from the Lanka Coal Company PVT Ltd., and three decades of disturbances. Defects liability periods the principles of Coal Supply Agreement have been of the two projects commissioned in late 2009 were agreed with the Lanka Coal Company. also completed successfully. Eight new projects proceeded to the signing of contracts during year 2010. Feasibility Study and site specific studies such as Further, it was possible to secure the required financing Topographical Survey and Geotechnical Survey for the for two new transmission projects and they were being power plant are in progress. EIA study for the power processed during the year 2010. A brief description of plant will be expected to commence in early 2011. the Projects handled under the Transmission Projects Branch is appended below. The Government of Sri Lanka has assumed the responsibility of construction of the Coal unloading port Power Sector Development (approx US $ 105 million) and the transmission line from Project-Part C Sampoor to Veyangoda (Cost: approx Rs 22,000 million) Asian Development Bank (ADB) funded the foreign under the MOA. In the meanwhile, in July 2010 the component of this project, which consists of three Government of India has agreed to provide a US$ 200 major components. One of these is the Transmission million loan to finance the transmission line and the Component, which is Part C of the total project. ADB Jetty. funds US$ 41 million as the foreign component of this transmission component and CEB-financed the local component of LKR 918 million.
CEB Annual Report 2010 49 New grid substations were constructed at (GCGSP). This project replaces the existing outdoor 33 Ambalangoda, Pannala, and Aniyakanda under the kV switchgear with new state-of-art GIS including original scope of this project. Work was completed and introduction of two new 132/33 kV power those grid substations were connected to the National transformers. Grid in mid 2009. Defect liability period of these substations were closely monitored and successfully Project agreement was entered in to and the completed in mid 2010. commencement date occurred in November 2008. It was expected to complete this project by end 2010 but Construction of New Katunayake grid substation and delayed due to faulty transformers. Actions are being augmentation of existing grid substations at Bolawatta, taken to remedy the situation. Deniyaya, Biyagama and Sapugaskanda were later added to the scope of this project. The works were Beliatta Grid Substation Project completed in 2010, and the substations were connected 132kV/33kV grid substation is being constructed at to the national grid. Beliatta under this project which is the Phase 1 of Lighting Hambantota Project. Additionally, a 132kV Several 132 kV transmission lines were also constructed transmission line is being constructed from Hakmana to under this project in addition to the substation works. Beliatta in order to interconnect this grid substation to Last line of them was from Matugama GSS to the national grid. Ambalangoda GSS. That line was re-conductored and completed in December 2009 and the defect liability period of the same was completed in end 2010.
Kerawalapitiya – Kotugoda Transmission Project Japanese Bank of International Corporation (JBIC) funded this project, costing, Yen 2,938 million as the foreign component. CEB financed the local component worth of LKR 874 million. Under this project, a new 220 kV GIS was constructed at Kerawalapitiya to interconnect the Kerawalapitiya combined cycle power Financing for the substation (Euro 4.731 million and LKR plant. Simultaneously, a new 220 kV outdoor grid 89.332 million) and for the transmission line (LKR 427 substation was constructed at Kotugoda and 18.5 km million) is provided by the Government of Sri Lanka. All 220 kV double circuit transmission line was also contracts have been finalized and the construction constructed from Kerawalapitiya to Kotugoda. Defect works of both substation and the line are in progress. It liability period was closely monitored and successfully is expected to complete this project by July 2011. completed in August 2010. Vavuniya - Kilinochchi Greater Colombo Grid Substation Transmission Project Project – Kotugoda Extension The Government has launched Waddakin Wasantham This project, costing Euro 6 million is being funded by (Uthuru Wasanthaya) program to reconstruct the KFW of Germany as an extension to the already infrastructure facilities of the Northern Province. completed Greater Colombo Grid Substation Project Construction of necessary power transmission lines and
50 CEB Annual Report 2010 grid substations to Northern Province was included as a As in the case of clearing of line route of Vavuniya to part of this program. Kilinochchi, the clearing of the route from Kilinochchi to Chunnakam was also a challenging task for the project JICA has agreed to finance this project, costing LKR staff, due to the presence of explosives, including land 3,092 million under the Waddakin Wasantham mines, along the route. Especially the Muhamalai area program. Scope of work in this Project consists of and the Elephant Pass lagoon were found to be heavily construction of 132/33kV Grid Substation at Kilinochchi, mined. It must be specially mentioned that the security attending to necessary augmentation work at Vavuniya forces in the area including high commanders grid substation, and the construction 67 km/132 kV downwards helped CEB in this endeavor in every transmission line from Vavuniya grid substation to possible way in a timely and professional manner for Kilinochchi grid substation. CEB to obtain the Safe to work – Clear from explosives Certificate from the Government Agents and the UN It was a challenging task for the project staff, especially Office. the clearing of 67 km long line route and the 16-acre grid substation premises from explosives, including land Procurement process for both grid substation and the mines. It must be specially mentioned that the security transmission line are in progress and expected to sign forces in the area including high commanders the Contracts with the selected bidders in early 2011. It downwards helped CEB in this endeavour in every is expected to complete the Project by end 2012. possible way in a timely and professional manner for CEB to achieve the targets set for the project. Once completed, the electricity supply in Jaffna district and also in surrounding districts will be vastly improved. Contracts were signed for all components and the work The mission of delivering national grid electricity to commenced in July 2010. It is expected to complete the Jaffna after more than two decades will be fulfilled with project by end 2012. Once completed, the electricity commissioning of this project. supply in Kilinochchi district and also in surrounding districts will be vastly improved. Kilinochchi grid Augmentation of Grid Substations for substation will also act as the gateway for delivering Absorption of Renewable Energy Project national grid electricity to Jaffna after more than two Asian Development Bank provides financing of LKR decades. 2,998 million for a part of this project under their Loans Kilinochchi - Chunnakam 2518–SRI/2519–SRI (SF) - Clean Energy and Access Transmission Project Improvement Project. Using these funds, a new 132/33 This project is also a part of the Waddakin Wasantham kV grid substation will be constructed at program launched by the Government to develop the Mahiyanganaya and the existing grid substations at Northern Province. Seethawaka, Balangoda, Badulla, Nuwara Eliya and Ukuwela will be augmented. Asian Development Bank finances this project, costing US$ 28.72 million under the Waddakin Wasantham Government of Sri Lanka finances the balance work of Program. Scope of work in this Project consists of this project worth of LKR 1361 million. Under this construction of a 132/33kV Grid Substation at phase, existing grid substations at Ratnapura, Chunnakam and the construction 73km/132kV Wimalasurendra, and Rantambe will be augmented by transmission line from Kilinochchi grid substation to increasing their transfer capacities. Further, a 132 kV Chunnakam grid substation. transmission line of 21 km will also be constructed by
CEB Annual Report 2010 51 connecting Rantambe and Mahiyanganaya grid grid substations will be constructed at Naula, Maho & substations. Pallekelle under Lot A2 of the project. Augmentation of existing grid substations at Habarana, Panadura, Contract agreements for ADB-funded component and Matara, Puttalam & Galle are also attached to Lot A2 for GOSL-funded grid substation component were component of the project. signed in August 2010 and November 2010 respectively. CEB has undertaken to construct the transmission line from Rantambe and Mahiyanganaya. Works of all components of the project are in progress and expected to completed the by end 2012. Once completed, much awaited capacity enhancements of existing grid substations to interconnect the mini hydro power plants will be achieved to great extent.
Transmission System Strengthening Habarana 132Kv Control Room under Transmission System Transmission Lines Project Strengthening & Grid Substations Project Asian Development Bank provides financing of US$ 20.4 million for the Transmission System Strengthening Lot A2 contract was signed in November 2010 and Transmission Lines project under their Loans expected to be completed in early 2013. Tendering 2518–SRI/2519–SRI (SF) - Clean Energy and Access process is in progress for other two components and Improvement Project. expected to be finalised soon.
New 100 km,132 kV transmission lines will be Transmission System Strengthening constructed in four different routes under this project. Eastern Province Project They are the Galle-Matara, Puttalam-Maho & Ukuwela- Asian Development Bank funds US$ 25.2 million for this Pallekelle lines and the interconnection line to Naula project under the under the Loans 2518–SRI/2519–SRI grid substation.Contract was signed in August 2010 (SF) - Clean Energy and Access Improvement Project. and the preliminary surveying, way leave clearing, and design reviewing works are in progress. Project is New 100 km, 132 kV transmission line will be expected to be completed by end 2012. constructed from Habarana grid substation to Valachchenai grid substation under the Lot B of this Transmission System Strengthening project. Lot A covers the augmentation of Valachchenai Grid Substations Project and Ampara grid substations. Lot B contract was signed This also a project funded by the Asian Development in November 2010 and the Letter of Acceptance was Bank worth of US$ 33.1 million under the Loans issued to the selected contractor for Lot A in December 2518–SRI/2519–SRI (SF) - Clean Energy and Access 2010. Both components are expected to be completed Improvement Project. in early 2013 and the quality & durability of electricity supply to East will be considerably improved once the Project was divided to three components based on the project is completed. technical requirements. Lot A1 will augment the existing Kurunegala grid substations and Lot A3 will upgrade the Veyangoda & Horana grid substations. Three new
52 CEB Annual Report 2010 North East Power Transmission New Galle Power Transmission Development Project Development Project The need of further improving the electricity supply in Construction of a new grid substation at Galle was on Eastern and North Central Provinces was identified and the priority list for past few years but could not be hence the financing assistance was sought form ADB implemented due to various reasons. Finally the Asian for this purpose. ADB has now agreed to finance US$ Development Bank agreed to provide US$ 21.6 million 55 million for the identified scope of the North East for the identified scope of the New Galle Power Power Transmission Development Project and loan Transmission Development Project and the loan agreements are being finalized. agreements are being finalized.
This project has been divided into three Lots, viz. New Galle grid substation will be constructed under the Lot A contract of the project. Lot B contractor will Lot A: Construction of three new grid substations construct 132kV transmission lines from Ambalangoda at Monaragala, Polonnaruwa & Vavunathiev, and grid substation to new Galle grid substation. Augmentation work of existing grid substations at Ampara & Rantambe A Project Management Unit was established in May 2010 and the requisite TEC and the CAPC were Lot B: 132kV transmission lines from appointed in July 2010. Transmission line route has been Mahiyangana to Vavunathievu, Uhana to Ampara finalized and a major share of way leave clearance and Medagama to Monaragala activities has been completed. Tendering process has commenced, initiated with preparation of bid Lot C: Construction of the second 220 kV circuit documents. It is expected to invite tenders in March of New Anuradhapura–Kotmale line 2011 and to complete the tendering process by mid- 2011. Initial works, such as formulating the Project Management Unit, appointing required TEC & the Transmission Construction CAPC, finalizing the line route, securing of substation Transmission Constriction unit was re-established by lands and proceeding with the procurement process appointing new engineering and supporting staff and have commenced in late 2010 and are in progress. It is necessary infrastructure facilities were provided. CEB expected to invite tenders for all the above Lots in plans to develop this unit further by appointing a February 2011 to complete the procurement process by Deputy General Manager to head the branch in order to mid 2011. undertake all CEB and GOSL funded transmission construction works.
Presently, the branch has undertaken to augment the Vavuniya grid substation by spending LKR 260 million. This unit is also managing the turn-key activities of the Puttalam grid substation augmentation work initiated to interconnect private wind power plants. Furthermore, shifting of transmission towers to facilitate the Southern Expressway is also being undertaken by this unit.
North East power Transmission Development Project: Searching for appropriate Transmission Line Routes
CEB Annual Report 2010 53 The Colombo City Electricity Distribution Development Project Head Works To meet the increasing power demand, improvement for Head Works consists of one dam across Uma Oya at the stable and reliable power supply of the distribution Puhulpola, Welimada and another dam across network in Colombo City, the upgrading, expansion and Mahathotilla Oya at Dyraaba, Welimada; approx. 4 km rehabilitation works including establishment of the long link tunnel connecting these two reservoirs; 15 km automation control and monitoring system of the long Headrace tunnel from reservoir at Dyraaba to the electricity distribution network are implementing under surge shaft; approx. 720 m vertical Penstock; this project. underground Power Plant having 120 MW installed capacity and 3.3 km tailrace tunnel. The power plant will be connected to Badulla Grid Sub Station via a 25km long transmission line.
Total estimated cost of Head Works is USD 529,059,198 plus SLR 6,121,750,000 out of which USD 450,000,000 is funded by Export Development Bank of Iran (EDBI) and the balance is borne by GOSL. The costs of Electromechanical/ Hydromechanical works and Transmission Line are USD 189,312,045 and USD 6,342,088 respectively. These sections of the Head Highlights of the Project during 2010 Works will be under the supervision of CEB during the
Physical Package Activity design, construction and commissioning. Progress
Extension of two(2) Grid Substations (In stallation of 01 No. 132kV GIS 98% The EPC Contractor, Farab Water and Energy Projects of bay at Kolonnawa Grid Substation and 10 Nos. 132kV GIS Bays including A GIS Building Construction at Kelanitissa Grid Substation) Islamic Republic of Iran commenced works of Head Works in March 2010 and will complete the works in Upgrading of Primary Substation “C” (33/11kV, 3 x 12.5MV! to 98% 132/11kV GIS, 2 x 31.5MVA) including GIS Building Construction) March 2015.
Construction of 132kV underground power cables (Kelanitissa Grid B Substation to Primary Substation “C”, single circuit 2.08km and 94% Down Stream Development Works Kolonnawa Grid Substation to Primary Substation “C”, single circuit, 6.78km) including fiber optic communication cables. (in Kirindi Oya Basin) It is proposed to construct a reservoir having a storage C Construction and Rehabilitation of 11kV Distribution System in Colombo 98% City and Augmentation of One Primary Substation. capacity of 8 MCM at the outfall of the tailrace at Alikota Ara for re-regulating purpose. Water thus stored
Installation of SCADA Distribution Control Center including building in this reservoir is conveyed to the down stream D construction, 15 Nos of Remote Terminal Units at Grid and Primary 60% reservoirs for irrigation work and for other uses such as Substations, 116 Nos of Remote Terminal Unit at Satellite Substations , 117 Nos of Remote Terminal Unit at Radial/Ring Substation industrial use and potable water, through a network system having following components.
Uma Oya Multipurpose Development Alikota Ara reservoir with Right Bank main Project canal Kuda Oya reservoir with Right Bank main canal Ussella Anicut and related canal system The Uma Oya Multipurpose Development Project Handapanagala Anicut Right Bank canal comprises of two (2) main components as described Handapanagala reservoir Left Bank canal below. Down Stream Development Works will be executed by Irrigation Department at a total cost of SLR 9,353 million.
54 CEB Annual Report 2010 DISTRIBUTION DIVISION 1
Distribution Division 1: Boundaries Highlights of the Year Units sold within the Division during the year GWh 2,573 Revenue earned from electricity sold Rs. million 38,542 Average selling Price Rs./kWh 14.98
Distribution loss %
Receivable position (Without Street Lights) and without month 0.97 finalized consumer electricity accounts
No. of retail consumers within the Di vision at the end of the year No. 1,185,989 No. of new connections provided during the year No. 61,897 No. of employees at the end of the year No. 2,789 No. of bulk supply consumers per empl oyee at the end of the No./employee 0.9727 year Aver age revenue Rs./month/consumer 2,702 Average No. of re tail consumers per employee at the end of the No/employee 425 year
Average No. of retail consumers per distribution substations No/substation 168
Average length of low voltage lines per emplo yee km/emplo yee 10.8 Average length of low voltage lines per consu mer km/consume r 0.025 Average length of medium voltage line per Distribution km/sub station 1.23 Substation
CEB Annual Report 2010 55 Area of Service Area of operation of Distribution Division 1 covers Officer to attend to human resources functions. Colombo Municipality Area, North Western Province Coordination of these activities and the human resource (NWP), North Central Province (NCP) and Northern functions of all the executive officers and the staff Province (NP) covering about 42% of the total land area attached to the corporate office are performed by the of the island. Total population within the Division is unit under the Deputy General Manager (Commercial & about 7.9 million. The highest electrification level of the Corporate). Division is 99% in Colombo City while North Western Key Objectives Province 91%, North Central Province 82% and the Key Objectives of the Division are: lowest 46% in Northern Province. Provision of reliable electricity supply to the The annual electricity consumption per-consumer in the consumers within the Division at statutory voltage Division is 2,164 units. Colombo City records the levels highest annual electricity consumption per consumer at Sell electricity and achieve planned surpluses of 7,582 units while the lowest annual electricity revenue over the total expenditure consumption per-consumer is 1,145 units in Northern Provide new connections to prospective consumers Province. Ensure rational development of the electricity distribution system within the Division. Operation Structure The Division 1 of Ceylon Electricity Board is headed by an Additional General Manager, who is directly responsible to the General Manager. For the operational purposes, the Division is divided in to four Provinces, headed by provincial Deputy General Managers. Each Province is sub-divided into Areas which are administered by either Chief Area Electrical Engineers or Area Electrical Engineers. There are 14 Areas and 47 Consumer Service Centers in total within the Division for effective operation.
In addition to Provincial Deputy General Managers, there are three Deputy General Managers to look after Projects and Heavy Maintenance functions, Planning and Development functions and Commercial and Corporate functions of the Division. Rural Electrification activities within this Division, as well as of other Divisions are coordinated by the Deputy General Manager (RE Projects & Procurement).
The finance and revenue functions of the Provinces are carried out by Accountants under supervision of the Additional Finance Manager of the Division. Each Province is provided with a separate Human Resource
56 CEB Annual Report 2010 Se L L L 33/11 k 11 kVU 11 kVDist 33 kVDist D Indus V Distri V Und V Distri is rv 24 tri Sales inDifferentT Sales ice % trial bution I e C V b b nderg rg o uti uti 72 P Distribution Division1 r r r nne r i i ou Di bu butio ima on on Street Lighti nfr % GW n Othe r c tio v oun d Ca L Sub tio ry S a i
Dome i si n ( st n n 2 n 35 es % L r d Ca L 66 sta o u
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s Purpose General Share ofEnergySales:DistributionDivision1 n
ng 39 s % B ulk
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CEB
Average selling Price Rs No. No. km km N km km km 10 15 20 0 5 o. Annual Report CC
18.56 A 112,7354 Distribution Division1 verage SellingPrices: 29,741 NW 7,039 7,375 (2 11.85 P 532 581 728 Di 38 57
Province v 28 3 i si NCP Incr G %
11.74 o n W e a 5.7 % 2009 1 5.2% 8.7% 6.9% 4.5% 2.9% 3.4% 2.4% se h
2010 ) NP over 13.29 Rs Aver Division Rs Av C EB 14 erage 13 age . . 98 06 1 57 Division 1 accounted for 28% of electricity sales in the NP country. In the year 2010, 2,573 GWh of electricity was NCP 6% sold in the Division, which is 9.3 % increase compared 10% with the previous year. The majority of sales in Division 1 come from General Purpose tariff category which is NWP Colombo City approximately 39 % of the total sales of the Division. 28% 56% Colombo City is the major contributor for sales in the General Purpose category.
Revenue from Electricity Sales by Province: Distribution Division 1 Revenue Domestic Colombo City accounts for 56 % of total sales in the 26.7% Division, followed by North Western Province at 28%, General North Central Province at 10% and Northern Province at Purpose 6%. The revenue from electricity sales during the year 51.9% was Rs.38,542 million, which is 8.0 % higher than the previous year. The majority of revenue in Division 1 Industrial resulted under General Purpose tariff, which is 18.4% approximately 51.9 % of the total revenue of the Division.
Religious Street Lighting The average selling price of the Division is Rs. 14.98 per 2.8% 0.5% kWh, which is higher than the overall CEB average of Rs. 13.06 per kWh. Revenue from Electricity Sales: Distribution Division 1
Customer Care Division 1 Rs m 38,542 Domestic 32% 86%
Industrial Other 2% Divisions Rs m 81,990 68% General Religious Purpose Share of Revenue: 1% 11% Distribution Division 1 Consumer Accounts by Tariff: Distribution Division 1
58 CEB Annual Report 2010 Establishment of e-city During the year under review, three e-city centres were made to these counters are credited to the consumers opened in Area Offices at Colombo South, Kurunegala accounts instantly on line. and Minneriya in order to enhance the services to the existing and prospective customers and general public. In addition, CEB has arranged with Singer Sri Lanka, Abans (Pvt) Ltd and Lanka Bell to accept Electricity Bill The services available at these e-city centres are as payments through their respective island wide networks follows: and to arrange for these payments to be credited to CEB consumer accounts on line. Collection from the Facility for payment of electricity bills Department of Posts has also been brought on line.
Resolving problems in relation to electricity bills The management of the revenue collection, which was hitherto under the purview of Division 1 was taken over Attending to customer quires such as meter by the Finance Head Quarters form November 2010. testing, meter changing, meter or service line shifting etc. A revenue collection during the said period was 97.8% of the sales. Receivable position on Heavy supply & Tariff changing of consumer accounts Ordinary Supply Debtors without Finalized Consumer Electricity Accounts and Street Lighting is 0.97 months, Name and address changes of consumer resulting in a positive impact in the cash flow of CEB.
Consulting services to the customers with regard to Electricity Consumer Accounts and electricity supply, Tariff and usage etc. New Service Connections Division 1 had 1,188,702 consumer accounts by the end Instruction on providing new connections. of the year 2010. The majority of consumer accounts were in the domestic category, while the second highest Acceptance of and providing follow up details of was from the General Purpose category. The number of power failure complaints. bulk supply consumers in the Division by the end of the year was 2,713. The largest number of bulk supply Special efforts were taken to improve the service at the consumers was recorded from Colombo City. Out of the customer interface points. The staff attached to 14 Area total number of consumer accounts in the Division 1, the Officers, 47 Consumer Service Centers, 45 Point of sales largest number of consumer accounts was recorded (POS) counters, and 3 Distribution Control Centers took from North Western Province and the lowest was from special care to serve the customers better during the Northern Province. year. With the opening of 9 new POS counters, difficulties encountered by the customers in queuing for During the year under review, a total of 61,897 new making payments were minimized. connections were provided, out of which 194 are new bulk supplies During the period from January–October 2010, the Division has extended their POS counters Net Work to 13. Total No. of Peoples Bank POS counters as at the end of the year was 45. These POS counters are very popular among the CEB consumers as the payments
CEB Annual Report 2010 59 Supply Reliability During year 2010, Planning & Development Branch of beyond some level in a tropical country like ours is Division 1 continued its efforts to improve the reliability uneconomical, if not practically impossible. Hence the of supply provided to its customers. Various measures other measure is to reduce fault locating / restoration were taken to reduce failures as well as to reduce time time. The latter is achieved by automating distribution taken to locate / isolate faulty sections in order to have network operations. a quick supply restoration. Commissioning of state-of- the art Distribution Control Center in North Western Province, equipped with distribution SCADA and Distribution Automation in March 2010 was one such activity.
Owing to predominantly overhead distribution network (except in Colombo City where MV distribution network is an underground cable system), the network suffered from many types of disturbances such as vegetation related faults, faults originated from bad weather conditions etc. The main causes of failures were vegetation, branches from distance, burning of jumpers and aging of components. The average failure rate of Commissioning of NWP MV network of the Division during the year was 6.1 per Distribution Control Centre 100 km of line per month. The same for LV network was 21.2 per 100 km of line per month. Corresponding In March 2010, for the first time in CEB Distribution figures for the previous year (2009) were 6.7 and 16.7 Sector, a state-of-art Distribution Control Center (DCC) respectively. with distribution SCADA and Distribution Automation was commissioned. This DCC is fully equipped with These network failures have reflected in supply reliability communication systems, data/voice recorders, data indices at customer levels. The customer level reliability loggers etc. Operational and safety procedures and indices of NWP, NCP and Colombo City during the year, guidelines were developed for remote operation of as monitored and calculated by Distribution Control equipment through SCADA. Centers of NWP, NCP and Colombo City were as follows: The DCC operates with Electrical Superintendents placed on duty round the clock. A Control Engineer was NWP NCP Colomb o City posted to DCC to be overall in charge of the centre.
SAIFI 39.6 19.8 - About 39 Load-Break Switches, 40 (remote & manual) Auto-reclosers and 40 remote Fault Passage Indicators SAIDI (hrs.) 80 57 0.64 that are installed in North Western Province are controlled by this DCC. These infrastructure facilitated Distribution Control Centres and logging of failure data, fault location, isolation of faulty Distribution Automation sections, dispatch of breakdown crews and speedy Improvement of supply reliability means reduction of restoration of supply. failure rate and reduction of restoration time. Reduction of failures of an overhead bear conductor MV network DCC now coordinates with all units in the Province and
60 CEB Annual Report 2010 arranges all planned interruptions to get the best use of Electronic Sectionalizes were procured and installed the supply interruptions. Supply failures are analyzed by in MV overhead network in NWP on a test basis, this cause and provide necessary feedback to maintenance year. Performance is now being closely monitored. unit of the Province to prepare proper maintenance Once proven to be effective, more such low-cost plans. The result is the improvement of SAIDI in this sectionalizes will be procured and installed year, as indicated above. Automatic Voltage Regulators (36 kV) are being Arrangements have already been initiated to procure procured for remote areas where load is not more remote controllable Load-Break Switches and significant for a economically viable power source other equipment for NWP. In the meanwhile, further but the voltage is very low owing to excessive training have been arranged for Control Center distance of MV line from the source. The locations Engineer and other staff in installing the switches, Mankulam (Killinochchi & Mullaitivu lines), Mannar, programming switches and SCADA system, to maintain Polonnaruwa, Maho and Kalpitiya have been sustainability of the system. identified as requiring Automatic Voltage regulators for improvement of the 33 kV voltages. Upgrading of other Distribution Control Centres With the implementation of this Distribution automation, Arrangements have been made to upgrade the DCC of time taken for location faults and restoration of supply North Central Province, which is basically a monitoring would be significantly reduced and thus SAIDI is expected center, to a fully-fledged Control Center by providing to reduce further. distribution SCADA, remote controllable switches and fault passage indicators. Eight remote controlled LBS were A system level study for the development of optimum provided to NCP during this year and NCP staff that was reliability improvement plan has been commenced. This provided training on these equipment commenced study would help to formulate MV development installation of remote Controlled LBS this year. Additional proposals to economically improve system reliability of fault passage Indications and other equipment are MV Network. The study is expected to complete by first planned to be installed in coming year. Equipment and quarter of 2011. SCADA system have already ordered and are expected to receive by the 1st quarter of 2011. Distribution Loss Reduction The CEB's system losses which were as high as 21 % of Under the Wadakkin Wasantham Project, SCADA and gross generation and Distribution level losses as high as more remote controllable switches have been ordered for 17 % of gross generation in year 2002 has been Northern Province. The DCC of Northern Province will be gradually brought down to 13.5 % and 9.78 % established with state-of- art technology, by the 2nd respectively by end of 2010. This reduction of quarter of coming year. Distribution level losses had been due to vigorous monitoring and implementation of distribution loss In addition, following measures are being taken to reduction programmes (technical & commercial) improve supply quality and reliability of the Distribution launched by the Distribution Divisions during past few Network. years. MV Auto-enclosures are being procured to install in overhead MV network of the Division to improve supply reliability.
CEB Annual Report 2010 61 Loss Reduction in three Phase 60A supplies Distribution losses of Division 1 were 9.3 % of In the meanwhile, Non-technical loss reduction distribution input to Division 1 during year 2010. The program–Stage II, was launched, in which action has Provincial level losses in Division 1 for the year 2010 been taken to install PPM meters with kVA recording in are given below. all 60A installations. This helps to identify 60A consumers demanding over 42 kVA. Also tamper events Energy input Losses Province are recorded in the meter for later investigation. GWh/year % Colombo City 1,249 6.3 Replacement of 60A electro-mechanical meters with North Western Province 1,022.5 10.1 PPM, rehabilitation of 60A metering installations by North Central Province 362 11.8 installing tamper-proof meter enclosures and installing Northern Province 204 19.4 Overall Division 1 2,838 9.3 padlock type tamper-proof seals commenced from Minneriya Area last year and was extended to all Areas Out of these losses of 9.3 %, it is estimated that in North Western and North Central Provinces this year. technical losses are about 8.3 % and balance 1 % Green padlock type tamper proof enclosures were amounts to non-technical losses such as theft, illicit installed under the 'Tamper Proof meter enclosure seal supply, billing errors, metering errors, unmetered street management System' implemented in Division 1. Four lamps etc. Areas, namely Chilaw, Kekirawa, Wariyapola and Anuradhapura have completed refurbishment and Under Non-Technical Loss Reduction Programme–Stage installation of PPM for 60A installations. As at the end I, all Bulk Supply Metering installations in NWP and NCP of the year, the progress is as follows: have been rehabilitated and installation of Programmable Poly phase Meters (PPM Meters) with 60 A retail Installations Ref urbished Supplies Nos. tamper proof enclosures and tamper proof seals have Nos. %
been completed. Remote reading of Bulk supply NWP 2391 1460 61
NCP 1072 871 81 installations commenced few years ago (i.e. NWP in Colombo City 3624 236 7 2007 and NCP in 2009), making a landmark in the history of Bulk Supply metering in CEB.
Automatic Meter Reading This program will continue in 2011 in Division 1 and is In the year under review, all Bulk Supply meters in expected to be completed in North Western Province, Colombo North Area were refurbished and PPM Meters North Central Province and in Northern Province. Annual were installed. All Bulk Supply meters in Jaffna Area of testing of all 60A installations by the province was NP were replaced with PPM in this year and remote commenced and 3-phase portable test equipment have metering will be provided to NP in 2011. been provided to all provinces for this purpose. A similar exercise commenced in year 2008 in Non-Technical loss These measures contributed to reduce electricity theft, reduction program –Stage III in NWP and NCP for 30A metering errors, etc. of Bulk Supplies to a greater supplies, where all 3-phase non-domestic installations extent. Annual testing of bulk supply meters, regular are fixed with tamper proof meter enclosures, green inspections and automated meter reading have brought tamper proof padlock type seals and the meters are down commercial losses of bulk supply installations to tested annually. New 3-phase electro-mechanical meters almost zero level. have been purchased to replace all defective meters in these installations.
62 CEB Annual Report 2010
Colombo inspected Distribution Substations have been reported 30A retail Supplies NC P City to respective Area Engineers. Total available 3,9 32 10 ,834
Refurbished 1,163 957 Inspection of the implementation of the Seal Percent refurbished 30% 9% Management System and the Transformer Movement Marking another landmark in history of energy auditing records in CEB distribution network, two of CEB areas, Wennappuwa and Kekirawa have completed Monitoring of implementation of the Seal Management installations of energy meters to 100% of its System and the Transformer Movement records was distribution transformers in year 2008. Energy auditing carried out in Year 2010. Observed Shortcomings have of distribution substations in all the distribution been reported to respective Area Engineers. substations of these areas were commenced by way of comparison with billing system consumption records.. Productivity Improvement and This exercise was further enhanced during the year Quality Management under review. The distribution substation areas with From April 2008, productivity improvement concepts high losses are identified and are being investigated were implemented in Planning & Development Branch towards possible theft. This programme is continued in and the units coming there under. As a result, Meter all areas of NWP, NCP and NP and is expected to Testing Laboratory of Division 1 obtained ISO 9001:2002 complete in the coming year quality certificate in January 2010. Since April 2008, the 5S concepts were implemented in Planning & Development Branch and units coming there No. of No. of Substations under. 5S is being continued in this branch, aiming at Province with Energy % Substations monitoring ISO 9001:2002 for the Planning & Development Branch. NWP 2528 1578 62.5 Preliminary documents were submitted to SLSI for initial NCP 1779 853 52.0 concurrence, aiming at ISO 9001:2002 for the Planning & Development Branch in 2011. System Monitoring System monitoring activities continued during year Procurement 2010, which mainly included following activities: There were 107 tenders (at MPC, BPC and RPC levels) initiated in this year with a total estimated purchase cost Monitoring of Bulk Supply Installations of Rs.1,515.4 million and 31 tenders were awarded Inspection of all Bulk Supply installations in NCP and within the year. Therefore, material position in Division 1 has improved greatly ensuring almost all centrally NWP has been completed in October, 2010 and new inspection cycle has been started. Visually observed purchased key materials available in the Division. shortcomings of inspected Bulk Supply Installations have been reported to relevant parties. Rectification process With the help of in-house developed software, of the reported shortcomings was followed up 'Procurement Monitoring System', status of each successfully in year 2010 procurement was continuously monitored and vigorously followed up to reduce the delays of TECs. Monitoring of Distribution Substations This software was further developed to automatically Monitoring of Distribution Substations of the Division generate reminders to track TEC delays, etc. was initiated in Year 2010. Observed Shortcomings of
CEB Annual Report 2010 63 MV Distribution Development Plan of Division 1 During the year, Medium Voltage Distribution System quality management system certification from ISO 9001: Development Plan 2010-2019 for Division 1 was 2000 to ISO 9001:2008. prepared. Up to now, Northern Province was not included in Divisional MV Plans due to high Obtaining a Provincial Productivity Award uncertainties in load forecasting and specific issues The Meter Laboratory also secured a Commendation connected to unsettled conditions in Northern Province. Certificate in service scale small category in North Hence MV Development proposals were prepared for Western Provincial Productivity Awards held in August specific requirements as and when need arises. The 2010 conducted by the National Productivity Secretariat. salient feature of the 2010 plan was that Northern The Meter Laboratory won this title by competing more Province is also included into the Plan. than 40 private, public and semi-government organizations in NWP. This is the first time that a Unit of Divisional Meter Testing Laboratory this Division secured such national recognition. Energy Meter Distribution in Division 1 Bulk Supply Meter Wiring Training The Meter Laboratory has always contributed to development the technical knowledge of the CEB staff in Division 1 in the energy metering field. The Bulk Supply Meter Wiring training for the supervisory grade staff and technicians of all Areas of NWP, NCP & NP is one such activity launched by Meter Laboratory in year 2010. The expected benefits of this programme were to make aware the CEB staff about the possible faults occurred during bulk supply meter wiring and to increase the revenue of CEB by eliminating such mistakes. Other Special Activities done by Meter Laboratory Meter Testing Laboratory Apart from the routine activities assigned to Meter During the year 2010, the Meter Laboratory of the Laboratory, it also undertook and completed several Division was able to distribute over 80,000 single phase special tasks in Year 2010. energy meters in entire Division, despite various problems occurred in continuous supply of 1Ph energy Assistance to commission the first ever commercial meters. At the beginning of the year 2010, as one of wind power plants in Sri Lanka by attending the the core values of the Meter Laboratory, the target set energy meter commissioning as per the request of was to test and distribute 90,000 single phase meters Energy Purchase Branch – Transmission Division within the Division. Even though strike of the Reprogram all the bulk supply meters in Colombo outsourced employees affected the functions of the North Area to be compatible with AMR Meter Laboratory, it managed to achieve 92% of the system. annual target set. Attend Bulk Supply meter testing in Kilinochchi Area Upgrading the Quality Management Test all the IPP energy meters in the Division in System Certification collaboration with Energy Purchase Branch – The Meter Laboratory secured the ISO 9001:2000 Transmission Division quality management system certification in year 2008. As part of its continual development process, in January 2010, the Meter Laboratory was able to upgrade its
64 CEB Annual Report 2010 Development of Electricity Distribution System Rural Electrification schemes and RE Works carried out and completed in year 2010 within the Division is given below.
S/S Line C onversion Job Category HT km LT km Nos. km CAARP 145.60 50 132.85 6.63
DCB - - 31.38 11.77 PCB 1.00 4 73.90 14.92 Lighting Sri Lanka 14.45 21 166.76 23.51 (N CP/NWP)
Wadakkin Wasantham 184.00 53 434.00 20.00
Gama Naguma 21.70 16 309.69 45.68 R ajarata Navodaya - - 2.60 - Nagamu Purawara - - 4.50 -
Bul k Supplies 22.02 111 10.79 - Cost Paid Jobs 16.16 11 33.84 2.60 System Augmentation & 52.32 67 14.54 131.79 Loss Reduction Insurance Reserve 1.30 2 2.88 0.00 Others 72.43 39 236.46 6.43 Total 530.98 374 1454.18 263.30
Conflict Affected Area Rehabilitation Project (CAARP) The Asian Development Bank (ADB) provided US Dollars 6.5 million to carry out CAARP, an electrification project for the rehabilitation and expansion work in Conflict Affected Areas of the North & East. This Project is expected to benefit 12,000 households affected by civil unrest and disturbances. The NORAD provided a further grant of US Dollars 8.6 million for extension work under this Project to provide electricity to 9,000 additional households. The total cost for the Project is US Dollars 18.5 million. The above loan components were utilized in 2010. North East Community Restoration and Development Project II supplementary loan (NECORD II) has agreed to provide LKR 187 million for further implementation of uncompleted jobs under CAARP. The Scope the CAARP includes 147 schemes, 275 km of MV development lines Works under CAARP and 10 Gantries.
CEB Annual Report 2010 65 RE 4 Project SIDA Rural Electrification Project – 8 (Iran) The scope of the Rural Electrification Project 4 The Rural Electrification Project–8 was planned to electrify thousand villages in eleven CEB provinces (SIDA) includes the following: namely North West, Central, Western North, Eastern, MV lines (33kV) 411 km West South-I, West South–II, Sabaragamuwa and Southern Province under the Rural Electrification LV lines 1,216 km program of the Government of Sri Lanka. Substations 225
Funding Arrangement Rural Electrification Project–8 is funded by he Government of Iran and the total estimated cost of the Swedish International project is US$ 106.5 million. The proposed Contractor Development Agency Loan Rs 3,170 million for this Project is Sunir Co. of Iran and supplies all the materials except RC & Pre-stressed poles which will be GOSL Rs 1,070 million procured by CEB.
The expected number of consumers to be connected The scope of work proposed under this project is: under this Project in single phase category is 33,000 and the number of consumers to be connected in 3 phase Erection of 1000 Nos. of 100kVA, 33kV/LV category is 1,300. distribution substations
All materials, except concrete poles and transformers, Erection of 1,000 km of 33km MV-Lines are supplied by the Swedish contractor Eltel and the procurement of concrete poles and transformers and Erection of 4,000 km of Bundle Conductor/3- erection work are undertaken by the CEB. The Supply phase, LV distribution lines Contract Agreement was signed between Eltel Networks TE AB of Sweden and CEB in September 2008 Erection of 2,000 km of 3-phase LV distribution and the LC was opened by CEB in April 2009. Eltel has lines delivered approximately 75% of the value of materials to CEB stores during the year 2010. Conversion of 50 km of Single phase lines to 3- phase lines Overall construction progress by the end of the year 2010 was approximately 80%. Project implementation period is 36 months and the Commercial Agreement of this project was signed in Target dates of completion June 2009.
Material Supply: end of April 2010
Erection Work: end of April 2011
66 CEB Annual Report 2010 Clean Energy and Access Development The Asian Development Bank has established a line of Project - Demand side Management for credit of US$3.5 million for CEB. The project is planned Municipal Street lighting (Part 4) to initiate in Hambantota, Ratnapura, Ampara districts. Under Clean Energy and Access Development Project (Demand Side Management for Municipal Street Project and Heavy Maintenance Work Lighting (Part 4)), CEB and Lanka Electricity Company Main responsibilities of Projects & Heavy Maintenance (LECO) have established internal units to undertake the Branch are construction and maintenance of the street lighting operations in selected municipal areas following equipment within Division 1. and to maximize energy savings through demand side management measures with ADB assistance. The total 33kV Tower Lines investment cost will be $5 million. Of this, US $4.2 million will be funded by two separate grants (one of US 33/11 kV Primary Substations $2.2 million from the Climate Change Fund and the other of US $2 million from the Asian Clean Energy Gantries Fund under the Clean Energy Financing Partnership Facility) and US $0.8 million will be provided by the Auto Reclosers Government. Load Break Switches The pilot project has been started in Homagama area to identify an optimal and efficient solution for street High Voltage Measuring Transformers lighting. It targets to obtain Technical Assistance for Training and preparation of Street lighting specification This Branch has technically specialized staff and special for CEB. machinery for undertaking heavy maintenance activities in the MV distribution network. Routine maintenance Clean Energy and Access Development activities that have been carried out in 2010, on the Project - Rural Household connection distribution facilities are summarized in the following (Part 8) table. The Rural Household Connection Project will help to Equipment Number improve operational and financial efficiency in rural electrification and expand coverage of rural 33/11kV Primary Substations 31 electrification for poverty reduction. The outcome of the Gantries 13 project will be sustainable access to grid electricity by Auto Reclosers 73 the rural population and a better service by CEB in rural Load Break Switches 41 areas. It is expected that at least 60,000 poor households will be connected to the grid in end of Measuring Transformers 43 2016. The Project would bring benefits such as, the Tower lines (km) 1,146 households themselves will enjoy the benefits to be derived from having access to electricity and CEB will To improve the system reliability, Hot Line Maintenance have more customers, generating more income, and is to be introduced in the first quarter of 2011 for enabling progress toward the electrification targets set routine maintenance on MV tower lines without by the Government. interrupting the supply. One engineer, two Electrical Superintendents and five workers have been given
CEB Annual Report 2010 67 training in India on Hot Line Maintenance procedures in of tower line designs and save public funds through this year. All tools necessary have been purchased in financial as well as technical optimization. In future, the 2010. In addition, a training centre is scheduled to be Design Centre will conduct all tower line design work established in Habarana to train CEB technical staff and and preliminary survey work of all new MV tower lines. provide them an opportunity to secure the license, so that they are eligible to work for Hot Line Maintenance By now 160 persons are working in this Branch and out crews. of them 18 are outsourced. This Branch intends to undertake construction work on tower lines of length Additionally, this Branch is responsible for the less than 5 km, unmanned Primaries and Gantries with implementation of MV development proposals related the expertise and skills of in house staff without to new constructions and augmentation of primary awarding turn key contracts in future. substations, MV tower lines, and switching gantries. The ongoing augmentation and construction jobs amounts COLOMBO CITY to Rs. 998 million and the scope covers the new Colombo City is the only distribution province that has constructions of 12 new gantries, tower lines of the an average selling price higher than that of the entire total length of 56 km and augmentation of 4 primaries. CEB. This is mainly attributed to the favourable According to the MV development Plan – 2008-2017, consumer mix in the City. within next five years period, Projects & Heavy Maintenance Branch has to construct two new Highlights 2010 primaries, eleven gantries and new tower lines of 130 Establishment of E-City km at a total cost of Rs. 2,400 million. In 2010, four All four Area Engineer's Offices in Colombo City had switching gantries in Vadukkodai, Chavakachcheri, cash collection counters since 2003. These counters Peraynankulam and Mankulam have been constructed were improved to provide all services rendered through in Northern Province under the CAARP project at an the Area Offices from a one stop shop named E-City. approximate total cost of Rs. 80 million. Additionally, Services made available to the customers and public capacity of Parameshwarm Primary has been through E-City are: augmented from 3x2MVA to 2x5MVA in 2010. Construction has been started on 18 km long double 1. Registration of new connection applications. An circuit tower line from Thulhiriya GSS to Narammala appointment is fixed with the applicant then and Gantry at a total cost is Rs. 250 million. During 2010, there for the visit by an officer to collect details for preliminary surveying has been completed for 30km estimation. length of new 33kV lines and land allocation work has been initiated for 3 new gantries. 2. Acceptance of service connection charges. The applicants will here again be given a date and time In 2010, initial measures have been taken to establish a for the connection. Design Centre under the Projects & Heavy Maintenance Branch, mainly to work on tower lines and Civil works 3. Attending to various other customer queries such design. Approval has been taken to purchase software as meter testing, meter changing, meter or service for tower line design. Survey equipment has already line shifts etc. All these queries are attended then been purchased in 2010 for conducting preliminary and there with intimation to the customer on when surveying work on tower lines. The objective of the activity will take place. establishing a design office is to develop in-house skills
68 CEB Annual Report 2010 4. Acceptance of payments for reconnections. logged in and their purpose of visit is recorded. All Reconnection is assured within couple of hours of workstations are provided with a PC and are in a LAN. the payment. Necessary software is being introduced.
5. Resolving billing queries. Any disputes regarding Establishment of a dormitory for security billing by the customer is attended to at the E-City officers serving in Colombo City and resolved with intimation of when the There are 25 CEB locations within Colombo City where correction or adjustment will appear in the security services are required. The security personnel had customer's account statement. virtually been residing in the backyards of all these places. The newly constructed three-storied building, with all 6. Conveying various information regarding technical facilities for lodging, was completed in May 2010. The assistance for house wiring, energy conservation security guards are now comfortably located in this etc., using magazines, leaflets and video displays. dormitory.
7. Acceptance of and providing follow up details of NORTH WESTERN PROVINCE power failure complaints. Productivity Improvement The above program is being implemented in Office E –City centres are fully functional in Colombo South Complex of DGM North Western Province, Kurunegala, and Colombo East areas. Kuliyapitiya and Wariyapola Areas, including four Consumer Service Centres. In 2010, Maho Consumer Implementation of MITFIN computer Service Centre was selected by the Ministry of software for stock management, Productivity Promotion for a Provincial Productivity accounting and service connection works Award at merit level. With the introduction of MITFIN program, which was customized to suit the needs of Colombo City all Other two Areas and Consumer Service Centres have Offices, Consumer Service Centres and units in started to improve the services through the same Colombo City are linked into a LAN. Each activity taking process. Old operating manuals have been updated to place anywhere in Colombo City is indexed making suit the present requirements and new manuals have auditing possible to the individual activity level. been written for new units.
Completion of new Colombo Automation of Medium Voltage Network City Control Center A Semi-automated GSM Distribution Control Centre The Colombo City Control Centre building was completed was started in March 2010. This is the first Distribution under Colombo City Distribution Development Project in Control Centre in the CEB with automated facilities. 2010. Intended activities are swiftly being mobilized into Thirty nine 33 kV SF6 load break switches with remote it. operation facility have been installed through out NWP, and there are 40 fault indicators with remote sensing Computerization and automation facility operating in the medium voltage network. The of office activities project was initiated by Projects & Heavy Maintenance The layout of the office of Deputy General Manager Branch and the implementation was done by the (Colombo City) had been re-designed to the concept of provincial staff with the help of engineers from the customer interface + back office support. All visitors are manufacturers and the planning and development and
CEB Annual Report 2010 69 distribution maintenance units. The total cost for the Electricity Consumer Accounts and entire project is around Rs.110 million. New Service Connections North Central Province had 299,917 consumer accounts After installation of the semi-automated system, more by the end of year 2010. The majority of consumer benefits are available to the operation staff with the accounts were in the retail category and number of more flexibility in providing alternating feeding retail accounts is 299,544. The number of the bulk arrangement for and to provide speedy restoration of supply consumers in the province by the end of year supply for the healthy section during a fault was 372. During the year 2010, a total of 25,786 new connections were provided, out of which, 34 are new Therefore the customers get greater benefits in bulk supplies. improving the availability of supply. Reliability Construction Progress Providing a reliable supply to consumer is one of the key Many rural electricification schemes have been functions of the province. Anuradhapura Consumer implemented through foreign and government funded Service Centre has 24 hr breakdown service for the projects during the year 2010. The average construction benefit of its consumers. out put has been maintained Rs. 120 millions per month. Reliability indices such as System Average Interruption Duration Index (SAIDI) and System Average Interruption NORTH CENTRAL PROVINCE frequency Index (SAIFI) are calculated to monitor the Area of operation of North Central Province covers reliability of the supply provided to consumer by the Anuradhapura, Kekirawa and Minneriya covering about Distribution Control Center in the province. Remote 15.9% of the total land area of Sri Lanka. The controlling of medium voltage Auto Reclosers via GSM electrification level of the province is 82%. was introduced to reduce the time taken for travelling and operations during supply failures and thereby to Operation Structure reduce supply failure duration. The North Central Province of Ceylon Electricity Board is headed by a Deputy General Manager who is directly As a further step in improving the supply reliability, responsible to Additional General Manager–Division 1. remotely controllable Load Break Switches were The Province is divided in to 3 areas which are introduced to the distribution system. Thus, out of 10 administrated by Area Electrical Engineers. There are 10 proposals for remote controllable load brake switches, Consumer Service Centers within the province for one LBS has been installed in the Minneriya area. effective administration. Metering The Finance and revenue function of the province are Provincial Commercial unit has been provided with 3- carried out by Accountant (Expenditure) and phase mobile meter testing units to carry out testing of Accountant (Revenue). Human Resource Officer attends meters at 60A supply installations under the guidance to the human resource functions. of the Divisional Meter testing Laboratory. Thus out of 1070 Nos. of 60A supply, 700 Nos. 60A supplies have been already tested and sealed.
70 CEB Annual Report 2010 CEB Annual Report 2010 71 Medium Voltage Development Plans proposed under year 2010. The total achievement of the Northern CAARP (funded by ADB/CEB) and Development Plan for Province is HT Lines 268 km, Substations 97 Nos. and LT Mullaithivu, Kilinochchi, Mannar and Vavuniya Districts lines 558 km. At the end of 2010, the electrification (which were financed under Wadakkin Wasantham) were level of NP stood at 55%. Our target is to achieve 100% implemented during this year. electrification by the end of 2012.
In Jaffna Peninsula, 76 km of express lines and one Human Resources: Distribution Division 1 Distribution Gantry were under construction and one At the end of the year, the total staff strength of the Primary SS is under augmentation. These jobs are Division was 2,789. The noticeable factor is that about expected to complete before the end of 2011. The 49 % of the staff is above 45 years of age and over 43 construction of Chavakachcheri and Vaddukoddai % of the employees have a service of over 20 years. gantries were completed during the year 2010. Implementation of the proposals of this plan would The employee distribution in the Division is given below: provide a healthy MV distribution network which could support industrial and commercial development and Staff Category Number As a % of the total provision of humanitarian requirements of the area. Executive Grades 170 6.1 MLT Grades 240 8.61 Wadakkin Wasantham Project Clerical & Allied Grades 507 18.18 During the year under review, Mankulam–Mulathivu (51 km), Mankulam–Thunnukaki (23km), Other Minor Grades 51 1.83
Kilinochchi–Paranthan (5 km), Skilled Technical Grades 845 30.30
Oddusuddan–Nedunkerny (11 km), Mullaithivu Semiskilled Technical Grades 741 26.57 –Uppumaweli (6 km), Muhamali–Pallai (12 km) lines Other Skilled Grades 235 8.43 have been completed and Mullaithivu town was Total 2,789 100 connected to the national grid. The age analysis below shows that 346 employees in Total number of transformers installed during the year the Division 1 retire from service within next five years. 2010 under Wadakkin Wasantham Project was 47. They In order to fill the vacuum, it is required to recruit quality were installed in: human resources on a priority basis.
Vavuniya District 13
Mullaithivu District 8
Kilinochchi District 10
Mannar District 12
Jaffna District 7
The Wadakkin Wasantham project had spent Rs 1,000 million for Northern electricity development during the
72 CEB Annual Report 2010 700 608 608 600
500 s
e 410 e y 400 o l 335 346 p
m 294 E
300 f o
o 188 N 200
100
0 Less than 31 - 35 36 - 40 41 - 45 46 - 50 51 - 55 56 - 60 30 Age Range Years Age analysis Year 2010 Division 1
600 566 539
500 439 s e 400 365 e y
o 313 l p 300 m E f 192 206 o 200 169 o N
100
0 < 3 03 - 05 06 - 09 10 -14 15 -19 20 - 24 25 - 30 > 30 No of Years of Service
Service analysis year 2010 Division 1
CEB Annual Report 2010 73 DISTRIBUTION DIVISION 2 Area of Operation
Area of operation of Distribution Division 2 covers the whole of the Eastern and Central Provinces and a part of the Western Province, named Western Province North (WPN). Eastern Province is subdivided into the areas of Ampara, Batticaloa, Trincomalee and Kalmunai. Central Province consists of Kandy City, Peradeniya, Nawalapitiya, Kegalle, Kundasale, Katugastota and Matale Areas. The Western Province North covers the Areas of Gampaha, Kelaniya, Negombo, Ja- ela, Divulapitiya and Veyangoda. The Division caters for 1,420,930 consumers, out of over 4 million consumers in Sri Lanka.
Distribution Division 2: Boundaries
74 CEB Annual Report 2010 3500 3010 3000 2715 2782 2734 2558 2500 2294 2101 2000 h W
G 1500
1000
500
0 2004 2005 2006 2007 2008 2009 2010
Sales Growth: Distribution Division 2
40000 36,668 35000 34,389 33,396 30000
) 26,965 . s R
. 25000
m 21,969 (
e 20000 u 16,824 n 15,272 e v 15000 e R 10000 5000 0 2004 2005 2006 2007 2008 2009 2010
Revenue Growth: Distribution Division 2
General Purpose & Hotel Industrial 481 1,293
Domestic & Street Lighting Religious Purpose 41 1,195
Sales in Different Tariff Categories (GWh) Distribution Division 2
CEB Annual Report 2010 75 14 12.36 12.21 12.18 12 9.93 10 e 8.58 c i r 7.33 P 8
g h n i l l
W 6 e k / S s
e R 4 g a r
e 2 v A 0 2005 2006 2007 2008 2009 2010 Year
Average Selling Prices: Distribution Division 2
25,000
20,000 .
n 15,000 M . s R 10,000
5,000
0 2005 2006 2007 2008 2009 2010 Year
WPN Central Eastern
Revenue from Electricity Sales: Distribution Division 2
General Purpose & Hotel Domestic & Rs 8,407 m Religeous Rs 9,304 m Industrial LECO Rs 13,297 m Rs 4,794 m
Street Lighting Rs 866 m
Revenue from Electricity Sales by Tariff: Distribution Division 2
76 CEB Annual Report 2010 The finance and revenue functions of the Provinces are carried out by Accountants under supervision of the Additional Finance Manager of the Division. Each Domestic & General Purpose Religious & Hotel Province is provided with a separate Human Resource Purposes 143,624 1,264,768 Officer to attend to human resources functions. Coordination of these activities and the human resource
Industrial functions of all the executive officers and the staff 12,538 attached to the corporate office are performed by the Consumer Accounts by Tariff: unit under the Deputy General Manager (Commercial Distribution Division 2 and Corporate). Operational Structure The Division 2 is headed by an Additional General Key Objectives Manager, who is directly responsible to the General Connecting more consumers to the existing Manager. For the operational purposes, the Division is consumer network divided in to three Provinces namely Eastern, Central and Western Province North. Each Province is headed by Maintaining an uninterrupted power supply a Deputy General Manager. Each Province is sub-divided throughout the day into several Areas, which are administered by Area Electrical Engineers. There are 17 Area offices and 59 Taking precautions to minimize all losses such as Consumer Service Centres within the Division for the technical losses, non-technical losses effectiveness of the operations. Attending all consumer matters and providing In addition to the Provincial Deputy General Managers, solutions within a minimum time there are three Deputy General Managers to look after Projects and Heavy Maintenance, Planning and Providing all the services for maximum satisfaction Development and Commercial and Corporate functions of the stakeholders of the Division. Commercial and Corporate Branch carries out revenue monitoring, non-technical loss reduction, energy management, engineering audit and human resources management and development functions. The Planning and Development Branch addresses the issues of reliability, medium voltage network development, Divisional material procurement, embedded generation related works, technical loss reduction and rural electrification issues. Projects and Heavy Maintenance Branch carries out construction, maintenance and rehabilitation of 33 kV steel tower lines, pre stressed pole lines using LYNX conductors, 33kV/11kV Primary Substations, 33 kV switching gantries, auto reclosers and High Tension metering transformers. Hot maintenance of 33 kV steel tower lines also carried out by Project and Heavy Maintenance Branch.
CEB Annual Report 2010 77 Highlights of the Year 2010
Units sold within the Division during the year GWh 3,010 Revenue earned from electr icity sold Rs. million 36,668
Average selling Price Rs./kWh 12.18
Distribution loss % 14.5 Total number of consumers in Division at the end of the No. 1,420,930 year No. of retail consumers within the Division at the end of No. 1,418,996 the year No. of new connections provided during the year No. 52,451 No. of emplo yees at the end of the year No. 3,647 No. of bulk supply consumers at the end of the year No. 1,934
Rs./month/cons Average revenue 2,151 umer
Average No. of retail consumers per employee at the end No/emplo yee 389 of the year Averag e No. of consumers per distribution substations No/substation 229 Average length of low voltage lines per employee km/employee 8.15 Average length of low voltage lines per consumer km/consumer 0.021 Average length of medium voltage line per Distribution km/sub station 1.17 Substation
Distribution Infrastructure 33 kV Distributio n Lines km 6,590
11 kV Dist ribution Lines km 640 No. of A reas No. 17
No. of CSC No. 59 33/11 kV Primary Sub stations No. 39
LV Distribution Lines km 29,730 33kV/LV Distribution Substations No. 5,299 11kV/LV Distribution Substations No. 896
78 CEB Annual Report 2010 Customer Care Every possible action is taken by all units in the Division collection of the Division was Rs. 33,396. The revenue to achieve the key objective of maintain an has been increased by Rs. 3,272 million compared with uninterrupted power supply throughout the day. These the last year. This could be attributed to the prevailing measures are described in detail in the ensuing sections. peaceful environment and the concrete efforts of staff in the Division. Consumer societies have been established in all Areas of the Division. Regular meetings of those societies were Electricity Consumer Accounts and provision conducted by the area staff. Accordingly, 17 consumer of new Electricity Supply Connections societies were formed during the year 2010. Both the There are 1,420,930 consumers in the Division 2 as at CEB and consumers were benefited by those societies. December 2010. Out of which 1,934 consumers are bulk This has immensely helped CEB to secure and maintain supply consumers. 52,451 new consumers have been the rights of way. Furthermore, the consumers had the added to the consumer network during the year 2010. opportunity to discuss their problems with the CEB officials openly and immediate solutions were provided Commercial and Corporate to some issues. The main responsibilities of Commercial & Corporate Branch are the commercial activities of the Division, Bulk Supply Consumer Societies also performed including Energy Management and Human Resources separately and had regular society meetings to improve activities of the Division. The Divisional Meter Testing the service and the collections from sales. Laboratory also functions under this Branch.
Initial work to establish E-city Centres in all provinces Meter Testing has commenced. These centres will give prompt The main functions of the meter testing Laboratory are attention to customer concerns and will afford them testing, calibration and repairing of single phase and with facilities such as applying for new service three phase meters. Field testing of bulk supply meters connections, making payments, attending consumer are also carried out. During the year 2010, nearly one inquiries etc. third of the bulk supply customers were provided with Programmable Polyphase Meters (PPM), which have the Energy Sales facility of remote reading and monitoring the tampering Sales in of meters. These in turn reduces the non-technical losses Province GWh in bulk supply consumer installations.
WPN 1,904
Central 688
Eastern 418
The total Energy Sales for the Division in the year 2009 was 2,734 GWh. The sales have increased by 10% and by the end of 2010; Energy Sales has reached 3,010 GWh.
Revenue The total collection of the Division during the year under review was Rs. 36,668 million. The last year revenue
CEB Annual Report 2010 79 Energy Management The energy management unit of WPN has attended to the following activities during the year:
Job Nos. House Service Mete rs 1. Meters collected from Ante LECO Metering Company and o thers 94,138 2. Meters repaired 7,842 3. Meters distributed 84,900 4. Meters Tested 33,604 Three phase direct connected meters (20/8 0)
1. Meters received 1,433
2. Meters repaired 90
3. Meters distributed 1,429
4. Meters tested 1523
PPM Meters 1. Meters received 1751 2. Meters installed 1192 3. Meters repaired 239 4. Meters tested 239 Site test of Bulk Supply meters Re-arranging bulk supp ly metering points 24 AMR-Bulk Supply meters Rearrange supply point, install enclosures, replacement of 522 electromechanical meters by PPM , replaced HRC fuse to MCCB, matching CT ratio with meter ratio, construction of cubicles AMR-HT Rearrange supply point, install enclosures, replace ment of 8 electromechanical met ers by PPM, matching CT ratio with meter ratio, construction of cubicles Testing of HT meters on Area Engin eers’ request 32 Routine testing of bulk supply meters 549 Testing and fixing of new bulk supply meters 32 Testing of BS meter on Area Engineer’s request 47 Replaced defective meter and meter testing 97 Meter testing after rearrange supply points, install enclosures, matching CT 61 ratio with meter ratio, construction of cubicles Augmentation 17
80 CEB Annual Report 2010 Loss Reduction Programme Human Resources: Distribution Division 2 Under the loss reduction programme of the Division, There are 3,647 of permanent employees attached to every effort has been taken to reduce technical and non the Division as at end 2010. The Grade-wise distribution technical losses in the low voltage net work. Major non of employees is shown below. technical losses were identified and new processes have been introduced to minimize them. 1200 1193 1027
A raid programme has been introduced to recover losses 800 from illicit electricity users. This process was carried out 642 under the direct supervision of DGM (C&C) by utilizing 400 309 Staff coordinators in Areas. The entire Division was able 245 158 to recover Rs. 69 million by carrying out raids during the 73 0
year 2010. l s s d e s r S a
e . e e e l e i c l d i y F d e l v . i a n o a v s l r A r e S r s
h e . e p i c D e c i G & G d
U L
d v e m l
l
a r Another activity introduced by Commercial and e a T r a a e E &
v r e l
i c c . t d G i i d e S G r u e n c S d l i i e . l c l h Corporate Branch in line with loss reduction programme f i f T e c M . k C x O e S S . T is the collection of arrears in finalized electricity E S accounts. This process was introduced in the later part Staff Distribution: Distribution Division 2 of the year. Having this programme implemented, Division 2 was able to collect outstanding dues Special training programs on improvement of amounting to Rs. 23 million in finalized electricity productivity were held for the staffs of Eastern Province, accounts during the year under review. Central Province and Head Office during the year under review. Remote Metering Remote metering for bulk customers has been further PLANNING & DEVELOPMENT expanded to seven Areas, i.e. Trincomalee, Nawalapitiya, Matale, Ja-Ela, Gampaha, Veyangoda and The Planning & Development Branch is responsible for Divulapitiya. Balance of the remote metering is providing the following services to the operating scheduled to be completed by the end of March 2011. provinces in Division 2:
Since digital Programmable Poly phase Meters are used Assistance for Development Activities for remote metering, their advanced features such as record of power failures, record of unauthorized meter Assistance for Network planning for System interferences etc. could also be used for energy Improvement in order to improve the quality and management purposes. An increase of bulk supply the reliability of electricity supply to the consumers revenue is expected with the introduction of remote in Division-2. metering. Required materials for maintenance works, new projects and connections.
CEB Annual Report 2010 81 Planning unit This Unit is working in coordination with the Provincial Planning units which propose improvements for the MV and LV Networks annually and prepare proposals for the long term MV Network Improvement Plan.
Proposed Scope of Work – Long Term proposals
Proposal / Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total New GSS/ (Nos.) - 3 1 3 2 - - - 1 10
Aug. GSS (Nos.) 4 1 ------5 Addl. Feeder Bays (Nos) 15 8 ------23
Backbone Lines (km) Lynx DC Tower 112 87 86 94.6 135 29 - - - 546.6 Lynx SC Tower 49 33 - 14 1.5 14.5 - - 0.5 112.5
Lynx DC Pole 38.8 - 52 - - 15 - - - 105.8 Lynx SC Pole - 6 64 3 - - 32 - - 105 Racoon 24.7 12 3 ------39.7
Distribution Gantries (Nos.) DBB Tower 16 2 6 3 2 2 - - 1 32 SBB Pole 1 0 4 - 4 1 2 1 - - 22 Reconductoring of
MV Lines (km) 25 ------25
MV Line Conversion (km) 29.5 79 25.5 15 - - 10 - - 159 New PSS+ (LECO) 1 + (1) 1 + (1) 1 ------5
Aug. PSS (Nos.) 2 1 - 1 - - - - - 4
82 CEB Annual Report 2010 The implementation of MV proposals was delayed in 6.00 2010 due to the lack of resources such as vehicles, 5.13 equipments and contractors for the implementation 5.00 work. The expected reduction in energy loss and the 4.00 quality of supply has not been achieved as planned )
n 2.90 because the MV proposals are not implemented in time. B . 3.00 In the meanwhile, efforts are being made to obtain s R ( material required for these improvement works through 2.00 donor funds. 1.00 0.83 1.00 Studies are being done by this Unit to improve the network performance. In doing so, it is intend to setup 0.00 Control Centres for all three provinces in Division 2. 2009 2010 These Control Centres are expected to record Year breakdown information, analyze the network positions and give detailed instructions to operation staff on how Material Procurement Procured (Rs.Bn) Plan (Rs.Bn) to restore supply. Further action has been initiated to automate operation of all Auto Reclosers, Load Break Material Procurements Switches and Boundary Meters in the Division. The main reasons for the gap between planned This Branch carried out technical feasibility studies for procurement and actual procurement in year 2010, is the proposals sent by the Provinces for providing Gird due to the fact that quantities for procurement have to Interconnections for Embedded Generation & Technical be curtailed due to the liquidity position of CEB. Proposal for major industrial loads with are over 2 MVA. During 2010, twelve Mini hydro proposals were received Development Unit and 2 plants were connected to the national grid. Development unit has been set up to improve the Accordingly, the total number of Mini Hydro Plants in quality & reliability of supply in Division 2. This unit is operation in this Division is 15. expected to study the power quality issues and supply improvements. This Branch constantly monitors the progress of the jobs allocated for each unit. Heavy construction works such Rural electrification projects such as ADB, Lighting Sri as Tower Lines, Gantries and Augmentation & Lanka (Eastern Province) are coordinated through this Construction of Primary Substation are allocated to the branch by providing the necessary materials for Projects & Heavy Maintenance Unit, while the other construction works. The Trincomalee Integrated works are allocated to the Provinces. Infrastructure Project (TIIP) using French AFD funds is also coordinated by this branch. The project scope is Material Management Unit construction of 48km MV express & distribution lines in One of the major tasks performed by this branch is Trincomalee area to improve the low voltage problem procurement of key material for the Distribution Division and the value of the project is Rs.355 Million. Most of 2. The estimated cost of Annual Procurement Plan & the materials have already been procured and Actual Expenditure of Procured materials are as follows: construction work is going on. It is expected to complete the project in 2011.
CEB Annual Report 2010 83 This branch also undertakes continuous improvement of Construction Standards, Designs and Material Specifications for the distribution activities in Division 02.
Rural Electrification All the RE Projects are implemented by the Provinces. These projects are funded by Lenders such as ADB, and through Decentralized Budget and Provincial Council Budget. The numbers of jobs completed by the Provinces is given below:
Province No. of jobs
Eastern 625 Central 924 WPN 636
The summary of the works carried out during the year are as follows:
Work Content No. of Cost Rs. Fund Type Jobs HT (km ) LT (km) S/S million
Decentrali zed Budget 197 - 32 - 33
Provincial Council Budget 492 3.4 95 3 114 Bulk Supply 137 2 0.3 8 93 232 Cost Recovery Distribution 206 2 0.7 69 47 308
Asian Developmen t Bank 2 0.5 6 1 4 System A ugmentation 269 19 145 98 345
Accelerated Rural Electrif ication Project 98 1 38 206 75 654 STAART 4 1 3 2 14 Lighting Sri Lanka Eastern 85 3 44 1 59 Lighting Sri Lanka Kegalle 38 0.5 17 2 17 Special Fund 417 6.7 123 5 137 Maintenance of line 228 335 53 25 191 Swedish Intl. Development Agency 12 24 48 12 123 Crimping of lines - 1200 - - 73
84 CEB Annual Report 2010 Project and Heavy Maintenance The Project and Heavy Maintenance Branch has two offices Construction of 33 kV new tower lines is in progress as for Western Zone and Central Zone located at Gampaha follows: and Kandy respectively. Construction of 33 kV tower lines, Aniyakanda GS to Kopiyawatta 33 kV Tower Line Gantries and primary substations are undertaken by this Construction of 33 kV Lynx Double Circuit Tower Line from Aniyakanda Grid Substation to Kopiyawatta of 4.5 km at a Branch. The work carried out by the two units during the cost of Rs. 76.7 Million is in progress, and is targeted to year 2010 is as follows: complete in February 2011. Western Zone Mankada road to Gala Junction 33 kV Line Construction of 33 kV Single Circuit Tower Line from Construction of new Gantries at the 6th Mile Post Mankada Road to Gala Junction of 3 km at a cost of Rs. (Trincomalee), Ampara, Jayanthipura, Galmaduwa, 19.7 Million. Weeragoda and Karathievu were completed. Rambukpitiya to Ulapane 33 kV Line Augmentation of existing Gantries at Thalagolla and Construction of 33 kV Lynx Double Circuit Tower Line from Katunayake were also completed during 2010. Rambukpitiya to Ulapane of 9 km and 200m Pole Line at a cost of Rs. 31.2 Million Construction of 9.8 km 33 kV Lynx Double Circuit tower Rearrangement of 33 kV feeders at Kotugogda GS line from Batticaloa to Valachchenai Stage 1 work at a cost Rearrangement of 33 kV feeders to facilitate the outgoing of Rs. 54 million was also completed. In addition, shifting feeders from augmented 33 kV switch yard of Kotugoda of feeders to facilitate construction of Katunayake Grid GSS. Substation, rearrangement of 33 kV feeders to facilitate Installation of 11 CT/PT Units was carried out in various the outgoing feeders of Katunayake GS and places in the Division, notably; those in Watakele (Matale) rearrangement of Katunayake gantry at a cost of Rs. 29.0 and the Prima (Pvt) Ltd, (Trincomalee) have been designed million were also attended to during 2010. by the Branch. The Preliminary works related to the following new gantries A crash program for installation of 33 kV and 11 kV Auto were also commenced: Reclosers was carried out. Installation of 18 new Auto Dagonna Reclosers were done during the year, thus increasing the Heenkenda number of functional Auto Reclosers to 148. Furthermore, Katana 45 Auto Reclosers are made remote operable. Tholangamuwa Augmentation of Thudella PSS by laying new cable on 11 Galigamuwa kV side was completed, providing LECO with a reliable Gevilipitiya supply. Construction of 3 section double busbar gantry at Rambukkana Katugastota at a cost of Rs. 23 Million had also Karandupona commenced during 2010. Kehelkotuwa UG cables (1Cx185 sq.mm) were layed at various places Morontota where Colombo–Katunayake Expressway crosses the tower Augmentation works of the following Gantries are in lines. The total UG cable length to be installed is about progress: 1000 m. Maeliya Central Zone Kopiyawatta Line construction activities in 2010 Works completed Welhena Work Type Length Cost (Rs.) Meerigama China Bay to Prima 33 kV SC 1.2 km 15 Million LYNX Ampara Galmaduwa 33 kV SC 4.0 km 45 Million LYNX Re conductoring of Old 66 kV 33 kV DC 9.1 km 41 Million line LYNX
CEB Annual Report 2010 85 Major works in progress Cost Work Type Length (Rs.)
Ukuwela to Katugastota 33 kV SC LYNX 8 km 88 Million Katugastota to Gorakad eniya 33 kV DC LYNX 8.7 km 99 Million Rabukpitiya to Imbulp itiya 33 kV SC LYNX 4.3 km 78 Million Meewatura Eriyagama 33 kV DC LYNX 2.2 km 21.8 Million
Batticaloa to Valachchenai S tages 3,4 33 kV DC LYNX 10.5 km 111 Million Trincomalee to Kiniya 33 kV DC LYNX 14 km 202 Million Ferry Crossings at Trincomalee 33 kV SC LYNX 1 km 39.5 Million
Development of Electricity had saved approximately 14.9 million rupees to the CEB. Distribution System The Division has taken all measures to maintain To solve low voltage problem in Dehiattakandiya Area, uninterrupted power supply at proper voltage to all the following line construction works have been consumers of the Division 2. To meet this requirement, commenced: the following action have been taken by the provinces. Construction of 3.3 km DC LYNX line from Eastern Province Manampitiya Junction to Dalukana Junction Under the rehabilitation work, works amounting to Rs. 24.5 million have been completed during the year 2010 Construction of 3.2 km SC RACOON line from in Eastern Province. The main goal of the MV line Maguldamana junction to Ellewewa rehabilitation work is to minimize the feeder tripping and maintaining reliable supply. The components of the Installation of 3 LBSs at Manampitiya Junction and works include changing of aged/cracked insulators, one LBS at Ellewewa Junction corroded conductors and cross arms, damaged/wooden poles, crimping of jumper points and mid span joints. Construction of Jayanthipura Gantry and Muttur Way leaves were cleared in Areas on time. As a special Gantry -under CARRP Project task, in Trincomalee Area sub stations belongs to town CSC having frequent failures were identified and 6th mile post Gantry, Trincomalee -Under AFD rehabilitated including Load balancing, crimping and Project (Construction completed and energized) changing of conductors. Apart from this, PG clamps at jumper points on entire 11KV town feeders were Fifteen Fault Passage Indicator units were installed in the replaced with crimped H connectors. The same tasks Eastern Province in order to identify the faulty sections were attended to in Ampara and Batticoloa towns. of the MV line quickly, thus facilitating speedy restoration of supply. Seventeen Auto Reclosers were In addition to normal routine works, Distribution automated to improve supply reliability of the province. Maintenance Branch of Eastern Province had established a Transformer Maintenance Unit (TMU) in 2009. For the To improve the reliability of power supply to Morawewa year 2010, total of 18 transformers were repaired and and Gomarankadawala areas and easy access to handed over to the stores. By this program the TMU maintain the HT line construction of a 4.5 km SC
86 CEB Annual Report 2010 Racoon line has been started in order to connect Completed new lines of Aniyakanda Maeliya tower Morarawewa-Gomarangadawela line with Habarana line 33 kV, Lynx, DC and Biyagama-Imbulgoda line spur line. 33 kV, Lynx, DC
Central Province Construction of 33kV new tower lines of Execution of the Distribution system Development plan Aniyakanda GS to Kopiyawatta 33kV tower line, is in progress to strengthen the Medium and Low Mankada road to Gala Junction 33 kV line and voltage network in Central Province. System rearrangement of 33 kV feeders at Kotugoda GS Augmentation proposals worth of Rs. 400 million had Kadawatha town development project and been prepared and included to the Distribution Hunupitiya-Wattala pole line 33kV/Lynx Development Plan. Rs. 240 million worth Low Voltage Improvement work were done during the year 2010.
The proposals have been made to improve the control centre of the Central Province as a fully automated system. The reliability of the Distribution System is to be improved through these proposals. Outage time due to breakdowns and area affected by the break downs will be reduced through this project.
Two new mini hydro projects were connected to the national grid. Accordingly, 15 mini hydro projects are now in operation in the Central Province. 103 GWh of Energy have been purchased from the mini hydro projects during this year.
Western Province North The following development works were carried out during the year:
Constructing of 132/33kV, 31.5 x 2 MVA Katunayake GSS
· Augmentation of Kotugoda GSS
Rearrangement of Thalagolla and Airport Gantries
Preliminary works of Dagonna gantry and Heenkenda Gantry were commenced
Augmentation works of Ma-eliya, Kopiyawatta, Welhena, Meerigama gantries are in progress
CEB Annual Report 2010 87 DISTRIBUTION DIVISION 3 Highlights of the Year
2009 2010 Units sold within the Division during the year GWh 1,809 2019 Revenue earned from electricity sold Rs . million 22,137 24,554
Average selling Price Rs./kWh 12.24 12.16
Distribution loss % 11.6 11.2 Receivable position month 1.7 1.7
No. of retail cons umers within the Division at the No. 1,100,235 1,053,973 end of the year No. of new connections provided d uring the year No. 49,367 58,675 No. of employees at the end of the year No. 2,413 2391
No. of bulk supply consumers per employee at the No./employe e 1,614 1730 end of the year
Average revenue Rs./month/consumer 1,841 1938 Average No. of retail consumers per employee at No/employee 414 441 the end of the year Average No. of retail consumers per distribution No/substation 226 332 substation Average length of low voltage lines per employee km/employee 9.9 10.2 Average length of low voltage lines per consumer km/consumer 0.02 0.02 Average length of medium voltage line per km/sub station 1.44 2.00 Distribution Substation
Area of operation of Distribution Division 3 covers Sabaragamuwa Province, Uva Province and part of Western Province called Western Province South-2 (WPS-2). Western Province South-2 covers areas of Homagama, Sri Jayawardenepura, Avissawella and Horana. Division covers about 23% of the total land area of Sri Lanka. Total population within the Division is about 5.0 million. The highest electrification level of the Division, 95% is recorded in Western Province South-2 and the lowest of 73%, is from Uva Province.
Distribution Division 3: Boundaries
88 CEB Annual Report 2010 Uva 16.00 14.98 16% 12.25 12.16 12.61 13.06 h
W 12.00 Sabaragamuwa k / s
19% WPS2 R ( 8.00 e
65% c i r P
t
i 4.00 n U 0.00 Division 1 Division 2 Division 3 Division 4 CEB
Share of Revenue by Province: Distribution Division 3 Unit Prices Comparison for Divisions
40 37
s 35 e n i l
f 30 o 25 WPS2
m 23
0 25 62% 0 1
r 20 17 Uva e p 14 13 17% n 15 12 w
o 9 d 10 k Sabaragamuwa a e
r 5 21% B 0 WPS2 UVA SAB R3
HT LT Number of Breakdowns per month per 100 line km. Sales by Province: Distribution Division 3
CEB Annual Report 2010 89 Industrial 37%
Domestic+Relig eous+Street Lamps 34%
GP+Hotel 13% LECO 16%
Sales by Tariff: Distribution Division 3
Other Divisions 78%
Division 3 22% Sales by Distribution Division 3 compared with Other Divisions
Domestic+Relig eous+Street Lamps 6,379
LECO Industrial 4,219 8,448
GP+Hotel 5,508
Revenue (Rs Million) by Tariff Category: Distribution Division 3
90 CEB Annual Report 2010 15.00 13.06 12.60 12.16 11.35 11.57 12.00
h 9.00 W k / s R
6.00
3.00
0.00 WPS2 Sabaragamuwa Uva Division 3 CEB Average Average
Average Selling Price: Distribution Division 3
400,000 374,729 353,632 327,342
300,000
200,000
100,000
0 WPS2 Sabaragamuwa Uva
Number of Consumer Accounts by Province: Distribution Division 3
CEB Annual Report 2010 91 Office Employees 49 Total CEB employees = 2391 In addition to the Provincial Deputy General Managers, Security 11 Total outsourced employees = 1093 there are three Deputy General Managers to look after Drivers 246 Projects and Heavy Maintenance, Planning and Unskilled 457
Semi Skilled 232 Development and Commercial and Corporate functions Skilled Technical 729 of the Division. Commercial and Corporate Branch Clerical & Allied 356 carries out revenue monitoring, non- technical loss 178 MLTS reduction, energy management, engineering audit and Executives 133 human resources management and development Outsourced 1093 functions. The Planning and Development Branch 0 200 400 600 800 1000 1200 addresses the issues of reliability, medium voltage Staff Distribution: Distribution Division 3 network development, Divisional material procurement, embedded generation related works, technical loss The annual electricity consumption per-consumer in the reduction and rural electrification issues. Projects and Division is 1,912 kWh. Western Province South 2 Heavy Maintenance Branch carries out construction, records the highest annual electricity consumption per maintenance and rehabilitation of 33 kV steel tower consumer, which is 3,825 kWh while the lowest annual lines, pre stressed pole lines using LYNX conductors, electricity consumption per consumer is 925 kWh in Uva 33kV/11kV Primary Substations, 33 kV switching Province. Western Province South-2 is the most gantries, auto reclosers and High Tension metering profitable part of the Division, while the business in transformers. Hot maintenance of 33 kV steel tower certain areas in Sabaragamuwa and Uva Provinces are lines also carried out by this Branch. far below the satisfactory level. The finance and revenue functions of the Provinces are There are about 223 embedded generators, mostly mini carried out by Accountants under supervision of the hydropower plants, proposed in the Division. Out of Additional Finance Manager of the Division. Each this, 64% are located in the Sabaragamuwa province, Province is provided with a separate Human Resource while 36% are located in Uva province. Presently 69 Officer to attend to human resources functions. mini hydropower plants have been commissioned for Coordination of these activities and the human resource commercial operation embedding 146 MW in the functions of all the executive officers and the staff Divisional distribution network attached to the corporate office are performed by the unit under the Deputy General Manager (Commercial Operational Structure and Corporate). The Division 3 is headed by an Additional General Manager who is directly responsible to the General Manager. For the operational purposes, the Division is Distribution Infrastructure divided in to three Provinces namely Sabaragamuwa, 33 kV Distribution Lines km 6,536 Uva and Western Province South 2. Each Province is 11 kV Distribution Lines km 66 headed by a Deputy General Manager. Each Province is 11 kV Underground Cables km 4 33/11 kV Primary Substations No. 15 sub-divided into Areas which are administered by Area LV Distribution Lines km 24,356 Electrical Engineers. There are 15 Area offices and 46 LV Distribution Substations No. 4,765 Consumer Service Centres within the Division for Service Connections No. 1,055, 703 effective operation.
92 CEB Annual Report 2010 Sales during 2010 The total number of consumer accounts in the Division The share of sales of Division 3 was 22% of the total 3 is fairly equally divided among the three Provinces. electricity sales in Sri Lanka. In the year 2010, Electricity sales in the Division was 2,019 GWh, which is a 11.6 % During 2010, a total of 58,675 new connections were increase compared with the previous year. provided, out of which 116 are new bulk supplies. Out of this total number of new connections 55% of the The majority of sales in Division 3 were from Industrial connections have been provided within two weeks. The tariff category which approximately is 37% of the total reasons for the delay in providing the connections were sales of the Division. This was followed by Domestic and found to be due to the longer service length, customer General Purpose tariff categories. Western Province un-preparedness and non-availability of requisite way South-2 accounts for 62% of total sales in the Division leaves. followed by Sabaragamuwa and Uva Provinces.
Revenue The revenue earned from electricity sales during the year was Rs. 24,554 million which is 10.9% higher than the previous year. Division 3 accounts for 20.0% of the total revenue of the CEB. Western Province South-2 accounts for 64% of the total revenue in the Division followed by Sabaragamuwa and Uva Provinces.
The average selling price of a unit in the Division was Rs. 12.16, which is lower than the CEB average of Rs. 13.06.
During 2010, the collection as a percentage of sales was 96.3%. The corresponding figure in the previous year was about 99.7%. The Debtors position of the Division for the year 2010 is Rs. 4,506 million. The overall receivable position of the Division was 1.7 months as at December 2009 while it was same in the year 2008.
Electrical consumer accounts and New Service Connections By the end of the year 2010, Division 3 had 1,055,703 consumer accounts. The majority of consumer accounts were in the Domestic category, while the second-most was from the Commercial category. The number of bulk supply consumers in the Division by the end of the year was 1,730. The largest number of bulk supply consumers 780, was recorded from Western Province South-2.
CEB Annual Report 2010 93 Reliability In order to analyze the reliability of the power 2, Uva and Sabaragamuwa Provinces. supply within Division 3, a breakdown software During 2010, the supply reliability bas been model was incorporated into Service Mains Cards maintained at the same level that was in previous (SMC) and installed in all Consumer Service year even though the HT and LT line lengths have Centres (CSC) of WPS 2 and Uva Provinces during been increased by 2.2% and 3.4% respectively the year 2010. However, there is a significant from previous year figures. The number of amount of ground level work, such as identifying breakdowns per month per 100 line km has been numbers of consumers in each substation, feeder maintained at about 13 for High Voltage lines tagging etc., are to be done for successful while at 23 for Low Voltage lines. implementation of this software in order for the During the year 2010, about 963 km LT new lines, reliability monitoring and improvements to be 106 km of new HT lines and 118 new substations effective. Some of these works have already been were constructed. Furthermore, 78 km of 1-phase done in WPS 2 during the year 2010, and the and 32 km of 2-phase lines were converted to 3- works in Uva Province is in progress. All Auto phase. The total cost of the scope of the works Reclosers are being set for remote operation and during 2010 amounted to Rs. 2,964 million. The this work is expected to be completed during the network expansion has added 58,675 consumers year 2011. In addition, plans are underway to to the Divisional distribution network. establish three distribution control centres in WPS
New Construction w orks New Augment ed Cost LT HT Project Substations Substations Rs km km No. No. million Decentralized Budget 14.3 - 1 - 12 Provin cial Council Budget 120.2 2.9 1 - 540 ADB 6 3.2 4.0 1 - 10
SIDA 220.5 63.7 37 - 470
Accelerated RE Program 477.4 155.8 81 - 967 System Augment ation 117.5 76.9 33 24 298 Maintenance 5.9 82.7 - 26 212 Others (Detail) 100.2 23.8 13 - 164
Lighting Kegalle 81.0 - - - 82
Lighting Nuwara Eliya 3.8 - - - 4 Lighting Ratnapura 728.1 23.4 18 - 205
Total 1,872 433 185 50 2,964
94 CEB Annual Report 2010 Human Resources Management: Distribution Division 3 The Human Resource Unit provides a supporting The following software has been developed by the service to all employees in order to create a IT Unit of the Planning and Development Branch: pleasant and efficient working environment. The SMCDBMS : Service Main Card Data total number of employees in the Division at the management software for all the activities in end of 2010 was 2,391. Wherever there has been CSC inadequacy of the staff, essential services were obtained by deploying persons by outsourcing. CCDMS : Commercial and Construction Data Human Resource Information System had Management Software for provincial activities automated most of the routine work of the Unit and thereby enhanced the efficiency of the Unit. HRMS: Human Resource Data Management The employee distribution in the Division is given in Software for HR works the figure. ESRLFS :Electricity Supply Reliability Level and Staff Welfare Failure Monitoring System In order to create a better working environment to promote team work in the Division, many events AM: Asset Management were organized to benefit the employees. Among them was the Annual Sports Meet and Get PDMS: Procurement Data Management Together held at Dharmapala Vidyalaya Grounds in System Pannipitiya and Peduru Sadya at Janakala Kendaraya, Battaramulla were noteworthy.
Development of IT
The updating, addition of new features, maintenance work and other support assistance for software are continuously provided by the IT Unit of the Division 3. The SMC software has to be reviewed with the introduction of Samurdhi loan scheme and the new rate structure during the year 2010. In addition, the SMC software was migrated from the Access Database to SQL Server Database in 2010. The development of Asset Management software has started in 2010 and it is expected to release first version in 2011.
CEB Annual Report 2010 95 DISTRIBUTION DIVISION 4 Area of Service
Area of operation of Distribution Division 4 covers a part of the Western Province (Western Province South 1), the entire Southern Province and few parts of the Sabaragamuwa and Uva Provinces. Western Province South 1 covers the Areas of Ratmalana, Kalutara and Dehiwala. The Distribution network extends from Dehiwala to Kataragama. Highlights of the Year 2010
Units sold within the Division during the year GWh 1,666
Revenue earned from electricity sold Rs. million 21,006 Average selling Price Rs./kWh 12.61 Distribution loss % 11.4 Receivable position month 1.22 No. of retail consumers within the Division at the end of the year No. 813,917 No. of bulk consumers within the Division at the end of the year 1,170 No. of new connections provided during the year No. 32,053 No. of employees at the end of the year No. 1,980 Rs./month/ Average revenue 2,148 consumer
Total population within the Division is about 4.04 million. The highest electrification level of the Division is 97.8% in Western Province South–1 and the lowest is 94% in Southern Province. Ratmalana Airport, Ramalana Industrial Zone, Koggala Industrial Zone and many of the famous beach resorts are geographically located in the Division.
The annual electricity consumption per-consumer in the Division is 2,044 Units. Western Province South–1 records the highest annual electricity consumption per consumer, which is 3,893 Units while the lowest annual electricity consumption per-consumer is 1,346 Units in Southern Province.
Distribution Division 4
96 CEB Annual Report 2010 Division 4 Others 18% 31% Domestic+ R.P 34%
General Purpose+H Other otel Industrial Divisions 14% 21% 82% Share of Energy Sales: Distribution Division 4 Sales by Tariff: Distribution Division 4
Western Southern Western Province Province Province Southern South 48% South 1 52% 45% 55%
Revenue by Province: Sales by Province: Distribution Division 4 Distribution Division 4
CEB Annual Report 2010 97 Domestic+RP Others 27% 31%
General Purpose + Industrial Hotel 20% 22%
Revenue by Tariffs: Distribution Division 4
Rs. / kWh 15 13.4 12.61 13.06 11.74 12
9
6
3
0 Western Southern Region 4 CEB South 1 Average Selling Price: Distribution Division 4
Domestic+RP 90%
Industrial General 1% Purpose + Hotel 9% Consumer Accounts by Tariff Distribution Division 4
98 CEB Annual Report 2010 700,000 591,887 maintenance of Primary Substations, 33 kV Tower lines, 600,000 Gantries and other related equipment in 33kV 500,000 distribution network in the Division. International and 400,000 National Competitive Bidding for major purchases of the Division are done by the Project and Heavy Maintenance 300,000 223,200 200,000 Branch. 100,000 The Planning and Development Branch is mainly 0 Western South 1 Southern engaged in preparation of the Medium Voltage No. of consumers by Province: Distribution Development Plan and improvement of Distribution Division 4 Energy Management, focusing on energy performance of distribution feeders and introducing energy meters at Operational Structure area boundaries for better accountability. In addition, Planning and Development Branch prepares new grid The Division 4 of Ceylon Electricity Board is headed by interconnection proposals for Embedded Generators. an Additional General Manager, who is directly responsible to the General Manager. For the operational The Commercial and Corporate Branch takes care of purposes, the Division is divided in to two Provinces, viz: commercial policies, heavy supplies, and management Southern Province, Western Province South–1, headed information of the Division. Each Province is provided by provincial Deputy General Managers. Each Province is with a separate Human Resource Officer to attend the sub-divided into Areas which are administered by either human resource functions. Coordination of these Chief Area Electrical Engineers or Area Electrical activities and the human resource functions of the all Engineers. the executive officers and the staff attached to the Divisional Corporate Office are performed by the Unit Western Province South 1 consists of Ratmalana, Commercial and Corporate Branch. Dehiwala and Kalutara Areas, while Southern Province The finance and revenue functions performed by the consists of Galle, Ambalangoda, Hambantota, Matara, Provinces are supervised by the Finance Branch of the Weligama and Tangalle Areas. Division. Western Province Southern
South 1 Province Key Objectives Land Area, sq. km 1,230 5,640 Key Objectives of the Division are: Pop ulation in millions 1.44 2.60 Number of Households 424,003 640,301 Provision of reliable electricity supply to customers Electrification level 97.8% 94% within the Division at the statutory levels of voltage In addition to Provincial Deputy General Managers, there are three Deputy General Managers, who are in To achieve planned surpluses of revenue ove the charge of Projects and Heavy Maintenance, Planning total expenditure and Development and Commercial and Corporate To provide new connections to prospective Branches of the Division. customers
The Projects and Heavy Maintenance Branch is To ensure rational development of the electricity entrusted with the construction, installation and distribution system within the Division
CEB Annual Report 2010 99 Distribution Infrastructure Sales 33 kV Distribution Lines km 4,305
11 kV Distribution Lines km 275 Division 4 maintains accounts for 18% of the total
33/11 kV Primary Substations No. 32 electricity sales in the country. In the year 2010, 1,666 LV Distribution Lines km 21,627 LV Distribution Substations No. 3,810 GWh of electricity was sold in the Division. The largest Service Connections (Including Bulk Supplies) No. 815,087 portion of sales in Division 4 was under Domestic Tariff Customer Care category, which is approximately 34% of the total sales Special efforts were taken to improve the services of the of the Division. Western Province South-1 accounts for customer interface points. The staff attached to nine 52% of total sales in the Division. Area Offices, 36 Consumers Service Centres, 86 POS counters and two Distribution Control Centres took Revenue special efforts in order to provide a better service to the The revenue from electricity sales during the year was customers during the year. New Control/Call Centre has Rs. 21,006 million which is 8.63% higher than the been established in Western Province South–1 in previous year. Division 4 accounts for 17% of the total November 2010 and new Sub-Consumer Service Centre revenue of the CEB. The largest portion of revenues in was opened in Middeniya, to serve the public in that Division 4 was under Domestic Tariff category. Western area more efficiently. Province South-1 accounts for 55% of the total revenue in the Division. The average selling price of the Division Consumer Service Societies were established for all is Rs.12.61 per kWh which is less than the national Consumer Service Centres in the Division, with a view to average of Rs. 13.06 per kWh. give a better service to the consumers and to address their grievances. Arrangements have been made to The receivable position of Bulk supply consumers and conduct the first mobile service in CEB history in early Ordinary Supply Consumers in the Division at the end of 2011. Establishment of E-shops in the Division are in 2010 was 1.27 months and 1.17 months respectively. progress under the Action Plans of CEB. During 2010 the collection as a percentage of sales was 98%. All measures were taken to provide new electricity connections within 14 days of the payment is made, Electricity Consumer Accounts and and wherever possible, to provide the connection within New Service Connections a day. The Loan schemes under the Viduli Athwela Division 4 has 815,087 consumer accounts by the end Programme have already been commenced. of the year 2010. The majority of consumer accounts were in the domestic category. During the year under review, a total of 32,053 new connections have been provided.
Reliability During the year 2010, the number of breakdowns per month per 100 line-km has been maintained at about 13 for Medium voltage lines, while for Low Voltage it was 16.
Control/Call Centre in Western Province South 1
100 CEB Annual Report 2010 Development of Electricity Computerization Activities Distribution System MITFIN software was developed for Cash Book, General In order to fulfil the governmental vision of Providing Ledger, Materials Management, Construction and Electricity to All by 2012, Rural Electrification Service connection works. MITFIN software continued to programmes were accelerated. The details of rural use in the Office of DGM (WPS1) during the year 2010. electrification schemes and other construction works Its online facility was extended to the Areas in Southern carried out and completed in year 2010 are given Province. Matara, Hambatota, Weligama and Tangalle below: Area offices and their CSCs were connected to the online network system. Configuration of the MITFIN Extent of work Job Category HT S/S LT Line system in other CSCs coming under Galle and conversions km Nos km km DecentralizedBudget + Provincial Ambalangoda Areas were also completed and 3.42 2 31.56 10.56 Council Budget scheduled to be operated online from January 2011. Cost Paid and Bulk Supply 6.10 21 1.62 0
The General Ledger, Cash book, Inventory modules and Gama Naguma 0.27 1 109.68 28.345 Property developments 2.86 11 25.59 0.434 Service Provisioning System were linked to the central System Augmentation 14.84 21 18.31 64.07 server. All four modules were successfully implemented Iran 0.29 2 3.83 0.46
Swedish International in all the cost centres of the Division 4 during the year 34.11 22 88.85 3.75 Development Agency 2010. Lighting Sri Lanka (Galle-Matara) 1.20 1 11.06 1.659 Lighting Sri LankaHambantota 49.45 44 579.34 0 Lighting Sri Lanka Kalutara 12.96 8 38.60 1.51 Vehicle Management System software package is used Other 0.04 1 2.57 0 in all the branches of the Division. During this year, 24 Total 125.54 134 911.00 110.79
CSCs and 2 Offices have been connected to the CEB IP- VPN through leased lines. Human Resources: Distribution Division 4 At the end of the year, the total staff strength of the Metering Division was 1,980.
Divisional Meter Testing Laboratory carried out the The staff of the Division was provided with Safety following programmes during the year 2010: equipment, and several Safety awareness programmes were arranged to ensure safety of employees at work Testing of approximately 1400 Current place. The 5S system was under implementation of the Transformers Division and it has been already introduced in some work places. Conversion of bulk supply energy meters to Security Services 17 Remote Meter Reading (RMR) was completed in Office employee services 40
Kalutara Area. All boundary meters in the Division Executive Grades 103
were converted to RMR mode Middle Level Technical Staff 150
Drivers 159 Accuracy Testing of over 1000 nos. Bulk Supply LT Clerical & allied Grades 336 Skilled Technical Grades 551 and HT Meters, energy meters at Primary and Grid Semi & Unskilled Technical Services 624 Substations 0 200 400 600 800
Training Programs on Metering and related Staff Categories activities
CEB Annual Report 2010 101 Highlights 2010 The following major activities were carried out during 2010: In addition to the aforesaid network development projects, Southern Province had undertaken line shifting Construction of 33kV LYNX Double Circuit tower works of many road widening projects, specially in lines and construction of gantries at a total cost of Hambantota Area and under the Southern Railway Rs.327 million. Project.
Construction of terminating towers to make way for Lighting Sri Lanka Hambantota Project the proposed Southern Expressway at a total cost of The objective of the Lighting Sri Lanka Hambantota Rs.6 million. Project is to make access to electricity for all households in Hambantota District and to improve quality, reliability Shifting of 33 kV tower line to make way for the and service of electricity supply to all in Hambantota proposed 132kV transmission line in Ambalangoda District. It caters to the on going development programs at a total cost of Rs. 5 million in Hambantota District where a rapid growth of infrastructure would be essential. Relocating of 33 kV tower line in Matara after an earth slip at a total cost of Rs. 8 million. The Project covers construction of 230 Nos. of distribution substations, 350 km medium voltage lines Rehabilitation of selected existing 33 kV tower lines and 1,250 km of low voltage lines. 108 km of 33 kV of 100 km in length in southern province at a total Express lines, Beliatte Grid Substation and transmission cost of 30 million lines are also to be constructed.
Hot line maintenance of about 150 km of 33 kV The Project has been formulated to be implemented tower lines with funds amounting to Rs. 4,000 million provided by the Government of Sri Lanka. As the funds have not Construction of new 2x5 MVA, 33/11kV PSS in been received as expected in initial year, most of the Mirijjawila, Hambantota at a total cost of Rs.38 activities have been postponed to subsequent years. million. Therefore, the Project is now scheduled to be completed at the end of year 2011. Construction of temporary unmanned PSS in Boralesgamuwa, Fullerton and Panadura at a total Construction of Medium Voltage lines and gantries is cost of Rs.33 million. expected to be completed by the end of 2011 to improve the electrical network. Low voltage and low Installation of Auto Reclosers, LBSS etc. at a total reliability of supplies persist in some of the AGA cost of Rs.10 million. Divisions will be improved and as a result more industries, commercial establishments, tourist hotels etc. Routine maintenance of 20 manned and 13 will be attracted to Hambantota district. unmanned PSS. The electrification level in Hambantota District in year Routing maintenance of 23 nos. 33 kV switching 2006 was 66% and now it has been improved to gantries, 56 nos. 33 KV Auto Reclosers, 121 nos. 100%. 33kV LBSS and 38 nos. metering transformers.
102 CEB Annual Report 2010 3500
3000
2500 n o i
l 2000 l i M
.
s 1500 R 1000
500
0 2007 2008 2009 2010 Total
Funds Received Expenditure Financial progress of the Lighting Sri Lanka Hambantota Project
Dehiwala-Mt.Lavinia Electricity Distribution Development Project
The objective of the Project is to upgrade electricity network infrastructure in Dehiwala-Mt.Lavinia area to meet the existing and future power requirements in a reliable manner. The preliminary route survey for laying 11 kV underground cables, identification of power injection points and locating of radial substations have been completed. Construction of radial substation buildings was carried out.
CEB Annual Report 2010 103 Asset Management And Centralized Services Division
Asset Management and Corporate Branch Our Journey Asset Management function was introduced in the CEB Over the years Training Branch has taken steps to build for the purpose of generating an additional income by up a competent work force by means of appropriate utilizing the available resources and assets for different Education, Training, Skills development and Experience purposes other than the normal activities of the CEB to effectively carry out the work involved in modern without affecting its statutory functions. In order to integrated industry. carry out this new function, a separate Branch has been established in June 2010. Some of the activities Adequate training for all staff is a standard procedure. identified for the Asset Management Branch are as During the year under review, several awareness follows: programmes in addition to the standard training curriculum were conducted for the benefit of the Leasing of CEB Hydro Reservoirs for tourism and employees in various fields. recreational facilities, such as operation of float planes and boat services Following sections within the Training Branch performed their duties to achieve above target. Opening up CEB Circuit Bungalows for outsiders at current market rates Section Responsibility
1. Technical Training Centre Technical Training
Leasing of space suitable for advertising in CEB 2. Technical Training Centre Castlereagh Technical Training
premises and Boundary Walls CEB Examin ations 3. Examination Unit Distance Education Programs Providing Facilities for Professional Studies System Training/In-- plant Training 4. Internal Training Unit Permitting advertisements on electricity posts at a Non Technical Tr ainin g price 5. External Training Unit Overseas Training Conducting Safety Awareness 6. Occupational Health and Safety Unit Programs for CEB emp loyees and Collecting dates on accidents and compiling for analysis. Action has also been made to prepare an inventory of Quality improvement productivity and 7. Systems Training ISO standards Lands & Buildings, in order to manage them effectively for income generating purposes. Staff has been identified for this Branch and expected to proceed with Performance during the Year 2010 the plan during the coming year. The corporate External Training Unit functions of the Asset Management & Centralised During 2010, the External Training Unit provided Services Division are also handled by this Branch. facilities to 281 employees of different categories to go abroad on scholarships, as follows:
Training Branch The Training Branch functions under the Asset Progra mme No. of Visits No. of Participants For Inspection 101 116 Management and Centralized Services Division. For Scholarship s, Training and Study 47 81 Tours For Workshop, Seminar, Conference 36 54 The Vision of the Training Branch: To Become the Best and Meeting Training Institute in the Utility Sector in Sri Lanka Sport Activities 3 30
The Mission of the Training Branch: To provide Career Guidance to Enrich Knowledge, Skills and Attitudes towards National Growth of Sri Lanka
104 CEB Annual Report 2010 Internal Training Unit Occupational Health and Safety Unit Internal Training Unit increased its training facilities for To comply with CEB, National and International CEB employees as well as external trainees by providing requirements on safety, a new Unit was established more training opportunities during 2010. Around 300 under Education and Training Branch for well being and Trainees from various external organizations such as safety of CEB employees. This is accomplished through German Technical Training Institute, University of awareness programmes, internal training and periodic Moratuwa, Open University and Technical Colleges collection of data on accidents and analysis to take under NAITA were benefited by in-plant training action to reach zero accidents target. facilities. During 2010, the following programmes and workshops Around 1,740 CEB employees were provided with were conducted by this Unit. training covering the fields of Computer Training, Programme No. of Programmes Participants Systems Training and Induction Training, including those Safety for Engineers (9 days) 3 111 for executive and non-executives categories of CEB Safety for MLTS (6 days) 3 86 employees. Two-day workshops 5 169 One-day workshops 37 1,871 For the benefit of Tamil-speaking staff of CEB, several Total 2237 such training programmes were conducted in Northern and Eastern provinces successfully. Examinations Unit The Examinations unit organized and conducted 45 Twenty six CEB employees of different disciplines and qualifying examinations for recruitment and promotion categories were provided training at local institutes for CEB staff, with the assistance of the Department of during the year 2010. Examinations, SLIDA Institute of Personnel Management, Maradana and Godagama Technical Colleges and University of Moratuwa by maintaining the quality and confidentiality of the process at the optimal cost.
Technical Training Centre: Piliyandala During the year 2,825 CEB employees, including Engineers, were provided with Technical training by the Technical Training Centre at Piliyandala. These programmes covered a total number of 2300 Trainees.
No. of No. of Programmes Programmes Trainees Continuous Professional Development (CPD) 8 128
Workshop and Seminars 3 142
Promotion 63 2,030 Computer Room at Training Branch Total 2,300
CEB Annual Report 2010 105 Technical Training Centre: Castlereagh Special Training Programs The Pioneer Training Centre of the CEB, The Technical Considering national and organizational requirements, Training Centre at Castlereagh provided training for Tamil language education programme was conducted 2,623 employees during the year 2010 utilization its for the benefit of CEB employees. In addition to this optimum capacity. These training programmes covered special programme, there were several other training the areas of System Training, Technical Training, programmes are conducted by the Systems Training Occupational Health and Safety First Aid Productivity. Unit, numbering 10 and total of 327 participants. Training programmes for employees of CEB Service
providers were also conducted. 3500 3000 s e
In a deviation from the normal training programmes, e 2500 n i
a 2000 r
Castlereagh Technical Training Centre has taken steps to T
f 1500 o
provide training for outside parties and other training : 1000 o
institutes on a cost recovery basis with a small margin of N 500 profit. 0
Benchmark Activities Workshop on disciplinary procedure 2009 2010 The Training Branch arranged a seminar on disciplinary Comparison of Training details procedure for executives of CEB. Sixty executives 2009- 2010 participated in this seminar. The seminar was arranged in collaboration with The Centre for Studies in Workshops and Ancillary Services Disciplinary Management, with the aim of creating There are four Sections coming under the Workshop and awareness and to up-grade knowledge of concepts, Ancillary Services Branch. They are: practices and techniques in Disciplinary Procedures. Air Conditioning and Refrigeration; Training Branch is in the process of providing training for external organizations and persons hiring resource Power Plant; persons and other resource facilities on profit basis for other state and private institutes. Lifts; and
System Training Central Workshops Under 5-S Quality Improvement work, action has been taken to establish Vision and Mission statements for the Air Conditioning and Refrigeration Branch, improved the Filing System, Management of The main responsibilities of the Air Conditioning and waste materials, Identification of equipment for easy Refrigeration Section are to: access etc., and improvement of environment with the Go- Green concept. With this, securing of ISO 9001- Undertake supply, installation and commissioning 2008 QMS Certificate has completed up to Stage II of mortuary coolers in the government hospitals Auditing Level. and all types of new air conditioning plants in government institutions.
106 CEB Annual Report 2010 Carry out all types of major repairs of air generators installed in Government hospitals and other conditioning plants installed in government Government institutions. hospitals and other government institutions. During the year 2010, four new generator installations Carry our preventive maintenance of all types of air were completed, valued at Rs.68.3 million. 128 annual conditioning plants installed in government maintenance and 38 repair jobs were done at Rs. 85.0 hospitals and other government institutions. million. The value of hiring of generators and providing of generators for state security purposes was Rs. 125.5 Providing of consultancy services in the field of air million. conditioning in connection with breakdown, repairs, new installation etc. Lifts The main responsibilities of the Lift Branch are to: During the year, 76 new split type air conditioners, valued at Rs.13.6 million were installed. Maintenance Undertake supply, installation and commissioning activities of 228 air conditioners, valued at Rs.171 of new Lifts. million were carried out in CEB's and other installations. Provide consultancy services in the field of Lifts in Power Plants connection with new installations, trouble The main responsibilities of Power Plants Section are to: shooting, repairs, modernization etc.
Supply, install and commission diesel generators at Undertake preventive maintenance of Lifts installed Government hospitals and other Governmental in Government hospitals and other institutions. institutions. Undertake repair and rehabilitation of Lifts installed Provide consultancy services in the field of diesel in Government hospitals and other institutions. generators in connection with installation of generators, trouble shooting and repairs During the year, 134 service and maintenance jobs of Lifts valued at Rs. 35.7 million and 17 repair and Operate diesel generators parallel with mains to rehabilitation jobs of lifts valued at Rs.4.8 million were supply electrical power to the national grid. carried out. Two new installations of Lifts valued at Rs.8.1 million were also carried out. Provide backup/standby power by operating mobile diesel generators for the functions where VIPP are present, and also for the state security purposes and other important national functions.
Provide diesel generators to various institutions on hire basis.
Carry out repairs of diesel generators
Carry out preventive maintenance of stand-by
CEB Annual Report 2010 107 Repairs to the Lift of VISUMPAYA State Residence
Rehabilitation of Bed Lift of Clinic Complex Cancer Institute-Maharagama
108 CEB Annual Report 2010 Central Workshops The main responsibilities of the Central Workshops are to: Manufacture components for L.T. and H.T. distribution lines.
Manufacture special components such as lugs, machined components etc.
Carry out special jobs such as fabrication of security fences, security huts etc.
Carry out repair and maintenance of electrical machines, such as rewinding of generators, motors etc. Refurbishment of Shroff Counters in Head Office Carry out repair, services, installations including rewiring of control panel, switchgear and related New Constructions items. Construction of a building for A/C, Refrigeration and Lifts,and Civil Works and Buildings Branches at Carry out motor vehicle repairs, including major Kolonnawa Workshop premises overhaul of engines, tinkering, paining and other major repairs of vehicles belonging to CEB Construction of a four storied building as an extension to the Central Provincial office in Kandy Carry out fuel consumption tests of CEB vehicles. Construction of store keeper's office, stores Inspection of motor vehicles to prepare the building and chain link fence at Vavuniya condition reports, accident reports etc. Improvements and Renovations During the year, 134 jobs of different types valued at Improvements to interior work for the office of Rs.20.5 million were carried out by the Central AGM (Corporate Strategy) at Head Office Workshops. Improvements to interior work for the office of Civil Works and Buildings Legal and Training branches at the Head Office
Civil Works and Buildings Branch attend to construction Improvements to interior work for the office of and renovation works of CEB buildings throughout Sri AFM (Distribution) at Head Office Lanka. The works attended by this Branch during 2010 are: Renovation of executive lunch room at CEB Head Office
Renovation & refurbishment of Shroff Branch at Ground Floor of CEB Head Office
CEB Annual Report 2010 109 Renovation of control room in Western North Improvement to interior work for the office of Provincial Office at Kiribathgoda General Manager.
Renovation of building in Western North Provincial Renovation to Pantry at Call Center at CEB Head Office Premises at Kiribathgoda Office
Renovation of toilets in Western North Provincial Bid documents & BOQ have been prepared for the Office at Kiribathgoda Following works:
Improvements to interior of the office of Finance Preparation of BOQ for repair of Depot Complex of Manager at Head office Mahiyangana and repair work of Badulla E.E.'s quarters. Improvement to interior of the offices of AGM (P&CS) and Generation Planning Branch Preparation of BOQ for repair work of Circuit bungalow and repair work at E.E. Qtrs. at Ampara. Improvement to interior work for the office of the DGM (P) office at CEB Head Office Preparation of BOQ for repair work of 21 Nos. Qtrs.at DGM (East) Improvement to interior work for the office of DFM (P&CS) office Preparation of BOQ for renovation of Negambo Area Office Improvement to interior work for the office of AFM (R1) Preparation of BOQ for construction of concrete road ways and repairs to internal roads at Improvement to interior of the office of Working Kolonnawa stores yard Director Preparation of BOQ for construction of well at CEB Repair work of Communication Branch at Head office premises Kelanitissa Power Station Preparation of BOQ for construction of depot Modification works to front entrance at CEB Head building at Chunnakam. Office Preparation of BOQ for construction of proposed The Branch also provided consultancy services for fire security office and security barrier at Hon. Deputy protection installation at CEB Head Office. Minister's Office T.B. Jayah Mawatha
Works at Bidding Stage Preparation of BOQ for boundary wall & angle iron Bids have been invited for the following works, which fence at Aniyakanda Central Workshop premises will commence in year 2011: Renovation of buildings and roads in Ja-ela, Renovation to toilets of student hostel in technical Wattala & Kolonnawa training centre at Piliyandala Preparation of BOQ for DGM (Com. & Corp.) Renovation to lecture hall and toilets in technical branch at Head Office training centre at Castlereagh Preparation of BOQ for modification work at Area Removing and reconstruction of Steel Emergency Engineer's office (3rd floor) at Negombo Exit at CEB Head Office Preparation of BOQ for Pantry at Energy Marketing Conversion of car park into office space in area Branch at Liberty Plaza building. office building at Negambo. Preparation of BOQ for proposed rest room for Improvement to interior work for the office of AFM security guards in Provincial Stores – Matale. (Transmission). 110 CEB Annual Report 2010 Preparation of BOQ for improvements to the civil prepare the schedule of lands that are possession of the structures in Jaffna Peninsula CEB since its inception in 1969 to publish a gazette notification for formal acquisition. Civil Works and Preparation of BOQ for construction of chain link Buildings Branch had also inspected following land sites fence with barbed wire and security hut for at and prepared reports as instructed by AGM (AM & CS): Kotugada Detailed report of CEB lands under Area Engineer's Following jobs, for which estimates have been prepared, Division- Nuwaraeliya District could not be proceeded due to non- availability of funds. Detailed report of CEB lands& reservations for Preparation for BOQ for construction of observation reservoirs under Laxapana Complex tower (Security) at Deniyaya Detailed report of Grid Substation premises at Preparation of BOQ for hostel building for grid Dalugama, Kelaniya. substation premises at Matara Work related to Head Office Maintenance Unit Preparation of BOQ for renovation of Circuit Civil Maintenance unit at Head Office is responsible to Bungalow at Kataragama carry out urgent maintenance work in various Branches located in CEB Head office, the Offices of the Ministry of Preparation of BOQ for repair works of CSC at Power and Energy and the residences of the Hon. Padukka Minister and Hon. Deputy Minister. Repair works are Preparation of BOQ for CSC at Mullaitivu attended to by the Civil Works & Buildings Branch, directly using the maintenance crews allocated for Head Preparation of BOQ for renovation to toilets in 6th Office maintenance work. and 7th floors at CEB Head Office Other works attended Preparation of BOQ for proposed repeater station at Labugamakanda Coordination and monitoring Soil investigation & surveying work for Trincomalee coal power project Preparation of BOQ for renovation of the ence Hon. at Sampoor Minister's Residence Taking down levels in the land at DGM office Preparation of BOQ for renovation of the Hon. Kiribathgoda Deputy Minister's Residence Investigation and reporting on the cracks at Work related CEB Asset Management Lunuwila substation building Civil Works and Buildings Branch is in the process of Arbitration Case: CEB Vs Engineering Enterprises collection of details of lands belonging to Ceylon Ltd.–in connection with the construction of 2 x 5 Electricity Board using the survey plans available in Civil MVA primary substations at Galle (Dikela) Works Branch and the deeds available with the Chief Legal officer. Preparation of a schedule of lands owned Arbitration Case: CEB Vs EE Ltd in connection with the construction of Student Hostel and Staff Hostel by CEB, including details of extent of the land and their at Piliyandala Technical Training Centre. utilization, to prepare a Master Plan for the re- development of premises owned by CEB is in progress in Structural Design of Security observation tower at all Provinces except in Northern and Eastern Provinces. Deniyaya
Civil Works and Buildings Branch has undertaken Structural Design of Hostel building at Matara grid inspection of each of the lands in Colombo City to substation premises
CEB Annual Report 2010 111
Internal Audit Internal Audit Branch headed by Chief Internal Auditor has a strength of 47 Nos. of audit staff who are performing audit activities of CEB branches situated throughout the island. Internal Audit helps to assist all members of management to effectively discharge their responsibilities by furnishing them with objective analysis, appraisal, recommendations and pertinent comments concerning the activities reviewed.
Internal Audit acts as an independent evaluating mechanism of the management which:
ensures that adequate internal controls are in place
review the reliability and accuracy of transactions and records
ensures that statutory responsibilities are properly discharged
performs systems and value for money audits
attends to specific investigative requirements of the management
During the year 2010, following audits had been carried out by the Internal Audit Branch:
Routine Audits 11
Revenue Audits 10
Systems Audits 38
Special Investigations 15
Two Audit Committee meetings were held during 2010 and the committee addressed remedial measures in relation to stocks of materials, Property Plant & Equipment, Emergency Power purchase payments, cash collection controls etc.
CEB Annual Report 2010 113 Financial Review
GENERAL FIXED ASSETS In the year 2010 the financial situation of the Board Net fixed assets increased by 7.28% which was mainly significantly improved. The Continued rainfall due to increase in Transmission and Distribution assets. throughout the period was the main contributory factor The table below indicates the growth in the distribution for this favorable situation. It is reported an increment Sector during the period under review. of hydro generation by 1,790 million units in the year 2010 (which is an increment of 46%) compared to the The total assets increased by Rs. 89,166 million while year 2009 and the reduction of thermal generation by total liabilities increased by Rs. 77,503 million resulting 16% compared to the year 2009. Consequently the in a net increase of contributed Capital and Reserves cost of sales has been declined by 0.9% due to the amounting to Rs. 11,663million during the year. The impact of these factors. Board insures its assets by maintaining a separate Insurance Escrow at the Peoples Bank and funds it at Other than the above proper management policies and 0.1% of the value of gross fixed assets, annually. The decisions also helped to increase the profit. A reduction funds stands at Rs. 3,710million as at the end of the in finance cost by 30% compared to the previous year year under review, compared to Rs 3, 941 million in last was mainly due to timely payment to Independent year.
power producers saved the penal interest and reduction 2010 2009 2008 No. of Distribution Sub-stations 21,930 21,319 19,838 in interest rates of term loans and overdraft were the main factors. MV Lines km 26,684 25,212 24,243 LV Lines km 104,153 99,445 95,113 OPERATIONS Service Connection Nos. 4,480,423 4,280,168 4,088,900 The turnover of the Board is increased 10.3% during the year under review, compared to the previous year. GROUP ACCOUNTS This is mainly due to the sufficient rainfalls prevailed The Board prepares Group accounts incorporating its throughout the year resulted in operating of hydro subsidiaries, Lanka Electricity Company (Pvt) Ltd, Lanka power plants at maximum rather than the thermal Transformers Limited and Lanka Coal Company Ltd in plants. CEB sold 9,262 million units of electricity during addition to the preparation of Board Accounts. the year, which is an increase of 9.7% from the previous year sales of 8441 million units.
CASH FLOW The inflow of cash flow is improved mainly due to savings of penal interest on independent power producers, reduced interest rate on bank borrowings & lesser thermal cost as a result of favourable hydro generation coupled with stable world oil price.
BORROWINGS The total long term borrowings have increased from Rs.106,660 million in 2009 to Rs. 184,243 million in 2010.
114 CEB Annual Report 2010
20 10 2009 2008 2007 2006 PRO FIT & LOSS Rs . Rs. Rs. Rs. Rs. Million Million Million Million Million
Turnover 12 1,862 110,518 111,287 87,575 69,941 Direct Cost (11 6,168) (118,186) 145,713) (108,355) (81,733) G ross Profit (Loss) 5,694 (7,668) (34,426) (20,780) (11,792)
Administration Expenses (1,851) (2,870) (1,487) (1,534) (2,383) Operation (Profit Loss) 3,843 (10,538) (35,913) (22,314) (14,175) Other Income 3,621 4,273 3,581 9,205 9,572 Interest Charges (2,605) (3,412) (1,537) (1,703) (1,521) Profit (Loss) before 4,859 (9,338) (33,869) (14,812) (6,124) Taxation
Balance Sheet Total Assets 605,423 516,021 465,296 417,610 355,035 Capital and Reserves 282,632 275,208 270,176 275,648 245,520 Non - Current 229,128 141,883 110,419 94,774 70,884 Liabilities Current Liabilities 93,662 98,930 84,700 47,189 38,630 Cash (3,102) (4,039) (2,261) (3,915) (3,787) Sales (GWh) 9,263 8,441 8,418 8,276 7,832 Generation (GWh) 10,689 9,882 9,901 9,815 9,389
CEB Annual Report 2010 115 Report Of the Directors
Borrowings The Directors of Ceylon Electricity Boar d present their The interest bearing loans and borrowings by the Board Report and Consolidated Financial Statements for the stood at Rs. 184,243 as against Rs. 106,660 million last year ended 31st December 2010. year.
Principal Activities and Business Reviews Contributed Capital The principal activities of the Board continued to be Contributed capital towards the Board stood at Rs 83, Generation, Transmission and Distribution of Electricity. 311 million as against Rs. 73,516 million last year. Contributions during the year related to Maga Naguma, Financial Results SIDA project, JICA Projects, Vidulamu Lanka lighting A turnover increase of 10.3% was registered for CEB Project, Rural electrification projects etc. for the year under review while the corresponding decrease in the previous year was 0.69%. A net profit Board Members Year 2010 of Rs 359 million was recorded in the year under The year commenced with Mr. E.A.S.K. Edirisinghe as review. Chairman, Mr. K.A. Ranaweera as Vice Chairman, Mr. B.A. Galwatta, Mr. H.P. Cashion Herath, Investments Mr. R.V.D. Piyatilake, Mr. S.K. Attygalle and CEB has an investment of 55.2% of the shares of Lanka Dr. R.H.S. Samaratunga as the Members of the Board. Electricity Co. (Pvt) Ltd, and 63% shares of Lanka Mr. E.A.S.K. Edirisinghe (Chairman) had resigned on Transformers Limited and 60% shares of Lanka Coal February 11, 2010 and Mr. T.M. Herath was appointed Company Ltd. as the Chairman from February 18, 2010. He resigned on May 4th 2010.Mr. B.A. Galwatta resigned on 29th Lanka transformers Limited (LTL) has declared a dividend April 2010.Mr. Cashion Herath, Mr. R.V.D. Piyathilake of Rs 200 million for the financial year 2010/2011 and and Dr. R.H.S. Samarathunga had resigned on 10th May, Rs. 126 million was received as dividend income for the 2010 and Mr. S.K. Attygalle resigned on 5th May 2010. 2010 financial year of CEB. The new Board was appointed on 10th May 2010 with Self Insurance Reserve Mr. Vidya Amarapala as the Chairman, Mr. Pradeep Ceylon Electricity Board maintains its own insurance for Roshan Gunawardena and Mr. Amila. P. Jayasinghe as its fixed assets and annually appropriate 0.1% of the members. Mr. Y.D. Nihal Jayathilaka, Dr. B.M.S. gross fixed assets value. The total accumulated funds of Batagoda and Mr. Tilak Collure were also appointed as this insurance as at Balance Sheet data amounted to members of the Board on 19th May 2010. Mr. Pitaduwa Rs.3, 710 million. Liyanage Douglas Premaratne was appointed as the Vice Chairman on 25th May 2010. On August 9, 2010, Additions to Property, Plant & Equipment Mr. Tilak Collure resigned and Mr. W.D. Jayasinghe was During the year Property, Plants & Equipment appointed to the board as a member from 13th August amounting to Rs. 25,730 million was added to the 2010. capital assets compared to Rs. 19,982 million added last year. The addition mainly related to the Transmission Provident Fund & Pension Fund and Distribution assets. Board maintains as independent fund in respect of Provident Fund and Pension Fund of its employees.
116 CEB Annual Report 2010 The CEB Provident, fund has earned an income of Rs. 2,354 million in 2010 on investments and declared a dividend of 13%. The income derived from the investments of the Pension Fund in 2010 was Rs. 1,106 million.
Employees The total number of employees as at the end of the year was 15,366 and total number of consumer/Employee ratio was 292 in 2010
Auditors The Financial Statement of the Board was audited by the Auditor General in terms of the financial Act No.38 of 1971.
Audit Committee The Audit Committee held four meeting during the year under review and dealt with the report of the Auditor General for the year ended 31st December 2009 & 2010 and Internal Audit reports furnished to the management. The committee addressed remedial measures in relation to maters such as internal control on Land & building, debtors stocks, revenue etc.
Sgd. Secretary to the Board
CEB Annual Report 2010 117 CEYLON ELECTRICITY BOARD CONSOLIDATED INCOME STATEMENT Year Ended 31st December 2010
Group Board Note 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Restated Restated Revenue 3 130,456,697 121,619,428 121,862,319 110,518,394
Cost of Sales (120,140,089) (125,363,208) (116,168,481) (118,186,508) Gross Profit / (Loss) 10,316,608 (3,743,780) 5,693,838 (7,668,114)
Other Income and Gain 4.1 3,727,025 4,217,579 3,062,969 3,412,018
Distribution Cost (105,908) (69,194) - -
Others (255,873) (155,340) - -
Administrative Expenses (3,721,895) (4,594,244) (1,850,634) (2,870,198)
Finance Income 4.2 881,300 1,170,696 557,713 860,800
Finance Cost 5 (3,057,971) (3,376,128) (2,605,179) (3,073,437)
Profit/ (Loss )Before Tax 6 7,783,286 (6,550,411) 4,858,707 (9,338,931)
Income Tax Expense 7 (4,931,181) (3,052,724) (4,500,000) (2,236,215)
Profit/(Loss) After Tax 2,852,105 (9,603,135) 358,707 (11,575,146)
Minority Interest (1,261,957) (1,078,296) - -
Profit/(Loss) for the Year 1,590,148 (10,681,431) 358,707 (11,575,146)
118 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD CONSOLIDATED BALANCE SHEET As at 31st December 2010
Group Board Note 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Restated Restated Non-Current Assets Property, Plant & Equipment - At Valuation 8 502,724,078 469,378,970 491,599,667 458,242,041 Investments in Subsidiaries 10 - - 736,902 736,902 Other Investments 11 3,814,514 3,862,486 - - Administrative Borrowings 570,000 570,000 - - Deferred tax assets 4,712 7 - - Investments of Insurance 12 3,710,485 3,940,796 3,710,485 3,940,796 Reserve Intangible assets 1,915 76 - -
Total Non-Current Assets 510,825,704 477,752,335 496,047,054 462,919,739
Current Assets Inventories 13 18,645,058 16,816,771 16,669,168 15,300,576 Trade and Other Receivables 14 94,032,465 41,706,561 89,311,828 35,973,414 Amounts Due from Related Parties 15 - 21,278 1,847,863 1,243,391 Investments - Others 11 7,404,851 7,314,852 - - Tax Refund Due 470,672 6,167 - - Cash and Bank Balances 26 3,078,053 1,624,567 1,546,976 584,658 Total Current Assets 123,631,098 67,490,196 109,375,835 53,102,039 Total Assets 634,456,802 545,242,531 605,422,889 516,021,778
EQUITY AND LIABILITIES Capital and Equity Contributed Capital 16 83,311,423 73,515,583 83,311,423 73,515,583 Reserves 17 320,550,127 322,710,481 316,799,057 319,013,994 Retained Loss (110,850,254) (111,824,043) (117,478,738) (117,321,751) 293,011,296 284,402,021 282,631,742 275,207,826 Minority Interest 9,540,244 8,479,257 Total Equity 302,551,540 292,881,278 282,631,742 275,207,826
Non-Current Liabilities and Deferred Income Preference Shares - 7,516 - - Interest Bearing Loans & Borrowings 18 175,054,426 94,143,319 174,264,109 93,797,421 Consumer Deposits 19 7,543,940 6,761,518 7,543,940 6,761,518 Provisions and Other Deferred Liabilities 20 3,357,020 3,102,655 2,929,959 2,726,466 Deferred Income 21 47,081,838 41,186,428 44,390,174 38,597,703 Deferred Taxation 22 791,574 462,796 - - Total Non-Current Liabilities 233,828,798 145,664,232 229,128,182 141,883,108 and Deferred Income
Current Liabilities Preference Shares 7,516 15,033 Trade and Other Payables 23 80,240,591 89,580,565 78,711,151 85,167,295 Dividends payables 282,274 168,753 - - Amounts Due to Related Parties 24 - - 72,692 466,995 Interest Bearing Loans & Borrowings 18 11,592,555 15,264,181 9,979,122 12,862,369 Income Tax Payable 5,953,528 1,668,488 4,900,000 434,185 Total Current Liabilities 98,076,464 106,697,020 93,662,965 98,930,844 Total Equity and Liabilities 634,456,802 545,242,531 605,422,889 516,021,778
The Board Of Directors and Management are responsible for the preparation and presenting of these financial statements. signed and on behalf of the Board by:
...... Chairman General Manager Finance Manager
20/04/2012 Colombo
CEB Annual Report 2010 119 CEYLON ELECTRICITY BOARD GROUP- STATEMENT OF CHANGES IN EQUITY As at 31st December 2010
Note Contributed Capital Revaluation Overhaul Depreciation Capital Reserve Reserve Reserve Reserve Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Balance as at 01st January 2009 63,474,675 17,727,513 292,421,106 35,539 23,000 Error Correction - - - - - Opening Balance reistatement (2008) - - - - - Restatement of Minority Interest - - - - - Surplus on Revaluation of Property,Plant & Euipment - - 7,190,412 - - Revaluation Surplus on Disposals - - (52,407) - - Net Profit/(Loss) for the year - - - - - Transferred to/from during the year - - - - - Transfer To the Preference Share Payables - - - - - Heat Rate Reserve - 10,274 - - - Foreign Exchange Reserve - 15,266 - - - Exchange Equalization Reserve - 3,078 - - - Overhaul Reserve - - - (34,263) - Investment Reserve - - - - - Pending Allotment of shares - 7,408 - - - Capital contribution - - - - - ADB Lan 2043 349,252 - - - - Coal Power Project 100,000 - - - - Second Power System Expansion Project-Part A 1,813,765 - - - - Lighting Project-Hambantota 2,764,537 - - - - Rural elecrification project 310,000 - - - - Ipologama Housing Prooject 7,035 - - - - Gama Naguma 1362928 - - - - Uthuru Wasanthaya 50,000 - - - - Consolidated Fund 90,646 - - - - Government Grant 1,687,137 - - - - Sida Project 1,505,607 - - - - Balance as at 31 December 2009 (Restated) 73,515,582 17,763,539 299,559,111 1,276 23,000
Surplus on Revaluation of Property,Plant & Euipment - - (2,727,754) - - Revaluation Surplus on Disposals - - (166,894) - - Assets replacement Reserve - - - - Investment Reserve - - - - - Net Profit/(Loss) for the year - - - - - Transferred to Self Insuarance Reserve - - - - - Heat Rate Reserve - 20,206 - - - Foreign Exchange Reserve - 19,890 - - - Exchange Equalization Reserve - (3,427) - - - Overhaul Reserve - - - 1,708 - Pending Allotment of shares - (7,409) - - - Capital contribution - - - - - Lighting Sri Lanka 3,211,608 - - - - CAARP GOSL 355,232 - - - - Vidulamu Lanka Lighting Project 25,000 - - - - GOSL Grant 3,024,167 - - - - Rural elecrification project 1,135,000 - - - - Maga Naguma 211,730 - - - - Absorption Energy Project 100,000 - - - - PSDTP Project 7,846 - - - - PSDTP ADB Loan - 1930 Project 3,790 - - - - Retention Release 270,891 - - - - Sri Lanka Gutter Connection Project 22,229 - - - - JICA Project 455,902 - - - SIDA Projrct 972,446 - - - - Dividends Ordinary Shares 2008/2009 - - - - - Dividends Preference Shares - - - - - Allotment of Shares - - - - - Balance as at 31 December 2010 83,311,423 17,792,799 296,664,463 2,984 23,000
120 CEB Annual Report 2010 Asset Investment Replacement Reserve Self Insurance Retained Minority Total Reserve Reserve Earnings Interest Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 171,395 - 4,509,345 (100,297,765) 7,121,972 285,186,780 - - - 187 - 187 - - - (16,179) (13,130) (29,309) - - - (28,261) 28,260 (1) - - - - 473,627 7,664,039 - - - 52,407 - - - - - (10,681,429) 1,078,296 (9,603,133) - - 624,801 (760,915) (227,981) (364,095) - - - - (22,549) (22,549) - - - - 6,034 16,308 - - - - 8,958 24,224 - - - - 1,808 4,886 - - - - (20,124) (54,387) - 58,015 - (92,088) 34,073 - - - - - 6,013 13,421 - - - - 4,000 4,000 - - - - - 349,252 - - - - - 100,000 - - - - - 1,813,765 - - - - - 2,764,537 - - - - - 310,000 - - - - - 7,035 - - - - - 1362928 - - - - - 50,000 - - - - - 90,646 - - - - - 1,687,137 - - - - - 1,505,607 171,395 58,015 5,134,146 (111,824,043) 8,479,257 292,881,278
- - - - 2,335 (2,725,419) - - - 166,894 - 1 18,220 - - (18,220) - - - 2,515 - (60,531) (54,700) (112,716) - - - 1,590,148 1,261,957 2,852,105 - - 682,589 (682,589) - - - - - (20,206) ------18,753 38,643 - - - - (2,012) (5,439) - - - (1,708) (0) (0) - - - - (6,013) (13,422) - - - - 1,000 1,000 - - - - - 3,211,608 - - - - - 355,232 - - - - - 25,000 - - - - - 3,024,167 - - - - - 1,135,000 - - - - - 211,730 - - - - - 100,000 - - - - - 7,846 - - - - - 3,790 - - - - - 270,891 - - - - - 22,229 - - - - - 455,902 - - - - - 972,446 - - - - (171,142) (171,142) - - - - (2,612) (2,612) - - - 13,422 13,422 189,615 60,530 5,816,735 (110,850,253) 9,540,244 302,551,540
CEB Annual Report 2010 121 CEYLON ELECTRICITY BOARD THE BOARD- STATEMENT OF CHANGES IN EQUITY As at 31st December 2010
Capital Note Contributed Capital Redemption Capital Reserve Reserve Fund Rs. '000 Rs. '000 Rs. '000
Balance as at 01st January 2009 63,474,675 17,447,061 165,446 Error Correction - - - Surplus on Revaluation of Property,Plant & Euipment - - - Revaluation Surplus on Disposals - - - Net Profit/(Loss) for the year - - - Transferred to/from during the year - - - ADB Loan 2043 349,252 - - Coal Power Project 100,000 - - Second Power System Expansion Project-Part A 1,813,765 - - Lighting Project-Hambantota 2,764,537 - - Rural elecrification project 310,000 - - Ipologama Housing Prooject 7,035 - - Gama Naguma 1,362,928 - - Uthuru Wasanthaya 50,000 - - Consolidated Fund 90,646 - - Government Grant 1,687,137 - - Sida Projrct 1,505,608 - -
Balance as at 31 December 2009 73,515,583 17,447,061 165,446
Balance as at 01 January 2010 (Restated) 73,515,583 17,447,061 165,446
Adjustment made during the year - - - Revaluation surplus on disposals - - - Net Profit/(Loss) for the year - - - Transferred to/from during the year - - - Lighting Sri Lanka 3,211,608 - - CAARP GOSL 355,232 - - Vidulamu Lanka Lighting Project 25,000 - - GOSL Grant 3,024,167 - - Rural elecrification project 1,135,000 - - Maga Naguma 211,730 - - SIDA Project 972,446 - - Absorption Energy Project 100,000 - - PSDTP Project 7,846 - - PSDTP ADB Loan - 1930 Project 3,790 - - Retention Release 270,891 - - Sri Lanka Gutter Connection Project 22,229 - - JICA Project 455,901 - - Balance as at 31 December 2010 83,311,423 17,447,061 165,446
122 CEB Annual Report 2010 Revaluation Depreciation Self Insurance Retained Total Reserve Reserve Reserve Earnings Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
289,705,863 23,000 4,493,395 (105,132,953) 270,176,487 - - - 1,111 1,111 6,606,835 - - - 6,606,835 (52,407) - - 52,407 - - - - (11,575,146)) (11,575,146 - - 624,801 (667,170) (42,369) - - - - 349,252 - - - - 100,000 - - - - 1,813,765 - - - - 2,764,537 - - - - 310,000 - - - - 7,035 - - - - 1,362,928 - - - - 50,000 - - - - 90,646 - - - - 1,687,137 - - - - 1,505,608
296,260,291 23,000 5,118,196 (117,321,751) 275,207,826
296,260,291 23,000 5,118,196 (117,321,751) 275,207,826
(2,730,631) - - - (2,730,631) (166,895) - - 166,895 - - - - 358,707 358,707 - - 682,589 (682,589) - - - - - 3,211,608 - - - - 355,232 - - - - 25,000 - - - - 3,024,167 - - - - 1,135,000 - - - - 211,730 - - - - 972,446 - - - - 100,000 - - - - 7,846 - - - - 3,790 - - - - 270,891 - - - - 22,229 455,901 293,362,765 23,000 5,800,785 (117,478,738) 282,631,742
CEB Annual Report 2010 123 CEYLON ELECTRICITY BOARD CONSOLIDATED CASH FLOW STATEMENTS As at 31st December 2010
Group Board Cash Flows From / (Used in) Operating Activities Note 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. ‘000 Rs. '000 Restated Restated
Net profit before Income Tax Expense and Extraordinary Items 7,783,286 (6,550,411) 4,858,707 (9,338,931)
Adjustments for Depreciation 6 17,080,400 16,505,771 16,064,035 15,477,337 Consumer Contribution 4.1 (1,885,012) (1,632,501) (1,632,276) (1,419,841) Government Grant 6 (12,391) (12,391) (12,391) (12,391) Foreign Currency Loss - (28,713) - - Amortization of Development Cost/ComputerSoftware 498 46 - - Interest Income from Investments 4.2 (881,300) (1,170,696) (431,713) (740,043) (Profit)/Loss on sales of Property, Plant & Equipment 4.1 (106,279) (56,366) (103,837) (38,229) Finance Costs 5 3,057,970 3,376,128 2,605,179 3,073,437 Unclaimed NBT 10,378 - - - - Provision for Bad Debts 54,603 327,517 34,325 - Provision for Obsolete and Slow Moving Stocks 78,929 (46,610) 78,929 - Provision for Price Variance 731,296 - 731,296 - Provision for others (14,682) (9,149) - - Provision for Defined Benefit Plans 20.1 598,216 127,817 522,220 87,257 Effect of change in share structure - (67,529) - - Transfers from Revenue Reserve 38,643 31,331 - - Amortization of Intangible Assets 17 - - Transfer to Exchange Equalization Reserve (5,439) - - - Operating Profit/(Loss) before Working Capital Changes 26,529,133 10,794,244 22,714,474 7,088,596
(Increase)/ Decrease in Inventories 13 (3,228,165) (2,272,803) (2,178,817) (2,236,677) (Increase)/ Decrease in Trade and Other Receivables 14 (54,860,272) 6,222,805 (53,372,739) 5,047,813 (Increase)/ Decrease in Amounts Due from Related Parties - 1,043,275 (604,472) (191,395) Increase/ (Decrease) in Trade and Other Payables 23 (7,399,012) 6,671,927 (6,456,144) 5,527,342 (Increase)/ Decrease in Amounts Due to Related Parties - (1,543,526) (394,303) 184,952 Cash Generated from Operations (38,958,316) 20,915,922 (40,292,001) 15,420,631
Finance Costs paid 5 (3,057,970) (3,376,128) (2,605,179) (3,073,437) Defined Benefit Plan Costs Paid 20.1 (329,169) (245,195) (318,727) (227,492) Income Tax Paid (311,636) (2,108,455) (34,185) (1,802,029) Net Cash From/(Used in) Operating Activities (42,657,091) 15,186,145 (43,250,092) 10,317,673
Cash Flows from / (Used in) Investing Activities Acquisition of Property, Plant & Equipment and Capital Work in Progress (52,777,774) (64,465,695) (52,372,340) (62,861,119) Investment in Ordinary Shares - (1,295,376) - - Dividend Received - 28,197 - - Investments made in Others 77,100 - - (6,000) Investment in Fixed Deposit/Treasury Bills (34,561) (3,168,477) - - Investments in Insurance reserves. 12 (404,150) (759,909) (404,150) (759,909) Withdrawals from insurance reserve 634,462 626,801 634,462 626,801 Sale Proceeds of Disposals 323,883 - 323,883 - Interest Received 4.2 881,300 1,142,499 431,713 740,043 Recoveries from Investments - 116,375 - - Net Cash Flows from/(Used in) Investing Activities (51,299,740) (67,775,585) (51,386,432) (62,260,184)
Cash Flows from/ (Used in) Financing Activities Proceeds From Contributed Capital 16 9,796,841 10,040,909 9,795,841 10,040,909 Repayment of Debentures (9,009) - - Repayment of Interest Bearing Loans & Borrowing 18 (5,275,276) (4,843,880) (4,711,400) (2,271,400) Repayment of preference Shares (15,033) (16,889) - - Consumer Contribution 21.1 7,792,813 6,960,824 7,437,138 6,667,899 Consumer Deposit 19 782,422 616,131 782,422 616,131 Proceeds From Interest Bearing Loans & Borrowing 18 82,268,817 37,503,749 82,268,817 35,111,336 Dividends Paid (186,207) (4,278) - - Net Cash Flows from/(Used in) Financing Activities 95,164,377 50,247,557 95,572,818 50,164,875 Net Increase/(Decrease) in Cash and Cash Equivalents 1,207,546 (2,341,883) 936,294 (1,777,636) Cash and Cash Equivalents at the beginning of the year (3,758,044) (1,416,161) (4,038,511) (2,260,875) Cash and Cash Equivalents at the end of the year (2,550,498) (3,758,044) (3,102,217) (4,038,511)
124 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
1.0 CORPORATE INFORMATION 1.1. General were authorized for issue in accordance with a Ceylon Electricity Board was incorporated under resolution of the Board of directors on 20th April Ceylon Electricity Board Act No.17 of 1969. The 2012. Head Office of the Board is situated at No.50, Sir Chittampalam A Gardiner Mawatha, Colombo 2.0 SUMMARY OF SIGNIFICANT 02. ACCOUNTING POLICIES 2.1 GENERAL POLICIES 1.2 Principal Activities and Nature of Operations Board 2.1.1 Basis of Preparation During the year, the principal activities of the The Balance Sheet, Statement of Income, Board were generation, procurement, effective Changes in Equity and Cash Flows, together with distribution and sale of electricity. the Accounting Policies and Notes ("Financial Statements") of the Board as at 31st December The principal activities of the Board's 2010 and for the year then ended, comply with Subsidiarieswere as follows. the Sri Lanka Accounting Standards.
Lanka Electricity Company (Pvt) Ltd These Financial Statements presented in Sri Lanka Purchasing electricity from Ceylon Electricity Rupee have been prepared on a historical cost Board and retailing to domestic and industrial basis except for the revaluation of certain customers through the company's branches Property, Plant and Equipment which are stated located at Galle,Kalutara, Moratuwa, Kelaniya, at market values. Nugegoda, Kotte and Negombo. 2.1.2 Statement of Compliance LTL Holdings (Pvt) Ltd The Balance Sheet, Statement of Income, Engaged in Investment Activities in group Changes in Equity and Cash Flows, together with companies as the implementation of the accounting policies and notes, (“Financial corporate business strategy. Statements”) of the Board as at 31 December 2010 and for the period then ended; comply with Lanka Coal Company (Pvt) Ltd the Sri Lanka Accounting Standards. Supplying of high quality, low sulphur coal for the power generation at Norochcholi Coal power 2.1.3 Consolidation Policy plant in Puttalam District. The Group Accounts comprise the consolidated Accounts of the Ceylon Electricity Board (CEB) 1.3 Number of Employees and the Subsidiaries, LTL Holdings (Pvt) Ltd. (LTL), The total number of employees of the board at Lanka Electricity Co.(Pvt) Ltd.,(LECO). Lanka Coal the end of the year was 15,366 (2009 – 15,140). Company (Pvt) Ltd. (LCC) and the subsidiaries of LTL Holdings (Pvt) Ltd. (LTL) and Lanka Electricity 1.4 Date of Authorization for Issue Co.(Pvt) Ltd.,(LECO). The Financial statements of the Ceylon Electricity Board, for the period ended 31 December 2010 The subsidiaries of LTL Holdings (Pvt) Ltd are LTL Transformers (Pvt) Ltd, LTL Galvanizers (Pvt) Ltd,
CEB Annual Report 2010 125 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Lakdhanavi Ltd ,Nividhu (Pvt) Ltd , LTL Energy The total profits and losses of the subsidiary (Pvt) Ltd , Nividhu Assupiniella (Pvt) Ltd and Lanka companies are included in the consolidated Industrial Products Engineering (Pvt) Ltd which Income Statements, and proportions of the profit are limited liability companies incorporated and or loss after taxation applicable to outside share domiciled in Sri Lanka and the registered offices holders, adjusted under the heading of Minority of these Companies are located at No.67, Park Interest in arriving at the profit or loss attributable Street Colombo 2. Bright International Power to the members of Ceylon Electricity Board. (Pvt) Ltd.is a fully owned subsidiary of Lakdanavi Limited having its registered office at 8 Pioneer All the assets and liabilities of the Board and its Sector 1, Singapore 628420. The principal place subsidiaries are included in the Group Balance of business of Lakdhanavi Limited and Lanka Sheet. The interest of the outside shareholders in Industrial products (Pvt) Ltd are situated at Lindel the net assets of the subsidiaries is shown Industrial Estate ,Sapugaskanda, LTL Energy (Pvt) separately in Consolidated Balance Sheet under Limited and Nividu (Pvt) Ltd at Belihul Oya, the heading of Minority Interest. Balangoda and Nividu Assupinieella (Pvt) Ltd at Aranayaka respectively. Inter group balances and transactions and any unrealized gains arising from inter group Heladhanavi limited is a joint venture between transactions, are eliminated in preparing the Lakdhanavi Limited and Hemas Power (Pvt) consolidated financial statements. Limited.The registered office of the Company is located at No 36,BristolStreet,Colombo 01 and 2.1.4 Comparative Information and Accounting the Principal place of business is situated at Hela Policies Estate, Puttalam. Comparative Information The subsidiaries of Lanka Electricity Co.(Pvt) Ltd The comparative information has been provided (LECO) are LECO Projects (Pvt) Ltd and Ante Leco and the accounting policies have been Metering Co.(Pvt) Ltd. The registered office of consistently applied and are consistent with those these companies are located at 411, E.H. Cooray used in the previous year. Certain Prior year Buildings, Galle Road, Colombo 03. figures and phrases have been rearranged wherever necessary to conform to the current The registered office of Lanka Coal Company year's presentation. (Pvt) Ltd is situated at 51/3, Dutugemunu street, Dehiwala. 2.2 Significant Accounting Assumptions Ceylon Electricity Board, Lanka Electricity Co.(Pvt) Assumptions Ltd. and Lanka Coal Co.(Pvt) Ltd. have a common The key assumptions concerning the future and financial year ending 31st December where as other key sources of estimation uncertainty at the the financial year of LTL Holdings (Pvt) Ltd. is 31st Balance Sheet date, that have a significant risk of March. However, the Financial Statements causing a material adjustment to the carrying certified by the Auditors of LTL Holdings (Pvt) Ltd. amounts of assets and liabilities within the next have been prepared solely to enable the Group to financial year are discussed below. The respective prepare Consolidated Financial Statements and carrying amounts of assets and liabilities are given not to report on LTL Holdings (Pvt) Ltd. in related notes to the financial statements.
126 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Defined Benefit Plans translated using the exchange rates as at the The defined Benefit Obligations and the related dates of the initial transactions. Non monetary charge for the year are determined using items measured at fair value in a foreign currency assumptions required under actuarial valuation are translated using the exchange rates at the techniques. The valuation involves making date when the fair value was determined. assumptions about discount rate, future salary increases, staff turnover rates etc. Due to the Procurements of LECO made under different long term nature of such obligations, these currencies for Projects under Asian Development estimates are subject to significant Bank Loan was converted to USD at the rate uncertainty. prevailing at the date of receiving supplies, and then converted to SLRs at the exchange rate 2.3 Summary of Significant Accounting Policies prevailing at the date of signing of the loan agreement between the Government of Sri Lanka 2.3.1 Foreign Currency Translation (GOSL) and LECO. Loans are repaid by LECO to GOSL at the exchange rate prevailing at the date Ceylon Electricity Board of signing the agreement. Exchange gains In terms of sub-section 6 of section 42 of the resulting from the above transactions were Ceylon Electricity Board Act No.17 of 1969,CEB transferred to a capital reserve in the previous does not take account of any profits or losses years. arising from foreign exchange fluctuations, in respect of the capital and interest on loans in Foreign exchange differences arising from other foreign currencies, as they are borne by the transactions in foreign currencies are recognised Government of Sri Lanka. The outstanding loans in the Income Statement. repayable are valued at the agreed exchange rate at the time of receipt of the loan by CEB. Foreign Currency Operations
LTL Holdings (Pvt) Ltd LTL Holdings (Pvt) Ltd. The Balance Sheet & Income Statements of Lanka Electricity Company (Pvt) Ltd. Overseas subsidiaries and Joint Ventures of LTL The financial statements are presented in Sri Holdings (pvt) Ltd which are deemed to be Lanka Rupees, which is the Company's' Foreign Operations are translated to Sri Lanka functional and presentation Currency. Rupees at the rate of exchange prevailing as at Transactions in foreign currencies are initially the Balance Sheet Date and at the average recorded at the functional currency rate ruling at annual rate of exchange for the period the date of the transaction. Monetary assets and respectively. liabilities denominated in foreign currencies are retranslated at the functional currency rate of The exchange difference arising on the translation exchange ruling at the Balance Sheet date. All are taken directly to a separate component of differences are taken to profit or loss. equity on disposal of a foreign entity, the differed cumulative amount recognized in equity relating Non monetary items that are measured in terms to that particular foreign operation is recognized of historical cost in a foreign currency are in the Income Statements.
CEB Annual Report 2010 127 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
2.3.2 Taxation 1978, the Company is exempted from tax for a period of 5 years starting from the year in which, a) Current Taxes the Company commences to make profits from The provision for income tax is based on the the business of Mini Hydro Electrical Energy elements of income and expenditure as reported Generation or any year of assessment not later in the financial statements and computed in than two years from the date of commencement accordance with the provisions of the Inland of commercial operations of the enterprise, Revenue Act except the following. whichever is earlier.
Lakdhanavi Ltd. Accordingly, due to the tax losses made during the The profit and income of the new undertaking years of 2005/2006 and 2006/2007, the Company commenced by the Company i.e. “The Project of is exempted from Income tax for a period of 5 Heavy Engineering Industry” is exempted from years from 2007/2008 to 2011/2012. income tax for a period of five years commencing from the year of assessment 2007/08 and ends After the expiration of the tax exemption period on 2011/2012 in terms of section 17(2)(b) of the the income of the enterprise shall be charged at Inland Revenue act No.10 of 2006 the rate of 10% for a period of 2 years.
The provision for income tax on income And after the expiration of the aforesaid generated from emergency power plant and concessionary tax rate, the profit and income of other income is computed in accordance with the enterprise shall for any year of assessment be the provision of the Inland Revenue Act. charged at the rate of 20%
Nividhu (Pvt) Ltd. However, other income of the company is liable for The provision for Income tax is based on the income tax in accordance with the provisions of elements of income and expenditure as reported the Inland Revenue Act. in the Financial Statements and computed in accordance with the provision of the Inland Heladhanavi Limited Revenue Act. Pursuant to agreement dated 28th August 2003, entered into with Board of Investment under The Company is engaged in generating electricity section 17 of the Board of Investment Law, the and supplying to the National Grid. However, in Company is exempted from tax for a period of 10 terms of section 21 A of the Inland Revenue years from the year in which the Company (Amendment) Act No.12 of 2004, the profit and commences to make profits or any year of income from industrial manufacturing carried out assessment not later than two years from the date by the company is exempted from Income tax for of commencement of commercial operations of a period of 5 years. the enterprise, whichever is earlier. Accordingly the company is exempted from Income tax from Nividhu Assupiniella (Pvt) Ltd. September 2004 to September 2014. Pursuant to agreement dated 11th September 2003, entered into with Board of Investment under After the expiration of the said, tax exemption Section 17 of the Board of Investment Law No.4 of period the income of the enterprise shall be
128 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
charged at the rate of 15%. However, other amendments thereto at the rate of 35% on its operating income of the company is liable for taxable income. income tax in accordance with the provision of the Inland Revenue Act. b) Deferred Taxation
Lanka Industrial Products Engineering (Pvt) LTL Holdings (Pvt) Ltd. Ltd. Lanka Electricity Co.(Pvt) Ltd. In accordance with the Section 21-A, of the Deferred Income tax is provided, using the liability Inland Revenue Act, for a period of five years method on temporary differences at the balance reckoned from the year of assessment in which sheet date between the tax bases of assets and the undertaking commences to make profits or liabilities and their carrying amounts for financial any year of assessment, not later than two years, reporting purposes. reckoned from the date on which the undertaking commences to carry on commercial Deferred Income tax liabilities are recognised for operations, which ever is earlier, the provision of all taxable temporary differences except where the Inland Revenue Act No.28 of 1979 relating to the deferred income tax liability arises from the the imposition of payments and recovery of initial recognition of an asset or liability in a Income tax in respect of the profits and income transaction that is not a business combination of the enterprise shall not be applied to the and, at the time of the transaction, affects profits and income of the enterprise. neither the accounting profit nor taxable profit or Accordingly, the company is exempted from the loss. Income tax from the year 2005/2006 to 2009/2010. Deferred tax assets are recognised for all deductible temporary differences, carry-forward After the expiration of the aforesaid period the of unused tax assets and unused tax losses, to provision of the Inland Revenue laws for the time the extent that it is probable that taxable profit being in force shall apply to the enterprise. will be available against which the deductible temporary differences and carry-forward unused Bright International Power (Pvt) Ltd. tax assets and unused tax losses can be utilized The provision for income tax is based on the except, where the deferred income tax assets elements of income and expenditure as reported relating to the deductible temporary differences in the financial statements and computed in arisen from the initial recognition of an asset or accordance with provisions of the Inland Revenue liability in a transaction that is not a business Act existing in Singapore. combination and, at the time of the transaction, affects neither the accounting profit nor taxable Lanka Coal Co.(Pvt) Ltd. profit or loss and the carrying amount of deferred The company is liable to pay Income tax in income tax assets is reviewed at each balance accordance with the provisions of the Inland sheet date and reduced by the extent that is no Revenue Act. Provision for taxation is based on longer probable that sufficient taxable profits will the profit for the year adjusted for taxation be available to allow all or part of the deferred purpose in accordance with the provisions of the asset to be utilised. Inland Revenue Act No. 10 of 2006 and the
CEB Annual Report 2010 129 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Deferred income tax assets and liabilities are can be sold in the ordinary course of business less measured at the rates that are expected to apply the estimated cost of completion and the to the year when the asset is realised or the estimated cost necessary to make the sale. liability is settled, based on tax rates (and tax laws) that have been enacted or substantively The cost incurred in bringing inventories to its enacted at the balance sheet date. present location and condition is accounted as follows except Goods in Transit which are valued Deferred Income tax relating to items recognized at actual cost. directly in equity is recognized in equity and not in the Income Statement. The Operational & Maintenance goods of LECO are valued at actual cost on a weighted average 2.3.3 Borrowing Costs basis Borrowing costs are recognized as an expense in the period in which they are incurred except to LTL Holdings (Pvt) Ltd the extent where borrowing costs that are directly attributable to the acquisition, construction, or Raw Materials are valued - at actual cost on first-in production of an asset that takes a substantial -out basis. period of time to get ready for its intended use or sale is capitalized as part of that asset. Finished goods & Work - at the cost of direct In-Progress materials, direct labour 2.4 VALUATION OF ASSETS AND THEIR and appropriate proportion MEASUREMENT BASES of fixed production overhead. 2.4.1 Inventories Consumables & Spares - at actual cost on first- Ceylon Electricity Board in-first-out basis. Inventories which are mostly used and listed in the annual price list are valued at Standard Prices 2.4.2 Trade and Other Receivables and others such as consumables and spares, at Trade receivables are stated at the amounts they the lower of cost and net realizable value. are estimated to realize net of provisions for bad and doubtful receivables. Other receivables and However, the CEB made provision for unrealized dues from Related Parties are recognized at cost profit of the inventories which are valued at less provision for bad and doubtful receivables. Standard Prices to enable to bring down the value to cost. The Board has applied the following method for calculating the bad and doubtful debts. LTL Holdings (Pvt) Ltd Lanka Electricity Co.(Pvt) Ltd. (1) 100%- finalized accounts and identified Inventories are valued at the lower of cost and customers as bad debts net realizable value, after making due allowances for obsolete and slow moving items. Net (2) 10% - Outstanding over 1-2 Years as bad realizable value is the price at which inventories debts
130 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
20%- Outstanding over 2-3 years as bad Lanka Electricity Company (Pvt) Ltd. debts All items of Property Plant & Equipment are 100%- Outstanding over 3 years as bad debts initially recorded at cost. Where items of Property, Plant and Equipment are subsequently (3) 5% - Outstanding over 6 months and revalued, the entire class of such assets is below one year as doubtful debts revalued. Revaluations are made with sufficient regularity to ensure that their carrying amounts 2.4.3 Cash and Cash Equivalents do not differ materially from their fair values at Cash and Cash equivalents are defined as cash in the Balance Sheet date. Subsequent to the initial hand, demand deposits and short-term highly recognition as an asset at cost, revalued Property, liquid investments, readily convertible to known Plant and Equipment are carried at revalued amounts of cash and subject to insignificant risk amounts less any subsequent depreciation of changes in value. thereon. All other Property, Plant and Equipment are stated at historical cost less depreciation. For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and As agreed with the Asian development Bank, the deposits in banks net of outstanding bank supply infrastructure assets of the Company are overdrafts. Investments with short maturities, i.e. revalued annually by applying the weighted three months or less from the date of acquisition average index base on the G-5 MUV index are also treated as cash equivalents. (published by World bank), in respect of imported assets and wholesale price index in respect of 2.4.4 Property, Plant and Equipment local components of the assets, commencing from the Financial Year Ended 31 December a) Cost & Valuation 1987. Assets originally taken over by LECO from Ceylon Electricity Board Local Councils/CEB have been valued at historical Property, Plant & Equipment is stated at cost or at cost up to and including financial year 1992 and revaluation less accumulated depreciation. re-valued thereafter. The surplus on revaluation is being credited to a capital reserve. Further, the Property, Plant & equipment of CEB is re-valued related increases in the brought forward balance annually on the basis of the arithmetical simple of the accumulated depreciation is adjusted to average of the changes in the Wholesale Price reflect the new values. Index, import value Index and Gross National product ratio for the year. The surplus or deficit When an asset is re-valued as described in the arising from such valuation is credited or debited paragraph above, any increase in the carrying to a Revaluation Reserve. amount is credited directly to a revaluation surplus unless it reverses a previous revaluation However due to the non significant impact of the decrease relating to the same asset. which was price indices in the year 2010, no revaluation has previously recognized as an expense. In these been done in the financial statements. circumstances the increase is recognized as income to the extent of the previous write down. When an asset's carrying amount is decreased as a result of revaluation, the decrease is recognized
CEB Annual Report 2010 131 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
as an expense unless it reverses a previous being re-valued at each reporting date in terms of increment relating to that asset, in which case it the indices originated by the Central Bank of Sri is charged against any related revaluation surplus, Lanka. Further an Insurance Escrow Account has to the extent that the decrease does not exceed been set up and 0.1 percent of the total value of the amount held in the revaluation surplus in the assets is transferred every year to the respect of that same asset. Any balance Insurance Escrow Account to make good of any remaining in the revaluation surplus in respect of losses of fixed assets. an asset, is transferred directly to retained earnings on retirement or disposal of the asset. The subsidiary companies assesses at each reporting date whether there is an indication that LTL Holdings Co.(Pvt) Ltd an asset may be impaired. If any such indication Property, Plant & Equipment is stated at cost, exists, or when annual impairment testing for an excluding the costs of day to day servicing, less asset is required, the companies make an accumulated depreciation and accumulated estimate of the asset's recoverable amount. An impairment in value. Such cost includes the cost asset's recoverable amount is the higher of an of replacing part of the plant and equipment asset's or cash-generating unit's fair value less when that cost is incurred, if the recognition costs to sell and its value in use and is determined criteria are met. for an individual asset, unless the asset does not generate cash inflows that are largely b) De-recognition independent of those from other assets or groups An Item of Property, Plant & Equipment is de- of assets. Where the carrying amount of an asset recognised upon disposal or when no future exceeds its recoverable amount, the asset is economic benefits are expected from its use or considered impaired and is written down to its disposal. Any gain or loss arising on de- recoverable amount. In assessing value in use, recognition of the asset (calculated as the the estimated future cash flows are discounted to difference between the net disposal proceeds and their present value using a pre-tax discount rate the carrying amount of the asset) is included in that reflects current market assessment of the the Income Statement in the year the asset is de- time value of money and the risks specific to the recognised. asset.
c) Restoration Cost Impairment losses of continuing operations are Expenditure incurred on repair or maintenance of recognized in the income statement in those Property, Plant & Equipment in order to restore or expense categories consistent with the function maintain the future economic benefits expected of the impaired asset, except for property from originally assessed standard of performance previously devalued where the revaluation was is recognised as an expense when incurred. taken to equity. In this case the impairment is also recognized in equity up to the amount of d) Impairment of Assets any previous revaluation. The Ceylon Electricity Board has set up Asset Management Units for condition monitoring of For assets, an assessment is made at each Assets of Generators, Transformers etc. which are reporting date as to whether there is any of highly technical nature and all the assets are indication that previously recognized impairment
132 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
losses may no longer exist or may have Distribution Lines: decreased. If such indication exists, the HT Underground-33 50 Years Companies make an estimate of recoverable HT Underground-132 50 Years amount. A previously recognized impairment loss HT Underground-11 40 Years is reversed only if there has been a change in the HT Overhead 35 Years estimates used to determine the asset's LT Underground 40 Years recoverable amount since the last impairment loss LT Overhead 35Years was recognized. If that is the case the carrying LT Feeder Pillar 35 Years amount of the asset is increased to its recoverable Consumer Substation 35 Years amount. That increased amount cannot exceed HT Switchgear 35 Years the carrying amount that would have been Primary & Grid Substation 35 Years determined, net of depreciation, had no Service Main 35 Years impairment loss been recognised for the asset in SCADA (Central facilities) & prior years. Such reversal is recognised in the communications equipment 15 Years income statement unless the asset is carried at Vehicles 07 Years devalued amount, in which case the reversal is Motor Boats 07 Years treated as a revaluation increase. Machinery and Tools 05 Years Office Equipment 05 Years e) Depreciation Furniture & Fittings 05 Years Depreciation is calculated on a straight line basis over the useful life of the assets, other than free LTL Holdings (Pvt) Ltd hold land in order to write off such amount over Buildings over 10 - 50 years the estimated useful lives. Buildings on leasehold Plant & Machinery over 05 - 15years lands are depreciated over the shorter of the Factory Equipment over 04 years estimated useful lives of the assets and the lease I ntercom Equipment over 04 years term. Fire Fighting Equipment over 04 years Office Equipment over 10 years The useful lives of the assets are estimated as follows. Furniture and Fittings over 03 - 10 years Motor Vehicle over 04 years Ceylon Electricity Board Heat Recovery Unit over 06 years Freehold Buildings & Lease hold Computer Software over 03 years Land & Buildings 40 Years Rotable Spare Parts over 03 years Civil Works: Spillways& Dams 100 Years Lanka Electricity Co.(Pvt) Ltd. Steel water pipes & pen stock 40 Years Buildings 40 years Substation & Switch Yard 35 Years Leasehold Land period over lease period Generation Plants: Supply of Infrastructure Power Stations including Plant (Hydro) 35 Years Substations, Overhead lines & Power Stations including Plant (Thermal) 25 Years Service Lines taken over from Power Stations including Plant (Diesel) 15 Years Local Authorities & CEB 10 years Power Stations including Plant (GasTurbine) 12Years Substations, Overhead lines & Service Transmission Lines at 220Kv, 132Kv and66Kv 35 Years Lines Constructed by LECO 20 – 25 years
CEB Annual Report 2010 133 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Motor Vehicles 7 years determined for each investment individually. Computers 5 years These reductions for other than temporary Office Equipments 7 years declines in carrying amounts are charged to Income Statement. Lanka Coal Co.(Pvt) Ltd. Furniture & Fittings 5 years Current Investments Equipments 4 years Current investments are stated at lower of cost or Motor Vehicles 4 years market value, carrying amount is determined on an aggregate portfolio basis in total.
The Board makes a full provision in the year of Carrying amount of the Current Investment of sales and none in the year of purchase. Lanka Electricity Company (Pvt) Ltd is determined on the basis of individual Investment. LTL Holdings (pvt) Ltd depreciates their assets on Straight Line basis over the useful lives of the Unrealized gains and losses on current assets when the assets are available for use. investments are carried at market value, i.e. Buildings on leased hold lands are depreciated reduction to market value and reversals of such over the shorter of the estimated useful lives of reductions required to reflect current investments the assets and lease term. at the lower of cost and market value, are credited or charged to the income statement. Lanka Electricity Company (Pvt) Ltd reviews and adjusts the methods of depreciation appropriately Marketable Securities of LTL Holdings(Pvt) Ltd are at the end of each financial year in terms of the stated at market value and Gain or Loss are dealt residual values and useful lives of the assets. with through the Income Statement. Investments in Treasury Bills are carried at the market value in Lanka Coal Company (Pvt) Ltd provides the Balance Sheet and any Gains or Losses are depreciation from the date, the assets are dealt with through the Income Statement. available for use up to the date of disposal, at the rates specified above on Straight Line basis over Disposal of Investment the periods appropriate to the estimated useful On disposal of an investment, the difference lives of the different types of the assets. between net disposal proceeds and the carrying amount is recognized as income or expense. 2.4.5 Investments 2.4.6 Leases Long Term Investments Long Term Investments are stated at cost. The Operating Leases cost of the investment is the cost of acquisition Lease where the lessor effectively retains inclusive of brokerage fees, duties and bank fees. substantially all the risks and benefits of ownership over the lease term are classified as The carrying amounts of Long term investments operating leases. are reduced to recognize a decline other than temporary in the value of investments, Rental paid under operating lease are recognized
134 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
as an expense in the income statements on a where appropriate, the risks specific to the straight line basis over the lease term. liability, Where discounting is used, the increase in the provision due to the passage of time is Finance Leases recognized as an interest expense. Finance Leases, which transfer to the Board substantially all the risks and benefits incidental 2.5.2 Retirement Benefit Obligations to ownership of the leased item, are capitalized at the inception of the lease at the fair value of a) Defined Benefit Plan – Gratuity the leased property or , if lower, at the present value of the minimum lease payments. Lease The Board payments are apportioned between the finance Gratuity provision up to 31.12.2010 has been lease charges and reduction of the leased liability provided as per Sri Lanka Accounting Standards so as to achieve a constant rate of interest on the 16. remaining balance of the liability. Finance charges are charged and reflected in the Income For defined benefit plans the costs are assessed Statement. using the projected unit credit method. Under this method the cost of providing retirement Capitalized leased assets are depreciated over the benefit obligations are charged to the income shorter of the estimated useful life of the asset statement so as to spread the regular cost over and the lease term, if there is no reasonable the service life of employees in accordance with certainty that the Board will obtain ownership by the recommendations of qualified actuaries who the end of the lease term. The depreciation policy carry out a full valuation of the plans every three for depreciable leased assets is consistent with years. This obligation is measured atthe present that for depreciable assets which are owned as value of the estimated future cash outflows using described in 2.3.4 (b) the interest rate of 11%.All actuarial gains / losses are spread forward over the average 2.5 LIABILITIES AND PROVISIONS remaining service lives of employees.
2.5.1 Provisions LTL Holdings (Pvt) Ltd. Provisions are recognized when the Group has a Gratuity is a defined benefit plan. The group present obligations (legal or constructive) as a measures the present value of the promised result of a past event, where it is probable retirement benefits for gratuity, which is a that an outflow of resources embodying defined benefit plan using Gratuity Formula in economic, benefits will be required to settle the Appendix E of SLAS 16. Employee benefits obligation and a reliable estimate can be made of (Revised 2006) which is based on Projected Unit the amount of the obligation. Credit (PUC) method as discussed in the said standard. Although actuarial assumptions are If the effect of the time value of money is used therein, it should not be treated as a material, provisions are determined by substitute to an Actuarial Valuation. discounting the expected future cash flows at a pre-tax rate that reflects current market Actuarial gains and losses are recognized as assessments of the time value of money and, income or expense in the year in which it arose
CEB Annual Report 2010 135 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
itself. The gratuity liability is not funded or actuaries. The Pension Fund has been actuarially actuarial valued. valued in December 2009. CEB's contribution to the Pension Fund is charged to the income Lanka Electricity Company (Pvt) Ltd. statement in the year to which it relates. The company measures the present value of the promised retirement benefits of gratuity which is 2.5.3 Self Insurance Reserve a defined benefit plan with the advice of an CEB transfers to a self Insurance Reserve each actuary every year using projected benefits year, at the rate of 0.1% of the gross re-valued valuation method. Actuarial gains and losses are fixed assets at the end of the year. recognised as income or expenses over the expected average remaining working lives of the Losses and damages to Property, Plant and participants of the plan. Equipment of CEB are charged to this Insurance reserve. The funds for this purpose are met from b) Defined Contribution Plans - Employees' the moniesinvested in a separate account at a Provident Fund & Employees' Trust Fund Bank.
Ceylon Electricity Board 2.6 DEFERRED INCOME Lanka Electricity Company (Pvt) Ltd. Employees are eligible for Employees' Provident a) Consumer Contribution Fund Contribution and Employees’ Trust Fund Contributions in line with the respective Statutes The Board and Regulations. The Board/Company Consumer contributions for new service contributes 15% and 3% of gross emoluments of connections of CEB were treated as a Capital employees to Employees' Provident Fund and Reserve from 1996. The contributions of CEB are Employees' Trust Fund respectively. deferred and amortized to the income statement over 35 years being the period over which the LTL Holdings (Pvt) Ltd. related assets are depreciated. Employees are eligible for Employees' Provident Fund Contributions and Employees' Trust Fund Lanka Electricity Co. (Pvt) Ltd. Contributions in line with the respective Statutes Contributions from consumers to defray the cost and Regulations. The Company contributes 12% of assets installed to establish new service and 3% of gross emoluments of employees to connections are recognised as deferred Employees' Provident Fund and Employees' Trust obligations. The new service connection assets Fund respectively. are depreciated over a period of 20 years. The corresponding consumer contributions are c) Ceylon Electricity Board amortised to the Income Statement over a similar period of 20 years up to 31st December 2008. Pension Fund Commencing from 1st January 2009, receipt of The investments of the Pension Fund are held in Consumer Contribution is amortized over a a separate fund. The Defined Benefit Plans are period of 8 years, and receipt of Consumer funded by CEB taking into account the Contribution before 31st December 2008 is recommendations of independent qualified amortised over 20 years.
136 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
b) Government Grants b) Interest • Government Grant received for acquisition of Plant & Machinery are treated as equity. Interest Income is recognized as the interest accrues unless collectibility is in doubt. • Government grant in note 21.2 represent the value of Grid substation and Transmission lines c) Dividends located at Seethawaka Industrial Park received from the Ministry of Industrial development Dividend Income recognised when the which is to be amortised over 35 years based on shareholders' right to receive the payment is the income approach. established
2.7 INCOME STATEMENT d) Others
2.7.1 Revenue Recognition Other income is recognised on an accrual basis. Net gains and losses of a revenue nature on the Revenue is recognised to the extent that it is disposal of property, plant & equipment and probable that the economic benefits will flow to other non current assets including investments the group and the revenue and associated costs have been accounted for in the Income incurred or to be incurred can be reliably Statement, having deducted from proceeds on measured. Revenue is measured at the fair value disposal, the carrying amount of the assets and of the consideration received or receivable net of related selling expenses. On disposal of re-valued trade discounts and sales taxes. property, plant & equipment, the amount remaining in Revaluation Reserve relating to that Revenue from construction contract received by asset is transferred directly to Accumulated Profit LTL Holdings (Pvt) Ltd is recognized on the Gains and losses arising from incidental activities percentage of completion method, measured by to main revenue generating activities and those reference to the construction cost incurred to arising from a group of similar transactions which date to estimated total construction cost for each are not material, are aggregated, reported and contract. presented on a net basis.
The following specific criteria are used for the 2.7.2 Expenditure Recognition purpose of recognition of revenue. a) Expenses are recognized in the Income Statement on the basis of a direct association between, the a) Rendering of Services cost incurred and the earning of specific items of income, all expenditure incurred in the running of Revenue from sale of goods is recognised when the business and in maintaining the property, the significant risks and rewards of ownership of plant & equipment in a state of efficiency has the goods have passed to buyer: with the Group been charged to income in arriving at the profit/ retaining neither continuing managerial (loss) for the year. involvement to the degree usually associated with ownership, nor effective control over the goods b) For the purpose of presentation of Income sold. Statement the directors are of the opinion that
CEB Annual Report 2010 137 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
function of expenses method present fairly the element of the company's performance and hence such presentation method is adopted.
2.7.3 Effect of Sri Lanka Accounting Standards issued but not yet effective: a) The following standards have been issued by the institute of Chartered accountants of Sri Lanka.
- Sri Lanka Accounting Standard 44 financial instruments; presentation ( SLAS 44)
- Sri Lanka Accounting Standard 45financial instruments; Recognition and Measurement ( SLAS 45)
- Sri Lanka Accounting Standard 39 Share based payments (SLAS 39)
The effective date of SLAS 44, 45 and 39 was changed during the year to be effective for financial periods beginning on or after 01 January 2012.These three standards have been amended and forms a part of the new set of financial reporting standards mentioned under note (b) below.
b) Following the convergence of Sri Lanka Accounting Standards with the International Financial Reporting Standards, the council of the Institute of Chartered Accountants of Sri Lanka has adopted a new set of financial reporting standards that would apply for financial periods beginning on or after 01 January 2012. The application of these financial reporting standards is substantially different to the prevailing standards.
138 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. ‘000 Rs. '000 3. REVENUE 3.1 Summary Sales 130,456,697 121,619,428 121,862,319 110,518,394 Less: Sales Taxes: - - - - Revenue 130,456,697 121,619,428 121,862,319 110,518,394
3.2 Segment Information Group Board 2010 2009 2010 2009 3.2.1 Segmental revenue-Customer basis Rs. '000 Rs. '000 Rs. '000 Rs. '000 Domestic 37,504,184 33,069,294 32,238,723 28,135,468 Industrial & Hotels 38,247,426 34,155,403 35,078,228 31,182,995 Religious purpose 504,956 462,704 429,132 388,853 Commercial 5,302,446 4,846,785 - - Street lighting 2,871,389 2,891,863 2,672,816 . 2,673,217 LECO - - 14,821,704 13,956,365 General purpose 36,621,716 34,201,735 36,621,716 34,181,496 Others 2,620,020 - - - 123,672,137 109,627,784 121,862,319 110,518,394 3.2.2 Segmental revenue- Manufacture of Transformers 1,842,831 1,440,464 - - Galvanizing Operation 683,197 576,041 - - Supply Of Electricity - 2,944,852 - - Setting Up of 300MW CC Power Plant 2,763,881 4,844,656 - - Technical & Engineering Services for the Power Plant 1,329,592 1,342,146 - - Energy saving 1,503 8,709 - - Others 163,556 834,777 - - 6,784,560 11,991,645 130,456,697 121,619,429 121,862,319 110,518,394
4.1 OTHER OPERATING INCOME Group Board 2010 2009 2010 2009 Interest Income Receivable from Rs. '000 Rs. '000 Rs. '000 Rs. '000 Staff Loans 159,242 247,552 138,326 235,992 Others 42,171 40,484 - - Total Interest 201,413 288,036 138,326 235,992
Income on Foreign Investment 43,167 285,183 - - Surcharge Income 22,067 468,212 22,067 468,212 Recoveries from Consumers 229,688 146,865 - - Profit Loss on Disposal of Property Plant and Equipment 103,837 41,085 103,837 38,229 Deferred Income Consumer Contribution 1,885,012 1,632,501 1,632,276 1,419,841 Miscellaneous Income 1,058,121 1,270,545 982,742 1,164,592 Government Department income 175,652 78,098 175,652 78,098 Rent 8,069 7,048 8,069 7,048 Fines - 6 - 6 3,727,025 4,217,579 3,062,969 3,412,018 4.2 FINANCE INCOME Group Board 2010 2009 2010 2009 Interest Income Receivable from Rs. ‘000 Rs. '000 Rs. '000 Rs. '000 Fixed Deposits &Treasury Bills 881,300 1,142,499 431,713 734,825 Dividend Income - 28,197 126,000 125,975 881,300 1,170,696 557,713 860,800
CEB Annual Report 2010 139 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
Group Board 5. FINANCE COST 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Interest Expense on Overdrafts and Bank Loan term loans 2,786,770 2,200,417 2,293,791 1,786,867 Penal interest on delayed power purchase payment 226,985 1,175,706 267,172 1,286,570 Exchange Loss 44,216 - 44,216 - Debenture Interest - 5 - - 3,057,971 3,376,128 2,605,179 3,073,437
6. PROFIT/(LOSS) BEFORE TAX Stated after Charging /(Crediting) Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Auditors' Remuneration - Current Year Fees and Expenses 8,355 4,788 4,045 2,347 Director's Emoluments 2,463 1,988 1,132 930 Depreciation 17,376,078 16,450,875 16,064,035 15,478,523 Personnel Costs Includes - Defined Benefit Plan Costs -Gratuity 598,229 123,343 522,220 87,257 - Defined Contribution Plan Costs - EPF & ETF 1,140,258 920,439 1,029,906 818,252 - Other Staff Costs 11,104,304 9,037,376 10,687,501 8,615,290 (Profit)/Loss on Disposal of Property, Plant and Equipment (106,259) (56,366) (103,837) (38,229) Consumer Contribution (1,885,012) (1,632,501) (1,632,276) (1,419,841) Government Grant (12,391) (12,391) (12,391) (12,391)
7. INCOME TAX EXPENSE Group Board
2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Current Income Tax Current Tax Expense on Ordinary Activities for the Year 4,980,513 1,039,553 4,500,000 400,000 Tax payment for previous years - 1,836,215 - 1,836,215 Under/(Over) Provision of current taxes in respect of prior years (374,745) 2,784 - - Social responsibility levy 1,167 1,833 - - Deferred Taxation Charge/(Reversal) 324,246 172,339 - - 4,931,181 3,052,724 4,500,000 2,236,215
140 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
8. PROPERTY, PLANT & EQUIPMENT The Group 8.1 Gross Carrying Amounts At Cost or Valuation Balance Additions Increase Disposals/ Adjustments Balance As at /Transfers /(Decrease) in Transfers As at 01.01.2010 /Acquisitions Revaluation 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Freehold Land and Buildings 23,743,844 2,022,622 (1,918,716) (157,211) (1,484,565) 22,205,975 Lease hold lands 7,065 - - - - 7,065 Civil Works 140,925,448 - - - - 140,925,448 Plant and Machinery 164,317,624 119,697 - (4,157,025) - 160,280,296 Transmission and Distribution Lines 337,080,292 21,848,182 8,433 (655,016) (722,756) 357,559,135 Motor Vehicles 6,289,378 1,199,449 (813,597) (175,741) (1,396) 6,498,093 Other supply infrastructure 14,725,499 390,658 - (19,729) - 15,096,428 Office and Other Equipment 1,811,168 394,890 (234,115) (5,240) (6,885) 1,959,818 Furniture and Fittings 61,429 20,731 (4,227) (197) (1,003) 76,733 Machinery and Tools 120,813 1,095,944 (3,551) - (43) 1,213,163 Total Value of Depreciable Assets 689,082,560 27,092,174 (2,965,773) (5,170,159) (2,216,648) 705,822,153
8.2 In the Course of Construction Balance Incurred During Reclassified/ Disposals/ Adjustments Balance As at the year Transfered Written Off As at 01.01.2010 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Capital Work In Progress (8.5) 84,472,165 56,704,153 (27,407,725) - - 113,768,593
Total Gross Carrying Amount 84,472,165 56,704,153 (27,407,725) - - 113,768,593
8.3Depreciation At Cost or Valuation Balance Charge for Transfers to Disposals/ Adjustments Balance As at the year Revaluation Transfers As at 01.01.2010 Reserve Discontinued 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Freehold Land & Buildings 3,346,123 288,121 (25,437) (58,408) 58,406 3,608,805 Lease hold land 3,801 183 - - - 3,984 Civil Works 33,561,111 1,487,163 - - - 35,048,274 Plant and Machinery 111,840,940 5,418,016 - (4,157,025) 1,731 113,103,662 Transmission and Distribution Lines 141,743,729 8,766,157 139 (307,331) - 150,202,694 Motor Vehicles 3,843,327 378,490 (93,740) (106,938) 81,992 4,103,131 Other supply infrastructure 8,485,882 596,239 - (11,766) - 9,070,355 Office and Other Equipment 1,300,869 138,753 (108,562) (3,682) 483 1,327,861 Furniture and Fittings 25,494 5,095 (224) (79) 88 30,374 Machinery and Tools 25,509 342,323 (475) - 171 367,528 Total Depreciation 304,176,785 17,420,540 (228,299) (4,645,229) 142,871 316,866,668
8.4 Net Book Values 2010 2009 Rs. '000 Rs. '000 At Cost or Valuation 502,724,078 469,378,970 Less : Provision for Damaged Assets - - Total Carrying Amount of Property, Plant & Equipment 502,724,078 469,378,970
CEB Annual Report 2010 141 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
9 PROPERTY, PLANT & EQUIPMENT The Board 9.1 Gross Carrying Amounts At Cost or Valuation Balance Additions Increase Disposals/ Adjustments Balance As at /Transfers /(Decrease) in Transfers As at 01.01.2010 /Acquisitions Revaluation 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Freehold Land 13,371,018 77,034 (1,918,716) - (1,484,565) 10,044,771 Buildings 8,296,746 1,919,590 - (157,211) - 10,059,125 Civil Works 140,925,448 - - - - 140,925,448 Plant and Machinery 160,299,788 101,291 - (4,156,950) - 156,244,129 Transmission and Distribution Lines 337,080,292 21,848,182 8,433 (655,016) (722,756) 357,559,135 Motor Vehicles 5,376,101 1,108,721 (813,597) (171,340) (1,396) 5,498,489 Office and Other Equipment 1,275,368 371,044 (234,115) (4,703) (834) 1,406,760 Furniture and Fittings 28,665 31,114 (4,227) (197) (1,003) 54,352 Machinery and Tools 120,813 211,465 (3,551) - (43) 328,684 Total Value of Depreciable Assets 666,774,239 25,668,441 (2,965,773) (5,145,417) (2,210,597) 682,120,893 9.1.1 Project Assets Gross Carrying Amounts Balance Additions Increase Disposals/ Adjustments Balance At Cost or Valuation As at /Transfers /(Decrease) in Transfers As at 01.01.2010 /Acquisitions Revaluation 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Land ------Buildings 7,977 - - - - 7,977 Civil Works ------Plant and Machinery ------Transmission and Distribution Lines ------Motor Vehicles 317,138 66,617 - - - 383,755 Office and Other Equipment 30,111 6,738 - - (6,051) 30,798 Furniture and Fittings 25,401 (10,491) - - - 14,910 Machinery and Tools ------Total Value of Depreciable Assets 380,627 62,864 - - (6,051) 437,440
9.1.2 Leasehold Assets Balance Additions Increase Disposals/ Adjustments Revaluation As at /Transfers /(Decrease) in Transfers As at 01.01.2010 /Acquisitions Revaluation 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. ‘000 Rs. '000
Motor Vehicles 14,953 15,519 - - - 30,472 14,953 15,519 - - - 30,472 Total Value Of Depreciable Assets 667,169,819 25,746,824 (2,965,773) (5,145,417) (2,216,648) 682,588,805
9.2 In the Course of Construction Balance Incurred During Reclassified/ Disposals/ Adjustments Balance As at the Year Transfered Written Off As at 01.01.2010 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Capital Work In Progress 84,059,471 56,346,900 (27,013,618) - - 113,392,753
Total Gross Carrying Amount 84,059,471 56,346,900 (27,013,618) - - 113,392,753
142 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
9.3 Depreciation At Cost or Valuation Balance Charge for Transfers to Disposals/ Adjustments Balance As at the year Revaluation Transfers As at 01.01.2010 Reserve Discontinued 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Freehold Land 295,142 23,210 - - 24,918 343,270 Buildings 2,896,463 236,798 (25,437) (58,408) 33,488 3,082,904 Civil Works 33,561,111 1,487,163 - - - 35,048,274 Plant and Machinery 110,029,777 5,120,814 - (4,156,950) 1,731 110,995,372 Transmission and Distribution Lines 141,743,729 8,766,157 139 (307,331) - 150,202,694 Motor Vehicles 3,344,286 270,847 (93,740) (102,537) 81,992 3,500,848 Office and Other Equipment 862,463 102,864 (108,540) (3,145) 483 854,125 Furniture & Fittings 7,722 8,685 (224) (79) 88 16,192 Machinery and Tools 25,509 47,497 (475) - 171 72,702 Total Depreciation 292,766,202 16,064,035 (228,277) (4,628,450) 142,871 304,116,381
Project Assets At Cost or Valuation Balance Charge to WIP/ Transfers to Disposals/ Adjustments Balance As at Transferes Revaluation Transfers As at 01.01.2010 Reserve Discontinued 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Freehold Land Buildings ------Civil Works ------Plant and Machinery ------Transmission and Distribution Lines ------Motor Vehicles 192,163 42,537 - - - 234,700 Office and Other Equipment 13,383 6,476 - - - 19,859 Furniture and Fittings 13,366 (4,551) - - - 8,815 Machinery and Tools ------Total Value of Depreciable Assets 218,912 44,462 - - - 263,374
Leasehold Assets Balance Additions Increase Disposals/ Adjustments Balance As at /Transfers /(Decrease) in Transfers As at 01.01.2010 /Acquisitions Revaluation 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Motor Vehicles 2,136 - - - - 2,136 2,136 - - - - 2,136 Total Depreciation 292,987,250 16,108,497 (228,277) (4,628,450) 142,871 304,381,891
2010 2009 9.4 Net Book Values Rs. '000 Rs. '000 At Cost or Valuation Less : Provision for Damaged Assets - - Total Carrying Amount of Property, Plant & Equipment 491,599,667 458,242,041
CEB Annual Report 2010 143 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
9 PROPERTY, PLANT & EQUIPMENT (Contd…)
9.5 Capital Work in Progress as at 31 December 2010 Represents the following: Group Board Projects 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000
Transmission Projects 2,149,688 6,966,569 2,149,688 6,966,569
Distribution Group Projects 14,948,632 16,428,057 14,948,632 16,428,057
Upper Kothmale Hydro Power Project 26,400,688 22,159,080 26,400,688 22,159,080
Coal Power Project 54,822,695 38,101,109 54,822,695 38,101,109
Others 15,071,051 404,656 15,071,051 404,656
Work in Progress -LECO 358,185 409,245 - -
Work in Progress -LTL 17,655 3,449 - - 113,768,594 84,472,165 113,392,754 84,059,471
144 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
9 PROPERTY, PLANT & EQUIPMENT The company's Property Plant & Equipment includes fully depreciated assets having a Gross 9.1 Ceylon Electricity Board carrying amount of Rs.754.268 Mn. (2009 – Rs.431.577 Mn) As explained in the accounting policies, Property, Plant & Equipment of CEB are re-valued each year 9.3 LTL Holdings (Pvt) Ltd. using indices that reflect price changes due to The fair value of buildings at Angulana of LTL inflation. The Property, Plant & Equipment of the Holdings (Pvt) Ltd were determined by means of a Generation Division and Distribution Divisions revaluation during the financial year 1989/90 by were re-valued by the Development Finance M/s. Engineering Consultants Ltd an independent Corporation (DFCC Bank) in 1996 and 1997 valuer. The results of such revaluation were respectively in accordance with the management incorporated in these Financial Statements from policy to obtain an independent professional its effective date which is 31 March 1990. Such valuation of all Property Plant & Equipment. assets were valued on an open market value for existing use basis. The surplus arising from the The carrying amount of re-valued assets that revaluation was transferred to a revaluation would have been included in the Financial reserve. Statements had the assets been carried at cost less depreciation cannot be disclosed due to The carrying amount of revalued assets that unavailability of information. would have been included in these Financial Statements had the assets been carried at cost Property Plant & Equipment includes fully less depreciation is as follows. depreciated assets having a Gross carrying amount of Rs.68,828,844,176 (2009-Rs. Cumulative Depreciation Net carrying Net carrying 67,433,428,137) If assets were Amount Amount Class of assets C o s t carried at cost 2010 2009 Rs . R s . R s . R s. 9.2 Lanka Electricity Co.(Pvt) Ltd. Buildings 1 2 , 3 2 5 ,000 6 , 332,007 5,992,993 6 , 2 39,493 The fair value of land and buildings was last determined by means of a revaluation during the During th-e period, the company acquired financial year 31 December 2006 by M/s. K.T.D. Property, Plant & Equipment to the aggregate Tissera, P.B.D. Edirisinghe, P.T. Mohideen and value of Rs. 54,661,912 of which cash payments S.A.S. Fernando, independent valuers in reference amounting to Rs. 54,661,912 were made during to market based evidence. The results of such the period for purchase of Property, Plant & revaluation was incorporated in these Financial Equipment. Statements from its effective date which is 01 January 2007. The surplus arising from the Property, Plant & Equipment includes fully revaluation was transferred to a Revaluation depreciated assets having a gross carrying Reserve. amount of Rs.317,742,258 (2009 – Rs.317,742,258). During the financial year, the company acquired Property, Plant & Equipment to the aggregate value of Rs. 758.221 Mn (2009 – Rs. 1,206.651 Mn).
CEB Annual Report 2010 145 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
9.4 Leasehold Properties HT Switchgears 35 Years Primary & Grid Substations 35 Years Lanka Electricity Co.(Pvt) Ltd. Service Mains 35 Years The details of leasehold lands are as follows. SCADA (Central Facilities) & Communication Equipment } 15 Years Location Cost Lease Period Since Unexpired Lease Vehicles 07 Years R s ’ 0 0 0 period as at 31.12.2010 Peliyagoda 1,350 99 years 30/03/99 88 years Motor Boats 07 Years Udahamulla 1,667 99 years 12/01/88 77 years Machinery & Tools 05 Years Hikkaduwa 1,448 50 years 07/11/97 37 years Office Equipment 05 Years Ambalangoda 600 30 years 01/12/96 16 years Furniture & Fittings 05 Years LTL Holdings (Pvt) Ltd 9.5 The Group Buildings over 10 - 50 years During the period, the Group acquired Property, Plant & Machinery over 05 - 15 years Plant & Equipment to the aggregate value of Factory Equipment over 04 years Rs.83,796 Mn (2009 – Rs.81,923 Mn). Intercom Equipment over 04 years Fire Fighting Equipment over 04 years 9.6 The useful lives of the assets are Office Equipment over 10 years estimated as follows Furniture and Fittings over 03 - 10 years Motor Vehicle over 04 years Ceylon Electricity Board Heat Recovery Unit over 06 years Freehold Buildings 40 Years Computer Software over 03 years Lease hold Land & Buildings Over the lease period Rotable Spare Parts over 03 years Civil Works: Lanka Electricity Co.(Pvt) Ltd Spillways & Dams 100 Years Buildings 40 years Steel water pipes & pens stock 40 Years Leasehold Land over lease period Substation & Switch Yards 35 Years Supply of Infrastructure Generation Plants: Substations, Overhead lines Power Stations Including Plants (Hydro) 35 Years & Service Lines taken over Power Stations Including Plants (Thermal) 25 Years from Local Authorities & CEB } 10 years Power Stations including Plants (Diesel) 15 Years Substations, Overhead lines Power Stations including Plants (Gas Turbine) 12 Years & Service Lines Transmission Lines at 220kV,132kV, and 66kV 35 Years Constructed by LECO } 20 – 25 years Distribution Lines: HT Underground-33 50 Years Motor Vehicles 7 years HT Underground-132 50 Years Computers 5 years HT Underground-11 40 Years Office Equipments 7 years HT Overhead 35 Years LT Underground 40 Years Lanka Coal Co.(Pvt) Ltd. LT Overhead 35 Years Furniture & Fittings 5 years LT Feeder Pillers 35 Years Equipments 4 years Consumer Substations 35 Years Motor Vehicles 4 years
146 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
10. INVESTMENTS IN SUBSIDIARIES Group Board
Holding Cost Cost Cost Cost 2010 2009 2010 2009 Non-Quoted % Rs. '000 Rs. '000 Rs. '000 Rs. '000
Lanka Electricity Company (Pvt) Ltd 55.2% - - 628,002 628,002 LTL Holdings (Pvt) Ltd 63% - - 96,900 96,900 Lanka Coal Company(Pvt)Ltd 60% - - 12,000 12,000 Total Non-Quoted Investments in Subsidiaries - - 736,902 736,902
10.1 Details of those companies in which Ceylon Electricity Board ,held a controlling interest, directly or indirectly are set out below.
Name of Company Percentage of Share holding Description of business Subsidiaries
Group Company LTL Holdings (Pvt) Ltd 63 % 63 % Manufacture and sale of transformers. Lanka Electricity Company (Pvt) Ltd.(LECO) 55.2 % 55.2 % Sale of energy. Lanka Coal Company(Private)Ltl 60% 60% Coal Purchases for coal power Lakdhanavi (Pvt) Limited. 52 % Generation of power to the national grid. LTL Energy (Pvt) Ltd 63 % Providing Energy efficiency Improvement Services. Lanka Industrial Products Engineering 63% Engineering Services LTL Transformers (Pvt) Ltd 63% Manufacturing & Repair of transformers, manufacturing of Feeder Pillars LTL Galvanizers (Pvt) Ltd 63% Engage in Galvanizing Operations LECO Projects ( Pvt) Ltd 55% Providing Infrastructure Facilities for electricity distribution. Bright International Power (Pvt) Ltd 51.7% Power plant Operation and supply
10.2 All of these companies were incorporated in Sri Lanka except the Bright International Power (Pvt) Ltd.
11. OTHER INVESTMENTS Group Board
2010 2009 2010 2009 Summary Rs. '000 Rs. '000 Rs. '000 Rs. '000 Non Current Investments in equity securities -non current 2,525,000 2,525,000 - - Term Deposits 1,170,321 1,163,315 - - Treasury Bonds 119,193 174,171 - - 3,814,514 3,862,486
Current Investments in Equity Securities 129 1,162 - - Investments in REPO & Commercial Papers 1,210,073 180,291 - - Investments in FD & Call Deposit 5,712,563 6,727,941 - - Investments in bank for Loans given to staff 482,086 405,458 - - 7,404,851 7,314,852
CEB Annual Report 2010 147 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
12. INVESTMENT OF INSURANCE RESERVE Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000
At the beginning of the year 3,940,796 3,807,688 3,940,796 3,807,688 Investments made during the year 404,151 759,909 404,151 759,909 Withdrawals During the year (634,462) (626,801) (634,462) (626,801) 3,710,485 3,940,796 3,710,485 3,940,796
13. INVENTORIES Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Raw materials 516,648 484,293 - - Finished Goods 56,214 834,188 - - Consumables & Spares 17,145,716 13,526,328 15,768,635 13,425,660 Fuel 2,090,408 2,534,857 2,090,408 2,534,857 Goods in Transit 431,929 162,976 417,835 137,544 Lees: Provision for Obsolete & Unserviceable Stock (1,623,753) (813,528) (1,607,710) (797,485) 18,617,162 16,729,114 16,669,168 15,300,576 Work in Progress 27,896 87,657 - - 18,645,058 16,816,771 16,669,168 15,300,576
14. TRADE AND OTHER RECEIVABLES Group Board Summary 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 14.1 Restated
Trade Debtors 13,745,499 15,204,627 11,030,866 12,606,599 Less: Provision for Doubtful Debts (2,915,139) (4,071,837) (2,164,397) (3,453,751) 10,830,360 11,132,790 8,866,469 9,152,848
Other Debtors 23,610,590 17,208,481 21,339,410 13,918,927 Advances and Prepayments 57,045,642 10,194,134 56,872,759 10,056,448 Less: Provision for Doubtful Debts (1,459,552) (135,873) (1,459,552) (135,873) Staff Debtors 4,003,152 3,312,795 3,690,470 2,986,830 Transit Account 2,272 (5,766) 2,272 (5,766) 94,032,465 41,706,561 89,311,828 35,973,414
15. AMOUNTS DUE FROM RELATED PARTIES Group Board Relationship 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000
Lanka Electricity Company (Pvt) Ltd Subsidiary Company 21,278 1,847,863 1,235,414 Lanka Coal Company (Pvt) Ltd Subsidiary Company 7,977
21,278 1,847,863 1,243,391
148 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
16. CONTRIBUTED CAPITAL The capital contributed represents the value of net assets taken over by CEB from the Department of Government Elcecrical Undertakings (DGEU) on the formation of CEB in 1969 as per CEB Act No. 17 of1969 and contributions made by GOSL to finance specific capital (development) projects as follows 2010 2009 Rs. '000 Rs.'000 DGEU net assets taken over (as per CEB Act No. 17 of 1969) 379,155 379,155 Contributions for capital projects: STAART project 250,000 250,000 ADB Loan 2043 980,166 980,166 Tsunami Government Aid 51,765 51,765 ADBLoan1930 1,812,469 1,808,678 Coal Power 604,516 604,516 Lighting Projects 7,780,345 4,568,738 Chinese Project RE 683,056 683,056 River Valleys Development Board 52,702 52,702 RE Schemes - 500 village - RE SCMS.1973-81 82,000 82,000 - ADBRE Scheme 1 - 1980-89 780,647 780,647 - ADBRE Scheme 2 - 1990-93 1,336,155 1,336,155 - ADBRE Scheme 3 - Extension 400,000 400,000 - ADBRE Schemes loan 1021-1995 153,710 153,710
Consolidated fund 1991-93 230,500 230,500 Free Trade Zone - Katunauake - 1978-83 87,600 87,600 - Biyagama - 1982 - 84 11,486 11,486 PSDPTD 1,406,551 1,398,706 Sri jawawardenapura Complex - 1980 - 82 150,840 150,840 Victoria (Mahaweli) 1,306,000 1,306,000 Pattiyapola REDP - 1984 - 85 1,582 1,582 Reimbursement of tax - 1984 - 88 1,351,700 1,351,700 Kotmale (Mahaweli) 3,500,000 3,500,000 Kotmale (3rd set) - 1985 - 90 344,452 344,452 D.S.T. Grant - 1992 450,000 450,000 Ukuwela (Mahaweli) - 1993 155,000 155,000 Rural Electrification Project (ADB Funds) 3,461,693 3,461,693 Rural Electrification Project (GOSL Funds) 1,420,161 1,420,161 Power System expansion Project (ADB 1414) 2,597,602 2,597,602 Power System Expansion Project (ADB 1021) 5,490 5,490 ESD Project - WBTF28955 108,601 108,601 Government Grant 6,103,336 3,079,169 Consolidated Fund 1,109,846 1,109,846 Rural electrification project(Kuwait Fund) 768,038 768,038 Laxapana Rehabilitation Project (SIDA) 88,739 88,739 Rural Electrification Project (RET) 3,494,334 2,359,334 Conflicted Affected Area Rehabilitation Project (CAARP-ADB) 939,852 939,852 Coal Power Project 636,852 636,852 STAART Project 1,897,273 1,897,273 Conversion of long term loans 30,998,209 30,998,209 Ipologama Housing Project 7,035 7,035 Gama Naguma 1,362,928 1,362,928 SIDA Project 2,478,053 1,505,607 Uthuru Wasantaya 50,000 50,000 Maga Naguma 211,730 - CAAP-GOSL 355,232 - JICA Project 455,903 - Retention Release 270,890 - Vidulamu Lanka 25,000 - Sri Lanka Gutterconection project 22,229 - Absorption renewable Energy Project 100,000 -
As at the end of the year 83,311,423 73,515,583
CEB Annual Report 2010 149 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
17. RESERVES Group Board Summary 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000
Capital Reserves (17.1) 17,792,799 17,763,539 17,612,509 17,612,509 Revaluation Reserve (17.2) 296,664,463 299,559,111 293,362,766 296,260,291 Depreciation Reserve (17.3) 23,000 23,000 23,000 23,000 Self Insurance Reserve (17.4) 5,816,735 5,134,147 5,800,785 5,118,195 Asset Replacement Reserve 189,615 171,395 - - Overhaul Reserve 2,984 1,274 - - Investment Reserve 60,530 58,015 - - 320,550,128 322,710,481 316,799,060 319,013,995
Lanka Electricity Company (Pvt) Ltd Asset Replacement Reserve This represents amounts set aside from profit for replacement and rehabilitation of Property,Plant and Equipment of the Company
17.1 Capital Reserve Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Balance as at the Beginning of the Year 17,763,539 17,727,513 17,447,063 17,447,063 Heat Rate Reserves 20,206 10,274 - - Foreign Exchange Reserve 19,890 15,266 165,446 165,446 Exchange Equalization Reserve (3,427) 3,078 - - Pending allotment of Shares (7,408) 7,408 - - Balance as at the end of the Year 17,792,799 17,763,539 17,612,509 17,612,509
Lanka Electricity Company (Pvt) Ltd Foreign Exchange Reserve
This represents the gain on exchange in the previous years when Asian Development Bank term Loans in SDR were paid to the Government of Sri Lanka at contracted rates although supplies of capital goods were received and accounted at higher prevailing rates and gain recorded when loan agreement were signed LTL Holdings (Pvt) Ltd Exchange Reserve This reserve has been created as a result of converting Syndicate loan (USD) in to reporting currency. Heat Rate Reserve This reserve has been created for heat rate bonus to be incurred in the future.
17.2 Revaluation Reserve Group Board On: Property, Plant & Equipment 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Balance as at the beginning of the year 299,559,111 292,421,106 296,260,291 289,705,863 Transfer of surplus during the year 2,876 7,190,412 - 6,606,835 Adjustment made during the year (2,730,630) - (2,730,630) - Revaluation surplus on disposals (166,894) (52,407) (166,895) (52,407) Balance as at the end of the year 296,664,463 299,559,111 293,362,766 296,260,291
17.3 Depreciation Reserve Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 At the beginning of the year 23,000 23,000 23,000 23,000
At the end of the year 23,000 23,000 23,000 23,000 Depreciation Reserve has been established under the provisions of Section 47 (2) of the CEB Act No.17 of 1969 which require CEB to maintain with the General treasury, a Depreciation Reserve to cover property, plant & equipment as determined by CEB.
150 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
17. RESERVES (Contd..) 17.4 Self Insurance Reserve Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 At the beginning of the year 5,134,147 4,509,346 5,118,196 4,493,394 Transfers from retained earnings 682,589 667,170 682,589 667,170 Damages charged during the year - (42,369) - (42,369) At the end of the Year 5,816,736 5,134,147 5,800,785 5,118,195 18. INTEREST BEARING LOANS & BORROWINGS
Group 2010 2010 2010 2009 2009 2009 Amount Amount Total Amount Amount Total Repayable Repayable Repayable Repayable Within 1 Year After 1 Year Within 1 Year After 1 Year Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Debentures (18.1) - - - 8,200 - 8,200 Bank Loans(18.2) 5,958,475 8,261,117 14,219,592 9,517,648 4,558,028 14,075,677 Syndicated Loan (18.3) - - - 355,722 55,270 410,992 Loans from Treasury (18.4) - 166,777,471 166,777,471 - 89,530,021 89,530,021 Lease Creditors (18.5) 5,529 15,838 21,367 - - - Bank Overdrafts 5,628,551 - 5,628,551 5,382,611 - 5,382,61 11,592,555 175,054,426 186,646,981 15,264,181 94,143,319 109,407,500
18.1 Debentures LTL Holdings (Pvt) Ltd As At Debenture Repayment As At 01.01.2010 Issued 31.12.2010 Rs. '000 Rs. '000 Rs. '000 Rs. '000 National Savings Bank 8,200 - (8,200) -
8,200 (8,200) National Savings Bank (Heladhanavi Ltd). Grace period for the repayment of the loan is 18 months from the date of disbursement and equal capital repayment over 66 months there after. These debentures carry and interest of 15.75% per annum half yearly in arrears. 18.2 Bank Loans 18.2.1The Board As At Loans Repayment As At Interest rate Repayment 01.01.2010 Obtained 31.12.2010 Per annum Period Rs.'000 Rs.'000 Rs.'000 Rs.'000 % (Oustanding) Peoples Bank 9250 M Loan 2,626,000 - (1,152,000) 1,474,000 11.98% 15 Months 1000M Loan 382,600 - (158,400) 224,200 11.85% 17 Months 1500M Loan 1,248,000 - (504,000) 744,000 11.83% 18 Months 8000M Loan 8,000,000 - (2,230,000) 5,770,000 11.37% 26 Months 5000M Loan - 5,000,000 (417,000) 4,583,000 11.19% 66 Months NSB Bank 500M Loan 250,000 - (250,000) - 21.00% 12,506,600 5,000,000 (4,711,400) 12,795,200
18.2.2 Lanka Electricity Company (Pvt) Ltd As At Loans Repayment As At Interest rate Repayment 01.01.2010 Obtained 31.12.2010 Per annum Period Rs.'000 Rs.'000 Rs.'000 Rs.'000 %
Asian Development Bank Project 2 200,280 - (44,507) 155,773 10.5% 20 Years Project 3 164,578 - (32,916) 131,662 13.0% 15 Years 364,858 (77,423) 287,435 CEB Annual Report 2010 151 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
18.2.3 LTL Holdings (Pvt) Ltd As At Loans Repayment As At Interest rate Repayment 01.01.2010 Obtained 31.12.2010 Per annum Period Rs.'000 Rs.'000 Rs.'000 Rs.'000 % Trust Receipt Loan HNB 255,645 - (255,645) - - 180 Days Short Term Loan HNB 882,000 977,516 (1,309,514) 550,002 - 3 Months Long Term Loan NDB 23,551 - (20,068) 3,483 - 7 Years HNB 19,797 - (19,797) - - 7 Years HSBC - 293,969 - 293,969 - SCB - 286,334 - 286,334 - DFCC 23,226 - (20,059) 3,167 - 1,204,219 1,557,819 (1,625,083) 1,136,955
18.3 Syndicated Loan LTL Holdings (Pvt) Ltd (Heladhanavi Ltd) As At Loans Repayment Exchange As At 01.01.2010 Obtained Gain 31.12.2010 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Long Term USD Syndicated Loan 410,992 - (410,992) - -
410,992 - (410,992) - - 18.4 Loans From Treasury 18.4.1 The Board Project Provider of Interest 2010 2009 funds Per annum(%) Rs.'000 Rs.'000 Treasury Loan 1,200,000 1,200,000 Treasury Loans 2006 DST 2006 Not Finalized 30,998,209 30,998,209 Upper Kotmale Hydro Power project JICA SLP 74 10% 21,726,793 15,552,618 Kelanitissa Diesal Storage Tank project China 10% 97,378 97,378 Greater Colombo Grid Substation Project KFW 10% 1,672,576 1,079,616 Colombo City Electricity Distribution Project SLP72 10% 5,561,883 2,850,323 Kerawalapitiya Kotugoda Transmission line Project SLP78 10% 2,982,016 2,912,261 Puttalam Coal Power project China 6% 45,604,676 33,652,348 Puttalam Coal Power project 11 6% 51,483,589 - New laxapana & Wimalasurendra Rehabilitation project french 2,788,243 1,185,295 Rehabilitation Ukuwela power Project JICA 12% 833,263 1,973 Jaffna Rehabilitation Electricity Supply Project 37,172 - Energy Diversification Enhancement Project 62,694 - Old Laxapana Rehabilitation Project 1,245,825 - Augmentation of grid substation renewable project 483,155 - 166,777,472 89,530,021 Amount Payable within one year - - Amount Payable after one year 166,777,472 89,530,021
18.5 Lease Creditors 18.5.1 The Board Total 2010 Total 2010 Total 2010 Amount Repayable Amount Repayable Within 1 year After 1 year Rs.'000 Rs.'000 Rs.'000 Merchant Bank Of Sri Lanka Lease Creditor 8,286 19,542 27,828 Interest in Suspense (2,757) (3,704) (6,461) 5,529 15,838 21,367
19. CONSUMER DEPOSITS Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Balance as at Beginning of the Year 6,761,518 6,145,387 6,761,518 6,145,387 Deposit Received during the year 918,026 712,310 918,026 712,310 Refunds Made during the year (135,604) (96,179) (135,604) (96,179) Balance as at the end of the Year 7,543,940 6,761,518 7,543,940 6,761,518
152 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
20. PROVISIONS AND OTHER DEFERRED LIABILITIES Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Retirement Benefits Obligation- Gratuity (20.1) 3,355,279 3,086,232 2,929,959 2,726,466 Other Provisions 1,741 16,423 - - 3,357,020 3,102,655 2,929,959 2,726,466 20.1 Retirement Benefits Obligation- Gratuity 2010 Group 2009 2010 Board 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Opening Balance 3,086,232 3,203,611 2,726,466 2,866,701 Charge for the year 598,216 127,816 522,220 87,257 Payments made during the year (329,169) (245,195) (318,727) (227,492) Closing Balance 3,355,279 3,086,232 2,929,959 2,726,466 20.2 Defined Benefit Plan The Board Messrs. Actuarial and Management Consultants (Pvt) Ltd Actuaries, carried out an actuarial valuation of the defined benefit plan gratuity on 31st December 2010 as per Sri Lanka Accounting Standard No. 16 (Revised 2006). Appropriate and compatible assumptions were used in determining the cost of retirement benefits. The principal assumptions used are 2010 2009
Discount rate assumed (%) (per Annum) 11% 11% Further salary increase (%)-once in three years 25% 25% Fair value of promised Retirement Benefits (Rs,000) 2,929,959 2,726,466
Lanka Electricity Company (Pvt) Ltd Messrs. Actuarial and Management Consultants (Pvt) Ltd Actuaries, carried out an actuarial valuation of the defined benefit plan gratuity of the company. Appropriate and compatible assumptions were used in determining the cost of retirement benefits. The principal assumptions used are, 2010 2009 Discount Rate11% per annum 11% per annum 11% per annum Further Salary Increase Rate 8.5% 8.5% Normal Retirement Age Appointments upto 31 December 2006 -65 years Appointments upto 31 December 2006 -65 years Appointments after 01 January 2007 -55 years Appointments after 01 January 2007 -55 years Current Service Cost Rs 17,068,291/- Rs.15,888,964/-
LTL Holdings (Private) Limited The transitional liability at the first date of adoption amounting to Rs.5,619,572/- in line with SLAS No.16- Employee Benefit transitional provision has been recognised immediately in the Income Statement. Principal Assumptions 2010 2009 Discount Rate 12% 12% Salary Increment Rate 10% 10% Staff Turnover 6% 6% Retirement Age 55 Years 55 Years
21. DEFERRED INCOME Group Summary 2010 2009 2010 Board 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Consumer Contribution (21.1) 46,796,834 40,889,033 44,105,170 38,300,308 Government Grant (21.2) 285,004 297,395 285,004 297,395 47,081,838 41,186,428 44,390,174 38,597,703 21.1 Consumer Contribution Balance at the beginning of the year 40,889,033 35,560,710 38,300,308 33,052,250 Consumer Contribution During the year 7,792,813 6,960,824 7,437,138 6,667,899 Amount Amortized During the year (1,885,012) (1,632,501) (1,632,276) (1,419,841) Balance at the end of the year 46,796,834 40,889,033 44,105,170 38,300,308
21.2 Government grant Balance at the beginning of the year 297,395 309,786 297,395 309,786 Amount Amortized during the year (12,391) (12,391) (12,391) (12,391) Balance at the end of the year 285,004 297,395 285,004 297,395
CEB Annual Report 2010 153 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
22. DEFERRED TAXATION Group Board 2010 2009 2010 2009 Rs. '000 Rs. '000 Rs. '000 Rs.'000 Balance at the beginning of the year 449,468 290,457 - - Provision made during the year 342,106 172,339 - - Disposal during the year - - - - Balance at the end of the year 791,574 462,796 - -
23. TRADE AND OTHER PAYABLES 2010 2009 2010 2009 Rs.000 Rs.000 Rs.000 Rs.000 Trade Payables 52,673,007 53,303,849 51,318,441 51,571,471 Other Payables 13,425,523 23,603,880 13,796,042 21,492,321 Sundry Creditors Including Accrued Expenses 3,150,767 1,604,505 2,605,374 1,035,172 Deposits(23.1) 10,991,294 11,068,331 10,991,294 11,068,331 80,240,591 89,580,565 78,711,151 85,167,295 23.1 Deposits 2010 2009 2010 2009 Rs.000 Rs.000 Rs.000 Rs.000 Service mains deposits 9,124,196 9,665,768 9,124,196 9,665,768 Tender Deposits 132,677 112,021 132,677 112,021 Security Deposits 48,677 - 48,677 - Other Deposits 1,685,744 1,290,542 1,685,744 1,290,542 10,991,294 11,068,331 10,991,294 11,068,331 24. AMOUNTS DUE TO RELATED PARTIES 2010 2009 2010 2009 Relationship Rs.000 Rs.000 Rs.000 Rs.000 LTL Holdings (Pvt) Ltd Subsidiary Company - - 72,692 384,641 Lanka Electricity Co.Ltd Subsidiary Company - - - - Ante LECO Metering Co.(Pvt) Ltd Associate Company - - - 82,354
72,692 466,995 25 RETROSPECTIVE RESTATEMENT OF ERRORS The presentation and classification of following items in these financial statements are amended to ensure compatibility with the current year. (a) Ceylon Electricity Board As Reported Previously 2009 Rs.000 Balance Sheet Current Assets Trade & Other Receivables Advance to the employees 234,996 Income statement Administrative expenditure 2,855,317 Cost of sales 117,870,797 Equity Retained earnings 116,956,975 Current Presentation 2009 Balance Sheet Current Assets Trade & Other Receivables Advance to the employees Income statement Administrative expenditure (salary+Tax) 2,898,617 Cost of sales (salary+fuel) 118,192,365 Equity Retained earnings (Restated balance) 117,321,753
Reasons for changing Presentation & Classification Retained earnings of 2009 balance is restated due to the following adjustments. 1) Allowances paid as an advance which had been accounted as advance account has been charged to the salary expenditure. 2) Rs1/= increase of fuel cost had been adjusted to the COS . 3) Tax paid on behalf of the 2009 had been adjusted.
154 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
(b) Group (I) LTL Holdings (Pvt). Limited - Consolidated Reserve and Minority Interest Consolidated Financial Statements of LTL Holdings (Pvt) Limited, has been prepared considering only the Ordinary Shares staking Nivindu (Pvt) Ltd. However, as per the subscription and shareholders, the Preference Share holders also have the equal rights as Ordinary Shareholders. Accordingly, It has identified that, LTL Holdings (Pvt) Ltd. should considered total number of shares including both Ordinary and Preference, in computing the Accumulated Profit of the Group and the Minority Interest. Accordingly, the consolidated accounts have been prepared during the period from 2000/01 up to 2004/05, assuming the Minority Interest has 35.7143%, and 84.536% for the period from 2005/06 to 2008/09. However, the corrected percentage should be 55% and 51.76% respectively. Effect on 31.12.2009 31.12.2008 Balance Sheet Rs.'000 Rs.'000 Decrease in Retained Earnings 29,088 15,770 Increase in Minority Interest 29,088 15,770
( ii ) Lakdhanavi Limited Dividend received from the West Coast Power (Private) Limited were incorrectly included in Trade & Other Payables at December 2009 at Rs.112,715,719. The Financial Statement of 2009 have been restated to correct this error. The effect of the restatement of those financial statements is summarized bellow. There is no effect in 2010. Year ended 31.12.2009 Rs.'000 Income Statement Increase in Other Income & Gains 112,716 Increase in Profits 112,716 31.12.2009 Balance Sheet Rs.'000 Decrease in Trade & Other Payables 112,716 Increase in Investment Reserves 92,088 Increase in Minority Interest 20,628
(iii ) Heladhanavi Limited The stated Capital and Retained Earnings were reinstated with the redemption amount of the Preference Shares, during the year as shown in accordance with the guidline issued by the "Company Law and Other Legislation Committee" of the Institute of Chartered Accountants of Sri Lanka. As Reported previously : 31.12.2009 Rs.'000 Equity atrributable to Equity Holders Minority Interest 1,217,141
Current Presentation Equity atrributable to Equity Holders Minority Interest 1,194,592
Non- Current Liabilities Preference Shares 7,516
Current Liabilities 15,033 Preference Shares
26 . CASH AND CASH EQUIVALENTS IN CASH FLOW STATEMENT Components of Cash and Cash Equivalents 2010 2009 2010 2009 Rs.000 Rs.000 Rs.000 Rs.000 26.1 Favourable Cash & Cash Equivalents balance Cash & Bank Balances 3,016,047 1,596,536 1,546,976 584,658 Call Deposits 62,006 28,031 - - 3,078,053 1,624,567 1,546,976 584,658 26.2 Unfavourable Cash & Cash Equivalent Balances Bank Overdraft(18) (5,628,551) (5,382,611) (4,649,193) (4,623,169) Total Cash and Cash Equivalents For (2,550,498) (3,758,044) (3,102,217) (4,038,511) the Purpose of Cash Flow Statement CEB Annual Report 2010 155 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
27. ASSETS PLEDGED
27.1 The Board The following assets have been pledged as security for liabilities.
Nature of Assets Nature of Liability Amount Pledged Included under 2010 2009 Rs.'000 Rs.'000 Laxapana Power Complex Term Loan 18,166,000 18,166,000 Property, Plant & Equipment 18,166,000 18,166,000
27.2 Lanka Electricity Company (Pvt ) Limited Following assets have been pledged as security for liabilities.
Nature of Assets Nature of Liability Carrying Amount Pledge Included under 2010 2009 Rs.'000 Rs.'000 Rs.'000 Rs.'000
Fixed Deposits Bank Overdraft facilities of People's Bank 45,500 36,000 Fixed Deposits SMI Loan Schemes of People's Bank 80,838 72,667 Current Fixed Deposits Staff loan Schemes of SMIB Bank and 482,086 405,458 and Non Current HDFC Bank Other Investment Fixed Deposits Bond against the stand by Letter of Credit 319,000 319,000 } facilities of West Cost Power (Pvt) Ltd to NDB Bank
27.3 LTL Holdings (Pvt) Ltd Following assets have been pledged as security for liabilities.
Nature of Assets Nature of Liability Carrying Amount Pledge Included under 2010 2009 Rs.'000 Rs.'000 LTL Holdings (Pvt) Ltd Immovaable Properties First Mortgage for Loans & Borrowings 550,000 20,719 Property Plant & Equipment Inventories First Mortgage for Loans & Borrowings 575,000 575,000 Inventories
Lakdhanavi Ltd & its Jointly Controled Entity Immovaable Properties USD 6,400,000 - Term Loan 3,440,197 - Property Plant & Equipment Immovaable Properties USD 6,400,000 - Term Loan 1,247,537 - Trade Debtors Immovaable Properties USD 6,000,000 - Term Loan 3,439,455 - Property Plant & Equipment
Nivindhu (Pvt) Ltd Project Assets Bank Loan - NDB 330,100 - Property Plant & Equipment Investment in Subsidiary Bank Loan - NDB 132,000 - Investment in Subsidiary
156 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
28. EVENTS OCCURING AFTER THE BALANCE SHEET DATE
The Board There have been no material events occurring after the Balance Sheet date that require adjustments to or disclosure in the financial statements
Lanka Electricity Company (Pvt ) Limited There were no events occurring after the balance sheet date that required disclosure.
LTL Holdings (Pvt) Ltd There have been no material events occurring after the balance sheet date that require adjustment to or disclosure in the financial statements 29. CONTINGENCIES
29.1 The Group The contingent liability arising with regard to the litigation matters pending in the labour tribunal and other Courts including Court of appeal and Supreme Courts as at 31.12.2010, the CEB is defendant respondent. The contingent liability in the unlikely event that all these cases are adversely decided is estimated at Rs.512 Mn.
29.2 Lanka Electricity Company (Pvt ) Limited
(a) The Company suspended paying turnover tax with effect from 01st July 2008.The turnover tax unpaid for the period 01st July 2008 to 31st December 2010 amounts to Rs. 140.467Mn (2009 - 196.47Mn).However, the written clearance has not yet been received by the company from the relevant tax authorities. No provision has been made in the financial statements in this regard.
(b) The company is a defendant respondent in 23 (2009 -24) lawsuits for which the maximum liability is estimated by the company at Rs.305,822,620/- (2009 - Rs.31,436,033/-) at the year end. Although there is no assurance, the directors believe, based on the information currently available, that the ultimate resolution of such legal procedures would not likely to have a material adverse effect on the results of operations, financial position or liquidity of the Company. Accordingly, no provision for any liability has been made in these financial statements in this regard.
CEB Annual Report 2010 157 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
30 CAPITAL COMMITMENTS
30.1 The Board 2010 2009 Rs.000 Rs.000
Approved by the Board, but not contracts placed 143,542 58,942
Contracted but not provided for 1,124,900 -
Total 1,268,442 58,942
The capital expenditure expected to be incurred on 2009,according to the capital expenditure budget.
30.2 Lanka Electricity Company (Pvt ) Limited The Company does not have material purchase commitments for acquisition of Property , Plant and Equipment incidental to the ordinary course of business as at 31st December 2010.(2009 - Nil).
30.3 LTL Holdings (Pvt) Ltd
30.3.1 The Group's commitment consisted of guarantees and letters of Credit. The Guarantees were mainly Bid and Performance Bonds. The total commitment can be broken down in to its respective beneficiaries as follows;
Letters of Guarantees Credit Total City Bank HNB HNB Beneficiary Total Name of the Company Colombo Cinnamon HSBC NDB Cinnamon Guarentees 07 Gardens Bank Gardens LTL Holdings (pvt) Ltd 104,610 80,169 - - 184,779 11,067 195,846 Lakdhnavi Ltd 172,221 117,603 2,297 - 292,121 1,700 293,821 Heladhanavi Ltd - - - 300,000 300,000 - 300,000 LTL Galvanizers (pvt) Ltd - 1,241 - - 1,241 2,672 3,913 Lanka Industrial Product Engineerig (pvt) Ltd - 3,490 - - 3,490 - 3,490 LTL Transformers (pvt) Ltd - 6,159 - - 6,159 12,554 18,713
30.3.2 Operating Lease Commitments Nature
The company has entered into an operating lease agreement with Lanka Industrial Estate Limited for a period of 30 years commencing from 1st June 1998 to 31 May 2013
2010 2009 Rs.000 Rs.000 Within One Year 9,397 9,397 After One year but not more than 5 years 13,313 22,710 22,710 32,107
Lease rentals are renewed every five years ,therefore lease rentals more than five years can not be determined.
158 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
30.3.3 Lakdhanavi Limited & its Jointly Controlled Entity Operating Lease Commitments
Nature The company has entered into an operating lease agreement with Lanka Industrial Estate Limited from 19th Feb 1996 to 18th Feb 2013. 2010 2009 Rs.000 Rs.000
Within One Year 8,093 8,093 After One year but not more than 5 years 15,520 23,613 23,613 31,706
30.3.4 Heladhanavi Limited (Jointly Controlled Entity) (a) Power Purchase Agreement with Ceylon Electricity Board
If Heladhanavi Limited fails to supply Minimum Guaranteed Energy Amount (MGEA), which is 698,417,280 kWh per year, if there is a shortfall.
Shortfall Amount of liquidated damages for
Exceeding 10% of MGEA up to 25% of MGEA 15% of Capacity Charges Exceeding 25% of MGEA 25% of Capacity Charges
(b) Fuel Supply Agreement with Ceylon Petroleum Corporation
If Heladhanavi Limited is unable to accept fuel under supply schedule (subject to change) and/or comply with its obligations under this agreement and costs, expenses, damages & losses incurred as direct & exclusive result of such failure or inability should be paid by the company within 30 days.However company's liability under this agreement is limited to a maximum of US $ 500,000 per annum.
According to the clause of fuel supply agreement, company has established a Letter of Credit at Hatton National Bank in favour of Ceylon Petroleum Corporation to the value of Rs. 280 Mn.
( c ) Operations & Maintenance Agreement with Lakdhanavi Limited According to this agreement, the fixed fee payable after the final completion date is US $ 625,000 per annum paid in equal monthly installments.
The company is liable to pay Lakdhanavi Limited an additional sum of US $ 2,000,000 for each remaining year of the term or pro rata for part of term upon the early termination of this agreement.
A variable fee, depends on the Net Energy Output generated.
(d) Fuel Transport Agreement with LTL Projects (pvt) Limited
The company has entered in to a contract during the period with LTL projects (Pvt) Ltd for the transportation of fuel. According to the arrangement, the company need to pay a fixed charge of US $ 10,500 per month from the date of commencement of power generation in the plan.
CEB Annual Report 2010 159 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
31 RELATED PARTY TRANSACTIONS 31.1 Directors Interest on Contracts
Board Mr. E.A.S.K.Edirisinghe was bearing the office of Chairman, CEB upto 11.02.2010. He also served as Director in the Director Boards of Lanka Electricity Co.(Pvt) Ltd., LTL Holdings (Pvt) Ltd. and Lanka Coal Co.(Pvt) Ltd which are subsidiary companies of CEB.
Mr. T.M.Herath was appointed as chairman CEB, on 18.02.2010 and was bearing office until 14.05.2010.
Mr.B.A Galwatta had resigned on 29.04.2010, Mr. .R.V.D. Piyathilaka had resigned on 10.05.2010 and Mr. SK Attiygalle had resigned on 05.05.2010.
Dr. R.H.S. Samarathnge, Deputy Secretary to Treasury, appointed to the Director Board of CEB on May 25, 2009 representing the Ministry of Finance & Planning/Treasury as a Board Member in place of Mr. Lalith R. de Silva, former Deputy Secretary to the Treasury resigned on 10.05.2010.
The new board was appointed on 10.05.2010 with Mr. Vidya Amarapala as the chairman CEB, Mr. Pradeep Roshan Gunawardena and Mr. Amila P.Jayasinghe as members. Mr. D.M.S Batagoda and Mr. Thilak Collure were also appointed as members of the board on 19.05.2010.Mr. Pitaduwa Liyanage Douglas Premarathna was appointed as the Vice Chairman on 25.05.2010. On 08.09.2010 Mr. Thilak Collure resigned and Mr. W.D. Jayasinghe was appointed to the board as a member from 13.08.2010.
Lanka Electricity Co.(Pvt) Ltd. The Company purchase electricity from Ceylon Electricity Board which is the major shareholder (55.2%) of the Company. The Directors appointed by Ceylon Electricity Board to the Directorate of the Company; Mr. Chandana.J.haputhantri Chairman, Mr.Vidya Amarapala, Mrs. Badra Jayaweera,Mrs. P.K.A.D. de Silva,Mr. Rohan Seneviratne,Mr.A.A.R. Abeysinghe served as Directors throughout the year under review.
LTL Holdings (Pvt) Ltd. The Company from which CEB purchases, repairs, and galvanize transformers and where CEB is the major shareholder (63%) of the Company. Ceylon Electricity Board has appointed Mr.E.A.S.K.Edirisinghe from December 2008 and was bearing office until 19.02.2010.Mr.T.M. Herath was appointed on 19.02.2010 and had resigned on 14.05.2010. Mr. Vidya Amarapala appointed on 14.05.2010 , Mrs. B. Jayaweera, General Manager, CEB (From 08 September 2008), and Mr. Palitha Gamage to the Director Board of the Company and they served throughout the year under review.
Lanka Coal Company (Pvt) Ltd. The Company was incorporate of on January 23, 2008 under Companies act No.07 of 2007 to carry on the business of procuring and selling coal needed for coal power plants in Sri Lanka,. Ceylon Electricity Board is the major shareholder (60%) of the Company. Ceylon Electricity Board has appointed Mr. E.A.S.K.Edirisinghe (from December 2008 up to 11, February2010), Mr. Udayasri Kariyawasam (from January 2008 up to 04, August 2010), Mr.Kurugamage Srineil Perera Jayawardena, Mrs. Badra Jayaweera to the Director Board of the Company and they served throughout the year under review.
160 CEB Annual Report 2010 CEYLON ELECTRICITY BOARD NOTES TO THE FINANCIAL STATEMENTS As at 31st December 2010
31.2 Transactions with Related Companies
Name of related Volume of transactions Name of Directors Relationship Nature of transaction Party/parties 31/12/2010 Rs.'000
Lanka Electricity 1. Mrs. B.Jayaweera Sale of Directors 12,544,671 Company (Pvt) Ltd. 2. Mr.Vidya Amarapala electricity
1. Mr. J.P.G.Palitha Gamage Purchase of Transformers/ LTL Holdings 2.. Mr.Vidya Aamarapala Directors Galvanized items & 4,778,028 (Pvt) Ltd. 3.. Mrs. B. Jayaweera Electricity
Expenses incurred by the parent Lanka Coal Co. 1. Mr.E.A.S.K.Edirisinghe 9,873 Directors Company on behalf (Pvt) Ltd. 2.. Mrs. Badra Jayaweera of Lanka Coal Co.(Pvt) Ltd.
31.3 Transaction with Key Management Personnel Key Management personnel comprise the Directors of the Board (i) Loans to Directors No loans have been given to the Directors of the Board (ii) Key Management Personnel Remuneration During the year under review, Rs. 1,132,244 (2009 - Rs. 1,141,600) Incurred on behalf of key management personnel of the company. 31.3.1 Key Management Personnel Compensation Lanka Electricity Co.(Pvt) Ltd. 2010 2009 (Rs'000) (Rs'000) Directors fees and short term benefits 474 744 Remuneration of other key management personnel 13,879 10,731 14,353 11,475
LTL Holdings (pvt) Ltd 2010 2009 (Rs'000) (Rs'000) Short-term employee benefits 24,915 19,256 Post-employment benefits 3,737 2,888 28,652 22,144
CEB Annual Report 2010 161 Auditor General’s Report
LP/C/CEB/FA/2010 statements that are free from material 21 April 2012 misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The Chairman, 1.3 Scope of Audit and Basis of Opinion Ceylon Electricity Board My responsibility is to express an opinion on these financial statements based on my audit. REPORT OF THE AUDITOR GENERAL ON THE Audit opinion, comments and findings in this CONSOLIDATED FINANCIAL STATEMENTS OF THE report are based on review of the financial CEYLON ELECTRICITY BOARD FOR THE YEAR statements presented to audit and substantive ENDED 31 DECEMBER 2010 IN TERMS OF SECTION tests of samples of transactions. The scope and 14(2)(c) OF THE FINANCE ACT NO.38 OF 1971 extent of such review and tests were such as to enable as wide an audit coverage as possible The audit of consolidated financial statements of within the limitations of staff, other resources the Ceylon Electricity Board and its subsidiaries and time available to me. The audit was carried for the year ended 31 December 2010 was out in accordance with Sri Lanka Auditing carried out under my direction in pursuance of Standards to obtain reasonable assurance as to provisions in Article 154(1) of the Constitution of whether the financial statements are free from the Democratic Socialist Republic of Sri Lanka material misstatements. The audit includes read in conjunction with Section 49(4) of the examination on a test basis of evidence Ceylon Electricity Board Act No.17 of 1969 as supporting the amounts and disclosures in amended by Act No.31 of 1969 and Section financial statements and assessment of 13(1) of the Finance Act No.38 of 1971. My accounting policies used and significant estimates comments and observations, which I consider made by the management in the preparation of should be published with the annual report of financial statements, as well as evaluating their the Ceylon Electricity Board (CEB) in terms of overall presentation. I have obtained sufficient Section 14(2) (c) of the Finance Act, appear in information and explanations which to the best this report. A detailed report in terms of Section of my knowledge and belief were necessary for 13(7) (a) of the Finance Act will be issued to the the purpose of my audit. I therefore believe that Chairman of the Board in due cause. my audit provides a reasonable basis for my opinion. Sub-sections (3) and (4) of Section 13 of 1:2. Responsibility of the Management for the the Finance Act No.38 of 1971 give discretionary Financial Statements powers to the Auditor General to determine the Management is responsible for the preparation scope and extent of the audit. and fair presentation of these financial statements in accordance with Sri Lanka Accounting Standards. This responsibility includes; designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
162 CEB Annual Report 2010 2. Financial Statements 2.1.2. Deficiencies in Accounting of Subsidiary Companies - Lanka Electricity Company (Pvt) 2.1. Opinion Ltd. (LECO) So far as appears from my examination and to The auditors of the Lanka Electricity Company, a the best of my information and according to the 55.2 per cent owned subsidiary of the Ceylon explanations given to me, I am of opinion that Electricity Board, had issued a qualified audit the Ceylon Electricity Board had maintained opinion on the Group financial statements of that proper accounting records for the year ended 31 Company subject to the following. December 2010 and except for the effects on the financial statements of the matters referred (I) The documents supporting the ownership of the to in paragraph 2.2 of this report, the financial land and buildings amounting to Rs. 83.782 statements have been prepared in accordance million were not available for audit inspection. with Sri Lanka Accounting Standards give a true and fair view of the state of affairs of the Ceylon (ii) Inability to ascertain the accuracy and Electricity Board as at 31 December 2010 and the completeness of the balance of the Infrastructure financial results of its operation and cash flows Work-in-progress Account amounting to Rs. for the year then ended. 358.2 million approximately at the year end included under Property, Plant and Equipment. I am of opinion that the consolidated financial statements of the CEB and its subsidiaries had (iii) Non-current Assets amounting to Rs. 11,116 been prepared in accordance with Sri Lanka million have not been tested for impairment in Accounting Standards and except for the effects accordance with SLAS 41, even though there are on the matters referred to in paragraphs 2.1.1, indications of impairment. Adjustments that 2.1.2 and 2.2 of this report, the consolidated could have arisen as a result of impairment of financial statements to give a true and fair view assets, if so tested, have not been made in these of the state of affairs of the Group as at 31 financial statements. December 2010 and the financial results of its operations and cash flows for the year then The Chairman of the Board stated in this regard ended and its subsidiaries dealt with thereby, so as follows. far as concern the Directors of CEB. “Non-current Assets had not been tested for 2.1.1. Accounting Policies in Consolidations impairment, owing to the highly specialized The Group had not followed uniform accounting technical nature of the assets. Impairment policies for similar transactions. For instance, testing of these assets is a complex and different methods had been applied for costly process.” depreciation and amortization of assets and deferred revenues. Further, the Ceylon Electricity (iv) Inability to obtain independent confirmations Board and Lanka Electricity Company had from lawyers to ascertain contingent liabilities of accounted for their distribution cost as an item of the Company amounting to Rs. 305.823 million the cost of sales in their Income Statements while (2009 – Rs. 31.436 million) as at the year end as the LTL Holding (Pvt) Ltd. had accounted for it as disclosed in Note - 27.2 (b) to these financial a separate item in its Income Statement. statements.
CEB Annual Report 2010 163 (v) Inability to ensure the completeness and accuracy (a) Sri Lanka Accounting Standard 3 – of the inventory valuation as of the year end due Presentation of Financial Statements. When to non-availability of all required information and items of income and expenditure are material, explanations and also a physical verification of their nature and amount should be disclosed inventories with a value of Rs. 42.5 million separately. However, the Board had not disclosed approximately has not been carried out as at 31 such information in respect of cost of sale, profit December 2010. share of minority, income tax payable and adjustments to the revaluation reserve in the (vi) Inability to ensure the completeness, financial statements. recoverability and adequacy of related bad and doubtful debt allowances for trade debtors as at (b) Sri Lanka Accounting Standard 5 – 31 December 2010. Further, no adjustment had Inventories. According to the Standard, the been made in the financial statements in respect inventories shall be measured at lower of cost or of the difference between the ledger and the the net realizable value and cost of inventories billing system balances amounting to Rs. 770.97 shall be assigned by using the first in first out million. (FIFO) or weightedaverage cost formula respectively. However, the Board had not (vii) Required information had not been received from followed this Standard in preparing its financial three key management persons regarding related statements. It was further observed that two party transaction as required by Sri Lanka different policies had been followed for valuation Accounting Standard (SLAS) 30. of the stock in the Generation Division and the Transmission and Distribution Divisions. (viii) The payable balance according to confirmations received from Ceylon Electricity Board and Lanka (c) The position of changing the indirect Transformers (Pvt.) Ltd.(present name is LTL shareholding of Nividhu (Pvt.) Ltd. from 30.24 per Holdings Company (Pvt.) Ltd.) did not agree with cent to 28.34 per cent on 24 February 2011 had the balance in the general ledger by Rs. 37.4 not been disclosed in the financial statements in million and Rs. 3.1 million respectively for which terms of the Sri Lanka Accounting Standard no satisfactory explanations was received. Further, 12 – Event after the Balance Sheet Date. the receivable balance according to the confirmation received from Ceylon Electricity (d) According to the revised Sri Lanka Accounting Board did not agree with the general ledger by Standard 18 - Property Plant and Equipment, Rs. 16.3 million for which no satisfactory the depreciation should be calculated on fixed explanations was received. assets from the time the assets are available for use in the business. However, the Board had 2.2. Comments on Financial Statements of the continued its policy. i.e. “made a full provisions Ceylon Electricity Board in the year of sales and none in the year of purchases” without considering the above 2.2.1.Sri Lanka Accounting Standards and requirements. Accounting Policies In addition, the following information also had The following observations are made. not been disclosed in the financial statements.
164 CEB Annual Report 2010 • Value of the assets classified as held for sale 2.2.2. Accounting Deficiencies and other disposal The following accounting deficiencies were observed in audit. • Carrying amount of temporarily idle property plant and equipment. (a) As reported in my previous year audit report, the value of lands and buildings released to the (e) The following disclosures in respect of the University of Sabaragamuwa amounting to Rs. provision for bad and doubtful debts, obsolete 100 million had not been disclosed as receivables and unserviceable stocks etc. had not been made in the financial statements of the Board as at 31 in the financial statements in terms of the Sri December 2010 as well. Therefore, the value of Lanka Accounting Standard 36 – Provision, property plant and equipment had been Contingent Liabilities and Contingent Assets. overstated while understating the other receivables by that amount. (i) The carrying amount at the beginning and end of the period (b) Interest charged for the delay on payment of electricity bills amounting to Rs. 635.887 million (ii) Additional provision made during the year and had erroneously been included in the sales amount used during the year revenue and as a result, the turnover and the other income shown in the income statement (iii) Amounts spent and charged against the provision had been overstated and understated by similar during the period amount respectively.
(iv) Unused amounts received during the period (c) Provision had not been made for trade receivable on street lights as mentioned in the accounting (f) Sri Lanka Accounting Standard 41 – policy 2.4.2 on the Valuation of Trade and Impairment of Fixed Assets. Impairment Other Receivables and their Measurement assessment in terms of the Standard had not Bases in the financial statements. As a result, been carried out by the Board for its fixed both profit for the year under review and the assets during the year 2010. The practice other receivables shown in the financial followed by the Board is the revaluation of its statements had been overstated by Rs. 740.263 assets based on the indices published by the million respectively as computed by the audit. Central Bank of Sri Lanka. (d) A sum of Rs. 8,226.116 million relating to The Chairman of the Board stated in this regard electricity sales made for street lighting had been as follows. credited to Sales Income Account while passing its corresponding debit entry to a non-personal “Majority of Assets base cannot be subjected account named as Street Lights Account and to the “impairment test” as those are classified under other receivables in the financial involved in highly technical nature and statements without treating it as a trade expertise is required to have the test of this receivable. As a result, the trade debtors and nature.” other receivables shown in the financial statements had been understated and overstated
CEB Annual Report 2010 165 by Rs. 8,226.116 million respectively. (i) No provision had been made in the financial statements for deemed dividend tax. (e) Sums of Rs. 46.739 million and Rs. 51.559 million payable to Lanka Electricity Company,which is a (j) Deferred tax liability/asset of the Board had not related party, in respect of the year under review been ascertained and taken into financial and the previous year respectively had not been statements. taken into the accounts. (k) The Board had a brought forward tax loss of f) Work-in-progress amounting to Rs.3,078.053 Rs. 67,244.835 million as at 31 December 2010 million and Rs. 748.017 million in Distribution which had not been disclosed in the financial Regions had continuously been shown in the statements. financial statements for periods ranging from 2 to 5 years and over 5 years respectively without (l) Trade and other receivable balances had been being cleared mainly due to non-availability of included credit balances aggregating Rs. 74.654 completion reports of the constructions (The million and as a result, the other debtors shown normal project period of those jobs was around in the financial statements had been understated three months). It was further observed in audit by that amount. that most of the jobs included in the Work-in- progress had been completed and energized. Similarly, debit balances aggregating Rs. 1,589.143 million had been included in the trade (g) Positive price variance of material, labour and and other payable balance which resulted in the overhead expenditure items aggregating Rs. understatement of that account by Rs. 1,589.143 3,294.873 million had been set off against the million cost of sale and as a result, the net profit for the year and the capital works shown in the financial (m) A private supplier account amounting to Rs. had been overstated and understated by that 64.090 million shown under payables in the amount respectively. financial statements of the Colombo City Divisions as at 31 December 2010 had not been (h) Property, plant and equipment settled by the Board over a period 2 - 4 years. added/transferred/acquired during the year under This type of abnormal balance had not been review amounting to Rs. 25,746.824 million had investigated and necessary adjustment made in not been depreciated. As a result, the net loss the financial statements accordingly. and net value of the property plant equipment shown in both the Group and Board Financial (n) Goods and Services Tax claimable balance Statements as at 31 December 2010 had been amounting to Rs. 34.180 million had been shown understated and overstated respectively. The in the financial statements even though the impact to the financial statements could not be Goods and Services Tax is not in operation at ascertained due to non-availability of required present. information such as date of purchase/transfer, etc. The Chairman of the Board stated in thisregard as follows.
166 CEB Annual Report 2010 149 “In term of the letter issued by the (R) Interest income amounting to Rs.432 million Department of Inland Revenue agreed to set (Rs. 729 million in the year 2009) derived from off this amount against the other tax dues investment of Insurance Escrow Fund for the year from the CEB.” under review had been treated as income of the Board without being treated it as an income of (o) Certain foreign Aid Loans obtained by the the Escrow Fund. As a result, the profit of the Government for power sector developments of Board for the year and the Insurance Escrow Fund the country had been sub-lent to the Board. Fifty balance as at 31 December 2010 had been per cent out of the sub- loan aggregating Rs. overstated and understated by a similar amount 61,996.418 million that remained as at 31 respectively. December 2005 had been transferred to equity and the balance i.e. Rs. 30,998.209 million had (s) In terms of the Cabinet Decision dated 17 been treated as a single loan according to the December 2003, the programme loan of Cabinet Decision of 01 March 2006. However, as Rs. 3,047 million from the Japan Bank for the Government had not yet communicated the International Cooperation (JABIC) under interest rate and the payment method, that loan SL-C15 had been accounted by the Board as had remained as unsettled and without any receivable through Treasury. Subsequently, the Interest charge in the financial statements. This Director General of Treasury Operations by his position had not been disclosed in the financial letter No.TO/REV/SL/2/96 dated 2 December statements. 2006 had informed the Board that the said amount was not considered for setting off as (p) Capital Reserves comprised the Loan Redemption those are programme loans received to the balance of Rs. 17,447 million and Other Reserve Treasury. Accordingly, it had been accounted as balance of Rs. 165 million as at 31 December receivable in 2003 and since then it had been 2010. However, the details such as nature, carried forwarded in the subsequent financial purpose etc. of those reserves had not been statements as well without reviewing the nature disclosed in the financial statements. Further, of the receipt due to poor accounting. details of the Depreciation Reserve amounting to Rs. 23 million as well had not been disclosed in (t) A sum of Rs. 267.171 million had been paid to the financial statements. 11 Independent Power producers as interest on delay for the first five months of the (q) The damages to the property plant and year under review. However, the Board had not equipment other than heavy damages caused made provision for interest due on delayed due to terrorist attacks and several other major payments amounting to Rs.213.502million for expenditure such as Uthuru Wasanthaya the balance seven months of the year even Programme etc. had not been charged against though the Independent Power Producers had the Insurance Escrow Fund and those losses and claimed in terms of Power Purchase Agreement. damages had been charged against the funds of As such, the profit for the year under review and the Board. Therefore, the purpose specified in the accrued expenditure shown in the financial the accounting policies had not been complied statements had been overstated and understated with. by Rs. 213.502 million respectively.
CEB Annual Report 2010 167 The Chairman of the Board stated in this regard (W) Even though the Ceylon Petroleum Corporation as follows. had revised the fuel prices invoice to the Board in several times during 2007 the Board had “Arbitration is pending regarding the continued to record the liability in their accounts interest on delayed payment in respect of an at fixed prices since then. As a result, both the Independent Power Producer. A decision will amount due to the Ceylon Petroleum Corporation be taken after this is finalized.” and the accumulated loss as at 31 December 2010 had been understated by Rs. 992.624 (U) Sums of Rs. 27.407 million and Rs. 13.288 million million respectively. settled by the respective Government institutions in 2010 and 2009 respectively from their The Chairman of the Board stated in this regard outstanding balances had been erroneously as follows. credited to Other Income Account of the respective years. As a result, the Other Debtors “In the year 2007 it was decided at a Treasury and profit for the year under review had been meeting that the fuel price per liter is Rs overstated by Rs. 40.696 million and Rs. 27.407 55.00 Therefore the entire year fuel was million respectively while understating the taken into accounts based on the fixed price brought forward loss as at 01 January 2010 by of Rs. 55.00. However CPC was continued to Rs. 13.288 million. invoice diesel to CEB on their cost based formula price. (V) Electricity debtors of the Deputy General Manager's Office at Sabaragamuwa Province had On a later date CPC adjusted the fuel prices included a debtor balance of Rs. 106.812 million at Rs. 55.00 from 1st January 2007 to 3 which had been outstanding from National Paper December 2007 and balance period of 27 Company Limited as at 31 December 2010.” days diesel prices were not adjusted to fixed Contrary to the prudence concept, the penalty price. Therefore, the 27 days price difference interest of Rs. 13.599 million had been credited (Fixed price & Invoice price) amounted to Rs. to revenue account even though the account had 992.624 million. been disconnected in May 2010. It was further observed that legal action had not been taken to In accordance with treasury decision CEB recover above mentioned outstanding balance up does not agree with this amount, as a to 31 May 2011. payable item to CPC.
The Chairman of the Board stated in this regard (X) Provision made for the assets of the Board which as follows. were damaged in Northern Province valued at Rs. 360.698 million had been inappropriately shown “Rs. 50 Million out of the balance in the financial statements as a current liability outstanding from National PaperCorporation and as a result, the property plant and equipment has been settled subsequently and balance and current liability shown in the financial will be recovered during year 2012.” statements had been understated and overstated by a similar amount.
168 CEB Annual Report 2010 Further, the adjustments for the Fixed Assets provision made for the purposes and as such, Register and the property plant and equipment both property plant and equipment and the had not been made for the assets damaged in Provision for Damaged Assets Northern Province Northern Province. The estimated cost of such Account had been overstated by a similar damaged assets amounted to Rs. 628.500 amount. million. As a result, the property plant and equipment shown in the financial statements had 2.2.3. Accounts Receivable and Payable been overstated by that amount and the depreciation of such assets were being charged The following observations are made. continuously. (a) A sum of Rs.28.667 million out of Rs. 226.028 The Chairman of the Board stated in this regard million outstanding from Lanka Electricity as follows. Company, which is a Subsidiary Company of the Board, as at 31 December 2010 (in Western “All the electricity lines (Overhead and Province South II) had remained unrecovered over underground) of the region are capitalized a period for more than 5 years without any as a total figure for the region since the progress. maintenance of anelectricity line wise break up is impractical due to the massive volume. (b) A sum of Rs. 209.863 million out of the total outstanding balance of Rs. 519.540 million as at A major part of the Distribution network 31 December 2010 had only been confirmed by (Distribution Lines) in the Northern Province the Lanka Electricity Company. was damaged due to the war prevailed for many years. Since the connection lines (C) Rebate on electricity receivable from the General cannot be separately identified in the fixed Treasury amounting to Rs 349.707 million relating assets register the removal of the net book to Central Province remained unrecovered over a value of the assets damaged cannot be long period. done. Therefore, a provision was made against the damaged asset and the loss was (d) Debtors amounting to Rs. 225 million shown charged to Income statement. The total under debtors of the Project Division had been provision so made was Rs. 628 million which older than 05 years. was done with the approval of the Board. The Chairman of the Board stated in this regard The Subsequent construction in replacement as follows. of the damaged assets was charged against the provision made. The remaining balance “As per the direction given by the of the above provision is Rs. 360 million in Department of treasury Operation in year order to charge the future construction cost 2006 particular amount of Rs. 225 million to be incurred.” receivable on Street Lighting Bill, should be set off against the repayment of loans and (Y) Construction cost of the damaged properties in interest to Treasury. Once the repayments the Northern Province amounting to Rs. commence it can be set off against the 76.478 million had not been debited to the ount repayments on Treasury loans.”
CEB Annual Report 2010 169 (e) Proper action had not been taken on the 18 “The documents pertaining to acquisition of payable balances aggregating Rs. 51 million the companies mentioned in the report shown in the financial statements of the Project cannot be traced.” Division of the Board over a period exceeding 05 years. (d) The Board had reimbursed shareholders dividend tax to a Company since 2005 and total (f) A long outstanding receivable balance amounting reimbursed amount for past five years could not to Rs. 43.662 million in respect of repair and be identified due to lack of required information. maintenance of Government buildings was observed in the financial statements as at 31 (e) Sample test check revealed that there were 58 December 2010 without taking action to recover journal entries amounting to Rs. 916.698 million for a period exceeding four years. posted to the relevant. accounts without obtaining proper approval from the authorization 2.2.4 Lack of Evidence for Audit officer. The following observations are made (f) There were no sub-loan agreements in respect of (a) Information relating to carrying out a Board of seven loans amounting to Rs. 56,931 million Survey covering entire Property Plant and granted by the Treasury. The repayment schedule Equipment of the Board as at 31 December 2010 and the interest rate for those loans were not was not made available to audit. made available to audit.
(b) The financial statements had shown a Treasury (g) Acceptable reasons for none settling the payables loan balance of Rs. 1,200 million. Details of this aggregating Rs. 1,055.925 million for more than loan balance were not made available to audit. six months (62 per cent of that was over one year) were not made available for audit. (C ) As reported in my report for the preceding year, the Board approvals for acquisitions of majority 2.2.5. Non-compliance with Laws, Rules, share holdings of the following companies, by its Regulations and Management Decisions subsidiary companies, in 2009 were not made available to audit. The following instances of non-compliance were
Name of the Caylon observed in audit. Subsidiary Electricity Name of the newly Interest of the Company Board’s formed sub-sidiary Subsidiary (%) Interest (%) (a) The Board had invested its funds amounting to
LTL Holding (Pvt) 63 (I) LTL Transformers 100 Rs. 3,710.485 million as at 31 December 2010 in Ltd (Pvt) Ltd the Insurance Escrow Fund based on a (ii) LTL Galvanizers contribution of 0.1 per cent of the total value of (Pvt) Ltd 100 its gross fixed assets at the end of each year since LECO (Pvt) Ltd 55.2 (I) LECO Project (Pvt) Ltd 100 1989 contrary to the provisions in Section 46 of (ii) Ante LECO Merering Company (Pvt) Ltd 70 the Ceylon Electricity Board Act No 17 of 1969 The Chairman of the Board stated in this regard and Sections 11(a) and (b) of the Finance Act No. as follows. 38 of 1971.
170 CEB Annual Report 2010 (b) The Board had paid the Pay As You Earn Tax 3. Financial and Operating Review (PAYE) which should be borne by its employees contravening the Cabinet Decision taken on 13 3.1. Financial Review December 2007 to shift the Pay As You Earn Tax liability to employees since the next salary revision 3.1.1. Financial Results i.e. in 2009. The Pay As You Earn Tax paid by the According to the financial statements presented, Board contravening the said Cabinet Decision as the operations of the Board during the year at 31 December 2010 amounted to Rs. 557.329 under review had resulted in a pre tax net profit million. of Rs. 4,859 million as against with the pre tax net loss of Rs. 9,339 million for the preceding The Chairman of the Board stated in this regard year thus showing an improvement in operating as follows. result by Rs. 14,198 million as compared with the previous year. The main reasons for such an “Ministry of Power and Energy forwarded a improvement were as follows. cabinet paper 07/2116/332/050 dated 22 November 2007 on “Exemption of (a) Increasing the Board hydro generation by 48.7 employees of CEB from paying PAYE tax per cent from 3356 GWh in 2009 to 4988 GWh attributable to their official emoluments in 2010 representing 47 per cent of total under the Inland Revenue Act “was electricity generation due to satisfactory water considered along with the observation of level in hydro reservoirs had resulted in the the Ministry of Finance and approval was increase of the total electricity sales (billed) in the granted to the subject to the condition that year 2010 by 9.8 per cent from 8441 GWh in PAYE tax payable by the employees of 2009 to 9268 GWh in 2010. should not be borne by the Board after the next salary revision (CD/07/2116/332/050-13 (b) The thermal power generation of the Board had December 2007). decreased by 697 GWh from 2091 in 2009 to 1394 GWh in 2010 representing 13 per cent of However during the CEB salary revision the total electricity generation. Due to this reason 2009, this was informed to the salary & the fuel consumption for thermal generation had Cadre Commission and discussion held with decreased by 35.1 per cent from 538 M. Litres in trade unions but consensus regarding the 2009 to 349 M. Litres in 2010. The total fuel cost same could not be reached with all CEB trade for thermal generation of the Board had unions. decreased by 35 per cent from Rs. 25,126 million in 2009 to Rs. 16,340 million in 2010. At the present salary revision 2012, relevant particulars regarding the payment of PAYE (c) Decreasing the private thermal power generation tax by CEB has sent to the Salaries and Cadre by 7.3 per cent from 3884 GWh in 2009 to 3600 Commission for their information and GWh in 2010. necessary action on this matter.” However, it was further observed that the tax A summary of the financial results of the Group liability had not been passed to the employees in and the Board for the year under review and 2012 salary revision as well. previous year is given below.
CEB Annual Report 2010 171 Group Board difference between the real number of electricity Item 2010 2009 2010 2009 Rs. Rs. Rs. Rs. units consumed and the number of units billed as Millions Millions Millions Millions street lights had been allowed to be counted as Revenue 130,457 121,619 121,862 110,518 Cost of Sale (120,140) (125,363) (116,168) (118,187) the distribution loss and is included in the overall Gross Profit 10,317 (3,744) 5,694 (7,668) Other Income and Gain 3,727 4,218 3,063 3,412 system loss. Such practice distorts the actual Administration Expenses (3,722) (4,594) (1,851) (2,870) Financial Income 881 1,171 558 861 position of the system loss. Finance Cost (3,058) (3,376) (2,605)- (3,074) Other Expense (362) (225) - - Profit/(Loss) before Tax 7,783 (6,550) 4,859 (9,339) Income Tax Expenses (4,931) (3,053) (4,500) (2,236) Profit/(Loss) after Tax 2,852 (9,603) 359 (11,575) 3.2.2. Matters of Contentious Nature Minority Interest (1,262) (1,078) - - Profit/(Loss) for the year 1,590 (10,681) 359 (11,575) The following observations are made. 3.1.2 Liquidity Position (a) It was observed in audit that the Board had The following ratios indicate the liquidity position maintained the position in accordance with the of the Board for the year under review and the Ceylon Electricity Board Act No. 17 of 1969 as preceding year. amended by Act No.31 of 1969, that the Treasury 2010 2009 Circulars and Public Administration Circulars (a) Current ratio 1.2:1 0.54 : 1 issued by the Government from time to time to maintain uniform procedures and practices in (b) Quick assets ratio 1:1 0.38 : 1 relation to Finance and Administration in all (c) Cash and bank balance 0.02:1 0.01 : 1 public sector organizations including Public to current liabilities Corporations and Boards are not applicable to Board, if the Board of Directors of the Ceylon Ratios (a) and (b) are expected to be within a Electricity Board had not allowed to adopt as the given range of 2:1 and 1:1 respectively. administrative rules of the Ceylon Electricity Board. According to the above analysis it was revealed that the liquidity position of the Board for the (b) According to the information made available, the year under review had improved to a certain level Finance Manager of the Board had taken as against the previous year due to the decisions on his own on investment of insurance improvement of the hydro power generation. reserve throughout the years since 1990 that is the year of incorporation of the Fund, although 3.2 Operating Review the Board had not delegated him the powers for taking investment decisions. 3.2.1 System Losses Electricity bills for street lighting are still being ( c) In accordance with SLAS- 5 standard costs would prepared based on the information made be allowed where prices are subject to available from the result of the survey carried out fluctuation; otherwise the value of inventories in 2004. Nevertheless a large number of new shall be computed at the lower of cost or net street lights had been installed throughout the realizable value. According to the prevailing island since last survey the Board had not carried situation prices have only increased but not out a new survey to ascertain the real fluctuated. It was clear that the Board in most consumption for street lighting. Instead the instances had overestimated its standard prices
172 CEB Annual Report 2010 over the actuals. For instance the net income of Inland Revenue Act No.10 of 2006 and the recognized by overestimation of the material Board had not considered the instructions in prices and labour rates in the financial statements Government Financial Regulations 136 (2) and (7) of the year 2010 amounted to Rs. 1,785.179 , 137 (4), 138 (4) and (8) in this connection. million and Rs. 548.036 respectively in addition to recovery of Rs. 961.658 million as overheads. The Chairman of the Board stated in this regard as follows. In view of this position the fair valuation of the stock, work-in- progress and completed jobs as at “The dividend tax reimbursed amount has 31 December 2010 is open to question. For been deducted by the CEB from August 2011 instance, the standard cost of the concrete poles invoice. But due to injunction notice received is 69 percent to 93 percent higher than their from the High court of the Western Province actual cost. this amount had to pay it back. But court case & arbitration is continuing.” (d) Public Administration Circular No.15/90 of 09 March 1990 and Public Enterprises Circular No. (f) According to the Cabinet Decision dated on 31 PED/12 of 02 June 2003. March 2008, ten per cent of the renewable energy cost of the Board should be refunded by (I) The Board had recruited non-skilled and semi- Sustainable Energy Authority. However, a sum of skilled staff annually as clerks, cashiers, Rs. 802.774 million of such renewable energy storekeepers, typists, drivers, office aides etc. cost which wasreceivable to the Board according from the list furnished by the Ministry without to the above mentioned arrangement had not calling for Island-wide applications from qualified been refunded by the Sustainable Energy candidates through newspaper advertisements, Authority. Total refundable amount as at 31 Gazette notifications etc. as specified in circular December 2010 amounted to Rs. 897.025 instructions. million. However, the Sustainable Energy Authority had not even recorded it as a liability in (ii) According to paragraph 7.2 of the Public its financial statements and the Board had not Enterprises Circular No.PED/12, of 02 June 2003 got confirmed that balance, as well. all public enterprises should have their own Systems/Manuals covering all major operations, The Chairman of the Board stated in this regard regularly revised and updated. However, the as follows. Board had not updated its procedure manuals prepared 20 years ago. “At the time of formulating the Cost Based Tariff for Renewable Energy, it was decided (e) A subsidiary company had declared Rs.1,037 that CEB should bear only the portion million dividends for the shareholders and the equivalent to 90 per cent of avoided cost. It company had paid dividend tax of Rs.135 million was further agreed that full amount based for the above declaration to the Department of on tariff should be paid by CEB and the Inland Revenue. Further, it was revealed that the amount in excess of 90 per cent of avoided above dividend tax had been reimbursed without cost to be reimbursed by Sustainable Energy considering the sub-section, 10 (d), 61 (b), 65 (1), Authority (SEA) to CEB. CEB has beeng SEA
CEB Annual Report 2010 173 informing SEA monthly amount to be (i) Even though the Board was selling electricity to reimbursed. The amount receivable was Lanka Electricity Company since its inception amounting to Rs. 897.026 million as at 31 there is no sales agreement entered into between December 2010. Action will be taken to call those two parties. for confirmations.” (j) It was observed that the Lanka Electricity (g) According to the sample selected, the subsidiary Company had enjoyed an average credit limit of company producing power independently has a Rs. 1,127.896 million and the average credit group of companies involved in various business period between 30-46 days during the year activities. As such the Company uses its Bank under review. That position had been maintained account for its day today activities other than the ignoring the severe liquidity problems faced by power generation activities but the Board had the Board. reimbursed the debit tax claimed by the company without considering the purpose of transactions 3.2.3 Identified Losses whether the debit tax is relevant to the power According to the schedule of the agreement production. In addition, the Board had dated on 23 March 2007, the Northern Power reimbursed debit tax amounting to Rs.698,738 Company had agreed to make available plant relating to five banks accounts of another Capacity of 30 MW of electricity but the independent power producing Company without company had failed to achieve that target. As considering its business activities. There should be such, the Board had charged the Company a sum a proper mechanism to identify the transactions of Rs. 35.778 million as liquidated damages for of the companies to ensure the refund of debit the period January to June 2010. However, the tax only on transactions relating to the Board. Board had to pay the amount charged back to the Company due to a decision taken by the (h) The shortfall observed between the Insurance Cabinet on 28 July 2010. Therefore, that amount Reserve Fund balance and Investment of could be treated as a loss to the Board. Insurance Reserve Fund as at 31 December 2010 amounting to Rs. 2,090 million had not been 3.2.4 Management Inefficiencies invested in accordance with the self-insurance As per the loan agreement with Asian policy of the Board. Development Bank an 8 per cent return on revalued assets is required to declare dividends by The Chairman of the Board stated in this regard the LECO. As a result of the Company failed to as follows. achieve the required target, no dividends had been declared for the financial years 2002, 2003, Due to liquidity problem faced by the CEB, It 2007, 2008, 2009 and 2010. Therefore, the was not possible to invest shortfall Board had not received any income for the amounting of Rs.2,090 million. Action will be investment amounting to Rs. 628.002 million taken to invest the balance amount to the made in that Company. The Company had run at fund when the Liquidity Position is a net loss of Rs. 605.543 million after tax for the improved. year 2010 (previous year loss was Rs. 427.409 million) as well. It was not possible to ensure that the Board as the Parent Company had taken any
174 CEB Annual Report 2010 action to improve the Company's profitability. 3.5 Human Resources Management
3.3 Assets Management The following observations are made. A land to the extent of 02 acres 01 rood and 26 perches situated at Pettah had not been used (a) The cadre of the Board had not been revised after properly to get maximum benefit to the Board. 2007. The value of the land could not be ascertained from the register of fixed assets. (b) A data base for Human Resources Management The Chairman of the Board stated in this regard had not been maintained by the Board. as follows. The Chairman of the Board stated in this regard “This land had been vested with the then as follows. Government Electrical undertakings and transferred later to the CEB. “Preparation of HR Management database is Subsequently, since part of this land has already commenced by the Information been acquired and occupied by the Urban Technology Branch of CEB.” Development Authority, action will be taken to establish the proper ownership before (c) There were vacancies for 231 key posts in any development.” technical grades.
3.4 Implementation of Projects 3.6 Audit Committee It was observed that the Audit Committee of the The following observations are made. Board had not functioned effectively in the year under review as specified in the Paragraph 7.4.1 (a) Samanalawewa Mini Hydro Project –10 GWH per of the Guidelines for Good Governance Circular annum had commenced before 2006 and it had No. PED/12 issued by the Department of Public been suspended due to a leak in the reservoir. Enterprises in 02 June 2003 due to the The total cost estimate for the Project amounted following reasons. to Rs. 200 million and it had been under study level even as at the end of the year under review. (a) Only two meetings had been held in 2010.
(b) The Government had allocated a sum of Rs. (b) Internal audit reports and the Auditor General's 1,998 million to the Board in the Annual reports had not been reviewed in detail and the Estimates for the year 2010 under the Ministry of follow up action had not been taken. Power and Energy for 27 electrification projects. However, no utilisation whatsoever had been (c) Interim financial statements, investigation made from that provision in the year 2010 and reports, monthly financial and physical progress, some of the main reasons for the savings were budgetary controls etc. had not been reviewed. improper planning, administration delays, making allocations prior to finalization of the Projects and (d) There was no member competent in the field of intention of funding arrangement for some other accounting in the Committee. lower estimated Projects. CEB Annual Report 2010 175 3.7 Budgetary Control Significant variances were observed between the budget and the actuals thus indicating that the budget had not been made use of as an effective instrument of management control.
4. Systems and Controls Significant observations made in systems and controls during the cause of audit were brought to the notice of the Board from time to time. Special attention is needed in respect of the following areas of control.
(a) Property, Plant and Equipment
(b) Credit Obligation
(c) Inventories
(d) Debtors and Creditors
(e) Power Purchases
(f) Procurement
(g) Budget
(i) Human Recourse Managements
(j) Accounting and Financial Management
(k) Investments
......
H.A.S. Samaraweera Auditor General
176 CEB Annual Report 2010 Replies to the Auditor General’s Report
REPLIES TO THE REPORT OF THE AUDITOR • Nugegoda Land GENERAL ON THE CONSOLIDATED FINANCIAL Although this has been reported by the Auditors STATEMENTS OF THE CEYLON ELECTRICITY the value of the land is not reflected in the books BOARD FOR THE YEAR ENDED 31 DECEMBER of Accounts of Nugegoda Branch. This is being 2010 IN TERMS OF SECTION 14(2)(C) OF THE investigated. FINANCE ACT NO 38 OF 1971. • Hikkaduwa Primary 1.2 Responsibility of the Management for the There is a lease agreement with the owners and Financial Statements thereafter this matter is pending in Court due to Informative a dispute.
1.3 Scope of Audit and Basis of Opinion • Hikkaduwa Consumer Service Centre Informative This is a 50 years lease. (lease agreement No.571) The lease agreement is available. 2. FINANCIAL STATEMENTS • Galkanda Land 2.1 Opinion Original deed is available. Informative • Udahamulla Land 2.1.1. Accounting Policies in Consolidations This is a land on 99 years lease for which the Discussions had been taken place and the decisions copies of the deed are available at the branch. not yet finalized. Action will be taken to conclude • Nugegoda Stanley Thilakaratne Mawatha & this matter and to adopt in future. Kelaniya Substation Land These lands have been purchased outright by 2.1.2. Deficiencies in Accounting of Subsidiary LECO for the purpose of building Primary Companies Substations. These lands have to be transferred to CEB. Lanka Electricity Company (Pvt) Ltd (LECO)
(ii) The breakup of the amount of Rs.358.2 Mn is as (I) The replies given by the Lanka Electricity follows. Company are as follows. Moratuwa 103,575,567 • Nugegoda Super Market Premises Nugegoda 87,680,406 Alternative land has been given by the Kotte Kelaniya 43,906,362 Municipal Council, but the ownership of the land has not been transferred to LECO. Action would Kaluthara 43,439,333 be taken to obtain the ownership. Kotte 40,176,703 Negombo 25,605,767 • Pitakotte CS Galle 12,189,857 Photocopy of the deed is available for this land which has been taken over in 1998. Action will Head office 1,614,207 be taken to obtain a certified copy. Total Rs. 35,818,602
CEB Annual Report 2010 177 Capital work-in Progress is comprised of 2.2 Comments on Financial Statements of the individual jobs and costs incurred in executing the Ceylon Electricity Board jobs. Cost particulars are recorded in the job cards using various accounting documents. 2.2.1 Sri Lanka Accounting Standards & Accounting Policies The details of the capital work in progress can be checked at Branch level as the Accounting (a) Cost of sales has been disclosed in the note no records are maintained at Branch level. Action 04 of the CEB financial statements and profit has already been taken to transfer completed share of minority, prior year adjustments have jobs to Assets Accounts. been disclosed in the CEB consolidated financial statements. (iii) Noncurrent Assets had not been tested for impairment, owing to the highly specialized (b) Inventories used by the Generation & technical nature of the assets. Impairment Transmission Divisions are valued at cost using testing of these assets is a complex and costly the FIFO system as the material used for the jobs process. are peculiar to the respective jobs of those Divisions.The cost of the project of same are (iv) In the year 2010 LECO did not have a company being transferred to the Assets Accounts. The Lawyer and all cases were handled by several costs of maintenance are treated as expenditure independent Private Lawyers, as well as the incurred by the Board. Attorney General's Department. Therefore, it was not possible to ascertain contingent Since the uniformity in prices of the materials of liabilities. Action will be taken in the future to the distribution division are to be maintained obtain necessary confirmations from the LECO evenly throughout the year for service lawyers and make provision in the accounts if connection, constructions, maintenance etc, to necessary. facilitate the consumers, the method of Standard Prices are being applied based on the (v) Physical verification of inventory was recommendation of the international consultants. inadvertently over looked during the Physical verification, in the year 2011. Physical The method of valuation of inventories at verification was carried out for these inventories standard prices was referred to the Urgent Issues on 30/11/2011. Task Force of the Institute of Chartered Accountants of Sri Lanka for a ruling which is (vi) The error has now been corrected. quoted as follows.
(vii) LECO has given undertaking to avoid this in the “So long as the valuation of stores materials future. based on the standard prices results approximately to cost, which comprises all cost of (viii) These differences are now being reconciled and purchase, cost of conversion and other costs hope to complete before finalizing of 2011 incurred in bringing the inventory to their present accounts. location and condition” as per paragraph 10 of SLAS 5(revised 2005).You may use the standard
178 CEB Annual Report 2010 price in valuation of stores materials as referred”. as part of surcharge. A separate revenue account code 1130 has been created to account for all However, steps were taken to create a provision surcharges levied from the consumer. Accordingly for the unrealized profit of the inventories of interest has been accounted under this code and which the prices are comparatively higher than shown as a separate item under turnover. the actual cost. However action will be taken to record interest charge for the delay on payment of electricity (c) Although details regarding the change of the bills under the other income from the year indirect share holding of Nividu (Pvt) Ltd has been 2011 onwards. requested from LTL Holdings (Pvt) ltd. No response has been received upto date. (c) Steps will be taken to follow an uniform basis for all regions. (d) Action had been already taken and implemented from 2011 onwards. (d) It is a practice of CEB in past several years Street lighting debtors classified under other receivables (e) This has been already disclosed in the CEB in the financial statement due to the fact that the Financial statements. street lighting sales are determined by the estimated basis which is to be recovered from the (f) Majority of Assets base cannot be subjected to government budget and no separate consumer the “impairment test” as those are involved in account is created in the system. highly technical nature and expertise is required to have the test of this nature. (e) Details are insufficient to reply the question.
2.2.2. Accounting Deficiencies (f) As mentioned in the query itself the main reason for not transferring the long outstanding work- (a) Samanalawewa Japanese Camp site which is part in-progress balance is the unavailability of of Samanalawewa Project was handed over to completion reports of the constructions. Further, establish Sabaragamuwa University after delay in obtaining permission from Authorities, obtaining cabinet approval for consideration of Customers concerned, and pending legal cases Rs. 100 Mn. However according to the records have also caused the delays in transferring the available this Rs. 100 Mn yet to be received to Completed Jobs. However, it is being CEB. We have already informed Treasury to continuously monitored, and already a portion obtain this amount. has been transferred to fixed assets.
Samanalawewa land & building were capitalized (g) The classification of Material Price variance under in the year 1992, and it was not identified as miscellaneous income and the labour rate separate components of buildings. Therefore it is variance under personnel cost had been a difficult to deduct Rs. 100 Mn from bulk amount common practice in all four distribution division of building value. However an attempt will be of CEB. At the time of preparing CEB Financial made to find the original value. statements material price variance has been set off against the distribution cost (b) Interest charged on the Electricity Bill is recognized
CEB Annual Report 2010 179 (h) Please refer the reply to the question on 2.2.1. method will be studied and action will be taken (d). accordingly.
(i) This has been corrected in the CEB consolidated (s) At the initial point, the Government Assistance financial statements. under Programme Loan Rs. 3047 million is recognized by the CEB as receivable from (j) Arrangements will be made to disclose the policy Treasury in terms of Cabinet decision dated 17th in respect of Deferred Tax in the CEB financial December 2003. However, the above Programme statements in the future. Loan would not be received by the CEB as per the reply given by the Director General of (k) Action has been taken for future compliance. Treasury Operations in his letter No. TO/REV/SL/2/96. Action will be taken to write off (l) Action has been taken to clear the balances in this balance after obtaining proper approval. 2011 (t) Arbitration is pending regarding the interest on (m) Total balance has been cleared in year 2011 delayed payment in respect of an Independent Power Producer .A decision will be taken after (n) In terms of the letter issued by the Department of this is finalized. Inland Revenue agreed to set off this amount against the other tax dues from the CEB. (u) Action will be taken to make necessary adjustments in the Finance Statements (o) According to the letter No. TO/REV/SL/2/96 dated 2nd December 2006 which was sent by the (v) Rs.50 Million out of the balance outstanding Director General of Department of Treasury from National Paper Corporation has been settled Operation in year 2006, the details of re- subsequently and balance will be recovered scheduled interest rate and repayment method during year 2012. will be notified by the Treasury after commissioning of Puttalam Coal Power Project. (w) In the year 2007 it was decided at a Treasury Disclosure will be made in 2011.(p) Noted for meeting that the fuel price per liter is Rs 55.00 future compliance. Therefore the entire year fuel was taken into accounts based on the fixed price of Rs. 55.00. (p) Noted for future compliance However CPC continued to invoice diesel to CEB on their cost based formula price. (q) Damages and losses to fixed assets have been charged against the Insurance Escrow Reserve On a later date CPC adjusted the fuel prices at Account as per the given scope of the Accounts Rs. 55.00 from 1st January 2007 to 3rd Circular No.GM/FM/41/89, 287. December 2007 and balance period of 27 days diesel prices were not adjusted to fixed price. (r) It is the practice that since fund was created Therefore the 27 days price difference (Fixed price interest income from investment had been & Invoice price) amounted to Rs. 992.624 Mn. treated as income of the Board. Proposed In accordance with Treasury decision CEB does
180 CEB Annual Report 2010 not agree with this amount, as a payable item to (c) Action has been taken to recover the outstanding CPC amount from the Treasury.
(x) All the electricity lines (Overhead and (d) As per the direction given by the Department of underground) of the regions are capitalized as a Treasury Operation in year 2006 particular total figure for the regions since the maintenance amount of Rs. 225 million receivable on Street of a electricity line wise break up is impractical lighting Bill, should be set off against the due to the massive volume. repayment of loans and interest to Treasury. Once the repayments commence it can be set off A major part of the Distribution network against the repayments on Treasury loans. (Distribution Lines) in the Northern Province was damaged due to the war prevailed for many (e) The majority of these creditors consist of years. Since the connection lines cannot be retention money and other unsettled dues to separately identified in the fixed assets register contractors/suppliers etc. However, none of the removal of the net book value of the assets these contractors have claimed these amounts damaged cannot be done. Therefore, a provision upto now. Therefore, action will be taken to was made against the damaged asset and the write back these amounts outstanding for over loss was charged to Income statement. The total five years to the profit and loss account. provision so made was Rs. 628Mn which was done with the approval of the Board. The (f) The claim have been referred to the respective Subsequent construction in replacement of the Ministries by the Ministry of Power & Energy. damaged assets was charged against the provision made. The remaining balance of the 2.2.4. Lack of Evidence for Audit above provision is Rs. 360mn in order to charge the future construction cost to be incurred. (a) Most of the assets are fully verified and the balance assets on sample basis due to (Y) This has been rectified in the year 2011. impracticability. Eg. Distribution and Transmission lines. 2.2.3 Accounts Receivable and Payable (b) Information is available for perusal. (a) Out of the Rs. 28,667,524/- outstanding from LECO Rs. 16,373,008/- is relating to self (c) The documents pertaining to acquisition of the generating rebate which has been recovered by companies mentioned in the report cannot be LECO from the Kotte bill in 2006 based on a traced. letter sent by Chairman CEB agreeing to give a self generating rebate. Action is being taken to (d) Information is available for perusal. adjust this amount in the CEB records. The balance amounts are still under dispute and (e) Although the Journal entries were checked, by an action is being taken to rectify this in 2012. oversight some Journal entries have not been signed by an authorized officer. The omission has (b) Confirmations had been called for entire been rectified and instruction have been given to outstanding balance. not to repeat this types of lapses.
CEB Annual Report 2010 181 (f) Please refer reply to the question No. 2.2.2 (0) considered along with the observation of the Ministry of Finance and approval was granted to (g) Region 01 the subject to the condition that PAYE tax Balances under 7 to 12 months and 1 to 3 years payable by the employees of should not be borne age categories mainly consist of the payables for by the Board after the next salary revision. the materials received under SIDA project. This (CD/07/2116/332/050-13/12/2007). balance has already been settled by year 2011 and the balances in 3 to 5 years and over 5 years However during the CEB salary revision 2009, this categories in the process of clearance. was informed to the salary & Cadre Commission and discussion held with trade unions but Region 02 consensus regarding the same could not be Payables over 6 months amounting Rs. reached with all CEB trade unions. 161,241,621/- and is already traced and being continuously monitored for settlement. At the present salary revision 2012, relevant particulars regarding the payment of PAYE tax by Region 03 CEB has been sent to the Salaries and Cadre Out of payables over 6 months amounting Rs. Commission for their information and necessary 41.3 Mn is relating to Tender Retentions and action on this matter. Lease Creditors which will be settled over a period. Balance is being traced to settle them 3. FINANCIAL AND OPERATING early. REVIEW
Region 04 3.1 Financial Review
This includes payments due to suppliers, LTL, 3.1.1 Financial Results Retention, street light maintenance & other balances due. These balances are in the process (a) Informative. of being cleared. (b) Informative. (c) Informative 2.2.5. Non-compliance with Laws, Rules, Regulations & Management Decisions 3.1.2 Liquidity Position Informative (a) The Escrow Fund was formed with funds which are immediately required for the purpose of 3.2. Operating Review indemnifying a loss that may occur at any given time. 3.2.1 System Losses Census had been carried out in May 2010, and (b) Ministry of Power and Energy forwarded a a report based on the results has been prepared cabinet paper 07/2116/332/050 dated and submitted to the Management. Therefore, 22.11.2007 on “Exemption of employees of CEB a policy decision is to be taken in this regard. from paying PAYE tax attributable to their official emoluments under the Inland Revenue Act “was
182 CEB Annual Report 2010 3.2.2. Matters of Contentious Nature manuals and updated manuals will be issued in due course. (a) The Ceylon Electricity Board is a statutory body established by the CEB Act no 17 of 1969 as (e) The dividend tax reimbursed amount has been amended by Act no. 31 of 1969. CEB follows the deducted by the CEB from August 2011 invoice. Treasury circulars issued to public corporations But due to injunction notice received from the and boards. High court of the Western Province this amount had to pay it back. But court case & arbitration is (b) Noted continuing.
(c) It has been the practice of the CEB to value the (f) At the time of formulating the Cost Based Tariff stocks at standard prices which have been for Renewable Energy, it was decided that CEB prepared based on the prices of the materials should bear only the portion equivalent to 90% prevailed in the previous year and published at of avoided cost. It was further agreed that full the beginning of year 2010. These prices will amount based on tariff should be paid by CEB remain evenly throughout the year. Due to the and the amount in excess of 90% of avoided cost competitive bidding process, the prices of some to be reimbursed by Sustainable Energy Authority of materials either may have increased or (SEA) to CEB. CEB has been informing SEA decreased. Action has been taken to minimize monthly amount to be reimbursed. The amount such variances as much as possible in the future. receivable was amounting to Rs. 897,025,999/= However, steps were taken to create a provision as at 31/12/2010.Action will be taken to call for for the unrealized profit of the inventories of confirmations. which the prices are comparatively higher than the actual cost. (g) According to the confirmation from Lakdhnavi Ltd the Debit tax has been claimed only for the (d) Public Administration Circular No. 15/90 of 09 transaction related to the power purchases. March 1990 and Public Enterprises Circulor No. PED 12 of 02 June 2003. (h) Due to liquidity problem faced by the CEB, It was not possible to invest shortfall amounting of (I) Noted Rs.2,090 million. Action will be taken to invest the balance amount to the fund when the (ii) Ceylon Electricity Board being a statutory body Liquidity Position is improved. follows Public Enterprises guidelines for good governance introduced by PED/12 dated (i) Noted. 02.06.2003 as applicable. During 1985-1987 as a first attempt, CEB prepared operating and (j) Lanka Electricity Company had settled the bill functional manuals for all the key posts of CEB. within 30 days. CEB follows Treasury and Public Administration Circulars on most operations/system and adopts 3.2.3. Identified Losses some and issue circulars of our own, by getting Liquidated Damages amount should be Rs.35.778 necessary approvals from relevant authorities. million. When Liquidated Damages amount Action was already taken to update procedure charged from Northern Power it has been
CEB Annual Report 2010 183 recorded as deduction in Power Purchase cost. So Old Laxapana Power Station Rehabilitation Project as per the cabinet decision this amount has been paid along with the power purchase cost. The above project has been financed by the Uni Credit Bank AG Government and Ceylon 3.2.4. Management Inefficiencies Electricity Board.
(a) As per the loan agreement with Asian The allocation granted under Finance Code (17) Development Bank an 8 percent return on Foreign Aid Related Domestic Fund has been revalued assetsis required to declare dividends requested for the 15% Advance Payment for the .During 2002, 2003, 2007, 2008, 2009 and above Project. The advance payment nearly Rs. 2010above target had not been achieved. 604,321,011 was made by Hatton National Bank Therefore, dividend was not declared. However, (Local Commercial Bank) as per the loan since the acquisition of LECO shares, CEB has agreement signed between HNB plc and received Rs 1,028,064,940 as dividends. Domestic Socialist Republic of Sri Lanka. Accordingly, the CEB has accounted above 3.3 Assets Management advance payment in to its books.
This land had been vested with the then Rural Electrification Project – 4 (SIDA) Government electrical undertakings and transferred later to the CEB. Subsequently, since The allocation was granted for the above project part of the this land has been acquired and to utilize any expenses which were not eligible to occupied by the Urban Development Authority, reimburse from the SIDA Credit Agreement. action will be taken to establish the proper During the year 2010, material has been supplied ownership before any development. by the contractor and the payment was directly made by the SIDA. 3.4. Implementation of Projects After completion of schemes, the claims for the (a) Samanalawewa Mini Hydro Project is continuing eligible expenditure was made by the CEB and to be under study due to leakage. balance has been reimbursed in year 2011.
(b) Colombo city Electricity Distribution Project Hence, part of utilized allocation was transferred to other projects by the MOPE which were in In case of Local expenditure which was not shortfall in year 2010.After transfer arrangements eligible to claim from JICA, the expenditure made by the MOPE the actual unutilized incurred by the CEB has been financed by the allocation was Rs. 155Mn in year 2010. CEB from its own Budget. Lighting Sri Lanka NCP (RE 4 Expansion) There was no necessity to utilize Rs. 400Mn Of allocation granted under Finance Code (17) for The allocation was granted with the expectation the Distribution and Transmission works. Hence, that the project might be commenced in year Rs.400Mn has been transferred to other projects 2010.But above project could not be started due which were in shortfall and no balance available. the delay of loan finalization. There were no
184 CEB Annual Report 2010 construction works carried out in year 2010, the 3.6. Audit Committee allocated amount of Rs. 5,000,000 has remained. (a) Due to changes in the board in first quarter of System Control Centre Modernization Project 2010, the members to the audit committee was under Clean Energy and Access Improvement appointed in July 2010.Hence, the required Project of ADB meetings could not be held due to time constraints. The budgeted amount for the year 2010 was mainly for the part 5 (Consulting Services for (b) It is impossible to review all internal audit reports Project Implementation Support for System and Auditor General's reports in Audit Control Modernization) of the Clean Energy and Committee meeting due to time frame and Access Improvement Project. selected audit reports were discussed in detail. Decisions have been made regarding stock The Consultancy Contract started in may 2010 control in Generation section, recording of after some procurement delays. However, a major Property, Plant & Equipment and stock portion of the expected work was completed in adjustment accounting entries and remedial year 2010 consuming approximately Rs. 38 Mn. actions were implemented through the direction The balance work was shifted to year 2011. of the committee.
3.5. Human Resources Management (c) Interim financial statements, Investigation reports, monthly financial and physical progress etc had (a) Last approved personnel cadre in 2007 was not been discussed in the audit committee and amended subsequently from time to time on action will be taken to discuss these issues in piece meal basis considering the expansion of future. CEB in Distribution, Transmission & Generation Divisions. Accordingly, Management services (d) Noted. department approved cadre of CEB as at 31.12.2010 is 17,559. 3.7. Budgetary Control
(b) Preparation of HR Management database is Significant variance was due to improved hydro already commenced by the Information condition prevailed in the 2010. Therefore, Technology Branch of CEB. significant savings was reported from cost of Thermal Power. (c) During the year 2010, action was taken to fill vacancies of 159 Executive Grade, 279 Middle 4 SYSTEMS AND CONTROLS Level Technical Grade, 85 Clerical & Allied Grade and 318 Labour Grade Vacancies. However, there Noted were few remaining vacancies in the Technical Grade which were not filled as at the end of the year.
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