8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 CONTENTS • Board of Directors ...................................................................................... 02 • Notice .......................................................................................................... 03 • Directors' Report ........................................................................................ 06 • C & AG Comments ....................................................................................... 24 • Auditors' Report ......................................................................................... 25 • Balance Sheet ............................................................................................. 30 • Profit and Loss Account ............................................................................. 31 • Cash Flow Statement ................................................................................. 32 • Significant Accounting Policies & Notes .................................................. 34 • Statement relating to Subsidiary Companies ........................................... 55 • Annual Reports of Subsidiary Companies 1 8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 BOARD OF DIRECTORS Shri D.J.Pandian,IAS Chairman Shri L.Chuaungo,IAS Director Shri R.N.Singh Director Shri Bimal.N.Patel Director Smt.Shahmeena Husain,IAS Director(Admn.) Shri Mukesh Puri,IAS Managing Director (up to 2-7-2012) Shri Raj Gopal, IAS Managing Director (from 2-7-2012) DIG OF POLICE (SECURITY) : Shri V.J.Gautam, IPS COMPANY SECRETARY Shri Parthiv Bhatt SR. EXECUTIVES BANKERS UCO Bank Canara Bank 1. Shri K.M. Shringarpure State Bank of India Allahabad Bank General Manager (F &A) Bank of India Syndicate Bank 2. Shri K.P.Jangid Central Bank of India Bank of Baroda General Manager(Comm.) Union Bank of India Indian Overseas Bank 3. Shri Y.D.Brahmbhatt Dena Bank Karur Vysya Bank I/c CE (Tech.) Indian Bank Vijaya Bank STATUTORY AUDITORS COST AUDITORS M/s S.C.Bapna & Associates. M/s. R. K. Patel & Co. Chartered Accountants, Cost Accountants Vadodara. Vadodara. REGISTERED OFFICE SUBSIDIARY COMPANIES Sardar Patel Vidyut Bhavan 1. Gujarat State Electricity Corp. Ltd Race Course 2. Gujarat Energy Transmission Corp.Ltd Vadodara - 390 007 3. Uttar Gujarat Vij Co. Ltd. Phone: 0265-2310582-86, Fax: 0265-2337918 4. Dakshin Gujarat Vij Co.Ltd web site : www.guvnl.com 5. Paschim Gujarat Vij Co. Ltd. 6. Madhya Gujarat Vij Co. Ltd. 2 8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 NOTICE TO SHAREHOLDERS NOTICE is hereby given that the Eighth Annual General Meeting of the Members of Gujarat Urja Vikas Nigam Limited will be held on Saturday, the 29th December,2012 at 5.00 p.m. at the Registered office of the Company at Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390 007 to transact the following business: ORDINARY BUSINESS: 1 To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2012 and Profit & Loss Account for year ended on that date along with notes forming part of the same and the Reports of the Board of Directors, Statutory Auditors thereon along with Comments, if any, of the Comptroller and Auditor General of India. 2. To appoint a Director in place of Shri Bimal Patel, who retires by rotation and is eligible for reappointment 3. To decide the remuneration payable to Statutory Auditors appointed by the Comptroller and Auditor General of India(C&AG), New Delhi for the financial year 2012-13. SPECIAL BUSINESS: 4. To consider and if thought fit, to pass ,with or without modification(s),the following Resolution as an Ordinary Resolution: “RESOLVED THAT Shri Raj Gopal,IAS who was appointed as an Additional Director of the Company effective from 2nd July,2012, under section 260 of the Companies Act,1956 and who holds such office up to the date of this Annual General Meeting and who is eligible for reappointment , be and is hereby appointed as a Director (Continuing as Managing Director) of the Company." By Order of the Board Date: 13 -12-2012 Parthiv Bhatt Place: Gandhinagar Company Secretary REGISTERED OFFICE : Sardar Patel Vidyut Bhavan Race Course Vadodara – 390 007 3 8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE, AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. 2. Proxies, in order to be effective must be received by the Company at its Registered Office not later than 48 hours before the time for holding of the meeting. 3. Explanatory Statement pursuant to the provisions of Section 173(2) of the Companies Act,1956 is annexed hereto as Annexure to the Notice. 4. The Statutory Auditors M/s S.C.Bapna & Associates, Chartered Accountants, Vadodara were appointed by the Office of the Comptroller and Auditor General of India (C & AG) for F.Y.2011-12 . M/s. S.C. Bapna & Associates, Chartered Accountants, Vadodara have been reappointed as the Statutory Auditors of the Company for the financial year 2012-13 by the office of C & AG as the Company continues to attract the provisions of Section 617 read with the provisions of section 619 (2) of the Companies Act, 1956. As per the provisions of the section 224(8)(aa) of the Companies Act remuneration of Statutory Auditors appointed by the C&AG of India shall be fixed by the Company in General Meeting or in such manner as the Company in General meeting may determine. 4 8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 ANNEXURE TO THE NOTICE : Explanatory Statement pursuant to Section 173(2) of the Companies Act,1956 Item No. 4 The Government of Gujarat vide GAD Notification No. AIS/35.2012/20/G dated 27th June ,2012 placed the services of Shri Raj Gopal, IAS to the disposal of Energy and Petrochemicals Department for appointment as Managing Director, Gujarat Urja Vikas Nigam Limited vice Shri Mukesh Puri, IAS transferred. Further Energy and Petrochemicals Department,Govt. of Gujarat vide letter No. GUV-14- 2012-1948-K dated 28th June,2012 directed GUVNL to take further necessary action for appointment of Shri Raj Gopal, IAS as Managing Director of the Company in terms of the provisions of Articles of Association of GUVNL. Accordingly Shri Raj Gopal,IAS was appointed as an Additional Director pursuant to section 260 of the Companies Act,1956 and w.e.f. 2nd July, 2012. He holds office as an Additional Director up to the date of this Annual General Meeting(AGM). Shri Raj Gopal,IAS was also appointed as Managing Director of the Company w.e.f. 2nd July,2012. On his appointment as Director at this Annual General Meeting , he will continue to be the Managing Director of the Company. Shri Raj Gopal is a senior IAS officer of 1987 batch. He has held various important positions in the Government. He has long, rich and varied experience of administration in various areas. Your Directors, therefore, recommend the resolution for your approval. None of the Directors, except Shri Raj Gopal, IAS is interested or concerned in this resolution. By Order of the Board Date: 13 -12-2012 Parthiv Bhatt Place: Gandhinagar Company Secretary REGISTERED OFFICE : Sardar Patel Vidyut Bhavan Race Course Vadodara – 390 007 5 8th GUJARAT URJA VIKAS NIGAM LIMITED Annual Report 2011-12 DIRECTORS’ REPORT To, The Members, Your Directors are pleased to present the EIGHTH ANNUAL REPORT together with Audited Accounts for the Eighth Financial Year ended 31st March, 2012. FINANCIAL RESULTS: The Company was operationalized w.e.f. Financial Year 2005-06. The Company has continued the efforts to sustain the performance and growth momentum over the years. The financial results of the F.Y. 2011-12 are as under: Sr. [` in Lakhs] Particulars No. 2011-12 2010-11 1 Total Turnover 2485600.65 2031505.69 2 Total Expenditure 2472302.95 2018935.95 3 Profit Before Tax 13297.70 12569.74 4 Provisions for Income tax - - Current Year(MAT) 2720.00 2600.00 - Past Years 3848.35 2400.00 5 Profit After Tax 6729.35 7569.74 6 Carried forward loss of erstwhile GEB (52367.22) (59936.96) 7 Balance carried to Balance Sheet (45637.87) (52367.22) Considering the total income of ` 2485601 Lakhs and total expenditure of ` 2472303 Lakhs, the Company has earned Profit Before Tax (PBT) of ` 13298 Lakhs as against ` 12570 Lakhs in the previous year. Since the Income Tax Act provides for payment of Minimum Alternate Tax (MAT) on book profit, a provision of ` 2720 Lakhs is made towards MAT liability (Previous Year ` 2600 Lakhs). In addition, on account of additional demand from the Income Tax Department in respect of Assessment Year 2009-10 due to disallowance of interest expenditure for A .Y. 2007-08 towards disallowance of other expenditure and for A Y 2008-09 towards disallowance of FBT expenditure, a provision of ` 3848 Lakhs is made to take care of these liabilities though the Company has contested these demands (Previous Year ` 2400 Lakhs). This leaves a Profit After Tax (PAT) of ` 6730 Lakhs as against ` 7570 Lakhs in the previous year. Since the Company inherited a loss of ` 73724 Lakhs from erstwhile GEB, despite net profit for the 7 consecutive years, the Company has to carry forward a loss of ` 45637 Lakhs (Previous Year ` 52367 Lakhs). SHARE CAPITAL: During the year 2011-12, 60,82,00,000 no. of equity shares of `10/- each were allotted to Govt. of Gujarat against capital contribution to GUVNL for Capital Infusion in Subsidiary Companies / implementation of Govt. Schemes pursuant to various Govt. of Gujarat Resolutions. The paid up capital as on 31-03-2012