8th - mesco.in › ann-rep › Annual Report09-10.pdf · Mangalore Electricity Supply Company Limited 2 BOARD OF DIRECTORS 1. Smt. G. Latha Krishna Rao, IAS - Chairperson 2. Sri

8th

Annual Report 2009 – 2010

Mangalore Electricity Supply Company Limited


2

BOARD OF DIRECTORS

1. Smt. G. Latha Krishna Rao, IAS - Chairperson

2. Sri. S.Sumanth - Managing Director

3. Sri. K.Ramakrishna - Director (Tech)

4. Smt. Aditi Raja - Director

5. Sri. T.Sham Bhatt, IAS - Director

6. Sri. Alok Mohan IPS - Director

7. Smt. Parvathy Keshavachar - Director

8. Sri. A.N.Sridhara - Director

9. Sri. L.Ravi - Director

10. Sri. M.Nagaraj - Director

11. Sri. P Rama Amin - Director

12. Sri. G.K Shadaksharappa - Director

Corporate Office

Paradigm Plaza, A.B Shetty Circle, Mangalore – 575001

Bankers :

1. Syndicate Bank

2. State Bank of India

3. State Bank of Mysore

4. Canara Bank

5. Vijaya Bank

6. Corporation Bank

7. Punjab & Sindh Bank

8. UCO Bank

9. Indian Bank

10. Axis Bank

11. Karnataka Bank

Statutory Auditors

M/s. Ganesh & Sudhir, Chartered Accountants, Mangalore

Annual Report 2009-2010

3

TABLE OF CONTENTS

1. Directors‟ Report 4

2. Addendum to the Directors‟ Report 25

3. Auditors‟ Report 28

4. Annexure to the Auditors‟ Report 32

5. Comments of the Comptroller and Auditor General of

India on the Annual Reports 35

6. Balance Sheet 36

7. Profit & Loss Account 37

8. Schedules 38

9. Cash Flow Statement 69

10. Balance Sheet Abstract & Business Profile. 70

11. Vital Statistics 71

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4

DIRECTORS’ REPORT FOR FY 2009-10

1. The Board of Directors herewith presents the 8th Annual Report on the business and

operations of the Company along with the Audited Accounts for the year ended 31st

March, 2010.

2. In a year marked with challenges and opportunities, resorting to innovative technological

concepts and efforts, the Company has achieved credible results especially with regard

to reduction in distribution losses and failure of transformers, which stands at 12.64%

and 9.49% respectively.

3. With an annual turnover of about Rs.1200.66 Crs. and a committed pool of 4112

employees, the Company is serving 16.60 lakh Nos. of consumers in the four revenue

districts of Karnataka State, viz., Dakshina Kannada, Udupi, Shimoga and

Chikkamagalur.

4. At a glance the status of the Company as on 31st March 2010 is as follows:

Area of distribution and supply (Sq. Km.) 26,222

Number of sub stations 220 KV, 110 KV, 66 KV (of KPTCL) 67

Number of 33 KV stations 29

Number of Distribution Transformers 32140

Length of LT Lines (in CKMs) 66084.14

Length of 11 KV Lines (in CKMs) 23647.312

Length of 33 KV Lines (in CKMs) 723.81

Number of Electricity consumers (in lakhs) 16.60

Gross Fixed Assets (as on 31-03-2009) (in Crs.) 918.16

Net Fixed Assets as on 31.3.2009 (in Crs.) 600.79

Total Income (in Fy-09) (in Crs.) 1072.59

Net Profit (in Fy-09) (in Crs.) -41.33

Gross Fixed Assets as on 31-03-2010 (in Crs.) 1070.52

Net Fixed Assets as on 31.3.2010 (in Crs.) 719.46

Total Income for FY-10 (in Crs.) 1200.66

Net Profit for FY-10 (in Crs.) 8.78


5

5. Consumer Base

As on 1st April 2009, the Company had a consumer base of 16,01,622 Nos. With the

addition of 58,830 Nos. of new consumers during the year, the number of consumers at

the end of the year March 2010 stood at 16,60,452 Nos., comprising of the following

categories:

Tariff Description Total

LT -1 BJ/KJ 1,36,766

LT-2 (a&b) Lighting & AEH 11,31,728

LT-3 Coml. Lighting 1,48,537

LT-4 IP Set Installations 1,95,507

LT-5 LT Industrial 19,012

LT-6a (1) Water Supply - VPs / TPs 8,257

LT-6a (2) Public Lighting - VPs / TPs 8,583

LT-6b (1) Water Supply - CMC / Corp 1,267

LT-6b (2) Public Lighting - CMC / Corp 3,623

LT-7 Temporary Supply 6,164

LT TOTAL 16,59,444

HT-1 Water Suppy 47

HT-2a HT Industrial 433

HT-2b Commercial 462

HT-3a Lift Irrigation 6

HT-3b Agricultural / Horticultural Farms 2

HT-4 Residential Apartments 58

HT TOTAL 1,008

LT + HT TOTAL 16,60,452

6. The progress of the Company on various counts is enumerated hereunder:

A) Financial Performance:

(Rs. in Crores)

Particulars For the year

ended 31.03.2010

For the year ended 31.03.2009

For the year ended

31.03.2008 Income

Revenue from sale of power 1009.25 852.15 770.90

Revenue from subsidies 166.00 195.69 129.69

Other income 25.41 24.75 19.69

Total income 1200.66 1072.59 920.28

Expenditure

Purchase of Power 877.35 884.45 701.81

Repairs and Maintenance 12.42 11.57 8.58

Employee Cost 128.39 119.72 100.04

Administrative and Other Expenses 30.26 24.88 21.69

Other Debits 4.10 2.71 3.78

Total expenditure 1052.52 1043.33 835.90

Depreciation 45.39 26.27 20.42

Operating Profit 102.75 2.99 63.96

Interest and Financing Charges 78.71 48.70 44.56

Prior period (credits ) /debits 13.17 (4.68) 10.38

Profit before tax 10.87 (-) 41.03 9.02

Provision for Taxation 2.09 0.30 0.74

Net Profit 8.78 (-) 41.33 8.28


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7. The highlights of the performance of the Company for the year 2009-10 are as

follows:

Review of Balance Sheet and Profit and Loss Account for the year ending

March 31st 2010.

(Rs. in Crs.)

Sl. No.

Particulars 31.03.2010 31.03.2009

Sources of funds

A Share Capital 110.34 100.34

B Share Deposit 22.00 0.00

C Reserves & Surplus 300.79 250.01

D Share holders’ fund (A to C) 433.13 350.35

E Secured Loans 342.21 271.86

F Unsecured Loans 8.36 39.35

G Loan funds (E+F) 350.57 311.21

H Other Funds (Service Line & Security Deposits) 281.94 260.34

I Total (D+G+H) 1065.64 921.90

Application of Funds

J Gross Block of Fixed Assets 1070.52 918.16

K Accumulated Depreciation 351.06 317.36

L Net Block (J-K) 719.46 600.80

M Capital Work-in Progress 91.93 64.95

N Fixed Assets (L+M) 811.39 665.75

O Investments 2.51 0.01

P Net Current Assets 251.74 256.14

Q Total (N to P) 1065.64 921.90

Share holders’ Fund has increased by Rs. 82.78 Crs. (Net). Amounts added are:

(Rs. in Crs.)

1. Reserve for Material Cost Variance 4.70

2. Consumers‟ contribution towards cost of Capital Assets 17.00

3. APDRP Grant 0.29

4. Equity released by State Govt. 10.00

5. RGGVY Grant Amount 20.01

6. Conversion of Interest free loan into Equity 22.00

7. Net Profit for the year 8.78

Total additions to Share Holders’ fund 82.78


7

Net Loan funds have been increased by Rs. 39.36 Crs due to drawal of additional loan from Commercial Banks to the tune of Rs. 129.50 Crs and other loans to the tune of Rs 8.87 Crs and repayment of Rs. 99.01 Crs.

Fixed Assets (Net) have increased by Rs.145.65 Crs on account of capitalization of commissioned works and accounting of on going works and capital work-in progress.

Investments have been increased by Rs. 2.50 Crs. due to reclassification of initial advance paid to M/s. PCKL towards its networth from advances to investments.

Net Current Assets: The net current assets stand at Rs. 251.74 Crs. This is Rs. 4.40 Crs. lesser as compared to previous year in view of increase in current liabilities in the following:

(Rs. In Crs.)

Particulars 08-09 09-10 Difference

Power purchase Liability 291.46 371.38 ↑ 79.92

Provision for Outstanding Liabilities 91.59 134.90 ↑ 43.31

Employee liabilities 30.67 37.80 ↑ 7.13

Other Liabilities 241.02 265.14 ↑ 24.12

Net additions to Current Liability ↑ 154.48

Total Current Assets 910.88 1060.96 ↑ 150.08

Total Current Liability 654.74 809.22 ↑ 154.48

Net Current Assets 256.14 251.74 ↓ 4.40

Sundry Debtors for the supply of power

Particulars Amount

(Rs. in Crs.)

Opening Balance 283.48

Demand 1175.25

Total 1458.73

Realization 1057.80

Provision for Bad & Doubtful debts 50.04

Provision for withdrawal of revenue demand 2.28

Total Provisions 52.32

Closing Balance 348.61

Ratios

Sl. No. Particulars 31.03.2010 31.03.2009

1 Debt (including OD) Equity (Equity + Accumulated Profit) Ratio

2.11 : 1 2.32 : 1

2 Current Ratio 1.31 : 1 1.39 : 1

3 Liquid Ratio 1.29 : 1 1.35 : 1


8

Profit and Loss Account (Rs. in Crs.)

Sl. No.

Particulars 31.03.10 31.03.09 Increase / decrease

Variance in (%)

A Income

1 a Revenue from sale of power 1009.25 852.15 157.10 +18.44

1 b Subsidy 166.00 195.69 -29.69 -15.17

Total Revenue (a+b) 1175.25 1047.84 127.41 +12.16

2 Other Income 25.41 24.75 0.66 +2.67

Total 1200.66 1072.59 128.07 +11.94

B Expenditure

1 Purchase of power 877.35 884.45 -7.10 -0.80

2 Repairs & maintenance 12.42 11.57 0.85 +7.35

3 Employee Costs 128.39 119.72 8.67 +7.24

4 Administrative & other expenses 30.26 24.88 5.38 +21.62

5 Interest & Finance charges 78.71 48.70 30.01 +61.62

6 Other debits 4.10 2.71 1.39 +51.29

7 Depreciation 45.39 26.27 19.12 +72.78

Total 1176.62 1118.30 58.32 +5.22

C Profit for the year 24.04 -45.71 69.75 +152.59

D Prior period charges (Credits) 13.17 (4.68) 17.85 +381.41

E Profit before tax 10.87 -41.03 51.90 126.49

F Provision for taxes 2.09 0.30 1.79 596.67

G Profit after tax 8.78 -41.33 50.11 121.24

Total Revenue has increased by 12.16% (Rs. 127.41 Crs) over the previous year

inspite of reduction in receipt of tariff subsidy to the extent of Rs. 29.69 Crs in the current

year. This increase is mainly due to increase in energy sales to the extent of 128.58

MUs, revision of tariff w.e.f. 01.12.2009 and accountal of tariff subsidy to the extent of

Rs.22.34 Crs. as receivable from Govt. for FY 2009-10 based on the Govt. commitment.

Other Income has increased by 2.67% (Rs. 0.66 Crs) over the previous year mainly due

to increase in miscellaneous receipts.

Power purchase cost has been decreased by 0.80% (Rs. 7.10 Crs) over the previous

year inspite of increase in the quantity of energy purchased to the tune of 60.79 MUs.

The decrease in cost is mainly due to decrease in the cost of high cost energy to the

tune of Rs. 60.20 Crs. when compared to the previous Year.


9

Repairs and Maintenance Expenses have increased by 7.35% (Rs.0.85 Crs.) as

compared to previous year due to increase in repairs and maintenance cost of lines

cable network etc.

Employee cost has increased by 7.24% (Rs. 8.67 Crs) over the previous year on

account of increase in salaries, wages and increase in the rate of pension contribution

payable to the Trust.

Administrative expenses have increased by Rs. 5.38 Crs. (21.62%), mainly due to

contribution to Chief Minister‟s Calamity Relief Fund, due to sanction of new offices &

revision of hire charges.

Depreciation has increased by 72.78% (Rs. 19.12 Crs.) over the previous year, due to

adoption of new depreciation rates w.e.f. 01.04.2009 as approved by Hon‟ble KERC in

its Tariff Order 2009 and also due to increase in the value of newly added assets.

Finance Charges have increased by 61.62% (Rs. 30.01 Crs) over the previous year on

account of increase in interest paid on loans drawn from commercial banks and interest

payable for belated payments of power purchase dues.

Other Debits have increased by 51.29% (Rs. 1.39 Crs) over the previous year due to

increase in provision for reserve for bad & doubtful debts from consumers and also due

to losses on scrapping of assets.

Profit before Tax has increased by 126.49% (Rs. 51.90 Crs) over the previous year due

to reduction in the high cost power purchase, revision of tariff w.e.f. 01.12.2009 and

accounting of RE/ Tariff subsidy as receivable from Govt. to the tune of Rs. 22.34 Crs,

as per the Govt. commitment.

The Current year tax works out at Rs. 2.09 Crs, as against Rs. 0.30 Crs. (only FBT)

during the previous year. The increase is mainly due to the reason that, during FY 2008-

09, in the absence of any taxable income for the year as per the provision of Income Tax

Act 1961, both under normal taxation scheme and Minimum Alternate Tax (MAT) under

Section 115 JB of Income Tax Act 1961, no provision for taxation has been made in the

accounts of the Company for the year and provision for Fringe Benefit Tax payable to

the tune of Rs. 0.30 Crs. only has been created in the accounts. But during FY 2009-10,

the accounts of the Company is showing Net Profit, hence Provision for Taxation

amounting to Rs. 2.09 Crs. is created.

Profit after Tax has increased by 121.24% (Rs. 50.11 Crs.) over the previous year.

The Tariff Subsidy: Govt. has committed to release R.E./Tariff subsidy of Rs.166 Crs

and IP set subsidy of Rs. 50 Crs, totaling to Rs. 216 Crs. to MESCOM for FY 2009-10

vide GOK Letter No: EN 91 PSR 2008 Dated 07.05.2009. But Govt. has released only

Rs. 143.66 Crs of R.E/ Tariff Subsidy during the year. Balance R.E/Tariff subsidy

receivable amounting to Rs.22.34 Crs. (166 Crs -143.66 Crs) is accounted as receivable

from GOK as on 31.03.2010.


10

Actual IP set subsidy receivable from the Govt. for FY 2009-10 amounts to Rs.

73.41Crs. against which Govt. has released only Rs. 16.63 Crs (excluding previous

year‟s release of Rs.7.57 Crs.). Balance IP set subsidy receivable amounting to Rs.

56.78Crs (73.41 Crs – 16.63 Crs) is also accounted as receivable from GOK as on

31.03.2010 in accordance with G.O No: EN 55 PSR 2008 Dtd 04.09.2008.

Further, as per KERC Tariff Order 2009 dated 25th November 2009, ROE at 15.5% is

determined as base minimum profit for the Company. As per the accounts, the revenue

gap of the Company for FY 2009-10 is Rs. 182.35 Crs. Even after accounting the

committed subsidy of Rs.166 Crs, additional subsidy of Rs.16.35 Crs. is required to earn

the base minimum profit. The Company has brought this fact to the notice of the GOK.

vide Ltr. No. 73-74 / 2010-11 dtd 08.06.2010. But as on date no communication has

been received from the GOK about the admissibility of the subsidy claimed by the

Company. Hence as a matter of prudence, RE/Tariff subsidy is accounted by MESCOM

to the extent of commitment already received from GOK.

8. An overview of the performance of MESCOM with regard to Distribution Transformers,

HT/LT lines, Electrification, Vigilance Activities and Revenue Collection Efficiency is as

under:

Sl

No Particulars Measure 2009-10 2008-09 2007-08

1 Total Lines & TCs added:

a. DTCs erected Nos. 2589 2795 2871

b. 11 KV HT lines RKms 953.914 1102.07 1188.26

c. LT lines RKms 1430.638 1558.15 1503.82

d. Reconductoring of HT Lines R.Kms 559.33 328.40 541.92

e. Reconductoring of LT Lines R.Kms 810.94 430.83 591.11

2 DTC Failures % 9.49 10.33 10.84

3 RE Works:

a. Electrification of Hamlets Nos. 183 120 260

b. Electrification of Harijan Basthies/JCs/Tandas Nos. 79 58 59

c. Electrification of Tribal Colonies Nos. 75 46 38

4 Servicing of:

a. Drinking Water Supply Schemes Nos. 574 551 415

b. Ganga Kalyana Schemes Nos. 1053 1554 768

5 Total Energy Handled Mus 3273.83 3137.76 2899.95

6 Distribution loss % 12.64 12.95 13.70

7 IP set serviced

a. New IP sets Nos. 8857 6183 4470

b. Regularisation of Unauthorised IP sets Nos. - - -

8 BJ/KJ installations serviced Nos. 4713 6380 10184

9 Theft cases booked Nos. 1823 1207 1179

10 Collection Efficiency:

a. Overall % 96.88 99.02 93.63

b. Without IP, GP, BJ/KJ, Municipality % 99.98 101.81 99.63

c. Without IP % 98.04 101.78 97.94

11 HT Consumption:

a. Total Mus 752.881 698.002 683.76

b. Without EHT Mus 472.384 422.425 382.76

12 Growth in Demand

(a) Total % 14.89 8.61 7.74

(b)Excluding IP Sets % 11.02 8.24 14.73

13 Growth in Collection

(a) Total % 12.42 14.85 6.45

(b) Excluding IP Sets % 6.94 12.47 11.26


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9. Dividend

The Board has not proposed any dividend for the financial year ended

31st March, 2010.

10. Power purchase

During the year 2009-10, the power purchase is 3382.00 MU. at a total cost of Rs.

877.35 Crs. Total energy available for sale is 3273.83 Mus. Total sales during the year

were about 2860.15 MU. Metered sale during FY-2010 was 2638.01 MU and un-

metered sale was around 222.13 MU and the remaining 413.68 MU was attributable to

system loss. Metered sales increased by 7.65% whereas un-metered sales decreased

by 20.94% compared to previous year.

11. Source of funds & Borrowings

a) The source of funds of the Company stands to Rs. 433.13 Crs. at the end of the

Financial Year comprising of Equity Share Capital of Rs. 110.34 Crs., Share Deposit

of Rs. 22.00 Crs. and Reserves & Surplus of Rs. 300.79 Crs.

b) The total Secured Loans of MESCOM at the financial year end stands at Rs. 342.21

Crs. The Unsecured Loans amounts to Rs. 8.36 Crs. and the service line, security

deposits amounts to Rs. 281.94 Crs.

12. Milestones achieved during 2009-10:

Several initiatives have been taken up to strengthen and stabilise the distribution system

as well as the fiscal status of the Company. A bird‟s eye view of some of the major

achievements and the innovative initiatives are as follows:

(A) Reduction in Distribution Loss:

(i) With a constant endeavor since FY 2005, from 16.65% of T&D loss as at the end

of March 2005, a considerable reduction in distribution loss has been achieved.

As at the end of March 10, the distribution loss of the Company stands at 12.64%

which is the lowest the Sector has achieved so far in the State.

Financial Year % of Distribution

Loss % of Reduction in Distribution loss

(compared to FY 2005)

2006-07 15.29 1.36

2007-08 13.71 2.94

2008-09 12.95 3.70

2009-10 12.64 4.01

(B) Addition of new Distribution Transformers to the System: In order to improve

the quality and reliability of power supply, more number of distribution transformers is

added to the system in the identified low voltage pockets. The break-up are as

follows:

Financial Year No. of DTCs added

2006-07 3194

2007-08 2871

2008-09 2795

2009-10 2589


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(C) Fall in failures of Distribution Transformers: Improved maintenance and constant

system up-gradation has resulted in reduction in failure of distribution transformers.

Compared to a position of 15.79% of failures in FY-05, the Company with all its

commitments could able to spot a niche as follows:

Financial Year % of failure

2006-07 11.54

2007-08 10.84

2008-09 10.33

2009-10 9.49

(D) Metering Programme:

(i) As is evident from the following data, the Company is marching towards 100%

metering of the installations. With a perennial and dedicated commitment, through

universal metering programme, the Company has achieved 98.10% metering as at

the end of FY10.

Financial Year % of Metered installations

2005-06 93.61

2006-07 95.36

2007-08 96.98

2008-09 97.96

2009-10 98.10

(ii) During FY 2009-10, 45,998 Nos., of DC/MNR Meters, 8,714 Nos., of IP Sets, 4,472

Nos., of BJ/KJ installations and 551 Nos., of Street light/Water works installations

have been metered as against 44,272 Nos., of DC/MNR, 7,665 Nos., of IP Sets,

9,139 Nos., of BJ/KJ installations and 360 Nos., of Street light/Water works metered

in FY 2008-09.

(E) Metering of Distribution Transformer Centers: For more effective energy audit, it

is contemplated to meter all Distribution Transformer Centers of town feeders.

Further, RLMS system is being introduced in 8802 rural Distribution Transformer

centers. In both the categories, it is contemplated to introduce metering with

Automatic Meter Reading facility. 14581 Nos. of DTCs have been metered as on

31.3.2010. MESCOM is the pioneer in the State in this regard and second in the

Country.


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(F) Civil Engineering Works: During 09-10 Civil Engineering Wing has carried out the

construction of office buildings, residential quarters and other infrastructure works as

noted below:

[Rs. in lakhs]

Sl No.

Particulars

Completed Works Spill over Works

Expenditure during 09-10

No.s. of Works

Completed

Expenditure

during 09-10

Budget proposed

during 2010-11

1. Construction of quarters

68.43 9 - 46.80

2.

Construction of Office Building/Stores/Guest houses and other building and extension works.

26.01 9 66.20 243

3.

Other infrastructure works such as compound, road, water supply, fencing & drainage etc.,

109.94 43 - 67.32

Total 204.38 61 66.20 357.12

(G) RGGVY:

For implementation of RGGVY scheme in Shimoga & Chikmagalur Districts, works

amounting to Rs.78.14 crores (10.31% and 12.21% less than SR in respect of

Shimoga & Chickmagalur Districts respectively) have been awarded on Total

Turnkey basis to M/s L&T Ltd., Bangalore and work is under progress.

The details of the scheme are as follows:

Sl. No District Amount

(Rs.in crores)

No. of Rural Habitations with

above 100 Population

No. of BPL House holds

No. of RHH (Excluding

BPL)

Total No. of RHH

1 Shimoga 39.30 3515 24415 18118 42533

2 Chikmaglur 38.84 2911 16041 21106 37147

Total 78.14 6426 40456 39224 79680

Progress (as on 31-03-2010)

Sl. No District

Progress of villages No. of BPL house holds electrified

Survey completed

Work Under Progress

Work completed

1 Shimoga 1289 420 123 1981

2 Chikmaglur 941 154 23 570

Total 2230 574 146 2551


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(H) R-APDRP:

i) R-APDRP works approved by MoP, GoI, have been taken up in respect of 11

Nos., of towns of Dakshina Kannada, Udupi, Shimoga & Chickmagalur Districts.

The scheme is spread over for a period of 3 years.

ii) MOP, GoI, has approved a total loan amount of Rs.12.07 crores. M/s. RIL,

Mumbai, has been appointed as the Common IT Consultant at an award cost of

Rs.0.36 crores. M/s Infosys has been appointed as the IT Implementation

Agency at an award cost of Rs.24.89 crores. The work is under progress.

(I) New 33/11 KV Sub-stations:

(i) To facilitate distribution with Ring Main System, the works of establishing 4 Nos.

of 33/11 KV Sub-stations in Mangalore City Corporation limit at Kadri, Attavara,

Alake & Nandigudda and drawing of 32.50 Kms of 33 KV UG cable have been

awarded on partial turn key basis at a cost of Rs.31.23 Crores and works are

under progress.

(ii) Augmentation work of existing 33/11 KV Sub-station at Bellare in D.K Dist at a

cost of Rs.1.93 Crores. is in progress.

(iii) For better power supply to Byakodu village and surrounding areas located at a

distance of 71.32 Kms from Hosanagar, it is proposed to establish a 33/11KV,

1X5MVA sub station at Byakodu with LT line to an extent of 60 Kms at a total

estimated project cost of Rs.784.31 lakhs.

(iv) 33KV Sub-station at NR Pura with terminal bays and lines at a cost of Rs.11.50

Crores. is in progress.

(v) It is proposed to establish 33/11KV Sub-stations at Malpe, Gangolli & Savanoor

at an estimated cost of Rs.5.63 Crores, Rs.3.46 Crores & Rs.3.27 Crores

respectively. Further, two more stations at Subramanya & Kollur are on cards.

(vi) Conversion of existing overhead distribution network system into UG cable

system from Shivappanayaka Circle to Anjaneya Swamy Temple in Shimoga City

at a cost of Rs.1.53 crores is in progress.

(J) SCADA:

Integrated Extended SCADA (IES) has been implemented in association with

KPTCL. The Company has implemented the 1st phase of the scheme by contributing

its share of Rs.6.80 crores for implementing Integrated Extended SCADA all over the

State with participation of KPTCL and ESCOMS. The project is executed on turnkey

basis through M/s.ABB Limited.

MESCOM is getting reports of 6 Nos of 220KV, 44 Nos., of 110KV, 15 Nos., of 66KV

and 24 Nos., of 33KV sub stations coming under its jurisdiction. MESCOM can

control existing 29 Nos., of 33/11KV Sub Stations directly coming under its control.

The supervisory controls of 11KV feeders are yet to be transferred.


15

(K) For better administrative control and effective service to the consumers, new O&M

Division has been formed at Shikaripura. Further new Sub-Divisions and Sections

have been formed duly re-organizing Sagar, Kadur & Chickmagalur O&M Divisions.

(L) Auto Re-closures with Sectionalizers:

MESCOM is amongst the first utilities in the State of Karnataka to introduce Auto Re-

closures with Sectionalizers for effective control of interruptions in the distribution

system. 175 Nos of 11 KV feeders are identified out of which 135 Nos. of feeders

have been installed with Auto Reclosures & Sectionalizers successfully. MESCOM

has been benefited in the form of reduced line faults & increase in consumption.

(M) Rural Load Management System (RLMS):

RLMS scheme has been implemented in Shimoga, Sagar, Chikmagalur & Kadur

Divisions. On implementation of RLMS, the general & industrial loads will have 24

hours of power supply & irrigational loads will have staggered power supply as per

prevailing norms. 149 Nos. of rural feeders have been identified for RLMS of which

134 Nos. of feeders have been commissioned. The rest are in progress. This has

been acknowledged and applauded by Audit.

(N) 3 Star Rated Distribution Transformers:

MESCOM is the first Company to introduce 3 Star Rated Transformers in the State.

The procurement data is as under;

FY 2008-09 63KVA 500 Nos

FY 2009-10 25KVA 200 Nos

FY 2010-11 63KVA 1250 Nos

13. Proposed Target for 2010-11: (A) Capital Investment Plan :

Sl. No. Schemes Target

1. Electrification of Hamlets 100 Nos.

2. Electrification of HB/JC/Tandas 8 Nos.

3. Electrification of Tribal Colonies 12 Nos.

4. Energization of IP sets 3387 Nos.

5. Kutir Jyothi 2590 Nos.

6. Service Connection 40,000 Nos.

7. Addition of new 33KV stations and allied lines 3 Nos.

8. Augmentation of 33KV Stations 1 No.

9. New HT Line 1200 Kms.

10. New LT Line 1200 Kms.

11. Distribution Transformers 2100 Nos.


16

14. Consumer Friendly Initiatives

Strengthening of Central Public Grievance Cell in addition to other consumer

complaint cells.

Soujanya counters have been opened at the Sub Divisional level to redress the

public grievances.

Interactive Voice Response System (IVRS) has been launched at Mannagudda

Central Complaint Center of Mangalore Division.

Implementation of Geographical Information System to improve quality of power

supply.

Computerization of all revenue sections and implementation of information

technology in day to day activities.

Electronic Clearing System has been introduced for payment of electricity bills.

25 Nos. of ATP machines have been installed & working satisfactorily.

24 Nos. of 24 Hours Consumer Service Centers have been opened.

Due to completion of more number of System Improvement Works failure rate of

distribution transformers is reduced from 14.52% in FY-06 to 9.49% in FY-10.

Providing intermediate poles for rural feeders.

More system infrastructure development is planned for the FY-11.

Providing DTC meters with AMR facility to all town feeders to carry out energy audit

in more effective manner.

Implemented “Karnataka One” the collection center for payment of electricity bills at

Mangalore & Shimoga.

15. Innovatives:

To minimize the transformer failure rate especially in the heavy lightning prone-area,

polymeric type (composite) lightning arresters are being introduced.

For better and economic usage, polymeric type disc insulators are being introduced.

In Mangalore city, for 250 KVA transformers, two pole structures are being replaced

by 11 Mtrs PSC spun poles which consume less space.

For better economical usage, action plan for replacing RCC poles by PCC poles of

similar design is initiated.

16. Public Grievances Cell

a. During the year 2009-10, the Public Grievances Cell received 513 Nos., of written

complaints out of which 94% ie., 480 Nos., of complaints were resolved satisfactorily.

The remaining 33 complaints were redressed in the current financial year. Further

1051 Nos., of minor complaints relating to fuse-off call, low voltage etc were received

through telephonic calls.


17

b. The category-wise complaints:

Sl. No. Category of Complaints Nos. of Complaints

1. Electricity Supply & Distribution code-violation 31 2. Voltage. 114 3. Bills related 77 4. Delay in Sanction & work 0 5. Accident & Compensation 82 6. Theft & unauthorized use of Elecy 21 7. Transformers Shifting etc. 57 8. Bribe/corruption 38 9. Reduction in deposits 22 10. New connection 02 11. Disconnections 35

Other Miscellaneous complaints. 34

Total 513

c. A comparative data as to complaints are as follows;

No. of Complaints 2007-08 2008-09 2009-10 Remarks

No. of Written Complaints 505 523 513 Fall in No. of complaints by 10

Nos. compared to 2008-09.

No. of minor Telephonic

Complaints 1900 850 1051

Increase in No. of complaints

by 201 Nos. compared to

2008-09.

d. MESCOM Consumer Grievance Redressal Forum consisting of the Chief Engineer (Elecy), MESCOM, as the Chairman, the Superintending Engineer (C&RP), & a representative of Bharatiya Kisan Sangha, Udupi as the Members and the Manager (Public Grievance) as the Co-ordinator is functioning in the Corporate Office. During the year forum has received 22 complaints and all complaints are heard and disposed off.

17. (A) Board of Directors during the FY 2009-10:

Sl

No. Shriyuths/Smt., Particulars

1 K. Jairaj, IAS Chairman from 27.6.2008 to 29.7.2010

2. G. Latha Krishna Rao, IAS Chairperson from 29.7.2010

3. S.Sumanth Managing Director from 18.03.05

4. Tushar Giri Nath, IAS Director from 28.2.2008 to 2.8.2010

5. Parvathy Keshavachar Director from 11.6.2007 to 28.2.2008 and from 1.4.2008

6. Aditi Raja Director from 24.9.08

7. Alok Mohan, IPS Director from 24.9.2008

8. L.Ravi Director from 24.9.2008

9. Chikkananjappa Director (Tech) from 7.11.08 to 20.6.09

10. M.Nagaraj Director from 17.12.2008

11. A.N.Sridhara Director from 7.3.2009

12. C.S.Ganesh Director (Tech) from 20.6.09 to 13.4.2010

13. K.Ramakrishna Director (Tech) from 26.6.2010

14. T.Sham Bhatt, IAS Director from 2.8.2010

15. P Rama Amin Director from 15.12.09

16. G.K Shadaksharappa Director from 15.12.09

The Board places on record its sincere appreciation and gratitude of the services rendered by the outgoing Directors.


18

(B) Meetings of the Board and Board Sub-Committees

i) Board meetings 7

ii) Purchase Committee 5

iii) Audit Committee 3

(C) General Meetings:

The seventh Annual General Meeting of the Company was held at the Registered

Office of the Company on 30th October 2009 for consideration and adoption of

accounts.

18. Personnel, Industrial relations and Human Resource Development:

A) PERSONNEL DETAILS:

The working strength of employees as on 31.03.2010 is placed category-wise as

under:

Cadres Mangalore Circle Shimoga Circle Total % of

Vacancy S W V S W V S W V

A- Grade (Regular Employees) 135 94 41 64 50 14 199 144 55 27.64

A- Grade (Deputation Employees) 4 2 2 2 0 2 6 2 4 66.66

Total 139 96 43 66 50 16 205 146 59

B- Grade (Regular Employees) 136 73 63 133 61 72 269 134 135 50.19

B- Grade (Deputation Employees) 2 2 0 2 2 0 4 4 0

Total 138 75 63 135 63 72 273 138 135

C- Grade (Regular Employees) 1274 801 473 1120 908 212 2394 1709 685 28.61

C- Grade (Deputation Employees) 16 16 0 16 12 4 32 28 4 12.50

Total 1290 817 473 1136 920 216 2426 1737 689

D- Grade (Regular Employees) 2276 1058 1218 1837 1033 804 4113 2091 2022 49.16

Company Grand Total 3843 2046 1797 3174 2066 1108 7017 4112 2905 41.40

B) Industrial Relations:

From the date of inception to date, the Company has maintained cordial relations

with the employees and their Union.

C) Training and Development Programmes during the year 2009-10:

a) The Company has a committed and dedicated work force. It has also outsourced

the services of some employees in Group-D.

b) To inculcate the requisite work-culture and to develop the orientation and skill

essential for today‟s advancing technology and operating environment, sufficient

and constant both external and internal training programmes are being imparted

to the rank and file employees of the Company.


19

c) Emphasis is given to IT tools, financial and legal faculties which are of practical

importance from the consumer point of view as well as for responsive functioning

of the organization.

d) During the year 2009-10, nearly 84.12% of the regular working staff of the

Company have undergone various internal and external training programme. The

details of training programme are as follows;

Internal Training Programme 2009-10 (in Rs.)

Sl No

Subject No. of

Participants No. of

Programmes Total Cost

1 Pilferage of Electricity- Technical and Legal Remedies

25 1 237986

2 Awareness of Safety & Advanced Technology And Customers & Employees Relationship Management

558 14 70400

3 «vÀgÀuÁ ªÀåªÀ¸ÉÜAiÀÄ ¥ÀjPÀgÀ 2202 68 292307

4. M/S REC sponsored National Training Programs

319 12 942964

5. MESCOM-Mandatory Training programmes 230 6 1627312

6. Power Trading : An Emerging Business Avenue

31 1 10121

TOTAL 3365 102 3181090

Total No. of Internal Training Programmes 102

Total Cost including programme fees 3181090

No. of persons participated 3365

Cost per Head (Average) 945

External Training Programme 2009-10

Sl No

Subject No. of

Participants No. of

Programmes Fees Paid

1. Data Engineering and Verification of Station SLD 2 1 9780

2. Substation Planning & Engineering 2 1 23521

3. ISO 9001:2008 - Effective Implementation & Internal Auditor Training

2 1 22900

4. Heart of Effective Leadership-key to success in the new millennium

3 1 40517

5. Passing of Bills pertaining to Power Purchase &

Verification of Invoices 2 1 3023

6. Electricity Metering Technologies Advanced Applications & Systems

1 1 25344

7. Power Trading and Power Exchange 3 1 20048

8. International Financial Reporting Standards (IFRS) 2 2 43846

9. Pilferage of Electricity- Technical and Legal Remedies

2 1 37751

10. Role Excellence: Personal Assistants and Executives Secretaries

1 1 7688

11. Training of Trainers 1 1 35836


20

Sl No

Subject No. of

Participants No. of

Programmes Fees Paid

12. Test Facilities 5 1 62848

13. Corporate Tax-Planning, Compliance and

Management 2 1 43658

14. GIS/GPS for Power Utilities 1 1 11401

15. Finalization of System Meters Technical Specification based on Indian Standard equivalent of IEC 62056 Protocol

1 1 32000

16. Earthing For Power System 2 1 14327

17. Financial Statements for the Government Departments/ Autonomous Bodies & closure of March Accounts

2 1 12904

18. Efficient Lighting System 2 1 3130

19. Present Trends & Practices of Transformers & Energy measurement

11 1 18645

20. IT Powers Energy 3 1 61655

21. National Growth and Security – Technological Challenges

5 1 4850

22. Energy Audit and Loss Reduction in T&D Systems 2 1 26113

23. Right to Information Act - 2005 3 1 7108

24. Performance Benchmarking and Quality of Supply and Service

3 1 31037

25. Pilferage and Prevention of Theft 3 1 7700

26. Condition Monitoring and RLA of Substation Equipments[11KV to 400 KV]

2 1 14320

27. Principles and practices of RTI, KTPP Act and E-Tendering system

2 1 2349

28. Tax Planning For Executive Compensation And Tax Deducted At Source

2 1 12551

29. Energy Audit 6 1 8700

30. Clean Energy Technology Action Plan for Climate Mitigation for Karnataka

2 1 1534

31. Promise of a Smart Grid Opportunities and Challenges in the Indian Power Scenario

2 1 60314

32. Energy Audit and Loss Reduction in T&D Systems 2 1 20000

33. Lighting – Energy Saving & Pollution Control 10 1 7450

TOTAL 94 34 734848

Total No. of External Training Programmes 34

Total Cost including programme fees 734848

No. of persons participated 94

Cost per Head (Average) 7818


21

D) Employees’ Welfare Schemes: As a step towards strengthening the rapport

between the employees & management, several welfare schemes have been

initiated by the Company.

(a) Besides contributing to the Sports Fund of KPTCL/ MESCOM,

encouragement and cash awards have been provided for various participants

and winners in sports and games competitions on the eve of Independence

Day and other national festivals.

(b) to promote & encourage academic excellence, cash incentive of Rs.2500/-

(Rupees two thousand five hundred only) is being awarded to the meritorious

children of the regular employees of the Company, who secure 90% and

above marks in the SSLC /10th Standard and II PUC examination under the

State/Central syllabus from the academic year 2007-08 and onwards.

(c) Re-imbursement of cost of „Cochlear Implantation‟ to an extent of Rs.10.50

lakhs in respect of the daughter of Sri. M.R Kariyappanavar, Section Officer,

Tallur.

(d) Contributed Rs.5 lakhs to KEBEA, Mysore Zone, for up-gradation of Training

Centre at Kadakola.

(e) Contributed Rs.1.50 lakhs to sponsor the National Seminar on „Present

Trends & Practices of Transformers and Energy Measurement‟ conducted at

KEBEA, Kadakola.

(f) Contributed Rs.35.50 lakhs towards construction of KPTCL Training Centre

Complex at Hoodi.

19. Sponsoring of Socio-Economic Projects

To meet the socio-economic obligation of the Company, contributions and

sponsorships have been extended for many NGOs engaged in socio-economic

activities.

Contributed Rs.3.60 lakhs to adopt two Nos., of tigers at Pilikula Nisargadhama,

Mangalore, the only recognized zoological park in the State.

Contributed Rs.5 lakhs to M/s. Amase Bail Charitable Trust at Kundapura for

providing infrastructure facilities and solar electrification to the BPL families in

Amase Bail village, a Naxal prone area in Kundapura Taluk.

Contributed Rs.1 crore to Calamity Relief Fund of Karnataka towards

rehabilitation and relief operations of recent flood affected areas in Northern

Karnataka.

Contributed Rs.1 lakh for conducting KAMBLA a rural pastime at Pilikula.


22

20. Electrical Accidents during the year 2009-10

Circles Name of the

Division

Departmental Non-

Departmental Animal Grand Total

Fatal Non-Fatal Fatal Non-Fatal

Mangalore Circle

1. Mangalore 0 9 9 6 3 27

2. Puttur 1 4 6 0 4 15

3. Udupi 0 8 5 1 8 22

Circle Total 1 21 20 7 15 64

Shimoga Circle

4. Shimoga 0 8 2 1 12 23

5. Sagar 1 18 6 4 9 38

6. C.Mlor 1 14 8 5 11 39

7. Kadur 0 4 5 2 17 28

Circle Total 2 44 21 12 49 128

GRAND TOTAL 3 65 41 19 64 192

21. (A) Highlights of Public Relations & Communication Wing Activities during 09-10:

During the year 2009-10, 1876 No. of Jana Samparka Sabhas (a programme of direct interaction with the public/consumers) have been conducted at sub-division and section office levels to sort out and redress the problems and grievances of the consumers relating to electricity distribution.

To educate the consumers regarding the usage of electricity devices and to follow safety measures, wide publicity has been given through newspapers, magazines, pamphlets, souvenirs and T.V. channels.

Participated in the direct interaction with public organized by local T.V. channels in which, the issues and problems of the electricity consumers have been attended to and measures were taken to handle and resolve the consumers‟ queries and grievances.

The awareness of safety usage, electricity savings and other initiations of the Company are broadcasted through Radio FM channels, so as to communicate and reach the general public.

The contact numbers of „24 Hours Service Stations‟, Section/Sub-Divisional Officers and Divisional Engineers have been published in the newspapers having wide circulation for which consumers may contact for their any problems in the electricity distribution system especially during monsoon season.

The Company has distributed the printed placards furnishing the telephone Nos. of Section/Sub-division/ Division offices and Vigilance offices, to all domestic, commercial & LT industrial consumers across the Company to enable them to contact the concerned officers in case of need.

“MESCOM KIRANA” an internal quarterly magazine is being published covering various matters, statistics, suggestions, reports of various programmes, tips of arts etc of the Company and is being circulated among other ESCOMs and other Government Offices.

Consumer Meetings have been arranged at Sub-division, Division and Circle office levels to have interaction between them and the Company. In these meetings the grievances are heard and steps are being taken to solve the issues/problems. Also consumers‟ suggestions to improve the systems are very well taken into consideration.


23

(B) Implementation of Right to Information Act 2005 in MESCOM

The details of PIOs, APIOs and respective Appellate Authorities have been

notified and updated in MESCOM website www.mesco.in under the caption Right

to Information Act in home page and the details are also made available to the

general public in the respective offices.

During 2009-10, 588 Nos. of requests including nine requests from BPL citizens

have been received across the Company for which Rs.14,344/- has been

collected. During the year all the requests were attended within the time limit.

Further, ten Nos. of appeals have been received and disposed off within time.

22. Particulars as per Companies (particulars of employees) Rules, 1975 and as amended:

None of the employees of the Company was in receipt of remuneration amounting to

Rs.24,00,000/- and above per annum or at the rate of Rs.2,00,000/- and above per

month during the financial year under review.

23. Directors’ Responsibility Statement:

Pursuant to Section 217(2)(AA) of the Companies Act, 1956, the Directors wish to state

that to the best of their knowledge:

i. in the preparation of the annual accounts, the applicable accounting standards have

been followed along with proper explanation relating to material departures;

ii. accounting policies have been selected and applied consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and

fair view of the state of affairs of the Company at the end of the financial year and of

the profit or loss of the Company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequate

accounting records in accordance with the provisions of the Companies Act, 1956 for

safeguarding the assets of the Company and for preventing and detecting fraud and

other irregularities;

iv. Annual Accounts have been prepared for the Financial Year ended March 31, 2010

on a going concern basis.

24. General:

The Board would like to place on record its appreciation of:

The Government of Karnataka, the Government of India, Central Electricity

Authority, Comptroller &Auditor General of India, Central Electricity Regulatory

Commission, Karnataka Electricity Regulatory Commission, Karnataka Power

Transmission Corporation Ltd., Karnataka Power Corporation Ltd., & Power

Company of Karnataka Ltd., for their assistance, guidance and co-operation.

http://www.mesco.in/


24

Financing agencies, such as Rural Electrification Corporation, Power Finance

Corporation, Syndicate Bank, State Bank of Mysore, Canara Bank,

Corporation Bank, Vijaya Bank, State Bank of India, Punjab & Sindh Bank,

UCO Bank, Indian Bank, Axis Bank and Karnataka Bank for their financial

support.

The media for publicity and creating awareness among the public.

The statutory auditors for their guidance and support.

All the agencies associated with the computerisation of billing.

The employees, Employees’ Union and other Associations of employees for

their co-operation and collective participation.

The suppliers, contractors and consultants for their co-operation.

Sd/- Bangalore (Smt. G.Latha Krishna Rao) Dated: 28.9.2010 CHAIRPERSON


25

Addendum to Directors’ Report

Replies offered on the observations / comments of the Statutory Auditors on the

accounts of the Company for the year 2009-10 are as follows:

I) The Title deeds of immovable properties

in the erstwhile name of the establishment,

which MESCOM has succeeded, are yet to

be transferred in the name of the Company.

The charge created on assets of the

Company will not be complete to the extent

to which documentation in respect of

properties for which charge has been

created continues to be held in the name of

erstwhile establishment.

Out of a total of 139 landed assets

(excluding leased assets), MESCOM has

obtained documents for 133 of them. The

process of transfer of documentations in the

name of MESCOM in respect of balance 6

No. of landed assets is in progress and will

be completed in coming year.

II) The Company has an internal audit

system. However, considering the size of

the Company and volume of its business,

we are of the opinion that the present

system requires to be strengthened. The

audit system should cover technical audit,

materials, inventory, stores and particularly

compliance and adherence to various

provisions of Tax Laws and Labour Laws.

Company has an Internal Audit Wing

working in each accounting division to verify

and report any shortcoming regarding cash,

revenue, work accounts, cost register,

material audit, inventory and stock records.

Further at Company‟s corporate office,

Controller, Internal Audit is monitoring and

supervising the work of Internal Audit Wing

of each Division and rendering periodical

reports to management regarding any

shortcomings observed. Company has a

built in system of Internal Control for each

activity.

The TAQC wing of Corporate Office along

with field staff is monitoring the quality of

materials and implementation of works.

III) The Balances of Sundry Debtors,

Sundry Creditors, Loans and Advances,

Other Receivables and other debit / credit

balances including that of other ESCOM‟s

and KPTCL are subject to confirmations

and reconciliations. The effect of the

adjustment arising from reconciliation and

settlement of old dues and possible loss

which may arise on account of non

recovery or partial recovery of such dues is

not ascertained. Thus we are unable to

comment upon the impact thereof on the

accounts and profit for the period.

As disclosed under para 3, 4 and 6 of

schedule 30 - Notes on Accounts, under

heading “Balance Sheet”, the balances in

respect of Sundry Debtors, Sundry

Creditors, Loans and Advances to

Suppliers and other borrowings are subject

to confirmation. However action has been

taken to reconcile the balances of inter-

company transactions as well as power

purchase dues.


26

IV) The Control account balances as

reflected by the General Ledger at Divisions

and Subsidiary Registers at Sub-Divisions

in the matter of Consumer Security

Deposits and Meter Security Deposits are

not fully reconciled.

The Company has not furnished in the

notes on accounts, the estimated amounts

of contract remaining un-executed on

capital account and not provided for, in

respect of projects having estimated cost of

less than Rs. 50 lakhs.

During the balance sheet restructuring plan

III, certain amount of meter security deposit

has been capitalized as per the instruction

of the Govt. Though the amount has been

capitalized, the amount is still outstanding

in the consumers‟ ledger account. But the

meter security deposit as per accounts was

reduced to that extent in the accounts of the

Company, leading to difference between

the balance as per consumers‟ ledger

account maintained at Divisions and as per

accounts of the Corporate Office. Further,

the deposit registers are being maintained

at Sub-divisional / Section levels and the

accounts are maintained at divisional

levels. The company has made efforts to

reconcile the balances between the deposit

registers and accounts during the financial

year. However it could not be completed

due to large volume of work, as the process

is to be carried out since inception of

MESCOM. The continued efforts will be

made to reconcile the balances in the

coming year.

Further, due to large number of small

works, the amount of contract remaining to

be executed in respect of projects having

estimated cost of less than Rs. 50 lakhs

could not be ascertained.

V) The Company has not furnished in the

notes to accounts, the details with regard to

Micro and Small Scale Business

Enterprises, to whom the Company owes

dues, which are outstanding for more than

45 days as at March 31st, 2010. This

information is required to be disclosed

under the Micro, Small and Medium

Enterprises Development Act, 2006.

As disclosed vide Para 6(g) of schedule

30 - Notes on Accounts, under heading

“Profit & Loss Account”, amount due to

Small and Medium Enterprises as required

under the Micro, Small & Medium

Enterprises Development Act, 2006 are not

ascertained in the absence of ready related

information. The company has not received

any confirmations from the registered

suppliers, in respect of whom disclosures

are required to be made under the said Act.


27

VI) As stated in Note 1, to Profit and Loss

A/c. in Notes on Accounts, payment to

power suppliers made by MESCOM, is

subject to the norms stipulated by Load

Dispatch Center, which is yet to come out

with a notification on the results of energy

balancing for the financial year 2008-09 and

2009-10. As informed to us, this may

impact the profitability of the company.

Factual. Since FY 2008-09 Load

Dispatch Centre (LDC) is working out the

energy balancing and the cost implication

among the ESCOMs. But as on the date of

finalization of Annual Accounts of the

Company for FY 2009-10, the results of the

energy balancing for FY 08-09 & 09-10 are

not received from LDC, hence the same

could not be incorporated in the accounts of

the company.

VII) A Fixed Asset register maintained by

the company does not show full particulars

such as asset identification number and its

situation.

Owing to the peculiar nature of power

distribution business, it has not been

possible to allot asset identification

numbers to all assets of the company.

However, Fixed Asset Register maintained

at the Divisional Offices give particulars

about the nature of assets, year of

installation etc.

VIII) In the absence of adequate report on

physical verification of Fixed Assets, we are

unable to comment about the

reasonableness of intervals at which Fixed

Assets have been verified and accounting

of discrepancies noticed thereon if any.

The company carries out physical

verification of assets situated at power

station level. Other assets like poles and

transmission lines could not be physically

verified since it is spread throughout service

area.

IX) In our opinion the company does not

have an Internal Audit system

commensurate with the size and nature of

its business. Internal Audit system needs

to be strengthened in terms of area of

coverage as mentioned in Para 4(II) of our

Audit Report.

The Company will enhance the scope of

activities covered by Internal Audit to

extend coverage for compliance and

adherence to tax issues as well. The

framework of the audit plan is under

preparation and is actively pursued upon.

X) The Company does not have

accumulated losses as at the end of the

financial year. The Company has not

incurred cash loss during the financial year

covered by the audit but in the immediately

preceding financial year, had incurred cash

losses.

The cash loss has occurred during the

preceding financial year due to purchase of

high cost power to honor the social

obligations of the Company and also to

minor extent increase in the other costs. As

there was no commitment from GOK for

release of subsidy claimed by the

Company, book loss is shown.

However in the current financial year

MESCOM has accounted Rs. 22.34 Crs. of

subsidy as receivable from Govt., based on

the commitment of GOK. Hence no cash

loss in the current year

Sd/- Bangalore (Smt. G. Latha Krishna Rao) Dated: 28.9.2010 CHAIRPERSON


28

AUDITORS’ REPORT

TO THE MEMBERS OF

MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, MANGALORE

1. We have audited the attached Balance Sheet of Mangalore Electricity Supply

Company Limited (MESCOM), Mangalore, as at 31st March 2010 and the Profit and

Loss Account and also the Cash Flow Statement for the year ended on that date,

annexed thereto. These financial statements are the responsibility of the Company‟s

Management. Our responsibility is to express an opinion on these financial statements

based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in

India. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatements. An

audit includes, examining, on a test basis, evidence supporting the amounts and

disclosures in the financial statements. An audit also includes assessing the accounting

principles used and significant estimates made by management, as well as evaluating

the overall presentation of financial statements. We believe that our audit provides a

reasonable basis for our opinion.

The Mangalore Electricity Supply Company Limited is a Government Company within the

meaning of Section 617 of the Companies Act, 1956, formed to take over the Assets and

Liabilities of certain divisions of Karnataka Power Transmission Corporation Limited

(KPTCL) engaged in distribution of power. The Company has adopted the accounting

policies and procedures followed by KPTCL and is consistently following the accounting

system laid down in the Electricity (Supply) Annual Accounts Rules, 1985 framed under

the Electricity (Supply) Act, 1948 (54 of 1948) (now repealed) by virtue of clause (d) of

sub-section 2 of section 185 of the Electricity Act, 2003.

3. As required by the Companies (Auditor‟ Report) Order, 2003, as amended by the

Companies (Auditors‟ Report) (Amendment) Order, 2004 (together the „Order‟) issued by

the Central Government of India in terms of Section 227(4A) of the Companies Act,

1956, (“the Act”) and on the basis of such checks we considered appropriate, and

according to the information and explanations given to us, we give in the Annexure a

statement on the matters specified in paragraph 4 and 5 of the said Order to the extent

applicable to the Company.

Accordingly, the Company had prepared Balance Sheet as at 31-03-2010 and Profit and

Loss Account for the year ended on that day together with cash flow statement which

was approved by the Board of Directors of the Company on 30-07-2010 and was

forwarded to us for our Report thereon and we had issued our report thereon on

02-08-2010. There after the accounts of the Company has been reviewed by Comptroller

and Auditor General of India as mentioned in Others - Note 10 of Notes on accounts

and the Comptroller and Auditor General of India has raised certain issues as far as the


29

accounts are concerned. The Board of the Directors of the Company have taken note of

the observations and have opted to revise the accounts of the Company in light of the

aforesaid observations. The said revision has resulted in increase in Net Profit by Rs.

3.42 crores as compared to earlier accounts. In the Balance Sheet, the reserves and

surplus stands increased by Rs. 3.42 crores and service line and security deposit stands

increased by Rs. 0.20 crores, fixed assets stands decreased by Rs. 0.06 crores,

Investment stands increased by Rs. 2.50 crores, current assets stands increased by Rs.

4.00 crores and current liabilities and provisions stands increased by Rs. 2.82 crores. As

a result, net current assets stands increased by Rs. 1.18 crores and total of assets and

liabilities stands increased by Rs. 3.62 crores.

4. Further to our comments referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by

the Company so far as appears from our examination of those books.

(c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt

with by this report are in agreement with the books of account.

(d) The company follows accounting policies and procedures as laid down in

Electricity (Supply) Annual Accounts Rules, 1985 (hereinafter referred to as

ESAAR), which is in variance with the requirements of the Accounting Standards

referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. The

Company has informed us that ESAAR, 1985 is a Statutory Regulation and in

the event of a variance in accounting treatment as specified under ESAAR, 1985

and the Accounting Standards, the Company has accounted for the same as per

ESAAR, 1985. Therefore, the Company has not complied with the following

Accounting Standards:

1. Accounting Standard-2: The Company has valued its inventories at Standard

Rate and not at cost or net realizable value whichever is lower.

2. Accounting Standard – 10: Items of fixed assets retired from active use are

stated at their book value or standard rate depending on their re-usability. The

value is not tested in comparison to net realizable value. Such assets are

disclosed as a part of current assets. Also, value of capital works representing

consumers contribution for assets transferred to the Company is included in

the block of fixed assets under various categories. These fixed assets are

recorded at standard costs for the assets as on the date of transfer. This

accounting policy is not in consonance with the Accounting Standard.

3. Accounting Standard – 12: Government grants relating to specific fixed

assets are not shown as a reduction from the Gross Value of the assets

concerned while arriving at their book value neither is the grants treated as


30

deferred income and accounted in the Profit and Loss Account on a

systematic basis.

4. Accounting Standard – 15: The Company has made a provision for leave

encashment and Family Benefit Fund. The Company is also contributing to an

independent trust, amounts pertaining to Pension and Gratuity plans.

However, the company has not made a disclosure about the actuarial

assumptions as required by the Standard.

5. Accounting Standard – 22: The Company has not accounted deferred tax

assets/liabilities as required by Accounting Standard – 22.

The effect of the above on the financial statements is not ascertainable.

Further,

i. The Title deeds of immovable properties in the erstwhile name of the

establishment, which MESCOM has succeeded, are yet to be transferred

in the name of the Company. The charge created on assets of the

Company will not be complete to the extent to which documentation in

respect of properties for which charge has been created continues to be

held in the name of erstwhile establishment.

ii. The Company has an internal audit system. However, considering the

size of the Company and volume of its business, we are of the opinion

that the present system requires to be strengthened. The audit system

should cover technical audit, materials, inventory, stores and particularly

compliance and adherence to various provisions of Tax Laws and Labour

Laws.

iii. The Balance of Sundry Debtors, Sundry Creditors, Loans and Advances,

Other Receivables and other debit/credit balances including that of other

ESCOM’s and KPTCL are subject to confirmations and reconciliations.

The effect of the adjustment arising from reconciliation and settlement of

old dues and possible loss which may arise on account of non recovery or

partial recovery of such dues is not ascertained. Thus we are unable to

comment upon the impact thereof on the accounts and profit for the

period.

iv. The Control account balances as reflected by the General Ledger at

Divisions and Subsidiary Registers at sub-divisions in the matter of

Consumer Security Deposits and Meter Security Deposits are not fully

reconciled. The Company has not furnished in the notes on accounts, the

estimated amount of contracts remaining unexecuted on capital account

and not provided for, in respect of projects having estimated cost of less

than Rs. 50 lakhs.


31

v. The company has not furnished in the notes to accounts, the details with

regard to Micro and small scale Business Enterprises, to whom the

Company owes dues, which are outstanding for more than 45 days as at

March 31, 2010. This information is required to be disclosed under the

Micro, -Small and Medium Enterprises Development Act, 2006.

vi. As stated in Note 1, to Profit and Loss A/c. in Notes on Accounts, cost of

power purchase made by MESCOM, is subject to the result of energy

balance to be notified by the Load Dispatch Center, which is yet to come

out with a notification on the results of energy balancing for the financial

year 2008-09 and 2009-10. As informed to us, this may impact the

profitability of the company.

e) As per Notification No.: GSR 829(E) dated 21-10-2003, Government Companies

are exempted from the provisions of clause 274(1)(g) of the Companies Act,

1956.

f) Subject to our comments in para 4(d) above, the aggregate effect of which on

the Profit and on the Assets and Liabilities is not ascertained, and on the basis of

the fact that the accounts are prepared as per ESAAR, in our opinion and to the

best of our information and according to the explanations given to us, the said

financial statements, read together with the notes thereon and attached thereto,

give the information required by the Companies Act, 1956, in the manner so

required and give a true and fair view in conformity with the accounting principles

generally accepted in India:

i) In the case of the Balance Sheet of the state of affairs of the Company as at

31st March, 2010:

ii) In the case of the Profit and Loss Account of the Profit for the year ended on

that date; and

iii) In the case of Cash Flow Statement, of the cash flows for the year ended on

that date.

For GANESH & SUDHIR Chartered Accountants, (Firm Regn No. 000866S) Sd/-

Place : Mangalore (GIRIDHAR KAMATH) Date : 07.09.2010 Partner (M.No. 203199)


32

ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in Paragraph 3 of our Report of even date)

(i) (a) The Fixed Asset Register maintained by the Company does not show full

particulars such as asset identification number and its situation.

(b) In the absence of adequate report on physical verification of Fixed Assets, we are

unable to comment about the reasonableness of intervals at which Fixed Assets

have been verified and accounting of discrepancies noticed thereon if any.

(c) According to the information and explanations given to us, the Company has not

disposed off a substantial part of its fixed assets during the year.

(ii) a) As informed and explained to us physical verification of inventory has been

conducted at reasonable intervals by the management.

b) In our opinion, the procedures of physical verification of inventory followed by the

management are reasonable and adequate in relation to the size of the Company

and nature of its business.

c) In our opinion and as explained and informed to us, the Company is maintaining

proper records of inventory. Material discrepancies noticed on physical

verification have been properly dealt with in the books of account.

(iii) According to the information and explanation given to us, the Company has

neither granted nor taken any loan from Companies, firms or other parties

covered in the register maintained U/s 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us,

there is an adequate internal control system commensurate with the size of the

Company and the nature of its business with regard to the purchase of inventory

and fixed assets and for the sale of electricity. According to the information and

explanations given to us, the purchase price and sale of electricity is regulated by

Karnataka Electricity Regulatory Commission. Further, cost of power purchased

is subject to notification of energy balancing result issued by the Load Dispatch

Center, which is yet to come out with a notification for the year 2008-09 and

2009-2010. We are unable to form an opinion on the financial implication of the

same on the profitability of the Company. On the basis of our examination of the

books and records of the Company, and according to the information and

explanation given to us, we have neither come across nor have we been

informed of any continuing failure to correct major weaknesses in the aforesaid

internal control system.

(v) As informed and explained to us the Company has not entered into any

transactions that needs to be entered into the register in pursuance of section

301 of the Act.


33

(vi) In our opinion and according to information and explanations given to us, the

Company has not accepted any deposits from the public within the meaning of

section 58A of the Companies Act, 1956 and the rules framed thereunder.

Therefore the provisions of clause (vi) of paragraph 4 of the aforesaid order are

not applicable to the Company for the financial year under report.

(vii) In our opinion, the Company does not have an Internal Audit System

commensurate with the size and nature of its business. Internal Audit system

needs to be strengthened in terms of area of coverage as mentioned in Para 4(ii)

of our Audit Report.

(viii) We have broadly reviewed the books of account maintained by the company

pursuant to the rules made by the Central Government for maintenance of cost

records u/s 209(1)(d) of the Companies Act, 1956 in respect of distribution of

electricity and are of the opinion that prima facie, the prescribed accounts and

records have been maintained. We have not, however, made a detailed

examination of the said records.

(ix) a) According to the books and records as produced and examined by us in

accordance with generally accepted auditing practices in India and also based

on Management representations, undisputed statutory dues have been regularly

deposited by the Company during the year with appropriate authorities.

According to the information and explanations given to us, there were no

undisputed amounts payable in respect of provident fund, employee state

insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise

duty, cess and other statutory dues outstanding as at March 31, 2010 for a period

of more than six months from the date they became payable.

b) According to the information and explanations given to us and the records

examined by us, the particulars of income tax which has not been deposited on

account of a dispute pending are as under:

Name of the

Statute

Nature of the

disputed dues

Amount

(Rs.)

Payments made

by the company

/adjustments

made by the dept.

(Rs.)

Period to

which the

amount

relates

Forum

where

disputes are

pending

The

Income-

tax Act,

1961

Disallowance of

Deduction U/s

80IA

23,55,63,148 4,77,92,030 2005-06 I.T.A.T.

Bangalore

EPF Act

EPF of contract

employees –

error in

calculation of

demand

4,44,06,265 1,77,63,000 2006-07

EPF

Appellate

Tribunal,

New Delhi


34

(x) The Company does not have accumulated losses at the end of the financial year.

The Company has not incurred cash losses during the financial year covered by

the audit but in the immediately preceding financial year, had incurred cash

losses.

(xi) In our opinion and according to the information and explanations given to us,

there is no default in repayment of loan dues by the Company.

(xii) According to the information and explanations given to us, the Company has not

granted any loans and advances on the basis of security by way of pledge of

shares, debentures and other securities.

(xiii) The provisions of any special statute as referred under clause (xiii) of paragraph

4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the

Company is not a dealer or trader in securities.

(xv) According to the information and explanations given to us, the Company has not

given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according the information and explanations given to us, the

term loans outstanding at the beginning of the year and those raised during the

year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall

examination of the Balance Sheet of the Company, funds raised on short term

basis have, prima facie, not been used during the year for long term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and

companies covered in the register maintained under section 301 of the

Companies Act, 1956.

(xix) The Company has not raised any debentures during the year.

(xx) The Company has not raised any monies by way of public issues during the year.

(xxi) To the best of our knowledge and belief and according to the information and

explanations given to us, no material fraud on or by the Company was noticed or

reported during the year, except in the case of theft of electricity reported by the

Vigilance Department of the Company, the amount for which is not ascertainable.

For GANESH & SUDHIR Chartered Accountants, (Firm Regn No. 000866S) Sd/-

Place : Mangalore (GIRIDHAR KAMATH) Date : 07.09.2010 Partner (M.No. 203199)


35

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, MANGALORE FOR THE YEAR ENDED 31 MARCH 2010.

The preparation of financial statements of MANGALORE ELECTRICITY SUPPLY

COMPANY LIMITED, MANGALORE for the year ended 31st MARCH 2010 in accordance

with the financial reporting framework prescribed under Companies Act, 1956 is the

responsibility of the management of the Company. The Statutory Auditors appointed by the

Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956

are responsible for expressing opinion on these financial statements under section 227 of

the Companies Act 1956 based on independent audit in accordance with the auditing and

assurance standards prescribed by their professional body, the Institute of Chartered

Accountants of India. This is stated to have been done by them vide their Audit Report

dated 07 SEPTEMBER 2010.

I, on behalf of the Comptroller and Auditor General of India, have conducted a

supplementary audit, under section 619(3)(b) of the Companies Act, 1956, of the financial

statements of “MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED,

MANGALORE” for the year ended 31st MARCH 2010. This supplementary audit has been

carried out independently without access to the working papers of the Statutory Auditors and

is limited primarily to inquiries of the Statutory Auditors and company personnel and a

selective examination of some of the accounting records. In view of the revisions made in

the financial statements by the management, as a result of my audit observations highlighted

during supplementary audit as indicated in the Note No. 2(10) of the Significant Accounting

Policies and Notes on Accounts, Notes on Accounts – Others (Schedule - 30), I have no

further comments to offer upon or supplement to the Statutory Auditors‟ Report under

section 619(4) of the Companies Act, 1956.

For and on behalf of the Comptroller & Auditor General of India Sd/- (D.J.BHADRA) BANGALORE PRINCIPAL ACCOUNTANT GENERAL DATED: 20 SEPTEMBER 2010 (CIVIL & COMMERCIAL AUDIT) KARNATAKA, BANGALORE


36

BALANCE SHEET AS AT 31ST MARCH 2010

(Amount in Rs.)

PARTICULARS SCH NO.

ACCOUNT CODE

CURRENT YEAR 2009-10 PREVIOUS YEAR 2008-09

SOURCES OF FUNDS :- Share holders Funds Share Capital 1 52.301 110 33 99 310 100 33 99 310 Share Deposit 1A 52.303 22 00 00 007 7 Reserves and Surplus 2 55 to 58 300 78 81 660 250 00 60 968

433 12 80 977 350 34 60 285 Loan Funds Secured Loans 3 51 to 54.4 342 21 07 948 271 85 95 340 Unsecured Loans 4 8 36 45 717 39 35 34 663

350 57 53 665 311 21 30 003 Other Funds Service Line and Security Deposits 5 47 & 48 281 94 00 049 260 33 96 252

TOTAL 1065 64 34 691 921 89 86 540

APPLICATION OF FUNDS :- Fixed Assets 6 10 to 13 (a) Gross Block 1070 52 46 117 918 16 02 731 (b) Less: Depreciation -351 06 00 187 -317 36 08 341

(c) Net Block 719 46 45 930 600 79 94 390 (d) Increase in foreign currency liabilities (Net) (e) Intangible assets 6A 18 (f) Capital Work in Progress 7 14 91 93 23 046 64 95 20 032

811 39 68 976 665 75 14 422 Investments 8 20 2 51 00 000 1 00 000 Current Assets, Loans and Advances

(a) Interest accrued on investments 9 28.2 & 28.3 and deposits (b) Inventories, Stores & Spares 10 22 20 79 52 750 24 65 26 377 (c) Sundry Debtors 11 23 & 28.1 348 61 37 971 283 48 34 777 (d) Cash and Bank balances 12 24.110 –

24.605

42 97 58 218 62 57 15 316

(e) Loans, Advances and Deposits 13 25 to 27 and 28

34 96 39 582 8 31 18 157

(f) Other Assets 14 28.4 to 28.825 & 30 to 37

613 60 64 169 531 86 04 809

1060 95 52 690 910 87 99 435 Less: Current Liabilities & Provisions 15 40, 41, 42, 43,

44, 46 & 50, 51 809 21 86 975 654 74 27 317

(a) Liabilities (b) Provisions Net Current Assets 251 73 65 715 256 13 72 118 Miscellaneous Expenditure to the 29 17 extent not written off / or adjusted

TOTAL 1065 64 34 691 921 89 86 540

NOTES TO ACCOUNTS 30 Sd/- Sd/- Sd/- (K. JAYARAMA ALVA) (K. RAMAKRISHNA) (S.SUMANTH) Financial Advisor Director (T) Managing Director

In terms of our Report of even date

for GANESH & SUDHIR Chartered Accountants, Firm Reg. No: 000866 S

Sd/-

Place : Mangalore GIRIDHAR KAMATH Date : 07.09.2010 Partner Membership No. 203199


37

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010

PARTICULARS SCH No.

ACCOUNT CODE

CURRENT YEAR 2009-10 PREVIOUS YEAR 2008-09

INCOME Revenue from sale of power 16 61 1175 24 87 796 10 47 83 73 374

Revenue Subsidies & Grants 17 63

Other Income 18 62 25 41 20 036 24 75 17 667

TOTAL 1200 66 07 832 1072 58 91 042

EXPENDITURE

Purchase of power 19 70 877 35 32 596 8 84 45 36 350

Repairs and maintenance 20 74 12 42 17 174 11 57 43 395

Employee Costs 21 75 128 38 54 944 1 19 71 57 057

Administration and other expenses

22 76 30 25 72 866 24 88 30 882

Other Debits 23 77 & 79 4 09 39 074 2 70 69 004

Preliminary Expenses written off

TOTAL 1052 51 16 654 1043 33 36 687

Less: Expenses capitalised 24 74.9,75.9 & 76.9

TOTAL 1052 51 16 654 1043 33 36 687

PROFIT BEFORE DEPRECIATION AND INTEREST

148 14 91 178 29 25 54 355

Depreciation (Net) 25 77 45 39 38 672 26 26 91 467

Profit Before Interest and Taxes 102 75 52 506 2 98 62 887

Interest and other Charges(Net) 26 78 78 71 06 398 48 69 60 782

Add / Less:

Prior period charges or (credits) 27 65 & 83 13 17 11 536 (46864202.51)

Profit before Taxation 10 87 34 572 -41 02 33 692

Provision for Income tax 28 81.1 2 09 24 314 -

Provision for FBT - 30 21 178

Total provision for Taxation 2 09 24 314 30 21 178

Profit after Taxation 8 78 10 258 -41 32 54 870

Provision for taxation and interest on Income Tax in respect of earlier years

NET PROFIT 8 78 10 258 -41 32 54 870

Balance of profit brought over from Previous years

41 95 17 058 83 27 71 928

Statutory Reserves and Other

Appropriations Transfer to General Reserve

Appropriations

Balance Carried to Balance Sheet

50 73 27 316 41 95 17 058

EARNING PER SHARE

Basic Earning per Share (Rs) 0.84 -4.12

Diluted Earning per Share (Rs) 0.84 -4.12

NOTES TO ACCOUNTS: 30

Sd/- Sd/- Sd/- (K. JAYARAMA ALVA) (K. RAMAKRISHNA) (S.SUMANTH) Financial Advisor Director (T) Managing Director


for GANESH & SUDHIR Chartered Accountants, Firm Reg. No: 000866 S

Sd/-

Place : Mangalore GIRIDHAR KAMATH Date : 07.09.2010 Partner Membership No. 203199


38

SCHEDULE : 01 SHARE CAPITAL (Amount in Rs.)

PARTICULARS ACCOUNT

CODE CURRENT YEAR 2009-10 PREVIOUS YEAR 2008-09

Authorised Capital 15,00,00,000 Equity shares of Rs.10/- each

150 00 00 000.00 150 00 00 000.00

Issued, Subscribed and Paid up

Equity Share Capital (1,00,50,000 shares of Rs. 10 each)

52.301 10 05 00 000.00 5 00 000.00

Shares capital investment by GOK for consideration other than cash (100289931 shares of Rs. 10 each)

52.302 100 28 99 310.00 100 28 99 310.00

110 33 99 310.00 100 33 99 310.00

TOTAL 110 33 99 310.00 100 33 99 310.00

SCHEDULE : 1A SHARE DEPOSIT (Amount in Rs.)

PARTICULARS ACCOUNT


Share Deposit 52.303 22 00 00 006.68 6.68

(Received from GOK

Pending Allotment) 22 00 00 006.68 6.68

TOTAL 22 00 00 006.68 6.68

SCHEDULE : 02 RESERVES AND SURPLUS (Amount in Rs.)

PARTICULARS ACCOUNT


Capital Reserve 56.2 1 32 66 435.00 1 32 66 435.00

Reserve for Material Cost Variance

56.610 23 22 55 944.44 18 52 97 897.06

Surplus

Profit and Loss Account 50 73 27 316.30 41 95 17 057.87

Contributions, grants and subsidies towards cost of Capital assets

Consumers contribution towards cost of capital assets

55.1 90 75 17 883.49 73 74 83 897.13

Subsidies towards Cost of Capital Assets

55.200 11 93 33 000.00 11 93 33 000.00

State Govt. grants towards cost of capital works

55.300 4 00 00 000.00 4 00 00 000.00

APDRP Grant Account 55.301 36 75 80 656.00 36 46 80 656.00

PMGY Grant Account 55.302 56 25 000.00 56 25 000.00

RGGVY Grant Account 55.303 43 63 43 400.00 23 62 25 000.00

Special Grant Towards Capital works under APDRP 55.500 36 70 32 025.00 36 70 32 025.00

GOK Grant Towards energization of IP sets under Ganga Kalyana Scheme

55.501 53 00 000.00 53 00 000.00

Central Govt. Grant towards Power Sector Automation

55.502 63 00 000.00 300 78 81 660.23 63 00 000.00 250 00 60 968.06

TOTAL 300 78 81 660.23 250 00 60 968.06


39

SCHEDULE : 03 SECURED LOANS (Amount in Rs.)

PARTICULARS ACCOUNT


Loans from Rural Electrification Corporation

53.301 1 21 56 701.00 4 99 69 214.00

Loan drawn by MESCOM from REC– APDRP works

53.308 1 60 89 000.00 1 60 89 000.00

Loan drawn by MESCOM from REC – General

53.309 6 33 71 500.00 4 67 50 500.00

Loan from REC – RGGVY Works

53.310 5 10 21 720.00 2 52 59 000.00

Loan from PFC- R-APDRP works

53.311 3 61 96 200.00 .00

Loans from Commercial Banks

53.500 324 32 72 826.81 258 05 27 625.93

Total 342 21 07 947.81 271 85 95 339.93

TOTAL 342 21 07 947.81 271 85 95 339.93

SCHEDULE : 04 UN SECURED LOANS (Amount in Rs.)

PARTICULARS ACCOUNT


Loans from Banks - UCO

Bank 53.303 0.00 5 17 59 085.00

APDRP-REC Loan payable

to KPTCL 53.305 4 72 81 098.00 7 83 44 164.00

PMGY Loan Account 53.306 1 11 70 099.00 1 11 70 099.00

GOK loan for energization of

IP sets under GK scheme 53.307 72 00 000.00 84 00 000.00

Loan from Power Finance

Corporation Ltd., 53.960 120.00 1 06 21 315.00

Central Govt. Loan towards

Power Sector Automation 54.600 1 17 60 000.00 1 47 00 000.00

Loan from GOK - Interest

free 54.700 62 34 400.00 21 85 40 000.00

8 36 45 717.00 39 35 34 663.00

Total 8 36 45 717.00 39 35 34 663.00

SCHEDULE : 05 SERVICE LINE AND SECURITY DEPOSITS (Amount in Rs.)

PARTICULARS ACCOUNT


Deposits for:

Electrification / Service Connection

47.3 18 99 60 186.46 8 94 12 449.27

Other Deposits from Consumers

47.601 to

47.606

15 33 50 191.90 14 03 47 642.90

Security Deposit from consumers:

48.100 to

48.200

247 60 89 671.07 281 94 00 049.43 237 36 36 160.07 260 33 96 252.24

TOTAL 281 94 00 049.43 260 33 96 252.24


40

SCHEDULE - 6 : FIXED ASSETS (Amount in Rs.)

Gross Block Depreciation Net Block

Asset Group A/c

Code

As at

31-03-2009 Additions Deductions

As at

31-03-2010

A/c

Code

As at

31-03-2009 Additions Deductions

As at

31-03-2010

As at

31-03-2009

As at

31-3-2010

Land &

Rights 10.1 42865733.43 5083081.00 0.00 47948814.43 12.1 0.00 21538.00 0.00 21538.00 42865733.43 47927276.43

Buildings 10.2 166269291.82 19652727.00 123981.05 185798037.77 12.2 30951477.64 5837789.35 266671.93 36522595.06 135317814.18 149275442.71

Hydraulic

Works 10.3 14472907.12 2224347.00 0.00 16697254.12 12.3 2283540.85 802269.22 0.00 3085810.07 12189366.27 13611444.05

Other Civil

Works 10.4 1879853.79 717323.00 0.00 2597176.79 12.4 412900.86 70177.83 0.00 483078.69 1466952.93 2114098.10

Plant &

Machinery 10.5 1437767409.97 318618873.67 154921934.91 1601464348.73 12.5 357630852.30 73684045.55 33559699.05 397755198.80 1080136557.67 1203709149.93

Lines Cable

Networks 10.6 7459649325.04 1422941461.13 93622376.47 8788968409.70 12.6 2739951563.77 370690055.66 79613254.40 3031028365.03 4719697761.27 5757940044.67

Vehicles 10.7 33493822.04 1093082.00 1694377.10 32892526.94 12.7 29725603.63 165313.23 1524939.60 28365977.26 3768218.41 4526549.68

Furniture &

Fixtures 10.8 18421398.55 2560056.00 466600.00 20514854.55 12.8 8849731.79 918040.83 416349.40 9351423.22 9571666.76 11163431.33

Office

Equipments 10.9 6782989.71 1740307.00 158603.00 8364693.71 12.9 3802670.14 326273.26 142742.60 3986200.80 2980319.57 4378492.91

TOTAL 9181602731.47 1774631257.80 250987872.53 10705246116.74 3173608340.98 452515502.93 115523656.98 3510600186.93 6007994390.49 7194645929.81

Previous year figures 7174816237.24 2205884621.55 199098127.32 9181602731.47 2992231225.53 261899846.32 80522730.87 3173608340.98 4182585011.71 6007994390.49


41

SCHEDULE: 06A INTANGIBLE ASSETS (Amount in Rs.)

PARTICULARS ACCOUNT


----------NIL--------

SCHEDULE: 07 CAPITAL WORKS IN PROGRESS (Amount in Rs.)

PARTICULARS ACCOUNT


Capital Work in Progress 14 91 03 28 005.90 55 22 43 310.68

Sub Total 91 03 28 005.90 55 22 43 310.68

Revenue expenses pending

allocation over capital works -

Interest

15.206 88 85 354.00 9 71 67 035.00

Preliminary expenditure on

survey / feasibility studies of

projects not yet sanctioned

17.301 1 09 686.00 1 09 686.00

Sub Total 89 95 040.00 9 72 76 721.00

Grand Total 91 93 23 045.90 64 95 20 031.68

SCHEDULE: 08 INVESTMENTS (Amount in Rs.)

PARTICULARS ACCOUNT


Investments:

Long Term Investments -

(Un-quoted at cost.)

Investment in share capital of

Power Company of Karnataka

Limited (Equity shares of

Rs. 1000 each)

20.291 2 51 00 000.00 1 00 000.00

TOTAL 2 51 00 000.00 1 00 000.00

SCHEDULE: 09 INTEREST ACCRUED ON INVESTMENTS AND DEPOSITS (Amount in Rs.)

PARTICULARS ACCOUNT


Income Accrued and Due 28.290

----------NIL-------- Income Accrued but not

received 28.390

TOTAL


42

SCHEDULE - 10 INVENTORIES, STORES AND SPARES (Amount in Rs.)

PARTICULARS ACCOUNT


Materials Stock Account

Materials Stock Account 22.610 14 36 37 138.51 16 24 58 813.67

Material imprest Account 22.641 19 17 238.00 22 14 795.80

Materials pending Inspection 22.660 .00 .00

Materials Account -

Temporary works 22.731 11 36 417.48 23 90 631.39

Materials stock Excess /

Shortage Pending

Investigation.

Stock Shortage pending

investigation. 22.820 1 04 804.00 14 67 95 597.99 2 46 563.00 16 73 10 803.86

Assets not in use

Written down value (WDV) of obsolete / scrapped assets.

16.1 2 90 71 773.24 4 20 52 651.53

Written down value (WDV) of Faulty / Dismantled Assets.

16.2 3 20 85 378.45 6 11 57 151.69 3 71 62 921.14 7 92 15 572.67

TOTAL 20 79 52 749.68 24 65 26 376.53

SCHEDULE: 11 SUNDRY DEBTORS (Amount in Rs.)

PARTICULARS ACCOUNT


RECEIVABLES AGAINST

SUPPLY OF POWER.

Sundry Debtors for sale of

Power – LT, HT & Others

23, 47.607,

47.609 & 28.1

400 93 29 002.64 333 26 24 421.75

Sub Total 400 93 29 002.64 333 26 24 421.75

Less :

Provision for withdrawal of

Revenue demand 23.8 22757505.00 11587604.00

Provision for Doubtful Dues

from consumers (Credit

Account)

23.9 50 04 33 526.22 52 31 91 031.22 48 62 02 041.02 49 77 89 645.02

Net Receivables against

Supply of Power 348 61 37 971.42 283 48 34 776.73

(Sundry debtors outstanding

for less than 6 months &

considered good)

124 99 04 273.00 105 67 90 811.73

(Sundry debtors outstanding for more than 6 months & considered good)

223 62 33 698.42 177 80 43 965.00

TOTAL 348 61 37 971.42 283 48 34 776.73


43

SCHEDULE 12 : Cash and Bank Balances (Amount in Rs.)

PARTICULARS ACCOUNT


Cash Accounts

Cash on Hand 24.110 1 82 44 063.16 2 35 07 138.96

Postage stamps on hand 24.120 1 87 656.50 2 11 175.70

Sub-Total 1 84 31 719.66 2 37 18 314.66

Cash Imprest with Staff

– Accounts

Imprest with Staff 24.210 3 63 000.00 3 41 500.00

Collecting Bank Accounts

(Non-Operative) 24.3 3 00 69 982.97 2 82 45 317.65

Disbursement Bank

Account (Operative)

State Bank of Mysore 24.401 60 880.00 31 181.00

State Bank of India 24.402 4 11 642.00 5 00 080.00

Canara Bank 24.404 5 26 256.76 2 68 779.76

Syndicate Bank 24.405 30 09 894.46 36 70 543.50

Vijaya Bank 24.409 1 21 23 355.25 29 29 96 877.38

State Bank of Mysore 24.411 26 98 159.99 77 18 851.18

State Bank of India 24.412 2 65 029.50 23 24 107.50

Canara Bank 24.414 80 60 341.01 1 01 45 768.86

Syndicate Bank 24.415 4 86 30 518.39 2 44 35 096.41

Corporation Bank 24.424 27 33 176.00 27 48 767.00

Punjab Sind Bank 24.425 76 59 232.00 17 47 335.00

UCO Bank 24.426 56 73 788.11 32 63 252.00

AXIS Bank 24.427 15 631.00

Karnataka Bank 24.428 35 33 254.00

Indian Bank 24.429 27 82 244.00

Sub-Total 9 81 83 402.47 34 98 50 639.59

Remittance to Head Office

-Transit Account 24.5 8 05 794.00 10 47 126.00

Transfers from Head

Office In Transit Account 24.6 1 19 595.00 20 00 13 228.00

Fixed deposits in Banks 20.280 28 17 84 724.00 2 24 99 190.00

TOTAL 42 97 58 218.10 62 57 15 315.90


44

SCHEDULE 13: LOANS, ADVANCES AND DEPOSITS (Amount in Rs.)

PARTICULARS ACCOUNT


LOANS AND ADVANCES

Advances to Suppliers (considered good & Fully Secured)

25.501 .00 63 93 560.00

Advances to Contractors 26.6 31 01 10 199.00 1 42 09 550.40

Other Loans and Advances

Loans and advances to Staff - Interest bearing

Marriage advance 27.103 .00 750.00

Loans and Advances to Staff - Interest free

27.2 91 41 163.45 96 32 742.88

Sub-Total 31 92 51 362.45 3 02 36 603.28

Deposits 28.930

to 28.935 2 33 59 383.61 2 37 21 435.61

Advance paid to Power Company of Karnataka Limited

28.913 70 28 836.00 2 91 60 118.00

TOTAL 34 96 39 582.06 8 31 18 156.89

SCHEDULE 14 : OTHER ASSETS (Amount in Rs.)

PARTICULARS ACCOUNT


Income accrued and due on fund Investments

28.210 15 746.00

Amounts Recoverable from Employees

28.4 49 38 367.95 25 34 240.35

Capital Subsidy / Grants receivable

28.610 .00 3 00 00 000.00

Subsidy / Grants receivable 28.620 48 47 86 325.04 48 47 86 325.04

Tariff subsidy receivable from

GOK 28.625 22 34 25 842.00

Subsidy receivable from GOK

towards BJ/KJ consumers 28.626 8 30 96 841.81 8 30 96 841.81

Amount receivable from State

Govt. towards free supply of

power to IP Sets upto 10 HP

28.627 56 77 56 911.90 7 56 65 627.07

Other Claims

Claims for Loss / Damage to

Capital Assets 28.749 19 27 836.52 24 47 769.25

Receivables from

KPTCL/ESCOMS/VVNL

KPTCL

28.826,

28.831,

28.836,

28.841,

28.881

105 38 80 710.48 106 11 92 895.48


45

SCHEDULE 14 : OTHER ASSETS (Amount in Rs.)

PARTICULARS ACCOUNT


BESCOM 28.827, 28.832, 28.837, 28.842

9 30 16 040.90 9 80 89 228.90

HESCOM 28.829, 28.839, 28.844

24 36 27 440.70 24 36 27 440.70

GESCOM 28.840, 28.845

79 59 16 927.00 79 59 16 927.00

CESCO 28.850, 28.790

12 70 99 840.25 12 70 99 840.25

VVNL 28.865, 28.874

4 08 771.00 4 08 771.00

Amount receivable from CESCO on account of excess of Assets over liability assumed by CESCO on bifurcation of undivided MESCOM as on 01.04.2005

28.851 224 76 92 194.69

Other Receivables

28.810,

28.815, 28.816,

28.820, 28.899

3 24 70 275.92 1 37 91 311.32

Income tax /FBT paid in advance

28.821 14 08 04 156.00 6 18 39 072.00

Amount receivable from P&G Trust

28.907 1 43 82 932.50 10 51 53 251.50

Amount receivable from the ABT based reactive charges account

28.912 .00 1 64 802.00

Advance made to M/s. NTPC RSTPS towards power purchase

41.110 13 29 092.00

Amount deposited with PF Authorities

46.930 1 77 63 000.00 1 77 63 000.00

Inter Unit Accounts :

Inter Unit Accounts (Dr.) 31 to 37 30 54 008.16 211 36 98 373.15

613 60 64 168.82 531 86 04 808.82

TOTAL 613 60 64 168.82 531 86 04 808.82

SCHEDULE 15 : CURRENT LIABILITIES & PROVISIONS (Amount in Rs.)

PARTICULARS ACCOUNT


LIABILITY FOR PURCHASE OF POWER

Sundry Creditors for purchase of power

M/s. KPCL 41.108 292 27 30 859.00 217 55 99 969.00

M/s. NTPC RSTPS 41.110 11 87 63 493.00

M/s. Madras Automic Power Station 41.111 14 38 570.00 20 86 816.00

M/s. Neyveli Lignite Corporation Ltd., 41.112 15 86 33 052.00 14 61 74 210.00 M/s. NPCIL - Kaiga Generating Station

41.114 1 99 86 881.00 1 31 78 825.00

M/s. Sandur Power Company Ltd., 41.115 6 37 73 338.00 6 23 67 482.00

M/s. Sahyadri Power Company Ltd., 41.116 8 49 065.00 10 80 587.00

M/s. Malavalli Power Plant, 41.117 61 39 438.00 1 60 63 060.00

M/s. Kalson Power 41.118 33 67 148.00 97 051.00

M/s. Subhash Kabini 41.119 1 42 42 181.00 1 82 35 911.00

M/s. Graphite India Ltd., 41.120 29 57 686.00 4 09 165.00


46


PARTICULARS ACCOUNT


M/s. Maruthi Power Gen(I) Kabini Pvt. Ltd.,

41.121 2 52 61 937.00 .00

M/s. Maruthi Power Gen Hemavathi Pvt. Ltd.,

41.122 0.00 11 260.00

M/s. Moodabagil Power Pvt. Ltd. 41.123 3 94 133.00 12 90 064.00

M/s. BPCL ( NERIA) 41.124 54 717.00 1 78 698.00

Sundry Creditors for Purchase of Power - JTPCL

41.125 2 99 85 015.00 1 99 69 461.00

Sundry creditors for purchase of power M/s. Mrujara Power Plant

41.126 11 95 840.00 10 06 440.00

M/s. Rayalseema Alkalies 41.129 2 65 40 049.00 1 82 33 034.00

M/s. Tata Company Limited 41.131 15 26 24 118.00 14 67 57 976.00

M/s. GMR Energy Ltd 41.133 2 41 79 565.00 4 20 94 442.00

Sundry Creditors for purchase of power - Wind Mill Projects

41.140 4 86 32 554.00 9 06 30 931.00

Amount payable to KPTCL in respect of Wind Mill Projects

41.141 15 74 200.00 12 14 200.00

Sundry creditors for purchase of power - KPTCL / Shared expenses

41.173 1 09 07 964.00 1 52 42 831.00

Sundry creditors for purchase of power - open access charges payable to M/s. LEUL

41.174 0.00 60 34 091.00

Trading margin charges payable to M/s. Lanco Electric Utility Ltd., Hyderabad (LEUL) through BESCOM

41.175 0.00 8 83 795.00

Sundry creditors for purchase of power - M/s. PTC India Ltd through BESCOM

41.176 0.00 2 37 07 720.00

Sundry creditors for purchase of power - M/s. PTC India Ltd - open access charges

41.177 0.00 7 23 385.00

Sundry creditors for purchase of power - M/s. MPM Ltd

41.195 0.00 25 01 215.00

Sundry creditors for purchase of power - M/s. Kalyani - trading margin charges

41.197 0.00 60 287.00

Sundry creditors for purchase of power - M/s. Kalyani - open access charges

41.196 0.00 9 03 755.00

Sundry creditors for the purchase of power from NTPC VVNL

41.198 1 01 27 277.00

Sundry creditors for purchase of power M/s. PTC India Limited

41.199 5 97 14 827.00 10 79 02 913.00

Sundry creditors for purchase of power M/s. Shamili Hydel Power Project

41.202 97 10 960.00

Total Power Purchase Liability 371 37 84 867.00 291 46 39 574.00

LIABILITY FOR SUPPLIES / WORKS

41.2,42.101, to

42.601

26 31 21 442.07 50 90 83 069.99

Dues to KPTCL/ESCOMs / VVNL

KPTCL

42.214, 42.219, 42.224, 42.229

39 13 10 104.45 39 19 95 592.79

BESCOM

42.215, 42.220, 42.225, 42.230

12 70 08 981.08 9 49 30 260.74


47


PARTICULARS ACCOUNT


HESCOM 42.216 42.222, 42.232,

1 05 30 933.00 1 05 30 933.00

GESCOM 42.233 19 76 00 000.00 19 76 00 000.00

CESCO 42.790 24 10 56 405.19 12 03 70 960.19

VVNL 42.203, 42.213

3 47 577.30 3 47 577.30

Sub-Total 96 78 54 001.02 81 57 75 324.02

Staff Related Liabilities and Provisions

Provision for payment to Pension Trust

44.122 12 86 80 786.00 12 60 45 153.00

Provision for earned leave encashment

44.130 17 56 43 499.00 11 34 58 360.00

Provision for Family Benefit Fund 44.141

+44.142 + 44.143

5 45 21 368.63 4 58 57 927.21

Provision for contribution to newly defined contributory pension scheme

44.150 18 89 644.00 27 75 418.00

Unpaid Salaries 44.210 1 11 449.10 8 33 240.10

Unpaid Bonus 44.220 23 639.00 11 310.00

Salary payable 44.310, 44.311

14 91 544.16 7 62 193.96

Bonus payable 44.320 47 40 295.00 35 35 934.00

Ex-gratia payable 44.330 1 08 78 387.00 1 34 70 073.00

Sub Total 37 79 80 611.89 30 67 49 609.27

Payables to GOK

Electricity tax 46.300 11 75 10 107.90 24 73 38 517.00

Compounding fee 46.301 3 77 118.00 4 10 000.00

BRP - II recoveries 46.202,204 205,206,

207 40 74 054.00 38 34 505.00

Sub Total 12 19 61 279.90 25 15 83 022.00

Other Liabilities and Provisions

Security Deposits in cash from Suppliers / Contractors

46.101 9 13 42 869.21 10 07 00 597.20

Retention Money-Bill amount retained as per terms of purchase order/turnkey contract

46.104 36 95 31 672.00 17 80 96 927.00

Funds Transfered from KPTCL. 46.106 88 30 416.00 88 30 416.00

KPTCL Pensioners / Family Pensioners Family Benefit / Security Fund 46.103 .00 300.00

Provision for Income-Tax 46.800 4 23 46 746.00 96 23 847.00

Liability for Expenses 46.4 134 89 54 025.11 91 59 96 575.83

Sales tax and other liabilities 46.910 to 46.928 & 46.951

74 42 651.80 28 76 305.80

Stock Excess pending Investigation.

22.810 1 51 094.00 1 51 094.00

Sundry debtors for sale of power - BJ scheme

23.1017 38 02 690.53


48


PARTICULARS ACCOUNT


S. Drs. for sale of power-temporary power supply

23.1457 7 38 98 941.14

Advances to KPTCL, PCKL and SLDC for power purchase

28.910, 28.911, 28.915

9 61 10 592.00 11 69 72 859.00

Inter Unit Accounts (Cr) 32.310, 36.310, 37.310

1 63 62 384.50

Amount recoverable from Govt., towards Bhagya Jyothi Works

28.816 3 38 91 542.60

Amount deducted from contractors bills towards PF, ESI & CESS

46.930 + 46.931 + 46.932

5 62 589.00 8 94 875.00

Amount recovered from salary of employees towards employees CPS

46.952 7 86 442.00 20 36 240.00

Miscellaneous deposits 46.966 29 70 208.00 19 55 108.00

Excess credit afforded by Banks 46.971, 974, 975

11 546.10 3 55 385.10

Amount payable to other Departments against DCW works

46.967 & 46.970

63 96 522.72 1 10 02 309.72

Bank overdraft- State Bank of Mysore

50.210 23 92 99 151.00

Bank overdraft - Vijaya Bank 50.260 12 64 97 960.00 18 75 81 293.00

Loans installment due to Commercial Banks and REC

51.1 2 79 84 045.91 6 25 14 595.20

Interest payable to consumers 48.340 & 48.350

15 03 10 683.00 15 00 07 990.00

Sub-Total 264 74 84 772.62 174 95 96 717.85

TOTAL 809 21 86 974.50 654 74 27 317.13

SCHEDULE: 16 REVENUE FROM SALE OF POWER (Amount in Rs.)

PARTICULARS ACCOUNT


REVENUE FROM SALE OF POWER – LT

Bhagya jyothi Scheme. 61.101 3 83 02 830.77 1 80 17 756.56

Domestic combined lighting, heating and motive power, Private, Professional and unaided educational institutions.

61.110 + 61.111

272 47 73 327.63 243 21 05 675.56

Commercial and Non-Industrial Lights and Fans.

61.115 134 89 97 076.23 113 43 45 358.47

Irrigation Pump Sets (10 HP & below)/ Water Lifting.

61.119 86 06 50 800.16 33 73 53 866.41

Irrigation Pump sets (above 10 HP)/Water Lifting.

61.120 30 66 810.08 29 33 171.82

Water supply-Village Panchayats and Town Panchayats.

61.125 24 97 37 074.13 20 82 60 832.80

Water supply - Others. 61.126 4 81 22 539.97 4 40 34 056.94

Private Horticultural Nurseries, Coffee, Tea, Coconut and Arecanut Plantations.

61.121 1 37 95 771.88 1 37 88 676.47


49

SCHEDULE: 16 REVENUE FROM SALE OF POWER (Amount in Rs.)

PARTICULARS ACCOUNT


Industrial, Non-Industrial, Heating and Motive Power including Lighting

61.129 To

61.133 59 46 35 287.98 57 76 79 017.19

Public Lighting/ Village and Town Panchayats.

61.140 6 96 29 710.41 6 13 04 564.25

Public Lighting - Others. 61.141 10 65 05 580.46 9 13 22 406.35

Temporary Power Supply - Non-commercial lights and fans and other small appliances.

61.145 14 21 20 710.08 8 35 30 831.23

Sub Total 620 03 37 519.78 500 46 76 214.05

Revenue from Sale of Power – HT

Public Water Supply & Sewerage Pumping

61.250 23 28 32 131.55 18 56 46 073.61

Industrial, Non-industrial and Commercial purposes & Railway Traction

61.255 233 10 42 512.26 214 47 51 347.03

Commercial. 61.256 91 74 02 379.30 80 89 23 508.49

Irrigation and Agricultural Farms. Lift Irrigation Societies, Lift Irrigation Schemes and Govt., Horticultural Farms - HT3(a1)

61.260 15 63 146.75 14 96 909.48

Private Horticultural Nurseries, Coffee and Tea Plantations

61.261 6 53 016.53 10 17 142.54

Residential apartments and colonies availing power supply independently.

61.271 6 47 59 076.95 5 62 46 741.40

Sub Total 354 82 52 263.34 319 80 81 722.55

Revenue from sale of power through GOK subsidy

Revenue from sale of power IP sets below 10 HP

61.401 159 87 68 871.96 189 23 49 552.00

Revenue from sale of power BJ/KJ

61.402 6 12 31 128.04 6 45 38 777.00

Sub-Total 166 00 00 000.00 195 68 88 329.00

Wheeling charges recoveries

61.8 17 38 893.00 22 90 065.00

Miscellaneous charges from Consumers.

Reconnection Fee (D & R) 61.902 10 76 527.00 21 24 443.00

Service Connection (Supervision charges)

61.904 5 38 34 600.00 4 63 09 475.00

Delayed payment charges from consumers.

61.905 28 93 16 470.04 26 18 09 661.84

Other Receipts from consumers

61.906 1 69 73 748.98 1 18 45 240.00

Sub Total 36 12 01 346.02 32 20 88 819.84

Gross Revenue from sale of Power

1177 15 30 022.14 1048 40 25 150.44

Withdrawal of Revenue Demand

83.830, 83.831 & 83.832

1 90 42 226.00 56 51 776.00

NET REVENUE 1175 24 87 796.14 1047 83 73 374.44


50

SCHEDULE: 17 REVENUE SUBSIDIES AND GRANTS (Amount in Rs.)

PARTICULARS ACCOUNT


----------NIL--------

TOTAL

SCHEDULE: 18 OTHER INCOME (Amount in Rs.)

PARTICULARS ACCOUNT


Interest on Staff Loans and

Advances. 62.210 185.00 847.00

Interest on Bank Fixed Deposits 62.222 79 15 159.49 32 03 874.19

Interest on Other Investments 62.224 7 06 655.00

Sub-Total 86 21 999.49 32 04 721.19

Income from Trading

Profit on sale of stores 62.330 24 09 513.00 4 23 986.00

Sale of scrap 62.340 61 70 682.77 35 45 563.60

Other Miscellaneous receipts

from Trading 62.360 5 90 237.00 29 82 535.00

Gain on Sale of Assets 62.400 33 25 268.88 4 76 418.00

Sub-Total 1 24 95 701.65 74 28 502.60

Miscellaneous Receipts

Rental from Staff Quarters 62.901 60 60 836.00 48 47 830.00

Rental from others 62.902 2 65 322.00 1 95 366.00

Excess found on physical

verification of Materials Stock. 62.905 7 18 368.00 1 35 283.10

Rebate for collection of Electricity

Duty. 62.916 42 19 278.00 27 90 921.00

Miscellaneous Recoveries. 62.917 15 71 12 329.15 13 10 82 226.17

Incentives received 62.918 4 62 74 874.00 5 42 94 907.00

Other income relating to purchase of power

62.919 95 06 520.00 4 14 51 920.00

Interest received from Income Tax Department

62.920 39 01 852.00 6 71 202.00

Cross subsidy surcharge 62.921 16 90 956.00

Subsidies against Loss on account of Flood, Fire, Cyclone etc.,

63.200 32 52 000.00 14 14 788.00

Sub-Total 23 30 02 335.15 23 68 84 443.27

TOTAL 25 41 20 036.29 24 75 17 667.06


51

SCHEDULE: 19 PURCHASE OF POWER (Amount in Rs.)

PARTICULARS ACCOUNT


Purchase of Power

M/s. KPCL 70.108 287 29 60 905.00 262 85 15 198.00

M/s. NTPC RSTPS 70.110 114 77 40 889.00 105 88 31 027.00

M/s. Madras Automic Power Station 70.111 2 01 70 357.00 1 49 10 082.00 M/s. Neyveli Lignite Corporation Ltd., 70.112 47 90 30 563.00 38 43 80 845.00 M/s NPCIL-Kaiga 70.114 20 54 64 619.00 17 50 49 993.00 M/s. Sandur Power Company Ltd., 70.115 30 99 20 168.00 29 45 92 252.00 M/s. Sahyadri Power Company Ltd., 70.116 29 28 979.00 34 60 752.00 M/s. Malavalli Power Plant, 70.117 6 91 30 428.00 6 28 08 523.00 M/s. Kalson Power 70.118 2 39 54 528.00 2 46 84 226.00 M/s. Subhash Kabini 70.119 20 63 92 016.00 15 07 40 700.00 M/s. Graphite India Ltd., 70.120 1 75 85 932.00 1 64 08 549.00 M/s. Maruthi Power Gen(I) Kabini Pvt. Ltd., 70.121 2 54 31 755.00 2 41 55 191.00 M/s. Maruthi Power Gen Hemavathi Pvt. Ltd.,

70.122 1 56 59 310.00 1 95 62 718.00

M/s. Moodabagil Power Pvt. Ltd. 70.123 28 67 355.00 39 23 719.00 M/s. Bhoruka power corporation Ltd., (NERIA)

70.124 6 20 49 963.00 6 08 93 839.00

Power purchased from M/s. Mrujara Power Plant

70.126 38 67 840.00 14 62 600.00

M/s. Rayalseema Alkalies 70.129 22 81 83 692.00 20 28 65 110.00 M/s. Tata Company Limited 70.131 54 22 42 863.00 54 45 23 549.00 M/s. GMR Energy Ltd 70.133 .00 33 81 91 661.00 Wind Mill Projects 70.140 47 45 90 832.00 45 83 80 397.00 KPTCL transmission charges 70.161 69 57 74 398.00 60 88 37 069.00 SLDC Charges 70.162 42 25 266.00 PGCIL transmission charges 70.163 21 04 95 412.00 18 24 50 325.00 Open access charges M/s. LEUL 70.190 .00 15 71 464.00 Trading margin charges M/s. LEUL 70.191 9 83 808.00 4 27 953.00 Power purchased from M/s. Mysore Paper Mills Ltd.,

70.195 2 57 33 834.00 2 35 19 624.00

Power purchased from M/s.Kalyani Power Devpt Ltd.,- open access charges

70.196 .00 4 65 760.00

Power purchased from M/s.Kalyani Power Devpt Ltd.,- trading margin charges

70.197 .00 11 788.00

Power purchased from M/s. Shamili Hydel Power Project

70.202 7 04 66 200.00

Power purchased from M/s. Sagar Power (Dandela) Pvt. Ltd.,

70.203 3 91 43 910.00

Power purchased from M/s. Soham Mannapitlu Power Pvt. Ltd.,

70.204 2 18 77 020.00

Power purchased from M/s. Sagar Power (Neerukatte) Pvt. Ltd.,

70.205 1 16 25 600.00

Power purchased from M/s. AMR Power Pvt. Ltd.

70.206 2 61 43 174.00

Sub-Total 781 66 41 616.00 728 56 24 914.00

High Cost Energy Purchased

UI charges 70.172 12 28 12 075.00 91 47 82 123.00

M/s. GMR 70.133 4 91 98 201.00 12 38 30 238.00

Power purchased from JTPCL 70.125 27 66 69 905.00 33 33 10 539.00

Short term power purchased from M/s. NTPC - VVNL

70.198 2 75 48 799.00 1 90 38 918.00

Short term power purchased from M/s. PTC India Limited

70.199 23 72 51 165.00 14 81 90 238.00

Short term power purchased from M/s. JSW PTC Limited

70.200 52 94 981.00 1 97 59 380.00

Power purchased from M/s. LANCO Electric Utility Limited

70.201 22 65 21 792.00

Power purchased from Reliance Energy 70.207 1 15 94 062.00

Sub-Total 95 68 90 980.00 155 89 11 436.00

TOTAL 877 35 32 596.00 884 45 36 350.00


52

SCHEDULE: 20 REPAIRS AND MAINTENANCE (Amount in Rs.)

PARTICULARS ACCOUNT


Repairs & Maintenance to

Plant and Machinery 74.1 5 96 11 233.98 5 74 08 308.60

Buildings 74.2 73 32 182.00 78 41 502.00

Civil Works 74.3 6 41 726.00 10 19 214.00

Lines, Cable Network Etc. 74.5 5 32 87 596.22 4 64 05 536.97

Vehicles 74.6 22 02 905.70 22 93 391.00

Furniture and Fixtures 74.7 51 456.00 33 868.00

Office Equipments. 74.8 10 90 074.00 12 42 17 173.90 7 41 574.00 11 57 43 394.57

TOTAL 12 42 17 173.90 11 57 43 394.57

SCHEDULE: 21 EMPLOYEE COSTS (Amount in Rs.)

PARTICULARS ACCOUNT


Salaries 75.1 59 86 16 785.00 63 11 02 547.00

Over Time 75.2 1 97 43 712.00 2 00 19 518.00

Dearness Allowance 75.3 22 93 31 522.00 18 02 12 207.00

Other Allowances 75.4 5 55 43 993.00 5 02 72 222.55

Bonus 75.5 1 56 17 770.00 1 70 05 095.00

Sub-Total 91 88 53 782.00 89 86 11 589.55

Medical Expenses

reimbursement 75.611 1 15 22 302.15 1 00 13 172.00

Leave travel assistance 75.612 14 897.00 20 542.00

Earned leave encashment 75.617 5 21 51 787.00 4 21 26 986.00

Earned leave encashment retired

employees 75.618 6 40 64 765.00 2 94 48 126.00

Payment to helpers/employees

of Monsoon gang 75.630 1 18 70 367.00 1 50 55 001.00

Sub-Total 13 96 24 118.15 9 66 63 827.00

Staff Welfare expenses 75.7 1 89 67 168.45 2 17 65 060.39

Terminal Benefits 75.8 20 64 09 875.42 18 01 16 579.67

Sub-Total 22 53 77 043.87 20 18 81 640.06

GRAND TOTAL 128 38 54 944.02 119 71 57 056.61


53

SCHEDULE: 22 ADMINISTRATION AND OTHER EXPENSES (Amount in Rs.)

PARTICULARS ACCOUNT


Rent, Rates & Taxes 76.101 +

76.102 1 26 96 030.00 1 21 83 512.00

Pagers cellular phones E-mail, Telephone, Trunk call, Telegrams and Telex Charges

76.111 +

76.112 +

76.114

80 31 574.67 87 66 897.00

Postage 76.113 15 58 536.20 15 83 638.30

Revenue Receipts Stamps 76.115 .00 .00

Legal Charges 76.121 11 68 059.00 8 89 068.00

Audit Fees includes Statutory Audit Fee - Rs.1,10,000/- Tax audit fee Rs.40,000/- Service Tax Rs. 15,450/-

76.122 1 65 450.00 1 31 336.00

Cost Audit Fees Rs.

50,000/- Service

Tax Rs. 5,150/-

76.122 55 150.00 55 150.00

Consultancy charges 76.123 20 44 993.00 25 49 926.00

Other Professional Charges 76.125 to

76.130 13 85 22 876.00 11 45 69 915.00

Conveyance & Travel

expenses

76.131 To

76.139 7 09 25 710.00 6 19 52 929.50

Shared Expenses of KPTCL

& PCKL

76.140,

76.141 50 14 321.00 42 90 125.00

Sub - Total 24 01 82 699.87 20 69 72 496.80

OTHER EXPENSES

Fees and Subscriptions 76.151 29 73 951.00 21 32 705.00

Books, periodicals and

diaries 76.152 1 08 303.00 1 02 600.00

Printing & Stationery 76.153 62 27 895.00 51 97 319.50

Licence Fees 76.154 10 00 000.00 10 70 666.00

Advertisement Expenses 76.155 36 39 871.00 24 79 808.00

Computer stationery and floppies 76.156 3 53 509.00 5 96 932.00

Contributions 76.157 1 75 76 984.00 16 61 180.00

Electricity Charges 76.158 79 64 935.88 69 48 263.50

Statutory Payments as per Companie's Act 1956 76.159 39 035.00 65 360.00

Water Charges 76.160 6 25 684.00 6 97 601.00

Entertainment 76.162 7 417.00 11 237.00

Secret Service grant 76.164 0.00 60 000.00

Miscellaneous expenses 76.190 +

76.191 68 94 598.15 53 60 863.00

Freight & other material

related expenses

76.201 To

76.282 1 49 77 983.00 1 54 73 850.00

Sub - Total 6 23 90 166.03 4 18 58 385.00

TOTAL 30 25 72 865.90 24 88 30 881.80


54

SCHEDULE: 23 OTHER DEBITS (Amount in Rs.)

PARTICULARS ACCOUNT


Asset Decommissioning

Costs 77.5 3 77 368.00 3 24 647.00

Small & Low value items

Written off 77.610 10 47 589.12 6 02 519.42

Losses relating to Fixed

Assets 77.7 1 39 64 667.50 82 73 684.00

Sub-Total 1 53 89 624.62 92 00 850.42

Bad & Doubtful Debts

Written off / provided for 79.4 1 43 85 838.20 1 16 15 380.60

Miscellaneous losses and

Write offs 79.5 1 11 63 611.45 62 52 772.81

Sub-Total 2 55 49 449.65 1 78 68 153.41

T O T A L 4 09 39 074.27 2 70 69 003.83

SCHEDULE: 24 - OTHER EXPENSES CAPITALISED (Amount in Rs.)

PARTICULARS ACCOUNT


TOTAL ----------NIL--------

SCHEDULE: 25 DEPRECIATION (Amount in Rs.)

PARTICULARS ACCOUNT


Depreciation on Lease

hold Assets 77.110 21 538.00

Depreciation on Buildings 77.120 58 37 789.35 27 69 168.40

Depreciation on Hydraulic

Works 77.130 8 02 269.22 2 48 417.47

Depreciation on Civil

Works 77.140 70 177.83 33 355.23

Depreciation on Plant and

Machinery

77.150 +

77.151 7 49 77 823.55 4 49 91 460.85

Depreciation on lines,

cable, network etc.,

77.160 +

77.161 37 08 19 374.66 21 34 57 061.14

Depreciation on Vehicles 77.170 + 77.171

1 65 313.23 2 58 017.00

Depreciation on furniture,

fixtures 77.180 9 18 040.83 6 94 788.72

Depreciation on Office

equipments

77.190 +

77.191 3 26 345.26 2 39 198.51

Total 45 39 38 671.93 26 26 91 467.32

Depreciation (Net) 45 39 38 671.93 26 26 91 467.32


55

SCHEDULE: 26 - INTEREST AND OTHER CHARGES (Amount in

Rs.)

PARTICULARS ACCOUNT


Interest on Other Loans /

Deferred Credits

Interest on Central Govt.

Loan towards Power Sector

Automation

78.101 20 15 712.00 17 64 000.00

Interest on Income Tax 78.510 0.00 10 774.00

Interest on Loan from REC 78.540 1 71 90 971.00 2 44 28 683.00

Interest on Loan from

Commercial Banks 78.560 30 63 48 035.55 22 84 16 736.23

Interest on APDRP-REC

Loan payable to KPTCL 78.572 12 78 031.00 13 69 319.00

Interest on PMGY Loan

account 78.573 14 30 625.00 13 40 411.00

Interest on GOK Loan for energization of IP sets under GK Scheme

78.580 9 24 000.00 12 00 000.00

Interest on Loan from PFC 78.584 0.00 19 50 185.00

Interest on loan drawn by MESCOM from REC– APDRP works

78.591 22 13 171.00 4 00 022.00

Interest on loan drawn by MESCOM from REC – General

78.592 74 09 809.00 50 52 619.00

Interest on loan drawn by MESCOM from – REC – RGGVY Works

78.593 35 55 134.00 16 955.00

Interest on loan drawn from PFC for implementation of RAPDRP works

78.594 29 08 092.00

Sub Total 34 52 73 580.55 26 59 49 704.23

Interest to Consumers 78.6 15 03 10 683.00 15 00 07 990.00

Other Interest and Finance

Charges 78.8 2 42 35 518.03 1 18 06 834.69

Interest on belated payment

for power purchase 80.1 28 60 01 740.00 12 46 50 788.00

Sub Total 31 02 37 258.03 13 64 57 622.69

Less : Interest and finance

charges capitalised

Capitalisation of interest on funds used during construction

78.900 1 87 15 124.00 6 54 54 535.00

Net Interest and other

Charges 78 71 06 397.58 48 69 60 781.92


56

SCHEDULE: 27 PRIOR PERIOD CREDITS / CHARGES (Amount in Rs.)

PARTICULARS ACCOUNT


Income relating to previous years :

Interest income for prior periods

65.400 0.00 25 080.00

Excess provision for Income Tax in prior periods

65.500 0.00 71 46 720.00

Excess provision for Depreciation in prior periods

65.600 4 20 825.29 3 20 887.83

Excess provision for Interest and Finance Charges in prior periods

65.700 9 23 023.00 3 61 392.00

Other Excess provision in prior periods

65.800 3 74 02 154.00 42 15 164.98

Other Income relating to prior periods

65.900 10 70 95 830.00 6 32 73 307.00

Sub-Total 14 58 41 832.29 7 53 42 551.81 Prior Period Expenses / losses:

Operating Expenses of previous years.

83.300 7 49 826.00 21 290.00

Employee costs relating to previous years

83.500 1 28 26 541.00 13 59 002.00

Depreciation under provided in previous years.

83.600 10 86 522.31 2 31 855.94

Interest and other Finance charges relating to previous years

83.700 0.00 7 66 497.36

Short Provision for Income tax - previous years

83.810 13 542.00 2 77 574.00

Administrative Expenses - previous years.

83.820 2 53 727.00 2 356.00

Materials related expenses - previous years.

83.840 0.00 3 24 293.00

Other Expenses relating to prior periods

83.850 1 26 12 428.39 1 03 427.00

Prior Period Expenses relating to purchase of power

83.860 25 00 10 782.00 2 53 92 054.00

Sub-Total 27 75 53 368.70 2 84 78 349.30

Net Prior Period (credits)/ charges

13 17 11 536.41 (4 68 64 202.51)

SCHEDULE: 28 PROVISION FOR TAXATION (Amount in Rs.)

PARTICULARS ACCOUNT


Provision for Income Tax 81.100 2 09 24 314.00 -

Provision for FBT - 30 21 178.00

TOTAL 2 09 24 314.00 30 21 178.00

SCHEDULE 29 :

MISCELLANEOUS EXPENDITURE TO THE EXTENT NOT WRITTEN

OFF / OR ADJUSTED (Amount in Rs.)

PARTICULARS ACCOUNT


Total ----------NIL--------


57

SCHEDULE: 30

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

I) SIGNIFICANT ACCOUNTING POLICIES FOR THE PERIOD ENDED 31-03-2010.

a) Basis of preparation of financial statements:

The Company is registered under the provisions of Companies Act, 1956. The Company is a

distribution licensee under Section 14 of the Electricity Act, 2003. The provisions of the

Electricity Act, 2003 read with the rules made there under prevails wherever the same are

inconsistent with the provisions of the Companies Act, 1956 in terms of Section 174 of the

Electricity Act, 2003.

The Accounts of the company have been prepared on the basis of going concern concept

and under the historical cost convention. The Company adopts accrual basis in preparation

of its accounts to comply in all material aspects with Generally Accepted Accounting

Principles (GAAP) and the accounting standards issued by the Companies (Accounting

Standard) Rules, 2006 as per notification no. G.S.R 739 (E) dated 7th December, 2006.

However Rebate for early payment and interest on delayed payment to power producers

which are accounted as intimated by them. Further, in certain areas where different

accounting treatment has been prescribed under GAAP and Electricity (Supply) (Annual

Accounts) Rules 1985 (ESAAR, 1985) for an item of income/expenditure or Assets/Liabilities,

the accounting treatment prescribed under ESAAR 1985 has been adopted as per Section

174 of the Electricity Act, 2003. Further, assets and liabilities created under applicable

electricity laws continue to be depicted under appropriate heads in the Balance Sheet.

b) Use of Estimates:

In the preparation of the Financial Statements, the company has made estimates and

assumptions that affect the reported amounts of assets and liabilities on the date of the

financial statements and the reported amounts of revenues and expenses during the

reported period to conform with the generally accepted accounting principles. Differences

between actual results and estimates are recognized in the period in which results are known

/ materialized.

c) Fixed Assets:

i) Fixed assets which are acquired or constructed are recorded in the books of accounts

and disclosed in annual accounts at actual cost of acquisition / construction or at

standard rate, as the case may be less accumulated depreciation. Cost of acquisition

is inclusive of freight, duties & taxes, levies, borrowing costs and all incidentals

attributable to bringing the asset to its working condition.

ii) In case of fixed assets, for new projects / extension, the related expenses and interest

cost up to the date of commissioning attributable to such project / expansion are

capitalized.


58

iii) Fixed Assets other than those classified as „Furniture & Fixture‟ and „Office

Equipments‟, costing individually up to Rs 500 are written off to Profit and Loss Account

during the year.

iv) Assets transferred by M/s Karnataka Power Transmission Corporation Limited (KPTCL)

have been stated at the cost of transfer indicated by KPTCL in transfer document.

v) Contributions, grants and subsidies towards cost of Fixed Assets have not been

reduced from the cost of assets but have been shown separately under Capital

Reserve Head in the Balance Sheet. The depreciation pertaining to such Fixed Assets

is fully charged to Profit and Loss account. The ESAAR, 1985 provides for accounting

of such grants separately and not to reduce it from the value of respective Fixed

Assets.

d) Impairment of Assets:

The Company at the Balance Sheet date assesses individual fixed assets and group of

assets constituting “Cash Generating Units” (CGU) for impairment, if circumstances indicate

a possibility or warrant such assessment. If carrying cost is higher than recoverable amount

provision will be made for impairment of state of assets or CGU.

e) Depreciation:

i) Depreciation on all assets (except lease hold land) is provided on straight line method

over the useful life of the asset at the rates approved in KERC Tariff Order 2009 dated

25th November 2009. Due to adopting the revised rate of depreciation with effect from

01.04.2009, the depreciation provision for the year 2009-10 is increased by Rs. 14.78

Crs. approximately. Depreciation on released assets re-issued to works and

categorized as assets, is charged at the rates prescribed vide said regulation

considering the WDV as the base value. This system is followed consistently.

ii) In respect of Lease hold land where entire lease amount is paid in advance

depreciation is charged every year by an fixed amount which is arrived by dividing the

total Lease cost by the number of years of lease so that 100% of the leased cost of

land is recovered over the lease period.

iii) Depreciation on all assets excluding land is provided up to 90% of the original cost.

Depreciation is not charged on those assets for which the accumulated depreciation as

at the Balance Sheet date is 90% of the original cost.

iv) Depreciation on additions of assets is provided on pro-rata basis from the following

month in which the asset is available for use. Depreciation on disposed assets / assets

withdrawn from use is provided up to the month in which the asset is disposed /

withdrawn.


59

f) Capital Work in Progress:

Material issued to Capital Work is valued at a price which is determined on the basis of

previous purchases and prevailing market rates, which is stated as Common Standard Rates

for all ESCOMs jointly published by all the ESCOMs in the state of Karnataka.

g) Inventory valuation:

Inventories are valued at Standard Rate, which is determined by MESCOM from time to time

based on previous purchase price and prevailing market rates (published as O & M Schedule

of Rates). The difference in actual cost of material received and standard issue rate

represents “Material Cost Variance”. At the end of the year debit balance if any, under

Material Cost Variance is charged to Profit and Loss Account and credit balance if any is

transferred to reserve account called “Reserve for Material Cost Variance”.

Dismantled Assets are valued at written down value of assets. Stock of non-reusable or

reusable materials for which facilities for repair do not exist are valued at scrap rates

indicated in the schedule of rates.

h) Revenue Recognition:

Sale of Electricity is accounted for, based on tariff rates approved by the Karnataka

Electricity Regulatory Commission (KERC). Revenue from sale of energy is accounted on

accrual basis. Revenue is reduced by unbilled revenue of previous year included in current

year‟s revenue. It is increased by the unbilled revenue of current year and revenue due from

consumers whose ledger accounts are yet to be opened.

i) Subsidy from Government:

Govt. has committed to release R.E. / Tariff subsidy of Rs.166 Crs and IP set subsidy of Rs.

50 Crs, totaling to Rs. 216 Crs. to MESCOM for FY 2009-10 vide GOK Letter No: EN 91 PSR

2008 Dated 07.05.2009. But Govt. has released only Rs. 143.66 crs of R.E/ Tariff Subsidy

during the year. Balance R.E/ Tariff subsidy receivable amounting to Rs. 22.34 Crs. (166 Crs

-143.66 Crs) is accounted as receivable from GOK as on 31.03.2010.

Actual IP set subsidy receivable from the Govt. for FY 2009-10 amounts to Rs. 73.41Crs.

against which Govt. has released only Rs. 16.63 Crs (excluding previous year‟s release of

Rs. 7.57 Crs.). Balance IP set Subsidy receivable amounting to Rs. 56.78 Crs (73.41 Crs –

16.63 Crs) is also accounted as receivable from GOK as on 31.03.2010 in accordance with

G.O No:EN 55 PSR 2008 Dtd 04.09.2008.

Further, as per KERC Tariff Order 2009 dated 25th November 2009, ROE at 15.5% is

determined as base minimum profit for the company. As per the Accounts, the revenue gap

of the Company for FY 2009-10 is Rs. 182.35 Crs. Even after accounting the committed

subsidy of Rs.166 Crs, additional subsidy of Rs. 16.35 Crs. is required to earn the base

minimum Profit. The company has brought this fact to the notice of the GOK. vide Ltr. No.

73-74 / 2010-11 Dtd 08.06.2010. But as on date no communication has been received from

the GOK about the admissibility of the additional subsidy claimed by the company. Hence as

a matter of prudence, RE/Tariff subsidy is accounted by MESCOM to the extent of

commitment already received from GOK.


60

j) Employee Benefits:

i) All the employees of the company are on deputation from KPTCL.

ii) In respect of Pension and Gratuity, provision for contribution to KPTCL/ESCOMs‟

Pension & Gratuity Trust is made on the formula evolved by the Trust based on the

actuarial valuation undertaken by KPTCL/ESCOMs‟ Pension & Gratuity Trust. The

contribution towards pension and gratuity is accounted at the rates noted below:-

Pension - 26.13% of Basic Pay + Dearness Pay + Dearness Allowance

Gratuity - 2.24.% of Basic Pay + Dearness Pay

For those employees who have joined MESCOM on or after 1.4.2006, the contributory

pension scheme is applicable wherein 10% of the Basic Pay + Dearness Pay +

Dearness Allowance are contributed to the pension fund with matching contribution of

employees.

iii) Provision for ELS & FBF:

Provision towards Earned Leave Encashment and Family Benefit Fund has been

created based on the Actuarial Valuation carried out as on 31.03.2010.

k) Provision for Bad and Doubtful Debts:

Provisions for Bad and Doubtful Debts is made in the accounting divisions at 4% (as per para

4.2 of Annexure V of ESAAR, 1985) on the balance of sundry debtors for sale of power,

outstanding as at the end of the year.

l) Accounting for Grants:

As per para 2.33 / 2.34 / 2.35 of Electricity (Supply) Annual Accounts Rules, 1985, Grants

received towards capital expenditure are shown separately under capital grants and are

neither diminished as deferred income nor cost of assets has been reduced to the extent of

such grants.

m) Contributions from consumers:

As per para 2.33 / 2.34 / 2.35 of ESAAR, 1985, consumer contributions received for capital

expenditure are shown separately under contributions and are neither diminished as deferred

income nor cost of assets have been reduced to the extent of contributions. Further, the

Company has accounted a sum of Rs 38.92 Crs. as contribution from consumers towards

capital assets which is only book value (at standard rates) of the assets transferred to the

Company for works executed by the consumers and does not represent any value received

in cash.


61

n) Investments

I) Investment in Power Company of Karnataka Ltd (PCKL):

An amount of Rs 1.00 lakh paid towards the initial minimum share capital and Rs 2.50

crores paid towards networth of Power Company of Karnataka Ltd (PCKL) have been

accounted as investments under account code 20.291.

II) Long term investments are carried at cost less provisions if any for diminutions in the

value of such investments. Current investments are carried at Cost or fair value

whichever is lower.

o) Compliance to Accounting Standards:

As per Section 616 of the Companies Act, 1956, the provisions set out in ESAAR 1985 will

prevail over the provisions of Companies Act, 1956, in the event of any conflict between

ESAAR, 1985, and Accounting Standards. Therefore, the Company has complied with

accounting standards only to such extent that it does not conflict with ESAAR, 1985.

2) Notes on Accounts:

Balance Sheet:

1) Details of security offered against Secured Loans of the Company:

a) Loan obtained from REC for APDRP Scheme for Mangalore and Udupi Town is

secured by hypothecation of all existing unencumbered moveable properties

including Machinery, Equipments, Machinery Spare, Tools, Implements and

Accessories installed / created / erected and all future moveable properties including

machinery etc bought out of the loan amount. The loan is borrowed through KPTCL

and beneficiary is MESCOM. The charge was created for Rs. 100.89 Crs. and the

loan balance at the end of the FY 2010 is Rs. 4.81 Crs.

b) Loan from Syndicate Bank is secured by a first charge (floating) on fixed assets viz.,

transformers, transmission lines, meters, poles, conductors, cables and computers

worth Rs. 80.00 crores situated at Mangalore and Sagar Divisions. The security has

also been extended by way of first charge (floating) on fixed assets viz., transformers,

transmission lines, meters, poles, conductor cables etc that were subsequently

created by borrowing an additional loan of Rs. 40 crores. The charge was created for

Rs. 80.00 Crs. and the loan balance at the end of the FY 2010 is Rs. 50.00 Crs.

c) Loan from State Bank of Mysore is on the security of first charge on moveable

machinery viz., meters and metering equipments worth Rs. 14.12 crores of Puttur

division. The charge was created for Rs. 10.00 Crs. and the loan balance at the end

of the FY 2010 is Rs. 2.50 Crs.

d) Loan obtained from REC for APDRP works at Shimoga, Bhadravathi and

Chikkamagalur is secured by way of first charge by hypothecation of moveable

machinery, equipments, machinery spares, tools, implements and accessories

installed and equipments created under the project and procured out of loan

sanctioned by REC. The charge was created for Rs. 2.87 Crs. and the loan balance

at the end of the FY 2010 is Rs. 1.61 Crs.


62

e) Loan from REC obtained for project works at Vogga, Kukkipady and Nellyadi in

Dakshina Kannada district is secured by first charge by hypothecation of all moveable

machinery, equipments, machinery spares, tools, implements and accessories

installed and equipments created under the project and procured out of loan

sanctioned by REC. The charge was created for Rs. 6.38 Crs. and the loan balance

at the end of the FY 2010 is Rs. 6.34 Crs.

f) Loan from Corporation Bank is secured by way of Hypothecation of present and

future current assets of the Company. The charge was created for Rs. 150.00 Crs.

and the loan balance at the end of the FY 2010 is Rs. 54.42 Crs.

g) Loan from Vijaya Bank, Catholic Centre (City Branch); State Bank of Mysore–Janatha

Bazaar Branch; Punjab and Sindh Bank Mangalore; Corporation Bank, M.G.Road,

Mangalore; Indian Bank, K.S.Rao Road, Mangalore; UCO Bank – Jayanagar

(Bangalore) is secured by Hypothecation of the whole of present and future current

assets including inventories and book debts belonging to the Company situated at

Corporate Office. For the loan from Vijaya Bank charge was created for Rs. 50.00

Crs. and the loan balance at the end of the FY 2010 is Rs. 26.83 Crs. For the loan

from State Bank of Mysore charge was created for Rs. 10.00 Crs. and the loan

balance at the end of the FY 2010 is Rs. 2.50 Crs. For the loan from Panjab & Sindh

Bank charge was created for Rs. 100.00 Crs. and the loan balance at the end of the

FY 2010 is Rs. 86.90 Crs. For the loan from Corporation Bank charge was created

for Rs. 150.00 Crs. and the loan balance at the end of the FY 2010 is Rs. 54.42 Crs.

For the loan from Indian Bank charge was created for Rs. 50.00 Crs. and the loan

balance at the end of the FY 2010 is Rs. 44.50 Crs. For the loan from UCO Bank

charge was created for Rs. 60.00 Crs. and the loan balance at the end of the FY

2010 is Rs. 60.00 Crs.

2) At the time of unbundling of transmission and distribution activities and formation of

Electricity Distribution Companies, the Government of Karnataka has transferred certain

loans taken by M/s KPTCL to the Company as part of transfer of assets and liabilities. The

interest payment as intimated by KPTCL has been charged off in the books of accounts

since the assets have been commissioned.

3) The Balances in respect of Sundry Debtors, Sundry Creditors, Loans, Advances to Supplies

and other borrowings are subject to confirmation and other reconciliation if any.

4) Balance with KPTCL and Other ESCOM‟s are subject to confirmation and reconciliation.

5) The Company has received a grant of Rs. 43.63 Crs under RGGVY Scheme for providing

power connection to consumer under BPL category. The unspent amount of grant to the

extent of Rs. 22.13 Crs. has been kept under fixed deposit account with Vijaya Bank.

6) The loan balances between KPTCL and the Company is subject to reconciliation and

confirmation.


63

7) Out of interest free loan of Rs. 22.62 Crs released by Government of Karnataka during

Financial Year 2008-09 towards short term Power purchase vide GOK Order No. EN 86 PSR

2008 Bangalore dated 30.03.2009, Rs. 22.00 Crs is converted into Equity vide GOK Order

No. EN 67 PSR 2009 Bangalore dated 01.03.2010 and kept under share deposit account.

8) An amount of Rs. 10.00 Crs has been received from the GOK during the year towards share

capital with a condition that the amount should be used for improvement of basic

infrastructure facility (electrical only).

9) An amount of Rs. 1,87,15,124/- towards interest on loan taken for capital works has been

capitalized during the year.

10) The difference between the balance of consumers security deposit held as per accounts and

consumers ledger accounts are subject to reconciliation.

11) Rs. 99 lakhs paid towards working Capital of PCKL during FY 2007-08 is accounted under

code 28.913 as advance and shown under “Loans and Advances” schedule. Again

Rs. 50 lakhs is paid towards working Capital during FY 2009-10. After adjusting the revenue

expenditure of M/s. PCKL for FY 2007-08 to FY 2009-10, the net balance under account

code 28.913 is Rs. 70,28,836/-.

Profit & Loss Account:

1) With effect from 1.4.2006, share of power project capacity allocated to MESCOM has been

revised vide GOK notification No. EN 45/PSR 2006/22.04.06. Power Purchase Cost is being

accounted for and paid as per the above share which is readjusted at the end of the year

based upon actual drawal of energy for the year.

MESCOM is arranging payment to the power suppliers based on the notional share basis

fixed and notified by the Govt. of Karnataka from time to time. However at the year end the

energy balancing and cost implication among ESCOMs was being carried out by the then

SPPCC / PCKL till FY 2008 and the same was accounted by MESCOM in its Annual

Accounts & Reports. Since FY 2008-09 Load Dispatch Centre (LDC) was carrying out the

said exercise of energy balancing. As on the date of finalization of Annual Accounts of the

Company for FY 2009-10, the results of the energy balancing for FY 08-09 & 09-10 are not

received from LDC, hence the same could not be incorporated in the accounts of the

company.

2) Total Revenue from sale of energy during 2009-10 includes Rs 69.76 Crs in respect of

revenue accrued but pending billing at the year end.

3) As per the Government Order No. EN 06 PSR 2009 Bangalore, Dated 22.02.2010 the rebate

payable to the Electricity Distribution Companies for collection of Electricity Tax from

Consumers and its remittance to Govt. is revised from 1.5% to 0.5% with effect from

01.01.2010.


64

4) Electricity Taxes: Electricity Tax of Rs. 24.74 Crs collected from Consumers from Aug-2009

to Feb-2010 is adjusted against the Tariff Subsidy received/ receivable from Govt. vide order

No. EN 36 PSR 2009/P1 dated 31.03.2010 and accounted as per Ltr. No FA(A&R)/ KCO-

30/14386/09-10 dated 31.05.2010 of Financial Advisor (A&R), KPTCL.

5) The Government of Karnataka vide order No. EN 50 EEB 2005 Bangalore dated 03.12.2007

has released a loan of Rs. 147.00 lakhs towards Power Sector Automation. In the absence

of interest rate and terms of repayment and as a matter of prudence the company has

provided interest at the rate of 11% per annum for the said loan and repayment of two loan

installments amounting to Rs. 29.40 lakhs (total loan is assumed to be for 10 years and each

year installment is considered by dividing the total loan by 10 years) has been reduced from

the loan and shown separately under other liabilities and provisions under schedule – 15

under account code 51.1.

6) Disclosures required by Accounting Standards:

a) Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits are recognized as an expense at the undiscounted amount in

the profit and loss account for the year in which related services are rendered.

Post Employment Benefits:

The Company makes contribution for Pension and Gratuity to KPTCL/ESCOM‟s Pension and

Gratuity Trust. The same becomes a Multi-Employer Defined Benefit Plan.

For employees who have joined the Company on or after 1.4.2006, the pension plan is Multi-

Employer Defined Contribution Plan.

b) Segment Reporting:

Business Segment:

Electricity distribution is the principal business activity of the Company. There are no other

activities which form a reportable segment as per the Accounting Standard – 17 „Segment

Reporting‟.

Secondary Segment:

The operations of the Company are mainly carried out within the four districts of Karnataka

State namely, Dakshina Kannada, Udupi, Chickmagalur and Shimoga. Therefore

geographical segments are not applicable.

c) Disclosure of transactions with Related Parties as required by the Accounting

Standard – 18:

In view of the paragraph 9 of AS 18, no disclosure is required as regards related party

relationships with other state-controlled enterprises and transactions with such enterprises.

Other disclosures as required under AS 18 are as given below:


65

Managerial Remuneration paid / payable for the financial year 2009-10 to the directors are as

follows:

(Rupees)

Sl No.

Particulars Current Year

2009-10 Previous Year

2008-09

WHOLE TIME DIRECTORS:

1. Salary and Allowances 1545547 1107520

2. Exgratia 7000 4036

3. Medical Expenses 37108 1918

4. Travelling Expenses 384758 273130

PART TIME DIRECTORS

5. Travelling Expenses 0.00 23597

6. Sitting Fees 29500 16500

TOTAL 2003913 1426701

d) Earnings Per Share

Particulars 2009-10 (Rs) 2008-09 (Rs)

Profit after tax as per Accounts (For Basic and Diluted Earnings Per Share) – (A)

87810258 (-) 413254870

Weighted Average number of shares outstanding during the year for Basic and Diluted EPS – (B)

104531712 100339931

Basic and Diluted Earnings per Share (A/B) 0.84 (-) 4.12

e) Taxation:

Current Taxation:

The provision for Minimum Alternate Tax (MAT) under Section 115 JB of Income Tax Act

1961 has been created in the Accounts.

Deferred Taxation:

The Company has not recognized Deferred Tax Asset / Deferred Tax Liabilities since there is

no such requirement under ESAAR, 1985.

f) Estimated amount of capital works remaining to be executed as on 31.03.2010 in respect of

Projects having individual Estimated cost of Rs. 50 Lakhs and above is amounts to Rs.

171.76 Crs. In rest of the small works remaining to be executed portion could not be

ascertained due to large volume of works.

g) Amount due to Small and Medium Enterprises as required under the Micro, Small & Medium

Enterprises Development Act, 2006 are not ascertained in the absence of ready related

information. The company has not received any confirmations from the registered suppliers

as of date, in respect of whom disclosures are required to be made under the said Act.

7) Interest accrued but not due for the financial year 2009-10 in respect of long-term borrowing

assigned by KPTCL to the extent of Rs 3.60 lakhs has been provided for as per KPTCL letter

No. FA (A & R)/KCO 24/14201/2009-10 dated 08.04.2010.


66

8) RE subsidy amounting to Rs. 48.48 Crs. pertaining to the period prior to FY 2004-05 is

pending for release from Govt. of Karnataka as on 31.03.2010. The case was presented

before the Govt. but no direction was received from GOK as to release / write off of the said

amount. This has a bearing on the profit of the company if the dues are not paid by the

Government.

Others:

1. The details of energy purchase, sale of energy and distribution losses during the year 2009-10 are as follows:

Details of Sale of Energy and T & D Loss:

Sl. No.

Particulars Units For the year

2009-10 For the year

2008-09

1. Energy purchased at Generation Point Mus 3382.00 3321.21

2. Energy attributable to Energy Balancing &

Transmission Loss Mus 108.17 183.45

3. Total Energy Available for Sale Mus 3273.83 3137.76

4 Total Metered Sales Mus 2638.01 2450.60

5. Total un-metered sales Mus 222.13 280.97

6. Total Sales (4+5) Mus 2860.15 2731.57

7. T & D Loss Mus 413.68 406.19

8. Percentage of T & D Loss % 12.64 12.95

2. The outstanding balance in Revenue Suspense Account representing collection from

consumers pending allocation for want of details has been shown as deduction from the

Sundry Debtors account since this amount is with the Company.

3. Considering the financial implications involved, insurance of fixed assets or current assets is

not done as it is not economical.

4. Transferring the name in the title deeds of properties transferred from KPTCL is under

progress.

5. The net balances outstanding in the Account heads 37.820 & 37.821 reflecting the amount

due from CESCO on account of excess Assets over liabilities assumed by CESCO at the

time of bifurcation of undivided MESCOM into MESCOM&CESCO as on 01.04.2005, is

transferred to Account Head “Receivable from CESCO”.

6. Contingent Liabilities:

a) The Company was subjected to EPF Inspection during the year 2006-07 and thereby a

demand of Rs 4.44 Crores was raised on the Company towards the dues for EPF of

Contract Employees. The Company has disputed the same in view of the error in

calculation of demand and also with regard to applicability of the regulations to

contractors‟ employees. A deposit of Rs 1.77 Crores has already been made with the

EPF department and an appeal has been preferred at the EPF Appellate Tribunal at New

Delhi. The Company is hopeful of a positive outcome on the appeal. No provision has

been made in the accounts for the disputed demand.


67

b) KPTCL vide Ltr No. FA(A&R)/C(AP&A)/DC(A&C)/AAO1/cys-104 dated 15.3.2007 has

informed MESCOM to create regulatory assets and regulatory liabilities for the payment

of fixed costs of US 4 cents paid to Tannir Bhavi Power Company Ltd., based on the

order of ATE in appeal No. 107 of 2006. Based on that, the company has created

regulatory assets and liabilities in the books of MESCOM in Financial Year 2006-07.

However, during supplementary audit of MESCOM accounts by C & AG for FY 2006-07,

it was pointed out that since there is no order from KERC as to the creation of regulatory

assets and liabilities, no regulatory assets or liabilities shall be created in the books of

MESCOM. During the FY 2007-08, the regulatory assets and liabilities created in FY

2006-07 had been withdrawn. MESCOM may contingently be liable to pay a sum of Rs.

45.38 Crs. of principal and Rs. 1.22 Crs. as interest to KPTCL by collection through tariff

from consumers based upon the finalization of issues by KERC.

c) While filing Income Tax returns for the Financial Year 2005-06 (AY 2006-07), MESCOM

has claimed the benefit of Tax Holiday under Section 80IA of Income Tax Act 1961,

which allows total deductions of income from power distribution business on compliance

with certain conditions specified therein, for a period of 10 years out of 15 years.

Accordingly MESCOM has paid MAT under Section 115JB and claimed refund of the

excess amount of Rs. 9.05 Crs. The excess amount paid by MESCOM has been

refunded by the Income Tax department during FY 07-08. However on regular

assessment of Income tax returns of the company for the FY 05-06 (AY 06-07),

Assessing Officer (AO) has disallowed the 80IA claim of MESCOM and issued a demand

notice dated 29.12.2008 for Rs. 20,91,52,991/- towards income tax.

The appeal preferred by MESCOM against the assessment order of AO before CIT(A)

Mangalore, was disposed vide order dated 22.10.2009, by disallowing the claim of

MESCOM under section 80 IA of Income Tax Act. Aggrieved by the said order

MESCOM has filed an appeal before the Hon‟ble ITAT Bangalore. The appeal has not

yet been taken up for hearing so far by the ITAT. However based on the order of CIT(A)

the AO has issued a demand notice for Rs. 22,31,79,833/-. The MESCOM has got

stayed the outstanding demand in question in ITAT Bangalore, subject to the payment of

25% of the demand in 10 monthly installment of Rs. 25 lakhs starting from 5th January

2010 onwards.

The company is hopeful of a positive outcome on the Appeal.

d) Sundry debtors for sale of Power amounting to Rs. 330.40 Lakhs is disputed by the consumers and the cases are pending before various authorities and Courts as follows.

Sl No Cases are pending with Number of

Cases pending

Amount Involved

(Rs. In Lakhs)

1 High Court 10 100.43

2 Lower Courts 24 219.88

3 Consumer Forum 22 10.09

TOTAL 56 330.40

MESCOM may be contingently liable for this amount if the cases are decided in favour of consumers.


68

e) KPTCL had raised a demand at 26.23 paise per unit for the transmission of electricity for

the year 2006-07 against which the company has admitted the bills at 19.42 paise per

unit as per KERC order. However, KPTCL has appealed against the order of KERC with

Appellate Tribunal for Electricity, New Delhi. The ATE has passed an order requiring

KERC to carry out certain modification in its transmission tariff. The KERC preferred an

appeal against the order of ATE at Hon‟ble Supreme Court, New Delhi. The appeal is

pending for disposal before the Hon‟ble Supreme Court. MESCOM may contingently be

liable for an amount of Rs. 19.74 Crs. if orders are passed in favour of KPTCL.

8. The figures of previous year are regrouped or rearranged wherever necessary to conform

with current year presentation.

9. In accordance with the provisions of Section 185 (2)(d) of the Electricity Act, 2003, all rules

made under sub-section (1) of section 69 of the repealed Electricity (Supply) Act, 1948 shall

continue to have effect until such rules are rescinded or modified. Accordingly, the

accounting system is based on the rules laid down under the Electricity (Supply) Act, 1948,

since the modified rules have not yet been notified under the Electricity Act, 2003.

10. The Companies Accounts that are approved by the Board on 30.07.2010 have been revised

in the light of observations made by the Comptroller and Auditor General of India. The said

revision has resulted in increase in net profit by Rs. 3.42 Crs. The reserves and surplus

increased by Rs. 3.42 Crs, service line and security deposit are increased by Rs. 0.20 Crs.,

fixed assets are decreased by Rs. 0.06 Crs., investment increased by Rs. 2.50 Crs., current

assets increased by Rs. 4.00 Crs., current liabilities and provisions increased by Rs. 2.82

Crs. and Net current assets increased by Rs. 1.18 Crs. The total assets and liabilities

increased by Rs. 3.62 Crs.

Sd/- Sd/- Sd/-

(K. JAYARAMA ALVA) (K. RAMAKRISHNA) (S. SUMANTH)

Financial Advisor Director (T) Managing Director


for GANESH & SUDHIR Chartered Accountants Firm Reg. No: 000866 S

Sd/- Place : Mangalore GIRIDHAR KAMATH Date : 07.09.2010 Partner Membership No. 203199


69

CASH FLOW STATEMENT (In Rupees)

Particulars For the year ended 2009-10 For the year ended 2008-09

A. Cash flow from Operating Activities

Net Profit after Tax as per Profit & Loss

Account 8 78 10 258.42 -41 32 54 870.04

Adjustments for:

Depreciation 45 39 38 671.93 26 26 91 467.32

Interest & Finance Charges 78 71 06 397.58 48 69 60 781.92

Provision for Income Tax 2 09 24 314.00 30 21 178.00

Interest Income - 86 21 999.49 - 32 04 721.19

Subsidy .00 .00

Operating Profit before working capital

changes 134 11 57 642.44 33 62 13 836.01

Adjustments for:

Changes in Trade Receivables -65 13 03 194.69 -9 26 37 433.52

Changes in Other Receivables -73 84 94 276.00 -9 64 73 226.61

Changes in Inventories 3 85 73 626.85 1 13 81 714.71

Changes in Interest accrued on investments .00 .00

Changes in Current Liabilities & Provisions 154 47 59 657.37 146 75 42 094.21

Cash Generated from Operations 153 46 93 455.97 162 60 26 984.80

Less: Taxes Paid (Including FBT) 9 98 89 398.00 3 10 38 368.00

Net cash inflow from Operating Activities 143 48 04 057.97 159 49 88 616.80

B. Cash Flow From Investing Activities

Changes in Fixed Assets -164 05 90 211.44 -208 81 00 845.81

Changes in Capital Work in Progress -26 98 03 014.22 -9 10 64 494.33

Interest Income 86 21 999.49 32 04 721.19

Investments -2 50 00 000.00 .00

Changes in Loans & Advances (Non-trade) -26 65 21 425.17 8 84 04 990.77

Net cash inflow from Investing Activities -219 32 92 651.34 -208 75 55 628.18

C. Cash Flow From Financing Activities

Changes in Equity 32 00 00 000.00 .00

Changes in Secured & Unsecured Loans 39 36 23 661.88 107 41 69 126.39

Changes in Deposits and Contributions from

Consumers 21 60 03 797.19 -14 03 08 630.97

Subsidy in P/L .00 .00

Contributions, grants & Subsidies towards cost

of capital assets 42 00 10 433.74 55 59 25 569.95

Interest & Finance Charges -78 71 06 397.58 -48 69 60 781.92

Net cash used in Financing Activities 56 25 31 495.23 100 28 25 283.45

Increase in Cash & Cash Equivalents (A+B+C) -19 59 57 098.14 51 02 58 272.07

Add: Opening Cash & Cash Equivalents as on

01.04.09 62 57 15 315.90 11 54 57 044.12

Closing Cash & Cash Equivalents as on

31.03.2010 42 97 58 217.76 62 57 15 316.19

Sd/- Sd/- Sd/- (K. JAYARAMA ALVA) (K. RAMAKRISHNA) (S.SUMANTH) Financial Advisor Director (T) Managing Director

In terms of our Report of even date for GANESH & SUDHIR

Chartered Accountants Firm Reg. No: 000866 S

Sd/- Place : Mangalore GIRIDHAR KAMATH Date : 07.09.2010 Partner

Membership No. 203199


70

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

(PURSUANT TO PART-IV OF SCHEDULE-VI TO THE COMPANIES ACT, 1956)

1. Registration Details

Registration No. 0 8 / 3 0 4 2 5 State Code 0 8

Balance Sheet Date

3 1 0 3 1 0

2. Capital Raised during the year (Amount in Rs. Thousands)

Public Issue: : NIL Right Issue: : NIL

Bonus Issue: : NIL

Private

Placement: : NIL

3. Position of Mobilization and Deployment of Funds

(Amount in Rs. Thousands)

Total liabilities: : 1,06,56,435 Total assets: : 1,06,56,435

Source of Funds

Paid-up Capital : 11,03,399 Reserves & Surplus : 30,07,882

Share Deposit : 2,20,000 unsecured loans : 83,646

Secured loans : 34,22,108

Application of funds

Net Fixed Assets : 81,13,969 Investment : 25,100

Net Current Assets : 25,17,366 Misc. Expenditure : -

Accumulated losses : -

4. Performance of Company (Amount in Rs. Thousands)

Turnover : 1,20,06,608 Total Expenditure : 1,19,18,798

Profit before Tax : 1,08,735 Profit After Tax : 87,810

Earnings per share

in Rs : 0.84 Dividend rate % : -

5. Generic Names of Three Principal Products/Services of Company

Item Code No. :

Product Description : Distribution of Electricity

(Note: Figures are rounded off to nearest thousand)

Sd/- Sd/- Sd/-

(K. JAYARAMA ALVA) (K. RAMAKRISHNA) (S.SUMANTH)

Financial Advisor Director (T) Managing Director


for GANESH & SUDHIR

Chartered Accountants, Firm Reg. No: 000866 S

Sd/-

GIRIDHAR KAMATH

Place : Mangalore Partner

Date : 07.09.2010 Membership No. 203199


71

Statement showing sector wise capital expenditure with and without released assets issued to capital works for 2009-10

(Rs. in lakhs)

Sl. No

Particulars Budget

Allocation

Cost during the

year

Released Assets

issued to capital works

Net Capital Expenditure

1 System Augmentation &

Strengthening

A Extension & Improvement

(i) RLMS - 2229.87 - 2229.87

(ii) DTC Metering 2000.00 520.94 - 520.94

(iii) Sectionalisers & Auto reclosures - 487.14 - 487.14

(iv) Other extension & improvement 17900.00 8924.92 1085.72 7839.20

B Accelerated Power Development &

Reform Programme 3200.00 119.96 - 119.96

C Replacement of faulty distribution

transformers 1500.00 951.71 - 951.71

Sub Total 24600.00 13234.54 1085.72 12148.82

2 Service Connection 1000.00 1415.17 83.82 1331.35

3 Rural Electrification (General)

A Electrification of Hamlets (General) 228.25 622.30 5.55 616.75

B RGGVY 8500.00 461.35 - 461.35

C Energisation of IP sets 1800.00 912.52 54.05 858.47

D Kutir Jyothi 106.75 27.27 0.19 27.08

Sub Total 10635.00 2023.44 59.79 1963.65

4 Tribal Sub – Plan

A Electrification of Hamlets/Colonies 19.50 109.21 - 109.21

B Energisation of IP sets 30.00 54.81 4.29 50.52

C Kutir Jyothi 5.00 6.80 - 6.80

Sub Total 54.50 170.82 4.29 166.53

5 Special Component Plan

A Electrification of Hamlets/Colonies 30.00 26.58 - 26.58

B Energisation of IP sets 225.00 - 0.00

C Kutir Jyothi 19.68 3.11 - 3.11

Sub Total 274.68 29.69 0.00 29.69

6 Tools & Plants & Computers 200.00 117.62 - 117.62

7 Civil Engineering Works 400.00 251.24 - 251.24

8 Metering (IP, Street light &BJ/KJ) 21.03 - 21.03

9 Construction of new sub stations &

lines (33KV) 3000.00 3316.67 - 3316.67

Grand Total 40164.18 20580.22 1233.62 19346.60


72

STATEMENT SHOWING CAPITAL WORKS IN PROGRESS FOR THE YEAR 2009-10

(Rs.in Lakhs)

A/c CODE

DESCRIPTION O.B. AS on 01.04.2009

Incurred Categorized C.B. as on 31.03.2010

14.110 CWIP - Transmission lines (G.P) 1.38 - - 1.38

14.120 CWIP - Step Down Stations (GP) 193.04 3168.02 390.23 2970.83

14.126 CWIP - Step Down Stations - non plan 58.70 45.19 103.89 0.00

14.142 CWIP - Promoter vanished layouts - 11KV lines,

Transformers, LT lines/ S.C etc., (G.P) 10.05 35.54 28.98 16.61

14.143 CWIP - 11KV & below Distribution works under APDP

works 317.85 105.86 22.45 401.26

14.150 CWIP - Transmission lines - Transformers etc.,

Improvements (GP) 1467.29 9673.33 9561.97 1578.65

14.155 CWIP- Additional Street Lights/Street Lights in

cities/Towns/Villages 0.07 -0.03 0.04 0.00

14.160 CWIP - Reduction of Losses in lines 1301.28 2337.25 2367.86 1270.67

14.170 CWIP - Replacement of distribution Transformers by

similar capacities 54.05 948.73 902.38 100.40

14.200 CWIP - REC Plan Schemes 33.10 82.20 78.26 37.04

14.220 CWIP - SPA Schemes 13.25 17.77 13.91 17.11

14.300 CWIP - Village Electrofication (G.P) 200.86 328.17 288.50 240.53

14.301 CWIP - village electrification (Non plan) 0.17 0.17 0.00

14.302 CWIP - Electrification of Hamles and Tandas (G.P) 5.67 5.27 10.01 0.93

14.303 CWIP - Electrification of Hamles and Tandas (Non-

Plan) 4.50 74.58 79.08 0.00

14.320 CWIP - Power Supply to IP sets (G.P) 377.22 962.10 938.60 400.72

14.325 CWIP - Power Supply to IP sets under O.Y.T Scheme 0.21 - - 0.21

14.326 CWIP - Regularisation of unauthorised IP sets under

O.Y.T Scheme - 0.25 - 0.25

14.340 CWIP – Tribal Area Electrification (G.P) 65.45 151.30 111.53 105.22

14.350 CWIP – Bhagya Jyothi Schemes 234.94 -3.49 207.57 23.88

14.351 CWIP – Metering of existing B.J Installation - 0.12 0.12 0.00

14.360 CWIP – Kuteera Jyothi Schemes 246.52 43.53 68.36 221.69

14.370 CWIP- Border Area Development Programme. 0.48 0.20 0.68 0.00

14.400 CWIP – Service Connections 359.04 1388.80 1197.21 550.63

14.401 CWIP – Metering of I.P sets pf 10 HP and below 0.15 52.26 52.41 0.00

14.502 CWIP – Buildings 86.86 359.68 288.84 157.70

14.607 CWIP – Vehicles - 10.93 10.93 0.00

14.708 CWIP – Furniture and Fixtures 0.14 14.10 14.24 0.00

14.809 CWIP – Office equipment 0.82 62.58 62.90 0.50

14.810 CWIP – Tools and Tackles 19.72 20.70 30.78 9.64

14.811 CWIP – Mobile Phones - 0.99 0.99 0.00

14.902 CWIP - expenditure categorized-APDP 11kv

distribution works -175.21 11.97 144.16 -307.40

14.911 CWIP - Provision for ongoing works 622.68 682.15 - 1304.83

TOTAL 5500.11 20580.22 16977.05 9103.28


73

STATEMENT OF MATERIAL STOCK ACCOUNT (Rs. in lakhs)

Sl. No.

Account Head Particulars

As on 31.03.2010 As on 31.03.2009

A Opening Stock 1624.58 1752.54

B R E C E I P T S

1 Material Purchases 9848.50 7697.22

2 Material inward - Others 1529.24 1527.76

TOTAL RECEIPTS 11377.74 9224.98

C OPENING STOCK + RECEIPTS 13002.32 10977.52

D I S S U E S

1 Material issued (capital) 8797.43 7003.54

2 Material issues (O&M) 1079.36 879.56

3 Material Outward - Others 1689.16 1469.84

TOTAL ISSUES 11565.95 9352.94

E CLOSING BALANCE OF STOCK (C-D) 1436.37 1624.58

STATEMENT SHOWING THE DETAILS OF SOURCE-WISE POWER PURCHASE COST

Sl. No.

Particulars

2009-10 2008-09

Energy (Mus)

Cost (Rs. in Crs.)

Energy (Mus)

Cost (Rs. in Crs.)

1 Hydel Power 942.98 56.53 1063.52 64.67

2 Thermal Power 1518.83 366.07 1344.38 321.57

3 Lignite Power 219.54 47.90 210.73 38.44

4 Atomic Power 10.38 2.02 7.89 1.49

5 Conventional Energy 97.82 77.04 129.15 108.56

6 Non Conventional Energy 279.05 93.48 199.60 68.62

7 Wind Mill energy 139.61 47.46 134.84 45.84

8 UI Charges 47.25 12.28 133.45 91.13

9 High Cost Energy 126.54 82.83 97.65 64.40

10 Transmission charges 90.64 0.00 79.13

11

Other Charges (Trading margin

charges, open access charges,

SLDC charges, PCKL charges)

- 1.10 0.00 0.60

Total 3382.00 877.35 3321.21 884.45

COST OF POWER AT DIFFERENT POINTS

Sl. No.

Particulars

2009-10 2008-09

Energy (MU)

Amount (Rs. In Crs)

Rate per unit

(in Rs.)

Energy (MU)

Amount (Rs. In Crs)

Rate per unit

(in Rs.)

1 At Generation Point 3382.00 877.35 2.59 3321.21 884.45 2.66

2 At Interface Point 3273.83 877.35 2.68 3137.76 884.45 2.82

3 At Consumer Point 2860.15 877.35 3.07 2731.57 884.45 3.24

4 Delivered cost of power to consumer (Excluding ROE)

2860.15 1191.88 4.17 2731.57 1113.92 4.08


74

Statement showing the details of Loans borrowed and repayments arranged during 2009-10

Sl.

No.

A/c.

code

Name of the Financial

Institutions

O.B as on

01.04.09

Loan

drawn

during

09-10

Repayments

arranged

during the

year 09-10

Closing

balance as

on 31.03.09

1 53.301 Loan drawn from REC -

General 49969214 0 37812513 12156701

2 53.305 APDRP-REC Loan payable

to KPTCL 78344164 2417900 33480966 47281098

3 53.306 PMGY Loan Account 11170099 0 0 11170099

4

53.307 GOK Loan for energization of

IP sets under Gangakalyana

Scheme

8400000 0 1200000 7200000

5 53.308 Loan drawn by MESCOM

from REC-APDRP works 16089000 0 0 16089000

6 53.309 Loan drawn by MESCOM

from REC-General 46750500 16621000 0 63371500

7 53.310 Loan from REC-RGGVY

works 25259000 25762720 0 51021720

8 53.311 Loan from PFC -RAPDRP

works 0 36196200 0 36196200

9

53.500

&

53.303

Loan from Commercial

Banks

Syndicate Bank 705431202 70000000 275409272 500021930

State Bank of Mysore 50000000 0 25000000 25000000

Corporation Bank 375000000 270004410 100752113 544252297

Vijaya Bank 360096424 0 100144894 259951530

Indian Bank 0 445000000 0 445000000

Punjab & Sind Bank 1000000000 0 130952930 869047070

UCO Bank 141759085 510000000 51759085 600000000

10 53.960 Loan from Power Finance

Corporation Ltd., 10621315 0 10621195 120

11 54.600 Central Govt. loan towards

Power Sector Automation 14700000 0 2940000 11760000

12 54.700 Loan from GOK - Interest

free 218540000 7694400 220000000 6234400

Total 3112130003 1383696630 990072968 3505753665


75

Collection Efficiency as per DCB for FY 2008-09 and 2009-10

Category

Collection Efficiency (in %)

2008-09 2009-10

LT 1 BJ/KJ 91.89 117.33

LT 2 99.78 99.61

LT 3 100.38 99.90

LT 4 IP 51.92 84.81

LT 5 100.91 99.99

LT 6 W/S & P/L 106.22 69.09

LT 7 113.95 119.43

HT 103.37 98.80

Misc. 100.00 100.00

Total 99.02 96.88

Category wise Energy Sales as per DCB for FY 2008-09 and 2009-10

Category

Category Energy Sales in M.U

2008-09 2009-10

Metered Un-

metered Total

% of

Energy

Sales

Metered Un-

metered Total

% of

Energy

Sales

LT 1 BJ/KJ 24.12 6.31 30.43 1.11 23.89 5.44 29.33 1.03

LT 2 784.37 - 784.37 28.71 867.60 - 867.60 30.33

LT 3 180.65 - 180.65 6.61 211.03 - 211.03 7.38

LT 4 IP 514.81 274.65 789.46 28.90 512.60 216.69 729.29 25.50

LT 5 123.60 - 123.60 4.52 125.38 - 125.38 4.38

LT 6 W/S & P/L 111.32 - 111.32 4.08 122.62 - 122.62 4.29

LT 7 9.09 - 9.09 0.33 17.29 - 17.29 0.60

HT 702.65 - 702.65 25.72 757.61 - 757.61 26.49

Total 2450.61 280.96 2731.57 100.00 2638.02 222.13 2860.15 100.00


76

Customer Base as per DCB for FY 2008-09 and 2009-10

Category

Customer Base

2008-09 2009-10 Installati

ons in nos.

% Installati

ons in nos.

%

LT 1 BJ/KJ 134417 8.39 136766 8.24

LT 2 1089313 68.01 1131797 68.16

LT 3 143627 8.97 148537 8.95

LT 4 IP 188676 11.78 195507 11.77

LT 5 18193 1.14 19012 1.14

LT 6 W/S & P/L 21288 1.33 21730 1.31

LT 7 5166 0.32 6164 0.37

HT 942 0.06 1008 0.06

Total 1601622 100.00 1660521 100.00

Revenue Demand as per DCB for FY 2008-09 and 2009-10

Category

Revenue Demand as per DCB

2008-09 2009-10

Rs. in Lakhs

% Rs. in Lakhs

%

LT 1 BJ/KJ 1062.96 1.17 1230.93 1.18

LT 2 25564.55 28.13 28674.44 27.46

LT 3 11880.49 13.07 14124.73 13.53

LT 4 IP 5036.43 5.54 9111.19 8.73

LT 5 6094.46 6.71 6256.12 5.99

LT 6 W/S & P/L 5065.48 5.57 5865.81 5.62

LT 7 827.56 0.91 1532.15 1.47

HT 33807.68 37.20 36763.52 35.21

Misc. 1532.39 1.69 845.35 0.81

Total 90872.01 100.00 104404.24 100.00


77

Revenue Collection as per DCB for FY 2008-09 and 2009-10

Category

Revenue Collection as per DCB

2008-09 2009-10

Rs. in

Lakhs %

Rs. in

Lakhs %

LT 1 BJ/KJ 976.77 1.09 1444.22 1.43

LT 2 25508.47 28.35 28563.62 28.24

LT 3 11925.28 13.25 14110.85 13.95

LT 4 IP 2614.75 2.91 7727.34 7.64

LT 5 6150.02 6.84 6255.22 6.18

LT 6 W/S &

P/L 5380.73 5.98 4052.86 4.01

LT 7 942.98 1.05 1829.84 1.81

HT 34946.58 38.84 36320.59 35.91

Misc. 1532.39 1.70 845.35 0.84

Total 89977.98 100.00 101149.89 100.00

Closing Balance as per DCB for FY 2008-09 and 2009-10

Category

Closing Balance as per DCB

2008-09 2008-09

Rs. in

Lakhs %

Rs. in

Lakhs %

LT 1 BJ/KJ 1644.45 5.63 1431.16 4.41

LT 2 1603.73 5.49 1714.55 5.28

LT 3 400.45 1.37 414.34 1.28

LT 4 IP 16828.49 57.62 18212.35 56.11

LT 5 228.51 0.78 229.42 0.71

LT 6 W/S &

P/L 8209.53 28.11 10022.49 30.88

LT 7 -436.90 -1.50 -734.60 -2.26

HT 726.19 2.49 1169.14 3.60

Misc. 0.00 0.00 0.00 0.00

Total 29204.45 100.00 32458.85 100.00


78

Average Realization Rate From Sale of Power 2009-10

Account Head - LT Category Tariff

Account Code

No. of Consumers

Units Sold Average Realization Rate per Unit

(Ps.)

Opening balance

as on 01.04.2009

Demand as per DCB (in Crs)

Net provision for unbilled

revenue (in Crs)


revenue (in Crs)

Demand as per Accounts

(in Crs)

Collection for the year

09-10 (in Crs)

Closing Balance (in Crs)

Demand Series

Closing Balance Series

Units (MU)

% of Units Sold

BJ / KJ - Tariff subsidy LT - 1 61.101

61.402 23.101 136766 29.328 1.03 339 6.30 9.88 0.08 0.00 9.95 6.60 9.65

Dom. Ltg., Non-Dom,

Non-Com Ltg and

Govt. Hospital Ltd.,

Dom. Combined Ltg.

(AEH), Non-Dom.,

Non-Coml. Comb. Ltg.

& htg. Motive Power,

& Govt. Hospitals for

handicapped Orphans,

aged & destitute & Pvt.

Professional & other

Pvt. Edu. Instns.

LT -

2a&b

61.110,

61.111

23.110,

23.111 1131728 853.831 29.85 319 24.54 271.68 0.78 -0.02 272.48 270.99 26.02

Comml. Ltg. Heating &

motive power LT - 3 61.115 23.115 148537 211.030 7.38 639 7.84 134.15 0.75 0.00 134.90 134.72 8.02

Irrigation pumpsets,

Lift Irrigation Schemes

/ Socities (upto &

inclusive of 10 HP)

LT - 4a 61.119

23.119 193265 722.249 25.25

119

122.13 73.46 12.60 0.00

86.07

235.17 132.90 Irrigation pumpsets, Lift Irrigation Schemes / Socities (upto & inclusive of 10 HP) - Tariff subsidy

LT - 4a 61.401 221 159.88

Irrigation pumpsets, Lift Irrigation Schemes / Socities (above 10 HP)

LT - 4b 61.120 23.120 198 1.452 0.05 211 0.96 0.30 0.01 0.00 0.31 0.34 0.92

Private Horticultural Nurseries, Coffee, Tea, Coconut & Arecanut Plantations

LT - 4c 61.121 23.121 2044 5.588 0.20 247 8.03 1.36 0.02 0.00 1.38 0.90 8.51


79


Account Code

No. of Consumers


(Ps.)

Opening balance

as on 01.04.2009



revenue (in Crs)


revenue (in Crs)


(in Crs)


09-10 (in Crs)


Demand Series


Units (MU)

% of Units Sold

Industrial, Non-

Industrial Htg. &

Motive Power

including lighting

LT - 5a

to d

61.129,

61.130,

61.131,

61.133

23.129,

23.130,

23.131,

23.133

19012 125.382 4.38 474 4.34 59.37 0.09 0.00 59.46 59.41 4.40

Water Supply -

Sewerage pumping -

VP/TP

LT -

6a(1) 61.125 23.125

9524 76.902 2.69 387

51.03 24.81 0.19 0.03 24.97 17.00 59.00

Water Supply - Others LT -

6b(1) 61.126 23.126 0.68 4.77 0.01 -0.03 4.81 3.62 1.87

Public lighting - VP/TP LT -

6a(2) 61.140 23.140

12206 45.722 1.60 385

15.09 6.93 0.03 0.00 6.96 6.43 15.62

Public lighting -

Others

LT -

6b(2) 61.141 23.141 0.47 10.52 0.13 0.00 10.65 9.02 2.09

Temporary Power

Supply LT - 7 61.145 23.145 6164 17.292 0.60 822 -3.89 14.57 -0.35 0.00 14.21 10.17 0.16

KPC 69 13.77 0.48

TOTAL OF LT 1659513 2102.546 73.51 374 237.50 611.79 14.34 -0.03 786.03 754.37 269.17

Public Water Supply & Sewerage Pumping

HT - 1 61.250 23.250 47 61.767 2.16 377 3.36 22.53 0.75 0.00 23.28 19.81 6.83

Industrial, Non-Industrial, Non-Commercial and Railway Traction

HT - 2a 61.255 23.255 433 525.622 18.38 443 22.61 229.94 3.92 0.75 233.10 228.81 26.91

Commercial HT - 2b 61.256 23.256 462 153.113 5.35 599 7.40 90.25 1.49 0.00 91.74 90.11 9.03

Irrigation and Agricultural Farms, Private Horticultural Nurseries, Coffee and Tea and Arecanut Plantations.

HT -

3a&b 61.260 23.260 8 0.311 0.01 713 0.12 0.22 0.00 0.00 0.22 0.22 0.12


80


Account Code

No. of Consumers


(Ps.)

Opening balance

as on 01.04.2009



revenue (in Crs)


revenue (in Crs)


(in Crs)


09-10 (in Crs)


Demand Series


Units (MU)

% of Units Sold

Residential

Apartments and

Hospitals.

HT - 4 61.271 23.271 58 16.799 0.59 385 0.50 6.30 0.17 0.00 6.48 6.25 0.72

TOTAL OF HT 1008 757.612 26.49 468 33.99 349.25 6.33 0.75 354.83 345.21 43.61

TOTAL (LT + HT) 1660521 2860.158 100.00 399 271.50 961.04 20.67 0.73 1140.86 1099.57 312.78

Sundry debtors for

electricity tax 5.19 44.55 0.00 0.04 44.51 41.85 7.85

Misc. receipts from

consumers (Interest) 57.06 28.93 28.93 7.00 79.00

Misc. receipts from

consumers (Other than

Interest)

7.36 7.36 0.00

Less : Provision for

withdrawal of revenue

demand

1.10 1.49

Less : Provision for

doubtful dues from

consumers

48.62 50.04

Less: Revenue

suspense account 1.90 1.83

Sundry receivables -

trading 1.35 2.35

Less : Withdrawal of

revenue demand of

previous Years

1.90

GRAND TOTAL 1660521 2860.158 100.00% 283.48 1034.52 20.67 0.76 1219.76 1155.79 348.61

Documents

8th - mesco.in › ann-rep › Annual Report09-10.pdf · Mangalore Electricity Supply Company Limited 2 BOARD OF DIRECTORS 1. Smt. G. Latha Krishna Rao, IAS - Chairperson 2. Sri