Annual Report - Dakshin Haryana Bijli Vitran Nigam › staticContent › information › financialstatement › … · Rajan Kumar Gupta, IAS Chairman Addl. Chief Secretary (Power)

DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITEDRegistered Office: Vidyut Sadan, Vidyut Nagar, Hisar-125005(Haryana)

www.dhbvn.org.in

Annual Report2015-2016

DHBVN

Annual Report2015-2016

CONTENTS

Page Nos.

Board of Directors 2

Notice 3-4

Director's Report 5-24

Managements replies to Comments of C & AG 25-27

Report of Comptroller & Auditor General 28-29

Statutory Auditors Report 30-44

Managements replies to Report of Statutory Auditors 45-74

Balance Sheet 75

Profit and Loss Account 76

Cash Flow Statement 77

Significant Accounting Policies & Notes on Accounts 78-122

CONTENTS

Prepared by:

Sandeep Legha, Sr. AO & Team

2

DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED

Board of Directors

Audit Committee Company Secretary

Auditors

Lead Banker Registered Office

1. Sh. Rajan Kumar Gupta, IAS ChairmanAddl. Chief Secretary (Power)

2. Sh. Arun Kumar Verma Managing Director

3. Sh. Vineet Garg, IAS DirectorMD, HVPNL

4. Sh. Nitin Kumar Yadav, IAS DirectorSecy./Power & MD, UHBVNL & HVPNL

5. Sh. Ravi Prakash Gupta Director

6. Sh. Suresh Kumar Bansal Director Projects

7. Sh. Ravinder Kumar Batra Director Operations

8. Sh. M.K.V. Rama Rao DirectorMD, HPGCL

9. Sh. Kalyan Kumar Ghosh Director

10. Sh. R. P. Sasmal Director

11. Ms. Sanghamitra Pyne Director

12. Sh. Anil Gupta Director

Sh. M.K.V. Rama Rao Sh. Harjinder SinghDirector, DHBVNLChairman of the Committee

Sh. Kalyan Kumar GhoshDirector, DHBVNLMember of the Committee

M/s O. Aggarwal & CoMs. Sanghamitra Pyne Chartered AccountantsDirector, DHBVNLMember of the Committee

Oriental Bank of Commerce Vidyut Sadan, Vidyut Nagar,Hisar – 125 005 (Haryana)

3

NOTICE

Endst. No.

Copy of notice is sent to the following with a request to attend the meeting:-

1. Sh. Shatrujeet Singh Kapoor, IPS, Chairman-cum-Managing Director, DHBVNL

2. Sh. Vineet Garg, IAS MD, HVPNL & HPGCL

3. Smt. Ashima Brar, IASSpecial Secretary FinanceGovt. of Haryana, HPUs& Director, DHBVNL

4. Sh. Ravinder Kumar BatraDirector/Operations & Project, DHBVNL

5. Sh. Anil GuptaDirector, DHBVNL

6. Smt. Anjana AgarwalDirector DHBVNL

M/s O. Aggarwal & Co.

Chartered Accountant, Bhiwani

M/s Grish Madan & Associates

Company Secretaries, Panchkula

-Sd/-

(Harjinder Singh)

COMPANY SECRETARY

72/CS/AGM/DH-6 Dated: 17.02.2017

BOARD OF DIRECTORS

STATUTORY AUDITOR

SECRETARIAL AUDITOR

Notice is hereby given that the Adjourned 17th Annual General Meeting of the Shareholders of Dakshin Haryana Bijli Vitran Nigam Ltd. which was scheduled to be held on Thursday, the 16th of February, 2017 at 10:30 AM and was Adjourned due to lack of quorum, will now be held on Thursday, 23rd of February, 2017 at 10.30 AM at the Registered Office of the Company i.e in Conference Hall, Vidyut Sadan, Vidyut Nagar, Hisar, Haryana.

Your are requested to kindly make it convenient to attend the said meeting.

By order of the Boardfor Dakshin Haryana Bijli Vitran Nigam Ltd.

-Sd/-(Harjinder Singh)

Company Secretary

Memo No. Ch-72/CS/AGM/DH-6

Dated: 17.02.2017

1. Hon'ble Governor of Haryana through Sh. Anurag Restogi, IASPrincipal Secretary (Power)Govt. of Haryana.

2. Sh. Anurag Restogi, IASPrincipal Secretary (Power)Govt. of Haryana.

3. Sh. Shatrujeet Singh Kapoor, IPSChairman-cum-Managing Director, DHBVNL.

4. Sh. Nikhil Gajraj, IASD. C. Hissar.

5. Sh. Ravinder Kumar BatraDirector Operation & Projects, DHBVNL.

6. Sh. Sumit Kumar, HCSEstate Officer, HUDA, Hisar.

7. Sh. Arun Kumar Verma

8. M/S Haryana Vidyut Prasaran Nigam Ltd. through Sh. H. C. Gupta, Chief Engineer / TS, HVPNL, Hisar.

Sd/-(Harjinder Singh)

COMPANY SECRETARY

SHAREHOLDERS

4

Subject: Notice for holding Adjourned 17th Annual General Meeting of the Dakshin Haryana Bijli Vitran Nigam Ltd.

SHAREHOLDERS

Please find enclosed herewith the 17th Annual Report of the Company for the Financial Year 2015-16 containing the Notice for holding Adjourned 17th Annual General Meeting scheduled to be held on Thursday, the 16th day of February, 2017 at 10:30 AM at the Registered office of the Company in Conference Hall, Vidyut Sadan, Vidyut Nagar, Hisar, Haryana.

You are requested to kindly make it convenient to attend the meeting.

By order of the BoardFor Dakshin Haryana Bijli Vitran Nigam Ltd


Memo No.-Ch-71/CS/AGM/DH-6Dated: 13.02.2017

1. Hon'ble Governor of Haryana through Sh. Anurag Restogi, IASPrincipal Secretary (Power)Govt. of Haryana.

2. Sh. Anurag Restogi, IASPrincipal Secretary (Power)Govt. of Haryana.

3. Sh. Shatrujeet Singh Kapoor, IPSChairman-cum-Managing Director, DHBVNL.

4. Sh. Nikhil Gajraj, IASD. C. Hissar.

5. Sh. Ravinder Kumar BatraDirector Operation & Projects, DHBVNL.

6. Sh. Sumit Kumar, HCSEstate Officer, HUDA, Hisar.

7. Sh. Arun Kumar Verma

8. M/S Haryana Vidyut Prasaran Nigam Ltd. through Sh. H. C. Gupta, Chief Engineer / TS, HVPNL, Hisar.


COMPANY SECRETARYEndst. No.

Copy of notice is sent to the following with a

Company Secretary

71/CS/AGM/DH-6 Dated: 13.02.2017

NOTICE

request to attend the meeting:-

1. Sh. Shatrujeet Singh Kapoor, IPS, Chairman-cum-Managing Director, DHBVNL

2. Sh. Vineet Garg, IAS MD, HVPNL & HPGCL

3. Smt. Ashima Brar, IASSpecial Secretary FinanceGovt. of Haryana, HPUs& Director, DHBVNL

4. Sh. Ravinder Kumar BatraDirector/Operations & Project, DHBVNL

5. Sh. Anil GuptaDirector, DHBVNL

6. Smt. Anjana AgarwalDirector DHBVNL

M/s O. Aggarwal & Co.

Chartered Accountant, Bhiwani

M/s Girish Madan & Associates

Company Secretaries, Panchkula

-Sd/-

(Harjinder Singh)

COMPANY SECRETARY

BOARD OF DIRECTORS

STATUTORY AUDITORS

SECRETARIAL AUDITORS

INCOMESRevenue from the sale of power (including FSA) 12413.67 11170.03Other Income including Revenue Subsidy & Grants 2756.36 2230.83TOTAL INCOME 15170.03 13400.86TOTAL EXPENSES 13670.35 13386.55Gross Loss/Profit before Interest, Depreciation and Taxation 1499.68 14.31Less : Interest 1772.19 950.50Profit/(Loss) before depreciation & Taxation (272.51) (936.19)Less : Depreciation 199.89 180.38Provision for Taxation 0.00 0.01Net Prior Period Charges/Income (0.52) 0.03Profit/Loss after Taxation (472.92) (1116.55)Add: Transfer to Regulatory Assets --------- ---------Less: Amortization of regulatory assets --------- ---------Extraordinary Items 1.34 480.38Profit/(Loss) of Current Year (471.58) (636.17)Profit/(Loss) transferred from UHBVN 0.00 (1356.27)Accumulated losses up to Previous Year (12719.03) (10726.59)Balance carried forward to next year (13190.61) (12719.03)

Financial Results:

Particulars 2015-2016

(Rs. in crore)

ToThe Members,Dakshin Haryana Bijli Vitran Nigam LimitedHissar

Your Directors present the Seventeenth Annual Report and the Audited Accounts of the Company for the financial year ended 31st March, 2016

2014-2015(Rs. in crore)

5

Director's Report

6

Turnover( In Crores) `

Net Profit & Loss( In Crores) `

Capital Expenditure

( In Crores) `

197218

262 265279

2011-12 2012-13 2013-14 2014-15 2015-16

Sub Stations (In Numbers)

33 KV

161177

199749218603

236953 243651

2011-12 2012-13 2013-14 2014-15 2015-16

Distribution T/Fs (in Numbers)

Distribution T/Fs

2470 2721 3088 3237 3261

5202154313

62095

69157

63842

55094 55769

6491562957

70593

2011-12 2012-13 2013-14 2014-15 2015-16

Transmission & Distribution Lines (In KMs)

2848859

3073617

3671255

3985856

4275659

604403

12233511360210

14643841597196

3262733 3190625

35440123710023 3776109

21844112314698

28418243016063

3117068

802723715576

810397910458

1047520

2011-12 2012-13 2013-14 2014-15 2015-16

Connected Load (In KWs)

Domestic

Commercial

Industries

Tube-Wells

Others

-4599.44

-1352.40

-2088.65

-636.16 -471.58

2011-12 2012-13 2013-14 2014-152015-16

24.28

23.29

24.25

26.11

26.89

2011-12 2012-13 2013-14 2014-15 2015-16

AT&C Losses (%)

23.71

22.38

23.66

24.47 24.47

2011-12 2012-13 2013-14 2014-15 2015-16

Distribution Losses (%)

389.61425.15

953.05

704.58587.87

2011-12 2012-13 2013-14 2014-15 2015-16

7067.008407.39

11454.06

13400.8615170.03

2011-12 2012-13 2013-14 2014-15 2015-16

OPERATIONAL PERFORMANCE

INFRASTRUCTURE ADDITIONS

Increase in Revenue

The amount billed to consumers against supply of power increased by 11.14% to Rs. 12414 crore in 2015-16 from Rs. 11170 crore in FY 2014-15.

Increase in supply of power:

The power supplied to the consumers of the Company during FY 2015-16 has been 24861 MU in comparison to 24488 MU supplied during FY 2014-15, which is 1.52% higher than the previous year.

Distribution Losses & AT&C Losses:

The Distribution Losses have been same i.e. 24.47% in FY 2015-16 & FY 2014-15 and the AT&C Losses increased from 26.11% in FY 2014-15 to 26.89 in FY 2015-16.

Remittance into Bank (RIB):

The Remittance into Bank during the year under review grew from Rs. 10397.93 crore in 2014-15 to Rs. 11484.17 crore in 2015-16, showing an increase of 10.45% over the previous year.

Detection of theft and recovery thereof:

Theft of energy is the major cause of loss of revenue. During the period, major emphasis was given on checking of theft of energy. Several teams of Operations and Vigilance Staff were deployed for checking the consumer premises to detect theft cases and FIRs were lodged against the guilty besides imposing penalty. A total of 95212 no. connections were checked during FY 2015-16, out of which 24904 theft cases were detected. A sum of Rs. 85.34 crore as penalty was imposed on the consumers in 2015-16 who were found stealing the energy.

HVDS Projects

Under HVDS Scheme, the work of 59 No. feeders amounting to Rs. 195 Cr. approx. for Gurgaon, Faridabad & Dadri Town was allotted. Out of 59 Nos., the work of 11 No. 11 kV feeders has been completed till 31.03.2016 and the work on the remaining feeders is under progress.

Bifurcation of 11 KV Mixed load feeders

Under Bifurcation of 11 KV mixed load feeders, the work of 113 No. feeders amounting to Rs. 73 Cr. approx. for Gurgaon & Faridabad was allotted. Out of 113 Nos., the work of 100 No. 11 kV feeders has been completed till 31.03.2016 and the work on the remaining feeders is under progress.

Creation of 33 KV sub-station along with associated lines and augmentation of 33 KV sub-station.

During the FY 2015-16, 8 No. new 33 KV sub-stations along with the associated lines commissioned and 53 no. sub-stations were augmented with overall cost amounting to Rs. 105.4 Cr. approx.

Restructured Accelerated Power Development and Reforms Program (R-APDRP)

Under the flagship program of RADRP (now subsumed IPDC) Govt. of India, DHBVN has implemented IT part of this program, wherein 18 Towns having population of more than 30,000 as per Census of 2011 has been brought into IT Domain and the entire distribution and retail supply business activities have been made IT enabled. Based on the accomplishment of the above scheme, further penetration of the scheme has also been planned with the financial assistance from Govt. of India so as to cover the other towns having population of more than 5000 as per 2011 census. Under the second phase almost 28 Towns shall be added in the IT domain which will further the operational efficiency of the Nigam, besides focusing towards customer satisfaction. Under the UDAY Scheme further absorption as technology inform of implementation of AMI solutions in a phased manner which will further improve the performance and financial health of the Nigam. For the implementation of AMI/Smart Grid Solutions various approaches i.e. CAPEX & OPEX models are also being discussed with India Smart Grid Cell constituted by Govt. of India under NSGM (National Smart Grid Mission). Under the IT initiatives implementation of SCADA, DMS has also been planned by the Nigam for Faridabad town which has been selected for the Smart City by Ministry of Urban Development, Govt. of India besides plan for developing Smart Grid Infrastructure in the Millennium City of Gurugram which is also priority project for Govt. of Haryana. The CAPEX incurred for the above stated projects during 2015-16 was Rs. 15.23 crores and the budget for the current financial year i.e. 2016-17 is Rs. 60 crores. ..

LOAD AND MARKET RESEARCH DESIGN & DEVELOPMENT OF BASELINE DATA

For design and development of DSM plan a detailed Load Research & Market Analysis had been carried out by Surveying agency M/S Darashaw & Co. (P) Ltd. Hired by EESL. The same has been approved by DHBVN. On the basis of Load Research Report the major findings on saving potential from all category consumers are as under:

DSM PROGRAMME

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S. No.

Segment

Proposed Activities for saving Saving Potential

1

Commercial

Replacement with LED and EE Fans 140 MU

2

Agriculture

Replacement of inefficient pumps with EE Pumps

219 MU

3

Street Light

Replacement of existing lighting with LED Lights

19 MU

4

Domestic

Replacement with LED and EE Fans 563 MU

5 PWW Replacement of inefficient motor pumps with EE Pumps

21 MU

6 Industry Replacement with Energy Efficient appliances

105 MU

Discom Drawl Info: on the basis of LR Report the Max., Min. and Avg. load requirement is as under:

UJALA Program (Unnat Jyoti Affordable Lamps for All)

UJALA Program was launched by Hon'ble Chief Minister, Haryana Sh. Manohar Lal Khattar on 11th March 2016.in order to reduce the electricity consumption under the program LED Bulbs are to be distributed to the consumers at subsided rates in all the operational circles of DHBVN.

Agriculture Pump Set Program

Under this program old inefficient agriculture pump set will be replaced with 4 or 5 star rates Energy Efficient Agriculture Pump Sets. The detail proposal for agriculture DSM program has been submitted TO DHBVN by EESL which is under the consideration of management.

ØIt was decided vide Sales Circular No. D-16/2015 dated 19.06.2015 to issue Demand notice to the applicants who have applied for tube well connection from 01.01.2012 to 31.12.2012. Further it was decided by the Sales Circular No. D-11/2016 dated 28.04.2016 to issue the demand notice for tubwell connection upto 31.12.2013.

ØFurther Tatkal Facility was floated for releases of tubewell connection vide Sales Circular No. D-30/2015 dated 25.08.2015. The applicant who is desirous of obtaining connection on priority over and above the waiting list can opt for "Tatkal Facility". Under the "Tatkal Facility", the application would be processed expeditiously on payment of Rs. 1 lac over and above the normal charges /cost to be levied on General Category connections.

ØThe Board of Directors in its meeting held on 15/12/2014 had approved laying of electrical infrastructure of 220/33/0.4 KV in Sectors 58-115 of Gurgaon and Sectors 75 to 89 of Faridabad instead of conventional 220/66/11/0.4 KV system.

ØAccordingly, Sales Circular No. D-1/2015 was issued in this regard. The matter was reviewed by the Management and it was decided vide Sales Circular No. D-19/2015 that till such time 220/33/0.4 KV level is created in these sectors of Gurgaon and Faridabad, supply on 11 KV level will be given to the Developers / Builders / Societies etc. wherever possible at their cost, restricting the load upto 5 MVA

IMPORTANT POLICY DECISIONS REGARDING COMMERCIAL ACTIVITIES DURING THE FY 2015-16

through 3 X 300 mm2 11 KV underground XLPE cable. Such release of load on 11 KV will be subject to the condition that the Developers / Builders / Societies will erect the system afresh on 33 KV level from the nearest 220/33 KV sub-station/ switching station at their own cost either by upgrading the 11/0.4 KV distribution transformer to 33/0.4 KV level or by way of installing 33/11 KV Power Transformer. To safeguard the implementation of the above provision, the Developers / Builders / Societies will submit the Bank Guarantee equaling 1.5 times the cost of such changeover from 11 KV level to 33 KV level including 33 KV line at the time of applying for load upto 5 MVA at 11 KV level. Once the 33 KV level is created in these sectors, the Developers / Builders / Societies shall have to mandatorily switchover from 11 KV to 33 KV level within 6 months of issue of notice by DHBVN in this regard failing which the BG shall be encashed and the work shall be got executed by the Nigam at its own level and any extra expenditure incurred in the process shall be suitably recovered from the developer.

ØIn compliance to the Law and legislative Department Notification No. Leg. 07/2014 dated 26th March, 2014 and Administrative Reforms Department Notification No. 07/31/2014-3AR dated 7th May, 2015 vide which Govt. of Haryana has notified the Right to Service Act-2014, the various services to be provided to the citizens within the time frame as notified under Right to Service Act, 2014 were circulated to field offices vide Sales Circular No. D-21/2015 dated 10/7/2015 for strict compliance.

ØIn compliance to Haryana Electricity Regulatory Commission (Rooftop Solar Grid Interactive System based on Net Metering) Regulations (1st Amendment), 2015 dated 09.06.2015, it was notified vide Sales Circular No. D-24/2015 dated 24.07.2015 that "Incentive at the rate of 25 Paise per unit shall be given during the FY 2015-16 on the solar power generated to the extent the same is admissible for off-setting consumer's consumption under Net Metering system".

ØIn compliance to the decision of the Government of Haryana to curb theft of power, improving billing efficiency and quality of service to the consumers of the selected feeder, the 'Mhara Gaon Jag Mag Gaon Scheme' was launched w.e.f. 01.07.2015. Under this scheme one RDS feeder in each of the Haryana Assembly constituencies having least AT&C losses were initially selected for providing increased supply hours from 12 to 15 hours w.e.f. 01.07.2015. The scheme is being carried out in phased manner so that all the RDS feeder are covered in phases.

The salient features of the scheme are as under:-

8

S No. Category Load in MW1 Max. peak demand requirement 3275

2 Min. peak demand requirement 2661

3 Min. Average peak demand 2919

1. The principal amount of the old arrears will be recovered from the consumers of the village in five regular installments along with current bills. After payment of the last bill and arrear installment, entire surcharge amount will be waived off.

2. Reconnection at defaulter premises shall be allowed after payment of first installment without surcharge of outstanding bill. Balance outstanding amount will be paid in four installments along with next current bills.

3. Following activities shall be carried out in the villages to improve the quality of service to consumers:-

i. Replacement of bare conductor with AB cable.

ii. Replacement of defective/electro mechanical meters.

iii. Shifting of meters outside the premises.

iv. Maintenance of DT's.

v. Maintenance of LD system.

vi. As a one time measure, the meter so replaced would not be subject to further checking from the M&T Lab.

4. When the naked LT conductor of the village is fully changed into AB cables as per site requirement and the meters of all the households have been brought out, the power supply to the village will be increased from 15 hours to 18 hours.

Ø5. For measuring the power supplied to the village the meters shall be installed on all the points from which 11 KV lines go into the village. After allowing for the permitted quantum of technical losses i.e. 20%, if the village pays bills to the extent of 90% of power supplied, their electricity supply will be increased from 18 to 21 hours. After the defaulting amount of the feeder becomes less than 10%, 24 Hours supply will be provide

In case a village does not fulfill the obligations cast upon them in terms of helping installation of AB cables, replacement of meters and bringing them outside the houses, eventually leading to reduction of losses, the increased supply hours of power will be withdrawn.

ØVoluntary scheme for declaration of un-authorized load of DS, NDS, LT Industrial & Agriculture Consumers -VDS-2015 was floated vide Sales Circular No. D-27/2015 dated 11/8/2015 whereby consumer can get their unauthorized load regularized from existing system by paying Advance Consumption Security for extended load and Service Connection charges, wherever applicable. This scheme remained applicable upto 30/9/2015.

ØIt was decided vide Sales Circular No. D-29/2015 dated 12.08.2015 to release temporary

connections to the residents of unauthorized /slums colonies with following conditions:-

1. A specific notice by the SDO/OP on prescribed format shall be given to the concerned official/local competent authority e.g. the Commissioner or Executive Officer of Municipal Corporation or Municipal Council or Secretary of the Municipal Committee or E. O HUDA or BDPO/ Gram Panchayat for giving at least four weeks' time for taking suitable action by them regarding the status of premises before the connection is actually released.

2. The connection will be provided purely on temporary basis and the consumer with such an electricity connection would not be entitled to any right over the land or property, if any.

3. The energy meter of the connection will be installed on the pole outside the premises through cable.

4. Only single phase connection will be given to such a consumer.

5. The electricity connection would be charged at the tariff applicable to the concerned category of consumers.

6. The colour of the bill of such a temporary electricity connection shall be different than the usual bills.

7. An affidavit as well as indemnity bond shall be taken from each of such consumer stating clearly that he shall be liable for any legal action regarding his premises by the concerned Local Bodies Department or Town and County Planning Department or Panchayat department or any other legal/competent authority as the case may be.

8. The applicant is required to submit an identity proof (Driving License, PAN No, Adhaar Card, Voter ID Card, Ration Card, Passport, Bank Passbook, etc).

9. All the electricity bills of such consumer will have a detailed disclaimer "clearly stating that release of power connection and collection of bills from the concerned individual does not confer him/her any occupation or ownership rights on the concerned property and that he/she is simply making payment for the electricity actually consumed by him/her and nothing more".

ØThe matter regarding site checking of CT meters has been reviewed keeping in view the fact that it is practically not feasible to check each and every connection by M&P wing, once in a year with the present staff strength due to increased work load and hence, it has been decided vide Sales Instruction No. 11/2015 dated 24/7/2015 to revise the norms for site checking of CT meters by M&P wing as under:-

a) The site checking of all HT CT connections and theft prone industries such as Electroplating Units, Oil

9

Expellers, Plastic Units, Rubber Units, Steel Furnaces, Mobile Towers & Stone Crushers etc. will be carried out by M&P wing, once in a year. The checking report will be prepared by the concerned SDO/M&P in the prescribed format at the time of checking.

b) Seasonal Industries such as Ice Factories, Ice Candies, Cold Storage units, Cotton Ginning Mills and Rice Shellers etc. shall be checked twice during the season i.e. at least once every three months.

c) The connections of all other LT CT consumers will be checked once in every two years.

d) SDO M&P shall invariably check and record a certificate on MT-1 Performa during each such checking that the ratio of CT & PT installed at the consumer's premises as well as that of substation (in case of independent feeder) has been tested and the same is as per record.

Note: However SDO/Op, XEN/Op & XEN/M&P shall monitor the consumption pattern of the consumers and will get the meters checked wherever considered necessary to ensure that the meters are in proper working order.

ØSimplified application form for new connection, reconnection, extension of load, reduction of load and change of name was circulated vide Sales Circular No. D-4/2016 dated 9/2/2016. The applicant is required to submit only 2 nos. documents viz Proof of Ownership / Legal occupation of the premises & Proof of identity along with standard Application and Agreement (A&A) Form.

ØNigam introduced 'Out of Court Settlement Scheme' vide Sales Circular No. D-42/2019 dated 9/12/2015 for Settlement of disputes pertaining to various categories of Electricity consumers which are pending in Courts/Arbitration/ DCDRF/State Commission/National Commission etc, in the Lok Adalats being held regularly under the jurisdiction of DHBVN. This scheme remain applicable upto 31/1/2016. Thereafter the scheme was again extended from 18/3/2016 to 31/7/2016 vide Sales Circular No. D-7/2016 dated 18/3/2016.

SMART GRID PROJECT GURUGRAM:

a. The meeting held on 08.10.2016 under the chairmanship of Hon'ble Chief Minister Haryana and the Hon'ble MoS (IC) Power, Coal and Renewable Energy Departments, GoI, provided the impetus to the development of "Smart Grid Project" leading to smart City Gurugram. The decisions taken in the meeting acted as the way forward guidelines upon which the development of Smart Grid project of Gurugram was to be based. The main objectives in mind to start with are to provide 24x7 uninterrupted electricity to all the consumers, to make Gurugram a Diesel Generator free city

10

within next one year and subsequently scaling up the infrastructure to make it a Smart City.

The Execution was planned in 3 Parts-

¢ Part-l-(sec 1-57 )which was further divided in to 4 phases

i) DLF City S/D

ii) South City & Sohna Road S/D

iii) Maruti & IDC SO

iv) Kadipur, N. Clny & N. Palam Vihar S/D

ØPart-ll(Sector 58 to 115)

ØPart-III(IMT Manesar)

Implementation of Smart Grid will ensure 24 X 7 uninterrupted power supply to the end consumers resulting in reduction in AT&C losses and overhead cost due to integration of various IT tools to make the Grid system more efficient by ensuring consumer participation.

b. The total project cost was estimated of 10000 Cr out of which Rs 7000 Cr was envisaged for Part -1 of the project.

Under the original strategy the NIT was floated for the Part-I, Phase-I of the project with the estimated cost of Rs 504 Cr.

c. After deliberation at various levels the original strategy was changed to implement Smart Grid Project from sector 1 to 57 in Gurugram in different layers as detailed out below

1. Strengthening of infrastructure by laying 11 kV network in ring main along with optical fiber cable to meet with future requirement of communication and by providing SCADA compatible field equipments. Apart from this, strengthening of LT network with additional distribution transformers to meet with the future load growth is also included.

2. In the second layer SCADA with various IT tools will be implemented for entire Gurugram.

3. Advance metering infrastructure (AMI) will be implemented for the entire Gurugram to remove the inefficiency in the system on account of meter reading and improper data analytics.

4. Undergrounding of LT network in such a fashion that the network is in ring main to ensure round the clock supply up to the consumer premises.

SMART CITY PROJECT OF FARIDABAD:

Faridabad town has been shortlisted as one of the fast track cities selected by Ministry of Urban Development, Gol for development as a Smart City. Following area has been selected for development under Faridabad Smart City Project for rolling out the pilot project:

Sector-19, Sector 20, Sector 20A, Sector 21B, Sector 21D, Badhkal Lake, Fatehpur, Village Ajraundi & Village

11

Sant Nagar.

Under the pilot project in Faridabad the complete electrical infrastructure is being undergrounded in ring main. Apart from this, SCADA and AMI is also being implemented and integrated with the system to bring efficiency in the system by ensuring 24 X 7 quality power supply to the consumers. The system efficiency will also be increased by implementing demand side management (DSM) and with the integration of renewable energy with the Grid.

Online Consumer Grievances Redressal System

As online consumer Grievances Redressal System is already place in DHBVNL. During the year 2015-16 total numbers of 5,411 complaints have been lodged by the consumers through Consumer Grievances Redressal System.

Centralized Call Centre:

DHBVN has established a centralized call center as part of R-APDRP (Part-A) Project, for registering of no current complaints on 24X7 for all consumers falling under its administrative control. The operations of the call centre was started from 26/08/2014. To avoid any charges to the consumer one Toll Free number (i.e. 1800-180-4334) has been provided. A total of 2,32,181 nos. complaints have been received through call centers during 2015-16.

Court Case Monitoring System:

It has been observed that substantial portion of revenue is getting blocked in the court cases for better monitoring of court cases DHBVN has implemented online Court Case Monitoring System (CCMS) wherein the synopsis of all the consumer related court case are being entered by the field offices. Through the system the court cases are being monitored and prompt action against the high stake court cases is being taken up timely.

Online Cash Collection and Reconciliation System:

The source of Company's revenue a vast consumer base and there are many collection centers being operated in the field by Company's staff as well as outsourced staff. For better monitoring of revenue collection in the field and better cash handing process "Online Cash Collection and Reconciliation System" has been implemented in DHBVN wherein all the models of cash collection shall be integrated on a single platform so as to facilitate real time monitoring and further extend the facility of Online Payments to all the consumers of DHBVN. Which was earlier provided to the consumers of Gurgoan, Faridabad & Hisar towns only.

Online application for HT/LT Connections:

Transparent & visible process of submission of online

IT INITIATIVES

application for all industrial (HT/LT) connection and other categories of connections, where the applied load is more than 20 KW has been launched, which facilitates monitoring of pending applications by management and higher offices. The system has been upgraded to cater all categories of consumers, irrespective of load applied.

Capex works:

Various Capex works have been undertaken by the Company such as construction of new sub stations, augmenting existing overloaded sub stations, bifurcation/trifurcation of overloaded 11 KV feeders, shifting of connections to feeder pillar boxes, release of connections etc. An amount of Rs. 587.87 crore was spent as Capex works in 2015-16 as against Rs. 704.58 crore spent in 2014-15.

Your Directors have not recommended any dividend since the Company has incurred losses during the year under review.

As on the date of this report, the Authorized Share capital of the Company is Rs. 5000 crores and the paid up share is Rs. 20051442000/-. The State Govt. is holding 78.20% of the paid up capital of the company and the balance of 21.80% is held by Hayana Vidyut Parasaran Nigam Limited.

During the year under review the Company has not accepted any deposit under Section 73 of the Companies Act, 2013.

The Haryana Electricity Regulatory Commission (HERC) has granted License to the Company for Distribution & Retail Supply of Power in the South of Haryana.

The information on conservation of Energy Technology Absorption as stipulated in section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Account) Rules 2014 is attached as Annexure-I.

The Board of Directors of the Company comprises of below mentioned Directors and Key Managerial Personals as on 31.03.2016:-

DIVIDEND

SHARE CAPITAL

FIXED DEPOSITS

LICENCE FOR CARRYING OUT BUSINESS

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

DIRECTORS AND KEY MANAGERIAL PERSONALS

12

The following changes had taken placed in the Board of Directors and Key Managerial Personals of your company since last financial year 2015-16.

(i) Sh. Suresh Kumar Bansal, was appointed to be Director/Projects w.e.f. 08.04.2015.

(ii) Sh. Ravinder Kumar Batra, was appointed as Director/Operation on 09.04.2015.

(iii) Sh. Anil Gupta, Chartered Accountant was appointed as Part Time Director-Independent w.e.f. 28.05.2015.

(iv) Smt. Ashima Brar, IAS was appointed as Nominee Director w.e.f. 03.08.2015.

(v) Sh. Vineet Garg, IAS was appointed as Nominee Director w.e.f. 16.12.2015.

(vi) Sh. Ravi Prakash Gupta, IAS was appointed to be Nominee Director w.e.f. 16.12.2015.

(vii) Sh. Vijay Singh Dahiya, IAS was ceased to be Director w.e.f. 16.12.2015.

(viii) Smt. Ashima Brar, IAS was ceased to be Director w.e.f. 16.12.2015.

The Board places on record its sincere appreciation and gratitude for the valuable contribution & support rendered by the outgoing Directors during their tenure in the Company.

Board of Directors Meeting

DECLARATION BY INDEPENDENT DIRECTORS

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors met Five times during the financial year 2015-16. The meetings of the Board were conducted by the Company Secretary and majority of the Directors had attended each meeting.

All the Independent Directors meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013, and necessary declarations under section 149(7) of the Companies Act 2013 have been received from them.

1. Audit Committee

The Board of Directors had constituted Audit Committee pursuant to the provisions of section 177 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of Board & its Powers) Rules 2014 with below mentioned compositions for the financial year 2015-16:-

1. Sh. M. K. V. Rama Rao Chairman

2. Sh. K. K. Ghosh Member

3. Sh. Sanghamitra Pyne Member

During the financial year 2015-16 three meetings of Audit Committee had been conducted. All the recommendations made by the Audit Committee during the year had been accepted by the Board of Directors.

Sr. No.

Name of Directors Designation Category Date of

Appointment

1. Sh. Rajan Gupta ACS/Power & Chairman, DHBVNL

Part Time Director 18.11.2014

2. Sh. Arun Kumar Verma Managing Director Whole Time Director 04.03.2014

3. Sh. Vineet Garg Director Part Time Director Representing Power Utilities

16.12.2015

4. Sh. Nitin Kumar Yadav Director Part Time Director Representing Power Utilities

24.11.2014

5. Sh. Ravi Prakash Gupta Director Part Time Director Representing Power Utilities

16.12.2015

6. Sh. Suresh Kumar Bansal Director/Projects Whole Time Director 08.04.2015

7. Sh. Ravinder Kumar Batra Director/Operation Whole Time Director 09.04.2015

8. Sh. M. K.V. Rama Rao Director Part Time Director Representing Power Utilities

05.11.2013

9. Sh. K. K. Ghosh Director- Independent Part Time Director 17.04.2013

10. Sh. R. P. Sasmal Director- Independent Part Time Director 17.04.2013

11. MS. Sanghamitra Pyne Director- Independent Part Time Director 17.04.2013

12. Sh. Anil Gupta Director- Independent Part Time Director 28.05.2015

13. Sh. Kapil Kumar Marwha Chief Financial Officer /KMP Whole Time 23.07.2014

14. Sh. Harjinader Singh Company Secretary/ KMP Whole Time 24.09.2014

2. Whole Time Directors

To review the functional areas of business and other matters, the Whole Time Directors of the Company hold their meetings from time to time and Twenty such meetings were held during the financial year 2015-16. The Company Secretary acts as Secretary for conducting the meetings.

3. Nomination & Remuneration Committee

The Company is having dully constituted Nomination & Remuneration Committee pursuant to the provisions of section 178 of the Companies Act 2013. The composition of the Nomination & Remuneration Committee for the financial year ending 31.03.2016 is mentioned below:-

1. Sh. M.K.V. Rama Rao Chairman2. Sh. R. P. Sasmal Member3. Ms. Sanghamitra Pyne Member

During the financial year 2015-16 one meetings of Nomination & Remuneration Committee had been conducted.

4. Corporate Social Responsibility

The Company is having dully constituted Corporate Social Responsibility Committee pursuant to the provisions of section 135 of the Companies Act 2013. The composition of the Corporate Social Responsibility Committee for the financial year ending 31.03.2016 is mentioned below:-

1. Sh. Suresh Kumar Bansal, Chairman

2. Sh. R. P. Sasmal Member

3. Sh. Ravinder Kumar Batra Member

The Company has also formulated a Corporate Social Responsibility Policy which inter alia contains guidelines and mechanism for undertaking various projects for developments and welfare of Society at large.

Due to non availability of profits no CSR activities had been carried out by the company during the financial year 2015-16.

During the financial year 2015-16 one meetings of Corporate Social Responsibility Committee had been conducted.

5. Meeting of Independent Directors

During the financial year 2015-16 one meeting of Independent Directors was held. All the independent Directors except Ms. Sanghamitra Pyne had attended the meeting. The meeting was chaired by Sh. K. K. Ghosh.

Pursuant to the provision of section 177 of the Companies Act 2013 the company has formulated and adopted a Vigil Mechanism Policy. The policy provides a channel to Directors and employees to report their genuine concerns about any unethical or improper behavior of an employee of the company or malpractices or events which have taken place or suspected to take place. It also provides adequate

VIGIL MECHANISM

safeguards against the victimization of an employee who has availed the Vigil Mechanism.

RELATED PARTY

All transactions entered with Related Parties for the year were on arm's length basis and in ordinary course of business. The disclosure of related party transactions as required under Section 134 (3) (h) of the Companies Act 2013 in Form AOC-2 has been annexed as Annexure-II.

In accordance with the provisions of the section 134 (3) (a) of the Companies Act 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in form MGT-9 has been annexed as Annexure-III.

There are no loans given, guarantee issued or investment made by the Company to which provision of section 186 of the Companies Act, 2013 are applicable.

M/s O. Aggarwal & Co., Chartered Accountants, were appointed as Statutory Auditor to conduct audit of the books of Accounts for the financial year 2015-16 (had appointed the Comptroller and Auditor General of I n d i a , N e w D e l h i v i d e s i t s l e t t e r N o . CA.V/COY/HARYANA, DHBJLI(1)/1176 dated 05.08.2015) The reports of the Statutory Auditor and the Comptroller General of India on the account for the financial year 2015-16 have been received.

As required under Section 134(3) (f) of the Companies Act, 2013, your Directors also offer their fullest information and explanations on the reservations, qualifications and comments of the Statutory Auditors on the accounts of the Company for the year 2015-16 in the addendum to this report.

Further, M/s O. Aggarwal & Co., Chartered Accountants, have also been appointed as Statutory Auditors of the Company for the FY 2016-17 by the C&AG of India vide its letter No. CA.V/COY/ HARYANA,DHBJLI(1)/1259 dated 26.08.2016.

The Comptroller Auditor General of India (CAG) has given comments on the accounts for the financial year ended 31.03.2016 under Section 143(6) of the Companies Act 2013. The comments of the Comptroller Auditor General of India along with replies of Management have been enclosed as addendum to this report.

Pursuant to the provisions of the section 204 of the Companies Act 2013, the Board of Directors had appointed M/s Girish Madan & Associates as Secretarial Auditors of the Company for the financial year 2015-16. M/s Girish Madan & Associates, Panchkula has

RELATED PARTY TRANSACTIONS

ANNUAL RETURN

PERTICULERS OF LOANS, GUARRANTEE AND INVESTMENTS

STATUTORY AUDITORS

Comments of the Comptroller Auditor General of India

SECRETARIAL AUDITORS

13

submitted the Secretarial Audit Report in Form MR-3 for the financial year 2015-16 the copy of the same has been annexed as Annexure-IV. The Report submitted by M/s Girish Madan & Associates does not contain any qualification or adverse remarks for the financial year 2015-16.

In accordance with the provisions of section148 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rule 2014 M/s A.G. Aggarwal & Associates, Cost Accountants, Noida, had been appointed as Cost Auditors by Board of Directors for the financial year 2015-16.

The Cost Audit Report for the financial year 2015-16 had been submitted by M/s A.G. Aggarwal & Associates, Cost Accountants, Noida.

Further, on the recommendations of the Audit Committee the Board of Directors had appointed M/s A.G. Aggarwal & Associates, Noida as Cost Auditors for the financial year 2016-17.

The Company has an internal audit system commensurate with the nature and size of the business of the company. The Chief Auditor, DHBVNL has been appointed as Internal Auditor of the Company under Section 138 of the Companies Act 2013 by the Board of Directors of the Company.

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge beliefs, ability and according to the information received confirms that:-

(i) in the preparation of the Annual Accounts for the year ended 31st March, 2016 the applicable accounting standards have been followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for the financial year 31st March, 2015 on a 'going concern' basis;

(v) the Directors have devised proper systems to ensure compliance with the provisions of all applicable

COST AUDITORS

INTERNAL AUDIT

Directors' Responsibility Statement

laws and that such systems are adequate and operating effectively.

The company has adequate internal financial controls and these internal controls were operating effectively during the year.

As required under Electricity Act 2003 and HERC guidelines, DHBVN had established a Forum for Redressal of grievances of consumer in March, 2006. This Forum prepares monthly schedules to visit all Nine Circles in every month for redressal of consumer grievances in the respective circles as per procedure prescribed under State Electricity Regulation. During the financial year 2015-16, 275 number complaints had been received and decided by the Forum.

As per manpower position of DHBVN as on 31.03.2016, details of technical and Non-technical staff are tabulated below:-

During the year 2015-16, detail of training provided to the employees of DHBVN in man days is as under:

In line with provisions of "Sexual Harassment of Women (Prevention, Prohibition & Redressal) Act, 2013, an "Internal Complaints Committee" has been constituted in the Nigam for Redressal of complaint(s) against sexual harassment of women employees. During the financial year 2015-16, no complaint against the sexual harassment of women employees has been received in the Nigam.

The Ministry of Corporate Affairs vide its notification dated 05.06.2015 has exempted the Govt. Companies from the applicability of section 197 of the Companies Act, 2013. Hence no information is required to be given by the Company under this section.

Ujwal Discom Assurance Yojna (UDAY)

INTERNAL CONTROLS SYSTM AND THEIR ADEQUACY

CONSUMER GRIEVANCE REDRESSAL FORUM

HUMAN RESOURCE ACTIVITIES:

TRAINING IN MAN DAYS

COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AT REDRESSAL) ACT, 2013

PARTICULARS OF EMPLOYEES

MATERIAL CHANGES AND COMMITMENTS

Sr. No. Category Sanctioned Posts Working Position s

1.

Technical

13527

7186

2. Non-technical 5134 2230

Category Period of training No. of officers/officials attended the training

Man days

Gazetted &

Non-Gazetted

FY 2015-2016 2849 8846

14

The Govt. of India (Ministry of Power) notified Ujwal Discom Assurance Yojna (UDAY) on 20.11.2015 for operational and financial turnaround of State Power Distribution Utilities. The tripartite MoU amongst Govt. of India, Govt. of Haryana and State DISCOMs (UHBVN & DHBVN) was signed at New Delhi on 11.03.2016. The scheme aims at reducing debt burden of DISCOMs, reduces cost of power & reduce AT&C losses to the level of 15% in next 3 years by 2018-19.

Under the scheme, 75% of the loan liabilities of DISCOMs outstanding as on 30th September, 2015, are to be taken over by the State Govt. in two years i.e. 50% in FY 2015-16 and balance 25% in FY 2016-17 by issuing non SLR bonds and treating the same as loan from State Govt. to Power Utilities. The entire loan amount would be converted into equity & grant to Utilities over a period of 5 years starting from 2015-16 to 2019-20 @ 15% every year.

First tranche of UDAY bonds for both the DISCOMs was issued by the State Govt. on 31.03.2016 at coupon rate of 8.21 % for Rs. 17300 crores. The 2nd, 3rd & 4th tranche of UDAY bonds for the balance amount of Rs. 8650 crores were issued from 15.06.2016 to 04.07.2016 through Reserve Bank of India at coupon rate ranging from 8.06% to 8.14%. The weighted average rate of interest for UDAY bonds of Haryana State comes to 8.20% approx.

The DHBVN loan liabilities coered under UDAY are Rs. 11727 crores including 75% of the loans of Rs. 2632.13

crores transferred from UHBVN on account of transfer of Jind distribution circle in FY 2013-14.

The UDAY would result in significant reduction in interest cost for the DISCOMs. The loans in the books of the DHBVN prior to take over by the State Govt. were carried interest at around 11.70% (Base Rate of Lead Bank +2%) to 12.38 % which after issue of bonds reduced to 8.20% resulting into saving of amount Rs. 425 crores approx. in FY 2016-17 as interest cost. The full benefit would, however come after conversion of entire State Govt. loan portion into equity and grant to DISCOMs by the year 2020 @ 15% every year.

During the year under review, the industrial relations with the employees remained cordial and peaceful. The Directors wish to place on the record their sincere appreciation for unstinted support provided to the Company by the employees at all levels.

The Board of Directors acknowledge with gratitude the co-operation and assistance rendered by the Haryana Electricity Regulatory Commission (HERC), Bankers, Financial Institutions and various Departments of the Central and State Governments. The Board also expresses its deep gratitude for the continued co-operat ion and support received from the Shareholders.

.

INDUSTRIAL RELATIONS

ACKNOWLEDGEMENTS

For and on behalf of the Board of Directorsof Dakshin Haryana Bijli Vitran Nigam Ltd.

Shatrujeet Singh Kapoor, IPSChairman-cum-Managing Director,

DHBVNLDate: Place: Panchkula

sd/-

15

PARTICULARS UNDER COMPANIES (ACCOUNTS) RULES 2014 FOR THE YEAR ENDED 31ST MARCH, 2016

a) For conservation of energy a number of steps have been taken by the Company such as replacement of incandescent lamps with CFL, use of solar water heater system, use of energy efficient/ BEG level equipments, use of energy efficient/ star rated transformers, automatic power switching system, automatic power factor correction units, ESCO model for DSM of commercial, industrial and domestic sectors.

Besides the above, a number of other steps have also been taken by the Company such as distribution of leaflets and pamphlets on energy conservation on important occasions like India International Trade Fair, Gandhi Jayanti Samaroh, Inaugurat ion/ foundat ion s tone laying programmes of VIPs etc. for mass awakening. Messages were also disseminated through audio cassettes in various programmes.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

For reduction of consumption of energy new Distribution Transformers are being added wherever required. Rehabilitation and expansion of distribution system has been undertaken and overloaded feeders are being rehabilitated and new feeders are being energized. Rebate is being given in electricity bill of consumers using solar water heater system, Incentive for use of star rated/ energy efficient pump sets is also being given.

c) Impact of measures at (a) and (b) above for reduction in energy consumption and consequent impact on the cost of production of goods.

As a result of the above measures the following benefits have arisen:

?There is a reduction in technical and non-technical line losses and reduction in unauthorized tapping of power supply.

?Supply of quality power to consumers resulting to greater consumer satisfaction.

?Reduction in damage rate of distribution transformers.

A. CONSERVATION OF ENERGY

?Solution to Low Voltage problem and improved voltage to consumer.

?Reduction in overloading of Transformers and reduction in Peak Power Loss.

d) Total energy consumption per unit of production as per Form-A.

DHBVN is not covered in the category of Industries required to furnish the information as contained in the Schedule.

e) Research & Development (R&D): Nil.

(a) Efforts have been made in this regard such as providing high speed internet connections with Computers and Lap Tops to officer's/offices, Installation of advance version of Electronic Energy Meters, Installation of upgraded Distribution Transformers, computerization of energy billing & various other functions of the Nigam.

(b) As a result of the above efforts, the Company has benefited in curbing theft of electricity and reduction in line losses. The above efforts have also lead to supply of quality power and accurate metering resulting to consumer satisfaction, increase in revenue and efficiency & transparency in working.

a) Earning in Foreign Exchange: Nil

b) Foreign Exchange outgo: Nil

For and on behalf of the Board of Directorsof Dakshin Haryana Bijli Vitran Nigam Ltd.

Sd/-

Shatrujeet Singh Kapoor, IPSChairman-cum-Managing Director, DHBVNL

Place: Panchkula

B. TECHNOLOGY ABSORPTION:

C. FOREIGN EXCHANGE EARNING AND OUTGO :

ANNEXURE- I TO DIRECTOR'S REPORT

16

17

Date:

Place: Panchkula

For and on behalf of the Board of Directors

of Dakshin Haryana Bijli Vitran NIgam Ltd.

Shatrujeet Singh Kapoor, IPS

Chairman-cum-Managing Director, DHBVNL

sd/-

18

19

20

21

22

23

Date:

Place: Panchkula

For and on behalf of the Board of Directors

of Dakshin Haryana Bijli Vitran NIgam Ltd.

Shatrujeet Singh Kapoor, IPS

Chairman-cum-Managing Director, DHBVNL

24

sd/-

25

REPLIES OF THE MANAGEMENT ON THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER

SECTION 143 (6) (B) OF THE COMPANIES ACT 2013 ON THE ACCOUNTS OF DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED

HISAR FOR THE YEAR ENDED 31ST MARCH 2016.

MANAGEMENT REPLYCOMMENTSPara No.

ANNEXURE-II TO THE DIRECTOR'S REPORT

The preparation of financial statements of the Dakshin Haryana Bijli Vitran Nigam Limited for the year March 2016 in accordance with financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139 (5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the Standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 22 November 2016.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6) (a) of the Act of the stand alone financial statements of Dakshin Haryana Bijli Vitran Nigam Limited for the year ended 31 March 2016. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under Section 143 (6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related Audit Report.

A. Comments on profitability:

I Current Liabilities:

Trade Payables (Note 9): 2193.67 crore

The above does not include

a. Payable of `2.83 crore to Haryana Power Generation Corporation Limited (HPGCL) owing to true up orders of Haryana Electricity Regulatory Commission (HERC) dated 31 March 2016 on the cost of that Company.

No Comments

No Comments

It is submitted that HPGCL had raised the bill amounting to 69.62 crore as true-up expenses for the FY 2014-15 as per the HERC order dt. 31.03.2016 on 11.04.2016. In response to the HERC order dt. 31.03.2016 and the bill raised by HPGCL for True-up Expenses for FY 2014-15, HPPC had made a reference to HPGCL stating that

b. Payable of `47.17 crore to Lanco Amarkantak Power Limited (LAPL) for power purchased in the years 2011-12 and 2012-13. This has resulted in understatement of Liabilities for purchase of power, Trade payable and Loss by 50.00 crore.

II Current Assets:

Other Current Assets (Note 20): `67.26 crore

The above includes difference of `19.55 crore of written down value of asset and realizable value of assets disposed/retired from active use during 2015-16.This has resulted in overstatement of Current Assets, other current assets and understatement of loss by 19.55 crore.

III Cost of power purchase 12500.40 crore

The power purchase cost includes prior period expenditure of `201.98 crore and prior period income of 217.10 crore which should have been shown separately. This has resulted in understatement of power purchase cost and loss for the year by

as per HERC order dt. 31.03.2016, HPGCL is also directed to reverse the excess amount of fixed cost of `64.45 crore recovered in the FY 2014-15 to the Discoms and requested to revise the bill of 69.62 crores after considering the reversal of fixed cost of `64.45 crores and returned the original copy of the bill for True-up Expenses for FY 2014-15 to HPGCL. But HPGCL vide its letter dated 26.04.2016 had intimated that HPGCL is going to file a review petition against the Hon'ble Commission's order dt. 31.03.2016. HPPC again requested to HPGCL to raise this bill for True-up Expenses for FY 2014-15 dt. 11.04.2016 as a whole only after the outcome of review orders of Hon'ble Commission otherwise stay order by HERC against this order be provided to this office.

On 20.07.2016, HPGCL had raised the bill for True-up Expenses for FY 2014-15 for the net amount of `5.07 crore (`69.52 crore - `64.45 crore) as per HERC order dated 29.06.2016 and `2.83 crore (`5.07 x 55.93%) was booked into the monthly account of the month of July 16 in which the final invoice from HPGCL is received.

It is submitted that HPPC had booked the total amount of monthly invoices of actual energy supplied by Lanco Amarkantak Power Ltd. (LAPL) in the respective months in the FY 2011-12 and FY 2012-13.

As per HERC order dt. 12.07.2016, this payable differential amount of 88.123 crore for the period from 07.05.2011 to 31.03.2013 at the tariff determined by the Commission was paid in three installment starting from the month of August 2016 and same stand accounted far in the books during FY 2016-17.

In this connection it is stated that assets disposed/retired from use during the year, having original value of 47.59 crore mainly includes meters & metering equipments which may be replaced earlier than its useful life ascertained being obsolete or damaged. Under such circumstances, the residual value of the asset cannot be exactly 10% of original value but the value remained after providing depreciation for useful life of assets. Moreover the depreciation is provided at the rates fixed by HERC as per MYT Regulation. The above treatment is in accordance with the provision contained in AS-10. Moreover the amount of loss charged to P&L account on this account is 17.71 Cr.

The issue raised by Audit for the understatement of power purchase cost is a disclosure issue and do not effect the profit or loss of the DHBVN.

DHBVN is recognizing the power purchase cost in the period during which the corresponding liabilities is

26


`15.12 crore (`217.10 - `201.98= `15.12 crore).

B Impact on Profitability:

The impact of above comments is that the losses have been understated by `69.55 crore. If they are taken into account, the losses for the year of `471.58 crore would increase to 541.13 crore.

established and accepted. This process help the DHBVN to correctly ascertain the amount of FSA to be recovered from consumers in future.

The comment of the audit regarding understatement of power purchase cost cannot be accepted in view of position explained above.

This does not impact true & fair view of the financial statement of the Nigam.

As per our replies above.

27


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Sd/-

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE

COMPANIES ACT, 2013, ON THE FINANCIAL STATEMENTS OF THE DAKSHIN HARYANA BIJLI VITRAN

NIGAM LIMITED, HISAR FOR THE YEAR ENDED 31st MARCH 2016

The preparation of financial statements of the Dakshin Haryana Bijli Vitran Nigam Limited for the year March 2016 in

accordance with financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the

management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India

under Section 139 (5) of the Act are responsible for expressing opinion on the financial statements under Section 143

of the Act based on independent audit in accordance with the Standards on auditing prescribed under Section 143(10)

of the Act. This is stated to have been done by them vide their Audit Report dated 22 November 2016.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section

143(6) (a) of the Act of the stand alone financial statements of Dakshin Haryana Bijli Vitran Nigam Limited for the year

ended 31 March 2016. This supplementary audit has been carried out independently without access to the working

papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel

and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to

highlight the following significant matters under Section 143 (6)(b) of the Act which have come to my attention and

which in my view are necessary for enabling a better understanding of the financial statements and the related Audit

Report.

A. Comments on Profitability :

I. Current Liabilities:

Trade Payables (Note 9): 2193.67 crore

The above does not include

a. Payable of `2.83 crore to Haryana Power Generation Corporation Limited (HPGCL) owing to true up

orders of Haryana Electricity Regulatory Commission (HERC) dated 31 March 2016 on the cost of that

Company.

b. Payable of 47.17 crore to Lanco Amarkantak Power Limited (LAPL) for power purchased in the years

2011-12 and 2012-13.

This has resulted in understatement of Liabilities for purchase of power, Trade payable and Loss by

`50.00 crore.

II. Current Assets:

Other Current Assets (Note 20): 67.26 crore

The above includes difference of `19.55 crore of written down value of asset and realizable value of assets

disposed/retired from active use during 2015-16.This has resulted in overstatement of Current Assets, other

current assets and understatement of loss by 19.55 crore.

III. Cost of power purchase 12500.40 crore

The power purchase cost includes prior period expenditure of `201.98 crore and prior period income of

`217.10 crore which should have been shown separately. This has resulted in understatement of power

purchase cost and loss for the year by 15.12 crore (`217.10 - 201.98= 15.12 crore).

B. Impact on Profitability:

The impact of above comments is that the losses have been understated by 69.55 crore. If they are taken into

account, the losses for the year of 471.58 crore would increase to 541.13 crore.

1829

For and on the behalf of the

Comptroller & Auditor General of India

Place: Chandigarh

Date: 25.01.2017 Sd/-

(Karan Singh)

A.G. (Audit), Haryana

Chandigarh

The Members,Dakshin Haryana Bijli Vitran Nigam LtdHisar

1. Report on the Standalone financial statements

We have audited the accompanying standalone financial statements of Dakshin Haryana Bijli Vitran Nigam Ltd (“the Company”), which comprise the Balance Sheet as at March 31, 2016 the Statement of Profit and Loss and Cash Flow Statement, and a summary of significant accounting policies and other explanatory information for the year then ended.

2. Management's Responsibility for the Standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion on the standalone financial statements.

4. Basis for Adverse Opinion

We draw attention to the matters described in Annexure II, the effects/possible effects of which, individually or in aggregate, are material and/or pervasive to the financial statements and matters where we are unable to obtain appropriate audit evidence. The effects of the matters described in Annexure II, which could be reasonably determined/ quantified, on the basis of accompanying financial statement are tabulated as under:

Profit & Loss A/c (Items) (Rs. In Crore)

INDEPENDENT AUDITOR'S REPORT

O AGGARWAL & CO., Chartered Accountants(A Peer Reviewed Firm)Office: 22420688,22017315, Mob: 9891577403, Email: H-3/11-A, Krishna Nagar, Delhi-110051

[email protected]

30

mailto:[email protected]

31

On analysis of above table and keeping in mind the concept of “MATERIALITY” as per AS -1 & SA 320 issued by ICAI , the impact of above are further analysed according to different parameters as under:

Parameters Amount (Rs. in Crore) % of Impact

Net over statement of Loss/ Loss before tax for the FY 2015-16 380.23/471.58 80.63

Net over-statement of Loss / Gross Turnover 380.23/12413.67 3.06

Net over -statement of Loss / Total Assets 380.23/9826.37 3.87

Net over -statement of Loss / Share capital 380.23/1472.36 25.82%

Net over-statement of Loss / Accumulated Losses 380.23/10234.82 3.72%

Sr. No.

Reference P & L Note No.

Head of Account OverstatedLoss

UnderstatedLoss

1. Annexure I, Part – A I -Sr. No. (b)(i)

Note – 22,Code –62.2401- 2481

Delayed Payment Charges from Consumers:

492.71 -

2

Annexure I, Part –

A I-

Sr. No. (b) (ii)

Note – 25,Code – 78.601

Finance Cost:Short

Non booking of income on accrual basis u/s 128 (1) of Companies Act, 2013

making of Interest Provision

on consumer security deposit.

- 75.70

3

Annexure I, Part – A II

Note-25,

Code- 78.553 Finance Cost:

Interest on Loan from UHBVNL has been understated

- 36.85

4


A

III

Note –

22,

Code –

62.8,

62.9, 62.3

Misc. Receipt:

Short booking of Misc . Receipt

0.07 -

Total 492.78 112.55Net Result is Over- Statement of Losses (Rs. In Crore)

380.23

Balance Sheet (Items) (Rs. In Crore)

Sr. No.

Reference B/s Note No. Head of Account Overstated Understated

1. Annexure I, Part – A, Sr. No. (b) (i)

Note – 17 Code – 23.1701 -81 & 23.5301 -81

Trade Receivables : Understatement of Trade Receivable Balance for Surcharge.

- 492.71

2.


A I,

Sr. No. (b) (ii)

Note –

10 Code –

46.238

Other Current Liabilities

Understatement of Interest Payable on Consumer Security

-

75.70

3

Annexure I,

Part –

A II,

Note –

3 Code –

55.308

Reserves & Surplus

Understatement of Grant form Govt of

Haryana Under UDAY.

-

115.96

4.

Annexure I,

Part –

A II

Note –

5 Code –

53.553 & 53.554

Long Term Borrowings

Overstatement of Loan from UHBVN

115.96

-

5

Annexure I,

Part – A II

Note –

5

Code – 53.553 &

53.554

Long Term Borrowings

Understatement of loan from UHBVN

-

36.85

Accordingly, the loss for the year is overstated by Rs. 380.23 Crore and Accumulated Loss as at March 31, 2016 by Rs. 380.23 crore. The effects/possible effects of the others qualifications described in Annexure I to the Report on financial statements are not ascertainable.

5. Adverse OpinionIn Our opinion, because of the significance of the matters discussed in Annexure I referred in our Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March ,2016 and its profit/loss and its cash flows for the year ended on that date :

32

(a) In the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2016.

(b) In the case of the Statement of the Profit and Loss, of the loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 'II' a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As the company is governed by the electricity Act, 2003, the Provisions of the said Act have prevailed wherever they have been inconsistent with the provisions of the Companies Act, 2013.

3. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained, except for the possible effects of the matters described in the basis for Adverse Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us]

c. The Balance sheet, Statement of profit and loss and Cash flow statement dealt with by this report are in agreement with the books of account [ and with the returns received from the branches not visited by us];

d. Except for the effects of matter described in the basis for adverse opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules , 2013 ;

e. The matter described in the basis for Adverse Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. As per notification No. GSR 463 (E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Companies Act, 2013 is not applicable to the company.

g. With respect to the adequacy of the internal controls over the financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in Annexure 'III'.

h. The adverse remarks relating to the maintenance of accounts and other matters connected therewith are as stated in the basis for Adverse Opinion paragraph above.

With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 1 para 1.21 and para (vii) (b) of annexure-I to the financial statements;

(ii) Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term Contracts including derivative contracts.

(iii) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is required to be transferred to the Investor Education and Protection Fund by the Company. However, no such transfer took place so far.

4. As required by section 143 (5) of the Act, we give in Annexure 'IV', a statement on the matters specified by the Comptroller and Auditor General of India for the Company.

For O. Aggarwal & Co.Chartered AccountantsFRN: 005755N

Sd/-CA. ASHOK KUMARPartnerM.No.: 093725

Place : DelhiDate : 22.11.2016

33

(i) Books of Accounts & Accounting Software:

(a) The Nigam has 126 no. of Sub-divisions, 52 no. of divisions and 9 no. of circles with Head Office at Hisar. The system of accounting followed by the Nigam is quite peculiar. To sum up, vouchers for all receipts / income, payments / expenditure are prepared in duplicate on day today at all divisions / sub - divisions indicating suitable a/c code only for debit & credit entries. Subsequently, punching / feeding of these vouchers is also done on daily basis by all sub divisions / divisions on excel sheet thereby respective debit or credit amount of relevant a/c code goes on updated indicating its progressive figure on daily basis. Thus, at the end of the month, a trial balance gets automatically prepared at each sub-division / division a/c code wise. All sub-divisions forward this trial balance to its controlling division along with original set of vouchers for the month as well as supporting documents to vouchers wherever available. The respective division punches / updates the debits / credits a/c code with figures of sub-divisions with their own debits / credits a/c code wise. Thus, a trial balance of a division incorporating the figures or its subordinate sub-division for a particular month is got ready on excel sheet. The respective division forwards this trial balance to Head Office along with original set of vouchers of sub-division and its own for the relevant month. This practice is followed by all sub-divisions & divisions each month for the year.

Thus, Head Office gets 12 no. of Trial balances for a year from each division. The Head Office also prepares its own trial balance a/c code wise each month in the manner explained above. At the end of the year, Head Office merges all trial balances received from Divisions with its own trial balance in Fox Pro and gets one consolidated Trial Balance a/c code wise for the whole organization based on which Profit & Loss a/c & Balance Sheet is prepared at the year end.

From the foregoing it will be evident that this system of accounts is devoid of the following :-

1. Vouchers prepared at different locations do not show as to which Head of A/c is being debited or credited.

2. No date wise posting of debit / credit entry is made under any Head of A/c.

3. In view of sl. (1) & (2) above, date wise debit / credit entries are not available in any Head of Account.

4. As a result of sl. No. (3) above, verification of correctness of amount appearing under any head of A/c is not possible and so also the closing balance thereof at the end of the year.

Keeping in view of above, we have been unable to scrutinize the transactions of the year & therefore not in a position to verify the correctness of the figures under any head of account mentioned in the Profit & Loss A/c and Balance Sheet for the year ended 31.03.2016.

Moreover, there is non-compliance of SECTION 128(1) OF THE COMPANIES ACT, 2013 regarding keeping of Books of Accounts etc. of the company which states that "Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting". Hence, in our opinion DHBVN has contravened the provisions of section 128(1) of Companies Act, 2013 as well.

(b) Rectification of Balance of HVPNL in F.Y. 2015-16

It came to our Knowledge that in F.Y. 2014-15, the Nigam had shown the Debit Balance of HVPNL by Rs. 484.81 crore as Advance to HVPNL (note- 19 code 41.156), this has been reported by us in CARO para (iii)(a) and management replied "No comment as a matter of fact" ,however, during the year under audit Nigam has shown Advance to HVPNL after regrouping of figure for the F.Y. 2014-15 as Rs. 142.53 crore instead of Rs. 484.81 crore.

It is worth mentioning here that due to above stated deficiencies in book keeping method, the Nigam has Committed Error in its Balance Sheet as on 31.03.2015 by Rs. 342.28 i.e, overstated the Assets & Liability by Rs. 342.28 crore.

On raising our query, Nigam replied on 27.10.2016 through email that " It is a compensatory error committed during the F.Y. 2014-15 rectified during the F.Y. 2015-16". Again we asked to provide more detail with documentary proof, the Nigam has replied on 28.10.2016 as given below:

ANNEXURE 'I' PART-A

Actual Entry Done in FY 2014-15 Entry to be Done in FY 2014-15 Rectification entry done in FY 2015-16 Balance as

on

31.03.2014 Rs.313.67 Add: during

The year Rs.171.14

Total Rs.484.81

Balance as on

31.03.2014 Rs.313.67 Add: during

The year Rs.(171.14)

Total Rs.

142.53

Balance as

on

31.03.2015 Rs.484.81 Less: rectification

Entry passed (Rs.342.28) Total

Rs.142.53

34

On perusal of rectification entry passed in F.Y. 2015-16 as indicated above, it is apparent that there has been error in disclosure if true value of "Advance To Supplier" as on 31.03.2015 and by rectifying this error in the current year, the value of advance to supplier has been reduced by Rs. 342.28 crore. This being a material amount of error in the F.Y. 2014-15 which is materially reducing the balance of "Advance to Suppliers" in the F.Y. 2015-16, it is felt that the Financial Statements are not free from material error and inherent risks as per SA-315 issued by ICAI.

i. Income from Surcharge for delayed payment on receipt basis

As per para no. 1.7(e) "Revenue Recognition" Significant Accounting Policies , As per Nigam's decision, the income from surcharge is to be accounted for on the basis of actual realization.As para no 1.36 of Notes to Accounts , As per Nigam's decision, the income from surcharge is to be accounted for on the basis of actual realization. On the basis of actual realization a sum of Rs. 79.08 crore has been accounted for as Income from surcharge against total assessment of Rs. 571.79 crore. A sum of Rs. 492.71 crore has not been recovered from the consumers and the same has been written back from the delayed payment surcharge income and has been reduced from the gross debtors.

In our opinion, with the above accounting treatment, Nigam has contravened the provisions of section 128(1) of Companies

Act 2013. This has resulted in overstatement of loss by Rs. 492.71 crore and understatement of Debtors by the same amount

as on 31.03.2016.The Nigam has followed above accounting treatment in earlier years as well.

ii. Interest On Consumer Securities On Cash Basis

As Per Para 1.44 of Notes to Accounts, Nigam has booked interest expense on Consumer Security amounting to Rs. 15.41 crore on cash basis during the F.Y. 2015-16 .Nigam has not disclosed in its accounting policies on revenue recognition under para 1.7 regarding cash basis of accounting for interest on consumer securities. In our opinion, the above practice of NIGAM is contravention of section 128(1) of Companies Act, 2013 which mandatorily require to keep the books of account on accrual basis and double entry system of accounting. In our opinion, Nigam has understated the loss as well as the current liabilities as given below:

? Due to non availability of information, interest on Addition of Consumer Securities is calculated on average basis.

II. Difference Between DHBVN balance and UHBVN balances:

As per the information provided by DHBVN and direct confirmation obtained from statutory auditors of UHBVN vide email dated 17.11.2016 ( in compliance to SA-305 External Confirmations) we have observed the following differences as on 31.03.2016 between balance of DHBVN and UHBVN as detail given below:We have noted that UHBVN has transferred the grant of Rs. 394.82 crore on account of Jind Circle vide foot note no. 3.1 of Note NO. 3 of UHBVN Balance Sheet as on 31.03.2016, however DHBVN has accounted for grant of Rs. 278.86 crore vide

Particulars Security Amount (`.) Interest (`.)

Opening Amount of Securities 9745552985.00 877099769.00Securities Addition During the year 757081136.00 34068651.00*

Total 10502634121.00 911168420.00

Less: Interest Booked during the year 154119031.00

Interest Short Booked (i.e, Loss Understated) 757049389.00

Particulars Amount (In Rs. crores)

Amount Outstanding in Books of DHBVN (Liability)

Note No. Code No. Amount

2043.22

Loan from UHBVN 5 53.553 &53.554 1580.19 Payable to UHBVN

other than power purchase

10 46.995,28.877,28.103

& 43.4

463.03

TOTAL

2043.22

Amount Outstanding in Books of UHBVN (Assets)

Note No.

Code No.

Amount

2722.04

Amount Receivable from UHBVN

15 28.8 2722.04

Difference In Balances Shown in DHBVN and UHBVN books as on 31.03.2016

678.82 Difference As on 31.03.2015 379.14

35

Note No. 3 code no. 55.308 (DHBVN grants from Govt. of Haryana 1513.13 crore + 278.86 crore accounted for Jind Circle = 1791.99 crore) as shown in the balance sheet of DHBVN. Hence, there is difference of Rs 115.96 crore which results in understatement of Reserve & Surplus by Rs. 115.96 crore and overstatement of Long term borrowings by Rs. 115.96 crore.Further, we have also noted that there is short booking of interest expenses by Rs. 36.85 crore on Loan from UHBVN as per the direct confirmation received from the statutory auditor of UHBVN detail of which as follows:

Short booking of finance expenses results in understatement of losses by Rs. 36.85 crore and under-statement of Long term Borrowings by Rs. 36.85 crore.

III. TDS and Corresponding Income (Note no. ; 19 Code 27.420):

During the F.Y. 2015-16 Nigam has booked/claimed TDS of Rs. 2457717.00 whereas as per 26 AS of the Nigam it is 24544428.00 there is a difference of Rs. 3289.00.Further, Nigam booked/ claimed TDS of Rs.710797.00 included in above figure against which corresponding income has not credited into Profit & Loss account which is not in accordance of the Income Tax Act. Moreover, as per section 198 of the Income Tax Act which states " All sums deducted in accordance with the foregoing provisions of the Chapter XVII shall, for the purpose of computing the income of an assessee, be deemed to be income received".Hence, in our opinion Nigam has understated the loss by Rs. 710797.00 as well as for income not credited to Profit & Loss Account against TDS of Rs. 710797.00.

IV. Voilation of AS - 5 : Net Profit or Loss for The Period, Prior Period Items and Changes in Accounting Policies

As per Para 15 of the AS-5 "The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived".The Nigam has not classified Interest on UHBVN loan into current period and prior period. As per information provided to us Nigam has booked interest on Loan from UHBVN Rs. 391.57 crore for the period 03.07.2013 to 31.03.2015 and Rs. 221.15 crore for the F.Y. 2015-16. Nigam has not shown Rs. 391.57 crore as prior period expenses on the face of the Profit & Loss account as required by the para 15 of AS-5. Hence, it is a contravention of AS-5.Further, the same has also qualified by us in Last Year Audit report.However, now DHBVN has reclassified it and shown Rs. 391.57 crore in Finance Cost without mentioning it as Prior Period expenses.

V. R.E. Subsidy (Note-22) (Code-63.1):

During the F.Y. 2015-16 Nigam has booked R.E. Subsidy @40% of total subsidy of Rs. 6323.25 on ADHOC BASIS amounting to Rs. 2529.34 crore. The Nigam has not provided to us any order from HERC/GOH for distribution RE Subsidy, however, Nigam has provided unapproved and unsigned allocation chart of R.E. subsidy between DHBVN and UHBVN for the F.Y. 2015-16. In absence of relevant information/ explanation we are unable to comment upon the accuracy or correctness of booking of RE subsidy in the Books of Accounts during the F.Y. 2015-16. Hence, impact on the Profit/Loss could not ascertained.

Particulars Amount

(in crore)

Interest Expenses booked in the Books of Accounts of DHBVN on loan of UHBVN 612.72

Interest Income booked by UHBVN on loan provided to DHBVN (as per confirmation received vide email dated 17.11.2016) 649.57

Short Booking of Finance Expenses 36.85

Total Subsidy (Amount

In Crore)

DHBVN Share

(Amount In Crore)

UHBVN Share

(Amount In Crore)

6323.35 2529.34 3794.04

100.00%

40.00%

60.00%

Particulars

R. E. Subsidy from GOH

during F.Y. 201 5-16

Percentage (%)

36

VI. Cash and Cash Equivalents (Note-18):

Out of the various balances included in note no. 18 as on 31.03.2016, Inter Unit Account-Remittance to Head Office amounting to Rs. 229.29 Crore deposited by the various field offices. Similar remittance of Rs. 145.95 Crore as on 31.03.2015. Further, the Nigam has provided reconciliation IUT-33 Inter Unit Account-Remittance to Head Office amounting to Rs. 229.29 Crore as on 31.03.2016 where as Nigam could not provide us any satisfactory explanation regarding outstanding entries pertaining to past years and ultimate closing balance tallied with whom. It shows poor accounting and internal control system which make the Nigam vulnerable to fraud occurrences. In the absence of reconciliation and proper information/explanation we are unable to comment on the same.

VII. Sundry Debtors (Note-17):

The Company has shown gross trade receivables of Rs. 6358.57 crore (before considering provision and debtors reversed for surcharge not realized of Rs.3406.32 crore) out of which trade receivables of Rs. 5330.55 crore are outstanding for more than 2 years or more as at 31st March 2016 being 83.83% of gross trade receivables. Details are as under:

On analysis of above table, we have observed the below:

?We are not agree with the Nigam's disclosure of gross debtors amounting to Rs.6358.57 crore, since when Nigam has reversed the Income as well as debtors towards surcharge not realized amounting to Rs. 2922.83 crore then how it can form the part of the GROSS DEBTORS. In our opinion, Gross Debtors should be 3435.74 crore as on 31.03.2016 (as shown in above table).

?The Actual Debtors for more than 1 year as per above table is 95.65% (i.e, Rs.2416.94 crore net of provision for bad debts ) to the total actual debtors of Rs. 2526.75 crore. In our opinion, 95.655 is a quite big percentage of debtors which shows the very poor recovery as well as poor internal control system of the Nigam.

?As per Footnote 1 of the Note no: 17 of the Balance Sheet, Nigam has shown "Existing provision for bad & doubtful debts in respect of Sale of Power is sufficient to meet with the amount of bad debts on this account". We are not agreeing with the Nigam's disclosure that existing provision is sufficient for Bad and Doubtful Debts, as existing provision is only 16.70% of the total debtors outstanding for a period of more than 2 years and nigam has not made any provision towards doubtful debts during the FY 2013-14, FY 2014-15 and in FY 2015-16 as disclosed in the Footnote No.1 of the Note no. : 17 of the Balance Sheet.

?However, the company has not been able to provide us individual age wise breakup of trade receivables and therefore we are neither able to form an opinion on the sufficiency of provision for debts nor to comment on correctness of the segregation of receivables of more than and less than six month old.

As the trade receivables outstanding for more than six months are very high, their recovery seems doubtful.

Particulars Debtors 3 Yrs &

Above

Debtors Upto 2

Years

Debtors Upto 1

Years

Total

Gross Debtors 3437.67 1892.88 1028.02 6358.57 Less : Sale & Debtors Reversed for Surcharge Not Realized

1722.41 707.41 492.71 2922.83

Debtors Net of Surcharge 1715.26 1185.17 535.31 3435.74 Less : Provision (Made only on Debtors More than 1 year)

2900.43

483.49

Nil

483.49 Net Debtors 2416.94 535.31 2952.2 5 Less: Provision for Unbilled Revenue for the month of March, 2016

-

425.50

425.50

Actual Debtors (Net of Unbilled)

2416.94

109.81

2526.75

% of Provision for Bad Debts

16.70

-

16.70

% of Debtors to Total Actual Debtors

95.65 4.35 100

Rs. In Crores

37

?Nigam has made provision for Unbilled Revenue for the month of March, 2016 amounting to Rs. 425.50 crore as per Footnote No. 3 of Note No.17 of the Balance Sheet. However, we are unable to verify the accuracy and sufficiency of the Provision made against Unbilled Revenue during the month March, 2016 due to different billing cycles of the consumers as informed to us.

Further, the company has security deposits of Rs. 1050.26 Crore as on 31.03.2016. However, consumer wise detail thereof is not available as the same could not be produced for our verification.

The company has segregated trade receivables as secured and considered good only those which represent security deposits.

VIII. Diversion of Funds :

As per information and explanation provided to us we are of the opinion that long term funds of Rs. 7830.89 Crore and short term funds of Rs. 336.04 Crore has been utilized to meet out losses of the Nigam or to say that funds converted into losses.

Nigam does not have enough current assets to meet its working capital/short term funds.

IX. Inter Unit Reconciliation:

Above mentioned IUT Accounts are pending reconciliations since long time the impact thereof on any assets, liabilities, Statement of Profit & Loss could not be quantified in the absence of required information.

X. Balance Confirmation/Reconciliation:

Under the following heads DHBVN could not provide us balance confirmations except in few case under the head Long Term Borrowings (Note No. 5).

The impact of reconciliation/ confirmation, if any, on assets & liabilities could not be quantified in the absence of confirmation/ reconciliation and qualification as per point no. (i) (a) - Note on Books of Accounts & Accounting Software.

Reserves & Surplus for additions during the year (Note No. 3), Long Term Borrowings (Note No. 5), Other Long Term Liabilities (Note No. 6), Trade Payables (Note No. 9), Other Current Liabilities (Note No. 10), Long Term Loans & Advances (Note No. 13), Other Non-Current Assets (Note No. 14), Trade Receivables (Note No. 17), Cash & Cash Equivalents (Note No. 18) (Code-33), Short Term Loans & Advances (Note No. 19), Other Current Assets (Note No. 20).

XI. Terminal/Retirement Benefits (Adhoc Provision)- (Note-24) (Code-75.632 & 75.633):

The pensionary liability for terminal/retirement benefits has been booked on estimated basis of Rs. 392.00 Crore for the year F.Y. 2015-16 whereas the provision was made of Rs. 260.00 Crore during the F.Y. 2014-15. There is a sharp increase of Rs. 132.00 Crore i.e. 50.77% in the provision on Adhoc Basis and no satisfactory reply given in this regard. The estimated provisions may affect the statement of profit & loss account and balance sheet as the same is not based on actuarial valuation and is not in accordance with the provisions of AS-15 (Accounting for retirement benefits) issued by the institute of Chartered Accountants of India. The effect of non-compliance of AS-15 on the Statement of Profit & Loss and Balance Sheet of the company cannot be Computed (Reference note no.1.34 & 1.35 of significant accounting policies & notes to the financial statements).

XII. TDS not deducted on Interest on World Bank Loan:

Account

Code

Note

No.

Particulars Amount as

on

31.03.201 6 (Rs. In Lakhs)

Amount as

on

31.03.201 5

(Rs. In Lakhs)

34

10

Inter Units Accounts -

Funds transferred from

Head Office

551.61 409.74

31

10

IUT –

Material Accounts

0.26

0.40

35

10

IUT –

Head Office Transactions

0.00

47.07

36

20

IUT –

Personnel Transactions

223.92 225.07

37 20 IUT – Other Transactions/ Adjustments 1030.42 1112.67

38

On perusal of above table it is evident that DHBVN has not deducted TDS on interest payment to World Bank through Govt. of Haryana during the F.Y. 2015-16. We have, however, been explained that as the interest payment is being done by Haryana Government to the World Bank, there is no TDS liability on DHBVN.

In our opinion the proviso of section 195 of the IT Act, 1961 is very clear on this point which says that even payment by Govt. to Non-Resident attracts section 195 of the IT Act, 1961 and therefore in our opinion DHBVN is liable for TDS liability. And as per Section 40(a)(i) of Income Tax Act, the 100% of the expenditure on which TDS is not deducted is not allowable expenditure.

XIII. Deficiencies in Financial Statements for the F.Y. 2015-16

We have observed the below deficiencies in financial statements which are as under:

?Amount in "LAKHS" to be mentioned as per Schedule III of Companies Act, 2013 whereas NIGAM has mentioned amounts in "LACS".

?We have noted that on the face of the Balance Sheet and in few Notes To Accounts NIGAM has not disclosed amounts in decimals whereas the same has been disclosed in Statement of Profit and Loss.

Other Observations on Financial Statements:

(i) Analyses of Transmission and Distribution losses of DHBVN:

Date of Payment/Provision Amount in INR TDS Liability u/s 195

23.11.2015 46,69,409.00 TDS not deducted

30.03.2016 66,28,866.00 TDS not deducted

Total 1,12,98,275.00

39

(Rs. In Lakhs)

Sr. No. Account Code Note No. Particulars 2015-16 2014-15

1 46.994 10 Payable to HPGCL (Other than Power Purchase) 459.12 459.122 46.2 20 IUT Provisions 100.03 100.033 44.370 7 Unfunded balance of Employees Terminal Benefits 0.00* 13802.36

The percentage of transmission & distribution losses on sale of units of power by DHBVN is quite high. Further, there is no decline in the trend of transmission & distribution losses year after year, seems that no effective remedial steps taken by the NIGAM to bring down the "Transmission and Distribution Losses".

(ii) Account Code Showing Same Opening & Closing Balances:

*This figure has been transferred to code no. 57.131, 132, 28.784 payable to pension trust HVPNL in Note No. 10, hence there is no change in liability as compare to previous year.

On perusal of above table it would be seen that above account codes show same balances at the end of the year for a long time. DHBVN has not given attention/focus on above balances to clear them.

The above balances have been picked up from notes to balance sheet & profit & loss account. However, we are unable to comment on other individual balances/items which are grouped in notes and not easily available.

(iii) Excess Vat Deposited Not Carry Forward/ Claimed As Refund :

Quarter VAT Liability Vat Deposited Excess Deposited

(As Per Return)

1 4528893.04 4542449.00 13555.96

2 2208398.28 2254299.00 45900.72

3 2006632.43 2032074.00 25441.57

4 3047600.94 3059708.00 12107.06

Total 97005.31

It has been noted that in every quarter the Nigam has deposited the excess amount of Vat (as shown in above table) and the same has not been carried forward in subsequent period of return filed by the Nigam and not claimed as refund.

(iv) Cost Per Unit of Power Sold:

Under sub para (a) of para 1.47 - Power Purchase, the purchase cost including transmission charges has been stated at Rs. 4.57 per unit for the F.Y. 2015-16. However, the above purchase cost is only the bare cost paid to the companies supplying power to the Nigam and does not include other overhead cost related thereto. If overhead cost is also included while working out the purchase cost the cost of power purchase will work out to Rs. 8.33 per unit (As per Annexure-A Attached).

As per generally accepted accounting principles the cost of any salable unit is to include direct as well as indirect cost and to that extent the accounting note given above and the practice being followed by Nigam needs review. Similarly, other notes forming part of accounts may also be reviewed once again to make them in accordance with practice/generally accepted accounting principles.

Particulars 2015-16

(Units in MU) (Units in MU) (Units in MU)

Gross Units Purchased A 28499.73 28618.60 26405.27

Less: Transmission Losses B 1136.76 1121.88 1038.80

Less: Inter State Sale of Power C 2501.25 3008.48 3310.00

Net Units Available for Sale D=(A-B-C) 24861.72 24488.24 22056.47

% of Loss on Purchase of Power E=(B/A) 3.99% 3.92% 3.93%

Units Sold F 18777.19 18496.05 16838.30

Transmission & Distribution Losses G=(D-F) 6084.53 5992.20 5218.17

% of Loss on T&D H=(G/D) 24.47% 24.47% 23.66%

2014-15 2013-14

PART-B

40

(v) Analysis of Net Working Capital, Current Ratio & Debt Equity Ratio:

Table showing detail of Net Working Capital & Current Ratio: (Rs. In Crore)

Particulars F.Y. 2015-16 F.Y. 2014-15

Current Assets 3946.86 3163.96Current Liabilities 4345.65 3926.46

Net Working Capital (398.79) (762.53)

Current Ratio (CA/CL) 0.91 0.81

From above figures, it may noted that the Nigam is having negative working capital and current ratio is quite low

. Table showing detail of Debt-Equity Ratio:

(Rs. In Crore)

Particulars F.Y. 2015-16 F.Y. 2014-15

Total Debts 18588.83 18892.22

Total Shareholder's Fund (8,762.47) (10,174.40)

Net Own Funds (27,351.30) (29,066.63)

Debt Equity Ratio (Debts/Equity) (2.12) (1.86)

The above figures show that Nigam is having negative Own Funds and negative debt equity ratio.

36

DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD.

ANALYSIS OF COST & SALES ANNEXURE-IPARTICULARS NOTE NO. 2014 - 15

AMOUNT IN

LAKHS

UNITS IN

LAKHS

PER UNIT

COST IN `

LAKHS IN LAKHS COST IN `

2013 -14

AMOUNT IN UNITS PER UNIT

Purchase cost including

charges and units after

Transmission Losses

Add: Other Attributable Expenses

Employee Benefit Expenses 23 89,070.89 68,714.75

Financial Cost 24 95,050.19 99,168.86

Depreciation 25 18,038.35 14,987.66

Other Expenses 26 13,797.66 14,244.70

Cost of Power Sold (A) 1,451,741.51 1,310,250.84

Gross Receipt/Sale of Power & 20 1,117,003.11 215,045.30 984,987.70 201,483.24

other operating revenue

Less: Inter state sale of power 20 111,132.82 30,084.80 3.69 99,601.69 33,100.00 3.01

& banking

Net Domestic Sale/Receipt (B) 1,005,870.29 184,960.50 5.44 885,386.01 168,383.24 5.26

Add: R.E. Subsidy 21 209,803.97 146,033.05

Net Domestic Sale/Receipt (C) 1,215,674.26 184,960.50 6.57 1,031,419.06 168,383.24 6.13

after Subsidy

Cost of Power Sold Per Unit of (A/C) 7.85 7.78

Units Sold

Gross per unit Sales Realization 6.57 6.13

Domestic T&D Lossses in Units 59,922.00 24.47% 52,181.45 23.66%

If DHBVN reduced its losses 12,243.97 11,027.36

by 5%

Extra revenue would be 66,586.37 57,983.60

(12243.97*5.44)

22 1,235,784.42 274,967.26 4.49 1,113,134.87 253,664.69 4.39

The Annexure referred to in our Independent Auditors' Report to the members of the Nigam on the standalone financial statements for the year ended 31 March 2016, we report that:

(i) (a) The Nigam has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. However, the location and the extent of the area in respect of land needs to be updated in the fixed assets registers and have to be reconciled with the revenue records as to the extent of holding and location of land.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Nigam and the nature of its assets. As informed to us, no material discrepancies were noticed by the management on such verification.

(c) Since, the Nigam could not provide us documentary evidence regarding title deeds of immovable properties which are held in the name of the Nigam, hence we are unable to comment on the same.

(ii) (a) The Nigam has a regular programme of physical verification of its inventory conducted at reasonable intervals as informed to us. However, in our opinion DHBVN does not have inventory of traded or manufactured goods (being a power distribution Nigam) as described in AS-2, but having inventory of stores & spare parts of capital goods.

(b) The Nigam is maintaining quantitative records of inventory in the form of Bin Cards, the procedure of physical verification of inventory followed by management is reasonable and adequate in relation to size of the Nigam and the nature of its business. As informed to us, no material discrepancies were noticed by management on such physical verification.

(iii) As per available information the Nigam has not granted loans, secured or unsecured. However, there is interest free outstanding advance due from HVPNL as on 31.03.2016, as per detail given below:

Sr. No. Name of Parties Amount as on 31.03.20161. HVPNL (Note-19, Code 41.156) 95,15,66,204.002 HVPNL (Note-14, Code 28.879 & 46.993) 9,76,73,809.00

(iv) As per information and explanation given to us, the Nigam has not granted any loans or made any investment or given any guarantee and security covered under section 185 and 186 of the companies Act, 2013.

(v) According to the information and explanations given to us, the Nigam has not accepted any deposits from public during the year. Accordingly, paragraph 3(v) of the Order is not applicable to the Nigam.

(vi) The maintenance of cost records have been prescribed under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of Electricity Supply Companies. We have been informed that the preparation of cost records for the financial year 2015-16 are under process. Hence, we are unable to form any opinion about maintenance of cost records.

(vii) (a) According to the records and information from the Nigam, following undisputed contributions/statutory dues are payable as on 31.03.2016 as per detail given including old outstanding balances:

As per information and explanation provided to us DHBVN has following disputed liabilities as on 31.03.2015.

ANNEXURE 'II' TO THE AUDITOR'S REPORT

41

Nature of Dues Rs. (In Lakhs )

Pension Trust (HVPNL) (Note-10, Code-57.131) 33540.39

Pension Trust (DHBVN) (Note -10, Code-57.141)

4204.42

Municipal Taxes (Note -10, Code-46.501)

12355.75

Electricity Duty Payable to Govt. (Note -10, Code-46.3)

9259.55

GH of Note-10

Statutory Dues Payable as on 31.03.2015

Transactions during 2015

-16

Payable as on 31.03.2016

Challan Status

46.936

Service Tax Liabilities

56.43 Credit

23.99

Credit

80.42 Credit

Challan of Rs. 69.20 Provided

In the following case DHBVN has not shown its contingent liability in notes to accounts, detail of which is as under:

It is worth mentioning to here that this query was already qualified in our previous year report for the year ended on 31.03.2015 however, it has been again intimated to DHBVN vide our email dated 24.10.2016. However, Nigam has shown in its Contingent Liabilities under para 1.21 of Notes to Accounts under Civil Suits which is not correct.(viii) Based on our audit procedures and as per the information and explanations given by the management, the Nigam during

the year has not delayed repayment of dues to banks and financial institutions towards working capital facilities/terms loans. The Nigam has no outstanding dues from any debenture holders.

(ix) The Nigam has not raised any money by way of Initial Public Offer, however, Share application received from Govt. of Haryana during the F.Y. 2015-16 by way of Right Issue as informed to us (including under UDAI scheme) amounting to Rs. 556.03 crore and share issued for Rs. 33.24 crore during the F.Y. 2015-16. As per information and explanation given to us we are of the opinion that long term funds of Rs. 7830.89 crore and short term funds of Rs. 336.04 crore has been utilized to meet out the losses of the Nigam or to say that the funds converted into losses.

(x) According to the information and explanations given to us, no material fraud on or by the Nigam has been noticed or reported during the course of our audit except reported in Note No. 1.37 to 1.43 of significant accounting policies & notes to the financial statements.

(xi) As per notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Companies Act, 2013 is not applicable to the Nigam. Accordingly, para 3(xi) of the Order is not applicable.

(xii) According to the information and explanation given to us, the Nigam is not a Nidhi Nigam. Accordingly, para 3(xii) of the Order is not applicable.

(xiii) According to the information and explanation given to us and based on our examination of the records of the Nigam, transactions with the related parties are in compliance with section 177 and section 188 of the Companies Act,2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Nigam, the Nigam has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year u/s 42 of the Companies Act, 2013.

(xv) According to the information and explanations given to us by the management and based on our examination of the records of the Nigam, the Nigam has not entered into non-cash transactions with the directors or persons connected with Nigam. Accordingly, para 3(xv) of the order is not applicable.

(xvi) The Nigam is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For O. Aggarwal & Co.Chartered Accountants FRN: 005755NSd/-

42

Sr.

No.

Nature of the

Statute

Nature of the Dispute Amount

(In Crores)

Forum where dispute is

Pending

1

Income Tax Act,

1961

FBT on pension fund

contribution

8.60

(PY-8.60) Delhi High Court

2 Income Tax Act,

1961

TDS on transmission

charges

(F.Y. 2008 -09)

55.99

(PY-55.99)

Punjab & Haryana High Court

vide order dated 08.05.14

remand back the case to A.O.

3 Income Tax Act,

1961 Non deduction of TDS on

wheeling & transmission

charges(AY 2007 -08 &

08-09)

39.41 {Total Expenses

Disallowed is Rs.

394.08, contingent

liability (Non

Deduction of TDS)

@10% on 394.08

i.e 39.41}

Punjab & Haryana High

Court. On 30.03.2015

adjourned the case sine -die till

the final decision in ITA 652

of 2010.

A.Y.

Particulars

Demand

Deposited

Remarks2005-06 Income tax penalty

raised on 11.02.201531,71,09,410.00 7,83,21,730.00

on 26.03.2015Appeal filed before CIT(A) Hisar on 04.03.15

CA. ASHOK KUMARPartnerM.No.: 093725

Place: DelhiDate : 22.11.2016

43

ANNEXURE 'III'

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the

Act”)

We have audited the internal financial controls over financial reporting of DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED ('the Company') as of 31-Mar-2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of Companies Act, 2013 to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

"A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements."

ANNEXURE 'III' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL

STATEMENTS OF DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED FOR THE YEAR ENDED ON 31ST

MARCH, 2016

44

Inherent Limitations of Internal Financial Controls Over Financial Reporting

"Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate."

Opinion

Keeping in view of our observations in Annexure “I” to our Independent Auditor's Report, we are of the opinion that the Company has poor internal financial controls over financial reporting in material respects, which were not operating effectively as at 31st March, 2016 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For O.AGGARWAL & CO.

Chartered Accountants

Firm Regn No.:-05755N

Sd/-

(C.A ASHOK KUMAR)

PARTNER

M.NO:-093725

Place: Delhi

Dated: 22.11.2016

Replies of Management

REPLIES OF THE MANAGEMENT TO THE COMMENTS OF STATUTORY AUDITORS ON THE ANNUAL ACCOUNTS OF DHBVNL FOR

THE FINANCIAL YEAR 2015-16


REPLIES OF MANAGEMENT

1. Report on the Standalone financial

statements

We have audited the accompanying standalone financial statements of Dakshin Haryana Bijli Vitran Nigam Ltd ("the Company"), which comprise the Balance Sheet as at March 31, 2016 the Statement of Profit and Loss and Cash Flow Statement, and a summary of significant accounting policies and other explanatory information for the year then ended.

2. Management's Responsibility for the

Standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and des ign , imp lementa t ion and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based

No Comments being statement of facts.



46

on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion on the standalone financial statements.

4. Basis for Adverse Opinion

We draw attention to the matters described in Annexure II, the effects/possible effects of which, individually or in aggregate, are material and/or pervasive to the financial



47


statements and matters where we are unable to obtain appropriate audit evidence. The effects of the matters described in Annexure II, which could be reasonably determined/ quantified, on the basis of accompanying financial statement are tabulated as under:

On analysis of above table and keeping in

mind the concept of "MATERIALITY" as per

AS -1 & SA 320 issued by ICAI , the impact of

above are further analysed according to

different parameters as under:

1. Delayed Payment Charges from Consumers:

As per the comments (reproduced below) of the then Statutory Auditors M/s Sunil Kumar Gupta Co, Chartered Accountants, Rohtak on the accounts for the FY 2002-03 and the decision of Audit Committee of DHBVN (reproduced below) DHBVN has changed the accounting policy on surcharge not realized

Further, as per the proviso of section 129 (1) of the Companies Act 2013, financial statement shall be prepared in accordance with the accounting standards. The Nigam's accounting policy on surcharge is in accordance with the accounting standard 1 and accounting standard 9 issued by ICAI which are reproduced as under:

Extract of the AS-1 issued by Institute of Chartered

Accountants of India

Prudence refers to the accounting convention according to which profits are not anticipated but recognized only when realized. Provision is made for all known liabilities and losses even though the amount cannot be determined with certainty and represents only a best estimate in the light of available information.

Extract of the AS-9 issued by Institute of Chartered

Accountants of India

Where, at the time of sale or the rendering of the service, the ultimate collection of revenue cannot be assessed with reasonable certainty, revenue recognition should be postponed, till the time when it is reasonably certain that the ultimate collection will be made. When such uncertainty arises after the making of the sale or rendering of the service, it is more appropriate to make a provision than to adjust the revenue recorded originally.

The Hon'ble High Court while deciding the appeals in DHBVN favour had discussed the system and applicable accounting standards and procedures thread bare with inherent meanings and interpretations of accruels and after that upheld the accounting system of DHBVN to be in accordance with Mercantile system of accounting and in sync with the accounting standards of ICAI applicable in India and it is not the case that the Hon'ble Court has permitted Nigam to follow Hybrid system of accounting.

Profit & Loss A/c (Items) (Rs. In Crore)

Sr. No.

Reference

P & L Note

No.

Head of Account Overstated

Loss

Understated

Loss

1.


A I-Sr. No. ( b)

(i)

Note –

22,

Code –

62.2401-

2481

Delayed Payment Charges

from Consumers:Non booking of income on accrual basis u/s 128 (1) of Companies Act, 2013

492.71 -

2 Annexure I, Part – A I-Sr. No. (b)(ii)

Note – 25,Code –78.601

Finance Cost:

Short making of Interest Provision on consumer security deposit.

- 75.70

3 Annexure I, Part – A II

Note-25,Code-78.553

Finance Cost:

Interest on Loan from UHBVNL has been understated

- 36.85

4 Annexure I, Part – A III

Note – 22,Code – 62.8,62.9, 62.3

Misc. Receipt:

Short booking of Misc. Receipt

0.07 -

Total 492.78 112.55Net Result is OverStatement of Losses(Rs. In Crore)

380.23

48

2. Short making of Interest Provision on consumer

security deposit.

BOD of DHBVN in its meeting held on 28/09/2015 has changed the policy on accounting of interest on consumer security deposit on actual basis being it is considered that the change would result in a more appropriate presentation of the financial statements of the enterprise. This is in accordance with the Para 29 of the AS-5 which prescribed that a change in accounting policy should be made for a more appropriate presentation of the financial statement of the company. Necessary disclosure in this regard has been made at para no. 1.43 of Significant Accounting Policies & Notes to the financial statement for the FY 2014-15 and necessary disclosure has been made at para no. 1.44 of Significant Accounting Policies & Notes on Accounts to the financial statement.

3. Interest on Loan from UHBNL has been understated.

The GoH has issued revised Notification with regards to the transfer of assets and liabilities of the Jind Circle in September, 2016 (FY 2016-17) which have been taken into account by DHBVN in the current year 2016-17 as per ratio of 2014-15 and the differences to be automatically addressed in FY 2016-17.

4. S hort booking of Misc receipt.

This is due to mis-classification and shall be taken care in future.

Already explained above.


Rs. 115.96 crore (Rs. 773.09 x 15%) grants has been taken in the accounts by DHBVN in current year 2016-17 being notification of GOH has been issued on dated 05/09/2016 and the difference to be automatically addressed in FY 2016-17.




Balance Sheet (Items) (Rs. In Crore)

Sr. No.

Reference B/s Note

No.

Head of Account Overstated Understated

1. Annexure I,Part – A,Sr. No. (b) (i)

Note – 17Code –23.1701-81 & 23.5301 -81

Trade Receivables:Understatement of Trade Receivable Balance for Surcharge.

- 492.71

2. Annexure I,Part – A I,Sr. No. (b) (ii)

Note – 10Code –46.238

Other Current LiabilitiesUnderstatement of Interest Payable on Consumer Security

- 75.70

3 Annexure I,Part – A II,

Note – 3 Code –55.308

Reserves & SurplusUnderstatement of Grant form Govt of Haryana Under UDAY

- 115.96

4. Annexure I,Part – A II

Note – 5 Code –53.553 & 53.554

Long Term BorrowingsOverstatement of Loan from UHBVN

115.96 -

5 Annexure I, Part – A II

Note – 5Code –53.553 & 53.554

Long Term BorrowingsUnderstatement of loan from UHBVN

- 36.85

49


Accordingly, the loss for the year is overstated by Rs. 380.23 Crore and Accumulated Loss as at March 31, 2016 by Rs. 380.23 crore. The effects/possible effects of the others qualifications described in Annexure I to the Report on financial statements are not ascertainable.

5. Adverse Opinion

In Our opinion, because of the significance of the matters discussed in Annexure I referred in our Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March ,2016 and its profit/loss and its cash flows for the year ended on that date :

(a) In the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2016.

(b) In the case of the Statement of the Profit and Loss, of the loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory

Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 'II' a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As the company is governed by the electricity Act, 2003, the Provisions of the said Act have prevailed wherever they have been inconsistent with the provisions of the Companies Act, 2013.

3. As required by Section 143 (3) of the Act, we report that:

a. We have sought and obtained, except for the possible effects of the matters described in the basis for Adverse Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, in our opinion proper






50

books of account as required by law have been kept by the Company so far as it appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us]

c. The Balance sheet, Statement of profit and loss and Cash flow statement dealt with by this report are in agreement with the books of account [ and with the returns received from the branches not visited by us];

d. Except for the effects of matter described in the basis for adverse opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules , 2013.

e. The matter described in the basis for Adverse Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. As per notification No. GSR 463 (E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Companies Act, 2013 is not applicable to the company.

g. With respect to the adequacy of the internal controls over the financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in Annexure 'III'.

h. The adverse remarks relating to the maintenance of accounts and other matters connected therewith are as stated in the basis for Adverse Opinion paragraph above.

With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 1 para 1.21 and para (vii) (b) of annexure-I to the financial statements;

(ii) Except for the possible effects of the matters described in the basis for adverse opinion paragraph above,










51


the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term Contracts including derivative contracts.

(iii) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is required to be transferred to the Investor Education and Protection Fund by the Company. However, no such transfer took place so far.

4. As required by section 143 (5) of the Act, we give in Annexure 'IV', a statement on the matters specified by the Comptroller and Auditor General of India for the Company.


52

PART-A

I. Books of Accounts & Accounting

Software:

(a) The Nigam has 126 no. of Sub–divisions, 52 no. of divisions and 9 no. of circles with Head Office at Hisar. The system of accounting followed by the Nigam is quite peculiar. To sum up, vouchers for all receipts / income, payments / expenditure are prepared in duplicate on day today at all divisions / sub – divisions indicating suitable a/c code only for debit & credit entries. Subsequently, punching / feeding of these vouchers is also done on daily basis by all sub divisions / divisions on excel sheet thereby respective debit or credit amount of relevant a/c code goes on updated indicating its progressive figure on daily basis. Thus, at the end of the month, a trial balance gets automatically prepared at each sub-division / division a/c code wise. All sub-divisions forward this trial balance to its controlling division along with original set of vouchers for the month as well as supporting documents to vouchers wherever available. The respective division punches / updates the debits / credits a/c code with figures of sub-divisions with their own debits / credits a/c code wise. Thus, a trial balance of a division incorporating the figures or its subordinate sub-division for a particular month is got ready on excel sheet. The respective division forwards this trial balance to Head Office along with original set of vouchers of sub-division and its own for the relevant month. This practice is followed by all sub-divisions & divisions each month for the year.

Thus, Head Office gets 12 no. of Trial balances for a year from each division. The Head Office also prepares its own trial balance a/c code wise each month in the manner explained above. At the end of the year, Head Office merges all trial balances received from Divisions with its own trial balance in Fox Pro and gets one consolidated Trial Balance a/c code wise for the whole organization based on which Profit & Loss a/c & Balance Sheet is prepared at the year end.

The commercial accounting system as followed by us since FY 1986-87 was prepared by M/s A.F. FERGUSON & CO., New Delhi (amongst the Big5 during that time) & implemented in all power utilities of India on the recommendation of Central Electricity Authorities of India to have uniform procedure in power sector.

The accounting system in power utilities is based upon "Branch Accounting". Under this system, the different DDOs are considered as Independent Branch and prepare their independent trial balance which are clubbed in the Head Office on monthly basis. Thus the

1. Vouchers are prepared at different locations stating respective head of accounts.

2. Posting made in the respective head of account on monthly basis.

3. M/s Ernst & Young, our consultant appointed by the World Bank, has also recommended the same system in FY 14-15.

As explained above, the proper books of accounts have been maintained in the branch offices as well as Head Office according to double entry system on accrual basis as per the accounting principles and policies adopted by the DHBVN.


ANNEXURE – I

53


From the foregoing it will be evident that this system of accounts is devoid of the following :-

1. Vouchers prepared at different locations do not show as to which Head of A/c is being debited or credited.

2. No date wise posting of debit / credit entry is made under any Head of A/c.

3. In view of sl. (1) & (2) above, date wise debit / credit entries are not available in any Head of Account.

4. As a result of sl. No. (3) above, verification of correctness of amount appearing under any head of A/c is not possible and so also the closing balance thereof at the end of the year.

Keeping in view of above, we have been

unable to scrutinize the transactions of

the year & therefore not in a position to

verify the correctness of the figures under

any head of account mentioned in the

Profit & Loss A/c and Balance Sheet for the

year ended 31.03.2016.

Moreover, there is non-compliance of

SECTION 128(1) OF THE COMPANIES ACT,

2013 regarding keeping of Books of

Accounts etc. of the company which states

that “Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office

or offices, if any, and explain the

transactions effected both at the

registered office and its branches and

such books shall be kept on accrual basis

and according to the double entry system

of accounting”. Hence, in our opinion

DHBVN has contravened the provisions of

section 128(1) of Companies Act, 2013 as

well.

b) Rectification of Balance of HVPNL in

F.Y. 2015-16

It came to our Knowledge that in F.Y.

2014-15, the Nigam had shown the Debit

Balance of HVPNL by Rs. 484.81 crore as

Advance to HVPNL (note- 19 code

41.156), this has been reported by us in

CARO para (iii)(a) and management

It was a compensatory error committed during FY 2014-15 and now rectified (during FY 2015-16).

No doubt it is a significant amount and has overstated

54

replied "No comment as a matter of fact",

however, during the year under audit

Nigam has shown Advance to HVPNL

after regrouping of figure for the F.Y.

2014-15 as Rs. 142.53 crore instead of Rs.

484.81 crore.

It is worth mentioning here that due to

above stated deficiencies in book

keeping method, the Nigam has

Committed Error in its Balance Sheet as

on 31.03.2015 by Rs. 342.28 i.e.

overstated the Assets & Liability by Rs.

342.28 crore.

On raising our query, Nigam replied on

27.10.2016 through email that " It is a

compensatory error committed during

the F.Y. 2014-15 rectified during the F.Y.

2015-16". Again we asked to provide

more detail with documentary proof, the

Nigam has replied on 28.10.2016 as given

below:

On perusal of rectification entry passed in

F.Y. 2015-16 as indicated above, it is

apparent that there has been error in

disclosure if true value of "Advance To

Supplier" as on 31.03.2015 and by

rectifying this error in the current year,

the value of advance to supplier has been

reduced by Rs. 342.28 crore. This being a

material amount of error in the F.Y. 2014-

15 which is materially reducing the

balance of "Advance to Suppliers" in the

F.Y. 2015-16, it is felt that the Financial

Statements are not free from material

error and inherent risks as per SA-315

issued by ICAI.

i. Income from Surcharge for delayed

payment on receipt basis

As per para no. 1.7(e) "Revenue


Actual Entry Done in

FY 2014-2015

Entry to be Done in FY

2014 -15

Balance as on31.03.2014 Rs.313.67

Add: duringThe year Rs.171.14

Total Rs.484.81

Balance as on31.03.2014Rs.313.67

Add: duringThe

year

Rs.(171.14)

Rectification entry done

in FY 2015-2016

Balance as on31.03.2015 Rs.484.81

Less: rectificationEntry passed (Rs.342.28)

Total Rs.142.53 Total Rs. 142.53

the Assets & Liability by Rs. 342.28 crore but neither has affected the profitability of the Nigam in the previous year and current year nor resulted into any fraud/embezzlement.

55


Recognition" Significant Accounting Policies , As per Nigam's decision, the income from surcharge is to be accounted for on the basis of actual realization.

As para no 1.36 of Notes to Accounts , As per Nigam's decision, the income from surcharge is to be accounted for on the basis of actual realization. On the basis of actual realization a sum of Rs. 79.08 crore has been accounted for as Income from surcharge against total assessment of Rs. 571.79 crore. A sum of Rs. 492.71 crore has not been recovered from the consumers and the same has been written back from the delayed payment surcharge income and has been reduced from the gross debtors.

In our opinion, with the above accounting

treatment, Nigam has contravened the

provisions of section 128(1) of Companies

Act 2013. This has resulted in overstatement

of loss by Rs. 492.71 crore and

understatement of Debtors by the same

amount as on 31.03.2016.The Nigam has

followed above accounting treatment in

earlier years as well.

ii. Interest On Consumer Securities On Cash

Basis

As Per Para 1.44 of Notes to Accounts, Nigam has booked interest expense on Consumer Security amounting to Rs. 15.41 crore on cash basis during the F.Y. 2015-16 .

Nigam has not disclosed in its accounting policies on revenue recognition under para 1.7 regarding cash basis of accounting for interest on consumer securities.

In our opinion, the above practice of NIGAM is contravention of section 128(1) of Companies Act, 2013 which mandatorily require to keep the books of account on accrual basis and double entry system of accounting.

In our opinion, Nigam has understated the loss as well as the current liabilities as given below:

? Due to non availability of information, interest on Addition of Consumer Securities is calculated on average basis.

As already explained above

As already explained above

Particulars Security Amount

( `.)

Interest

Opening Amount of Securities 9745552985.00 877099769.00Securities Addition During the year

757081136.00 34068651.00 *

Total 10502634121.00 911168420.00

Less: Interest Booked during the year 154119031.00Interest Short Booked (i.e, Loss Understated) 757049389.00

( `.)

56

II. Difference Between DHBVN balance and

UHBVN balances:

As per the information provided by DHBVN and direct confirmation obtained from statutory auditors of UHBVN vide email dated 17.11.2016 ( in compliance to SA-305 External Confirmations) we have observed the following differences as on 31.03.2016 between balance of DHBVN and UHBVN as detail given below:

We have noted that UHBVN has transferred the grant of Rs. 394.82 crore on account of Jind Circle vide foot note no. 3.1 of Note NO. 3 of UHBVN Balance Sheet as on 31.03.2016, however DHBVN has accounted for grant of Rs. 278.86 crore vide Note No. 3 code no. 55.308 (DHBVN grants from Govt. of Haryana 1513.13 crore + 278.86 crore accounted for Jind Circle = 1791.99 crore) as shown in the balance sheet of DHBVN.

Hence, there is difference of Rs 115.96 crore which results in understatement of Reserve & Surplus by Rs. 115.96 crore and overstatement of Long term borrowings by Rs. 115.96 crore.

Further, we have also noted that there is short booking of interest expenses by Rs. 36.85 crore on Loan from UHBVN as per the direct confirmation received from the statutory auditor of UHBVN detail of which as follows:

The GoH has issued revised Notification with regards to the transfer of assets and liabilities of the Jind Circle in September, 2016 (FY 2016-17) which have been taken into account by DHBVN in the current year 2016-17 as per ratio of 2014-15 and the differences to be automatically addressed in FY 2016-17.


Particulars Amount(In Rs.

crores)Amount Outstanding in Books of DHBVN (Liability)

Note No.

Code No. Amount

2043.22

Loan from UHBVN

5 53.553 &53.554 1580.19Payable to UHBVN other than power purchase

10 46.995,28.877,28.103 & 43.4

463.03

TOTAL 2043.22

Amount Outstanding in Books of UHBVN (Assets)Note No.

Code No. Amount

2722.04Amount Receivable from UHBVN

15 28.8 2722.04

Difference In Balances Shown in DHBVN and UHBVN books as on 31.03.2016

678.82

Difference As on 31.03.2015 379.14

57


III. TDS and Corresponding Income (Note no.

; 19 Code 27.420):

During the F.Y. 2015-16 Nigam has booked/claimed TDS of Rs. 2457717.00 whereas as per 26 AS of the Nigam it is 24544428.00 there is a difference of Rs. 3289.00.

Further, Nigam booked/ claimed TDS of Rs. 710797.00 included in above figure against which corresponding income has not credited into Profit & Loss account which is not in accordance of the Income Tax Act. Moreover, as per section 198 of the Income Tax Act which states “ All sums deducted in accordance with the foregoing provisions of the Chapter XVII shall, for the purpose of computing the income of an assessee, be deemed to be

income received”.

Hence, in our opinion Nigam has understated the loss by Rs. 710797.00 as well as for income not credited to Profit & Loss Account against TDS of Rs. 710797.00.

Regarding Rs. 3289/-

The matter is being perused with the deductor for rectifying their quarterly statements.

Rs. 689022/-TDS on deposits from consumer for

electrification/service connections

During the year the company has received deposits from institutions/ contractors on account of installation/ shifting of electric lines. As per the terms of the company if any such work is to be executed by the company for any contractor, first of all an estimate of expense is prepared and the contractor is required to make initial deposit against the work. The amount so received is credited in the books under the head GH 47. As and when work is executed, the amount incurred on execution of work is debited to this head, the amount is squared off accordingly, credited to GH "Assets created from consumer contribution". Moreover depreciation on Assets created by consumer contribution is also not charged to P&L. So the amount received from contractor is no way income of the company.

Rs. 18486/- TDS on interest from fixed deposits-RGGVY

The company receives funds from RGGVY towards capital project. The amount is received as a loan and as per express terms and condition of the loan agreement, the interest on the amount remaining unutilized has to be deposited in specified instruments and any interest income arising thereon has to be returned to RGGVY. Accordingly no real income arises to the company on these temporary investments and therefore no such income has been booked by the company. Had the company would have booked it as an income, there would have to be booked the corresponding interest expense on the other side.

Further, the Nigam while filing its Income tax return for assessment year 2016-17 has made necessary adjustments in its computation of income.

Particulars Amount (in

crore)

Interest Expenses booked in the Books of Accounts of DHBVN on loan of UHBVN

612.72

Interest Income booked by UHBVN on loan provided to DHBVN (as per confirmation received vide email dated 17.11.2016)

649.57

Short Booking of Finance Expenses 36.85

Short booking of finance expenses results in understatement of losses by Rs. 36.85 crore and under-statement of Long term Borrowings by Rs.36.85 crore.

58

IV. Voilation of AS - 5 : Net Profit or Loss for

The Period, Prior Period Items and Changes

in Accounting Policies

As per Para 15 of the AS-5 "The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived".

The Nigam has not classified Interest on UHBVN loan into current period and prior period. As per information provided to us Nigam has booked interest on Loan from UHBVN Rs. 391.57 crore for the period 03.07.2013 to 31.03.2015 and Rs. 221.15 crore for the F.Y. 2015-16.

Nigam has not shown Rs. 391.57 crore as prior period expenses on the face of the Profit & Loss account as required by the para 15 of AS-5. Hence, it is a

contravention of AS-5.

Further, the same has also qualified by us in Last Year Audit report.

However, now DHBVN has reclassified it and shown Rs. 391.57 crore in Finance Cost without mentioning it as Prior Period expenses.

V. R.E. Subsidy (Note-22) (Code-63.1):

During the F.Y. 2015-16 Nigam has booked R.E. Subsidy @40% of total subsidy of Rs. 6323.25 on ADHOC BASIS amounting to Rs. 2529.34 crore. The Nigam has not provided to us any order from HERC/GOH for distribution RE Subsidy, however, Nigam has provided unapproved and unsigned allocation chart of R.E. subsidy between DHBVN and UHBVN for the F.Y. 2015-16.

In absence of relevant information/ explanation we are unable to comment upon the accuracy or correctness of booking of RE subsidy in the Books of Accounts during the F.Y. 2015-16. Hence, impact on the Profit/Loss could not ascertained.

As per para no 4.4 of AS-5, the definition of prior period is as under:

"Prior period items are income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods"

The Nigam has booked the interest on UHBVN loan after receiving the notification of Govt of Haryana (No.23/10/2016-4 Power) dated 16.02.2016 regarding the transfer of assets of Jind circle.

The Nigam has not made any error in prior year financial statement, as the rate of interest and the amount of loan became evident on 16.02.2016.

Thus the interest expenditure of Rs. 391.57 crore has been materialised in current FY 2015-16 and it is a expenditure of current year not prior years.

It is pertinent here that under the Electricity Act. of 20003 (U/s 62 & 65) the State Electricity Regulator HERC is competent in such matters. The HERC is passing a common order on the ARR/tariff filings of both the DISCOMs in Haryana and no separate allocation of the subsidy for the Utilities is made in the orders. However, the subsidy bookings are made by the utilities as per HERC methodology. It is also brought out that the totals of the subsidy recvd. From the Govt. and booked by both the Utilities UHBVN and DHBVN in its accounts for the year 2015-16 tally and there is no difference.


Particulars Total Subsidy

(Amount In

Crore)

DHBVN

Share

(Amount

In Crore)

UHBVN

Share

(Amount

In Crore)

R. E. Subsidy from GOH during F.Y. 201 5-16

6323.35 2529.34 3794.04

Percentage (%) 100.00% 40.00% 60.00%

59


Reconciliation is a continuous process and being done with all branches of DHBVN. Inter Unit Account-

Remittance to Head Office has now been reconciled up to Feb. 2016.

The reconciliation of IUT-33 has been made upto 31.03.2016 and has been provided to statutory auditor.


The debtors upto two years are Rs. 2920.88 as per detail as under:

VI. Cash and Cash Equivalents (Note-18):

Out of the various balances included in note no. 18 as on 31.03.2016, Inter Unit Account-Remittance to Head Office amounting to Rs. 229.29 Crore deposited by the various field offices. Similar remittance of Rs. 145.95 Crore as on 31.03.2015.

Further, the Nigam has provided reconciliation IUT-33 Inter Unit Account-Remittance to Head Office amounting to Rs. 229.29 Crore as on 31.03.2016 where as Nigam could not provide us any satisfactory explanation regarding outstanding entries pertaining to past years and ultimate closing balance tallied with whom.

It shows poor accounting and internal control system which make the Nigam vulnerable to fraud occurrences. In the absence of reconciliation and proper information/explanation we are unable to comment on the same.

VII. Sundry Debtors (Note-17):

The Company has shown gross trade receivables of Rs. 6358.57 crore (before considering provision and debtors reversed for surcharge not realized of Rs.3406.32 crore) out of which trade receivables of Rs. 5330.55 crore are outstanding for more than 2 years or more as at 31st March 2016 being 83.83% of gross trade receivables. Details are as under:

Rs. In Crores

Particulars Debtors 3

Yrs &

Above

Debtors

Upto 2

Years

Debtors

Upto 1

Years

Total

Gross Debtors 3437.67 1892.88 1028.02 6358.57Less : Sale & Debtors Reversed for Surcharge Not Realized

1722.41 707.41 492.71 2922.83

Debtors Net of Surcharge

1715.26

1185.17

535.31 3435.74

Less : Provision (Made only on Debtors More than 1 year)

2900.43

483.49

Nil 483.49

Net Debtors 2416.94

535.31 2952.25

Less: Provision for

Unbilled Revenue for

the month of March,

2016

- 425.50 425.50

Actual Debtors (Net

of Unbilled)

2416.94 109.81 2526.75

% of Provision for

Bad Debts

16.70 - 16.70

% of Debtors to Total

Actual Debtors

95.65 4.35 100

Particulars Amount (Rs. In crore)

Less than 6 months 627.626 months to 1 year

400.38One year to two year

1892.88

2-3 years 1593.713 years and above

1843.95

Total 6358.57

60

On analysis of above table, we have observed the below:

ØWe are not agree with the Nigam's disclosure of gross debtors amounting to Rs.6358.57 crore, since when Nigam has reversed the Income as well as debtors towards surcharge not realized amounting to Rs. 2922.83 crore then how it can form the part of the GROSS DEBTORS. In our opinion, Gross Debtors should be 3435.74 crore as on 31.03.2016 (as shown in above table).

ØThe Actual Debtors for more than 1 year as per above table is 95.65% (i.e, Rs.2416.94 crore net of provision for bad debts ) to the total actual debtors of Rs. 2526.75 crore. In our opinion, 95.655 is a quite big percentage of debtors which shows the very poor recovery as well as poor internal control system of the Nigam.

ØAs per Footnote 1 of the Note no: 17 of the Balance Sheet, Nigam has shown "Existing provision for bad & doubtful debts in respect of Sale of Power is sufficient to meet with the amount of bad debts on this account". We are not agreeing with the Nigam's disclosure that existing provision is sufficient for Bad and Doubtful Debts, as existing provision is only 16.70% of the total debtors outstanding for a period of more than 2 years and nigam has not made any provision towards doubtful debts during the FY 2013-14, FY 2014-15 and in FY 2015-16 as disclosed in the Footnote No.1 of the Note no. : 17 of the Balance Sheet.

ØHowever, the company has not been able to provide us individual age wise breakup of trade receivables and therefore we are neither able to form an opinion on the sufficiency of provision for debts nor to comment on correctness of the segregation of receivables of more than and less than six month old.

As the trade receivables outstanding for more than six months are very high, their recovery seems doubtful.

ØNigam has made provision for Unbilled Revenue for the month of March, 2016 amounting to Rs. 425.50 crore as per Footnote No. 3 of Note No.17 of the Balance Sheet. However, we are unable to verify the accuracy and sufficiency of the Provision made against Unbilled

ØIt is a fact that gross debtors without consideration of provision are Rs. 6358.57 crore and Rs.5330.55 crore as on 31.03.2016 & 31.03.2015 respectively. Figures of debtors can only be reduced with the approval of GOH, being the competent authority.

ØIt is not fact that the trade receivable outstanding as on 31.03.2016 includes all the outstanding as on 31.03.2015 being out of trade receivable outstanding as on 31.03.2015 some debtors have paid their dues during FY 2015-16 and some new dues are added during FY 2015-16. It is a continue process.

ØThe disclosure at foot note -1 of notes -17 of Balance sheet have been already states that the provision is sufficient to meet the amount of bad debts.

ØIndividual Age wise Break Up of Trade Receivable and Consumer wise detail of security deposits available with Op/Sub division/Sub Office Level.

ØAs per policy disclosed at 1.7(e) and 1.35 to Significant Accounting Policy"" income from surcharge is to be accounted for on the basis of Actual realization.


61


Revenue during the month March, 2016 due to different billing cycles of the consumers as informed to us.

Further, the company has security deposits of Rs. 1050.26 Crore as on 31.03.2016. However, consumer wise detail thereof is not available as the same could not be produced for our verification.

The company has segregated trade receivables as secured and considered good only those which represent security deposits.

VIII. Diversion of Funds :

As per information and explanation provided to us we are of the opinion that long term funds of Rs. 7830.89 Crore and short term funds of Rs. 336.04 Crore has been utilized to meet out losses of the Nigam or to say that funds converted into losses.

Nigam does not have enough current assets to meet its working capital/short term funds.

IX. Inter Unit Reconciliation:

Above mentioned IUT Accounts are

pending reconciliations since long time the

impact thereof on any assets, liabilities,

Statement of Profit & Loss could not be

quantified in the absence of required

information.

This is a fact that DHBVN is in continuous losses like majority of the Power DISCOMs in the Country. The losses were funded from short term bank loans which were converted into term loans at the tiume of restructuring/securitization/take over under the GoI/GoH supported FRP-2012 and UDAY-2015 launched for operation and financial turnaround of DISCOMs.

The MoU signed with GoI and GoH on 11/03/2016 for financial turnaround of DHBVN is available on records and may be referred to.

The financial position of DHBVN is well disclosed in the financial statements in sync.

The booking of IUT and its reconciliation between various offices is a continuous process as there are 52 accounting units in the company. Major IUT transaction are relating to stock & transfer of assets etc, which have took place normally in the month of March, & are reconciled in the subsequent year.

All out efforts are made to bring the balance under IUT to bare minimum.

Account

Code

Note

No.

Particulars Amount as on

31.03.2016

(Rs. In Lakhs)

Amount as

on

31.03.2015

(Rs. In Lakhs)

34 10 Inter Units Accounts -Funds transferred from Head Office

551.61 409.74

IUT – Material Accounts 0.26 0.4035 10 IUT – Head Office

Transactions 0.00 47.07

31 10

36 20 IUT –

Personnel

Transactions

223.92 225.07

37 20 IUT – Other Transactions/ Adjustments

1030.42 1112.67

62

X. Balance Confirmation/Reconciliation:

Under the following heads DHBVN could not provide us balance confirmations except in few case under the head Long Term Borrowings (Note No. 5).

The impact of reconciliation/ confirmation, if any, on assets & liabilities could not be quantified in the absence of confirmation/ reconciliation and qualification as per point no. (i) (a) - Note on Books of Accounts & Accounting Software.

Reserves & Surplus for additions during the year (Note No. 3), Long Term Borrowings (Note No. 5), Other Long Term Liabilities (Note No. 6), Trade Payables (Note No. 9), Other Current Liabilities (Note No. 10), Long Term Loans & Advances (Note No. 13), Other Non-Current Assets (Note No. 14), Trade Receivables (Note No. 17), Cash & Cash Equivalents (Note No. 18) (Code-33), Short Term Loans & Advances (Note No. 19), Other Current Assets (Note No. 20).

XI. Terminal/Retirement Benefits (Adhoc

Provision)- (Note-24) (Code-75.632 &

75.633):

The pensionary liability for terminal/ retirement benefits has been booked on estimated basis of Rs. 392.00 Crore for the year F.Y. 2015-16 whereas the provision was made of Rs. 260.00 Crore during the F.Y. 2014-15. There is a sharp increase of Rs. 132.00 Crore i.e. 50.77% in the provision on Adhoc Basis and no satisfactory reply given in this regard. The estimated provisions may affect the statement of profit & loss account and balance sheet as the same is not based on actuarial valuation and is not in accordance with the provisions of AS-15 (Accounting for retirement benefits) issued by the institute of Chartered Accountants of India. The effect of non-compliance of AS-15 on the Statement of Profit & Loss and Balance Sheet of the company cannot be Computed (Reference note no.1.34 & 1.35 of significant accounting policies & notes to the financial statements).

This is a general observation and even where the confirmations have been provided to the extent of the entries in the accounts have been ignored as per reply below:

However, as regards other current assets, sundry creditors, loans and advances, all the records and proper schedule of advances to suppliers and employees are maintained and monitored by the respective DDO's.

There may be minor differences in a very few loan accounts but the same are normal and duly calculated and stands taken up with the respective Bankers for setting their accounts as the calculations in the books of DHBVN found to be in order as per terms of the loan accounts. It is not always necessary to match the entry of the loan account of the client with that of the bank and there bound to be the differences and for that the reconciliation process is there.

In absence of the actuary report, the Nigam has provided a sum of Rs. 392 crore on best estimate basis on account of terminal benefits of the employees. After getting final Actuarial valuation from the firm, the difference if any, for the period FY 2015-16 shall be adjusted in the annual accounts of FY 2016-17 or thereafter.


63


XII. TDS not deducted on Interest on World

Bank Loan:

On perusal of above table it is evident that DHBVN has not deducted TDS on interest payment to World Bank through Govt. of Haryana during the F.Y. 2015-16. We have, however, been explained that as the interest payment is being done by Haryana Government to the World Bank, there is no TDS liability on DHBVN.

In our opinion the proviso of section 195 of the IT Act, 1961 is very clear on this point which says that even payment by Govt. to Non-Resident attracts section 195 of the IT Act, 1961 and therefore in our opinion DHBVN is liable for TDS liability. And as per Section 40(a)(i) of Income Tax Act, the 100% of the expenditure on which TDS is not deducted is not allowable expenditure.

XIII. Deficiencies in Financial Statements for the

F.Y. 2015-16

We have observed the below deficiencies in financial statements which are as under:

ØAmount in "LAKHS" to be mentioned as per Schedule III of Companies Act, 2013 whereas NIGAM has mentioned amounts in "LACS".

ØWe have noted that on the face of the Balance Sheet and in few Notes To Accounts NIGAM has not disclosed amounts in decimals whereas the same has been disclosed in Statement of Profit and Loss.

The interest payment on WB loans is made to the GOH. The Govt. is exempted from the TDS under section 196 of the Income Tax Act, 1961 of the Income Tax Act.

This is a typographical error and will be taken care in future.

Date of Payment/

Provision Amount in INR TDS Liability u/s 195

23.11.2015

46,69,409.00 TDS not deducted30.03.2016

66,28,866.00 TDS not deducted

Total 1,12,98,275 .00

64

PART - B

Other Observat ions on F inanc ia l

Statements:

(i) Analyses of Transmission and Distribution

losses of DHBVN:

The percentage of transmission & distribution losses on sale of units of power by DHBVN is quite high. Further, there is no decline in the trend of transmission & distribution losses year after year, seems that no effective remedial steps taken by the NIGAM to bring down the "Transmission and Distribution Losses".

(ii) Account Code Showing Same Opening &

Closing Balances:

*This figure has been transferred to code no. 57.131, 132, 28.784 payable to pension trust HVPNL in Note No. 10, hence there is no change in liability as compare to previous year.

On perusal of above table it would be seen that above account codes show same balances at the end of the year for a long time. DHBVN has not given attention/focus on above balances to clear them.

The above balances have been picked up from notes to balance sheet & profit & loss account. However, we are unable to c o m m e n t o n o t h e r i n d i v i d u a l balances/items which are grouped in notes and not easily available.

The transmission and distribution losses are same for the FY 2014-15 and FY 2015-16. All out efforts are being made to reduce the T&D Losses.

1. Financial year wise detail along with allied documents of receivable/payable has been sent to HPGCL for reconciliation but pending at the end of HPGCL as yet.

2. IUT provisions remain the same being the IUT are almost equals as compared to FY 2014-15.

3. After due consideration the unfunded liability on account of terminal benefits have been reclassified in the accounts as payable to HVPNL pension trust. There is no material change.


Particulars 201 5-16

(Units in MU)

2014 -15

(Units in MU)

2013 -14

(Units in MU)

Gross Units Purchased A 28499.73 28618.60 26405.27Less: Transmission Losses

B

1136.76 1121.88 1038.80Less: Inter State Sale of Power

C

2501.25 3008.48 3310.00Net Units Available for Sale

D=(A-B-C)

24861.72 24488.2 4 22056.47

% of Loss on Purchase of Power

E=(B/A)

3.99% 3.92% 3.93%

Units Sold F 18777.19 18496.05 16838.30Transmission & Distribution Losses

G=(D-F) 6084.53 5992.20 5218.17

% of Loss on T&D H=(G/D) 24.47% 24.47% 23.66%

(Rs. In Lakhs)

Sr. No.

Account Code

Note No.

Particulars 2015-16 2014-15

1

46.994

10

Payable to HPGCL (Other than Power Purchase)

459.12 459.12

2 46.2 20 IUT Provisions 100.03 100.033 44.370 7 Unfunded balance of

Employees Terminal Benefits0.00* 13802.36

65


(iii) Excess Vat Deposited Not Carry Forward/

Claimed As Refund :

It has been noted that in every quarter the Nigam has deposited the excess amount of Vat (as shown in above table) and the same has not been carried forward in subsequent period of return filed by the Nigam and not claimed as refund.

(iv) Cost Per Unit of Power Sold:

Under sub para (a) of para 1.47 - Power Purchase, the purchase cost including transmission charges has been stated at Rs. 4.57 per unit for the F.Y. 2015-16. However, the above purchase cost is only the bare cost paid to the companies supplying power to the Nigam and does not include other overhead cost related thereto. If overhead cost is also included while working out the purchase cost the cost of power purchase will work out to Rs. 8.33 per unit (As per Annexure-A Attached).

As per generally accepted accounting principles the cost of any salable unit is to include direct as well as indirect cost and to that extent the accounting note given above and the practice being followed by Nigam needs review. Similarly, other notes forming part of accounts may also be reviewed once again to make them in accordance with practice/generally accepted accounting principles.

(v) Analysis of Net Working Capital, Current

Ratio & Debt Equity Ratio:

Table showing detail of Net Working Capital & Current Ratio: (Rs. In Crore)

From above figures, it may noted that the Nigam is having negative working capital

In the return "Excess carry forward to next return" is shown. The issue is already in notice and taken care, while filing annual return of VAT.

Power purchase cost as works out in para 1.47 of Note 1 of "Significant Accounting Policies & Notes to the financial statement for the FY 2015-16" is for quantifying the difference between the HERC approved rate (Rs. 4.47/unit) & actual cost of power purchase only for the purpose of FSA only.


Quarter VAT Liability

(As Per Return)

Vat Deposited Excess

Deposited

1 4528893.04 4542449.00 13555.96

2 2208398.28 2254299.00 45900.72

3 2006632.43 2032074.00 25441.57

4 3047600.94 3059708 .00 12107.06

Total 97005.31

Particulars F.Y. 201 5-16 F.Y. 2014 -15

Current Assets

3946.86 3163.96

Current Liabilities

4345.65 3926.46

Net Working Capital (398.79) (762.53)

Current Ratio (CA/CL) 0.91 0.81

66

and current ratio is quite low.

The above figures show that Nigam is having negative Own Funds and negative debt equity ratio.



Table showing detail of Debt-Equity Ratio: (Rs. In Crore)

Particulars

F.Y. 201 5-16 F.Y. 201 4-15

Total Debts

18588.83 18892.22

Total Shareholder’s Fund (8,762.47) (10,174.40)

Net Own Funds

(27,351.30) (29,066.63)

Debt Equity Ratio (Debts/Equity) (2.12) (1.86)

67


ANNEXURE 'II' TO THE AUDITOR'S REPORT

The Annexure referred to in our Independent Auditors' Report to the members of the Nigam on the standalone financial statements for the year ended 31 March 2016, we report that:

(i) (a) The Nigam has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. However, the location and the extent of the area in respect of land needs to be updated in the fixed assets registers and have to be reconciled with the revenue records as to the extent of holding and location of land.

(b) All the assets have not been phy s i ca l l y v e r i f i ed b y t he management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Nigam and the nature of its assets. As informed to us, no material discrepancies were noticed by the management on such verification.

(c) Since, the Nigam could not provide us documentary evidence regarding title deeds of immovable properties which are held in the name of the Nigam, hence we are unable to comment on the same.

(ii) The Nigam has a regular programme of physical verification of its inventory conducted at reasonable intervals as informed to us. However, in our opinion DHBVN does not have inventory of traded or manufactured goods (being a power distribution Nigam) as described in AS-2, but having inventory of stores & spare parts of capital goods.

(b) The Nigam is maintaining quantitative records of inventory in the form of Bin Cards, the procedure of physical verification of inventory followed by management is reasonable and adequate in relation to size of the Nigam and the nature of its business. As informed to us, no material discrepancies were noticed by management on such physical verification.


All the fixed assets are under control of respective DDO/ in charge and they are custodian of the same. All of them have certified during March account that there is no difference/discrepancies in assets.

All immovable property are in the name of DHBVN and the title deeds of the immovable property are available with the respective DDOs/Sub Divisions.



68


(iii) As per available information the Nigam has not granted loans, secured or unsecured. However, there is interest free outstanding advance due from HVPNL as on 31.03.2016, as per detail given below:

(iv) As per information and explanation given to us, the Nigam has not granted any loans or made any investment or given any guarantee and security covered under section 185 and 186 of the companies Act, 2013.

(v) According to the information and explanations given to us, the Nigam has not accepted any deposits from public during the year. Accordingly, paragraph 3(v) of the Order is not applicable to the Nigam.

(vi) The maintenance of cost records have been prescribed under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of Electricity Supply Companies. We have been informed that the preparation of cost records for the financial year 2015-16 are under process. Hence, we are unable to form any opinion about maintenance of cost records.

(vii) (a) According to the records and

information from the Nigam, following

undisputed contributions/statutory

dues are payable as on 31.03.2016 as per

detail given including old outstanding

balances:




Cost Records for FY 15-16 have been prepared and got audited from the Cost Auditor. The cost audit report been placed before the Audit Committee for consideration.


All DDO's of DHBVN are paying Service tax at their level and filing return thereof. All the relevant records in the matter is available with the concerned offices.



Name of Parties

Amount as on

31.03.2016HVPNL (Note-19, Code 41.156)

HVPNL (Note-14, Code 28.879 & 46.993)

95,15,66,204.00

9,76,73,809.00

Nature of Dues Rs. (In Lakhs )Pension Trust (HVPNL) (Note-10, Code-57.131) 33540.39Pension Trust (DHBVN) (Note -10, Code-57.141) 4204.42Municipal Taxes (Note -10, Code-46.501) 12355.75Electricity Duty Payable to Govt. (Note -10, Code-46.3)

9259.55

G H of

Note-10

Statutory Dues Payable as on

31.03.2015

Transactions

during 2015 -16

Payable as on

31.03.2016

Challan Status

46.936

Service Tax Liabilities

56.43Credit

23.99Credit

80.42Credit

Challan of Rs. 69.20 Provided

69

As per information and explanation provided to us DHBVN has following disputed liabilities as on 31.03.2015.

In the following case DHBVN has not shown

its contingent liability in notes to accounts,

detail of which is as under:

It is worth mentioning to here that this

query was already qualified in our previous

year report for the year ended on

31.03.2015 however, it has been again

intimated to DHBVN vide our email dated

24.10.2016. However, Nigam has shown in

its Contingent Liabilities under para 1.21 of

Notes to Accounts under Civil Suits which is

not correct.

(viii) Based on our audit procedures and as per the information and explanations given by the management, the Nigam during the year has not delayed repayment of dues to banks and financial institutions towards working capital facilities/terms loans. The Nigam has no outstanding dues from any debenture holders.

(ix) The Nigam has not raised any money by way of Initial Public Offer, however, Share application received from Govt. of Haryana during the F.Y. 2015-16 by way of Right Issue as informed to us (including under UDAI scheme) amounting to Rs. 556.03 crore and share issued for Rs. 33.24 crore during the F.Y. 2015-16.

As per information and explanation given to us we are of the opinion that long term funds of Rs. 7830.89 crore and short term funds of

As per the advice of statutory auditor the amount is, already included in contingent liability under para 1.21 of notes to accounts.



This is a fact that DHBVN is in continuous losses like majority of the Power DISCOMs in the Country. The losses were funded from short term bank loans which were converted into term loans at the time of restructuring/securitization/take over under the GoI/GoH supported FRP-2012 and UDAY-2015 launched for operation and financial turnaround of DISCOMs.

The MoU signed with GoI and GoH on 11/03/2016 for financial turnaround of DHBVN is available on records and may be referred to.


Sr. No.

Nature of the Statute

Nature of the Dispute

Amount (In Crores)

Forum where dispute is Pending

1

Income Tax Act, 1961

FBT on pension fund contribution

8.60(PY-8.60)

Delhi High Court

2

Income Tax Act, 1961

TDS on transmission charges(F.Y. 2008 -09)

55.99(PY-55.99)

Punjab & Haryana High Court vide order dated 08.05.14 remand back the case to A.O.

3 Income Tax Act, 1961

Non deduction of TDS on wheeling & transmission charges(AY 2007 -08 & 08-09)

39.41{Total Expenses

Disallowed is Rs. 394.08,

contingent liability (Non Deduction of

TDS) @10% on 394.08 i.e

39.41}

Punjab & Haryana High Court. On 30.03.2015 adjourned the case sine-die til l the final decision in ITA 652 of 2010.

A.Y. Particulars Demand Deposited Remarks

2005-06 Income tax penalty raised on 11.02.2015

31,71,09,410.00 7,83,21,730.00on 26.03.2015

Appeal filed before CIT(A) Hisar on 04.03.15

70


Rs. 336.04 crore has been utilized to meet out the losses of the Nigam or to say that the funds converted into losses.

(x) According to the information and explanations given to us, no material fraud on or by the Nigam has been noticed or reported during the course of our audit except reported in Note No. 1.37 to 1.43 of

significant accounting policies & notes to

the financial statements.

(xi) As per notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Companies Act, 2013 is not applicable to the Nigam. Accordingly, para 3(xi) of the Order is not applicable.

(xii) According to the information and explanation given to us, the Nigam is not a Nidhi Nigam. Accordingly, para 3(xii) of the Order is not applicable.

(xiii) According to the information and explanation given to us and based on our examination of the records of the Nigam, transactions with the related parties are in compliance with section 177 and section 188 of the Companies Act,2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Nigam, the Nigam has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year u/s 42 of the Companies Act, 2013.

(xv) According to the information and explanations given to us by the management and based on our examination of the records of the Nigam, the Nigam has not entered into non-cash transactions with the directors or persons connected with Nigam. Accordingly, para 3(xv) of the order is not applicable.

(xvi) The Nigam is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

The financial position of DHBVN is well disclosed in the financial statements in accordance with the applicable accounting standards.








71

ANNEXURE “III” TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF DAKSHIN

HARYANA BIJLI VITRAN NIGAM LIMITED FOR THE YEAR ENDED ON 31ST MARCH, 2016


Management's Responsibility for Internal Financial

Controls

The Company's management is responsible for establishing and maintaining internal financial controls. These respons ib i l i t ies inc lude the des ign, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of Companies Act, 2013 to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting



72


"A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements."

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

"Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate."

Opinion

Keeping in view of our observations in Annexure "I" to our Independent Auditor's Report, we are of the opinion that the Company has poor internal financial controls over financial reporting in material respects, which were not operating effectively as at 31st March, 2016 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.



The commercial accounting system as followed by us since FY 1986-87 was prepared by M/s A.F. FERGUSON & CO., New Delhi (amongst the Big5 during that time) & implemented in all power utilities of India on the recommendation of Central Electricity Authorities of India to have uniform procedure in power sector.

The accounting system in power utilities is based upon "Branch Accounting". Under this system, the different DDOs are considered as Independent Branch and prepare their independent trial balance which are clubbed in the Head Office on monthly basis. Thus the

1. Vouchers are prepared at different locations stating respective head of accounts.

73

2. Posting made in the respective head of account on monthly basis.

3. M/s Ernst & Young, our consultant appointed by the World Bank, has also recommended the same system in FY 14-15.

As explained above, the proper books of accounts have been maintained in the branch offices as well as Head Office according to double entry system on accrual basis as per the accounting principles and policies adopted by the DHBVN.

Further the internal control systems are well built in the accounting system in accordance with contemporary practices. Audit has not point out any specific deficiency in our independent branch accounting system as well as internal control mechanism.


74

BALANCE SHEET AS AT 31st MARCH 2016

Particulars NoteNo.

As at 31st March, 2016(`) in Lacs

I. EQUITY AND LIABILITIES(A) Shareholders' Funds

(a) Share Capital 2 147,236 143,912 (c) Reserves and Surplus 3 (1,023,482) (1,161,352)

(B) Share Application Money pending Allotment 4 53,279 1,000

(C) Non- Current Liabilities(a) Long-term borrowings 5 1,214,424 1,337,058 (b) Deferred tax liabilities(net)(c) Other long term Liabilities 6 156,616 144,717 (d) Long term Provisions 7 - 13,802

(D) Current Liabilities(a) Short term Borrowings 8 17,478 33,841 (b) Trade Payables 9 219,367 226,643 (c) Other current liabilities 10 197,720 132,161 (d) Short Term Provisions 11 - 1

TOTAL 982,637 871,782

II. ASSETS

(A) Non-Current assets(a) Fixed Assets(i) Tangible Assets 12(a) 455,338 443,353 (ii) Intangible Assets 12(b)(iii) Capital Work in Progress 12{c) 98,961 82,919 (iv) Intangible assets under development

(b) Non- Current Investments(c) Deferred Tax Assets (net)(d) Long -term Loans and Advances 13 14,091 11,788 (e) Other Non- Current Assets 14 19,561 17,330

(B) Current Assets(a) Current Investments 15 - - (b) Inventories 16 24,909 23,167 (b) Trade Receivables 17 295,225 241,694 (c) Cash and cash equivalents 18 41,712 18,028 (d) Short term loans and advances 19 26,114 26,358 (e) Other current assets 20 6,726 7,145

TOTAL 982,637 871,782

As at 31st March, 2015(`) in Lacs

75

-

-

As per our report of even date attached For and on behalf of Board of Directors

FOR O. Aggarwal & Co. (R.K BATRA) (ARUN KUMAR VERMA)Chartered Accountants Director/Operations Managing DirectorF.R No.: 005755N DIN: 07167590 DIN: 03111696

(CA. ASHOK KUMAR) (RAJESH SHARMA) (CA KAPIL K MARWAHA) Partner CGM/Accounts Chief Financial OfficerM. No. 093725

Place : Delhi Place : Hisar(HARJINDER SINGH)Date : 22.11.2016 Date : 21.11.2016 Company Secretary

Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

Notes to Accounts from 1 to 29 form integral part of the accounts.

I. Revenue from Operations 21 1,241,366.88 1,117,003.11II. Other Income 22 275,635.98 223,083.87 III. Total Revenue (I+II) 1,517,002.85 1,340,086.98 IV. Expenses

(a)Cost of materials consumed(b)Purchase of Power 23 1,250,040.19 1,235,784.42 (c)Changes in inventories of finished goods, work-in-progress and Stock-in-Trade(d)Employee benefit expense 24 102,968.13 89,070.89 (e)Financial costs 25 177,219.42 95,050.19 (f)Depreciation and amortization expense 26 19,989.23 18,038.35 (g)Other expenses 27 14,026.43 13,797.66(e) Prior Period Expenses/Income 27 (a) 51.83 -3.63Total Expenses 1,564,295.23 1,451,741.51

V. Profit/ (Loss) before exceptional and extraordinary items and tax(III-IV) -47,292.38 -111,654.53

VI. Exceptional Items 28 -134.37 -48,039.00 VII. Profit/ (Loss) before extraordinary items and

tax (V - VI) -47,158.01 -63,615.53 VIII. Extraordinary Items - - IX. Profit/ (Loss) before tax (VII - VIII) -47,158.01 -63,615.53 X. Tax expense:

(a) Current tax (b) Deferred tax - - (c) Wealth Tax - 1.11

XI. Profit(Loss) from the period from continuing operations(IX-X) -47,158.01 -63,616.64

XII. Profit/(Loss) from discontinuing operationsXIII. Tax expense of discounting operationsXIV. Profit/(Loss) from Discontinuing operations

(XII - XIII) - - XV. Profit/(Loss) for the period (XI + XIV) -47,158.01 -63,616.64 XVI. Earning per equity share: 29

(1) Basic & Diluted -326.48 -442.05

PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31st MARCH 2016

Sr.

No.Particulars

Ref. of

Schedule

31-3-2016 31-3-2015

(`) in Lacs (`) in Lacs

76




Place : Delhi Place : Hisar(HARJINDER SINGH)Date : 22.11.2016 Date : 21.11.2016Company Secretary

Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

CASH FLOW STATEMENT FOR THE YEAR ENDING MARCH 2016

Description FY 2014-15FY 2015-16

A: (Indirect method)

1 Net Profit Before Tax and Extraordinary items (47,158) (63,616)2 Add:- Operation Items

Depreciation including Prior Period 19,996 18,038 Interest Income (719) (913)Loss from UHBVN on transfer of Jind Circle 0 (135,627)Interest & finance charges 177,219 95,050 Due to thefte/surveyed off/discarded assets 1,771 198,268 1,810 (21,641)

3 Operating Profit/(Loss) Before Working Capital Changes (1+2) 151,110 (85,257)4 Changes in Working Capital:

Decrease /(Increase) in Trade & Other Recoverable (54,852) (28,334)Decrease/ (Increase) in Stores & spares (1,742) 5,501 Increase /(Decrease) in Trade Payable 63,872 7,278 (74,498) (97,331)

5 Cash Generated From Operations (3+4) 158,388 (182,587)6 Taxes Paid (1) (1)

Cash Flow before Extraordinary Items 158,387 (182,589)Extraordinary Items 0 0

8 Net Cash Flow From (Used in) Operating Activities (A) 158,387 (182,589)

9 B: Cash Flow From Investing Activities(I) Purchase of Fixed Assets & capital W.I.P.-(increased)/Decreased(61,091) (73,324)(ii) Disposal of Fixed Assets 695 589 (iii) Service line contribution-Increased 12,973 11,226 (iv) Purchase of Investments-(increase)/Decrease (1,732) 3,265 (v) Interest Income 545 (48,610) 641 (57,603)Net Cash Flow From (Used in) Investing Activities (i to v) (B) (48,610) (57,603)

C: Net Cash Used In Financing Activities(I) Proceeds from Long Term & Other Borrowings (including foreign exchange fluctuation and loan from UHBVN) 655,853 349,927 (ii) Repayment of Long Term & Other Borrowings (810,718) (22,033)(iii) Interest & finance charges (176,414) (102,092)(iv) Consumer security deposits-increased 7,571 8,024 (v) Grant-increased 180,281 (571)(vi) Govt. equity 3,324 0 (vii)Share application money 52,279 (87,825) 1,000 234,255 Net Cash Flow from (Used in) Financing Activities (i to vii) (C) (87,825) 234,255 Net Increase in Cash and Cash Equivalents (A+B+C) 21,952 (5,937)Opening Balance of Cash and Cash Equivalents 17,873 23,810 Closing Balance of Cash and Cash Equivalents 39,825 17,873Cash and Bank balances as per Balance Sheet 41,712 18,028 Deposits (not cash and cash equivalents) 1,887 155 Cash and Cash equivalents 39,825 17,873

Cash Flow From Operating Activities

(`) in Lacs

77

For and on behalf of Board of Directors



Place : Delhi Place : Hisar(HARJINDER SINGH)Date : 22.11.2016 Date : 21.11.2016 Company Secretary

Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

SIGNIFICANT ACCOUNTING POLICIES:

1.1. The Nigam is governed by the provisions of the

Electricity Act, 2003. The provisions of the Act

prevails in preparing the Accounts wherever they

are inconsistent with the provisions of the

Companies Act, 2013.

1.2.BASIS OF ACCOUNTING:

Accounts of the Nigam are being prepared on

accrual basis based on the historical cost

convention except in case of surcharge levied on

delayed payments which are on actual realization

basis.

1.3.USE OF ESTIMATES:

The preparation of financial statements requires

estimates and assumptions to be made that affect

the reported amount of assets and liabilities on the

date of the financial statements and the reported

amount of revenues and expenses during the

reporting period. Difference between the actual

results and estimates are recognized in the period

in which the results are known / materialized.

1.4.FIXED ASSETS:

a) The Fixed Assets are carried at the original cost

including appropriate expenses capitalized less

depreciation thereof.

b) The interest on borrowed funds attributable to

acquisition/construction of fixed assets, till

commissioning of such assets, is being capitalized

c) Consumer's contribution, grants and subsidies

towards cost of capital assets are not reduced

from the cost of assets but being treated as 'Capital

Reserves' and shall be amortized with the

amount of depreciation over the useful life of fixed

assets created out of consumer contribution/

grants/ subsidies. The average rate of depreciation

of plant & machinery (T&D) is taken for

amortization.

d) The expenditure on capital work in progress is

transferred to appropriate asset at the end of

month irrespective of the date of commissioning of

project/work during that month.

e) During FY 2015-16, 5 Nos 33 KV sub stations are

capitalized. These sub stations are constructed on

the land, donated by the Gram Panchayat of

villages concerned to DHBVN through a

resolution...

1.5.DEPRECIATION:

The depreciation shall be calculated in the

following manners as per HERC MYT Regulation

2012 effective from 1/4/2013:

a) The value base of asset shall be the historical

capital cost of the assets as admitted by the

Commission. The historical capital cost shall

include additional capitalization including foreign

exchange rate variation, if any already allowed by

the Commission up to 31st March of the relevant

year.

b) The residual value of the asset shall be considered

as 10% and depreciation shall be allowed up to

maximum of 90% of historical capital cost of the

asset;

c) Depreciation shall be calculated annually over the

useful life of the asset at the rates specified in

Appendix II up to 31st March of the 12th year from

the date of commercial operation of the asset.

From 1st April of 13th year from the commercial

date of operation of the asset, the remaining

depreciable value if any out of the 90% of the

capital cost of the asset shall be equally spread

over the balance useful life of the asset.

The deprecation rates give in Appendix-II will be

applicable w.e.f. 1.4.2013 only. The depreciation,

in case of existing assets, up to 31.03.2013 shall

be considered as already allowed and shall not be

re-visited. The depreciation rates as per Appendix-

II for such assets shall be applicable w.e.f.

1.4.2013 up to 12th year from the date of COD

(Commencement Operation Date).

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE FINANCIAL STATEMENTS FOR FY 2015-16:-

78

d) Land shall not be considered as a depreciable

asset and cost shall be excluded from the capital

cost while computing depreciable value of asset.

e) Depreciation shall be chargeable from the first

year of commercial operation. In case of

commercial operation of the asset for part of the

financial year, then the depreciation shall be

charged on pro rata basis.

f) Depreciation shall not be allowed on assets (or

part of assets) funded by consumer contribution

(i.e. any receipts from consumers that are not

treated as revenue) and capital subsidies / grants.

Provision for replacement of such assets shall be

made in the capital investment plan..

1.6. STOCK OF STORES & SPARES (CURRENT ASSETS):

a) Inventory of stores & spares (Current Assets – Note

16, “Inventories”) is valued at cost.

b) Cost is determined on Weighted Average Method.

Cost includes duties, taxes, freight, octroi,

insurance, handling, clearing charges and other

incidental expenses. Cost of Material at Site is,

however, determined as per issue price.

c) No provision has been made in the current year in

respect of obsolete stock.

d) The profit or loss on sale of scraps are accounted

for as and when these are sold.

1.7. REVENUE RECOGNITION:

a) Revenue from sale of power is being accounted for

on accrual basis, in addition to this the unbilled

revenue equivalent to 50% of the amount billed

during the month of March is also added in

revenue from sale of power. However, differences

on account of adjustments of undercharge /

overcharged billing with actual billing are adjusted

in the year of rectification.

b) The subsidy from Govt. of Haryana is to be

accounted for on the basis of budget provision of

the GOH as well as its actual realization.

c) Material known liabilities are provided for on the

basis of available information/ estimates.

d) All income / expenses pertaining to balance sheet

under Audit and noticed upto 30th April next

(being cut off date) or the date of submission of

monthly accounts by concerned accounting units,

whichever is later, shall be adjusted in the financial

year under Audit.

e) As per Nigam's decision, the income from

surcharge is to be accounted for on the basis of

actual realization.

1.8. FUEL SURCHARGE ADJUSTMENT

The amount of difference between the actual

power purchase rate and the rate approved by

HERC vide its orders on Annual Revenue

Requirement for the relevant year is being filed with

Commission to claim as FSA in accordance with

mechanism devised by the Commission for

computing FSA, which is being allowed to recover

from the consumers in subsequent period i.e. in

monthly installments over a period of 2 to 4 year

The expenditure on account of Fuel Surcharge

Adjustment (FSA) is being accounted far when it is

incurred and revenue on its actual Billing basis.

1.9. RETIREMENT BENEFITS:

The retirement benefits are being provided on

actuarial valuation basis and as per the certificate

of the Actuary in accordance with the provision of

Accounting Standard 15 (Revised-2005) or

otherwise stated in notes on accounts. Pension

liabilities include liabilities on account of leave

encashment, gratuity, family pension and pension

of employees appointed before 1.7.99. The retrial

benefits of employees appointed on or after 1.7.99

are also being provided on the basis of actuarial

valuation certificate. The benefit of pension will not

be available to the employees joining service on or

after 01-01-2006 as they will be covered under

“New Pension Scheme” notified by Govt. of

Haryana vide its notification No. 01/01/2004-I

pension dated 04/12/2008 and adopted by

DHBVNL in the BOD meeting held on

31/07/2009.

However for FY 2015-16, the estimation of

79

retirement benefits have been done, based upon

past experience/liabilities. Accordingly Rs 392

crore have been provided in the books of accounts.

1.10. TRANSACTIONS IN FOREIGN CURRENCY:

a) Transactions in foreign currency are accounted for

at exchange rates prevailing on the date of

transaction.

b) Current Assets and Liabilities are translated at the

rates prevailing at the end of the year.

c) In the case of liabilities in respect of foreign

currency loans obtained for acquisition of fixed

assets, the variation in the liability arising out of the

variation in exchange rates at the year-end is

adjusted to the cost of the acquisition of fixed

assets. Further, during the FY 2015-16 exchange

fluctuation of Rs. 10,86,10,809/- is capitalized in

capital work in progress and corresponding

increased the liabilities.

d) All transaction differences are recognized as

income / expense during the year in which they

arise.

1.11. PROVISIONS, CONTINGENT LIABILITIES AND

CONTINGENT ASSETS:

a) Provisions involving substantial degree of

estimation in measurement are recognized when

there is a present obligation as a result of past

events and it is probable that there will be an

outflow of resources. Contingent Liabilities are not

recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor

disclosed in the financial statements.

b) Provision for amount of theft of property pending

investigation is made @10% of the amount

outstanding as on 31/03/2016 and thereafter

provision @10% of the incremental amount will be

made in next financial years (disclosed as per AS-

5, issued by ICAI).

1.12. BORROWING COST:

The borrowing cost that are attributable to the

acquisition or construction of qualifying assets are

capitalized as the part of the cost of such assets.

The borrowing cost is capitalized on the basis of

weighted average formula as under:-

a) Average of opening & closing outstanding loans

for capital works.

b) Average of opening and closing balance of CWIP.

c) Interest paid and provided for the year on loans for

capital works.

d) Capitalization of borrowing cost = C X B/A.

1.13. INVESTMENTS:

No contingency reserve is created since financial

year 2008-09 as per Hon'ble Commission orders

dated 20-11-2008 on ARR for FY 2008-09.

However the said amount of investment has also

been realized during the FY 2013-14.

1.14. UNSECURED LOANS-GOVT./HVPNL LOANS:

Receipt of loans, interest accrued thereon &

repayments regarding loans from Govt./HVPNL

(directly/indirectly) are accounted for on the basis

of advice/instructions of Govt./HVPNL.

1.15. GOVERNMENT GRANTS:

Grants from Central/ State Government for the

purpose of Capital Works are considered as

Capital Receipts and other grants in the shape of

incentives/ subsidies etc. are considered as

Revenue Receipt are accounted on the basis of

advice/instructions of Govt. or Relevant

Authorities.

1.16. RESEARCH & DEVELOPMENT:

Revenue expenditure on research & development

is expenses as incurred and Capital expenditure

incurred on research & development is added to

respective fixed assets.

1.17. IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying

cost of asset exceeds its recoverable value. An

impairment loss is charged to the Profit and Loss

Account in the year in which an asset is identified as

impaired. The impairment loss recognized in prior

accounting period is reversed if there has been a

change in the estimate of recoverable amount.

Further, DHBVN has not done any impairment of

assets during the FY 2015-16.

80

1.18. PROVISION FOR CURRENT TAX, DEFERRED TAX :

a) Current Tax:

The DHBVN has not made any provision for

current tax for the FY 2015-16, since company has

incurred loss during the year.

b) Deferred Tax:

The AS-22 is applicable in the case of DHBVN for

timing differences, however, the provision for

deferred tax assets is not made for the FY 2015-16

and earlier years according to AS-22, since there is

no certainty of profits in future years.

1.19. MISCELLANEOUS:

a) Expenses on raising of finance and financial loans

are charged to revenue.

b) Income from Surcharge levied on consumers for

delayed payment of energy bills have been

accounted for on actual realization basis.

c) Cash flow statements are prepared using indirect

method as prescribed in Accounting Standard-3,

issued by ICAI

d) No significant events that occurred after the

balance sheet date (disclosed as per accounting

standard 4, issued by ICAI).

e) Prior period expenses/income have been disclosed

under note-27 (a) “Prior Period Expenses/Income”

of the balance sheet. (disclosed as per Accounting

Standard 5, issued by ICAI)

f) Interest on loans and advances advanced to the

staff is being recovered after the full recovery of

principal amount. However, interest is accounted

for on accrual basis in the accounts.

Accounts have been prepared as per Accounting

Standards prescribed by Institute of Chartered

Accountants of India from AS 1 to AS 29 and which

are relevant to DHBVNL.

1.20.. The figures for this year and the previous year have

been shown in the relevant notes and regrouped

NOTES ON ACCOUNTS

and rearranged for better presentation wherever

considered necessary.

1.21. CONTINGENT LIABILITY:-

Contingent Liabilities as on the date of Balance

Sheet:

i) Contingent liabilities in respect of civil suits filed by

the third parties against the Nigam are

approximately Rs. 2,06,315.86 lacs (previous year

Rs. 91,378.85 lac), Out of Rs. 2,06,315.86 lacs,

contingent liability of Rs. 1,79,000 Lacs arises due

to claiming of price hike of Raw Material by

generating Co (M/s Adani Power, CGPL & JPL). In

lieu of compensatory Tariff/Changes in Law Policy

etc. The case is pending with Hon'ble Apex Court,

New Delhi.

ii) The Nigam had filed a petition in Punjab and

Haryana High Court Chandigarh regarding

payment of Fringe Benefit Tax on contribution to

superannuation fund for FY 2005-06. The matter

has been stayed by the Hon'ble Punjab and

Haryana High Court. Later on, all the petitions

of similar nature from various High Courts of

India have been transferred to Delhi High Court

by Hon'ble Supreme Court of India. The amount of

Rs. 8,59,86,715/- paid on account of FBT for

FY 2005-06 was considered as an Advance Tax

during FY 2005-06 to be refunded by the Income

Tax Department. Proceedings are still pending in

High Court, Delhi. Any adverse decision of Court

will affect the profitability of the Nigam.

No payment of FBT in respect of contribution to

superannuation fund has been made during FY

2006-07, 2007-08 & 2008-09. however, the FBT

case for FY 2005-06 has been assessed by the

Authority vide order dated 28.12.2008 and refund

of deposited amount has been claimed by the

Nigam.

iii) During FY 2008-09, the Income Tax Department,

Hisar has raised a demand of tax Rs.

55,99,01,707/- on account of non deduction of

81

TDS under section 194J of Income Tax Act on

payment of transmission charges made to HVPNL

for FY 2005-06, 2006-07 and 2007-08. This

amount was shown as contingent liability in the FY

2008-09. The case was decided in favour of

DHBVNL by ITAT, New Delhi bench on dated

23.10.2009 & the appeal was allowed in full. But

there after the Income Tax Department had filed an

appeal in Punjab and Haryana High Court

Chandigarh. The Hon'ble Court, vide its order, ITA

No 652 of 2010 (O&M) dated 8/5/2014,

authorize the Assessing Officer to consider the

element of income in the transaction as well,

before passing a fresh order in accordance with

law. Now the case is pending with concerned,

Assessing Officer, IT Department.

iv) Commissioner of Income Tax Hisar have filed an

appeal against the ITAT Delhi “Bench B” order

dated 27/06/2012 and 10/02/2012 in the

Hon'ble Pubjab & Haryana High Court

Chandigarh vide CRA No. 369 of 2014 and CRA

No. 226 of 2014 for the Assessment Year 2007-08

and 2008-09 respectively on account of

disallowance u/s 40(a) (ia) for non-deduction of

Tax on payment of wheeling / transmission charges

of Rs. 152.53 crore (AY 2007-08) and Rs. 241.55

crore (AY 2008-09). Both the cases were heard by

the Hon'ble Punjab & Haryana High Court on

dated 30/03/2015 and adjourned sine-die till the

final decision in ITA 652 of 2010.

v) Commissioner of Income Tax Hisar has filed an

appeal in the Hon'ble Apex court New Delhi

against the Judgement dated 01/10/2014 passed

by Hon'ble Punjab & Haryana Hight Court

Chandigarh in ITA No. 209/14 for the Assessment

Year 2006-07 on disallowance of provision of

delayed payment surcharge due but not realized

worth Rs. 225.18 crore. Next date of hearing is

02/12/2016.

vi) The Electricity Ombudsman, Haryana, HERC,

Panchkula in its decision dated 20 September

2012 had directed to charge the penalty for MDI,

exceeds on RICO Industries for one month Rs.

32.96 lacs (one month) only instead of 17 months

Rs. 5.60 crore (17 Months i.e. January 2010 to

May 2011). The Nigam has filed an appeal with

Punjab and Haryana High Court, Chandigarh

against the orders of Ombudsman, Haryana,

HERC, Panchkula and the case is defended by Xen

S/U Gurgaon and still under trial. The next date of

the case is fixed on 23/11/2016. The Nigam is

contingently liable for to Rs. 5.27 crore.

1.22. The fixed assets have not been insured. The cash in

transit and cash in chest has been insured. The

Fixed assets include some transformers which were

damaged during warranty period and lying un

attended at store for want of repairs. The suppliers

of transformers have refused to carry out the

repairs under warranty period. Amount in lieu of

these cases are included in Contingent liabilities

given in para 1.21 (i).

1.23. The assets allocated to other power utilities are

being utilized by DHBVNL and vice versa. The

accountings of rental payables/receivables

to/from have not been made in accounts of

DHBVNL in absence of specific agreement in this

regard.

1.24. In the opinion of the Nigam, the current assets and

loans and advances are of the value as stated in the

accounts, if realized in the ordinary course of

business.

1.25. Assets held for disposal as shown in the Note 14

amounting to Rs. 2693.28 Lacs (previous year Rs.

2693.32 lacs) represents the discarded/ surveyed

off assets and these have been taken at their written

down value. Further, loss or profit is accounted on

actual sale of assets.

1.26. Subsidy from GOH for concessional Agriculture

Power:

Subsidy received from G.O.H during FY 2015-16

is to the tune of Rs. 2529.34 crore for providing

electricity supply to agriculture pump-set consumer

at subsidized rates and FSA relating to agriculture

category.

82

1.27. The value of stores and spares as shown in note-16

has been taken on the basis of historical cost taken

in stock records.

1.28. The debit and credit balances appearing under

current assets and current liabilities are subject to

confirmation from respective parties.

1.29. SUNDRY DEBTORS:

As per balance sheet, the Gross debtors

outstanding as on 31-03-2016 are to the tune of

Rs. 6358.57 Crore out of which a sum of Rs.

1090.08 crore pertains to banking and interstate

sale of power. The age wise break-up of debtors

are as under:-

After considering the provisions for bad and

doubtful debts and the amount of unrealized

surcharge the net debtors comes to Rs. 2952.25

crore shown in Note 17 of the Balance Sheet which

includes Rs. 1090.08 crore pertaining to banking

and interstate sale of power.

MTC. EXPENSES OF VIDYUT NAGAR, HISAR.

A sum of Rs. 180.64 Lacs (previous year 186.72

lacs) has been charged as recoverable from

HVPNL on account of maintenance of Vidyut

Nagar, Hisar as 25% portion belongs to HVPNL.

1.30. INTEREST AND OTHER EXPENSES CAPITALISED

Interest & Guarantee Charges amounting to Rs.

10508.43 lacs (Previous year Rs. 10689.50 lacs)

and employees cost and other expenses

amounting to Rs. 1503.01 lacs (Previous year Rs.

1650.95 lacs), out of current year expenses have

been capitalized and included in capital work in

progress as shown in the note 12 (c).

1.31. GPF DEDUCTIONS/PAYMENTS OF EMPLOYEES

RECRUITED BEFORE 01-07-1999:-

At the beginning of the year, a sum of Rs. 1624.76

lacs was Receivable from HVPNL Provident Fund

Trust and at the end of this year it is Rs. 2944.19

lacs as “receivable from HVPNL Provident Fund

Trust”.

The details of the same are given as under:-

1.32. GPF DEDUCTIONS/PAYMENTS OF EMPLOYEES

RECRUITED ON OR AFTER 01-07-1999:

At the beginning of the year, a sum of Rs. 30.88

lacs was receivable by DHBVN from Provident

Fund Trust and at the end of current financial year

Rs. 53.25 lacs is receivable from Trust. The detail

of the same is given as under:-

1.33. PENSIONARY CHARGES OF OLD EMPLOYEES:

Being the higher valuation given by the previous

Actuary, an amount of Rs. 370.00 crore on account

of terminal benefits of the employees recruited

before 1-7-1999 for FY 2015-16 has been

accounted for on estimate basis in absence of

Age of Debtors

Debtors more than 6 monthsDebtors other Total

(` in Crore)

5730.94627.63

6358.57

Amount in Lacs

Amount in Lacs

83

Amount of Debtors

Sr.No. LC No. Name of Accounting Unit

1. 801

Controller of Stores, DHBVNL, Hisar

2. 901 Accounts Officer/EAD, DHBVNL, Hisar

3. 701 Sr.A.O./Workshop, DHBVNL, Hisar

Sr.No

Particulars Current Year

Previous Year

1. Net amount Receivable from HVPNL Employees Provident Fund Trust at the beginning of the year

1624.76 3894.25

2. Payable-GPF Subscription (GH 57.120) during the year

6122.47 5979.86

3. Interest Receivable from HVPNL Trust (57.122)

151.89 470.53

4. Total payable to HVPNL Employees Provident Fund Trust (2-1-3)

4345.82 1615.08

5. Receivable-GPF payments made (57.121) to Employees during the year

7290.01 8067.63

6. Amount paid/(received) to Trust/adjustment (57.123)

0 (4827.79)

7. Receivable from Trust (5+6)

8. Net receivable from HVPNL Employees Provident Fund Trust as on 31.3.2016 (7-4)

7290.01 3239.84

2944.19 1624.76

Sr. No.

Particulars Current Year

Previous Year

1

Opening balance of GPF amount payable to Trust as on 1.4.2015

(30.88) 237.18

2

Add GPF contribution payable during the year (57.160)

424.07 389.68

3

Add Interest payable @ 8.70% during the year (57.162)

(7.53) 11.97

4

Payable amount of GPF (1+2+3)

385.66 638.835

Less paid to Employees on behalf of Trust during the year (57.161)

185.78 227.61

6 Less paid to Trust during FY 2015-16 (57.163) 253.13 442.107 Total paid amount of GPF (5+6) 438.91 669.718 Net payable /(receivable) amount to DHBVNL

employees GPF Trust up to 31.3.2016

(4-7)

(53.25) (30.88)

actual valuation and has been shown as payable to

HVPNL Pension Fund Trust.. A new actuary has

been appointed by the Nigam through opening

tendering process for getting actual valuation and

the same is under process. The difference if any

will be accounted for in the next financial year after

getting the new valuation report from Actuaries

thus appointed by the Nigam.

1.34. PENSIONARY CHARGES OF NEW EMPLOYEES:

A sum of Rs. 22.00 crore on account of pension

contribution in respect of employees recruited on

or after 1.7.1999 has been provided in the

accounts on estimated basis in absence of

valuation made by actuary and has been shown as

payable to DHBVN pension fund trust. If any

differences arise after getting the valuation from

new actuaries the same will be accounted for in

next financial year.

1.35. SURCHARGE LEVIED ON DELAYED PAYMENT:

As per Nigam's decision, the income from

surcharge is to be accounted for on the basis of

actual realization. On the basis of actual

realization a sum of Rs. 79.08 crore has been

accounted far as Income from surcharge against

total assessment of Rs. 571.79 crore. A sum of Rs.

492.71 crore has not been recovered from the

consumers and the same has been written back

from the delayed payment surcharge income and

has been reduced from the gross debtors.

1.36. Cash embezzlement was detected in Op. S/Divn.

Adampur under Op. Divn. No. II, Hisar in April

2004 for which Sh. Karam Singh Kamboj and Sh.

Sita Ram LDC/C were found at fault. An FIR was

lodged against Sh. Karam Singh Kamboj SDO and

Sh. Sita Ram LDC/C, Now, Sh. Karam Singh

Kamboj SDO has already been retired and the

services of Sh. Sita Ram LDC/C has been dismissed

vide SE Op. Circle, DHBVN Hisar O/O No. 301

dated 29.03.2010. The total embezzled amount

was Rs. 43,39,836/-. The provision for the above

amount had already been made in the accounts for

FY 2004-05. No recovery from any officer/official

has been made so far. Besides, the criminal

proceedings against Sh. Sita Ram LDC/C

(dismissed) is under trial in Civil Court, Hisar and

the date of next hearing has been fixed on

05/11/2016. However, criminal proceeding

against Sh. Karam Singh Kamboj, AEE (Retd) has

been decided in his favour vide Hon'ble Pb &

Haryana High Court LPA No. 597 of 2011 &

Hon'ble Supreme Court in SLP No. 14313 of 2011.

Hence, recovery can not be made.

1.37. An embezzlement of Rs. 7,53,767/- was taken

place in Op. S/Divn. Taoru under O.C.C Divn.

Gurgaon during FY 2005-06, out of which a sum

of Rs. 27499/- were recovered from the officials

concerned so far and the remaining amount of Rs.

7,26,268/- is still pending for want of final

decision from the Court. However, the provision of

the loss was made in FY 2005-06.

1.38. An embezzlement of Rs. 20,18,341/- was detected

in Op. S/Divn. Taoru under Op. Divn. Sohna

during FY 2007-08 as intimated by Xen Op. Divn.

Sohna. A sum of Rs. 9,53, 432/- was deposited

by Sh. Deewan Chand SDO and Sh. Parveen

Kumar LDC, who was entrusted the duties of

cashier. The provision for loss on this account was

made during FY 2007-08. However, the figure of

embezzlement as intimated by CGM/Audit,

DHBVNL Hisar is Rs. 22.58 lacs. GM/Admn.,

DHBVN, Hisar vide his O/o No. 58/Conf/NG/DH-

337 dated 30/07/2012 orders for recovery worth

Rs. 17,71,120/- from Sh. Parveen Kumar, LDC.

Out of which Rs. 3,24,937/- already deposited by

him & recovery for the remaining amount is

commencing @ Rs. 7000/- PM w.e.f. 1/1/2013 till

date. (Rs. 22,500/- + Rs. 2,94,000/- has been

recovered upto 6/2016).

1.39. The work of bill collection was outsourced to HDFC

Bank, CBI, Vijaya Bank & M/s Suvidha in

Faridabad Circle. Some embezzlement were

noticed during June 2014, matter is under

investigation and exact amount involved will be

worked out in due course.

1.40. An embezzlement of Rs. 47.22 lacs in S/u

84

Ballabgarh Sector 25 under Op Circle Faridabad

has been detected & Chief Auditor DHBVN Hisar

vide his memo no. CA/RA/Misc/707 dated

29/12/2014 reported that Rs. 41.72 lac (with

surcharge Rs.5.31 lacs) stands recovered from the

consumer and balance of Rs. 10.81 lacs is to be

recovered. However delinquent official, Sh.

Balwan Singh, MR placed under suspension &

charge sheet issued to him vide SE/HR. DHBVN,

Hisar Memorandum No. Ch-2/RCS-112 dated

25/02/2014. The decision of charge sheet is

pending.

1.41. An embezzlement of Rs. 29.03 lacs in Op S/Divn

Badrola under Op Circle Faridabad has been

detected & Chief Auditor DHBVN Hisar vide his

memo no. CA/RA/Misc/707 dated 29/12/2014

reported that Rs. 14.26 lacs stands recovered from

the consumer and balance is being recovered.

Charge sheet has been served upon delinquent

official (Sh. Naresh Kumar Singla, ASSA working

as CA vide SE/Op Circle DHBVN Faridabad

Memorandum No. 43/ES/FC-59 dated

10/06/2014 and Sh. Maan Singh, L/Man working

as LDC vide SE/Op Circle, DHBVN, Faridabad

Memorandum No. 12/ES/FC-864 dated

10/06/2014). The decision of charge sheet is

pending.

1.42. FIR against contractor for execution of Piller Box

work order to the tune of Rs. 125.33 crore in

Faridabad Circle has now been transferred to

Director General, State Vigilance Bureau,

Haryana, Panchkula through Chief Secretary to

GOH, Vigilance Department vide his Memo No.

47/5/14-3VII dated 27/03/2015 for further

investigation. The investigation is in process.

1.43. As per Nigam's policy, Rs. 15.41 Crore on account

of interest on total amount of consumer security @

9% per annum during FY 2014-15 was paid to the

consumers. Provisions prior to FY 2013-14, for Rs.

1.34 crore, as relates to Jind Circle, has been

reversed now (shown in Note No. 28, as

exceptional Items)

1.44. SHARE CAPITAL:

The Authorized Share Capital of the Nigam is

Rs. 2000.00 crore. As on 31-3-2016 the share

application money pending for allotment is

Rs. 5,32,78,65,461/- against previous year of

Rs. 10,00,01,461/-.

The breakup of paid up Capital is as under:-

1.45. INTER UNIT ACCOUNTS:-

The Inter Unit Accounts balances under IUT-33,

34, 36 & 37 as shown in Notes No. 10, 18 & 20

are in the process of reconciliation.

1.46. POWER PURCHASE:-

a) Government of Haryana, Power Department has

transferred the power trading business from

HPGCL to the Distributing Nigam i.e. DHBVNL and

UHBVNL with effect from 1st April 2008 vide its

notification dated 11th April 2008. As provided

with the notification, the Haryana Power Purchase

Cell (HPPC) be handled by the transferee

Companies on Single Buyer Model and the

functions of procuring short term and long term

power will be discharge by HPPC, Panchkula.

During FY 2015-16, the Nigam has purchased the

Power from short term and long term sources as

per detail given.

b) FUEL SURCHARGE ADJUSTMENT

The power purchase cost (including Transmission

charges) works out to Rs. 4.57 /-Unit against HERC

approved rate of Rs. 4.27/- Unit (including

Transmission charges) for FY 2015-16. The

Difference between the HERC approve rate and

actual cost of power purchase (As per HERC orders

dated 07/05/2015) comes to Rs. 820.88 crore

which is treated as Fuel surcharge adjustment

85

Sr. No.

Particulars

Amount

a)

Govt. Total No. of Shares = 103,50,842 Nos.1035,08,42,000

b)

HVPNL Total no. of Shares =43,72,735 Nos. Out of the above 4372735 no. shares are allotted as fully paid up pursuant to a contract without payment received in cash.

437,27,35,000

Total:1472,35,77,000

(FSA). The Nigam has billed the amount of FSA to

consumers on quarterly basis during FY 2015-16

in compliance with the HERC orders dated

27.05.2010. If there is any difference between the

amounts billed to consumers and actual cost of

FSA, the same will be filed with HERC and after

getting its approval the same will be billed to the

consumers accordingly. True up shall be filed with

HERC on Quarterly Basis.

1.47. A sum of Rs. 4,00,000/- (Rs. 2,75,000/- as audit

fee & Rs. 1,25,000/- as traveling expenses out of

pocket expenses etc.) (Previous year Rs.4,00,000/-

) plus service tax as applicable has been provided

as audit fee of Statutory Auditors for FY 2015-16.

1.48. A sum of Rs. 23,400/- (previous year Rs.23,400/-)

have been provided for professional charges in

connection with maintenance of Cost Accounting

Records of DHBVNL. In addition, a sum of Rs.

19,499/- plus service tax (previous year Rs.

25000/- inclusive all pocket expenses TA/DA and

service tax) has been provided as cost audit fees in

the accounts for F.Y. 2015-16.

1.49. A sum of Rs. 2,00,75,000/- (Previous year Rs.

2,00,50,000/-) have been paid on account of

license fees to the Haryana Electricity Regulatory

Commission. Out of which Rs. 75000/- relates to

FY 2015-16 and balance Rs. 2,00,00,000/-

relates to FY 2016-17 which has been transferred

to prepaid expenses.

1.50. No provisions for Income Tax have been made as

the Nigam has incurred losses after taking into

account the accumulated losses up to the previous

year.

1.51. The provisions for depreciation and all known

liabilities are adequate and considered

reasonable.

1.52. As per HERC orders dated 20.11.2008 on the ARR

for FY 2008-09. The Nigam has stopped to create

contingency reserve from FY 2008-09.

1.53. Dakshin Haryana Bijli Vitran Nigam Ltd. was a

subsidiary of Haryana Vidyut Prasaran Nigam upto

FY 2008-09. Now, the share capital of GOH has

been increased and it comes to more than 51% of

the total Share Capital. The HVPNL is holding

4372735 shares @ Rs.1000/- each amounting to

Rs.437,27,35,000/-.

1.54. DHBVNL is engaged in Distribution and Retail

Supply business on the license granted by HERC in

its orders dated 04-11-2004 bearing license no.2-

DR.

1.55. Aggregate amount of capital liabilities falling due

for repayment/redemption is NIL.

1.56. Nothing is due to Small Scale Industries as on 31-

3-2016 where the amount is due for payment

exceeding 30 days. The amount is paid to the small

scale Industries and non small scale Industries

within the contractual period. The amount payable

to the small scale Industries and non small scale

industries as on 31-3-2016 is within the

contractual period.

1.57. Loans & Advances as per Note 13 of Balance Sheet

given to Contractors/ Suppliers and Note 19 given

to Employees are secured against bank guarantee,

hypothecation of building and vehicles and

surety of confirmed employees of DHBVNL.

Moreover, unsecured advances given to

employees are on verification of confirmed

employees of the Nigam.

1.58. No expenses of personal nature have been

charged to P&L Account of the Nigam during FY

2015-16.

1.59. Internal Audit is being conducted on rotational

86

Sr. No.

Particulars Unit in (MU) Rupees in Crore

Rate Per Unit (Rs.)

1 Long Term

26,337.08

10,099.53

3.83

2 Short Term

1,948.53

798.88

4.1

3 Unscheduled Interchange

214.12

150.21

7.02

4 Total Power Purchase (1+2+3)

28,499.73

11048.6 2

3.88

5 Transmission charges PGCIL &

open Access

815.63

6 Total Power Purchase (4+5) 28,499.73

11864.25

4.16

7 Less (a) Transmission losses

1,136.76

8 (b) Inter State sale of Power 2,501.25 891.76 3.579 Net Power Purchase (Delivery

Point) (6-7-8) 24,861.72 10972.49 4.4210 Add Inter state sale of power (1) 2,501.25 891.76 3.5711 Total 27,362.97 11864.25 4.3412 Add Transmission charges of

HVPNL 636.1513 Total (11+12) 27,362.97 12500.40 4.57

basis by Chief Auditor of DHBVNL. Internal Audit

being perpetual in the Nigam, the audit of

accounting units which could not be taken up

during the current year, will be conducted in

subsequent year.

1.60. SEGMENT REPORTING:

The Nigam has single business segment namely

“supply /distribution of electricity”. The Nigam has

its distribution net work in nine operational circles

named Sirsa, Hisar, Bhiwani, Faridabad,

Gurgaon, Narnaul, Rewari, Palwal and Jind which

are identical in respect of geographical,

economical, political and operations etc. The

Nigam business, therefore, does not fall under

different business segments as defined under AS-

17. So segment reporting is not given here.

1.61. The Nigam has neither received direct information

from vendors nor Nigam has called as such

information from vendors regarding their status

under the Micro, Small and Medium Enterprises

Development Act, 2006 and hence disclosure

relating to amounts unpaid as at the year and

together with interest paid/payable under this Act

as required by Schedule III of Companies Act,

2013 have not been given.

1.62. RELATED PARTIES DISCLOSURES:

(1) (a) Director's Remuneration:

Information given in accordance with requirement

of Accounting Standard-18 in related parties

disclosures issued by the Institute of Chartered

Accountants of India:

(1) (b) Key management personnel:

The above members of Board of Directors are

availing the transport facility of 400 KMs against

deposit of Rs.400/- P.M through salary. Nothing is

due from Managing Director, Whole Time

Directors & Company Secretary as on 31.03.2016

relating to loans and advances.

(2) (a) (i) Name of Related Party: Haryana Vidyut Parasaran

Nigam Ltd.

(ii) Relationship: Share holder having substantial

interest of 29.70% share of Nigam.

(iii) Nature of Transaction: Use lines and system for

transport of electricity.

(iv) The HVPNL billed amounting to Rs. 636.15 crore

as wheeling charges and SLDC charges during FY

2015-16.

(v) Amount outstanding as on 31-03-2016:-

(a) Payable/(Receivable) against transmission

charges: Rs. (95.16) crore

(b) Receivable other than transmission charges:

Rs. 9.77 crore

(vi) As per 2nd Transfer scheme notified by Govt. of

Haryana on dated 01-07-1999, HVPNL is liable

for all payments and other obligations in respect of

all personnel related liabilities, whether statutory or

under the terms & conditions of service and/or

service rules and regulations applicable to the

personnel, but not limited to Provident Fund

(including contribution of the personnel and/or

where applicable, any employer contribution),

pension and other superannuation and/or

terminal benefits, accrued for and/or attributable

to the entire period of service of the personnel with

HVPNL and/or the Board prior to the effective date

(b) Name of Related Party: Haryana Power

Generation Corporation Limited.

(i) Relationship: Fellow Generating Company.

Payable to HPGCL other than power purchase: Rs.

4.59 crore

(c) Name of Related Party: Uttar Haryana Bijli Vitran

Nigam Limited:

(i) Relationship: Fellow Distribution Company

(ii) Amount outstanding: A sum of Rs. 463.03

87

Particulars Current year Previous year Basic pay 47,52,359.00

41,98,953.00

D.A. 18,97,673 .00

12,72,186 .00

Elecy. All. 15,786 .00

9,153.00

Medical Allow. 6,000.00

4,500.00

Pension, DCRG & Leave Encashment etc

34,12,800 .00

15,57,000.00

TA Bill 1,61,724 .00 2,63,422 .00Medical Bills Reimbursement 4,744.00 30,521 .00LTC 0.00 1,63,530.00Total: 102,51,086 .00 74,99,265.00

1. Arun Kumar Verma, Managing Director 01-04-2015 to 31-03-20162.

Sh. R.K.Batra, Director/Projects/Operation 09-04-2015 to 31-03-2016

3.

Sh. S.K.Bansal, Director/Project

08-04-2015 to 31-03-20164. CA Kapil Kumar Marwaha, CFO 01-04-2015 to 31-03-20165. Sh. Harjinder Singh, Company Secretary 01-04-2015 to 31 -03-2016

crore is payable to UHBVNL as on 31-03-

2016.

(iii) Amount outstanding for Loans / Bonds on a/c

of transfer of Jind Circle Rs. 1580.19 Crore

(iv) Rs. 612.72 booked on a/c of interest on loan

from UHBVN.

(3) Name of Related Party: Govt. of Haryana:

Relationship: Majority shareholding of 70.29%.

1.63. ACCOUNTING FOR TAXES ON INCOME:

The Nigam has not created deferred tax assets in

the books of accounts because of huge amount of

losses carried forward, unabsorbed depreciation

and un-certainty of future taxable income against

which deferred tax assets can be realized. This is in

conformity with Accounting Standard-22 issued by

ICAI.

1.64. COST ACCOUNTING RECORDS & COST AUDIT:-

M/S Vandana Gupta & Co. Panchkula was

assigned the work of maintenance of cost

accounting records for FY 2014-15 by the CAO,

DHBVNL, Hisar which have been completed and

submitted by them. The said firm has been

assigned the job of preparing the cost accounts for

FY 2015-16 and the work of cost records is under

process.

1.65. The total of share capital, Reserve and Surpluses

and Capital consumer contribution & Grants works

out to Rs 4428.14 (it includes Rs. 1791.99 crore as

grant received from GoH under UDAY) (previous

year Rs. 2544.63) crore and the accumulated

losses are Rs.13190.61 (previous year Rs.

12719.03) crore up to 31/03/2016.

1.66. Due to financial crisis, the Nigam was not in a

position to make the repayment of loans as per

schedule agreed upon with the commercial banks.

The Nigam got re-structured the all working capital

loans from the commercial banks. As per re-

structuring schedule the repayment of principal

loans outstanding as on date will start from

January 2015 but the interest cost will be paid

regularly.

1.67. The information becoming the part for evaluation

of eligibility parameters for claiming interest

subsidy etc required by funding agencies viz

REC/PFC etc

88

Transmission Loss Units 113.67 Energy sold Units

1877.72

Revenue from operation / sale of energy

Rs.

12413.67 Revenue from energy traded / Inter State sales

Rs.

891.76

Opening debtors for sale of energy w/o deducting provision for doubtful debts or any amount written off

Rs.

5330.55

Closing debtors for sale of energy w/o deducting provision for doubtful debts or any amount written off

Rs.

6358.57

Total Expenditure including exceptional items

Rs.

15641.32

Non-Tariff / Other Income

Rs.

226.74

Subsidy received Rs.

2529.34

Subsidy Booked / Built in t he Revenue Rs. 2529.34Sundry debtors for energy traded & Inter State sale of power Rs. 1090.07Energy Purchased Units 2849.97Energy Traded / Inter State sales (Net) Units 250.12

Amount in Crore

67

Amount in `

1.68. The status of secured & unsecured loans as on 31-03-2016 are detailed hereunder

89

Particulars 31.03.201 6 31.03.201 5

Secured

Commercial Banks for Electrification Schemes

1,55,02,90,644 1,82,01,41,054

Punjab Sind Bank

Bank of Rajasthan

1,36,84,35,280 18,18,55,364 1,66,65,88,642 22,16,66,666

Workin g Capital Loans:- - Syndicate Bank Hisar (10)

0.00

4,68,49,41,383

Indian Bank Hisar (9)

0.00

2,49,46,25,484

Allahabad Bank Hisar (9)

0.00

2,83,92,26,189

Vijay Bank Hisar (9) 0.00

2,81,25,69,135

Bank of India, Chandigarh (9)

0.00

2,32,76,39,222

Canara Bank, Hisar (10)

0.00

6,68,91,92,247

Central Bank of India, Hisar (11)

0.00

2,73,16,87,083

Dena Bank, Hisar (10)

0.00

3,48,55,68,388

UCO Bank, Zirakpur / Panchkula (7)

0.00

5,88,73,33,794

OBC Panchkula (8) 0.00

1,76 ,47,19,939

Punjab & Sind Bank Hisar (10)

0.00

1,85,52,85,129

Punjab National Bank, Hisar (8)

0.00

1,90,76,88,393

Indian Overseas Bank Panchkula/Hisar (10) 0.00

3,17,08,97,393

Bonds from Various Banks (FRP)

1,62,86,00,000

22,02,37,00,000

Cash Credit Limits from Banks

Vijaya Bank, Hisar 20,00,35,526

25,01,11,115

Indian Bank, Hisar 20,00,73,677

4,14,01,968

Oriental Bank of Commerce, Panchkula

45,52,41,520

79,57,74,579

Allahabad Bank, Hisar

21,47,53,289

60,97,12,625

Canara Bank, Hisar 67,76,76,036

1,68,70,80,685

Total Secured Loans from Banks (a)

4,92,66,70,692

69,87,92,95,805

REC for Re-financing of IBRD Loans

2,96,6,0603

PFC under R-APDRP 54,12,80,998

43,33,80,998

REC for capital works

15,05,55,12,965

13,45,01,63,387

REC for Working Capital

13,36,66,66,666

9,50,00,00,000

REC for Procurement of material

Nil

Nil

PFC for Working Capital

19,28,57,14,286

20,00,00,00,000

Total Secured Loans from Others (b)

48,24,91,74,915

43,41,32,04,988

Total Secured Loan (c=a+b)

53,17,58,45,607

113,29,25,00,793

UnsecuredFrom OthersWorld Bank Project 1, 56,73,23,273 1,05,45,52,060 NABARD Projects 0.00 36,46,00 APDRP Projects 24,59,54,265 28,04,96,405 PMGY Projects 65,98,822 74,88,001 PFC for capital works 2,71,07,5 00 4,25,97,500 State Govt Loans Under 47,07,51,36,000 0NCR Planning Board 19,69,81,003 41,50,74,003 REC against RGGVY Scheme 6,74,22,734 7,58,50,579 Loan from HVPNL 6,26,25,00,000 6,26,25,00,000

Total Unsecured Loans from Others (d) 55,449,023,597 8,13,89,23,148

loans received from UHBVN (e) 15,801,891,697 18,59,04,60,820

Total (c+d+e) 124,426,760,901 140,02,18,84,761

90

The above figures are in consolidation of amount appearing in Note-5 (Rs.121,442,387,373), Note-8 (Rs.

174,77,80,048), Note 10 (Rs. 161,25,97,022) current maturities of long term debt and excluding foreign exchange

fluctuation (Rs. 37,60,03,543) foot note-5.6.

1.69. As per Govt. of Haryana vide its notification No. 23/10/2016-4 Power dated 16.2.16 assets and liabilities in lieu of

transfer of Jind Circle from UHBVN to DHBVN vide GOH Notification No. 22/04/2012-3 dated 3/7/2013.

The Government Notification is reproduced as under:-

No .23/10/2016-4 Power:- In excise of the power conferred by Section 55 read with Section 23, 24 & 25 of Haryana

Electricity Reforms Act, 1997 (Haryana Act-10 of 1998), the Governor of Haryana hereby makes the following rules

further to amend the Haryana Electricity Reform (Transfer of Distribution Undertaking from Haryana Vidyut Prasaran

Nigam Limited to Distribution Companies) Rule 1999. namely-

1. These rules may be called the Haryana Electricity Reform (Transfer of Distribution Undertaking from Haryana Vidyut

Prasaran Nigam Limited to Distribution Companies) Amendment Rule, 2016.

2. In Haryana Electricity Reform (Transfer of Distribution Undertaking from Haryana Vidyut Prasaran Nigam Limited to

Distribution Companies) Rule -1999, the following assets and liabilities shall be excluded from Schedule-B and shall be

included in Schedule-C, namely –

Aggregate Value of Assets and Liabilities Transferred from Discom I to Discom II

The loans shall be interest bearing in the books of DHBVN (Discom-II) as per actual rate borne by UHBVN (Discom-I)

with effect from transfer date i.e. 03.07.2013.

1.70. As required by Accounting Standard 20 on Earning per Share issued by the Institute of Chartered Accountants of India

(ICAI), basic earning per share has been calculated by dividing Net Profit after Tax by the weighted average number of

equity shares outstanding during the year as per details given below:

Liabilities Assets Consumer Contribution 521942633 Fixed Assets 3332913661 Loans from UHBVN to DHBVN

18590460820 CWIP 388399893

Other long term liabilities

451324660 Long term loans and advances

39779283

Other current liabilities 491786783 Other non-current assets

70783272

Inventories 53442466

Trade Receivables

2348556436

Cash

532263

Other current assets

258377669

Accumulated losses

13562729953

Total

20055514896 Total

20055514896

91

1.71 a). Additional information pursuant to part-II of schedule III of company Act, 2013.

Particulars Current F.Y. 2015-16

PreviousF.Y. 2014-15

Profit/( -) Loss as per Profit & Loss A/c (4,715,800,611)

(6,36,16,63,993)

Weighted average number of shares used in computing basic earning per equity share

14,444,536

1,43,91,176

Basic earning per share (Rs.) (on nominal value of Rs. 1000/ -

per share)

(326.48)

(442.05)

Weighted average number of shares used in computing diluted earning per equity share

14,444,536

1,43,91 ,176

Diluted earning per share (Rs.) (on nominal value of Rs. 1000/-per share) (326.48) (442.05)

Particulars Current year Previous year

Amount in Lakhs

Unit in Lakhs Amount in Lakhs

Unit in Lakhs

Total quantum of power purchased during the year

1250040.19

284997.28 1235784.42

286186.05

Less: Transmission losses

11367.58

-

11218.79

Less: inter-state sale of power

25012.51

30084.77

Total units of power available in DHBVN

1250040.19

248617.19

1235784.42

244882.49

Total quantum of power sold during the year (excluding FSA)

187771.91

845351.91

184960.50

T&D loss in units

922265.24

60845.49

59922.00

%age losses

24.47%

24.47%

b) Distribution losses of 7.55% in respect of open access unit wheeled through DHBVN's distribution system (33KV

and below) has been recognized in the Accounts as unit sold (amount and unit billed).The net impact of above

arrangement is that the distribution loss of 7.55% (of open access unit) is shown as unit sold by DHBVN alongwith

the revenue in the shape of wheeling charges received by DHBVN.In calculation of distribution losses and AT&C

loss for the FY 2015-16, 8.49 crore units (112 crore units wheeled on 33KV and below * 7.55%) has been added

in unit sold and Rs. 71.18 crore received as income.

92

c) Provision for unbilled AP consumers:-

As per sale circular D-2/2016, bills of AP consumers are issued once in 4 months. Accordingly ¼th consumption of

AP consumers have been billed during March 2016 and ¾th of Actual consumption remained unbilled.

Thus provision of 40.87 crore units has been added in unit billed / sold (As per decision of BOD, held on

24/08/2016) and same will be reversed in next FY


FOR O. Aggarwal & Co. (R.K BATRA) (ARUN KUMAR VERMA)Chartered Accountants Director Project /Operations Managing DirectorF.R No.: 005755N DIN: 07167590 DIN: 03111696

(CA. . ASHOK KUMAR) (RAJESH SHARMA) (CA KAPIL K MARWAHA) Partner CGM/Accounts Chief Financial OfficerM. No. 093725

(HARJINDER SINGH)Place : Delhi Place : Hisar Company Secretary Date : 22.11.2016 Date : 21.11.2016

Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

93

NOTES NO. 2SHARE CAPITAL

Particulars Account Code

As at 31st March, 2016

(a) Authorised :-

200,00,000 (Previous year 200,00,000) Equity Shares of ` 1000/- each

2,00,000.00

2,00,000.00

(b) Issued

14723577(Previous year-14391176) Equity Shares of

` 1000/- each54.502 147,235.77

143,911.76

14723577(Previous year-14391176) Equity Shares of 147,235.77

143,911.76

Grand Total 147,235.77

143,911.76

RECONCILIATION OF THE NUMBER OF SHARES AND AMOUNT OUTSTANDING AT THE END OF THEREPORTING PERIOD:

Note 2.1 : The paid up Share Capital includes 4372735 No. Equity Shares of ` 1000/- each issued to HVPNL and10350842 No. Equity Shares (previous year 10018441 No. shares) of `1000/- each issued to State Govt. which includes 6 Equity Shares issued to subscribers to the Memorandum of Association. Out of the shares issued to HVPNL, 4372725 No. shares were issued in pursuant to a contract without payment being received in cash.

BELOW ARE THE NAMES OF THE SHAREHOLDERS HOLDING MORE THAN 5% OF SHARES

Equity Share of Rs.1000/- each fully paid

No. of Share Holding

% of Share Holding

No. of Share Holding

% of Share

As at 31.03.2016 As at 31.03.2015

Total 14,723,571 99.99 14,391,170 99.99

Holding

1 Government of Haryana 10,350,836 70.29 10,018,435 69.61

2 Haryana Vidyut Prasaran Nigam Limited 4,372,735 29.70 4,372,735 30.38

Sr. No. Name


(`) in Lacs (`) in Lacs

c) Subscribed and paid up

` 1000/- each

No of Equity Shares ` in Lacs

No of Equity Shares ` in Lacs

Opening Balance of Issue, Subscribed & Paid up Equity Share Capital 14391176 143,911.76

14391176 143,911.76

Add: Issued, Subscribed & Paid up Equity ShareCapital during the year ended 2015-16 3.32401 3,324.01

-

-____________ ____________ ____________ ____________

Closing Balance of Issued, Subscribed & Paid up Equity Share Capital 14,391,179 147,235.77 14,391,176 143,911.76

As at 31st March, 2016 As at 31st March, 2015

94

NOTES NO. 3RESERVES AND SURPLUS

Particulars st As at 31 March, 2016

stAs at 31 March, 2015

" in Lakhs"` " in Lakhs"`

Account Code

Note No. 3.1 The Company has not provided any contingency reserve during the current financial year. However the amount of Rs. 2723.21 Lacs lying under contingency reserve represents the amount allowed by Haryana Electricity Regulatory Commission in different years upto the FY 2007-08.

Note No. 3.2 A sum of 7434.93 Lacs (previous year 5942.19 Lacs) towards depreciation on consumer contribution has been reversed under GH 77.150 (also refer to Note 26).

Note No. 3.2 A sum of `790.93 Lacs (previous year `762.63 Lacs) towards depreciation on assets created with the help of grant has been reversed under GH 77.150 (also refer to Note 26).

a

55.110 to 55.150

55.4

55.304

55.306

55.310

55.309

55.301

55.302

55.303

55.305

55.315

55.3 (Except 55.308)

55.500

56.680 b

c

Capital reserve

(Capital reserve & Service line contributions

received under the Electricity (supply) act, 1948)

As per last financial statements 136,309.52 125,083.80

Add: Additions during the year 12,972.68 11,225.72

149,282.20 136,309.52

Total Capital Reserve 149,282.20 136,309.52

Less: Depreciation pertaining to assets created from Consumer Contribution 44,748.14 37,313.20

Closing Balance 104,534.06 98,996.32

Other Reserves

Grant from Member Parliament


Add: Additions during the year 332.19 463.32

Closing Balance 2,008.22 1,676.03

Grant under RGGVY Scheme.


Add: Additions during the year - -1,034.44


Grant from GOH on a/c of 50% share of shifting of Dhani

connections from AP feeders to Rural Domestic feeders

As per last financial statements 17.39 17.07

Add: Additions during the year - 0.32

Closing Balance 17.39 17.39

Subsidies towards Cost of Capital Assets (As per last financial Statements) 18.69 18.69

Grant from GOH under Mahatma Gandhi Gramin Basti Yojna 750.00 -

Grant from APDP (As per last financial Statements) 5,908.83 5,908.83

Grant from PMGY (As per last financial Statements) 65.32 65.32

Grant from Kutir Jyoti (As per last financial Statements) 265.18 265.18

Incentive from GOI/GOH for improvement of Distribution System (As per last financial Statements) 286.20 286.20

Donated Land (As per last financial Statements) 0.00 0.00

Total Grants received towards cost of capital assets 15,880.63 14,798.43

Less: Depreciation pertaining to assets created from Grants 6,757.86 5,966.94

Total Other Reserves 9,122.76 8,831.49

Grant from Govt. of Haryana under UDAY 179,198.62 -

Contingency Reserve -


Add: Additions during the year - -


Surplus/ (Deficit) in Statement of Profit & Loss

As per last financial statements -1,271,903.02 -1,072,659.08

Add: Profit/(Loss) transferred from UHBVN - -135,627.30

Add: Profit/(Loss) transferred from Profit & Loss account -47,158.01 -63,616.64

Closing Balance -1,319,061.02 -1,271,903.02

Total -1,023,482.37 -1,161,352.00

55.308

55.200

95

NOTES NO. 4SHARE APPLICATION MONEY PENDING ALLOTMENT

ParticularsAs at 31st March,

2016As at 31st March,

2 0 1 5 ` in Lacs ` in Lacs

54.501 Share Application Money Pending Allotment

Account Code

As per last financial statements 1,000.01 0.01

Application received during the year 55,602.65 1,000.00

Share Issued during the year 3,324.01 -


Total 53,278.65 1,000.01

96

NOTES NO. 5LONG TERM BORROWINGS

As at 31st March, 2016 As at 31st March, 2015 ` in Lacs ` in Lacs

ParticularsAccount Code

Secured From Banks

553.547 &53.548 b Working Capital Loans:- - -

Syndicate Bank Hisar 0.00 46,533 Indian Bank Hisar - 24,781 Allahabad Bank Hisar (0.00) 28,204 Vijay Bank Hisar (0.00) 27,937 Bank of India, Chandigarh (0.00) 23,121 Canara Bank, Hisar (0.00) 66,441 Central Bank of India, Hisar 0.00 27,133 Dena Bank, Hisar (0.00) 34,647 UCO Bank, Zirakpur - 58,458 OBC Panchkula (0.00) 17,541 Punjab & Sind Bank Hisar 0.00 18,473 Punjab National Bank, Hisar 0.00 18,980 Indian Overseas Bank (0.00) 31,495

52.114 & 52.115 Bonds from Various Banks (FRP) 16,286 220,237 Total Secured Loans from Banks 31,789 659,485 From Others

53.302 & 53.303 REC for Re-financing of IBRD Loans - - 53.306 PFC under R-APDRP 5,413 3,837 53.300 & 53.301 REC for capital works 136,908 122,851 53.518 & 53.519 REC for Working Capital 133,667 90,411 53.519 REC for Procurement of material - - 53.549 PFC for Working Capital 192,857 193,095

Total Secured Loans from Others 468,845 410,194 UnsecuredFrom Others

53.100, 53.101 & 46.237 Loan from GOH (funded by world bank ) 19,433 13,219 53.400 & 53.401 NABARD Projects 0 - 54.212 & 54.213 APDRP Projects 2,114 2,460 53.516 & 53.517 PMGY Projects 57 66 53.527 & 53.537 PFC for capital works 116 271 53.514 & 53.515 NCR Planning Board 0 2,075 53.553 & 53.554 Loan from UHBVN 158,019 185,905 53.555 State Govt. Loans Under UDAY 470,751 - 53.551 & 53.552 REC against RGGVY Scheme 674 759 53.307 &53.309 Loan from HVPNL 62,625 62,625

Total Unsecured Loans from Others 713,790 267,380 Total 1,214,424 1,337,058

3.510 & 53.511 a Commercial Banks for Electrification Schemes 15,503 15,504

Note 5.1 :- of the loan amount

Note 5.2 :- Loans from commercial banks for electrification schemes is against the security of T&D assets of the NigamNote 5.3 :- Loan from HVPNL was obtained as per decision of Govt of Haryana so as to adjustment of amount payable by DHBVN to HPGCL & HVPNL, against power

purchase & transmission charges respectively. Such amount was raised by HVPNL by issuing bonds-2012 series- I & II(Part-I&II) during FY 2012-13, HVPNL Bonds 2013 series-I(Part I & II) in FY2013-14 and HVPNL Bonds 2014-15 Series-I in F.Y 2014-15(other than cash).

Note 5.4 :- Loan from PFC was obtained for working capital to fund the 50% of the untied gap for FY 2012-13. The loan shall be repaid in 84 monthly installments after 3 years moratorium period from the date of first disbursement of each tranche. The interest shall be payable on monthly basis on 15th of every month after 1st disbursement.

Note 5.5 :- A transitional financial loan was raised from REC for working capital to fund the 50% of the untied cash gap for FY 2012-13. Period of moratorium for repayment of principal shall be 36 months form the 15th day of the month of disbursement of first installment of loan, but the entire loan shall be repaid within a period of 84 months (excluding the moratorium period ) from the date of disbursement of the first installment of loan.

Note: 5.6:- Loan from GOH (funded by world bank ) of GH-46.237 includes Rs. 3760.04 Lacs (including Rs. 2673.93 Lacs for previous year) on account of foregin exchane fluctuation.

Note: 5.7 Loan from state govt under Uday scheme, as per Tri-partite MOU Dated. 11.03.2016

5.1 :- Loan from REC for Refinancing of IBRD loan is secured against hypothecation of existing fixed assets of Operation Division Ch. Dadri to the extent of 130%

97

NOTES NO. 6 OTHER LONG TERM LIABILITIES

As at 31st March, 2016` in Lacs

As at 31st March, 2015` in LacsParticulars

Account Code

Note 6.1 :- Amount of Security Deposit shown against GH-48.1 includes interest bearing meter security deposit from consumers.

46.1,46.2 Dexcept 46.237

48.1 Security deposits from consumers-Interest bearing 105,026 97,456

47 Deposits for electrification/ service connection 20,794 18,964

Total 156,616 144,717

eposits and retention from suppliers and contractors 30,796 28,297

98

NOTES NO. 7LONG TERM PROVISIONS



a Provision for Employee Benefits

44.370 & 44.380

-

b Others

Total -

13,802.36

13,802.36

Unfunded Liability of Employees Terminal Benefits

Account

CodeParticulars

99

NOTES NO. 8 SHORT TERM BORROWINGS

Note 8.1:- Cash Credit Limit from the Commercial Banks are secured against hypothecation of Book Debts/Receivables of the Nigam.



` in Lacs

Secured

50.1 Cash Credit Limits

from Banks

` in Lacs


Vijaya Bank, Hisar 2,000.36 2,501.11

Indian Bank, Hisar 2,000.74 414.02

Oriental Bank of Commerce, Panchkula 4,552.42 7,957.75

Allahabad Bank, Hisar 2,147.53 6,097.13

Canara Bank, Hisar 6,776.76 16,870.81

Total Secured Cash Credit 17,477.80 33,840.81 Limits from Banks

Total 17,477.80 33,840.81

100

NOTES NO. 9TRADE PAYABLES

As at 31st March, 2016 As at 31st March, 2015` in Lacs ` in Lacs

41.1, 41.2& 41.3 (except 41.156)

Total

219,367 226,643

226,643

(B) Liability for purchase of power (HPGCL &Others)


219,367

101

NOTES NO. 10OTHER CURRENT LIABILITIES

As at 31st March, 2016 As at 31st March, 2015` in Lacs ` in Lacs

Account Codes Particulars

Note-10.1:- The net payable amount as on 31.03.2016 to UHBVN is. Rs.46302.71 Lacs (Rs.71653.95 Lacs -25351.24 Lacs). Hence shown in this note. Amount receivable from UHBVN as on 31.03.2015 is shown in Note-14.

a Current maturities of long term debt

51.110 Repayment due to Commercial Banks for elect. Schemes - -

51.243 b Current maturities of Long Term Borrowing 16,125.97 31,994.40

46.7 c Interest accrued but not due on borrowings 12,657.25 11,717.13

j Other payable -

42.1 to 42.3 Liability for Capital supplies/Works 39,959.97 37,277.43 GH 43(except 43.4) Liability for O&M supplies/Works 942.38 1,077.11

44.1 to 44.4 (Except 44.370 & 44.380) Staff related Liabilities and provisions 5,106.62 5,004.59

51.209 Interest due on staff security 0.38 0.32

46.3 Electricity Duty Payable to Govt. 9,259.55 9,009.91

46.4 Liability for expenses 1,071.63 1,139.70

46.501 Municipal Tax payable 12,355.75 9,660.72

46.502 Amount payable to Govt. on account of compounding of offence in case theft of elecy. 3,899.73 3,424.15

46.9 Other Liabilities and provision (except 46.993, 994 & 995) 11,019.55 10,112.60

46.994& 28.876 Payable to HPGCL(Other than Power Purchase) 459.12 459.12

46.995,28.877,28.103&43.4 Payable to UHBVNL(Other than Power Purchase) 46,302.71 0.00

31 IUT- Material Accounts - -

28.110 Sundry Debtors for sale of stores other than UHBVN 262.46 -

48.3 Interest Payable on Consumers Securities Deposits -0.00 134.37

46.238 Provision for Interest on Consumer Security - -

34 Inter Units Accounts - Funds Transfer from Head Office 551.61 409.74

35 IUT-Head Office Transaction - -

57.120-123 Payable to GPF Trust (HVPNL) - -

31 IUT- Material Accounts 0.26 0.40

32 0.00 0.00

35 IUT-Head Office Transaction 0.00 47.07

57.131-57.132 & 28.784 Payable to Pension Trust (HVPNL) 33,540.39 8,665.24

57.141, 142 & 28.785 Payable to Pension Trust (DHBVNL) 4,204.42 2,026.69

Total Other payable 168,936.53 88,449.16

Total 197,719.76 132,160.69

102

NOTES NO. 11SHORT TERM PROVISIONS

` in Lacs ` in Lacs

Provision for Wealth Tax - 1.11

Total


Account

CodesParticulars


1.11

46.801

-

103

NO

TES

NO

. 12

(a)

TAN

GIB

LE A

SSET

S

AS

AT

31.0

3.20

15AS

ON

31

.03.

2016

DEPR

ECIA

TIO

NG

ROSS

BLO

CKN

ET B

LOCK

AS O

N

01.0

4.20

15UP

TO

31.0

3.20

16UP

TO

01.0

4.20

15FO

R TH

E YE

ARAS

AT

31.0

3.20

16AD

JUST

MEN

TSPa

rticu

lars

ADDI

TIO

NDI

SPO

SAL

Land

2,6

62.4

0 -

-

2

,662

.40

--

--

2,6

62.4

0 2

,662

.40

-

-

-

-

Build

ing

& C

ivil

Stru

ctur

es 1

9,50

7.76

6

46.0

3 0

.16

20,

153.

63

3,9

96.9

4 5

66.7

3 0

.05

4,5

63.6

2 1

5,59

0.01

1

5,51

0.82

-

-

-

-

-

-

-

--

-

Tran

smis

sion

/Dis

trib

utio

n 5

97,9

67.1

7 4

2,03

1.49

4

,957

.40

635

,041

.26

173

,916

.94

27,

479.

61

2,4

21.7

7 1

98,9

74.7

8 4

36,0

66.4

7 4

24,0

50.2

3

Syst

em(P

lant

& M

achi

nery

) -

-

-

-

-

-

-

-

-

-

-

-

-

-

Vehi

cles

1,3

72.4

3 0

.29

6.5

1 1

,366

.21

1,1

64.0

4 2

2.96

5

.86

1,1

81.1

4 1

85.0

7 2

08.3

9

Furn

iture

& F

ixtu

res

(Incl

udin

g O

ffice

Eq

uipm

ents

) 1

,799

.76

67.

70

6.8

8 1

,860

.58

878

.17

152

.28

3.9

1 1

,026

.54

834

.04

921

.58

Tota

l 6

23,3

09.5

2 4

2,74

5.50

4

,970

.95

661

,084

.07

179

,956

.10

28,

221.

58

2,4

31.5

9 2

05,7

46.0

9 4

55,3

37.9

9 4

43,3

53.4

3

PREV

IOU

S YE

AR

538

,612

.28

89,

192.

65

4,4

95.4

1 6

23,3

09.5

2

157

,697

.17

23,

930.

74

1,6

71.8

1 1

79,9

56.1

0 4

43,3

53.4

3 3

80,9

15.1

1

Not

e-12

.1:-

Sinc

e th

e C

ompa

ny is

eng

aged

in th

e El

ectr

icity

Dis

trib

utio

n bu

sine

ss a

nd a

ll th

e as

sets

are

use

d in

this

bus

ines

s onl

y, th

e fu

nctio

n-w

ise

deta

ils o

f ass

ets a

re n

ot re

quire

d.

Not

e-12

.2:-

The

Ass

ets

crea

ted

out o

f con

sum

ers

cont

ribut

ion

am

ount

ing

to

149

282.

20 L

acs(

Prev

ious

Yea

r ` 1

3629

6.84

Lac

s) in

clud

ed in

the

gros

s bl

ock

agai

nst

Pla

nt &

Mac

hine

ry (T

&D

) ca

tego

ry a

nd d

epre

ciat

ion

of `

7434

.93

Lacs

@ 4

.98%

ave

rage

rate

of d

epre

ciat

ion

on

T&D

cat

egor

y of

ass

ets

(Pre

viou

s Ye

ar `

531

4.84

Lac

s @

3.9

0%) C

harg

ed o

n th

e op

enin

g ba

lanc

e of

ass

ets.

Not

e-12

.3:-

The

Ass

ets

crea

ted

with

G

ovt.

Gra

nt

amou

ntin

g to

` 1

5880

.63

Lacs

(Pre

viou

s Ye

ar `

1479

8.43

Lac

s) in

clud

ed in

the

gros

s bl

ock

agai

nst

Pla

nt &

Mac

hine

ry (T

&D

) cat

egor

y an

d de

prec

iatio

n of

7

90.9

3 La

cs @

4.9

8% a

vera

ge ra

te o

f dep

reci

atio

n on

T&

D c

ateg

ory

of a

sset

s (Pr

evio

us Y

ear

577.

55 L

acs @

3.9

0%) C

harg

ed o

n th

e op

enin

g ba

lanc

e of

ass

ets.

Not

e-12

.4:-

Th

e La

nd fo

r 33

KV S

ub S

tatio

n C

hang

don

ated

by

Gra

m P

anch

ayat

, Vill

age

Cha

ng is

reco

rded

at n

omin

al v

alue

of

100

/- in

abo

ve a

sset

s.

Not

e-12

.5:-

A

ccum

ulat

ed d

epre

ciat

ion

incl

ude

Rs 2

228.

92 L

acs r

elat

ed to

prio

r per

iod

adju

stm

ent o

f ear

lier y

ears

.

Not

e-12

.6:-

D

epre

ciat

ion

of R

s. 6

.50

Lacs

per

tain

s to

FY 2

014-

15 a

nd h

as b

een

book

ed a

s prio

r per

iod

expe

nses

.

104

NOTES NO. 12 (b)INTANGIBLE ASSETS

NOTES NO. 12 (c)CAPITAL WORK-IN-PROGRESS

As at 31st March,

2016

As at 31st March,

2015` in Lacs ` in Lacs

- -




` in Lacs ` in Lacs

Account CodesParticulars

14 Capital Work in progress

Total 98,961 82,919

WORKING NOTE ON CAPITAL WORK-IN-PROGRESS

2015-16 2014-15

At the beginning of the year 82,918.79 101,653

Added during the Year 47,193.01 59,503

Total (A) 130,111.80 161,155

Less: Transfer to Fixed Assets

1. Land - -

2. Building and Civil Structures 646.03 4,008

3. Plant & Machinery-T&D 42,031.49 85,089

4. Vehicles 0.29 23

5. Furniture & Fixture (Including Office Equipments) 67.70 73

Total Transferred to Fixed Assets (B) 42,745.50 89,193

Net Balance (C=A-B) 87,366.30 71,963

Add: Interest & Guarantee Charges Capitalized during the Year 10,508.43 10,689

Add: Exchange Fluctuation Fund Capitalized 1,086.11 266

Closing at the year end 98,960.84 82,918.79

98,961 82,919

105

NOTES NO. 13LONG TERM LOANS AND ADVANCES



` in Lacs ` in Lacs

Secured Considered Good


27.101 House Building Advance 2,984.08 3,206.07

27.102 Scooter Advance 207.41 210.78

27.103 Car Advance 218.35 241.18

Unsecured Considered Good -

27.104, 107, Cycle, Marriage & Computer Advance 1,480.75 1,608.59

108 & 109

Capital Advances:- Secured Considered good - -

25.1 a) Interest bearing - -

25.5 b) Interest free 9,200.76 6,521.03

25.6 c) Material received but not taken in books - -

25.7 d) Contractors material control account (capital) - -

46 d) Less : Provisions - -

Total 14,091.34 11,787.65

106

NOTES NO. 14OTHER NON-CURRENT ASSETS



` in Lacs ` in Lacs

Particulars

Account Codes

Note-14.1:- The net of amount of receivable/payable from/to as on 31-03-2016 becomes payable to UHBVN amounting to Rs.46302.71 Lacs

hence the same has been adjusted against Note-10

28.3 (ii) Interest accrued but not due 1,805.35 1,632.17

28.4 (iii) Amount recoverable from employees 502.39 523.58

27.412 Interim Deposit with Income Tax 1,282.70 1,200.00

28.7 (iv) Other claims and receivable (except 28.784 & 28.785) 1,552.70 784.50

28.6 (v) Receivable from GOH against liabilities 7,632.42 7,687.18

28.9 (vi) Deposits 468.89 450.34

57.120-123 (vii) Receivable from HVPNL GPF Trust 2,944.19 1,624.76

57.160-163 Receivable from GPF Trust (DHBVNL) 53.25 30.88

28.879 & 46.993 (viii) Amount receivable from HVPNL 976.74 781.69

28.877,46.995, (ix) Receivable from UHBVNL (Other 28.103 & 43.4 than Power Purchase) - 272.23

16.1 Assets held for disposal 2,693.28 2,693.32

46.2 Less: Others Provisions 350.93 350.93

Total 19,560.97 17,329.71

107

NOTES NO. 15CURRENT INVESTMENTS



` in Lacs ` in Lacs

Investments against Contingency Reserves With Banks

20.297 Contingency Reserve Investment -

Total -

-

-

ParticularsAccount Codes

108

NOTES NO. 16INVENTORIES


` in Lacs



` in Lacs

22.20 To 22.63 and 22.68 to 22.70,22.8 (a) Stores and Spares

In Stores(Capital, O &M) 21,966.34 20,608.05

22.640 & 22.650 (b) Stores and Spares

At Site (Capital & O&m) 3,142.17 2,858.72

25,108.51 23,466.77

46.201,46.222,46.233 Less : Provisions against Stock 200.00 300.00

Net Stock 24,908.51 23,166.77

Total 24,908.51 23,166.77

STORES AND SPARES


` in Lacs

Account Codes ParticularsAs at 31st March,

2015` in Lacs

22.62 O&M stores and spares 12,770.35 12,602.66

22.639 O&M Material Stock-Others 600.43 211.11

Sub Total-2 O&M Store 13,370.78 12,813.77

22.64 Stores and spares at site(capital) 2,418.79 2,039.15

22.641 Stores and spares at site(World Bank) 3.69 18.49

22.65 Stores and spares at site(O&M) 719.69 801.08

Sub Total-3 MASA 3,142.17 2,858.72

22.68&22.69,22.7 Other Material A/C 8,520.29 7,730.30

22.8 Material Stock-Excess/shortages pending investigations 75.27 63.98

Sub Total-4 8,595.56 7,794.28

Grand Total(1+2+3+4) 25,108.51 23,466.77

46.201 Less: Provision against obsolete stock 200.00 300.00

Net Total 24,908.51 23,166.77

Note-1:- (Previous year 828.20 Lacs) respectively & the same have not been declared obsolete so far.

Note-2:- The existing provision amounting to ` 200.00 lacs is sufficient to meet the value of non-moving/slow-moving items costing to 989.11 lacs.

Note-3:- No Stores & Spares have declared an obsolete by the committee constituted for the purpose during FY 2015-16.

Stores & Spares includes slow moving and non moving stores worth 457.42 lacs (Previous year `515.95 Lacs) & 531.69Lacs

109

TRADE RECEIVABLES

Account CodesAs at 31st March,

a

exceeding six months from the date they were due for payment - -

i) Secured, considered good 92,446.37 71,213.89

ii) Unsecured, considered good 167,416.77 112,392.50

iii) Doubtful 340,631.86 291,361.08

Less: Provision for doubtful trade receivables 340,631.86 291,361.08

b Other Trade Receivables - -

i) Secured, considered good 12,579.97 22,530.00

ii) Unsecured, considered good 22,781.83 35,557.72

Total 295,224.94 241,694.11

Trade receivables outstanding for a period

23.1001-81, 3001-81 & 3101-81 Trade receivables for Sale of Power 49,430.50 49,989.91

23.1101-81, .3201-81 & 3301-81 Trade receivables for Fixed Charges 21,620.78 14,156.85

23.2001-81,3401-81 & 3501-81 Trade receivables for Electricity Duty 9,291.23 7,402.89

23.2301-81,23.3601-81 & 3701-81 Trade receivables for Municipal Tax 2,323.02 1,931.92

23.1701-81, 23.7701-81,23.7801-81 & 23.5301-81 Trade receivables for Surcharge 292,282.99 243,012.22

23.4 Provision for Un-billed Revenue 42,500.58 27,573.31

23.6 Trade receivables for Inter State Sale/ Banking of power 109,007.93 109,356.82

Dues from Permanently Disconnected consumers - -

23.5001-81 A) Sale of Power 38,477.13 34,827.34

23.5401-81 B) Electricity Duty 1,576.18 1,519.80

23.5601-81 C) Municipal Tax 183.87 178.29

23.7 Trade receivables for Misc. Receipts from consumers - -

23.1301-81, 23.7301-81,7401-81 & 5201-81 Trade Receivables for FSA 69,162.59 43,105.84

Sub Total 635,856.80 533,055.20

23.971 Less: Advance receipt from GOH against EAWS -

23.9 Less: Provision for doubtful trade receivables (Except Surcharge) 48,348.87 48,348.87

23.934 Less: Provision for Surcharge not Realised 292,282.99 243,012.22

Total 295,224.94 241,694.11

Note:- 1. Existing provision for bad & doubtful debts in respect of Sale of Power is sufficient to meet with the amount of bad debts on this account.2. The Trade receivables for surcharge prior to 9/2003 includes in the Trade receivables for Sale of Power.3. The Trade receivable includes provision for unbilled revenue Rs 425 cr. Created for the month of March

NOTES NO. 17

As at 31st March, 2016 2015

` in Lacs ` in LacsParticulars

Detail of Trade Receivables

110

NOTES NO. 18

As at 31st March, 2016 2015

` in Lacs ` in LacsAccount Codes Particulars

As at 31st March,

a Balance with Banks

24.3&24.4 In Current Accounts 16,886.64 3,273.06

24.1 & 24.2 b Cash in Hand 9.43 4.56

c Others -

33 Inter Unit Accounts-Remittance to Head Office 22,929.31 14,595.46

20.280 In Deposit Accounts 1,885.95 131.77

20.281 Investment of amount received against 30.92 23.21

RGGVY Grant in fixed deposit.

Total 41,712.25 18,028.07

CASH AND CASH EQUIVALENTS

Note :- A sum of ` 22929.31 Lacs (Previous year `14595.46 Lacs ) deposited by the various field offices in the last days of March-2016 has not been received in the head office main bank account till 31/03/2016.

111

NOTES NO. 19

Account Codes Particulars As at 31st March, 2015


` in Lacs ` in Lacs

SHORT TERM LOANS AND ADVANCES

i) Unsecured, considered good

41.156 Transmission of Power(HVPNL) 9,515.66 14,253.23

26.1 to 26.9 Advances for Purchase of Power and

Operation & Mtc. Supplies 15,344.85 10,665.28

27.201&202 TA & Pay Advance (interest free) 5.04 4.17

27.203,204,206 to 209 Festival, Wheat advance, Other loans

& Adv. Of GIS Premium (interest free) 237.64 249.26

27.420 Advance income Tax Deduction

at source 150.66 326.29

27.411 Advance Fringe Benefit Tax deposited

with I.T. Deptt. 859.87 859.87

27.9 & 46.218-221 Less: Provision for doubtful loans

and advances - -

Total Unsecured Advance 26,113.72 26,358.09

ii) Doubtful - -

Total 26,113.72 26,358.09

112

NOTES NO. 20OTHER CURRENT ASSETS

As at 31st March, 2016 As at 31st March, 2015

` in Lacs ` in Lacs


28.8 Other receivable (except 28.876,877& 879) 5,570.05 5,905.67

17.224 Deffered Revenue Expenditure-Mobile Handset 1.77 2.09

Sub Total-1 5,571.83 5,907.77

36 IUT -Personnel Transaction 223.92 225.07

37 IUT- Other Transaction/Adjustments 1,030.43 1,112.67

Sub Total-2 1,254.35 1,337.74

(A) Total (1+2) 6,826.18 7,245.50

46.2 Less : IUT Provisions 100.03 100.03

Net Current Assets 6,726.15 7,145.48

NOTES NO. 21REVENUE FROM OPERATIONS

113

Account Codes

Particulars

NOTES NO. 21.1 REVENUE FROM SALE OF POWER

Sr.No. Particulars

Account Code 31-3-2016 `

31-3-2015 `

Sale of ServicesSale of power and Banking Outside the state 89,176.05 111,132.82Sale of power within the state 829,295.84 763,944.04Total Sale of Services 918,471.89 875,076.86

Other Operating RevenueRevenue against FSA 222,273.37 153,553.33Fixed Charges 92,969.40 81,407.89Meter Rent/ Service Rental 3,867.80 3,545.77Recovery for theft of Power/Malpractices 2,183.13 1,598.88 Misc. Charges from consumers 1,601.27 1,820.39 Total Other Operating Revenue 100,621.61 88,372.92

Total 1,241,366.88 1,117,003.11

1and Banking 61.1 89,176.05 111,132.82

2 Within state sale of power - a) Domestic supply 61.2001-07 204,249.68 174,826.46 b) Non domestic supply 61.2011-17 156,816.92 128,167.41 c) Industrial supply -

i) Industrial supply LT 61.2031-33 58,137.40 50,035.55 ii) Industrial supply HT 61.2021-26 309,577.81 310,539.90

d) Lift Irrigation 61.2041 11,477.39 11,605.28 e) Agriculture 61.2042-46 7,065.04 7,463.87 f) Bulk supply 61.2051-56 30,530.27 36,903.81 g) Railway Traction 61.2061-64 7,103.69 7,781.21 h) Metro (DMRC) 61.2065 3,093.00 1,868.87 i) Street Lighting 61.2071 4,376.39 3,419.07 j) Public water works 61.2081 36,868.27 31,332.60 2 SUB TOTAL (a toj) 829,295.84 763,944.04 3 Fixed Charges 61.2101-81 92,969.40 81,407.89 4 (a) FSA Assessed 61.2301-81 222,273.37 153,553.33 4 (b) FSA in lieu of Agri received from GOH 61.301 - - 4 Total FSA (a+b) 222,273.37 153,553.33

5 (a) Electricity duty recovery 61.50&51 15,181.69 13,297.34 5 (b) Municipal Tax 61.52&53 5,334.93 4,783.91 5 (c) Meter Service Charges/Line Service Charges 61.6 3,867.80 3,545.77 5 (d) Recovery for theft of power/ malpractices 61.7 2,183.13 1,598.88 5 SUB TOTAL(a to d) 26,567.55 23,225.90

6 Misc.charges from consumers 61.9 1,601.27 1,820.39 7 Gross revenue from sale of power(1 to 6) 1,261,883.49 1,135,084.36

Lessa) Elecy. duty payable as per contra 5 (a) above 61.54& 55 15,181.69 13,297.34 b) M.tax payable as per contra 5 (b) above 61.56& 57 5,334.93 4,783.91 8 SUB TOTAL (a+b) 20,516.61 18,081.25

Net total revenue (7-8) 1,241,366.88 1,117,003.11

Revenue from inter state sale of power

2015-16 2014-15` in Lacs ` in Lacs

114

NOTES NO. 22OTHER INCOME

Interest Income on

Account Code 2016-15 Particulars

Note:-22.1 Interest on fixed deposit with banks amounting to 138.41 Lacs (previous year 74.46 Lacs) represents gross amount and includes an amount of TDS of 4.78 Lacs (previous year 7.50 Lacs).

6

62.222 Fixed Deposits with Banks 138.41 74.46

62.229 Contingency Reserve Investments - -

62.285 Provident Fund 187.94 470.53

718.58 912.63

62.6 Income from Staff welfare activities 12.01 6.01

62.901, 62.908 Rent from Residential Building 34.37 32.78

62.2401-2481 Delayed payment charges from consumers (surcharge levied) 7,908.12 4,933.55

63.1 Subsidies from State Govt. for supply to agriculture tube wells at subsidised tariff 252,934.00 209,803.97

62.8, 62.9 & 62.3 Misc.receipts (except 62.901&62.908) 14,028.90 7,394.93

Total 275,635.98 223,083.87

2.210 Staff Loans and advances 392.23 367.64

in Lacs` in Lacs`

2015-14

115

NOTES NO. 23PURCHASE POWER COST (GH-70)

Unit (In LU) Unit (in LU)Sr

No Particulars 2015-16 2014-15

` in Lacs ` in Lacs

A Power purchase

1 Long Term 263,370.80 1,009,953 271,343.89 1,045,164

2 Short Term 19,485.29 79,888 15,969.98 64,350

3 Unscheduled Intercharges 2,141.19 15,021 -1,127.83 8,990

4 Total (1+2+3) 284,997.28 1,104,863 286,186.05 1,118,503

5 Add Transmission Charges PGCIl & Open Access 81,563 49,802

6 Total (4+5) 284,997.28 1,186,426 286,186.05 1,168,305

Less Transmission Losses 11,367.58 11,218.79

Net Power available after transmission Losses 273,629.70 1,186,426 274,967.26 1,168,305

B TRANSMISSION & SLDC CHARGES (HVPNL) 63,615 - 67,479

TOTAL (A+B) 1,250,040 1,235,784

C Net Cost of Power 1,250,040 1,235,784

Net cost of power after accountal of FSA 1,250,040 1,235,784

Total (A+B) 273,629.70 1,250,040 274,967.26 1,235,784

116

NOTES NO. 24EMPLOYEES BENEFIT EXPENSES

2015-16 2014-15` in Lacs ` in Lacs

Account Codes

Particulars

Note: 24.1- Employees cost of ` 809.23 Lacs (previous year ` 906.46 Lacs) relating to capital works has been capitalized.

75.175.3 Dearness allowance 22,266.46 20,654.68 75.4 Other allowance 6,241.52 6,501.96 75.5 Bonus including honorarium 7.01 10.74

SUB TOTAL 1 48,016.88 47,620.37

Other staff costs

75.611, 613, 614 & 615 Medical expenses reimbursement (Indoor & Outdoor) 753.57 1,216.79 75.612 Leave Travel Concession 184.03 858.75 75.617 & 75.618 Earned leave encashment 4.98 93.14 75.629 Payment under Workmen's Compensation Act. 41.45 55.18 75.630 & 75.631 Pension & Leave contribution (staff on deputation

with DHBVNL) 34.31 0.92 75.632 Pension, Leave, Gratuity contribution 37,000.00 24,000.0075.633 Pension contribution of new staff 2,200.00 2,000.00 75.640 to Expenditure on Employees Engaged on Contractual Basis75.643 (Data Entry Operator/SA/ALM) 11,586.23 10,511.07 75.7 Staff welfare expenses(On medical, canteen, education,

uniform/livery & re-creation). 538.06 457.2675.8 Terminal benefit. 3,417.84 3,163.86

SUB TOTAL 2 55,760.48 42,356.97

Total (1+2) 103,777.37 89,977.34

75.9 Less Expenses Capitalized 809.23 906.46

Total 102,968.13 89,070.89

Basic Salaries 19,501.90 20,452.99

117

NOTES NO. 25FINANCE COST

2014-15` in Lacs

Account Codes

Particulars` in Lacs2015-16

Interest on loans

78.2 a) Interest on Loan Recd. From HVPNL 6,287.61 2,484.10

78.502 b) Rural Electrification Corp. 17,501.49 15,912.63

78.505 c) State Govt. for NABARAD Projects - 0.82

78.515 d) Power Finance Corp. 29.32 43.63

78.518 e)Payment of interest on loan from commercial bank for Electrification schemes 2,014.23 2,283.37

78.527 f)Interest on loans from Comml. Banks for working capital 54,689.24 44,423.04

78.535 g) State Govt. under APDP/APDRP Projects 296.17 334.17

78.536 h)Interest on Loan from NCR 271.51 465.32

78.537 i)State Govt. under PMGY Projects 7.87 8.86

78.538 j)Interest on Loan from RECfor procurement of material 16,177.67 10,203.18

78.539 k)Interest on Loan from REC for re-financing of IBRD loans. 18.86 51.03

78.541 l)Interest on world bank loan 103.44 58.84

78.542 m)Interest on REC Loan against RGGVY scheme 85.50 102.75

78.545 n) Interest on loan from PFC under R-APDRP 504.30 294.64

78.549 o) Interest on Loan from PFC for working Capital 24,255.70 22,090.89

78.553 p) Interest on Loan from UHBVN 61,272.00 -

Sub Total (a to n) 183,514.91 98,757.28

78.601 q) Interest paid on consumer security 1,541.19 1,849.17

78.7 r) Interest on OD/CC from banks for working capital 2,509.54 4,434.05

78.8 s) Other interest and finance charges (except 78.884) 162.21 699.19

Gross Total 187,727.85 105,739.68

78.9 t) Less: Interest & Guarantee Charges Capitalized 10,508.43 10,689.50

Net Total 177,219.42 95,050.19

118

NOTES NO. 26DEPRECIATION

Account Code Particulars 2015-16 2014-15` in Lacs ` in Lacs

77.120 Building and civil structure 566.73 425.39

77.150,160 Transmission and Distribution 27,479.61 23,317.48

77.170 Vehicles 22.96 39.89

77.180 Furniture and Fixture 152.28 147.98

Total 28,221.58 23,930.74

77.150 Less depreciation on assets contributed by consumers and grants. 8,225.86 5,892.39

77.150 Less: transfer to Prior Period 6.50

NET TOTAL 19,989.23 18,038.35

119

OTHER EXPENSES

Note:27.1- Administrative and General expenses of ` 693.78 Lacs/- (previous year ` 744.50 Lacs) relating to capital works have been capitalized.

2015-16 2014-15` in Lacs ` in Lacs


NOTES NO. 27

74.3 Civil Works 4.59 1.80

74.1 & 74.5 Machinery 3,131.59 3,487.12

74.2,74.6 to 74.8 Others 428.24 454.72

Total Repair & Maintenance 3,564.43 3,943.64

Administrative & General Expenses (A&G)

76.101 Rent (including lease rentals) 278.88 349.67

76.102 Rate & Taxes 58.59 31.50

76.103-106 Insurance 32.69 39.19

76.111-116 Telephone charges,postage,tele-gram, telex charges & Mtc.of website of internet, new instruments 682.71 537.11

76.120 Expenditure on Internal Audit carried out by Outsource Agencies 75.21 42.70

76.121 Legal charges. 437.95 605.38

76.122 Audit fees 4.60 4.49

76.123 Consultancy charges. 631.48 740.38

76.124 & 76.125 Other professional charges & technical Fees 32.09 16.18

76.126 Service charges for computerization 625.06 503.56

76.129 Exp. on training to staff for computer 7.14 13.96

76.130 License fee 0.75 200.50

76.131-139 Conveyance & travelling expenses. 1,569.33 1,536.42

76.153 Printing & Stationery 248.46 223.78

76.158 Electricity Charges 368.36 359.76

76.151, 152, 76.154-157, 76.159-191, 193 & 194 Other expenses like watch & ward of building, photo state charges,

indexing & scanning of consumer case files and implementation of online computerization etc. 1,368.07 1,471.89

76.195 Service Tax on Reverse Charge 1,062.29 711.93

76.170 Cash/Secret reward paid to Vigilance and Informer to detect the theft of electricity 24.01 14.16

76.192 Expenditure on GSM modems at DT meters 7.56 --

76.210,30,40,50,60,70,71& 83 Other material related expenses 391.74 525.00

Total A&G Expenses 7,906.98 7,927.56

76.9 Less:- A&G Expenses Capitalized 693.78 744.50

Net A&G Expenses 7,213.19 7,183.06

Other Debits

79.480 to 483 Refund of Revenue 0.88 2.50

79.5 Misc. losses and write off 3,247.93 2,672.09

Total Other Debits 3,248.81 2,674.59

Total 14,026.43 13,801.29

120

NOTES NO. 27(a)PRIOR PERIOD EXPENSES/INCOME

2015-16 2014-15` in Lacs ` in Lacs


Prior Period Items

Prior period Expenses (a)

83.6 Prior Period Depreciation 6.50 -

83.8 Other charges relating to previous years (refer detail below) 45.34 19.72

Prior period Income (b) -

65.8 & 65.9 Other excess provision in prior periods - 23.35

Net Prior Period Items (a-b) 51.83 -3.63

Total 51.83 -3.63

Detail of (83.8) Other charges relating to previous years

Provisions written off - 19.72

Prior Period Interest on Provident Fund Trust 28.52 -

Prior Period Expenditure on Internal Audit carried out by Outsource Agencies 16.82 -

Total 83.8 45.34 19.72

121

NOTES NO. 28EXCEPTIONAL ITEMS

2015-16 2014-15` in Lacs ` in Lacs Account Codes Particulars

65.9 Prior Period Subsidy - 33,449.68

65.8 Prior Period Excess Provision-Consumer Security 134.37 14,589.32

TOTAL 134.37 48,039.00

122

NOTES NO. 29EARNING PER SHARE (EPS)

2015-16 2014-15` in Lacs ` in LacsParticulars

I. Net Profit as per Profit & Loss A/c Available for Equity (47,158) (63,617)Shareholders (in Rupees)

II. Weighted Average number of equity Shares for Earning per Share Computation:

(A) For Basic Earning Per Share of Rs.1000/- each (in Nos.) 144 144

(B) No. of Shares For Diluted Earning Per Share of Rs.1000/- each (in Nos.) 144 144

III. Earning Per Share (Face value of Rs.1000/- each)

BASIC (in Rupees) (326.48) (442.05)

DILUTED (in Rupees) (326.48) (442.05)

Particulars

Profit/(-) Loss as per Profit & Loss A/c -47,158.01 -63,616.64

Weighted average number of shares used in computing basic earning per equity share 144.45 143.91

Basic earning per share (Rs.) (on nominal value of Rs. 1000/- per share) -326.48 -442.05

Weighted average number of shares used in computing diluted earning per equity share 1,444.45 143.91

Diluted earning per share (Rs.) (on nominal value of Rs. 1000/- per share) -32.65 -442.05

SUMMARY

Current F. Y.2015-16

Previous F. Y.2014-15

Calculation of Basic Earning Per Share:

Previous Year Issued, Subscribed & Paid-up Shares 14,391,176 5,267,170,416

Current Year Issued, Subscribed & Paid-up Shares-28.09.15 100,001 18,600,186

Current Year Issued, Subscribed & Paid-up Shares-28.03.16 232,400 929,600

Total 5,286,700,202

WEIGHTED AVG. NO OF BASIC SHARES 14,444,536

Form No. MGT-11

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

CIN :

Name of the company :

Registered office :

Name of the member (s):__________________________________________

Registered address: ______________________________________________

E-mail Id: _______________________________________________________

Folio No/ Client Id: ____________

DP ID: ___________

I/We, being the member (s) of ______ shares of the above named company, hereby appoint

1. Name : _________________________

Address :

Email Id :

Signature: ___________________ or failing him

2. Name: _________________________

Address:

Email Id:

Signature: _____________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Adjourned 15th Annual General Meeting of the Company, to be held on the 28th day of July, 2015 At 10:30 A.M. at the Registered Office in Conference Hall, Vidyut Sadan, Vidyut Nagar, Hisar, Haryana and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution No.

1____________

2____________

3_____________

Signed this____ day of_________ 20___

Signature of shareholder___________Signature of Proxy holder(s)________

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

I............................................, a member of.................................................................... do

hereby appoint........................................... of........................................................... (or

failing him/her)..................................................of..................................................... as my

proxy to attend and vote for me and on my behalf at the adjourned 15th Annual General Meeting

of the Company to be held on ..........................................the ..........................................day

of ............................................2015 at ..........................................am/pm at the Registered

Office of the Comany, Vidyut Sadan, Vidyut Nagar, Hisar and at any adjournment thereof.

As witness my hand, this.................................................. day of ..........................................

Signature by the said..........................................

(affix one rupee Revenue Stamp)

PROXY FORM

Affix Revenue Stamp

Save Money And The Planet

DHBVN

Documents

Annual Report - Dakshin Haryana Bijli Vitran Nigam › staticContent › information › financialstatement › … · Rajan Kumar Gupta, IAS Chairman Addl. Chief Secretary (Power)