A

PROJECT STUDY REPORT

ON

Training Undertaken at

Raj.Rajya vidhut Utpadan Nigam Ltd.

Comparative Analysis Of Financial Performance Of Two

Fiscal Years

Submitted in partial fulfilment for theAward of degree of

Master of Business Administration

Submitted By: - Submitted To: -

Manpreet kaur Ms. Nisha Goyal

MBA 2nd Sem. Assistant Professor

2010-12

ARYA INSTITUTE OF ENGINEERING &TECHNOLOGY

KUKUS, JAIPUR

Preface The underlying aim of the project of summer training as an integral part of M.B.A

program is to give presentation by the students on the issue. The topic of my

project report is “Comparative Analysis of Financial Performance of Two

Fiscal Years” contains complete information about it. Although we have tried our

best to prepare this report an error free report , every effort has been made to

offer the most authenticate position of accuracy.

This report provides an opportunity to students to learn and expand their knowledge that

we evaluate & compare financial position of JVUNL. They would be able to know the

exact reason behind this, methods taken to tackle it and hence take necessary steps for it.

The report also helps the student to devote his/her skill to analyze the problem to suggest

alternative solutions, to evaluate them and to provide feasible recommendations on the

provided data.

ACKNOWLEDGEMENT

I express my sincere thanks to my project guide Ms. Nisha Goyal (Faculty of

MBA) Department for guiding me right from the inception till the successful

completion of the project. I sincerely acknowledge her for extending her valuable

guidance, support for literature, critical reviews of project and the report and above

all the moral support she had provided me with all stages of this project.

I would also like to thank the supporting staff of JVUNL,at for their help and

cooperation throughout the project.

MANPREET KAUR

MBA Third Semester

Table of Contents

1. Executive summary

2. Introduction of industry

3. Industry profile of Raj. Rajya Vidhut Utpadan Nigam

4. Research methodology

a. Title of study

b. Duration of study

c. Objective of study

d. Type of research

e. Scope of study

f. Limitation of study

5. Facts & findings

6. Analysis & interpretation

7. SWOT

8. Conclusion

9. Recommdations &

10. Appendix

11. Bibliography

INDUSTRY PROFILE

The electricity sector in India is predominantly controlled by the Government of

India's public sector undertakings (PSUs). Major PSUs involved in the generation

of electricity include National Thermal Power Corporation (NTPC), Damodar

Valley Corporation (DVC), National Hydroelectric Power Corporation (NHPC)

and Nuclear Power Corporation of India (NPCI). Besides PSUs, several state-level

corporations, such as Maharashtra State Electricity Board(MSEB), Kerala State

Electricity Board, (KSEB),in Gujarat (MGVCL, PGVCL, DGVCL, UGVCL four

distribution Companies and one controlling body GUVNL, and one generation

company GSEC), are also involved in the generation and intra-state distribution of

electricity. The Power Grid Corporation of India is responsible for the inter-state

transmission of electricity and the development of national grid.

The Ministry of Power is the apex body responsible for the development of

electrical energy in India. This ministry started functioning independently from 2

July 1992; earlier, it was known as the Ministry of Energy. The Union Minister of

Power at present is Sushilkumar Shinde of the Congress Party who took charge of

the ministry on the 28th of May, 2009.

India is world's 6th largest energy consumer, accounting for 3.4% of global energy

consumption. Due to India's economic rise, the demand for energy has grown at

an average of 3.6% per annum over the past 30 years.

 In June 2010, the installed power generation capacity of India stood at

162,366 MWwhile the per capita energy consumption stood at 612 kWH. The

country's annual energy production increased from about 190 billion kWH in 1986

to more than 680 billion kWH in 2006.The Indian government has set an ambitious

target to add approximately 78,000 MW of installed generation capacity by

2012.The total demand for electricity in India is expected to cross 950,000 MW by

2030.

About 70% of the electricity consumed in India is generated by thermal power

plants, 21% by hydroelectric power plants and 4% by nuclear power plants More

than 50% of India's commercial energy demand is met through the country's

vast coal reserves. The country has also invested heavily in recent years on

renewable sources of energy such as wind energy. As of 2008, India's installed

wind power generation capacity stood at 9,655 MW. Additionally, India has

committed massive amount of funds for the construction of various nuclear

reactors which would generate at least 30,000 MW .In July 2009, India unveiled a

$19 billion plan to produce 20,000 MW of solar power by 2020.

Electricity losses in India during transmission and distribution are extremely high

and vary between 30 to 45%. In 2004-05, electricity demand outstripped supply by

7-11%. Due to shortage of electricity, power cuts are common throughout India

and this has adversely effected the country's economic growth.

Theft of electricity, common in most parts of urban India, amounts to 1.5% of

India's GDP. 

Despite an ambitious rural electrification program, some 400 million Indians lose

electricity access during blackouts. While 80 percent of Indian villages have at

least an electricity line, just 52.5% of rural households have access to electricity.

In urban areas, the access to electricity is 93.1% in 2008. The overall

electrification rate in India is 64.5% while 35.5% of the population still live without

access to electricity. According to a sample of 97,882 households in 2002,

electricity was the main source of lighting for 53% of rural households compared

to 36% in 1993. Multi Commodity Exchange has sought permission to offer

electricity future markets.

GENERATION

Grand Total Installed Capacity is 162,366 MW.

1. Thermal Power

Thermal Power in India is mainly generated through coal, gas and oil. India coal

power forms a majority share of the source of power supply in India. The electric

power in India is generated at various thermal power stations in India. The power

generated at these thermal power plants is then distributed all over India through a

network of power grid at regional and national levels. The power ministry

organization responsible for the thermal power management in India is the NTPC.

Current installed capacity of Thermal Power (as of 06/2010) is 104,424 MW which

is 63.7% of total installed capacity.

Current installed base of Coal Based Thermal Power is 86,003 MW which

comes to 53% of total installed base.

Current installed base of Gas Based Thermal Power is 17,221 MW which is

10.61% of total installed base.

Current installed base of Oil Based Thermal Power is 1,199 MW which is

0.74% of total installed base.

The state of Maharashtra is the largest producer of thermal power in the country.

2. Hydro Power

India was one of the pioneering countries in establishing hydro-electricpower plants.

The power plant at Darjeeling and Shimsha (Shivanasamudra) was established in

1898 and 1902 respectively and is one of the first in Asia.

Various hydropower projects and hydro power plants have been set up by the

ministry of power for generation of hydro power in India. Various dams and

reservoirs are constructed on major rivers and the kinetic energy of the flowing

water is utilized to generate hydroelectricity. The power generator here is the

running water. The hydroelectric power plants and the hydro power generation

companies are managed by the National Hydro Electric Power Corporation

(NHPC).

The installed capacity as of 2008 was approximately 36,877.

The public sector has a predominant share of 97% in this sector.

Nuclear Power

Currently, seventeen nuclear power reactors produce 4,560 MW (2.81% of total

installed base). Nuclear Power in India is generated at huge nuclear power

plants and nuclear power stations in India. A nuclear power plant generates the

electricity using nuclear energy. All the nuclear power plants in India are managed

by the Nuclear Power Corp of India Ltd (NPCL). The electricity from all India

nuclear plants is distributed by the NPCL as per the nuclear power project

scheme.

Renewable Power

Current installed base of Renewable energy is 16,492.42 MW which is 10.12% of

total installed base with the southern state of Tamil Nadu contributing nearly a

third of it (5008.26 MW) largely through wind power.

Wind Power

Wind Power in India is available in plenty as India witnesses high intensity winds

in various regions due to the topographical diversity in India. Efforts have been

made to utilize this natural source of energy available free of cost for wind power

generation. Huge wind energy farms have been set up by the government for

tapping the wind energy by using gigantic windmills and them converting the

kinetic energy of the wind into electricity by the use of power converters. The wind

power advantages start with the very fact that a wind energy power plant does not

require much infrastructure input and the raw material i.e. wind itself is available

free of cost.

Solar Power

Solar Power in India is being utilized to generate electricity on smaller scale by

setting up massive solar panels and capturing the solar power. Solar power India

is also being utilized by the power companies in India to generate solar energy for

domestic and small industrial uses.

Biogas Production in India is still in its infancy stage. Also the number of biogas

plants in India is still very low. India being the largest domestic cattle producer has

plenty of biogas fuel and thus utilization of the fuel for mass biogas production by

setting up more biogas plants in India would solve the power shortage problem to

some extend.

Transmission

Transmission of electricity is defined as bulk transfer of power over a long

distance at high voltage, generally of 132kV and above. In India bulk transmission

has increased from 3,708ckm in 1950 to more than 165,000ckm today.

The entire country has been divided into five regions for transmission systems

Northern Region

North Eastern Region

Eastern Region

Southern Region

Western Region.

The Interconnected transmission system within each region is also called the

regional grid.

DISTRIBUTION

The total installed generating capacity in the country is over 148,700MW and the

total number of consumers is over 144 million. Apart from an extensive

transmission system network at 500kV HVDC, 400kV, 220kV, 132kV and 66kV

which has developed to transmit the power from generating station to the grid

substations, a vast network of sub transmission in distribution system has also

come up for utilisation of the power by the ultimate consumers.

POWER FOR ALL BY 2012

Government of India has an ambitious mission of POWER FOR ALL BY 2012.

This mission would require that the installed generation capacity should be at least

200,000 MW by 2012 from the present level of 144,564.97 MW. Power

requirement will double by 2020 to 400,000MW.

Objectives

Sufficient power to achieve GDP growth rate of 8%

Reliable power

Quality power

Optimum power cost

Strategies

Power Generation Strategy with focus on low cost generation, optimization of

capacity utilization, controlling the input cost, optimisation of fuel mix,

Technology up gradation and utilization of Non Conventional energy sources

Transmission Strategy with focus on development of National Grid including

Interstate connections, Technology up gradation & optimization of

transmission cost.

Distribution strategy to achieve Distribution Reforms with focus on System up

gradation, loss reduction, theft control, consumer service orientation, quality

power supply commercialization, Decentralized distributed generation and

supply for rural areas.

Regulation Strategy aimed at protecting Consumer interests and making the

sector commercially viable.

Financing Strategy to generate resources for required growth of the power

sector.

Conservation Strategy to optimise the utilization of electricity with focus on

Demand Side management, Load management and Technology up gradation

to provide energy efficient equipment / gadgets.Communication Strategy for

political consensus with media support to enhance the general public

awareness.

Rural electrification

Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttaranchal, Madhya Pradesh etc are

some of the states where significant number (more than 10%) of villages are yet to

be electrified.

Number of Villages (1991 Census) - 593,732

Villages Electrified (30 May 2006) - 488,173

Village level Electrification % - 82.2%

SUBSIDIES

Several state governments in India provide electricity at subsidised rates or even

free to some sections. This includes for use in agriculture and for consumption by

backward classes. The subsidies are mainly as cross-subsidisation, with the other

users such as industries and private consumers paying the deficit caused by the

subsidised charges collected. Such measures have resulted in many of the state

electricity boards becoming financially weak.

At present (2009), the price per unit of electricity in India is about Rs. 4 (8 US

cents) for domestic consumers, and Rs. 9 for the commercial supply.

INTRODUCTION

Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN)

Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with

the job of development of power projects under state sector, in the state along

with operation & maintenance of state owned power stations. Government of

Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN)

under Companies Act-1956 on 19th July, 2000. The Nigam is since playing lead

role in giving highest priority to the power generation for manifold and rapid

development of the state.

The generating Stations of RVUN have acquired a distinctive reputation in the

country for their efficient and economic power generation. RVUN has track record

of completing the generation projects ahead of schedules.

Present Installed capacity of Rajasthan Rajya Vidyut Utpadan Nigam is

4097.35 MW

S.No. Power Station Present Capacity

1. Suratgarh STPS,Suratgarh, Distt-Shriganganagar 1500 MW

2. Kota STPS, Kota 1240 MW

3. Chhabra Thermal Power Station,Chhabra, Distt. Baran 500 MW

4. Dholpur CCPS ,Dholpur 330 MW

5. Giral Lignite TPS ,Giral, Distt. Barmer 250 MW

6. Ramgarh Gas Thermal Power Station,Distt. Jaisalmer 113.50MW

7. Mahi Hydel Power Station.Distt-Banswara 140 MW

8. Mini Micro Hydel Schemes 23.85 MW

  Total 4097 .35 MW

RVUN is also managing and operating the following Inter State Projects

1. Rana Pratap Sagar Hydel PS (4X43 MW) 172 MW

2. Jawahar Sagar Hydel PS (3X33 MW) 99 MW

  Total 271 MW

Ongoing Projects of RVUN

Commissioning Schedule

S.No NAME OF UNIT CAPACITY EXPECTED

DATE OF

COMMISSIONIN

G

1 KALISINDH TPS UNIT-1 600 MW March 2012

2 KALISINDH TPS UNIT-2 600 MW July 2012

3 CHHABRA TPS PHASE 2 (UNIT-3) 250 MW March 2012

4 CHHABRA TPS PHASE 2 (UNIT-4) 250 MW June 2012

5 RAMGARH EXTN. PROJECT GT 110 MW January 2012

6 RAMGARH EXTN. PROJECT ST 50 MW May 2012

  Total 1860 MW  

Rajasthan Rajya Vidyut Utpadan Nigam Ltd has been entrusted with the job of

development of power projects under state sector, in the state along with

operation and maintenance of state owned power stations by un bundling the

erstwhile RSEB. Govt of Rajasthan continued the RVUNL under the companies

Act 1956 on 19 July 2000. The nigam is since playing lead role in giving height

priority to the power generation and manifold and rapid development of the state.

The Government of Rajasthan formed the Rajasthan Rajya Vidyut Utpadan Nigam

Ltd. (RVUN) in the year 2000, with an objective of power generation to cater to the

growing need of the state. The company has a total installed capacity of of over

2500 MW.

There are various thermal and hydel power stations under RVUN. The Suratgarh

Super Thermal Power Station has maximum capacity of 1250 MW. Kota Super

Thermal Power Station I has a capacity of 1045 MW. Of its other projects,

Ramgarh Combined.Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN)

was established upon unbundling of erstwhile Rajasthan State Electricity Board

(RSEB) into separate companies for generation, transmission and distribution

functions.The restructuring of RSEB was done with a view to bring about

improvement in the efficiency of Power Generation, Transmission and Distribution

in the State, to facilitate and attract private investments therein and to create an

environment of growth in the Power Sector for the overall benefit of the people of

the State.

Following is the information about the hydro-electric power station:

1. Type of Power House: Indoor Type Surface Station

2. Type of Turbine: Francis Vertical Shaft

3. Capacity of Turbine: 25MW

4. Type of Generator: Umbrella

5. Length of Penstock: 90 m

6. Diameter of Penstock: 4.2 m

Date & Mode of Incorporation:

19.6.2000. RVUN was incorporated as a Public Limited Company on 19.6.2000

and subsequently became a State Government Company, upon transfer of

business pursuant to the Transfer Scheme, 2000 and allotment of entire equity

share capital to the State Government & its nominees...

Subsidiary Companies –

(i) Giral Lignite Power Limited, a wholly owned

Subsidiary incorporated on 23.11.2006.

(ii) Dholpur Gas Power Limited, a wholly owned

Subsidiary incorporated on 22.11.2006.

(iii) Chhabra Power Limited, a wholly owned

Subsidiary incorporated on 22.11.2006.

Business of the Company –

RVUN has been established to carry out the objectives

Specified in the Memorandum & Articles of Association of the Company as

amended from

Time to time*. The main activities of RVUN are setting up of power plants and

operation & maintenance thereof for power generation through its coal, gas, and

lignite based thermal power plants as well as hydel power plants.

(* The Main, Incidental and Other Objects of the Company are contained in the

Memorandum of Association of

The Company and the same can be obtained from the Office of Company

Secretary.)

The business portfolio of the company is as under:

1. Generation of Electric Power.

2. Power Project Construction.

3. Captive Mining of Coal through Joint Venture(s)

To implement the Power Sector Reforms effectively in the state, Government of

Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN)

under Companies Act-1956 on 19th July, 2000. The Nigam is since playing lead

role in giving highest priority to the power generation for manifold and rapid

development of the state.

 The total installed capacity of various Thermal and Hydel Power

Stations owned and run by RVUN as on 30.11.2004 is 2569.35 MW having

following station wise capacity:-

Name of Power House Installed Capacity

1. Suratgarh Super Thermal Power Station.     1250        MW

2. Kota Super Thermal Power Station 1045        MW

3. Ramgarh Combined Cycle Gas Power

Station

           110.50  MW

4. Mahi Hydel Power  Station        140        MW

5. Mini Hydel Schemes (10)    23.85   MW

Total 2569.35 MW

Beside above, Utpadan Nigam is carrying out operation and

maintenance of Rana Pratap Sagar Hydel power Station (172MW) and

Jawahar Sagar Hydel power Station(99MW) owned by RVPN.

SALE OF POWER AND COST OF GENERATION:

As per financial restructuring plan formulated under power sector

reforms, RVUN has to sell its entire generated power to RVPN on no loss no

profit basis till 31.3 .2004.

Consequent upon introduction of electricity act 2003 in the State,

Rajasthan Rajya Uptadan Nigam has been selling its entire generated power

directly to three Discoms i.e. Jaipur, Ajmer & Jodhpur in pre-assigned ratio

of 36:36:28 respectively on no profit no loss basis and this policy of no profit

no loss shall be adopted till March, 2005 as per FRP.

ORGANISATIONAL CHART

POWER & DUITES OF OFFICERS AND EMPLOYEES

1. PERSONNEL, ADMINISTRATION & LEGAL WING:-

The Joint Director (Personnel & Administration) is the head of

Personnel, Administration & Legal Wing of RVUN. He mainly deals with all

matters related with Human Resource Planning, Recruitment, Career

Advancement through Promotion, Limited Direct Recruitment (LDR) &

Selection grade / Assured Career Progression (ACP), Seniority, Transfers &

Postings, Disciplinary Proceedings, APAR s, Legal & Court’s related matters,

Rules section, Trainings, Employees welfare schemes & activities, Sanction of

terminal benefits, Pension, Industrial relations.

2. ACCOUNTS WING

The Director (Finance) is the head of Accounts & Finance Wing of the

Company, under whom there are mainly two sections at corporate office level

– Ways & Means section and Accounts & Internal Audit section, which are

headed by Chief Accounts Officers. The Director (Finance) arranges funds

from governments & financial institution and gives guidance on all policy mater

for proper financial management of the company. The work distribution

between the two Chief Accounts Officer, posted at Corporate office is as

follows:-

A. Chief Accounts Officer (W&M):-

1. Establishment of non-gazetted of Accounts Wing.

2. Establishment & Audit and Cash Section of Corporate office.

3. Ways & Means including disbursement of funds.

4. Matters related to RERC, determination & finalization of Tariff and

issuance of Energy bills.

5. Financial & commercial related rules matters.

B. Chief Accounts Officer (IA & Accounts):-

1. Works related to Internal Auditing, Assembly, PUC and CAG.

2. Preparation & Finalization of Annual Accounts and Income Tax

&Sales Tax, etc.

3. Matters related to Statutory Audit & Tax Audit of the Company

4. Preparation of Annual Plan Resources / Budget Estimate and

exercising of Budgetary Control Measures.

5. Financial concurrences of purchase and contract cases relating to

O&M activities.

3. COMPANY SECRETARY:-

This office is responsible for dealing with matters related with Company

affairs of RVUN and it’s wholly owned subsidiary Companies, to ensure

compliance with of various provisions of the Companies Act and other

applicable laws. The office of Company Secretary is also responsible for

convening & conducting the meetings of Shareholders, Board of Director and

its various Subcommittees, besides maintaining the minutes of such meetings.

4. PPC &F WING:-

The Wing is headed by a Chief Engineer and is mainly responsible for

new power projects, planning, commercial activities and fuel management. It

also deals with long term fuel linkages, obtaining various approval/clearances

from statutory & regulatory agencies, ABT, filling of ARR, etc.

5. TD WING:-

The Wing is headed by a Chief Engineer who looks after the work

relating to designing of new power projects, awards of contracts for execution

of projects, appointing design consultant, proper work execution including

construction and procurement of equipments & material etc.

6. PUBLIC RELATIONS WING:-

Public Relations Officer (PRO) is the head of Public Relations Wing

and is responsible for liaison & rapport with press, media & public repre

entities. Public Relations Wing prepares & disseminates the Informative

material & Press release for RVUN. PRO also arrange Publication of

Brochures, participation in exhibitions & display material. Release of

advertisement including Nits for publication in News Papers & other media.

7. POWER GENERATING STATIONS:-

These are headed by the Chief Engineer/ Addl. Chief Engineer an are

required generating the electricity and arranging it’s transmission to RVPN.

EQUIPMENT USED

3.1 LINE TRAP

It is also called "Wave trap". It is connected in series with the power (transmission)

line. It blocks the high frequency carrier waves (24 kHz to 500 kHz) and let power

waves (50Hz - 60 Hz) to pass through. It is basically an inductor of rating in mille

Henry.

3.2 COUPLING CAPACITOR 

It provides low impedance path for carrier energy to HV line and blocks the

power frequency circuit by being a high impedance path.

3.3 LINE MATCHING UNIT

LMU is a composite unit consisting of Drain Coil, Isolation transformer with

Lightning Arrester on its both the sides, a Tuning Device and an earth switch.

Tuning Device is the combination of R-L-C circuits which act as filter circuit. LMU

is also known as Coupling Device. Together with coupling capacitor, LMU serves

the purpose of connecting effectively the Audio/Radio frequency signals to either

transmission line or PLC terminal and protection of the PLCC unit from the over

voltages caused due to transients on power system.

3.4 DIGITAL POWER LINE CARRIER 

A power line carrier using a power line as transmission media needs to change its

transmission system from analog to digital to address rapid diffusion of IP devices

and digital telecommunication devices. With this view, digital power line carrier

(DPLC) was developed featuring several technological measures which enable

digital transmission via power lines and performed a field evaluation test. As a

result, DPLC has the required quality of bit error rate characteristics and

transmission ability such as transmitting information from monitored electric-

supply stations and images

.

Corporate Social Responsibility Activities:

The list of the activities covered under CSR policy is purely suggestive

In nature and any other activities may also be taken up as per the

Need of the Project Affected Persons/ Project Affected Areas to be

Assessed at the Project level. The list of CSR activities will be as

Under:

i) Education: with emphasis on Primary education, Girl education and

Adult education;

ii) Drinking Water Supply: with emphasis on safe drinking water to

Villagers and other water related facilities;

iii) Electrification of Villages / Electrification of Public Places;

iv) Health care, such as Mobile clinics and Community health related

Services;

v) Environment;

vi) Social Empowerment;

vii) Infrastructure development, such as construction of anicuts, roads,

Community halls, school buildings, health centres, sanitation facilities,

Etc.;

viii) Sport(s) and cultural activities;

ix) Generation of employment / Capacity building such as vocational

Training to local people;

x) Grant/donation/financial assistance/sponsorship to the reputed

NGOs/societies/Local agencies involved in social development works;

xi) Works related for preservation of ‘heritage sites’ in the Project Affected

Area;

xii) Empowerment of women for education, health & self employment;

xiii) Providing relief to victims of Natural Calamities like Earth Quake,

Cyclone, Drought & Flood situation etc;

xiv) Distribution of efficient Chula(s) to the villagers;

xv) Adoption of village(s) for overall development;

xvi) Any other development works suggested by local Gram Panchyats/

Panchayat Samities/ District Administration / CSRI Committee;

xvii) All works for creating community assets.

Execution of the CSR Works

The CSRI Committee will identify the executing agency for CSR

Activities / works. Government agencies such as Public Works

Department (PWD), Irrigation Department, Public Health Engineering

Department (PHED), Power Distribution Companies of the State,

Panchayat Raj Institutions / Local bodies, Education Department, etc.

Shall generally be engaged to execute these CSR activities/ works.

These agencies shall follow the relevant Rules/ Regulations/ Delegation

Of Powers issued by the respective departments in respect of ‘Deposit Works’.

The CSRI Committee will also decide the modalities, payment

Procedure and verification process, etc. for issuing grants/ donations/

Financial assistance/ sponsorship to reputed Non-Government

Organizations (NGOs)/ societies/ Local agencies engaged in similar

Social development works.

The CSRI Committee shall restrict the total amount of such grants,

Donations, etc. under Clause 10.2 to a maximum of 10% of the total

Allocation to CSR activities/ works as per Clauses 7.1.1 and/ or 7.2.1,

Power infrastructure in India: 

The power industry in India derives its funds and financing from the government,

some private players that have entered the market recently, World Bank, public

issues and other global funds. The Power Ministry India has set up Power

Finance Corporation of India that looks after the financing of the power sector in

India. The Power Finance Corporation Limited provides finance to major power

projects in India for power generation and conversion, distribution and supply of

power in India.

Power Finance Corporation (PFC) Ltd India also looks after the installation of

any new power projects as well as renovation of an existing power project India.

The PFC in association with central electricity authority and the ministry of power

facilitates the development in infrastructure of the power sector India. They have

taken up construction of mega power projects that will answer to the power

shortage in various states through power transmission through regional and

national power grids. 

The power management and implementation of the various power projects

undertaken, formulation and amendments of the power laws in India, management

of the power supply in India, monitoring of the power plants in india, power

companies in India, power generation in India and other power shortage problems

etc.

The power management and implementation of the various power projects

undertaken, formulation and amendments of the power laws in India, management

of the power supply in India, monitoring of the power plants in india, power

companies in India, power generation in India and other power shortage problems

etc.

The Ministry of Power (MoP) is coordinated by Central Electricity Authority (CEA)

in all technical and economic aspects. Along with the CEA, other subsidiary

organizations of the Mop are:

National Thermal Power Corporation (NTPC)

National Hydro Electric Corporation (NHEC)

Power Finance Corporation of India (PFCI)

Nuclear Power Corporation of India Limited

North Eastern Electric Power Corporation (NEEPC)

Rural Electrification Corporation (REC)

Damodar Valley Corporation (DVC)

Bhakra Beas Management Board (BBMB)

Tehri Hydro Development Corporation (THDC)

Satluj Jal Vidyut Nigam (SJVN)

Power Grid Corporation of India Ltd (Power Grid India)

Power Trading Corporation (PTC)

Bureau of Energy Efficiency (BEE)

Power Companies in India:

Many government as well as private organizations have taken up the task of

power generation in India. The major Indian power companies playing prime are:

Bhakra Beas Management Board

Enercon Systems India

Essar Group

GMR Group

Gujarat State Petroleum Corporation Ltd

Jindal Steel & Power Limited

Karnataka Power Transmission Corporation Limited (KPTCL)

Karnataka Renewable Energy Development Limited

Konarka

Magnum Power Generation Limited

Nippo Batteries

Reliance Energy Ltd.

Shri Shakti

Durgapur Projects Limited

Satluj Jal Vidyut Nigam Ltd.

United Power

Ventral Systems Pvt. Ltd.

Under the provision of the Electricity Act, 2003, RVPN has been declared as State

Transmission Utility (STU) by Govt. of Rajasthan. Section 39(1) of this act, prohibits the

STU to undertake business of trading of electricity, however RVPN continued its

function of transmission of bulk power from generating stations to inter-phase point of

Discoms from 1st April 2004.

Now the Distribution Companies are directly contracting with Generating Companies in

accordance to the share allocated by the State Government. Rajasthan Power

Procurement Cell (RPPC) has been established for purchase of power on behalf of

Discoms.

RVPN Provides the pathway for power within whole of Rajasthan. RVPN owns, builds,

maintains and operates the high-voltage electric transmission system that helps to keep

the lights on, businesses running and communities strong. RVPN also owns the shared

generating projects as representative of erstwhile RSEB.

Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN) a company under the

Companies Act, 1956 and registered with Registrar of Companies as

"RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LIMITED" vide No. 17-016485

of 2000-2001 with its Registered Office at VIDYUT BHAWAN, JYOTI NAGAR,

JAIPUR-302005 has been established on 19 July, 2000 by Govt. of Rajasthan

under the provisions of the Rajasthan Power Sector Reforms Act, 1999 as the

successor company of RSEB. The RERC has granted RVPN a license for

transmission and bulk supply vide RERC/Transmission and Bulk Supply License

4/2001 dated 30.4.2001 to function as Transmission and Bulk Supply Licensee in

the State.

Under the provision of the Electricity Act, 2003, RVPN has been declared as State

Transmission Utility (STU) by Govt. of Rajasthan. Section 39(1) of this act, prohibits

the STU to undertake business of trading of electricity, however RVPN continued

its function of tranmission of bulk power from generating stations to inter-phase

point of Discoms from 1st April 2004. Now the Distribution Companies are directly

contracting with Generating Companies in accordance to the share allocated by the

State Government.Rajasthan Power Procurement Cell (RPPC) has been

established for purchase of power on behalf of Discoms.

RVPN Provides the pathway for power within whole of Rajasthan. RVPN owns,

builds, maintains and operates the high-voltage electric transmission system that

helps to keep the lights on, businesses running and communities strong. RVPN

also owns the shared generating projects as representative of erstwhile RSEB.

Our customers include electricty generators, distribution companies and open

access consumers who count on RVPN to deliver power from the location of

generation to inter-phase point of Discoms enabling them to supply where it's

needed in the homes and businesses they serve.

Our aim is to provide reliable electric transmission service to these customers. As a

public utility whose infrastructure serves as the link in transporting electricity to

millions of electricity users, RVPN has following duties and responsibilities:

• Intra state transmission of electricity through Intra-State Transmission System

• Planning and co-ordination relating to intra-state transmission with all concerned

agencies such as CTU, State Govt., generating companies, licensees, Regional

Power Committees etc.

• Ensuring development of an efficient, co-ordinated and economical system of

intra-state transmission of electricity from generating stations to Load Centres.

• Non-discriminatory Open Access to its transmission system on payment of

transmission charges

• Complying with the directions of RLDC and SLDC, operating SLDC until any

other authority is established by the State Govt.

• Now RVPN is "An ISO 9001:2008 Certified Company" .

rajasthan Electricity Regulatory Commission

The Rajasthan State Electricity Board was constituted with effect from 1st July,

1957 by Government of Rajasthan Notification No. F.11/OSD(PWD)/57 dated the

28th June,1957 under the Electricity (Supply) Act,1948 which enactment has for

its object, the co-ordinated development and rationalisation of generation and

supply of electricity on a regional basis throughout the country in the most efficient

and economical way.

The Rajasthan Electricity Regulatory Commission was constituted by the State

Government under sub section (1) of section 17 of the Electricity Regulatory

Commissions Act, 1998 and recognized as  a duly established commission under

Rajasthan Power Sector Reform Act, 1999 and Electricity Act, 2003. The

objective/purpose of constituting RERC is to establish a credible, efficient and

transparent regulatory authority responsible for overall development of power

sector including approval of tariffs.

RERC is a body incorporated and was fully funded up to the year 2007-08 by the

State Government and currently being funded by its own resources with its office

located at Sahakar Marg Jaipur. It consists of a Chairperson and two Members

one each from the technical and financial discipline. The Commission has a

Secretary and other supporting staff to carry out its day-to-day functions.

The functions and duties assigned to the Commission

(i)      To determine the tariff for generation, transmission, distribution and

wheeling of electricity, in wholesale, bulk or retail, as the case may be, within the

State of Rajasthan.

(ii)     To regulate electricity purchase and procurement process of distribution

licensees including the price at which electricity is to be procured from the

generating companies or licensees or from other sources through agreements for

power purchase for distribution and supply within the State.

(iii)    To facilitate intra State transmission and wheeling of electricity.

(iv)    To issue licenses for transmission, distribution and for trading electricity

within the State of Rajasthan.

(v)     To promote cogeneration and generation of electricity from renewable

energy sources by providing suitable grid connectivity measures and sale of

electricity besides specifying for power purchase from such sources, as a

percentage of total electricity consumption in the area of a distribution licensee.

(vi)    To adjudicate upon the disputes between the licensees and the generating

companies and to refer any dispute for arbitration.

(vii)   To levy fee for the purposes of this Act;

(viii) To specify the State Grid Code consistent with the Grid Code specified under

clause(h) of sub section(1) of section 79;

(ix)    To specify or enforce standards of performance with regard to quality,

continuity and reliability of service by licensees;

(x)     To fix the trading margin in the intra State trading of electricity, if necessary;

(xi)    To discharge such other functions as are assigned to the Commission under

the Electricity Act, 2003.

   Advisory role

(i)      Promotion of competition, efficiency and economy in the power sector;

(ii)     Promoting investment in the power sector;

(iii)    Reorganization and restructuring of power sector in the State of Rajasthan;

Guidance

The State Commission in discharge of its functions gets guided by the National

Electricity Policy, National Electricity Plan and Tariff Policy published under sub

section(2) of section 3 of the Electricity Act,2003.

Rajasthan Renewable Energy Corporation Limited

Rajasthan Renewable Energy Corporation Limited (RRECL) had been formed by

merging erstwhile REDA (Rajasthan Energy Development Agency) and the

Rajasthan State Power Corporation Ltd (RSPCL) in August 2002. Corporation is

registered under Companies Act 1956.

RRECL is working as a State Nodal Agency for promoting & developing Non-

conventional Energy Sources in the State and as a State Designated Agency

(SDA) for enforcement of provisions of Energy Conservation Act 2001 in the

State. This agency co-ordinate the programme activities between various

programmes on Non-conventional Energy Sources and the Society.

It is also engaged in creating awareness among people towards conservation of

energy, protection of environment degradation through demonstration projects and

other methods. The Corporation is headed by a Chairman & Managing Director, at

the State H.Q. Jaipur who is assisted by Executive Director, two General

Managers, two Project Managers  in addition to other staff.

There are nine block offices of the Corporation in the State headed by a Project

Officer of Junior Engineer / Assistant Engineer rank. These Project Officers handle

activities connected with non-conventional energy sources in all the 32 districts in

Rajasthan.

Vision, Mission and Core Values

RRECL is committed to development and promotion of clean power generation in

Rajasthan. Reflecting this committed, clear statement of Vision, Mission and Core

values of company need to be written and widely made known to all the stake

holders. The vision, Mission and Core values of the company may typically be

written as follows

Vision

To lay the foundation for generation of clean electrical power in Rajasthan.

Mission

To emerge as a leading and sustainable company committed to promotion and

generation of electricity through Renewable Sources of Energy, in Rajasthan.

Corevalues

Continuous innovation - Updating professional knowledge and strive to achieve

newer heights of technology development, pooling the unique competence of each

team member.

Accept challenges - Face difficulties and overcome impediments to achieve the

laid down goals.

Other related agencies

R a j a s t h a n R a j y a V i d y u t U t p a d a n N i g a m L i m i t e d

Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with

the job of development of power projects under state sector, in the state along

with operation & maintenance of state owned power stations. Government of

Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN)

under Companies Act-1956 on 19th July,2000. The Nigam is since playing lead

role in giving highest priority to the power generation for manifold and rapid

development of the state. The generating Stations of RVUN have acquired a

distinctive reputation in the country for their efficient and economic power

generation. RVUN has track record of completing the generation projects ahead of

schedules

Present installed capacity of Rajasthan Rajya Vidyut Utpadan Nigam is 4097.35MW

S.No. Power Station Capacity as on 31.03.09 Present

Capacity

1. Suratgarh TPS 1500 MW 1500 MW

2. Kota TPS 1045 MW 1240 MW

3. Chhabra Super Thermal Power Station - 500 MW

4. Ramgarh Gas Power Plant 113.50MW 113.50MW

5. Mahi Hydel 140 MW 140 MW

6. MMH Schemes 23.85 MW 23.85 MW

7. Giral Lignite TPS 250 MW 250 MW

8. Dholpur CCPP 330 MW 330 MW

Total 3402.35 MW 4097 .35

MW

RVUN is also managing and operating the following Inter State Projects

1. Rana Pratap Sagar Hydel PS (4X43 MW) 172 MW

2. Jawahar Sagar Hydel PS (3X33 MW) 99 MW

  Total 271 MW

A                      

A j m e r V i d y u t V i t r a n N i g a m l i m i t e d

Ajmer Vidyut Vitran Nigam Ltd, (AJMER DISCOM) has been

established under the Companies Act,1956 by Govt. of Rajasthan.

The Ajmer Discom has been created with the principal object of

engaging in the business of distribution and supply of electricity in 11

districts of Rajasthan, namely Ajmer, Bhilwara, Nagaur, Sikar,

Jhunjhunu, Udaipur, Banswara, Chittorgarh, Rajsamand, Doongarpur

and Pratapgarh. The area of operation of Ajmer Discom is 87256 sq.

km. And the population in this area is 198 lacs as per 2001 census.

The power supply in the Ajmer Discom is managed by 9 distribution

circles i.e. Ajmer, Bhilwara, Nagaur, Udaipur, Chittorgarh, Banswara,

Sikar,Rajsamand Jhunjhunu.

J o d h p u r V i d y u t V i t r a n N i g a m l t d

Jodhpur Vidyut Vitran Nigam Ltd, (Jodhpur DISCOM) has been established

under the Companies Act,1956 by Govt. of Rajasthan. The Jodhpur

Discom has been created with the principal object of engaging in the

business of distribution and supply of electricity in 9 districts of Rajasthan,

namelyJODHPUR(CITY)  ,JODHPUR(DIST.),BIKANER, BARME

R,CHURU,HANUMANGARH,   JALORE ,PALI,  SHRIGANGANAGAR .

The area of operation of Ajmer Discom is 1.82Lacs. sq. km. the area of

Jodhpur Discom is equivalent to area of Gujarat (1.96Lacs.sq.km.).The

area of Jodhpur Discom is more than three times of area of Punjab(0.50

Lacs.sq.km.

Jaipur Vidyut Prasaran Nigam limited

JAIPUR VIDYUT VITRAN NIGAM LIMITED(Jaipur Discom) has been established

under the Companies Act,1956 by Govt. of Rajasthan, Jaipur Discom has been

created with the principal object of engaging in the business of distribution and

supply of electricity in 12 districts of Rajasthan, namely Jaipur, Dausa, Alwar,

Bharatpur, Dholpur, Kota, Bundi, Baran, Jhalawar, Sawaimadhopur, Tonk and

Karoli. The area of operation of Jaipur Discom is 72474 sq. km. And the

population in this area is 196 lacs as per 1991 census. The power supply in the

Jaipur Discom is managed by 8 distribution circles i.e. Jaipur City , Jaipur Distt.,

Dausa, Alwar, Bharatpur, Kota , Jhalawar and Sawaimadhopur.

Administrative Structure

Jaipur Discom is managed by the Board of Directors. CMD is controlling day to

day affairs of the company. He is assisted by various Head of Departments at

the corporate level. The field organisation is divided into 8 operation and

maintenance circles. Each circle is further divided into divisions and sub

divisions which are the lowest operational unit. The brief details of the

organisational structure are as under:-

Circles : 8

Divisions : 37

Sub Divisions : 153

Besides O&M setup, the field set up also consists of metering & protection civil

& vigilance etc.

Some of the important information for Jaipur Discom is as under:

-Population Density(Persons/sq.km) 289 165

District 12 32

Employees 15011 35,988

Electrical (As on 31.3.2006) (Tentative)

Total connected load(MW) 5395.856  

33kV lines (kms) 8465 31560

33/11 kV S/S (Nos./capacity in MVA) 696/3357 MVA 2366/10332 MVA

Domestic connected load (MW) 1514.46  

Agriculture connected load (MW) 1411.91  

Mixed Load (MW) 819.43  

Industrial connected load(MW) (Ind.

+PWW)1630.86  

Domestic electrification 42.46% 46.62%

Organizational Structure of RVPN

Chairman and Managing Director(CMD)

Tech.Assit.-CMD P.S.-CMD Company secratory

Director (Technical)

Zon.C.E (T&C) Jaipur

Zon.C.E (T&C) Jodhpur

Zon.C.E (T&C) Ajmer

Zon.C.E (civil) Jaipur

Chief Engg. (PPM&R)

Chief Engg. Protection

S.E. TCC -1 Jaipur

S.E. TCC-2

S.E. TCC-4 Jodhpur

S.E.

S.E TCC-3 Jaipur

S.E. TCC-3

S.E.

Jaipur Circle

Sr.AO (MPP)

S.E. (400kv) Design

S.E. (Pro.) Jaipur

S.E.(Pro.)

S.E. TCC-2 S.E.

S.E. TCC-3

S.E. S.E.(Pro.)

Chairman and Managing Director(CMD)

P.S.-CMD

Chairman and Managing Director(CMD)

Tech.Assit.-CMD P.S.-CMD Company secratory

Research Methodology

S.E.(I.S.P.)

AO (R.P.C.C)

S.E.( M.I.S.)

Training centre

Chief Eng. (IT-training)

Dy. Chief Eng.(RPPC)

Secratory (Admin.)

Advisor (legal)

Land Acqi. officer

Dy.Director(Head qua.)

Dy.secratory (pension)

Assist.Sec.

Assist. Sec.

Assist.sec. (G.A.D)

A.C.P.

R.O.(G.D.S.)

Title of project:-

Comparative analysisof financial performance of two fiscal years

Objectives

As electricity works as blood in the body of any state. Power is an extremely

important infrastructure for economic development of any state or nation.

So study of agencies which are involved in electricity related functions as

generation, transmission and distribution are very important and rationale enough.

The objective of this study is to study the financial status of such large

organization. In this study the financial performance of year 2009nd 2010 has

been compare to find out the difference between them because being a

government body with duty of transmission of electricity plays a important role in

development, so improvement is essential. So the main concern of this study is to

check out whether the performance of organization has improved or declined

Type of resarch Research

The methodology used is to gain an insight into various dimensions and aspects

of the study so as to determine the feasibility and viability of the project for

granting financial assistance.

In Initial Stage, primary data was be collected through extensive literature study

specific to financial papers to collect relevant information. The books and manuals

of Rajasthan Vidyut Vitran Nigam have formed a part of secondary data along with

many personal discussions and interviews with the people of the organization. It

also includes study of various magazines and journals websites used as a

medium for collection of relevant information. Second Stage involves applying the

knowledge gained and transforming it into real practice by having hands-on

experience. It also includes the study of related procedures – Documentation,

Financial Analysis.

Primary Data-

Primary data is collected through observation method.

Secondary Data

Secondary data is collected through the manuals of organization as

1- Annual Reports Of Accounts.

2- Budget Estimates.

Accept these manuals data is collected from websites of electricity departments.

Scope of the study

The study is concerned with Rajasthan Rajya Vidyut Vitran Nigam ltd. In rajasthan

all electricity generation, transmission and distribution functions are taken care by 5

agencies they are RVPN, RVUN, AVVNL, JVVNL, and JDVVNL.

Among them RVPN is concerned with transmission of generated electricity to all

three Discoms. This organization takes care of transmission and substations . So

this is a very important agency in electricity circulation in state so study on this

agency covers a wide scope –

Overview of electricity industry in India.

Overview of electricity industry in Rajasthan.

Overview of energy department of Rajasthan.

Overview of all five agencies involved in electricity industry of Rajasthan.

Overview of regulation authority i.e. RERC.

Introduction of RVPN as whole.

Deep insight of finance department of RVPN.

Study of financial status of RVPN comprises of various revenue and expenditure

sources.

Study of financial performance of RVPN in 2010.

Study of financial performance of RVPN in 2009.

Comparision between both year’s financial performance Purpose of the

study

Purposes of conducting this kind of study are-

To get work experience in such a big organization

To add up practical knowledge with the theoretical knowledge.

To understand the work practices which are followed in organization.

To get exposure with corporate world.

LIMITATIONS

The Company restricts sharing of important data, as most of the information

is confidential and is not approachable.

Since all the systems in the division remains busy most of the time, there is

limited access to computers during training hours that leads to certain

problems while preparing the report.

Study is not very exhaustive and many concepts cannot be studied due to

time and other constraints.

Senior Officers and Employees though very helpful, are not able to give much of

their time due to their own time constraint

Facts & findings-

RVUN registered healthy growth in revenues of about 48% from 880 crore in year

2008-09.

However, the company faced loss of 767 crore at operating level primarily due to

Significant increase in employee costs on implementation of the sixth pay

commission recommendations and actuarial valuation undertaken in 2009 to

comply with AS-15 issued by ICAI. Loss for the year was 719 crore.

RVUN has filed a petition with RERC for reimbursement of additional employee

costs incurred in FY2009.Total debt increased from 3,503 crore in FY2008 to

4,570 crore in FY2009.

Gearing levels were high at 7.8 times in FY2009 on account of reduced networth

due to losses in the year.

Current assets include 690.8 crore (FY2009) of grants and subsidy receivable

from GoR (`691.4 crore – FY2008). Current ratio declined from 0.95 in FY2008 to

0.65 in FY2009 mainly due to increase in pension liabilities post actuarial valuation

and implementation of 6th pay commission.

Along that T&D and wheeling losses are main cause of losses .Electric power

transmission and distribution losses include losses in transmission between

sources of supply and points of distribution and in the distribution to consumers,

including pilferage.

In 2007-08 T&D losses of RVUN were 4.61% and in 2008-09 the losses were

declined to 4.34%. the reason behind decline in the losses is upgrading the

transmission capacity and by establishing new grid station and increasing the

transmission lines.

Along that subsidies provided to agriculture and industries also cause a losses to

RVUN.

So we can say that while the performance of RVUN is improved in 2009 with

comparison of 2008 but till is facing huge losses.

The loan burden has increased on this organizations

Data Analysis

Introduction

Financial performance is a subjective measure of how well a firm can use assets

from its primary mode of business and generate revenues. This term is also used

as a general measure of a firm's overall financial health over a given period of

time, and can be used to compare similar firms across the same industry or to

compare industries or sectors in aggregation.

There are many different ways to measure financial performance, but all

measures should be taken in aggregation. Line items such as revenue from

operations, operating income or cash flow from operations can be used, as well as

total unit sales. Furthermore, the analyst or investor may wish to look deeper into

financial statements and seek out margin growth rates or any declining debt.

In this report the analysis of performance of RVUN is done on the following bases-

1) On the basis of Comparative Balance Sheet.

2) On the basis of Comparative Profit and Loss account.

3) Changes in Working Capital

4) Changes in Revenues and Expenditure.

Accept this the capital structure of RVUN is also described as

1) Share Capital and reserves and surpluses

2) Loan Financing

Rajasthan rajya vidhut utpadan nigam Ltd.

SHEDULE NO 1: SHARE CAPITAL

Particular ACCOUNT CODE

31ST MARCH 2010

31ST MARCH 2009

Authorized Capital 1500000000 equity shares of Rs. 10

15000000000 15000000000

Issued subscribed & paid up 1104000000(939000000) equity share of Rs. 10 each fully paid up & issued (out of this share) issued for consideration other than cash

56400 11040000000

9390000000

TOTAL 11040000000 9390000000

Under the Rajasthan Power Sector Reform Scheme 2009 the government of

Rajasthan has restructured the whole power sector of Rajasthan, So RVPN has

Constituted. For the purpose of providing financial soundness The Government of

Rajasthan has floted share in the market every year. In 2007 and 2008 it was of

amount 10,000,000,000 while in 2009 it was increased to 15,00,000,000 . From this

authorized capital 9,390,000,000 in 2008 and 11,040,000,000 was subscribed. In

2009 it was 73.6% and in 2008 it was 93.9%.

SHEDULE NO. 2 .RESERVE FUND: RESERVE SURPLUS

PARTICULERS 31ST MARCH 2010 31ST MARCH 2009Subsidiary towards cost of capital asset As par last balance sheetLess_trasfer to schedule 3

120303872 120303872

NIL 120303872

Grants towards cost of capital assetAs per last balance sheetLess _transfer schedule 3

177574556 177574556

NIL 177574556

Exchange varrince NIL 2503825Surplus_ net revenue

NIL NIL

TOTAL 300,382,253

NOTE- Till 2008 contributions, grants and subsidies towards cost of capital

assets have not been reduced from the cost of assets, but have been treated as

“capital reserves”. Further, depreciation pertaining to such fixed assets is fully

charged to revenue. Because of this in 2008 there was a capital reserve of Rs.

300,382,253 while in 2009 it was remain nil because grants and subsidies were

not transferred .

Interpretation- Till 2009 except Consumer’s Contribution for deposit works all

grants and subsidies were transferred to Capital Reserve while from 2010in the

absence of details for identification of these grants with specific assets , the

average remaining useful life of such assets is estimated at seven year from

01.04.2009. Consequently the balances appearing in Reserves and surplus being

rs. 29.79 crores is transferred to profit & loss account in seven equal installment

commencing from 2010.

Any grant and subsidy received thereafter shall be recognized in the P&L account

in proportion to the useful life of the assets.

LOAN FUNDS

The capital structure of RVUN is also comprises of Loan funds. RVUN takes

loans from both governments as state and central government. The loan structure

of RVUN is as follows-

RVUN has to follow a long procedure for taking loan. The steps for

approval and sanctioning a loan are as follows-

Secured Loans

Short Term

Long Term

Preparation of scheme and sending letter to bank with Rate of Interest and conditions

Responding letter of bank with terms and condition

Presentation of proposal to board directors(Agenda)

Approval of Board Of Directors

Approval send to Energy Department for issuing concurrence of state govt. and request to FD to move to issue to issue for Government Guarantee in favor of bank on behalf of RVPN

Approval of Government conditions checklist

Counter Guarantee by RVPN with signature of authorized officer

Irrecoverable and unconditional letter of authority for recoveries from P.D A/C of RVPN

Government Guarantee on behalf of RVPN

So, this is the procedure of receiving loan from banks.State and Central

Governments also provides loan to RVUN .

Status of Loan Funs in 2008-09 and 2009-10

Demand Promissory Note

Agreement and Disbursement of Rupees

58%13%

12%

17% LIC

Central Bank of India

Bank Of Ra-jasthan

oriental bank of commerce

50%

25%

25%Bank of Ma-harastraSBBJAllahbad Bank

17%

83%

Long term loansshort term loans

Duration for short term loan is mostly for 2-3 years.

Long term loans are for mostly more than 10 years duration

60

40LICComm. Banks

42%

23%

35% Bank of Ma-harastraSBBJAllahbad Bank

23%

77%

Long term loansShort term loans

Secured long term loan 2010

Secured long term loan 2009

Secured short term loan 2010 Secured short term loan 2009

Secured loan2010 Secured loan 2009

COMPARATIVE ANALYSIS OF FINAL ACCOUNT

Rajasthan rajya vidhut utpadan nigam ltd

Balance sheet at 31st march 2010

Particuler 31st march2010 31st march2009

COMPARED BALANCE SHEET AS AT 31st

MAR.2010

Particulars

31st March, 2010 31st

Mar.2009 Difference %

SO URCES OF

FUNDS

SHAREHOLDERS

FUND

Share Capital 11,040,000,000 9,390,000,000

1,650,000,00

0 17.57%

Reserves and Surplus

Nil 300,382,253

-

300,382,253 -100%

Deffered govt grands 2,081,048,534 1,026,703,235

1,054,345,2

99

102.69

%

LOAN FUNDS

Secured Loans

7,766,695

,404 6,161,314,618

1,605,380,7

86 26.06%

Unsecured Loans 37,930,884,741 28,865,453,871

9,065,430,8

70 31.41%

Total

58,818,628,67

9 45,743,853,977

13,074,774,

702 28.58%

APPLICATION OF

FUNDS

FIXED ASSETS

a) Gross Block 53,267,475,035 44,822,151,998

Less: Accumulated

Depreciatin 17,845,630,972 16,776,933,661

NET BLOCK 35,421,844,063 28,045,218,337 7,376,625,726 26.30%

Capital Works in

Progress 13,196,002,245 6,564,621,230

6,63

1,381,015

101.02

%

Investments 3,447,697 6,628,962 -3,181,265

-

47.99%

CURRENT

ASSETS,LOANS &

ADVANCES

inventories,stores .spe

ars 2,318,327,504 702,834,380

Sundary Debtors 9,648,897,079 9,005,441,031

Interpretation

Shareholder Fund-

In RVUN the shareholders funds comprises of Three elements which

are

1) Share Capital- The share capital of RVUN is provided by Rajasthan Govt. under

the Rajasthan Power Sector Reforms Scheme. In 2009 the share capital has

increase around 18%.

2) In 2009 no reserves and surpluses were maintained. all amount related with

reserves ia transferred to P&L account so reserves have gone 100% negative.

3) In 2009 deferred grants and subsidies have been increased with 102%

4) Loans have also increased in good percentage. The growth in secursd loan was

recorded 26% and in unsecured loans it was 36%.

Application of funds

1) Fixed assets have increased with 27% in 2009 it indicates sufficient investment

in capital works.

2) Current assets have increased with just around 8% which indicates no major

changes in Working Capital.

3) Current liabilities in 2009 have increased with a huge difference of around

97% .

The main part of these liabilities is of employees cost which has increased due to

sixth pay commission.

5) Due to increases in expenditure mainly in employee cost huge losses were

recorded inbalanse sheet . the loss of the fiscal is Rs.7,192,319,630.

RATIO ANALYSIS

To interpret the balance sheet of RVPN following ratios have been calculated

Current Ratio

Liquidity Ratio

Assets turn over ratio

Fixed Assets turn over ratio

Current Assets turn over ratio

Net Profit Ratio

Current Ratio

Current ratio of firm measures it short term solvancy and reflects its ability to meet

short term obligations when they are due. Current Ratio of 2:1 is considered

satisfactory.

If this ratio is higher it is good from the creditors point of view.

2010 2009

Current Assets 22587803745 20895633409

Current Liabilities 19689082842 9947949488

Current Ratio 1.15:1 2.10:1

The current ratio of RVUN in 2009 was 2:1 that is an ideal and satisfactory ratio

but in this year the ratio has become down due to great changes in Current

liabilities.

Liquidity Ratio

Liquidity Ratio is an indication of a firms ability to meet unexpected demand

for working capital.A quick ratio of 1:1 is condsidered as an ideal ratio. A high

liquidity ratio compared to current atio may indicate under-stocking while a low

ratio indicates over stocking

2010 2009

Quick Assets 20,269,476,241 20,192,799,029

Current Liabilities 19689082842 9947949488

Liquidity Ratio 1:1 2:1

The liquidity Ratio of RVPN in 2009 was 2:1 which was not good . it depicts the

over stocking of assets. While in 2010 this ratio has come down to 1:1 that is the

ideal ratio for any firm in coaping with need of working capital.

Total assets turn over ratio

This ratio expresseses the relationship b/w cost of goods sold or net sales

and total assets or investments of a firm.

A high total assets turn over ratio is the indicator of effective utilation of

investment in assets whereas lower assets turn over ratio indicates that assets are

not properly utilised incomparison to sales .

2010 2009

Net sales 10597815083 8766372522

Total assets 58009647808 48940851746

Total Assets Turnover

Ratio

0.18 times 0.18times

In both years the Total Assets Turnover Ratio was 0.18times which is not at the

sufficient level . the main cause of this low ratio is the social concern of RVPN

because it has to sale electricity on very cheaper rates.

Fixed assets turnover ratio

The atio expresses the relationshp b/w fixed assets and net sales . the higher

the ratio,the greater is the intensive utilisation of fixed assets lower ratio means

under utilisation of fixe assets ans accesive investment in these assets.

2010 2009

Net sales 10597815083 8766372522

Fixed Assets 35421844063 28045218337

Fixed Assets Turnover

Ratio

0.30times 0.31times

In both years the Fixed Assets Ratio is also same but it’s again not satisfactory

Current assets turn over ratio

The ratio expresses the relationship between current assets and net sales.

Net profit ratio

2010 2009

Net Sales 10597815083 8766372522

Current Assets 22587803745 20895633409

Current Assets Turnover

Ratio

0.47 times 0.42 times

Net Profit Margin Ratio

The ratio measures the relationsthip between net profit and sales of the firm a high

net profit ratio would only meah addiquete retuens to the owner.

2010 2009

Net Profit -7192319630 8026076

Net Sales 10597815083 8766372522

Net Profit Margin

Ratiossss

-67.87% 0.092%

This ratio is an indication of overall profitability and efficincy of the business RVPN

is going in huge losses in 2010 while in 2009 it was not in losses but there were

no profits at all. This ratio shows the lower performance of the company.

COMPARITIVE PROFIT & LOSS ACCOUNT

S

INCOME

31ST MARCH

2010 2009 DIffrence %

Revenue from sale of Power 1,799,370,728 1,533,796,115 265,574,613 17.31%

Revenue from Transmission

&SLDC Charges 8,798,444,355 7,232,576,407 1,565,867,948 21.65%

Revenue subsidies and

Grants 155,582,504 35,181,386 120,401,118 342.23%

Other Income 2,817,654,230 312,818,160 2,504,836,070 800.73%

Sub-Total 13,571,051,817 9,114,372,068 4,456,679,749 48.90%

EXPENDITURE

ULDC/NLDC Charges 155,847,868 128,512,094 27,335,774 21.27%

Generation of Powers 1,653,117,182 1,047,943,032 605,174,150 57.75%

Repaires & Maintenance 744,664,455 664,060,135 80,604,320 12.14%

Employees Cost 15,404,379,715 3,744,428,138 11,659,951,577 311.39%

Admin.& Other Expenses 466,295,323 347,178,046 119,117,277 34.31%

Depriciation 1,330,027,044 1,199,959,881 130,067,163 10.84%

Sub-Total 19,754,331,587 7,132,081,326 12,622,250,261 176.98%

Less. Incidencial expenses

Transffered to capital A/C 953,054,147 583,270,744 369,783,403 63.40%

Net Expenditure 18,801,277,440 6,548,810,582 12,252,466,858 187.09%

Profit/Loss before Interest and

Tax -5,230,225,623 2,565,561,486 -7,795,787,109 -303.86%

Interest, finance,lease charges 2,242,103,470 2,067,173,403 174,930,067 8.46%

Extraordinary Items 239,736,295 588,506,603 -348,770,308 -59.26%

Profit/Loss for the Year -7,712,065,388 -90,118,520 -7,621,946,868 8457.69%

Add prior Period

Income/Expenses 528,370,156 98,144,595 430,225,561 438.36%

Profit/Loss before Tax -7,183,695,232 8,026,076 -7,191,721,308

-

89604.45%

Provision for Taxation

1)Fringe Benefit Tax 8,624,398 8,026,076 598,322 7.45%

2)Income Tax 0 0 0

Profit/Loss After Tax -7,192,319,630 0 -7,192,319,630

NET LOSS carried to B/S -7,192,319,630 0 -7,192,319,630

Interpretation

The year 2010 has brought changes in the accounts of RVUN. Though before

RVUN was not in great profits but it was covering its costs through revenues. But

in 2009 RVUN has recorded great losses of rs.7192319630.This was mainly due

to increased expenditures of RVUN. The comparative analysis of Profit and loss

account of RVUN is as follows-

Changes in Revenues

There was a positive change in revenues in RVUN in comparision of year 2008.

The revenues of RVUN have increased with around 48%. The improvement is

sufficient enough which shows the increasing capacity of transmission and

distribution.

Except this in the head of income the income from other income has also

increased with 800% which includes

Interest on Loans and Advances to staff

Interest Income from Investment/Deposites

Income from trading-Stores & scrapes and so on

Changes in Expenditure

The main reason of occurring huge losses was the increase in expenditures.

Expenditures of RVUN has been increased with around 187%. The main cause of

increase in expenditure of employee cost.

The employee cost has been increased with 311%.The company has adopted AS-

15 Employee Benefit from 1st April 2008.transitional obligation of in respect of

Pension liability Rs.845.9 crores till 31.03.2008. is recognized as expense on a

straight line basis of five years from the date of adoption . Consequently Rs

169.18 crores being 1/5 of transitional liability is charged to Profit and loss

account.

In respect of leave enhancement company has obtained actuary valuation for

liability as on 31.03.2009 only and in absence of actuary valuation as of

31.03.2008, the traditional liability could not be ascertained. Hence the entire

liability of Rs. 62.16 crores as determined by actuary is recognized as expense of

this year.

The obligations of the Pension and Gratuity trust towards retirement benefit as on

19.07.2000 of the employees of successor companies of RSEB and existing

pensioners as notified in the transfer scheme dated 18.01.2002 issued by GOr.

Was Rs. 1769 crores out of which liability of active employees of all companies

was Rs.1444 crores. The liability of RVUN has been ascertained as Rs. 1155

crores for active employees of other successor companies as on 19.07.2000. This

has also been recognized in 5 equal installments.

WORKING CAPITAL POSITION

Working Capital, in simple words, means the capital tied up in current assets. It is

the capital, which is used to finance the day-to-day operations of the business.

To know the WC position of RVPN a schedule of changes in working capital is

prepared for the year 2008-09 and 2007-08

Year 2008-09

Inventories:the inventory of the company have been valued on the following bases-

Consumable stores and Spares At lower cost of NRV

Construction Stores At lower Cost of NRV

Mandatory Spares of consumable nature At Cost

Surplus Material At Cost

In 2009 the value of Material Stock and related account was of Rs. 2,39,623,081

from which the provision of O&M expenses have been lessed according to the

instruction of FRP act. So the value of inventory was Rs 2,318,327,504 in 2009 and

the value of inventory in 2008 was Rs. 702,834,380.In other words, it increased by

around 30% which depicts the increased investment in capital works and

transmission channel expansion.

Debtors:Debtors increased from 9,005,441,031 to 9,648,897,079 in 2009. He debtors

have been increased around 7.14%. The debtors of the company are discoms and

other electricity shared projects.

Cash & Bank Balance: In RVPN cash is managed just to manage day to day

expenses so the amount of hard and core cash is less. The major amount of liquid

assets is in banks which are scheduled banks. the amount of cash in 2009 was Rs

4,55,154,453 while in 2008 it was Rs.679,389,886. In 2009 Cash and Liquid assets

came down around 33%.

Other Current assets including loans and advances: Other current assets include

loans and advances and other current assets. The amount of current assets was

10,16,54,24,709 in 2009 while in 2008 it was 10,50,79,68,112 in 2008.

Current liabilities and Provisions:Current liabilities and provisions are Rs

19,689,082,842 in the current year.

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2010

2009

S

Working Capital in progress

Particular As at 31st march,

2010

As at 31st march

2009

Capital works in progess 13,168,103,438 6,481,884,197

Advances to suppliers 27,898,807 82,737 033

TOTAL 13,196,002,245 6,564,621,230

RVUN is in transmission work and it needs to invest in capital work. In 2009 the RVPN

has invested Rs.6,481,884,197 for urgradation of capacity of transmission as well as

generation. In 2010 the capital works have been increased with 33.83% in comparison

of 2009.

INVESTMENT

Long term investment

At 31st march 2010 At 31st march 2009

Investment in govt. securities NIL NILInvestment in Bonds 3,447,697 6,628,962Immvoable properties NIL NILInvestment in capital of partnership firm

NIL NIL

Balance of unsitised money raised by issue

NIL NIL

TOTAL 3,447,697 6,628,962

RVUN being an government body invests in Govt. securities. RVUN has invested Rs

6628962 in 2009 in govt. bonds while in 2010 this investment has come down to Rs

3447697. The investment has been decreased with 77.39% in 2010 with comparison of

2009.

Comparison On the basis of Revenue and Expenditure and

Interest and tax charges

Income(External) 2010 2009

Revenue from sale of power 17993.71 15337.00 2656.71 17.32%

Revenue from SLDC charges 2349.61 2239.42 110.19 4.92%

Revenue from transmission

charges

77836.39 64761.33

13075.06 20.19%

Recovery of generation cost 7798.44 5325.00 2473.44 46.45%

Revenue from subsidy 1555.82 351.813 1204.01 342.23%

Other income 28176.54 3128.181 25048.36 800.73%

Inter segment sales NIL NIL

Total 135710.51 91142.74

Difference %

NIL NIL

44567.77 48.90%

Rs in Lacs

2009

Expenditure 2010 2009 Difference %

Urldc/Nrldc charges 1558.48 1285.12 273.36 21.27%

Generation of power 16531.17 10479.43 6051.74 57.74%

Repair & maintenance 7446.64 6640.60 806.04 12.13%

Employees cost 145759.36 37444.28 108315.08 289.27%

Admin.& Gen. expenses 3416.86 3471.78 -54.92 -1.58%

Depreciation 13300.27 11999.59 1300.68 10.83%

Extra ordinary items 2397.36 5885.06 -3487.7 -59.26%

Total

190410.14 77205.86

113204.28 146.62%

Reven

ue fro

m sale

of power

Reven

ue fro

m SLDC ch

arges

Reven

ue fro

m tran

smiss

ion

Recove

ry of g

enera

tion cost

Reven

ue fro

m subsid

y

Other inco

me

Inter se

gmen

t sale

s 0

10000

20000

30000

40000

50000

60000

70000

80000Rs in Lacs

2010

2009

Swot Analysis

Strength

RVUN registered healthy growth in revenue of about 48% from 880 crore in year

2008-09. To emergne as a leading &sustainable company committed to promotion

& generation of electricity through renewable sources of energy, in Rajasthan.

Transmission losses can be controlled by winding of the network of lines. By

establishing more 400 &220 KV grid system the efficncy of system can be

increased

Weakness

.

T&D & wheeling losses are mainly causes of losses. Electric power transmission &

distribution losses include in transmission between sources of supply & points of

distribution to consumers ,include pilferage

A regular increase in the amount of loss year by year

The basic reasons behind this are:

a) Purchase cost of Electricity is higher than the Sales cost

b) Tarries rates are not revised

Opportunity

Urldc/N

rldc c

harges

Genera

tion of power

Repair

& m

ainten

ance

Employe

es co

st

Admin.& Gen

. exp

enses

Deprec

iation

Extra

ordinary

items

020000400006000080000

100000120000140000160000

Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with

the job of development of power projects under state sector, in the state along

with operation & maintenance of state owned power stations. The Nigam is since

playing lead role in giving highest priority to the power generation for manifold and

rapid development of the state. The generating Stations of RVUN have acquired a

distinctive reputation in the country for their efficient and economic power

generation.

Threats

Government should provide enough subsidies to cover up the losses and for

making accounts balanced.

Tariff planning should be improved. Low price should be given to just requiring

section of society.

ssssss. Effective measures should be taken to prevent electricity theft.

Conclusion

With the comparison of various accounts it is true that in year 2008-09 major

changes have taken place in accounts. In year 2007-08 the company was not in

losses .In 2009 it has recorded huge losses.

After seeing the Revenue account JVUNL always face a fiscal deficit year by year.

In case of urgency the cost of purchase of electricity is higher which is bear by the company completly

A regular increase in the amount of loss year by year

The basic reasons behind this are:

c) Purchase cost of Electricity is higher than the Sales cost

d) Tarries rates are not revised

e) Budget estimates are mostly based on past data

f) Taxes and duties imposed on government on the DISCOM is high

g) Transmission cost is high

h) Theft of electricity in rural areas

i) Low Maintenance of electrical equipments

j) Distribution charges are fixed not based on distance supplied by electricity

Unable in recovery of dues from the public on time

Recommendations

Transmission pricing should anticipate the emergence of an interstate and

intrastatecompetitive power market. This pricing should be based on thefollowing

principles:

• The transmission system operator should provide access to the grid without

Discriminating among types of users;

• There should be no discrimination among customers when connecting new

customers to the transmission network;

• Use-of-system charges should not restrict, distort or prevent competition in the

generation, supply or distribution of electricity.

2. Inviting private sector in transmission

Including private sector in the electricity department can reduce the losses

because of-

Cost reduction

Up gradation of technology

Rational usages of assets

3. Transmission losses can be controlled by widening the network of lines. By

establishing more 400 and 220 kv grid systems the efficiency of system can be

increased.

4. Government should provide enough subsidies to cover up the losses and for

making accounts balanced.

5 Tariff planning should be improved. Low price should be given to just requiring

section of society.

6. Effective measures should be taken to prevent electricity theft.

.

BIBLIOGRAPHY

www.rvpn.co.in

www.rajenergy.com

www.rerc.gov.in

www.avvnl.com

www.jvvnl.com

www.jdvvnl.com

www.rseb.com

www.consumercourtforum.com

www.economicfoundation.com

Referenced Book

Management Accounting by Agarwal and Kiradoo