toal kan-engonline.mesco.in/documents/view_document.jsp... · towards Earned leave encashment and FBF as per actuarial valuation report. Tangible Assets: Net fixed Asset is increased

Mangalore Electricity Supply Company Limited

TH15 ANNUAL REPORT2016 –17

BOARD OF DIRECTORS 1. Jawaid Akhtar IAS : Chairman2. Chikkananjappa : Managing Director3. K. Ramakrishna : Director (Technical)4. Dr. Aditi Raja IA & AS : Director 5. A.N Jayaraj : Director6. M. Nagaraju, : Director7. P.I Sreevidya IAS : Director8. Prachi Pandey IA & AS : Director9. C. Adinarayana : Director10. M. D. Ravi : Director11. S. Sanjeeva Shetty : Director12. Surendra B Kambaly : Director13. B.V. Jayaram : Director14. Riyaz Ahmad : Director15. Mallika P Pakkala : Director16. Abhilash P.V : Director17. Sudhir Kumar : Director18. J.Sadashiva Ameen : Director19. K.M Krishnappa : Director20. R. Mohan : Director

CORPORATE OFFICE MESCOM BHAVANA, Kavoor Cross Road, Bejai, Mangaluru - 575 004.

WEBSITE www.mesco.in

CORPORATE IDENTITY No. (CIN):

U40109 KA 2002 SGC 030425

BANKERS:1. Syndicate Bank 2. Canara Bank3. State Bank of India4. State Bank of Mysore5. Vijaya Bank6. Corporation Bank7. Central Bank of India8. Karnataka Bank 9. Punjab & Sindh Bank10. Indian Bank11. Axis Bank12. Union Bank of India

STATUTORY AUDITORSM/s. Gopalaiyar and Subramanian, Chartered Accountants, Coimbatore

COST AUDITORS M/s. Rao Murthy & Associates, Cost Auditors, Bengaluru

SECRETARIAL AUDITORSM/s. Ullas Kumar Melinamogaru & Associates, Mangaluru

MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED

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ANNUAL REPORT 2016-17

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TABLE OF CONTENTS

1. Directors' Report .... 4

2. Secretarial Audit Report .... 30

3. Addendum to the Directors' Report .... 43

4. Auditors' Report .... 48

5. Annexures to the Auditors' Report .... 52

6. Comments of the Comptroller and Auditor General .... 60

of India on the Annual Accounts

7. Balance Sheet .... 61

8. Statement of Profit and Loss .... 62

9. Cash Flow Statement .... 63

10. Significant Accounting Policies .... 64

11. Notes on Financial Statements .... 68

12. Vital Statistics .... 102

1. ¤zÉÃð±ÀPÀgÀ ªÀgÀ¢ .... 113

2. ¸ÉPÉæmÉÃjAiÀÄ¯ï Drmï ªÀgÀ¢ .... 140

3. ¤zÉÃð±ÀPÀgÀ ªÀgÀ¢UÉ C£ÀÄ§AzsÀ .... 152

4. ¯ÉPÀÌ ¥Àj±ÉÆÃzsÀPÀgÀ ªÀgÀ¢ .... 156

5. ¯ÉPÀÌ ¥Àj±ÉÆÃzsÀPÀgÀ ªÀgÀ¢UÉ C£ÀÄ§AzsÀUÀ¼ÀÄ .... 161

6. ¨sÁgÀvÀ ¸ÀgÀPÁgÀzÀ ¤AiÀÄAvÀæPÀgÀÄ ªÀÄvÀÄÛ ªÀÄºÁ¯ÉÃR¥Á®gÀ ºÉÃ½PÉUÀ¼ÀÄ .... 170

7. D¹Û ºÉÆuÉ ¥ÀnÖ .... 171

8. ¯Á¨sÀ ªÀÄvÀÄÛ £ÀµÀÖ ¥ÀnÖ .... 172

9. £ÀUÀzÀÄ ºÀjªÀÅ ¥ÀnÖ .... 173

10. ¯ÉPÁÌZÁgÀzÀ ¥ÀæªÀÄÄR PÁAiÀÄð ¤ÃwUÀ¼ÀÄ .... 174

11. ºÀtPÁ¸ÀÄ «ªÀgÀuÁ ¥ÀnÖAiÀÄ n¥ÀàtÂUÀ¼ÀÄ .... 178

12. ¥ÀæªÀÄÄR CAQ CA±ÀUÀ¼ÀÄ .... 213


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DIRECTORS' REPORT FOR FY 2016-17

1. The Board of Directors herewith present the 15th Annual Report on the business and operations of

the Company along with the Audited Accounts for the year ended 31st March, 2017 duly expressing

its sincere thanks to the esteemed consumers and duly recognizing with gratitude, the guidance

and efforts of predecessor Chairman and Directors who have served in the Company. Mangalore

Electricity Supply Company Limited (MESCOM) being wholly owned Government of Karnataka

undertaking, was awarded with the Chief Minister's Annual Award i.e., "Rathna 2014-15", is engaged

in distribution of electricity in four districts of Karnataka i.e., Dakshina Kannada, Udupi, Shivamogga

and Chikkamagaluru. It has performed creditable in 2016-17 also.

2. Company having a working strength of 5447 employees is serving 2220040 consumers of various

category has achieved an all-time record turnover of about 3420.86 Crores during the year

2016-17.

3. The status of the Company as on 31-03-2017 at a glance:

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Area of Supply and Distribution (Sq. Km.) 26,222

Number of sub stations 400 KV, 220 KV, 110 KV, 66 KV (of KPTCL) 83

Number of 33 KV sub stations 38

Number of Distribution Transformers 59170

Length of LT Lines (in RKMs) 78222.12

Length of 11 KV Lines (in RKMs) 33421.58

Length of 33 KV Lines (in RKMs) 738.38

4. Consumer Base

As on 1st April 2016, the Company had a consumer base of 2152546 Nos. with the addition of 67494

Nos. of new consumers during the year. The number of consumers at the end of the year March 2017

stood at 2220040 Nos., comprising of the following categories:

Tariff Description Total

LT -1 BJ/KJ 193372

LT-2 (a&b) Lighting & AEH 1455795

LT-3 Commercial 197670

LT-4 IP Set Installations 295047

LT-5 Industrial 28793

LT-6a Public Water Supply 13680

LT-6b Public Lighting 19676

LT-7 Temporary Supply 14153

LT -TOTAL 2218186

HT-1 Water Supply 88

HT-2a Industrial 784

HT-2b Commercial 624

HT-2c Hospitals and Educational Institutions 264

HT-3 Lift Irrigation 26

HT-4 Residential Apartments 52

HT-5 Temporary Supply 16

HT- TOTAL 1854

LT + HT -TOTAL 2220040

I Sources of funds

A Share Capital 35807.02 26636.02 9171.00 34.43

B Reserves & Surplus 17019.61 15544.51 1475.10 9.49

C Share holders' fund 52826.63 42180.53 10646.10 25.24

D Share Deposit (pending allotment) 1400.00 1400.00 - -

II Non Current Liabilities

A Long Term borrowings 41660.56 37304.75 4355.81 11.68

B Other long term liabilities 231601.70 208019.86 23581.84 11.34

C Long term provisions 4186.82 3382.25 804.57 23.79

Sub-total 277449.08 248706.86 28742.22 11.56

III Current liabilities

A Short term borrowings 30856.55 22843.09 8013.46 35.08

B Trade Payables 36102.11 24207.85 11894.26 49.13

C Other Current liabilities 52140.94 46733.75 5407.19 11.57

D Short-term provisions 984.41 1139.71 -155.30 -13.63

Sub-Total 120084.01 94924.40 25159.61 26.50

TOTAL EQUITY & LIABILITIES 451759.72 387211.79 64547.93 16.67

II Assets `

1 Non-Current assets

A Fixed Assets

(i) Tangible Assets 114052.08 100396.03 13656.05 13.60

(ii) Intangible assets - - - -

(iii) Capital work in progress 14655.74 11814.35 2841.39 24.05

(iv) Intangible assets under development

B Non-Current investments 251.00 251.00 - -

C Deferred tax assets (net) - - - -

D Long term loans and advances 8161.11 7582.49 578.62 7.63

E Other non-current assets 120556.67 156553.96 -35997.29 -22.99

Sub Total 258102.01 276914.82 -18812.81 -6.79

2. Current assets

A Inventories 4225.64 6302.70 -2077.06 -32.96

B Trade receivables 17072.37 26830.96 -9758.59 -36.37

C Cash and cash equivalents 7255.57 4148.42 3107.15 74.90

D Short-term loans and advances 5303.01 4046.12 1256.89 31.06

E Other current assets 159801.12 68968.77 90832.35 131.70

Sub-Total 193657.71 110296.97 83360.74 75.58

TOTAL ASSETS 451759.72 387211.79 64547.93 16.67

425.41 316.99 108.42 34.20


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5. Review of Balance Sheet and Statement of Profit and Loss for the year ending 31st March 2017 with

the previous Year ending 31st March 2016 is as detailed below:

Review of Balance Sheet and Statement of Profit and Loss:

Analysis of Balance Sheet (` in lakh)

Sl. No. Particulars 31.03.201631.03.2017Increase (+)/ Decrease (-)

Variancein %


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vShare holders' Funds has increased by ̀ lakh (Net).

Amounts added are:

10646.10

(` in lakh)

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Long term borrowings : This is increased by 4355.81 lakhs. During the Year MESCOM has borrowed 18200.00 Lakh and repaid 11179.69 lakh. Further installments repayable during FY 2017-18 amounting to 13097.17 Lakh have been transferred to current liabilities. Increase in the amount of current maturities of long term loans is 2664.50 lakh.

Other Long Term Liabilities: It is increased by 23581.84 lakh (Net). During the Year the long term trade payables have increased by 4473.52 lakhs mainly due to accounting of 6958.00 lakh of KPCL dues transferred by KPTCL as per G.O. No EN 67 PSR 2017 Bangalore Dated 31.07.2017. Further old dues of KPCL to the extent of 2484.48 lakh are cleared during the year. The interest liability to KPCL is increased by 286.49 lakhs. Initial/Additional Security deposits have been collected to the extent of 4109.65 lakh and MSD to the extent of 55.37 lakhs. The payable to other ESCOMs has been increased to the extent of 11789.42 lakh (net). Security deposit and retention money amounting to 2869.66 lakh has been collected from the Contractors. And there is decrease of 2.27 lakh in miscellaneous deposits.

Long Term Provisions: It is increased by 804.57 lakh due to increase in liability in accordance with actuarial valuation report towards Earned leave encashment and FBF.

Short Term Borrowings: There is increase in the short term borrowings to the extent of 8013.46 lakh mainly due to drawal of additional Bank overdraft for payment of power purchase dues. Further installments repayable during FY 2017-18 amounting to 6666.67 Lakh have been transferred to current liabilities.

Trade Payables: The trade payable is increased by 11894.26 lakh (net) mainly due to non-clearing of power purchase dues of M/s UPCL ( 6081.06 lakh), CGS Units ( 4391.22 lakh), Short Term & Medium Term power suppliers ( 3232.17 lakhs) and reduction in others suppliers ( -1810.19). However these are not due for payment.

Other Current Liabilities: It is increased by 5407.19 lakh, mainly due to increase in the liability payable to Contractors ( 1109.62 lakhs), increase in current maturities of Long term and Short term Loans ( 2664.50 Lakhs). Other liabilities increased by 1633.07 lakhs.

Short term Provisions: It is decreased by 155.30 lakh, mainly due to decrease in current liability towards Earned leave encashment and FBF as per actuarial valuation report.

Tangible Assets: Net fixed Asset is increased by 19439.11 lakh due to categorization of Capital Works during the Year. Further it is decreased by 5783.06 lakh being the assets created out of Govt. grants and consumer contribution as per AS-12. There is net increase of 13656.05 lakh.

Capital Work in progress: It is increased by 2841.39 lakh due to uncompleted Station Works, and Improvement works, etc.

Long Term Loans and Advances: It is increased by 578.62 lakh, mainly due to increased MAT credit entitlement and Income Tax paid in advance.

Other Non- Current Assets: It is decreased by 35997.29 lakh (Net). The long term receivables are decreased by 12306.57 lakh, the inter company receivables are decreased by 31697.90 lakh mainly due to write off of interest levied on energy balancing dues to the extent of 26492.00 lakh.

Further Company has accounted the past subsidy of 7722.00 lakh as receivable from GoK which was transferred by KPCL to concerned ESCOM's as per GO no. EN 67 PSR 2017 Bangalore, Dated 31.07.2017. Other Receivables is increased by 285.18 lakh.

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1. Proposed adjustment to Net worth : (-)2896.00

2. Reserve for Material Cost Variance : (-) 251.62

3. Consumers contribution & Govt. grants towards cost of Capital Assets : 9112.10

4. Consumers contribution & govt. Grants Reduced from Capital Assets : (-) 5783.06

5. Equity released by State Govt. : 9171.00

6. Net Profit for the year : 1293.68

Total additions to Share Holders' fund: 10646.10

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Inventories: It is decreased by 2077.06 lakh.

Trade receivables: It is decreased by 9758.59 Lakh mainly due to classification of receivables outstanding for more than one year under Non-current Assets.

Short term Loans and Advances: It is increased by 1256.89 Lakh mainly due to increase in advances given to the Suppliers and Contractors for Capital Works ( 1222.11 lakh). Other Short term loans increased by 34.78 lakh.

Other Current Assets: It is increased by 90832.35 lakh (Net). During the year FY 2015-16, Regulatory Assets to the extent of 44954.00 Lakhs are created in the accounts by computing the provisional gap expected to be considered by Hon'ble KERC for inclusion in the tariff revision of future year/s. Hon'ble KERC has arrived at a Revenue Gap of 39574.00 lakhs and carried forward the same for allowing in the year 2017-18. Hence excess Regulatory Asset created to the extent of 5380.00 lakh has been written off during this year itself and balance amount of 39574.00 lakh will be reversed during FY 2017-18.

Further fresh regulatory Asset to the extent of 51196.93 lakh is created in the accounts for FY 2016-17 by computing the provisional gap expected to be considered by KERC for inclusion in the tariff revision of future year/s.

During the year 2016-17, the company has accounted 78066.05 lakhs as subsidy receivable from Government of Karnataka towards free power supply to the IP set consumers (upto 10HP) and BJ/KJ consumers having monthly consumption upto 18 units. Out of these 52626.00 lakhs has been released by Government of Karnataka during the year and balance of 25440.05 lakhs is accounted as receivable as on 31.03.2017. This apart, out of the opening amount of 15429.89 lakhs as on 01.04.2016, a sum of 4331.00 lakh has been received during the year. There is a net increase of 21109.05 lakhs.

Further, pursuant to G.O. No. EN 3 PSR 2016/P3 Dated 31.03.2017, the Company has transferred the accumulated dues from Rural Local bodies together with interest upto 31.03.2015 amounting to 21959.00 lakh to PCKL for securitisation of such receivables by PCKL in order to get loans from

Banks and utilise the proceeds of such loans to clear the dues of KPCL.

The other receivables are increased to the extent of 1947.37 lakhs.

vRatios

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Particulars 31.03.2017 31.03.2016

1 Debt:

a) Long Term Borrowings : Equity 1.16 : 1 1.40 : 1

b) Including Short Term Borrowings 2.03 : 1 2.26 : 1

2 Current Ratio 1.61 : 1 1.44 : 1

3 Liquid Ratio 1.58 : 1 1.38 : 1

Equity Ratio

Sl. No.

2. Analysis of Statement of Profit and Loss ( in lakh)`

Increase(+)/

decrease(-)

A Income

1 Revenue from operations (Distribution of Power)

2 Other Income 15841.37 7692.32 8149.05 105.94

Total Revenue 342085.52 276867.53 65217.99 23.56

B Expenses

1 Purchase of power 254170.75 223056.22 31114.53 13.95

326244.15 269175.21 57068.94 21.20

Sl. No. Particulars 31.03.201631.03.2017Variance

in (%)


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vTotal Revenue has increased by 21.20% ( 57068.94 Lakh) net, over the previous year. This includes

following regulatory Asset Adjustments:

Regulatory Assets to the extent of 44954.00 Lakhs are created in the accounts for FY 2015-16 by

computing the provisional gap expected to be considered by Hon'ble KERC for inclusion in the tariff

revision of future year/s. Hon'ble KERC has arrived at a Revenue Gap of 39574.00 lakhs and

carried forward the same for allowing in the year 2017-18. Hence excess Regulatory Asset created to

the extent of 5380.00 lakh has been written off during this year.

Further fresh regulatory Asset to the extent of 51196.93 lakh is created in the accounts for

FY 2016-17 by computing the provisional gap expected to be considered by KERC for inclusion in

the tariff revision of future year/s.

If these adjustments of Regulatory Assets are excluded, the increase in revenue during FY-17 will be

20.09% ( 46513.62 lakh). This increase in revenue is because of increase in sale of energy to the

extent of 485.25 Mus and increase in the tariff.

Other Income is increased by 105.94% ( 8149.05 lakh) over the previous year. This is mainly due to

accounting of income consequent to write off of interest charged by KPCL on past Power Purchase

dues and transferred by KPTCL as per GO no. EN 67 PSR 2017 Bangalore Dated 31.07.2017 to the

extent of 3660.00 lakhs and also due to writing off of excess provisions created for power purchase

cost during previous years in respect of KPCL Stations. Interest due from Gram Panchayaths for

delayed payment of Electricity consumption charges levied during FY 2016-17 is withdrawn as per

GO no.EN 3 PSR2016/P Dated 31.03.2017 to the extent of 1625.49 lakh.

Since the arrears in respect of IP set Consumers having connected load upto 10 HP is frozen with

effect from 01.08.2008, the Company has stopped charging interest on said arrears from the year

2011-12 which has an impact of 9.23 Crs in FY-17.

Power purchase cost has been increased by 13.95% ( 31114.53 lakh) over the previous year due

to purchase of high cost energy. As per the energy balancing for the year 2016-17, Company is

payable to other ESCOMs to the tune of 8921.80 lakh.

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Increase(+)/decrease(-)

2 Employee Benefits Expense 26697.98 24924.08 1773.90 7.12

3 Finance Costs 12691.10 11060.42 1630.68 14.74

4 Depreciations and amortization expenses

5 Other Expenses 39387.48 10577.73 28809.75 272.36

Total Expenses 340791.84 276026.59 64765.25 23.46

C Profit before exceptional and extraordinary items & tax (A-B)

D Exceptional Items - -270.45 270.45 -100.00

E Profit before extraordinary items and tax (C-D)

F Extraordinary Items - - - -

G Profit before tax (E-F) 1293.68 1111.39 182.29 16.40

H Tax Expense 307.01 231.22 75.79 32.78

I MAT credit entitlement -307.01 -231.22 -75.79 -32.78

J Profit after Tax (G-H-I) 1293.68 1111.39 182.29 16.40

7844.53 6408.14 1436.39 22.42

1293.68 840.94 452.74 53.84

1293.68 1111.39 182.29 16.40

Sl. No. Particulars 31.03.201631.03.2017Variance

in (%)

1. KPC Hydel, TB Dam 3.8537% to 8.0184%

2. KPC Thermal, Jurala & CGS 8.0184% to 10.3405%

3. Major IPPs 8.0184%

4. Short term & Medium term 8.0184%

5. IPPs of NCE sources with whom MESCOM has entered into PPA

100%


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Employee cost has increased by 7.12% ( 1773.90 lakh) over the previous year on account of increase in salaries, wages and increase in the rate of pension contribution payable to the Trust.

Finance Charges has increased by 14.74% ( 1630.68 lakh) over the previous year. This year also Company has not accounted the interest liability for belated payment of power purchase dues of KPCL.

Depreciation and amortization expenses have increased by 22.42% ( 1436.39 lakh) over the previous year.

Other expenses have increased by 272.36% ( 28809.75 lakhs) over the previous year. This is mainly due to write off of interest levied on energy balancing dues to the extent of 26492.00 lakh of previous years. The R&M expenses have increased by 284.42 lakh and A&G expenses have increased by 105.83 lakh due to increase in vehicle running expenses and remuneration paid for Contract agencies for the services obtained. The other expenses are increased by 1927.50 lakh.

Profit before Tax has increased by 182.29 lakh over the previous year.

The Current tax works out at 307.01 lakh, against the profit of 1293.68 lakh on MAT basis

MAT Credit Entitlement: Company has accounted the MAT credit entitlement to the tune of 307.01 lakh for the current year.

Profit after Tax has increased by 182.29 lakh over the previous year.

6. Dividend stThe Board has not proposed any dividend for the financial year ended 31 March, 2017.

7. Source of funds & Borrowings

a) The source of funds of the Company stands at 528.27 Cr. at the end of the Financial Year comprising of Equity Share Capital A/c of 358.07 Cr., and Reserves & Surplus of 170.20 Cr.

b) The total long term borrowing of the Company amounts to 416.61 Cr. and the security deposits from consumer's amounts to 509.09 cr.

8. Power purchase

During the year 2016-17, the power purchase is 5668.84 MU at a total cost of 2541.71 Cr. Total energy available for sale is 5411.61 Mus. Total sales during the year were 4794.42 MU. Remaining 617.19 MU was attributable to system loss.

9. MESCOM is purchasing power from generators as per GoK order No. EN 131 PSR 2003 dated 10.05.2005 w.e.f 10.06.2005. The power is procured from the following sources during FY-17.

a. Central Generating Stations like NTPC, NTPC VVNL, NLC, NPCIL, NTECL & NTPL.

b. State owned generating stations of KPCL – Hydel & Thermal.

c. Major Independent Power Producer - Udupi Power Corporation Ltd.,

d. Independent power producers from non-conventional sources like Wind, Solar & Mini hydel.

e. Telangana State Power Generation Corporation Ltd.,(Priyadarshini Jurala)

f. Damodar Valley Corporation Ltd.,

g. Co-gen Short Term & Medium Term

1. The GoK issues order allocating share to each ESCOM for payment purpose and also power allocation. The share of payment allocation to MESCOM for FY 17 as per order No: EN 22 PSR 2016, Bengaluru dated 18.03.2016 is as below:

Average Cost(Crs)

KPCL (Thermal) 1548.28 670.84 4.33

KPCL (Hydel) 411.27 41.83 1.02

Total KPCL 1959.55 712.67 3.64

CGS 1575.61 562.34 3.57

Priyadarshini Jurala 9.55 4.73 4.95

Damodar Valley Corporation 267.47 119.16 4.46

Major IPPs 594.03 266.59 4.49

Medium & Short term power purchase 369.65 162.54 4.40

Co-gen 16.31 5.65 3.46

NCE Projects

Mini Hydel 227.80 78.33 3.44

Wind Mill 284.20 101.88 3.58

Solar 74.91 55.97 7.47

Total NCE 586.91 236.18 4.02

Captive Power - - -

UI Charges 45.39 12.59 2.77

KPTCL Transmission Charges - 248.38 -

PGCIL Transmission Charges - 111.70 -

Other Expenses 11.23 8.01 -

Total 5435.70 2450.54 4.51

Energy Balancing FY 2016-17 233.14 89.22 3.83

Sub Total 5668.84 2539.76 4.48

Energy Balancing Difference of previous years - - -

Net Energy/Cost 5668.84 2539.76 4.48

(`/Unit)

3. The comparison of source wise power purchase cost of FY 2015-16 & 2016-17 :

KPCL 2275.77 836.80 3.68 1959.55 712.67 3.64

CGS 1121.50 367.96 3.28 1575.61 562.34 3.57

Priyadarshini Jurala 0.75 4.79 63.87 9.55 4.73 4.95

Damodar Valley Corporation 43.99 19.74 4.49 267.47 119.16 4.46

Major IPPs 381.47 159.83 4.19 594.03 266.59 4.49

Medium & Short term power purchase

Co-gen - - - 16.31 5.65 3.46

NCE 554.24 208.82 3.77 586.91 236.18 4.02

564.70 287.42 5.09 369.65 162.54 4.40

2016-172015-16

Source Energy (MU)

Cost (Crs)

Average ( unit)`/

Energy (MU)

Cost(Crs)

Average( /unit) `


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2. The source wise power purchase and cost incurred by MESCOM during FY 2016-17 is as below:

Source Energy (MU) Amount

1 Total Lines & TCs added:

a. DTCs erected Nos. 5114 4504 4749 3620 3395

b. 11 KV HT lines RKms 1781.36 1595.70 1187.70 1135.57 1208.00

c. LT lines RKms 1413.62 1462.38 1931.99 1290.07 1676.00

d. Reconductoring of HT Lines RKms 103.65 252.47 179.06 190.29 468.97

e. Reconductoring of LT Lines RKms 362.05 579.45 780.54 607.89 676.01

2 DTC Failures % 11.67 11.88 11.52 10.02 9.63

3 RE Works: (Excluding RGGVY)

a. Electrification of Hamlets Nos. 3 12 12 24 201

b. Electrification of Harijan Basthies/JCs/Tandas

c. Electrification of Tribal Colonies

4 Servicing under:

a. Drinking Water Supply Schemes

b. Ganga Kalyana Schemes Nos. 1593 1090 1150 997 1310

5 Total Energy Handled MU 5411.61 4869.13 4688.54 4584.63 4280.45

6 Distribution loss % 11.40 11.50 11.57 11.93 11.88

7 IP set serviced

a. IP sets serviced Nos. 10650 11996 10273 8493 6655

b. Regularisation of Unauthorised IP sets serviced

8 BJ/KJ installations serviced(Excluding RGGVY)

Nos. 13 6 8 13 45

Nos. 9 8 10 4 20

Nos. 1018 631 887 814 619

Nos. - 9394 6142 - 8137

Nos. 2412 1083 1351 492 1023


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2016-172015-16

Source Energy (MU)

Cost (Crs)

Average ( /unit)`

Energy (MU)

Cost(Crs)

Average( /unit) `

Captive Power 2.44 0.63 2.58 - - -

KPTCL Transmission Charges - 218.70 - - 248.38 -

PGCIL Transmission Charges - 71.81 - - 111.70 -

UI Charges & Other Expenses 46.71 21.60 4.62 56.62 20.60 3.64

Total 4991.57 2198.10 4.40 5435.70 2450.54 4.51

Energy Balancing adjustment 36.15 14.87 4.11 233.14 89.22 -

Sub Total 5027.72 2212.97 4.40 5668.84 2539.76 4.48

Energy balancing adjustment of previous years

Net Energy & Amount 5027.72 2230.40 4.44 5668.84 2539.76 4.48

- 17.43 - - - -

10. An overview of the performance of MESCOM (in respect of Distribution Transformers, HT/LT lines, Electrification, etc.):

SlNo

Particulars Measure 2016-17 2015-16 2014-15 2013-14 2012-13


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11. Milestones achieved during 2016-17:

Several initiatives have been taken up to strengthen and stabilise the distribution system as well as the fiscal status of the Company. A bird's eye view of some of the major achievements and the innovative initiatives are as follows:

(A) Addition of new Distribution Transformers to the System:

In order to improve the quality and reliability of power supply, 1225 numbers of distribution transformers are added to the system in the identified low voltage pockets.

(B) Metering Programme:

The Company is marching towards 100% metering of the installations. With a perennial and dedicated commitment, through universal metering programme, the Company has achieved 97.72% metering as at the end of FY 17.

(C) Metering of Distribution Transformer Centers:

MESCOM has contemplated to introduce metering to all Distribution Transformer centers with RRAMR facility to carry out energy audit in a more effective manner. 37083 numbers of DTCs have been metered out of 59170 numbers of DTCs as at the end of FY-17.

Further, providing meters to the balance numbers of Distribution Transformer Centres is under progress.

(E) R-APDRP :

MESCOM has taken up R-APDRP Part-A project in 11 towns (viz. Mangaluru, Udupi, Puttur, Bantwala, Shivamogga, Bhadravathi, Sagar, Shikaripura, Kadur, Tarikere and Chikkamagaluru) for revised sanctioned cost of 29.05 Crores.

The IT implementation work has been awarded to M/s. Infosys Technology, Bengaluru.

Initially M/s. Reliance Infrastructure, Mumbai had been awarded the IT consultancy works. At present, it has been awarded to M/s Ernst & Young, Gurgaon.

All 11 numbers of R-APDRP towns have been declared Full stack Go-Live.

R-APDRP Part-'B' Project work is not taken up in MESCOM

(F) New 33/11 KV Sub-station/ Enhancement /Providing additional power transformers in existing 33/11 kV Sub-station :

Establishing 2x5 MVA, 33/11 kV substation at Malpe in Udupi Division and construction of 33 kV single circuit tap line to a distance of 7 kms.

Establishing 2x5 MVA, 33/11 kV substation at Venur in Belthangady Taluk in Bantwal Division and construction of 33 kV single circuit line to a distance of 14.9 kms using Coyote conductor and 0.60 kms using UG cable.

Establishing 2x5MVA, 33/11kV substation at Kalladka in Bantwal Division and construction of 33 kV double circuit line to a distance of 0.25 kms.

Establishing, 1x5MVA, 33/11kV substation at Byakodu in Sagar Division and construction of 33 kV single circuit tap line to a distance of 65 kms.

Establishing 1X5MVA, 33/11 kV substation at Kavu at Madnoor Village in Puttur Division and construction of 33kV single circuit line for a distance of 3.0 kms.

Providing additional 1x5MVA, 33/11kV power transformer at 33/11kV NR Pura substation in Chikkamagaluru division.

Providing additional 1x5 MVA, 33/11 kV power transformer at 33/11 kV, Savanoor substation in Puttur division.

Enhancement of 1x5 MVA power transformer by 1x12.5 MVA power transformer at 33/11kV Sullia substation, Puttur Division.

Establishing 2x5 MVA, 33/11 kV Substation at Guthigaru in Sullia Taluk and construction of 33 kV single circuit line to a distance of 24 kms using Coyote conductor & 2.5 kms using UG cable.

12. Other Schemes

Decentralized Distribution Generation(DDG):

REC has communicated sanction for only 2 numbers of DDG projects covering 3 numbers of unelectrified villages namely Shettihalli, Chitrashettihalli and Urulugallu villages in Shivamogga District for electrification of 123 households in Shivamogga District for an amount of

0.615 Crores considering Standalone solar system and the works have been completed during Fy-2017.

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Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)

GoI has launched DDUGJY for Rural areas. REC is the Nodal Agency. Scope of work includes feeder separation, strengthening of sub-transmission and distribution system, metering, rural electrification etc. 'In-Principle' approval for an amount of 395.65 Crores has been communicated from REC/GoK during January-2017 for all 4 districts of MESCOM.

Further, feeder segregation and rural electrification woks have been awarded. Tenders have been called for metering component works.

Integrated Power Development Scheme(IPDS)

GoI has launched IPDS for Urban/ Semi-urban areas. PFC is the Nodal agency. Scope of work includes strengthening of sub-transmission and distribution network, metering, provision for solar panels, IT enablement works etc. Sanction for an amount of 157.80 Crores has been communicated from PFC for 29 numbers of statutory towns for the above works excluding IT enablement works.

Further, for strengthening of distribution networks and provision for solar panels on roof top of government buildings works have been awarded. Tenders have been called for metering component works.

IPDS (Integrated Power Development Scheme) Part -II:

The scope of work involves ERP and IT applications in IPDS towns i.e. establishing IT infrastructure etc. The DPR amounting 6.00 Crores has been submitted to MoP and approval is awaited.

Belaku Yojana

'Belaku Yojana' scheme is a GoK programme which aims at large scale replacement of 2 numbers of incandescent Lamps in Anthyodaya Anna Yojane (AAY) households with 2 numbers of CFLs. MESCOM has been allotted 2,00,400 numbers of CFLs for distribution out of which 1,92,807 numbers of CFLs have been distributed.

LED distribution

It is a program towards energy conservation under domestic category. Program is launched for distribution of LED bulbs and LED Tube lights to the domestic consumers through EESL. 5 to 10 LED bulbs are being issued to each consumer at a concessional price of 80/- per bulb. In total 29, 49,897 numbers of LED Bulbs and 10,605 number of LED Tube lights have been distributed upto March-2017.

Solar LED Lanterns scheme

Solar LED Lanterns scheme is a GoK programme for promotion of renewable energy which aims at distribution of 'Solar LED Lanterns' to the beneficiaries who are economically backward, living in remote and isolated locations and are not supplied with electricity. MESCOM has been allotted 6500 numbers of 'Solar LED Lanterns' for distribution out of which 3,952 number have been distributed.

13. Other Programme:

Replacement of Electromechanical meters by Static meters:

As per CEA guidelines all the interface meters, consumer meters and energy accounting and audit meters shall be of Static type, with an objective to increase metered consumption, thereby reducing commercial losses especially in LT2, LT3, LT5 installations.

At present only New/MNR installations are being provided with Static meters supplied through Meter outlets in MESCOM.

Providing Infrastructure to regularized UIP sets :

As per GoK order No: EN9/PSR 2011 dated: 11.03.2011, 21,693 numbers of unauthorized IP sets have been regularized and 19646 numbers of IP sets have been provided with infrastructure and work is under progress.

As per GoK order No: EN41/VSC 2014/PI dated: 14.07.2014, 15536 numbers of unauthorized IP sets have been regularized and 335 numbers of IP sets have been provided with infrastructure.

For speedy execution of providing infrastructure to balance 15,201 numbers of IP sets, works have been entrusted on total turnkey basis (Rate Contract) at a cost of 331.55 Crores for which completion schedule of one year is fixed including monsoon period.


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Target

1. Electrification of Hamlets 10 Nos.

2. Electrification of HB/ JC/ Tandas 10 Nos.

3. Electrification of Tribal Colonies 10 Nos.

4. Energization of IP sets 7500 Nos.

5. Providing infrastructure to regularized unauthorized IP sets 8000Nos.

6 Kutir Jyothi 1500 Nos.

7. Service Connection 50000 Nos.

8. Addition of new 33 kV sub-stations and allied lines 2 Nos.

9. Augmentation of 33 kV Stations. 5 Nos.

10. New HT Line 1200 Kms.

11. New LT line 1200 Kms.

12. Distribution Transformers 3000 Nos.

Sl. No. Schemes

14. Civil Engineering Works:

During 2016-17 the following office buildings and other infrastructure works has been taken up inMESCOM.

Sl. Expenditure

No. during 15-16

Stores/Guest houses and other building and extension works

Other infrastructure works such as compound, road, water supply,

fencing & drainage etc.,

Total 1600.00 55 1600.00

1 Construction of office Building/ 950.00 20 1400.00

2 650.00 35 200.00

Spill over worksCompleted works

[ In Lakhs]`

For financial year 2017-18, a budget of 1600.00 lakhs is allocated towards spill-over and fresh Civil Engineering works in MESCOM.

15. New initiatives in procurement of Materials:

1. Energy Efficient 3 star labeled Distribution Transformers:- In order to comply with Energy Conservation Act-2001, procurement of Energy Efficient minimum 3 star labeled Distribution Transformers is being implemented since 2008. Number of such Distribution Transformers procured during FY-2016-17 are as below:

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Capacity Quantity (Nos)

25 kVA 2800

63 kVA 1448

100 kVA 150

Total 4398

Particulars Expenditureduring 15-16

Nos., of workcompleted

2. Following Polymeric Type Materials are being procured instead of Porcelain type materials in order to minimize the failure rates.

?Only Polymeric type Lightning Arrestors are being procured in order to minimize the distribution transformer failure rate especially in the heavy lightning prone areas. Quantity procured during 2016-17 is 13500 Nos.

Proposed Target for Capital Investment Plan 2017-18:

Nos. of Complaints

1 Electricity Supply & Distribution code -violation 1

2 Voltage/Interruptions 17

3 Bills Related 43

4 Delay in Sanction & Work 1

5 Accident & Compensation 9

6 Theft & unauthorized use of Electricity 31

7 Transformers Shifting etc. 26

8 Bribe/Corruption/Dishonest 9

9 Reduction in Deposits /Load Reduction/Repayment of Deposits 2

10 New Connection 9

11 Disconnections 12

12 Other Miscellaneous Complaints. 178

Total 338

Category of complaintsSl. No.

c. A comparative data of complaints are as follows;


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?50000 Nos of 45KN Polymeric type Insulators for 11kV distribution system are procured during 2016-17.

?60000 Nos of 11kV 5KN Polymeric Type Pin Insulators for 11kV distribution system are procured during 2016-17 for usage in coastal and heavy lightning prone areas

3. Purchase order has been placed for supply of 1 No each of Single Phase, 40 Position & Three Phase, 10 Position, Fully Automatic Energy Meter Test Benches suitable for calibration of 3 Phase and single phase energy meters to be installed at Shivamogga & Chikkamagaluru Circles

4. Purchase order has been placed for procurement of 7sets of fully automatic Distribution Transformer Test Benches to be installed at various divisions in MESCOM jurisdiction. Materials are already supplied and installation of the same is under progress.

16. Public Grievances Cell

a. Public Grievances Cell established in the Corporate office is working under the direct control of Managing Director which is headed by Manager (PG Cell). During the year 2016-17, the Public Grievances Cell received 338 written complaints out of which 76.92% i.e., 260 complaints were resolved satisfactorily. The remaining 78 complaints were redressed in the current financial year. Further 829 minor complaints relating to fuse-off call, low voltage, etc, were received through telephonic calls.

b. The category-wise complaints:

17. Personnel, Industrial Relations and Human Resource Development:

A) The Company functions through the following organizational structure: (as on 31.03.2017)

Written Complaints 590 406 370 340 338 Decrease of

2 complaints

Minor Telephonic Complaints 475 850 600 579 829 Decrease of

250 complaints

2015-16 2016-17 RemarksNo. of Complaints 2013-142012-13 2014-15

Corporate Office

O&MZone

O&MCircles

O&MDivisions

O&MSub Divisions

RevenueSections

O&M Sections

1 1 4 13 58 11 216


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B) Personnel Details:

The working strength of the employees as on 31.03.2017 is placed category – wise as under:

C) Training and Development Programmes during the year 2016-17

a) Keeping in view of the organization growth and by onsidering necessity to provide training through

internal and external agencies in the fast growing technological environment training is imparted,

with special importance to work culture to the officers and employees at each level of organization

hierarchy.

b) Also, training on Contract Management, Service Tax, Excise & Customs Duty, commercial aspects

of ESCOM operations, better productivity through process and people, Public Private Partnerships,

Design Development of Efficient Transformers, IPDS implementation, Finance for Non-finance

Officers, Transformers Quality Control, Skills for personal effectiveness, Regulatory Aspects of

Power Sector Operations, New Techniques in Metering, Billing and Collection, Open Access,

Power Trading and Availability Based Tariff, Technical Symposium, Evolving Technologies in

intelligent Management of future Grid, Urja Mitra Application, Smart Grid Technologies : Recent

initiatives, challenges and opportunities, Introduction of GST, Indian Accounting Standards etc.,

have been given to the employees for the enrichment of their knowledge and betterment of their

attitudes and behavior.

c) During the year 2016-17, the company has organized several Internal Training Programmes and

deputed the regular working staff of the company to various external training programmes.

Mangaluru Circle

Udupi Circle

Shivamogga Circle

Chikmagaluru Circle

Total

S-Sanctioned Posts, W-Working Posts, V-Vacant Posts

Cadres

S W V S W V S W V S W V S W V

A-Grade(Regular Employees) 142 120 22 32 31 1 45 43 2 35 28 7 254 222 32

A-Grade (Deputation Employees) 1 1 - - - - - - - - - - 1 1 -

Total 143 121 22 32 31 1 45 43 2 35 28 7 255 223 32

B-Grade(Regular Employees) 125 76 49 44 34 10 87 47 40 59 30 29 315 187 128

B-Grade (Deputation Employees) 1 1 - 1 1 - 1 - 1 1 1 - 4 3 1

Total 126 77 49 45 35 10 88 47 41 60 31 29 319 190 129

C-Grade(Regular Employees) 905 537 368 495 308 187 709 508 201 489 319 170 2598 1672 926

C-Grade (Deputation Employees) 4 2 2 5 5 - 4 4 - 4 3 1 17 14 3

Total 909 539 370 500 313 187 713 512 201 493 322 171 2615 1686 929

D-Grade(Regular Employees) 1922 1114 808 1088 611 477 1559 1034 525 1097 589 508 5666 3348 2318

Company Grand Total 3100 1851 1249 1665 990 675 2405 1636 769 1685 970 715 8855 5447 3408


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The Details of training programmes are as follows:

Internal Training Programmes:

Subject No. of Participants (in `)

1

2 REC/C&D 272 7,87,287

Total 312 11,93,739

Total Cost

M.T.T.P.-2 40 4,06,452

Sl. No.

Total No. of Internal Training Programmes 2

No. of Persons Participated 312

Total Cost including Programme fees ` 11,93,739/-

Cost per Head (Average) ` 3,826/-

External Training Programmes :

The Details of Training held through the Internal and External Training Centre on various subjects in the year 2016-17 are as given below:

Sl. Subject No. of AmountNo. Participants (in `)

1 Contract Management 2 -

2 Electrical Transformer (Quality Control) Order 2 -

3 Labour Laws-covering also the contract labour (regulation & abolition)

4 Latest Updates on Service Tax, Excise and Customs Duty (covering also impact of proposed GST)

5 Commercial aspects of ESCOM operations for the officers of power sector

6 Better Productivity through process and people 1 -

7 Operation, Maintenance and Protection aspects of distribution substations

8 Knowledge Exchange Program - 3 1 -

9 Public Private Partnerships (PPPs) 2 -

10 Design and Development of Efficient Transformers 3 22050

11 IPDS implementation 1 -

12 Finance for Non-Finance Officers 2 -

13 PFMS portal for payment and accounting of DDUGJY/RGGVY projects

14 Tender, Bidding and Contract Management 2016 2 45150

15 Trafocare 2016 Workshop on Transformers 1 -

16 Skills for Personal Effectiveness 4 -

17 Public Private Partnerships (PPPs) 2 -

18 "SSCI - Sustainable Smart Cities SUMMIT" 2 20000

19 Tariff Policy and Submission of ARPs-Regulatory Compliance 2 41400

20 Contract Management 3 -

21 Open Access, Power Trading and Tariffs - ABT Scenario 2 34500

22 Leveraging IT in Power Distribution 1 -

2 8360

2 9405

8 -

1 23187

1 -


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23 Day - long GIS Session 1 -

24 Regulatory Aspects of Power Sector Operations 7 -

25 New Techniques in Metering, Billing and Collection 4 -

26 IDAM admin functionalities 3 -

27 Open Access, Power Trading and Availability Based Tariff (ABT) 1 20700

28 Finance for Non-Finance Officers 3 -

29 Implementation of SAPCC and Opportunities for Climate Finance 5 -

30 Technical Symposium - 2016 20 -

31 Evolving Technologies in Intelligent Management of future Grid 2 -

32 Urja Mitra Application 21 -

33 Smart Grid Technologies : Recent Initiatives, Challenges and 6 -Opportunities (ISSGT 2017) - reg.

34 Introduction of GST 137 -

35 Indian Accounting Standards 4 -

36 Karnataka CMA Convention 6 -

37 PFMS implementation 1 -

Total 268 224752

Total No. of External Training Programmes 37

No. of Persons Participated 268

Total Cost including Programme fees ` 2,24,752/-

Cost per Head (Average) ` 838/-

D. Industrial Relations:

The Company has maintained cordial relations with the employees and their union. Employee's

grievances if any are redressed at respective offices by conducting periodical meeting with the

local office bearers of the union.

E. Employees Welfare Schemes:

As a step towards strengthening the relationship between the Employees and Management,

several welfare schemes have been initiated by the company.

a) In order to maintain efficiency continuously in future days, MESCOM has decided to promote

and encourage officers/employees by awarding cash prize and appreciation letter to best O&M

Division, best O&M Sub-division and best O&M Section in the year 2016-17.

b) To promote and encourage sports excellence, an amount of 6,00,000/- has been sponsored

to MESCOM sports organization, Mangaluru for conducting KPTCL/inter Company State level

Kabbadi, Khokho, Power lifting, Body building and Swimming sports meet.

c) To maintain cordial relation and welfare of employees, 50 Lakhs has been given to KPTCL

Employees Association at Chikkamagaluru, for construction of Samudhaya Bhavana.

d) Company Quarters facilities wherever available are provided to the employees of the company.

F. Training Activities of HRD Centre, MESCOM for the year 2016-17:

vDuring the year 2016-17, MESCOM HRD Centre has organized Mandatory Technical Training

Programme for KPTCL employees 40 working days (MTTP -2) for 40 members of Overseer,

Meter Reader and Junior Meter Reader during the period from 24.05.2016 to 12.07.2016 for

MESCOM/KPTCL employees.

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Sl. Subject No. of AmountNo. Participants (in `)

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vNational Training Programme conducted to C&D Employees of MESCOM during the year

2016-17.

REC & MESCOM have jointly sponsored 4 days training programme to 272 Nos. of

maintenance staff in 10 batches of C&D including one day field training.

G. Sponsoring of Socio-Economic Project

4 Lakhs to Public Socio-Economic Projects for maintaining one Lion at Dr. Shivarama Karantha

Pilikula Nisargadhama, Mangaluru.

25,000/- to Mangaluru Sangeethothsava -2016 organised by Sangeetha Parishath – Mangaluru

(R) at Sri Vivekananda Auditorium, Ramakrishna Matha, Mangaladevi, Mangaluru on 24.11.2016 to

27.11.2016.

To promote and encourage academic excellence, cash incentive of 2,500/- (Rupees Two

Thousand Five Hundred Only) is being been awarded since 2007-08 to each of the meritorious thchildren of the employees of the company, who secure 90% and above marks in SSLC/ 10

ndStandard and 2 PUC examination. During FY 2016-17 the cash incentive is awarded to 24

numbers of meritorious children.

18. Recruitment Activities:

MESCOM is committed to give quality service to the consumer. With regard to this, efforts have

been made to fill the vacant posts at the cutting edge level. Hence, during the year 2015-16 direct

recruitment for the post of Assistant Lineman, Station Attendant Gr-2 and Junior Lineman was made

and 2253 number of persons were inducted.

The appointment of supervision staff, technical and accounts staffs and also the clerical staff has

been undertaken and is in progress. The details in this regard are given below:

a) For the post of Assistant Engineer (Ele) / (Civil) and Assistant Accounts Officer, Kannada

Language Test was conducted on 05.02.2017 at Mangaluru center.

b) For the recruitment of 119 Junior Engineer (Ele) / (Civil) posts Online Aptitude Test was

conducted on 12.02.2017 at various centers of Karnataka and on the basis of marks secured in

the Aptitude Test and as per roster system in vogue, provisional selection list was published and

the document verification has been done on 30.05.2017 and action will be taken to issue the

appointment orders shortly.

c) For the recruitment of 85 Assistant Engineer (Ele) / (Civil) and for the recruitment 41 Assistant

Accounts Officer posts, the Online Aptitude Test was conducted on 08.04.2017 to 09.04.2017 at

various centers of Karnataka and on the basis of marks secured in the Aptitude Test and as per

roster system in vogue, provisional selection list was published, and document verification has

been done on 28.06.2017 and action will be taken to issue the appointment orders shortly.

d) For the recruitment of 122 Assistants and 74 Junior Assistants posts Online Aptitude Test was

conducted from 06.05.2017 to 08.05.2017 at various centers of Karnataka and on the basis of

marks secured in the Aptitude Test and as per roster system in vogue, provisional selection list

was published and document verification has been done on 02.08.2017 and action will be

taken to issue the appointment orders shortly.

Further action will be taken to fill the balance vacant posts on need basis.

In case of C&D employees working in MESCOM as well as KPTCL (Under MESCOM

Jurisdiction), the pension and other terminal benefits are being processed in the Corporate

Office on their retirement/death.

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Medical reimbursement scheme is followed in the company as per which, bills worth ` 2000/- and

above are processed and approval conveyed from the Corporate Office. During the year 2016-17, 1021

number of medical claims were processed amounting to ̀ 126.7 lakhs.

Further in order to have financial security to the families of employees in case of death of an

employee, a group insurance policy has been initiated to the all the employees for a total sum of

` 10 lakhs for the dependents of each employee. During the year 4 death cases were reported and a sum

of ̀ 40 lakhs has been paid to the dependents.

19. Electrical Accidents during the year- 2016-17

The details of electrical accidents are presented as below.

No. of Pension Papers received No. of pension Papers Processed

128 124

During the year 2016-17 total Pension claims settled are as below:

Name of the Grand

Circle/Division Fatal Non-Fatal Fatal Non-Fatal Total

MANGALURU CIRCLE:

1 Mangaluru -1 - - 2 4 - 6

2 Kavooru - 1 2 - 1 4

3 Bantwal - 1 3 3 3 10

4 Puttur 2 - 7 - 1 10

Circle Total 2 2 14 7 5 30

UDUPI CIRCLE:

1 Udupi 1 2 1 4 - 8

2 Kundapura - 1 1 2 - 4

Circle Total 1 3 2 6 - 12

SHIVAMOGGA CIRCLE:

1 Shivamogga - 6 8 3 13 30

2 Bhadravathi - 1 - - 2 3

3 Sagar - 1 4 4 5 14

4 Shikaripura - - 5 4 6 15

Circle Total - 8 17 11 26 62

CHIKKMAGALURU CIRCLE:

1 Kadur - 2 10 - 5 17

2 Chikkmagaluru 1 1 10 2 10 24

Circle Total 1 3 20 2 15 41

Grand Total 4 16 53 26 46 145

AnimalNon-Departmental Departmental Sl.No

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20. Public Relation and Communication activities in MESCOM for the year 2016-17

MESCOM has a separate wing for Communication activities which is looking after Public Relations

and Corporate protocol duties. Accounts Officer (Public Relation and Communication) is discharging

the duties of this section duly reporting to the Managing Director. Maintaining the relationship with the

public and media as well as representing the Company in the society are the main functions of this wing.

Arrangement for publication of Company's news and public Notifications like Tender & such other

notifications arranging programmes etc., are the routine activities of the section. Further, the news

regarding the Power Sector and highlights of company activities will be brought into the knowledge of the

management on daily basis.

Highlights of Public Relations and Communication activities in MESCOM during 2016-17:

a) Jana Samparka Sabhas :

It has been made mandatory that, the concerned Superintending Engineers (Ele) of O&M

Circles shall conduct consumer meets i.e., Jana Samparka Sabhas, a direct interaction

programme with the general public and consumers at sub-divisional headquarters on frequent

intervals. The programme schedules of these Jana Samparka Sabhas will be published in the

leading newspapers by way of notification and also in the form of news. Under these

programmes, the problems and grievances of the consumers relating to electricity distribution

have been dealt with and solved in the presence of Company's local officers.

b) Attending VP, TP & ZP Meetings:

The concerned O&M Section Officers are regularly attending the meetings of concerned

Village Panchayats and the concerned O&M Sub-divisional Officers are attending the meetings

of concerned Taluk Panchayat. Further, the concerned O&M Divisional Officers are attending

concerned Zilla Panchayat meetings. In these meetings, Company's concerned Officers will

discuss on various ongoing O&M works and Capital works and also redress the customers'

complaints and problems if any.

c) Consumer Education Programmes :

Under the Consumer Education Programmes the information and guidance on electricity

usage and safety, as well as rules and regulations with regard to electricity are being given to

the consumers, during the various programmes and meetings with consumers. Information on

power saving, safety and payment modes are made available to the consumers through the

paper notification and printed handouts. These informations are being telecasted thorugh

audio messages in KSRTC Bus stations of MESCOM jurisdiction.

Consumer Friendly Measure

24 Hours “Consumer Service Centres” have been opened in major city and town places.

Soujanya counters are working at Sub Divisional level to redress the public grievances.

Consumer Grievance Redressal Forums (CGRF) are formed at each District headquarters

under the chairmanship of respective O&M Circle's Superintending Engineers (Ele). The details

of CGRF and address and contact numbers of the Forum and about its members have been

widely published in the leading News Papers.

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Implementation of Geographical Information System to improve quality of power supply.

Computerization of all revenue sections and implementation of information technology in day to

day activity.

Electronic clearing system has been introduced for payment of Electricity bills.

ATP machine have been installed in Sub Divisional and Prime locations, they are working

satisfactorily.

Provision has been made to collect the Consumer Electricity bills through Post Offices.

Electricity Bills are also collected at 'Mangaluru One' and Shivamogga One' Centers, a multi

service providing centre recognized by the Government.

Electricity bills are also collected through Online, Karnataka Mobile One App and Paytm.

24x7 CCC (Centralized Customer Care centre) opened in Mangaluru. Consumer can approach

from any part of MESCOM jurisdiction through toll free No. 1912 for his electricity related

complaints and help.

Other Programmes :

The newly built Corporate Office own building 'MESCOM Bhavana' was dedicated to the public

by Hon'ble Energy Minister. Organized inaugural function and stage programme, participation

of Ministers, MLA's Local representatives, Department Heads, Media and General Public has

brought a good public relation to the company.

The newly constructed substations at Puttur and Subrahmanya were inaugurated by Energy

Minister. The Ministers, MLA's, consumers and the general publics were participated.

The District wise HT & EHT consumers meet arranged in Mangaluru, Udupi, Shivamogga,

Chikkamagaluru. The programme helped to build a good relationship between the consumers

and the company.

The Mega Solar Camp was arranged in Mangaluru with a intension to guide the consumers in

installing the Solar rooftop units and was a grand success.

Internal Communication activities:

An Orientation programme was arranged in Mangaluru for the newly recruited employees like

ALMs, Station Attendents, AAO's and AE's/JE's. The Hon'ble Energy Minister, Managing

Director KPTCL & Chairman MESCOM, Senior Officers of KPTCL, Managing Director, PCKL,

and Directors of MESCOM were participated.

Kannada Rajyothsava: Kannada Rajyothsava programme was arranged in a grand manner.

The officers and employees actively participated and it helped to bonding the employees and

management relationship. In the programme the employees were staged many cultural

programmes. Company had provided a good opportunity for the employee to exhibit their

talents.

The National festivals are being celebrated in the company in a meaningful way.

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The New Year greetings, Diary and Calendars were distributed among the officers and staff.

Felicitation programme to the retired employees of the company is being arranged by

honouring them with a Silver Memento worth 10,000/-. During the financial year 88 retired

employees were felicitated along with their family members. This meaningful programme was

appreciated by all.

21. Internal Audit in MESCOM

The Internal Audit Wing of MESCOM is headed by Controller (Internal Audit), and reporting directly

to the Managing Director of the Company. The Revenue Audit, Voucher Audit, Cash Audit, Store

Audit, Audit of Power Purchase Bills, Audit of Pensionary benefits to the C & D group employees of

MESCOM and KPTCL employees in MESCOM Jurisdiction and day to day pre and post audit are

the regular function of Internal Audit. Also on need basis, the special inspections are

independently carried out by the Internal Audit Officers and Staff of the Company. The Tender

documents, Technical price bids, LOIs, Work Awards and Purchase Orders placed at Divisional,

Circle, Zonal level and Corporate office level are being verified by the Internal Audit in the respective

offices. The working strength of the Internal Audit MESCOM is as follows.

The Revenue Ledgers maintained in the Sub-Divisions and Accounting Section is audited as per

Action Plan by concerned Divisional Assistant Accounts Officer (IA) and Senior Assistants (IA).

Depending upon the requirement and availability, the services of Rtd. Senior Assistants are also utilized

on contract basis during the period to audit the Revenue Ledgers of LT-2 & LT-3 Tariff Category. Further,

the services of B.Com Graduates who have knowledge in auditing have been obtained on contract basis

in Mangaluru-1, Kavoor, Puttur, Bantwal, Kundapura, Bhadravathi, Sagar, Shikaripura, Chikkamagaluru

and Kadur Divisions. Their services are utilized to audit the Revenue Ledgers of Power installations of LT-2

& LT-3 Tariff category.

Audit functions are being continuously carried out as per approved Action Plan. The overall

performance of Internal Audit is being reported to the Managing Director on the basis of information

obtained from the Accounts Officers of Internal Audit every month. The meetings of the Accounts

Officers of Internal Audit are being held at every quarter in which the progress is reviewed and action plan

of audit will be monitored periodically so as to have effective control in audit programme and also to have

efficiency in auditing.


CA Accounts Officer

Asst. Account Officer

SeniorAssistant

Assistant TotalName of the Division

S W V S W V S W V S W V S SW WV V

Corporate Office 1 1 - 1 1 - 1 - 1 1 - 1 1 - 1 5 2 3

Mangaluru Circle - - - 4 4 - 4 - 4 8 5 3 4 - 4 20 9 11

Udupi Circle - - - 2 1 1 2 1 1 3 1 2 - - - 7 3 4

Shivamogga Circle - - - 4 4 - 4 1 3 9 7 2 1 - 1 18 12 6

Chikkamagaluru Circle - - - 2 2 - 3 - 3 4 3 1 - - - 9 5 4

Total 1 1 - 13 12 1 14 2 12 25 16 9 6 - 6 59 31 28


24

22. Vigilance Activities in MESCOM

1. As per the Electricity Act 2003, Vigilance Police Stations are working in MESCOM, headed

by Superintending Engineer (Ele) Commercial, who is assisted by Executive Engineer of

Vigilance in technical matters. Deputy Superintendent of Police is assisting in police matters.

2. Assistant Executive Engineers (Ele.) / Police Sub Inspectors are working in each District and

are assisted by / Head Constables / Police Constables.

3. Under section 126 and 135 of Electricity Act 2003, non- cognizable and cognizable cases

are booked in MESCOM vigilance police stations.

4. Cases booked under section 135 are admitted only in special courts.

5. Statement showing the progress of vigilance activities for the year 2016-17 is furnished

below.

23. Implementation of Right to Information Act 2005 in MESCOM

1. The details of PIO's, APIO's and respective Appellate Authorities have been notified and updated

in MESCOM website under the caption Right to Information Act in home page

and the details are also made available to the general public in the respective offices.

2. During 2016-17, 2667 No.s of Applications including 197 Applications from BPL Citizens have

been received seeking information under RTI act 2005 across the Company, for which 44, 102/-

has been collected towards the application fee and charges for furnishing information. During

the year 2651 No.s of request for information were attended within the time limit & 8 No.s of

request were disposed off after the time limit. Remaining 8 No.s of applications are pending.

Further, during 2016-17, 32 No.s of Appeals received. 32 No.s of Appeals were disposed off

within the time limit.

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

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

60,00,000/- and above per annum or at the rate of 5,00,000/- and above per month during the

financial year under review.

25. Appointment of Cost Auditors: thThe Ministry of Corporate Affairs, GoI vide No.52/62/CAB-2008 dated 4 Feb.2008 has directed the

Cost Audit of cost accounts maintained by the Company in respect of the financial year ending

31.03.2008 and for every financial year thereafter continuously to be conducted by an Auditor with

www.mesco.in

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2 Shivamogga 4161 504 52 556 6626437 41497502 298584 264000 42060086 25378170 263957 256000 25898127

3 Chikkamagaluru 2485 535 52 587 7797750 39917719 444282 663000 41025001 2282285 820882 624000 3727167

4 Udupi 5627 210 8 218 290752 3056758 128451 48000 3233209 1877485 116170 48000 2041655

TOTAL 22458 5803 133 5936 16257889 100089717 1595394 1249000 102934111 38281821 1903238 1193000 41378059

Mangaluru 10185 4554 21 4575 1542950 15617738 724077 274000 16615815 8743881 702229 265000 9711110

25

qualifications prescribed in section 233 (B) of the Companies Act, 1956. Accordingly, M/s. Rao

Murthy & Associates, Cost Accountants, Bengaluru- 560004 have been appointed as the Cost

Auditors of the Company for the FY 2007-08 and onwards.

The details of Cost Audit Reports filed with GoI are as under:

26. Secretarial Audit

In Pursuant to Section 204(1) of the Companies Act, 2013 and Rule no.9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Auditor

M/s Ullas Kumar Melinamogaru & Associates, Mangaluru was appointed as Secretarial Auditor for

conducting Secretarial Audit for FY 2016-17 as per the authorization of the Board vide Board Resolution

No. 66/25. The Report of the Secretarial Audit has been enclosed here with vide Annexure-1 and the

replies of the Management are enclosed here with vide Annexure-2.

27. Board of Directors

(A)


Financial Year Due date to Submit Report Date of Submission of Report

2007-08 30.09.2008 30.09.2008

2008-09 30.09.2009 08.12.2009

2009-10 30.09.2010 29.09.2010

2010-11 30.09.2011 04.11.2011

2011-12 30.09.2012 10.01.2013

2012-13 30.09.2013 26.12.2013

2013-14 30.09.2014 27.09.2014

2014-15 30.09.2015 29.09.2015

2015-16 30.09.2016 27.10.2016

Sl. No. Shriyuths/Smt., Particulars

1. Jawaid Akhtar, IAS Chairman from 27.05.2015

2. Chikkananjappa Managing Director from 25.06.2014 To 22.08.2017

3. K. Ramakrishna Director (Tech) from 27.04.2015 To 21.08.2017and reported as Managing Director on 23.08.2017

4. Ananda Naik Director (Tech) from 15.09.2017

5. Dr. Aditi Raja, IA &AS Director from 24.09.2008

6. A.N. Jayaraj Director from 07.04.2015

7. M. Nagaraju Director from 17.12.2008 to 13.06.2017

8. T.R. Ramakrishnaih Director from 14.08.2017

9. P.I Sreevidya, IAS Director from 07.05.2016 to 07.06.2017

12. Dr. R.C. Chethan, IRS Director From 14.09.2017

13. C. Adinarayana Director from 06.09.2016 to 07.06.2017

15. M.D. Ravi Director from 07.05.2016

16. R. Vishal, IAS

10. H. Thimmegowda Director from 22.04.2017

11. Prachi Pandey, IA &AS Director from 07.05.2016 to 14.09.2017

14. H. Nagesh Director from 22.04.2017

Director from 07.05.2016 to 20.07.2016

17. B.C. Honnegowda Director from 07.05.2016 to 06.09.2016


26

Sl. No. Shriyuths/Smt., Particulars

18. Sanjeeva Shetty Director from 07.04.2016

19. Surendra B. Kambaly Director from 7.4.2016

20. B.V. Jayaram Director from 7.4.2016

21. Riyaz Ahmad Director from 7.4.2016

22. Mallika P. Pakkala Director from 7.4.2016

23. P.V. Abhilash Director from 7.4.2016

24. Sudhir Kumar Director from 7.4.2016

25. J. Sadashiva Ameen Director from 7.4.2016

26. K.M. Krishnappa Director from 7.4.2016

27. R. Mohan Director from 20.7.2016

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

outgoing Directors.

(B) Board Sub Committees :

(I)

1. Managing Director, MESCOM, Mangaluru Chairman

2. Director (Technical), MESCOM, Mangaluru Member

3. Nominee director from KPTCL Member

(ii) Audit Committee:

1. Director (Finance), KPTCL, Bengaluru Chairperson

2. Director (Technical), MESCOM, Mangaluru Member

3. Nominee director from Finance Dept. Member

4. Nominee director from Energy Dept. Member

(iii) Corporate Social Responsibility Committee:

1. Director (Technical), MESCOM, Mangaluru Chairman

2. Chief Engineer (Elecl), KPTCL, Hassan Member

3. Nominee director from KPTCL Member

Purchase Committee:

27

C) Meetings of the Board and Board Sub-Committees

i) Board meetings

61st Meeting 14.06.2016

62nd Meeting 02.08.2016

63rd Meeting 27.10.2016 4

64th Meeting 22.02.2017

ii) Purchase Committee meetings

63rd Meeting 27.06.2016

64th Meeting 17.09.2016

65th Meeting 04.11.2016 5

66th Meeting 23.01.2017

67th Meeting 06.03.2017

iii) Audit Committee meeting 1

22nd Meeting 01.08.2016

iv) Corporate Social Responsibility (CSR) meeting 1

3rd CSR Meeting 27.10.2016

D) MESCOM Directors Attendance of Meetings for 2016-17

BM BM BM BM AC CSR PC PC PC PC PC

1

2 Chikkananjappa P P P P - - P P P P P

3 K. Ramakrishna P P P P P P P P P p P

4 Dr. Aditi Raja P P P P P P - - - - -

5 Prachi pandey - - P P - - - - - - -

6 P.I Sreevidya P - - - - - - - - - -

7. R. Vishal - - - - - - - - - - -

8 B.C Honnegowda P P - - - - P - - - -

9 C. Adinarayana - - P - - P - P P P P

10 M.D Ravi P - P P - - - - - - -

11 A.N. Jayaraj P P P P - - - - - - -

12 M. Nagaraju P P P P - - - - - - -

13 S. Sanjeeva Shetty P P P P - - - - - - -

14 Surendra B Kambaly P P P P - - - - - - -

15 B.V. Jayaram P P P P - - - - - - -

16 Riyaz Ahmad P P P P - - - - - - -

17 Mallika P Pakkala P P P P - - - - - - -

18 Abhilash P.V P - - P - - - - - - -

19 Sudhir Kumar P P P P - - - - - - -

20 J.Sadashiva Ameen P P P P - - - - - - -

21 K.M Krishnappa P P P P - - - - - - -

22 R. Mohan - P P P - - - - - - -

61st 62nd 63rd 64th 22nd 3rd 63rd 64th 65th 66th 67th

Jawaid Akhtar IAS P P P P - - - - - - -

14.6

.16

2.9.

16

27.1

0.16

22.2

.17

27.1

0.16

27.6

.16

17.9

.16

4.11

.16

23.1

.17

6.3.

17

1.8.

16


Name of the Director

Shriyuths/Smts.

Sl.No.

P : Present,BM : Board Meeting, PC: Purchase Committee, AC: Audit Committee, CSR: Corporate Social Responsibility Committee.

Sl.No. or activity which the programs outlay on the projects expenditure spent Direct

identified Project is (1) Local (budget) or programs upto to the or through covered area or other project or Sub - heads: reporting implementing

(2) Specify the programs 1.Direct period agencyState and district wise expenditure on (in )where projects (In `) projects or

or programs was programsundertaken 2. Overheads

1 2 3 4 5 6 7 8

a Contribution to Protection - - - 400000Shivarama of NaturalKarantha Pilikula ResourceNisargadhama

b Sponsership to the Promotion - - - 200000Symposium of EducationOrganised by NIEIT, Mysuru

c Consumer Education - - - 2464043Education

TOTAL 3064043

CSR project Sector in Projects or Amount Amount spent Cumulative Amount

`


28

(E) General Meetings:

The Fourteenth Annual General Body Meeting of the Company was held at the Registered Office of

the Company on 27th October 2016 for consideration and adoption of accounts of the year 2015-16.

(F) Corporate Social Responsibility (CSR)

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies

(Corporate Social Responsibility) Rules, 2014]

1. A brief outline of the Company's CSR policy:

To direct CSR programs of MESCOM towards one or more of the following- promotion of

education, preservation and enhancement of environmental and natural capital, promotion

of sports, contributing to development and relief funds of government, contributing to the

welfare of schedule castes and the scheduled tribe and other backward classes and

minorities, promoting gender equality and women empowerment, promoting healthcare in

rural areas, promotion of cultural activities.

To engage in activities such as skill development, vocational training so as to enhance

employability of persons from different sections of society.

Adopt approaches that contribute towards achieving balanced socio-economic

development of the society.

To carry out CSR programs to full fill commitments arising from requests by government

2. The Board has re constituted a Corporate Social Responsibility Committee comprising Director

(Technical), MESCOM, Chief Engineer (Elecl), KPTCL, Hassan and Nominee director from

KPTCL.

3. The Average net profit of the Company for the last three financial year: 7,51,25,004/-

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): 15,02,500/-

5. Details of CSR spent during the financial year:

(i) Total amount spent for the financial year: 30,64,043/-

(ii) Amount unspent, if any: Nil

(iii) Manner in which the amount spent during the financial year is detailed below:

?

?

?

?

`

`

`

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29

6. rdThe Corporate Responsibly Committee 3 Meeting has approved to incur the required

expenditure to meet the Corporate Responsibly obligation during the FY 2016-17.

7. Responsibility Statement : The CSR Committee hereby confirms that the implementation and

monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.

28. Annual Return

Extract of Annual Return pursuant to the provisions of section 92 furnished in Annexure-3 (Form

MGT-9)

29. Directors' Responsibility Statement:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors wish to state that to the best of

their knowledge:

i. in the preparation of the annual accounts, the applicable Accounting Standards have been

followed along with proper explanation relating to material departures;

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

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs

of the company at the end of the financial year and of the profit or loss of the company for that

period;

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

in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of

the company and for preventing and detecting fraud and other irregularities;

iv. Annual Accounts have been prepared for the Financial Year ended March 31, 2017 on a going

concern basis.

30. General:

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

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

Comptroller & Auditor General of India, Central Electricity Regulatory Commission, Karnataka

Electricity Regulatory Commission, Karnataka Power Transmission Corporation Ltd.,

Karnataka Power Corporation Ltd., & Power Company of Karnataka Ltd., for their assistance,

guidance and co-operation.

Financing agencies, such as Rural Electrification Corporation, Power Finance Corporation,

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

Bank of India, Punjab & Sindh Bank, Indian Bank, Axis Bank, Karnataka Bank, Central Bank of

India and Union Bank of India for their financial support.

The media for publicity and creating awareness among the public.

The Statutory Auditors and Cost Auditors for their guidance and support.

All the agencies associated with the computerisation of billing.

The Employees, Employees' Union and other Associations of employees for their co-operation

and collective participation.

The Suppliers, Contractors and Consultants for their co-operation.

Place : Mangaluru Date : 18.09.2017

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Sd/-(K. Ramakrishna)Managing Director

Sd/-(Dr. Aditi Raja)Chairperson


30

Annexure -1

Form No. MR-3

SECRETARIAL AUDIT REPORT

ST FOR THE FINANCIAL YEAR ENDED 31 MARCH 2017

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,


Mescom Bhavana Bejai,

Kavoor Cross Road,

Mangalore-575 004.

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the

adherence to good corporate practices by Mangalore Electricity Supply Company Limited

(hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided me a

reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my

opinion thereon.

Based on my verification of the Company's books, papers, minute books, forms and returns filed and

other records maintained by the Company and also the information provided by the Company, its

officers, agents and authorized representatives during the conduct of Secretarial Audit, I hereby report stthat in my opinion, the Company has, during the audit period covering the financial year ended on 31

March 2017 complied with the Statutory Provisions listed hereunder and also that the Company has

proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to

the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained stby Mangalore Electricity Supply Company Limited (“the Company”) for the financial year ended on 31

March 2017, according to the provisions of:

I. The Companies Act, 2013 (the Act) and the rules made thereunder;

II. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder is not

applicable to the Company as it is an Unlisted Public Company

III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder is not applicable

to the Company as it is an Unlisted Public Company;

IV. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the

extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial

Borrowings is not applicable to the Company;

V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of

India Act, 1992 ('SEBI Act') is not applicable to the Company as it is an Unlisted Public Company:-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,

1992;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2009;

d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee

Stock Purchase Scheme) Guidelines, 1999;

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,

2008;

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)

Regulations, 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

vi) Following other laws applicable to the Company.

a. Electricity Act, 2003

b. Contract Labour (Regulation and Abolition)Act, 1970

c. Payment of Wages Act, 1936

d. Industrial Disputes Act, 1947

e. Employees State Insurance Act, 1948

f. Maternity Benefit Act, 1961

g. Minimum Wages Act, 1948

h. Payment of Bonus Act, 1965

i. Payment of Gratuity Act, 1972

j. Provisions of Environment (Protection) Act, 1986

k. The Water( Prevention and Control of Pollution)Act, 1974 and

l. The Air (Prevention and Control of Pollution) Act, 1981 and rules made there under.

I have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by The Institute of Company Secretaries of India.

ii. The Listing Agreements entered into by the Company with the Stock Exchanges does not

apply to the Company as it is an Unlisted Public Company.

During the period under review the Company has generally complied with the provisions of the Act,

Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

a. The Company has not appointed an Internal Auditor as per Section 138 of the Companies Act, 2013,

but there is an Internal Audit wing as a part of controlling mechanisms of the Organization.

Controller (Internal Audit) is the head of the Internal Audit wing.

b. The Company has not constituted Nomination and Remuneration committee as required under

Section 178 of the Companies Act 2013.As it is a Government Company all the Appointments and

Remunerations thereof are decided by the Government of Karnataka.


31


32

c. In accordance with Section 177(10) of the Companies Act, 2013, the Company has to disclose the

details of establishment of vigil mechanism in the website. However no such disclosure has been

made in the website.

d. The Company has not appointed a Company Secretary as required under Section 203(1) of the

Companies Act 2013.

e. The Company has appointed Mr. Jawaid Akhtar as the Chairman of the Board. However no form

DIR-12 has been still filed in this regard. This was also reported in the last Secretarial Audit Report.

f. The Company has not filed the Form DIR-12 for the intimation of Appointment of Independent and

Nominee Director appointed by the Government vide notification dated 07.05.2016 namely Dr. Aditi

Raja, M. Nagaraju, and A.N. Jayaraj.

g. The Fixed Assets Register maintained by the Company does not show full particulars such as asset

identification number and its situation.

h. The Company has accepted the share application money, however it remains unallotted for a period

of over 60 days or allotted after the period of 60 days from the receipt of money, which is not in

accordance with the Companies (Acceptance of Deposit) Rules, 2014. The Company has obtained

share application advance which remains to be allotted worth 14,00,00,000/-

I. The Share Certificate pending to be issued to the Government of Karnataka even though share

allotment completed worth 91,71,00,000/-

j. Resolution for Approval of the Board's Report for the Financial Year 2015-16 was not filed in MGT-14,

though MGT-14 has been filed for Approval of Annual Accounts for the said Financial Year.

I further report that

The Board of Directors of the Company is duly constituted consisting of Executive Directors and stIndependent Directors on its Board for the Financial Year ended 31 March 2017. The changes in the

composition of the Board of Directors that took place during the period under review were carried out in

compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings and were given atleast seven

days in advance except in one case wherein the Notice was given at a shorter period, agenda and

detailed notes on agenda were not usually sent at least seven days in advance, but the consent for the

shorter notice was obtained from the Directors entitled to attend the Board Meeting as per Section 173(3)

of the Companies Act, 2013.

th thThe 14 Annual General Meeting of the Company was held on Thursday 27 October, 2016 though as per

the provisions of the Companies Act, 2013 the Annual General Meeting of the Company is to be held thwithin 6 months from the date of closing of the Financial Year that is on or before 30 September, 2016.

The Company has filed Form GNL-1 with ROC, Karnataka, Bangalore for extension of the date of Annual

General Meeting stating the reasons of non-receipt of the Test Audit Report from the Comptroller and

Auditor General of India and the extension has been granted on 28.09.2016 by Registrar Of Companies,

Karnataka, Bangalore.

The Annual General Meeting of the Company was held with the shorter notice but the consent for the

shorter notice was obtained by the Company as per Section 101(1) of the Companies Act, 2013.

I further report that there are adequate systems and processes in the Company commensurate with the

size and operations of the Company to monitor and ensure compliance with applicable laws, rules,

regulations and guidelines subject to the observation that has already been made by the Statutory

Auditors in their Report.

`

`

I further report that during the audit period the Company has allotted 9,17,10,000 shares of 10/- each

vide Board Resolution dated 22.02.2017 to Government of Karnataka.

I further report that during the audit period, the Company does not have specific events / actions having a

major bearing on the company's affairs in pursuance of the above referred laws, rules, regulations,

guidelines, standards, etc. referred to above

For Ullas Kumar Melinamogaru & Associates

Practising Company Secretaries

Sd/-

CS Ullas Kumar Melinamogaru

Proprietor

FCS 6202, CP No. 6640

thDate : 24 August, 2017Place : Mangaluru

This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

`


33


34

To,

The Members,Mangalore Electricity Supply Company Limited,Mescom Bhavana Bejai, Kavoor Cross Road, Mangalore-575 004.

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial Record is the responsibility of the management of the Company. My responsibility is to express an opinion on these Secretarial Records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial Records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of Financial Records and Books of Accounts of the company.

4. Where ever required, I have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Ullas Kumar Melinamogaru & Associates

Practising Company Secretaries

Sd/-

CS Ullas Kumar Melinamogaru

Proprietor

FCS 6202, CP No. 6640

thDate : 24 August, 2017

Place : Mangaluru

Annexure - A

Annexure -2

Management Replies to the observations of Secretarial Auditors [M/s Ullas Kumar Melinamogaru & Associates, Practicing Company Secretary, Mangaluru] in their report for 2016-17

1. The Company has not appointed an Internal

Auditor as per Section 138 of the

Companies Act, 2013, but there is an

Internal Audit wing as a part of controlling

mechanisms of the Organization. Controller

(Internal Audit) is the head of the Internal

Audit wing.

2. The Company has not constituted

Nomination and Remuneration committee

as required under Section 178 of the

Companies Act 2013. As it is a Government

Company all the Appointments and

Remunerations thereof are decided by the

Government of Karnataka.

3. In accordance with Section 177(10) of the

Companies Act, 2013, the Company has to

disclose the details of establishment of vigil

mechanism in the website. However no

such disclosure has been made in the

website.

4. The Company has not appointed a

Company Secretary as required under

Section 203(1) of the Companies Act 2013.

5. The Company has appointed Mr. Jawaid

Akhtar as the Chairman of the Board.

However no form DIR-12 has been still filed

in this regard. This was also reported in the

last Secretarial Audit Report.

6. The Company has not filed the Form DIR-12

for the intimation of Appointment of

Independent and Nominee Director

appointed by the Government vide

notification dated 07.05.2016 namely

Dr. Aditi Raja, M. Nagaraju, and A.N. Jayaraj.

7. The Fixed Assets Register maintained by the

Company does not show full particulars

Observations

Company has already formed separate Internal

Auditors wing in its first Board meeting, which is

headed by controller (IA) to carry out regular

audit and special investigation.

Whole time directors are appointed by Govt. of

Karnataka and the officials are given their scale of

pay in the parent department / organization -

hence no role for such committee.

There is an audit committee, internal audit and

vigilance organization which provide a forum to

report grievances. As per the section 177(10) the

information about audit committee, internal audit

and vigilance are disclosed in the Board's report.

The recruitment process is under progress.

Efforts were made in the past also. However due

to non-availability of suitable candidate, again

efforts are being made. Efforts are being made

by the company constantly.

Notification of the Chairman as Independent

directors was issued subsequently and the same

could not be uploaded in MCA portal due to

software/ system constraints.

The directorship of three directors namely

Dr. Aditi Raja, M. Nagaraju, and A.N. Jayaraj is

not withdrawn by GoK, and is continuing till date.

Hence it is not necessary to file DIR-12 ones

again.

Owing to the particular nature of power

distribution business, it has not been possible

Management reply


35

such as asset identification number and its

situation.

8. The Company has accepted the share

application money, however it remains

unallotted for a period of over 60 days or

allotted after the period of 60 days from the

receipt of money, which is not in accordance

with the Companies (Acceptance of

Deposit) Rules, 2014. The Company

has obtained share application advance

which remains to be allotted worth

` 14,00,00,000/-

9. The Share Certificate pending to be issued

to the Government of Karnataka even

though share allotment completed worth

` 91,71,00,000/-.

10. Resolution for Approval of the Board's

Report for the Financial Year 2015-16 was

not filed in MGT-14, though MGT-14 has

been filed for Approval of Annual Accounts

for the said Financial Year.

Observations

allot asset identification number to all assets of

the company. However, Fixed asset register

maintained at the division office give particulars

about the nature of assets, year of installation etc.

` 14.00Crs is the MESCOM's share of allocation

given by GoK out of total payment of ` 70 Crs

made to M/s Jurala Power Project through

M/s PCKL as an Investment in Power Utilities for

consideration at the time of filing of power tariff

before CERC. As there is no specific direction as

to issue of shares to GoK, correspondence with

regard to issue of shares is in progress. Further,

under section 2(31) of the Companies Act,

deposit does not include any amount received

from a State Govt and hence could not attract the

provision of the Companies Acceptance of

Deposit Rules 2014.

The Share Certificate is Issued for share

allotment completed worth ̀ 91,71,00,000/-, and

the share certificate number is 21.

Since resolution for approval of annual accounts

for the Financial Year 2015-16 and the approval

of the Board's Report is accorded in the same

resolution, both issues are filed in one MGT -14.

Management reply


36

FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2017

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

Annexure -3

I. REGISTRATION & OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing

10 % or more of the total turnover of the company shall be stated)

III. PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

Subsidiary Company- NIL

CIN: -NA-

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

Category-wise Share Holding

1. CIN U40109 KA 2002 SGC 030425

2. Registration Date 29/04/2002

3. Name of the Company MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED

4. Category/Sub-category of PUBLIC LIMITEDthe Company

5. Address of the Registered MESCOM BHAVANA,office & contact details KAVOOR CROSS ROAD,BEJAI

MANGALORE-575004. Tel:0824-2885700

6. Whether listed company NO

7. Name, Address & contact details of the Registrar & ___Transfer Agent, if any.

Sl. No. Name and Description of NIC Code of the % to total turnover of the

main products / services Product/service company

1 ELECTRICITY 35109/Distribution of power 100%

to Domestic/Commercial &

industrial usage


37

A. Promoters

(1) Indian

a) Individual/ HUF - - - - - - -

b) Central Govt - - - - - - -

c) State Govt(s) 266360231 266360231 100% 358070231 358070231 100% –

d) Bodies Corp. - - - - - - -

e) Banks / FI - - - - - - -

f) Any other - - - - - - -

Total shareholding of Promoter (A) -

B. Public Shareholding - - - - - - -

1. Institutions - - - - - - -

a) Mutual Funds - - - - - - -

b) Banks / FI - - - - - - -

c) Central Govt - - - - - - -

d) State Govt(s) - - - - - - -

e) Venture Capital Funds - - - - - - -

f) Insurance Companies - - - - - - -

g) FIIs - - - - - - -

h) Foreign Venture Capital Funds - - - - - - -

I) Others (specify) - - - - - - -

Sub-total (B)(1) :- - - - - - - -

2. Non-Institutions - - - - - - -

a) Bodies Corp. - - - - - - -

i) Indian - - - - - - -

ii) Overseas - - - - - - -

b) Individuals - - - - - - -

i) Individual shareholders holding nominal share capital upto ` 1 lakh - - - - - - -

ii) Individual shareholders holding nominal share capital in excess of

1 lakh - - - - - - -

c) Others (specify) - - - - - - -

Non Resident Indians - - - - - - -

Overseas Corporate Bodies - - - - - - -

Foreign Nationals - - - - - - -

Clearing Members - - - - - - -

Trusts - - - - - - -

266360231 266360231 100% 358070231 358070231 100%

`

No. of Shares held at the beginning of the year [As on 31-March-2016]

No. of Shares held at the end of the year [As on 31-March-2017]Category of

shareholders

% Changeduring

the year Physical PhysicalTotal Total% of Total

Shares% of Total

Shares


38

Foreign Bodies-DR - - - - - - -

Sub-total (B)(2):- - - - - - - -

Total Public Shareholding (B)=(B)(1)+ (B)(2) - - - - - - -

C. Shares held by Custodian for GDRs & ADRs - - - - - - -

Grand Total (A+B+C) 266360231 266360231 100% 358070231 358070231 100% -


39

No. of Shares held at the beginning of the year [As on 31-March-2016]

No. of Shares held at the end of the year [As on 31-March-2017]Category of

shareholders

% Changeduring

the year Physical PhysicalTotal Total% of Total

Shares% of Total

Shares

Shareholders at the beginning of the year

Shareholders at the end of the year

ShareholdersName % Change

inshareholding

duringthe year

Sriyuths / Smt No. of Shares

% of Total Sharesof the

Company

% of SharesPledged /

encumberedto totalshares

No. of Shares

% of Total Sharesof the

Company

% of SharesPledged /

encumberedto totalshares

1 His Excellency Governor Of Karnataka 266360222 100 - 358070222 100 - -

2 Jawaid Akthar, IAS 1 - - 1 - - -

3 Chikkananjappa 1 - - 1 - - -

4 Dr. Aditi Raja, IA & AS 1 - - 1 - - -

5 ISN Prasad, IAS 1 - - 1 - - -

6 K. Ramakrishna 1 - - 1 - - -

7 Dr. Ashok D.R. 1 - - - - - -

8 H. Nagesh - - - 1 - - -

9 A.B. Ibrahim, IAS 1 - - - - - -

10 Dr. K.G Jagadish, IAS - - - 1 - - -

11 G.N. Yadravi 1 - - - - - -

12 M.D. Ravi - - - 1 - - -

13 M. Srinivasmurthy 1 - - - - - -

14 Javid Rubbani - - - 1 - - -

B) Shareholding of Promoter-

Shareholding at thebeginning of the year

Cumulative Shareholdingduring the yearParticulars

No. of Shares No. of Shares% of Total Shares of the company

% of Total Shares of the company

At the beginning of the year 266360231 74.39 266360231 100

Date wise Increase / Decrease in (1) Share of 25.61 91710000 -Promoters Shareholding during the year ` 10 each allotted specifying the reasons for increase / in favour of GoK decrease (e.g. allotment /transfer / vide 64th meeting

of the Board dated 22.02.2017

At the end of the year 100 358070231 100

bonus/ sweat equity etc.)

C) Change in Promoters' Shareholding (please specify, if there is no change) – There was no change.


Cumulative Shareholdingduring the yearShareholding of each Directors

and each Key Managerial Personnel No. of Shares

SecuredLoans

excludingdeposits

No. of Shares

GoK Loans


UnsecuredLoans


Deposits


Cumulative Shareholdingduring the yearFor Each of the Top 10

ShareholdersNo. of Shares No. of Shares



At the beginning of the year As at Item IV (B)

Date wise Increase / Decrease in “Promoters Shareholding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

At the end of the year “

At the beginning of the year - - - -

Date wise Increase / Decrease in - - - -Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

At the end of the year - - - -

Indebtedness at the beginning of the financial year

i) Principal Amount 474.24 1.51 1.62 467.44 944.81

ii) Interest due but not paid 2.63 - - - 2.63

iii) Interest accrued but not due 1.83 0.01 - - 1.84

Total (i+ii+iii) 478.70 1.52 1.62 467.44 949.28

Change in Indebtedness during the financial year

* Addition 153.00 - - 52.37 205.37

* Reduction 80.92 1.51 0.36 - 82.79

Net Change 72.08 -1.51 -0.36 52.37 122.58

Indebtedness at the end of the financial year

I) Principal Amount 546.32 - 1.26 519.81 1067.39

ii) Interest due but not paid 0.49 - - - 0.49

iii) Interest accrued but not due 0.20 - - - 0.20

Total (i+ii+iii) 547.01 - 1.26 519.81 1068.08

D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):

E) Shareholding of Directors and Key Managerial Personnel:

V) INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment.

TotalIndebtendness

Particulars

(` in Crs.)


40

Director (Tec)Managing Director

Name of MD / WTD / Manager

Gross salary From 1.4.2016 to 31.3.2017

(a) Salary as per provisions contained in Sri Chikkanajappa Sri.K.Ramakrishna

section 17(1) of the Income-tax Act, 1961 ` 1621143 1508257 3129400

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - -

© Profits in lieu of salary under section 17(3)Income- tax Act, 1961

Stock Option - -

Sweat Equity - -

Commission

- as % of profit

- others, specify… - -

Others, please specify - -

Total (A) 1621143 1508257 3129400

Ceiling as per the Act

From 1.4.2016to 31.3.2017

` `

- - -

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

TotalAmount

Particulars ofRemuneration

Name of Directors

Key Managerial Personnel

Particulars of Remuneration

Particulars of Remuneration

Total Amount

Total

----

CFO

----

-

----

-

----

-

Independent Directors - - - - -

Fee for attending board committee meetings - - - - -

Commission - - - - -

Others, please specify - - - - -

Total (1) - - - - -

Other Non-Executive Directors - - - - -

Fee for attending board committee meetings - - - - -

Commission - - - - -

Others, please specify - - - - -

Total (2) - - - - -

Total (B)=(1+2) - - - - -

Total Managerial Remuneration - - - - -

Overall Ceiling as per the Act - - - - -

Gross salary - From 1.4.2016 to - - -31.3.2017

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 - `

Sri D. R. Srinivasa - - ` 1713642 1713642

B. Remuneration to other directors

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD


41

(in `)

Key Managerial PersonnelParticulars of Remuneration

Total CFO CFOCEO CS

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - - -

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 - - - -

2 Stock Option - - - - -

3 Sweat Equity - - - - -

4 Commission - - - - - - as % of profit - - - - - others, specify… - - - - -

5 Others, please specify - - - - -

Total Rs: 17,13,642 17,13,642

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Section of theCompanies

ActType

Details ofPenalty/

Punishment/Compoundingfees imposed

BriefDescription

Authority[RD/

NCLT/COURT]

A. COMPANY

Penalty - - - - -

Punishment - - - - -

Compounding - - - - -

B. DIRECTORS

Penalty - - - - -



C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -



Appealmade,

if any (giveDetails)


42

Addendum to Directors' Report

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

Company for the year 2016-17 are as follows:

1. The Company had initially recognized a

sum of ` 46,272.91 Lakhs, as income

from Regulatory Asset which stands

revised to ` 51,196.93 Lakhs and

credited to Other Revenue from

Operations by creating a Regulatory

Asset (deferred revenue expenditure)

and shown under other current assets.

(Refer Para 24.7.15(a) of the notes

fo rming par t o f the f inanc ia l

statements). There is no mandate from

the Karnataka Electricity Regulatory

Commission for either recognizing the

same as income or creating the asset as

stated above. The recognition of

income is not in accordance with the

Accounting Standard 9 - Revenue

Recognition. Further the company has

withdrawn from the regulatory asset a

sum of ̀ 5380 Lakhs created during the

financial year 2015-16 by reversing

Revenue from operations. (Refer Para

24.7.15(a) to Notes to Financial

Statements).

2. Items of fixed assets retired from active

use are stated at book value and their

value is not tested in comparison to net

realizable value. These assets are

disclosed under current assets and

grouped under Inventories, Stores and

Spares under the head WDV of

obsolete / scrapped assets. When the

asset is reissued, the company has

taken its value at the average rate for the

asset and not at its WDV. This is not in

accordance with the Accounting

Standard 10 - Property, Plant and

Equipment (PPE). The company has

Statutory Auditor's Observation

The actual cost of supply for FY 2016-17 is

much higher than the cost as approved by

Hon'ble KERC in ARR for FY 2016-17, which

has resulted in huge gap between income

and expenditure. Hence to present the fair

view of the financial statements of the

Company, regulatory Assets to the extent of

` 51196.93 Lakhs are created in the

accounts for FY 2016-17 by computing the

provisional gap expected to be considered

by KERC for inclusion in the tariff revision of

future year/s.

Factual.

Necessary action will be taken to comply

with the observations in the ensuing years.

MESCOM's RepliesSlNo.


43

Statutory Auditor's Observation MESCOM's Replies

also discontinued providing for

depreciation till reissue when the asset

has been moved to non Current

assets. Further when these fixed

assets are reissued again for reuse,

they are being taken at the average

rate as mentioned above as the base

value and depreciated over their

original life and not on the remaining

useful l i fe. These are not in

accordance with the Accounting

Standard 10 - Property, Plant and

Equipment (PPE).The effect of the

same on the financial statements is not

quantifiable.

3. Assets scrapped are valued at WDV

instead of WDV or NRV whichever is

lesser. This is not in accordance with

Accounting Standards 2, Valuation of

Inventories. The effect of this is not

ascertainable.

4. The Company has not accounted for

deferred tax assets / deferred tax

liabilities as required by Accounting

Standard 22 Accounting for taxes on

Income. The effect of this on the

financial statements is not as

certainable.

5. The Company had been charging

Interest on its dues to KPCL as of

March 31, 2014 up to Financial Year

2014-15. From the financial year

2015-16 the Company has not

charged interest on its dues to KPCL

as of March 2014. For the Financial

Majority of the materials held in MESCOM

Stores are made of Copper or Aluminium or

Iron, existing market rates of which are much

higher when compared to the rates of

purchase. Normally, the Market rate of these

materials does not decrease at later dates

also i.e., 'Net Realisable Value' is always

higher as compared to book value or their

procurement cost. As such, it is appropriate

to continue the existing procedure of

showing the value of scrapped assets at

book value.

Factual.

Necessary action will be taken to comply

with the observations in the ensuing years.

In respect of dues payable to KPCL as on

31.03.2014, no interest has been charged

from FY 2015-16 as it was decided in the

meeting held on 28.05.2014 at KERC,

Bengaluru that, GoK has to device a

mechanism for settlement of KPCL dues as

on 31.03.2014 and interest accrued there on

SlNo.


44


year 2015-16 and 2016-17 the interest

amounts to ̀ 20404.00 Lakhs.

6. The Company has an internal audit

system. However, considering the size

of the Company and volume of its

business, we are of the opinion that the

present system requires to be

strengthened and audit department

needs to be adequately staffed. The

audit system needs to cover Systems

Audit, technical audit, materials,

inventory, stores and compliance and

adherence to various provisions of Tax

Laws and Labour Laws in particular.

7. The Balance of Sundry Debtors, Sundry

Creditors, Loans and Advances, Other

Receivables and other debit / credit

balances are subject to confirmations

and reconciliations. The effect of the

adjustment arising from reconciliation

and settlement of old dues and possible

loss which may arise on account of non-

recovery or partial recovery of such

dues is not ascertained. The company

also has a practice of booking power

purchase at lesser than the amount

billed by supplier based either on KERC

Notification/Mistakes committed by

suppliers. However the short bookings

etc. are not intimated to the suppliers by

way of debit note on them (or) obtaining

a credit note from them. This could

c o m p o u n d t h e p r o b l e m o f

reconciliation. Thus we are unable to

upto 31.03.2014. The same has been

brought to the kind information of ACS,

Energy Department. Further, MESCOM

Board has also concurred in 62nd Board

meeting held on 02/08/2016 with the action

taken in the matter of non-levying of interest

on dues to KPTCL.

Company has an Internal Audit Wing

headed by AO rank working in each

accounting division to verify and report any

shortcoming regarding cash, revenue, work

accounts, cost register, material audit,

inventory and stock records. Further, at

Company's Corporate Office, Controller

(Internal Audit) is monitoring and

supervising the work of Internal Audit Wing

of each Division and rendering periodical

reports to management regarding any

shortcomings observed. Company has an

'in-built' system of internal control for each

activity.

As disclosed under note 37, the balances in

respect of Sundry Debtors, Sundry

Creditors, Loans and Advances to Suppliers

and other borrowings are subject to

confirmation. However the energy balancing

dues among the ESCOMs as on 31.03.2017

are reconciled. The reconciliation of other

balances with KPTCL and ESCOMs is under

process for which due action is taken from

MESCOM side by intimating the details for

the balance.

Further, action will be taken in the ensuing

year to intimate the short bookings etc. to the

concerned power suppliers by means of

debit notes.


45

SlNo.


comment upon the impact thereof on

the accounts and profit for the period.

8. The Control account balances as

reflected by the General Ledger at

Divisions and Subsidiary Registers at

sub-divisions in the matter of Consumer

Security Deposits and Meter Security

Deposits are not fully reconciled.

9. The Fixed Asset Register maintained by

the Company does not show full

particulars such as asset identification

number and its situation.

10. In the absence of adequate report on

physical verification of Fixed Assets, we

are unable to comment about the

reasonableness of intervals at which

Fixed Assets have been verified and

accounting of discrepancies noticed

thereon if any.

11. Based on our checking, we report that

the title deeds of Immovable Properties

are held in the name of the Company.

However the title deeds of the

During the balance sheet restructuring

plan III, a portion of meter security deposit

was capitalized as per the direction of the

Govt. Though the amount was capitalized,

the amount is still outstanding in the

consumers' ledger account. But the meter

security deposit as per accounts was

reduced to that extent in the accounts of the

Company, leading to difference between the

balance as per consumers' ledger account

maintained at Sub-Divisions and as per

accounts of the Division Offices. Further, the

deposit registers are being maintained at

Sub-divisional / Section levels and the

accounts are maintained at divisional levels.

The Company has made efforts to reconcile

the balances between the deposit registers

and accounts during the financial year.

Since the task is voluminous, efforts are

being made to complete the same.

Owing to the peculiar nature of power

distribution business, it has not been

possible to allot asset identification numbers

to all assets of the Company. However, Fixed

Asset registers maintained at the

Accounting Units will give particulars about

the nature of assets, year of installation etc.

The Company carries out physical

verification of assets situated at power

station level. Other assets like poles and

distribution lines could not be physically

verified since it is spread throughout the

service area.

Action will be taken to reconcile the details

with asset schedule in the ensuing year.


46

SlNo.


immovable properties of the company

do not reconcile with the breakup

shown under the fixed assets Schedule.

12. The Company has accepted share

application advance which either

remains un alloted for over 60 days or

was allotted after 60 days from the

receipt, in violation of the Companies

(Acceptance of deposit rules 2014).

13. According to the information and

explanations given to us, the company

has not established its internal financial

control over financial reporting on the

criteria based on or 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. Because of this reason, we are

unable to obtain sufficient and

appropriate evidence to provide a basis

for our opinion whether the company

had adequate internal financial controls

over financial reporting and whether

such internal financial controls were

operating effectively as on March

31, 2017.

Company is having ` 14.00 Crs in Share

deposit Account as on 31.03.2017 which is

the MESCOM's share of allocation given by

GoK out of total payment of ̀ 70 Crs made to

M/s Jurala Power Project through M/s PCKL

as an Investment in Power Utilities.

As there is no specific direction as to issue of

shares to GoK, correspondence with regard

to issue of shares is in progress.

Factual. Necessary action will be taken to

comply with the instructions of guidance

note in the ensuing years.


47

SlNo.

Place : MangaluruDate : 18/09/2017

Sd/-(K. Ramakrishna)Managing Director

Sd/-(Dr. Aditi Raja)Chairperson


48

INDEPENDENT AUDITORS’ REPORT

To the Members of Mangalore Electricity Supply Company Limited

On completion of audit of accounts of Mangalore Electricity Supply Company, for the year ended st th31 March 2017, we have issued our audit report on the 10 of August 2017. Subsequent to our report, in

the light of the observations arising from the audit of Comptroller and Auditor General of India, the

Accounts of the Company have been revised . In view of this , we are issuing a fresh Audit report on the

revised accounts for the year ended 31.03.2017 . The revised Audit report supersedes our earlier report.

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Mangalore Electricity Supply Company

Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of

Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant

accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE 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 of these 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.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these 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 there

under.

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

misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and 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. An audit also includes evaluating the

appropriateness of 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 audit opinion on the financial statements.

Basis for Qualified Opinion

a) The Company has initially recognized a sum of 46272.91 Lakhs as income from Regulatory

Asset which stands revised to 51,196.93 lakhs and credited to Other Revenue from Operations

by creating a Regulatory Asset (deferred revenue expenditure) and shown under other current

assets. (Refer Para 24.7.15(a) of the notes forming part of the financial statements). There is no

mandate from the Karnataka Electricity Regulatory Commission for either recognizing the same

as income or creating the asset as stated above. The recognition of income is not in accordance

with the Accounting Standard 9 Revenue Recognition. Further the company has withdrawn

from the regulatory asset a sum of 5380 Lakhs created during the financial year 2015-16 by

reversing Revenue from operations. (Refer Para 24.7.15(a) to Notes to Financial Statements).

b) Items of fixed assets retired from active use are stated at book value and their value is not tested

in comparison to net realizable value. These assets are disclosed under current assets and

grouped under Inventories, Stores and Spares under the head WDV of obsolete / scrapped

assets. When the asset is reissued, the company has taken its value at the average rate for the

asset and not at its WDV. This is not in accordance with the Accounting Standard 10 - Property,

Plant and Equipment (PPE). The company has also discontinued providing for depreciation till

reissue when the asset has been moved to non Current assets. Further when these fixed assets

are reissued again for reuse, they are being taken at the average rate as mentioned above as the

base value and depreciated over their original life and not on the remaining useful life. These are

not in accordance with the Accounting Standard 10 - Property, Plant and Equipment (PPE). The

effect of the same on the financial statements is not quantifiable.

c) Assets scrapped are valued at WDV instead of WDV or NRV whichever is lesser. This is not in

accordance with Accounting Standards 2, Valuation of Inventories. The effect of this is not

ascertainable.

d) The Company has not accounted for deferred tax assets / deferred tax liabilities as required by

Accounting Standard 22- Accounting for taxes on Income. The effect of this on the financial

statements is not ascertainable.

e) The Company had been charging Interest on its dues to KPCL as of March 31, 2014 up to

Financial Year 2014-15. From the financial year 2015-16 the Company has not charged interest

on its dues to KPCL as of March 2014. For the Financial year 2015-16 and 2016-17 the interest

amounts to 20404 Lakhs .

The cumulative effect of the above is not ascertainable.

Further to the above,

I) The Company has an internal audit system. However, considering the size of the Company and

volume of its business, we are of the opinion that the present system requires to be

strengthened and audit department needs to be adequately staffed. The audit system needs to

cover Systems Audit, technical audit, materials, inventory, stores and compliance and

adherence to various provisions of Tax Laws and Labour Laws in particular.

II) The Balance of Sundry Debtors, Sundry Creditors, Loans and Advances, Other Receivables and

other debit / credit balances are subject to confirmations and reconciliations. The effect of the

adjustment arising from reconciliation and settlement of old dues and possible loss which may

arise on account of non-recovery or partial recovery of such dues is not ascertained. The

company also has a practice of booking power purchase at lesser than the amount billed by

supplier based either on KERC Notification/Mistakes committed by suppliers. However the

short bookings etc. are not intimated to the suppliers by way of debit note on them (or) obtaining

`

`

`

`


49

a credit note from them. This could compound the problem of reconciliation. Thus we are

unable to comment upon the impact thereof on the accounts and profit for the period.

III) The Control account balances as reflected by the General Ledger at Divisions and Subsidiary

Registers at sub-divisions in the matter of Consumer Security Deposits and Meter Security

Deposits are not fully reconciled.

The Company had prepared its balance sheet as at 31.03.2017 and the statement of Profit and

loss for the year ended as on that date together with cash flow statement which was approved

by the Board of Directors of the Company on 10.08.2017 and was forwarded to us for our report

thereon and we had issued our report on 10.08.2017. Thereafter, the accounts of the Company

have been reviewed by Comptroller and Auditor General of India and have been revised in the

light of observation made by them.

The said revision has resulted in decrease in net profits by 12.77 lakhs ; decrease in the

reserves and surplus by 12.77 lakhs ; increase in Other long term liabilities by 1639.77 lakhs ;

increase in Trade payables by 21.27 lakhs ;increase in Other Current liabilities by

69.12 lakhs ; increase in Tangible Assets by 53.87 lakhs ;decrease in Capital work in

progress by 12.77 Lakhs. ; increase in Inventories by 4.35 lakhs ; decrease in Other non

current assets by 25211.11 Lakhs ; increase in Other current assets by 26883.05 lakhs.

As a result, the total assets and liabilities have increased by 1717.39 lakhs.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for

the effects of the matter described in the basis for qualified opinion paragraph, the aforesaid financial

statements give the information required by the Act in the manner so required and 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 March 31, 2017, and its profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to the following.

a) Vide GO no EN 67 PSR 2017 Bangalore dated 31.07.2017, the Company has passed a scheme of

Entries for transfer of subsidy receivable from GoK as well as principal and interest outstanding to

KPCL from KPTCL's books . As per the order, the Company has accounted subsidy receivable

from GOK amounting to 7722 lakhs and also accounted dues to KPCL consisting of Principal

( 6958 Lakhs ) and interest ( 3660 Lakhs) . As mandated in the above order, the Company has

also written back the interest component on KPCL dues for 3660 lakhs . These apart, as per the

order cited above the Company has also accounted a sum of 2896 lakhs under the Accounting

head “proposed adjustment to Networth” representing the difference between Receivables and

payables arising out of the aforesaid transfer under Note 2 “ Reserves and Surplus” as a negative

figure. Reference is invited to note 2.2(a)

b) Further, while revising the Accounts pursuant to the observations made by the Comptroller and

Auditor General of India, the Company has given effect to GO No EN 3 PSR 2016/P3,

dated:31.03.2017 by transferring its dues as of 31.03.2015 from Gram Panchayats together with

interest upto 31.03.2015 amounting to 21959.00 Lakhs to PCKL for securitization of such

receivables by PCKL in order to get Loans from Banks and utilize the proceeds of such Loans to

clear the Company's dues of KPCL . Though PCKL has expressed inability to account this in their

books as of 31.03.2017 vide their letter dated 14.07.2017, the Company has transferred the dues

from local bodies as above to PCKL to comply with the GO. Attention is drawn in this regard to note

no 24.7.28.(a)

`

` `

`

` `

` `

` `

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`

` `

`

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`

50


50

Our opinion is not modified in respect of these matters.

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 in terms of sub section 11 of Section 143 of the Act, we give in the Annexure I,

a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required under the Provisions of section 143(5) of the Companies Act, 2013, we have given in

Annexure III , a report on the Directions as well as Additional Company specific Directions issued

under the aforesaid section by the Comptroller and Auditor General of India, based on the

verification of Records of the Company and based on information and explanations given to us.

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

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

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

b) Except for the possible effects on the matters described in qualified 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.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with

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

d) In our opinion, subject to basis for qualified opinion Para stated above, the aforesaid financial

statements comply with the Accounting Standards specified under Section 133 of the Act, read

with Rule 7 of the Companies (Accounts) Rules, 2014;

e) As per Notification No.: GSR 463(E) dated 05.06.2015, Government companies are exempted

from the provisions of sub section (2) of section 164 of the Companies Act, 2013.

f) With respect to the adequacy of the internal financial controls over financial reporting of the

company and the operating effectiveness of such controls, refer to our separate report in

Annexure II and

g) 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:

The Company has disclosed the impact of pending litigations on its financial position in its financial

statements – Refer Note 36.5 to the financial statements.

vThe Company has made provision, as required under the applicable law or accounting

standards, for material foreseeable losses, if any, on long term contracts.

vThere were no amounts required to be transferred to the Investor Education and Protection

Fund by the Company.

vThe Company has provided requisite disclosures in its financial statements as to holdings as

well as dealings in Specified Bank Notes during the period from 08.11.2016 to 30.12.2016 and

these are in accordance with the Books of Accounts maintained by the Company.

For Gopalaiyer and Subramanian

Chartered Accountants

(Firm Regn No : 000960S)

Sd/-

(KR Suresh)

Place: Mangaluru Partner

Date :18/09/2017 Membership No : 025453


51

ANNEXURE-I TO INDEPENDENT AUDITORS' REPORT

Name of Nature of Amount Period to Due Date Date of Remarks,

Statute dues ` which the payment if any

amount

relates

NIL

(Referred to in paragraph 1 of Report on other legal and regulatory requirements of our Audit Report of

even date)

In terms of the information and explanations sought by us and given by the company and the books

and records examined by us in the normal course of audit and to the best of our knowledge and

belief, we report the following.

i). a) The Fixed Asset Register maintained by the Company does not show full particulars such as

asset identification number and its situation.

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

comment about the reasonableness of intervals at which Fixed Assets have been verified and

accounting of discrepancies noticed thereon if any.

c) Based on our checking, we report that the title deeds of Immovable Properties are held in the

name of the Company. However the title deeds of the immovable properties of the company do

not reconcile with the breakup shown under the fixed assets Schedule.

ii) The physical verification of inventory has been conducted at reasonable intervals during the year by

the management and material discrepancies noticed on physical verification have been properly

dealt with in the books of account.

iii) The company has not granted loans, secured or unsecured, to companies, firms, LLP's or other

parties covered in the register maintained U/s.189 of the Companies Act,2013. In view of this

clauses iii (a), iii (b) and iii(c) are not applicable.

iv) The Company has not given any given loans / investments / guarantees to which the provisions of

Sec 185 and 186 of the Companies Act, 2013 apply.

v) The Company has accepted share application advance which either remains unalloted for over 60

days or was allotted after 60 days from the receipt, in violation of the Companies (Acceptance of

deposit rules 2014).

vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules

made by the central government for maintenance of cost records under sub section (1) of section

148 of the companies Act,2013 in respect of distribution of electricity and are of the opinion that

prima facie, the prescribed accounts and records have been maintained. We have not, however

made a detailed examination of the cost records with a view to determining whether they are

accurate or complete.

vii) a) The Company has been generally regular in depositing with the appropriate authorities

undisputed statutory dues viz., provident fund, employee state insurance, Income-tax, Sales-

tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory

dues except the following which were outstanding for a period of more than 6 months from the stdate they became payable as on the Balance sheet date i.e., 31 March, 2017.


52

b) According to the information and explanation given to us and the records examined by us, there

are no dues of sales tax, customs duty and VAT which have not been deposited on account of any

dispute. The particulars of EPF, Service tax, Income Tax which have not been deposited on

account of disputes pending are as under:

Nature of Demand Amount paid Year to which Forum where

Sl. No payment Raised demand relates dispute is

pending

1 EPF of Contract ` 4,44,06,265/- ` 1,77,63,000/- 2007 Case remanded

Employees - error back to PF

in calculation of Office Mangaluru.

demand

2 Tax on Goods Service Tax - Not paid CESTAT

Transport Agency ` 45,95,328/- Bengaluru.

Services and Penalty

` 45,95,328/-

3 Provident Fund - Interest- Fully paid 2002 to Provident Fund

For payment of ` 83,25,618/- 2012 Appellate

Interest and Damages Tribunal

Damages as per ` 1,06,95,493/- New Delhi

section 7Q and

14B.- Mangaluru

Division

4 Provident Fund - Interest- Fully paid 01.06.02 Provident Fund

For payment of ` 64,36,970/- to 2008 Appellate

Interest and Damages Mazdoor Tribunal

Damages as per ` 83,43,738/- Gangmen New Delhi

section 7Q and

14B.-

Puttur Division

5 Provident Fund - Interest- Fully paid LC Work Provident Fund

For payment of ` 7,57,961/- 3/06 to Appellate

Interest and Damages 7/2013 Tribunal

Damages as per ` 3,83,386/- New Delhi

section 7Q and 14B.-

Shimoga Division

6 Provident Fund - For Interest- Interest- Mazdoor Provident Fund

payment of Interest ` 38,28,351/- ` 38,28,351/- Gangmen Appellate

and Damages as per Damages Damages 1999-05 Tribunal

section 7Q and 14B.- ` 33,77,361/- ` 25,33,021/- New Delhi

Sagara Division

7 Provident Fund - For Interest- Fully paid 2002 to Provident Fund

payment of Interest ` 65,40,760/- 2010 Appellate

and Damages as per Damages Mazdoor Tribunal

section 7Q and 14B.- ` 74,99,653/- Gangmen New Delhi

Chikmagaluru Division


53

8 Provident Fund - Interest- Fully paid 08/2006 to Provident Fund

For payment of ` 5,99,890/- 3/2010 Appellate

Interest and Damages Damages Mazdoor Tribunal

as per section ` 11,05,063/- Gangmen New Delhi

7Q and 14B.-

Kadur Division

9 Income Tax - in ` Fully paid AY 2006-07 High Court

respect of of Karnataka

disallowance of

80 IA claim of

MESCOM relating

to AY 2006-07




Sd/-

(KR Suresh)


Date : 18.09.2017 Membership No : 025453

25,61,62,603

`

viii) Based on our audit procedures, we are of the opinion the company has not defaulted in

repayment of dues to banks, financial institutions or Government.

ix) The Company has not raised any moneys by initial public offer / further public offer during the

year. In our opinion, the moneys raised by way of term loans during the year have been applied for

the purposes for which those were raised.

x) Based on our audit procedures performed, we report that no material fraud by the company has

been noticed or reported during the course of audit. However, one case of misappropriation of

cash by an employee involving 9.40 Lacs was noticed during the year. Departmental enquiry

has been initiated and the Company has a lien on the terminal benefits which will adequately

cover the amount involved.

Besides there have also been cases of theft of electricity reported by the vigilance department of

the company, the amount of which is not quantifiable.

xi) The managerial remuneration has been paid/provided in accordance with the requisite approvals

mandated by Sec.197 of the Companies Act, 2013 read with Schedule V of the said act.

xii) The Company is not a Nidhi Co. and therefore clause 3(12) of the Order is not applicable to the

company.

xiii) Based on our audit procedures, all the related party transactions entered into by the company

during the year are in compliance with the provisions of Sec 177 and 188 of the Companies

Act,2013 and the details thereof have been disclosed in the financial statements as required by

the Accounting standards and the Act.

xiv) The Company has not made any preferential allotment / private placement of shares during the

year and therefore clause 3(xiv) of the Order is not applicable to the Company.

xv) The company has not entered into any non-cash transactions with directors/persons connected

with him as stipulated u/s.192 of the Act. Clause 3(xv) of the order is therefore not applicable to the

company.

xvi) In our opinion, the Company is not required to be registered u/s 45-IA of the Reserve Bank of India

Act, 1934


54

Annexure - II to the Independent Auditors' Report of even date on the financial statements of

Mangalore Electricity Supply Company Limited.

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 Mangalore Electricity Supply

Company Limited (“the Company”) as at 31 March 2017 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

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 ('ICAI'). 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 the 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


55

(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 authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised

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

According to the information and explanations given to us, the company has not established its internal

financial control over financial reporting on the criteria based on or 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. Because of this reason, we are

unable to obtain sufficient and appropriate evidence to provide a basis for our opinion whether the

company had adequate internal financial controls over financial reporting and whether such internal

financial controls were operating effectively as on March 31, 2017.

We have considered the disclaimer reported above in determining the nature, timing and extent of audit

tests applied in our audit of the financial statements of the company and the disclaimer does not affect our

opinion on the financial statements of the company.




Sd/-

(KR Suresh)




56

The company is not selected for disinvestment

Company had charged the interest on the

receivables from other ESCOMs on account of

Energy Balancing for the period from 2004-05 to

2014-15 to the extent of 26492.00 lakhs. Since

the amount is not realised and also to comply

with the audit observations Company has

decided to not to charge interest from

FY 2015-16. The interest charged already during

previous years amounting to 26492.00 lakhs is

written off during the year under report.

No inventories are lying with third parties but in

few cases inventories (Meters) are held with

employees for immediate replacement for which

proper control is exercised based on the records

maintained. No assets have been received as gift

from Government or other authorities during the

year under report.

There are number of cases pending before

various courts/ authorities in respect of the

company's corporate office and its zone and

circle offices as well as divisional offices. These

legal cases are in respect of revenue and Labour

matters and miscellaneous cases. Age wise

analysis of these pending cases is as detailed

below:

Based on the information and verification, there

is a monitoring mechanism in place for

expenditure on legal cases.

`

`

Sl. No Period No. of Cases

1 Less than ONE year 04

2 One to Two Years 67

3 Two to Three years 70

4 Three to Four Years 60

5 Four to FiveYears 115

Total 316

1. If the Company has been selected for

disinvestment, a complete status report in

terms of valuation of Assets (including

intangible assets and land) and Liabilities

(including Committed & General Reserves)

may be examined including the mode and

present stage of disinvestment process.

2. Please report whether there are any cases

of waiver/write off of debts/ loans/interest

etc., if yes, the reasons thereof and the

amount involved.

3. Whether proper records are maintained for

inventories lying with third parties & assets

received as gift from Govt. or other

authorities.

4. A report on age-wise analysis of pending

legal/arbitration cases including the

reasons of pendency and existence/

effectiveness of a monitoring mechanism

for expenditure on all legal cases (foreign

and local) may be given

ANNEXURE III TO INDEPENDENT AUDITOR'S REPORT

Directions Reply of AuditorSlNo.


57


The task of Meter reading, Billing and Collection

of revenue has been entrusted to TRM (Total

Revenue Management) Agencies. Meters are

being read monthly on specified dates and bills

are issued to Consumers using spot billing

machines. The Billing efficiency and collection

efficiency of the Company for FY 2016-17 are

99.76 % & 99.20 % respectively. Based on the

technical certificate given to us, tamper proof

meters have been installed for all consumers.

No reconciliation of receivables and payables

between generat ion, distr ibut ion and

transmissions companies have been undertaken

as there is no response from the generation,

distribution and transmission companies in this

respect. However efforts are being made by the

company for reconciliation of receivable and

payable transactions during the year.

The Company generally recovers and accounts

KERC/ CERC approved fuel and Power purchase

adjustment cost save for a few instances as

detailed in notes to accounts - Please refer from

Note no 27.6, 27.7, 27.8, 27.9, 27.10, 27.12,

27.16 and 27.22.

During the year 2016-17, the company has

accounted ` 78066.05 lakhs as subsidy

receivable from Government of Karnataka

towards free power supply to the IP set

consumers (upto 10HP) and BJ/KJ consumers

having monthly consumptions upto 18 units. Out

of these ̀ 52626.00 lakhs has been released by

Government of Karnataka during the year and

balance of ` 25440.05 lakhs is accounted as

receivable as on 31.03.2017. This apart, out of

the opening amount of ` 15429.89 lakhs. As on

01.04.2016, a sum of ` 4331.00 lakhs has been

received during the year. The total closing

balance as on 31.03.2017 including the current

year's arrears of ̀ 25440.05 lakhs, is ̀ 36538.94

lakhs. Besides, as per G.O. No. EN 67 PSR 2017,

Bangalore Dated 31.07.2017, the Company has

also accounted subsidy for ` 7722.00 lakhs

receivable from GoK.

(a) Report on the efficacy of the system of

billing and collection of revenue in the

Company. Whether tamper proof meters

have been installed for all consumers? If not

then, examine how accuracy of billing was

ensured.

(b) Whether the reconciliation of receivable

and payables between the generation,

distribution and transmission companies

has been completed. The reasons for

difference may be examined.

(c) Whether the company recovers and

accounts, the State Electricity Regulatory

Commission (SERC) approved Fuel and

Power Purchase Adjustment Cost

(FPPCA)?

(d) How much tariff roll back subsides have

been allowed and booked in the accounts

during the year? Whether the same is being

reimbursed regularly by the State

Government?

.

ADDITIONAL COMPANY SPECIFIC DIRECTIONS :


58


Barring Billings, all other sections/ operations are

not computerized. The task of Metering, Billing

and Collection of revenue has been entrusted to

TRM (Total Revenue Management) Agencies.

Meters are being read monthly on specified

dates and bills are issued to Consumers using

spot billing machines. We have enquired and

gathered that the Software/Data are managed

and controlled by the system administrator.

Alteration or modification of any data cannot be

made without proper admin access. So, there is

a centralized mechanism that provides a sense

of security to data and the software. However,

being more of system and technical operations,

we suggest that a Systems audit be done by

system trained audit professionals to ensure

proper security in place.

59


(e) If the audited entity has computerised its

operations or part of it, assess and report,

how much of the data in the company is in

electronic format, which of the area such as

accounting , sales personnel information,

payroll, inventory, etc., have been

computerised and the company has

evolved proper security policy for

data/software/hardware?




Sd/-

(KR Suresh)



COMMENTS OF THE COMPTROLLER AND AUDITOR GENRAL OF INDIA UNDER

SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS

OF MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED, MANGALORE FOR THE YEAR

ENDED 31 MARCH 2017.

No.AG (E&RSA)/ES-II/PS-II/2017-18/K-981/89 Dated: 21.09.2017

The preparation of financial statements of Mangalore Electricity Supply Company Limited,

Mangalore for the year ended 31 March 2017 in accordance with the financial reporting framework

prescribed under the Companies Act, 2013 is the responsibility of the management of the company. The

statutory auditor appointed by the Comptroller and Auditor General of India under section 139 (5) or

139(7) of the Act is 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:

18.09. 2017.

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 financial statements of Mangalore Electricity Supply

Company Limited, Mangalore for the year ended 31 March 2017. This supplementary audit has been

carried out independently without access to the working papers of the statutory auditors and is limited

primarily to inquiries of the statutory auditors and company personnel and a selective examination of

some of the accounting records. In view of the revisions made in the financial statements by the

management, as a result of my audit observations highlighted during supplementary audit as indicated

in the Note No. 40 of the financial statements, I have no further comments to offer upon or supplement to

the statutory auditors' report under section 143(6)(b) of the Act.

For and on behalf of the Comptroller & Auditor General of India

Sd/-(BIJIT KUMAR MUKHERJEE)

ACCOUNTANT GENERAL (ECONOMIC & REVENUE SECTOR AUDIT)

KARNATAKA, BENGALURUPLACE: BENGALURUDATED: 21.09.2017


60

BALANCE SHEET AS AT 31ST MARCH 2017

Sd/-(D.R. SRINIVAS)

Chief Financial Officer

Sd/-(M.D.RAVI)

Director, MESCOM

Sd/-(K. RAMAKRISHNA) Managing Director

In terms of our Report of even datefor GOPALAIYER & SUBRMANIAN

Chartered AccountantsFirm Reg. No: 000960 S

Sd/-CA K.R. SURESH

PARTNER Membership No. 25453

Place : MangaluruDate: 18/09/2017

( in Lakh)`

61


I EQUITY AND LIABILITIES

(1)

a) Share Capital 1 52.301 35807.02 26636.02

b) Reserves and Surplus 2 17019.61 52826.63 15544.51 42180.53

(2) Share application money pending allotment

Sub-Total 54226.63 43580.53

(3) Non-Current Liabilities

a) Long-term borrowing 4 53 to 54 41660.56 37304.75

b) Deferred Tax Liabilities(Net) 5 - - -

c) Other long term liabilities 6 42 to 48 231601.70 208019.86

d) Long-term Provisions 7 44 4186.82 3382.25

Sub-Total 277449.08 248706.86

(4) Current Liabilities

a) Short-term borrowings 8 50 30856.55 22843.09

b) Trade payables 9 41 36102.11 24207.85

c) Other current liabilities 10 42 to 46 52140.94 46733.7551,53,54

d) Short-term provisions 11 46 984.41 1139.71

Sub-Total 120084.01 94924.40

TOTAL 451759.72 387211.79

II ASSETS

1 Non-Current assets

(a) Fixed assets

(i) Tangible Assets

(a) Tangible Assets (Net) 12 10 & 12 171351.77 151912.66

(b)Gross Assets created out of Govt. 12 10 57299.69 51516.63grant/ Consumers Contributions

(c) Net Fixed Assets 114052.08 100396.03

(ii) Intangible assets 13 - - -

(iii) Capital work-in-progress 14 14,15 &17 14655.74 11814.35

(iv) Intangible assets under development 15 18.101 425.41 316.99

(b) Non-Current investments 16 20.291 251.00 251.00

(c) Deferred Tax Assets (net) 17 - - -

(d) Long term loans and advances 18 28.935 8161.11 7582.49

(e) Other non-current assets 19 28,16.2 & 120556.67 156553.9652.308

Sub-Total 258102.01 276914.82

2 Current assets

(a) Inventories 20 22 & 16.1 4225.64 6302.70

(b) Trade receivables 21 23, 47.607 & 17072.37 26830.9647.609

(c ) Cash and cash equivalents 22 20 & 24 7255.57 4148.42

(d) Short-term loans and advances 23 25, 26, 27 & 5303.01 4046.12 28.913

(e) Other current assets 24 23.4 & 28 159801.12 68968.77

Sub-Total 193657.71 110296.97

TOTAL 451759.72 387211.79

Significant Accounting Policies and Notes to Accounts form the part of the Accounts.

Shareholders' Funds

52.302

55 to 58

3 52.303 1400.00 1400.00

SL.NO.

PARTICULARS AS AT 31.03.2017 AS AT 31.03.2016NOTE

NOACCOUNT

CODE


62

I

II Other Income 26 62 & 65 15841.37 7692.32

III Total Revenue (I+II) 342085.52 276867.53

IV Expenses

Purchase of Power 27 70 254170.75 223056.22

Employee Benefits Expense 28 75 26697.98 24924.08

Finance Costs 29 78 & 80 12691.10 11060.42

Depreciation and amortization expenses 30 77 & 83.6 7844.53 6408.14

Other Expenses 31 74,76, 79 & 83 39387.48 10577.73

Total Expenses 340791.84 276026.59

V PROFIT BEFORE EXCEPTIONAL AND EXTRAORDINARY 1293.68 840.94

ITEMS AND TAX (III-IV)

VI Exceptional Items 32 65.500 - -270.45

VII PROFIT BEFORE EXTRAORDINARY ITEMS 1293.68 1111.39

AND TAX (V-VI)

VIII Extraordinary items - -

IX PROFIT BEFORE TAX (VII-VIII) 1293.68 1111.39

X TAX EXPENSE

Current Tax 81.1 307.01 231.22

Deferred Tax - -

MAT Credit entitlement 33 62.922 -307.01 -231.22

XI Profit (Loss) for the period from continuing 1293.68 1111.39

operations (IX-X)

XII Profit (Loss) from discontinuing operations - -

XIII Tax expense of discontinuing operations - -

XIV Profit (Loss) from discontinuing operations - -

(after Taxes) (XII-XIII)

XV Profit (Loss) for the period (XI+/-XIV) 1293.68 1111.39

XVI Earnings per equity share (in `)

Basic and diluted

Significant Accounting Policies and Notes to Accounts form the part of the Accounts.

Revenue from operations (Distribution of Power) 25 61 & 83 326244.15 269175.21

0.36 0.48

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2017

FOR THE YEAR 2015-16

SL.NO.

PARTICULARS NOTE NO.ACCOUNT

CODEFOR THE YEAR

2016-17

( in Lakh)`

Sd/-(D.R. SRINIVAS)


Sd/-(M.D. RAVI)

Director, MESCOM




Sd/-CA K.R. SURESH



A) Cash flows from operating activities :

Net profit before taxation and extraordinary items 1293.68 1111.39

Adjustment for:

Depreciation 7844.53 6373.86

Foreign exchange loss - -

Interest income -70.38 -24.86

Dividend income - -

Interest expense 12691.10 11060.42

Operating profit before working capital changes 21758.93 18520.81

(Increase)/Decrease in trade recievables 9758.59 26268.84

(Increase)/Decrease in loans and advances -1256.89 -1775.89

(Increase)/Decrease in other current assets -90832.35 -16724.59

(Increase)/Decrease in inventories 2077.06 -278.48

Increase/(Decrease) in short term borrowings 8013.46 1187.20

Increase/(Decrease) in trade payables 11894.26 8660.38

Increase/(Decrease) in provisions -155.30 584.91

Increase/(Decrease) in other current laibilities 5407.19 -55093.98 12417.95 30340.32

Cash generated from operations -33335.05 48861.13

Income taxes paid 307.01 231.22

Cash flow before extraordinary item -33642.06 48629.91

Extraordinary items (specifying nature) - -

Net cash from operating activities (A) -33642.06 48629.91

B Cash flows from investing activities

Purchase of tangible fixed assets -21500.58 -19478.22

(Increase)/ Decrease in Capital Work in Progress -2841.39 -1474.41

Increase/ (Decrease) in other long term Liabilities 23581.84 20825.63

Increase/ (Decrease) in other long term Provisions 804.57 -251.32

Purchase of intangible fixed assets -108.42 -44.88

Purchase of long term investments - -

(Increase)/Decrease in other non-current assets 35997.29 -41168.82

(Increase)/Decrease in other long term loans and advances -271.61 -146.31

Interest received 70.38 24.86

Net cash from investing activities (B) 35732.08 -41713.47

C Cash flows from financing activities

Proceeds from Share Application Money 9171.00 2763.00

Increase/(Decrease) in other long term borrowings 4355.81 1523.85

Contributions/ Grants and subsidies towards Cost of 181.42 695.63Capital Assets

Interest paid -12691.10 -11060.42

Dividends paid - -

Dividend distribution tax - -

Proceeds from ESOPs - -

Net cash used in financing activities (C) 1017.13 -6077.94

Net increase in cash and cash equivalents 3107.15 838.50 (A) + (B) + (C)

Cash and cash equivalents at beginning of period 4148.42 3309.92

Cash and cash equivalents at end of period 7255.57 4148.42

PARTICULARS 31.03.2017 31.03.2016

CASH FLOW STATEMENT FOR THE YEAR ENDING ( in Lakh)`

Sd/-(D.R. SRINIVAS)


Sd/-(M.D.RAVI)

Director, MESCOM




Sd/-CA K.R. SURESH



63


SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

I) SIGNIFICANT ACCOUNTING POLICIES FOR THE PERIOD ENDED 31-03-2017.

a) Basis of preparation of financial statements:

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

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

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

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

accounts to comply with all material aspects of Generally Accepted Accounting Principles

(GAAP) and the accounting standards specified under Section 133 of the Companies Act 2013.

However, rebate for early payment and interest on delayed payment to power producers are

accounted for as and when intimated by them. Further, assets and liabilities created under

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

Sheet.

b) Use of Estimates:

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

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

statements and the reported amounts of revenues and expenses during the reported period to

conform with the generally accepted accounting principles. Differences between actual results

and estimates are recognized in the period in which results are known / materialized.

c) Fixed Assets:

i) During the year the Company has modified the accounting policy of accounting for Fixed

Assets to comply with Accounting Standard-10.

The existing policy and modified policy are as given below :

ii) Cost of acquisition is inclusive of freight, duties & taxes, levies, borrowing costs and all

incidentals attributable to bringing the asset to its working condition.

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

to the date of commissioning attributable to such project / expansion are capitalized.

iv) Fixed Assets other than those classified as 'Furniture & Fixture' and 'Office Equipments',

costing individually up to ̀ 500 are written off to Profit and Loss Account during the year.


64

Existing Policy

Fixed assets which are acquired or constructed are recorded in the books of accounts and disclosed in annual accounts at actual cost of acquisition/ construction or at standard rate, as the case may be, less accumulated depreciation.

Modified Policy

The cost of a fixed asset comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use less accumulated depreciation.

Value of Fixed Assets which constitute the Opening Balance for FY 2016-17 will be retained at the value existed in the books of Accounts as at the end of 31/03/2016.


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

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

d) Impairment of Assets:

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

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

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

provision will be made for impairment of assets or CGU.

e) Depreciation:

i) Depreciation on all assets is provided on straight line method over the useful life of the asset at ththe rates approved in KERC Tariff Order 2009 dated 25 November 2009. Depreciation on

released assets re-issued to works and categorized as assets, is charged at the rates

prescribed vide said regulation considering the WDV as the base value. This system is

followed consistently.

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

amount is amortized over the lease period by charging a fixed amount which is arrived by

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

land is recovered over the lease period.

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

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

Balance Sheet date is 90% of the original cost.

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

following the one in which the assets becomes available for use. Depreciation on disposed

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

/ withdrawn.

f) Inventory valuation:

During the year the Company has modified the accounting policy of valuation of inventories to

comply with Accounting Standard-2.

The existing policy and modified policy are as given below:

65

Existing Policy

Inventories are valued at Standard Rate, which is determined by MESCOM from time to time based on previous purchase price and prevailing market rates (published as O & M Schedule of Rates). The difference in actual cost of material received and standard issue rate represents "Material Cost Variance". At the end of the year debit balance if any, under Material Cost Variance is charged to Profit and Loss Account and credit balance if any is transferred to reserve account called "Reserve for Material Cost Variance".

Modified Policy

AS-2 to be implemented from 1st April 2016 and onwards.Value of materials which constitute the Opening Balance for FY 2016-17 (i.e. as on 01.04.2016) will be retained at the value existed in the books of accounts as at the end of 31.03.2016.All the materials at the time of purchase are to be valued at purchase cost instead of standard Rates prescribed in Schedule of Rates Book.All the materials issued are to be valued at weighted average rate applicable to the closing stock before such issue.

Dismantled Assets are valued at written down value of assets.

g) Capital Work in Progress:

With the change in the accounting policy for valuation of inventory, material issued to Capital

Works are valued at weighted average rate applicable to the closing stock before such issue.

h) Revenue Recognition:

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

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

Revenue is reduced by unbilled revenue of previous year included in current year's revenue. It is

increased by the unbilled revenue of current year and revenue due from consumers whose

ledger accounts are yet to be opened.

i) Subsidy from Government of Karnataka:

GoK vide notification no. EN 55 PSR 2008 dtd 14.09.2008 has introduced a scheme of free power

supply to IP sets having capacity of upto 10 HP. Further GoK is also providing free power supply to

Bhagyajyothi and Kutirajyothi consumers having monthly consumption upto 18 units.

In accordance with the aforesaid notification, MESCOM is providing free power to IP sets & BJ/KJ

consumers and the cost thus involved in providing free power supply to those consumers will be

made good by GoK. The difference between the amount of free power supply to BJ/KJ and IP set

consumers and the actual amount received from the Govt. will be accounted as receivable from

the GoK.

j) Employee Benefits:

i) The employees earlier appointed by the KPTCL are working in the Company on deputation

basis. Now the Company is recruiting its employees independently depending on vacancy

available.

ii) In respect of Pension and Gratuity, provision for contribution to KPTCL/ESCOMs Pension &

Gratuity Trust is made on the formula evolved by the Trust based on the actuarial valuation

undertaken by KPTCL/ESCOMs' Pension & Gratuity Trust. Any revision in contribution due to

actuarial valuation by the Trust is accounted in the year of intimation by the Trust.The

contribution towards pension and gratuity for the year 2016-17is accounted at the rates noted

below:-

Pension - 33.05% of Basic Pay + Dearness Pay +Dearness Allowance

Gratuity – 6.08% of Basic Pay + Dearness Pay

For those employees who have joined MESCOM on or after 1.4.2006, the contributory

pension scheme is applicable wherein 10% of the Basic Pay + Dearness Pay + Dearness

Allowance are contributed to the pension fund with matching contribution of employees.

iii) Provision for EL& FBF:

Provision towards Earned Leave Scheme and Family Benefit Fund has been created based

on the Actuarial Valuation carried out as on 31.03.2017.


66

k) Provision for Bad and Doubtful Debts:

Provision for Bad and Doubtful Debts is made at 4% on the balance of sundry debtors for sale of

power, outstanding as at the end of the year.This method is being followed by the company

consistently.

l) Accounting for Grants & Contributions from consumers

The Company has implemented provisions of Accounting Standard -12 issued by the Institute of

Chartered Accountants of India for recognizing the Grants & Consumers contribution received

towards capital expenditure from the year 2012-13. Hence the value of grants and consumer

contribution utilized towards the capital expenditure has been reduced from carrying amount of

the fixed Assets. Company has also not charged depreciation on the Assets created out of

Consumers Contribution and Govt. grants.

m) Investments:

I) Investment in Power Company of Karnataka Ltd (PCKL):

An amount of ̀ 1.00 lakh paid towards the initial minimum share capital and 250 lakh paid

towards networth, subsequently converted to Equity by Power Company of Karnataka Ltd

(PCKL) have been accounted as investments under account code 20.291.

II) Long term investments are carried at cost less provisions if any for diminutions in the value of

such investments.

`


67

2.1

As per Last Balance Sheet 56.200 132.66 132.66

Add: Additions during the Year - -

Less: Utilised during the Year - -

Closing Balance 132.66 132.66

2.2 Proposed Adj. to Net worth:

As per Last Balance Sheet 52.308 - -

Add: Additions during the Year -2896.00 -


Closing Balance -2896.00 -

2.3 Reserve for Material Cost Variance

As per Last Balance Sheet 56.610 4592.66 5048.03

Add: Additions during the Year - -

Less: Utilised during the Year 251.62 455.38


2.4 Profit and Loss Account (Surplus)

As per Last Balance Sheet 9668.19 8556.80

Add: Additions during the Year 1293.68 1111.39



Capital Reserve:

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31.03.2017

1 EQUITY AND LIABILITIES

NOTE : 01 SHARE CAPITAL

1.1 Authorised Capital 50000.00 30000.00

50,00,00,000 Equity shares of ` 10/- each

1.2 Issued, Subscribed and Paid up

Equity Share Capital 52.301 35807.02 26636.02

(35,80,70,231 shares of 52.302

10 each)

35807.02 26636.02

TOTAL 35807.02 26636.02

`

Sl. No

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

( in Lakh)`

1.3 Company is having one Share each in the name of 9 Directors and remaining shares are held in the name of His Excellency Governor of Karnataka.

1.4 The reconciliation of the No. of Equity shares outstanding is set out below:

Particulars As at 31.03.2017 As at 31.03.2016

Equity shares at the beginning of the Year 266360231 216070231

Add: No. of Equity shares issued during the Year 91710000 50290000

Less : No. of Equity shares cancelled on buy back during the Year - -

Equity shares at the end of the Year 358070231 266360231

NOTE : 02 RESERVES AND SURPLUS

Sl. No

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

( in Lakh)`


68

ParticularsFor Shivamogga & Chikkmagaluru dist

For DK & Udupi dist

Total

Grant received from Central Govt. 6601.34 7006.66 13608.00

Grants returned to MoP -159.55 - -159.55

Loan from RECL 765.31 786.82 1552.13

Interest earned on un-utilised fund upto 31.03.2017 132.44 99.96 232.40

Invested by MESCOM 224.91 - 224.91

Total funds available 7564.45 7893.44 15457.89

Funds utilised 7422.40 7796.23 15218.63

Returned to MoP 142.00 92.22 234.22

Total fund available as on 31.03.2017 0.05 4.99 5.04

( in Lakh)`

69


2.5 Contributions, grants and subsidies

towards cost of Capital assets

2.5.1 Consumers contribution towards cost of 55.100 33656.05 27713.44

capital assets

2.5.2 Subsidies towards Cost of Capital Assets 55.200 1193.33 1193.33

2.5.3 State Govt. grants towards cost of 55.300 1551.00 1551.00

capital works

2.5.4 APDRP Grant Account 55.301 3704.81 3704.81

2.5.5 PMGY Grant Account 55.302 56.25 56.25

2.5.6 RGGVY Grant Account 55.303 13448.45 13608.00

2.5.7 IPDS Grant Account 55.304 955.00 -

2.5.8 DDUGJY Grant Account 55.305 2374.04 -

2.5.9 Special Grant Towards Capital works under 55.500 3670.32 3670.32

APDRP

2.5.10 GoK Grant Towards energization of IP sets 55.501 53.00 53.00

under Ganga Kalyana Scheme

2.5.11 Central Govt. Grant towards Power Sector 55.502 63.00 63.00

Automation

2.5.12 Grants received from GoK towards special 55.504 775.00 775.00

component sub plan [SCSP]

2.5.13 Grants received from GoK towards Tribal 55.505 279.48 279.48

sub plan [TSP]

Sub - Total 61779.73 52667.63

2.6 Gross Assets created out of Grants and 57299.69 51516.63

reduced from total Fixed Assets

2.7 Grants received for installing Solar roof 4480.04 1151.00

Tops, IPDS and DDUGJY Schemes yet

to be utilised

TOTAL 17019.61 15544.51

Sl. No

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

2.2 (a) Govt. of Karnataka vide order No. EN 67 PSR 2017 BANGALORE Dated 31.07.2017 has ordered to transfer the old

balances of Subsidy and KPCL dues including principal and interest existing in the books of KPTCL as on 31.03.2016 to the

ESCOMs. Further approval has also been accorded to the write back of the said interest in the books of ESCOMs and to

adjust the difference in Receivables and payables resulting from the above transaction under the head Proposed

adjustment to Networth Account in the books of Escoms Accordingly the Company has accounted Subsidy amounting to

` 7722.00 lakh, KPCL dues of ` 10618.00 lakh (Principal of ` 6958.00 lakh and interest of ` 3660.00 lakh), and proposed

adjustment to Net worth of ` 2896.00 lakh which has been shown as a line item under 2.2 above. Further, Company has

written back the interest amount of ̀ 3660.00 lakh by crediting miscellaneous revenue and debiting KPCL account.

2.5.6 (a)The Central Government has formulated RGGVY Scheme to provide power supply to the consumers under BPL category.

M/s RECL was nominated as the nodal agency for the Scheme. In MESCOM jurisdiction, the scheme was implemented in

Chikkamagaluru and Shivamogga districts in Phase I of XI plan and the work was completed in all respect in the year

2011-12. Further the Scheme was extended to Dakshina Kanada and Udupi Districts in Phase II of XI Plan and the work was

completed in all respect in the year 2014-15.

The details of funds received and expenses booked under this scheme are as detailed below:

( in Lakh)`

3.2 Details for the Share Deposit held as on 31.03.2017 is as below.

3.2.1Equitable Distribution of 70.00 Crs paid towards 50% of the cost of power block of Jurala Hydro Electric Project among Electricity Supply Companies. The amount was paid by PCKL to Andhra Pradesh Power Generation Corporation Ltd on behalf of ESCOMs. The share of MESCOM amounting to ` 14.00 Crs is accounted as Share deposit received from GoK and paid as Deposit to Andhra Pradesh Power Generation Corporation Ltd under A/c 28.935.

Total

GoK in its Order No: EN 58 PSR 2013 Bangalore dated 23.09.2013 has accorded approval for `

Amount(` in Lakh)Sl. No Particulars

1400.00

1400.00

3 NON -CURRENT LIABILITIES

NOTE: 04 LONG TERM BORROWINGS

4.1 TERM LOANS

4.1.1 SECURED LOANS

4.1.1.1 From Banks 53.500 37502.29 31483.57

4.1.1.2 From Others 53.301, 3480.03 4255.75

53.308,

53.309,

53.311,

53.312

Sub- Total 40982.32 35739.32

4.1.2 UN-SECURED LOANS

4.1.2.1 From Banks - -

4.1.2.2 From Government 53.306, 118.49 140.85

53.307,

54.600,

54.700,

54.701,

54.702

4.1.2.3 From Others 53.305, 559.75 1424.58

53.310

53.960

Sub- Total 678.24 1565.43

TOTAL 41660.56 37304.75

Sl. No ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

( in Lakh)`

2. SHARE APPLICATION MONEY PENDING ALLOTMENT

NOTE : 3 SHARE APPLICATION MONEY PENDING ALLOTMENT

3.1 Share Deposit from GOK Pending Allotment 52.304 1400.00 1400.00

Total 1400.00 1400.00

( in Lakh)`


CodeAs at 31.03.2017 As at 31.03.2016

2.5.7(a) Integrated Power Development Scheme (IPDS): Govt. of India has launched IPDS for urban/Semi-urban areas. Power Finance Corporation (PFC) is the nodal Agency. Scope of Work includes strengthening of Sub- transmission and Distribution network, metering, provision for solar panels, IT enablement works etc. Sanction for an amount of ` 157.80 Crs has been communicated from PFC for 29 numbers of statutory towns for the above works excluding IT enablement works. Company has received ̀ 9.55 Crs for this project during FY 2016-17.

2.5.8(a) Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY): Govt. of India has launched DDUGJY for Rural areas. Rural Electrification Corporation (REC) is the nodal agency. Scope of Work includes feeder seperation, strengthening of Sub- transmission and Distribution system, metering, rural electrification etc. At present approval for an amount of 395.67 Crs has been communicated from REC/GOK for all four districts of MESCOM. Company has received 23.74 Crs for this project during FY 2016-17.

``


70

4.1.2.4the Government of Karnataka has transferred certain loans taken by M/s KPTCL to the Company as part of transfer of assets and liabilities. The interest payment as intimated by KPTCL has been charged to Profit and Loss Account in the books of account since the assets have already been commissioned.

At the time of unbundling of transmission and distribution activities and formation of Electricity Distribution Companies,

I Term Loan-Secured

A Commercial Banks

1 Syndicate Bank-III/Union Bank of India II

Loan from Syndicate Bank is 4000 10149317 8 8.65 1114.26 - 507.34 606.92 12 486.00secured by a first charge (02/09(floating) on fixed assets viz., to transformers, transmission 01/17)lines, meters, poles, conductors, cables and computers worth ` 40.00 crores situated at Company jurisdiction

2 Syndicate Bank-V/Union Bank of India IV

Loan from Syndicate Bank is 10000 10526347 8 8.65 9166.67 - 1428.84 7737.83 12 1428.53secured by a first charge (09/14 (floating) on fixed assets viz., totransformers, transmission 08/22)lines, meters, poles, conductors, cables and computers worth ` 100.00 crores situated at Company jurisdiction

3 Syndicate Bank-VI/Union Bank of India V

Secured by Hypothecation of 2600 10550297 40 8.65 1625.00 - 780.31 844.69 12 780.00the whole of present and future Mnths current assets including (12/14 inventories and book debts to belonging to the Company 03/18)situated at Corporate Office.

4 Syndicate Bank-IV/Union Bank of India III

Secured by a first charge on 10000 10281594 8 8.65 4265.46 - 1426.38 2839.08 12 1419.56assets such as Plant & (03/11 Machinery, line cable networks toincluding poles, towers, 02/19)Transformers, Meters etc, Furniture, Office equipment etc located in Dakshina Kannada, Udupi, Shivamogga & Chikkamagaluru Districts.

5 Corporation Bank-II 10000 10190264 8 8.65 2359.28 - 1428.60 930.68 12 930.68secured by Hypothecation of (10/09 present and future current toassets of the Company. 09/17)

6 Punjab & Sind Bank - I

Secured by Hypothecation of 10000 10105976 8 10.75 118.31 - 118.31 - - -the whole of present and future (05/08 current assets including to inventories and book debts 04/16)belonging to the Company situated at Corporate Office.

4.1.2.5 Reconciliation of loan Balances

Sl. No.

Name of the Bank / Lender

Loan Drawn

Charge ID No

Term of

Loan in

Yrs.

Floating Rate of Interest as on

31.03.17 (%)

Loan Balance

as on 01.04.16

Loan Drawn during

2016-17

Repayment during

2016-17

Loan Balance

as on 31.03.2017

No of Instal

ments.

Details for Loan Installment due

for 2017-18

Amount

( in Lakh)`


71

7 Indian Bank/Union Bank of India VII

Secured by Hypothecation of 5000 10185366 9 8.65 1562.50 - 625.04 937.46 4 (Qtly) 625.14the whole of present and future (10/09 current assets including toinventories and book debts 09/18)belonging to the Company situated at Corporate Office.

8 State Bank of Mysore-II/Union Bank of India VIII

Hypothication of the 10000 10369875 8 8.65 6160.00 - 1426.40 4733.60 12 1385.45equipments/meters/ (08/12transformers/ poles/aluminium to wires/ conductors/ cables/ civil 07/20)works etc. purchased/ acquired for the project out of the term loan granted.

9 Canara Bank-I

Pari passu Charge on Fixed 5000 10448012 8 8.65 3869.50 - 714.00 3155.50 12 714.00Assets of the Company, (08/13existing and future assets to to the extent of ` 50 crs. 07/21)

10 Canara Bank-II

Pari passu Charge on Fixed 5000 10448012 8 8.65 4167.00 - 714.00 3453.00 12 714.00Assets of the Company, (08/13 existing and future assets to tothe extent of ` 50 crs. 07/21)

11 Syndicate Bank-VII/Union Bank of India VI

Exclusive charge on fixed 5000 10593879 9 8.65 2100.00 2900.00 416.70 4583.30 12 625.06assets to the tune of ` 62.50 (08/15 crores to be acquired by the to Company. 07/24)

12 Canara Bank-III

Pari passu First Charge on 5000 10448012 8 8.65 5000.00 - 357.00 4643.00 12 714.00Fixed Assets of the Company, (07/15 existing and future assets to to the extent of ` 50 crs. 06/23)

13 Canara Bank-IV

Pari passu First Charge on 5000 10448012 8 8.65 - 3000.00 - 3000.00 7 416.50Fixed Assets of the Company, (09/16 existing and future assets to to the extent of ` 50 crs. 08/24)

14 Union Bank of India-I 10000 100036293 8 9.85 - 8000.00 - 8000.00 10 1190.50Charge over Existing & Future (06/16 Fixed assets of the company toalong with other lenders. 05/24)

15 Punjab & Sind Bank - II

Charge of whole of existing 10000 100053901 8 9.70 0.00 4300.00 - 4300.00 7 833.35fixed assets & capital assets (09/16 created out of TL under pari topassu charge with other 08/24)Lenders in MBA.

Sub-Total 106600 41507.98 18200.00 9942.92 49765.06 12262.77

B Others

1 REC– APDRP works

Works at Shivamogga, Bhadravathi 161 80059293 13 12.25 107.54 - 32.18 75.36 1 16.09and Chikkamagaluru are secured (06/07 by way of first charge by to hypothecation of moveable 05/20)machinery, equipments,

Sl. No.


Loan Drawn

Charge ID No

Term of

Loan in

Yrs.


31.03.17 (%)

Loan Balance

as on 01.04.16

Loan Drawn during

2016-17

Repayment during

2016-17

Loan Balance

as on 31.03.2017

No of Instal

ments.


for 2017-18

Amount

( in Lakh)`


72

machinery spares, tools, implements and accessories installed and equipments created under the project and procured out of loan

2 REC – General

Projects at Vogga, Kukkipady 634.00 10033614 13 12.25 316.86 - 126.75 190.11 1 63.37and Nellyadi in Dakshina (01/07Kannada district, are secured toby first charge by 12/19)hypothecation of all moveable machinery, equipments, machinery spares, tools, implements and accessories installed and equipments created under the project and procured out of loan sanctioned by REC.

3 REC bulk Loan

Transformers and Conductors 3481.26 10384994 7 12.25 3481.26 - 696.25 2785.01 2 696.25utilised for System Improve- (10/12 ment works to the extent of to` 89.66 Crs. 09/19)

4 PFC- R-APDRP works

Loan from M/s PFC is secured 723.96 10184171 10 9.00 509.02 - - 509.02 - -by (02/091.moveable properties of tonewly financed Assets under 01/19)projects installed at MESCOM project Area.2.Existing and proposed Moveable plant and Machinery of the Company.

Sub-Total 5000.22 4414.68 - 855.18 3559.50 775.71

Total Secured Loans 111600..22 45922.66 18200.00 10798.10 53324.56 13038.48

II Term Loan-Un-Secured

1 APDRP-REC Loan payable 150.44 - 150.44 - - -to KPTCL

2 PMGY Loan Account 126.00 - 20 12.00 71.46 - 7.66 63.80 1 7.66(12/04

to 11/24)

3 Central Govt. Loan towards 147.00 - 10 9.00 29.40 - 29.40 - - -Power Sector Automation (06/07

to 05/17)

4 Loan from GoK - Interest free 2262.34 - 62.34 - - 62.34 - -

5 REC – RGGVY Works 765.32 - 11.50 714.30 - 194.09 520.21 1 51.03Shivamogga & Chikkamagaluru Districts

6 REC – RGGVY Works - DK & 786.82 - 11.50 786.82 - - 786.82 - -Udupi Districts

Sub-Total 4207.48 - 1814.76 - 381.59 1433.17 - 58.69

TOTAL LONG TERM LOANS 115807.70 - 47737.42 18200.00 11179.69 54757.73 - 13097.17

Term loan due for repayment 10432.67 13097.17in next year (shown as currentLiabilities in Note:10)

Net long term loan (Note-4) 37304.75 41660.56

- - - -

Sl. No.


Loan Drawn

Charge ID No

Term of

Loan in

Yrs.


31.03.17 (%)

Loan Balance

as on 01.04.16

Loan Drawn during

2016-17

Repayment during

2016-17

Loan Balance

as on 31.03.2017 No of

Instalments.


for 2017-18

Amount

( in Lakh)`


73

6.1

6.1.1 M/s KPCL 41.108 89098.86 84625.34

6.1.2 Interest payable to M/s KPCL 46.430 43150.81 42864.32

Sub-Total 132249.67 127489.66

6.2 Others

6.2.1 Security Deposits from consumers:

6.2.1.1 Meter Security Deposits 47.603 to 2351.72 2296.3547.606 & 47.611 & 47.612

6.2.1.2 Initial/ Additional Security Deposits 48.100 to 48557.28 44447.6348.200

Sub- Total 50909.00 46743.98

6.3 KPCL, KPTCL & Other ESCOMs

6.3.1 M/s KPCL42.213

6.3.2 M/s KPTCL42.219, 42.224,42.229, 46.106

6.3.3 M/s BESCOM42.220, 42.225, 42.230

6.3.4 M/s HESCOM42.222,42.232

6.3.5 M/s GESCOM 5653.59 3332.39

6.3.6 M/s CESCO 3359.19 3330.69

Sub- Total 41908.60 30119.18

6.4 Staff related Liabilities

6.4.1 Security deposit from employees 46.920 0.27 0.39

Sub-Total 0.27 0.39

6.5 Liability to Suppliers and Contractors

6.5.1 Security Deposits in cash from 46.101 923.89 608.51Suppliers / Contractors

6.5.2 Retention Money- Bill amount retained 46.104 5446.34 2892.06as per terms of purchase order/ turnkey contract

Sub-Total 6370.23 3500.57

6.6 Payables to GoK

6.6.1 BRP - II recoveries 46.202 to 40.75 40.75 46.207

6.6.2 Amount received from Govt., towards 28.816 68.59 78.70Bhagya Jyothi Works

Sub-Total 109.34 119.45

6.7 Others

6.7.1 Stale Cheques 46.910 27.07 3.81

6.7.2 Miscellaneous deposits 46.966 27.52 42.82

Sub-Total 54.59 46.63

TOTAL 231601.70 208019.86

Trade Payables

42.203, 3.48 3.48

42.214, 4001.41 4001.41

42.215, 26644.85 18576.43

42.216, 2246.08 874.78

42.233

42.790

NOTE : 05 - DEFERRED TAX LIABILITIES (NET)

5.1 Deferred Tax Liabilities (Net) - -

NOTE: 06 - OTHER LONG TERM LIABILITIES


CodeAs at 31.03.2017 As at 31.03.2016

( in Lakh)`

(` in Lakh)


CodeAs at 31.03.2017 As at 31.03.2016


74

I Short Term Loan-Secured

1 Syndicate Bank-II/Union Bank of IndiaAgainst hypothecation of Current Assets of the Company, present and future, along with other lenders

Sub-Total 20000.00 - - - 17777.78 - 6666.70 11111.08 6666.67

B Overdrafts

1 Union Bank of IndiaAgainst Hypothecation of stocks of spares, consumables and book debts/ receivables

20000.00 10610407 36 Months 8.65 17777.78 - 6666.70 11111.08 6666.67(12/2015

to11/2018)

16500.00 10151134 - 8.65 11731.98 4755.89 - 16487.87 -

8.1

8.1.1 State Bank of Mysore 50.210 - 5949.51

8.1.2 Syndicate Bank 50.220 9924.27 -

8.1.3 Vijaya Bank 50.260 - 3852.30

8.1.4 Central Bank of India 50.270 - 1930.17

8.1.5 Union Bank of India 50.290 16487.86 -

Sub-Total 26412.13 11731.98

8.2 Short Term Loans

8.2.1 Syndicate Bank 53.500 4444.42 11111.11

Sub-Total 4444.42 11111.11

TOTAL 30856.55 22843.09

Bank Overdraft

Sl. No.


Loan Drawn

Charge ID No

Term of

Loan in

Months


31.03.17 (%)

Loan Balance

as on 01.04.16

Loan Drawn during

2016-17

Repayment during

2016-17

Loan Balance

as on 31.03.2017

Details of Loan

Installments due in FY 2017-18

8.3 Reconciliation of loan Balances( in Lakh)`

NOTE: 07 LONG TERM PROVISIONS

7.1 Provisions for Employee benefits

7.1.1 Provision for earned leave encashment 44.130 3096.08 2193.17

7.1.2 Provision for Family Benefit Fund 44.141 ,44.142, 1090.74 1189.0844.143

Sub-Total 4186.82 3382.25

Total 4186.82 3382.25

4 CURRENT LIABILITIES

NOTE: 08 SHORT TERM BORROWINGS

( in Lakh)`

( in Lakh)`


CodeAs at 31.03.2017 As at 31.03.2016


CodeAs at 31.03.2017 As at 31.03.2016

6.8 The balance of consumers security deposit held as per accounts and consumers ledger accounts are subject to

reconciliation.


75

9.1

POWER

9.1.1 M/s. NTPC RSTPS 41.110 3603.45 1609.20

9.1.2 M/s. Madras Automic Power Station 41.111 31.35 39.84

9.1.3 M/s. Neyveli Lignite Corporation Ltd., 41.112 3519.70 989.95

9.1.4 M/s. NPCIL - Kaiga Generating Station 41.114 415.65 539.94

9.1.5 M/s. Sandur Power Company Ltd., 41.115 221.98 299.52

9.1.6 M/s. Sahyadri Power Company Ltd., 41.116 0.64 2.30

9.1.7 M/s. Master Power 41.118 0.04 0.07

9.1.8 M/s. Subhash Kabini 41.119 9.75 79.22

9.1.9 M/s. Graphite India Ltd., 41.120 - 12.72

9.1.10 M/s. Moodabagil Power Pvt. Ltd. 41.123 1.01 6.45

9.1.11 M/s JSW PTCIL 41.125 0.52 0.52

9.1.12 M/s. Mrujara Power Plant 41.126 1.06 2.90

9.1.13 M/s. Tata Company Limited 41.131 42.64 42.64

9.1.14 M/s. UPCL 41.132 11885.87 5804.81

9.1.15 M/s Wind Mill Projects 41.140 457.89 369.12

9.1.16 Solar Power Projects 41.150 1277.74 483.58

9.1.17 Solar Roof-top P.V.Generation plants 41.501 32.49 2.87

9.1.18 M/s. MPM Ltd. 41.195 - 19.34

9.1.19 M/s. NTPC VVNL 41.198 252.90 222.73

9.1.20 M/s. Shamili Hydel Power Project 41.202 47.16 63.00

9.1.21 M/s. AMR Power Pvt. Ltd 41.206 - 1364.76

9.1.22 M/s. Cogeneration Units & Non PPAs 41.208 147.48 3891.27

9.1.23 Sundry creditors towards other power 41.211 7351.09 4118.92 purchase cost (ST & MT)

9.1.24 M/s. Kundankulam 41.214 470.20 433.31

9.1.25 M/s. Vasgi Power Projects Ltd 41.216 1.17 1.53

9.1.26 M/s. Jurala Power Project 41.218 94.49 410.70

9.1.27 M/s. NLC Tamilnadu power Ltd 41.219 1473.70 421.08

9.1.28 M/s Damodhar Valley Corporation 41.223 1463.60 1723.37

9.1.29 Payable to KPTCL in respect of Wind Mill Projects

9.1.30 Transmission charges payable to M/s TNEB 41.164 2.37 2.22

9.1.31 M/s PGCIL 41.173 3220.97 1178.58

Total Power Purchase Liability 36102.11 24207.85

TOTAL 36102.11 24207.85

LIABILITY FOR PURCHASE OF

41.141 75.20 71.39

2 Syndicate BankAgainst Hypothecation of stocks of spares, consumables and book debts/ receivables

Sub-Total 26500.00 11731.98 14680.16 - 26412.14 -

Total Short Term Borrowings

3 Short term loan due for 6666.67 6666.67repayment in next year (Note-10)

4 Net Short Term loans 22843.09 30856.55(Note-8)

10000.00 100070176 9.45 - 9924.27 - 9924.27 -

46500.00 29509.76 14680.16 6666.70 37523.22 6666.67

Sl. No.


Loan Drawn

Charge ID No

Term of

Loan in

Months


31.03.17 (%)

Loan Balance

as on 01.04.16

Loan Drawn during

2016-17

Repayment during

2016-17

Loan Balance

as on 31.03.2017

Details of Loan

Installments due in FY 2017-18

NOTE: 09 TRADE PAYABLES ( in Lakh)`


CodeAs at 31.03.2017 As at 31.03.2016


76

10.1

10.1.1 Term Loan Installment due for repayment within Next One Year

10.1.1.1 Loans from REC 53.305 - 150.45

10.1.1.2 Loan drawn by MESCOM from 53.308 16.09 32.18 REC– APDRP works

10.1.1.3 Loan drawn by MESCOM from 53.309 63.37 126.74 REC – General

10.1.1.4 Loan from REC- RGGVY works 53.310 51.03 76.53

10.1.1.5 Loan from REC- Bulk Loan 53.312 696.25 -

10.1.1.6 Loans from Commercial Banks 53.500 12262.77 10024.41

10.1.1.7 PMGY Loan Account 53.306 7.66 7.66

10.1.1.8 G0K loan for energization of IP sets 53.307 - -under GK scheme

10.1.1.9 Central Govt. Loan towards Power Sector 54.600 - 14.70Automation

Sub-Total 13097.17 10432.67

10.2 Short Term Loan Installment due for repayment within Next One Year

10.2.1 Loans from Commercial Banks 53.500 6666.67 6666.67

Sub-Total 6666.67 6666.67

10.3 Other Payables

10.3.1 LIABILITY FOR SUPPLIES / WORKS

10.3.1.1 Liability for supply of Materials 42.101 1300.31 758.97

10.3.1.2 Sundry creditors / Control Account 42.201 1468.71 1834.91

10.3.1.3 Sundry creditors – Amount payable 42.202 8.23 3.42towards supply of materials which do not pass through stores.

10.3.1.4 Contractors Control Account 42.401 2381.80 1337.90

10.3.1.5 Provision for work completed but not 42.601 53.78 168.01commissioned where expenditure are not booked

Sub-Total 5212.83 4103.21

10.3.2 Statutory Dues

10.3.2.1 Service Tax payable under reverse 46.921 1.84 1.75charge Mechanism

10.3.2.2 Income tax deducted at source on 46.924 252.02 42.73payment to contractors

10.3.2.3 Income tax deducted at source on 46.925 69.91 141.08other payments

10.3.2.4 Sales tax deducted at source and 46.927 118.46 104.06payable to department

10.3.2.5 Sales tax payable on sale of Stores 46.951, 14.32 0.51 46.926

10.3.2.6 Amount deducted from contractors 46.930 15.97 14.53bills towards PF, ESI & CESS

10.3.2.7 ESI Contributions recoverable from bill 46.931 0.37 0.30amount of contractors and payable to ESI Corporation

10.3.2.8 Amount of CESS deducted at source 46.932 18.43 4.11and payable to the departm8ent

Sub-Total 491.32 309.07

10.3.3 Employee related liabilities

10.3.3.1 Liability towards Pension & Gratuity Trust 44.122 576.64 1055.55

10.3.3.2 Liability towards contribution to newly 44.150 56.66 47.18defined contributory pension scheme

10.3.3.3 Amount received from General Insurance 44.160 - 4.00Company pending disbursement

Current Maturities of Long Term Debts

( in Lakh)`NOTE 10 : OTHER CURRENT LIABILITIES


CodeAs at 31.03.2017 As at 31.03.2016


77

10.3.3.4 Unpaid Salaries 44.210 0.43 0.02

10.3.3.5 Unpaid Bonus 44.220 0.74 0.27

10.3.3.6 Salary payable 44.310 84.13 153.12

10.3.3.7 Salary payable to contract Employees 44.311 14.06 2.28

10.3.3.8 Bonus payable 44.320 153.84 31.83

10.3.3.9 Ex-gratia payable 44.330 235.73 369.51

10.3.3.10 Sundry creditors for expenses 46.410 181.34 91.11

10.3.3.11 Sundry creditors for travelling allowance 46.411 - 1.14to contract Employees

10.3.3.12 Liability for miscellaneous expenses. 46.412 279.40 130.33

10.3.3.13 Security deposit from employees 46.920 0.40 0.38

Sub-Total 1583.37 1886.72

10.3.4 Payables to GOK

10.3.4.1 Electricity tax to be collected and remitted 46.300 3151.60 2905.29

10.3.4.2 Electricity tax collected but to be remitted 46.300 72.03 187.42

10.3.4.3 Compounding fee 46.301 2.58 1.42

10.3.4.4 Inspection charges payable to Govt. 46.440 7.97 1.95

10.3.4.5 Royalty payable to Govt. 46.450 0.83 0.59

10.3.4.6 Duty and Taxes payable to Government. 46.470 1.79 -

Sub-Total 3236.80 3096.67

10.3.5 Payables to Consumers

10.3.5.1 Interest on ISD/ASD 48.340 3184.02 3163.13

10.3.5.2 Interest on MSD 48.350 239.99 267.21

10.3.5.3 Other Deposits from Consumers 47.601- 54.67 55.7147.602

10.3.5.4 Self Execution works 47.701 0.04 -

Sub-Total 3478.72 3486.05

10.3.6 Others

10.3.6.1 Security Deposits in cash from Suppliers / 46.101 127.83 311.78Contractors

10.3.6.2 Retention Money-Bill amount retained as 46.104 930.60 1064.00per terms of purchase order/turnkey contract

10.3.6.3 Liability for expenses 46.430 3500.64 3856.30

10.3.6.4 Stale Cheques 46.910 7.50 7.34

10.3.6.5 Advance received for sale of stores/ scrap 46.922 25.81 60.24

10.3.6.6 Amount recoverable from salary of 46.928 60.42 85.83Company employees and payable to other department / other institutions

10.3.6.7 Income tax collected at source 46.929 2.26 -

10.3.6.8 Amount recovered from salary of 46.952 55.63 46.64employees towards employees CPS

10.3.6.9 Employees PF and depatl. Share of 46.957 0.52 -PF payable a/c

10.3.6.10 Miscellaneous deposits 46.966 21.91 11.27

10.3.6.11 Excess credits by banks pending 46.971 - 0.06 0.68 reconciliation 46.976

10.3.6.12 Interest earned on un-utilized funds 46.985 32.11 -payable to MOP

10.3.6.13 Electrification / Service Connection 47.300 4586.34 4836.88

10.3.6.14 Encashment of Bank Guarantee 56.202 6.40 -

10.3.6.15 Stock Excess pending Investigation. 22.810 3.76 1.17

10.3.6.16 Sundry debtors for sale of power - 23.1 & 23.2 6417.19 5112.53Credit Balances

10.3.6.17 Amount recoverable from employees - 28.409 8.33 1.06material related

10.3.6.18 Advances paid to SLDC towards 28.910 39.41 -UI Charges

10.3.6.19 Advance paid to KPTCL towards 28.911 2501.60 1348.25transmission charges

ParticularsSl.No.Account

CodeAs at 31.03.2017 As at 31.03.2016

( in Lakh)`


78

10.3.6.20 Advance paid to Power Company of 28.913 1.25 -Karnataka Limited

10.3.6.21 Advance made to M/s. PCKL towards 28.915 44.49 -short term power purchase

10.3.6.22 Advance made to M/s. PCKL towards 28.916 - 6.09Non- POC bills

Sub-Total 18374.06 16750.06

10.3.7 Inter Unit Accounts (Net) 31 to 37 - 2.63

Sub-Total - 2.63

TOTAL 52140.94 46733.75

(` in Lakh)

Sl. No Particulars As at 31.03.2017 As at 31.03.2016Account

Code

NOTE: 11 SHORT TERM PROVISIONS

11.1 Provision for Employee benefits

11.1.1 Provision for earned leave encashment 44.130 683.08 1035.88

11.1.2 Provision for Family Benefit Fund 44.143 207.76 10.26

Sub-Total 890.84 1046.14

11.2 Others

11.2.1 Provision for Income Tax (AY 2006-07) 46.800 93.57 93.57

Total 984.41 1139.71

(` in Lakh)

Sl. No Particulars As at 31.03.2017 As at 31.03.2016Account

Code

10.3.6.21 (a) The Revenue expenditure of PCKL is being met out of seed money contributions made to PCKL by the ESCOMs.

The expenditure is being allocated to ESCOMs in terms of MOU entered into between PCKL & ESCOMs. The seed

money contributions made by the Company are accounted under Account Code 28.913 as advance. However, the

expenditure allocated to the Company for FY 2016-17 is more than the advance paid by the Company to the extent of

` 124650/-. This amount is shown as payable under A/c 28.913.


79

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80

14.1 Capital Work in Progress 14.000 14512.09

14.2 Revenue expenses pending 15.206 70.15 70.63

allocation over capital works - Interest

14.3 Preliminary expenditure on survey / 17.301 73.50 46.74

feasibility studies of projects

pending allocation

Sub Total 143.65 117.37

Total 14655.74 11814.35

11696.98

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

14.4 An amount of ̀ 239.64 lakh towards interest on loan taken for capital works has been capitalized during the year.

NOTE: 15 INTANGIBLE ASSETS UNDER DEVELOPMENT

NOTE : 14 CAPITAL WORKS IN PROGRESS

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

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

(` in Lakh)

(` in Lakh)

15.1 Software acquired/ Purchased 18.101 425.41 316.99

for internal use

Total 425.41 316.99

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

(` in Lakh)

NOTE : 16 NON- CURRENT INVESTMENTS

16.1 Investments:

16.1.1 Long Term Investments -

(Un-quoted at cost.)

16.1.1.1 Investment in share capital of 20.291 251.00 251.00

Power Company of Karnataka Limited

(25100 Equity shares of ` 1000 each)

Total 251.00 251.00

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

(` in Lakh)

NOTE : 17 DEFERRED TAX ASSETS (NET)

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

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

(` in Lakh)

NOTE: 13 INTANGIBLE ASSETS


81

NOTE : 18 - LONG TERM LOANS AND ADVANCES

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

(` in Lakh)

(` in Lakh)

18.1 Deposit with Others 28.935 2083.06 2033.33

18.2 Income Tax paid in advance 28.821 3361.06 3139.18

18.3 MAT Credit Entitlement 28.802 1968.86 1661.85

18.4 Amount deposited with PF Authorities 46.930 748.13 748.13

Total 8161.11 7582.49

NOTE :19 OTHER NON CURRENT ASSETS

19.1 Long Term Trade Receivables

19.1.1 1. Secured and considered Good 23.1 & 23.2 2897.50 19663.52

19.1.2 2. Un-secured and considered Good 23.1 & 23.2 11634.83 14532.33 7175.38 26838.90

19.2 Subsidy Recoverable from GOK

19.2.1 Subsidy / Grants receivable 28.620 15749.60 8027.60

Sub-Total 15749.60 8027.60

19.3 Others

19.3.1 Receivables from KPCL, KPTCL

and Other ESCOMs

19.3.1.1 M/s KPTCL 28.826, 28.831, 10023.65 9134.95

28.836, 28.841,

28.881

19.3.1.2 M/s BESCOM 28.827, 28.832, 8753.52 11394.52

28.837, 28.842

19.3.1.3 M/s HESCOM 28.829, 28.839, 29134.00 43827.00

28.844

19.3.1.4 M/s GESCOM 28.840,28.845 15394.12 29098.12

19.3.1.5 M/s CESCO 28.850,28.790 2979.24 4527.84

19.3.1.6 Amount receivable from CESCO on 28.851 22476.92 22476.92

account of excess of Assets over

liability assumed by CESCO on

bifurcation of undivided MESCOM

as on 01.04.2005

19.3.1.7 M/s KPCL 28.865,28.874 4.09 4.09

Sub-Total 88765.54 120463.44

19.3.2 Assets not in Use

19.3.2.1 Written down value (WDV) of Faulty / 16.200 1509.20 1224.02

Dismantled Assets.

Sub-Total 1509.20 1224.02

TOTAL 120556.67 156553.96

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

19.1.1(a)

due from M/s MPM, Bhadravathi. These dues includes principal amount of ̀ 9292.12 Lakhs and Interest to the extent of

` 1969.56 Lakhs outstanding as on 31.03.2017. Company has made all possible efforts for recovery of these dues. The

discussion regarding settlement is still going on between MESCOM, MPM and GoK. Since, MPM is a Govt. of Karnataka

undertaking, expecting revenue at the worst from GoK, no additional provision is made towards bad and doubtful debts.

19.2.1(a) The GOK vide order No. EN 34 PSR 2008 dated 19.08.2010 has ordered to refund the amount paid by the farmers during

the period from 01.04.2001 to 31.03.2003 to them and the same is implemented by MESCOM. An amount of

` 3179.74 lakh is shown as receivable from GOK under this head. ` 4847.86 lakh pertains to the Tariff Subsidy for the

years prior to FY 2004-05. Further company has accounted past subsidy of ̀ 7722.00 lakh as receivable from GOK as per

G.O No: EN 67/PSR 2017 BANGALORE Dated 31.07.2017.

Dues from Mysore paper Mills (MPM): Trade receivables includes an amount of ̀ 11261.68 Lakhs being the amount


82

20.1 Materials Stock Account

20.1.1 Materials Stock Account 22.610 3756.24 5642.46

20.1.2 Material imprest Account 22.641 11.90 11.90

20.1.3 Materials Account - Temporary works 22.731 4.28 5.53

20.1.4 Stock storage pending investigation/ 22.820 2.42 3.20

general

Sub- Total 3774.84 5663.09

20.2 Written down value (WDV) of obsolete / 16.100 450.80 639.61

scrapped assets.

TOTAL 4225.64 6302.70

NOTE - 20 INVENTORIES, STORES AND SPARES

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

NOTE : 21 TRADE RECEIVABLES

(` in Lakh)

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

21.1 Trade Receivables

21.1.1 Sundry Debtors for sale of Power – 23, 47.607, 20358.40 30260.43

LT, HT & Others (Excluding Un billed 47.609

revenue)

21.1.2 Sundry Debtors for Electricity Tax 23.300 3104.99 2905.29

Less :

21.1.3 Provision for withdrawal of Revenue 23.800 173.05 261.66

demand

21.1.4 Provision for Doubtful Dues from 23.900 6217.97 6391.02 6073.10 6334.76

consumers (Credit Account)

Net Receivables against Supply of 17072.37 26830.96

Power

21.2 Sundry debtors outstanding for less than 11931.40 21017.70

6 months & considered good

21.3 Sundry debtors outstanding for more 5140.97 5813.25

than 6 months & considered good

TOTAL 17072.37 26830.96

(` in Lakh)

21.1.1 (a)

allocation for want of details has been shown as deduction from the Sundry Debtors account since this amount is

with the Company.

The outstanding balance in Revenue Suspense Account representing collection from consumers pending

22.1 Balances with Banks

22.1.1 Collecting Bank Accounts 24.300 1619.14 2062.52

(Non-Operative)

22.1.2 Disbursement Bank Account (Operative)

22.1.2.1 State Bank of Mysore 24.401 9.37 0.07

22.1.2.2 State Bank of India 24.402 0.25 1.20

22.1.2.3 Canara Bank 24.404 2.70 8.76

22.1.2.4 Syndicate Bank 24.405 13.74 23.68

22.1.2.5 Vijaya Bank 24.409 17.39 45.96

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016Sl.

No

(` in Lakh)NOTE 22 : CASH AND CASH EQUIVALENTS


83

23.1 Capital Advance

23.1.1 Secured Considered good

23.1.1.1 Advances to Suppliers (Considered 25.501 1034.05 755.70good & Fully Secured)

23.1.1.2 Advances to Contractors 26.6 2485.62 3519.67 1541.86 2297.56

23.1.2 Un-Secured Considered good

23.1.2.1 Loans and advances to Staff - Interest bearing

23.1.3 Loans and advances to Staff - Interest Free

23.1.3.1 Travel advance 27.202 2.64 2.62

23.1.3.2 Festival advance 27.203 40.66 34.91

23.1.3.3 Medical advance 27.204 26.47 22.67

23.1.3.4 Advances to staff against expenses 27.205 47.35 8.99

23.1.3.5 Transformers / meters etc. issued for 27.210 0.22 8.68repairs to the Company personnel

Sub-Total 117.34 77.87

23.2 Advance paid to Power Company of 28.913 - 4.69Karnataka Limited

23.3 Advance paid to M/s. UPCL 28.957 1666.00 1666.00

TOTAL 5303.01 4046.12

27.1 - -

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Sl. No

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016Sl.

No

(` in Lakh)

NOTE 23 : SHORT TERM LOANS AND ADVANCES (` in Lakh)

22.1.2.6 State Bank of Mysore 24.411 47.83 258.76

22.1.2.7 State Bank of India 24.412 33.00 11.63

22.1.2.8 Canara Bank 24.414 193.79 185.23

22.1.2.9 Syndicate Bank 24.415 1073.54 692.59

22.1.2.10 Corporation Bank 24.424 33.99 89.73

22.1.2.11 Punjab Sind Bank 24.425 30.10 0.29

22.1.2.12 AXIS Bank 24.427 0.07 0.07

22.1.2.13 Karnataka Bank 24.428 20.06 10.31

22.1.2.14 Indian Bank 24.429 0.24 0.99

22.1.2.15 Union Bank of India 24.430 3.68 -

Sub-Total 1479.75 1329.27

22.2.1 Cash on Hand 24.110, 66.28 96.29

24.210

22.2.2 Cheques/drafts on hand 24.110 481.94 548.22 311.50 407.79

22.3 Others

22.3.1 Postage stamps on hand 24.120 2.79 1.84

22.3.2 Remittance to head office -in transit 24.500 2.06 -

account

22.3.3 Transfers from Head Office-In Transit 24.600 20.77 71.86

Account

22.4 Fixed deposits in Banks

22.4.1 Margin Money towards L.C. 20.280 250.00 271.30

22.4.2 Un-utilised fund of IPDS Scheme 20.280 955.00 -

22.4.3 Un-utilised fund of DDUGJY Scheme 20.280 2374.00 -

22.4.4 Others 20.280 3.84 3.84

Sub-Total 3582.84 275.14

TOTAL 7255.57 4148.42


84

24.1 Sundry Debtors for Un Billed Revenue 23.400 16971.13 15158.22

24.2 Sundry Debtors- Trading Account 28.100 217.43 241.77

24.3 Income accrued and due on Bank 28.210 21.82 22.12Deposits

24.4 Income accrued and due - others 28.290 34.84 22.85

24.5 Recoverable from GOK

24.5.1 Subsidy receivable from GOK towards 28.626 - - -BJ/KJ consumers

24.5.2 Amount receivable from State Govt. 28.627 28511.34 7402.29towards free supply of power to IP Sets upto 10 HP

Sub-Total 28511.34 7402.29

24.6 Recoverable from Employees

24.6.1 Amount recoverable from Employees 28.401 8.92 0.90

24.6.2 Amount recoverable from Ex-Employees 28.402 0.43 -

24.6.3 Amount recoverable from employees - 28.409 0.61 0.15material related

Sub-Total 9.96 1.05

24.7 Others

24.7.1 Claims for Loss / Damage to Capital 28.749 30.08 32.94Assets

24.7.2 Amount receivable from Panchayaths 28.801 1036.03 603.92towards energisation of Rural Water Supply works

24.7.3 Expenses recoverable from suppliers / 28.810 3.95 3.31contractors

24.7.4 Amount receivable from M/s MSTC Ltd. 28.819 0.25 -towards TDS on Service charges paid by Company

24.7.5 Prepaid Expenses 28.820 38.30 9.21

24.7.6 Excess repayments of State Govt. Loans 28.857 - -

24.7.7 Receivable from other states towards 28.872 1.54 17.10reactive energy charges

24.7.8 Receivable from others 28.898 & - 0.35 28.899

24.7.9 Amount receivable from P&G Trust 28.907 58.29 269.19

24.7.10 Advances paid to SLDC towards 28.910 - 171.68UI Charges

24.7.11 Advance made to M/s. PCKL towards 28.915 - 2.79short term power purchase

24.7.12 Advance made to M/s. PCKL towards 28.916 71.99 -Non- POC bills

24.7.13 Advance made to M/s. PCKL towards 28.917 15.00 20.00payment Legal charges

24.7.14 Advance made to M/s. KREDL towards 28.918 14.07 21.53beneficiary contribution against supply of LED Solar Lanterns

24.7.15 Regulatory Assets - KERC 28.922 90770.93 44954.00

24.7.16 Deposits with Banks towards Bank 28.936 3.00 -Guarantee

24.7.17 M/s. Maruthi Power Gen (Kabini) 41.121 3.81 1.37Pvt. Ltd.,

24.7.18 M/s. Maruthi Power Gen Hemavathi 41.122 0.89 -

Pvt.Ltd.,

24.7.19 M/s. BPCL ( NERIA) 41.124 1.41 1.15

24.7.20 M/s. Sagar Power (Dandela) Pvt. Ltd 41.203 1.93 2.07

24.7.21 M/s. Soham Mannapitlu Power Pvt. Ltd 41.204 1.93 1.57

24.7.22 M/s. Sagar Power (Neerukatte) Pvt. Ltd 41.205 - 2.38

23.1.1(a) Advances given to Suppliers and Contractors are given against the Bank guarantee for the supply of Materials.

ParticularsAccount

CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

(` in Lakh)NOTE 24 : OTHER CURRENT ASSETS


85

24.7.23 M/s. AMR Power Pvt. Ltd 41.206 5.65 -

24.7.24 M/s. SRM Power Pvt. Ltd 41.212 0.05 0.03

24.7.25 M/s. GVP Infra Power Projects 41.217 4.07 4.57

24.7.26 M/s. Soham Phalguni Renewable 41.220 1.22 0.91Energy Pvt Ltd

24.7.27 M/s. Devar power Ltd 41.221 0.61 0.40

24.7.28 Receivable from PCKL - Transfer of 28.919 21959.03 -GP dues as on 31.3.2015 towards securitisation

Sub-Total 114024.03 46120.47

24.8 Inter Unit Accounts (Net) 31 to 37 10.57 -

Sub-Total 10.57 -

TOTAL 159801.12 68968.77

(` in Lakh)

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CodeAs at 31.03.2017 As at 31.03.2016

Sl. No

24.8 (a) IUA Balance includes debit Balance of ` 40000/- pertaining to FY-15, debit Balance of ` 713994 of FY-17 and credit

Balance of ̀ 302780/- Pertaining to the period prior to Fy 2005-06.

24.7.15(a) Regulatory Asset:

Regulatory Assets to the extent of ` 44954.00 Lakhs are created in the accounts for FY 2015-16 by computing the

provisional gap expected to be considered by Hon'ble KERC for inclusion in the tariff revision of future year/s. Hon'ble

KERC has arrived at a Revenue Gap of ` 39574.00 lakhs and carried forward the same for allowing year 2017-18.

Hence excess Regulatory Asset created to the extent of ̀ 5380.00 lakh has been written off during this year itself and

balance amount of ̀ 39574.00 lakh will be reversed during FY 2017-18.

Further fresh regulatory Asset to the extent of ̀ 51196.93 lakh is created in the accounts for FY 2016-17 by computing

the provisional gap expected to be considered by KERC for inclusion in the tariff revision of future years.

24.7.28.a Securitisation of Gram Panchayat Dues: Pursuant to G.O. No. EN 3 PSR 2016/P3 Dated 31.03.2017, the Company has

transferred the accumulated dues from Rural Local bodies together with interest upto 31.03.2015 amounting to

` 21959.00 lakh to PCKL for securitisation of such receivables by PCKL in order to get loans from Banks and utilise

the proceeds of such loans to clear the dues of KPCL. Though PCKL has expressed inability to account this in their

books as of 31.03.2017, vide their letter dated 14.07.2017, the Company has transferred the dues from local bodies as

above to PCKL to comply with the G.O.

25.1 Revenue from Operations

25.1.1 REVENUE FROM SALE OF POWER–LT

25.1.1.1 Bhagya jyothi Scheme. 61.101 1024.76 959.00

25.1.1.2 Revenue from sale of power BJ/KJ 61.402 1027.01 924.53

up to 18 Units

25.1.1.3 Domestic combined lighting, heating 61.110 64810.69 57252.85

and motive power, Private, Professional 61.111

and unaided educational institutions

25.1.1.4 Commercial and Non-Industrial Lights 61.115 28983.72 26462.99

and Fans.

25.1.1.5 Irrigation Pump Sets (10 HP & below)/ 61.119 77557.62 50177.25

Water Lifting.

25.1.1.6 Irrigation Pump sets (above 10 HP)/ 61.120 63.17 55.81

Water Lifting.

25.1.1.7 Water supply-V.P, T.P and Others 61.125 5551.62 4650.06

25.1.1.8 Private Horticultural Nurseries, Coffee, 61.121 405.26 303.05

Tea, Coconut and Areca nut Plantations

25.1.1.9 Industrial, Non-Industrial, Heating and 61.129 - 9318.34 8851.96

Motive Power including Lighting 61.133

25.1.1.10 Public Lighting-V.P, T.P and Others 61.140 4877.89 3607.04

25.1.1.11 Temporary Power Supply - Non- 61.145 2715.00 2478.71

commercial lights and fans and other

small appliances.

Sub-Total 196335.08 155723.25

(` in Lakh)NOTE : 25 REVENUE FROM OPERATIONS

ParticularsAccount

CodeFor the year 2016-17 For the year 2015-16

Sl. No


86

25.1.2 Revenue from Sale of Power – HT

25.1.2.1 Public Water Supply & Sewerage 61.250 4412.61 3875.34

Pumping

25.1.2.2 Industrial, Non-industrial and 61.255 44382.56 41780.86

Commercial purposes & Railway Traction

25.1.2.3 Commercial. 61.256 16398.65 14782.46

25.1.2.4 Hospitals and Educational Institutions 61.257 2641.68 2506.99

maintained by Govt/ Local bodies

25.1.2.5 Hospitals and Educational Institutions 61.258 8682.64 8601.77

maintained by Others

25.1.2.6 Irrigation and Agricultural Farms, Lift 61.260 449.64 236.73

Irrigation Societies, Lift Irrigation

Schemes and Govt., Horticultural Farms

25.1.2.7 Private Horticultural Nurseries, Coffee 61.261 10.58 11.74

and Tea Plantations

25.1.2.8 Residential apartments and colonies 61.271 1191.46 1014.67

availing power supply independently

25.1.2.9 Temporary power supply 61.290 682.06 953.57

Sub-Total 78851.88 73764.13

TOTAL REVENUE FROM OPERATIONS 275186.96 229487.38

25.2 Fuel cost Adjustment charges LT & HT 61.400 1787.91 1405.75

25.3 Less: Withdrawal of Revenue Demand 83.830, 76.08 146.31

83.831,

83.832,

83.833

REVENUE FROM OPERATIONS 276898.79 230746.82

25.4 OTHER REVENUE FROM OPERATIONS

25.4.1 Wheeling charges recoveries 61.800 - ` -

25.4.2 Miscellaneous charges from

Consumers

25.4.2.1 Service Connection charges 61.904 839.42 558.08

25.4.2.2 Other Receipts from consumers 61.906 162.93 137.21

25.4.2.3 Amount collected for green tariff 61.907 77.21 22.62

25.4.2.4 Incentives received 62.918 1609.53 2181.49

25.4.2.5 Other income relating to purchase of 62.919 839.34 676.99

power

Sub- Total 3528.43 3576.39

25.5 Regulatory Assets

25.5.1 Income on account of Regulatory 61.910 45816.93 34852.00

Assets/ Truing up Subsidy.

NET REVENUE FROM OPERATIONS 326244.15 269175.21

ParticularsAccount

CodeSl. No

(` in Lakh)

For the year 2016-17 For the year 2015-16

25.6 Total Revenue from sale of energy during 2016-17 includes ` 16971.13 Lakh in respect of revenue accrued but pending

billing at the year end as against a sum of ̀ 15158.22 Lakh during the previous year.

25.7 During the Year the amount to be received from the GoK as subsidy towards free power supply to IP set consumers having

connected load of upto and inclusive of 10 HP and free power supply to BJ/KJ consumers with consumption upto 18 units,

on actual basis are ` 77038.00 Lakh and ` 1027.01 lakh respectively. As against this GoK has released an amount of

` 51599.00 lakh and ̀ 1027.01 lakh for IP Set and BJ/ KJ installations respectively.

Further GoK has also released ̀ 4331.00 lakh against the arrears subsidy of previous years.


87

NOTE: 26 OTHER INCOME

26.1 Interest Income

26.1.1 From Consumers

26.1.1.1 Delayed payment charges from 61.905 3012.00 4856.04

consumers

26.1.2 From Others

26.1.2.1 Interest on Bank Fixed Deposits 62.222 70.38 24.86

26.1.2.2 Interest earned on un-utilized funds 62.290 -32.11 -

payable to MOP - Debit Account

Sub-Total 3050.27 4880.90

26.2 Other Non-operating Income

26.2.1 Interest on Loans and Advances to 62.240 0.98 18.72

Licenses

26.2.2 Interest on advance to Suppliers/ 62.260 3.72 0.86

Contractors

26.2.3 Interest on Savings Bank Account 62.270 1.57 5.45

26.2.4 Profit on sale of stores 62.330 10.16 7.17

26.2.5 Sale of scrap 62.340 159.56 166.00

26.2.6 Other Miscellaneous receipts from 62.360 1.01 0.71

Trading

26.2.7 Gain on Sale of Assets 62.400 0.02 0.01

Sub-Total 177.02 198.92

26.3 Miscellaneous Receipts

26.3.1 Rental from Staff Quarters 62.901 124.01 118.12

26.3.2 Rental from others 62.902 4.41 10.58

26.3.3 Excess found on physical verification 62.905 0.61 3.98

of Materials Stock

26.3.4 Rebate for collection of Electricity Duty 62.916 50.97 49.35

26.3.5 Miscellaneous Recoveries 62.917 4510.34 1476.26

26.3.6 Recoveries for Theft of power 61.710 1.21 1.52

26.3.7 Interest received from Income Tax 62.920 14.51 33.10

Department

Sub-Total 4706.06 1692.91

26.4 Income relating to previous years :

26.4.1 Excess provision for Interest and 65.700 24.96 6.36

Finance Charges in prior periods

26.4.2 Other Excess provision in prior periods 65.800 6978.60 797.80

26.4.3 Other Income relating to prior periods 65.900 904.46 115.43

Sub-Total 7908.02 919.59

TOTAL 15841.37 7692.32

ParticularsAccount

CodeSl. No

(` in Lakh)

26.1.1 (a) Since the arrears in respect of IP set Consumers having connected load upto 10 HP is freezed with effect from

01.08.08, the Company has stopped charging interest on this arrears from the year 2011-12.

26.5 Electricity Taxes: The Electricity Tax collected from Consumers and payable to GOK during FY 2016-17

is ` 10078.61 lakh. Out of this GoK has adjusted ` 10194.00 lakh to Tariff Subsidy receivable from GoK

during the year.



88

NOTE : 27 PURCHASE OF POWER

27.1 Purchase of Power

27.1.1 M/s. KPCL 70.108 71267.18 83680.01

27.1.2 M/s. NTPC RSTPS 70.110 25641.16 16877.89

27.1.3 M/s. Madras Automic Power Station 70.111 394.87 372.78

27.1.4 M/s. Neyveli Lignite Corporation Ltd., 70.112 13390.65 8114.47

27.1.5 M/s NPCIL-Kaiga 70.114 4799.73 5487.95

27.1.6 M/s. Sandur Power Company Ltd., 70.115 2186.66 2293.50

27.1.7 M/s. Sahyadri Power Company Ltd., 70.116 19.91 19.05

27.1.8 M/s. Master Power 70.118 122.20 151.90

27.1.9 M/s. Subhash Kabini 70.119 1285.30 1741.06

27.1.10 M/s. Graphite India Ltd., 70.120 39.17 150.23

27.1.11 M/s. Maruthi Power Gen(I) Kabini Pvt.Ltd., 70.121 58.63 140.69

27.1.12 M/s. Maruthi Power Gen Hemavathi 70.122 -0.89 62.78

Pvt. Ltd.,

27.1.13 M/s. Moodabagil Power Pvt. Ltd. 70.123 23.00 34.87

27.1.14 M/s. Bhoruka power corporation Ltd., 70.124 579.21 634.42

(NERIA)

27.1.15 M/s. Mrujara Power Plant 70.126 37.06 62.10

27.1.16 M/s. UPCL 70.132 26659.30 15983.25

27.1.17 Wind Mill Projects 70.140 10187.52 9614.88

27.1.18 Solar Power Projects 70.150 5572.64 2645.13

27.1.19 Solar Roof-top P.V. Generation plants 70.501 194.85 16.73

27.1.20 M/s. Mysore Paper Mills Ltd., 70.195 - 63.31

27.1.21 M/s. NTPC-VVNL 70.198 2373.10 2390.78

27.1.22 M/s. Shamili Hydel Power Project 70.202 553.66 660.68

27.1.23 M/s. Sagar Power (Dandela) Pvt. Ltd., 70.203 445.22 482.84

27.1.24 M/s. Soham Mannapitlu Power Pvt. Ltd., 70.204 870.59 824.44

27.1.25 M/s. Sagar Power (Neerukatte) Pvt. Ltd., 70.205 435.67 567.86

27.1.26 M/s. AMR Power Pvt. Ltd. 70.206 - -

27.1.27 KPTCL transmission charges 70.161 24838.12 21870.34

27.1.28 SLDC Charges 70.162 157.66 170.97

27.1.29 PGCIL transmission charges 70.163 11170.87 7181.08

27.1.30 Transmission charges to M/s TNEB 70.164 4.75 3.28

27.1.31 M/s SRM Power Pvt Ltd 70.212 219.85 227.13

27.1.32 PGCIL NON POC bill 70.213 25.50 24.03

27.1.33 M/s. Kundanlkulam – Non POC charges 70.214 4834.74 1421.96

27.1.34 M/s.Welspun Solar – Non POC charges 70.215 - -

27.1.35 M/s. Vasgi Power Projects Ltd 70.216 27.13 30.26

27.1.36 M/s.GVP Infra Power Projects Ltd. 70.217 252.84 185.83

27.1.37 M/s.Jurala Power Project 70.218 472.72 478.57

27.1.38 M/s NLC Tamilnadu Power Ltd 70.219 4799.23 2130.31

27.1.39 M/s Soham Phalguni Renewable 70.220 492.90 224.46

Energy Pvt Ltd

27.1.40 M/s Devar Power Ltd 70.221 170.08 127.24

27.1.41 STOA UI charges 70.222 - -

27.1.42 M/s Damodhar Valley Corporation Ltd. 70.223 11916.20 1974.34

Sub-Total 226518.98 189123.40

27.2 Purchases from others (Other than

Long term PPAs)

27.2.1 UI Charges credits received 70.171 - -

27.2.2 UI charges 70.172 1259.40 1422.86

27.2.3 Short term power purchased from 70.200 50.01 -

IEX / PXI

27.2.4 Non PPA Co-generation Units 70.208 2940.47 11335.10

ParticularsAccount

CodeSl. No

( in Lakh)`



89

27.2.5 JSW power trading Company limited 70.211 9848.36 3022.40

27.2.6 BMM Ispat Ltd., 70.211 596.34 2759.39

27.2.7 Nirani Sugars Ltd 70.211 55.47 195.47

27.2.8 Hare Krishna Metalics & Others 70.211 - 25.93

27.2.9 Gujarath Urja Vikas Nigam Ltd., 70.211 - -

27.2.10 Athani Sugars Ltd 70.211 - 298.06

27.2.11 M/s GMR Energy ltd 70.211 - 486.37

27.2.12 M/s Tata Power Trading Ltd 70.211 577.22 2073.34

27.2.13 NSL Sugars Ltd 70.211 8.61 12.13

27.2.14 NSL Sugars Koppa 70.211 38.15 106.63

27.2.15 NSL Sugars TB 70.211 51.29 164.31

27.2.16 M/s Global Energy 70.211 - 185.48

27.2.17 M/s TATA PTCPL 70.211 147.39 38.26

27.2.18 M/s Sathish Sugars 70.211 41.46 267.78

27.2.19 M/s Reliance Energy 70.211 - -

27.2.20 M/s Dhruvadesh Meta Steel 70.211 - 34.33

27.2.21 M/s PTCIL 70.211 74.57 564.92

27.2.22 M/s Mittal Steel 70.211 172.03 764.47

27.2.23 M/s Balakeshwar 70.211 6.66 68.28

27.2.24 M/s JSW PTC 70.211 1861.42 6739.88

27.2.25 M/s Kalyani Power/ Pune Power Ltd 70.211 - -

27.2.26 M/s Prabhulingeshwara sugars 70.211 30.64 -

27.2.27 M/s Fortune five hydel projects Ltd 70.211 - -

27.2.28 M/s Bradavavan Hydro 70.211 - -

27.2.29 M/s Ambuthirtha Power Pvt Ltd 70.211 14.16 26.91

27.2.30 Tunga Badra Hydro Energy 70.211 27.73 44.82

27.2.31 M/s Ugar Sugar works Ltd 70.211 - 0.43

27.2.32 M/s Davanagere Sugar Company Ltd. 70.211 - 2.38

27.2.33 M/s IEPL 70.211 - 63.29

27.2.34 M/s. Coregreen Sugars 70.211 10.81 -

27.2.35 M/s. EID Parry (India) Ltd-Bagalkot 70.211 38.78 -

27.2.36 M/s. EID Parry (India) Ltd-Halliyal 70.211 47.56 -

27.2.37 M/s. GEM Sugars Ltd 70.211 44.15 -

27.2.38 M/s. Godavari Biorefineries Ltd., 70.211 91.79 -

27.2.39 M/s. Jamkhandi Sugars Ltd I 70.211 27.50 -

27.2.40 M/s. Jamkhandi Sugars Ltd II 70.211 16.71 -

27.2.41 M/s. KPR Sugars Ltd. 70.211 25.78 -

27.2.42 M/s. Manali Sugars Ltd., 70.211 1.05 -

27.2.43 M/s. Shiraguppi Sugars Ltd., 70.211 25.66 -

27.2.44 M/s. Shivashakthi Sugars Ltd., 70.211 28.11 -

27.2.45 M/s. Soubhagyalaxmi Sugars 70.211 2.89 -

27.2.46 M/s. Sri Chamundeshwari Sugar 70.211 24.57 -

27.2.47 M/s. Renuka Sugars Ltd.,(Burlatti)/ 70.211 20.08 -

(Athani)

27.2.48 M/s. Renuka Sugars Ltd., (Havalga) 70.211 45.27 -

27.2.49 M/s. Renuka Sugars Ltd (Munoli) 70.211 10.45 -

27.2.50 M/s. Vijayanagar Sugar Pvt Ltd., 70.211 7.06 -

Mundargi

27.2.51 M/s. Sri Balaji Sugars & Chemicals 70.211 64.94 -

Pvt Ltd (Other Non recurring bills)

27.2.52 Un-scheduled Energy & Infirm Energy 70.211 385.35 -

27.2.53 M/s green Infra wind power generation Ltd 70.211 10.08 -

Sub-Total 18729.97 30703.22

27.3 Power Purchase cost accounted on 70.209 8921.80 3229.60

basis of energy balancing

TOTAL 254170.75 223056.22

(` in Lakh)

ParticularsAccount

CodeSl. No



90

27.4 With effect from 1.4.2016, share of power project capacity allocated to MESCOM has been revised vide GOK notification

No. EN 22 PSR 2016 dated 18.03.2016. Power Purchase Cost is being accounted for and paid as per the above share

which is readjusted at the end of the year based upon actual drawal of energy for the year.

27.5 MESCOM is arranging payment to the power suppliers based on the notional share basis fixed and notified by the Govt.

of Karnataka from time to time. Based on the reconciled energy balancing report furnished by LDC upto the year

2016-17, the results have been incorporated in the books of account of MESCOM.

27.6 M/s NLC Ltd. :M/s NLC Ltd., have filed truing up petition for the period 09-14 and tariff petition for the period 14-19 as per

CERC Tariff Regulation 2009 and it continued to bill provisionally at the tariff approved by the Commission and applicable

as on 31.03.2014 for the period from 01.04.2014 and on finalization of tariff by CERC,the amount under paid/paid in

excess along with simple interest shall be paid to/recovered from NLC.

27.7 Kaiga , MAPS : The rates for PP from Kaiga Units I to IV and MAPS are as per notifications of DAE7/20/2011-Power/1623

and 7/19/2011-Power/1570 respectively both dated 08.02.2012 and are valid till 30.06.2015. However the same rates are

being continued beyond June 2015 as per Article 8.1.3 of the PPA dated 08.10.08 as the new tariff is yet to be notified by

DAE, GOI and on finalization of tariff by DAE the amount under paid/paid in excess shall be paid to/ recovered from Kaiga

and Maps.

27.8 In the case of certain CGS Thermal stations, CERC regulations allow taking NAPAF at 83% instead of 85% in view of

uncertainty of assured supply of coal on sustained basis till it is reviewed. Based on the above regulation some CGS

thermal stations billings have been admitted at 83% NAPAF for computation of capacity charges. CERC is yet to review

this and on finalization of the review by CERC, the amount under paid/paid in excess shall be paid to/recovered from the

parties concerned.

27.9 M/s GMR Energy Ltd. : PCKL & ESCOMs have filed Civil Appeal No. 8439-40/2014 Vs M/s GMR Energy Ltd., & Others

against APTEL order dated 23.05.2014 in Appeal No. 303/2013 & 37/2013 filed by ESCOMs and M/s GMR Energy Ltd.,

respectively. The issue is with respect to tariff payable for the energy supplied under Section-11 during the period Jan-09

to May-09. As per the conditional stay order dated 22.11.2015 of Hon’ble Supreme Court of India, MESCOM has

discharged its share of liability (principal) of ̀ 426 lakhs on 22.01.2016. The case is still pending for adjudication.

27.10 M/s J. K Cements & M/s Himatsingka Seide Ltd.: PCKL & ESCOMs have filed Civil Appeal No. 3577-78 /2015 before

Hon’ble Supreme Court against APTEL order dated 12.11.2014 in RP No. 11/2014. The issue is regarding determination

of tariff for the energy supplied under Section-11during the period Apr-10 & May-10 to Jun-10. As per the interim order

dated 13.05.2016 of Hon’ble Supreme Court, MESCOM has filed before Hon’ble KERC Corporate Guarantees issued in

favour of M/s J.K Cements & M/s Himatsingka Seide Ltd., to the extent of ̀ 5.69 Lakh & ̀ 18.76 Lakh respectively.

27.11 M/s TATA Power Ltd.: PCKL & ESCOMs have filed Civil Appeal No. 21462/2014 before the Hon’ble Supreme Court of

India, on the dismissal order dated 02.05.2014 passed by Hon’ble APTEL in Appeal No. 330/2013 field by BESCOM,

MESCOM & PCKL, in respect of reimbursement claim of ` 1630 lakhs of MAT paid during 2006-07 to 2009-10 by

M/s TATA Power Ltd., The case is pending for adjudication. This includes MESCOM’s share of ̀ 300 lakhs.

27.12 UPCL: In respect of 1200 MW capacity project of M/s UPCL, Hon’ble CERC has determined the tariff vide order dated

10.07.2015 and it is subject to truing up in terms of Regulation 6 of the 2009 tariff regulations. The truing up Petition No.

07/GT/2016 is pending for disposal at CERC. As CERC is yet to redetermine the tariff, the same provision of ̀ 4200 lakhs

for the period from 11.11.2010 to 31.01.2013 made in FY 14 is being continued as contingent liability. Further, the tariff

invoices of UPCL are being admitted provisionally by MESCOM to avoid delay in payment. However PCKL on behalf of all

ESCOMs has worked out the monthly bill amount and also dues payable to UPCL as per CERC order dated 10.07.2015.

PCKL is yet to decide and intimate the difference in bill amount to be booked by ESCOMs. UPCL has invoked “force

majure” clause for Bills raised during 2015-16 by taking the number of days as 342.66 which has not been considered by

MESCOM. The Coal Jetty consumption for the FY 2015-16 is being charged at average tariff for the month and is being

deducted in the monthly billing whereas UPCL is considering energy charge rate only. However the treatment of Coal

Jetty consumption is under adjudication in the Court.

27.13 KPCL Dues: As per MESCOM books of Accounts, the outstanding dues payable to KPCL as on 31.03.2017 is ̀ 80501

lakhs. The demand and balance were reconciled upto FY 2011-12 on 27.02.2013.

27.14 In the case of Central Generating Stations, where the PAF is less than 83%, the NAPAF is considered as 83% for recovery

of fixed charges in accordance with Regulation 36 of CERC Tariff Regulations 2014.

27.15 Interest on KPCL Dues: It was decided in the KERC meeting held on 28.05.2014 that, in respect of KPCL, arrears of both

energy charges payable and the interest there on up to 31.03.14 need to be dealt with separately and resolved with the

financial support of Government of Karnataka. Accordingly, MESCOM has not provided interest from Fy-16 on KPCL

dues pending as on 31.03.2014 and the same was brought to the notice of GoK vide letter dated 10.06.2016. However,

the interest accounted to the extent of ̀ 42835 lakhs up to 31.03.2015 is now being continued.


91

27.16 NTPC Simhadri STPS : In the case of Simhadri STPS of NTPC Ltd., the tariff for FY 15 to 19 is yet to be determined by

Hon’ble CERC. M/s NTPC Ltd., has provisionally continued to claim the capacity charges as per tariff determined vide

order dated 02.11.2015 for FY 12 to FY 14 with correction in ROE, the impact of which will be adjusted as and when the

tariff is finalized.

27.17 The Energy Balancing Dues and other dues relating to short term and medium term power transactions among ESCOMs

are reconciled up to 31.03.2017.

27.18 GoK Vide Government order dated 16.09.2015 has invoked section-11, in which it was ordered that all generators

existing and operating in Karnataka State to operate and maintain generating stations to the maximum exportable

capacity with a provisional tariff of ` 5.08 per unit which is subject to determination of final tariff by KERC. KERC in the

common order dated 18.08.16 has determined the tariff for the energy supplied under section 11 at ` 4.67 per unit.

However there is a stay order for the said order of KERC.

27.19 M/s AMR: M/s AMR was having power purchase agreement with MESCOM which was executed on 02.08.2006. The tariff

fixed for the project for sale of power to MESCOM was ` 2.80/unit. MESCOM filed a petition in OP No. 37/2012 on

09.08.2012 before Hon’ble KERC praying for quashing the Notice of Termination dated 22.07.2011 served by the

generator. KERC passed an interim order dated 23.08.2012 to maintain status quo pending disposal of the main petition.

The generator filed an appeal before Hon’ble ATE in appeal No. 223/2012 questioning the interim order of KERC dated

23.08.2012 to maintain the status quo. Hon’ble ATE disposed the appeal No. 223/2012 in the order dated 04.01.2013 with

a direction to Hon’ble KERC to dispose the matter pending in OP No.37/2012 as expeditiously as possible and to pass

appropriate order in accordance with law. Hon’ble KERC in the order dated 14.08.2013 dismissed the petition filed by

MESCOM in OP No. 37/2012. Aggrieved by the order dated 14.08.2013 of Hon’ble KERC in OP No.37/2012, MESCOM

filed an appeal No. 275/2013 seeking to execute wheeling & banking agreement for wheeling of energy. Hon’ble ATE

passed an interim order on 27.03.2014 directing MESCOM to execute wheeling & banking. As a last resort, MESCOM

had also challenged the Order dated 17.10.2014 of Hon’ble ATE in appeal no. 275/2013 before the Hon’ble Supreme

Court of India in Civil Appeal No. 1665/2015. The Hon’ble Supreme Court of India while disposing of the Civil Appeal

No.1665/2015 in the order dated 15.09.2016 has confirmed the order of APTEL.

In the letter dated 08.05.2017, M/s AMR power Pvt Ltd, has claimed an amount of ` 19070 lakhs including interest as

receivable from MESCOM stated to be the liability of MESCOM towards energy supplied in the non-PPA period from

22.07.2011 to 16.10.2014. Since the claim is stated to be as per Hon’ble Supreme Court order the matter has been placed

before MESCOM Board of Director meeting scheduled on 22.07.2017 seeking approval for mutual negotiations.

27.20 KPTCL had raised a demand at 26.23 paise per unit for the transmission of electricity for the year 2006-07 against which

the company has admitted the bills at 19.42 paise per unit as per KERC order. However, KPTCL has appealed against the

order of KERC with Appellate Tribunal for Electricity, New Delhi. The ATE has passed on order requiring KERC to carry out

certain modification in its transmission tariff. The KERC preferred an appeal against the order of ATE at Hon’ble Supreme

Court, New Delhi. The appeal is pending for disposal before the Hon’ble Supreme Court. MESCOM may contingently be

liable for an amount of ̀ 1974 lakhs. If orders are passed in favour of KPTCL.

27.21 KPTCL vide letter No FA(A&R)/C(AP&A)./DC(A&C)/AAO1/Cys-104 dated 15.03.2007 has communicated to MESCOM to

create Regulatory Assets & Regulatory Liabilities for additional fixed cost paid by KPTCL to M/s Tannir Bhavi Power

Company Ltd, based on the order of ATE in which the appeal of KPTCL was allowed for passing the cost on Consumers.

The order of the ATE has been contested by FKCCI and KERC before the Hon’ble Supreme Court of India and the same is

pending. MESCOM may contingently be liable to pay a sum of ` 4538 lakhs, of principal and ` 122 lakhs as interest to

KPTCL by collection through tariff from consumers based upon the finalization of issue by Hon’ble KERC.

27.22 M/s. MPM: MESCOM has entered into PPA with M/s MPM Ltd., on 13.09.2006 for purchase of surplus power generated

from the captive power plant at the tariff of ` 2.20/KWh with 2% annual escalation on base tariff for a period of 10 years

from 01.11.2000. From the 10th year onwards i.e from 01.11.2010, the tariff has to be negotiated based on operating cost

and incentives. KERC has also directed MESCOM vide letter dated 22.12.2010 to negotiate the tariff. As MPM Ltd., has

not placed any proposal for tariff fixation, it was intimated to the firm vide letter dated 18.04.2011 that the 10th years tariff of

` 2.596/KWh would be applied till finalization of the tariff. In this regard, a joint meeting was also convened at MESCOM,

Corporate Office on 18.01.2013. As decided in the meeting the firm was requested vide this office letter dated 30.01.2013

to furnish a detailed tariff proposal along with a cost audit report, working sheet for tariff with technical parameters. But

the firm has not come forward with the details so far. Hence the exported energy is being billed at ` 2.596/Kwh without

any escalation from 01.11.2010 and is adjusted against the dues of their EHT installation bearing RR No. BCHT2.


92

28.1 Salaries and Wages

28.1.1 Salaries 75.100 13591.61 12135.53

28.1.2 Over Time 75.200 214.39 266.30

28.1.3 Dearness Allowance 75.300 4442.23 3713.80

28.1.4 Other Allowances 75.400 1655.51 1655.11

28.1.5 Bonus 75.500 389.57 401.34

28.1.6 Medical Expenses reimbursement 75.611 171.08 203.68

28.1.7 Leave travel assistance 75.612 0.22 -

28.1.8 Earned leave encashment 75.617 1357.60 1078.69

28.1.9 Earned leave encashment to retired 75.618 377.85 439.43

employees

28.1.10 Payment to helpers/employees of 75.630 0.98 25.43

Monsoon gang

28.1.11 Pension & Leave contribution of 75.890 25.41 22.46

employees on deputation

Sub-Total 22226.45 19941.77

28.2 Contribution to Provident and Other

Funds

28.2.1 Terminal benefits (PF) Corporation 75.810 21.71 16.11

Contribution

28.2.2 Terminal benefits (Pension) Corporation 75.830 3097.01 3523.72

Contribution

28.2.3 Terminal Benefits Company contribution 75.831 609.75 554.46

to Contributory pension scheme with

effect from 01.04.06

28.2.4 Terminal Benefits Departmental 75.832 0.45 -

contribution under NDCPS -Deputed

Employees

28.2.5 Terminal Benefits (Gratuity) 75.840 408.00 545.73

Sub-Total 4136.92 4640.02

28.3 Staff Welfare expenses 75.7, 334.61 342.29

75.845,

75.860,

75.880

TOTAL 26697.98 24924.08

NOTE : 28 EMPLOYEE COSTS

ParticularsAccount

CodeSl. No

( in Lakh)`


28.4 Employee Benefits:

28.4.1 Short Term Employee Benefits:

28.4.1.1 Short Term Employee Benefits are recognized as an expense in the profit and loss Statement for the year in which

related services are rendered.

28.4.2 Post Employment Benefits:

28.4.2.1 The Company makes contribution for Pension and Gratuity to KPTCL/ESCOM’s Pension and Gratuity Trust. The same

becomes a Multi-Employer Defined Benefit Plan. Any revision in contribution due to actuarial valuation by the Trust is

accounted in the year of intimation by the Trust.

For employees who have joined the Company on or after 1.4.2006, the pension plan is Multi-Employer Defined

Contribution Plan.

27.23 KPCL had preferred supplementary claim in March 2017 relating to BTPS unit-1 for revision of fixed charges for the

2008-09 to 2015-16 due to revision in the debt equity ratio from 80:20 to 88.65:11.35, amounting to ̀ 12.82 crs. However, it

appears that, there are some discrepancies in the claim. The same has to be reconciled and will be accounted in the

ensuing year.


93

NOTE : 29 - FINANCIAL COSTS- INTEREST AND OTHER BANK CHARGES (NET)

ParticularsAccount

CodeSl. No

(` in Lakh)

29.1 Interest Expenses

29.1.1 Interest on Consumers' Security

Deposits

29.1.1.1 Interest on ISD, ASD & MSD 78.600 3567.91 3555.02

29.1.2 Interest on power purchase dues

29.1.2.1 M/s KPCL 80.108 286.50 29.22

29.1.2.2 M/s. UPCL 80.132 - -

29.1.2.3 M/s. Wind Mills 80.140 - -

29.1.3 Interest on Loans

29.1.3.1 Interest on GOK Loans

29.1.3.1.1 Interest on Central Govt. Loan towards 78.101 0.61 4.45

Power Sector Automation

29.1.3.1.2 Interest on PMGY Loan 78.573 8.16 9.10

29.1.3.1.3 Interest on GOK Loan for energization 78.580 - 1.32

of IP sets under GK Scheme

Sub- Total 8.77 14.87

29.1.3.2 Interest on REC loans

29.1.3.2.1 Interest on Loan from REC 78.540 14.04 26.45

29.1.3.2.2 Interest on loan drawn by MESCOM 78.591 11.22 13.19

from REC– APDRP works


from REC – General


from REC – RGGVY Works

29.1.3.2.5 Interest on Bulk loan from Rural 78.597 390.91 427.29

Electrification Corporation

Sub- Total 610.08 679.01

29.1.3.3 Interest on PFC loans

29.1.3.3.1 Interest on Loan from Commercial Banks 78.560 8062.70 6792.60

Total Interest on Loans 8681.55 7486.48

29.2 Other Borrowing Costs

29.2.1 Other Interest and Finance Charges 78.800 394.78 120.13

Gross Finance Costs 12930.74 11190.85

29.3 Less : Interest and finance charges

capitalised

29.3.1 Capitalisation of interest on funds used 78.900 239.64 130.43

during construction

TOTAL 12691.10 11060.42


29.6 NEF (Interest Subsidy) Scheme: Govt. of India vide Office Memorandum No. 24/01/2012-NEF/APDRP dated 14.03.2012,

has approved the NEF (Interest Subsidy) Scheme to promote the capital investment in the distribution sector by providing

interest subsidy, linked with reform measures, on the loans taken by public and private power utilities for various capital

works under Distribution projects.

The interest subsidy will be provided by the GOI duly considering the achievements in various parameters. Company has

submitted the proposals of interest subsidy to REC which is a nodal Agency for implementing this Scheme, for granting

interest Subsidy in respect of two loans obtained from M/s RECL. But Company has not received any subsidy in this regard.

Since the amount of interest subsidy can not be ascertained by the Company, no adjustments are made in the accounts.


94

31.1 Repairs

31.1.1 Buildings 74.200 116.79 132.32

31.1.2 Plant and Machinery 74.100 1140.55 1328.18

31.1.3 Lines, Cable Net Work Etc. 74.500 2283.05 1782.83

31.1.4 Civil Works 74.300 10.52 14.47

31.1.5 Vehicles 74.600 19.89 25.20

31.1.6 Furniture and Fixtures 74.700 0.17 0.33

31.1.7 Office Equipments. 74.800 17.13 20.35

Sub-Total 3588.10 3303.68

31.2 Power and Fuel

31.2.1 Electricity Charges 76.158 95.82 80.19

31.2.2 Fuel expenses for generators 76.161 1.01 2.09

Sub- Total 96.83 82.28

31.3 Rent

31.3.1 Rent (including lease rentals) 76.101 215.87 220.84

Sub- Total 215.87 220.84

31.4 Rates and Taxes excluding Taxes on 76.102 8.72 7.49

Income

31.5 Miscellaneous Expenses

31.5.1 Payment to Auditors

30.1 Depreciation on Fixed Assets

30.1.1 Amortisation of Lease hold Assets 77.110 7.29 3.50

30.1.2 Depreciation on Buildings 77.120 162.93 111.01

30.1.3 Depreciation on Hydraulic Works 77.130 13.35 12.83

30.1.4 Depreciation on Civil Works 77.140 2.53 2.20

30.1.5 Depreciation on Plant and Machinery 77.150 2072.02 1773.99

30.1.6 Depreciation on lines, cable, network 77.160 8056.21 7287.08

etc.,

30.1.7 Depreciation on Vehicles 77.170 18.13 11.67

30.1.8 Depreciation on furniture, fixtures 77.180 28.26 17.55

30.1.9 Depreciation on Office equipments 77.190 7.60 3.10

Sub-Total 10368.32 9222.93

30.1.10 Depreciation withdrawn on Assets -2872.75 -2634.33

Created out of Govt. grants /

Consumers Contributions

Total 7495.57 6588.60

30.1.11 Add : Depreciation under provided 83.6 461.36 643.71

in previous years

30.1.12 Less : Excess provision for 65.6 144.82 858.45

Depreciation in prior periods

Deprecition on Fixed Assets 7812.11 6373.86

30.2 Depreciation on Released Assets

30.2.1 Plant and Machinery 77.151 28.40 31.23

30.2.2 Lines. Cable, network etc 77.161 4.02 3.05

30.2.3 Office equipments 77.191 - -

Sub-Total 32.42 34.28

Depreciation (Net) 7844.53 6408.14

NOTE : 30 DEPRECIATION AND AMORTIZATION EXPENSES (NET)

ParticularsAccount

CodeSl. No

( in Lakh)`


NOTE : 31 OTHER EXPENSES

ParticularsAccount

CodeSl. No

(` in Lakh)



95

ParticularsAccount

CodeSl. No


31.5.1.1 Payment to statutory Auditors

31.5.1.1.1 As Auditor 76.122 2.20 2.20

31.5.1.1.2 Taxation Matter 76.122 0.55 0.55

31.5.1.1.3 Reimbursement of Expenses 76.125 - -

31.5.1.2 Payment to Cost Auditors

31.5.1.2.1 As Auditor 76.122 0.75 0.75

31.5.1.2.2 Taxation Matter - -

31.5.1.2.3 Reimbursement of Expenses - -

Total Payment to Auditors 3.50 3.50

31.6 Other A&G Expenses

31.6.1 Service Tax payment to service provider 76.107 391.74 247.85

on Revenue expenditure bills

31.6.2 Service Tax payment to central excise 76.108 358.02 347.78

customs & service Tax Department on

Revenue expenditure bills

31.6.3 Service Tax – Payment to Service 76.109 122.26 21.39

provider on Capital Expenditure bills

31.6.4 Service Tax – Payment to Central Excise, 76.110 68.53 22.77

Customs and Service Tax Department

on Capital expenditure bills

31.6.5 Pagers cellular phones E-mail & other 76.111 17.34 21.55

communication charges

31.6.6 Telephone, Trunk call, Telegrams and 76.112 93.32 78.61

Telex Charges

31.6.7 Mobile Phone Charges 76.114 50.99 47.72

31.6.8 Postage 76.113 18.89 23.55

31.6.9 Legal Charges 76.121 33.82 32.62

31.6.10 Consultancy charges 76.123 21.81 8.29

31.6.11 Other Professional charges 76.125 214.02 4.78

31.6.12 Remuneration to Contract Agencies for 76.126 340.67 349.57

opening & maintenece of ledger

Accounts

31.6.13 Remuneration to Private Contractor 76.127 208.07 206.80

engaged for shift and minor

maintenance duties of stations/MUSS

31.6.14 Remuneration paid to Chartered 76.128 5.16 5.77

Accountants for auditing cash &

Revenue Accounts

31.6.15 Remuneration paid to Contract 76.129 2479.88 3346.10

Agencies/ Services obtained

31.6.16 Remuneration paid to Grama Vidhyuth 76.130 187.08 69.55

Prathinidhis

31.6.17 Conveyance expenses 76.131 0.33 0.40

31.6.18 Travelling expenses 76.132 1.64 8.66

31.6.19 Travelling allowance to employees 76.133 513.22 319.00

31.6.20 Travelling Allowance to Contract 76.134 - 1.41

Employees

31.6.21 Vehicle hiring expenses for vehicles 76.135 280.62 258.72

hired to stations

31.6.22 Vehicle running expenses other than 76.136 129.28 106.69

store vehicles

31.6.23 Vehicle hiring expenses 76.137 448.12 383.22

31.6.24 Vehicle License, Registration fee 76.138 11.02 10.40

and Taxes

31.6.25 Travelling and other expenses of 76.139 2.35 -

Non-functional Directors of Company

31.6.26 Shared expenses of MESCOM with 76.140 16.66 9.18

KPTCL

( in Lakh)`


96

31.6.27 Shared expenses of MESCOM with PCKL 76.141 81.92 86.63

31.6.28 Band width / data charges for 76.142 17.05 -

R-APDRP project

31.6.29 Fees & Subscriptions 76.151 72.19 77.73

31.6.30 Books, periodicals and diaries 76.152 6.51 2.09

31.6.31 Printing & Stationery 76.153 114.15 139.20

31.6.32 Factory License Fees 76.154 10.00 10.00

31.6.33 Advertisement Expenses 76.155 59.23 33.36

31.6.34 Computer stationery and floppies 76.156 8.67 8.73

31.6.35 Contributions 76.157 - 5.09

31.6.36 Statutory payments as per Company 76.159 49.34 2.18

Act, 1956

31.6.37 Water Charges 76.160 3.07 4.21

31.6.38 Remuneration to Centre for 76.171 0.07 -

e-governance for revenue collection

through Mobile Application

31.6.39 Miscellaneous expenses 76.190 200.64 166.67

31.6.40 Compliment Expenses 76.191 3.60 2.70

31.6.41 Material related expenses 76.200 52.15 50.48

Sub- Total 6693.43 6521.45

31.6.42 Expenses relating to CSR Activities

31.6.42.1 Consumer Relation/ Education 76.196 24.64 10.98

31.6.42.2 CSR related expenses 76.197 6.00 7.25

Sub- Total 30.64 18.23

Total A&G Expenses 7048.99 6853.79

31.6.43 Administration & General Expenses 76.900 - -57.26

charged to capital works

(credit Account)

31.6.44 Administration & General Expenses 76.901 -190.79 -44.16

charged to capital works (credit

Account) - Service Tax

Net A&G Expenses 6858.20 6752.37

31.7 Other Debits

31.7.1 Asset Decommissioning Costs 77.500 3.21 12.95

31.7.2 Small & Low value items Written off 77.610 10.56 7.97

31.7.3 Losses relating to Fixed Assets 77.700 86.85 189.32

31.7.4 Interest paid to Income Tax dept. 78.510 - 6.80

31.7.5 Research and development expenses 79.210 - 0.86

31.7.6 Bad & Doubtful Debts Written off / 79.400 145.30 121.92

provided for

31.7.7 Miscellaneous losses and Write offs 79.500 1773.59 128.81

Sub Total 2019.51 468.63

31.8 Prior Period Expenses / losses :

31.8.1 Operating Expenses of previous years 83.300 0.02 0.95

31.8.2 Employee costs relating to previous 83.500 37.07 4.22

years

31.8.3 Interest and other Finance charges 83.700 0.39 11.24

relating to previous years

31.8.4 Short Provision for Income tax - 83.810 - -

previous years

31.8.5 Administrative Expenses - previous 83.820 1.97 0.25

years

31.8.6 Other Expenses relating to prior periods 83.850 178.83 35.30

31.8.7 Prior Period Expenses relating to 83.860 26703.39 1.09

purchase of power

Sub-Total 26921.67 53.05

TOTAL 39387.48 10577.73

ParticularsAccount

CodeSl. No

(` in Lakh)



97

Particulars Current Year 2016-17 Previous Year 2015-16

Salary and Allowances 31.29 28.65

Ex-gratia 0.14 0.18

Medical Expenses 1.37 4.59

Travelling Expenses 0.80 1.94

PART TIME DIRECTORS:

Travelling Expenses 1.05 -

Sitting Fees 0.69 0.49

TOTAL 35.35 35.85

33.1 Income on account of MAT 62.922 307.01 231.22

Entitlement - Current Year

Total 307.01 231.22

credit

34

34.1 Segment Reporting:

34.1.1 Business Segment:

34.1.1.1 Electricity distribution is the principal business activity of the Company. There are no other activities which form a

reportable segment as per the Accounting Standard – 17 ‘Segment Reporting’.

34.1.2 Secondary Segment:

34.1.2.1 The operations of the Company are mainly carried out within the four districts of Karnataka State namely, Dakshina

Kannada, Udupi, Chikkamagaluru and Shivamogga. Therefore geographical segments are not applicable.

34.2 Disclosure of transactions with Related Parties as required by the Accounting Standard – 18

34.2.1 In view of paragraph 9 of AS 18, no disclosure is required as regards related party relationships with other state-

controlled enterprises and transactions with such enterprises.

Other disclosures as required under AS 18 are as given below:

34.2.2 Managerial Remuneration paid / payable for the financial year 2016-17 to the Directors are as follows:

Disclosures required by Accounting Standards:

NOTE : 32 EXCEPTIONAL ITEMS

ParticularsAccount

CodeSl. No

(` in Lakh)

(` in Lakh)

32.1 Income on account of MAT credit 65.500 - 270.45

Entitlement - Previous year

TOTAL - 270.45

NOTE : 33 MAT CREDIT ENTITLEMENT

ParticularsAccount

CodeSl. No



(` in Lakh)

34.3 Earnings Per Share

Particulars 2016-17 2015-16

Profit after tax as per Accounts (For Basic and 1293.68 1111.39

Diluted Earnings Per Share) – (A) (` in Lakhs)

Weighted Average number of shares outstanding 361839135 233478861

during the year for Basic and Diluted EPS – (B)

Basic and Diluted Earnings per Share(A/B) (in `) 0.36 0.48


98

34.4

34.4.1 Current Taxation:

34.4.1.1 The provision for Minimum Alternate Tax (MAT) under Section 115 JB of Income Tax Act 1961 has been created in the Accounts.

34.4.2 Deferred Taxation:

34.4.2.1 The Company has not recognized Deferred Tax Asset / Deferred Tax Liabilities as required by Accounting Standard-22.

34.5 Estimated amount of capital works remaining to be executed as on 31.03.2017 in respect of Projects amounts to ` 8825.01 Lakh.

34.6 The details of amount outstanding to Small and Medium Enterprises based on available information with the Company is as under:

Taxation:

Particulars As at 31st March 2017 As at 31st March 2016

Principal amount due and remaining unpaid - -

Interest due on above and the unpaid interest - -

Interest paid - -

- -

Interest due and payable for the period of the delay - -

Interest accrued and remaining unpaid - -

Amount of further interest remaining due and - -

payable in succeeding Years

35 Others:

35.1 The details of energy purchase, sale of energy and distribution losses during the year 2016-17 are as follows:

35.2not economical.

35.3 The title deeds of properties transferred from KPTCL are completely transferred in the name of Company.

36 Contingent Liabilities:

36.1 The Company was subjected to EPF Inspection during the year 2006-07 and thereby a demand of ` 4.44 Crores was raised on the Company towards the dues for EPF of Contract Employees. The Company has disputed the same in view of the error in calculation of demand and also with regard to applicability of the regulations to contractors’ employees. A deposit of ` 1.77 Crores has already been made with the EPF department and the case has been remanded to PF Office Mangaluru for hearing once again in the year 2011-12. Details along with the contention of the Company are submitted to APFC Mangaluru on 10.03.2014. The Company is hopeful of a positive outcome on the said issue. No provision has been made in the accounts for the disputed demand.

Considering the financial implications involved, insurance on fixed assets or current assets has not been made as it is

Particulars Units For the year 2016-17 For the year 2015-16

Energy purchased at Generation point Mus 5435.70 4991.57

Energy Balancing Adjustments Mus 233.14 36.15

Net energy Mus 5668.84 5027.72

Energy at interface point Mus 5411.61 4869.13

Energy Sales Mus 4794.42 4309.17

Distribution Loss Mus 617.19 559.96

Percentage of Distribution Loss % 11.40 11.50

Payment made beyond the appointed day during the year

Particulars Units For the year 2016-17 For the year 2015-16

Energy sales as per DCB Mus 4707.31 4204.69

Add : Sales of April 2017 Mus - 467.27

Less : Sales of April 2016 Mus - 431.42

Add : Wheeled energy Mus 81.21 59.04

Add : KPCL Colony consumption Mus 5.90 9.59

Total Sales considered for Energy Audit Mus 4794.42 4309.17

Reconciliation of Energy Sales

(` in Lakh)


99

36.2 The Regional Provident Commissioners have issued Notices to various Acounting Units of the Company for payment of

interest and damages for the belated remittances under Section 7Q and 14B of the Employees' Provident Fund and

Miscellaneous Provision Act, 1952. Company has deposited the said amounts with PF authorities under protest and

filed appeals before the Employees' Provident fund Apellate Tribunal at New Delhi. No provision is made in the

Accounts for the expenditure. MESCOM may be contingently liable for this amount if the cases are not decided in

favour of MESCOM. The details are as follows:

36.3 The appeal No. ITA/1118/Bang/09 AY 2006-07 preferred by MESCOM against the order CIT(A) Mangalore in respect of

disallowance of 80 IA claim of MESCOM relating to AY 2006-07 is disposed by the Hon'ble ITAT Bangalore on

31.10.2012 stating that the appeal of the Company is partly allowed for statistical purpose. As the major claim of

disallowance of 80IA was not considered by the ITAT, an appeal has been preferred before the Hon'ble High Court of

Karnataka at Bangalore. The case is not yet come for hearing as on date. The entire demand pertaining to the

Assessment Year 2006-07 has been paid and treated as deposit in view of the pending appeal for disposal before the

Hon'ble High Court of Karnataka.

36.4 The Commissioner of Central Excise and Service tax, Mangaluru has passed two orders bearing No. C.No.

IV/09/114/2010 Hqrs. Adjn 1/2295 on 28.01.2011 and order No. IV/09/114/2010/Hqrs Adj(1)/17109 dated 26.10.2010

for ` 6,37,250/- and for ` 85,53,406/- which includes service tax of ` 3,18,625/- and `42,76,703/- respectively and

penalty of ̀ 3,18,625/- u/s. 76 and penalty of ̀ 42,76,703/- u/s. 78 respectively excluding penalty u/s. 77 and rule 7(c).

Further interest amount u/s. 75 has not been quantified. These orders have been passed in respect of service tax on

Goods transport Agency Service since 2005 being not paid to the Department. The Company has got stay against the

demand raised by the department from CESTAT Bangalore. The case is not come up for hearing so far.

36.5 The table given below indicates the number of pending cases before various authorities and courts as on 31.03.2017

and corresponding amount involved in it.

Name of the Accounting Unit

Interest Damages Total

Demand raisedPaid Appeal No.

& Date

1. O & M Division Mangaluru 8325618 10695493 19021111 19021111 ATA No.

1275(6)/2014

2. O & M Division Puttur 6436970 8343738 14780708 14780708 ATA No.

630(6)/2013

3. O & M Division Shivamogga 757961 383386 1141347 1141347 ATA No.

114(6)/2014

4. O & M Division Sagar 3828351 3377361 7205712 6361372 ATA No.

1084(6)/2015

5. O & M Division Chikkmagaluru 6540760 7499653 14040413 14040413 ATA No.

742(6)/2014

6. O & M Division Kadur 599890 1105063 1704953 1704953 ATA No.

743(6)/2014

Total 26489550 31404694 57894244 57049904

Particulars No. of pending cases

Revenue 25 135.68

Labour 72 268.25

Miscellaneous 213 218.79

Total 310 622.72

Amount involved in lakh Rupees.

There may be contingent liability for the said amount if the cases are not decided in favour of MESCOM


100

36.6

As per the conditions of Power purchase Agreements entered with various Power generators, company has provided

LC to the Generators as a payment security and availing rebate as per the rebate clause. Status of LC provided as on

31.03.2017 is furnished as below:

Letter of Credits issued:

36.7 Power Purchase related Contingent Liabilities

37

subject to confirmation and other reconciliation if any.

38 The previous figures have been regrouped/ reclassified, wherever necessary to conform to the current year presentation

39 Details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December,

2016 is provided in the Table below:-

The Balances in respect of Sundry Debtors, Sundry Creditors, Loans, Advances to Supplies and other borrowings are

Sl. No Particulars Amount of Liability Ref. to Note No.(in ` Lakhs)

1 Mysore Paper Mills Not ascertained 27.22

2 M/s J.K. Cements 5.69 27.10

3 M/s Himathsingka Seide Ltd. 18.76 27.10

4 M/s TATA Power Ltd 300.00 27.11

5 M/s UPCL 4200.00 27.12

6 M/s KPCL Not ascertained 27.13

7 M/s NTPC Simhadri STPS Not ascertained 27.16

8 M/s KPTCL (Transmission Charges) 1974.00 27.20

Total 6498.45

Other

Particulars SBNs Denomination Total

notes

Closing cash in hand as on 08.11.2016 51.26 7.28 58.54

(+) Permitted receipts - Receipts against dues on

Electricity consumption being utility bill in nature.

(-) Permitted payments - - -

(-) Amount deposited in Banks 4761.00 5065.46 9826.45

Closing cash in hand as on 30.12.2016 - 62.68 62.68

4709.74 5120.85 9830.59

1 State Bank of Mysore 25.00 16.91 8.09

2 Corporation Bank 7.50 4.61 2.89

3 Vijaya Bank 167.50 82.31 85.19

Total 200.00 103.83 96.17

Sl.No. Name of the BankComprehensive

LC Limit

Amount of

LC availed

Balance of LC limit available

out of Comprehensive LC

as on 31.03.2017

` in crs

Sd/-(D.R. SRINIVAS)


Sd/-(M.D. RAVI)

Director (MESCOM)

Sd/- (K. RAMAKRISHNA)Managing Director



Sd/-CA K.R. SURESH



40. The companies Accounts that are approved by the Board on 10.08.2017 have been revised in the light of observations

made by the Comptroller and Auditor General of India. The said revision has resulted in decrease in net profits by ̀ 12.77

lakhs ; decrease in the reserves and surplus by ̀ 12.77 lakhs ; increase in Other long term liabilities by ̀ 1639.77 lakhs ;

increase in Trade payables by ` 21.27 lakhs ; increase in Other Current liabilities by ` 69.12 lakhs ; increase in Tangible

Assets by ̀ 53.87 lakhs ; decrease in Capital work in progress by ̀ 12.77 Lakhs. ; increase in Inventories by ̀ 4.35 lakhs ;

decrease in Other non current assets by ` 25211.11 Lakhs ; increase in Other current assets by ` 26883.05 lakhs. As a

result, the total assets and liabilities have increased by ̀ 1717.39 lakhs.


101

` in lakhs

1 System Augmentation & Strengthening

a DTC Metering 14.152 1941.93 0.20 1941.73

b Replacement of Electro- Mechanical Meters by Static Meters

c Auto-recloser & Sectionliser 14.156 27.14 - 27.14

d RLMS Works 14.157 - - -

e Link lines, Re-conductering of HT,LT & 33 KV lines

f Installation of Additional Transformers 14.168 2430.75 7.73 2423.02

g Universal Metering 14.35114.36114.401

h Improvement- Others 14.15014.160 917.18 6.35 910.83

I Tackling of High Loss High consumption Feeders & HVDS

Sub-Total 18000.00 8462.55 17.83 8444.72

1 R- APDRP Works 14.144 15780.00 1673.82 1.16 1672.66

2 Replacement of faulty distribution transformers by similar capacities

Replacement of faulty distribution transformers by higher capacities

3 Service Connection including vanished layout works

a Service Connection 14.400 1664.95 9.02 1655.93

b Energisation of Rural Water Supply 4000.00Works under RD & PR.

c Promotor vanished layout works 14.142 42.42 0.04 42.38

Sub Total 4000.00 3140.22 13.94 3126.28

4 Rural Electrication (General)

a RGGVY 14.210 70.00 2.07 - 2.07

b Deen Dayal Upadyaya Gram Jyothi Yojana (DDUGJY)

c Electrification of Hamlets / Janatha 14.302,14.300,Colonies 14.200,14.303

d Energisation of IP sets 14.320, 14.326, 14.220,14.325 20000.00

e Regularization of un-authorised I.P sets 14.324 112.59 3.04 109.55

f Power supply to IP sets (Existing under OYT)

g Providing Infrastructure to Un-Authorised IP sets on Total Turnkey basis

h Kutir Jyothi 14.350, 14.360 25.00 0.67 0.11 0.56

I Sheeghra Samparka Yojane 14.330 - 438.09 14.35 423.74

j Naksal Package 14.371 - - - -

Sub Total 59895.00 7763.90 28.24 7735.66

5 Tribal Sub-Plan

a Electrification of Tribal Colonies 14.340, 14.341 100.00 150.03 - 150.03Janatha Colonies

b Energisation of IP sets 14.328 150.00 29.83 0.02 29.81

c Kutir Jyothi 14.362 5.00 0.86 0.40 0.46

Sub Total 255.00 180.72 0.42 180.30

6 Special Component Plan

a Electrification of S.C. Colonies / 14.342 110.00 36.73 - 36.73Janatha Colonies

b Energisation of IP sets 14.329 150.00 78.45 0.04 78.41

c Kutir Jyothi 14.363 10.00 0.51 -0.01 0.52

Sub Total 270.00 115.69 0.03 115.66

14.153 211.96 1.21 210.75

14.167 18000.00 2908.82 0.67 2908.15

- - -

14.169 24.77 1.67 23.10

14.170 3332.74 2623.51 709.233500.00

14.171 415.29 84.66 330.63

promotor

14.404 1432.85 4.88 1427.97

39600.00 - - -

200.00 98.43 - 98.43

802.10 10.74 791.36

14.327 - -0.25 - -0.25

14.335 - 6310.20 - 6310.20

ParticularsAccount

Code

Budget Allocation

Sl. No

Statement showing sector wise capital expenditure with and without released assets issued to capital works for 2016-17

( in Lakhs)`

Cost during the year

Released Assets issued

to capital works

Net Capital Expenditure


102

14.110

14.120 CWIP - Step Down Stations (GP) 1552.20 1812.28 350.85 3013.63

14.126 CWIP - Step Down Stations - non plan - 0.64 0.64 -

14.142 CWIP - Promoter vanished layouts - 11KV lines, 40.72 42.42 63.65 19.49Transformers, LT lines/ S.C etc., (G.P)

14.144 CWIP - 11KV & below Distribution works under 747.09 1654.05 196.62 2204.52RAPDRP works

14.150 CWIP - Transmission lines - Transformers etc., 429.94 791.79 771.02 450.71Improvements (GP)

14.152 CWIP-Improvements - DTC Metering 122.30 1941.93 1720.60 343.63

14.153 CWIP-Improvements - replacement of electro 199.28 211.96 197.85 213.39mechanical meters by static meters

14.156 CWIP- improvements - Auto - reclosures & 0.69 27.14 27.14 0.69sectionalizers

14.160 CWIP - Reduction of Losses in lines 70.23 136.06 162.21 44.08

14.167 CWIP- improvements - linklines & reconductering 1370.97 2950.00 2624.80 1696.17of HT, LT& 33kv line

14.168 CWIP- installation of additional transformers 1696.36 2446.78 2314.02 1829.12

14.169 CWIP- tracking of high loss high consumption 127.36 24.77 54.25 97.88feeders & HVDS

14.170 CWIP - Replacement of distribution Transformers 417.59 3332.74 3534.30 216.03by similar capacities

14.171 CWIP - Replacement of Transformers by higher 61.98 415.29 420.36 56.91capacities

14.210 CWIP - RGGVY - 2.07 2.07 -

14.300 CWIP - Village Electrofication (G.P) - 0.49 0.49 -

14.302 CWIP - Electrification of Hamles and Tandas (G.P) 27.18 98.63 48.38 77.43

14.320 CWIP - Power Supply to IP sets (G.P) 280.35 806.39 724.08 362.66

14.324 CWIP – Regularization of un-authorised I.P sets 415.17 112.59 355.72 172.04registered on or before 31.07.11.

14.327 CWIP - Power Supply to IP sets (Exisitng) under O.Y.T) 0.25 -0.25 - -

14.328 CWIP - Energization of IP sets under Tribal Sub-Plan 17.85 30.16 23.62 24.39

14.329 CWIP - Energization of IP sets under Special 34.12 78.58 58.99 53.71Component Plan

14.330 CWIP - Sheeghra Samparka Yojane 40.48 438.09 278.24 200.33

CWIP - Transmission lines (G.P) 200.64 5.38 199.26 6.76

DescriptionAccount

Code

(` in Lakh)

O.B. As on 01.04.2016

Incurred CategorisedC.B. As on 31.03.2017

7 Tools & Plants & Computers 14.600 2000.00 348.12 - 348.1214.70014.800

8 Civil Engineering Works 14.502 1800.00 2520.16 - 2520.16

9 Construction of new sub stations & 14.110 4500.00 1814.60 20.36 1794.24lines (33KV) 14.120 14.126

10 Niranthara Jyothi Yojane 14.381 - - - -

11 Energisation of IP sets under Ganga Kalyana

IP sets of SC 14.331 797.31 15.74 781.57

IP sets of ST 14.332 226.39 1.81 224.58

IP sets of BCM 14.333 641.65 5.62 636.03

IP sets of Minorities 14.334 220.74 2.52 218.22

GRAND TOTAL 110000.00 31653.90 2815.84 28838.06

ParticularsAccount

CodeBudget

Allocation

Sl. No

(` in Lakh)

Cost during the year

Released Assets issued

to capital works

Net Capital Expenditure

STATEMENT SHOWING CAPITAL WORKS IN PROGRESS FOR THE YEAR 2016-17


103

14.331 CWIP - Energisation of Borewells drilled under 206.47 797.31 564.83 438.95Gangakalyana Scheme by Dr. B.R.Ambedkar Devpt. Corporation Ltd.

14.332 CWIP - Energisation of Bore wells drilled under 43.38 226.68 133.58 136.48Gangakalyana Scheme by Karnataka Scheduled Tribe Devpt. Corporation Ltd.

14.333 CWIP - Energisation of Bore wells drilled under 171.66 642.52 495.66 318.52Gangakalyana Scheme by D. Devaraj Urs Backward Class Devpt. Corporation Ltd

14.334 CWIP - Energisation of Bore wells drilled under 124.69 223.06 244.10 103.65Gangakalyana Scheme by Karnataka Minorities Devpt. Corporation Ltd

14.335 CWIP- Providing infrastructure to Un-authorised 300.75 6310.20 6610.95 -IP Sets on Total Turnkey basis.

14.341 CWIP electrification of tribal colonies under Tribal 5.08 150.03 24.86 130.25sub-plan

14.342 CWIP electrification of SC colonies under Special 9.14 36.73 28.02 17.85Component plan

14.360 CWIP - Kuteera Jyothi Schemes - 0.67 0.67 -

14.362 CWIP - Metering of existing K.J Installation under 0.07 0.86 0.09 0.84TSP

14.363 CWIP - Metering of existing K.J Installation under 1.29 0.51 0.23 1.57SCP

14.400 CWIP - Service Connections 851.07 1693.35 1687.66 856.76

14.401 CWIP - Metering of I.P sets pf 10 HP and below 3.12 - 1.72 1.40

14.404 CWIP-Energisation of Rural Water Supply Works 404.10 1462.07 1416.68 449.49under RD & PR.

14.502 CWIP - Buildings 1485.39 2515.40 3244.51 756.28

14.607 CWIP - Vehicles 14.88 18.06 32.31 0.63

14.708 CWIP - Furniture and Fixtures 2.08 12.11 12.58 1.61

14.809 CWIP - Office equipment 16.69 160.92 138.08 39.53

14.810 CWIP - Tools and Tackles 36.22 154.87 70.88 120.21

14.811 CWIP - Mobile Phones 0.12 2.16 2.21 0.07

14.911 CWIP - Provision for ongoing works 168.03 -113.59 - 54.44

TOTAL 11696.98 31653.90 28838.78 14512.10

A Opening Stock

B R E C E I P T S

1 Material Purchases 16576.29 15848.52

2 Material inward - Others 1459.70 3225.78

TOTAL RECEIPTS 18035.99 19074.30

C OPENING STOCK + RECEIPTS 23678.45 24677.41

D I S S U E S

1 Material issued capital 16921.79 14707.06

2 Material issues (O&M) 1633.88 1365.30

3 Material Outward - Others 1366.54 2962.59

TOTAL ISSUES 19922.21 19034.95

E CLOSING BALANCE OF STOCK (C-D) 3756.24 5642.46

5642.46 5603.11

Description

ParticularsAmount

As on 31.03.2017 As on 31.03.2016

Account Code

(` in Lakh)

(` in Lakhs)

O.B. As on 01.04.2016

Incurred Categorised C.B. As on 31.03.2017

Statement of Material Stock Account

SI.No.


104

Statement showing the details of source-wise power purchase cost

1

2 Thermal Power

A KPC 1548.28 670.84 1734.68 719.94

B NTPC 702.78 218.92 480.79 147.69

C NTECL 85.89 37.49 56.02 21.09

D NTPC VVNL 49.22 23.73 53.83 23.91

E Damodhara Valley Corporation 267.47 119.16 43.99 19.74

3 Lignite Power - NLC 421.54 181.90 303.25 102.44

4 Atomic Power

A MAPS 18.21 3.95 17.78 3.73

B KAIGA 152.15 48.00 175.69 54.88

C Kundankulam 145.83 48.35 34.14 14.22

5 Conventional Energy 594.03 266.59 381.47 159.83

6 Jurala Hydro Power 9.55 4.73 0.75 4.79

7 Non Conventional Energy

A Mine Hydel 227.80 78.33 252.70 86.22

B Bio-Mass - - - -

C Captive Generation - - 2.44 0.63

D Solar 74.91 55.97 32.11 26.45

E Wind Mill energy 284.20 101.88 269.43 96.15

8 UI Charges 45.39 12.59 44.43 13.44

9 High Cost Energy

A Medium term & Short term power 385.95 168.19 564.70 287.42

B Peak power - - - -

10 Transmission charges

A KPTCL - 248.38 - 218.70

B PGCIL - 111.71 - 71.81

C TNEB - 0.05 - 0.03

11 Other Charges (Trading margin charges, open access 11.23 7.95 2.28 8.13

charges, SLDC charges, PCKL charges energy to be

accounted as per reconciliation)

Sub Total 5435.70 2450.54 4991.57 2198.10

12 Energy Balancing Adjustments

A Relating to present year 233.14 89.22 36.15 14.87

Sub Total 5668.84 2539.76 5027.72 2212.97

B Relating to previous years - - - 17.43

C Difference amount due to change in Average Rate - - - -

taken for Energy Balancing (2008-09 & 2009-10)

Total 5668.84 2539.76 5027.72 2230.40

Hydel Power 411.27 41.83 541.09 116.86

Particulars2016-17

Energy (Mus) Energy (Mus)

2015-16Sl. No

(` in Crs)

(` in Crs)

Cost Cost

COST OF POWER AT DIFFERENT POINTS

1 P.P Cost at Generation Point 5668.84 2539.76 4.48 5027.72 2230.40 4.44

2 P.P Cost at Interface Point 5411.61 2539.76 4.69 4869.13 2230.40 4.58

3 P.P Cost at Consumer Point 4794.42 2539.76 5.30 4309.17 2230.40 5.18

4 Delivered cost of power to consumer 4794.42 3407.92 7.11 4309.17 2760.27 6.41

(Excluding ROE)

Particulars

2016-17 2015-16Sl. No Energy

(MU)Energy (MU)

Amount AmountRate per unit (in `)

Rate per unit (in `)


105

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

No. of Installations

Category

Customer Base: FY-16 Vs. FY-17

2015-16

2016-17

0

20

40

60

80

100

120

140

Percentage %

Category

Collection Efficiency: FY-16 Vs. FY-17

2015-16

2016-17

Collection Efficiency as per DCB

CategoryCollection Efficiency (in %)

2015-16 2016-17

Sales

LT 1 41.61 0.99 40.97 0.99

LT 2 1264.68 30.08 1306.06 30.08

LT 3 327.07 7.78 342.34 7.78

LT 4 1177.56 28.01 1637.62 28.01

LT 5 134.78 3.21 136.73 3.21

LT 6 173.50 4.13 189.91 4.13

LT 7 19.63 0.47 19.40 0.47

HT 1065.86 25.35 1034.29 25.35

Total 4204.69 100.00 4707.31 100.00

Category

Sales -Mus

2015 -16 2016 -17

sales sales% %

LT 1 195633 9.09% 193372 8.71%

LT 2 1409185 65.47% 1455795 65.58%

LT 3 190104 8.83% 197670 8.90%

LT 4 281645 13.08% 295047 13.29%

LT 5 27859 1.29% 28793 1.30%

LT 6 29893 1.39% 33356 1.50%

LT 7 16506 0.77% 14153 0.64%

HT 1720 0.08% 1854 0.08%

Total 2152545 100.00 2220040 100.00

Category

Customer Base

2015 -16 2016 - 17

Installations in nos.

Installations in nos.% %

Customer Profile

0

200

400

600

800

1000

1200

1400

1600

1800

SALES

MUs

Category

Custom er Base: FY-16 Vs. FY-17

2015-16

2016-17

SA

LE

S

MU

sP

erc

en

tag

eN

o.

of

Insta

llati

on

s

LT 1 88.91 87.20

LT 2 100.02 98.09

LT 3 99.98 98.05

LT 4 100.71 98.77

LT 5 99.13 97.22

LT 6 133.25 130.68

LT 7 108.13 106.05

HT 100.99 99.05

Misc. 100.00 98.07

Total 101.97 99.20


106

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Rupees in Lakhs

Category

Revenue Demand: FY-16 Vs. FY-17

2015-16 2016-17

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Rupees in Lakhs

Category

Revenue Collection: FY-16 Vs. FY-17

2015-16 2016-17

Revenu Demand

LT 1 2018.32 0.82% 2213.16 0.76%

LT 2 60675.32 24.78% 69065.02 23.74%

LT 3 28087.26 11.47% 30886.22 10.62%

LT 4 50588.64 20.66% 77599.70 26.67%

LT 5 9316.44 3.80% 9903.69 3.40%

LT 6 11274.63 4.60% 13448.40 4.62%

LT 7 2597.48 1.06% 2826.62 0.97%

HT 79802.43 32.59% 84361.59 29.00%

Misc. 510.08 0.21% 606.16 0.21%

Total 244870.60 100.00 290910.57 100.00

Category

Revenue Demand as per DCB

2015-16 2016-17

` in Lakhs

`Lakhs

in % %

Revenue Collection

LT 1 1794.52 0.72% 2157.45 0.75%

LT 2 60685.62 24.30% 69574.88 24.11%

LT 3 28081.48 11.25% 30918.22 10.71%

LT 4 50950.34 20.41% 77877.48 26.99%

LT 5 9235.12 3.70% 10006.11 3.47%

LT 6 15023.88 6.02% 12295.32 4.26%

LT 7 2808.70 1.12% 2882.67 1.00%

HT 80596.06 32.28% 82271.26 28.51%

Misc. 510.08 0.20% 606.16 0.21%

Total 249685.81 100.00 288589.54 100.00

Category

Revenue Collection as per DCB

2015-16 2016 - 17

`Lakhs

in `Lakhs

in % %

Closing Balance

LT 1 1082.49 1.96 1138.20 1.98

LT 2 3668.52 6.65 3158.64 5.49

LT 3 910.64 1.65 878.67 1.53

LT 4 14673.97 26.60 14396.19 25.04

LT 5 482.58 0.87 380.17 0.66

LT 6 24822.92 45.00 25975.97 45.18

LT 7 -1367.36 -2.48 -1423.40 -2.48

HT 10894.32 19.75 12984.68 22.59

Misc. - - - -

Total 55168.08 100.00 57489.11 100.00

Category

Closing Balance as per DCB

2015-16 2016-17

`Lakhs

in `Lakhs

in % %

Ru

pe

es in

Lakh

sR

up

ee

s in

Lakh

s

-5000

0

5000

10000

15000

20000

25000

30000

Rupees in Lakhs

Category

Closing Balance: FY-16 Vs. FY-17

2015-16 2016-17


107

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9


111

(As p

er

D.C

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Documents

toal kan-engonline.mesco.in/documents/view_document.jsp... · towards Earned leave encashment and FBF as per actuarial valuation report. Tangible Assets: Net fixed Asset is increased