19 th annual report -2011 -12 · · 2014-11-2619 th annual report -2011 -12 ... kotak mahindra...

19th Annual Report-2011-12

GUJARAT STATE ELECTRICITY CORPORATION LTD(A wholly owned Subsidiary of Gujarat Urja Vikas Nigam Limited )

SHRI D.J.PANDIAN,IAS CHAIRMAN SHRI I.P.GAUTAM, IAS DIRECTOR SHRI MUKESH PURI,IAS DIRECTOR KUM. S. APARNA, IAS DIRECTOR SHRI B.S.REUBEN DIRECTOR SHRI H.P.DESAI DIRECTOR SHRI P.H.RANA DIRECTOR SHRI GURDEEP SINGH MANAGING DIRECTOR

BOARD OF DIRECTORS

COAL BASED GAS BASED HYDRO

Ukai Utran Ukai Gandhinagar Dhuvaran Kadana Wanakbori Panam Sikka Panandhro

Shri B.N. Chudasama Executive Directors (P&P) Shri M.B.Kaka Sr.Chief General Manager(F&A) Shri A.D.Karpe Chief General Manager(HR&A) Shri V.P.Jani Company Secretary Shri U.D.Adhvaryu Chief Engineer(Generation) Shri P.M. Parmar Chief Engineer (P&P) Shri H.N.Baxi Chief Engineer (Fuel) Shri D.R.Gupte Chief Engineer(Civil) STATUTORY AUDITORS : P.PARIKH & ASSOCIATES Chartered Accountants Mumbai COST AUDITORS : Y.S.THAKAR & ASSOCIATES Cost Accountants INTERNAL AUDITORS: VCA & ASSOCIATES K.N.MEHTA & CO AGRWAL & DHANDHANI P.G.PATEL & ASSOCIATES VIJAY N. TEWAR & CO. MULANI KAJAREKAR & CO

POWER PLANTS

CORE TEAM

AUDITORS

GUJARAT STATE ELECTRICITY CORPORATION LTD

FINANCIAL INSTITUTIONS / GOVERNMENT COMPANY POWER FINANCE CORPORATION LIMITED RURAL ELECTRIFICATION CORPORATION LIMITED GUJARAT STATE FINANCIAL SERVICES LIMITED NABARD CANARA BANK BANK OF BARODA DENA BANK INDIAN BANK INDIAN OVERSEAS BANK STATE BANK OF INDIA SYNDICATE BANK UNION BANK OF INDIA CORPORATION BANK VIJAYA BANK ORIENTAL BANK OF COMMERCE KALUPUR COMMERCIAL CO-OPERATIVE BANK CENTRAL BANK ALLAHABAD BANK KARUR VYSYA BANK ICICI BANK INDUSIND BANK BANK OF INDIA KOTAK MAHINDRA BANK

FINANCIAL INSTITUTIONS & BANKERS

BANKERS

THE MEMBERS OF GUJARAT STATE ELECTRICITY CORPORATION LIMITED

1. We have audited the attached Balance Sheet of Gujarat State Electricity Corporation

Limited as at 31st March, 2012 the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the

on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in

India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor's Report) Order, 2003 as amended by the

Companies (India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, attention is invited to the following: (a) As a part of efforts towards restructure of power sector, the Company has been

promoted by erstwhile Gujarat Electricity Board (GEB) (now known as Gujarat Urja Vikas Nigam Limited (GUVNL) with effect from 1/4/2005) in August, 1993, GUVNL held 100% equity shares of the Company throughout the year under consideration. The Company has entered into Inter Company Agreements and Facility Sharing Agreements with GUVNL and its subsidiary companies for working capital and Term Loans and sharing of certain common facilities viz. Group Gratuity Contribution to LIC. All such arrangements results into multifaceted relation of the Company with GUVNL and other successor entities of holding company.

The financial statements are prepared on Going Concern principles and performance

of the Company for the year under consideration has been determined after reviewing several long term arrangements of the Company with GUVNL and its subsidiary Companies.

(b) arat Electricity

Industry Reorganization Transfer of Gandhinagar Thermal Power Station Scheme Electricity Industry Reorganization and Comprehensive Transfer

Scheme, has transferred and vested all the assets & liabilities and proceedings of the specified existing and under implementation power stations of GEB to the Company with effect from 1st April 2005.

In accordance with the above referred schemes, the State Government has notified

the values of the assets and liabilities at which these undertakings are transferred to and vested in the Company.

5. Particular attention is drawn to the following:

(a) Note 29(a) of Notes forming part of the financial statements regarding the non-registration of charge on the transferred assets of the Company.

(b) Note 31(a) of Notes forming part of the financial statements regarding provision for

depreciation for the year at the rates specified by the Central Electricity Regulatory Commission (CERC) as against the rates as per Schedule XIV to the Companies Act, 1956.

(c) Note 31(c) of Notes forming part of the financial statements regarding the re-

classification/re-grouping of installed capital spares. The Company has made issues from the capital spares to plant & machinery. On such issues, the company has to reduce the value of the capital spares and increase the value of plant & machinery. Similarly, the replaced value of capital spares in plant &machinery should be reduced from plant & machinery to the extent of its WDV. However, the Company has not complied with the same and its resultant financial impact could not be ascertained, as the accounting of capital spares is done in lots at the end of each month and not as per purchase of individual capital spares/date-wise.

(d) The Company has the policy of impairment testing and accounting for Impairment of

all Fixed Assets, if any, once in three years, except in case of Capital Spares.

(e) The Company, on receipt of debit note/journal entry amounting to 6,852.72 lakhs, from its Holding Company M/s. Gujarat Urja Vikas Nigam Ltd. (GUVNL) for Interest on working capital limits used by the Company, passed a net entry of 5,757.41 lakhs in its books (i.e. 6,852.72 lakhs debit note/journal entry received from the Holding Company minus 1,095.34 lakhs - actual interest paid by the Company to GSFSL for utilization of working capital facilities, which was recovered from its Holding Company). For want of daily product balance of working capital facilities enjoyed by GUVNL on behalf of GSECL, the actual amount of interest on working capital utilized by the company could not be calculated. The same practice is followed in the previous financial years and its resultant financial impact could not be ascertained.

(f) During the year, the Company has given a rebate/discount of 9856.06 lakhs and charged interest on delayed payments amounting to 681.25 lakhs to its Holding Company Gujarat Urja Vikas Nigam Limited (GUVNL) on receipt of debit note/journal entry from GUVNL. In our opinion, the Company has not charged the interest on delayed payments received from GUVNL accurately and also, the amount of rebate is given to GUVNL after considering the indirect payments given by GUVNL as against the rebate to be given only on direct payments received from GUVNL. However, the impact of the same could not be ascertained. Also, the amount of delayed payments to be received from GUVNL could not be ascertained.

(g) During the year, Gujarat Urja Vikas Nigam Limited (GUVNL), the Holding Company did not admit the claim of Fuel Cost Adjustment in full based on the quality of coal received at coal based power stations. GUVNL has admitted the fuel cost adjustment based on last three years weighted average GCV as against the actual gross calorific value (GCV) as per the norms of GERC. The difference is not been

recognized by the Company. Hence, the impact of the same could not be ascertained.

6. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

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

(d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(e) The Company, being a Government Company, in view of the Notification No.GSR 829(E) dated 21st October 2003 issued by the Government of India, the provisions of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956, are not applicable to the Company.

(f) In our opinion and to the best of our information and according to the explanations

given to us, the said accounts, subject to para 5 above, read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

31st March 2012; (ii) In the case of the Profit and Loss Account, of the profit of the Company for the

year ended on that date; and

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

that date. FOR P. PARIKH & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No 107564W Ashok Rajagiri

(Partner) M. No. 046070 Place: Date:

date to the members of Gujarat State Electricity Corporation Limited on the financial statements for the year ended 31st March, 2012] i. (a) The Company has maintained proper records showing full particulars including

quantitative details and situation of Fixed Assets. (b) The Company has a programme of physical verification of its Fixed Assets over a

period of three years; which in our opinion is reasonable having regard to the size of the Company and nature of its assets. In accordance with this programme, certain Fixed Assets have been physically verified by the management through firm of Chartered accountants specially appointed for the purpose at power stations during the year under review and according to information and explanation given to us, no material discrepancies have been noticed on such verification.

(c) As per the information and explanation given to us, during the year the Company has

not disposed off any substantial part of Fixed Assets that would affect the going concern assumption.

ii. (a) The inventory comprises of coal, oil and stores and spares has been physically

verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable looking to the size of the Company.

(b) In our opinion and according to information and explanation given, the procedure of

physically verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to explanation given to us, the Company has

maintained proper records of inventory. The discrepancies noticed on physical verification of inventory have been properly dealt with by the Company in the Books of Accounts.

iii. (a) In our opinion and according to the information and explanation given to us, the

company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies act, 1956.

In view of (a) above, sub-clauses (b), (c) and (d) are not applicable. On the strength of a legal opinion obtained by the Company, it has represented that

the provisions of section 299, 300 and 301 of the Companies act, 1956 are not attracted to the transactions entered in to by the company with GUVNL and its subsidiaries and are not liable to be listed in the register maintained under section 301 of the Companies act, 1956.

iv. In our opinion and according to the information and explanation given to us, there are

adequate internal control procedures / system commensurate with the size of the

Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of electricity and services.

Further, on the basis of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) The Company has entered into contract / arrangements with GUVNL being the

holding Company. As per the information and explanations given to us and based on the legal opinion obtained by the Company, the transactions pursuant to these contracts and / or arrangement are not falling under the provisions of section 301 of the Companies Act, 1956 and accordingly these transactions are not entered into the Register maintained under section 301 of the Companies Act, 1956.

In view of (a) above, sub-clause (b) is not applicable. vi. In our opinion and according to the information and explanations given to us, the

Company has not accepted any deposits within the meaning of Section 58A, 58AA or any other relevant provision of the Companies act, 1956, and the rules framed there under.

vii. The Company has an in house Internal Audit System and it has also assigned internal

audit assignments to practicing firms of Chartered Accountants and this arrangement in conjunction with the existing internal control and checks is in our opinion commensurate with the size of the Company and the nature of its business.

viii. We have reviewed the books of account maintained by the Company, pursuant to the

Rules made by the Central Government of India, for the maintenance of cost records under clause (d) of sub section (1) of section 209 of the Companies act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

We have not, however, made a detailed examination of the records with a view to

determine whether they are accurate or complete. ix. According to the information and explanation given to us in respect of statutory and other

dues:

(a) The Company is generally regular in depositing undisputed statutory dues, including Provident Fund, investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other statutory dues with the appropriate authority during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2012 for a period more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues of Income Tax, Customs Duty, Wealth Tax, Service Tax and Cess, which have not been deposited on account of any dispute.

x. The Company does not have any accumulated losses as at the end of the financial year.

The company has not incurred cash losses during the current year and the immediately preceding financial year.

xi. Based on our audit procedures and on the information and explanation given by the

management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks in respect of the existing loans, which were originally raised by the Company. As regards the loans transferred from GUVNL, we have been informed that the same have been serviced by GUVNL on behalf of the Company and in view of the above we are not in a position to opine whether the Company has defaulted in repayment in dues to Financial Institutions and Banks.

xii. Based on our examination of documents and records and according to the information

and explanations given to us, we are of the opinion that the Company has not granted any loans and / or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statues applicable to chit fund, nidhi and mutual benefit

funds/ societies are not applicable to the Company. xiv. Based on examination of the accounts and as per the information and explanation given

to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

xv. In our opinion and according to the information and explanation given to us, the company

has not given any guarantee in respect of loans taken by others from banks or f inancial institutions.

xvi. (a) Term loans raised by GUVNL on behalf of the company have been accounted in the

books of the Company by debit to GUVNL Account and the repayments and interest thereon are reimbursed by the company to GUVNL by crediting GUVNL Account without any actual cash inflow or outflow. In view of the above and in absence of the relevant information as regards the purpose and other terms and conditions of loans availed through GUVNL, we are unable to comment on the application of such loans for the purpose for which they were obtained.

(b) In case of loans directly raised by the Company during the year, on the basis of

records examined by us, and relying on the information compiled by the Company for Co-relating funds raised for the end use of the term loan, the Company has, prima facie, applied the loans for the purpose for which they were obtained.

xvii. The Company has raised its allocated term loans through GUVNL and for the reasons

given in clause xvi above, it is not possible for us to ascertain whether funds raised on short term basis have been used for long term investment. However, funds raised by the Company on long term basis have been applied for long term investment.

xviii. Based on a legal opinion obtained by the company, the provisions of section 301 of the

Companies Act, 1956 are not applicable to the company. In view of the above, this clause is not applicable.

xix. The liabilities under the bonds issued by the erstwhile GEB transferred to the Company

are secured either by a charge over the assets and / or by a guarantee by Government of Gujarat.

xx. The Company has not raised any money by public issue during the year. xxi. We have informed that the vigilance department of the company is regularly investigating

frauds and knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR P. PARIKH & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No 107564W Ashok Rajagiri

(Partner) M. No. 046070 Place: Date:

GUJARAT STATE ELECTRICITY CORPORATION LIMITED 19th Annual Report 2011-12

BALANCE SHEET AS AT 31st MARCH, 2012(` IN LAKHS)

Particulars Notes

Figures for the current reporting

period (2011-12)

Figures for the previous reporting

period (2010-11)

I EQUITY AND LIABILITIES1 Shareholder's Fundsa Share Capital 2 145,802.24 145,802.24b Reserves and Surplus 3 222,665.43 205,421.622 Share Application money pending allotment 4 22,300.00 22,300.003 Non Current Liabilitiesa Long Term Borrowings 5 566,494.47 473,414.88b Other long term liabilities 6 60,132.01 37,884.84c Long term provisions 7 13,482.93 11,773.084 Current Liabilitiesa Short Term Borrowings 8 93,516.67 68,535.30b Trade Payables 9 45,551.14 45,871.92c Other current liabilities 10 194,858.26 208,842.44d Short Term Provisions 11 24,325.15 15,008.23

TOTAL 1,389,128.30 1,234,854.55II ASSETS

1 Non Current Assetsa Fixed asset

(i) Tangible Asset 12 671,234.81 707,285.16(ii) Capital Work in Progress 411,192.06 285,455.78b Non-curent investments 13 2,052.05 2,052.05c Long Term Loans & Advances 14 29,464.98 22,922.74d Other non current assets 15 18,329.40 18,980.782 Current Assetsa Inventories 16 54,163.33 34,805.47b Trade receivables 17 172,747.54 135,387.22c Cash and cash equivalents 18 17.64 4,044.18d Short term loans and advances 19 23,299.04 18,600.40e Other current assets 20 6,627.45 5,320.77

TOTAL 1,389,128.30 1,234,854.55

See accompanying notes forming part of the financial statements. 1 to 49As per attach report of even dateFOR P.PARIKH & ASSOCIATES. FOR AND ON BEHALF OF THE BOARDCHARTERED ACCOUNTANTSFirm Reg.No.107564W

ASHOK RAJAGIRI D.J.PANDIAN GURDEEP SINGHPartner Chairman Managing DirectorMem.No. 046070

M.B.KAKA V.P.JANI Sr.Chief Genaral Manager (F&A) Company Secretary

Place: Place:Date : Date:

GUJARAT STATE ELECTRICITY CORPORATION LIMITED

GUJARAT STATE ELECTRICITY CORPORATION LIMITED 19th Annual Report 2011-12

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2012(` In Lakhs)

Particulars Notes


period (2011-12)


period (2010-11)

I Revenue from Operations 21 856,015.23 772,259.80

II Other Income 22 8,153.07 2,472.47

III Total Revenue (I+II) 864,168.30 774,732.27

IV Expenses

Cost of Fuel consumed 23 649,833.70 589,336.87

Employees benefit expense 24 42,763.69 39,399.37

Finance Cost 25 47,108.63 42,907.17

Depreciation & Amortization Expenses 12 61,689.63 57,955.23

Other Expenses 26 45,227.13 34,849.50

Total Expenses 846,622.78 764,448.14

VProfit before Exceptional , Extra oridenery Items , Prior period Items & Tax 17,545.52 10,284.14

VI Exceptional Items 27 4,785.20 9,515.03

VII Prior Period Adjustment 28 773.87 1,868.05

VIII Profit before tax 21,556.85 17,931.11

IX Tax Expenses( 1 ) Current Tax 4,313.04 3,577.13

X Profit for the period 17,243.81 14,353.98XI Earning Per Share (in Rs.)

1.Basic 1.18 0.982.Diluted 1.14 1.01

See accompanying notes forming part of the financial statements. 1 to 49

As per attach report of even date

CHARTERED ACCOUNTANTSFirm Reg.No.107564W

GURDEEP SINGH Managing Director

Mem.No. 046070 V.P.JANI Company Secretary

Place: Place: Date : Date:

Sr.Chief General Manager

FOR P.PARIKH & ASSOCIATES. FOR AND ON BEHALF OF THE BOARD

ASHOK RAJAGIRI D.J.PANDIANPartner Chairman

M.B.KAKA

19th Annual Report 2011-12

(` in lakhs)


period (2011-12)


period (2010-11)

21,556.85 17,931.09

3.75 63.98(20.98) (672.85)

61689.63 57955.2347108.63 42907.19(110.15) (110.15)

Prior Period Adj relating to Investment & Financing Activites 291.71 1,889.52130519.45 119964.01

(19357.87) 5765.84(37360.32) 10075.91(4698.64) (4747.99)42327.83 (96140.12)(2264.72)

109165.72 34917.65(3849.99) (3399.94)

105315.73 31517.71

(152403.58) (123662.87)Advances for Capital Assets (4141.00) (3125.20)Loan to Joint Venture Co. (1036.61) (81.21)

753.53 2240.65Dividend/Interest Received 110.15 110.15

0.00 (0.05)(156717.51) (124518.53)

Equity Share Capital 0.00 25021.2593079.61 114701.11

(45704.37) (42746.34)47,375.24 96,976.02

(4026.54) 3975.204044.18 68.98

17.64 4044.18

Chartered AccountantsFirm Reg.NO.107564W

GURDEEP SINGH Managing Director

Mem.No. 046070 V.P.JANI

Sr.Chief General Manager(F&A) Company SecretaryPalace: Palace : Date : Date :

FOR P.PARIKH & ASSOCIATES. FOR AND ON BEHALF OF THE BOARD

ASHOK RAJAGIRI D.J.PANDIANPartner Chairman

M.B.KAKA

C. NET CASH FROM FINANCING ACTIVITIES

NET INCREASE IN CASH & CASH EQUIVALENTS(A+B+C)CASH AND CASH EQUIVALENT AS AT 1-4-2011(OP.BAL)CASH AND CASH EQUIVALENT AS AT 31-3-2012 (CL.BAL)

Note: Purchase of Fixed Assets include Movement in capital works in progress.

Interest Paid

A. NET CASH FROM OPERATING ACTIVITIESCASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (Including interest cost)

Sale of Fixed Assets

Investment B. NET CASH FROM INVESTING ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITIES

( Repayment) / Proceeds From Borrowings

Direct Tax Paid (Net of Refund)

Dividend Received

Operating Profit Before Working Capital ChangesAdjustments for Changes in Working Capital(Increase) /Decrease In Inventories(Increase) /Decrease In Trade Receivable(Increase) /Decrease In Loan & advancesIncrease /(Decrease) In Trade Payables and other liabilities(Increase) /Decrease In Other Current Assets

CASH GENERATED FROM OPERATIONS

Interest and financing charges


CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2012

PARTICULARS

Cash Flow from Operating ActivitiesNet Profit Before TaxAdjustments For:Add / (Less) :Loss on disposal of Fixed AssetsProfit on Sale of Fixed AssetsDepreciation



GGGGGGGG[Type text] [Type text] [Type text]

Note 1 SIGNIFICANT ACCOUNTING POLICIES I. Basis of Preparation of Financial Statements (a) The Company is a Public Limited Company registered under the Provisions of The

Companies Act, 1956 and has applied provisions of the said act for the preparation of its financial statements, unless otherwise stated. The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting as going concern, in accordance with the accounting principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Accounting policies have been followed consistently except stated specifically.

(b) The Government of Gujarat, under the provisions of the Gujarat Electricity Industry

(Reorganization and Regulation) Act, 2003 had framed the “Gujarat Electricity Industry Reorganization and transfer of Gandhinagar Thermal Power Station Scheme, 2003” and “ The Gujarat Electricity Industry Reorganization and Comprehensive Transfer Scheme, 2003” for the purpose of providing and giving effect to the comprehensive transfer and vesting of all Assets, Liabilities and Proceedings of all the power stations of erstwhile Gujarat Electricity Board and revesting the same in the Company.

The Government of Gujarat vide Notification No.GEB-1105-1749-K dated March

31, 2005, has declared the date of transfer under the schemes referred to above as final with effect from 01/04/2005. In pursuance of the said notification and the final transfer of functions and activities relating to, generation of power to the Company, the entire operations have been undertaken by the Company (GSECL) with effect from 01/04/2005 and, the opening balance sheet of the company has been accordingly incorporated as on 01.04.2005 in the books of accounts of the company.

(c) The material known liabilities are provided for on the basis of available information /

estimates unless otherwise stated. II. Use of Estimates The presentation of financial statements requires certain estimates and assumptions. These

estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/ materialized.




III. Fixed Assets

(a) Fixed Assets are stated at cost of acquisition or construct ion less accumulated depreciation. The Fixed Assets of transferred generating undertaking of erstwhile Gujarat Electricity Board are stated as specified in said Notification No.GEB-1105-1749-K dated March 31, 2005 issued by the Government of Gujarat.

In case of Fixed Assets for new projects/extensions/renovation and modernization,

the related expenses and interest cost up to the date of commissioning, attributable to such projects/ expansions/renovation and modernization are capitalized.

Recoveries of liquidated damages for construction delays are recorded as a reduction

in the related project’s construction costs as and when accepted/settled. (b) The amounts contributed towards the cost of Dam and Canal in respect of Ukai

Power station transferred to the Company as per the scheme of restructuring of erstwhile Gujarat Electricity Board is treated as Capital Expenditure and is depreciated as “Hydraulic work dam, slipway etc.”

(c) The Company is capitalizing the capital spares purchased initially with the

equipment or purchased subsequently in accordance with the provisions of Accounting Standard 10 read with Accounting Standard Interpretation 2 issued by the Institute of Chartered Accountants of India.

IV. Capital Work In Progress (a) Cost of material consumed, erection charges and the incidental expenses incurred for

the project, pending for capitalization are shown as capital work in progress till the capitalization of assets/project.

(b) In case of Capital Work in Progress for work against Deposits/work contract where

the final settlement of bills with contractor is yet to be effected, capitalization is done on provisional basis subject to necessary adjustment in the year of final settlement.

(c) Claims for price variation/exchange rate variation in case of capital contracts are

accounted for on acceptance thereof by the Company. (d) A portion of overhead expenses of Corporate Office and Plant Offices determined on

rational basis are allocated to the project, pro-rata to their capital expenditure for the year and the same are apportioned to respective capital work in progress accounts on the basis of accretion thereto.

(e) Capital Expenditure on assets not owned by the Company are reflected in fixed

assets and the same are depreciated at relevant rates.

(f) The cost incurred and revenue generated during the Trial Run Stage of the Project/Power Station are capitalized. 2011-12




V. Borrowing Cost Borrowing cost including interest, guarantee fees, commitment charges etc., that is directly

attributable to the acquisition, construction or production of a qualifying asset is capitalized as part of the cost of that asset up to period the project is commissioned or asset is put to use. The borrowing cost incurred on common funds borrowed generally and used for the purpose of obtaining a qualifying asset, is apportioned on rational basis, the remaining borrowing cost is charged to revenue.

VI. Impairment of Assets The impairment of Assets i.e. “The cash generating unit” as defined in accounting

standard-28 issued by The Institute of Chartered Accountants of India on “Impairment of Assets” are identified at the balance sheet date with respect to carrying amount of the asset

vis-à-vis its estimated revenue generation during balance useful life of that asset and the loss, if any, is recognized in profit & loss account. Impairment loss, if any, to be reversed subsequently is accounted for in the year of reversal.

The company has adopted the policy of carrying out impairment test once in every t hree

financial years. VII. Depreciation and Amortisation (a) The Company is providing depreciation on straight line method on pro rata basis at

the rates specified by the Central Electricity Regulatory Commission (CERC), the statutory authority established under the Electricity Act, 2003, in terms of notification No. 23/2/2005 R & R (Vol. III) dated 6 th January, 2006 issued by the Ministry of Power, Government of India.

(b) Capital spares with the company are mostly capable of being used in the group of

power stations with near identical or similar technology using similar plants and machineries and are expected to be used during more than one accounting period. These spares are, therefore, depreciated over the residual useful life of the plant in accordance with Accounting Standard 10 issued by The Institute of Chartered Accountants of India.

(d) Plant & Machinery, loose tools and items of any appliances included under different

head of assets costing Rs.5,000/- or less are charged to the revenue account. VIII. Investments Investments are classified into current and long term investments. Current investments are

stated at the lower of cost and fair value. Long term investments are stated at cost price. Provision for diminution in the value of Long Term Investment is made only if such decline is not temporary in nature in the opinion of the management.




IX. Inventories (a) The Inventories of Coal and Oil are valued at lower of grade based purchase cost

plus freight and other fuel related cost on monthly weighted average basis or net realisable value (NRV).

(b) Stores and spares are valued at lower of the weighted average cost inclusive of

freight and other allocable overheads or net realisable value. (c) Scrap/Obsolete assets are valued at estimated cost or net realisable value, whichever

is less. (d) Coal, Oil and Stores and spares in Transit are valued at Cost plus Freight and other

Incidental expenses. X. Retirement Benefits (a) The Company has Defined Contribution Plan for its employees’ retirement benefit

comprising of provident fund (administered through trust ) and, Employees’ Pension Scheme and Employees Death Linked Insurance scheme.

(i) The company and eligible employees make monthly contributions to provident

fund trust equal to specified percentage of the covered employees’ salary. (ii) The amounts towards accrued liabilities for pension to employees are

deposited with the Regional Provident Fund Commissioner office as per provisions of Employee Pension Act.

The company has no further obligations to the above referred plans beyond its

monthly contributions. (b) The Defined Benefit Plan comprising of Gratuity (administered through trust and

funded through Life Insurance Corporation of India) and Leave Encashment. The liability for the gratuity and leave encashment is determined and accrued on the basis of independent actuarial valuation done at year end.

XI. Revenue Recognition (a) Energy sales are recognised on the basis of amount of invoices for supply of energy determined in accordance with the Techno-Commercial parameters approved in the relevant Power Purchase Agreement/Tariff orders by Gujarat Electricity Regulatory Commission. Revenue is recognised when there is no significant uncertainty as to the measurability and ultimate collection. In case of Unscheduled Interchange (UI) charges income, the similar treatment is given.




(b) Income from sale of scrap, administration charges of fly ash, Interest income, Income on O & M contract and Carbon Emission Reduction (CERs) are accounted for on accrual basis and insurance claims and dividend are accounted for on their receipt.

XII. Expenditure All expenses are reflected in revenue accounts under their natural heads. Expenses shown

under the generation of power, repairs & maintenance, employee cost, depreciation, administration and general expenses and interest and finance charges, are disclosed separately. In case of Long Term Service Contract entered into for the maintenance of the plants, yearly provisions are made for the expenditure to be incurred.

XIII. Grant from the Government (a) In accordance with the Accounting Standard 12 on ‘Accounting for Government

Grants’, issued by The Institute of Chartered Accountants of India, Grants and Subsidies received from Government are recognised on reasonable certainty of its realisability.

(b) Grant and subsidies received for the specific assets are reduced from the cost of

concerned specific assets. (c) Capital Grants received under Financial Restructuring Plan (FRP) as promoters

Contributions are treated as Capital Reserve forming part of “Shareholders Fund”. (d) Grants & Subsidies on Revenue account are disclosed separately as Income in the

Profit & Loss Account. XIV. Taxation Current Tax provision is determined on the basis of estimated taxable income under the

Income Tax Act, 1961 after considering permissible tax exemption, and reduction/disallowance. In the absence of any prospective taxable income for the year, the tax liability is calculated at the minimum alternate tax rate under section 115JB of the Income Tax Act, 1961.

XV. Transactions in Foreign Currency (a) Transactions denominated in foreign currencies are normally recorded at the

exchange rate prevailing at the time of the transaction. (b) Any income or expense on account of exchange rate difference either on settlement

or on transaction is recognised in the profit and loss account.




XVI. Prior Period Items and Extra - Ordinary Items Adjustments arising due to errors or omission in the financial statements of earlier years are

accounted as “Prior Period” Items. Items of Income & Expenditure, which are not of recurring nature viz., damages due to floods, earth quakes etc., are disclosed as Extra Ordinary items.

XVII. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when

there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

GUJARAT STATE ELECTRICITY CORPORATION LIMITED19th Annual

Report 2011-12

2. SHARE CAPITAL


period (2011-12)


period (2010-11)

350,000.00 350,000.00

148,358.01 148,358.01

145,802.24 145,802.24

145,802.24 145,802.24

As at 31st March 2012 No. of

Shares

As at 31st March 2011 No. of

Shares

1,458,022,424 912,972,424

0 545,050,0001,458,022,424 1,458,022,424

3. RESERVES AND SURPLUS


period (2010-11)

Capital Reserve (Capital Grant under FRP) 31,427.94 31,427.94Share Premium 99,201.71 99,201.71Surplus As per last Balance Sheet 74,791.97 60,438.04 Add: Balance of profit from Profit & Loss A/c. 17,243.81 14,353.93

92,035.78 74,791.97222,665.43 205,421.62

Particulars

` IN LAKHS

Figures for the current reporting period

(2011-12)

Total

Equity Shares at the beginning of the year

Add : Shares issued on right basis to Gujarat Urja Vikas Nigam LimitedEquity Shares at the end of the year

1483580189 Equity shares of Rs. 10 each fully paid up Subscribed and fully paid up145,80,22,424(P.Y. 145,80,22,424) Equity Shares of Rs 10/- each fully paid held by the holding Company Gujarat Urja Vikas Nigam Limited and its nominees

Total1.Of the above, 145,80,22,424 Equity Shares are held by "Gujarat Urja Vikas Nigam Ltd ", the holding Company (GUVNL) & its nominess.2.Of the above 330,672,354 Equity shares of Rs. 10/- each have been issued at premium as specified in Govt.GR GHU-(203)-GUV-1106-590-K Dtd. 12.12.2008 for transfer of generation undertaking of erstwhile GEB (now GUVNL)

Notes forming part of the Financial Statements.

Particulars

(` In Lakhs)

Authorised350,00,00,000 (P.Y. : 350,00,00,000) Equity Share of Rs. 10/- each

Issued Share Capital

3.Of the aove 44,40,00,070 Equity Shares of Rs 10/- each were allotted at par to erstwhile GEB (now GUVNL) on conversion of Unsecured Loan amounting to Rs. 44,400,01 lakhs.Reconciliation of number of Shares outstanding at the end of year is setout below.

Particulars

1


Report 2011-12

Notes forming part of the Financial Statements.4. SHARE APPLICATION MONEY PENDING ALLOTMENT


period (2011-12)


period (2010-11)

22,300.00 22,300.00

22,300.00 22,300.00

Equity Share Application Money

Total

(a) The Company has issued 5,57,50,000/- equipty share of Rs. 10/- each at cash with premium of Rs. 30 /-per share to M/s. Gujarat Urja Vikas Nigam Ltd.during the month of July'12 for pending share application money since March-2011 & company has sufficient authorised share capital for issuing equity shares.

Particulars

` IN LAKHS

2


Report 2011-12

Notes forming part of the Financial Statements.5. LONG TERM BORROWINGS


period (2010-11)

SECURED LOANS 0.00 0.00A. Term Loan from Financial Institution Power Finance Corporation Limited 226,885.13 211,124.48 Rural Electrification Corporation Limited 709.58 851.50

227,594.71 211,975.98B. Term Loan from Bank Oriental Bank of Commerce 38,287.43 35,481.75 Indian Bank 6,825.03 4,528.42 Dena Bank 24,976.50 25,230.11 Corporation Bank 10,987.28 7,341.33 Syndicate Bank 8,202.97 6,605.61 Canara Bank 14,577.92 7,575.87 Allahabad Bank 19,302.24 17,516.71 Kalupur Commercial Co.Op.Bank Ltd 1,443.53 2,085.53 Bank of Baroda 20,646.28 22,229.91 Vijya Bank 24,142.48 26,155.00 Union Bank 24,190.32 0.00 National Bank for Agriculture & Rural Development 1,551.38 0.00

195,133.36 154,750.24C. Deffered payment Guarantee 133.80 0.00

D. Loans transferred from GUVNL Term Loan from Banks: Dena Bank 0.00 321.15 Union Bank of India 0.00 228.50 Allahabad Bank 0.00 685.50 Indian Overseas Bank 0.00 869.12 Canara Bank 0.00 2,621.29 Syndicate Bank 0.00 0.00 0.00

422,861.87 371,451.78

UNSECURED LOANSA. Term Loan from Financial Institution/Banks: Power Finance Corporation Limited 3,643.24 7,650.75 Gujart State Financial Services Limited 100,833.33 44,444.44

104,476.57 52,095.19B. Loans transferred from GUVNL Bonds. 39,156.03 46,407.09 Term Loan from Financial Institution: Gujarat State Financial Services Limited 0.00 3,460.82

143,632.60 3,460.82Total (Long Term Secured+Unsecured) 566,494.47 473,414.88

Total Long Term Secured

Total Long Term Unsecured

Particulars

` IN LAKHS


(2011-12)

3


Report 2011-12


Name of FIs/ Banks Out Standing Amt.as

on 31.03.2012

Maturity Period from 31.03.2012

(in Month)

Amount of Instalments per

Quarter.

Out Standing Amt.as on 31.03.2011

SecuredA-Power Finance Corporation1-KLTPS - I & II 679.83 78 26.15 784.422-GNR R & M 13459.44 89 451.18 14741.293-Ukai Unit - VI 177500.00 189 2958.33 149940.874-Ukai R & M I & II 15381.50 105 439.47 17139.385-KLTPS - IV 5103.54 96 159.49 5741.496-DHN - II 11666.67 84 416.67 13333.337-DHN - I 4060.59 38 320.46 5865.298-PFC -KLTPS IV 10233.24 57 536.59 12387.609- UTRAN 135MW 2722.22 21 388.89 4277.778B-Banks.1-Oriental Bank of Commerce 38287.43 150 1125.00 35481.752-Indian Bank 6825.03 150 413.00 4528.423-Dena Bank 27540.50 0.00Dena Bank-Sikka project 4653.12 150 250.00 3435.11Dena Bank-Utran Power plant 21794.99 102 641.00 24359.00Dena Bank-Dhuvaran Project 1092.39 144 375.00 0.004-Corporation Bank 10987.28 150 500.00 7341.335-Syndicate Bank 8202.97 150 500.00 6605.616-Canara Bank 14577.92 0.00Canara Bank-Sikka Project 13695.52 150 1000.00 7575.87Canara Bank-Dhuvaran Project 882.39 144 500.00 0.007-Allahabad Bank 20890.24 500.00Allahabad Bank-Sikka Project 7377.00 150 500.00 4001.69Allahabad Bank-Utran Project 13513.24 102 397.00 15103.028-Kalupur Commercial Co.Op.Bank Ltd 2085.53 161.00 2727.539-Bank of Baroda 23262.28 0.00Bank of Baroda-Utran power plant22217.52 102 654.00 24845.91Bank of Baroda-Dhuvaran project 1044.75 144 875.00 0.0010-Vijya Bank 27218.48 0.00Vijya Bank-Utran Power plan 26155.00 102 769.00 29231.00Vijya Bank-Dhuvaran project 1063.48 144 375.00 0.0011-Union Bank of India 27130.32 0.00Union Bank of India-Dhuvaran Project15899.55 144 750.00 0.00Union Bank of India-KLTPS-IV/Dhuvaran-II. 11230.77 120 735.00 0.0012-Nabard-Solar Project 1595.70 1595.70 119 44.33 0.00C-Loan Transferred from GUVNL.1-GUVNL - Syndicate Bank 0.00 6153.972-GUVNL - DENA BANK 321.14 12 80.29 2922.15

1. The above Term Loans (referred at A, B and C ) are secured by way of hypothecation on the w hole of movable properties of the company including its movable plant and machinery, machinery spares, tools and acc essories and other movables, both present and future (save and except book debts) for power generating units of the co mpany, namely Ukai unit 1 & 2, Gandhinagar unit 1 & 2 and KLTPS unit no. 1 & 2 for R&M schemes, KLTPS unit 4, Ukai unit 6, Sik ka unit 3 & 4, Utran CCPP II, Dhuvaran -III, Nabard Loan for Solar project,UBI 56 for short fall in loan of KLTPS-IV /DHR-II as well as Wind Mill 10 MW towards expansion projects of the company. Similarly, the company has raised Term Loan against hypot hecation of assets for various minor R&M schemes. Loan for Utran 135 MW of Rs. 27.22 Crores from PFC- Unsecured during 201 1-12 is covered by mortage of Assetes and is consider as Secured loan.2. The above term loans are further secured by way of mortgage on all immovable properties, both pre sent and future in respect of the power stations of the company as stated above.

3. The working capital loans from banks are secured by way of hypothecation on all current assets of the compnany viz. coal, oil, consumable spares and stores, bills receivable and book debt.

4.Repayment terms & maturity period of long term loans.

4


Report 2011-12

Notes forming part of the Financial Statements.3-GUVNL - IOB 869.12 12 217.28 1776.384-GUVNL - SBI 0.00 12 0.00 4584.405-GUVNL - BOB 0.00 12 0.00 3010.226-GUVNL - ALLAHABAD 685.50 12 171.38 1599.507-GUVNL - UNION 228.50 12 57.13 685.508-GUVNL - CANARA BANK 2621.29 12 655.32 7340.59

Name of FIs/ Banks Out Standing Amt.as

on 31.03.2012


(in Month)

Amount of Instalments per YEAR

Out Standing Amt.as on 31.03.2011

A-Deffered Payment Guarantee 172.03 54 19.11

Name of FIs/ Banks Out Standing Amt.as on 31.03.2012


(in Month)Amount of

Instalments per YEAROut Standing Amt.as

on 31.03.2011A-REC 851.50 72 141.92 993.419Un SecuredA-Power Finance Corporation1-R & M of Wanakbori TPS 455.71 21 65.10 716.1222-R & M of Gandhinagar TPS 748.45 21 106.92 1176.1333-R & M of Ukai TPS 720.73 24 90.09 1081.0904-R & M of Wanakbori TPS 66.90 36 5.58 89.2005-R & M Sikka TPS (2x120 MW) 40.73 30 4.07 57.0286-R & M of KLTPS (2x70 MW) 3285.00 54 182.50 4015.0007-RLA & LE study/Works of GTPS 76.07 24 9.51 114.1008-R & M of Gandhinagar TPS-2x120+2x210 MW 102.39 69 4.45 120.1979-RLA GTPS 26.35 51 1.55 32.55010-RLA & LE study/Works of GTPS 5.00 3 5.00 25.000B-Gujarat State Financeial Services.1-GSFS-2 44444.44 46 2777.78 50000.0002-GSFS-4 50000.00 17 6250.00 0.0003-GSFS-5 30000.00 22 3750.00 0.000C-Loan Transferred from GUVNL.1-GUVNL - KARNATAKA Bank 0.00 1651.7552-GUVNL - GSFS 3460.82 12 865.21 28984.1493-GUVNL - BONDS 46407.09 57337.019

634999.48 3814.79 21311.92 563913.145

BOND with ROI 2012.13 2013.14 2014.15 2015.16 2016.1711.50% Series-Vl Option-II 4471.67392 0 0 0 011.75% Series-Vl Option- III 959.48234 959.48234 1279.30978 0 07.50% Series-Vl Option- III 1773.09783 1773.09783 2364.13043 0 011.25% Series-VII option-II 46.80978 62.41305 0 0 011.50% Series-VII option-III 0 2097.37772 0 0 08.95% Series-Vlll 0 0 5733.84375 5733.84375 7645.138% Series-lX 0 0 911.37228 911.37228 1215.168% Series-X 0 0 2540.84918 2540.84918 3387.80

7251.06387 4892.37094 12829.50542 9186.06521 12248.09

5. Loans transferred from GUVNL ( referred at D above) -bonds raised by erstwhile GEB will be repaid by March-2017.

MATURITY OF PUBLIC BONDS.

Loan from Indian Overseas Bank (outstanding Rs.20 Crores) is secured against the 1st hypothecation c harge on the assets of Dhrangadhra and Surendranagar O & M Division of PGVCL.

5


Report 2011-12


6. OTHER LONG TERM LIABILITIES


period (2011-12)


period (2010-11)

Liabilities for Capital Supplies / works 3,569.86 1,951.44Staff Welfare Scheme 3,224.11 3,097.90Deposit and Retention from Supplier And contractor 53,338.04 32,835.50

TOTAL 60,132.01 37,884.84

7. LONG TERM PROVISIONS


period (2011-12)


period (2010-11)

13,482.93 11,773.08

TOTAL 13,482.93 11,773.08

8. SHORT TERM BORROWINGS


period (2010-11)

Secured Working Capital Loan from Bank Cash Credit 2,066.96 5,201.97Unsecured Loan Term Loan from Financial Instituation/Bank Union Bank of India 40,000.00 15,000.00 Bank of Baroda 29,998.55 15,000.00 Gujarat State Financial Services Limited 6,666.67 33,333.33 Purchase bill discounting 14,784.49 91,449.71 63,333.33

93,516.67 68,535.30

Provision for Employees benefits ( Leave Encashment)

Particulars

` IN LAKHS


(2011-12)

Total Short Term Borrowings Secured+Unsecured Loan

Loan from Canara Bank (outstanding Rs.83.32 Crores) is secured against the extension hypothecation charge on the assets of Godhra and Baroda O&M Divisions of MGVCL.Loan from Dena Bank (outstanding Rs.12.50 Crores) is secured against the 1st hypothecation charge on the assets of Amreli, Dhasa, & Vartej Tr.Divisions of GETCO.Cash Credit limit is secured against the I st hypothecation charge in favour of UCO Bank Consortium on the Stocks and Book Debts of all the Companies except UGVCL ranking pari-passu and in favour of SBI Consortium in case of UGVC L.

Particulars

` IN LAKHS

Particulars

` IN LAKHS

Loan from Indian Overseas Bank (outstanding Rs.18.33 Crores) is secured against the 1st hypothecati on charge on the assets of Vijapur, Mehsana & Chhatral Tr. Division of GETCO.Loan from Union Bank of India (outstanding Rs.10 Crores) is secured against the 1st hypothecation ch arge on the assets of Soja, Dhansura & Chhatral Tr. Division of GETCO.Loan from Allahabad Bank (outstanding Rs.30 Crores) is secured against the 1st hypothecation charge on the assets of Sabarmati, Gandhinagar & Bavla O & M Division of UGVCL .

6


Report 2011-12


9. TRADE PAYABLE


period (2011-12)


period (2010-11)

Fuel : Coal 42,687.79 40,518.24 Gas 2,737.90 5,227.35 Oil 125.45 126.33

45,551.14 45,871.92TOTAL

Particulars

` IN LAKHS

7


Report 2011-12

Notes forming part of the Financial Statements. 10. OTHER CURRENT LIABILITIES


period (2011-12)


period (2010-11)

O&M Supplies/Works 3,983.27 4,322.83 Staff 43.57 58.69 Expenses 3,198.21 936.07 Deposit 357.68 500.35 Interest accrued and due 1,701.95 1,558.76 Interest accrued but not due 10,362.70 8,958.44 Inter Company Payable 101,894.36 100,690.00 Other Liabilities 4,811.51 1,319.01

126,353.25 118,344.15Current maturities of Long Term Debt:A Term Loan from Financial Institution Power Finance Corporation Limited 15,805.99 12,862.65 Rural Electrification Corporation Limited 141.92 141.92 Gujarat State Financial Services Limited 23,611.11 5,555.56B. Term Loans from Bank 39,559.02 18,560.13 Dena Bank 2,564.00 2,564.00 Allahabad Bank 1,588.00 1,588.00 Kalupur Commerical Co-operative Bank Ltd 642.00 642.00 Bank of Baroda 2,616.00 2,616.00 Vijaya Bank 3,076.00 3,076.00 National Bank for Agriculture & Rural Development 44.33 0.00 Union Bank of India 2,940.00 0.00 Deferred payment Gurantee 38.23 0.00

13,508.56 10,486.00C. Loan Transferred from GUVNL(i) Term Loan from Banks Dena Bank 321.14 2,601.00 Union Bank of India 228.50 457.00 Allahabad Bank 685.50 914.00 Indian Overses Bank 869.12 907.25 Canara Bank 2,621.29 4,719.30 Syndicate Bank 0.00 6,153.97 State Bank of India 0.00 4,584.40 Bank of Baroda 0.00 3,010.22 Karanataka Bank 0.00 1,651.76

4,725.55 24,998.90(ii) Bonds 7,251.06 10,929.93(iii) Term Loan from Financial Institutation Gujarat State Financial Services Limited 3,460.82 25,523.33

15,437.43 61,452.16TOTAL 194,858.26 208,842.44

Particulars

` IN LAKHS

8


Report 2011-12


11. SHORT TERM PROVISIONS


period (2011-12)


period (2010-11)

Provision for expenses 23,969.81 14,852.69Provision for Obsolence of Asset 2.84 21.31Provision for Income Tax 10,410.17 0.00Less : Advance Tax, TDS and FBT 10,191.90 218.27 0.00

Provision for Fringe Benefit Tax 134.23 134.23TOTAL 24,325.15 15,008.23

13. NON CURRENT INVESTMENT( Non Trade)


period (2011-12)


period (2010-11)

QuotedGujarat State Petronet Limited 550.00 550.0055,00,000 Equity Shares of Rs.10/- each fully paid

Gujarat Industries Power Company Limited 1,500.00 1,500.00

22,05,882 Equity Shares of Rs.10/- each fully paidat premium of Rs. 58/- per share

UnquotedMahaguj Collieries Limited (Joint Venture Company) 2.00 2.0020,000 Equity Shares of Rs. 10/- each fully paidKalupur Commercial Co.Op.Bank Ltd 0.05 0.05

200 Equity Share of Rs. 25 each fully paidTOTAL 2,052.05 2,052.05

Aggragate cost of quoted investment 2,050.00 2,050.00Aggragate Market Value of quoted investment 5,624.34 7,493.69Aggragate cost of unquoted investment 2.05 2.05

Particulars

` IN LAKHS

Particulars

` IN LAKHS

9

GUJARAT STATE ELECTRICITY CORPORATION LIMITEDNotes forming part of Financial statements

Note 12 : FIXED ASSETS

As at 1.4.2011 Additions

Deductions/ Adjustment

(Note 1)

As at 31.03.2012

As at 1.4.2011

Deduction/ Adjustment

(Note 2)Credit As at

31.03.2012As at

31.03.2012As at

31.03.2011

a Tangible AssetLand & Land rights 10.1 1,982.03 40.14 0.00 2,022.16 4.67 0.00 1.34 6.01 2,016.15 1,977.35Buildings 10.2 54,253.01 134.61 21.53 54,366.09 13,186.75 3.12 1,814.61 14,998.24 39,367.85 41,066.26Hydraulik Works 10.3 59,388.21 940.70 1,596.71 58,732.20 18,919.80 1,399.76 3,074.82 20,594.87 38,137.33 40,468.40Other Civil works 10.4 35,586.48 1,511.83 242.47 36,855.84 5,325.41 178.67 1,202.57 6,349.30 30,506.54 30,261.07Plant & Machinery 10.5 719,169.11 165,420.90 3,026.56 881,563.45 268,951.92 2,466.78 105,566.00 372,051.14 509,512.31 450,217.19Lines & Cable Net works 10.6 5,561.38 70.88 0.71 5,631.55 1,625.72 -0.27 294.59 1,920.58 3,710.97 3,935.65Vehicles 10.7 699.09 116.33 51.84 763.58 552.66 45.17 17.49 524.98 238.60 146.43Furniture & Fixtures 10.8 2,314.08 46.50 1.55 2,359.03 1,235.73 -41.71 147.38 1,424.82 934.21 1,078.35Office Equipments 10.9 1,732.37 54.23 0.00 1,786.60 841.78 -4.62 222.61 1,069.00 717.60 890.60Cap. Exp. Resultig in assets not belonging to the board 11.1 187.97 0.00 187.97 6.30 0.00 6.28 12.57 175.40 181.68Cap. Spares at Gen. Stations 11.3 206,395.83 15,692.83 157,361.16 64,727.50 69,319.24 67,609.06 17,081.21 18,791.39 45,936.11 137,076.59

1,087,269.57 184,028.97 162,302.53 1,108,995.97 379,969.99 71,655.96 129,428.90 437,742.91 671,253.07 707,299.59Impairment of Fixed Assets 14.40 0.00 3.85 18.25 18.25 14.40

1,087,269.57 184,028.97 162,302.53 1,108,995.97 379,969.99 71,655.96 129,432.75 437,761.16 671,234.81 707,285.161,034,567.93 58,570.92 1,730.78 1,091,408.07 320,267.49 130.81 59,847.71 379,984.39 711,423.68 714,300.44

Note: 0.00

2. It includes the amount of depreciation related to prior period resulted due to error in applicat ion of depreciation rates in earlier years for certain class of assets.

3. The capital spares are re-clasified and re-grouped to Plant & Machinry (Refer Note 31 (c) ) 14.40

` IN LAKHS

SR. NO. PARTICULARS A/C

CODE

GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK

Total fixed assets

TotalPrevious Year

1. It includes cost of assets sold, retired from active use and discarded assets.

GUJARAT STATE ELECTRICITY CORPORATION LIMITED 19th

Annual Report 2011-12

GGGGGGG[Type text] [Type text]

Notes forming part of the Financial Statements. Type text]

29. Secured and Unsecured Loans (a) Loans directly raised by company

During the year, the Company raised Secured and Unsecured long term loans from Power Finance Corporation Limited (PFC) ` 27559.13 lakhs, Nationalized Banks: `53965.88 lakhs (including `11230.77 lakhs availed from UBI for short fall in loan of for KLTPS-IV/DHR-II Power plant and `1595.70 lakhs from NABARD for Solar projects ) and Gujarat State Financial Services Limited (GSFS) ` 80000 lakhs aggregating to `161525.01 lakhs. As these loans are secured against charge / security of fixed assets described in Note 4 for Long term Borrowings under the head “Secured Loans”. the same are classified as secured loans ( except loans from GSFS.) and the charge thereof has been registered with the Registrar of companies. The amount Rs. 3643.24lakhs from PFC has been classified as Un-secured loans in Notes 5 though guaranteed by Government of Gujarat.The Company achieved the Financial Closure for Dhuvaran-CCPP-III Power project and executed the Security Documents for the entire Term Loans raised from Nationalized Banks ` 115000.00 lakhs. The same is now shown as secured loans.For the Solar projects and KLTPS-IV/Dhuvaran-II, the charge has been registered with the Registrar of companies.The Company raised Short Term Finance from Union Bank of India (` 40000 lakhs and from Bank of Baroda (`.30000 lakhs) and from GSFS `.20000 lakhs) aggregating to ` 90000.00 lakhs shown as Unsecured Loans.

(b) Loans transferred under the Financial Restructuring Plan (FRP) Scheme

(i) The loans transferred under Clause 3 (ii) of the Gujarat Electricity Industrial Re-organization & Regulation Act 2003 comprised of Loan Term secured and unsecured loans. These are the loans earlier raised by erstwhile GEB against hypothecation / mortgage of various assets of Transmission Company and Distribution Companies, as per the details given at Note 10, Secured Loans and Un Secured Loans.

(ii) Balance under loans and Bonds transferred from GUVNL and interest thereon received / receivable from GUVNL are accounted as per the intimations received from GUVNL.

. 30. Claim Settlement / Pending Reconciliation

(a) The reconciliation of the Coal Suppliers accounts, namely South Eastern Coalfields Limited (SECL) and Western Coalfields Limited (WCL) are reconciled up to 30th June 2012. The necessary adjustments upon reconciliation, if any, are made in the year of reconciliation.





(b) There were total 4055 missing railway wagons of the company as on 31st March 2012. The matter regarding its adjustment is under pursuance with the competent railway authority. Necessary Gain/Loss would be booked in the year of adjustment given by Railways.

31. Fixed Assets and Depreciation

(a) Adhering to significant accounting policy, the depreciation on assets is provided at rates prescribed by Central Electricity Regulatory Commission (CERC), which are similar to the rates as referred to in Schedule-XIV to the Companies Act, 1956 after its revision with effect from 1-04-2009, however, the depreciation provided by the Company is higher by ` 575 lakhs as compared to the depreciation calculated as per the Companies Act.

(b) During the last year there was an accident at Dhuvaran CCPP-I on 2nd May 2010. The Company had lodged insurance Claim with M/s. Cholamandalam General Insurance Co. Ltd and received insurance claim of ` 3631.20 lakhs.

(c) As per the accounting policy, the company is capitalizing the capital spares initially

purchased with the plant & machinery/equipment or capital spares purchased subsequently, in accordance with the provisions of Accounting Standard 10 read with Accounting Standard Interpretation 2 issued by ICAI. The capital spares which are installed upto 31st March 2012, have been shown under the sub head Plant & Machinery separately and depreciation is being charged as per existing practice only. The company has re-classified/re-grouped installed capital spares of ` 1,57361.16 lakhs to head of account 10598 as installed Capital Spares of respective power station from head of account 11300. Hence, the value of Gross Block of Fixed Assets does not change. Also, the corresponding proportionate depreciation of ` 67609.06 lakhs, regrouped/reclassified Capital Spares are also transferred accordingly in the respective head of accounts.

32. Provision for Employees’ remuneration and benefits: (a) Salaries and Wages

Employees of erstwhile GEB were transferred under the scheme with complete benefit of continuation of service on same terms and conditions as were prevailing on the effective date of transfer. The employee costs in respect of the transferred employees have been accordingly accounted.





(b) Employee Benefits (i) Defined contribution to Provident fund, Employee Pension Scheme and

Employees Death Linked Insurance. The Company makes contribution towards Employees’ Provident Fund,

Employees’ Pension Scheme and Employees Death Linked Insurance. In accordance with the provisions of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company has, during the year, recognized the sum of ` 3307.98 lakhs (P.Y. `. 3015.59 lakhs) as an expense towards contributions to these plans.

(ii) Defined contribution towards retirement benefits:

The liability on account of Gratuity (retirement benefit in the nature of defined benefit plan) is accounted as per Accounting Standard -15 dealing with Employee Benefits.

The following table ( on next page) sets out the status of the gratuity and leave encashment scheme plans as at 31st March, 2012.





` Gratuity Leave Encashment

2011-12 2010-11 2011-12 2010-11

Changes in the present value of obligation

Present value of obligation (Opening) 21837.52 19257.45 11773.08 10761.05Interest cost 1747.00 1540.60 941.85 860.88Past service cost NIL NIL NILCurrent service cost 766.57 742.84 388.06 394.41Curtailment Cost / (Gain) NIL NIL NIL NILSettlement Cost / (Gain) NIL NIL NIL NILBenefits paid (2064.53) (1641.18) (1163.68) (798.36)Actuarial (Gain) / Loss 953.15 1937.82 1147.14 555.10Present value of obligation (Closing) 23239.71 21837.52 13086.45 11773.08Changes in the fair value of plan assets Present value of plan assets (Opening) 9946.60 7548.33 NIL NILExpected return on plan assets 998.63 794.81 NIL NILActuarial Gain / (Loss) (88.23) (32.70) NIL NILEmployers Contributions 3195.10 3277.34 NIL NILEmployees Contributions NIL NIL NIL NILBenefits paid (2064.54) (1641.18) NIL NIL Percentage of each category of plan assets to total fair value of plan assets at the year end

NIL Bank Deposits (Special Deposit Scheme,1975) NIL NIL NIL NILDebt Instruments 100% NIL NIL NILAdministered by Life Insurance Corporation of India NIL 100% - -Others NIL NIL NILReconciliation of the present value of defined benefit obligation and the fair value of assets

Present value of funded obligation as at the year end 11987.56 9946.60 NIL NILFair value of plan assets as at year end 11987.56 9946.60 NIL NILFunded (Asset)/ Liability recognised in the balance sheet

NIL NIL NIL NIL

Present value of unfunded obligation as at the year end 11252.14 11890.92 13086.45 11773.09Unrecognized past service cost NIL NIL NIL NILUnrecognized Actuarial (Gains) / Losses NIL NIL NIL NILUnfunded net liability recognised in the balance sheet 11252.14 11890.92 13086.45 11773.09 Amount recognized in the balance sheet (Through holding company GUVNL for gratuity)

Present value of obligation as at the year end 11987.56 21837.52 11773.08 11773.09Fair value of plan assets as at the year end 11987.56 9946.60 NIL NIL(Asset) / Liability recognized in the balance sheet (11252.14) (11890.92) (13086.45) (11773.09) Expenses recognised in the profit & loss account Current service cost 766.57 742.84 388.06 394.41Past service cost NIL NIL Nil NILInterest cost 1747.00 1540.60 941.85 860.88Expected return on plan assets (998.63) (794..81) NIL NILCurtailment Cost / (Credit) NIL NIL NIL NILSettlement Cost / (Credit) NIL NIL NIL NILNet Actuarial (Gain) / Loss 1041.37 1937.82 1147.14 555.10Employee’s Contribution NIL NIL NIL NILTotal expenses recognized in the profit and loss account

2556.32 3459.14 2865.85 1810.39

Principal actuarial assumption (Rate of Discounting)

Rate of discounting 8.00% 8.00% 8.00% 8.00%Expected return on plan assets 9.50% 9.50% - -Rate of increase in salaries 5.00% 5.00% 5.00% 5.00%Attrition Rate (Employees opting for early retirement) 3% to 1% 3% to 1% - -+





33. Borrowings Cost and Other Cost Related To Project

The Borrowing cost and other Financial charges includes interest on loans, Bank charges, Bank Commission, Cost of Raising finance etc.

During the year under consideration the Company has Capitalized borrowing costs amounting to ` 28348.54 Lakhs and other financial charges ` 32.40 Lakhs, Agreegating amount of ` 28380.95 Lakhs in accordance with the Accounting Slandered 16 “Borrowing Costs” issued by The Institute of Chartered Accountants of India.

The Company has Capitalized ` 5252.89 Lakhs being the aggregate of the employee cost and administration cost of Project Department and other general administration cost which are apportioned to the ongoing projects and renovation and modernization schemes.

34. Segment Reporting The company’s primary business segment is Generation of Electricity. Based on the guiding

principles given in Accounting Standard 17 on “Segment Reporting” issued by The Institute of Chartered Accountants of India, this activity falls within a single primary business segment and accordingly the disclosure requirements of Accounting Standard 17 in this regard are not applicable.

35. Related party disclosures

Based on opinion obtained from eminent consultants and in accordance with the Accounting Standard 18 “Related Party Disclosures” issued by The Institute of Chartered Accountants of India, the disclosure related to the transactions with the related parties is not required and therefore such disclosures are not made.





36. Earning per share Earning per share is calculated by dividing the profit attributable to the equity shareholders

by the weighted average number of equity shares outstanding during the year. Numbers used for calculating diluted earnings per equity share includes the amount of Equity Share Application Money. The details are under:

Sr.No. Particulars 2011-12 2010-11

1. Earnings Available to Equity Share Holders (` in Lakhs) 17,243.81 14,353.96

2. Number of equity shares 1458022424 1458022424

3. Face value per share (`.) 10.00 10.00

4. Earnings per Share (Basic) 1.18 0.98

5. Number of dilutive potential equity shares 1513772424 1424592150

6. Earnings per Share (Diluted) 1.14 1.01

37. Taxation

(a) According to the legal opinion of an eminent tax consultant, the Company is eligible for the benefit of carry forward of business losses and unabsorbed depreciation of the erstwhile Gujarat Electricity Board under section 72 (A) of the Income Tax Act, 1961 read with Central Government Gazette Notification No. SO-1159(E) dated 26/12/2000.

(b) Current Taxation In the absence of any taxable income for the year, the tax liability is calculated at

Minimum Alternate Tax under Section 115JB of Income Tax 1961 and provision of `4313.04 lakhs has been made for the same.

(c) Deferred Taxation

The company is entitled to set off carried forwarded losses and unabsorbed

depreciation against the future taxable income under the Income-tax Act. As a matter of prudence and in the absence of virtual certainty, Company is not recognizing the deferred tax assets in respect of carried forward losses and unabsorbed depreciation as provided by Accounting Standard 22 “Accounting for Taxes on Income”, issued by The Institute of Chartered Accountants of India. Deferred tax assets in respect of other timing differences is also not recognised as in the opinion of the management, there will be no future sufficient income to recover such deferred tax asset.





38. Contingent Liabilities and Capital Commitments

[ ` in Lakhs]

Particulars 2011-12 2010-11

A. Contingent Liabilities not provided for in respect of :

i. Claims against the company not acknowledged as debt.

(employees related matters) 37378.00 27154.00

ii. Others 400.00 400.00

iii. Disputed Income-tax Matters and VAT matters 3366.21 2802.34

iv. Claims from lessor for disallowance of depreciation on

leased assets 17397.00 17397.00

vi. Claims against Company pending Court Orders 157.18 157.18

B. Capital Commitments

Estimated amount of contract remaining to the executed on

capital accounts (Net of Advances) 118762.12 191770.94

39. Old outstanding balances. The amounts receivable (Debit) from and payable (Credit) to various parties, suppliers,

contractors etc., on various accounts, which are carried in various Suspense Accounts/Registers at plants, more particularly, those transferred to Company under transfer scheme as on 1-4-2005, required thorough scrutiny to ascertain the precise break up and supporting documents to establish the claims by and/or against the Company of these parties. Pending scrutiny and reconciliations, the Company has identified long outstanding debits and credits, neither recoverable nor payable and made provision for bad and doubtful debts amounting to ` 1685.08 lakhs in earlier years. During the year, the company has identified non recoverable amount of ` 156.27 lakhs and had written off after obtaining approval of competent authority. Scrutiny of remaining parties is, however, in progress.





40. Statutory Auditors’ Remuneration [` in Lakhs]

Sr. No. Particulars

For the year ended

March 31, 2012

For the year ended

March 31, 2011 1. 2.

Statutory Audit fees Out of Pocket Expenses

17.98 1.36

17.650.00

Total: 19.34 17.65

Note : Inclusive of Service Tax 41. Consumption of Fuel

[` in Lakhs]2011-12 2010-11

Particulars Qty. Amount Qty. Amount

Consumption of Coal & Lignite ( in ‘000 MT)

17725.53 530346.57 17421.69 479192.05

Consumption of Gas(Lakh SCM) 7730.27 95106.73 7305.86 83822.61

Consumption of Oil (in ‘000 Liters) 28.28 11307.42 44.40 13395.37

42. Expenditure in foreign currency

[` in Lakhs] Particulars 2011-12 2010-11 Earnings in Foreign Currency NIL 391.68 Remittances in Foreign Currency 13570.82 7712.45 CIF Value of Imports 15001.18 2963.62 Foreign Traveling NIL NIL





43. The Company has obtained confirmation from suppliers who have been registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). As on 31st March, 2012, there is no balance outstanding to these suppliers. Hence, there is no payment of interest as required under MSMED Act, 2006.

44. During the year, the Company has installed 1 MW Solar Power Plant at overhead of

Narmada Canal and 1 MW Solar Power Plant at Fly Ash Pond at Gandhinagar power Station. The total expenditure incurred is ` 2847.76 Lakhs. Against this, we have received contribution of `. 1500 Lakhs from the Govt. of Gujarat as a capital grant. As per Accounting Policy, the gross value is reduced to that extent.

45. As per GERC regulation and in pursuance of Power Purchase Agreement, the company has

allowed the rebate to the tune of ` 9850.63 lakhs for prompt payment and also recovered ` 681.25 lakhs as delayed payment charges

46. The management has carried out an adequate evaluation of assets to estimate the remaining

useful life of all the plants and on the basis of such evaluation and in view of ongoing renovation & modernization schemes, the management is of the opinion that the depreciation charged for the year on the Company’s assets of Gandhinagar Unit 1 & 2 and Ukai Unit 1 & 2 are not fully charged. All the existing units have completed 35 years of life, but they are running efficiently above the target i.e. cash generating units as per the standard determined by Hon’ble Commission (GERC), as reviewed by Management. Further life of Ukai unit 1 and 2 has been increased by 10 years on account of major renovation and modernization work.

47. GMDC has revised the rates of lignite from `. 500/- to ` 635/- per MT with retrospective

effect from 1st April 2011. Therefore, an amount of `. 3045.95 lakhs is payable to GMDC and liability is created by debiting the fuel charges. However, sales will be credited after confirmation from GUVNL/GERC.





48. Statement of Management

(a) The current assets, loans and advances are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated other wise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary. There are no contingent liabilities except those stated in the notes.

(b) Balance Sheet, Profit & Loss Account and Cash Flow statement read together with the

schedules to the accounts and notes thereon, are drawn up so as to disclose the information required under The Companies Act, 1956 as well to as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review.

49. Previous year figures have been regrouped, reclassified and reworked wherever necessary

to comply requirement of revised schedule VI and for comparative purpose. FOR P.PARIKH & ASSOCIATES FOR & ON BEHALF OF BOARD CHARTERED ACCOUNTANTS Firm Regd No.107564W

Ashok Rajagiri

D.J.PANDIAN GURDEEP SINGH

PARTNER Chairman Managing Director M.No.046070

M.B.KAKASr. Chief General Manager(F&A)

V. P. JANI Company Secretary

PLACE: GANDHINAGAR PLACE: GANDHINAGAR DATE: DATE:

BALANCE SHEET ABSTRACT AND COMPANY�S GENERAL BUSINESS PROFILE AS REQUIRED PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT ,1956

I. Registration Details: Registration No. 19988, State Code 04

Balance sheet Date 31st March,2012.

II Capital Raised during the year Public Issue : NIL (Rs. in thousands) Right Issue : NIL Bonus Issue : NIL Private Placement : NIL III Position of Mobilization and Deployment of Fund (Rs. in thousands)

Total Liabilities 138912830 Total Assets 138912830

Sources of Funds Application of Fund Paid-up Capital 14580224 Net Fixed Assets 67123481 Equity Pending 2230000 Investment 205205 Allotment Reserve and Surplus 22266543 Net Current Assets 10139623 Secured Loan 42286187 Misc.Expenditure - Unsecured Loan 14363260 Accumulated Losses -

IV Performance of Company (Rs. in thousands) Turnover & Other Income 86895350 Total Expenditures 84739664 (+)Profit/(Loss) before tax 2155685 (+)Profit/(Loss) after tax 1724381 Earning per share(Rs.) 1.18 Dividend Rate -

V Generic Names of principal products services of company(as per monetary terms) Product/Service Description Item code NO. Generation of Electricity Not Applicable

FOR AND ON BEHALF OF THE BOARD

D.J.PANDIAN GURDEEP SINGH Chairman Managing Director

M.B.KAKA V.P.JANI Sr.Chief General Manager Company Secretary