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6 Th Annual Report 2008-09DAKSHIN GUJARAT VIJ COMPANY LIMITED

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CONTENT

BOARD OF DIRECTORS 2

NOTICE 3-4

ANNEXURE TO THE NOTICE 5

FINANCIAL STATISTICS 6

DIRECTORS’ REPORT 7-19

AUDITORS’ REPORT 20-25

BALANCE SHEET 26

PROFIT & LOSS ACCOUNT 27

CASH FLOW STATEMENT 28

SCHEDULE 29-58

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BOARD OF DIRECTORS

Shri L. Chuaungo, IAS ChairmanShri G. K. Sinha, IFS Managing DirectorShri P. H. Rana DirectorShri R. G. Sheth DirectorShri H. P. Desai DirectorProf. Surendra Sundararajan DirectorShri S. B. Khyalia DirectorShri N. Srivastava, IFS Additional Director w.e.f. 06th October,2009

COMPANY SECRETARY

Shri Viral H. Vora

BANKERS

Bank of BarodaDena BankState Bank of IndiaUco BankCanara BankBank of IndiaVijaya Bank,Central Bank of IndiaSyndicate BankUnion Bank of IndiaAllahabad BankIndian Overseas BankThe Karur Vysya Bank LimitedIndian Bank

Senior Executives

Shri M.B.Parikh GM (F&A)Shri A.K.Kaul CE (O&M)

AUDITORS

M/s. SNK & Co.

Chartered Accountants,Surat

REGISTERED OFFICE

Nana Varachha Road,Kapodra Char Rasta,Surat - 395 006.





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NOTICE

Notice is hereby given that the Sixth Annual General Meeting of the Members of Dakshin Gujarat VijCompany Limited will be held on 24th December, 2009 at 10.30 am at the registered office of theCompany at Nana Varachha Road, Kapodra Char Rasta, Surat - 395 006 to transact the followingOrdinary and Special Business:

ORDINERY BUSINESS:

1. To receive, consider and adopt Audited Balance Sheet as at 31st March, 2009 and Profit &Loss Account of the year ended on that date and the Reports of the Board of Directors andAuditors with NIL comments of the Comptroller & Auditor General of India.

2. To appoint a Director in place of Shri R.G. Sheth who retires by rotation being eligible forre-appointment.

3. To appoint a Director in place of Shri P.H. Rana who retires by rotation being eligible forre-appointment.

4. To decide the remuneration payable to Statutory Auditors, appointed by the Comptroller andAuditor General of India (C & AG), New Delhi, for the audit of accounts of the Company forthe Financial Year 2009-10.

SPECIAL BUSINESS:

5. To consider and if thought fit, to pass, with or without modification/s, the following resolutionas an Ordinary Resolution.

“RESOLVED THAT Shri. N. Srivastava,IFS who was appointed as an Additional Director ofthe Company on 6th October, 2009, under section 260 of the Companies Act, 1956 and whoholds such office up to date of this Annual General Meeting and who is eligible for appointmentbe and is hereby appointed as a Director of the Company, liable to retire by rotation.

Date: 23.12.2009Place: Vadodara

REGISTERED OFFICE:Nana Varachha Road,Kapodra Char Rasta,Surat - 395 006.

By order of the Board

VIRAL H.VORACompany Secretary




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NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO AP-

POINT A PROXY TO ATTEND AND VOTE ON A POLL, INSTEAD OF HIMSELF AND THAT A

PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. The explanatory statement pursuant to the provisions of Section 173 (2) of the Companies

Act, 1956, is annexed hereto as “Annexure to the Notice”.





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Annexure to the Notice

Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956

In respect of Item No.5

In terms of Section 260 of the Companies Act, 1956, the Board of Directors appointed Shri N.Srivastava, IFS as an Additional Director, representing Gujarat Urja Vikas Nigam Limited, pursuant toArticle 57, of the Articles of Association of the Company, on the Board of the Company to hold officeup to the date of this Annual General Meeting.

Shri N. Srivastava, IFS is presently working as Additional Secretary (P.E.) in Finance Department,Government of Gujarat.

He holds degree of B. Tech in Chemical Engineering. Since 1991 he has worked under Department ofForest & Environment at senior positions in various Districts in Gujarat. Later in 2005 he moved toFinance Department of Government of Gujarat and handling State Budget and Bureau of PublicEnterprises. He is working also as Financial Advisor of Roads & Buildings Department of Governmentof Gujarat.

The Company is a Government Company falling within the provisions of Section 617 of The CompaniesAct, 1956 and is entitled to various exemptions notified by Government from the time to time,including Section 257 relating to notice to be given to the Company for appointment as Director andhence no such notice for his candidature is required.

Your Directors therefore recommend the resolution for your approval.

None of the Directors, except Shri N. Srivastava, IFS is interested or concerned in this resolution.

Date: 23.12.2009Place: Vadodara

REGISTERED OFFICE:Nana Varachha Road,Kapodra Char Rasta,Surat - 395 006.

By order of the Board

VIRAL H.VORACompany Secretary




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FINANCIAL STATISTICS - FOUR YEARS AT A GLANCE

OPERATING RESULTS AT A GLANCE [Rupees in Crores]

Particulars 2008-09 2007-08 2006-07 2005-06Revenue from Sale of Power 4148.22 3324.59 3138.46 2782.04Total Income 4282.67 3507.11 3361.86 3015.45Purchase of Power 3953.55 3194.76 3030.38 2815.27Total Expenditure 4278.96 3505.09 3334.30 3008.45Profit Before Tax 3.71 2.02 27.56 7.00Profit after Tax 2.99 1.55 20.23 10.08

FINANCIAL POSITION AT A GLANCE [Rupees in Crores]

Liabilities:-Equity share capital 237.73 291.63 291.63 291.63Share Application Money 30.00 0.00 0.00 0.00Equity share premium 218.69 0.00 0.00 0.00Reserve and surplus 34.86 31.87 30.32 10.08Deferred Govt. Grants & 409.23 282.60 306.52 115.91Consumer ContributionLoans 638.10 658.18 656.07 612.25TOTAL 1568.61 1264.28 1284.54 1029.87Assets:-Gross Fixed Assets 1725.33 1516.06 1296.22 1036.71Less: Accumulated Depreciation 329.21 255.59 192.84 139.48Net Fixed Assets 1396.12 1260.47 1103.38 897.23Current Assets 1056.89 762.28 858.53 673.34Less Current Liabilities 884.81 759.29 678.60 556.93Net Current Assets 172.08 2.99 179.93 116.41Misc. Exp. (To extent not written off) 0.41 0.82 1.23 16.23TOTAL 1568.61 1264.28 1284.54 1029.87

KEY INDICATORS AT A GLANCE

Number of Consumers 1935569 1827804 1710165 1631319Energy Purchased (Mus) 10331 9918 9525 9331Energy Sold (Mus) 8305 7979 7557 7065Collection efficiency (%) 98.40 100.24 100.09 102.49T& D Losses (%) 19.61 19.55 20.66 24.28Distribution losses (%) 14.74 15.43 16.52 19.99AT& C Losses (%) 20.90 19.36 20.59 22.40Debt Equity Ratio 0.69 1.09 1.05 1.53Current Ratio 1.19 1.00 1.27 1.20Earning Per Share.(In Rs.) 0.40 0.05 0.69 0.34





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DIRECTORS’ REPORTTo,

The Members,

Your Directors have pleasure in presenting the Sixth Annual Report of the Company together withthe Audited Accounts for the Financial Year ended 31st March, 2009.

FINANCIAL PERFORMANCE:

During the year under review, your Company achieved revenue from sale of power of Rs. 4148.22Crores by selling 8305 MUs of energy to various consumers. The average rate of realization per unitsold works out to Rs. 5.00. The company purchased 10331 MUs of energy from Gujarat Urja VikasNigam Limited. The T&D losses have been restricted to 19.61% and Distribution loss at 14.74% forthe year under review. The collection efficiency attained 98.40% and hence the AT&C losses for thecompany were higher than the T&D loss at 20.90%.

The comparative summarized operating financial results of the Company for the year 2008-09and 2007-08 are given below.

Particulars 2008-09Rs. In Crores

%age 2007-08Rs. In Crores

%age

Income:Revenue from sale of power 4148.22 96.86 3324.59 94.80

Rev. subsidies 49.70 1.16 49.38 1.41

Other income 84.75 1.98 133.14 3.80

Total Income 4282.67 100 3507.11 100.00Expenditure:

Purchase of power 3953.55 92.31 3194.76 91.09

Repairs & Maintenance 20.33 0.47 35.67 1.02

Employee Cost 147.21 3.44 124.61 3.55

Admin. & Gen. Expenses 26.42 0.62 24.49 0.70

Depreciation 75.57 1.76 64.58 1.84

Int. & Fin. Cost 89.42 2.09 73.29 2.09

Sub-Total 4312.49 100.70 3517.40 100.29(-) Exp. Capitalized 40.85 0.95 42.87 1.22

Sub-Total 4271.64 99.74 3474.53 99.07

Other debits & extra ordinary items. 4.57 0.11 4.52 0.13

Net prior period Income / Exp. 2.74 0.06 26.05 0.74

Total expenditure 4278.97 99.91 3505.10 99.94Profit before tax 3.71 0.09 2.02 0.06

Tax Expenditure/(Income) 0.72 0.02 0.47 0.01

Profit after tax 2.99 0.07 1.55 0.04Net profit available for appropriation 2.99 0.07 1.55 0.04




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The comparative key finance figures/ ratios/ % based on Annual Accounts of the Company for F.Y.2008-09 and 2007-08 are as under.

Particulars 2008-09 2007-08

1. Power Purchased (MUs) 10331 99182. Units Sold (MUs) 8305 79793. Unit Loss (MUs) 2026 19394. T & D Losses (%) 19.61 19.555. Distribution Losses (%) 14.74 15.436. AT & C Losses (%) 20.90 19.367. Collection Efficiency (%) 98.40 100.248. Average Realization Per Unit (Rs.) 5.00 4.179. Debt Equity Ratio 0.69 1.0910. Return on Equity (%) 1.25 1.5311. Return on Net Worth (%) 0.32 0.2612. Return on Capital Employed (%) 4.32 4.24

Sr.No.

During the year 2008-09, whereas the power purchase MUs increased by 4.16 %, the units soldincreased by 4.09% and revenue from sale of power increased by 24.77%. The ARR has alsoincreased from Rs.4.17 per unit to Rs.5.00 per unit.

DIVIDEND

Considering the requirement of funds for systems improvement and the reserves available, theDirectors did not recommend any dividend for the year.

SHARE CAPITAL

During the year under review, the Energy & Petrochemicals Department vide its notification no.GHU-(203)-GUV-1106-590-K dated 12th December, 2008 modified its earlier notification & bifurcatedthe amount transferred to share capital suspense account into equity share capital and equity sharepremium with effect from 01 April, 2008 as under:

Equity Share Capital 7294.60 Lacs

Share Premium 21868.78 Lacs

As per the approval in the Extra Ordinary General Meeting dated 30th March, 2009, 164,779,531equity shares of Rs.10 each were offered and allotted by the Board of Directors on 30th March, 2009to the holding Company Gujarat Urja Vikas Nigam Limited (GUVNL), for cash, at par, on privateplacement and/or preferential basis, towards financial assistance for Jyoti Gram Yojna (JGY)implemented in non-tribal areas.

Accordingly, the equity share capital of the Company increased to Rs.237.73 Crores.

OPERATIONAL PERFORMANCE

8 Implementation of various initiatives & loss reduction measures resulted into reduction inDistribution Losses to 14.74 % as compared to 15.43% in previous Financial Year.





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8 In Agriculture sector, electrification of wells carried out during the year is as under:-

- Wells electrified under TASP Schemes – 4,159 Nos.

- Wells electrified under Micro Irrigation System Scheme – 1410 Nos.

- Wells electrified under S.P.A. Scheme – 706 Nos.

8 29 Nos. of electrification of Petaparas carried out in tribal areas.

8 270 Nos. of electrification under Special component Plan at Harijan Basti

8 BPL House Hold were electrified under RGGVY Scheme – 12,508 Nos.,

Under ZUPPADPATTI Scheme – 1,373 Nos., under Kutir Jyot state Scheme – 29,133Nos.

8 Power availability improved from 99.93% to 99.97%.

8 Transformer failure rate reduced from 15.81% to 14.10%.

8 By vigorous efforts, the debit arrears have been reduced to 21.86% during the currentyear i.e. reduction in 6.07% compared to previous year (27.93%).

8 During the year 2008-09 and up to 31.10.2009, a total 120 Lok Adalats were arrangedfor settlement of Civil Suits pending in various Courts, settled 325 cases involving Rs.439.77 Lacs for Rs. 264.98 Lacs and recovered Rs. 118.94 Lacs. Additionally, 22,490time-barred cases involving an amount Rs. 2087.14 Lacs were settled for Rs. 1259.85Lacs and a sum of Rs. 399.66 Lacs was recovered during the year by arranging 293 pre-Litigation Lok Adalats at various Courts.

AWARDS & ACHIEVEMENTS

8 Your Directors are pleased to inform that ISO 9001-2008 certification has been awardedby Bureau Veritas Certification (India) Pvt. Ltd. for Quality Management System for allOffices under DGVCL i.e., entire Company by auditing the Quality Management Systemin accordance with the requirement of ISO 9001-2008 standard. The scope of supplyinvolves management, monitoring and performance enhancement of electricity distribution,operations and maintenance.

Moreover, 30 Officers of DGVCL were imparted training for IRCA (International Registerof Certificated Auditors/ Lead Auditors) conducted by Bureau Veritas Certification (India)Pvt. Ltd. and out of these 19 officers have passed the examination and are now IRCA(9001-2008 series) certified Auditor /Lead Auditor.

SYSTEM IMPROVEMENT

The Company is constantly upgrading and augmenting its network to achieve multi- pronged objectivesviz., to reduce technical losses, to improve reliability of the system, to serve the consumers forbetter services and to give uninterrupted quality power. Several initiatives were undertaken duringthe year as under:

8 103.49 km coated conductor laid in the identified theft prone area to reduce theft ofpower by direct hooking. Besides, this decreases LT interruptions.

8 High Voltage Distribution System (HVDS) is being implemented to reduce hooking in ruralareas as well as to reduce the LT line losses. In order to implement HVDS system, the




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sum of contracted load of Transformers and sum of connected KVA of each TransformerCenter is worked out and if there is an exorbitant difference between these two, thende-augmentation of the transformer is recommended by way of providing appropriatecapacity of transformers in accordance with contract load.

8 27.83 Km overhead line of the feeders where more interruptions were observed isconverted into underground cable system for reduction in interruptions and therebyincreasing system reliability and reduction in accidents.

8 11 Ring Main Units are provided on the high revenue earning Urban Feeders for givinguninterrupted power supply by isolating the faulty section / part of the feeder wheremaintenance work is required to be carried out.

8 Very old meters, namely, 112267 of single phase and 8695 of three phases werereplaced by quality / static meters to provide quality metering to the Consumers and tounblock the blocked revenue of the Company.

8 Approximately 1,600 remote meter reading modems are installed at High consumptionHT Consumers enabling monitoring at Division, Circle and also at Corporate Office throughdata transfer. Also load graph can be developed through software. IT department ismodifying HT Billing software to prepare HT Bills by data down loading through remotemetering.

8 The study of ampere loading of JGY feeders in relation to the monthly consumption andits connected load on the feeders is exercised. Accordingly, the bench marking of feedersis decided in consultation with GETCO. Whenever the Ampere load exceeds its benchmark, checking is arranged.

8 In rural/ tribal areas of the Company where feeders are very long, bifurcation of feederhas been undertaken to reduce the losses and improve the quality of power supply inrural areas.

SAGAR KHEDU YOJNA:

It is planned to strengthen and renovate of the existing network in Coastal area by replacingdetoriated conductors, damaged Poles, old disc insulators, old pin insulator, Distribution Boxes andService Line under Sagar Khedu Yojna at an estimated cost of Rs.1566 Lacs.

CUSTOMER SERVICES

The Company continued its thrust towards improving customer services during the year. Throughcontinuous improvements in systems and processes, the Company has continued to focus onproviding reliable and quality power to customers.

8 Customer Care Centres are operational at all district places i.e., Surat, Bharuch, ValsadCity, Navsari City and Ahwa for better consumer interaction and services and for minimizingfault detection time by diagnosing the possible causes and location of outages. OneCustomer Care Center was established at Rajpipla of Narmada District during the monthof August 2009.

8 A new sectional office at Sagbara has been created by bifurcating Dediapada Sub-Division of Bharuch Circle for providing better service to the Consumers.

8 During the year under review, two fully computerized Any Time Payment Centres (ATP)have been installed at Adajan and Kapodra Sub-Divisions area to facilitate consumers to





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pay their energy bills at any time.

8 5 Nos. of Mobile Van for collection of energy bills have been introduced in the tribal areasof Valsad district i.e. Dharampur and Kaprada and in Tapi District Songardh and Mandviarea providing facilities for payment of energy bills by consumers at their door step.

8 Lokdarbar was organized during the month of August’09 for resolving consumers’grievances/complaints. Lokdarbar was organized at Vyara, Waghai,Ankleshwar, Bharuch,Rajpipla, Valsad, Vapi, Surat, Navsari and Bardoli. Approximately 1219 customers includingMPs and MLAs attended Lokdarbar. Six hundred grievances were received, out of which306 grievances were resolved at or before Lok Darbar. Sixty-seven grievances pertainedto policy matters like providing power supply for 24 hours for agriculture/power supplyduring day time only, giving connections to more than five-year old PDC connections andno increase in Fuel surcharge adjustment FPPPA, etc., 313 grievances related tomaintenance of network matters like frequent tripping, delay in replacement of transformers,particularly stolen transformers and complaints regarding low voltage, etc., 27 grievanceswere GERC related matter like Security Deposit (SD), no increase/Bank Guarantee in lieuof cash/No SD in case of load extension and penalty on consumers in case PF is notmaintained, 38 grievances of billing and allied related issued like Demand for monthly/bimonthly billing, Reconnection charges – is levied without actual disconnection and Demandfor Bill Collection Centre, etc., 41 on administrative matters like demand for new sub-division and appointment of helper/lineman in village, etc., 3 Nos. of consumer servicerelated matter like Demand for new Customer Care Centre and Demand for new Vijghar,etc., and 111 Nos. related to miscellaneous issues like service similar to 108 should beavailable to attend fault, electricity related offences should have more stringent penaltyand names and phone numbers of officers should be displayed on electricity bills, etc.For 245 grievances, assurances were given for redressing the same within a certain timelimit and 67 grievances on policy issues are under consideration. An encouraging responsewas received at Lok Darbar.

8 ‘HT Consumers’ meet was held at Ankleshwar Industrial and Vapi Industrial during theyear to resolve their grievances.

8 Billing work of LT consumers is outsourced in 18 Sub-Division of Surat Circle. This helps intimely billing to the LT Consumers.

8 Introduction of HTP V tariff applicable to Agriculture Consumer at the Unit rate of Rs.1.60 per unit and Rs. 25 per KVA.

8 Introduction of Below Poverty Line (BPL) tariff covered 79,465 Nos. of BPL Consumersat the rate of Rs. 1.50 per unit up to 30 Units/Bi monthly.

8 The Company’s web site is regularly updated to make it more informative and customerfriendly. The web-site address of the Company is www.dgvcl.com.

8 Consumer Redressal Forum has been set up as mandated by the Electricity Act, 2003and the regulations notified there under.

I.T. INITIATIVES

8 Government of India through Nodal Agency Power Finance Corporation has given Financialassistance of Rs.23.38 Crores under Part-A of R-APDRP covering 11 towns having


http://www.dgvcl.com



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population of more than 30 thousand under which project for establishment of baselinedata and IT Applications for energy accounting/auditing, consumer indexing, GIS Mapping,metering of distribution transformers, feeders and automatic data logging for all distributiontransformers and feeders will be implemented. Besides

8 IT-enabled consumer care center with state of the art technology will be established atSurat under the project.

For implementing the said Project, IT Consultants and IT implementing agency areappointed by the Company for the entire project period. Telecommunications ConsultantsIndia Ltd. (TCIL) has been appointed as an IT Consultant and awarded contract of Rs.45 Lacs. Tata Consultancy Services Ltd. (TCS) has been awarded contract of Rs. 34.6Crores as an IT implementing agency.

8 For e-governance and modernization of various villages of Gujarat, the Government ofGujarat (GoG) had decided to provide computers to various Gram Panchayat Offices toenable them to render various e-services for benefit of rural population. Accordingly,Government of Gujarat has designated various Gram Panchayats as E-Gram Panchayats(E-GPs), who qualified as per eligibility criteria. In order to make such E-GPs self-sustainableby increasing their income and also to facilitate the consumers of the Company forpayment of energy bills in their villages itself, GoG has decided to award the bill collectionwork to such E-GPs. There are 2364 E-GPs falling under Dakshin Gujarat area. 342 E-GPs have executed the agreements and 148 E-GPs have already started Bill Collectionwork of the Company as on 31.10.09. The Company is pursuing with all the E-GPs toinitiate Bill Collection work of the Company by 31st March, 2010.

8 Your Company has initiated steps to start e-payment of Electricity Bill through internet.Consumers will be able to pay their Electricity Bill by accessing the Web-Site of theCompany from anywhere in the world. The e-payment facility will be started within avery short period.

FUTURE PLANS

1) Energy Auditing:

The Energy Audit identifies the area of leakage, wastage of energy. It helps to identifysuitable measures for reduction of T&D losses. As a part of Energy Audit & Accounting out of44,171 Nos. of Distribution Transformer, 22,691 Nos. of Distribution Transformer are metered.The company has planned to provide meters on balance transformers by end of the year.

2) Under Ground Cable with RMU :

For ensuring consumer satisfaction by providing the continuous and reliable power supply, theCompany has planned underground system in Surat urban and Industrial, Vapi Industrial,Navsari City and Rural, Bharuch City and Rural, Ankleshwar Industrial and Rander area.

3) Feeder Bifurcation:

The scheme for bifurcation of 6 nos. of over-loaded feeders and having a poor voltageregulation is planned to improve the quality of power supply in agriculture feeders.

4) For reduction in technical losses, 1300 nos. of Amorphous Transformers will be installed inUrban, GIDC and feeders.

5) It is planned to install fourteen Any Time Payment Machine (ATP) at Ankelshwar-Industrial





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Estate, Ankleshwar-Town, Bharuch City, Bharuch west, Valsad City, Navsari City, Vapi-Town,Vapi-GIDC,Rajpipla, Kapodara,Rander Town-I,Puna Sub-Division and Pandesara Sub-Division.

6) Automatic Meter Reading (AMR) system provides close surveillance on theft of energy. Ithas other distinct advantages, viz., automatic and fast billing and quicker realization of revenueetc. The AMR system has been installed for HT connections. It is planned to install 5,200Nos. of LT AMR at high consumption industrial and commercial consumers.

7) The Company has planned to install/ replace 1,000 Nos. of 10/16/25 KVA Transformer forimplementation of the scheme – High Voltage Distribution System (HVDS)

8) Implementation of R-APDRP Scheme for the towns having more than 30000 populations willstart from January, 2010. As stipulated by Power Finance Corporation (PFC), the nodalagency for R-APDRP Scheme “as is study” has been completed & submitted to PowerFinance Corporation (PFC). The work of finalizing base line data is under progress and uponinspection of third party agency appointed by Power Finance Corporation (PFC), the work ofcentralized Consumer Care Center at Surat, GIS mapping and other module will start fullfledged.

The work of preparation of Detailed Project Report (DPR) and Part-B which covers all systemimprovement activities is under process for the towns having AT&C losses of more than15%.

9) Under the Golden Goal scheme, your Company will electrify 17,086 agricultural wells up toDecember 2010 and 10,000 lighting connections under Zupadpatti scheme, 6500 Nos. ofconnections under Kutir Jyoti scheme, 1800 connections under SCSP Scheme.

The Ministry of Power, New Delhi, has launched “Rajiv Gandhi Grameen Vidyutikaran Yojna”(RGGVY) for 100% electrification of Villages, habitations in the Country and supply power toBelow Poverty Line (BPL) families. It is planned to electrify household connections of 82,062,22,680, 16,704 and 3262 in Surat & Tapi,Valsad, Navsari and Dang Districts respectively upto December 2010.

During the year 2008-09 and up to November 2009, 3262 and 33733 connections have beenreleased in Dang and Narmada districts respectively. The turnkey work order is given to M/s.Syntex Industry, Kalol at an estimated cost of Rs.2622.80 Lacs , 2961.45 Lacs and 1008.81Lacs for Surat , Valsad and Navsari district respectively.

10) Project of Rs. 102 Crores has been prepared under SI Scheme for the next three years.

The works to be implemented under this project are:

8 26 Nos. of Feeder Bifurcation

8 Renovation of 6,000 Nos. of deteriorated Distribution Box/ Breakers of Dist.Transformer

8 Providing of 1100 kms. of three-phase and 4380 kms. of single-phase Aerial BunchConductor

8 Conversion of 200 Kms of overhead lines into underground HV Cable system.

8 Providing of 45 Nos. of Ring Main Units at some locations in GIDC and Urban areas

8 Providing 900 Kms of LT 34 mm2 AAAC insulated Conductor




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8 Providing of 6,000 Nos. of Strip Earthing and Replacement of old/ faulty / Stop metersby 1,80,000 Nos. of quality / Static meters with Metal Meter Box.(M.M.B)

11) Anti Theft Measures

8 In order to prevent theft of electricity, Strong headed areas in DGVCL are identified.Checking activities are intensified in such areas with adequate police protection. Checkingdrives are also organized during holidays and at odd hours also.

8 23 intensive checking drives in various strong headed areas of the company were carriedout during the year 2008-09. 8333 Nos. of connections were checked and 310 Nos. ofconnections were detected in theft of power & mal practice with total assessment of Rs.3.31 Crore.

8 To discourage the theft of power, Names of the consumers detected in power theftwhose theft-bill-amount exceeds one lakh and above are being published in leading newspapers and displayed in local TV channels.

8 During the year 2008-09, total 215596 Nos. of connections were checked under theinstallation checking drives and 10748 Nos. of connections were detected in theft ofpower & mal practice with total assessment of Rs. 27.51 Crores.

8 Various hi-tech modus operandi adopted in power theft by industrial consumers weredetected and one HT and seven LT industrial connections using such modus operandiwere detected in theft during the year with total assessment of Rs.2.3 Crores.

8 Information network is strengthened by effective implementation “CASH INCENTIVESCHEME” by the Company. Informers are being encouraged by paying quick CASHREWARD and by keeping their identity confidential.

8 In order to analyze & monitor the consumption pattern of various categories of consumers& keep watch on faulty meters Consumption Analysis System (CAS) is introduced in theCompany. By using CAS, specific consumers suspected to have been indulged in theft ofpower are targeted so that honest & regular consumers are not harassed by way ofraid.

TARRIF

Gujarat Electricity Regulatory Commission [GERC] is the authority entrusted with various functionsinter alia, the determination of tariff for electricity for various categories of consumers. During theyear, DGVCL had filed a petition no.946/2008 before GERC on 31.07.2008 for approval of Multi YearTariff proposal for first control period for the F.Y.2008-09, 2009-10, 2010-11. Detailed Tariff Orderwas issued by Gujarat Electricity Regulatory Commission on 17.01.2009 effective from 01.02.2009.All field offices were directed to implement the same w.e.f. 01.02.2009 vide Circular dated 07.02.2009.

Further, the Annual Performance Review of FY 2008-09 and determination of Tariff for FY 2009-10,the Petition no.978/2009 has also been filed by DGVCL before GERC on 25.08.2009 for which thetariff order has also been issued by GERC on 14.12.2009 wherein there is no change in existing tariff.GERC has in its order dated 14.12.2009 has introduced Consumer Category as LTP-V.

HUMAN RESOURCE DEVELOPMENT

To develop competency of employees and thereby enhance organizational effectiveness andproductivity, many need-based training and development programs are organized with special





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emphases on fostering a culture of innovation. Industrial relation continues to be cordial.

DIRECTORS

Shri R.G. Sheth and Shri P.H. Rana retire by rotation at the ensuing Annual General Meeting and areeligible for re-appointment.

Shri N. Srivastava, IFS was appointed as an Additional Director with effect from 06th October, 2009.

DIRECTORS RESPONSIBILTY STATEMENT

In accordance with Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

1. In the preparation of annual accounts for the financial year ended 31st March 2009, theapplicable accounting standards have been followed along with proper explanation relating tomaterial departures, if any.

2. Accounting policies have been selected and consistently applied and judgments and estimatesmade that are responsible and prudent so as to give a true and fair view of the state ofaffairs of the Company as at 31st March 2009, and of profit of the Company for the yearended on that date.

3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provision of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities and

4. The annual accounts for the financial year ended 31st March 2009 have been prepared on agoing concern basis.

AUDITORS

M/s. SNK & Co., Chartered Accountants, Surat has been appointed as the Statutory Auditors of theCompany by the Comptroller and Auditor General of India, New Delhi, (C&AG) to audit the accountsof the Company for the year ended 31st March 2010. As per the provisions of the Section 224 of theCompanies Act, 1956, their remuneration is required to be fixed by the Company in General Meeting.

AUDITORS REPORT

The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore donot call for any further comments.

The Company has received NIL comment of the Comptroller and Auditor General of India on theaccounts of the Company for the financial year 2008-09.

COST AUDITORS

The Government of India, Ministry of Finance has issued Cost Audit Order under Section 233B ofthe Companies Act, 1956 to appoint Cost Auditor to audit the Cost Accounts relating to ElectricityIndustry Product. Accordingly, the Board of Directors appointed Mr. Y. S. Thakar, Vadodara as CostAuditors for the financial year 2008-09, and the same has been approved by the Central Governmentfor auditing the Cost Accounts relating to Electricity Industry Product.

For the financial year 2009-10, the Board of Directors has appointed Mr. Manubhai. K. Desai, Suratas Cost Auditors of the Company to conduct the cost audit of the Company which has been




16


approved by the Central Government.

AUDIT COMMITTEE

Pursuant to Section 292A of the Companies Act, 1956, the Audit Committee as presently constitutedconsists of the following Directors.

Prof. S. Sundararajan — Chairman of the Committee

Shri P.H.Rana — Member

Shri R.G. Sheth — Member

Shri H.P. Desai — Member

Shri N. Srivastava, IFS — Member

DISCLOSURES

(A) Particulars of Employees:

There was no employee during the year drawing remuneration in excess of the ceilings underthe provisions of Section 217(2A) of the of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975, as amended.

(B) Energy Conservation & Technology Absorption:

As required under Section 217(1) (e) of the Companies Act, 1956, read with the Companies(Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, informationregarding Conservation of Energy, Technology Adsorption are given in the Annexure I to thisReport and forms part of this report.

(C) Foreign Exchange Earnings & Outgo

During the year under review, there was no foreign exchange earning or outgo.

ACKNOWLEDGEMENT

The Board of Directors are pleased to place on record their appreciation for the continued supportand guidance provided by the Government of India particularly the Ministry of Power, Government ofGujarat, especially the Energy & Petrochemicals Department, Gujarat Urja Vikas Nigam Limited,Gujarat State Electricity Regulatory Commission, GEDA, financial institutions, bankers, suppliers andother business Associates.

Your Directors also wish to place on record the appreciation for the continued support and co-operation of the consumers.

The Board also places on record its appreciation for the understanding and support extended by theemployees at all levels.

Place : Vadodara

Date : 23-12-2009

For and on behalf of the Board

Managing Director Director





17

ANNEXURE I TO DIRECTORS’ REPORT

PARTICIULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARSIN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

A. CONSERVATION OF ENERGY:

a) Conservation of Energy Measures taken

8 A total of 203 high-loss feeders have been identified to reduce technical loss andreduce overall losses. Senior officers in the rank of Executive Engineers and aboveare allotted 10 feeders each wherein they are expected to prepare a road map /action plan for reduction of T&D Losses of such high-loss feeders.

8 Your Company has participated at exhibitions organized at Vapi and Surat, wherepamphlets were distributed explaining energy saving measures and its efficient useto public at large.

8 Regular and periodical maintenance of line and equipments.

8 Intensive inspection to curb theft of energy and malpractice.

8 In the entire Below Poverty Line (BPL) category Consumers, it is planned to provideCFL lamp instead of conventional incandescent lamp.

b) Additional investment and proposal, if any, being implemented for reductionof Consumption of Energy.

Hand-held instruments for meter reading to minimize human intervention and errors andperform spot billing.

Replacement of LT line bare conductor by PVC coated Cable in high loss areas.

Aerial Bunch Conductor (ABC) to avoid theft by direct hooking and also to controlcommercial loss in theft prone areas.

Scheme for providing energy-efficient motors and pump sets to farmers in the Company’sis under active consideration. This will conserve at least 10 % energy consumed byfarmers.

c) Impact of the measures at a) and b) above for reduction of energy consumptionand consequent impact on the cost of production of Goods.

8 Saving in KWH and peak demand

8 Reduction in T & D losses




18


B. TECHNOLOGY ABSORPTION:

Efforts made in technology absorption as per Form B.

FORM-B

(Disclosure of particulars with respect to Technology Absorption)

Research and Development (R&D)

The Company per se did not carry out any R&D work during the year. However, someactivities were carried out as a part of Technology Absorption through indigenous sourceswhich resulted in improvement in the performance.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts, in brief, made towards technology absorption, adaptationand innovation.

Deployment of Automatic Meter Reading (AMR) System to HT consumers.

A Pilot project of gas-filled fixed capacitor was implemented for improving power factorand reducing ampere loading and losses. The project was implemented at JalaramIndustrial feeder of Pandesara.

Fibre cross arm and top fittings purchased to provide at the coastal area.

2. Benefits derived as a result of the above efforts.

AMR facilitates meter reading with almost zero meter reading errors and saves produc-tive man power. The data stored in meter, can be downloaded at any time for fasterprocessing and to monitor consumers’ behaviour in regard to electricity consumption andtampering meter or any other irregularity.

With the implementation of pilot project, the ampere loading on the feeders was reducedby 12 amperes. With the improvement in Power factor losses also declined.

With the use of fiber cross arm and top fittings faults on the lines and corona lossesreduced and incidence of snapping of conductors were minimized.

3. In case of imported technology (imported during the last five years reckonedfrom the beginning of the Financial Year) following information is furnished.

Not Applicable

4 Future plan of Action

Energy efficient transformers for distribution areas.

1. Expenditure on R & D

No expenditure on R & D of capital or recurring nature has been incurred.

Place : Vadodara

Date : 23-12-2009

For and on behalf of the Board

Managing Director Director





19

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER 619 (4)OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF DAKSHIN GUJARAT VIJ COMPANYLIMITED FOR THE YEAR ENDED 31 MARCH 2009

===============================================================

The preparation of financial statements of Dakshin Gujarat Vij Company Limited for the year ended31 March 2009 in accordance with the financial reporting framework prescribed under the CompaniesAct, 1956 is the responsibility of the management of the Company. The Statutory Auditors appointedby the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 isresponsible for expressing opinion on these financial statements under Section 227 of the CompaniesAct, 1956 based on independent audit in accordance with the auditing and assurance standardsprescribed by their professional body the Institute of Chartered Accountants of India. This is statedto have been done by them vide their Audit Report dated 29 September 2009.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a SupplementaryAudit and under section 619(3) (b) of the Companies Act, 1956 of the financial statements ofDakshin Gujarat Vij Company Limited for the year ended 31 March 2009. This Supplementary Audithas been carried out independently without access to the working papers of the Statutory Auditorsand is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selectiveexamination of some of the accounting records. On the basis of my audit nothing significant hascome to my knowledge which would give rise to any comment upon or supplement to StatutoryAuditors’ report under Section 619 (4) of the Companies Act, 1956.

For and on behalf ofThe Comptroller & Auditor General of India

Sd/-Accountant General

Place : AhmedabadDated : 04-12-2009




20


1. We have audited the attached Balance Sheet of DAKSHIN GUJARAT VIJ COMPANYLIMITED as at March 31, 2009, Profit and Loss Account and cash flow statement for theyear ended on that date annexed thereto. These financial statements are the responsibility ofthe Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosure in the financialstatement. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. The company is governed by the provisions of the Electricity Act, 2003 read with rules and theregulations issued there under. The section 616(c) of the Companies Act, 1956, also providesthat the provision of special acts like Electricity Act, will apply to the extent the provisions of thecompanies Act are inconsistent with the provision of those Acts.

4. As required by the Companies (Auditor’s Report), Order, 2003 (As amended by the Companies(Auditor’s Report)(Amendment) Order, 2004), issued by the Central Government of India interms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) We have obtained all information and explanations, which to the best of our knowledgeand belief were necessary for the purposes of our audit.

(ii) In our opinion proper books of account as required by law have been kept by thecompany so far as it appears from our examination of such books.

(iii) The Balance sheet and Profit and Loss Account referred to in this report are in agreementwith the books of accounts as submitted to us.

(iv) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statementcomplies with the Accounting Standards referred to in sub- section (3C) of section 211 ofthe Companies Act, 1956.

AUDITOR’S REPORT TO THE MEMBERS





21

(v) According to Notification No. GSR 829(E) dtd. 21-10-03 issued by Govt. of India, theprovision of section 274(1)(g) of the Companies Act, 1956 are not applicable to thecompany.

(vi) In our opinion and to the best of our information and according to the explanations givento us, the said accounts, subject to observations made in Companies (Auditor’s Report),Order, 2003, and the notes forming part of the audited financial statement, give theinformation required by the Companies Act, 1956 in the manner so required and give atrue and fair view,

(a) in so far as it relates to the Balance Sheet, of the state of affairs of the company, asat March 31, 2009 and

(b) in so far as it relates to the Profit and Loss Account, of the Profit of the company, forthe year ended on that date.

(c) in the case of the cash flow statement, of the cash flows for the year ended on thatdate.

sd/-(Jimi R. Modi)

PartnerM. No. 119188

For SNK & Co.Chartered Accountants

PLACE : SuratDATE : 26-09-2009




22


ANNEXURE TO THE AUDITORS REPORT

(Referred to in our Report of even date an annexure on the matters specified in paragraphs 4 and5 of the CARO on the Statements of Accounts of DAKSHIN GUJARAT VIJ COMPANY LIMITEDas at and for the year ended March 31, 2009).

1. Fixed Assets:

In our opinion and according to information and explanation given to us, the company hasmaintained proper records of fixed assets. During the current year fixed assets are notphysically verified by the management of the company and hence discrepancies if any, couldnot be ascertained or reported, however the same had been verified by out side agencyappointed by the company during the immediate preceding year.

Fixed assets disposed off during the year were not substantial and therefore do not affect thegoing concern assumption.

2. Inventory:

The inventory has been physically verified during the year by the management. In our opinion,the frequency of verification is reasonable in relation to the size of the company and thenature of its business. Confirmations have been obtained from the management with respectto inventories lying with third parties.

The procedures of physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.

On the basis of our examination of the records of inventory as maintained, we are of theopinion that the company is maintaining proper records of the inventory.

The discrepancies noticed on verification between the physical stocks and the book recordshave been properly dealt with in the books of accounts.

3. Loans taken / granted by the company:

a. According to the information and explanation provided to us, the company has not takenany loan from companies, firms or other parties listed in the registers maintained underSection 301 of the Companies Act, 1956. Since the company has not taken any loan, nocomment are required in respect of rate of interest and other term and condition.

b. According to the information and explanation provided to us, the company has not grantedany loan to companies, firms or other parties listed in the registers maintained underSection 301 of the Companies Act, 1956. Since the company has not given any loan, nocomment are required in respect of rate of interest and other term and condition.

4. Internal Control:

According to the information and explanations given to us, the company has internal controlsystem commensurate with the size of the company and the nature of its business withregard to purchase of inventory, fixed assets, with regard to sale of power. However, in our





23

opinion internal control needs to be reviewed and strengthen in respect of movement ofinventories during maintenance works, material issued to fabricators /contractor /repairingagencies, transactions with respect to inter company / inter unit, works contract and capitalwork in progress.

5. Transactions with parties listed u/s. 301 of the Companies Act

According to Notification No. GSR 233 dtd. 31-01-1978 issued by Govt. of India, the proviso tosub-section (1) of section 297 of the Companies Act, 1956 shall not be applicable to theGovernment company. Accordingly transactions entered into by the company with othercompanies do not fall under the provision of section 301 of the Companies Act, 1956 and thusthis clause is not applicable to the company.

6. Deposits from public:

In our opinion and according to the information and explanations given to us, the companyhas not accepted any deposits from the public and consequently, the directives issued byReserve Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisionsof the Act and the rules framed there under with regard to the deposits accepted from thepublic are not applicable.

7. Internal Audit System:

The company has an in-house Internal Audit System and it has also assigned internal auditassignments to practicing firms of Chartered Accountants and this arrangement, is in ouropinion commensurate with the size of the company and nature of its business. During theyear the company has appointed an external agency to carry out the pre-audit of its BharuchCircle. In our opinion the external agency should also be appointed to carry out the pre-audit ofall the other circles and corporate office so that the internal audit system as a whole can befurther strengthened.

8. Cost Records:

According to information and explanations given to us the Central Government has prescribedfor the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956. Wehave broadly reviewed such cost records and are of the opinion that prima facie, the prescribedaccounts and records have been made and maintained. We have not, however, carried out adetailed examination of the same.

9. Statutory Dues:

According to information and explanations given to us and on the basis of our examination ofthe books of accounts, the company has been regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund, income tax, sales tax/vat and service taxexcept minor delay in depositing TDS.

According to the information and explanation given to us, no undisputed amounts payable inrespect of provident fund, income tax, sales tax/vat and service tax were outstanding, as atMarch 31, 2009 for a period of more than six months from the date they became payable.




24


Government has issued Notification No. GHU-2006-91-GUV-1106-590-K-Dated 3rd October2006 notifying the final opening balance sheet of the company as on 01-04-05 comprising ofthe company’s own assets and liabilities. Thus we are unable to comment on whether thereare any unpaid dues before 1-4-2005 on account of dispute in respect of sales tax, servicetax, income tax, wealth tax, electricity duty and cess are there or not as no specific explanationhas been provided in that regard by the management.

10. Accumulated Losses:

The company does not have accumulated losses at the end of financial year. The companyhas not incurred any cash losses in financial year and in the immediately preceding financialyear.

11. Repayment of financial dues:

Based on our audit procedures and on the information and explanation given by themanagement, we are of the opinion that the company has not defaulted in repayment ofdues to financial institutions and banks in respect of the existing loans, which were originallyraised by the Company. As regards the loans transferred from GUVNL, we have been informedthat the same have been serviced by GUVNL on behalf of the Company and in view of theabove we are not in a position to opine whether the company has defaulted in repayment indues to Financial Institutions and Banks.

12. Secured Loans and Advances:

Based on our examination of documents and records and according to the information andexplanations given to us, we are of the opinion that the company has not granted any loansand /or advances on the basis of security by way of pledge of shares, debentures and othersecurities.

13. Chit Fund/Nidhi/Mutual Benefit Fund/Soceities:

Since the company is not Chit Fund/Nidhi/Mutual Fund/Societies, no comments are requiredon the same.

14. Dealing or trading in shares

Since the company is not dealing or trading in shares, securities, debentures and otherinvestments no comments are required in this regard.

15. Guarantee for loans:

As per the information and explanation provided to us, the company has not given guaranteefor loan taken by others from bank or financial institutions.

16. End use of funds:

No comment can be offered in respect of apportioned balance of loan in the company byGUVNL (Holding Company) for common use of all activities namely generation, transmissionand distribution etc.





25

Based on the Cash Flow Statement for the year ended 31-3-2009 we find that the companyhas used short term fund mainly for short term purpose.

17. Preferential allotment:

Based on the information and explanation given to us, the provisions of section 301 of theCompanies Act, 1956 are not applicable to the company. In view of the above, this clause isnot applicable.

18. Issue of debentures:

During the period covered by our report the company has not issued any debentures.

During the period covered by our report the company has not raised money by public issue.

19. Frauds:

Based on information and explanation provided by the management, which have been reliedupon by us, no frauds had been committed during the year under audit.

sd/-(Jimi R. Modi)

PartnerM. No. 119188

For SNK & Co.Chartered Accountants

PLACE : SuratDATE : 26-09-2009




26


BALANCE SHEET AS AT 31ST MARCH , 2009

SOURCES OF FUNDSSHAREHOLDERS FUNDShare Capital 1 23772.55 5.01Share Capital Suspense Account 2 0.00 29158.37Share Application Money 3 3000.00 0.00Reserves & Surplus 4 66277.87 31447.36LOAN FUNDSSecured Loans 5 33857.69 40480.95Unsecured Loans 6 29952.40 25337.06 TOTAL 156860.51 126428.76APPLICATION OF FUNDSFIXED ASSETSGross Block 7 171653.22 150288.17Less : Accumulated Depreciation. 32921.18 25559.64Net Block 138732.04 124728.52Assets not in Use 8 30.57 66.10Capital expenditure in progress. 9 849.06 1252.43TOTAL FIXED ASSETS 139611.67 126047.05INVESTMENTS 0.00 0.00DEFERRED TAX ASSETS 0.00 0.00CURRENT ASSETS, LOANS & ADVANCESInventories 10 16639.49 13182.87Sundry Debtors 11 44705.23 38067.66Cash & bank balances 12 6459.18 5684.03Other current assets. 13 35540.94 17230.39Loans & Advances 14 2344.02 2063.51TOTAL CURRENT ASSETS 105688.86 76228.46LESS : CURRENT LIABILITIES & PROVISIONS 15 88481.18 75929.08NET CURRENT ASSETS 17207.68 299.38MISCELLANEOUS EXPENDITURE 16 41.16 82.33(To the extent not written off or adjusted) TOTAL 156860.51 126428.76Significant Accounting Policies 31Notes Forming Parts of Accounts 32

PARTICULARSSCHEDULENUMBER AS AT 31ST

MARCH 2009

[ RUPEES IN LACS]

As per our attached report of even date For and on behalf of the Board of DirectorsFor SNK & Co. Dakshin Gujarat Vij Company LimitedChartered Accountants(Jimi R. Modi) (L. Chuaungo, IAS) (G. K. Sinha, IFS)Partner Chairman Managing Director

(M. B. Parikh) (Viral Vora)General Manager (F&A) Company Secretary

Place : Vadodara Place : VadodaraDate : 26-09-2009 Date : 26-09-2009

AS AT 31ST

MARCH 2008

Membership No 119188





27

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH , 2009

INCOMERevenue from Sale of Power 17 414821.98 332459.22

Revenue Subsidies 18 4970.33 4937.92

Other Income 19 8474.84 13314.31

TOTAL INCOME 428267.15 350711.45

EXPENDITUREPurchase of Power 20 395354.57 319476.05

Repairs and Maintenance 21 2033.33 3566.72

Employee Costs 22 14720.96 12461.42

Administration and General Expenses 23 2641.56 2448.66

Depreciation 24 7557.29 6458.11

Interest and Finance Charges 25 8942.10 7329.45

Sub-Total 431249.81 351740.41

Less:

Other Expenses Capitalised 26 4085.37 4287.51

Sub-Total 4085.37 4287.51

Sub-Total 427164.44 347452.90

Other Debits 27 432.86 327.26

Extra-ordinary items 28 24.79 124.29

Net Prior Period Expenses / (Income) 29 274.41 2605.19

TOTAL EXPENDITURE 427896.50 350509.64

PROFIT /(LOSS) BEFORE TAX 370.65 201.81

Tax Expenses / (Income) 30 71.85 46.55

NET PROFIT /(LOSS) AFTER TAX AVAILABLE 298.80 155.26FOR APPROPRIATION

Balance broughtforward from last Balance Sheet 3186.92 3031.66

Balance broughtforward to the Balance Sheet 3485.73 3186.92

Significant Accounting Policies 31

Notes Forming Parts of Accounts 32

PARTICULARSSCHEDULENUMBER AS AT 31ST

MARCH 2009

[ RUPEES IN LACS]




AS AT 31ST

MARCH 2008





28


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009

Cash Flow from Operating ActivitiesNet Profit Before Tax 370.65 201.81Adjustments For: :Add / (Less) :-Prior period Charges 274.41 2,605.19Loss on Sale of Fixed assets 1.03 115.46Profit on Sale of Fixed Assets (17.43) (31.03)Misc Expenses w/off 41.16 41.16Provision for Leave Encashment 2,241.99 154.06Depreciation 7,557.29 6,458.11Interest and financing charges 8,942.10 7,329.46Extraordinary Item 24.79 124.28Operating Profit Before Working Capital Changes 19,436.01 16,998.50Adjustments for Changes in Working Capital(Increase)/Decrease in Current Assets (28,613.99) 10,015.09Increase /(Decrease) In Current Liabilities 10,066.86 8,028.27CASH GENERATED FROM OPERATIONS 888.88 35,041.86Direct Tax Paid (62.81) (282.88)CASH FLOW BEFORE EXTRAORDINARY ITEMS 826.07 34,758.98Extraordinary Item (24.79) (124.28)Prior Period Charges (274.41) (2,605.19)

A. NET CASH FROM OPERATING ACTIVITIES 526.87 32,029.51CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (22,081.71) (22,076.57)Sale of Fixed Assets 537.30 236.20(Increase)/Decrease in CWIP 403.37 (379.88)(Increase)/Decrease in Assets not in use 35.53 (32.69)

B. NET CASH FROM INVESTING ACTIVITIES (21,105.51) (22,252.95)CASH FLOW FROM FINANCING ACTIVITIESEquity Share Capital and Share Application Money 19,477.95 -Proceeds From Borrowings (2,007.92) 211.72Proceeds from Consumer Contribution/ Grants/subsidies 12,662.92 (2,391.48)Interest Paid (8,779.16) (7,489.42)

C. NET CASH USED IN FINANCING ACTIVITIES 21,353.79 (9,669.18)NET INCREASE IN CASH & CASH EQUIVALENTS(A+B+C) 775.15 107.38OPENING BALANCE OF CASH AND CASH EQUIVALENT 5,684.03 5,576.65CLOSING BALANCE OF CASH AND CASH EQUIVALENT 6,459.18 5,684.03

PARTICULARS YEAR ENDED31ST MARCH, 2008

YEAR ENDED31ST MARCH, 2009

[ RS. IN LAKHS]




Notes:The above cash flow has prepared under the Indirect Method as set out in the Accounting Standard - 3 onCash Flow Statements.






29

SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH , 2009

1 AUTHORISED50,00,00,000 (Previous Year 50,00,00,000) Equity Shares each of 50000.00 50000.00Rs. 10 each

Issued, Subscribed and Paid-up Capital 23772.55 5.0123,77,25,547 Equity Shares each of Rs. 10 each fully paid-up(Previous year 50,080 Equity Shares) held by the holding companyGujarat Urja Vikas Nigam Limited and its nominees.

TOTAL 23772.55 5.01

PARTICULARS As at 31st

March, 2009

[ RS. IN LAKHS]

SCHEDULE: 1SHARE CAPITAL

As at 31st

March, 2008

1 Equity Share Capital Suspense Account 0.00 29158.37

TOTAL 0.00 29158.37


March, 2009

[ RS. IN LAKHS]

SCHEDULE: 2SHARE CAPITAL SUSPENSE

As at 31st

March, 2008


March, 2009

[ RS. IN LAKHS]

SCHEDULE: 4RESERVES & SURPLUS

As at 31st

March, 2008

1 ReservesGrants towards cost of Capital Assets 87.86 214.86Govt. Grants / Consumer Contri. towards Capital Assets 40835.50 28045.58Equity Share Premium 21868.78 0.00

2 SurplusSurplus as per Profit & Loss Account 3485.73 3186.92TOTAL 66277.87 31447.36

1 Share Application Money 3000.00 0.00

TOTAL 3000.00 0.00


March, 2009

[ RS. IN LAKHS]

SCHEDULE: 3SHARE APPLICATION MONEY

As at 31st

March, 2008

Sr.

No.

Sr.

No.

Sr.

No.

Sr.

No.

See note No. 1 of SCHEDULE : 32






30



March, 2009

[ RS. IN LAKHS]

SCHEDULE: 5SECURED LOANS

As at 31st

March, 2008

Sr.

No.

1 Borrowings for Working CapitalCash Credit from Banks 4911.76 4544.74Loan from Power Finance Corporation 6.37 19.11Interest Accrued & Due on Working Capital 61.53 65.04

2 Borrowings allocated by G.U.V.N.LLoan from Banks, Fin. Institutions & Companies. 16004.09 17473.47Deferred Payment Credit 4093.79 7634.26Loan from Rural Electrification Corporation 8780.14 10744.33

TOTAL 33857.69 40480.95


1. Cash Credit limit from banks is secured against the 1st hypothecation charge in favour of UCO Bankconsortium on the Stocks, Book Debts & other current assets of the Company

2. Loan from PFC is secured against the 1st mortgage/hypothecation charges on the assets of BharuchTransmission Circle

3. Loan from REC are secured against charges on the plant & Machinery & Line of Asoj TransmissionDivision, GETCO as well as the movable assets consisting of 3 phase Meters, Quality Meters / StaticMeters, Static Meters on Indl. Consumers with MMB, DTCs, 11KV Feeder Bifurcation / Link Line for NewSub-Stations 66 KV lines, 66 KV Sub Stations, 11KV Conductor at Valsad O&M, Surat O&M and BharuchO&M of DGVCL, Baroda City O&M of MGVCL, Bhavnagar O&M, Junagadh O&M and Jamnagar O&M ofPGVCL and Sabarmati O&M and Himmatnagar O&M of UGVCL.

4. Loan from OBC is secured against the 1st hypothecation charges on the assets of Baroda City Circle andJambuva O&M Division of MGVCL.

5. Loan from SBI is secured against the 1st hypothecation charges on the assets of Valsad & Surat O&MCircle, Ankleshwar Ind. and O&M Division, Bharuch City and O&M Division Rajpipla O&M Division ofDGVCL.

6. Loan from CBI is secured against the 1st hypothecation charge on the assets of Rajkot Rural Division andRajkot RSO of PGVCL.

7. Loan from BOB is secured against the 1st hypothecation charge on the assets of Rajkot , Amreli, BhujO&M Circle and Jamnagar Rural Division of PGVCL.

8. Loan from SBI is secured against the 1st hypothecation charge on the assets of Gondal, Jetpur, Rajkot,Jamnagar, Dhoraji and Ranasan TR. Division of GETCO.

9 Loan from IOB is secured against the 1st hypothecation charge on the assets of Dhrangadhra andSurendranagar O&M Division of PGVCL.

10. Loan from SBS is secured against the 1st hypothecation charge on the Plant & Machinery of DhrangadhraO&M Division of PGVCL.

11. Loan from DNB is secured against the 1st hypothecation charge on the assets of Amreli, Dhasa and VartejTR. Division of GETCO.

12. Loan from IOB is secured against the 1st hypothecation charge on the assets of Vijapur, Mehsana andChhatral TR. Division of GETCO..

13. Loan from UBI is secured against the 1st hypothecation charge on the assets of Soja, Dhansura andChhatral TR. Division of GETCO.





31

14. Loan from BOB is secured against the 1st hypothecation charge on the assets of Bhavnagar, JunagadhRural, Botad, Mahuva, Bhavnagar City, Keshod (No.1), Keshod REC & Surendranagar O&M Division ofPGVCL.

15. Loan from Allahabad bank is secured against the 1st hypothecation charge on the assets of Sabarmati,Gandhinagar, Bavala O&M Division of UGVCL.

16. Loan from SBI is secured against the 1st hypothecation charge on the assets of Valsad, Surat, AnkleshwarInd. Division, Bharuch City Division,Bharuch O&M Division and Ankleshwar O&M Division of DGVCL.

17. Loan from BOB is secured against the 1st hypothecation charge on the assets of Amreli, Bhuj ,JamnagarRural Division, Mahuva O&M Division, Keshod REC Divn., Surendranagar O&M Divn. of PGVCL.

18. Loan from CANARA Bank is secured against the 1st hypothecation charge on the assets of Halol O&MDivn., Baroda O&M Divn. and Dabhoi O&M Divn. Of MGVCL.

19. Bill Discounting limits availed from ICICI Bank, SIDBI, HDFC, SBI, Allahbad Bank, BOB and UBI are securedunder the Deferred Payments Guarantees issued by consortium member banks.Amount due within one year Rs.8524 Lakhs (previous year Rs. 8351 Lakhs)

1 Loan from Rural Electrification Corporation for RGGVY Project 458.27 289.43

2 Borrowings allocated by G.U.V.N.L

3 Loan from Banks, Fin. Institutions & Companies. 14367.09 7653.99

4 Public Bonds 10511.55 12522.05

5 Loan under APDRP (State Govt. Loans) 4610.01 4849.81

6 Interest Accrued & Due on Working Capital 5.48 21.77

TOTAL 29952.40 25337.06

Amount due within one year Rs.10058 Lakhs (previous year Rs. 5692 Lakhs)

See note No: 3 of Schedule : 32


March, 2009

[ RS. IN LAKHS]

SCHEDULE: 6UNSECURED LOANS

As at 31st

March, 2008

Sr.

No.

See note No: 3 of Schedule : 32




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33


SCHEDULE: 8ASSETS NOT IN USE

1 Written down Value of Obsolete / Scrapped Assets

2 Plant & Machinery 26.43 20.703 Lines & Cable Net Works 2.47 43.504 Vehicles 1.67 1.855 Office Equipments 0.00 0.05

TOTAL 30.57 66.10


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 9CAPITAL EXPENDITURE IN PROGRESS

1 Capital Works-in-progress. 775.90 1136.592 Provision for completed works 73.16 115.84

TOTAL 849.06 1252.43


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 10INVENTORIES (As taken, valued and certified by Management)

1 Stock of materials at Stores. 12739.12 10155.102 Materials at Site (O&M). 585.17 457.133 Materials in Transit. 542.14 1249.024 Other Materials Accounts. 2684.10 969.845 Mat.Stock Excess / Shortage Pending Investi. 88.96 351.77

TOTAL 16639.49 13182.87


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.




34




March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 11SUNDRY DEBTORS

1 Sundry Debtors for Sale of Power (1,794.68) 929.182 Provision for Unbilled Revenue. 38777.22 30494.143 Dues from PDC (Net of SD forefeited). 35538.73 35446.794 Sundry Debtors for Misc.Receipts from Cons. 3197.06 3050.35

Sub-Total 75718.34 69920.465 Less : Unposted Receipts. 1.87 1.55

Sub-Total 75716.46 69918.916 Less : Prov. for Doubtful Dues from Consumers. 26504.46 26585.18

Sub-Total 49212.00 43333.747 Less : Deferred ED & TSE from Consumers. 4506.77 5266.08

TOTAL 44705.23 38067.66Out of above --Outstanding for a period exceeding six months. 33339.78 35638.15-Others. 42378.56 34282.31TOTAL 75718.34 69920.46Debtors shown net of advance received.


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 12CASH AND BANK BALANCES

1 Cash on hand. 1376.50 795.22

2 Cash Imprests with Staff. 0.00 0.00

3 Balance with Banks. 3276.31 3981.61

4 Remittance in Transit. 119.21 904.25

5 Fixed deposits with Banks 1687.16 2.95

TOTAL 6459.18 5684.03





35


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 13OTHER CURRENT ASSETS

1 Sundry debtors - Trading Account. 25.46 25.46Income accrued but not due on staff loan & Advances. 212.91 234.93Amt. recoverable from emp./ ex-employees. 13.71 16.75Interest Accrued & Due on Staff Loans & Advances 41.23 25.77Receivables from Government 0.00 0.09Other Claims & Receivables. 1.46 1.73Other Misc. Receivable from Govt Dept.,Local Bodies 30.02 54.88Deposits. 232.07 237.56Other Inter company receivables from companiesunder the same managementGujarat State Electricity Corporation Limited 864.35 535.24Madhya Gujarat Vij Company Limited 662.93 696.86Paschim Gujarat Vij Company Limited 124.68 145.33Gujarat Electricity Transmission Corporation Limited 0.00 643.73Gujarat Urja Vikas Nigam Limited 33325.21 14608.42Gujarat Energy Training & Research Centre 6.92 3.63TOTAL 35540.94 17230.39



March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 14LOANS AND ADVANCES

1 Unsecured considered Good for which company holdsno security other than the personal security.Advances for O&M Supplies / Works. 1460.81 1211.76Loans & Advances to staff -Interest Bearing. 173.21 205.84Loans & Advances to staff -Interest free. 130.21 128.92Loans & Advances - Others. 69.06 69.06Advance TaxesAdvance Income Tax / deduction at source. 392.61 355.82Advance Fringe Benefit Tax 118.12 92.11TOTAL 2344.02 2063.51




36



March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 15CURRENT LIABILITIES AND PROVISIONS

1 CURRENT LIABILITIESLiability for Purchase of Power. 28.03 15.85Liability for Capital Supplies / Works. 60.87 74.10Liability for O & M Supplies / Works. 3516.91 3482.87Staff related Liabilities. 128.44 100.09Welfare Schemes 1057.71 991.47Deposits & Retentions from Supp. & Contractors. 1925.83 1334.63Electricity Duty & other related charges Payable to Govt. 34.49 245.87Accrued interest but not due pertaining to long term Borrowings. 860.83 1104.50Other Liabilities and Provisions. 822.89 772.25Security Deposit from Consumers in Cash 57019.77 50195.43Interest payable on Security Deposit from Consumers 2195.61 1837.64Deposits for Electrification & Service Conn. etc. 6658.31 5898.40Other Inter/Intra-company payables fromcompanies under the same managementUttar Gujarat Vij Company Limited 352.26 241.03Gujarat Energy Transmission Corporation Limited 8.46 0.00Sub Total 74670.41 66294.13PROVISIONSProvision for Income Tax 437.89 394.39Provision for Wealth Tax 1.72 1.48Provision for Fringe Benefit Tax 103.47 75.35Provision for Leave encashment 4544.86 2302.87Provisions for expenses 8722.83 6860.85Sub- Total 13810.77 9634.95TOTAL 88481.18 75929.08



March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

1 Preliminary & Preoperative Expenses

Opening Balance 82.33 123.49Less: Written of during the year 41.16 41.16TOTAL 41.16 82.33

SCHEDULE: 16MISCELLANEOUS EXPENDITURE (To the extent not written off)





37


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 17REVENUE FROM SALE OF POWER

1 Revenue from Sale of PowerDomestic or Residential 53013.22 38861.71Commercial 28109.71 21831.06Industrial low & medium voltage 114386.54 96887.84Industrial high voltage 182552.70 146183.43Public lighting 1247.11 930.01Traction railways 15364.68 13172.58Irrigation agricultural 10059.39 6112.88Public water works and sew.pumps 3347.06 2402.96Total revenue from sale 408080.40 326382.47Electricity Duty & Tax on Sale of ElectricityEle. Duty - assessed 46243.62 38229.35TSE-assessed 0.00 0.04Total Duties & Taxes 46243.62 38229.38Miscellaneous Revenue from ConsumersMeter Rent / Service Line Rental 2948.87 2750.15Recoveries for Theft of Power / Malpractices Non-Consumers 1744.16 1207.70Wheeling charges Recoveries 39.68 3.19Misc. charges from consumers 2008.87 2115.72Total Miscellaneous revenue 6741.58 6076.75Gross revenue from sale of power 461065.60 370688.61Less:Ele. Duty assessed (contra) 46243.62 38229.35TSE assessed (contra) 0.00 0.04TOTAL 414821.98 332459.22

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

1 Agricultural Subsidy. 4970.33 4937.92TOTAL 4970.33 4937.92

SCHEDULE: 18REVENUE SUBSIDIES




38



March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 19OTHER INCOME

1 Interest on Staff Loans and Advances. 25.50 27.92Interest from Banks 15.15 0.00Delayed Payment Charges from Consumers 2147.78 1883.47Income from Trading 82.10 49.18Gain on sale of Fixed Assets 17.43 31.03Income from Staff Welfare Activities. 0.01 0.00APDRP Incentive 0.00 6551.92Miscellaneous Receipts. 1564.91 1268.75Excess provision of bad debts written back 0.00 362.00Govt. Grants/Cons. contribution( Deferred amount 10% W.Back) 4546.97 3140.05Grant for Energy Conservation. 75.00 0.00TOTAL 8474.84 13314.31



March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

1 Purchase of PowerPower purchase from GUVNL 395109.16 319450.33Power purchase from Windfarms 245.41 25.73TOTAL 395354.57 319476.05

SCHEDULE: 20PURCHASE OF POWER


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

1 Repairs and MaintenancePlant and Machinery. 702.99 506.50Buildings. 18.21 9.80Civil Works. 47.03 24.24Hydraulic Works. 0.04 0.02Lines, Cable Network etc. 1222.79 2948.93Vehicles. 7.93 7.55Furniture, Fixtures. 2.28 2.31Office Equipments. 32.05 67.38TOTAL 2033.33 3566.72

SCHEDULE: 21REPAIRS & MAINTENANCE





39


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 22EMPLOYEE COSTS

1 Salaries. 4711.13 5809.23Overtime. 10.38 10.54Dearness allowance & Dearness Pay. 3909.48 3263.67Other allowances. 1380.04 1490.87Bonus. 103.10 154.38Total emoluments 10114.13 10728.69Medical Expenses Reimbursement. 224.51 151.34Leave Travel Assistance. 7.32 2.32Waival of O/s.HBA Loan & interest. 3.10 0.00Death & accident compensation. 0.84 4.72Payment under Workmen’s Comp. Act. 10.36 39.75Board’s contri.Bombay Labour welfare Act. 0.39 0.40EDLI - Board’s contribution. 13.60 8.40EDLI - Administration charges. 0.17 0.18Total Other Staff Costs. 260.28 207.13Staff Welfare Expenses. 118.89 91.90Terminal Benefits. 4227.63 1433.70TOTAL 14720.93 12461.42





40


1 Administration ExpensesRent including Lease rentals 61.54 39.72Rates and Taxes. 16.98 35.79Insurance. 3.48 2.74Testing Charges 7.15 6.34Annual Inspection & Installation Checking fees to Coll. of ED 98.07 28.89Telephone, Postage, Telegram,Telex, Mobile Charges. 114.41 109.26Legal Charges. 26.35 40.05Audit Fees. 33.49 33.62Consultancy Charges. 37.45 21.80Technical Fees. 5.93 1.29Other Professional fees and expenses. 40.11 10.24Conveyance & Travel . 953.66 898.32Total Administration Expenses 1398.62 1228.06Other ExpensesAdmn. Charges for Restoration of damages 0.09 0.00Directors’ Fees 0.79 0.24Fees & Subscription. 45.49 1.13Books & Periodicals. 0.95 1.20Printing & Stationery. 139.83 134.39Expenses on Computer Billing & EDP Charges. 139.66 120.71Advertisements (Other than purchase related). 20.88 22.68Xerox copy Charges 28.12 24.45Contributions and Charities. 0.00 50.00Electricity Charges. 77.86 73.79Water Charges. 11.06 6.46Maintenance to Tree Plantations. 0.06 0.00Entertainment. 2.16 0.43Expenses on Meetings & Conferences. 2.23 3.11Expenses for CISF. 5.63 0.00Guest House Expenses. 0.47 0.37Miscellaneous Expenses. 583.03 464.08Total Other Expenses 1058.31 903.04Freight & Other Purchase related expensesFreight. 50.83 55.90Other Purchase Related Expenses. 94.59 213.18Fabrication ch. Less:amt. absorbed in cost of fabrication 0.00 0.01Total Freight & Other Purchase related expenses 145.42 269.10Rev.Stamps on Receipts issued by the Board. 7.36 4.75Expenditure on Training to Staff. 31.86 43.73Total General Expenses 39.22 48.47TOTAL 2641.56 2448.66


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 23ADMINISTRATION & GENERAL EXPENSES






41

1 Depreciation on Buildings 28.41 24.24Depreciation on Hydraulic Works 0.96 0.59Depreciation on Other Civil Works 16.13 13.80Depreciation on Plant & Machineries 1538.72 1278.59Depreciation on Lines & Cable Net Works 5780.81 4972.55Depreciation on Vehicles 11.66 12.65Depreciation on Furniture & Fixtures 23.55 20.08Depreciation on Office Equipments 157.06 135.61TOTAL 7557.29 6458.11


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 24DEPRECIATION


1 Int. on State Government Loans 14.60 (1,150.96)Int. on Bonds 1098.72 1400.76Interest on other Loans/Deferred CreditsInterest on Deferred Payment Guarantee 422.60 851.76Int. on REC Loans 959.89 1269.67Int. to Consumers on advance Payment 56.50 30.93Int. on Loan under DLAS 0.00 0.84Int. on Loans from PFC 0.91 2.06Interest to Consumers on security deposit. 2636.39 2227.19Total Int. on Cap. Liabilities 5189.61 4632.25Int. on Borrowing for Working Capital. 3182.86 2160.75Other Int. & Finance ChargesDiscount to Cons. for Timely Payment of BillsDiscount to Cons. for Timely Payment of Bills 3.03 1.82Interest to Suppliers/ContractorsInterest Charges - Bill collection agencies 20.22 12.02Other InterestOther Interest 69.55 68.39Cost of Raising FinanceCost of raising equity - Stamp Duty 45.64 0.00Other chargesOther Charges 308.96 299.79Guarantee Fees 118.88 151.81Banking Cash Transaction Tax 3.37 2.62Sub - Total 3752.49 2697.21TOTAL 8942.10 7329.45


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 25INTEREST AND FINANCE CHARGES




42


1 Employee Costs Capitalised. 3463.81 3583.38Administration & General Expenses Capitalised. 621.55 704.13TOTAL 4085.37 4287.51


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 26OTHER EXPENSES CAPITALISED


1 Small & Low Value Items Written - off. 0.24 0.04Write Off of Written down value of assets scrapped. 0.05 0.00Loss on Sale of Fixed Assets. 1.03 115.46Research & Development Expenses. 0.00 0.38Miscellaneous Losses & Write-offs. 390.34 170.16Deferred Revenue Expenses W.off/Sundry Expenses. 41.20 41.23TOTAL 432.86 327.26


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 27OTHER DEBITS

1 Extraordinary DebitsLosses on account of Flood, Cyclone, Fire etc. 24.79 124.29TOTAL 24.79 124.29


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 28EXTRAORDINARY ITEMS





43

1 Receipts from consumers Prior period 0.00 9.02Interest income for prior periods 0.00 0.36Excess provision for depreciation. 5.33 0.25Excess provision for Interest & other fin. Charges prior period 2.05 16.32Other excess provision. 145.39 83.20Other income. 162.75 386.93Total prior period income 315.53 496.08Prior period expenses / lossesOther generation costs. 40.93 0.08Employee costs. 29.05 12.54Depreciation under provided. 70.05 47.33Int. & Other Finance charges to Prior period 2.54 59.70Other charges related to prior period 447.10 316.76Other excess provision. 0.26 2664.86Total prior period exp.& losses 589.94 3101.27Net Prior period Expenses /(Income) 274.41 2605.19


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 29NET PRIOR PERIOD (INCOME)/EXPENSES


1 Income Tax (MAT) 43.50 23.24Wealth Tax 0.24 0.26Fringe Benefit Tax 28.11 23.05TOTAL 71.85 46.55


March, 2009

[ RS. IN LAKHS]

As at 31st

March, 2008

Sr.

No.

SCHEDULE: 30TAX EXPENSES




44


SCHEDULES FORMING PART OF BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE – 31SIGNIFICANT ACCOUNTING POLICIES

A) INTRODUCTORY:

Transfer of undertaking as per the Financial Reconstruction plan of The Governmentof Gujarat:

Pursuant to the enactment of the Electricity Act, 2003 and the Gujarat Electricity Industry(Reorganization and Regulation) Act, 2003, Government of Gujarat (the Government) hasissued various notifications, Government resolutions and Transfer Schemes for vesting of theassets, liabilities, proceedings and personnel from erstwhile Gujarat Electricity Board (GEB-erst)to the Government of Gujarat and then to revest the same into initially six companies i.e. oneGeneration Company, one Transmission Company and four Distribution Companies. DakshinGujarat Vij Company Ltd (DGVCL) is one of these four Distribution Companies, registeredunder the provisions of Companies Act, 1956. Dakshin Gujarat Vij Company Limited (DGVCL)was incorporated under the provisions of the Companies Act, 1956 on 15.09.2003. Thecertificate of commitment of Business was received on 15.10.2003 from the Registrar ofCompanies.

On reorganization of GEB by the Government, the existing shares issued to and allotted by thecompany in the name of GEB were transmitted w.e.f 1st April, 2005, by operation of law, inthe name of Gujarat Urja Vikas Nigam Limited (GUVNL), a company promoted by Governmentto carry out the residual functions of GEB-erst.

Consequent on such transmission and transfer of shares to the nominees of GUVNL, theentire share capital of the Company is held by GUVNL and the Company has become thewholly owned subsidiary of GUVNL, a Government Company within the meaning of Section 617of the Companies Act, 1956. The company having become the subsidiary of the Governmentcompany (GUVNL) w.e.f 1st April 2005, it is also became a Government Company by virtue ofthe operation of the provisions of the said Section 617.

As a major steps for implementation of Financial Restructuring Plan (FRP), Government ofGujarat issued notification NO.GHU-2006-91-GUV-1106-590-K dated 3rd October, 2006 notifyingthe final opening balance sheet of the Company as on 1-4-2005 containing the values of theassets and liabilities of the Distribution activities which stood transferred from erstwhile GujaratElectricity Board to the Company as specified in Annexure-D appended to the notification.Accordingly, the said values of the assets & liabilities have been taken in to as openingbalances while preparing the Final Accounts for the year 2005-06.

The consideration for the transfer of undertaking comprising of the values of assets andliabilities and the proceeding relating to distribution activities of erstwhile GEB as specified in thenotification will be discharged by DGVCL by issue of Equity Shares of Rs. 10/- each fully paid forconsideration other than cash to Gujarat Urja Vikas Nigam Limited (GUVNL), the successorcompany to erstwhile GEB as may be directed by Government of Gujarat (GoG).

Energy & Petrochemical Department, Government of Gujarat issued a notification No. GHU-(203)-GUV-11006-590K dated 12th December, 2008 modifying the earlier notification no. GHU-2006-91GUV-1106-590K dated 3rd October, 2006, thereby bifurcating the earlier notified entry





45

share capital into equity share capital of Rs.728959360/- (i.e. 72895936 fully paid up equityshares of Rs.10/- each) and share premium of Rs.2186878070/- w.e.f. 1st April, 2008.Consequently, the Share Capital Suspense Account of Rs.29158.37 lacs stand transferred toequity share capital A/c. for Rs.7289.59 lacs and Share Premium Account for Rs.21868.78lacs. Total 72895936 Equity Shares of Rs.10/- each (fully paid) issued to ‘GUVNL’ for considerationother than cash.

B) ACCOUNTING POLICIES/PRINCIPLES:

(1) The company is engaged in the business of electricity distribution in South Gujarat area and isgoverned by the provisions of the Electricity Act, 2003 and Gujarat Electricity Industry(Reorganization & Regulation) Act, 2003. The provisions of these Act read with the rules madethere under prevail wherever the same are inconsistent with the provision of the CompaniesAct, 1956.

The company prepares its financial statements under historical cost basis in accordance withGenerally Accepted Accounting Principles (GAAP) and the Accounting Standards issued by theInstitute of Chartered Accountants of India unless otherwise stated.

(2) Revenue Recognition:

(i) Revenue from sale of power:

Revenue from sale of power is recognized on accrual basis for energy supplied in accordancewith the tariff orders awarded by Gujarat Electricity Regulatory Commission (GERC) asapplicable to the consumers.

(ii) Misc. revenue from consumers.

Meter rent, recoveries from theft of power/malpractices, wheeling charges recoveries arerecognized on accrual basis. Misc. charges from consumers are recognized on cash basisexcept when ultimate realization of such income is certain.

(iii) Revenue subsidies:

Revenue Subsidies are accounted for as allocated by GUVNL (Holding Company) andcredited to profit and loss account.

(iv) Other income:

(a) Income from sale of scrap and insurance claims are accounted for on the basis ofactual realization. Amount in respect of delayed payment charges (except for caseswhere suit is filed in the court) is accounted on the basis of actual realization of latepayment against outstanding energy bills.

(b) Other income except mentioned above is recognized on accrual basis except whenultimate realization of such income is uncertain.

(v) Amount in respect of unclaimed Security Deposit, Earnest Money Deposit and Misc.Deposit of suppliers and contractors which is pending for more than three years andwhich, as per policy of management, is not payable, is considered as income.

(3) Fixed Assets:

a) Fixed assets are stated at cost including all attributable charges properly incurred inerecting and bringing the asset into commercial use. The opening gross value of fixed




46


assets, accumulated depreciation and net block of fixed assets as on 1.4.2005 are statedat values notified by Govt. of Gujarat notification no. GUV-2006-91-GW-1106-590-K dt.3rd October, 2006.

The fixed assets and its depreciation fund balances have been transferred to the companyas intimated by notification of Govt. of Gujarat. In such transfer depreciation has beenwritten back up to 70% of the value of assets as per the scheme of transfer which in theopinion of the company has adequate useful life due to continuous renovation andmaintenance of distribution network to provide the quality power to the esteemed consumersof the company.

b) Capital work- in -progress:

i) Capital work -in - progress includes the cost incurred on fixed assets that are not yetready for the intended use and is capitalized whenever ready for use. Commonexpenditure of Corporate Office and field offices are allocated to Capital work – in –progress (except for unbilled capital WIP)at flat rate determined having regard toamount of allocable expenditure incurred during the year.

ii) Claims for price variation are accounted for on their acceptance.

c) Owing to the high rate of movement of spare transformers within the Company, thedepreciation is not withdrawn on removal of burnt transformer for repairs. Accordingly, thedifference in the value of spare transformer and burnt transformer is not capitalized andthe same is reflected in stock under Current Assets.

(4) Depreciation:

i) Depreciation is provided on Straight Line Method as per rates prescribed in Schedule XIVto the Companies Act, 1956.

ii) Any depreciable assets except office equipments and furniture & fixtures, having writtendown value below Rs. 5000/- have been fully charged to revenue in the year in whichassets are purchased.

iii) Depreciation on addition of fixed assets is provided on pro rata basis from the quarter,next following the quarter in which the asset is put to use.

(5) Preliminary Expenses / Pre-Operative Expenses:

Preliminary Expenses as well as Pre-Operative Expenses are amortized over a period of fiveyears commencing from the financial year 2005-06.

(6) Inventories:

The Inventories of the Company have been valued on the following basis:

(a) Consumable Stores and Spares - At cost (Weighted Average Method.)

(b) Scrap - At cost or estimated Net Realizable Valuewhichever is lower

(c) Shortage/Surplus material - At cost (Weighted Average Method.)

(d) Material in transit - At cost





47

(7) Retirement Benefits:

i) Provident Fund

Contribution to Provident Fund is made to recognized provident fund as required by therelevant statutes and the rules.

ii) Gratuity

Liability towards gratuity payable to employees is covered by Gratuity Trust Fund managedby GUVNL (Holding Company). The contribution payable as per actuarial valuation ischarged to Profit and Loss Account of the company.

iii) Leave Encashment

The benefit of encashment of leave is given to employees of the company on retirement.The Company accounts for Leave Encashment Liability to its employees while in serviceon the basis of actuarial valuation made by LIC.

iv) Leave Travel Concession

Expenditure on Leave Travel Concession to eligible employees is recognized on the basisof actual reimbursement.

(8) Borrowing Costs:

Borrowing Cost specifically identified to the acquisition or construction of qualifying assets iscapitalized as part of such asset. A qualifying asset is one that necessarily takes substantialperiod of time to get ready for intended use. All other borrowing costs are charged to Profitand Loss Account.

(9) Taxation:

The provision for Income-tax is ascertained on the basis of assessable profits computed inaccordance with the provisions of the Income-Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences,being the differences between taxable income and accounting income that originate in oneperiod and are capable of reversal in one or more subsequent periods. The deferred taxassets is recognized and carried forward only to the extent that there is a reasonable certaintyexcept for carried forward losses and unabsorbed depreciation which is recognized on virtualcertainty that the asset will be realized in future.

(10) Provisions and contingent liabilities:

The company recognizes a provision when there is a present obligation as a result of an eventthat probably requires an outflow of resources and a reliable estimate can be made of theamount of the obligation. A disclosure for a contingent liability is made when there is a possibleobligation or a present obligation that may, but probably will not, require an outflow of re-sources. Where there is a possible obligation or a present obligation that the likelihood ofoutflow of resources is remote, no provision or disclosure is made.

(11) Consumer contributions & Capital Grants:

Consumers’ Contribution and capital grants towards cost of capital assets are not reducedfrom cost of assets. All receipts of consumer contributions and capital grants accounted from




48


1-4-2005 are treated as deferred credit and 10% of the year-end balance are transferred toprofit & loss account.

(12) Impairment of Assets:

Consideration is given at each Balance Sheet date to determine whether there is any indicationof impairment of the carrying amount of the Company’s fixed assets. If any indication ofimpairment exists, recoverable amount of the asset is estimated. If such recoverable amountof the asset or the recoverable amount of the cash generating unit to which the asset belongsis less than its carrying amount, the carrying amount is reduced to its recoverable amount.The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account.If at the Balance Sheet date, there is an indication that if a previously assessed impairmentloss no longer exists, the recoverable amount is reassessed and the asset is reflected at therecoverable amount so reassessed.

(13) Segment Reporting:

(i) Business Segments: The Company has only one activity namely ‘Distribution of Electric-ity’. Accordingly, the Accounting Standard 17 – Segment Reporting issued by the Instituteof Chartered Accountants of India has been considered as not applicable.

(ii) Geographical Segments: The Company’s operations are mainly confined within the Stateof Gujarat. The Company does not have material earnings outside Gujarat or outsideIndia. As such, there are no reportable geographical segments.

(14) Intangible Assets:

The Company has policy to write off such expenditure in the year in which it is incurred.

(15) Prior period items:

All identifiable items of income and expenditure pertaining to prior period are accounted throughnet prior period credits/ (charges) as stipulated in the Accounting standard number 5 dealingwith “Prior period items etc…” .





49

NOTES ON ACCOUNTSFOR THE YEAR ENDED 31ST MARCH, 2009

SCHEDULE – 32

NOTES FORMING PART OF ACCOUNTS

1. Equity Share Capital Account:

(a) The Government of Gujarat (GoG) has notified the opening values of assets and liabilitiesof the Company in respect of the transferred undertaking of erstwhile Gujarat ElectricityBoard (GEB) as on 1st April 2005 vide Notification No. GHU-2006-91-GUV-1106-590-Kdated 3rd October, 2006. The Energy & Petrochemical Department, Government ofGujarat vide Notification No. GHU-(203)-GUV-1106-590-K dated 12th December, 2008partially modifying the earlier Notification No.GHU-2006-91-GUV-1106-590-K dated 3rd

October, 2006 has bifurcated the earlier notified Equity Share Capital into Equity SharesCapital of Rs.728959360/- (i.e. 72895936 fully paid Equity Shares of Rs.10/- each) andShare Premium of Rs.2186878070/- effective from 1st April, 2008.

(b) The Government of Gujarat has released the financial assistance by way of Equity ShareCapital in Gujarat Urja Vikas Nigam Limited (GUVNL), the holding company, forimplementation of JGY in non-tribal areas by all distribution subsidiary companies of GUVNL.In turn, the company has allotted 164779531 shares of Rs.10/- each (fully paid up)aggregating to Rs.1647795310/- to GUVNL by way of preferential allotment throughprivate placement.

(c) Share application money for Rs.30,00,00,000/- shown in the balance sheet representsthe amount transferred by GUVNL, the holding company towards Equity Share Capital onaccount of capital grant under FRP.

2. Registration of charge in-respect of proportionate Secured Loans transferred byGEB-erst :-

The company has, under a scheme of transfer, acquired the properties, which are subjectedto charges created by the erstwhile GEB, a transferor entity. As per the provisions of theCompanies Act, the company is required to register the charges in respect of all such assetswith the Registrar of companies, Gujarat state. Due to the common funds for all the operationsof erstwhile GEB, funds were raised against the charge over all its assets. However, theamount of secured loans of erstwhile GEB which are secured against the separate propertiestransferred to each transferee company has not yet been identified. DGVCL, therefore, hasnot registered the charge on these properties with the Registrar of Companies, Gujarat.

Certain assets of the company which are given as security for the loans raised by holdingcompany i.e. GUVNL ( outstanding as on 31.03.2009 ) are as under:

(i) Loan from State Bank of India for Rs.468.74 Crores is secured against the firsthypothecation charge on the assets of Valsad, Surat, Ankleshwar (Ind.) division, BharuchCity division, Bharuch (O&M) division and Ankleshwar (O&M) division of DGVCL.




50


(ii) Loan from State Bank of India for Rs. 132.80 Crores is secured against the firsthypothecation charge on the assets of Valsad & Surat (O&M) Circles, Ankleshwar (Ind.) &(O&M) divisions, Bharuch City division and Rajpipla (O&M) division of DGVCL.

(iii) Loans from REC (Scheme) under APDRP Scheme for Rs.159.76 Crores are securedagainst hypothecation charge on the 11KV Conductor at Valsad (O&M), Surat (O&M) &Bharuch (O&M) of DGVCL.

3. Secured and Unsecured Loans.

(1) The loans which were raised by erstwhile G.E.B. from Bonds, Banks, PFC, REC, LIC,Financial Institutions and other Lenders against the Security of the assets relating togeneration, transmission and distribution activities and were used for common purposesare continued in the books of GEB / (now GUVNL) on behalf of all transferee companiesand the same have been apportioned under FRP Notification dated 3rd October, 2006,amongst all transferee companies and the same loans have been accounted by theCompany as per information submitted by the holding company i.e. GUVNL. Therepayments and interest thereon are reimbursed by the Company to GUVNL.

(2) Additional Loans raised by GUVNL during 2008-09:

GUVNL has raised several loans during the year 2008-09 for common usage of transfereecompanies. GUVNL has apportioned Rs.19259.97 lacs out of these loans to the Company.The repayment and interest thereon are reimbursed by the company to GUVNL.

In light of above note, the said loans are reclassified and regrouped either as securedloans or unsecured loans.

4. Legal ownership (titles) of immovable properties:

The immovable properties, in respect of which the account balances have been transferred,are held in the name of erstwhile GEB. The procedure for the registration and /or transfer inthe name of the Company is in progress.

5. Inventory :

The material stock shortage/excess pending investigation of Rs. 88.96 lacs as on 31.03.2009(Rs. 351.77 lacs as on 31.03.2008) includes discrepancies between closing stock as per TrialBalance and monthly inventory control report besides material stock shortage/excess noticedduring physical verification on inventory.

6. Compensation of usage of inter company assets:

Consequent upon unbundling of business of GEB-erst, various assets including lands andbuildings of other group companies are used by companies other than the companies to whichthey virtually belonged under the scheme of transfer. In absence of any understanding forcompensating the other company by the company actually using the said assets, no provisionhas been made for any such charges receivable or payable to or by the company. The profit/ loss of the current year as well as the balances of the receivables / payables are said to beaffected compared to the situation if these amounts would have been determined. However





51

it is not possible even to roughly estimate such receivable and/or payable. Any formula whenever determined will affect the general reserve as well as the receivable and/or payablebalances in the balance-sheet of that respective year.

7. Staff Welfare Scheme:

Management is in the process of ascertaining the adequacy and apportion of all the fundgrouped under the welfare scheme created by erstwhile GEB for the purpose of objective forwhich it is collected from employees. However, on determination of same the adjustmentmay have to be made in Profit & Loss Account to bring to them appropriate amount to be ableto fully meet the obligation promised to employee from GEB-erst as determined in consultationwith GUVNL.

8. Provision for employees remuneration and benefits:

(i) Salaries and wages:

8 Employees of erstwhile GEB were transferred under the Scheme with complete benefitof continuation of service without break and on same terms and conditions as wasprevailing on the effective date of transfer. The employee costs in respect of thetransferred employees have been accordingly accounted.

8 Pursuant to the final settlement for Wage Revision effective from 01.01.2006, thecompany has accounted liabilities of Rs.1517.86 lacs during the year after consideringthe total provision made in earlier years.

(ii) Leave Encashment:

The company has adopted policy of accounting liability for leave encashment on the basisof actuarial valuation by Life Insurance Corporation of India. The actuary determinedpast service cost arising on the introduction of retirement benefit of Leave encashmentfor its existing employees as on 31st March, 2009 considering the wage revision effectedfrom 01-01-2006. Liability for the current year of Rs. 2426.90 lakhs has been charged toProfit & Loss Account.

(iii) Defined contribution to provident fund, employee pension scheme andEmployees Death Linked Insurance:-

The company makes contribution towards Employees’ Provident Fund, Employees’ PensionScheme and Employees’ Death Linked Insurance. In accordance with the provisions ofthese schemes, the Company is required to contribute a specified percentage of payrollcosts. The Company has, during the year, recognized the sum of Rs. 8.51 Crores (P.Y.Rs. 7.86 crores) as expense towards contributions to these plans.

(iv) Defined contribution towards gratuity:-

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

The following table summarises the component of net benefit expenses recognized in theProfit & Loss Account and amounts recognized in the Balance-sheet.




52


Present Value of Obligations 2258.07 4526.64Fair value of plan assets 2258.07 1803.97Unrecognized past service cost Nil NilNet liability in the Balance Sheet 2988.28 2722.67

F.Y. 2008-09

(Rs. In Lakhs)

The amounts recognized in the balance sheet

Current service cost 114.44 131.06Interest on obligation 362.13 344.55Expected return on plan assets (185.18) (125.40)Net actuarial losses (gains) recognized in year 670.26 9.78Past service cost Nil NilLosses (gains) on curtailments and settlements Nil NilExpense recognized in the statement of Profit & Loss 961.65 359.99

Cost for the period

Opening defined benefit obligation 4526.64 4306.84

Prior period adjustment

Service cost 114.44 131.06Interest cost 362.13 344.55

Actuarial losses (gains) 648.65 7.93

Benefits paid (405.50) (263.74)Closing defined benefit obligation 5246.36 4526.64

Change in Benefit Obligations

(Rs. In Lakhs)

(Rs. In Lakhs)

F.Y. 2007-08

F.Y. 2008-09 F.Y. 2007-08

F.Y. 2008-09 F.Y. 2007-08





53

* Apportioned based on the ratio of closing liabilities of holding and fellow subsidiary companies

9. Deferred Tax Asset / Liability:

Based on the expert opinion sought by GUVNL and adopted by the company, Deferred TaxAssets have not been recognized in the books of accounts as the company does not envisagethe Taxable Profit in the near future.

Further on account of huge carry forward losses and unabsorbed depreciation as per theincome tax, there is no virtual certainty that sufficient future taxable income will be availableagainst which such deferred tax assets can be realized and hence as a matter of prudencethe deferred tax assets have not been recognized in the books of accounts.

Deferred Tax on the depreciation on the opening balances of the assets vested by theGovernment of Gujarat under various notifications and Restructuring Plan have not beenrecognized considering the permanent difference. Further consequential difference betweenthe amount of depreciation for accounting purpose and tax purpose in respect of such assetsin subsequent years would also be considered as permanent difference.

The Deferred Tax Asset is worked out as under:

Difference in Depreciation 555.15 —Provision for Leave Encashment 824.90 —Total Deferred Tax Asset / (Liability) 1380.05 —Net Deferred Tax Asset 1380.05Set off against c/f Deferred Tax AssetNet Deferred Tax Asset for the year 2008-09 Not to be Recognized

Deferred TaxAsset Amount

Deferred TaxLiabilityAmount

(Rs. In Lakhs)

Particulars

Opening fair value of plan assets 1803.97 1106.23

Expected return 185.18 125.40

Actuarial gains and (losses) (21.60) (1.85)Contributions by employer * 696.04 837.93

Assets acquired in an amalgamation in the nature of purchase Nil Nil

Exchange differences on foreign plans Nil Nil

Benefits paid (405.50) (263.74)

Closing fair value of plan assets 2258.07 1803.97

(Rs. In Lakhs)

Change in Plan Assets(not applicable as liability is currently not funded) F.Y. 2008-09 F.Y. 2007-08




54


10. The Income Tax assessment for the assessment year 2006-07 (financial year 2005-06) hasbeen completed and Income Tax Department has raised demand of Rs.15.55 lakhs forIncome Tax and Rs.36.29 lakhs for Fringe Benefit Tax. As Fringe Benefit Tax has alreadybeen paid, DGVCL has preferred appeal for rectification of mistake and grant of stay on thesame. As regards demand of Income Tax for Rs. 15.55 lakhs, DGVCL has paid the same andhas also preferred an appeal before the Commissioner of Income Tax.

11. Waiver of Interest on outstanding Government Loans :-

The Government of Gujarat vide Resolution no. GEB-1104-7319-K dated 7th November, 2008has resolved to waive the interest on outstanding Government loans of Rs. 84177.39 lakhs (ason 31.03.2005 ) which was earlier deferred till 2010-11 while approving the Financial RestructuringPlan of erstwhile GEB. Accordingly, no provision is required to be made on these loans forperiod till 2010-11.

12. Related Party Transactions:-

As per Para 9 of AS 18 on “Related Party Disclosure”, no disclosure is required in the financialstatements as regards related party relationships with other state-controlled enterprises andtransactions with such enterprises.

The balances in the accounts of holding company and other five fellow subsidiary companiesreflect the following differences as compared to the confirmation of balances obtained fromthe respective Company.

Balancesas per

Confirmationas on

31.03.2009Receivable/

(Payable)

Difference

(Rs. In Lakhs)

Name of companySr.No.

Closing bal-ance as per

DGVCL as on31.3.2009.Receivable/

(Payable)

a) Gujarat Urja Vikas Nigam Limited 33325.21 (33326.78) 1.57(Holding Company)

b) Gujarat State Electricity Corp. Ltd. 864.35 ( 864.35 ) NIL(Fellow Subsidiary Company)

c) Gujarat Energy Transmission Corp. Ltd. ( 8.46 ) 61.82 53.36(Fellow Subsidiary Company)

d) Madhya Gujarat Vij Company Ltd. 662.93 ( 662.93 ) NIL(Fellow Subsidiary Company)

e) Paschim Gujarat Vij Company Ltd. 124.68 ( 124.68 ) NIL(Fellow Subsidiary Company)

f ) Uttar Gujarat Vij Company Ltd. (352.26 ) 352.26 NIL(Fellow Subsidiary Company)

g) Gujarat Energy Training and 6.92 ( 6.92 ) NILResearch Institute

The group companies have confirmed the balances. However, the differences as shown above aresubject to reconciliation.





55

13. In view of their large number of accounts and in absence of segregated information, totaloutstanding dues to Small Scale Industrial Undertaking as defined under Micro, Small & MediumEnterprises Development Act, 2006 have not been disclosed separately, as required underPart-1 of Schedule VI to the Companies Act, 1956.

14. Balance in respect of sundry creditors, sundry debtors, loans and advances (debit / credit) asat 31.03.2009 have been taken as shown in the books of accounts and are subject toindependent confirmation and reconciliation.

15. The Contingent Liabilities not provided for:

a) Unexpired Bank Guarantees issued by Banks Nil Nilb) Letters of Credit issued by Banks Nil Nilc) Bill discounted with Bank. Nil Nild) Sales Tax demand in Appeal/Dispute Nil Nile) Income Tax demand in Appeal / Dispute(not provided for) Nil Nilf) Claims against company not acknowledged as debt. 3313.11 3348.45

As at 31st March

(Rs. In Lakhs)

Contingent Liabilities in respect of

16. Estimated amount of Contracts remaining to be executed on Capital Account and not providedfor (net of advances) Rs. 156.05 lakhs. (Previous Year Rs. 953.05 lakhs).

17. Segment Information

The company is principally engaged in the business of distribution of electricity and ancillaryactivities. Accordingly there is only one reportable segment as per Accounting Standard 17issued by the Institute of Chartered Accountants of India on “Segment Reporting”.

18 Managerial Remuneration

Salaries 626341 561702

Allowances & perks 252000 252000

Total 878341 813702

For the period ended 31st March

(Amount in Rupees)

Particulars

2009 2008

2009 2008




56


19. Auditors’ Remuneration:

(A) Statutory Auditor:

Statutory Audit Fees 900000 650000Cash Flow Certificate & Others 200000 200000Out of pocket expenses 100000 100000Total 1200000 950000

Particulars

20. Statement of Management:

Management is of the opinion that the current assets, loans and advances are good andrecoverable and are approximately of the values, if realized in the ordinary courses of businessunless and to the extent stated other wise in the Accounts. Subject to the notes hereof andthe method of accounting followed by the Company, management is of the opinion that theprovision for all known liabilities is adequate and not in excess of amount reasonably necessaryand that there are no contingent liabilities except those stated in the notes.

21. Impairment of Assets:

As per assessment made by the management, the company has not suffered any impairmentloss during the financial year 2008-09.

22. Borrowing Cost:

All borrowings during the year are taken by GUVNL on behalf of its subsidiary companies whichare not directly allocable for any specific project of the Company. Hence no borrowing cost onsuch loans is capitalized during the year. However, the interest paid to REC for specific loansof RGGVY projects has been capitalized during the year.

23. Valuation of assets retired from active use

As per Para 14 of Accounting Standard – 10 “Accounting for Fixed Assets” an item of fixedasset that has been retired from its active use and is held for disposal (& shown as “AssetsNot in Use” under Fixed Assets) is to be stated at the lower of Net Book Value or NetRealizable Value (NRV). However, the Company has not determined the NRV for assetsretired from active use as the management is of the opinion that the NRV of the same ishigher than the Net Book Value due to very old assets and upward trend in scrap rates. As aresult of this, company has not recognized any expected loss, if any, in the Profit & LossAccount.

24. Additional information pursuant to provision of paragraph 3, 4C, 4D of the Part-II of ScheduleVI to the Companies Act, 1956 is given to the extent possible in view of nature of business ofthe company.


(Amount in Rupees)

2009 2008





57

(a) Nature of activity: - the company is a utility industry and is mainly engaged in distributionof electricity and providing services ancillary to the main activity.

(i) Category wise units sold & Average realization per unit.

MusSold

% of TotalMUs Sold

Year ended March 31, 2008 Year ended March 31, 2009

RevenueRs. in Lacs

AverageRate

Rs./unit

ConsumerCategory

MusSold

% of TotalMUs Sold

RevenueRs. in Lacs

AverageRate

Rs./unit

1239 15.53% 38862 3.14 Residential 1346 16.21% 53013 3.94

450 5.64% 21831 4.85 Commercial 487 5.86% 28110 5.78

2313 28.99% 96888 4.19 Industrial LT 2280 27.45% 114386 5.02

3084 38.65% 146183 4.74 Industrial HT 3281 39.51% 182553 5.56

27 0.33% 930 3.48 Public Light. 29 0.35% 1247 4.27

252 3.16% 13173 5.23 Railways 260 3.13% 15365 5.91

530 6.64% 6113 1.15 Agriculture * 533 6.42% 10059 1.89

84 1.06% 2403 2.85 Water Works 89 1.07% 3347 3.76

7979 100.00% 326382 4.09 Total 8305 100.00% 408080 4.916077 0.08 Misc. Recovery 6742 0.08

fromConsumers

7979 332459 4.17 Total 8305 414822 5.00

* Ag. MUs Sold=metered unit 106 MUs + 427 MUs Unmetered unit assessed as per GERC.

* Includes Ag. Tariff compensation Rs. 2503.73 Lacs + Rs. 13855.25 Lacs FPPPA

(ii) Units purchased T& D losses & Distribution losses.

Units Purchased 9918 10331Transmission & pooled losses 483 590Net units to be considered for distribution losses 9435 9741Units sold 7979 8305Transmission & Distribution losses - Units (MUs) 1939 2026T & D loss in % 19.55% 19.61%Distribution losses – Units (MUs) 1456 1436Distribution loss in % 15.43% 14.74%

2007-08(Units in

MUs)

2008-09(Units in

MUs)

(Rs. In Lakhs)

Particulars




58


(b) C.I.F value of direct import during the year is Rs. Nil (previous year Rs. Nil)

(c) The value of consumption of directly imported and indigenously obtained raw material,components, stores and spares part and percentage of each to the total consumption.

Indigenous 1. Raw Materials Not Ascertainable Not Ascertainable 2. Spares 3. Components

Particulars

1. Payment for professional / consultancy fees Nil Nil2. Payment for capital goods Nil Nil3. Foreign travel expenses Nil Nil4. Others Nil Nil

(Amount in Rupees)

Particulars

(d) Expenditure in foreign currency

(e) Earning in foreign currency: Rs. Nil (previous year Nil)

(f) Remittance in foreign currency Rs. Nil (previous year Nil)

25. The previous year’s figures have been recast / restated, wherever necessary, in conformityto the current years’ presentation.


(Amount in Rupees)

2009 2008

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

For SNK & Co. Dakshin Gujarat Vij Company LimitedChartered Accountants

(Jimi R. Modi) (L. Chuaungo, IAS) (G. K. Sinha, IFS)Partner Chairman Managing Director




SIGNATURES TO SCHEDULE 1 TO 32


2009 2008





59

STATEMENT PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. Registration Details

Registration No. U40102GJ2003SGC042909 State Code 04Balance Sheet Date 31-03-2009

II. Capital Raised during the year (Rs.in Thousands )Public Issue NIL Right Issue NILBonus Issue NIL Private Placement 2376755

III.Position of Mobilization and Deployment of Funds. (Rs.in Thousands )Total Liabilities. 15686051 Total Assets 15686051SOURCES OF FUNDSPaid up Capital 2377255 Reserves & Surplus. 6627787Share Application Money 300000Secured Loans 3385769 Unsecured Loan 2995240

APPLICATION OF FUNDSNet Fixed Assets 13961167 Investments NILNet Current Assets 1720768 Misc. Expenditure 4116Deferred Tax NIL

IV. Performance of the Company. (Rs.in Thousands )Turnover 42826715 Total Expenditure 42789650Profit/(Loss) before tax + 37065 Profit/(Loss) after tax + 29880** Earning per share in Rs. 0.40 Dividend rate % NIL* Including transfer from share capital suspense account** Earning per share has been calculated considering weighted average nos. of shares ( (72946016*365/365)+(164779531*2/365) )

V. Generic Names of Three principal products/services of the Company(as per monetary terms)

Item code No.(ITC code) NILProduct Description: Distribution of Energy.

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

For SNK & Co. Dakshin Gujarat Vij Company LimitedChartered Accountants

(Jimi R. Modi) (L. Chuaungo, IAS) (G. K. Sinha, IFS)Partner Chairman Managing Director




6h Annual Report 2008-09DAKSHIN GUJARAT VIJ COMPANY LIMITED




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