GUJARAT STATE ELECTRICITY CORPORATION LIMITED

GUJARAT STATE ELECTRICITY CORPORATION LIMITED 22nd Annual Report 2014-15

CORPORATE INFORMATION

BOARD OF Shri D.J.Pandian,IAS Chairman (up to 30.08.14) DIRECTORS Shri L.Chuaungo,IAS Chairman ( w.e.f. 08.04.2015) Shri I.P.Gautam,IAS Director

Kum. S.Aparna, IAS Director ( up to 24.04.15 ) Shri Raj Gopal,IAS Director (up to 30.08.2014) Smt. Shahmeena Husain,IAS Director (w.e.f. 30.10.2014) Shri T.Natarajan, IAS Director (w.e.f. 19.06.15)

Shri P.H.Rana Director Shri H.P.Desai Director

Shri B.S.Reuben Director (up to 24.12.2014) Shri N.N.Misra Director (w.e.f. 31.03.2015)

Shri Gurdeep Singh Managing Director COMPANY Shri Vijay Jani

SECRETARY SENIOR Shri A.A.Chhaya Executive Director(Gen) EXECUTIVE Shri M.B.Kaka Sr.Chief General Manager(F&A)CFO

Shri A.D.Karpe I/c.Chief General Manager (HR&A) Shri H.D.Joshi Chief Engineer (Fuel)

Shri J.C.Mali Chief Engineer (P&P) Shri K.C.Yadav I/c.Chief Engineer (Civil)

Statutory Auditors S.C.Bapna & Associates Chartered Accountant

Cost Auditor Y.S.Thaker & Associates,Vadodara

Secretarial Auditors Niraj Trivedi, Practicing Company Secretary,

Vadodara

Registered Office “Vidyut Bhavan”, Race Course, Vadodara-390007.

Website www.gsecl.in

CIN U40100GJ1993SGC019988

Installed

Power Station Thermal Hydro Gas

Gandhinagar Kadana Dhuvaran Wanakbori Panam Utran Sikka Ukai Ukai Panandhro Financial Institutions Power Finance Corporation Limited Rural Electrification Corporation Limited Gujarat State Financial Services Limited National Bank for Agricultural & Rural Development Bankers Canara Bank Bank of Baroda Dena Bank Indian Bank Indian Overseas Bank State Bank of India Syndicate bank Corporation Bank Vijaya Bank Oriental Bank of Commerce Kalupur Commercial Co-operative Bank Limited Central Bank Allahabad Bank Karurvysya Bank ICICI Bank Indus Ind Bank Bank of India Kotak Mahindra Bank Union Bank of India UCO Banks

CONTENTS PAGE NO.

Directors’ Report

Auditors ‘ Report

Balance Sheet

Profit & Loss Account

Cash Flow Statement

Notes forming part of Financial Statement

Installed

Annexure - IV

Annual Report on Corporate Social Responsibility Activities as prescribed under Section 134 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014

1. ew of projects or programmes proposed to be undertaken and a reference to the web- link to the CSR Policy and Projects or Programmes: The Gujarat State Electricity Corporation Limited (GSECL) has been a constant supporter of Social and Economic upliftment towards rural India even before the provisions made in the Companies Act 2013 with respect to CSR. Now, with the implementation of the provisions relating to CSR in the Act, there is a strategic and streamlined approach towards activities related to social development of the communities. The Corporate Social Responsibility Policy of the Company is available on the website of the Company viz. www.gsecl.in

2. Composition of the CSR Committee: Sr. No. Name Role

1 Shri P. H. Rana Chairman 2 Shri H. P. Desai Member -Director 3 Shri Gurdeep Singh Member -Director

3. Average Net Profit of the Company for last three Financial Years: Average Net Profit (2011-12 to 2013-14): 2, 04, 27, 79, 806.00

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): The Company is required to spend approx. Rs. 4, 08, 55, 596.00 towards CSR.

5. Details of CSR spent during the Financial Year: a) Total amount spent for the financial year: Rs. 2, 28, 28, 777.00 b) Amount unspent, if any: approx. Rs. 1, 80, 26, 819.00 c) Manner in which the amount spent during the financial year is detailed below:

ANNEXURE III TO DIRECTOR'S REPORT Annual Report on Corporate Social responsibility Activities

(as prescribed under Section 135 of the Companies Act, 2013 & Companies (Corporate Social Responsibility Policy) Rules, 2014)

Sr. No. (1)

CSR Project or Activity identified.

(2)

Sector in which the project is covered.

(3)

Projects/programmes (1) Local area or

other (2) Specify the state or district where the projects

or programmes were undertaken.

(4)

Amount outlay

(Budget) project or programme wise.

(5)

Amount spent on the projects/programmes

Cumulative expenditure

up to the reporting

period. (7)

Amount

spent: Directly or throu

gh implementi

ng agenc

y. (8)

Direct Expenditure

on programmes or projects

(6a)

Over Heads (6b)

1

Activities related to promoting education, distribution of school kits and encouragement towards education.

Promoting Education

Vagda village and Gunsada Village 28745

Higher Secondary School, Dhuvaran 40000

Sangol Primary School, Wanakbori 32200

Sangol Primary School, Wanakbori 7350

Mungani Village 2880

2

Activities related towards

construction, development

and renovation of the villages.

Infrastructure and Rural

Development

Pethapur Village, Gandhinagar 3084000

Ghoda Khadi, Songadh 1582416

Sonalnagar 49900 Panandhro 916737 Panandhro 6000 Panandhro 12351 Ektanagar 28000

Badalpur Village, Dhuvaran 230699

Sangol Village, Wanakbori 15508697

Timba na Muvada Village,

Wanakbori 1046668

3

Activities related towards preventing spread of disease and organizing

Preventive Healthcare

and its awareness

JSV School, Songadh 3422

Sarvodaya High School Songadh 2005 Dakor Village,

Nadiad 100000 Mungani Village 13000

health check up camps of various kinds.

Mungani village & Digvijaya Village 4136 Mungani village & Digvijaya Village 640 Mungani Village 23500 Mungani Village 15894

Gaushala, Mungani Village 11990 Panchvati village

& Mungani Village

10750

Sikka 7675 Gagva village, Mungani and

Sikka 17960

Mungani and

Sikka 7610 Moti Khavadi 33552

Grand Total 22828777

6. In case the Company has failed to spend two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its board reports:

The Company was not able to spend 2% of its average profits for the last three financ ial years as required under Companies Act, 2013 amounting to Rs 4, 08, 55, 596.00.

It is pertinent to mention that the unspent CSR amount shall not lapse and will be carried forward to 2015-16 for utilization for the purpose for which it was allocated in l ine with the CSR policy.

Currently, the Company has on-going long term projects and newer projects in pipeline that span up to a period of 2 to 3 years and the unspent will be allotted towards its implementation and completion. To that extent, the Company has an unspent amount of Rs 1, 80, 26, 819.00 in its CSR spend for the current year.

7. The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives & Policy of the Company

_______________ Shri Gurdeep Singh Managing Director

_______________ Shri P H Rana

Chairman CSR Committee

ANNEXURE VI

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

[Section 134(3)(m)of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts)Rules, 2014]

(A) Conservation of energy-

(i) the steps taken or impact on conservation of energy;

Energy Audits

As per BEE notification dated 27th May 2014, the mandatory Energy Audit of all the generating units of the Company is undertaken. Based on the recommendations given in the final reports of Energy Audit, the actions for implementation of the same shall be initiated.

Auxiliary Power Consumption

Actions undertaken to reduce auxiliary power consumption inter alia include:

Replacement/setting of APH seals, attending air/flue gas duct leakages, replacement of expansion joints, destaging of pumps wherever feasible, Optimisaiton of CW pumps operation, Optimising DP across feed regulating stations, attending BFP recirculation valves etc.

Heat Energy

Restoring & upgrading thermal insulation, Replacement of high energy drain valves, Replacement of damaged cooling tower distribution pipes and nozzles, Condenser bullet/jet cleaning, condenser flooding tests & replacement of damaged condenser tubes.

Additional actions proposed to be taken for reduction in Auxiliary Power Consumption

- LED Street lights - Installation of VFD - Energy Efficient Motors

(ii) the steps taken by the company for utilising alternate sources of energy;

The Company has undertaken the following activities to utilise alternate sources of energy :

(1) Installation of 349 TR VAM Based Air Conditioning System for Main Control Rooms, ESP & AHP control Rooms using Waste heat unit no 3 c4 & 5

(2) Installation of 85 M³ Biogas plant from kitchen waste at Wanakbori TPS (iii) The capital investment on Energy Conservation Equipment: Rs. 11.41 lacs

(B) Technology absorption, adaptation & Innovation

No Technology Year Stations 1 Adoption of Super Critical

Technology in large size of 800 MW Super critical technology with steam parameters 247 kg/cm2 & temperature of 566/593 C

2014-15 Being implemented at 1 x 800 MW Super critical unit at Wanakbori TPS

2 Installation of Solar PV Power Project of 10 MW Capacity at Charnanka

2013-14 The project is commissioned on 31.01.2015

The expenditure incurred on Research and Development. NIL

(C) Foreign exchange earnings and Outgo-

The Company has incurred Expenditure in Foreign Exchange to the extent of Rs. 5981.78 Lacs during the year under review. Foreign Exchange Earnings during the year were NIL.

_______Sd/_______ CFM (F & A)

_________Sd/-_________ Chief Engineer (P&P)

_______ Sd/-_____ Chief Engineer (Gen.)

Installed

2011-12 Notes to the financial statements for the year ended 31 st March 2015. Note 1 SIGNIFICANT ACCOUNTING POLICIES I. Basis of Preparation of Financial Statements

(a) The Company is a Public Limited Company registered under the provisions of earlier Companies Act, 1956. The company is governed by the Electricity Act, 2003. The provisions of the Electricity Act, 2003 read with the rules made there under prevails wherever the same are inconsistent with the provisions of the Companies Act, 2013 to the extent applicable, in terms of Section 174 of the Electricity Act, 2003. The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting as going concern, in accordance with the generally accepted accounting principles in India, accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, the Companies Act 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, provisions of Electricity Act, 2003 (to the extent applicable) and the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Accounting policies have been followed consistently except those stated specifically.

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

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

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

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

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

information / estimates unless otherwise stated.

II. Use of Estimates The presentation of financial statements requires certain estimates and assumptions to

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

Installed

III. Fixed Assets (a) Fixed Assets are stated at cost of acquisition or construction less accumulated

depreciation. The Fixed Assets of transferred generating undertaking of erstwhile Gujarat Electricity Board are stated as specified in said Notification No.GEB-1105-1749-K dated March 31, 2005 issued by the Government of Gujarat.

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

modernization, the related expenses and interest cost up to the Commercial Operation Date (COD) as per Power Purchase agreement, attributable to such projects/ expansions/renovation and modernization are capitalized.

Recoveries of liquidated damages for construction delays are recorded as a

reduction in the related project’s construction costs as and when accepted/settled.

(b) The amounts contributed towards the cost of Dam and Canal in respect of

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

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

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

IV. Capital Work In Progress

(a) Cost of material consumed, erection charges and the incidental expenses incurred for the project, pending for capitalization are shown as capital work in progress till the capitalization of assets/project.

(b) In case of Capital Work in Progress for work against Deposits/work contract where the final settlement of bills with contractor is yet to be effected, capitalization is done on provisional basis subject to necessary adjustment in the year of final settlement.

(c) Claims for price variation/exchange rate variation in case of capital contracts are accounted for on acceptance thereof by the Company.

(d) A portion of overhead expenses of Corporate Office and Plant Offices determined on rational basis are allocated to the project, pro -rata to their capital expenditure for the year and the same are apportioned to respective capital work in progress accounts on the basis of accretion thereto.

(e) Capital Expenditure on assets not owned by the Company are reflected in fixed assets and the same are depreciated at relevant rates.

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

V. Borrowing Cost

Borrowing cost including interest, guarantee fees, commitment charges etc., that is directly attributable to the acquisition, construction or production of a qualifying asset is capitalized as part of the cost of that asset up to period the project is commissioned or asset is put to use. The borrowing cost incurred on common funds borrowed generally and used for the purpose of obtaining a qualifying asset, is apportioned on rational basis, the remaining borrowing cost is c harged to revenue.

Installed

VI. Impairment of Assets The Company assesses at each balance sheet date whether there is any indication that

an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss a nd is recognised in the profit and loss account. Impairment loss, is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Further the Company has adopted the policy of carrying out impairment test with independent valuer once in every three financial years.

VII. Depreciation and Amortization

(a) The Company is providing depreciation on straight line method at the rates specified by the Central Electricity Regulatory Commission (CERC), the statutory authority established under the Electricity Act, 2003, in terms of notification No. L-1/144/2013/CERC dated 21st Feb 2014, which came into force for a period of 5 years from 01st April 2014. unless reviewed earlier or extended by the Commission.

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

VIII. Investments Investments are classified into current and long term investments. Current

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

IX. Inventories

(a) The Inventories of coal and oil are valued at lower of grade based purchase cost plus freight and other fuel related cost on monthly weighted average basis or net realisable value (NRV).

(b) Stores and spares are valued at lower of the weighted average cost inclusive of freight and other allocable overheads or net realisable value.

(c) Scrap/Obsolete assets are valued at estimated cost or net realisable value, whichever is less.

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

other Incidental expenses.

X. Employee Benefits Post Employment Benefits

(a) The Company has Defined Contribution Plan for it s employees’ retirement benefit comprising of provident fund (administered through Trust) and, Employees’ Pension Scheme and Employees Death Linked Insurance scheme.

Installed

(i) The company and eligible employees make monthly contributions to provident fund trust equal to specified percentage of the covered employees’ salary.

(ii) The amounts towards accrued liabilities for pension to employees are deposited with the Regional Provident Fund Commissioner office as per provisions of Employee Pension Act.

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

contributions.

(c) The Defined Benefit Plan comprising of Gratuity (administered through trust and funded through Life Insurance Corporation of India) and Leave Encashment. The liability for the gratuity and leave encashment is determined and accr ued on the basis of independent actuarial valuation done at year end.

XI. Revenue Recognition

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

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

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

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

XIII. Grant from the Government

(a) In accordance with the Accounting Standard 12 on ‘Accounting for Government Grants’, issued by The Institute of Chartered Accountants of India, Grants and Subsidies received from Government are recognised on the basis of certainty of its realisability.

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

(c) Capital Grants received under Financial Restructuring Plan (FRP) as promoters Contributions are treated as Capital Reserve for ming part of “Shareholders Fund”.

(d) Grants & Subsidies on Revenue account are disclosed separately as Income in the Profit & Loss Account.

Installed

XIV. Taxation (i.) Income Tax

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

(ii) Deferred Tax Deferred tax is the tax effect of timing difference between taxable income and

accounting income for a period that originate in on period and are capable of reversal in one or more subsequent periods, as per the Accounting Standard 22 “Accounting for Taxes on Income”.

XV. Transactions in Foreign Currency

(a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

(b) Any income or expense on account of exchange rate differe nce either on settlement or on transaction is recognised in the statement of Profit and Loss.

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

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

XVII. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. XVIII. Cash Flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Accounting Standard (AS) 3 “Cash Flow Statements”.

XIX. Earnings Per Share (EPS) Basic earnings per share are computed by dividing the profit/ loss after tax by the

weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/ loss after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

2. SHARE CAPITAL

Name of share holderEquity share % of Share Equity share % of Share

Gujarat Urja Vikas Nigam Ltd

1,69,22,84,854 99.99 1,64,82,84,854 99.99

(v ) Terms/right attached to equity share. The Company has only one class of equity shares having par value of Rs. 10/- per share.Each holder of equity share is entitled to one vote per share. The dividend proposed by Board ofDirectors if any, is subject to the approval of share holders in the ensuing annual general meeting,except in case of interim dividend.

3. RESERVES AND SURPLUS

Total

Equity Shares at the end of the year

Total

GUJARAT STATE ELECTRICITY CORPORATION LIMITED

Notes forming part of the Financial Statements.

(vi )Details of the share in the company held by each share holder holding more than 5% share. As at 31st March,2015 As at 31st March,2014



4. LONG TERM BORROWINGS

Interest Rate

Out Standing Amt.as

on31.03.15

Maturity period from

31.03.2015(in Month)

Amount of Qtr. Inst

Out Standing Amt.as

on31.03.14

10.50% 184782.04 96 5700.00 207736.18

10.50% 191235.23 108 5250.00 0.00

10.75% 43083.57 112 1125.00 45335.64

10.75% 15113.76 112 413.00 14421.32

10.75% 9159.52 112 250.00 8717.62

10.25% 14225.65 64 641.00 16811.94

10.25% 14373.96 112 375.00 12085.63

10.75% 26313.47 112 750.00 25262.26

10.75% 17699.17 112 500.00 16915.46

10.75% 35206.86 112 1000.00 33636.25

10.25% 17884.56 112 500.00 15741.66

10.75% 18756.48 112 500.00 17697.71

10.25% 8825.51 64 397.00 10427.28

9.85% 160.87 1 161.00 808.24

10.25% 14369.59 64 654.00 17133.42

10.25% 29162.93 109 875.00 27763.04

10.25% 17089.09 64 769.00 20185.04

10.25% 12563.64 110 375.00 12133.29

10.25% 27750.00 109 750.00 30000.00

10.25% 21315.00 87 735.00 24255.00

10.50% 1196.78 82 44.33 1374.08

11.25% 0.00 0 0.00 470.65

12.25% 0.00 0 0.00 10895.74

12.25% 10107.84 67 439.47 11865.73

10.75% 6666.67 46 416.67 8333.33

12.40% 0.00 0 451.18 451.18

11.40% 3770.14 19 536.59 5924.51

Name of FIs/ Banks

MW.)

3&4.)

Unit-3&4.)

Unit-3&4.)

CCPPIII.)

MW.)

CCPPIII.)

Dhuvaran-II)

Dhuvaran-I)

8.50% 425.75 35 141.9170 567.67

6.50% 0.00 0 0.00 22.307.25% 0.00 0 0.00 8.15

10.02% 1095.00 16 182.50 1825.007.86% 48.97 31 4.45 66.788.41% 7.75 13 1.55 13.95

10.00% 11111.11 10 2777.78 22222.2210.00% 0.00 0 0.00 12500.0010.00% 0.00 0 0.00 15000.0010.00% 6250.00 5 3125.00 18750.0010.00% 30000.00 31 3000.00 0.0010.00% 20000.00 35 3000.00 0.00

57.34 15 38.2280 95.57

831242.40 701717.47

Int. 2016-17 2015-16

8% 3387.80 2540.85

8% 1215.16 911.37

8.95% 7645.13 5733.84

7.50% 0.00 0.00

11.75% 0.00 0.00

12248.09 9186.07

Total

GSFS-2GSFS-4GSFS-5GSFS-6GSFS-7GSFS-8

Total

BOND



TOTAL6. LONG TERM PROVISIONS

5. OTHER LONG TERM LIABILITIES

TOTAL7. SHORT TERM BORROWINGS

Particulars

8. TRADE PAYABLE

TOTAL



TOTAL

9. OTHER CURRENT LIABILITIES

10. SHORT TERM PROVISIONS



TOTAL

TOTAL

Others

TOTAL

Particulars

12. NON CURRENT INVESTMENT( Non Trade)

13. LONG TERM LOANS AND ADVANCES

14. OTHER NON CURRENT ASSETS


Notes forming part of the Financial Statements. 15. INVENTORIES

TOTAL

Due from holding company 1,56,579.86 Lacs( previous year 68,970.27 Lacs)

Particulars

TOTAL 16. TRADE RECEIVABLES

TOTAL

Particulars

Particulars

17. CASH AND CASH EQUIVALENTS



TOTAL

TOTAL

21. OTHER INCOME

TOTAL

19. OTHER CURRENT ASSETS

TOTAL

Particulars

18. SHORT TERM LOANS AND ADVANCES

20. REVENUE FROM OPERATIONS

Particulars



TOTAL 24 . FINANCE COST

TOTAL

Particulars

TOTAL 23 . EMPLOYEES BENEFIT EXPENSES

Particulars

Particulars

Particulars

22. COST OF FUEL CONSUMED



TOTAL

TOTAL

Particulars

26. PRIOR PERIOD ADJUSTMENT

25 .OTHER EXPENSES

Particulars

Installed

Notes forming part of the Financial Statement:

27. Secured and Unsecured Loans

(a) Loans directly raised by company

Secured and Unsecured Loans

(i) During the year, the Company has raised Secured long term loans from Nationalized Banks; ( 224311.80 lakhs).As these loans are secured against charge / security of f ixed assets described in Note 4 the same is classified as secured loans. Further the company has raised unsecured loans from GSFS ( 50000.00 Lakhs)

(ii) The Company has raised Short Term Loans from Union Bank of India ( 13000 lakhs) and from Dena Bank ( .11000 lakhs), and from Indian Bank ( 21000 lakhs) aggregating to 45000 lakhs.

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

(i) The loans / Bonds transferred under Clause 3 (ii) of the Gujarat

Electricity Industry Re-organization & Regulation Act 2003 comprised of Long Term secured and unsecured loans as per the details given at Note 4.

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

28. Claim Settlement / Pending Reconciliation

(a) The reconciliation of the Coal Suppliers accounts, namely South Eastern Coalfields Limited (SECL) and Western Coalfields Limited (WCL) are reconciled up to 30th June 2015 and 31st March 2015 respectively. The necessary adjustments upon reconciliation, if any, are made in the year of reconciliation.

(b) There were total 144 missing railway wagons (Cost .454.59 lakhs) of the company

as on 31st March, 2015 respectively. The matter regarding its adjustment is under pursuance with the competent railway authority. Necessary Gain/Loss would be booked in the year of adjustment given by Railways.

29. Fixed Assets and Depreciation

(a) Adhering to significant accounting policy, the depreciation on assets is provided at rates prescribed by Central Electricit y Regulatory Commission (CERC).

(b) As per the accounting policy, the Company is capitalizing the capital spares

initially purchased with the plant & machinery/equipment or capital spares purchased subsequently, in accordance with the provisions of Accounting Standard 10 issued by ICAI.

The capital spares which are issued to the plant and machinery are also transferred to the plant and machinery along with depreciation. Accordingly, during the year, based on E-Urja report, capital spares of Rs. 18716.38 Lacs is transferred to plant and machinery and corresponding depreciation of Rs. 6882.96 Lacs is also transferred to appropriate head of depreciation.

Installed

(c) The Company carried out an adequate evaluation to estimate the remaining useful life of all plants and on the basis of such evaluation and in view of renovation & modernization, and considering efficient running of Unit 1 & 2 of Ukai, its life was increased by 10 years as per standard determined by GERC/CERC.

(d) In accordance with the provisions contained in the Accounting Standard – 6,

“Depreciation Accounting” issued by The Institute of Chartered Accountants of India and in consideration of GERC MYT Order No. 1061, of March 2011 related to Unit I & II of Gandhinagar Thermal Power Station and increased cost of Power Generation for aforesaid units, the Company has reviewed the balance useful life of these units at year end. Upon review and reassessment of balance useful life of aforesaid units, which being significantly different from previous estimates, the unamortized depreciable amount has been charged to the Statement of Profit & Loss over the revised remaining useful life up to 2015-16. Consequently, additional sum of . 979.14 lakhs has been charged to the Statement of Profit & Loss under the head “Depreciation” for the current financial year. Also depreciation on capital spares has been charged Rs. 4938.16 lakhs for Gandhinagar unit no. 1& 2 after considering balance useful life of the plant.

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

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

(b) Employee Benefits

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

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

Employees’ Pension Scheme and Employees Death Linked Insurance. In accordance with the provisions of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company has, during the year, recognized the sum o f . 4270.41 lakhs (P.Y 3914.39 lakhs) as an expense towards contributions to these plans.

(ii) Defined contribution towards retirement benefits: The liability on account of Gratuity (retirement benefit in the nature of

defined benefit plan) is accounted as per Accounting Standard -15 dealing with Employee Benefits.

The following table sets out the status of the gratuity and leave encashment

scheme plans as at 31st March, 2015.

Installed

[ in Lakh]

Particulars Leave Encashment Gratuity

2014-15 2013-14 2014-15 2013-14 Amounts recognized in the balance sheet Present value of obligation 17248.28 16216.13 28096.19 27232.12 Fair Value of Plan Assets NIL NIL 15790.85 14321.72 Unrecognized past service cost NIL NIL 0.00 0.00 Net Liability in the Balance Sheet 17248.28 16216.13 12305.34 12910.40 Cost for the period Current Service Cost 475.48 1455.09 724.95 752.46 Interest on obligation 1297.29 1153.46 2178.57 2024.06 Expected return on plan assets NIL NIL (1372.52) (1290.58) Net Actuarial (Gains) / Losses recognised in the year 829.96 462.02 823.85 1516.67 Past Service Cost NIL NIL NIL NIL Losses / (Gains) on Curtailments and Settlements NIL NIL NIL NIL Expenses recognised in the statement of Profit & Loss 2601.12 1723.09 2354.86 3002.61 Change in Benefit Obligations Opening defined benefit obligation 16216.13 14418.26 27232.12 25300.70 Prior period adjustments NIL NIL NIL NIL Current Service Cost 475.48 1455.09 724.95 752.46 Past Service Cost NIL NIL NIL NIL Interest on obligation 1297.29 1153.46 2178.57 2024.06 Actuarial (Gains) / Losses 829.96 462.02 676.39 1465.25 Benefits paid (1570.57) (1272.71) (2715.84) (2310.35) Closing defined benefit obligation 17248.28 16216.13 28096.19 27232.12 Changes in Plan Assets Opening fair value of Plan Assets NIL NIL 14321.72 14084.86 Expected return on Plan Assets NIL NIL 1372.52 1290.58 Actuarial Gains / (Losses) NIL NIL (155.06) (54.05) Employers Contributions NIL NIL 2967.51 1310.68 Assets acquired in an amalgamation in the nature of purchase NIL NIL NIL NIL Exchange differences on foreign plans NIL NIL NIL NIL Benefits paid NIL NIL (2715.84) (2310.35) Benefits paid earlier credited to fund NIL NIL NIL NIL Closing fair value of Plan Assets NIL NIL 15790.85 14321.72 Principal Actuarial Assumptions Rate of Discounting 8% 8% 8% 8% Expected Return on Plan Assets - - 9.50% 9.50% Rate of Increase in Salaries 10% 10% 10% 10% Attrition Rate 3% to 1% 3% to 1% 3% to 1% 3% to 1%

Installed

31. Borrowings Cost and Other Cost Related To Project

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

During the year under consideration the Company has Capitalized borrowing costs amounting to . 19081.84 (P.Y. .28,148.51 Lakhs) in accordance with the Accounting Standard 16 “Borrowing Costs” issued by The Institute of Chartered Accountants of India.

The Company has capitalized . 2779.15 lakhs ( P. Y. 4975.41lakhs) being the aggregate of the employee cost and administration cost of Project Department and other general administration cost which are apportioned to the ongoing projects and renovation and modernization schemes. Capitalization of Dhuvaran CCPP III- GSECL has commissioned Gas based plant Dhuvaran CCPP III 376.1 MW and achieved full load on 21.05.2014. And accordingly company has capitalized plant on 21.05.2014

32. Segment Reporting

Primary segment

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

Secondary Segment

The operations of the Company are mainly carried out within the state of Gujarat and therefore, geographical segments are not applicable.

33. Related party disclosures

As Para 9 of AS 18 on “Related Party Disclosure”, no disclosure is required in the financial statement as regards to related party relationships with other state controlled enterprises’ and transactions with such enterprises.

Disclosure of transactions with related party (key managerial personnel) as required by AS

18 are as under: Remunerations paid to Key Managerial personnel ( .in lacs)

Sr. No

Name Designation 2014-15 2013-14

1 Mr. Gurdeep Singh M.D 89.86 71.28 2 Mr.M.B.Kaka Sr.CGM &CFO 20.85 19.01 3 Mr.V.P.Jani Company

Secretary 18.32 16.04

Installed

34. Earnings per share Earnings per share are calculated by dividing the profit attributable to the equity

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

Sr. No. Particulars 2014-15 2013-14

1. Earnings Available to Equity Share Holders ( in lakhs) 15787.31 15382.30 2. Number of weighted equity shares 1675287664 1592918348 3. Face value per share (Rs.`.) 10 10 4. Earnings per Share (Basic) ` 0.94 0.97 5. Number of dilutive potential equity shares 1675287664 1592918348 6. Earnings per Share (Diluted) ` 0.94 0.97

35. Taxation (a) Current Taxation

In the absence of any taxable income for the year, the tax liability is calculated at Minimum Alternate Tax under Section 115JB of Income Tax Act 1961 and provision of 5450 lakhs has been made for the same.

(b) Deferred Taxation The company is entitled to set off carried forwarded unabsorbed depreciation

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

36. Contingent Liabilities and Capital Commitments

[ in Lakhs]

Particulars 2014-15 2013-14 A. Contingent Liabilities not provided for in respect of : i. Claims against the company not acknowledged as debt. (employees related matters) 57708.00 51184.00 ii. Disputed Income-tax Matters 16164.80 5648.04 iii. Claims against Company pending Court Orders 70.12 157.18

iv) Demand raised by irrigation Department 56452.18 60927.17 v) Contingent liability in respect of sales bill discounting . 23500.00 12400.00 VI )Bank Guarantee 4381.79 16068.92 Vi) Others 13600.00 0.00 B. Capital Commitments Estimated amount of contract remaining to the executed on capital accounts (Net of Advances)

21521.62 35679.76

Installed

37. Statutory Auditors’ Remuneration

[ in Lakh] Particulars

For the year ended March 31, 2015

For the year ended March 31, 2014

Statutory Audit fees (Inclusive of service Tax)

18.25 12.36

Total:

18.25 12.36

38. Consumption of Fuel [ in Lakh]

2014-15 2013-14

Particulars Qty. Amount Qty. Amount

Consumption of Coal & Lignite ( in ‘000 MT)

14268.20 523282.88 10544.43 341838.76

Consumption of Gas(Lakh SCM) 801.59 27454.69 445.68 12517.82 Consumption of Oil (in ‘000 Liters) 25.45 11211.61 28.38 11748.01

39. Expenditure in foreign currency Rs. In lakhs

Particulars 2014-15 2013-14

Earnings in Foreign Currency NIL NIL Remittances in Foreign Currency 5981.79 4871.50 CIF Value of Imports 40.29 3790.40 Foreign Traveling NIL NIL

40. Generation of Electricity and Units sold

Particulars 2014-15 2013-14 Installed Capacity (MW) 5894 5508 Gross Generation (in Mus) 21344 15817 Auxiliary consumption( in MUs) 2028 1555 Unit Sold (in Mus) 19316 14262

41. The balances in trade payables, liability for O&M supplies/works and liability for

capital suppliers/works, fuel related claims and receivable, capital advances are subject to confirmation and reconciliation, if any, from respective parties.

42. Unscheduled Interchange charges receivable/payable.

Effective from 17 February 2014, instead of Unscheduled Interchange Charges (UI), Deviation Settlement Mechanism (DSM) was introduced by Central Electricity Regulatory Commission (CERC). DSM is approved by Gujarat State Electricity Regulatory Commission (GERC), and accordingly the DSM accounts have been issued by SLDC.

43. Rebate The Company has allowed rebate of 1961.92 lakhs (P.Y. 11602.54lakhs) for prompt payment considering the payments made by GUVNL.GSECL has also charged Delay Payment Charges of 4201.55 lakhs (P.Y. Nil) to GUVNL for delay in payment of sale of power.

Installed

44. Fly Ash utilization

As per the Notification of Ministry of Environment and Forests dated 3rd November, 2009, the Company is required to maintain a separate Account for the amount collected from sale of fly ash and fly ash based products and this amount should be kept in separate Account Head and shall be utilized only for development of infrastructure or facilities, promotion and facilitation activities for use of fly ash until 100% fly ash utilization level is achieved.

The Notification also provides that as long as 100% fly ash utilization levels are maintained, then the Thermal Power Stations would be free to utilize the amount collected for other development programme also. Gandhinagar and Sikka TPS have achieved 100% fly ash utilization, Wanakbori and Ukai TPS have achieved 58% and 62% respectively. Hon’ble GERC has deducted the amount received from sale of fly ash, from admitted fixed cost. Therefore the company has no balance available for creation of fund from sale of fly ash and other product. Therefore the company is not maintaining septerate reserve fund. However the Company is utilizing fund from the common revenue pool of the company for development of infrastructure facility, promotion and facilitation activities for use of fly ash etc and expenses are incurred from the common pool of expenses.

45. The Company has obtained confirmation from suppliers who have been registered

themselves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). As on 31st March, 2015, there is no balance outstanding to these suppliers. Hence, there is no payment of interest as required under MSMED Act, 2006.

46. During the year 2014-15 company has recognised Rs. 29327.00 Lacs as revenue which was

less admitted by GUVNL for GCV difference for the year 2011-12 (Rs. 16169.00 lacs), 2012-13(Rs. 8035.00 lacs) and 2013-14(Rs. 5123.00 lacs) and now admitted by GUVNL during the year 2014-15.

47. Old outstanding balances.

The amounts receivable (Debit) from and payable (Credit) to various parties, suppliers, contractors etc., on various accounts, which are carried in various Suspense Accounts/Registers at plants, more particularly, those transferred to Company under transfer scheme as on 1-4-2005, required thorough scrutiny to ascertain the precise break up and supporting documents to establish the claims by and/or against the Company of these parties. Pending scrutiny and reconciliations, the Company has identified long outstanding debits and credits, neither recoverable nor payable and made provision for bad and doubtful debts amounting to 1200.00 lakhs in earlier years. Similarly, the company has identified non-recoverable amount of 2153.20 lakhs and had written off after obtaining approval of competent authority in earlier years. Similarly liabilities of Rs. 3186.00 Lacs was also written back in earlier years.

48. During the year Company has incurred expenditure amounting to Rs. 271.38 Lacs (previous year Nil ) towards Corporate Social Responsibility (CSR) activities.

Installed

49 Joint venture operation The Company has entered in to a Joint venture operation with MAHAGENCO for allocation

of captive coal mining block in state Orissa and sharing of coal in ratio of 40:60 from extractable reserves. For this purpose a joint venture company namely, MahaGuj colleries Ltd (Domicile India) has been incorporated with a paid share capital of Rs. 5,00,000/- (50,000 equity shares of Rs. 10 each) out of which company has held 40% equity (20,000 shares of Rs. 10/- each) amounting to Rs. 2, 00, 000.

Based on audited Account of MahaGuj Colleries Ltd (MGCL) the assets and liability as on

31st March,2015 in respect of company share is as under. (

Particulars 31.03.15 31.03.14 Audited Audited Non-current liabilities Un secured loan 2175.94 2107.87 Current liabilities Trade payable 0.12 0.77 Other current liabilities 0.14 2.20 Provision 1.87 0.63 Non current Assets Tangible Assets 0.70 1.19 Current Assets Cash & Cash equivalents 1.84 3.12 other current assets 1.26 1.30 Miscellaneous Expenditure 2176.27 2107.85

During the year company has made the provision for Rs. 2169 Lacs against long term loans

& advance given to MahaGuj colleries Ltd for development of Machhkata and Mahanadi coal block which has been de allocated as per the order of Hon’ble Supreme Court.

50 Liquidated Damages As per the terms of Power Purchase Agreement (PPA) approved by GERC, the company has

provided liquidated damages of Rs 5050 lacs payable to GUVNL on account of delay of Sikka 3 & 4.

51. Statement of Management

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

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

the schedules to the accounts and notes thereo n, are drawn up so as to disclose the information required under The Companies Act, 2013 as well to as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review.

Installed

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

to comply the requirements of schedule III of Companies Act 2013 and for comparative purpose.

FOR S. C. Bapna&Asscociates FOR & ON BEHALF OF BOARD Chartered Accountants Firm Regd No.115649W

J.P.GUPTA GURDEEP SINGH L.CHUAUNGO, IAS Partner Managing Director Chairman M.No.088903

DIN 00307037 M.B.KAKA Sr. Chief General Manager(F&A ) & Chief Finance Officer

DIN 00032867 V. P. JANI Company Secretary

PLACE: PLACE: DATE: DATE:

Affix Revenue Stamp &

Sign across

(

GUJARAT STATE ELECTRICITY CORPORATION LIMITED

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