annual report 2014-15 - employee portal annual report 2014-15 himachal pradesh state electricity...

1

6th

ANNUAL REPORT

2014-15

HIMACHAL PRADESH STATE ELECTRICITY BOARD LIMITED (A State Govt. Undertaking)

Regd. Officer: Vidyut Bhawan, Shimla-171004. Phone No. 0177-2801762 Fax No 2658908 email ID [email protected]

2

6th

ANNUAL REPORT

2014-15

HIMACHAL PRADESH STATE ELECTRICITY BOARD LIMITED

(A State Govt. Undertaking) Regd. Officer: Vidyut Bhawan, Shimla-171004.

Phone No. 0177-2801762 Fax No 2658908 email ID [email protected]

3


Regd. Officer: Vidyut Bhawan, Shimla-171004 INDEX

Sr. No.

Subject Page

1. Notice of AGM 1

2. Proxy Form 2

3. Board of Directors 3

4. Boards' Report 5-41

5. Standalone Financial Statements of the Company 42-131

6. Auditors’ Report on stand alone financial statement 132-177

7. Replies to Auditors’ Report on stand alone financial statement 178-245

8 Consolidated Financial Statements of the Company 246-279

9 Auditors’ Report on consolidation financial statement 280-285

10 Replies to Auditors’ Report on consolidated financial statement 286-292

11 Comments of CAG of India 293-297

12. Replies to CAG Comments 298-303

1

Himachal Pradesh State Electricity Board Limited, Shimla-4

(A State Govt. Undertaking)

Regd. Office: Vidyut Bhawan, Shimla-4

CIN No U40109HP2009SGC031255

Phone No 0177-2801762 Fax No 2658908 email ID www. [email protected]

Notice of 6th Annual General Meeting of the HPSEB Ltd.

“Notice is hereby given that the 6th Adjourned Annual General Meeting of the Members of the Himachal Pradesh State Electricity Board Limited, Shimla-4 will be held on 21th March, 2017 at 04:30 PM at Committee Room of Armsdale Building, H.P. Sectt., Shimla-171002 to transact the following business:

ORDINARY BUSINESS:

To receive, consider and adopt the Annual Accounts of the Company for the year ended 31st March, 2015, Boards’ Report and Report of Auditors & comments of the Comptroller and Auditors General of India along with replies thereto as on that date.

To note the appointment of Statutory Auditors of the Company for the financial.

By order of the Board of Directors

Place: Shimla

Dated: 21.03.2017 Sd/-

Director (Finance & Accounts)

Note: -

1. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and a proxy need not be a member.

2. The Memorandum for Shareholders is enclosed.

3. Proxy Form is attached.

2

PROXY FORM

I/We member (s) of the Himachal Pradesh State Electricity Board Limited, Shimla, 171004 do hereby

appoint__________________ of ________________________as my proxy to attend and vote for me/us and

on 21-03-2017 at 4.30 PM and at any adjournment thereof.

Signatures

Signed this on ………….

Affix Rs.5/- Revenue Stamp

3


Regd. Officer: Vidyut Bhawan, Shimla-171004.

List of Board of Directors as on 21-03.2017.

Sl No. Name Particulars

1. Sh. Tarun Shridhar, IAS Chairman, Addl. Chief Secretary (MPP& Power)

2. Sh. Pratap Chand Negi Managing Director

3. Dr. Shrikant Baldi, IAS Nominee Director

4. Sh. Ajay Sharma, IAS Nominee Director

5. Sh. Akshay Sood, IAS Nominee Director

6. Smt. Anita Tegta,Retired, IAS Independent Woman Director

7. Sh. Sharabh Chhopel Negi, Retired, IAS Independent Director

8. Sh. Rajeev Sharma, IAS Director (F&A)/Personnel

9 Sh. Pavan Kumar Kohli Director (Civil)

10 Sh. Ravinder Kumar Sharma Director (Op)

11. Sh. Brij Mohan Sud Director (Tech.)

Statutory Auditors for FY 2014-15. Secretarial Auditors for FY 2014-15

M/s Anil K. Sood & Co. Chartered Accountants U/F 56, Lower Bazar, Shimla-1 Ph. No. 0177-2652285.

Cost Auditors for FY 2014-15. Regulatory Accounts Auditors for FY 2014-15

M/s Anirudh Joshi & Associates, Cost Accountants, 203, Railway Road, Opp. Shartri Market, Hoshiarpur (Pb.)

Sh. P.S.R. Murthy, Practicing Company Secretary, 178 PRS flats, Sheik Sarai Phase-1, New Delhi-110017.

M/s Mukesh K Sharma & Associates, Chartered Accountant , 118 B No 10 SDA Complex, Kasumpti Shimla-171009 (HP)

4

Principal Bankers:- 1. State Bank of India, Shimla-3

2. Punjab National Bank, The Mall, Shimla-1

3. The H.P. State Co-Op. Bank Ltd., Shimla-4

4. The Kangra Central Co-Op. Bank Ltd., Dharamshala

5. UCO Bank, Vidhan Sabha, Shimla-3

6. State Bank of Patiala, Shimla

7. Punjab and Sind Bank, Shimla

8. Canara Bank, The Mall, Shimla

9. Bank of Maharshtra, Shimla

10. ICICI, The Mall Shimla

11. Vijaya Bank, The Mall, Shimla

12. United Bank of India, Shimla

13. Bank of India, Shimla

14. Bank of Baroda, Shimla

15. Union Bank of India, Shimla

16. Oriental Bank of Commerce, Lower Bazar, Shimla

17. IDBI, Solan

18. Yes Bank, Shimla

19. Indian Oversea Bank, The Mall, Shimla

20. Central Bank of India, Shimla

21. Syndicate Bank, The Mall, Shimla

22. Indian Bank, The Mall, Shimla

23. J&K Bank, The Mall, Shimla

24. Axis Bank, Shimla

25. Maharastra Bank, Shimla

26. HDFC, The Mall, Shimla

5


Regd. Officer : Vidyut Bhawan, Shimla-171004. BOARDS’ REPORT Dear Members, Your Directors are pleased to present the Sixth Annual Report of the Company for the year ended March 31, 2015 along with the financial Statements (Annual Accounts), Report of Statutory Auditors and Comments of the Comptroller and Auditor General of India and replies thereto. 1. GENESIS Himachal Pradesh State Electricity Board Limited (HPSEBL), an undertaking of Government of Himachal Pradesh, was incorporated on 03-12-2009 with the objective to maintain and operate generation, distribution and trading of electricity, electricity used in the State of Himachal Pradesh and to purchase of electrical energy and sale of energy to the other agencies and to co-ordinate, maintain and operate an integrated power distribution system in all aspects including; to acquire, establish, construct erect, lay, operate, run, manage, maintain, enlarge, alter, renovate, modernize, work in the State of Himachal Pradesh. The Financial highlights for the year ending 31 March, 2015 briefly encapsulate the performance of your company.

FINANCIAL RESULTS

(` in crores)

PARTICULARS 2012-13 2013-14 2014-15 Income:- Sale of Power 4221.67 5050.90 5584.34Revenue subsidies & Grants 0.00 0.00 0.00Other Incomes 372.40 172.93 382.42Total Income 4594.07 5223.83 5966.76Expenses:- Purchase of Power 2629.38 2992.73 3706.99Other Expenses 2304.97 2368.08 2964.36Total Expenses 4934.35 5360.81 6080.27Profit/Loss (340.28) (136.98) (113.51)Loss transferred from Previous Years (1398.35) (1738.63) (1875.61)Accumulated Loss (1738.63) (1875.61) (1989.12)

2. VISION, MISSION, AIMS AND TARGETS

Vision:- Availability of reliable and quality power at competitive rates on a sustainable basis to all.

6

Mission: To provide environment friendly, qualitative and reliable power to all sections of the society by creating a value based, customer centric, employee oriented organization, with an aim to enhance the standard of life of the society in which the organization operates. Targets: During the year under review, the targets for achieving the goals set out under Power Sector Reforms, implementation of IT initiatives under R-APDRP, computerized billing and accounting, GIS/ GPS asset based valuation, ERP etc. Objectives The objectives of Himachal Pradesh State Electricity Board Limited are:-

a) To plan, promote, organize, maintain and operate an integrated power distribution system in all aspects including; to acquire, establish, construct erect, lay, operate, run, manage, maintain, enlarge, alter, renovate, modernize, work and use in the State of Himachal Pradesh and elsewhere, extra high voltage (EHV), high voltage (HV), medium voltage (MV) and low voltage (LV) lines and associated sub-stations, including distribution centers, cables, wires, accumulators, plants motors, meters, apparatus, computers and materials connected with transmission, distribution, supply of electrical energy, communication and telemetering equipments.

b) To plan, promote, organize, maintain and execute Power Project within and outside the State of Himachal Pradesh including execution of new projects.

(c) To undertake, for and on behalf of others the erection, operation, maintenance, management of extra high voltage, high voltage, medium voltage and low voltage lines and associated sub-stations, equipment apparatus, cables and wires.

(d) To carry on the business of purchasing, selling, trading electrical energy and co-importing, exporting, wheeling, trading of electrical energy, including formulation of tariff, billing and collection thereof.

(e) Universal power access through various electrification schemes/ processes/ Programs.

(f) To improves quality and reliability of power by system strengthening.

(g) To avoid cost and time overruns on the schemes under execution through effective TMR System.

(h) Reduction of T&D and AT&C losses.

3. FUNCTIONS

(i) Distribution of Electricity in the State of H.P.

(ii) Sale, Purchase and Trading of Electricity.

(iii) Operation and Maintenance of all existing Power Generation Plants & Electrical System infrastructure associated with evacuation & distribution of electricity.

(iv) Completion of ongoing HEPs and execution of HEPs so allotted by GoHP along with

associated electrical networks.

7

(v) R&M of existing EHV, HV & LV Electrical System networks in the State of H.P. for distribution of electricity.

(vi) Creation of New and Augmentation of EHV, HV & LV Electrical System Network

commensurate with load growth, rural electrification system extension, distribution loss reduction and quality improvement of power in the State of Himachal Pradesh.

4. Works

The Company has 487.450 MW installed capacity of Hydel Generating Stations and the Beas Valley Power Corporation Ltd subsidiary Company of HPSEB Ltd. is executing the Uhl –III projects continue to progress satisfactorily during the period under review:-

Sr. No. Name of Project Installed capacity(MW)

Revised Estimated cost (Rs. in crores)

Date of start Target date of commissioning

1 Uhl-III in Distt. Mandi

100 1523.52 Oct,2002 June, 2017

The following EHV lines/Sub-Stations and HV distribution lines/ Sub-Stations were completed/ commissioned during the year 2014-15.

Sr.No. Name of Scheme

EHV Distribution Lines and Sub-Stations

1. Construction of 132 KV D/C Transmission line from Kurthala to Bathri.

2. Construction of 132 KV S/C Transmission line from Una to Thahliwala.

3. Construction of 132 KV LILO Transmission line D/C from existing 132 KV Giri Solan Trans. Line to 132/33KV Sub Station Gaura.

4. Construction of 33/11 KV, 2x3, 15 MVA Sub Station at Bhareri.

5. Agumentation of 2X4 MVA to 2X6. 30 MVA Power Transformer alongh other equipment of 33/11 KV, Sub Station at Bhunter under ED Kullu.

6. Augmentation of 33/11 KV, 2X2.5 MVA to 2X6. 30 MVA Power Transformers at Jabli.

7. Augmentation of 33/11 KV, 1X1+1x205 MVA to 2x3.15 MVA Sub Station at Jhandutta.

8. Augmentation of 33/11 KV, 1x1.0 MVA to 2x1.6 MVA Sub Station at Dhaneta.

9. Construction of new 1x3.15 MVA Sub Station at Attara Gangath.

10. Construction of new 2x3.16 MVA Sub Station at Rehan.

11. Construction of 33KV HT Line from 33KV Sub Station Pragpur to 33/11KV Sun Station at Bharoli Jadid.

Sub-Stations Completed/Augmented

1. Augmentation of 220/KV, 1x80/100 MVA Transformer at Kolta Sub- Station.

8

2. Augmentation of 132/33KV, 1x25/31.5 MVA Power Transformer at 132/33KV Sub Station at Kala Amb.

3. Augmentation of 132/66KV, 1x50/63 MVA Transformer at 132 KV Sub Station at Jutogh.

4. SOP to LWSS Solan Town from 132/33KV, 1x6 MVA Sub Station at Gaura.

5. Construction of 132/33KV, 2x25/31.5 MVA Sub Station at Tahliwala.

6. Construction of 132/33KV, 3x16.67/21 MVA Sub Station at Kurthala.

5. HUMAN RESOURCES

A) Manpower Position:- HPSEBL has an overall sanctioned posts of 24853 as on 31-3-2015 and 5 (five) Whole Time Directors are on the rolls. The class wise position of sanctioned posts as on 31.3.2015 is as under:-

Class Sanctioned Existing Vacant

I 1092 962 130

II 638 577 61

III 15601 11624 3977

IV 7521 4285 3236

G. Total 24852 17448 7404

Personal Post:

i Personal Post (Regular) 801

i Work Charged 128

ii Daily wages/ Part-time 388

In order to meet the immediate requirement of technical professional personnel for O&M/projects your Company during FY 2014-15 created 100 posts of Junior Office Assistant (IT) and 677 post of Junior T/Mate during FY 2014-15. The post of Junior T/Mate has been filled and process to fill posts of Junior Office Assistant (IT) is in final stage with H.P. Subordinate Services Selection Board, Hamirpur. HPSEBL has also skilled/ semi-skilled outsourced manpower from services providers.

B) Training :

In the present day competitive World when numerous technological and other changes are taking place in every sphere of activity, it has become increasingly challenging to the Power Utilities to vie with other stake- holders that are now coming into play in the Power Sector and provide quality Power Supply to Electricity Consumers with efficiency and promptness. Your Company gives utmost importance for the enrichment of skills and towards this in-house and external training programme are proposed to be organized in all disciplines and at all levels. Training to filed Technical Staff of the HPSEBL are imparted at the HPSEBL Lineman Training Centre at Solan. During the year FY 2014-15, the figures tabulated here below show at a glance the numbers of personnel sponsored by the HPSEBL to undergo training and participate in various Conference/ Workshops and Seminars:

9

(i) Technical Staff = 1196

(ii) Non Technical Staff = 641

6. Dividend

Since the Company has no profits, the information, therefore, is Nil.

7. Reserves

The information may kindly be treated as Nil.

8. Change in the nature of business, if any

No such changes occurred during the year. However, Company has entered into joint venture with State owned newly created Company namely “Himachal Renewable Limited” for the construction of 2.5 MW hybrid (Solar+Wind) Power Plant with large battery storage at Kaza in Lahual and Spite District and other Renewable Power Projects in HP.

9. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

No such changes occurred during the year.

10. Significant and material orders passed by the Regulators or Courts or Tribunals impacting the Going Concern status and Company’s operations

There were no such orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations during the financial year ending 31st March, 2015. ”. However, HPERC had imposed penalty for non achievement of Renewable Power obligation (RPO) of Rs. 17.23 Crore for FY 14 vide its order dated 10.11.2014. Further, Commission has treated this amount as consumer’s contribution and excludes the same for depreciation and return of equity. Besides, Dy. Commissioner Income Tax, Shimla against the assessment of FY 2013-14 (AS 2014-15) disallowing prior period expense i.e deprecation & POP cost etc and considered book profit for that year and raised demand of Rs. 1.81 Crore u/s MAT 143 of Income Tax under MAT by. The Company has been deposited Rs. 1.50 Crore & filed appeals before CIT (Appeal) against the order of DCIT.

11. Subsidiary/Joint Ventures/Associate Companies

The Himachal Pradesh State Electricity Board Limited has a subsidiary Company named Beas Valley Power Corporation Limited, which was earlier incorporated by the erstwhile Himachal Pradesh State Electricity Board. Beas Valley Power Corporation Limited is having its registered office at Shimla. Presently, the Authorized Share Capital of the Company is Rs.300 crore and paid up capital is Rs.300 crore. The Nominees of the State Govt. and Himachal Pradesh State Electricity Board Limited are on the Board of Directors of the Beas Valley Power Corporation Limited. The Beas Valley Power Corporation Limited has adopted its Annual Accounts for FY 2014-15 in its 12th Annual General Meetings (AGM) held on 18.12.2015 at corporate office i.e. C-208, Sector-III, Phase-II, New Shimla-09. Further, in order to meet the statutory requirements of Section 129 (3) of the Companies Act, 2013 and Rules (6) of the Companies (Accounts) Rules, 2014, its annual accounts for FY 2014-15 have been consolidated with annual accounts of HPSEB Ltd. (Holding Company) and the Consolidated Financial Statement (CFSs) have been prepared as per the statutory requirements.

Company has entered into joint venture with State owned newly created Company namely “Himachal Renewable Limited” for the construction of 2.5 MW hybrid (Solar+ Wind) Power Plant with large battery storage

10

at Kaza in Lahual and Spite District and other Renewable Power Projects in HP and having 50% shareholding therein. HPSEBL has been invested an amount of ` 25.00 Lac as share application money pending allotment of shares as on 28.2.2017 and Chief Engineer (Gen) HPSEBL, Sundernagar is holding additional charges of Managing Director of joint ventures.

12. Performance and Financial Position of each of the Subsidiaries, Associates and Joint Venture Companies included in the Consolidated Financial Statement

In order to meet the statutory requirements of Section 129 (3) of the Companies Act, 2013 and Rules (6) of the Companies (Accounts) Rules, 2014, annual accounts for FY 2014-15 of Beas Valley Power Corporation Limited (BVPCL) a subsidiary Company of HPSEB Ltd., have been consolidated with annual accounts of HPSEB Ltd. (Holding Company) and the Consolidated Financial Statement (CFSs) have been prepared as per the statutory requirements of Schedule- III and annexed with this annual report for the purpose of approval and e-filing the same with ROC/MOC. During the FY 2014-15 Joint Venture Company “Himachal Renewable Limited” was not in existence.

13. Deposits

The Company has not accepted deposits (except consumer’s contribution for capital works). Hence the information is Nil.

14. Auditors’ Report

M/s Anil K. Sood & Company, Chartered Accountants, Upper Floor 56, Lower Bazar, Shimla-1 were appointed as the Statutory Auditors of the Company for the financial year ended 31st March, 2015 by the Comptroller & Auditor General of India. The Auditors have audited the accounts and submitted their report on 27th December, 2016, which is annexed.

14.1 Cost Audit

Pursuant to the Central Government directions to audit Cost Accounting Records as maintained by the Company, your Company has appointed M/s Anirudh Joshi & Associates, Cost Accountants, 203 Railways Road , opposite Shastri Market, Hoshiarpur (Punjab) 146001 as Cost Auditors for the year 2014-15 with the approval of Ministry of Corporate Affairs. The Auditors have audited the Cost accounting Record for FY 2013-14 and submitted their report on 27th December, 2016, which is annexed as per Annexure-V.

15. Share Capital

The Authorized Share Capital of the Company as on dater is Rs.1100,00,00,000/- (Rs. Eleven Hundred crore only). The issued, subscribed & paid up capital of the Company on 31.3.2015 was Rs.5,22,03,18,000/-.

A) Issue of equity shares with differential rights

The information is Nil.

B) Issue of sweat equity shares


C) Issue of employee stock options


11

D) Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees


16. Extract of the Annual Return:

The Information pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 is appended hereunder in annexure MGT-9 as Annexure I.

17. The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as per Rule 8 of the Companies (Accounts) Rules, 2014

(a) Conservation of Energy

The Company does not consume renewable energy in its projects or offices except for energy generated from small Hydro Electric Projects having capacity upto 5MW.

(b) Foreign Exchange Earning and Out-Go

There is no import and export of foreign exchange during this year and as such this information is treated as Nil.

(c) Technology Absorption

This information can be treated as Nil.

18. Directors:

(A) The Board of Directors

1.1 Size of the Board

Being a State owned Company, the power to appoint Directors of HPSEB Ltd. vests with the Government of H.P. During the Financial Year, the approved strength of Board of Directors was minimum 3 and maximum 10 & as on date the minimum approved strength is 3 and maximum 15.

1.2 Composition & Tenure of the Board

As on 31.03.2015, the Board is comprised of 9 (Nine) Directors, consisting of 5 (five) Whole Time (Functional Directors) including Managing Director, 04 (Four) part time Directors.

1.3 Board Meetings

The meetings of Board of Directors are held at Shimla to facilitate full participation by the Directors during the FY 2014-15, (4) Board Meetings were held, on the following dates: 10.07.2014, 18.10.2014, 28.01.2015 & 05.03.2015. Almost all the Directors have attended these meetings.

12

PARTICULARS OF THE PERSONS WHO ARE/WERE DIRECTORS/SECRETARY OF THE COMPANY AS ON THE CLOSURE OF FINANCIAL YEAR (2014-15).

Sr.No.

Name Usual Address Date of Birth

Date of Appointment

Date of Cessation (If Any)

1. Sh. S.K.B.S. Negi, IAS

Abey File Cottage, Lakkar Bazar, Shimla, 171001, Himachal Pradesh, INDIA

11.09.56 28.12.2012 In position as Chairperson

2. Sh. Pratap Chand Negi

V.P.O- Jeori, Tehsil- Rampur

Distt.- Shimla, Himachal Pradesh, India 172101

21.04.57 12.10.2011 In position as Managing Director

3. Dr. Shrikant Baldi, IAS

Old Brock Hourst No. 1, Chotta Shimla, Shimla, 171002, Himachal Pradesh,

12.12.59 25.07.2011 In position as Nominee Director

4. Dr. Ajay Sharma, IAS

VPO.- Kharanal, Via Paprola, Tehsil- Baijnath, Kangra, 176115, Himachal Pradesh, INDIA

21/01/63 27/11/2014 In position as Nominee Director

5. Sh. Akshay Sood, IAS

B 227, Sector 3 Tehsil Shimla (Rural) Distt Shimla,171009, Himachal Pradesh

04.08.63 28.06.2011 In position as Nominee Director

6. Sh. Rajeev Sharma, IAS

House No.-24, Type-V, Officers Colony, Kasumpti,, Shimla, 171009, H.P.

15/10/63 05/11/2014 In position as Whole- time- Director

7. Sh. Jai Parkash Kalta

Kalta Villa, Below B.C.S., Phase-III, New Shimla, Shimla, H.P. India 171009

10.05.60 01.06.2012 In position as Whole- time- Director

8. Sh. Pavan Kumar Kohli

House No.-62, Housing Board Colony, Saproon, Solan, 173211, Himachal Pradesh, INDIA


9. Sh. Ravinder Kumar Sharma

Type-IV, HPSEB Colony, Kelston, Shimla, 171001, Himachal Pradesh, INDIA


13

PARTICULARS OF CHANGE IN THE PERSONS WHO ARE/WERE DIRECTORS/SECRETARY OF THE COMPANY DURING THE FINANCIAL YEAR (2014-15).

1. Sh. R. D. Nazeem, IAS

Tea Board, Shelwood, Coonoor,Tamil Nadu, India 643101

02.12.68 18.12.2012 Ceased as Nominee Director w.e.f. 18/09/2014

2. Sh. Akshay Sood, IAS

B 227, Sector 3 Tehsil Shimla (Rural) Distt Shimla,171009, Himachal Pradesh

04.08.63 28.06.2011 Designation Changed from WTD to Nominee Director w.e.f. 01/11/2014

3. Sh. Amandeep Garg, IAS

Type Vi, Set No 18,, Ias Colony, Kasumpti, Shimla, 171009, Himachal Pradesh


4. Sh. Kameshwar Singh Dhaulta

House No.- A-62, Phase- 1, Sector-2,, New Shimla, Shimla, 171009, Himachal Pradesh, INDIA


PARTICULARS OF DIRECTOR/ SECREATRY AS ON DATE

Sh. Tarun Shridhar, IAS, ACS (MPP & Power) GoHP - Chairman Er. Pratap Chand Negi – Managing Director Dr. Shrikant Baldi, IAS, ACS (Finance) GoHP- Director Dr. Ajay Sharma, IAS , Special Secretary (MPP & Power) -cum-Director (Energy) - Director Sh. Akshay Sood, IAS, Special Secretary-cum-Director I F, GoHP - Director Smt. Anita Tegta Retired, IAS - Independent / Woman Director Sh. Sharabh Chhopel Negi, Retired, IAS - Independent Director Sh. Rajeev Sharma, IAS , Director (F&A)/ Pers Sh. Pavan Kumar Kohli - Director (Civil) Sh. Ravinder Kumar Sharma - Director (Op) Sh. Brij Mohan Sud - Director (Tech)

(B) Declaration by Independent Director(s) and re- appointment, if any

The Company has been appointed Independent & Woman Directors and Independent Directors have devised proper system to ensure compliance with the provision of all applicable laws and that such system are adequate and operating effectively.

(C) Formal annual evaluation of the Board of its performance

No such formal evaluation has been done. However, all intricate issues are discussed and settled after consultation among the directors.

19. Audit Committee

In accordance with the provisions of Section 177 (2) of the Companies Act, 2013, Audit Committee of the Company has now been re-constituted on 06.04.2016 with the following Directors of the Company:-

(i) Addl. Chief Secretary/Pr. Secretary (MPP & Power) to the Govt. H.P. (ii) Addl. Chief Secretary/Pr. Secretary (Finance) to the Govt. H.P. (iii) Director (Finance & Accounts), HPSEBL

14

(iv) Sh. S.C. Negi, IAS (Retd.) Independent Director (v) Smt. Anita Tegta, IAS (Retd.) Woman Director

The Chief Accounts Officer is the Secretary to the Audit Committee. The meetings of the Audit Committee are being held from time to time.

20. Details of establishment of vigil mechanism for Directors and employees

HPSEBL is following conduct, discipline and appeal rules of the Govt. of Himachal Pradesh/Himachal Pradesh State Electricity Board Ltd. covering all the employees below the Board level and at the Board level in whole-time employment. Grievance Redressal Mechanism applicable to all employees is also in place. To meet the requirement of Section 177 (9) of the Companies Act, Vigil Mechanism policy 2016 has been approved by Vigil Mechanism Committee on 06.05.2016.

21. Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted as per the provisions of section 178 of the Companies Act, 2013.

22. Particulars of loans, guarantees or investments under section 186

The Company has availed Secured Loans of Rs.186354.98 Lac as on 31.03.2015.

23. Particulars of contracts or arrangements with related parties

The information in this respect is nil as the Company is owned by the State Govt.

24. Secretarial Audit Report

Sh. P.S.R. Murthy, Practicing Company Secretary has been appointed by the Company as Secretarial Auditor for the FY 2014-15 with the prior approval of the Board and he has conducted the Secretarial Audit during first week of Sept., 2015 and submitted his Report Form No MR 3 Annexure III.

25. Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made.

(I) By the Auditor in his report: The comments on the annual accounts have been received from CAG of India on 10.3.2017 and reply prepared by the Company is annexed.

(II) By the Secretarial Auditor in his report: --- The observations of the Secretarial Auditor shall be replied in the Boards’ Report for FY 2014-15 Annexure -IV.

(III) By the Statutory Auditors in his report: --- Replies of the audit reports of Statutory Auditors are furnished & annexed with the Annual Accounts.

26. Risk Management Policy

The Company monitors risk-prone areas in its projects and offices. However, in the current financial year, the Company may form a Risk Management Policy.

27. Directors’ Responsibilities Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submit its responsibility Statement:—

15

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. Company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178.

Since being a State Govt. Company, the appointment of all directors is being done by the State Govt. only. Further, their remuneration, qualification, etc. are being regulated as per the norms/notifications of the State Govt. issued from time to time.

29. Corporate Social Responsibility initiatives taken during the year

Under the provisions Section 135 of the Companies Act, 2013, a CSR Committee has been constituted and Company is extending all help for the development of various section of the State.

(a) Environment

All the Environment Management Plans (EMP) of the State Government or the Company are proposed to be implemented diligently with a view to ensure safeguarding environment and improving the same, wherever possible. To this end, the HPSEBL may go beyond the provisions in EMP.

(b) Industrial Relations

The work of Hydel generation, distribution and transmission is extended mostly through Contractors/Contractors Companies/itself by the HPSEBL. In order to accomplish goals and objectives of organization, due attention has been focused on Industrial Relation issues. During the year 2014-15, we have taken number of steps to maintain peaceful and proper Industrial Relations. Regular Meetings are held with the representatives of the various Associations/Unions to sort out the issues as well as policies related matters. Better employee-employer relations and cordial industrial relations have been maintained during the year. Industrial relations remained peaceful and cordial during the period under review. It has always been our endeavor to strengthen the relations with all trade unions.

30. Accounts

The Profit & Loss Account Statement for the period ended 31st March, 2015 and Balance Sheet as on that date of the Himachal Pradesh State Electricity Board Limited have been prepared and are annexed along with the annual accounts of its subsidiary Company, Beas Valley Power Corporation Limited for the same year. The Annual Accounts of both these companies are placed for the perusal and further directions of the Shareholders to the BOD to file them with the Registrar of Companies/MCA.

16

31. Internal Control Systems

The Company has adequate internal control systems and the transactions/processes are guided by delegation of powers, documented policies, guidelines etc. of the Company as well as of the State Govt. The Organizational Structure is well defined in terms of the structured authority/ responsibility involved at a particular hierarchy level.

In order to ensure that all checks and balances are in place and internal control systems are in order, regular internal audit is conducted by the Firms of Chartered Accountants in close coordination with Company’s own internal Audit Department.

32. Particulars of employees pursuant to section 217 (2a) of the Companies Act, 1956 and now as per the Companies Act, 2013.

The information under Section 217 (2a) of the Companies Act, 1956 for the year ending 31st March, 2015 is Nil.

33. Statutory and other information

a) Industry Overview

Power is the backbone for economic development. India needs to sustain 8% to 10% economic growth rate over the next 25 years, if it is to eradicate poverty and meet its human development goals. To deliver a sustained growth rate of 8% till 2031-32 and to meet the lifeline energy needs of all citizens, India needs at least increase in its primary energy supply by 3 to 4 times and its electricity generation capacity by 5 to 6 times of 2003-04 levels. With this base, India’s commercial energy supply would need to grow from 5.2% to 6.1% per annum, while its total primary energy supply would need to grow at 4.3% to 5.1.% annually. By 2030-31, power generation capacity must increase to nearly 8,00,000 MW from the current capacity of around 2,98,000 MW inclusive of all captive plants during March, 2016.

As regards hydro potential, India has an estimated hydro potential of about 1,50,000MW of which only about 42783.42 MW has been commissioned so far. Himachal Pradesh has huge potential in its five river basins and state can play a major role in the power development. Out of this potential 487.45 MW installed capacity is under the control of HPSEBL. No Power cut was imposed during the year FY 2014-15 in the state except periodical maintenance shut downs/ breaks downs and repair work in various power houses.

The above Industry scenario signifies that there is an ample opportunity for consistent growth in the business of power sector in the times to come. All efforts are being made and we hope that HPSEBL and its subsidiary BVPCL will certainly be one of the producers and distributors of hydro power in Himachal Pradesh.

b) Corporate Governance

The Companies Act, 2013 has been implemented with effect from 1st April, 2014 and as per provisions of this Act, HPSEBL has formulated Corporate Social Responsibility (CSR) Policy which has been approved by the Board in its 24 Board meeting vide agenda item No 24.16 dated 18.12.2015 . The CSR Committee in its meeting held on 30-12-2016 decided and recommended that HPSEBL has accumulated loss to the tune of of Rs. 1989.12 Crore in the FY 2014-15, therefore in the absence of any net profit; the Company is not required to spent any amount towards Corporate Social Responsibility obligation.

The above recommendation of the CSR Committee were approved by the Board with the direction to incorporate these recommendation in the Board’s Report for the financial year 2014-15, 2015-16 & 2016-17. Therefore, the policy would be implemented as per the requirement of the Act.

The approved policy along with requisite perform is attached at Annexure –II.

17

b) Others

There is no decision to buy back its shares during the year under report under section-77 (A) of the Companies Act, 1956 and as per the provisions of Companies act, 2013.

Further, as per requirement of the Companies Act, 2013, a Remuneration and Nomination Committee, Audit Committee, Vigil Mechanism Committee of the Company have been constituted & Woman Director/ Independent Director have been appointed with the prior approval of the Board. The Chairman and Director (F&A) have been appointed as the Key Managerial Personnel and appointment of Independent Company Secretary is under consideration of the management.

Acknowledgements

Your Directors gratefully acknowledge the continuous support and assistance provided by the State Govt. and its Departments such as Deptt. of Power, Deptt. of Finance, Deptt. of Forests, Deptt. of I&PH, HPERC, Pollution Control Board etc. The Board of Directors also acknowledge with thanks the guidance and help extended by various Ministries/Departments of the Government of India, Central Electricity Authority, and Financial Institutions, such as ADB, PFC, REC and Banks etc.

The Board conveys its gratitude to the outgoing Directors for their dedicated services rendered during their tenure. The Directors further place on record, their gratitude to the officers of HPPCL, HPPTCL, BVPCL and other agencies for their institutional support. The Directors would also like to thank the office of A.G. H.P., C.A.G. of India, Statutory Auditors, Internal Auditors who have made efforts in conducting and finalizing the audit report of the Company.

Last but not least, the Board commends the hard work and dedicated efforts put in by the employees of the Company including the employees on deputation at all levels.

Thanking you.

For and on behalf of Board of Directors

Sd/- Sd/-

Rajeev Sharma, IAS Er. P.C. Negi Director (Finance & Personnel) Managing Director Place: Shimla

Date: 21.3.2017

18

ANNEXURE I TO THE BOARDS’ REPORT

Form No. MGT-9 EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31st MARCH, 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN U40109HP2009SGC031255

ii. Registration Date 03/12/2009

iii. Name of the Company Himachal Pradesh State Electricity Board Limited

iv. Category / Sub-Category of the Company

Company Limited by shares

(State Govt. Company)

v. Address of the Registered office and contact details

Vidyut Bhawan, HPSEB, Shimla HP INDIA

171004

vi. Whether listed company No

vii. Name, Address and Contact details of Registrar and Transfer Agent, if any

Nil

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sr. No.

Name and Description of main

products / services

NIC Code of the

Product/ service

% to total turnover of the

company

1 Electricity, gas, steam and air condition supply

40101 100 %

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sr. No.

Name And Address Of The Company

CIN/GLN Holding/ Subsidiary

/Associate

% of shares held

Applicable

Section

1. Beas Valley Power Corporation Limited

U40101HP2003SGC025877 Subsidiary 100 2(46)

19

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i. Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change durinthe year

Demat Phys ical Total % of Total Shares

Dem at Phy

sica l

Total % of Total Shares

A. Promoter

1) Indian 0 0 0 0 0 0 0 0 -

a) Individual/ HUF 0 0 0 0 0 0 0 0 -

b) Central Govt 0 0 0 0 0 0 0 0 -

c) State Govt(s) 44651780 100.00 52201780 100.00 -

d) Bodies Corp 0 0 0 0 0 0 0 0 -

e) Banks / FI 0 0 0 0 0 0 0 0 -

f) Any Other 0 0 0 0 0 0 0 0 -

Sub-total(A)(1):- 44651780 100.00 52201780 100.00 -

2) Foreign 0 0 0 0 0 0 0 0 -

g) NRIs-Individuals 0 0 0 0 0 0 0 0 -

h) Other-Individuals (Six Sr. Officers of the State Govt./HPSEBL holding 1400 Shares on behalf Himachal Pradesh State Electricity Board Limited)

1400 0.00 1400 0.00 -

i) Bodies Corp. 0 0 0 0 0 0 0 0 -

j) Banks / FI 0 0 0 0 0 0 0 0 -

k) Any Other…. 0 0 0 0 0 0 0 0 -

20

Sub-total (A)(2):- 1400 0.00 1400 0.00 -

B. Public Shareholding

1. Institutions

a) Mutual Funds 0 0 0 0 0 0 0 0 -

b) Banks / FI 0 0 0 0 0 0 0 0 -

c) Central Govt 0 0 0 0 0 0 0 0

d) State Govt(s) 0 0 0 0 0 0 0 0 -

e) Venture Capital Funds

0 0 0 0 0 0 0 0 -

f) Insurance Companies

0 0 0 0 0 0 0 0 -

g) FIIs 0 0 0 0 0 0 0 0 -

h) Foreign Venture Capital Funds

0 0 0 0 0 0 0 0 -

i) Others (specify) 0 0 0 0 0 0 0 0 -

Sub-total (B)(1) 0 0 0 0 0 0 0 0 -

2. Non Institutions

a) Bodies Corp. (i) Indian (ii) Overseas

0 0 0 0 0 0 0 0 -

b) Individuals

(i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

(ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh

0 0 0 0 0 0 0 0 -

c) Others(Specify) 0 0 0 0 0 0 0 0 -

Sub-total (B)(2)

0 0 0 0 0 0 0 0 -

0 0 0 0 0 0 0 0 -

21

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

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0 0 0 0 0 -

Grand Total

(A+B+C)

44653180 100 52,203,180 100 -

ii.Shareholding of Promoters

Sr. No

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

No. of Shares

% of total Shares of the compa ny

% of Shares Pledged/

encumbe red to total shares

No. of Shares

% of total Shares of the company

%of Shares Pledged / encumbe red to total shares

% changein share holding during thyear

1. Governor of Himachal Pradesh

44651780 100.00 - 52201780 100.00 - -

2. Sh. Sudripta Roy 200 0.00 - - 0.00 - -

3. Sh. Parthasarathi Mitra

- 0.00 - 200 0.00 - -

4. Sh. S. K. B.S. Negi

400 0.00 - 400 0.00 - -

5. Sh. Anil Kumar Dutta

200 0.00 - 200 0.00 - -

6. Sh. Akshay Sood 200 0.00 - 200 0.00 - -

7. Dr. Shrikant Baldi

200 0.00 - 200 0.00 - -

8. Sh. Jai Parkash Kalta

200 0.00 - 200 0.00 - -

Total 44653180 100 52203180 100

22

iii. Change in Promoters’ Shareholding: V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment:

Secured Loans excluding deposits

Unsecured

Loans

Deposits Total

Indebtedness

Indebtedness at the beginning of the financial year (2014-15) i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

19829094000 - -

25911076000 - -

- - -

45740170000 -

Total (i+ii+iii) 19829094000 25911076000 - 45740170000

Sr. no

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the company

No. of shares % of total shares of the company

At the beginning of the year

44653180

100 7,550,000 100

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

DATE NO. OF SHARES

TO WHOM ISSUED

REASON

ALLOTMENT 18.10.2014 44,16,000 The Governor of H. P.

Allotment to existing Shareholders

28.01.2015 31,34,000 The Governor of H. P.

-do-

TRANSFER DATE NO. OF SHARES Transferor's & Transferee's Name

REASON

18/10/2014 200 Sh. Parthasarathi Mitra

As per Orders of State Government & approval of BOD

At the End of the yea 52203180 100 52203180 100

23

Change in Indebtedness during the financial year(2014-15) - Addition - Reduction

- - - -

Net Change - - - -

Indebtedness at the end of the financial year(2014-15) i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

18622000000

28437000000 -

- -

4700059000000 -

Total (i+ii+iii) 18622000000 28437000000 - 4700059000000

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

Sl. No.

Particulars of Remuneration

Designation

Total Amount (in Rs.)

1. Name of MD/WTD/ Manager: 1) Sh. Pratap Chand Negi: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income- tax Act,1961 (c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

(Managing Director)

2,171,084

2) Sh. Akshay Sood: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961


(Whole Time Director)

1,228,415

3) Sh. Rajeev Sharma: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act,


638,563

24

1961 (b) Value of perquisites u/s 17(2) Income- tax Act,1961 (c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

4) Sh. Jai Parkash Kalta: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961



2,141,938

5) Sh. Pavan Kumar Kohli: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961



2,140,894

6) Sh. Ravinder Kumar Sharma: Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961



2,087,275

2. Stock Option - -

3. Sweat Equity - -

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

- -

5. Others, please specify - -

6. Total (A) - 10,408,169

Ceiling as per the Act - -

B. Remuneration to other directors: Sl. No. Particulars of Remuneration

Name of MD/WTD/ Manager

Total

Amount

Independent Directors - -

25

· Fee for attending board committee meetings · Commission · Others, please specify

Total (1)

Other Non-Executive Directors · Fee for attending board committee meetings · Commission · Others, please specify

- -

Total (2)

Total (B)=(1+2)

Total Managerial Remuneration - -

Overall Ceiling as per the Act - - - - -

C. Remuneration to Key Managerial Personnel Other Than MD /Manager /WTD

Sl. no.

Particulars of

Remuneration Key Managerial Personnel

(Name) CEO Company

Secretary

CFO Total

9. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

- - - -

10. Stock Option - - -

11. Sweat Equity - - -

12. Commission

- as % of profit - others, specify…

- - -

13. Others, please specify - - -

14. Total

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of

the companies Act

Brief description

Details of Penalty/ Punishment/ Compounding fees imposed

Authority[RD /NCLT/Court]

Appeal made. If any(give details)

A. Company

26

Penalty - - - - -

Punishment - - - - -

Compounding - - - - -

B. Directors

Penalty - - - - -



C. Other Officers In Default

Penalty - - - - -



Sd/- Sd/-

Rajeev Sharma, IAS Er. P.C. Negi Director (Finance & Personnel) Managing Director

27

Annexure -II

Annual Report on Corporate Social Responsibility and Sustainability for the financial year 2014-15.

1. Brief outlines of the Company’s CSR policy and overview of CSR

HPSEBL has formulated a well perceived corporate social Responsibility Policy in its 24th meeting held on 18.12.2015 which is in consonanance with Company Act, 2013 and CSR guidelines, 2014 of DPE. To meet this commitment HPSEBL will respect the rule of law, local communities and socities at large and it will make conscious efforts to enhance the quality of life and environmental sustainability through its CSR. In accordance with the provisions of Section 135 of the Companies Act, 2013, CSR Committee of the Company has now been re-constituted on 06.04.2016 with the following Directors of the Company:-

(i) Addl. Chief Secretary (MPP & Power) to the Govt. H.P. (ii) Managing Director, HPSEBL (iii) Director (Finance & Accounts), HPSEBL (iv) Sh. S.C. Negi, IAS (Retd.) Independent Director (v) Smt. Anita Tegta, IAS (Retd.) Woman Director

The Executive Director (Pers) is the Secretary to the CSR Committee.

The Corporate Social Responsibility Committee in its meeting held on 30-12-2016 has approved that as per CSR policy the Company is required to spend in every financial year, two (2%) of the average net profit of the Company made during the three immediately preceding financial years towards CSR obligation. Since, HPSEBL has accumulated loss to the tune of Rs.1875.61 Crore in the financial year 2013-14, Rs.1989.12 Crore in FY 2014-15 , Rs.1999.63 Crore (Provisional) in FY 2015-16 and at the end of FY 2016-17 these losses will increase above Rs. 2000.00 crore, therefore, in the absence of any net profit, the Company is not required to spend any amount towards CSR obligation. Sd/- Sd/- Sd/- Kumad Singh, HAS Rajeev Sharma, IAS Tarun Shridhar, IAS Executive Director (Pers) Director (Personnel) Addl. Chief Secretary (MPP & Power)

Annexure- III

P.S.R MURTHY PRACTICING COMPANY SECRETARY

C.P. 13090

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2015

{Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014}

To, The Members, Himachal Pradesh State Electricity Board Limited, Vidyut Bhawan, Shimla-171004. I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Himachal Pradesh State Electricity Board Limited (the “Company”) CIN

28

U40109HP2009SGC031255 The Company is a State Government Company and is listed on Bombay Stock Exchange for its Debt Securities issued on Private Placement. Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on my verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March 2015 compiled with the statutory provisions listed compliance-mechanism in place to the extent; in the manner and subject to the reporting made hereinafter: I have examined the books, papers minute books forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2015 according to the provisions of:


C.P. 13090

(i) The Companies Act, 2013 (the Act) and the rules made there under; During the period under review the Company has part compliance with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations: a) The Company has not complied with Section 129(2) of the Act governing the placement of Financial Statement for the year 2013-14 before the Annual General Meeting ought to have been held on or before 30th September, 2014. Adoption of Accounts for the year 2013-14 by the Members, on the date of issue of the Report, was still pending. b) The Composition of the Board was without the required number of Independent Directors, as per provisions of Section 149 (4) read with the provisions of Rule 4 of Companies (Appointment of Directors) Rules 2014. The Audit Committee and Nomination and Remuneration Committee were constituted without Independent Directors. Further the Mandatory Committees were constituted with Designations. c) There was no compliance of Section 203 read with the provisions of Rule 8A of Companies (Appointment and Remuneration) Rules 2014 in respect of appointment of Company Secretary, a key managerial personnel; d) The terms of reference of Audit Committee as enumerated under Section 177 (4) of the Companies Act, 2013 are to be included. e) Vigil mechanism for Directors and employees to report genuine concerns was not in place as required under Section 177 (9) of the Act read with Rule 7 of Companies (Meetings of Board and its powers) Rules 2014. f) The Company had issued unsecured bonds worth Rs. 234.10 crore on private placement basis during the year 2014-15. The Company also issued unsecured bonds worth Rs. 265.90 crore on private placement basis during the year 2013-14 also. However, the Company has not filed Returns called for under Companies (Issue of Debentures) Rules 2014.


C.P. 13090

I Further Report compliance under:-

(ii) The Securities Contracts (Regulation) Act., 1956 (SCRA) and the rules made there under;

29

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (Not applicable for the period ending 31st March 2015 as there were no transactions as reported).

(v) The following Regulations and guidelines prescribed under the Securities and Exchange Board of India Act., 1992 (SEBI Act):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (Not Applicable for the period ending 31st March 2015).

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (Not Applicable for the period ending 31st March 2015).

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(d) The Securities and Exchange Board of India (Employee Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (Not Applicable for the period ending 31st March 2015).

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008.

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act. and dealing with client.

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not Applicable for the period ending 31st March 2015) and; (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not Applicable for the period ending 31st March 2015); I further report that The Board of Directors of the Company is constituted with Executive Directors, Non-Executive Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice of the Meeting was given to all directors to schedule the Board Meetings. Agenda and detailed notes on agenda were sent in advance. However there is no date of dispatch. A system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes. I further report that the Company is yet introduce system to monitor compliance with applicable laws, rules regulations and guidelines commensurate with the size and operations of the Company. As regards compliance with other laws, the Company had not identified the laws with which it is governed or regulated. In the absence, the audit is unable to report on the status of compliance or otherwise. I further report that during the audit period, the Company had passed special resolution increasing borrowing powers of the Board up to Rs. 5,000 crore to meet the funding needs of the on-going Projects and also the Company secured financial restructuring to the extent of Rs. 1,050 crore. Further the Company is seeking financial restructuring which have a major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations,

30

guidelines, standards, etc. referred to above. Sd/- (P.S.R. Murthy) Place : Shimla Date 21st November 2015 This Report is to be read with our letter of even date which is annexed as Annexure A and forms integral part of this Report.

P.S.R MURTHY PRACTICING COMPANY SECRETARY -C.P. 13090

Annexure-III A

To, The Members, Himachal Pradesh State Electricity Board Limited, Vidyut Bhawan, Shimla-171004. My Report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.

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

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, I have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

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

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

Sd/- (P.S.R. Murthy) Place: Shimla Date 21st November 2015

Annexure- IV Reply to the Secretarial Auditor’s Observations

Sr. No. Secretarial Audit Observation Reply a) The Company has not complied with Section 129(2) of the

Act governing the placement of Financial Statement for the year 2013-14 before the Annual General Meeting ought to have been held on or before 30th September, 2014. Adoption of Accounts for the year 2013-14 by the Members, on the date of issue of the Report, was still pending.

All out efforts are being made to clear the backlog of financial statements.

31

b) The Composition of the Board was without the required number of Independent Directors, as per provisions of Section 149v (4) read with the provisions of Rule 4 of Companies (Appointment of Directors) Rules 2014. The Audit Committee and Nomination and Remuneration Committee were constituted without Independent Directors. Further the Mandatory Committees were constituted with Designations.

The Audit Committee and Nomination and Remuneration Committee have been re- constituted with Independent Directors/ woman Director and mandatory requirement of the Act.

c) There was no compliance of Section 203 read with the provisions of Rule 8A of Companies (Appointment and Remuneration) Rules 2014 in respect of appointment of Company Secretary, a key managerial personnel;

Case for appointment of Company Secretary is in process with H.P. Public Services Commission.

d) The terms of reference of Audit Committee as enumerated under Section 177 (4) of the Companies Act., 2013 are to be included.

The same has now been compiled by the Company

e) Vigil mechanism for Directors and employees to report genuine concerns was not in place as required under Section 177 (9) of the Act read with Rule 7 of Companies (Meetings of Board and its powers) Rules 2014.

Vigil mechanism for Directors and employees to report genuine concerns are now been complied

f) The Company had issued unsecured bonds worth Rs. 234.10 crore on private placement basis during the year 2014-15. The Company also issued unsecured bonds worth Rs. 265.90 crore on private placement basis during the year 2013-14 also. However, the Company has not filed Returns called for under Companies (Issue of Debentures) Rules 2014.

The requisite Return has now been filed by the Company.

(ii)

I Further Report compliance under:- The Securities Contracts (Regulation) Act., 1956 (SCRA) and the rules made there under;

Statement of facts. No action required. All out efforts are being made to comply with the Secretarial Standard.

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (Not applicable for the period ending 31st March 2015 as there were no transactions as reported.

(v) The following Regulations and guidelines prescribed under the Securities and Exchange Board of India Act., 1992 (SEBI Act):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (Not Applicable for the period ending 31st March 2015).

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (Not Applicable for the period ending 31st March 2015).

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(d) The Securities and Exchange Board of India (Employee Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (Not Applicable for the period ending 31st March 2015).

(e) The Securities and Exchange Board of India (Issue and

32

Listing of Debt Securities) Regulations, 2008. (f) The Securities and Exchange Board of India (Registrars to

an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act. and dealing with client.

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not Applicable for the period ending 31st March 2015) and;

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not Applicable for the period ending 31st March 2015); Annexure-V

FORM-CRA-3

(Pursuant to Rule 6 (4) of the Companies (Cost Records and Audit), rules, 2014)

FORM OF THE COST AUDIT REPORT

1 We, Anirudh Joshi & Associates , Cost Accountants, having been appointed as Cost Auditors undersection 148 of the Companies Act, 2013 of Himachal Pradesh State Electricity Board Limited, having its registered office at Vidyut Bhawan, Shimla-171004 (hereinafter referred to as the Company), have audited the Cost Recordsmaintained under section 148 of the said Act, in compliance with the Cost Auditing standard, in respect of the GENERATION,TRANSMISSION & DISTRIBUTION of ELECTRICITY for the Period 2013-2014 maintained by the company and report, in addition to our observation and suggestions in Para 2.

(i) We have obtained all the information and explanation, which to the best of our knowledge and belief were

necessary for the purpose of this audit. (ii) In our opinion, proper cost records, as per Rule 5 of the Companies (Cost Records and Audit) Rules,

2014 have not been maintained by the company in respect of units/products/services under reference. (iii) In our opinion, proper returns adequate for the purpose of the Cost Audit have not been received from

the branches not visited by us. (iv) In our opinion and to the best of our information, the said books and records give the information required

by the Companies Act, 2013, in the manner so required. (v) In our opinion, company has not adopted adequate systems of internal audit of cost records which to our

opinion is commensurate to its nature and size of its business. (vi) In our opinion, information statements in the annexure to this Cost Audit Report gives true and fair view

of the Cost of Production of product/ rendering of services, Cost of Sales, Margin and Other Information relating to product/services under reference.

(vii) Details unit-wise and product/services-wise cost statements and schedules thereto in respect of theproduct /services under reference of the company duly audited and certified by us are kept in the company.

2 Observations and suggestions, if any, of the Cost Auditor, relevant to the cost auditor

a) Capacity Utilisation

The installed capacity of company is same as compared to the previous year i.e(487.583 MW ) where aspower generation has increased to 1950.790 MKwh (P/Y 1815.48 MKwh) which is 46.67% of Installedcapacity.

The consumption of power within the state has increased to 7535.833 Mkwh as compared to previous year7223.517 Mkwh which has forced the company to buy more power from outside the state.

33

The capacity utilisation is less than 50 % which has increased the cost of power generated. So consideringthe above it is suggested that company should plan to increase its power generation for better results.

b) Increase in Interest Cost

The Interest cost of the company has increased by 18.58 % in C/Y as compared to P/Y which has increasedits cost of sale. We feel that Company should plan to increase its capital base to reduce its Interest cost infuture.

c) Increase in Employee cost

Employee cost has increased by 10.6 % as compared to previous year.

d) Excessive stock of spares and stores

Company carries stock of Spares and Stores to its monthly consumption by 19 times (P/Y 20 TIMES) which isvery much on higher side still . So it is suggested that company should get it physically verified and all itemsof obsolete in nature should be identified and disposed off. Management should also take thorough reviewwhile ordering fresh material.

There is no information regarding shortage/excess of material during physical verification of the inventory.

e) Repairs & Maintenance cost

The company undertakes repairs and maintenance with their own staff or through the contractors. In numberof cases stores and spares are purchased by the company and issued for repairs and maintenance. The value of consumables issued in circles/wings and divisions are recorded under heading repairs andmaintenance. With this practice it is not possible to work out the consumption of stores materials. Also all capital spares have been booked under this head.

For better control it is suggested to record the consumption of stores and spares under separate headings.

f) Depreciation: In case where assets have been acquired out of subsidies depreciation is charged on full value of assets which has direct impact on cost of power generated.

Depreciation has been charged on Straight Line Method at the rates as given by Regulatory Commission forelectricity companies. Where rates are not provided by HPREC, rates as per Companies Act as been taken.

The impact of difference with rates as applicable under Companies Act, 2013 has to be worked out. So weare not in a position to comment on the cost implication for the same. Further depreciation has not beencharged on addition to fixed assets.

g) Effect on net worth

On account of losses every year, value of net worth has been diminishing year after year. Major portion ofcurrent year losses is excessive interest which has affected profitability per unit of output.

h) Company has amortised capital expenditure to the tune of Rs. 29.7 crore incurred on assets (pertaining tomore than 10 yrs ) not owned by company to this year which has been treated as non-cost item.

i) Company has charged cost of new meters replacing old one to revenue fully and not withdrawn the cost of old/damaged meters and accumulated depreciation there on. It has increased the cost per unit. As the impacthas not been workout we are not in position to comment upon.

j) Company’s transit loss though has come down from 13.62% to 12.36% but still on higher side which need a

34

review.

k) Considering the activities and size of the organization we suggest that a formal Costing mechanism of CostRecords and Internal Audit must be introduced at all power generating units of the company.

2. COST ACCOUNTING POLICIES: General information The Himachal Pradesh State Electricity Board was constituted on 1st September 1971 in accordance with the Electricity (Supply) Act, 1948 for Generation, Transmission and Distribution of electricity within the State ofHimachal Pradesh. The Board has been re-organised as Himachal Pradesh State Electricity Board Limitedwith effect from 14.06.2010. The Company has own hydel generation. HPSEBL also purchased electricity fromPSEB on banking basis, it also purchased/obtained energy against HP’s share from BBMB, PSEB, SJVNL,UJVNL, UPPCL, NHPC, NTPC and NPCL. HPSEBL also sell electricity to other states after meeting its own demand.

Process of Manufacture The Himachal Pradesh State Electricity Board Limited (HPSEBL) has huge hydel potential in its five riverbasins. The Company has generated about 1950.790 MKwh units of electricity during the year from its . Electricity is generated with renewable source of energy i.e. water. Water is dropped from certain height to rotate the turbines which in turn generate electricity. This electricity is evacuated with the help oftransmission lines and distributed within and outside the state. The shortage of electricity to meet the demand in the state is made by purchasing from other states. In case of excessive supply of electricity, it is sold to other states. Cost Accounting System The division of the company has maintained cash and bank books. The adjustment entries are passed in the memorandum statement. The divisions extract monthly Trial balance for the purpose of consolidation ofrecords by Circles and wings. The Head office on the basis of memorandum statement submitted byCircles and Wings compile the records. At the Head office level cost records and annexure there to arederived from above said records and company has not maintained formal cost records. So, in the absenceof formal cost records we are unable to comment upon and give our opinion on true and fair costing of power generated/purchased and sold.

a) Identification of cost centres/cost objects The Company has apportioned the cost on the different cost centres such as Generation,Transmission, SLDC, Distribution and Projects.

b) Accounting for material cost including packing materials, stores and spares etc,employee cost, utilities and other relevant cost The company has no material cost because electricity is generated with help of water throughturbines. The company maintains separate stores and spares account. Cost of Stores and spares is determined on weighted average method. The issues are made for both capital andrevenue spares. Generally, for repairs and maintenance Company has its own staff. Thecompany also take major repairs with the help of contractors. All consumptions are booked under Repair and Maintenance heads. All items are codified on the basis of Tata ConsultancyReport of 1984. Employee cost is directly allocated to respective cost centres. Employees cost at Head Officehas been allocated to respective cost centre based upon their assets value.

c) Disclosure regarding accounting, allocation and absorption of overheads Production overheads are allocated to cost centres on actual basis and overhead incurred atHead office has been allocated to cost centre on their asset value.

d) Disclosure regarding accounting for depreciation or amortization Depreciation has been charged at the rates as given by Regulatory Commission for electricitycompanies. The same has been taken to work out the cost of power units generated. The

35

impact of difference with rates as applicable under Companies Act, 2013 has to be work out.So, we are not in a position to comment the cost implication of the same. As per the practices followed by the company depreciation has been booked at Head office and the same has been allocated to cost centre at their assets value basis.

e) Disclosure regarding accounting for by products, joint products and scraps or wastageCompany has been generating, transmitting and distributing single product i.e. electricity. There is no by product and joint product. Scraps and wastage arises due usage are recordedunder separate cost centres. Loss or gain arising due to sale of these products is taken intoreconciliation statement.

f) Disclosure regarding basis of inventory valuation Company produces the electricity with help of water which is renewable source of energy sothere is no stock of inventory except Stores and Spares.

g) Disclosure regarding valuation of inter unit or inter-company and related party transaction Company works as single organisation for generation, transmission and distribution so thereis no inter-unit or inter-company transaction. HPSEBL transfers free power to HP Govt. astheir share as per agreement signed.

h) Disclosure regarding treatment of abnormal and non-recurring costs including classification of non-cost items Abnormal and non-recurring costs are not considered while calculating the cost of productionand cost of sales. These items are considered as non-cost items and its effect is considered in reconciliation statement.

i) Disclosure regarding other relevant cost accounting policy Costing policies not define above are as per generally accepted Cost Accounting Principlesand Cost accounting standards as prescribed by The Institute of Cost Accountant of India..

j) Disclosure regarding changes in cost accounting policy during reporting period Company has changed the method of charging of depreciation from 2010-11. Prior to that company had used average rate of 2.5% per annum. So impact for the same on cost of units generated during current year has to be determined. Depreciation has been charged on Straight Line Method at the rates as given by RegulatoryCommission for electricity companies. Where rates are not provided by HPREC, rates as perCompanies Act are considered except in case of Computers. The impact of difference with rates as applicable under Companies Act, 2013 has to beworked out. So we are not in a position to determine the cost implication of the same. Further depreciation has not been charged on addition to fixed assets. As per the practices followed by the company depreciation has been booked at Head officeand the same has been allocated to cost centre at their assets value basis. No depreciation is charged on addition of assets during the year.

k) Disclosure regarding adequacy of budgetary control system The Finance & Accounts wing of HPSEBL has been assigned the functions of preparation offinal Accounts and Budget of the company. This wing is responsible for all financial planningand forecasting, funds management of the Company. Annual budgets on capital projects and revenues are made. These budgeted figures are compared with actual.

36

FORM-II COST AUDIT REPORT [See rule 2 and rule 6]

We, Anirudh Joshi & Associates having been appointed as Cost Auditor under Section 233B of theCompanies Act, 1956 (1 of 1956) of Himachal Pradesh State Electricity Board Limited having its registeredoffice at Vidyut Bhawan, Shimla, have audited the books of accounts prescribed under clause (d) of sub-section (1) of section 209 of the said Act, and other relevant records in respect of Generation, Transmission& Distribution of Electricity for the year 2011-12 maintained by the company and report, in addition to ourobservations and suggestions in Para 2.

(i) We have obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purpose of this audit.

(ii) In our opinion, proper cost records, as per Companies (Cost Audit Report) Rules, 2011 underclause (d) of sub-section (1) of section209 of the Companies Act 1956, have been maintained bythe company so as to give true and fair view of the cost of production/operation, cost of sales andmargin of the product under reference.

(iii) In our opinion, proper returns adequate for the purpose of the Cost Audit have been received fromthe branches not visited by us.

(iv) In our opinion and to the best of our information, the said books and records give the informationrequired by the Companies Act, 1956, in the manner so required.

(v) In our opinion the said books and records are in conformity with the Generally Accepted CostAccounting Principles, Cost Accounting Standards issued by The Institute of Cost Accountants ofIndia, to the extent these are found to be relevant and applicable.

(vi) In our opinion company has adequate system of internal audit of cost records which to our opinion is commensurate to its nature and size of its business.

(vii) Detailed product/activity-wise cost statements and schedules thereto in respect of productgroup/activities under reference of the company duly audited and certified by us are kept in thecompany.

(viii) As required under the provisions of The Companies (Cost Audit Report) Rules, 2011, we have furnished Performance Appraisal Report, to the company, on the prescribed form.

2. Observation and suggestions:-

l) Capacity Utilisation The company has increased its installed capacity to 477.45 MW (P/Y 471.58 MW) where as power generation reduced to 1815.48 MKwh (P/Y 2020 MKwh) which 43% of Installed capacity.Company has generated less power by 10% in current year which need a review. The consumption of power within the state has increased to 7223.517 Mkwh as compared toprevious year 6918.17 Mkwh which has forced the company to buy more power from outside thestate. The capacity utilisation is less than 50 % which has increased the cost of power generated. Soconsidering the above it is suggested that company should plan to increase its power generation and also installed capacity to meet the demand.

m) Increase in Interest Cost The Interest cost of the company has increased by 64% in C/Y as compared to P/Y which hasincreased its cost of sale. We feel that Company should plan to increase its capital base to reduce its Interest cost in future. The excessive debt resulted high debt equity ratio up to 630%times.

37

n) Increase in Employee cost Employee cost has increased by 10 % as compared to previous year whereas thestrength/number of employee has gone down by 11% (from 20882 nos. to 18550 nos.)

o) Excessive stock of spares and stores Company carries stock of Spares and Stores to its monthly consumption by 20 times (Ref Para -9(E-3) of this audit report which is very much on higher side. So it is suggested that companyshould get it physically verified and all items of obsolete in nature should be identified anddisposed off. Management should also take thorough review while ordering fresh material.

p) Repairs & Maintenance cost The company undertakes repairs and maintenance with their own staff or through the contractors.In number of cases stores and spares are purchased by the company and issued for repairs and maintenance. The value of consumables issued in circles/wings and divisions are recordedunder heading repairs and maintenance. With this practice it is not possible to work out the consumption of stores materials. Also all capital spares have been booked under this head. For better control it is suggested to record the consumption of stores and spares under separateheadings.

q) Depreciation: In case where assets have been acquired out of subsidies depreciation is chargedon full value of assets which has direct impact on cost of power generated. Depreciation has been charged on Straight Line Method at the rates as given by RegulatoryCommission for electricity companies. Where rates are not provided by HPREC, rates as perCompanies Act as been taken. The impact of difference with rates as applicable under Companies Act, 1956 has to be workedout. So we are not in a position to comment on the cost implication for the same. Furtherdepreciation has not been charged on addition to fixed assets.

r) Effect on net worth On account of losses every year, value of net worth has been diminishing year after year. Majorportion of current year losses is excessive interest which has affected profitability per unit ofoutput.

s) Considering the activities and size of the organisation we suggest that a formal Costingmechanism of Cost Records and Internal Audit must be introduced at all power generating units ofthe company.

For Anirudh Joshi & Associates Cost Accountants

Firm Reg. No. 100384.

(Anirudh Joshi) FCMA

Dated:...................... Cost Auditor M.No..22827 At Hoshiarpur

To,

M/s Himachal Pradesh State Electricity Board Ltd., Shimla Subject: PERFORMANCE APPRAISAL REPORT-2012-13 Dear Sir(s), During the conduct of Cost Audit for the financial year 2012-13, we have observed the following area and would like to have your attention on the same. 1 Capacity Utilization Analysis:

The Company has been working at 43% (P/y 49%) of the available capacity which needs

38

immediate attention as company has invested huge amount for generation.

Cost of own generation of electricity before distribution stage is Rs. 3.46 per unit (as per performa-C) whereas rate for power purchased is Rs.2.27 per unit.

Better utilization of capacity means better utilization of resources like labour, machinery andfinance. It is an important consideration for cost determination and cost reduction. Thus, it isessential to establish the capacity of the plant with the help of technical people. Cost AccountingRecords Rules under section 209(1) (d) of Companies Act, 1956 and Cost Audit Report Rules,2011 under section 233B of the said Act specify that comparative statement of installed capacityand actual capacity utilization is to be recorded and furnished in order to assess the operatinglevel.

So, in view of the above we suggest that based upon the guidelines issued by The Institute ofCost Accountants of India under Cost Accounting Standard-2, we should establish our Licensed,Installed capacity, Normal Capacity of the plant(s) and company as a whole along with capacityutilized, idle capacity and reasons thereof to control and reduce the cost of production.

2. Productivity/Efficiency Analysis:

The ratio of loss to capital employed is -29% which is not healthy sign for the organization.Productivity involves variables of input resources such as labour, Stores consumables, overheadsand finance and the output. Measuring, identifying and isolating the different input resources andanalyzing their contribution to produce goods and their effect on costs and profitability isimperative for improving business performance. It should be noted carefully that productivity is ameasure of efficiency per unit of output, whereas efficiency is generally measured in totality.

Ratios like ‘operational expenses’ to ‘cost of goods sold’ indicates our productivity/efficiency statusand help us to identify the areas where we need to take remedial action. Similarly, PBT to capitalemployed, net worth, sales and value addition indicates our efficiency. So, we have to maintain our records in such a way that we can study the impact of each and everyinput resource on our output. We have to study causes of good performance and areas ofimprovement.

3. Utilities/Energy Efficiency Analysis:

The utilities are resources that are used in the process of conversion of material and othercomponents into a finished product, but these resources do not form part of the physical unit of theproduct. In manufacturing industries, utilities and energy form a substantial part of the conversioncost.

The broad headings under which the utilities and energy performance could be categorized arePower, steam, electricity, compressed air, water, etc. These utilities are consumed in theproduction process or in environment protection initiatives. The use of utilities for administrativefunctions may be found in terms of lighting, cooling, ventilation, heating refrigeration etc. We haveto evaluate the impact from cost angle as well as from the viewpoint of conservation of energy. Itis essential to check if there are any statutory norms prescribed for the company

Separate records of the Utilities such as power through DG sets, water, effluent treatment plant(ETP), compressed air/chiller etc. which are used for manufacturing process are required to bemaintained strictly as per Perform-‘A’ prescribed under Cost Accounting Records Rules-2011,read with Cost Accounting Standard-8 on Cost of Utilities. This will help the management toascertainment of correct cost per unit cost of production and improved analysis.

4. Key-Costs & Contribution Analysis:

The Cost of production is on the higher side on account of lower production volumes. Cost ofLabour and Finance are major cost of generation of electricity.

39

Transmission losses are around 13% (National losses are 21%). Considering the length of the transmission it seems to be on higher side. Please note that financial performance is the major element of the performance management. This analysis involves assessment of major items of cost, their relationship with the volume of production and impact on the profitability. Para 6 -Annexure to the cost audit report provides information on operating ratios for the current and previous years. These ratios are computed as proportion of individual cost elements to the cost of sales.

The contribution analysis is to include the break-even analysis and the margin of safety at the current volumes. It may be necessary to scientifically split the costs into fixed and variable elements. This split should be validated every year to find out structural changes if any. It will help to include inter-firm comparison for the same. The contribution analysis data shall be used by the management for decisions like pricing, accepting or rejecting an order, make or buy etc.

5. Product & Market Profitability Analysis:

Company is selling electricity of different category of consumers. So company must introduce system to work out customer wise profitability. Company can also introduce market wise profitability system to understand the market potential in better way. The unit product profits are driven by two major components viz. cost per unit and selling price per unit. This would facilitate the assessment of impact of changes in selling prices and changes in costs on the profitability or otherwise on the products. While the selling price is a single number, the cost is the sum total of different elements. We must ensure that the basis use to allocate indirect costs is consistently adopted by the company.

The term “profitability” should be taken with an extended meaning to include, apart from the concept of accounting profit, the ROI analysis as well. It would be useful to analyses profitability of products in domestic and export market. Care should be taken to isolate reasons for the changes in the profitability percentages. Similarly, if significant, profitability on sales to the related parties may be separately worked out.

6. Inventory Management Analysis:

Inventory management is the integrated functioning of an organization dealing with supply of materials and allied activities in order to achieve the maximum co-ordination and optimum expenditure on materials. The Company is carrying huge inventory 20 times of average consumption of stores & spares. Further, company added 3% on account of Storage of Inventory which needs a review as company has not added any value to inventory and it has cascading effect to cost.

For manufacturing industries, inventory is the major portion of the current assets. We have to evaluate the inventory management policy which would include, inter alia, procurement policy, stocking policy, inventory valuation method, inventory records and physical verification procedures. Benchmarking of the policy pursued by the company with the industry averages will enhance the value of performance report.

It will be appropriate to analyse the inventory into its components such as material and stores, Capital –work- in- progress etc. For each of these categories, system of inventory control should be evaluated using tools like ABC, EOQ technique, JIT system etc.

7. Working Capital Analysis: The analysis of working capital can be done using the traditional measures of ratios like current ratio, quick ratio, turnover ratios, number of days in operating cycle etc. These ratios could be

40

computed for each product separately. Analysis of the operating cycle of the company would be immensely useful.

Another important component of working capital is receivables. Analysis of receivables is important for internal perspective (working capital management) and external perspective (customer management) as well.

Similarly, trade credit from suppliers is the most crucial spontaneous source of working capital funding. The performance in respect of this could be critical for operational efficiencies and liquidity of the company.

8. Manpower Analysis:

The Company’s employees cost has gone up to 25 % (P/Y 24 %) of cost of sale. Company should see the reasons for such an increase and should take appropriate steps to reduce the cost especially in case of Direct Lab our. The depth of analysis of manpower could depend upon the proportion of manpower cost to the total cost of product or service. The performance criteria for this area will mainly be related to the costs and efficiency or productivity. Again, benchmarking with the similar organizations would be helpful.

The costs may be categorized into the cost of recruitment, cost of maintaining the manpower and the cost of separations. Recruitments costs may include position advertisements, commission paid to recruitment agencies, participation in job fairs or campus recruitment etc. The maintenance costs may be the training & development costs, facilities provided over & above the monetary benefits etc. The separation costs would mostly be implicit costs. These costs as a percentage of the total salaries and wages would provide an insight into the quality of manpower management. These costs could be further broken up as per the hierarchies of people. The time taken to recruit important positions may affect the performance adversely. The factor returns from the manpower is in terms of growth in production and productivity, enhancement of skills and knowledge of the organisation. We have to analyse the figures of manpower productivity, idle time, overtime worked, absenteeism etc. These factors could be compared with the respective outputs such as increased production, increased sales etc. The criteria such as sales per person achieved, production per man hour etc. will add value to the Performance Appraisal Report.

9. Management Accounting Tools:

- The performance measurement involves collection of information, analysing the same by

establishing the inter-relations between them, interpreting the results and then arriving at meaningful conclusion. The collection of information depends upon various sources of data and other reports for various systems used by the organisation.

- The data input is generally made in the accounting system used by the company e.g. the ERP systems. Most of the ERP systems facilitate input and capturing of even the non-financial data which can be then processed to produce desired reports. There is a lot of information to be accessed from outside of the ERP system.

- The other Cost Accounting tools like Activity Based Costing, Standard Costing, variance analysis and Budgeting are useful to work out cost of each activity being performed.

- Internal Audit of Cost Records to have better input/output reports and fast decision making in the organization can be explore,

10. Others:

- The regular maintenance of Cost Records help the organization to streamline its operation by identifying non-productive activities. So we suggest that formal Costing systems of

41

recording of cost must be introduced at all power generating units of the company.

- The system of updating MIS system on daily/monthly accumulated basis (today/till date) especially for all major activities related to production and supporting activities such as units Produced, Items Sold, major items stores consumed, fixed and casual lab our deployed, Fuel consumption, ETP performance, Compressors, major production/factory and administrative overheads etc. at all cost centre to improve the flow of information.

Hope you will find the above in order. In case you need any further clarification/ details please feel free to write.

For Anirudh Joshi & Associates Cost Accountants

Firm Reg. No...100384 (Anirudh Joshi)

FCMA Dated: Cost Auditor Place: M. No...22827

42

HIMACHAL PRADESH STATE ELECTRICITY BOARD LTD.

Balance Sheet as at 31st March, 2015 (Amount in Lac)

Particulars Note No. As at 31st March,2015 As at 31st March,2014 1 2 3 4 5 6

I. EQUITY AND LIABILITIES 1 Shareholders’ Funds (a) Share Capital 2.1 52,203.18 45,893.18 (b) Reserves and Surplus 2.2 -15,801.26 9,513.33

(c) Money Received against

Share Warrants

-

36,401.92

-

55,406.51 2 Share Application Money

Pending Allotment 2.3

3,126.40

3,186.40 3 Non-Current Liabilities

(a) Long-Term Borrowings 2.4 3,09,072.54 2,28,073.18 (b) Deferred Tax Lib. (Net) - - (c) Other Long Term Liabilities 2.5 49,418.38 38,857.76 (d) Long-Term Provisions 2.6 - 3,58,490.92 - 2,66,930.94

4 Current Liabilities (a) Short-Term Borrowings 2.7 1,11,880.46 1,81,103.30 (b) Trade Payables 2.8 1,90,764.90 1,58,677.93 (c) Other Current Liabilities 2.9 2,06,567.86 1,85,783.10 (d) Short-Term Provisions 2.10 45,912.68 5,55,125.90 41,320.02 5,66,884.35 TOTAL 9,53,145.14 8,92,408.20

II. ASSETS Non-current assets 1 (a) Fixed Assets

(i) Tangible Assets 2.11 5,12,791.09 5,01,992.25 (ii) Intangible Assets 2.12 1,603.23 2,051.97 (iii) Capital Work-in-Prog. 2.13 93,777.89 99,466.38

6,08,172.21 6,03,510.60 (b) Non-Current Investments 2.14 43,077.51 41,306.89 (c) Deferred Tax Assets (net) - -

(d) Long-Term Loans and Adv 2.15 18,577.25 11,403.50 (e) Other Non-Current Assets 2.16

16,771.08 6,86,598.05 14,243.64 6,70,464.63

2 Current Assets (a) Current Investments 2.17 1,147.85 1,051.06

(b) Inventories 2.18 7,122.70 7,696.53 (c) Trade Receivables 2.19 1,04,596.13 79,961.79

(d) Cash and Cash equ. 2.20 14,546.68 13,558.89 (e) Short-Term Loans and Adv 2.21 46,453.26 41,993.12 (f) Other Current Assets 2.22 92,680.47 2,66,547.09 77,682.18 2,21,943.57

TOTAL 9,53,145.14 8,92,408.20 The accompanying notes form an integral part of these financial statements

For and on behalf of Company Auditors Report As per our report of even date

Sd/- (Er. P C Negi)

Managing Director For Anil K. Sood & Company Charterted Accountants

Sd/- (Rajeev Sharma, IAS) FRN -007360N Director( F&A) Sd/- (Gulshan Aggarwal) Sd/- Chief Accounts Officer ( CA Anil Sood)

Partner Place: Shimla M. No. 086068

Date 27.12.2016

43

HIMACHAL PRADESH STATE ELECTRICITY BOARD LTD. Statement of Profit and Loss for the year ended 31st March, 2015

( Amount in Lacs) Sl No. Particulars Refer Note

No. Year ended 31st

March, 2015 As at 31st March,2014

I. Revenue from Operations 2.23 558434.20 505090.40

II. Other Income 2.24 38241.68 17292.49

III. Total Revenue (I + II) 596675.88 522382.89 IV. Expenses: Purchase of Power 2.25 370699.13 299272.73 Employee Benefits Expense 2.26 130594.07 125545.12 Finance Costs 2.27 53552.13 54617.27

Depreciation and Amortization expense 2.28 30532.24 30726.43 Other expenses 2.29 22052.36 27399.68 Total Expenses 607429.93 537561.23

V. Profit / (Loss) before exceptional and extraordinary items and tax (III-IV)

(10754.05) (15178.34)

VI. Exceptional items 0.00 0.00

VII. Profit / (Loss) before extraordinary items and tax (V - VI)

(10754.05) (15178.34)

VIII. Extraordinary Items 2.30 597.06 (1480.00)

IX. Profit / (Loss) before tax (VII- VIII) (11351.11) (13698.34)

X Tax expense:

(1) Current Tax 0.00 0.00

(2) Deferred Tax 0.00 0.00

XI Profit / (Loss) for the period from operations (VII-VIII)

(11351.11) (13698.34)

Earning (Loss) per equity share: (1) Basic 2.31 (22.53) (44.09)

(2) Diluted (21.68) (33.28)

The accompanying notes form an integral part of these financial statements

For and on behalf of Company

Sd/- (Er. P C Negi) Auditors Report Managing Director As per our report of even date

Sd/- For Anil K. Sood & Co. (Rajeev Sharma, IAS) Chartered Accountants Director( F&A) FRN 007360N Sd/-

(Gulshan Aggarwal) Sd/- (Anil Kumar Sood)

Chief Accounts Officer Partner Place: Shimla M No. -086068 Date 27.12.2016

44


Cash Flow statement for year ended 31st March, 2015

(Rs. In Lacs ) Sr. No. Description 2014-15 2013-14 A: Cash Flow from Operating Activities (indirect method)

1. Net profit/(Loss) Before Tax. (11351.11) (13698.34) 2. Add:- Non Cash transactions:

Depriciation including adjustment 30532.24 30726.43

Interest Income (71.01) (136.93)

Deffered Revenue Expenses write back (905.24) (477.97)

Interest & finance charges 53552.13 54617.27

Unbilled Revenue (21619.65) (24252.28)

Loss on a/c of flood, cyclone, fire etc. (1297.05) (1480.00) 3. Operarting Profit/(Loss) Before Working Capital Changes (1+2) 48840.31 45298.18

4. Adjustment for

Decrease in trade & other Recoverables 6514.73 33045.69

Descrease in Store & spare 456.86 1899.58

Decrease in Trade Payable (32086.97) (57968.94)

5. Cash Generated from Operations (3+4) 23724.93 22274.51

6. Borrowing for working Capital 0.00 0.00

7. Sub-Total (5-6) 23724.93 22274.51

8. Net prior Period (Expenses/Income ( Net of Priod period Dep.) 9224.84 (13145.89)

9. Fringe benefit Tax 0.00 0.00

10. Net cash Flow from Operating Activities ( 7+8+9)(A) 32949.77 9128.62

11. B: Cash Flow From Investing Activities.

i) Purchase of fixed assets & CWIP-increased/(decreased) 35281.85 22737.34

ii) Disposal of fixed assets. 0.00 0.00

iii) Service line contribution- increased. (12813.02) 171.71

iv) purchase of investments- increased/(decreased) 1770.62 7960.52

v) Deffered revenue expenditure- increased (13138.93) (406.97)

vi) Interest Income 71.01 136.93

Net Cash Used in Investing Activities. 11171.53 30599.53

12. C: Net Cash Used in Financing activities

i) Proceeds from long term & Other Borrowings 84156.48 118110.45

ii) Repayment of Long Term & Other Borrowings (62480.58) (114781.29)

iii) Interest & finance Charges (paid) (53552.13) (54617.27)

iv) Consumer security deposits-increased 2185.65 1765.80

v) Grant-increased 700.00 1595.98

vi) Reserves funds (14142.93) (649.18)

vii) Equity . 0.00 0.00

45

Net Cash generated from Financing Activities ( I to vii) (C ) (43133.51) (48575.51)

13. Net increase in Cash and cash equivalent ( A+B+C) 987.79 (8847.36)

14. Opening balance of Cash and cash Equivalents 13558.89 22406.25

15. Closing Balance of Cash & Cash Equivalents. 14546.68 13558.89 Sd/- (Er. P.C. Negi) For Anil K. Sood & Co. Managing Director Chartered Accountants Firm No. 007360N) Sd/- Sd/- (Sh. Rajeev Sharma) (CA Anil K. Sood) Director ( F&A) M. NO. 086068) Sd/- (Gulshan Aggarwal) Place: Shimla

Chief Accounts Officer Date: 27.12.2016 ______________

ANNUAL REPORT 2014-15

1. Notes to Accounts The Amounts in financial statements are presented in Indian Rupees and all figures have been rounded off to the neareast rupees lakh except when otherwise stated. The financial statement for the year ended 31st March, 2015 were prepared as per the provision under scheduled III to the Companies Act, 2013. The previous year figures have also been reclassified/ regrouped/ rearranged wherever necessary to conform to this year's classification.

2.1 Share Capital (Amount in Lac)

As at 31st March, 2015 As at 31st March, 2014

No. of Shares Amount No. of Shares Amount

Authorised

Equity Shares at par value ` 100/- each 110000000

1,10,000.00 110000000 1,10,000.00

EQUITY SUBSCRIBED AND FULLY PAID UP Equity Shares at par value ` 100/- each fully paid up 52203180

52,203.18 45893180

45,893.18

Total

52,203.18 45,893.18

2.1.1 Disclosure pursuant to Note No 6 (A) (d) of Part I of Revised Schedule VI to the Companies Acts, 1956 - No of Shares at the beginning & at the end of reporting period

(Amount in Lac) Accounts Code Name of Shareholder As at 31st March, 2015 As at 31st March, 2014


54.505 Number of shares Outstanding at the beginning 45893180

45,893.18 11400

11.40

Number of shares issued during the year. 6310000

6,310.00 45881780

45,881.78

Share bought back during the year 0

- 0

-

Number of shares outstanding at the end. 52203180

52,203.18 45893180 45893.18

46

2.1.2

Disclosure pursuant to Note No 6 (A) (g) of Part I of Revised Scheduled VI to the Companies Act, 1956-Details of Shareholding more than 5% shares in the company:

Name As at 31st March, 2015 As at 31st March, 2014

No. of Equity

Shares % of Shareholding

No. of Equity Shares

% of Shareholding

1. Governor of Himachl Pradesh 52201780 100.00 45891780 99.996

The remaining shares are in the name of nominee Directors of HP Govt

Total 99.996

2.2 Reserves & Surplus (Amount in Lac)

Accounts Code


Capital Reserves / Capital Grants from Go HP & GOI

54.6, 55.3,

Opening Balance 92,251.83 92,187.83

55.5 Add: addition during the year -

64.00

Less : Utilised during the year -

-

Closing balance 92,251.83

92,251.83

Capital Reserves / Other Grants and Subsidies

56,55.1, Opening Balance 1,02,843.53

1,03,728.42

55.2,55.5 Add: addition during the year 9,021.52

6,006.32

55.901 less: Utilised/ amortized during the year

22,153.52

6,891.21

Closing balance 89,711.53

1,02,843.53

General Reserves

Opening Balance ( Leave encashment fund)

1,979.33

1,849.84

57.182 Add: addition during the year - 831.49 129.49

less : Utilised during the year -

-

Closing balance 1,147.85 1,979.33

Deficit

Opening Balance - 1,87,561.37 - 1,73,863.03

58 Add: Loss during the year as per statement of P & L A/c

- 11,351.11

- 13,698.34

Closing balance - 1,98,912.48 - 1,87,561.37

Total - 15,801.26 9,513.33

2.3 Share Application Money Pending Allotment (Amount in Lac) Accounts Code


54.506 Application money pending allotment

3,126.40

3,186.40

47

2.4 Long Term Borrowings (Amount in Lac)

Accounts Code


Term Loans

A Secured

52, 53 Banks

- -

54.2 Financial Institutions

1,06,973.17

1,09,698.29

Others

-

-

Total A

1,06,973.17

1,09,698.29

B Unsecured

Banks

8,495.72

14,500.00

Financial Institutions

93,462.15

51,980.43

Others

840.46

840.46

Loan Restructured under FRP

99,301.03

51,054.00

Total B

2,02,099.36

1,18,374.89

Total Long Term Borrowings (A+B)

3,09,072.54

2,28,073.18

2.41 Loans from Financial Institutions PFC / REC / LIC were obtained under different schemes for creation of fixed assets. The assets created with the loans are hypothecated with the REC/PFC/LIC.

Particulars As at 31st March, 2015 As at 31st March, 2014 Secured REC 70,449.76 67,405.13 PFC 18,254.40 26,776.96 PFC ( APDRP Part-A) 4,139.49 5,347.80 PFC ( APDRP Part-B) 12,187.08 10,168.40 PFC ( APDRP Part-B) CP Loan 1,942.44 - Total 1,06,973.17 1,09,698.29

Unsecured

Banks

H P State Coop. Bank, Shimla

8,495.72

14,500.00

Kangra Central Cooperative Bank

-

-

SBI new Loan under FRP

-

-

Total 8,495.72 14,500.00


REC ( RGGVY )

2,245.15

2,741.43

Non SLR Bonds

83,717.00

39,239.00

LIC

7,500.00

10,000.00

Total 93,462.15 51,980.43

48

Others

ADB Loan through H P Government

840.46

840.46 APDRP Loan through H P Government incl. Interest accrued

-

-

RGGVY Loan H P Government

-

- Total 840.46 840.46

Term Loan Restructure under FRP

51,054.00

Kangra Central Cooperative Bank 290 cro

29,000.00


30,084.00

Central Bank of India

5,000.00


9,477.00

Punjab & Sind Bank

25,740.03

99,301.03

51,054.00

2.5 Other Long Term Liabilities (Amount in Lac) Accounts code


46101-128, 47.1,

Deposits, Retention Money from Contractors and Others

9,221.67

9,359.40

57.11 Contributory Provident Fund

-

0.00 57.12 GPF 1,30,679.80 1,14,734.55

20.14 less : GPF Investments -1,07,233.62 -99,900.17 57.180-

181 Other Funds-CPS

220.64

872.50 47.501,47.7, 47.9, 47.320

Advance for Infrastructure development / Others

16,529.88

13,791.49

Total 49,418.38 38,857.76

2.6 Long Term Provisions (Amount in Lac)


Provision for losses pending investigation 0.00 0.00

2.7 Short Term Borrowings (Amount in Lac) Accounts code


Secured Loans

50.2, 50.3 Overdraft / Cash Credit limit from banks

61,635.63

73,297.11

Cash Credit limit from banks - -

Unsecured Loans

50.1 Over Draft / Cash Credit limits from banks

50,244.83

38,443.11

Short Term Loans from banks - 69,363.08

Total

1,11,880.46

1,81,103.30

49

2.71 Overdraft from banks are secured against FDR's.

Over drafts

State Bank of India

9,065.34

6,408.75

UCO Bank

3,808.77

3,395.62

State Bank of Patiala

5,156.18

5,051.58

Bank of Baroda

3,695.49

3,670.89

Kangra Central Coop Bank

16,862.71

16,794.79

H P Cooperative Bank

10,372.58

12,637.57

Indian Overseas bank

1,044.99

1,042.43

Punjab National Bank

1,868.13

12,003.77

Central bank of India

946.03

800.31

Punjab & Sind bank

3,545.30

4,282.15

Working Capital (50.3)

-

-

H.P. Co-op Bank

3,017.56

2,800.00

UCO Bank

-

2,000.00

Punjab national Bank

1,456.15

1,500.00 Central bank of India 796.41 909.26 Total 61,635.63 73,297.11

Unsecured

Cash Credit limit against Escrow cover

State Bank of India

8,966.52

9,265.70


12,000.00

9,000.00 PNB 9,862.80 -

Cenara bank

19,415.51

20,177.41 Total 50,244.83 38,443.11

Short Term Loans from Banks

Kangra Central Coop Bank - 16,000.00


-

10,000.00

M/S PFC Ltd.

-

16,363.08

P& S bank

-

27,000.00 Total - 69,363.08

2.8 Trade Payables ( Amount in Lac) Accounts code


Sundry Creditors 41 Purchase of Power 1,90,764.90 1,58,677.93

Others - - Total 1,90,764.90 1,58,677.93

50

2.9 Other Current Liabilities (Amount in Lac) Accounts code


Current Liabilities of Long Term debt Secured 17,899.32 15,296.54

52, 53 Unsecured 20,346.35 12,910.48 Interest accrued but not due on : 46.710-735 46.127-46.128 Term loans

12,290.04

9,652.16

46.714 Bonds 2,080.37 1,196.09 Other Payables: 46.71-46.719, 46.31-35

Liability for employees remuneration and benefits

4,548.51

4,566.28

46.720 Unclaimed Interest 64.00 74.00 46.920 Security deposits from employees - 17.95 - 17.99

46.922,934

Advances received from contractors / others

1,069.54

115.43

46.2, 46.3,

Amounts payable to GoHP / other departments

62,607.72

61,543.37

44.406-420, 46.910

Other payable for expenses / employee deductions

761.04

560.15

42.1, 42.3, 43.1-2 Liability for Purchases -Capital / Others

23,819.84

19,562.09

46.924,925,46.901,46.902

TDS and other Statutory Taxes payable

480.39

540.65

46.9,47.3,47.5,47.6


60,618.67

59,783.84

Total 2,06,567.86 1,85,783.10

2.10 Short Term Provisions (Amount in Lac) Accounts

code As at 31st March, 2015 As at 31st March, 2014

Unfunded Employee Benefits 44.340 Leave Salary 2,402.64 1,374.05

Others - - 44.320 Bonus 33.93 16.72

44.330 Medical expenses

493.55

438.97

48.100 Consumers Security deposite

29,283.83

26,758.60

48.3 Interest Payable on Consumer deposits

1,576.67

1,916.25 46.430, 44.110 Provision for expenses

12,122.07

10,815.43

Total

45,912.68

41,320.02

51

HIMACHAL PRADESH STATE ELECTRICITY BOARD LTD. Note No. 2.11 FIXED ASSETS AND PROVISION FOR DEPRECIATION FOR FY 2014-15 (Amount in Lacs)

GROSS BLOCK PROVISION FOR DEPRECIATION NET BLOCK

Sl.No. Asset Group Account Code

OB as on 01.04.2014

Additions during FY 2014-15

Adjustments

during FY 2014-

15

Deductions during FY 2014-15

Gorss Block At

the end of March, 2015

Opening fund as on 01.04.2014

Depreciation for the period

01.04.2014 to

31.03.2015

Adjustments or

deductions 2014-15

At the end of March

2015.

At the end of March

2015.

At the end of March

2014.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 1. Land & Land Rights 10.101 7891.53 97.22 0.00 0.00 7988.74 0.00 0.00 0.00 0.00 7988.74 7891.53 2. Land held under lease 10.102 &103 590.01 0.00 17.95 0.00 572.06 96.70 1.62 0.00 98.33 473.73 527.82 3. Buildings 10.2 23099.99 376.52 0.00 0.00 23476.51 8672.12 1785.79 0.00 10457.91 13018.60 14427.87 4. Hydraulic Works 10.3 113045.66 1375.21 2037.52 0.00 112383.36 40994.40 5940.22 0.00 46934.63 65448.73 72051.26 5. Other Civil Works 10.4 53924.69 506.61 0.00 0.00 54431.30 10284.44 1733.40 0.00 12017.84 42413.47 43640.26 6. Plant & Machinery 10.5 223083.03 15580.96 0.00 0.00 238663.99 47545.80 10766.12 0.00 58311.92 180352.07 174896.70 7. Lines & Cable Net 10.6 222776.98 18689.63 0.00 0.00 241466.62 41545.61 7527.42 0.00 49073.03 192393.59 181231.37 8. Vehicles 10.7 1552.92 103.83 0.00 0.00 1656.75 1286.04 82.99 0.00 1369.03 287.71 266.88 9. Furniture & Fixtures 10.8 1063.70 21.52 0.00 0.00 1085.22 672.58 64.78 0.00 737.36 347.86 391.12 10. Office Equipments 10.9 5678.36 4869.93 0.00 0.00 10548.29 777.21 339.81 0.00 1117.03 9431.27 4901.14 11. Date Processing Euipments 10.95 318.48 0.00 0.00 0.00 318.48 0.00 524.96 0.00 524.96 -206.48 318.48

10(s) 841.79 0.00 0.00 0.00 841.79 0.00 0.00 0.00 0.00 841.79 1447.81 Sub-Total 653867.15 41621.44 2055.47 0.00 693433.12 151874.91 28767.13 0.00 180642.04 512791.08 501992.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10. Capital expenditure resulting in an assets not belonging to the Board.

11.101 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

11. 11.102 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Assets Transfer I/Ward 13.4 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Grand Total 653867.15 41621.44 2055.47 0.00 693433.12 151874.91 28767.13 0.00 180642.04 512791.08 501992.25

Gross Block does not include value of small and low value assets each costing below Rs. 500/- charged to revenue accounts in the year in which they are first put to use.

Value of such assets charges to revenue accounts during the year 2014-15 Rs. Nil

52


Note No. 2.12 INTANGIBLE ASSETS AND PROVISION FOR DEPRECIATION FOR FY 2014-15. (Amount in Lac)

GROSS BLOCK

PROVISION FOR DEPRECIATION

NET BLOCK

Sl.No.

Asset Group Account Code

OB as on 01.04.2014


Adjustments during FY 2014-

15

Deductions during FY 2014-

15

Gorss Block At the end of

March, 2015


Depreciation for the period

01.04.2014 to

31.03.2015

Adjustments or

deductions 2014-15

At the end of March

2015.

At the end of March

2015.

At the end of March 2014.

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Intangible Assets 18.301 2243.70 0.00 0.00 0.00 2243.70 191.74 448.74 0.00 640.48 1603.23 2051.97

Total 2243.70 0.00 0.00 0.00 2243.70 191.74 448.74 0.00 640.48 1603.23 2051.97

Note No. 2.13 Capital Work-in-Progress (C.W.I.P.) Sr. No. Particulars Accounts

Code As at 1st

April, 2014 Additions during the

year 2014-15 Transfers/ Adjustment Total Capitalised during

the year 2014-15 As at 31st March,2015

1 Land & Land Rights 14.1 2064.35 223.02 0.00 2287.37 360.76 1926.61 2 Building& civil structure 14.2 2249.15 4273.33 0.00 6522.48 994.79 5527.69

3 Hydraulic Works 14.3 2220.38 664.88 0.00 2885.26 241.85 2643.40

4 Other Civil Works 14.4 30822.02 2411.06 0.00 33233.07 600.18 32632.90

5 Plant & Machinery-T&D 14.5 7803.60 13074.86 0.00 20878.46 14151.39 6727.07

6 Lines & Cable Network etc. 14.6 50848.80 24539.40 0.00 75388.20 27296.46 48091.75

7 Vehicles 14.7 494.35 74.66 0.00 569.01 28.41 540.60

8 Furniture & Fixtures 14.8 10.41 149.82 0.00 160.23 5.50 154.74

9 Office Equipments 14.9 4.70 0.00 0.00 4.70 0.00 4.70 14s -9617.34 0.00 0.00 -9617.34 0.00 -9617.34 Sub-Total 86900.42 45411.04 0.00 132311.45 43679.33 88632.12

Other Assets at construction stage 0.00 0.00 0.00 0.00 0.00 0.00 1 Contract- in Progress 15.1 401.65 0.00 0.00 401.65 356.96 44.70

15 s 182.93 0.00 0.00 182.93 0.00 182.93

2 Revenue Expense Reclassified Pending Allocation over capital works 15.2 11981.37 5352.20 0.00 17333.58 12415.44 4918.14

Sub Total 12565.96 5352.20 0.00 17918.16 12772.40 5145.77

Total:- 99466.37 50763.24 0.00 150229.62 56451.73 93777.90

Previous Year 99372.57 66357.53 0.00 165730.10 66263.72 99466.38

53

2.14 Non Current Investments (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

Investments in Shares in : 20.310 Subsidiary (BVPCL)-

30000000 equity shares of ` 100/- each

30,000.00

30,000.00

20.340 Others ( HPPCL) 1307751

equity shares of ` 1000/- each 13,077.51

11,306.89

Investments in BBMB for upgradatuibs/Modernation of Bhakara Dam/P/H Right Bank in H.P.

755.20

755.20

Investments in BBMB for Renovations/Modernation of Bhakara Dam/P/H Less/Diminations Balance Investment in BBMB

566.22

1321.42 -

205,64

960.84 -

Total

43,077.51

41,306.89

2.15 Long Term Loans & Advances (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

Capital Advances

Secured

-

-

25 Unsecured - Considered Good

1,766.17

2,630.29

20.330 Loan to subsidary BVPCL-Considered Good

16,229.38

8,151.44

Loans & Advances to Employees

27.1 Secured

294.88

342.63

Unsecured - Considered Good

-

-

Loans & Advances Others

28.860-861 Unsecured - Considered Good

190.54

182.87

Interest Accrued but not due on

Staff loans & advances

-

-

28.304,330, 220 Others

96.27

96.27

Total

18,577.25

11,403.50 2.16 Other Non Current Assets (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

16 Assets not in use

2,813.12

960.01

17 Deferred Miscellenous expenses

11,553.03

11,620.29

23.5 Trade receivables-defaulters

1,293.75

613.35

22.7, 22.8 Inventories-Scrap/other materials/excess/shortages

532.23

415.28

54

Interest Accrued & due on


-

-

28.290 Others

0.43

0.44


28.2, 28.3 Staff loans & advances

491.18

546.91

28.390 Others

87.34

87.34

Total

16,771.08

14,243.62

2.17 Current Investments (Amount in Lac)

Accounts code


20.112, 113 Leave Encashment and CPS fund Investment

1,147.85

1,051.06

2.18 Inventories (Amount in Lac)

Accounts code


22.6 Materials Stock

7,122.70

7,696.53

Less : Provision for Shortage and Obsolescence

-

-

Total 7,122.71 7,696.53

2.19 Trade Receivables (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

23.1, 23.6, 23.7, 23.8 Outstandings for sale of power

83,537.99

56,263.23

23.4 Others (un billed Revenue )

21,619.65

24,252.28

23.9 Less: Provision for doubtful debts -561.52

-553.72

Total 1,04,596.13 79,961.79

Out of above

Trade receivables outstanding for period exceeding six months from the date they were due for payment

Unsecured considered good

69,654.43

44,654.43

Unbilled amount considered good

21,619.65

24,252.28

Other Trade Receivable

Unsecured considered good 13,322.05 11,055.08

Total 1,04,596.13 79,961.79 2.19.1 In the opinion of Company, trade receivable are the value as stated in the accounts, if realised in the ordinary course of Business.

55

2.20 Cash and Bank Balances (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

24.110 Cash and Cash equivalents

0.08

0.08

24.120 Postage stamps in Hand

1.78

1.74

24.2 Imprest with Staff

0.64

0.59

24.3,24.4,24.5 Balances with Banks

13,965.86

10,780.16

20.290, 296 (s) FDR's > 3M

578.32

2,776.32

Total

14,546.68

13,558.89 2.21 Short Term Loans & Advances

(Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

Advances to Contractors and Suppliers

26 Secured Considered Good

5,829.84

2,807.51

Less : Provision for doubtful advances

-

-

Others

27.1, 27.2, 9 Advance recoverable from employees

81.52

66.36

28.820 Prepaid expenses

15.61

106.72

27.4 Advance tax and tax deducted at source

3,158.94

2,033.41

28.7, 28.8 Amount recoverable- Government departments

4,099.76

3,675.27

28.761,773 Amt recoverable- Related parties

9,532.82

10,694.84

287, 28.8 Amount recoverable others

5,722.84

4,403.23

Deposits

14,190.68

14,190.65

28.4 Amount recoverable from employees

162.57

174.25

Interest accrued but not due from

28.365 Employees 1.15 1.15

28.310 Others 3,657.53 3,839.72 Total 46,453.26 41,993.11

2.21.1 Detail of Advance Income Tax/ Tax deducted at source (Amount in Lakh)

Financial year Particulars Amount of Tax deposited

Provision of Tax

Refund received Net Balance

2010-11 TDS 1.02 - - 1.02

2011-12 TDS

1,130.48

-

643.26 487.21

2012-13 TDS

921.42

- 921.42

2013-14 TDS

1,060.90

-

804.76 256.14

2014-15 TDS

1,493.15

-

- 1493.15

Total upto 31.3.2015

4,606.97

-

1,448.02 3158.94

56

2.21.2 (i) In the opinion of Company, receivable are the value as stated in the accounts, if realeised in the ordinary course of Business. (ii)The Company has not surrender the PAN No of erstwhile Board and some TDS are being deposited in this account by the deductors and the same has been calimed/ included in Company Returned

2.22 Other Current Assets ( Amount in Lac)

Accounts code


28.1 Receivables from scrap sale / miscellenous.

- 4.53

447.28

23.2 Electricity duty recoverable from consumers

1,254.86

1,134.97

28.620-626 Grant /Subsidies receivable GoHP

55,005.29

50,721.73

30-39 Inter unit transactions

36,424.85

25,378.21

Total

92,680.47

77,682.18 Note 2.23 Revenue from Operations

( Amount in Lacs) Particulars Account Code Year ended 31st

March, 2015 Year ended 31st

March, 2014

Total Inter State Sale of Power PSEB 61.101 0.00 0.00 UPSEB 61.103 0.00 0.00 Sangroli (NTPC) 61.110 0.00 0.00 Uttranchal Jal Vidyut Nigam Ltd. 61.113 0.00 0.00 Power Trading Corp. of India 61.114 2541.53 0.00

Through Banking-BRPL/BYPL 61.119 21459.38 19227.02 Through Banking-Haryana Power Corp. Ltd. 61.120 17318.40 15375.49 Through Banking-P.S.E.B 61.121 30885.84 20398.52 Consumers Deviation of Malana. 61.123 81.87 0.00 Reactive Engergy from various CPU's/SEBs 61.124 404.68 480.87 UI Charges /Sale of Power NREB Through PGCIL. 61.130 1176.22 3466.63 M/S Indian Energy Exchange & Power exc. Of India 61.148 20946.71 13514.84 UPPCL Bkg 7637.00 9494.96 Sale of Power UPPCL& other through MPPCL 61.149 20703.59 0.00 Chitassgarh 61.150 1055.25 0.00 Sub-Total(A) 124210.46 81958.33

REVENUE FROM SALE OF POWER OTHER CONSUMERS

Domestic 61.201 to 209 76619.34 70387.23 Commercial 61.211 to 219 26823.27 25647.52 Small Power 61.221 to 229 &

377 3473.88 3186.04

Medium Power 61.231 to 240 &

378 8897.83 9500.16

Large supply 61.241 to 250 &

379 238965.18 243483.15 Agriculture/Irrigation 61.251 to 259 2937.74 2524.47 Public Lighting 61.261 to 269 744.04 563.61 Bulk and Grid supply 61.271 to 290 10040.95 10402.09

57

Revenue from Sale of Power Non Domestic/Non commercial 61.301 to 309 8378.81 7216.60

Other (Water Works and sewerage) 61.350 to 357 & 376 33722.27 31017.67

Temporary Metered Supply 61.373 to 375 1460.94 1629.30 Total (B) 412064.24 4,05,557.84 Total Revenue (A+B) 5,36,274.70 4,87,516.17 Electricity Duty recovery 61.501 to 514 33937.19 37603.74 Meter Rent/Service Line Rentals 61.6 4402.86 4551.69 Recoveries for theft of power and Mal practice. 61.711 to 61.729 5.41 5.22 Peak Load vialotion charges 61.741 to 61.744 3549.47 41.71 Sub- Total 41894.93 42,202.36 Wheeling charges recoveries 61.8 13666.90 11978.76 Misc. Charges from consumers 61.9 534.87 996.31 Electricity consumption tax levied by MCs/NACS 61.941 to 953 376.04 362.99 Sub- Total 14577.80 13,338.06 GROSS REVENUE FROM SALE OF POWER 592747.43 543057.13 Less: Electy. Duty Payable (Contra) 61.541 to 553 33937.19 37603.74 Electricity consumption tax (Contra) 61.961 to 973 376.04 362.99 Sub- Total 34313.23 37,966.73 Total 5,58,434.20 5,05,090.40

Note 2.24 Other Income ( Amount in Lacs)

Particulars Account Code Year ended 31st March, 2015

Year ended 31st March, 2014

Interest on staff loans and advances. 62.210 to 219 32.18 53.76 Income from investments 62.220 to 240 9.03 420.17 Delayed payment charges from consumers. 62.250 7361.10 5421.58 Interest on advances to suppliers / contractors. 62.260 71.01 136.93 Income from Trading. 62.3 107.70 264.05 Other Misc receipt from trading 62.4 0.00 0.00 Income from staff Welfare activities. 62.6 13.62 7.76 Miscellaneous receipts. 62.9 4070.25 3115.85 Total 11664.89 9420.10 Revenue grant and subsidies 63.121 0.00 0.00 Amortization of Govt. grants and consumers contributions 63.140 5317.50 2621.18 Prior Period income Receipt from consumers relating to prior period 65.2 66.06 31.47 Interest income for prior period 65.4 401.58 0.00 Excess prov. for income tax p/year 65.5 0.00 0.51 Excess prov of depriciation in prior period 65.6 20139.17 0.00 Excess prov. of Intt & Finance charges 65.7 28.58 (265.09) Other excess prov in prior period 65.8 37.45 493.07

Other income relating to prior period 65.9 586.46 4991.22

Total Prior Period income 65 21259.30 5251.21

Total 38,241.68 17,292.49

58

2.25 Purchase of Power

Particulars Account Code



PSEB 70.101 0.00 0.00

HVPNL 70.102 36.63 0.00

U.P.P.C.L (through Banking ) 70.103 0.00 0.00

B.B.M.B 70.106 2511.16 1891.63

NTPC 70.11O 46329.43 41385.01

NPCC 70.112 2362.35 2349.96

Power Grid Corp. of Inda 70.114 33585.76 0.00

POP from Rajaystan atomic Power Project of NPCIL 70.119 3494.11 5430.69

Malana HEP 70.120 9.69 62.39

Uttranchal Power Corp. Ltd. 70.121 69.45 9389.63

7637.00 0.00

Uttranchal Jal Vidyut Nigam Ltd. 70.122 3961.16 3362.99

NHPC 70.123 10206.51 9289.85

Reactive Energy from various CPUs/SEB 70.124 0.00 353.84

Purchase of Power through banking-BRPL/BYPL 70.125 21459.38 23838.06 Purchase of Power through banking-Haryana Power Gen Corporation Ltd.

70.126 0.00 12747.49

Purchase of Power through banking-P.S.E.B. 70.127 35815.93 19925.50

Purchase of Power U.P.J.V.N.L. 70.129 3891.00 210.38

NREB Through PGCIL. 70.130 11731.38 3749.47

POP- Aravali power Co. 70.132 1414.00 1995.28

70.1 184514.94 135982.16

Wheeling chares 70.4 0.00 0.00

Wheeling charges -UPPCL Charges 70.401 0.00 0.00

Wheeling charges -PSPCL Charges 70.403 0.00 0.00

Kotlu HEP 70.801 98.78 0.00

Balij Ka nallah HEP 70.802 409.00 0.00

Tulang HEP 70.803 187.15 0.00

Kalm 70.804 87.69 0.00

Aello-II 70.805 107.18 0.00

Nanti 70.806 474.12 0.00

Kurtha 70.807 55.54 0.00

Jogni-II 70.811 181.37 0.00

Ubharah 70.812 46.92 0.00

Raskat HEP 70.816 96.24 94.93

Titang Mini HEP. 70.817 231.06 28.12

59

POP form Baspa-II HEP through Jai Prakash Ltd. 70.818 31976.96 32101.36

Satluj Jal Vidyut Nigam Ltd. 70.819 58522.82 15520.37

Manjhi HEP M/S Dharamshala Hydro Power Ltd. 70.820 348.73 288.65

Deher HEP M/S Astha Project India 70.821 1009.98 645.61

Baragaon HEP M/S K.K.K. Hydro Power Ltd.Faridabad 70.822 669.18 657.93

Ching HEP M/S Hateshwari Om Power Enterprises Ltd. 70.823 64.56 94.76

POP Aleo Hydro Project 70.824 359.61 348.15

POP Manal Hydro Project 70.825 440.92 575.55

POP from Power Trading Corp. of India Ltd. 70.826 22105.18 43843.32

POP Manjhal HEP M/S Virender Dogra Power Project. 70.827 121.16 99.88

POP- Salag HEP M/S Dhaluladar Hydro System Pvt. Ltd. 70.828 14.16 14.75

POP- Tehri Hydro Power Project. 70.829 6731.61 5195.84

POP- Jiwa Kothkhai HEP 70.830 159.07 141.40

POP- Marhi Mini hydro project 70.832 752.80 754.76

POP-Taraila HEP 70.833 33.39 595.17

POP- Kothi HEP 70.834 14.44 17.69

POP-JHTHED HEP 70.835 0.88 1.28

POP-Patikari HEP 70.836 1414.22 1459.58

POP-Salag HEP ( M/S -A-Himalya Ltd.) 70.837 110.22 0.00

POP- Braham ganga M/S Harison Hydel Construction (P) Ltd. 70.838 658.46 595.55

POP- Gharola HEP( Him Urja) 70.839 3.23 5.91

POP-Sahu HEP M/S. Him kailash Hydro Power Ltd. 70.840 473.19 521.97

POP- Sarabai HEP ( M/S DSL Hydrowati Ltd.) 70.842 761.74 705.64

POP- Awa HEP ( M/s Astha Project India Ltd.) 70.843 700.95 889.81

POP-Lingti HEP ( Him Unja) 70.844 0.00 0.00

POP- Sural HEP 70.845 8.03 7.27

IEX 70.846 502.81 0.00

POP_IKU-II HEP 70.848 602.87 548.89

POP- M/S Toss HEP 70.849 863.83 1000.64

POP- M/S Shyang HEP 70.850 36.61 245.85

POP- M/S Tarailla-II HEP 70.851 940.48 847.25

POP-M/S Luni-111 70.852 642.76 632.69

POP-M/S-Andhra Stage-11 70.853 513.28 573.58

POP-M/S-Changer Vidyut Karanti PVTLtd. 70.854 125.29 105.55

POP-M/S-A.T.Hydro Pvt-Ltd.(Upper Tarila) 70.855 783.31 691.82

POP-M/S -Sri Sai Krishna Hydro Eng.Pvt.Ltd. 70.856 779.84 682.25

POP-M/S-Vamshi Hydro Eng.Pvt.Ltd against Baner 111 HEP 70.857 503.68 407.26

POP- Manglar HEP 70.858 770.50 846.05

60

POP-Dirni Dhar HEP 70.859 864.65 685.09

POP- Sainj HEP 75.860 492.13 577.62

POP-Purthi HEP 70.861 4.85 4.75

POP-DSL Hydro HEP 70.862 876.39 834.35

POP-Gurcharan HEP 70.864 142.20 137.56

POP-Dharamshalla HEP 70.865 416.14 251.18

POP-Sach HEP 70.866 59.10 55.55

POP-Tanging HEP 70.867 422.56 345.62

POP-Polar-Ist HEP 70.868 214.59 266.94

POP-Bharhi HEP 70.869 557.89 509.67

POP-Gaj-IIrd HEP 70.870 146.31 232.47

POP-Jirah HEP 70.871 344.70 380.15

POP-Upper Khauli HEP 70.872 670.68 630.31

POP-Rikchad HEP 70.873 896.40 552.62

POP-Chirchand HEP 70.874 858.37 775.65

POP Koteshwar HEP 70.875 654.05 1439.25

POP-TimbiHEP 70.876 73.49 130.09

POP from Binwa parari HEP 70.877 705.44 661.36

POP from Dehar _II HEP 70.878 257.40 239.32

POP from Torela Power Ltd. 70.879 859.22 840.29

POP from Jaina HEP 70.880 698.31 701.93

POP from TATa Power Trading Company 70.881 0.00 0.00

POP from Knowledge Infrastructure system 70.882 0.00 0.00

POP from Rukti-II 70.883 638.72 633.45

POP from Sach HEP 70.884 449.67 481.53

POP from Sumer 70.885 834.48 786.60

POP from Chakshi HEP 70.886 209.93 255.02

POP from Beas Kund HEP 70.887 595.62 461.87

POP from Bely HEP 70.888 869.01 677.93

POP from Balso HEP 70.889 633.97 606.16

POP from Suman Suwari HEP 70.890 665.69 545.60

Purchase of power from M/sJala Shakti Ltd. Dunali. 70.891 616.64 406.31

Purchase of power from M/s Om power Corp. Ltd. HEP 70.892 603.58 494.39

Purchase of power from M/s Ascent Hydro Project. 70.893 421.41 338.23

POP from NSL Power Genration (P) Ltd. Rohru. 70.894 297.55 384.27

POP from M/s Mani MaheshHydro Project. 70.895 335.91 243.27

POP from M/s Bhavani Renewable Energy Pvt. Ltd. 70.896 426.01 249.21

POP from M/s hamal Hydel Pvt. Ltd. 70.897 226.30 0.00

61

POP from M/s Gangdori HEP 70.898 1072.79 0.00

POP from M/s Kurmi HEP Energy Pvt. Ltd. 70.899 225.06 0.00

Total:- 70.8 155832.98 128602.68

POP- Different utilities on a day ahead availibility 70.901 0.00 1700.00

Sub-Total 0.00 1700.00

O & M charges payable 70.5 0.00 0.00

HPPC 70.601 20917.48 0.00

BRPL/BYPL 70.601 574.68 0.00

NRLDC 70.601 7492.82 26318.50

MPPL 70.601 712.95 0.00

HMM 70.601 45.86 5217.04

HPPTCL 70.603 344.77 1192.00

Total:- 70.6 30088.57 32727.54 Expenses related to ULDC Scheme in the north reasons under unified scheme.

70.731 0.00 112.34

System/ Marketing operation charges Power System (op) Ltd. 70.733 262.64 148.01

Sub-Total 60439.78 65715.43

Total 370699.13 299272.73 Note 2.26 Employee Benefits Expenses ( Amount in Lac)

Employee Benefits Expenses Account Code


Year ended31st March, 2014

Dearness Pay 75.0 7.03 34.42 Grade Pay (Regular) 75.008 6411.42 6600.17 Grade Pay (work charged) 75.009 80.10 70.77 Salary 75.1 31686.13 32411.09 Overtime. 75.2 495.07 502.68 Dearness Allowance. 75.3 39615.18 32675.62 Other Allowances. 75.4 3303.84 3424.91 Bonus. 75.5 27.39 26.60 Sub-Total 81626.17 75746.25 Fee & Honorarium. 75.61O 2.32 6.99 Medical Expenses reimbursement. 75.611 982.01 998.08 Leave Travel Assistenance. 75.612 30.19 12.57

Salary/ wages of outsourced /contractor 75.613 874.13 526.42

Earned Leave Encashment. 75.617 4249.98 7426.42

Payment under Workmen's Compensation Act. 75.629 179.56 132.94

Leave Salary contributions.(Employees on Deputation) 75.633 0.00 0.00 Leave encashment Fund 75.635 0.00 0.00

Sub-Total 6318.19 9103.42

Staff welfare expenses. 75.7 71.03 70.59 Terminal Benefits. 75.8 47931.22 45377.15 Sub-Total 48002.25 45447.74 Total 135946.60 130297.41

Less: Expenses Capitalised 75.9 5352.53 4752.29

Net Employees Cost 130594.07 125545.12

62

2.27 Finance Cost

( Amount in Lac) Particulars Account Code Year ended 31st March, 2015 Year ended 31st March, 2014

Interest on State Government Loans. 78.1 0.00 0.00

Interest on Bonds 78.2. 0.00 0.00

Sub-Total 0.00 0.00

Interest on loans from LIC 78.501 932.33 1190.98

Interest on loans from REC 78.502 9810.43 9188.32

and other loans etc. 78.504 to 509

Interest on stock other loan 78.510 5205.04 8975.80

Interest on PFC Loan 78.511 5099.94 8313.39

Interest on stock PNB loan 78.512 0.00 0.00

Interest on stock canara Bank loan 78.513 0.00 0.00

Interest on stock Punjab & Sind Bank Loan

78.514 2870.25 3373.16

Interst on SIDBI 78.515 0.00 0.00

Interest on Private Bonds 78.516 3353.17 2747.27

Interest on UCO Bank Loan 78.517 0.00 0.00

Interest on loans from Bank of Maharashtra

78.522 0.00 0.00

Interest on loans from ADB against clean energy.

78.524 2430.78 914.06

Interest on loans from State Bank of India. 78.525 75.64 13.49

Interest on loans from RAPDRP Part-B PFC 78.526 0.00 0.00

Interst on loan from Vijay Bank 78.527 0.00 276.74

Interst on loan from Central Bank of India 78.529 966.79 1150.35

Sub-Total 78.5 30744.35 36143.56

Penal interest 0.00

Interest to consumers (securities) 78.601 1688.94 1684.05

Sub-Total 1688.94 1684.05

Total interest on capital liabilities 32433.30 37827.61

Interest on borrowing For working

capital. 78.7 12646.70 13072.12

Sub-Total 12646.70 13072.12

Rebate allowed for timely payment to Inter-state SOP Bulk Supply under

bilateral agreement

78.831 & 833 365.50 0.00

Sub-Total 78.82 & 78.831 365.50 0.00

Other interest and finance charges

Interest on GPF 78.852 1350.95 4162.29

Interest on Contributory Pension Fund. 78.854 20.44 76.28

63

Cost of raising finance. 78.861 to 869 123.21 675.72

Discount/ redumption premium on Bound

78.878 0.01 0.00

Surcharge on delayed payment of POP 78.880 11188.61 10784.63

Bank commission for collection from consumers

78.882 8.64 0.00

Other Bank charges 78.883 17.81 0.00

Margin money paid for SOP through trader

78.897 11.99 0.00

Sub-Total 12721.67 15698.92

Total 58167.16 66598.65

Less: Interest capitalised 78.9 4615.03 11981.38

Total 53552.13 54617.27

Note 2.28 Depreciation Amortization Expenses

( Amount in Lac) Particulars Account Code Year ended 31st

March, 2015 Year ended 31st

March, 2014

Depreciation. 77.1&77.2 30532.89 30721.94

Sub-Total 30532.89 30721.94

Amortisation of lease hold assets 77.110 1.62 3.85

WDV of assets scrapped- Land & Land rights 77.711 0.00 0.00 WDVof assets scrapped- Buildings 77.712 0.00 0.00 WDV of assets scrapped -Other Civil Works 77.714 0.00 0.00 Written down value of assets scrapped-Plant & Mechinery 77.715 0.00 0.13 Written down value of assets scrapped-Vechile 77.717 0.13 1.73 Write off of deficits of fixed assets absorbed on physical verification –vehicles

77.727 0.00 0.00

Loss on sale on fixed assets ie. Plant Machniery 77.736 0.00 0.00 Loss on sale on fixed assets ie. Vechile 77.737 0.00 0.00 Sub-Total 1.75 5.71 Less: Amount capitalised 77.9 2.40 1.22 Sub-Total 2.40 1.22

Total 30532.24 30726.43

2.29 Other Expenses ( Amount in Lac)

Particulars Account Code Year ended 31st March,

2015


Repair & Manitenance

Plant & Machinery. 74.1 1310.24 1248.90

Buildings. 74.2 354.76 361.35

Civil Works. 74.3 367.92 553.50

Hydraulic Works. 74.4 250.05 242.66

Lines cables,Net works etc. 74.5 4850.65 4379.73

Vehicles. 74.6 2358.29 2080.85

Furniture & Fixtures. 74.7 6.24 17.95

Office Equipments. 74.8 359.00 200.63

64

Others i.e. cost of vehicle other than vehicle/ 74.9 (288.67) (225.72)

Re-allocated to capital works

Total cost ( including employee costs.) 9568.48 8859.83

Less:- Employee costs and Admn. & Gen. Expenses 229.44 1287.92

Less:- Other costs reallocated such as Depreication 3791.53 2586.12

Recovery of cost of vehicle from O&M and other Units. 0.00 0.00

Sub-Total 4020.97 3874.04

Total ( Net Repair and Maintenance ) 5547.50 4985.79

Administration and General expenses

Rent 76.101 185.00 92.58

Rates & Taxes. 76.102 12.27 42.20

Total 197.27 134.78

Insurance 76.104 to 107 1.44 2.32

Telephone charges,postage,telegrams & telex charges. 76.111 to 113 267.59 268.53

Legal charges. 76.121 109.63 67.44

Audit fee 76.122 60.17 27.25

Consultancy charges. 76.123 57.24 124.58

Technical fees. 76.124 5.08 4.11

Other professional Charges 76.125 57.62 389.08

Income Tax Uploading Charges. 76.126 7.95 5.87

Statutory Audit fee 76.127 1.69 1.71

Charges on a\c of service rendered by central board keeping agency under new pension scheme

76.128 6.05 6.32

Internal Audit Fee. 76.129 0.01 0.30

Conveyance & Travel expenses 76.131 to 139 & 76.141.

1826.05 1744.48

Expenditure on foreign travel. 76.14O 0.00 0.00

TA/ Das to Statutory Auditor 76.143 8.52 7.79

TA / DA to Internal Auditors 76.144 7.14 0.00

Sub-Total 2416.18 2649.76

Other expenses:-

Fee & Subscription. 76.151 156.72 19.00

Books & Periodicals 76.152 11.15 8.54

Printing & Stationary. 76.153 247.69 181.85

Exp. Under Right to Information Act- Paper & Processing fee. 76.154 0.15 0.00

Advertisement expenses. 76.155 68.39 43.01

Public Interaction Programme Expenses 76.156 15.84 20.04

Contribution/Donations. 76.157 0.00 10.00

Electricity charges. 76.158 378.86 380.40

65

Cold weather expenses/water charges. 76.159 & 160 32.18 32.09

Expenditure on Gift/Presentation. 76.161 0.06 0.00

Entertainment. 76.162 5.62 6.10

Incentives to informer regarding theft of energy etc. 76.163 0.01 0.00

Expenditure on display of Models. 76.164 0.00 0.08

Expenditure on training to staff within the state. 76.165 2.51 7.56

Expenditure on training to staff outside the state. 76.166 1.64 6.79

Petition fee payment to HPERC 76.167 93.28 97.96

& Consumer grievances redressal forum 76.168 44.90 66.42

Licence fee for Distribution & Trans payable to HPERC 76.169 25.00 25.00

Fees for SAS Examination 76.170 2.24 2.63

Exp. On promotion of energy effeiciency 76.171 0.00 0.00

Exp. On Geographically information system/Global Position System (GIS/GPS) 76.173 35.87 63.02

Transction charges to SCAs for collection of energy bills 76.174 70.94 41.95

Compensation paid for non compliance of Renewale Power purchase obligations compensation fund 76.175 500.00 0.00

Exp. On providing cost free CFL bulb to domestic Consumers

76.183 0.00 (0.02)

Exp. Incurred on capacity building for Poverty Reduction Projects CBPRS for sponser HPSEB personnel to attend training programme.

76.185 1.64 0.53

Misc Expenses 76.190 74.34 39.05

Publicity expenses 76.191 3.73 1.85

Sub-Total 1772.75 1053.86

Freight. 76.210 to 220 8.67 5.61

Other purchase related expenses. 76.230 to 299 262.22 238.91

Sub-Total 270.89 244.52

Total 4657.09 4082.93

Less : Expenses Capitalised 76.9 140.73 159.21

Net Expenditure 4516.36 3923.72

Short provision for power purchase previous year 83.1 0.00 10746.94

Operating expense of previous year 83.3 77.61 43.38

Employee cost relating to previous year 83.5 441.76 1098.40

Deprication under provided in previous year 83.6 3660.46 2465.00

Interest and other finance charges relating previous year 83.7 7302.15 2721.80

Other charges relating to previous year 83.8 352.46 1321.58

Total Prior Period Expenses 83 11834.44 18397.10

Other Debits

Cost Variance 79.1 0.00 0.00

Bad & Doubtful debts written off / provided for. 79.4 7.80 6.12

66

Miscellaneous Losses & write offs. 79.5 146.10 86.95

79.7 0.16 0.00

Total 22052.36 27399.68

Note 2.30 Exceptional and Extraordinary items ( Amount in Lac)




Extra -Ordinary credits(including subsidies against loss on account of flood, cyclone, fire etc.

63.2 700.00 1,480

Total 700.00 1,480

Extra-Ordinary debits (including subsidies against 79.8 1297.06 0.00

loss on account of flood, cyclone, fire etc.)

Total 1297.06 0.00

Extraordinary items(Net) 597.06 (1480.00) Note 2.31

Earning Per Share (EPS) ( Amount in Lac)

Particulars Year ended 31st March,

2015


I Net Profit as per Profit and Loss A/c available for equity Shareholder ( in Rupees) (10,754) (15178.34)

II Weighted average number of equity shares for Earning Per Share Computation:

(A) For Basic Earning Per Share of Rs. 100/- each ( in Nos) 477.42 344.23

(B) For Diluted Earning Per Share of Rs. 100/- each No of Shares of Basic EPS as per II (A) ( in Nos)

477.42 344.23

Add: Weighted Average outstanding Shares related to Share Application Money ( in Nos)

18.54 111.87

Nos of Shares for Diluted Earning Per Share of Rs. 100- each ( in Nos) 495.96 456.10

III. Earning Per Share (Face Value of Rs. 100/- Each)

BASIC (in Rupees) (22.53) (44.09)

DILUTED (in Rupees) -21.68 -33.28

67

Note 2.32

Himachal Pradesh State Electricity Board Limited

Segregated Balance Sheet as at 31st March 2015

Sr. Particulars

No. Particulars

I Equity and Liabilities Distribution Transmission Generation Total

Share Holders' Funds Share Capital 52203.18 0 0 52203.18

Reserves & Surplus -27817.09 8575.36 3440.48 -15801.25

Share Application Money Pending Allotment 3126.40 0 0 3126.40

Non Current Liabilities Long Term Borrowings 282198.14 0 26874.39 309072.53

Other Long Term Liabilities 61635.42 11652.93 5413.86 78702.21

Long Term Provisions 0 0 0 0

Current Liabilities Short Term Borrowings 111880.46 0 0 111880.46

Trade Payables 190764.90 0 0 190764.90

Other Current Liabilities 202049.79 2118.7 2399.36 206567.85

Short Term Provisions 11581.35 3143.01 1904.5 16628.86

Total 887622.55 25490.00 40032.59 953145.14

II Assets 0 0

Non Current assets 0 0

Fixed Assets Tangible Assets 214901.77 106826.13 191063.19 512791.09

Capital Works in progress 60501.32 18127.90 15148.66 93777.88

Intangible Assets Work in Progress 1603.23 0 0.00 1603.23

Non Current Investments 43077.51 0 0.00 43077.51

Long Term Loans and Advances 17845.51 653.02 78.72 18577.25

Other Non Current Assets 7392.42 139.39 9239.27 16771.08

68

Current Assets Current Investments

1147.85 0 0.00 1147.85

Inventories 6083.83 616.32 422.56 7122.71

Trade Receivables 103456.01 1140.11 0.00 104596.12

Cash & Cash equivalents 14516.49 29.96 0.23 14546.68

Short Term Loans and advances 37178.39 6893.68 2381.19 46453.26

Other Current Assets 379918.22 -108936.51 -178301.23 92680.48

Total 887622.55 25490.00 40032.59 953145.14

Note-2.32.1

The Segregated Accounts have been prepared pursuant to the requirement laid down under Accounting Standard 17, the segment wise profitability and financial position of the Company as on 31st March, 2015 is Given in Note 2.32 (a).

(a) The Company,s principal business is DISCOM/ Distribution of power in the State .

(b) Revenue directely attributed to the segment is considred as segment revenue and common income allocated on the basis HPERC Tariff regulation. and reasonable basis as segment income The cost of own generation is fixed 186 paisa per unit and net own generation is 1981.765 Kwh during this year. the Transmission segment income on wheeling charges is considred @ Rs. 46 paisa determine by the HPERC for wheeling EHT on energy sold with in state.

( C ) Expense directly attributed to the segments and common expense allocated on the reasonable basis are considred as segment expenses.

(d) The Company adjustment assets and liabilites transferred from erstwhile are under reconcilation and entire gap has been allocated in Distribution segments

(e) The Company is maintaining loan and working loan, Depreciation , share capital, investment in head office level and entire amount has been allocated to Distribution function and further cahnges in this regards shall be done in due courses.

69

Himachal Pradesh State Electricity Board Limited Segregated Profit and Loss Statement for the year 31st March 2015 Note 2.32 (a) Sr. Particulars 2014-15 2014-15 2014-15 2014-15

Income Distribution Transmission Generation Total

1. Revenue from Operation 557894.06 4060.63 3784.31 565739

2. Other Income 35968.93 514.30 1758.45 38241.68

3. Total Revenue (1+2) 593862.99 4574.93 5542.76 603980.68

4. Expenses 0 0 0

(b) Purchase of Stock- in -Trade (POP) 378003.94 0 0 378003.94

(d) Employees benefits expenses 85217.79 17291.48 28084.8 130594.07

(e) Finance Costs 51621.33 -920.88 2851.68 53552.13

(f) Depreciation and other amortizatization expenses 13942.12 5948.86 10641.26 30532.24

(g) Other Expenses 18487.82 1128.1 2436.44 22052.36

Total Expenses 547273.00 23447.56 44014.18 614734.74

5. Profit (Loss) before exceptional and extraordinary items and 46589.99 -18872.63 -38471.42 -10754.06

6. Exceptional items 0 0 0

7. Profit (Loss) before extraordinary items and taxes(5+6) 46589.99 -18872.63 -38471.42 -10754.06

8. Extraordinary item 446.4 0 150.65 597.05

9. Profit (Loss) before the taxes 46143.59 -18872.63 -38622.07 -11351.11

10. Tax Expenses 0 0 0

11. Profit and (Loss) for the year ended 46143.59 -18872.63 -38622.07 -11351.11

70

Note 2.33

SIGNIFICANT ACCOUNTING POLICES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015

(A) Significant Accounting Policies

1. Basis of Accounting

Accounts of the Company are being prepared on accrual basis based on historical cost convention and are in line with the fundamental accounting principles of prudence, consistency and materiality except otherwise stated. Financial statements are prepared in accordance with the provisions of the Companies Act, 1956 and the relevant provisions of Electricity Act, 2003.

2. Fixed Assets

a) The Fixed Assets are carried forward at the original/ transfer cost including appropriate expenses capitalized less depreciation thereof.

b) The interest on the borrowed funds attributable to the acquisition/ construction of fixed assets till commissioning of such assets, is being capitalized.

c) Capital Expenditure on assets not owned by the company is reflected as a distinct item in the Fixed Assets.

d) Payments made towards compensation and other expenses relatable to land are treated as cost of land.

e) Leasehold Land is amortized over the period of the lease. f) Fixed Assets value of Rs. 966.45 lacs in respective of following field Units have been created on

land which does not belong to HPSEB Ltd.:- (Amount in Lacs.) (i) Electrical Division, Bilaspur 117.49 (ii) Electrical Division, Ghumarwin 122.22 (iii) Electrical Division, Kangra 108.30 (iv) Electrical Division, Dharamshala 313.46 (v) Electrical Division, Palampur 9.98 (vi) Electrical Division, Baijnath 66.24 (vii) Electrical Division, Lambagaon 96.22 (viii) Electrical Division, Dehra 125.80 (ix) Electrical Division, Chopal 6.74

Total 966.45

g) Residential and Non-Residential Building valuing Rs. 712.26 lacs and Rs. 93.34 lacs built in Sainj Project have been transferred to HPPCL on 16.01.2010 and 29.01.2010 respectively.

h) Land measuring 113.06 Bighas situated in Sainj Project having value of Rs.358.49 lacs Project has been transferred to HPPCL on 29.01.2010. Out of above, Land measuring 14.04 Bigas valuing Rs. 11.63 lacs had already been transferred to NHPC, Parbati during 1998-99.

i) Land measuring 3-06.74 Hectares situated in Mahal Chirgoan bearing Khatoni No. 433 occupied by HPSEB Ltd. is in the name of State Govt.

j) In view of large distribution and Transmission Network scattered all over the State of Himachal Pradesh, the physical verification of the fixed assets of the Company is not being conducted due the GIS/ GPS final report is still awaited.

71

k) The cost of Computer software recognized as intangible is amortized on straight line method over a period of five year.

3. Intangible Fixed Assets

Intangible assets are carried at cost less accumulated amortization and impairment. The cost of intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from tax authorities) any directly attributable expenditure on making the asset ready for its intended use, and net of any discount. Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense, when incurred, unless it is probable that such expenditure will enable the assets to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the assets reliably, in which case such expenditure is added to the cost of the assets.

4. Store & Machinery Spares :

Store and spare have been valued at cost or net realized value whichever is lower. The cost of capital spares purchased at any time after commissioning are charged to O&M expenditure and not capitalized.

5. Capital Work-in-Progress (CWIP) :

(a) Administrative and other general overheads at the head office attributable to the construction of fixed assets are identified and allocated on systematic basis on major assets.

(b) In respect of supply cum erection contracts, the value of supplies received and accepted is treated as capital work in progress.

(c) Expenditure against ‘Deposit Work’ is accounted for on the basis of statement of accounts received from the concerned agency and accepted by the company. Provision is made wherever necessary.

6. Depreciation and Amortization:

(a) Depreciation is charged on straight line method to the extent of 90% of the cost of asset following the rates notified by the H.P. State Electricity Regulatory Commission for the purpose of fixation of tariff with effect from 2009-10 . In respect of asset, where rate has not been notified by regulation of HPERC, depreciation is provided on straight line method at the rates corresponding to the rates laid down under the Companies Act, except in case of Computers and Peripherals which are depreciated @ 15% on SLM.

(b) Depreciation on vehicles is charged by the units to the extent of 90% of the cost of the asset. Life of vehicle is taken as 7 years, depreciation is charged on SLM basis.

(c) No depreciation is charged on addition to fixed assets during the year and depreciation is charged for the whole year in respect of assets ceased/sold during the year, as per accounting policy of the Company in this regard.

(d) The expenditure on capital work in progress is transferred to appropriate asset at the end of the financial year irrespective of the date of commissioning of asset.

(e) Intangible assets are amortized on straight line basis over their useful life. Software is amortized over 60 months.

(f) The depreciation of assets during the year has been adjusted for the less/ excess deprecation charged up to 31-3-2015 and effect of the same has been adjusted against prior period items.

(g) Assets acquired from govt. grants and consumers contributions have been amortized and recalculated retrospectively to comply the AS12 and amortized amount has been treated as Revenue Income.

h) Lease payment made upfront in respect of leased assets are amortized in equal installments over the period of lease.

(i) Annual lease rent payment are charged to revenue.

72

7. Inventories / Stores and Spares

(a) Inventories/ Stores and Spares are valued at cost or market value, whichever is less. The cost is determined on weighted average method. The cost of material at site however is determined as per issue price. “Here the Company deviates from the Accounting Standared-2 “Valuation of Inventories” issued by ICAI which requires Inventories to be valued at the lower of cost and net reliable value.”

(b) The stock of low value items of consumables are not maintained and are fully charged to revenue.

8. Revenue Recognition: 1. Sale of Power is being accounted for on accrual basis on the basis of bills raised by the Company

except as under :—

a. Unbilled revenue is accounted for at the close of year on the basis of average billing of a year of concerned group by remaining days of numbers of unbilled period.

b. Difference on account of adjustments of undercharged/ overcharged billing with actual billing is adjusted in the year of rectification.

c. Earning from sale of electricity does not include Electricity duty payable to State Govt. and Municipal Taxes (Octori) payable to Municipal Committee/ Municipal Corporation.

d. Bills issued for theft of energy, whether on consumption or outsides are recognized in full as soon as assessment order is received from the competent authority. Payment made by the consumer under protest is treated as part payment against the bill raised.

e. Any surplus or deficit arising as result of truing up order on the basis of audited annual accounts is adjusted in the year of issue of truing up ordered by the HPERC.

f. The consumers having credit balances in accounts of energy dues, municipal tax, Electricity duty and other dues due to advance payments has been netted up in consumer’s ledger with trade receivable and not shown separately.

g. The sale of Power is the major source of revenue of the Company. The Tariff schedule is notified by the HPERC and rates mentioned in the respective scheduled tariff are applicable to the consumers. The electricity duty and taxes (EC) are levies as per notification of Govt. of HP in time to time.

h. The income arise for Peak Load violation charges, Demand charges, wheeling charges, open access charges and other fixed charges as per tariff schedules are in addition to energy charges and considered part / income for sale of Power.

i. Charges recovered from consumers for delayed payment shall be clubbed with revenue from sale of power shall be shown in separately since these are more in the nature of financial charges.

j. Operational and Mtc. charges are recovered from HPPTCL as per mutual agreement, interlinking facility charges recovered from IPPs are considered part of revenue income.

k. Income from investment are treated other revenue income for the year in which income has accrued. However, if the investment is held as earmarked investment against any Fun such as Pension Fund, Gratuity Fund, RGGVY Fund etc, the income from such investment are credited directly to reserves Fund. The General Provident Fund investment interest income are netted up with the interest paid to the Members.

9. Employee Retirement Benefits & Pension : (i)Actual liabilities in respect of Earned Leave and Gratuity are accounted for at the time of actual

encashment of leave/ payment of gratuity on death/ resignation/ superannuation. Pension is paid by the Company on cash basis. To comply the requirement of AS 15 Company has made provision of Rs. 5201.68 Lac (gratuity Rs. 2799.04 +Leave encashment Rs. 2402.64 Lac) on accounts of Leave encashment & gratuity payable to present employee @ 2.5% and actual provision shall be made after actuarial evaluation in this regards. “Here the Company deviates from the Accounting Standard 15

73

“Employee Benefits” issued by ICAI, which requires the contribution to be made on the basis of actuarial valuation and the company is partially complying with this requirement”.

(ii)Employees who have joined the Company on or after 01.04.2006 are covered under “ New Defined Contributory Pension Schemes (NDCPS” and Company contribution at fixed percentage of salary is ascertained and paid/ provided.

10. Amount Recoverable and payable from/ to GoHP/Local Authorities: The above accounts are not being netted off, however, kept in separate recoverable and payable

accounts, as per practice, in view of the nature of such accounts. 11. General Provident Funds (GPF) of employees: GPF of employees is being accounted for in books of accounts, as per government rules governing GPF.

No separate Fund/ Trust is being maintained, however, liabilities with respect of GPF and interest accrued thereon is met by the Company out of own resources.

12. Provisions, Contingent Liabilities, 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 on accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

13. Borrowing Cost: Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of

the cost of asset. All other borrowing costs are charged to profit and loss account. 14. Investments:

(i) Current investments are valued at lower of cost and fair market value. (ii) Investments in BBMB have been shown to the extent of Company’s shares in power plant / fixed assets / Renovation/ Moderations / up gradation (RM& U) of the above entities. Diminution in the value of investment held in BBMB is being provided on yearly basis on entire amount invested in the year by taking these amount revenue expenses of the Company.

15. Government Grants: Grants received from Central/ State governments for the purpose of capital works are considered as

capital receipts and other grants in the shape of incentives/ subsidies etc. as revenue receipt and is shown separately in the Statement of Profit and Loss and Balance Sheet.

16. Use of Estimates The preparation of the financial statements in conformity with Indian GAAP requires the management to

make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Some of the estimations require higher degree of judgment to be applied than others. These include estimation for unbilled revenue etc. Management continually evaluates all its estimated and judgments based on available information and its experience and believes that the estimated used in the preparation of financial statements are prudent and reasonable. Future result could differ due to these estimates and differences between the actual result and the estimates are recognized in the periods in which the results are known/ materialize.

17. Segment Reporting: The Company identifies primary segments based on the dominant source, nature of risks and returns

and the internal organization and management structure. The operating segment are the segments for which separate information is available and for which operating profit/ loss amounts are evaluated regularly by the executive management in deciding how to allocate resources and in assessing performance.

74

The accounting policies used in the preparation of the financial statements of the Company are also applied for segment reporting. Revenue & expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expense , assets and liabilities which relate to the Company as a whole are not allocable to segments on reasonable basis have been include under unallocated revenue/ expense/ assets/ liabilities.

18. Cash and Cash Equivalents ( for the purpose of cash flow statement) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term

balances ( with an original maturity of three months or less from the date of acquisition), highly liquid investment that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

19. Cash Flow statement Cash flow are reported using the indirect method whereby profit/ loss before extraordinary items and tax

is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company is segregated based on the available information. .

20. Operating Cycle All assets and liabilities have been classified as current or non current as per Company’s normal

operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of business and the time between acquisition of assets for processing and their realization in cash and cash equivalents the Company has ascertained its operating cycle as 12 months for the purpose of current and non current classification of assets and liabilities.

21. Miscellaneous:

(a) Expenses on training and recruitment, research and development, if any are charged to revenue. (b) Expenses on raising of finance and financial loan are charged to revenue. (c) Income from surcharge levied on consumers for delayed payment of energy bills is accounted for

on actual realization basis. (d) Interest on loans and advances paid to the staff is recovered after full recovery of principal amount.

However, interest is accounted for on accrual basis in the accounts. The advance made to suppliers / contracts by the Company is secured advance on the progress made in turnkey works.

(e) Cost of new meter used to replace the damaged meter is charged to revenue and the cost of damaged meter and its accumulated depreciation is not withdrawn.

(f) Expenditure incurred on identification, survey & feasibility study of project, before project is considered for sanction or rejection, is accounted for under separate head and shown under deferred Cost. As and when the decision of competent authority is received, expenditure is adjusted accordingly by transferring expenditure to work concerned if accepted or written off to profit & Loss Accounts in case of rejection.

(g) Payment received against debtors from sale of power are adjusted as per their chronological order date i.e. old outstanding dues are cleared first.

(h) The Company has not formed its own Basic Accounting Policies but the basic accounting principles and policies Notified vide notification No GSR No 1134 of the Electricity (Supply) Annual Accounts Rules, 1985, adopted by the erstwhile Board for preparation of Annual Accounts are being considered till the adoption of new accounting Policies of the Company. Financial statements of the Company are drawn up on the premise that its business will continue indefinitely. The Policy on conveyance for losses of stock due to theft, fire flood etc, write off & recovery of shortage from contractors and suppliers, employees Accounting treatment of capital and revenue items and going concerned are detailed mentioned Annexure II, IV& V of above Basic Accounting Principles and

75

Polices, 1985 and Commercial Accounting System /Operating instructions, notified by erstwhile Board, June,1993.

(i) All revenue expenses/ income pertaining to prior period and losses for which no provision was made in the previous year due to error or omission are treated Prior period revenue income/ expenditure which have been shown in separate accounts head. Detailed disclosure of prior period expenses/ income till the finalization of balance sheet has disclosed in Notes forming part of the Accounts No 47 of 2.31 (B).

(j) Those items which arise from events or transactions outside ordinary activities of the Company and which are both material and expected not to recur frequently or regularly.

(B) NOTES FORMING PART OF THE ACCOUNTS:- 1. HPSEBL was incorporated under Companies Act, 1956 on 03-12-2009 and is a Government Company

within the meaning of Section 617 of the Companies Act, 1956. The entire paid up Share Capital is held by the Government of Himachal Pradesh and its nominees.

2. The financial year of the working of the Company is from 1-4-2014 to 31-3-2015 (Previous year from 1-4-2013 to 31-3-2014. The consolidated statement of assets and liabilities complied on the basis of Divisions; Circles with consolidated balance sheet used for compilation of these financial statements. The assets & liabilities transferred from erstwhile Board in accordance with “Transfer Scheme” is still under reconciliation with Divisions/ Circle. The following balances are not traced and is still under reconciliation:-

(Amount in Lacs) Current year previous year

Code Main Head Debit (Credit) Debit ( Credit)

Reserve And Surplus

55 Contribution , Grants and Subsidies Towards Cost of Capital Assets

(2664.21) (2664.21)

56 Reserve (266.70) (266.70)

Profit & Loss Accounts (81726.37) (81726.37)

(78795.46) (78795.46)

Other Long Terms Liabilities — —

41 Trade Payable — —

42 Other Current Liabilities Liability for Capital Supplier/ Capital Works

(166.15) (166.15)

43 Liability for O&M Supplies/ Works — —

44 Staff Related Liabilities & Provisions 102.35 102.35

46 Other Liabilities and Provisions (8535.82) (8535.82)

47 Deposit for Electrification, Service Connection Etc (3973.14) (3973.14)

(12572.76) (12572.76)

48 Security Deposit from Consumers 439.18 439.18

(13216.64) (13216.64)

Tangible Assets

10 Fixed Assets 841.79 841.79

11 Capital Expenditure Resulting in an Asset Not Belonging 0 0

76

to the Board

12& 13 Depreciation 0 0

841.79 841.79

Capital Work In Progress

14 Capital Works in Progress Accounts (9617.34) (9617.34)

15 Contracts- in Progress 182.93 182.93

Long Terms Loans And Advances (9434.41) (9434.40)

25 Advances to Suppliers/ Contractors- (Capital) 143.19 143.19

28 Sundry Receivables 6192.26 6192.26

Other Noncurrent Assets

16 Assets Not in Use 180.59 180.59

17 Deferred Revenue Expenditure 3509.19 3509.19

8843.58 8843.58

Inventories

22 Stock And Related Accounts 58.71 58.71

Trade Receivable

23 Sundry Debtors for Sale Of Power 2749.53 2749.53

Cash And Cash Equivalents

20 Investment Against Funds 76.32 76.32

24 Cash And Bank (120.57) (120.57)

(2763.99) (2763.99)

Short Term Loans And Advances

26 Advances to Suppliers/ Contractors- (O&M) 97.97 97.97

27 Other Loans and Advances (72.87) (72.87)

Other Currents Assets

30-39 Inter Unit Accounts (86911.53) (86911.53

Total 0.00 0.00

3. Provisions have been made for all known expenses and incomes of the current financial year. 4. The expenditure on foreign tour and revenue during the trial stage during the current year is Nil. 5. The Cash Flow Statement has been prepared on indirect method as prescribed in AS-3.

6. The Company has only one integrated business i.e. Generation, Transmission & Distribution of Power.

Management of erstwhile Board has identified five segments i.e. Distribution, Transmission, Generation, Projects, SL&DC and Head office as separate unit. The Govt. of H.P. through Transfer schemes made trifurcation and two new Companies HPPCL, HPPTCL have been formed. The HPSEBL have only distribution license and no segment reporting of above five segments further required under AS-17.

77

However, Generation, Transmission & Distribution segment wise profitability and financial position has been reported in Note 2.32 & 2.32 (a) to comply the AS 17.

7. An amount of Rs. 2813.12 Lac on account of Govt. loans shown in Note No. 2.4 (unsecured and Other loans of Rs. 27.51 crore) has been converted into Govt. Equity by the State Govt. under FRP vide letter dated 29-01-2014 and sanction order are awaited.

8. The details of Capital Work in Progress ( Except AG 15) and expenses capitalized are as under:-

(` in Lacs) Current Year

2014-15 Previous year 2014-15

Opening Capital Work in Progress (Excluding Advances To Supplier/ Contractor) (1-4-2014)

86900.45 88695.79

Addition During the Year Including Interest Capitalized on World Bank Loan Funded Project

45411.04 51511.42

Interest Capitalized During the Year 4615.03 11981.38 Employee Cost And Other Expenses Capitalized During the Year 5495.66

4911.50

Less: Transferred To Fixed Assets During the Year 43679.33 53306.76 Closing Capital Work In Progress at the End of the Year (Excluding Advances to Suppliers)

88632.12 86900.45

Capital Work-in-Progress also includes pre-operative expenses i.e. expenses capitalized in the previous years.

9. The Assets not in use amounting to Rs. 2813.12 Lac as shown in note 2.16.1 are in the nature of discarded/ surveyed off assets and these have been taken at its written down value.

10. The Company has not insured the fixed assets (except Vehicles & hypothecated to LIC against Loan). 11. In view of multiplicity and difficulty in identification of accounts relating to small scale industries

undertaking information for determining the particulars relating to current indebtedness to such undertaking as required under Part-I of Scheduled VI of the Companies Act-1956 is not readily available.

12. As required by the Accounting Standard (AS-28) “Impairment of Assets” issued by the ICAI , the

Company has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

13. The Income Tax assessment of the Company completed upto FY 2012-13 .HPSEBL has been filed

appeal against FY 2012-13 assessment order passed by the Income Tax Commissioner before the Commissioner of Income Tax (Appeals) , Solan/ Shimla for disallowing Rs. 9958.35 Lac on accounts of non deposit GPF, employee contribution and CPF , Rs. 11954.51 Lacs on accounts of expenditure booked under the accounts head prior period expenses.

14. (a) No earning in foreign exchange was accrued during the year.

(b) The Debtors and Creditors balances are subject to reconciliation and confirmation. 15. The company has taken loans from APDRP towards 100% financing of its approved projects, APDRP

scheme is subject to a condition requiring projects to be completed within Five years and rewards with 100% conversion of loan along with interest into grant else no conversion of loan and interest to grant shall be made if projects are not completed within 5 years i.e April/ 2016 & july/ 2016. In the absence of the rate of interest applicable to the scheme, the Company has provided lump sum provision of Rs, 6253.18 Lac for the interest on loan up to 31st March, 2015 in its books of account.

16. In the absence of terms and conditions of the Loans taken under RGGVY scheme from GoHP(Rs. 5, 00, 00,000/- and ADB through GoHP Rs. 8,40,45,967/- ) no provision for interest has been made.

78

17. No major incident has been occurred after the Balance date which can be quantified except normal

business of the Company which cane disclosed as per AS 4. However, on dated 8.6.2014 8 students of Engineering College , Hydrabad are wash away from river flood of near Larji Dam and Company paid immediate relief of 60,00,000/- during July, 2014 to the legal heir of student and also paid compensation of Rs. 2,28,13,738/- on dated 14.1.2016 on the direction of High Court.

18. Disclosure of Contingent Liabilities as on 31-3-2015 (amount in Lac)

(i) Arbitrations cases: -

(a) M/s SAB, Chandigarh (R.E. Khauli P/H) Rs. 757.00 (b) M/s Anshul Prop., Delhi (R.E. Khauli P/H) Rs. 205.00 (c) M/s Ansal Properties Delhi (R.E. Khauli P/House) Rs. 347.00 (d) M/s Ansal Properties Delhi (R.E. Khauli P/House) Rs. 346.00 (e) M/s P&R Engineering, Chandigarh (R.E. Khauli P/House) Rs. 265.00 (f) M/s P&R Engineering, Chandigarh (R.E. Khauli P/House) Rs. 345.00 (g) M/s P&R Engineering, Chandigarh (R.E. Khauli P/House) Rs.405.00 (h) M/S SSJV Ltd. Banglore (Sr. Xen Arb. & Mtd. Divn. Thalout) Rs. 12345.00. (i) M/s SSJV Ltd. Banglore (Sr. Xen Arb. & Mtd. Divn. Thalout) Rs. 14806.00 (j) M/s Prem Laxmi (Sr. Xen Arb. & Mtd. Divn. Thalout) Rs. 557.00 (k) M/s SSJV Ltd. Banglore (Addl. S.E. Thirot Construction Divn. Pandoh) Rs. 7364.00 (l) M/S Prem Laxmi (Addl. S.E. Thirot Construction Divn. Pandoh) Rs.239.00. (m) M/s Continantal Construction Ltd. (Addl. S.E. Thirot Const. Pandoh) Rs.1004.00 (n) M/s Continantal Construction Ltd. (Addl. S.E. Thirot Const. Pandoh) Rs.274.00. (o) M/s SSJV Ltd. Banglore (Addl. S.E. Thirot Const. Divn. Pandoh) Rs. 5228.00. (p) M/s On A/C of difference of rates of Shanan share sold to the Board by the PSEB Rs.

1884.00. (A.O. SL&D). (q) M/s UPJVNL on A/C of energy bills Rs. 528.00 Crore. (A.O. SL&D). (r) Arb. Case between Uhl Power Company Ltd. Rs. 91027.00 (C.E. (PCA)). (s) Arb. Case between M/S SSJV Project (P) Ltd. Rs.30904.00 (C.E. (PCA). (t) M/s Himalya Const Private Ltd vs HPSEBL Rs718.06 Lac (C.E. (PCA Arb No 36/ 2013). (u) M/s Himalya Const Private Ltd vs HPSEBL Rs 610.41 Lac (C.E. (PCA Arb No 37/ 2013). (v) vt Ltd vs HPSEB (w) Arbitration case lodged with SE HPPWD , Solan by Sh Rajeev Kapoor , Contractor Rs.

6774.00 (CE (OP) CZ. (x) Counter claim against Arbitration case lodged with SE HPPWD, Solan by Sh Rajeev

Kapoor , Contractor Rs. 2537.00 (CE (OP) CZ). (y) M/s Himalyan Intent Limited recovery suit for payment of energy bill of Rs. 1.98 crore (ED

Ponta).

(z) M/s Arsh Casting Limited recovery suit for payment of energy bill of Rs. 1.84 crore (ED Ponta).

(aa) M/s Steel Strips Limited recovery suit for payment of energy bill of Rs. 19.00 crore (ED Ponta).

(bb) M/s SAB Industries Limited recovery suit for payment of energy bill of Rs. 8.79 crore (ED Ponta).

(cc) Arbitration case JPJV (Baspa-II) vs HPSEB for releasing of Rs. 12.05 crore on accounts of lease money of accommodation occupied at Kaultu (CE PSP/ GCD)

19. Generating Station :

79

Sl No.

Location Capacity (MW)

1 Hydel Generating Plant, Bhaba 120.000 2 Hydel Generating Plant, Giri 60.000 3 Hydel Generating Plant, Bassi 66.000 4 Hydel Generating Plant, Binwa 6.000 5 Hydel Generating Plant, Nogli 2.500 6 Hydel Generating Plant, Chaba 1.750 7 Hydel Generating Plant, Rukti 1.500 8 Hydel Generating Plant, Chamba 0.450 9 Hydel Generating Plant, Rongtong 2.000

10 Hydel Generating Plant, Andhra 16.950

11 Hydel Generating Plant, Killar 0.300

12 Hydel Generating Plant, Thirot 4.500

13 Hydel Generating Plant, Gaj 10.500

14 Hydel Generating Plant, Baner 12.000

15 Hydel Generating Plant, Sal-II 2.000

16 Hydel Generating Plant, Ganvi 22.500

17 Hydel Generating Plant, Gumma 3.000

18 Hydel Generating Plant, Holi 3.000

19 Hydel Generating Plant, Larji 126.000

20 Hydel Generating Plant, Khauli 12.000

21 Hydel Generating Plant, Bhaba Aug. 4.500

22 Hydel Generating Plant, Ganvi-II 10.000

Total 487.450

1 Diesal Generating Station, Keylong 0.133

Grand Total 487.583

Total installed capacity at the end of the year 2013-14 487.583 Plant commissioned during the year 2014-15 0.000 Total installed capacity at the end of year 487.583

20. Details of Remuneration Paid to Auditors: (` in Lacs)

Particulars Current year Previous year

Statutory Auditor Fee (including services tax) 1.71 1.71

80

For other services (T.A.) includes previous year auditors TA also.

8.52 7.79

Total.. 10.23 9.50

21. During the financial year, Company has made net transactions with the 'Related Parties' in terms of Accounting Standard-18 as under:- (` in Lacs)

Sr. No Name of Party Current year Previous year

1 H.P. Power Corporation Ltd. 1Investment 1770.62 2 Other

1Investment 2 Other

2 H.P. Power Trans. Corp. Ltd. 0 0

3 Beas Valley Power Corporation * 1. Investment 2.Other 588.36 3 Advance 8077.94

1.Investment 2.Other 3 Advance

*HPSEBL has transferred net book value of assets/ cost of transmission lines amounting to Rs. 6122.16 Lac ( Gross Rs. 10263.37 less Deprecation Rs.4141.21 Lac) upto 13-6-2010 to HPPTCL as per transfer schemes after reconciliation from concerned Elect. System / Generation Divisions of the Company to HPPTCL vide letter dated 27-10-2014 and accountal adjustment of the same has been made in FY 2013-14 accounts and HPPTCL has been accounts for these value in their books of accounts in FY 2014-15 accounts.. During FY 2010-11 (14-6-2010 to 31-3-2011) , 2011-12 & 2012-13 Company has also charged depreciation on remaining gross block amounting to Rs.7623.46 Lac and amount of Rs. 1306.17 Lac has been withdrawn vide JV No 25 during FY 2014-15 3/15 S-II accounts.

* During this Year Company has given advance amounting to 8077.94 Lac ( previous year Rs. 8151.44 Lac ) Total Rs. 16229.38 Lac to Beas Valley Power Corporation for capital expenditure and on revision of project cost this amount shall be converted into investment in BVPCL from HPSEBL. The other amount on a/c of GPF, terminal benefits etc. receivable/ payable from BVPCL is under reconciliation/ confirmation.

22. Remunerations paid to CMD & Directors.

(` in Lacs)

Name Current year Previous year

Sh. R.D. Dhiman , IAS (CMD) 0 4.64

Sh. P.C. Negi, Managing Director 21.21 15.73

Sh. Akshay Sood, IAS, Director (F&A) 11.75 14.18

Sh. J.P. Kalta, Director (Op) 21.06 15.55

Sh. Rajiv Sharma Director (F&A)/ Admn 6.32 0

Sh. P.K. Kholi, Director (Civil) 21.02 2.68

Sh. R.K. Sharma Director (Tech.) 20.63 0

81

23. Other expenses like Medical / TA and Telephone paid to Directors.

(` in Lacs)

Name Current year Previous year Sh. R.D. Dhiman , IAS (CMD) 0.0 0.06

Sh. P.C. Negi, Managing Director 0.50 0.46 Sh. Akshay Sood, IAS, Director (F&A) 0.54 0.77

Sh. J.P. Kalta, Director (Op) 0.36 0.57

Sh. Rajiv Sharma Director (F&A)/ Admn 0.06 0

Sh. P.K. Kholi, Director (Civil) 0.39 0.22 Sh. R.K.. Sharma, Director (Tech.) 0.25 0.0

In addition to above, official car have been provided to Chairman, MD, Whole Time Directors for official use. However, the use of car allowed for private purpose is limited and for which charges as prescribed has been recovered from them.

25. Statement of Capital Base and surplus under Section 185 of Electricity Act, 2003 : (` in Lacs)

Sr. No. Particular At the beginning of Current year

(1-4-2014)

At the beginning of Previous Year

(1-4-2013) 1. Original cost of Fixed assets 653867.15 622501.64 2. Less- Accumulated Depreciation 180642.03 151874.91 3. Net Block (1-2) 473225.12 470626.73 4. Consumer’s Contribution, Grant &

Subsidies towards cost of Capital Assets. 129883.59

142696.60

5. Capital Base (3-4) 343341.53 327930.13 6. Surplus (Deficits) for the year (11331.01) (13698.34) 7. Surplus as a percentage of Capital Base

U/s 185 of Electricity Act, 2003. (4.36) (4.17)

26. The amount received from the Consumers on account of Grants and Contribution towards cost of Capital Assets is accumulated under BH 55 and expenditure is incurred in WIP. After completion the work/ asset(s) is put to use and the amount is debited to concerned fixed assets BH.10.

27. The Internal Audit is being conducted by reputed firms of Chartered Accountants. During the FY 2014-15, Internal Auditors conducted by the auditors as per the scope of work approved by the Audit Committee, changes; if any suggested by the Internal auditors have also been incorporated in the books of account.

28. Estimated amount of contracts remaining unexecuted on Capital Account and not provided for are as

under:

(` in Lacs)

Sr. No. Description Current year Previous year

1 Contract placed 4572.15 4,982.54 2 Payment/ advance payment made 642.55 9,62.99 3 Balance contracts as liability 3929.60 4,019.55

82

29. Purchase, Issues & Stocks of Materials (Value recorded in Account Heads 22.2 to 22.6) should be disclosed here:—

(` in Lacs)

A. Opening Stock Account Code Current year Previous year

Capital 22.601 & 22.619 1194.29 1740.22

O&M 22.621 & 22.639 6502.24 7420.93

Total.. 7696.53 9161.15

B. Purchases

Capital 22.201 & 22.219 10211.99 9706.51

O&M 22.221 & 22.239 3666.78 3387.56

Total.. 13878.77 13094.07

C. Opening Stock

Plus Purchases 21575.30 22255.22

D. Issues for Consumption

Capital 22.301 & 22.319 10331.39 6080.62

O&M 22.321 & 22.339 5597.87 9802.88

Total.. 15929.26 15883.50

E. Issued to Contractors

Issues 22.341 & 22.359 8.33 .09

Returns 22.361 & 22.379 0 0

Net Issues 8.33 .09

F. Total Issues (D+E) 15883.59 15883.59

G. Closing Stock

Capital 22.601 & 22.619 2068.01 1194.29

O&M 22.621 & 22.639 4940.10 6502.24

Total 7008.11 7696.53

H. Transfer Inward 22.401 & 22.419 11485.00 8731.71

I . Transfer Outward 22.421 & 22.439 11748.27 8646.65

Total -263.37 85.06

J. Material stock adjustment Capital

22.501 & 22.519 123.78 101.04

O & M 22.521 & 22.539 1509.99 1138.80

Total 1633.77 1239.84

*Note:- The Closing Stock Balance shown as above is excluding material at site.

83

30. Average Realization from Sale Of Power:-

The figures shown in brackets relate to previous year and without brackets relate to current year. Revenue received from each category of Consumers on account of Sale of Power and other applicable

levies is divided by the number of units sold to that category. 31. The amount of special and mean, advance on accounts of natural calamity relief funds received from

Govt. has been net up with the expensed incurred during the year and balance amount charged to Revenue account as per accounting Policies of the HPSEBL.

32. The Company has not reported any theft of assets/ inventories during this year. 33. The Share application Money of Rs. 31.26 Crore received on 23-3-2015 was pending for allotment at the

end year which has been allotted in next year. The time limit for allotment of share is 60 days from the receipt of funds. The Company has sufficient Authorized Share Capital Rs. 1100.00 Crore to cover the share capital amount resulting from allotment of share against pending share application money.

34. The Company obtained overdraft, facility of Rs. 56365.51 Lac against GPF Fixed deposits Funds of Rs. 61626.30 Lacs . In addition Company has obtained loan/ Cash Credit limit against escrow of Rs. 50244.83 Lac from various Banks against revenue collection of various Electrical sub divisions which has been utilized for operations of Company.

35. The amount of Electricity consumption Tax levied payable to MCs/ NACs has not been netted up with the amount of energy charges recoverable from them.

Sr. No. Consumers Category

No. of Consumers

Units Sold in MKWH

Revenue (Rs. in Lacs)

% of the Total units

sold

Average realization

in paisa per unit

1 Domestic

1811320 (1811320)

1893.519 (1774.497)

76619.34 (70387.23)

17.59 (18.60)

405 (396)

2 Commercial

244969 (238424)

473.211 (450.942)

26823.27 (25647.52)

4.39 (4.72)

567 (568)

3 NDNC

25521 (23769)

129.977 (117.590)

8378.81 (7216.60)

1.21 (1.23)

645 (613)

4 Industries : (i)

Small & Medium 32898

(32705) 208.728

(203.138) 12371.70

(12686.20) 1.94

(2.13) 593

(624) (ii)

Large supply 2255

(1737) 4377.015

(4287.579) 238965.18

(243483.15) 40.65

(44.96) 546

(567)

5 Agriculture/Irr-igation

23357 (21630)

45.095 (41.319)

2937.74 (2524.47)

0.42 (0.43)

651 (610)

6 Public Lighting

1117 (869)

13.338 (12.454)

744.04 (563.61)

0.12 (0.13)

558 (452)

7 Bulk Supply

313 (250)

157.759 (150.696)

10040.95 (10402.09)

1.58 (1.58)

636 (690)

8 Water Pumping & Irrigation

6262 (5531)

502.626 (470.722)

33697.60 (31017.67)

4.67 (4.93)

670 (558)

9 Temporary

5179 (4723)

25.628 (26.895)

1460.94 (1629.30)

0.24 (0.28)

570 (605)

Total within State

2199970 (2140985)

7826.896 (7535.832)

412039.57 (405557.84)

72.70 (79.02)

526 (538)

10 Outside the State

2939.506 (1999.600)

124210.46 (81958.33)

27.30 (20.98)

438 (409)

Total

2199970 (2140985)

10766.402 (9535.432)

536274.70 (487516.17)

100 (100)

502 (511)

84

36. The Company incurred expenditure in HPTCL on behalf of the Govt. of HP amounting to Rs. 74.08 Crore which is shown recoverable from State Govt. as per direction of Govt. and depreciated / net book value amounting to Rs.6122.16 Lac is being shown recoverable from HPPTCL. Due to erronesly ES Divn, Bhabanagar withdraw Rs. 66.08 crore from fixed assets and shown recoverable from Govt under BH 28.919 during FY 2013-14 which shall be rectify in FY 2015-16.

37. The Company had filed appeal against the penalty order passed by Income Tax department amounting to Rs. 666.52 Lac on 20-3-2013 under section 271 (C ) of the Income Tax Act, 1961 and. CIT, Chandigarh set aside the order of Income Tax Department and refund amount are still awaited. Besides, Hon’ble HPERC impose penalty of 22.23 Crore for Non compliance of Renewable Power which has been shown investment and shall utilized against capital works within next two years..

38. The Companies has not taken /granted any loans secured or unsecured from Companies, firms or other parties listed in the registered required to be maintained under section 301 of the Companies Act, 1956.

39. The Companies has not accepted any deposit from the public under section 58-A and 58 –AA of the Companies Act, 1956.

40. The Companies is generally regular in depositing with appropriate authorities statutory dues including PF, ESI, Income Tax, Sale Tax , Wealth tax, custom duty, exercise duty and cess and other statutory dues except the following dues which is in arrears for more than six months at the time finalization of accounts.

Current year (Rs. in Lacs)

Previous year (Rs. in Lacs)

Electricity duty 44898.63 33084.40

Municipal Taxes 746.85 670.94

Labour cess 0.00 0.00

CPS contribution 76.35 175.15

Services Tax 0.00 5.85

41. The distribution losses of the Company are within the limit fixed by the HPERC and detail of Circle wise distribution Losses is as under:

Unit MKWH (MU)

Name of Circle Energy input Energy sold T&D Losses % T&D Losses

% AT&C Losses

Shimla 456.706

437.712

403.828

380.088

52.88

57.62

11.58

18.50

20.52

20.19

Rampur 178.236

180.051

139.814

143.774

38.42

36.28

21.56

20.10

22.99

21.37

Rohroo 149.773

138.188

80.472

78.477

69.30

59.71

46.27

42.14

49.75

43.21

Solan 3605.775

3468.736

3372.478

3270.180

233.30

198.56

6.47

5.72

7.22

6.62

Nahan 1170.991

1162.893

1042.626

1032.57

128.37

130.33

10.96

11.21

12.88

13.97

85

Hamirpur 318.821

299.715

269.249

252.01

49.57

47.71

15.55

15.92

28.60

17.47

Bilaspur 640.596

636.102

568.001

566.141

72.59

47.96

11.33

11.00

13.79

14.62

Mandi 278.088

259.267

221.935

207.540

52.86

51.73

20.19

19.95

23.53

19.95

Kullu 269.375

268.874

216.515

207.967

60.91

60.91

19.62

22.65

27.13

25.74

Una 694.863

639.661

619.558

569.861

75.31

69.80

10.84

10.91

14.66

11.95

Kangra 586.939

576.619

461.015

414.733

125.92

161.89

21.45

28.08

26.85

31.97

Dalhousie 564.841

531.172

431.405

412.493

133.44

118.68

23.62

22.34

28.60

26.42

G.Total. Current year

Previous year

8915.004

8598.99

7826.896

7535.834

1088.108

1063.16

12.21

12.36

15.27

14.72

42. The following amounts are recoverable and payable to the Govt. of H.P. at the end of financial year :--

(Amount in Lacs) Amount Recoverable Current year Previous year

Investment in HPTCL 7408.00 7408.00

Share Application Money 1.40 1.40

Handling charges free Power 4217.00 4217.00

Roll Back subsidy 50034.00 45751.00

Upfront Tariff subsidy 4970.00 4970.00

Sale of Power Vidhan Sabha 193.00 193.00

Pension Contribution of Bhutan Projects 176.00 176.00

Total 67138.00 55318.40

Amount Payable

Free Power Charges 74425.00 85078.00

Electricity Duty 60185.00 59441.00

Total 134610.00 144519.00

86

43. Liability on accounts of the matter under litigation has not been provided for, as claims in respect thereof have not been entertained and are being contested. The total liability which can be reasonably ascertained is Rs. 7,78,26,821/- . Other matter mostly pertains to the employees where the amount of probable liability / obligation is not ascertainable. However, following court cases of Consumers and Employee/ Ex- Employee and their family members are pending for decision in various Court up to 6/2015.

Supreme High Court Tribunal Sub Court Misc SDRF Total 17 915 326 745 25 2011

44. The audit report/CAG comments/ Comments of works Audit party / RA party/ which were disclosed in earlier balance sheet has been settled and shown in FY 2012-13 reply to the Auditors Reports “Annexure A”.

45. The following amounts are receivable from Govt. department on account of Energy bill (other than

Interstate consumers). The party wise detail of the same is as under:- (Amount in Lacs)

Name of Department Current year Previous year I&PH 26445.52 18739.85 MC/NAC 265.45 393.25 26710.97 19133.10 Other Misc Medical Department 353.27 308.60 DC Office 46.41 19.05 PWD 32.11 44.99 Education Department 52.19 35.38 Revenue Department 67.03 108.66 Police` 8.55 8.72 Judiciary 6.49 2.69 Other Misc 896.50 619.31 Total 1462.55 1147.40 G.Total 28173.52 20280.50

46. The Company Moratorium period of REC loan are normally 2-3 year of each loan account, PFC loan are

3-5 years. Repayment period of long terms borrowing 10 to 15 years (different in all schemes ) and REC rate of average interest 7% t0 12% PA, PFC 5.75% to 11.25% LIC 8% to 12% Statement of default of repayment of interest and loan are Nil.

(B) THE DETAILED POSITION OF SECURED AND UNSECURED LOANS OUTSTANDING AT

THE END OF 31st MARCH, 2015 ALONGWITH REPAYMENT PERIOD AND RATES OF INTERST.

87

MAIN ABSTRACT OF CAPITAL LIABILITIES ON SECURED LOAN FOR THE YEAR 2014-15 (Figures in Lacs

Outstanding at the

end of previous

year 2012-13

Amount received

during the year 2013-14

Repayment due/made


S.No. Particulars Interest for the year 2014-15

Outstanding at the end of previous

year 2013-14

Amount received during the year 2014-

15

Repayment due/made


Head of Account

Outstanding at the end of the year

2014-15

63540.23 17946.69 7405.03 1 REC Loan 9478.87 74081.90 12129.81 6761.94 53.301 79449.76

7500.00 0.00 7500.00 2 REC STL 100 cr. 0.00 0.00 0.00 0.00 0.00 7500.00 0.00 7500.00 3 REC STL 150 cr. 0.00 0.00 0.00 0.00 0.00 2859.87 0.00 59.70 4 RGGVY 331.55 2800.17 0.00 262.44 53.302 2537.73

15124.87 0.00 2624.87 5 LIC loan 932.33 12500.00 0.00 2500.00 52.501 10000.00

28800.00 0.00 8200.00 6 KCC/HPSCOB

Larji/ Khauli (Long Term) 2011.24 20600.00 0.00 6104.28 53.7 14495.72 41025.74 2990.76 8619.77 7 PFC Loans 2814.18 35396.73 88.21 8610.55 53.800 26874.40 20000.00 0.00 3636.92 8 PFC STL 739.78 16363.08 0.00 16363.08 0.00 12368.00 36119.00 6908.00 9 Non-SLR Bonds 3353.17 41579.00 47598.00 2340.00 52.120 86837.00

20000.00 10000.00 3000.00 10 Punjab & Sind Bank

(Rs.140.00 + 117.40 cr..) 2870.25 27000.00 12240.03 13500.00 53.903 25740.03

12000.00 22054.00 12000.00 11 State Bank of India

(Rs. 30+190.54+80.30cr.) 2430.78 22054.00 8030.00 0.00 53.927 30084.00

55000.00 29000.00 39000.00

12 KCC STL Rs. 160 cr. (LTL Rs.290cr)

3193.80 45000.00 0.00 0.00 53.7 45000.00

8327.00 0.00 8327.00 13 Vijaya Bank

0.00 0.00 0.00 0.00 53.929 0.00 10000.00 0.00 0.00 14 Central Bank of India 966.79 10000.00 0.00 5000.00 53.501 5000.00

5347.80 0.00 0.00 15 R-APDRP Loans

(Part-A) 481.30 5347.80 0.00 1038.31 53.843 4309.49

10168.40 0.00 0.00 16 R-APDRP Loans

(Part-B) 930.37 10168.40 2128.00 0.00 53.844 12296.40

0.00 0.00 0.00

17 R-APDRP Loans (Part-B) Counter Part Loan 134.31 0.00 1942.44 0.00 1942.44

840.46 0.00 0.00 18 ADB Loan through H.P

GOVT 75.64 840.46 0.00 0.00 840.46 320402.37 118110.45 114781.29 30744.35 323731.53 84156.48 62480.58 345407.43

88

CAPITAL LAIBILITIES ON RGGVY LOANS FOR THE YEAR 2014-15 (Figures in Lacs) Outstanding at

the end of previous year

2012-13

Amount received

during the year

2013-14

Repayment due/ made during the year 2013-14

Particulars Interest for the year 2014-15

Outstanding at the end of

previous year 2013-14

Amount received


Repayment due/ made during the year 2014-15

Head of Account

Outstanding at the end of the year 2014-15

0 2 3 4 5 6 7 8 9 10(6+7-8) Electrification of 2531 rural house hold

inlblocks of chamba Distt. Of H.P. State under RGGVY scheme & 5% interest.(Code 300001) 537.31 0.00 59.70 56.92 477.61 0.00 59.70 53.30 417.91

388.71 0.00 0.00

Electrification of 3877 Rural House holds in 5 block in Solan Distt. Code No. 300002

45.84 388.71 0.00 38.87 53.30 349.84

193.80 0.00 0.00 Electrification of 3805 Rural House holds in 5 block in Una Distt. Code No. 300003 22.85 193.80 0.00 19.38 53.30 174.42

418.24 0.00 0.00

Electrification of 3805 Rural House holds in 6 block in Sirmour. Code No. 300004 49.32 418.24 0.00 41.82 53.30 376.42

38.80 0.00 0.00

Electrification of 701 Rural House holds in3 block in Bilaspur. Code No. 300005 4.57 38.80 0.00 3.88 53.30 34.92

50.23 0.00 0.00

Electrification of 1047 Rural House holds in3 block in Hamirpur (300006) 5.92 50.23 0.00 5.02 53.30 45.21

222.15 0.00 0.00

Electrification of 10107 Rural House holds in 14 block inKangra (300007) 26.20 222.15 0.00 22.21 53.30 199.93

283.31 0.00 0.00

Electrification of 6301 Rural House holds in 10 block in Mandi (300008) 33.41 283.31 0.00 28.33 53.30 254.98

432.12 0.00 0.00

Electrification of 686 Rural House holds in 10 block in Shimla (300009) 51.30 432.12 0.00 43.21 53.30 388.91

66.47 0.00 0.00 Electrification of 2492 Rural House holds in 5 block in Kullu (300010) 7.90 66.47 0.00 0.00 53.30 66.47

115.46 0.00 0.00 Electrification of 1113 Rural House holds in 3 block in Kinnaur (300011) 13.76 115.46 0.00 0.00 53.30 115.46

113.27 0.00 0.00 Electrification of 999 Rural House holds in 3 block in Lahaul & Spiti (300012) 13.56 113.27 0.00 0.00 53.30 113.27

2859.87 0.00 59.70 Total 331.55 2800.17 0.00 262.44 2537.73

89

LIC FOR THE YEAR - 2014-15

(Figures in Lacs) Outstanding at

the beginning of the previous year

2012-13

Amount received during the previous

year 20113-14

Repayment due/ made during the


Sr. No.

Particulars of loans No. Loan

from LIC of India

Rate of Interest

Interest for the year 2014-15

A/C Code

Out- standing at the end of the previous year

2013-14

Amount received


Re- payment due/made during the

year 2014-15

Outstanding at the end of the year 2014-15

1 2 3 4 5 6 6(b) 7 8 9 10 11

1 29th Loan of Rs.10.00 lacs 9%

0

124.87 0.00 124.87 2 30th Loan of Rs.1873.00 lacs 9%

0.00 0.00 0.00 0.00

1620.00 0.00 270.00 3 Term loan of Rs.2700.00 lacs 8.

00%

100.69

1350.00 0.00 270.00 1080.00


00%

149.17

2000.00 0.00 400.00 1600.00


00%

246.13

3300.00 0.00 660.00 2640.00


00%

253.59

3400.00 0.00 680.00 2720.00


00%

182.74

2450.00 0.00 490.00 1960.00

15124.87 0.00 2624.87 932.33 12500.00 0.00 2500.00 10000.00

90

N.S.L.R. BONDS. FOR THE YEAR 2014-15

(Figures in Lacs)

Outstanding at the end of the previous year 2012-13

Amount received during the year 2013-14

Repayment due during the year 2013-14

Sr. No.

Particulars Rate of Interest

Detail of the interest rates, moratoroin and rate applicable at the end of the year 2003-2004

A/C Code Outstanding at the end of the year 2013-14

Amount received during the year 2014-15

Repayment due during the year 2014-15

Outstanding at the end of the year 2014-15 Moratorium

repayment from

following year in

which the loan is

received.

Interest 2014-15

1 2 3 4 5 6 6(a) 6(b) 7 8 9 10 11

7800.00 0.00 2340.00 1 Non-SLR Bonds 9.30%

9.30% 5 Years 308.12 52.120 5460.00 0.00 2340.00 3120.00

4568.00 0.00 4568.00 2 Non-SLR Bonds 10.46%

10.46% Redemption 2011 to 2013

0.00 52.120 0.00 0.00 0.00 0.00

0.00 26590.00 0.00 3 Non-SLR Bonds 8.75%

8.75% Redemption 2021 to 2023

2313.88 52.120 26590.00 0.00 0.00 26590.00

0.00 0.00 0.00 4 NSLR Bonds Rs. 234.10 cr.

9.13% 731.18 52.120 0.00 23410.00 0.00 23410.00

0.00 6000.00 0.00 5 KCC Bank Bonds 60 crore

9.85% 0.00 52.120 6000.00 0.00 0.00 6000.00

0.00 3529.00 0.00 6 SBI Bank Bonds 35.29 crore

9.85% 0.00 52.120 3529.00 3000.00 0.00 6529.00

0.00 0.00 0.00 7 P&S Bank Bonds Rs. 161.88 cr.

9.85% 0.00 52.120 0.00 16188.00 0.00 16188.00

0.00 0.00 0.00 8 CBI Bonds Rs. 50.00 cr.

9.85% 0.00 52.120 0.00 5000.00 0.00 5000.00

12368.000 36119.000 6908.000 Total 3353.17 41579.00 47598.00 2340.00 86837.00

91

CAPITAL LIABILITIES ON PFC LOANS FOR THE YEAR 2014-15

(Figures in Lacs) Outstanding at the

beginning of the previous year

2012-13

Amount received during the


Repayments due/ made during the


Sr. No.

Particulars of loans No. Loan from PFC

Rate of Interest

Detail of the interest rates, moratoroin and

rate applicable at the end of the year 2014-15

A/C No.


Amount received

during the year 2014-

15

Repayment due during

the year 2014-15


the year 2014-15

Moratorium repayment

from following

year in which the loan is

received.

Interest

1 2 3 4 5 6 6(a) 6(b) 7 8 9 10 11

GENERATION

16915.00 0.00 3980.00 1 Larji HEP (04102007)

8.50% to 9.25%

919.73 53.840 12935.00 0.00 3980.00 8955.00

9095.00 0.00 2140.00 2 Larji HEP (04102010)

6.75% 379.54 53.860 6955.00 0.00 2140.00 4815.00

7565.00 0.00 1780.00 3 Larji HEP (04102012)

9.60% 409.36 53.844 5785.00 0.00 1780.00 4005.00

1916.67 0.00 166.67 6 RMU & LE of bassi HEP ( 04105004)

12.50% 205.88 53.824 1750.00 0.00 166.67 1583.33

354.45 46.93 34.58 8 Restoration ( R&M) work of existing Thirot HEP ( 04105005)

12.50% 47.01 53.875 366.80 88.21 42.40 412.61

5000.25 0.00 434.80 7 RMU & LE of bassi HEP ( 04105006)

13.00% 560.41 53.824 4565.45 0.00 434.80 4130.64

27.73 0.00 7.92 4 R/M &u of Kotla(04005006)

13% to 12.35%

1.96 19.80 0.00 7.92 11.88

32.30 0.00 7.60 5 R/M &u of Ganguwal (04005007)

13% to 12.35%

2.62 53.825 24.70 0.00 7.60 17.10

92

0.00 2943.83 0.00 9 R&M work in 8 (HEP) H.P. (4105008)

12.50% 367.98 2943.83 0.00 0.00 2943.83

40906.39 2990.76 8551.57 0 2894.48 35345.58 88.21 8559.40 26874.40 TRANSMISSION

119.350 0.000 68.200 10 Const.. Of single line from Nalagarh to Kunihar (04103015)

11.50% 1.70 53.870 51.15 0.00 51.15 0.00

119.35 0.00 68.20 1.70 51.15 0.00 51.15 0.00

0 0 0 (I) Less 0.25% rebate on prompt payment

82.00

41025.74 2990.76 8619.77 Total: 2814.18 35396.73 88.21 8610.55 26874.40

P.F.C. (STL) Schedule 32 (Figures in Lacs)

Outstanding at the beginning of the






Sr. No.


Rate of Interest



A/C No.


Amount received


15


the year 2014-15


the year 2014-15


from following


received.

Interest

1 2 3 4 5 6 6(a) 6(b) 7 8 9 10 11

20000.00 0.00 3636.92 1.00 Execution of working capital Requirement 04122006

12.25% 754.87 16363.08 0.00 16363.08 0.00

0.00 0.00 0.00 (I) Less 0.25% rebate on prompt payment

15.10

20000.00 0.00 3636.92 Total: 739.78 16363.08 0.00 16363.08 0.00

93

CO-OP. Bank loan Long Term/Largi /Khauli(Long Term) KCC Bank/SBI/CBI/P&S Bank Loans

(Figures in Lacs)Outstanding at the

beginning of the previous year

2012-13





Sr. No.


Rate of Interest



A/C No.


Amount received


15


the year 2014-15


the year 2014-15


from following


received.

Interest

1 2 3 4 5 6 6(a) 6(b) 7 8 9 10 11

300.00 0.00 200.00 1 D- Loan from Co-Operative Bank (for Larji HEP) khauli

9.00% Repayable in five years after moratorium period

4.49 53.7 100.00 0.00 100.00 0.00

864.00 0.00 864.00 2 KCC Bank (for Larji HEP)


0.00 53.7 0.00 0.00 0.00 0.00

1136.00 0.00 1136.00 3 H.P.State Co-op Bank (For Larji HEP)


0.00 53.7 0.00 0.00 0.00 0.00

26500.00 0.00 6000.00 4 H.P.State Co-op Bank (300)new


2006.75 53.7 20500.00 0.00 6004.28 14495.72

15000.00 0.00 15000.00 5 KCC Bank 150 Cr. 11.85% 2 years Bullet Payment

0.00 53.7 0.00 0.00 0.00 0.00

20000.00 0.00 20000.00 6 KCC Bank 200 Cr. 11.70% do 0.00 53.7 0.00 0.00 0.00 0.00

20000.00 0.00 4000.00 7 KCC Bank 200 Cr. 11.75% 2 years 0.00 16000.00 0.00 0.00 16000.00

0.00 29000.00 0.00 10 KCC Bank 290.00 Cr. (FRP)

11.00% 3193.80 29000.00 0.00 0.00 29000.00

94

0.00 19054.00 0.00 8 State Bank of India Rs. 190.54 Cr. (FRP)

10.30% 2095.94 19054.00 0.00 0.00 19054.00

0.00 3000.00 0.00 9 State Bank of India Rs. 30 Cr. (FRP)

103.30% 330.00 3000.00 0.00 0.00 3000.00

0.00 0.00 0.00 10 State Bank of India Rs. 80.30 Cr. (FRP)

10.30% 4.84 0.00 8030.00 0.00 8030.00

0.00 10000.00 0.00 11 P&Sind Bank FRP Loan Rs. 117.40 cr.

10.45% 1293.78 0.00 11740.01 0.00 11740.01

0.00 0.00 0.00 12 P&Sind Bank FRP Loan Rs. 140.00 cr.

10.45% 1576.47 27000.00 500.02 13500.00 14000.02

0.00 0.00 0.00 13 Central Bank of India

10.45% 966.79 10000.00 0.00 5000.00 5000.00

83800.00 61054.00 47200.00 11472.85 124654.00 20270.03 24604.28 120319.75

R-APDRP Part-A Loans for the year 2014-15

(Figures in Lacs)







Sr. No.


Rate of Interest



A/C No.


Amount received


15


the year 2014-15


the year 2014-15


from following


received.

Interest

1 2 3 4 5 6 6(a) 7 8 9 10 11

72.15 0.00 0.00 1 Loan amount sanctioned under (Part -A)-R APDRP Loan for Baddi Town

9% to 11.50%

6.494 53.843 72.15 0.00 14.71 57.44

95

(04133001)

69.34 0.00 0.00 2 Loan amount sanctioned under (Part -A) R APDRP Loan for Bilaspur Town (04133002)

9% to 11.50%

6.241 53.843 69.34 0.00 13.95 55.39

60.62 0.00 0.00 3 Loan amount sanctioned under (Part -A) R APDRP Loan for Chamba Town (04133003)

9% to 11.50%

5.456 53.843 60.62 0.00 12.19 48.43

109.27 0.00 0.00 4 Loan amount sanctioned under (Part -A)R APDRP Loan for Dharamshala Town (04133004)

9% to 11.50%

9.834 53.843 109.27 0.00 22.19 87.08

76.44 0.00 0.00 5 Loan amount sanctioned under (Part -A) R APDRP Loan for Hamirpur Town (04133005)

9% to 11.50%

6.880 53.843 76.44 0.00 15.49 60.95

65.71 0.00 0.00 6 Loan amount sanctioned under (Part -A) R APDRP Loan for Kullu Town (04133006)

9% to 11.50%

5.914 53.843 65.71 0.00 13.25 52.46

87.78 0.00 0.00 7 Loan amount sanctioned under (Part -A) R APDRP Loan for Mandi Town (04133007)

9% to 11.50%

7.900 53.843 87.78 0.00 17.70 70.08

65.73 0.00 0.00 8 Loan amount sanctioned under (Part -A) R APDRP Loan for Nahan Town (04133008)

9% to 11.50%

5.916 53.843 65.73 0.00 13.23 52.50

96

971.58 0.00 0.00 9 Loan amount sanctioned under (Part -A) R APDRP Loan for Paonta Sahib Town (04133009)

9% to 11.50%

107.422 53.843 971.58 0.00 197.11 774.47

3370.68 0.00 0.00 10 Loan amount sanctioned under (Part -A) R APDRP Loan for Shimla Town (04133010)

9% to 11.50%

283.381 53.843 3370.68 0.00 637.50 2733.18

154.19 0.00 0.00 11 Loan amount sanctioned under (Part -A) R APDRP Loan for Solan Town (04133011)

9% to 11.50%

13.877 53.843 154.19 0.00 31.41 122.78

70.25 0.00 0.00 12 Loan amount sanctioned under (Part -A) R APDRP Loan for Sundernagar Town (04133012)

9% to11.50%

6.323 53.843 70.25 0.00 14.12 56.13

111.51 0.00 0.00 13 Loan amount sanctioned under (Part -A) R APDRP Loan for Una Town (04133013)

9% to 11.50%

10.036 53.843 111.51 0.00 22.81 88.70

62.55 0.00 0.00 14 Loan amount sanctioned under (Part -A) APDRP Loan for Yol Town (04133014)

9% to 11.50%

5.630 53.843 62.55 0.00 12.63 49.92

5347.80 0.00 0.00 Total:-

0

481.30 5347.80 0.00 1038.31 4309.49

97

R-APDRP (Part-B) Loans for the year 2014-15 (Figures in Lacs)







Sr. No.


Rate of Interest



A/C No.


Amount received


15


the year 2014-15


the year 2014-15


from following


received.

Interest

2622.00 0.00 0.00 1 R APDRP (Part-B) Loan for Baddi (04134001)

9% 235.98 53.844 2622.00 0.00 0.00 2622.00

62.40 0.00 0.00 2 R APDRP (Part-B) Loan for Bilaspur (04134002)

9% 5.62 53.844 62.40 0.00 0.00 62.40

87.90 0.00 0.00 3 R APDRP (Part-B) Loan for Chamba(04134003)

9% 8.98 53.844 87.90 149.76 0.00 237.66

309.30 0.00 0.00 4 R APDRP (Part-B) Loan for Dharamshala (04134004)

9% 27.84 53.844 309.30 0.00 0.00 309.30

193.80 0.00 0.00 5 R APDRP (Part-B) Loan for Hamirpur 04134005

9% 18.86 53.844 193.80 198.51 0.00 392.31

222.00 0.00 0.00 6 R APDRP (Part-B) Loan for kullu (04134006)

9% 22.59 53.844 222.00 365.51 0.00 587.51

98

577.20 0.00 0.00 7 R-APDRP(PART-B)loan for Mandi(04134007)

9% 57.60 53.844 577.20 789.80 0.00 1367.00

182.10 0.00 0.00 8 R APDRP (Part-B) Loan for Nahan(04134008)

9% 18.31 53.844 182.10 268.98 0.00 451.08

1098.90 0.00 0.00 9 R APDRP (Part-B) Loan for Paonta Sahib 04134009

9% 98.90 53.844 1098.90 0.00 0.00 1098.90

3510.50 0.00 0.00 10 R APDRP (Part-B) Loan for Shimla (04134010)

9% 315.95 53.844 3510.50 0.00 0.00 3510.50

677.40 0.00 0.00 11 R APDRP (Part-B) Loan for Solan (04134011)

9% 60.97 53.844 677.40 0.00 0.00 677.40

196.50 0.00 0.00 12 R APDRP (Part-B) Loan for Sundernagar(04134012)

9% 17.69 53.844 196.50 0.00 0.00 196.50

219.30 0.00 0.00 13 R APDRP (Part-B) Loan for UNA(04134013)

9% 22.28 53.844 219.30 355.45 0.00 574.75

209.10 0.00 0.00 14 R APDRP (Part-B) Loan for Yol (04134014)

9% 18.82 53.844 209.10 0.00 0.00 209.10

10168.40 0.00 0.00 Total:- 930.37 10168.40 2128.00 0.00 12296.40

99

R-APDRP (Part-B) Counter Part Loans for the year 2014-15

(Figures in Lacs)







Sr. No.


Rate of Interest



A/C No.


Amount received


15


the year 2014-15


the year 2014-15


from following


received.

Interest

0.00 0.00 0.00 1 R APDRP (Part-B) Loan for Baddi (04437001)

12% 32.74 53.844 0.00 420.50 0.00 420.50

0.00 0.00 0.00 2 R APDRP (Part-B) Loan for Bilaspur (04437002)

12% 0.81 53.844 0.00 10.40 0.00 10.40

0.00 0.00 0.00 3 R APDRP (Part-B) Loan for Chamba(04437003)

12% 1.41 53.844 0.00 29.00 0.00 29.00

0.00 0.00 0.00 4 R APDRP (Part-B) Loan for Dharamshala (04134004)

12% 4.00 53.844 0.00 51.55 0.00 51.55

0.00 0.00 0.00 5 R APDRP (Part-B) Loan for Hamirpur 04437005

12% 3.09 53.844 0.00 62.92 0.00 62.92

0.00 0.00 0.00 6 R APDRP (Part-B) Loan for kullu (04437006)

12% 3.44 53.844 0.00 74.00 0.00 74.00

0.00 0.00 0.00 7 R-APDRP(PART-B)loan for Mandi(04437007)

12% 9.29 53.844 0.00 192.00 0.00 192.00

100

0.00 0.00 0.00 8 R APDRP (Part-B) Loan for Nahan(04437008)

12% 2.54 53.844 0.00 42.15 0.00 42.15

0.00 0.00 0.00 9 R APDRP (Part-B) Loan for Paonta Sahib 04437009

12% 14.21 53.844 0.00 183.15 0.00 183.15

0.00 0.00 0.00 10 R APDRP (Part-B) Loan for Shimla (04437010)

12% 46.70 53.844 0.00 601.85 0.00 601.85

0.00 0.00 0.00 11 R APDRP (Part-B) Loan for Solan (04437011)

12% 9.17 53.844 0.00 134.32 0.00 134.32

0.00 0.00 0.00 12 R APDRP (Part-B) Loan for Sundernagar(04437012)

12% 2.54 53.844 0.00 32.75 0.00 32.75

0.00 0.00 0.00 13 R APDRP (Part-B) Loan for UNA(04437013)

12% 3.53 53.844 0.00 73.00 0.00 73.00

0.00 0.00 0.00 14 R APDRP (Part-B) Loan for Yol (04437014)

12% 2.70 53.844 0.00 34.85 0.00 34.85

0.00 0.00 0.00 Total:- 136.17 0.00 1942.44 0.00 1942.44

0 0 0 (I) Less 0.25% rebate on prompt payment

1.86

0.00 0.00 0.00 Total:- 134.31 0.00 1942.44 0.00 1942.44

101

CAPITAL LIABILITIES ON REC LOANS FOR THE YEAR-2014-15 (Rs in Lacs)


the year 2012-13

Amount received


14


the year 2013-14

Sr. No.

Name of Scheme Loan Code Outstanding at the end of

the year 2013-14

Interest for the year 2014-15

Amount received


15

Repayment due during the year

2014-15

Outstanding at the

end of the year 2014-15

(i) (ii) (iii) (iv) (v) (vi) (viii) ((i+ii-iii) (ix) (x) (xi) (Viii+ix-x)

HPSEB

5.55 0.00 2.78 1 RE of 28 villages -do-Dharwar area -do- O60187 2.78 0.29 0.00 2.78 0.003.78 0.00 2.98 2 S.I. In Barsar,Bhoranj, Toni Devi area I,II

of Hamirpur. O60199 0.80 0.00 0.00 0.00 0.80

1.99 0.00 1.99 3 Scheme for RE in 8 villages of Dodra Kawar of Shimla.

O60214 0.00 0.00 0.00 0.00 0.00

1.24 0.00 1.24 4 Scheme for IE of the Renuka of Distt.Sirmour.

O60225 0.00 0.00 0.00 0.00 0.00

3.72 0.00 3.72 5 _do- O60226 0.00 0.00 0.00 0.00 0.00

3.08 0.00 3.08 6 _do- of Sundernagar Tehsil of Mandi. O60227 0.00 0.00 0.00 0.00 0.002.76 0.00 2.76 7 _do_ in Block Sundernagar Tehsil of

Mandi Distt. O60228 0.00 0.00 0.00 0.00 0.00

6.74 0.00 6.74 8 _do- Drang block of Mandi Distt. O60229 0.00 0.00 0.00 0.00 0.00

0.05 0.00 0.05 9 S.I. Scheme in Lad Bharol Block of Mandi Distt.

O60255 0.00 0.00 0.00 0.00 0.00

32.73 0.00 8.18 11 RE scheme for intensive elect. of parts of Tehsil Arki, Kasuali, Kandaghat & Solan Distt. Solan.

O60407 24.54 2.66 0.00 8.18 16.36

13.12 0.00 3.28 12 RE scheme for intensive elect. of parts of Tehsil Bangana Distt. Una.

O60408 9.84 1.12 0.00 3.28 6.56

76.60 0.00 19.15 13 RE scheme for intensive elect. of parts of Tehsil Bailnath, Palampur & Jai Singhpur in Distt. Kangra.

O60409 57.45 6.18 0.00 19.15 38.30

28.00 0.00 7.00 14 RE scheme for intensive elect. of parts of Tehsil Arki, Kasuali, Kishangarh Distt. Solan.

O60410 21.00 2.29 0.00 7.00 14.00

36.06 0.00 9.01 15 RE scheme for intensive elect. of parts of Tehsil Suni Shimla, Karsog and Arki Distt. Solan, Shimla,Mandi

O60411 27.04 3.01 0.00 9.01 18.03

102

87.53 0.00 21.88 16 RE scheme for intensive elect. of parts of Tehsil Jogindernagar, Baijnath in Distt. Mandi & Kangra

O60412 65.65 6.16 0.00 21.88 43.77

6.31 0.00 1.58 17 RE scheme for intensive elect. of parts of Tehsil Shillai in Distt. Sirmour Under (E) Divn. Poanta Sahib.

O60413 4.73 0.49 0.00 1.58 3.15

6.76 0.00 1.69 18 RE scheme for intensive elect. of parts of Tehsil Shillai in Distt. Sirmour Under (E) Divn. Rajgarh.

O60414 5.07 0.56 0.00 1.69 3.38

30.24 0.00 7.56 19 RE scheme for intensive elect. of parts of Tehsil Churah in Distt. Chamba Under (E) Divn. Chamba

O60415 22.68 2.52 0.00 7.56 15.12

50.63 0.00 12.66 20 RE scheme for intensive elect. of parts of Tehsil Chopal Nerwa, Cheta and Theog in Distt. Shimla

O60416 37.97 4.31 0.00 12.66 25.31

63.00 0.00 15.75 21 RE scheme for intensive elect. of parts of Tehsil Rampur, Nankhari in Distt. Shimla under Rampur

O60417 47.25 4.63 0.00 15.75 31.50

64.81 0.00 16.20 22 RE scheme for intensive elect. of parts of Tehsil Harali and Una in Distt. Una

O60418 48.61 5.51 0.00 16.20 32.40

34.06 0.00 8.52 23 RE scheme for intensive elect. of parts of Tehsil Theog & Chopal in Distt. Shimla

O60419 25.55 2.66 0.00 8.52 17.03

23.15 0.00 5.79 24 RE scheme for intensive elect. of parts of Tehsil Solan Kandaghat Junga & Pachhad in Distt. Solan, Shimla & Sirmour.

O60420 17.36 1.79 0.00 5.79 11.57

103

37.79 0.00 9.45 25 RE scheme for intensive elect. of parts of Tehsil Dangana in Distt. Una

O60421 28.34 3.12 0.00 9.45 18.89

32.91 0.00 8.23 26 RE scheme for intensive elect. of 279 Villages pats of Tehsil Bhalanj & Hamirpur in Distt. Hamirpur.

O60422 24.68 2.66 0.00 8.23 16.45

24.11 0.00 4.82 27 RE scheme for intensive electrication 9406 villages part of tehsil Palampur Jaisinghpur. Thural and Dehra in the Distt. Kangra under (E) Divn. Palampur in HP

O60435 19.29 1.83 0.00 4.82 14.47

40.74 0.00 8.15 28 RE scheme for intensive electrication 9383 villages part of tehsil Shimla and Junga in Distt. Shimla under (E) Divn. Shimla City in HP

O60436 32.59 3.17 0.00 8.15 24.44

14.56 0.00 3.07 29 RE scheme for intensive electrication 9170 villages part of tehsil Kotkhai in Distt. Shimla under (E) Divn. Jubbal in HP

O60437 11.49 1.30 0.00 3.07 8.42

11.83 0.00 11.83 30 RE scheme for intensive electrication 9196 villages of tehsil Nahan and parts of Dadahu and Pachhad in the Distt. Sirmour under (E) Divn. Nahan in HP

O60438 0.00 0.00 0.00 0.00 0.00

512.12 0.00 73.16 31 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Shimla Circle in Shimla Distt. Of (H.P.)

O60440 438.96 48.50 0.00 73.16 365.80

279.62 0.00 39.95 32 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Solan Circle in Solan Distt. Of (H.P.)

O60441 239.67 25.67 0.00 39.95 199.73

104

78.96 0.00 11.28 33 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Nahan Circle in Nahan Distt. Of (H.P.)

O60442 67.68 4.79 0.00 11.28 56.40

105.28 0.00 15.04 34 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Hamirpur Circle in Hamirpur Distt. Of (H.P.)

O60443 90.24 6.38 0.00 15.04 75.20

417.56 0.00 59.65 35 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Una Circle in Una Distt. Of (H.P.)

O60444 357.91 38.14 0.00 59.65 298.26

828.78 0.00 118.40 36 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Mandi Circle in Mandi Distt. Of (H.P.)

O60445 710.39 77.24 0.00 118.40 591.99

106.60 0.00 15.23 37 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Rampur Circle in Shimla Distt. Of (H.P.)

O60446 91.37 6.47 0.00 15.23 76.14

48.03 0.00 6.86 38 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Rohru Circle in Shimla Distt. Of (H.P.)

O60447 41.17 2.92 0.00 6.86 34.31

105

84.22 0.00 12.03 39 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Bilaspur Circle in BilaspurDistt. Of (H.P.)

O60448 72.19 5.11 0.00 12.03 60.16

572.32 0.00 81.76 40 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Kangra Circle in Kangra Distt. Of (H.P.)

O60449 490.56 54.54 0.00 81.76 408.80

435.38 0.00 62.20 41 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area dalhousie Circle in ChambaDistt. Of (H.P.)

O60450 373.18 40.32 0.00 62.20 310.99

533.37 0.00 76.20 42 Scheme for Up-Gradation of Sub-Transmision & Distribution network under APDRP covering for urban distribution area Kullu Circle in Kullu Distt. Of (H.P.)

O60451 457.17 48.78 0.00 76.20 380.98

76.41 0.00 9.55 43 Dist Scheme for creation of 33/11 KV 1.6 MVA cum- attendent S/stn. Chaned ( Bhanouta under ED in Chamba in H.P.

O60452 66.86 7.71 0.00 9.55 57.31

121.17 0.00 15.15 44 Dist Scheme for creation of 33/11 KV 1.6 MVA at Sadwan under ED in Nurpur in H.P.

O60454 106.02 12.17 0.00 15.15 90.87

140.60 0.00 17.57 45 Dist Scheme for creation of 33/11 KV 1.6 MVA at Lunj under ED Shahpur in Kangra in H.P.

O60455 123.02 14.13 0.00 17.57 105.45

87.13 0.00 10.89 46 Scheme for strenthining power supply system in Palampur town under (OP) Circle Palampur H.P.

O60456 76.24 8.90 0.00 10.89 65.35

106

54.83 0.00 6.85 47 Scheme for strenthining power supply system in Kangra town under (OP) Circle Kangra H.P.

O60457 47.98 5.59 0.00 6.85 41.13

120.95 32.81 13.87 48 Scheme for creation of 33/11 KV 2X1.6 MVA Sunstation in UNA Distt.

60459 139.89 16.17 0.00 15.54 124.34

156.33 0.00 31.27 49 Scheme for procurement of ACRS/AAAC cunductor for replacement of GI wire exiciting in distribution system (HT & LT) under South Zone of H.P.

62768/461 125.06 12.28 0.00 31.27 93.80

1553.54 0.00 388.39 50 Scheme for replacement of rotten wooden poles

62771 1165.16 119.92 0.00 388.39 776.77

664.52 0.00 66.45 51 Creation of 66/11KVA 2X10 MVA unmanned substation at Davni along with 66 KV S/C line on D/c Towers in Solan Distt of H.P

63117 598.07 69.94 0.00 66.45 531.62

227.32 62.45 0.00 52 Creation of 33/11 KV S/Stn at Kaira under (OP) Circle of Kangra

63200 289.77 35.89 0.00 0.00 289.77

0.00 17.94 0.00 53

P:SI (Distribution) Aug. of existing 33 KV Sub Station at Haroli from 33/11 KV, 2X3.15 to 2X 6.3 MVA under UNA Distt of H.P

63201 17.94 2.20 0.00 0.00 17.94

290.44 0.00 0.00 54 Creation of 33/11 KV S/Stn at Nagri Gopalpur under (OP) Circle Kangra

63217 290.44 35.96 0.00 0.00 290.44

256.17 12.91 0.00 55 Creation of 33/11 KV S/Stn. At Totarani (Mclodgang) in Kangra Distt

63218 269.08 33.45 0.00 0.00 269.08

107

0.00 634.87 0.00 56 P:SI Transmission Scheme for creation of 66/22KV 2x10 MVA Substation at Anni in Kullu Distt. Of H.P

63286 634.87 91.04 267.45 0.00 902.31

221.20 0.00 0.00 57 Construction of Add. 33 KV line from Una (Rakkar) to Thaliwala alongwith Aug. of 33/11 KV s/Stn. from 2*6.3 MVA to 2*10 MVA s/stn. at Thaliwala under operation circle Una H.P.

63416 221.20 27.43 32.98 22.12 232.05

284.55 0.00 0.00 58 Pumpset energisation Poanta Sahib block of Sirmour Distt

63440 284.55 34.96 0.00 0.00 284.55

7.56 10.15 0.00 59 P:SI (Distribution) Creation of 1 No 33 KV S/Stn. at Arki in Solan Distt.

63597 17.71 5.15 49.82 0.00 67.52

77.00 0.00 0.00 60 P:SI Distribution Creation of 2X1.6 MVA, 33 KV S/Stn at Mandap under E/D Dharampur in Mandi Distt

63605 77.00 9.58 0.00 0.00 77.00

65.48 0.00 0.00 61 P:SI Distribution Creation of 2x3.15 MVA 33 KV S/Stn at Oachgat in Solan Distt

63662 65.48 8.18 0.00 0.00 65.48

41.17 0.00 0.00 62 P: SI Distribution Aug. of 33/11 Kv S/Stn from 2X1.16 MVA to 2X3.15 MVA at shillai in Sirmour Distt

63666 41.17 5.10 0.00 0.00 41.17

108

94.29 0.00 0.00 63 P:SI Distribution Aug. of 33/11KV S/Stn. From 2x3.15 MVA to 2x6.3 MVA at Bhaira in Una Distt

63668 94.29 11.79 0.00 0.00 94.29

158.14 0.00 0.00 64 Aug of 2X6.3 MVA, 66/22 KV S/Stn at Huli to 2x10 MVA, 66/22 KV in Shimla Distt of H.P

63686 158.14 19.65 13.34 0.00 171.48

35.92 0.00 0.00 65 Construction of 2x3.15 MVA, 33/11 KV substation at Check Sarai Una Distt. of H.P.

63780 35.92 4.52 6.57 0.00 42.49

74.68 0.00 0.00 66 Augmentation of 33/11 KV Sub-Station at Shahpur from 2X2.5 MVA to 2X6.3 MVA in OP Circle Kangra in Distt. Kangra of H.P.

63912 74.68 9.34 0.00 0.00 74.68

67.42 0.00 0.00 67 Augmentation of 33/11 KV Sub-Station at Galura from 2X1.0 MVA to 2X3.15 MVA in OP Circle Kangra in Distt. Hamirpur of H.P.

63913 67.42 8.42 0.00 0.00 67.42

80.92 0.00 0.00 68 AUGMENTATION OF kv LINE Girinagar Nahan from ACSR 6/1/4.72 mm to AAA 37/2.59 mm conductor in Sirmour Distt. Of H.P. State

63920 80.92 10.11 0.00 0.00 80.92

53.98 0.00 0.00 69 Augmentation of 33/11 KV Sub-Station at Khudla from 2X1.6 MVA ti 2.3.15 MVA in OP Circle Hamirpur Distt. Hamirpur of H.P.

63914 53.98 6.75 0.00 0.00 53.98

109

0.00 8.36 0.00 70

Aug.of 1x1+1x2.5 MVA,33/11 KVA to 2x2.15 MVA, 33/11 KV S/Stn at Jhandutta in Bilaspu

63922 8.36 1.02 0.00 0.00 8.36

0.00 46.29 0.00 71

Const.of 1x3.15 MVA, 33/11 KV (Unattended type at Attara (Gangath) in Kangra Distt of H.P

63924 46.29 8.47 54.51 0.00 100.80

0.00 97.86 0.00 72

Const.of 2X3.15 MVA, 33/11 KV S/Station at Rehan in Kangra Distt of H.P

63925 97.86 17.51 65.96 0.00 163.82

19.67 103.83 0.00 73 Const of 2X3.15 MVA, 33/11 KV S/Stn at Barma Papri in Sirmour

63926 123.49 15.13 0.00 0.00 123.49

51.08 0.00 0.00 74 Aug of 33/11 KV Substation from 2x1.6 MVA to 2x3.15 MVA at Bharwain in Una Distt. of H.P.

63978 51.08 6.39 0.00 0.00 51.08

63.68 0.00 0.00 75 Aug of 33/11 KV Substation from 1x1.0 MVA to 2x2.6 MVA, at Dhaneta in Hamirpur Distt. of H.P.

64216 63.68 7.91 0.00 0.00 63.68

38.42 0.00 0.00 76 Construction of 2x1.10 MVA, 33/11 KV Substation at Bhararoo in Mandi Distt. of H.P.

64217 38.42 4.80 0.00 0.00 38.42

110

42.44 0.00 0.00 77 Construction of 2x3.15 MVA, 33/11 KV Substation at Bhareri in Hamirpur Distt. of H.P.

64218 42.44 15.01 134.57 0.00 177.01

4175.38 2847.02 0.00 78 Replacement of rotten/Wodden poles with Steel Tubular poles (2nd phase) under HPSEB Ltd.

64268 7022.39 869.88 240.45 0.00 7262.84

2.94 0.00 2.94 79 RE of 144 villages in Dehra Tehsil of Distt.Kangra.

O69012 0.00 0.00 0.00 0.00 0.00

2.24 0.00 2.24 80 RE of 113 villages in Dehra Tehsil of Distt.Kangra.

O69013 0.00 0.00 0.00 0.00 0.00

10.01 0.00 2.50 81 RE of 13 villages in Lower area of Lahaul & Spiti.

O69014 7.50 0.60 0.00 2.50 5.00

9.65 0.00 2.41 82 RE of IE of 4 villages in Kaza area of Spiti Tehsil.

O69015 7.24 0.57 0.00 2.41 4.82

9.24 0.00 2.31 83 RE of 12 villages and hamlets in Taboo area of Spiti Tehsil.

O69016 6.93 0.54 0.00 2.31 4.62

HPSEBL

295.96 0.00 0.00 84 Creation of 33/11 KV S/Stn at Patti Panchrukhi under (OP) Circle Kangra

63216 295.96 36.68 0.00 0.00 295.96

111

84.67 0.00 0.00 85 Aug. of 1 No. 33 KV Sub Station at Kalapul from 2x3.15 MVA to 2x6.3 MVA in Operation Circle Kangra Distt. of H.P.

63600 84.67 10.34 0.00 8.47 76.20

0.00 198.10 0.00 86

Aug.of 2x5 MVA,33/11KV to2x10MVA,33/11KVSubstation at P

63684 198.10 24.27 0.00 0.00 198.10

0.00 74.87 0.00 87

Aug of 1X3.15 MVA, 33/11 KV to 2X3.15 MVA, 33/ 11 KV S/Stn at Puruwala under ED Poanta Sahib in Sirmour

63688 74.87 9.17 0.00 0.00 74.87

184.40 0.00 0.00 88 Aug. of 132/33 KV Girinagar S/Stn., 1x16/20 MVA, 132/33 KV, 1x25/31.5 MVA Power T/F in Srmaur Distt. of H.P.

63746 184.40 22.51 0.00 18.44 165.96

224.14 240.13 0.00 89 Pumpsets energisation works in Una Operation Circle in Una District of H.P. State

63907 464.27 59.41 61.34 0.00 525.61

513.22 0.00 0.00 90 Aug. of 132/33 KV Bathri S/S from 132/33 KV, 2x16 MVA to 132/33 KV, 2x25/31.05 MVA power transformer having step up and step down provision in Chamba Distt. of H.P.

63908 513.22 61.58 0.00 51.32 461.89

71.28 0.00 0.00 91 Replacement of old equipment (switch gear) in 33 KV Sub-Station at Mehatpur, Bangana and Bhaira under operation Circle, Una in Una Distrist of H.P.State

63911 71.28 10.89 27.87 0.00 99.15

112

35.05 23.61 0.00 92 Augmentation of 33/11 KV Sub-Station at Jawali from 2X1.6 MVA to 2X3.15 MVA in OP Circle Kangra Distt. Kangra of H.P.

63915 58.66 10.56 37.31 0.00 95.97

31.49 0.00 0.00 93 Construction of 2x3.15 MVA, 33/11 KV Substation at Kalkahar in Mandi Distt. of H.P.

63923 31.49 3.93 0.00 0.00 31.49

0.00 116.26 0.00 94

Aug of 33/11 KV Substation from 2x3.15 MVA to 2x6.3 MVA at Dhaula Kuan in Sirmour Distt. of H.P.

64215 116.26 14.24 0.00 0.00 116.26

2983.91 137.30 624.24 95 Procurement of Conductor and PVC cable in all districts of H.P.

64271 2496.96 304.25 0.00 624.24 1872.72

3236.74 37.89 654.92 96 Procurement of Poles in all districts of H.P.

64272 2619.70 319.34 0.00 654.92 1964.77

2053.65 17.20 414.17 97 Procurement of Electronic Energy meters and CT-PT combined units all districts of H.P.

64273 1656.68 203.36 0.00 414.17 1242.51

2940.28 43.92 596.84 98 Procurement of distribution Transformers for all districts of H.P.

64274 2387.36 292.00 0.00 596.84 1790.52

113

118.90 0.00 0.00 99 Creation of 2x1.6 MVA, 33/11 KV S/Stn at Lahru Dadu in Kangra Distt. of H.P.

3383736 118.90 14.76 0.00 0.00 118.90

2215.49 989.97 0.00 100 IT scheme of HPSEB Limited for computerization offunction not covered under R-APDRP Part-A and ADB in all districts of H.P.

3383921 3205.46 397.57 159.47 0.00 3364.93

59.47 86.04 0.00 101 Aug of 33/11 KV S/Stn Jabli from 2X2.5 MVA to 2X6.3 MVA in Bilaspur Distt.of H.P.

3384333 145.51 17.82 0.00 0.00 145.51

0.00 0.00 0.00 102 Aug of IXI.10 MVA to + IX 1.0 MVA 1X3.15 MVA, 33/11 KV S/Stn at Chadiar in Kangra Distt of H.P.

3384334 0.00 5.05 99.30 0.00 99.30

27.17 8.49 0.00 103 Const. of 33 KV HT line for interlinking of 33/11 KV S/Stn Jakhu and 33/11 KV S/Stn Kakkar in Hamirpur Distt. of H.P.

3384337 35.66 4.44 0.00 0.00 35.66

0.00 62.24 0.00 104 Replacement of 22 KV OCB with VCB at 22 KV control point at Kotkhai in Shimla Distt.

3384363 62.24 7.62 0.00 0.00 62.24

0.00 0.00 0.00 105

Const of 1 No. 33/11 KV S/Stn at Bharoli Jadid in Kangra Distt of H.P.

3384368 0.00 11.68 179.90 0.00 179.90

18.12 73.84 0.00 106 Aug. of 2x1.6MVA to 2x3.15MVA,33/11kv sub-station atSarahan in distt.Sirmour

3384566 91.96 11.27 0.00 0.00 91.96

114

3421.85 301.19 0.00 107 Procurement of Electronic Energy Meters and Meter boxes unite for all distt.

3384569 3723.04 462.26 0.00 0.00 3723.04

0.00 31.78 0.00 108 Aug. of 220/132KV Substation Jassure from 150 MVA capacity to 150 MVA+2X50/63 MVA in Kangra district of H.P.

3385268 31.78 9.27 80.53 0.00 112.30

277.62 6.05 0.00 109 Scheme for evacuation of power from small HEPs (upto 25 MW) in Chamba Zone of HPSEBL in Himachal Pradesh.

3385299 283.67 38.46 67.19 0.00 350.87

0.00 0.00 0.00 110

Augmentation of 33/11 KV Substation at Bhunter from 2x4 MVA to 2x6.3 MVA in Kullu district of H.P.

3385368 0.00 6.46 88.46 0.00 88.46

0.00 0.00 0.00 111 Augmentation of 7.783 Km 33 KV line between Una and Mehatpur from ACSR 100 mm2 to ACSR 130mm2 conductor in Una district of H.P

3385623 0.00 2.00 21.16 0.00 21.16

0.00 0.00 0.00 112

Construction of 2x3.15 MVA, 33/11 KV Substation (Unmanned) at Santokhgarh in Una District of H.P.

3385625 0.00 0.19 10.44 0.00 10.44

0.00 603.88 0.00 113 Augmentation of 132/66 KV, 2x31.5 MVA Substation at Jutog to 132/66 KV 1x50/63+1x31.5 MVA capacity in Shimla district of H.P

3385663 603.88 76.22 34.74 0.00 638.62

755.49 663.09 0.00 114 Scheme for release of GSC (General Service Connections) in Solan Circle of HPSEBL in H.P.

3385695 1418.59 178.09 158.85 0.00 1577.43

115

215.26 881.36 0.00 115 Scheme for release of GSC (General Service Connections) in Nahan Circle of HPSEBL in H.P.

3385699 1096.62 146.18 321.74 0.00 1418.36

222.22 612.49 0.00 116 Scheme for release of GSC (General Service Connections) in Shimla Circle of HPSEBL in H.P.

3385700 834.72 104.56 131.79 0.00 966.51

332.66 200.83 0.00 117 Scheme for release of GSC (General Service Connections) in Dalhousie Circle of HPSEBL in H.P.

3385701 533.50 67.26 472.40 0.00 1005.90

260.36 184.27 0.00 118 Scheme for release of GSC (General Service Connections) in Hamirpur Circle of HPSEBL in H.P.

3385702 444.62 68.12 100.89 0.00 545.51

613.70 683.27 0.00 119 Scheme for release of GSC (General Service Connections) in Kangra Circle of HPSEBL in H.P.

3385703 1296.96 174.78 706.05 0.00 2003.01

300.49 396.71 0.00 120 Scheme for release of GSC (General Service Connections) in Mandi Circle of HPSEBL in H.P.

3385704 697.21 85.53 1.88 0.00 699.09

218.06 195.94 0.00 121 Scheme for release of GSC (General Service Connections) in Una Circle of HPSEBL in H.P.

3385705 414.00 67.20 287.33 0.00 701.33

457.31 178.42 0.00 122 Scheme for release of GSC (General Service Connections) in Bilaspur Circle of HPSEBL in H.P.

3385706 635.73 77.88 0.00 0.00 635.73

250.98 101.95 0.00 123 Scheme for release of GSC (General Service Connections) in Kullu Circle of HPSEBL in H.P.

3385707 352.93 45.90 43.68 0.00 396.61

116

0.00 12.40 0.00 124 Augmentation of 1x1.0 MVA to 2x1.6 MVA 33/11 KV Substation (Unmanned) at Darang in Kangra Distt. Of H.P.

3385755 12.40 3.43 19.94 0.00 32.34

0.00 184.85 0.00 125 Augmentation of 132/33 KV Substation at Kala Amb from 2x25/31.5 MVA to 3x25/31.5 MVA in Sirmour district of H.P.

3385822 184.85 23.67 13.34 0.00 198.20

606.97 2296.31 0.00 126 Construction of 1x315 MVA, 400/220 KV Subscription at Kunihar in Hamirpur district of H.P.

3385837 2903.28 369.91 252.65 0.00 3155.93

0.00 991.72 0.00 127 Augmentation of Kotla Substation from 2x25/31.5 MVA, 220/66 KV to 1x80/100, 220/66 KV and 1x25/31.5+1x10 MVA, 66/22 KV capacity in Shimla district of H.P

3385845 991.72 124.45 44.11 0.00 1035.83

0.00 29.40 0.00 128 Scheme for Replacement of overhead conductor of HT/LT lines with AB cable in MC Area of Sri Naina Devi Ji in Bilaspur district of H.P.

3386178 29.40 3.60 0.00 0.00 29.40

0.00 40.10 0.00 129 Construction of 220/32 KV, 1x160/200 MVA Substation at Nehrain, Amb alongwith connecting lines in Una District of H.P.

3386180 40.10 4.91 0.00 0.00 40.10

0.00 0.00 0.00 130

Scheme for construction of 2x1.6 MVA, 33/22KV Substaion Karsog in Mandi district of H.P.

3386181 0.00 0.14 59.69 0.00 59.69

117

0.00 207.20 0.00 131 Scheme for release of GSC (General Service Connections) in Rampur Circle of HPSBL in H.P.

3386524 207.20 28.50 263.37 0.00 470.57

61.57 227.48 0.00 132 Scheme for release of GSC (General Service Connections) in Rohru Circle of HPSBL in H.P.

3386525 289.05 46.56 316.58 0.00 605.63

0.00 0.00 0.00 133

Replacement of Electromechanical meters with Electronic Meters for the year 2012-13.

3387015 0.00 89.92 1251.48 0.00 1251.48

0.00 0.00 0.00 134

Aug. of 33 KV line from Bassi to Baijnath from ACSR 6/1/4.72 Conductor to 30/7/2.59 mm conductor in Kangra Distt. of HP .

3387147 0.00 3.93 48.49 0.00 48.49

0.00 0.00 0.00 135

Construction of 2x3.15 MVA, 33/11 Un manned Sub- Station Sarabhai in Kullu Distt. Of HP.

3387149 0.00 0.07 30.71 0.00 30.71

0.00 0.00 0.00 136

Construction/conversion of 33KV Single circuit line in to double circuit from MPCL, Dhunkara(Jari) to Barshaini under Electrical Division HPSEBL, Kullu for evaluation of power at Jirah (4 MW) HEP. H.P.

3388479 0.00 0.81 202.25 0.00 202.25

37271.05 15014.98 3643.45 Total; Distribution 48642.58 6152.27 6460.60 3705.90 51397.28

B. GENERATION SCHEME 0.00 0.00 0.00 0.00

118

4514.35 1133.31 1039.56 1 Generation (Hydro) scheme O60423 4608.10 637.87 962.60 1392.68 4178.03

361.20 0.00 0.00 2 Renovation Modernization & Uprating Works of 5x108 MW Bhakra Left Bank Power Houses

63497 361.20 56.79 142.47 0.00 503.67

2272.88 0.00 284.11 3 4.5 MW Bhaba Augmentation Power House Project in Kinnaur District of H.P

64140 1988.77 239.19 0.00 284.11 1704.66

7148.42 1133.31 1323.67 Total 6958.07 933.85 1105.07 1676.79 6386.35

C. TRANSMISSION SCHEME HPSEB

1630.39 0.00 1630.39 1 Scheme for meeting the loads of various industrial areas under short term plan in Solan, Sirmour, Bilaspur and Una Districts in HP P.SI(Transmission)category code No. 060439

O60439 0.00 0.00 0.00 0.00 0.00

4504.26 29.89 566.77 2 Scheme for strenthining 9 EHV system in Nalagarh and Baddi area & prov. 220/66KV 2x100 MVA at Nalagarh ( Bayal) in Solan H.P.

O60453 3967.38 463.79 71.72 566.77 3472.33

119

724.80 172.97 89.51 3 Scheme for errection of 132/33 KV S/stn. ,25/31.5 MVA S/Stn. At Maliyana Shimla of LILO of one of the circuit of 132 KVA kunihar jatog line of H.P. Scheme code No. HP-Td-SEB-006-2008-100313 ( old 060458).

O60458 808.26 106.32 339.23 101.03 1046.46

867.55 0.00 86.76 4 Aug. of existing 132/33 KV 2X18 trans. Bank to 1x25/31.5 MVA at Gondpur (Poanta)

62775 780.80 91.13 0.00 86.76 694.04

293.84 0.00 29.38 5 Replacement of 132/33 KV, 9 MVA with 25/31.5 MVA at Kangra H.P

62780 264.46 30.88 0.00 29.38 235.07

351.02 0.00 35.10 6 Replacement of 132/33 KV 25/31.5 MVA at Anu Hamirpur

62791 315.92 36.87 0.00 35.10 280.82

1137.93 257.19 0.00 7 Upgaradation of EHV system to meet the loan requirement of the state under Medium Term Plan

63296 1395.12 172.49 399.59 139.51 1655.20

1034.49 4.76 0.00 8 P:SI Transmission Aug. of existing 220/132/33 KV Sub Station at Kunihar by installing an additional transformer of 220/132 KV, 160/200 MVA in Solan Distt of H.P

63617 1039.26 130.14 57.97 0.00 1097.22

120

484.58 68.53 0.00 9 Augmentation of 22/132 KV Mattansidh S/S from 2880/100 MVA to 3880/100 MVA power transfer in Hamirpur District of H.P. State

63909 553.11 72.79 106.99 0.00 660.10

1070.09 11.60 0.00 10 Construction of 220/KV DC line from Tower No. 61 near Jamta of 1st ckt. Of Giri Solan line to Devani with single zebra conductor and 132 KV SC line on DC tower from 220/132 KV Devani S/S to existing 132/33 KV Kala-Amb S/S with panther conductor in H.P. State

63910 1081.69 134.33 32.33 0.00 1114.02

1136.46 346.26 0.00 11 Const. of 2X25/31.5 MVA 132/33 KV S/Stn at Taliwala alongwith 132 KV S/C line on D/C Towers from Una To Taliwala in UNA Distt

63917 1482.72 192.57 145.89 0.00 1628.60

HPSEBL

297.14 0.00 0.00 12 Augmentation of 220/33 KV Substation Baddi under Solan Circle, District Solan "(HP) by addition of 220/33 KV, 1x25/3.15 MVA Transformer of H.P

63607 297.14 36.28 0.00 29.71 267.43

596.75 0.00 0.00 13 P:SI Transmission Aug. of 220/66 KV S/Stn Baddi under olan Circle by addition of 220/66 K, 1x80/100 MVA Transformer of H.P

63618 596.75 73.88 0.00 0.00 596.75

958.48 0.00 0.00 14 Providing spare transformer and allied equipments for various existing EHV&HV substation under HPSEBL to meet with exigencies in various districts of H.P State

63735 958.48 117.50 0.00 0.00 958.48

121

0.00 90.78 0.00 15 Providing 25 MVAR Capatitor Banks at Baddi and Brotiwala in Solan Distt. of H.P.

63918 90.78 11.70 11.15 0.00 101.93

2397.00 443.21 0.00 16 Const. of 2x2.5/31.5 MVA 400 KV from 220/66 KV towers from 220/66 KV S/Stn Nalagrah to Baddi in Solan Distt of H.P.

64068 2840.21 408.60 1069.63 390.98 3518.85

142.72 18.20 0.00 17 Aug of one No. 132/11 KV S/Stn at Barotiwala with 1x25/31.5 MVA Transformer to replace 1x16/20 MVA transformer in Solan Distt.

3384280 160.92 20.03 14.87 0.00 175.79

950.45 -1.06 0.00 18 Aug.of 220/132KV Sub-station Girinager from 2x50/63MVA to 2x80/100MVA inSirmour Distt.

3385180 949.38 118.14 0.00 0.00 949.38

9.14 0.00 0.00 19 Construction of 2x6.3 MVA, 66/22 KV Substation Chopal alongwith 66 KV line from Sainj to Chopal in Shimla district of H.P.

3385270 9.14 1.75 8.10 0.00 17.24

372.00 0.00 0.00 20 Augmentation of 33/132 KV SubstationDehan from 2x16 MVA to 2x25/31.5 MVA capacity alongwith 132KV S/C line on D/C towards from Dehan to Kangra in Kangra district of H.P.

3385360 372.00 46.50 0.00 0.00 372.00

161.66 0.00 0.00 21 Augmentation of 33/132 KV, 1x16MVA to 1x25/31.5 MVA Substation at Malana in Kullu District of H.P

3385416 161.66 19.80 0.00 0.00 161.66

0.00 356.06 0.00 22 Construction of 132/33 KV, 1x16 MVA Subscription at Gaura in Solan district of H.P.

3385836 356.06 54.39 129.48 0.00 485.55

122

0.00 0.00 0.00 23

Augmentation of 132/33 KV Sub-station Bijni from 1X16MVA +1X20 MVA to 1X20+1X25/31.5 MVA capacity in Mandi District of Himachal Pradesh

3386795 0.00 12.20 183.01 0.00 183.01

0.00 0.00 0.00 24 Scheme for Construction of 220/66 KV 1x80/100 MVA & 66/11 KV, 4x20MVA Substation Mandhala by LILO of 220 KV D/C line from Uperla Nangal to Baddi upto Mandhala in Solan Distt. of H.P.

3388528 0.00 41.32 1994.17 0.00 1994.17

19120.76 1798.40 2437.91 18481.25 2393.41 4564.14 1379.26 21666.13

LESS 0.5% REBATE (-) 0.65

63540.23 17946.69 7405.03 0 74081.90 9478.87 12129.81 6761.94 79449.76

123

47. The Company has charged the following amount under the head prior period items in the accounts of FY 2015-16 after finalization of accounts of FY 2014-15 as per the accounting policy of the Company for prior period items.

NET PRIOR PERIOD CREDITS/(CHARGES) (` in Lacs)

Sr. No. Description Account Code

Current year

Previous year

(A) Prior Period Income

1 Fuel related gain on prior period transaction 65.1 0.00 0.00

2 Receipts from Consumers relating to prior periods. 65.2 0.00 75.89

3 Interest Income relating to prior periods 65.4 0.00 0.00

4 Excess provision of Income Tax in prior period 65.5 0.0 0.0

5 Excess provision for depreciation in prior periods 65.6 0 0

6 Excess provision interest & Finance charges 65.7 0 0

7 Other excess provision in prior period. 65.8 0 36.24

8 Other income relating to prior periods. 65.9 44.63 19.71

Sub-Total.. 44.63 131.81

(B) Prior period Expenses/Losses

1 Short provision for power purchased in previous years. 83.1 0 5363.79

2 Operating expenses of previous years (excess provision) 83.3 321.41 311.61

3 Excise duty relating to Generation in previous years 83.4 0.00 0.00

4 Employee costs relating to previous years. 83.5 796.54 879.95

5 Depreciation under provided in previous years. 83.6 0 -301.36

6 Interest & other Finance Charges relating to previous years.

83.7 15.23 0.00

7 Other charges relating to previous years ( Excess provision )

83.8 0 -96.62

Sub-Total.. 1133.18 6157.37

(A-B) Net prior period credits/{charges} (1088.55) (6025.53)

48. The Company has restructured loan under FRP in Bonds/ Long terms loans Rs. 1235.41 crore against Rs. 1462.50 approved by the state Govt. under FRP. The loan of Rs. 227.09 are yet to be restructured under this schemes, in terms of Ministry of Power Scheme dated 05-10-2012 .

49. The Company has stopped the practice for charging of Interest during Constriction stage on the works under capital works in progress as per Commercial Accounting Manual adopted by the HPSEBL and charged the IDC only on those assets which are funded from Loan from FIs. During this year Company has been capitalized interest of Rs. 4614.75 Lac and the same has been allocated to concerned works by the field Units in FY 2014-15.

50. (a) Additional information pursuant to clause 4 C of Part –II to Schedule VI of the Companies Act, 1956. (` in Lacs)

Particulars 2014-15 2013-14 Transmission Loss 215.400 MU 205.000 MU

Transmission & Distribution Loss 1353.829 MU 1063.156 MU

Energy Sold 8652.291 MU 9535.430 MU

Revenue from operation / sale of energy 556818.30 505090.40

124

Revenue from energy traded/ interstate sales 128747.95 81958.33

Opening debtors for sale of energy w/o deducting provision for doubtful debt

80515.51 63593.26

Closing Debtors for sale of energy w/o deducting provision for doubtful debts or any amount written off

103487.99 80515.51

Total Expenditure 603821.04 536081.23

Non Tariff/ Other Income 11663.05 9420.10

Subsidy received 70283.57 000 .00

Subsidy Booked / Built in the Revenue 74567.13 34493.73

Sundry debtor for energy traded & interstate sale of power 41570.90 23749.87

Gross Energy Generated 1815.480MU 1950.790MU

Auxiliary Consumption 5.413 MU 6.085 MU

Energy Purchased 10006.120 MU 10778.960 MU

Energy Traded/ Inter State Sales (Net) 1428.710 MU 1999.597 MU

51. Detail of equity received from state Govt.:—

Sr. No Particulars Year (` in Lacs)

1

Equity capital of Govt Laon of Rs. 468 crore outstanding as on 31-3-93 by converting 50% into equity of state Govt in HPSEB Ltd. as per following details:-

(i) Distribution Rs. 189.00 cr.

(ii) PH Gaj Rs. 15.00 cr.

(iii) PH Baner Rs. 15.00 cr.

(iv) PH Thirot Rs. 15.00 cr.

Total.. Rs. 234.00 cr.

1994-95 23400.00

2 Equity Share for Larji 1998-99 to 2004-05 4811.18

3 Khauli HEP 2007-08 1516.00

4 Ganvi HEP 2008-09,2012-13 1512.00

5 BVPCL 2007-08,2008-

09,2009-10 7426.00

6 PVPCL 2007-08 558.00 7 Equity for Trans & Distribution schemes 2009-10 1430.00 8 Equity share in the name of Director 2010-11&2011-12 1.40 9 T&D Schemes 2012-13 4000.00 10 T&D Schemes & 13th Finance Commission grants for

Boarder Area (31.75 +12.50-0.10) 2013-14 4425.00

11 Improvement of Harijan Basti Rs. 12.59 crore, grants for Boarder Area Rs 25 crore. (6.25 +12.50+6.25) and equity to HPSEBL under demand No 23 Rs. 25 crore

2014-15 6250.00

Total.. 55329.58

Abstract- Generation- 20359.18 Distribution- 34970.40 Total 55329.58

Note:-Besides above, Hon’ble Regulator has allowed equity of Rs. 107.46 crore for Larji HEP to HPSEBL from the cash available (w.e.f 1986-87 to 2006-07) considered by them internal accrual for the project.

125

52. Detailed Technical Data:—

TABLE-3 ENERGY GENERATED , PURCHASED AND SOLD (MU)

Sl. No. Particulars 2012-13 2013-14 2014-15

1 2 5 6

1 Generation in million KWH (Gross)

1815.480 1950.790 2096.815

Internal combustion(Diesel) 0.000 0.000 0.000

Total:- 1815.480 1950.790 2096.815

2(a) Auxiliary consumption (in MKwh) 5.413 6.085 5.720

(b) Less Govt. of HP Share in HPSEB's projects

a) Ghanvi 8.810 9.123 10.294

b) Baner 5.184 5.105 5.524

c) Gaj 4.690 5.578 6.007

d) Larji 78.091 71.706 76.757

e) Khauli 5.639 5.454 6.138

f) Ghanvi-II 0.000 0.440 4.610

Total:- 102.414 97.406 109.330

3 Net Availability from own projects (1-2(a)+2(b))) 1707.653 1847.299 1981.765

.

4 A. Energy purchased (in Mkwh)(With Losses)

I BBMB

a) Old HP 43.800 43.800 43.800

b) New HP 318.392 395.495 331.490

c) Dehar 180.902 178.647 178.170

d) Pong 53.518 51.892 38.920

Total I 596.612 669.834 592.380

II PSPCL

a) Shanan Share (45 MU) 45.000 45.000 45.000

b) Shanan share 1MW (at gen.cost) 5.256 5.256 5.260

c) Shanan share 0.5MW(free power) 2.628 2.628 2.630

d) Banking 0.000 0.000 0.000

e) Purchase 0.000 0.000 0.000

f) Pong (Shared Generation) 0.000 0.000 0.000

g) Thien share (free power)/ RSD 62.486 67.840 68.630

Total II 115.370 120.724 121.520

III UJVNL(Yamuna Share)Stage I,II,3 & Kulhal 438.13 481.64 439.600

126

IV UUPJVNL(Yamuna Share) Khara 71.902 56.860 42.59

V Bairasiul(Free Power) 41.405 0.000 0.000

VI NTPC

a) Rihand-I STPP 270.88 244.85 235.720

b) Rihand-II STPP 315.21 230.6 236.670

c) Rihand-III 36.929 114.98 218.790

d) Anta (Gas Fired) 77.080 82.713 67.510

e) Anta (Liq. Fired) 0.000 0.000 0.000

f) Anta (RF) 0.000 0.059 2.110

g) Auriya (Gas Fired) 70.195 58.169 61.940

h) Auriya (Liq. Fired) 0.000 0.000 0.010

j) Auriya (RF) 0.000 0.204 3.990

k) Dadri (Gas Fired) 111.603 105.127 82.630

l) Dadri(Liq. Fired) 0.000 0.000 0.000

m) Dadri (RF) 0.000 0.086 7.000

n) Dadri -II TPS 53.874 22.669 18.940

o Unchahar- I TPP 56.289 44.662 51.990

p) Unchahar- II 107.083 86.426 92.370

q) Unchahar- III TPP 68.275 51.069 60.380

r) Singrauli 124.065 49.694 36.970

s) Kahalgaon 134.337 143.185 152.810

t) Jhajjar/ Badri II 32.905 36.574 23.210

Total VI 1458.726 1271.063 1353.040

VII NPCIL

a) NAPP 91.491 94.415 93.590

b) RAPP-5 151.47 155.75 101.100

Total VII 242.960 250.168 194.690

VIII NHPC

a) Chamera-I

(i) 12% Free Power 114.37 84.927 0.120

(ii) At Cost 70.488 66.184 68.470

b) Chamera-II

(i) 12% Free Power 144.55 86.351 0.150

(ii) At Cost 64.100 60.931 58.130

c) Chamera-III

(i) 13% Free Power 25.078 26.310 15.260

(ii) At Cost 24.574 35.863 29.610

d) Salal 32.447 32.019 33.610

e) Tanakpur 14.444 12.116 11.610

f) Uri-I 80.288 68.097 81.590

127

g) Dhauli Ganga 46.551 13.577 27.850

h) Dulhasti 15.412 14.013 8.620

i) Sewa 4.974 4.107 0.000

j) Uri-II 0.000 1.392 0.000

k) Parvati-III

(i) 13% Free Power 0.000 0.000 0.070

(ii) At Cost 0.000 0.280 20.650

l) Tehri (Firm power) 104.496 0.000 0.000

m) Tehri (Interim Power) 0.000 0.000 0.000

n) Bairasuil 41.105 29.593 0.050

o) Koteshwar 35.728 0.000 0.000

Total VIII 818.61 535.760 355.790

IX SJVNL PROJECTS

A Nathpa Jhakri

(i) Free Power 386.46 688.56 61.230

(ii) Against Equity 0.000 189.673 1483.520

(iii) Sate of region share 192.94 200.99 178.630

A Rampur HEP

(i) Free Power 0.000 0.000 23.730

(ii) Against Equity 0.000 0.000 44.970

(iii) Sate of region share 0.000 0.000 32.140

Total IX 579.397 1079.214 1824.220

X THDC

Tehri (Firm Power) 0 127.22 60.99

Koteshwar 0 43.587 23.27

Total I 0.000 170.808 84.260

XI Private Sector

a Malana (Free Power) 49.401 57.644 65.390

b Baspa

(i) 12% Free Power 147.184 159.682 149.090

(ii) At Cost 1079.355 1171.010 1093.310

c Patikari

(i) At Cost 0.000 0.000 0.000

(ii) Free Power 8.236 0.000 0.000

d Sarbari (5.4 MW)

(i) At Cost 0.000 0.000 0.000

(ii) Free Power 0.000 0.000 0.000

e Tos

(i) Free Power 0.000 0.000 0.000

(ii) At Cost 0.000 0.000 0.000

f ADHPL

(i) Free Power 15.922 9.310 0.000

(ii) At Cost 0.000 0.000 0.000

128

g karcham Wangtoo 77.352 80.171 0.000

h Malana-II 3.147 3.927 0.000

i Budhil(70 MW) 1.790 3.474 0.000

j Mini Micros(Private Sector) 1048.401 1154.319 1407.942

Total X 2430.788 2639.537 2715.732

XI GO HP Share in HPSEB Projects

a) Ghanvi 8.400 9.123 10.294

b) Baner 5.184 5.105 5.524

c) Gaj 4.691 5.578 6.007

d) Larji 78.133 70.485 76.757

e) Khauli 5.639 5.454 6.138

f) Ghanvi-II 0.000 0.000 4.610

Total XI 102.047 95.745 104.720

XII HVPNL/HPGCL/HPPCL Bkg/ PSEB Bhg (Seller Bus)

0.000 0.000 0.000

XIII BYPL -Bkg( Seller Bus) 7.185 0.000 137.235

XIV BYPL -Contra Bkg( Seller Bus) 5.445 106.461 0.000

XV BRPL-Bkg (Seller Bus) 19.400 0.000 291.479

XVI BRPL-Contra Bkg. (Seller Bus) 195.659 243.266 0.000

XVII PSEB Contra Banking (Seller Bus) 0.000 0.000 0.000

XVIII HPGCL-Contra Bkg. (Seller Bus) 0.000 0.000 0.000

XIX HPPC- Contra Bkg (Seller Bus) 0.000 140.859 510.000

XX HPPC- FWD Bkg (Seller Bus) 0.000 174.600 0.000

XXI UPPCL-Contra BKG 86.183 178.850 192.133

XXII HPPCL-Fwd BKG 240.300 0.000 0.000

XXIII HPPCL-Contra BKG 123.792 0.000 0.000

XXIII PSPCL Fwd Bkg 259.543 182.400 0.000

XXIV PSPCL Conta Bkg 232.950 195.245 683.402

XXV UI 211.57 225.29 322.5

XXVI Market Purchase 61.885 113.32 82.66

XXVII Unallocated 0 0 0

XXVIII 11 kV Shanan Bassi Line(PSPCL) 0.020 0.020 0.000

Total-XII to XXVIII 1443.933 1560.307 2219.419

Total Pucrchases-(Grand Total-4A) 8298.467 8931.661 10047.961 5 External Loss

215.400 227.745 224.530 Net Purchas 8083.067 8703.916 9823.431

6 Energy available for sale without wheeling 10006.12 10778.96 12029.73

in million kWh(3+4(A)) .

7 Energy sold in million kWh i/C wheeling

i With in state 7223.581 7535.833 7866.796

ii Outside the state 1428.710 1999.597 2939.506

Sub total 8652.291 9535.430 10806.302

8 Transmission and

129

distribution losses :

a) In million Kwh (6-7) 1353.829 1243.530 1223.424

b) % age 13.62 11.54 10.17

Note: The energy transmitted, through HPSEBL system on account of wheeling has not been taken into account to work out the overall transmission and distribution losses of the Company.

The figures of Energy purchased and sold outside the state to other agencies are based on the data supplied by the Chief Engineer (SO&P), Shimla.4


Sd/- Sd/- Sd/-

(Gulshan Aggarwal) (Rajeev Sharma, IAS) (Er. P C Negi) Chief Accounts Officer Director (F&A) Managing Director Auditors Report

As per our report of even date

Sd/- For Anil K. Sood & Co. (C.A. Anil Kumar Sood) Chartered Accountants Partner Firm No. MNo. 086068 Place: Shimla

Date:

130

Himachal Pradesh State Electricity Board Limited Balance Sheet as at 31st March, 2015

Balance Sheet as at 31st March 2015 Head Office MT Shimla SLDC operations Electrical system

Genration Projects other Total

Sl. No. Particulars No. 31st March 2015

31st March 2015

31st March 2015

31st March 2015

31st March 2015

31st March 2015

31st March 2015

31st March 2015

31st March 2015

I Equity and Liabilities Head Office MT Shimla SOP operations Electrical system


Share Holders' Funds Share Capital

2.01 52203.18 0 0 0 0 0 0 0 52203.2

Reserves & Surplus 2.02 -412934.3 -767.4 -660.25 427667.27 8575.36 3426.15 14.33 -41122 -15801.3

Share Application Money Pending Allotment

2.03 3126.40 0 0 0 0 0 0 0 3126.40

Non Current Liabilities Long Term Borrowings

2.04 309072.5 0 0 0 0 0 0 0 309073

Other Long Term Liabilities 2.05 6482.92 0 -21.40 61302.3 11652.9 1471 3943 -6128 78702.2

Long Term Provisions 2.06 0 0 0 0 0 0 0 0 0

Current Liabilities Short Term Borrowings

2.07 111880.5 0 0 0 0 0 0 0 111880

Trade Payables 2.08 190448.3 0 0 316.65 0 0 0 0 190764.90

Other Current Liabilities 2.09 143226 34.06 36.16 19355.5 2118.7 2245 154.1 39398 206568

Short Term Provisions 2.10 44265.77 -239.3 -15.94 -32413.4 3143.01 1903 1.41 -15.76 16628.9

Total 447771.2 -972.7 -661.43 476228.29 25490 9045. 4113.10 -7868 953145 II Assets

Non Current assets

Fixed Assets Tangible Assets

2.11 -170252.9 825.86 605.39 278056 144405 257368.91 941.7 841.79 512791.09

Capital Works in progress 2.12 11986.66 16.57 26.28 57906.2 18127.90 826.2 14322.50 -9434 93777.9

Intangible Assets Work in Progress 2.13 1603.23 0 0 0 0 0 0 0 1603.23

Non Current Investments 2.14 43077.51 0 0 0 0 0 0 0 43077.5

Long Term Loans and Advances 2.15 17569.95 2.8 0.83 128.74 653.02 13.27 65.45 143.19 18577.25

Other Non Current Assets 2.16 1900.93 29.35 -1.77 1954.72 139.39 2166 7074 3509.2 16771.1

Current Assets Current Investments

2.17 1147.85 0 0 0 0 0 0 0 1147.85

Inventories 2.18 0 9.55 7.64 6007.93 616.32 395.03 27.53 58.71 7122.71

Trade Receivables 2.19 32359.56 0 0 68346.9 1140.11 0 0 2749.5 104596

Cash & Cash equivalents 2.20 14635.91 0 0.02 1.13 29.96 0.22 0.01 -120.6 14546.7

Short Term Loans and advances 2.21 25544.01 0 -3.13 5420.15 6893.68 2141 240.6 6217.4 46453.3

Other Current Assets 2.22 468198.5 -1857 -1296.69 58406.80 -146515 -253864.70

-18558.31 -11833 92680.5

Total 447771.2 -972.7 -661.43 476228.29 25490 9045.10 4113.10 -7868 953145.14

131

Himachal Pradesh State Electricity Board Limited Statement of Profit and Loss for the year 2014-15

Sl . No. Particulars 2014-15 2014-15 2014-15 2014-15 2014-15 2014-15 2014-15 2014-15 2014-15

Head Office MT Shimla

SLDC operations Electrical system


1 INCOME Revenue From Operations 2.23

2.23 103277.4 0 0 454617 441.9 98.23 0 0 558434

2 Other Income 2.24

2.24 26741.14 26.03 14.74 9187.02 514.30 503.6 1255 0 38241.7

3 Total Revenue (1+2) 130018.6 26.03 14.74 463804 956.2 601.8 1255 0 596675.87 4 a)

EXPENDITURE Cost of Materials Consumed

0

b) Purchase of Stock- in -Trade 2.25

2.25 370602.30 0 0 96.83 0 0 0 0 370699

d) Employees benefits expenses 2.26

2.26 53472.25 693.68 587.87 61552.8 6147.86 8312 -172 0 130594

e) Finance Costs 2.27

2.27 56239.8 0 -8.8 -1715.19 -920.88 -42.8 0.01 0 53552.1

f) Depreciation and other amortizatization expenses 2.28

2.28 30439.04 10.16 0 63.49 8.55 8.48 2.52 0 30532.2

g) Other Expenses 2.29

2.29 11819.15 145.01 78.72 6444.94 1128.1 2504 -67.7 0 22052.4

Total Expenses 522572.5 848.85 657.79 66442.8 6363.63 10782 -237 0 607430 5 Profit (Loss) before exceptional and extraordinary

items and -392554 -822.8 -643.05 397361 -5407.4 -10179.72 1492 0 -10754.1

6 Exceptional items 0 0.00 0 0

7 Profit (Loss) before extraordinary items and taxes(5+6)

-392554 -822.82 -643.05 397361 -5407.4 -10179.72 1492 0 -10754.1

8 Extraordinary items 433.12 0 0 13.28 0 2.08 148.6 0 597.05 9 Profit and Loss before tax(7+8) -392987.09 -822.82 -643.05 397347.54 -5407.43 -10181.80 1343.54 0.00 -11351.11

10 Tax Expenses 0 0

11 Profit and Loss for the year (9+10) -392987.09 -822.82 -643.05 397348 -5407.4 -10181.80 1343.54 0 -11351.11

133

Independent Auditors’ Report To

The Members of Himachal Pradesh State Electricity Board Limited.

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of Himachal Pradesh State Electricity Board Limited, Shimla (“the Company”) as on 31st March, 2015 which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information

Management’s Responsibility for the Standalone Financial Statements

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the financial statements

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair

134

presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit of disclaimer opinion.

Basis for Disclaimer Opinion

1 Preparation of Financial Statements for the year under review:-

a) The financial statements are prepared as per Schedule III of the Companies act 2013 during the year under review. During the year accounts statements at division levels are prepared on the basis of old schedule VI but the divisions, wings and circles balance sheets has been re casted as per schedule III for the year and also for the previous year. The previous year’s figures have been re casted and regrouped to comply with the requirements of schedule III of Companies Act 2013. The Companies Act, 2013 gives great importance to the compliance of the accounting standards by the Companies as evident from Section 129(1) wherein it has been stated that financial statements shall comply with the accounting standards the first proviso to said section also states that the items contained in financial statements shall be in accordance with the accounting standards. The Company has not complied with all the accounting standards as reported separately in Para 25 of this report.

b) Consolidation of Standalone Financial Statements at Head Office Level and Circle Level

The consolidated statements of assets and liabilities compiled on the basis of information provided by Divisions and Circles do not reconcile with consolidated balances used for compilation of these financial statements.

We further report that the erstwhile Board transferred it assets and liabilities to Company in accordance with “Transfer Scheme”. The following balances have not been reconciled / traced in subsidiary records maintained at Divisions / Sub-Divisions and accounting treatment and impact thereof in financial statements of the Company is subject to confirmation.

135

Current Year Previous Year

Main HeadsDebit, ( -

)Credit Debit( Credit)

Reserves and SurplusesContributions, grants and Subsidies Tow ards Cost of Capital Assets -2,664.21 -2,664.21

Reserves -266.70 -266.70 Prof it & Loss account -76,068.73 -76,068.73

-78,999.64 -78,999.64

Other Long term Liablilities - Deposits for electrif ication, service connection, etc. 439.18 439.18

439.18 439.18

Trade Payables -

Liability for Capital Supplies/Capital Works - - - -

Other Current LiabilitiesLiability for O&M Supplies/Works

Staff Related Liabilities & Provisions -166.15 -166.15

Other Liabilities and Provisions 102.35 102.35

Deposits for Electrif ication, Service connection etc. -8,535.82 -8,535.82 Security Deposits from Consumers -3,973.14 -3,973.14

-12,572.76 -12,572.76

Tangible Asssets -

Fixed Assets 841.79 841.79Capital Expenditure Resulting in An Asset Not Belonging To the Board

Depriciation

841.79 841.79

Capital work in progress - Capital Works in Progress Accounts. -9,617.34 -9,617.34Contracts – in-progress 182.93 182.93

-9,434.41 -9,434.41

Long term Loans and Advances -

Advances to Suppliers/ Contractors-- (Capital) 143.19 143.19Sundry Receivables 6192.26 6192.26

6,335.45 6,335.45

Other non current Assests -

Assets not in use 180.59 180.59Deferred revenue expenditure 3509.18 3509.18

3,689.77 3,689.77

Inventories -

Stock and Related Accounts. 58.71 58.7158.71 58.71

Trade Recivables -

Sundry debtors for sale of pow er 2749.53 2749.53

2,749.53 2,749.53

Cash and Cash Equivalents -

Investments Against Funds 76.32 76.32Cash and Bank -120.57 -120.57

-44.25 -44.25

Short term Loans and Advances -

Advances to Suppliers/ Contractors-- (O & M) 97.97 97.97Other Loans and Advances -72.87 -72.87

25.1 25.1

Other Current Assests -

Inter Unit accounts 86,911.53 86,911.53

Total 86,911.53 86,911.53

Grand Total - -

(i) We are of the opinion that Reserves and Surpluses are Overstated to the extent of ` 78999.64 lacs, Other Long Term Liabilities are understated to the extent of ` 439.18 lacs , Other current Liabilities are overstated to the extent of ` 12572.76 lacs, Tangible assets are overstated to the extent of ` 841.79 lacs. Capital work in progress are understated to the extent of ` 9,434.41, Long term loans

136

and advances are overstated to the extent of ` 6335.45, lacs, Other noncurrent assets are overstated to the extent of ` 3689.77 lacs, inventories are overstated to the extent of ` 58.71 lacs, Trade Receivables are overstated to the extent of ` 2,749.53, Cash and Cash equivalents are under stated to the extent of ` 44.25 lacs ,Short term loans and advances are overstated to the extent of ` 25.10 lacs and inter unit accounts are overstated to the extent of ` 86911.53 lacs.

2 Share Capital ( Note 2.1)

In terms of provisions of Sec. 143 (1) of the Companies Act, 2013, we report that the Company has allotted 14,000 Equity shares of ` 100/- each for cash at par, the payment against allotment of 14,000 Equity Shares has been shown as recoverable from HP Govt. and report that payment against above Equity shares amounting to ` 1.40 Lacs (P.Y ` 1.40 Lacs) have not been received till date of audit and same has also been shown as recoverable from HP Govt. The Company has shown the same as short term loan and advances. In our opinion the same is in the nature of other noncurrent assets. Thus short term loans and advances are overstated and other noncurrent assets are understated to that extent.

In terms of provisions of Sec. 143(1) of the Companies Act, 2013 we report that the Company has

allotted 6310000 Equity) shares of ` 100/- each for cash at par, and Share Application Money Pending Allotment amounting to ` 3184.40 Lakhs was utilized for allotment of equity Shares . Share Application Money was originally worked out at the time of “Transfer Scheme “in respect of assets and liabilities of Board transferred from HP State Government to the Company and the difference of ` 39,653 lacs has been recognized and recorded as share application money pending for allotment of equity shares to Himachal Pradesh Govt.

As reported in previous year Audit report, due to errors and incorrect consideration of accumulated losses assets in aggregate amounting to ` 7,48,893 lacs and liabilities amounting to `. 7,59,752 lacs has been transferred and a sum of �. 10,859 lacs is recoverable from HP Govt. whereas share application money of ` 39,653 lacs pending for allotment to HP Govt. has been disclosed in financial statements and that an accumulated loss also includes losses of ` 50,512 lacs pertaining to the tenure of Board.

The same is summarized as under:-

137

Amount ` in lacs

Balance as on

13/06/2010

Amount not to be

considered

As per transfer scheme

Net Fixed assets 387,461 - 387,461 Capital expenditure in progress 107,927 - 107,927 Assets not in use 625 - 625 Deferred costs 12,706 - 12,706 Investment 196,567 57,524 139,043 Subsidy receivable from Govt. 4,970 - 4,970 Current Assets 96,161 - 96,161 Total Assests 806,417 57,524 748,893

Less LiablitiesSecurity from consumers 21,965 - 21,965 Other current liabilities 192,124 - 192,124 Borrowing for working capital 82,887 - 82,887 Payment due on capital liabilities 32 - 32 Capital Liabilities 225,629 - 225,629 Funds from state Govt. 7,749 - 7,749 Spl. ways and means advance on a/c of 49,808 - 49,808 Contributions, grants and subsides towards 95,014 - 95,014 Equity share of HPSEB in its own projects 57,524 57,524 - Reserves and reserves funds 84,543 - 84,543 Total Liabilities 817,276 57,524 759,752

Amount recoverable from Govt. of HP 10,859 - 10,859

Therefore as opined by previous auditor the deficit in profit and loss statement, share application money pending for allotment was overstated to the extent of ` 50,512 lacs and ` 39,653 lacs, respectively and other non-current assets (amount recoverable from HP Govt.) was understated to the extent of ` 10,859 lacs.

Since no compliance was made to the above mentioned Audit para of previous year and the company has alloted share Capital against the Share Application Money which was not Authentic and subject to confirmation we are of opinion that the deficit in profit and loss statement was overstated to the extent of ` 50,512 and equity Subscribed and Fully Paidup Share capital was overstated to the extent of ` 39653.Lacs and other non-current assets (amount recoverable from HP Govt.) was understated to the extent of ` 10,859 lacs.

3. Reserves and Surplus (Note 2.2)

(a) Capital Reserves/Capital Grants from GOHP & GOI

(i) During the year under review the Company has Amortized Rs 22153.52 Lakh on the assets created from Government Grants and Consumer Contribution. The Amount of Amortization has been arrived at after applying the Depreciation Rates on the cost of such assets on yearly basis as per the accounting policy on depreciation refer Note 2.33 (A) 6 .The Company has no system in Place where the assets can be identified as if these were created from Government Grants / Consumer Contribution. There is no Fixed Assets Register from where the cost of these assets along with date of it being put to use can be verified. The company has arrived at the cost of these assets on Adhoc basis where it has capitalized the Grant received to particular year in which it was received without verifying the actual creation of the assets and without having sufficient records to verify the actual cost of bringing the asset to use along with the date of it being put to use. It was also observed that in many Divisions the amount of Consumer Deposits was not transferred from Account Code 47 to Account Code 55 in the absence of Completion certificates therefore assets created from government grants are subject to confirmation. As such the depreciation worked out is subject to confirmation and in our opinion reserves and surplus are understated and profit is overstated to the extent of Rs 22153.52 Lakh.

138

(ii) Assets created from loans under Government Schemes. Refer Note2.33(A)15

The Company and erstwhile Board have created assets under various Central Government and State Government schemes financed by government agencies. The assets created from such schemes are subject to reconciliations and confirmations. The Company has not disclosed.

(i) the accounting policy adopted for government grants, including the methods of presentation in the Financial statements;

(ii) The nature and extent of government grants recognized in the financial statements including grants of non monetary assets given at a concessional rate or free of cost.

(b) Deficit in Profit and Loss Statement

The company has transferred the accumulated profit and loss of the erstwhile Board amounting to ` 50,512 lacs as on 13th June 2010 as accumulated profit and loss of the company ( also refer para 4 of this annexure ). In our opinion the Deficit account is overstated to the extent of above also refer para 2 of this report.

4. Share Application Money Pending Allotment (Note 2.3)

(i) It was observed that Company showed an amount of Rs 3126.40 Lacs as Share Application Money Pending Allotment. In case of share application money pending allotment, the terms and conditions including the number of shares proposed to be issued, the amount of premium, if any have top be disclosed.The Company has not made any such disclosure. It was Also Observed that during the year under review the Company has allotted shares amounting to Rs. 6310.00 Lakhs out of this an amount of Rs 3186.40 Lakhs has been allotted against the Share Application Money Pending Investigation whereas Share Application Money was subject to confirmation as pointed out in para 2 of this report.

5. Long Term Borrowings (Note 2.4)

(a) The Company has not complied with the requirements of revised schedule III of Companies Act 2013 in respect of disclosure requirement Long term Borrowings :-

- Classification of Long Term Borrowing as.

(i)

(a) Bonds/debentures;

(b) Term loans:

(A) from banks.

(B) from other parties.

(c) Deferred payment liabilities;

(d) Deposits;

139

(e) Loans and advances from related parties;

(f) Long term maturities of finance lease obligations;

(g) Other loans and advances (specify nature).

(ii) Nature of security was not specified separately in each case of Secured Loans.

(iii) Bonds (along with the rate of interest and particulars of redemption or conversion, as the case

may be) was not stated in descending order of maturity or conversion, starting from farthest

redemption or conversion date, as the case may be. Where bonds/debentures are redeemable by

installments, the date of maturity for this purpose must be reckoned as the date on which the first

installment becomes due.

(iv) Particulars of any redeemed bonds/debentures which the company has power

to reissue was not disclosed.

(v) Terms of repayment of term loans and other loans was not stated.

(vi) Period and amount of continuing default as on the balance sheet date in

repayment of loans and interest, was not specified separately in each case.

b) Loans under APDRP Schemes Part A and B

(i) The company has taken loans from APDRP(Part A) scheme amounting to ` 4139.49 ( previous year ` 5347.80) towards 100% financing of its approved projects which is subject to a condition requiring that projects to be completed within five years (extended up to 31st July 2016) of the awards with 100% conversion of loan along with interest into grant else otherwise the same will be treated as loans and interest will be paid on them.

(ii) The company has taken loans from APDRP (Part A) scheme amounting to ` 12187.08 lacs ( previous year ` 10,168.40 lacs) towards 100% financing of its approved projects which is subject to a condition requiring that projects to be completed within five years( extended up to September, 2015 & December, 2016) of the awards with 100% conversion of loan along with interest into grant else otherwise the same will be treated as loans and interest will be paid on them.

(iii) The sanction letter stipulates the moratorium of principal and interest during moratorium period. The

Company has made provision for the interest on loan amounting to ` 6253.18 Lac (P.Y ` 4293.01Lac) lacs in the books of account on provisional basis up to 31st March 2016 and same is subject to confirmation. (Refer Note 2.33(B)(15) ).

c) Loans under RGGVY Scheme

The Company has taken loan from the state Government under RGGVY scheme amounting to ` 500.00 lacs (previous year ` 500.00 lacs). The government has not yet provided the terms and conditions of the loan and the payment of interest thereon. (Refer Note 2.33 (B)16 ). No provision has been made for the interest payable.

140

d) Loans under ADB though GOHP Scheme

The Company has taken loan under the scheme from the state Government under ADB Loan amounting to ` 840.46 lacs (previous year ` 840.46 lacs). The government has not yet provided the terms and conditions of the loan and the payment of interest thereon. (Refer Note 2.33 (B)(16) ).No provision has been made for the interest payable.

e) Financial Restructuring Plan

(v) The Company has opted for Financial Restructuring Plan formulated by the Ministry of Power Government of India for State Owned Discoms for restructuring of debts refer note no (2.33(B)(48)). In this scheme the short term loans amounting to ` 123541.00 lacs was converted into long term borrowings for 10 years with moratorium period of three years for repayment of principal loan. The short term loans is converted into Bonds of � 61280.54.00 lacs and Long term Loans amounting to ` 62260.46 lacs.

6 Other Long Term Liabilities (Note 2.5)

a) Security Deposits from Consumers

The Divisions of operation circles have not reconciled and balanced the customer-wise Security Deposit received and interest payable thereon. No sufficient records and reconciliation of subsidiary records confirming the balance outstanding has been made available to us, therefore, we are unable to comment on the amount outstanding as Security Deposits to customers and accordingly interest accrued thereon.

(b) Amount payable for Employees Provident Fund (GPF)

We report that, contribution towards Provident Fund collected from employees have been retained and invested in Fixed Deposits with Banks by the Company. The Company has neither obtained registration with `Employer’s Provident Fund Authorities’ nor exemption for creation of Trust as specified in Employer’s Provident Fund Act, 1952 and scheme framed there under. The Company has shown the same under other long term liabilities after netting off the investment made in the banks on account of GPF investments.

The amounts payable/ recoverable to employees GPF are subject to reconciliation and confirmations

During the year under review, the Company has neither made own contribution nor has made provision for same in these financial statements. The amount of contribution of employer’s share is subject to confirmation by Company.

The following is the position of Assets and Liabilities of the employees GPF at the close of the year and should be transferred to a trust and separate accounts of the same should be prepared as the same is not part of the accounts of the Company.

141

Current Year Previous YearAssestsInvestments in Fixed deposits of Banks 107,233.62 99,900.17 Interest Accured on Investments 3,657.53 3,839.72 Recoverable from HPSEB Limited 18,437.70 6,832.32

129,328.85 110,572.22

LiabilitiesMembers Account 130,679.80 114,734.55 Excess of Expenditure over Income - - Payable to HPSEB Limited 1,350.95 4,162.33

129,328.85 110,572.22

We further report that liabilities and corresponding assets transferred from Board to Company have not been deposited with EPF or Trust. In terms of information and explanations given to us, the Company has accumulated total contribution of ` 129328.85 lacs (previous year ` 1,10,572.22 lacs) and has deposits there against a sum of ` 110891.15 lacs (previous year ` 103,739.89 lacs )which has resulted in amount recoverable form company amounting to ` 18437.70 lacs. In our opinion, the said assets and liabilities do not relate to Company and sum of ` 18437.70 lacs is payable to General Provident Fund (GPF).

We further report that the Company has obtained Overdraft facility of ` 56365.51 lacs. (Previous year ` 73297.11lacs) against GPF Fixed Deposits which has been utilized for operations .Refer Note 2.33(B)(34)

We further report that during the year under review a sum of ` (1350.95) lacs (previous year ` 4162.33 lacs) has been debited to interest received on investments i.e. deficit of( interest received on deposits and interest paid to members on GPF) in our opinion, the said deficit interest do not relate to the operations of company,

We report that company has shown the amounts in the balance sheet as under different head:-

Amount in lacs Current Year PreviousYearAmount payable to GPF Fund Other Long term Liablities 23,446.18 14,834.38 Income on investments Income 1,350.95 4,162.33 Interest Accured on FDR Short Term Loans and advances 3,657.53 3,839.72 Net Recoverable/Payable 18,437.70 6,832.33

The overall impact of the above is that long term liabilities are overstated to the extent of ` 23446.18 Lacs, (Previous year ` 14,834.38 lacs) income is understated to the extent of ` 1350.95 lacs (Previous year understated ` 4162.33 lacs) and correspondingly the short term advances are overstated to the extent of � 22095.23 lacs.( Previous year ` 10672.05 lacs)

We further report that the above amount payable is of current nature and should be shown under current liabilities. Thus Current liabilities and Short Term Loan & Advances are understated to the extent of ` 18437.70 lacs (Previous year` 6832.33 lacs).

(c) Contributory Pension Scheme

In Account Code 57.180 and 57.181 an amount of Rs 319.35 was outstanding credit balance as on 31/03/2015. The amount has to be paid to the CPS authorities as and when demanded by them. In our opinion the liability is of current nature and should be shown under the head other current liabilities. Thus the other long term liabilities are overstated and Other Current liabilities are understated to the extent of above of � 319.35 lacs (previous Year 1049.79 lacs).

142

The following is the assets and liabilities of CPS Fund:-

Amount in Lacs


Assests ` `Fixed Deposits with Bank - - Interest Accured on FDR - - Amount Recoverbale from HPSEB Limited 319.35 1,049.79

319.35 1,049.79

LiablitiesCPS Employees Share 159.68 524.89 CPS Employer Share 159.67 524.90

319.35 1,049.79

(d) Staff Benevolent Fund

The company has received contributions from employees on account of staff benevolent fund and the company is making payments to employees from this fund to the employees on superannuation.

We report that the company has showed ` 98.71 lacs (previous year ` 177.29 lacs) as recoverable from staff benevolent fund on account of excess payments done from the fund under the head other long term liabilities by netting off with other long term liabilities. In our opinion, to balance the fund account a contribution ` 98.71 lacs (previous year ` 177.29 lacs) is required from the company as on 31st March 2015. Thus the expenditure is understated to the extent of above and correspondingly the reserve fund/other funds is understated to the extent of above.

Amount in lacs


Assests ` `Investments in Fixed deposits of Banks - - Interest Accured on Investments -

- -

Liabilities

Fund Acccount 98.71 177.29 Excess of Expenditure over Income - - Fund Contribution due/From to HPSEB Limited 98.71 177.29

- -

We further report that the above liability does not belong to the company and the same is of the nature reserve fund. In our opinion the other long term liabilities are understated to that extent.

(e) Non refundable advances from industrial consumers for infrastructure development charges

The erstwhile HPSEB and the company have received Non refundable advances from industrial consumers for infrastructure development charges from consumers. The company has received ` 14946.07 lacs (previous year ` 12191.28 lacs) under the above head up to 31st march 2015. In our opinion the other long term liabilities are overstated to the extent of above as they are not payable to the consumers and is part of the revenue of the company and income of the company is understated to that extent.

143

(f) Funds From ASIDE

The funds received from ASIDE are subject to confirmation and reconciliation. The assets created from the ASIDE funds have been fully completed and the amount has not been transferred to the reserves for want of completion certificates from the divisions concerned. The reserves are overstated and long term liabilities are overstated to that extent. In the absence of complete information, the amount could not be quantified.

7 Long Term Provisions

(a) Leave Salary Payable

The Company has not made provision of Leave salary payable to present employees as per the requirements of AS15- Accounting for Employees Benefits issued by The Institute of Chartered Accountants of India. The estimated liability on account of leave salary at end of the year is ` 51429.40Lacs (P.Y ` 48515.3 lacs) against which the company has created reserve fund of Rs 1147.84 lacs. (P.Y ` 1,051.06 lacs) .Thus in our opinion the long term provisions are understated and Income is overstated to the extent of 50281.56 (P.Y ` 47464.24 lacs)

(b) Gratuity Payable to Employees

The Company has not made provision of gratuity payable to present employees as per the requirements of AS15- Accounting for Employees Benefits issued by The Institute of Chartered Accountants of India. The estimated liability on account of leave salary at end of the year is ` 69938.15.(previous year ` 61535.36 lacs) against which the company has created provision of Rs 2799.04 .(previous year ` 1400.27 lacs). Thus in our opinion the long term provisions are understated to the extent of Rs.67139.11.( previous year ` 69,938.14 lacs.)

8 Short Term Borrowings(Note 2.7)

Overdraft and Cash Credit from Banks

(i) References invited to note no 2.33(B)(34) where the Company has obtained Overdraft facility/ Loans of ` 56365.51 lacs (previous year ` 73,297.11 lacs) against GPF Fixed Deposits which has been utilized for operations refer Note 2.33B (34).

9 Trade Payables (Note 2.8)

Liability for Purchase of Power

(i) The company did not provide us any information/ confirmation from the parties in respect of amount payable to Parties/ (Sundry creditors for purchase of power) amounting to Rs 190764.90 Lacs. Account code 41 is subject to confirmation and reconciliation with the account statements of parties. In the absence of complete information we can neither quantify nor comment upon the correctness of the balance.

10 Other Current Liabilities (Note 2.9)

a) Interest accrued and due Term Loans

144

(i) The above also includes the interest earned on surplus RGGVY and ARDRP Funds the details of the same is as under:

Amount In lacsCurrent Year Previous Year

` `Interest Accured and Due RGGVY Funds

46.127 56.78 958.48Interrest Accured and Due APDRP Funds

46.128 2,831.94 2750.982,888.72 3,709.46

The company has shown the interest accrued on surplus funds from the RGGVY fund and APRDP funds as current liabilities as it has been explained to us that the interest earned will be paid back to the agencies as and when they demand it. In our opinion the loans are for long term period and the interest due will be part of Long term loans. Thus in our opinion the interest due will be of the nature of other long term liabilities as a result the other current liabilities are overstated and long term liabilities are understated to the extent of � 2888.72 lacs.

(ii) Interest Payable APRDP Loans (Code 46.734)

The company has shown � 6253.18 lacs as interest accrued on APRDP part A and B loan up to 31st March 2015 and the same has been shown as current liabilities. In our opinion the interest payable is of long term nature as the same relates to the moratorium period of the loan. Thus other current liabilities are overstated and long term liabilities are understated to the extent of ` 6253.18 lacs. Refer note 2.33(B)(15).

b) Liability for Purchases Capital and Others

i) The above account code shows a sum of ` 23185.37 lacs payable as liability on account of capital materials O & M Supplies/ Works. The Subsidiary record in respect of the below mentioned accounts codes at division level is not reconciled. The above liabilities are subject to confirmations from the Parties .In the absence of information we are unable to comment on the old liabilities which are not payable and have to be charged to revenue. The following are the details of the above:-

Particulars A/c Code Current Year Previous Year

Liabilities for supply of Materials/Works – Capital 42.1 585.94 910.84

Liability for supply of Material / Works – O&M 43.1 10270.23 8,253.00

Stale cheques 46.91 2,710.18 2,781.70

Unclaimed Credit Balances 46.929 138.93 136.00

46.93 33.22 33.22

Provision for Outstanding Cheques 46.94 8369.85 6,286.54

145

(ii) It has been observed that divisions charge full liability of the bills of the suppliers when the materials are received. However in some case the bills are not fully passed by the Head Office and certain deductions on account of liquidity damages and price differences etc. from the final bills is being made. All such deductions which are done by the Head Office and not accounted for by the divisions may affect the other current liabilities and income of the company. In the absence of information we are unable to comment on the same.

(iii) In certain cases the payment of bills of the suppliers are to be made in phases on some percentage basis and will not be due at the end of the financial year. The Divisions has booked the bills with the full amount and no bifurcation has been made for current and noncurrent liability. In the absence of the information we are unable to comment on the same.

(iv) It has been observed that where the payments has been made by the CPC up to 31st March 2015 and the ATD for the same has been raised by them to the divisions the same has not been reconciled by the CPC department with the divisions on year to year basis. In the absence of the reconciliations we are unable to comment the amount of liabilities shown by the divisions.

(v) The Company has executed contract with HCL for computerization of the sub divisions and implementation of SAP in the year 2009 and advanced ` 1,155.65 lacs at various intervals to the company. The said payment was made by the CPC and was accounted for by the Shimla Division no II as advance to the company under the account Head 26.5. The material has been supplied by the company and the same has been accounted for by the respective divisions and created the liability under the Head 43. The ATD raised by Shimla Division II for the amount advanced to the HCL to respective divisions was not produced before us for our verification. In our opinion the other current liabilities are overstated to the extent of � 1,155.65 lacs and correspondingly the short term advances are overstated to that extent. This is old audit observation which was not rectified in the period under review.

c) Earnest Money Deposits from Suppliers and Contractors.

The above account code shows a sum of ` 1964.97 lacs (Previous Year ` 1861.48 Lacs) payable as earnest money deposits from suppliers and contractors. The subsidiary records in respect of above are pending for reconciliations at division level.

Particulars A/c Code Current Year Previous Year

Earnest money deposits – capital 46.103 1,195.23 1,245.08 Earnest money deposits – O&M 46.123 769.74 616.4

1,964.97 1,861.48

Suppliers/Contractors Control A/c 42.2 176.71 436.04

Provision for Supply of Materials-Works 42.3 22.27 22.27

Sundry Creditors/Contractors Control A/C – O&M 43.2 810.03 634.32

Provision for supply of Materials -- works – Capital 43.3 68.01 68.01

23185.37 19561.94

146

In the absence of reconciliations we are unable to comment on the authenticity of the amount payable. In A/c code 46.926 Public Works Misc. Deposits ` 4.86 Lakh was shown as debit Balance .This is Negative balance and in our opinion other Current liabilities are understated to the extent of above.

d) Electricity Consumptions Tax levied payable to MCs/NACs

The above account code shows a sum of � 937.56 lacs (previous year ` 782.51 lacs) payable to different Municipal corporations and NAC as at 31st March 2015. It has been observed that certain amounts are also recoverable from them on account of energy dues and the above account has not been netted off with amount recoverable from them. Thus other current liabilities are overstated to the extent of above. Please refer para 19(A) 5 of the report of this report.

e) Amount Payable to GOHP/Other Departments-

The above includes An amount of ` 25.02 Lakh debit balance in A/c code 46.971 Amount Payable to H.P Government other than loan, Loan interest and electricity duty. This amount is negative balance for which proper explanations were not provided to us and in opinion other current liabilities and deficit is understated to ` 25.02. In A/c code 46.975 Other Local bodies ` 160.47 Lakh was shown as credit balance. This balance is also subject to confirmation since details of this balance were not provided to us and this balance is carried forward from previous year.

f) Unclaimed Interest:

In the above head an amount of � 64.00 Lakh in A/c Code 46.730 Unclaimed repayment of bond/debenture was shown as an outstanding balance as on 31.03.2015 .The opening balance in this account code showed an amount of ` 74 Lakh . Since this amount is being carried forward from past year this liability is nature of noncurrent liability. In our opinion Other Current liabilities is overstated and noncurrent Liability is understated to the ` 64.00 Lakh.

f) Security Deposits from Employees (A/c Code : 46.920 & 46.921)

In the above head of account an amount of ` 17.95 Lakh was shown as debit Balance. This is negative balance and proper explanation for the same was not provided to us .In our pinion Other current liabilities is understated and income is also overstated to ` 17.95.

g) Sundry Creditors for Expenses

The above account code shows a sum of ` 416.46 lacs (previous year � 167.23 lacs) payable to different parties is subject to confirmation as at 31st March 2015.In the absence of information we are unable to comment on old liabilities which are to be charged to the revenue and may affect profit and loss account and the balance sheet.

i) Liabilities on account of cheques outstanding

The above account includes amounts pertaining to amount outstanding on account of cheques not presented for payments to banks by the parties to whom the same has been issued as at 31st March 2015 and are to be shown in bank reconciliations statements (Please refer para 20(b) .) The details of the same are as under:--

147

Amount in lacs


` `1 Details as per Bank Reconclilations Statements

Outstanding Cheques 1,850.80 4,997.06 Less amount debited by bank 71.89 74.84 Excess amount Debited by bank 6,447.16 1,214.64

8,369.85 6,286.54

2 Amount for which details are not available - - 8,369.85 6,286.54

In our opinion the other current liabilities are overstated and bank balance is also overstated to ` 8369.85 Lacs that extent.

The old non reconciled entries in above are subject to reconciliations which may affect profit and loss account and balance sheet.

(j) Liability on account cheques outstanding others/ stale Cheques (A/c code 46.910)

The company showed a sum of ` 2710.18 lacs (previous year ` 2,781.70 lacs) under the Head stale cheques. No information in respect of the same has been provided by the company. In our opinion the other current liabilities are overstated and income is understated to sum of � 2710.18 lacs.

(k) Deposits for Electrification Services Connections Account

The above account code showed a sum of ` 47580.08 lacs (previous year ` 50,608.43 lacs) on account of deposit amount received from consumer for Electrification Services Connections and other charges as at 31st March 2015. The company has not provided the details of the amount received under different sub heads under above head.

As per the practice of erstwhile board the amount kept under this head is transferred to grants and subsidies head when the work of the assets to be created from deposit work is completed.

The subsidiary records at the divisions level is pending for reconciliation as at 31st March 2015. We have not been provided with the following information’s by the Divisions.

1 The details of those works where the work has been completed and the amount from deposit has not been transferred to the consumer contribution towards the cost of the capital assets.

2 The details of the parties from whom full amount has not been received for the deposit work completed till 31st March 2015.

3 The details of parties from whom full amount has been received but no work of deposit work has been done till 31st March 2015.

In the absence of information we are unable to comment on the amount kept under this head of account.

(i) It has been observed that in some divisions the consumers has deposited only the departmental charges and deposit work has been done by the consumer by their own. The charging of the departmental charges to revenue and charging of the value of fixed assets created and creation of reserves is subject to confirmations and reconciliations.

148

(ii) The deposits received under this head is for capital works and in our opinion the deposits are also of long term nature. Thus other current liabilities are overstated and other long term Liabilities was understated to the extent of ` 47580.08 lacs.

l) Provision for Losses The Company has shown the provision for losses under the head other Current Liabilities and the following heads are having debit balances

Amount in lacs Current Year

Previous Year

` `Provision for Loss on obselance of Capital Assests 46.961 2.05 2.05 Provision for Loss on obselance of Capital Spares

46.962 11.97 11.97 Provision for losses pending investigation 46.939 0.33 0.23

14.35 14.25

No information in respect of above has been provided by the company. In our opinion the other current liabilities are understated and income is overstated to that extent.

(m) Unclaimed Credit Balance A/c code 46.929

The Company is showed � 138.93 lacs (previous year ` 136 lacs) as unclaimed credit balance as at 31st March 2015. The company has not provided information in respect of the same. In our opinion the time barred credit balance should be charged to revenue.

(n) GPF Deduction Payable to other Account offices Account Code 44.411

The above account code shows debit balance of ` 27.51 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to the extent of above.

(0) Account code 46.921

The above account code shows debit balance of ` 19.72 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to that extent.

(p) Account code 44.413 (Employees contribution towards GIS)


(q) Account code 44.414 (Employees contribution towards Chief Minister relief Fund)


149

(r) Account code 44.416 (Board contribution towards CPF Employee on deputation)


(s) Account code 44.418 (Board contribution towards CPS deputation with HPSEB)


t) Account Code 46.976 (UPSEB)


11 Short Term Provisions (Note 2.10)

a) Interest accrued on Consumer Security Deposit The company has provided interest on security deposits of consumers amounting to ` 1,576.67 lacs (Previous Year ` 1,916.25lacs) during the year under review. The provision made is subject to reconciliations and confirmations.

b) 46.430 Provision for Liability of Expenses The provision of Rs 9323.03 lacs made by the company on account of liability of expenses is subject to confirmations and reconciliations.

12 Tangible Assets (Note 2.11)

(i) Depreciation on fixed assets owned by Board and transferred to Company is in accordance with “Transfer Scheme”. The Board charged depreciation at the rate of 2.50 percent on the opening balance of the assets except on vehicles which is being charged at the rate of 90% of cost of vehicles having 7 years life expectancy at division levels which is not in accordance with Schedule II of Companies Act.

We further report that during the year under review and in previous year the Company has charged depreciation in accordance with rates notified by Himachal Pradesh Electricity Regulatory Commission on all assets, whereas the said depreciation should have only to be applied to assets acquired after 14th June, 2010 and depreciation on assets transferred from Board on the basis of rates computed on the basis of life expectancy of each assets or class of assets. In view that Company has not provided to us the sufficient information with regard to historical cost, date of purchase and expected life, we cannot comment on the adequacy of depreciation charged to revenue account. Depreciation and amortization expenses need to be arrived at as per Section 123 and Schedule II of the Companies Act,2013(earlier Schedule XIV of Companies Act,1956) . The Company has not complied with Schedule II of the Companies Act 2013.

We further report that the Company has not charged depreciation on addition made to any asset or where any asset has been sold, discarded, demolished or destroyed on pro rata basis during the year from the date of such addition or as the case may be up to the date on which such asset has been sold, discarded, demolished or destroyed.

150

(ii) We also report that the assets of the company except vehicles in use and assets created from REC loans have not been fully insured.

(iii) The Board has received the assets and liabilities of Kashang Project from HPPCL (Himachal Pradesh Power Corporation Limited) as per Government of Himachal Pradesh decision in 2008. The HPPCL has charged the depreciation on the assets of the Kasang project as per the policy of the HPPCL. The Board has taken the provision of depreciation as provided by the HPPCL which is not in lines with depreciation policy of the Board. No depreciation has been provided by the Board and company from 1st April 2008 to 31st March 2011 on the assets of the project transferred to the Board.

The Company has not provided to us the amount of depreciation required to be adjusted on account of above. In the absence of information we are unable to comment on the same.

(iv) The Company has not made provision against assets valuing ` 13.67 lacs washed away due to flash floods and heavy rain in Chamba, Nurpur, and Jubbal Divisions in earlier years. In our opinion the assets and income are overstated to extent of above.

(v) The Company has created assets valuing ` 966.45 lacs on the land the ownership of which does not belong either to the erstwhile HPSEB or the company.

(vi) The Company has not made provision of assets valuing ` 20.40 lacs stolen from various lines /sites in the books of accounts. In our opinion the assets and income are overstated to the extent of above.

(vii) The accumulated depreciation as on 31st March 2015 is not adjusted on account of assets washed away in floods, assets not in use, assets stolen and impaired assets. In the absence of information we are unable to comment on the authenticity of the accumulated balance of depreciation at the end of the year.

(viii) The Company had charged the cost of new energy meters installed in repair and maintenance account in earlier years, without writing off the cost of old meters and the corresponding depreciation from the Fixed Assets Register which is contrary to the AS10 – Accounting of Fixed Assets issued by the ICAI. In the absence of information we are unable to comment on the cost of written down of meters which are in the Fixed assets schedule which are of nonexistent nature.

(ix) During reconciliation of A/c Code 28.919 with respective divisions it was observed that ES Division of Bhawanagar has erroneously Credited Fixed Assets Amounting to ` 6608.00 Lakhs by debiting A/c code 28.919 in F.y 2013-14. This has resulted in the overstatement of Short Term Loan & Advances and understatement of Fixed Assets to the extent of ` 6608.00 Lakhs. Depreciation has also been less calculated on the said amount. The Amount of depreciation less charged is not ascertainable due to non availability of requisite information regarding the assets involved. The amount has still not been rectified. Refer note no 2.33(B)36.

13. Intangible Assets (Note 2.12)

(i) The cost of Computer software, SAP amounting to Rs. 2243.71 Lac was recognized as intangible assets and is being amortized on straight line method over a period of five years. The Company has not provided us with the details regarding whether the SAP is under Development Phase or it has completed Development Phase. Para 20 of AS 26 says intangible asset to be recognized only if

•Future economic benefits attributable to the asset will flow to the enterprise

•Cost of the asset can be measured reliable

–Positive answers to both the questions required

151

In the absence of complete information we are unable to comment on whether the Intangible Asset has been created or is under Work in progress. The Company has also amortized Rs 640.48 on the Intangible Assets as per the accounting note No 2.33 (A) (2)(k), however the Company has amortized 1/5th of the Opening Balance ie Rs. 2243.71 Lacs. This Policy is however not in compliance with AS 26. In the absence of information regarding the Phase of Software development we are of the opinion that Intangible Assets & CWIP is understated o to extent of Rs 2243.71 . Amortization Expenditure is overstated to extent of Rs 640.48 Lacs and income is understated to extent of ` 640.48 lacs .

14 Capital Work in Progress (Note 2.13)

(a) Capital Works in Progress

(i) The above account head shows a sum of ` 88632.12 lacs (previous year ` 86,900.45 lacs ) on account of work in progress of various capital works as on 31st March 2015 which is subject to reconciliation and confirmations.

No Information /explanations in respect of the same have been provided to us. In the absence of information we are unable to comment on the same.

(ii) It has been observed that the works under capital work in progress has not been closed for want of completion certificates where as actually the work has been completed and the assets has been put to use by the company. No sufficient information in respect of completed capital work in progress has been provided to us. In the absence of information we are unable to comment on the same.

(iii) It has also been observed that in some cases the expenditure on capital work in progress has been incurred in excess of the sanctioned amounts and the work is still going on.

(iv) It has also been observed that in some cases the work in progress has been partly transferred to the fixed assets on yearly basis without verifying that whether the work on the assets has been completely finished or not.

(v) Interest during Construction Period (IDC)

(a) It has been observed that divisions are charging IDC (Interest during Construction Period) on the works under capital work in progress at rates varying from 8% to 13 % on year to year basis without verifying whether the assets has been funded from the loan or not. In some cases the IDC charged on the assets is equivalent to the cost of the assets or even more than that.

b) IDC Calculations

The Company has charged the IDC during the year on following basis:

Amount in lacs

IDC Charged by Head Office for the year 2014-15 4,918.14 IDC Reveresed By Head Office for the year 2013-14 11,981.58 IDC Charged by the Division for the year 2013.14 -11,981.58

IDC has not been charged to individual scheme by the concerned division.

152

c) Contracts in Progress

The Company showed a sum of ` 530.98 lacs (previous year ` 887.93 lacs) as on 31st March 2015 as contract in progress at various divisions which is subject to reconciliation and confirmations.

d) Revenue Expenses pending allocation over Capital Works

The company showed ` 4918.14 lacs (previous year ` 11677.99 lacs) as revenue expenses pending allocation over capital works .No sufficient evidence for charging the amount to this head has been shown for our verification. We are of the opinion that capital work in progress is overstated to the extent of ` 4918.14 Lacs

15 Long Term Loans and Advances (Note 2.15)

a) Advances to Supplies/ Contractors ( Capital)

The Company is showing a sum of ` 1766.17 lacs (previous year ` 2630.29 lacs) as advances to supplier and contractors as on 31st March 2015. The above amount is subject to confirmation and reconciliations in respect of works completed against advances sanctioned. It was also observed that in Head office in A/c Code 25.1 Advance to Suppliers /contractor (Capital) an amount of Rs 919.32 Lakh was shown as Advances to Suppliers &Contractor. On Examination it was found that this amount was Paid for Bills by CPC section of the head office and the this amount is not in nature of advance but incurred for Expenses Thus long term advances are overstated to the extent of Rs 919.32 Lakh and income is overstated to that extent. It was also observed that CPC section has not reconciled the Balances of Advances with the amount as appeared in the accounts of the head office.

b) Loans and Advances to staff (Interest Bearing)

(i) It has been observed that the individual divisions does not have the complete record of the loan sanctioned and amount recovered from the employees and it has been explained to us that the same is being reconciled and kept at head office level in the broad sheets of the employees. However the reconciliation with broadsheet cell of The Account code 27.101 House Building Advance, 27.102 Scooter Motor Cycle Advance and 27.103 Car Advance was not provided to us. In Account Code 27.102 Scooter motor Cycle Advance Rs 38.56 Lakh Appeared as credit Balance ie Negative balances. Thus in our opinion Long term Loan and advances is understated and income is overstated to the extent of Rs 38.56 Lakh.

(ii) It has further observed that when an employee is transferred from one Division to other division his account is not transferred to the other division though ATD and as such partial accounts are being kept at different divisions on account of loan sanctioned and recovery made at different divisions.

(iii) No information regarding current and noncurrent portion of loans and advances to employees has been provided to us

(iv) It was observed that in company has showed Rs 96.27 Lakh as interest accrued but not due on Advances to Others under Long term Loans and advances. In this head it was observed that in Account code 28.330 income accrued and due on investment in subsidiary Rs 97.78 Lakhs appeared as opening balance, no Interest was provided during the year. It was also observed that in Account code 28.220 Rs 1.47 Lakh and in Account code 28.304 Rs 0.04 Lakh appeared as credit balance ie Negative balance. Thus in our opinion Long term Loan & Advances is understated and income is understated to the extent of Rs 1.51 Lakh.

153

(v) It was observed that Company has Showed Rs.190.54 in A/c Code 28.860 & 28.861 as commitment Advance. Thus advance was given in year 2009 and the same was not adjusted till the finalization of audit.

(C ) Loans and Advances to Others

16 Other Non Current Assets (Note 2.16)

(a) Assets not in use

The company is showing ` 2813.12 lacs (previous year ` 960.01 lacs) as assets not in use as at 31st March 2015. In our opinion the above assets has completed their use full life and will not help in generating any further revenue and should be charged to revenue. Thus other noncurrent assets and Income are overstated to the above extent. (Refer Note 2.33 (B) (9)

(b) Special Repair to Vehicles

The above account code shows a sum of ` 4.41 lacs (previous year ` 5.73 lacs) incurred on account of special repairs to vehicles as at 31st March 2015. The above cost does not qualify the definition of intangible assets as defined under AS 26 Accounting standard for Accounting of Intangible Assets issued by the ICAI. Thus other noncurrent assets and income are overstated to the above extent.

(c) Expenditure on Survey/ Feasibility Studies Projects not yet sanctioned.

The above account code shows a sum of ` 11548.61 lacs (previous year ` 11,614.56 lacs) incurred on account of Expenditure on Survey/Feasibility Studies Projects not yet sanctioned as at 31st March 2015.

It has been observed that expenditure on survey / feasibility studies on different Projects has been incurred by the erstwhile board since many years. The expenditure has been done as the HPSEB was the only nodal agency to do such kind of survey and feasibility studies on behalf of the Government. The expenditure has to be recovered from the party to whom the project will be allotted. The above cost pertains to 61 nos. of projects and the same has not been allotted to any agency by the GOHP.

In our opinion as no future economic benefit is available to the company as per AS 26 Accounting standard for Accounting of Intangible Assets issued by the ICAI the same should be charged to revenue. Thus, other noncurrent assets are overstated to the extent of above of ` 11548.61 lacs (previous year ` 9677.52 lacs) which was shown by the divisions for our verification.

d) Trade Receivables (Non Current)

The Company showed a sum of ` 1293.75 lacs (previous year ` 613.38 lacs) due from permanent defaulters as on 31st March 2015. The Company had made provision of Rs 561.62 Lakh for bad and Doubtful debts but the same has been reduced from current trade receivables. In our opinion noncurrent trade receivables are overstated and trade receivables are understated to of Rs 561.62 Lakh.

(e) Inventories- Scrap/ other material/ excess/ shortages

The Company is showing amounts under the following account codes under other noncurrent assets:--

154

Amount in lacsCurrent Year Previous Year

` `22.7 Obsolete materials stock account 283.69 167.46 22.8 Materials short excess pending investigations 248.54 247.22

532.23 414.68

In our opinion other noncurrent assets are overstated to the extent of ` 532.23 lacs (P.Y ` 414.68 Lacs) for which no provisions has been made in the books of accounts.

(f) Interest Accrued and Due and Interest Accrued but not due on staff Loans and others

The Company showed the following amounts under the above head for which sufficient details has not been provided as such the same cannot be commented on:--

Income accrued and due on Loans/ Advances to Staff & Others

i) The account code 28.364 is of the nature of short term nature and should be shown under the head other short term loans and advances. This code showed credit balance of Rs.0.76 balance is subject to confirmation. Thus other noncurrent advances and deficit are understated to that extent.

Particulars A/c code Current Year Previous Year

Income accrued and due on Loans/Advances to staff 28.26 -11.60 -11.37

Income accrued and due on loan and adv- HBA 28.261 173.29 208.24

Income accrued and due on loan and adv- CPS. 28.267 -0.01 0.07

Income accrued and due on loan and adv- other 28.290 0.43 0.44

Interest accrued but not due -HBA 28.361 313.83 332.80

Interest accrued but not due -MC/ Scooter 28.362 -0.14 0.00

Interest accured but not due -car 28.363 -0.32 1.29

Warm Clothing Advance 28.364 -0.76 -1.12

Income Accrued & due--- CPS 28.367 -0.10 -0.13

Income Accrued & due--- Others. 28.29 0.43 0.44

Income Accrued & due--- CPS 28.367 -0.10 0.08

Interest accured but not due - others 28.390 87.34 87.34

income accured but not due CPS 28.367 0.00 -0.13

income accured but not due others 28.390 87.34 87.34

155

17 Current Investments (Note 2.17)

Leave Encashment Fund

The Company is showing ` 1,147.85 lacs (Previous Year ` 1,051.06 lacs) under the head Leave encashment fund which are of noncurrent nature. In our opinion the Current Investments are overstated to the extent of above and noncurrent Investments are understated to that extent.

18 Inventories (Note 2.18)

(a) The divisions are adding 3 % as storage charges and freight charges in the cost of the material purchased which is contrary to the Accounting Standard AS 2 Accounting of Inventories issued by ICAI. The Accounting standard states that stock has to be accounted for at cost or realizable value whichever is less. In the absence of complete information we are unable to comment on its affect to the Profit and Loss Account.

(b) The company has been transferred with stocks of the erstwhile Board which have been purchased in

earlier years and the same has not been used till the close of the year and the same has resulted in over stocking of the stocks and pilling up of the stocks at Divisions level. The following is the details of stocks as provided by the company for which no provisions has been made in the books of accounts on account of obsolescence, shortages and reduction in the value.

In our opinion the inventories are overstated to the extent of ` 65.15 lacs for which no provisions has been made in the books of accounts.

(c) It has been found that there is no systematic accounting of stocks in this account heads and some divisions has not made distinctions between the stocks of stores and other materials and it has been observed that in some cases the office equipment stocks and other office equipment has also been included in the above head which should have been part of the fixed assets. In the absence of sufficient information we are unable to comment on the overstatement of inventories.

(d) The Company has not provided details in respect of inventories which are of current and noncurrent nature. In the absence of information we are unable to comment on the current and noncurrent portion of inventories.

(e) Physical verification reports of the inventories were not provided to us for verification at division level. In the absence of physical verification reports the balance of inventories are subject to confirmation. There is no system prevalent in the company to identify the obsolete Stock, company has not shown any loss by theft or natural calamity in stock. The System of reporting theft of Stock at the division level to H.O and its treatment in the accounts is not clearly specified. In the absence of complete information, its impact on profit / Loss could not be ascertained.

19 Trade Receivables (Note 2.19)


` `22.6 Opening Diffrence 23.65 23.65 22.6 Stocks in hand more than five years Critical 670.40 750.35 22.6 Stocks in hand more than five years non Critical 65.15 95.45

759.20 869.45

156

The Company has shown trade receivables from consumers and others under this head amounting to � 83537.99 lacs (P.Y ` 56263.23 Lacs). No sufficient information was provided to us regarding whether the trade receivables are of current nature (i.e. they are likely to be realized in next 12 months) or Trade receivable are of non Current Nature . Thus we are unable to comment on the non current nature of the trade receivables included in above amount. The Company has not provided to us the balance confirmation certificates / party statement from the concerned parties to confirm the balance as reflected in the books of the Company.

A Sundry Debtors for Energy Bill (Other than Interstate Consumers)

1 The subsidiary records in relation to consumer ledgers at the end of the year is pending for reconciliation at all divisions of the operation circles. In the absence of the proper reconciliation we are unable to comment on the authenticity of the amount recoverable from the consumers as at 31stMarch 2015.

2 The consumers having credit balances in accounts on account of energy dues, municipal taxes, electricity duty and other dues or who has made advance payments has not been shown separately as other current liabilities.

3 The Trade Receivables also includes ` 28173.52 lacs (previous year ` 20280.50 lacs) as amount recoverable from different departments of Government of Himachal Pradesh. The breakup is per Note No 2.33 (B) (45)

4 The company has made provision for doubtful debts amounting to ` 561.52 Lacs .In our opinion the provision is less keeping in view the amount recoverable from Government departments and other consumers.

5 The sundry debtors includes Municipal committees and NACs from which amount is recoverable since many years correspondingly the amount is also payable to them on account of electricity consumption tax. The amount payable as on 31st March 2015 to different Municipal committees and NAC is ` 937.55 (previous year ` 782.51 lacs) which has not been adjusted from the amount recoverable from them. Thus Trade receivables are overstated to that extent and correspondingly the other current liabilities are overstated to that extent.

6 The Company has not provided to us information about amount receivables against bills raised but not accepted by the respective consumers and were sub-judice ` 635.00 Lacs (P.Y it was ` 709.00 Lacs). In the absence of information we are unable to comment on amount of trade receivables which are overstated due to inclusion of above debtors in sundry debtors.

B Sundry Debtors for Interstate Sale of Power and for Wheeling / O & M Charges

1 The amount recoverable for interstate sale of power at Head Office amounting to ` 20010.04 lacs (previous year ` 3909.46 lacs) includes the accounts of following parties for which no sufficient information/ confirmations are available at Head Office.

157

Amount in lacs Amount in LacsCurrent Year Previous YearDebit Credit Debit Credit

23.601 PSEB 11,942.80 - 1,263.30 - 23.603 UPSEB 5656.95 - 949.69 - 23.610 NTPC 1.56 1.56 23.623 Malana Deve. Power 181.84 - 181.84 23.624 REC.CH. 749.54 - 981.65 23.630 PGCIL(UI) 1244.37 - 531.39 23.730 Open Access 232.98

Total 20,010.04 - 3,909.43 -

We are further of the opinion that the trade receivables are overstated to the extent of ` 20010.04 lacs (previous year ` 3909.46 lacs) on account of debit balance in the parties account for which no sufficient confirmations /information is available with the company. However these figures are not reconciled with SLND hence it is subject to confirmation.

2 The company is also showing a sum of ` 14014.63 lacs (previous year ` 19525.69) recoverable from different parties on account wheeling/ O&M Charges as on 31st March 2015.The following are the account balances of parties which were not confirmed.

Amount in Lacs

A/c Code Particulars Current

Year Previous Year

Debit Credit Debit Credit

23.802 HVPNL 22.66 – 22.66 –

23.814 MALANA(W) 2.07 552.22

23.82 Handling charges of Govt. Free power

3726.92 – 4217.93 –

23.821 MALANA(H) 10.89 – 10.89 –

23.826 HPPCL &BKG 220.60 1733.51

23.830 PTC System opt. ch. 10252.19 – 12986.51 –

23.831 Trans & System Operations Charges

1.97 – 1.97 –

TOTAL 14014.63 222.67 19525.69

We are of the opinion that the trade receivables are overstated to the extent of ` 14014.63 lacs (previous year ` 19525.69 lacs) on account of debit balance in the parties account for which no sufficient confirmations/information is available with the company. However these figures are not reconciled with SLND hence it is subject to confirmation.

3 O& M Charge Recoverable from HPTCL

The Company has booked` 1140.11 lacs (previous Year ` 848.68 lacs) as O & M Charges Recoverable from HPTCL during the year under Review. During the year under review ` 426.68 Lacs was debited and ` 135.25 lacs were credited. The Company has shown the ` 1140.11 as current trade receivable whereas the payment of opening Balance has not been received. Thus current trade receivables are overstated and noncurrent assets are understated to that extent.

158

C Court Cases by Consumers

As explained by the company The erstwhile Board/Company has billed ` 1035.25 lacs (previous year ` 1280.40 lacs) and ` 1345.50 lacs (previous year � 1475.10 lacs) to industrial consumers of Operation Circle, Solan and Nahan. The consumer had filed suits against the same and recovery had been stopped by the courts. No disclosure of the same has been made in notes to accounts. The Company has shown the above amounts as current trade receivable. Thus the current Trade Receivables are overstated to that extent.

20 Cash and Cash Equivalents (Note 2.20)

(a) Balance with Banks

(i) The company has done the bank reconciliations of all the Banks accounts at Head Office level and no reconciliation is being done at the division level. We have been provided with the bank reconciliations of the accounts maintained at Head office level bank wise consolidated and not by bank wise and branch wise individually. We have been explained that all collections received in the collection accounts maintained at Divisions level are being transferred to the Head Office account. We have not been provided with the bank reconciliation and balance confirmations certificates from the bank as on 31st March 2015 for all the collections accounts maintained at divisions and sub divisions levels in the fields. In the absence of the information we are unable to comment on the amount of collections not accounted for in the books of accounts during the period under review.

(ii) Bank Reconciliations at Head Office Level

It has been observed that the head office have accounted for all the pending entries in the bank reconciliations statements of all banks in the financial statements which is not in line with the commercial accounting practice. The un reconciled entries on account of unrepresented cheques and cheques outstanding for clearing has to be shown in the reconciliations statements only and has not to be accounted for in the financial statements and to be settled in the bank reconciliations statements in succeeding months.

b) Cash in Transit

The company is showing a sum of ` 12040.63 lacs (Previous year ` 7703.47 lacs) as cash in transit as on 31st March 2015. The details of the same as under:-


` `1 Details as per Bank Reconclilation Statements

Bank Charges Excess Charged by Bank - - Outstanding Remittance 9,586.85 4,439.60 Short credit given by Banks 1,430.33 2,017.16 Excess amount debited by Banks 991.38 1,214.64

12,008.56 7,671.40

2 Cheuqe in transit since 1996-97 32.07 32.07 Total 12,040.63 7,703.47

159

The above amounts pertains to cheques outstanding for clearing by banks which has been included in this head and it should have been shown in the bank reconciliations statements instead of accounting for the same in the financial statements.

The Company has shown the cash in transit in bank balances. Thus Bank balances are overstated to that extent.

The old un-reconciled entries in above are subject to reconciliations and it may affect the profit and loss account and balance sheet. In our opinion all old entries shown in the reconciliation statements should be reconciled and necessary adjustment entries may be passed in books of accounts.

21 Short Term Loans and Advances (Note 2.21)

A Advances to Contractors and Suppliers

(i) The company showed ` 5829.84 lacs (Previous year ` 2807.51 lacs) as loans and advances for supplies / works. The above advances also include advances which are old and require adjustments as the works has been completed at the close of the year and expenditure has not been booked. The company has not provided us any confirmations from the Parties for the amount due as such we are unable to comment on the above advances. The above advances have been shown as secured but no sufficient information in respect of the same has been provided. No Information in respect of noncurrent portion of advances has been shown for our verification. It was also in books of head office in A/c code 26.1 Advances to suppliers / Contractors 579.15 Lakh was shown as advances to suppliers / contractor this amounts pertains tip payment of bills by CPC section and this amount relates to Capital work in progress. In our opinion Short Term Loan & Advances are overstated and CWIP is understated to extent of ` 579.15.

(ii) The Binwa division of Generation wing has advanced ` 58.67 lacs to M/s Garg Engineering Industries Private Limited. The Advance has become bad as the party is not traceable. In our opinion the short term loans and advances and income is overstated to that extent.

B Loans and Advances to Staff

It has been observed that the individual divisions does not have the complete record of the loan sanctioned and amount recovered from the employees and it has been explained to us that the same is being reconciled and kept at head office level in the broad sheets of the employees.

It has also been observed that when an employee is transferred from one Division to other division his account is not transferred to the other division though ATD and as such partial accounts are being kept at different divisions on account of loan sanctioned and recovery made at different divisions.

The company has not provided us the details in respect of the following account heads during the year review.

Amount In lacs Credit

` Loans and advances to staff – Warm clothing 27.104 07.13 Loans and advances to staff – T.A 27.201 -4.11

160

Loans and advances to staff – pay 27.202 69.85 Loans and advances to staff – Festival 27.203 0.01 LTC advance 27.207 1.18 Medical advance 27.208 -2.30 warm clothing advance 28.264 -5.41 Fan Advance 28.266 3.02 Other 27.206 0.44 69.81

No information in respect of current and noncurrent portion of advances has been shown for our verification.

C Prepaid Expenses

(a) It has been observed that the company has no precise policy of charging the expenses to prepaid expenses head. Most of the divisions are charging petrol and diesel of vehicles in hand at the close of the year. Some Divisions have charged Insurance on vehicles in the prepaid expenses. During the year under review prepaid expenses have not been booked at H.O Level.

D Amount Recoverable from UPSEB Account code 28.831

The above account code shows credit balance of ` NIL (Previous Year Cr Balance ` 389.74 lacs) during the year under review. No information in respect of same has shown for our verification. Party Statement / Balance confirmation from the UPSEB was not provided to us for our verification. In our opinion the short term loans and advances and income are understated to the extent of above.

E Advance Income Tax/ Tax Deductions at Source

(i) The Company has claimed ` 1191.99 lacs (P.Y 854.30 Lacs) as income tax refund in the income tax return filed for the financial year 2014-15 where as the company has accounted for ` 3158.94 lacs under the head TDS recoverable. No sufficient information in respect of the same has been provided to us. In the absence of information we are unable to comment on the same.

(ii) The above account head shows � 3158.94 Lacs (P.Y` 2,033.41 lacs) as short term loans and advances where as above amount includes ` 1665.78 TDS which are of noncurrent nature. Thus short term loans and advances are overstated to that extent.

F) Amount Recoverable Government Departments A/c code 28.776

(i) A sum of ` 1.40 lacs share application money recoverable from HP Government for the share allotted to the government has been shown under the head short term loan and advances. Refer para 2 of this report in which we have stated that short term loans and advances are overstated to the extent of above.

(ii) Amount Deposited with PWD Kullu

The Thalot division of Generation Wing (earlier Projects Wing) has deposited � 100.00 lacs with PWD Kullu for construction of roads which is of non recoverable nature . In our opinion the amount short term loans and advances and income are overstated to the extent of above.

161

(iii) Amount Recoverable from HIMURJA

The Company has shown a sum of ` 26.99 lacs (previous Year ` 26.99 lacs) as amount recoverable from Himurja on account of DPR Charges of the projects of the Himurja. The amount has not been paid by the Himurja hence provision for the same should be made in the books of accounts. In our opinion the short term loans and advances and income are overstated to the extent of above.

(iv.) Amount Recoverable from Revenue Department A/c code 28.872

The Company has shown a sum of ` 86.86 lacs (previous Year ` 87.20 lacs) as amount recoverable from Revenue Department. The amount has not been paid by the Revenue Department hence provision for the same should be made in the books of accounts. In our opinion the short term loans and advances and income are overstated to the extent of above.

G) Amount recoverable Related Parties

I. BVPCL ( Subsidiary Company) A/c Code 28.761

The Company has incurred expenditure to the tune of ` 3596.64 lacs (previous year � 3008.28 lacs) as on 31st March 2015 for which shares has to be issued by the BVPCL. The above balance is subject to reconciliation and confirmation. The Company has allotted only shares for ` 3000.00 lacs. Thus a sum of � 596.64 lacs amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets. Thus Short Term Loans & Advances are overstated to that extent and other noncurrent assets are understated to that extent.

H) Amount Recoverable Others

(i) Amount Recoverable from SJVNL A/c code-28.701

The Company showed a sum of � 176.75 lacs (previous year ` 176.75 lacs) recoverable from SJVNL as on 31st March 2015 as short term loans and advances other. We were explained that SJVNL has not accepted the liability as such the amount is disputed and requires legal action/write off not current assets and is of the nature of noncurrent assets. Thus short term loans and advances are overstated and other noncurrent assets are understated to that extent.

(ii) Expenditure incurred on Resident of Parbati HEP A/c Code 28.704

The Company is showing a sum of ` 21.68 lacs (previous year ` 21.68 lacs) as amount recoverable from NHPC as on 31.03.2015. The amount has not been recovered till the approval of accounts. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

(iii) Amount Recoverable Himachal Pradesh Power Transmission Corporation Limited. A/c code-28.773

The company has transferred cost of transmission lines to the HPTCL (Himachal Pradesh Power Transmission Corporation Limited) as per the scheme of the transfer. A sum of ` 5936.18 lacs (previous Year ` 5916.05 lacs) has been shown as recoverable as at 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

162

(iv) Theft of Property Pending Investigation

The above head shows a sum of ` 23.35 lacs (previous Year ` 31.30 lacs) as on 31st March 2015. The above amount is to be shown under other noncurrent assets. Thus Short Term Loan & Advances are overstated and other noncurrent assets are understated to that extent.

(v) Expenses recoverable from Suppliers /Contractors.

The above head shows a sum of ` 1964.68 lacs (previous year ` 1901.44 lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. No sufficient information for showing the same as current assets has been shown for our verification. Thus Short Term Loan & Advances are overstated and other noncurrent assets are understated to that extent.

(vi) Inspection charges related to material / equipment third party inspection

The above head shows a sum of ` 105.41 lacs (previous year ` 07.38 lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. No sufficient information for showing the same as current assets has been shown for our verification. In our opinion short term loans and advances are overstated to the extent of above.

(vii) Amount Recoverable from PSEB

The above head shows a sum of ` 7.49 lacs (previous year ` 7.49 lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

(viii) Leave & Pensionary Benefits Recoverable from outside Parties (A/c Code 28.880) &28.881 The Above Account coded showed ` 2702.55 lacs (P.Y ` 2078.95 Lacs) recoverable on account of leave and pensionary contribution recoverable from outside parties. The above amount includes ` 1563.80 lacs which is of noncurrent nature. Thus short term loans & advances are overstated to the extent of above.

I) Deposits

(i) The Company is showing a sum of Rs. 14190.65 Lacs (P.Y ` 14190.65lacs) under this head the details of which as under : -- Current year Previous Year Deposits Rs. In Lacs Rs. In Lacs - - Other deposits A/c -28.919 14,073.79 14073.77 Security from suppliers and contractor in FD form A/c -28.93

20.50 20.50

Deposit with Hon'ble High Court/Court- Pending FD- A/c -28.917

96.38 96.38

14,190.67 14190.65

163

The amount is in the nature of long term loans and advances and should not be treated as current assets. Thus short term loans and advances are overstated to the extent of above.

(J) Amount Recoverable from Employees

(i) The above account includes a sum of � 162.54 lacs (previous year ` 174.21 lacs) recoverable from employees / ex employees. The account is subject to reconciliation and confirmation. In the absence of reconciliations we are unable to comment on the recoverability of the amount due from employees/ ex employees. It has been observed that the above account includes amount recoverable from employees on account of shortages and other recoveries. In some cases the amount has been disputed and employees has gone to courts and in some cases the monthly installments has been fixed and in some cases the amount has been paid by the employees and in some cases the employees are not paying shortages. The current and noncurrent portion of the amount recoverable has not been disclosed by the company.

(ii) Non provision of � 9.36 Lacs (previous Year ` 9.36Lacs) recoverable from employees who have been injured while performing their duties .In our opinion non provision of the same has resulted in overstatement of the short term loans and advances.

(K) Interest Accrued but not due employees A/c code 28.365

The above account includes a sum of ` 1.14 lacs (previous year �1.14 lacs) for which no sufficient information has been provided to us. In the absence of complete information we are unable to comment on the same.

(L) Interest Accrued but not due others. A/c code-28.310

The above account includes interest accrued and due on GPF Fixed deposits amounting to ` 3657.53 lacs (previous year ` 3839.72 lacs). The FDR wise interest accrued as at opening of the year has not been shown for our verification. In the absence of information we are unable to comment on the same.

(M) Others

In the following head of accounts balance confirmation from the concerned parties were not found on record. Hence these balances are subject to confirmation and reconciliation. In our opinion short term Loan And advances is overstated and other noncurrent assets is understated to the extent of � 7366.45 Lakh.

Name of Account A/c code Amount Remarks

Advances to suppliers/contractors (O&M) – Interest Free

26.5 774.37 Current /Non Current portion no ascertained

26.1 605.93 --do--

Suppliers/contractors Materials Accounts (O&M)

26.7 4378.34 --do--

Loan and advances to other 27.8 71.18 Opening Balance not adjusted

Loan and advances to CPS holders 27.107 4.96 Current /Non Current portion no ascertained

Loan and advances to other 27.8 7.09 --do--

164

Exp incurred on deposit work HRTC 28.702 178.96 Opening balance

claim for loss damaged of materials - suppliers

28.725 3.49 Opening balance

28.821 537.56 Account head not mentioned

HPPWD 28.870 126.73 Current /Non Current portion no ascertained

Other deptt to be specified 28.875 677.84 --do--

Total 7366.45

22 Other Current Assets (Note 2.22)

(i) Receivables from Sale of Store, Rental property A/c code 28.103, 28.104

The above account includes a sum of ` -4.60 as credit balance in accounts receivable from sale of store, rental property. This is a negative balance. Proper explanation for the same was not provided to us. In our opinion other current assets are understated and income is understated to the extent of above.

(ii) Reimbursement of up front subsidy by GOHP

The above account shows a sum of ` 4,970.00 lacs (previous year ` 4,970.00 lacs) recoverable as upfront subsidy from the Government of Himachal Pradesh which has not been approved by the Government hence the amount is not recoverable. In our opinion the other current assets are overstated to the extent of above.

(iii) Revenue Subsidy Grant From Govt. of HP (Account Code 28.623 ,28.264 and 28.625)

The amount recoverable from HP Government amounting to ` 50035.30 (P.Y ` 45751.80.00 lacs) is of noncurrent nature. Out of above ` 12751.80 is of noncurrent nature. Thus the other current assets are overstated and other noncurrent assets are understated to the extent of above.

iv) Inter Unit Transactions

The company is showing ` 36424.85 lacs (previous year ` 25387.21 lacs) on account inter unit transfers and the same has not been reconciled at the end of the year. It has been observed that the above practice of non reconciliation in inter unit accounts is pending since many years and same was not reconciled by the erstwhile Board and even by the Company. In our opinion the amount is not of recoverable nature as the inter units accounts has to be adjusted at the close of the year and amount should be Nil under this head. Thus other current assets are overstated to the extent of above.

23 Statement of Profit and Loss Account

(i) Income from Investments

165

The company has shown the following as interest earned on investments. The details of the same are as under:-


` `1 Net Interest recived/ (Paid) from GPF Fund 1,350.95- 4,162.34- 2 Interest on APRDP Fund - - 3 Interest on RGGVY Funds - - 4 Interest on Leave Encashment Fund -

1,350.95- 4,162.34-

In our opinion the income is understated to the extent of above since interest paid on GPF has been paid on the liability not related to Company.

(ii) Prior Period Items 2013-14

Reference is invited to Note No2.33 (B) (47) regarding prior period items amounting to ` 1088.55 charged in accounts in financial Year 2014-15 The account for the year 2013-14 was approved by the Board on 1st July 2016 and the prior period items are known to the company before the finalization of the accounts for the year 2014-15 but no effect of the same has been made in the financial statements for the year 2014-15.

(iii) Contingencies and Events Occurring after Balance Sheets Dates

The Company has not accounted for material events incurred after balance sheet date till the approval of the accounts by the Board of Directors as the next year accounts are not complete till the finalization of the report. The material items which may affect the profit loss account and balance sheet cannot not be commented on in the absence of the information as per the requirements of AS 4 Contingencies and events Occurring after the Balance Sheet Date issued by the Institute of Chartered Accountants of India. Refer to note 2.33 (B)47. Reference is also invited to note no. 2.33B 17 . compensation paid to legal heirs of deceased students amounting to Rs. 2.28 crores pursuant to orders of H’ble High Court

(iv) Reallocation costs of Employees and Repair and Maintenance to Capital works

The method and calculation of reallocation of employee costs and repair and maintenance costs is subject to reconciliation as the basis for the same and the actual expenditure incurred has not been providd to us.

(v) Prior Period Employee Costs

The Company has charged arrears of D.A in prior period Employee cost. The Above accounting treatment of arrears of salary/ D.A is in contravention of the AS 5 Net Profit or Loss for the year , Prior Period items and Changes in Accounting Policies which states that prior period items refers only income and expenses which arise in current period as a result of errors or omissions in one or more prior periods. Thus current year employee costs are understated to the extent of ` 441.76 lacs and similarly the prior period expenses are overstated to that extent.

24 Other Observations

166

(i) The BOD has sanctioned to write off the material washed away damaged due to flash flood in Andhra Khad and Pabbar River on 11 and 12.8.1997 amounting to ` 34.60 lacs vide resolution no 4.5 dated 16/12/2010 . We were explained that effect of the same has been given in the accounts but no documentary evidence was produced before us. In our opinion the Tangible assets are overstated to that extent.

(ii) Transfer of various HPSEB Limited Roads to HPPWD.

a) The BOD vide resolution no 3.03 dated 17/09/2010 decided to transfer the ownership of lands free of cost to HPPWD and write off the cost in the books of HPSEB Limited. No sufficient information in respect of same has been provided. In the absence of information we are unable to comment on the same.

b) The BOD vide resolution no dated 16.09 28/12/2013 has transferred Largi Barrage-Shilly Larji HPSEBL roads to HPPWD along with the title of the land free of cost amounting to ` 90.17 lacs. We were explained that effects of the same have been given in the accounts but no documentary evidence was produced before us. In our opinion the tangible assets are overstated to that extent.

(iii) The BOD has sanctioned to write off the stolen AAC amounting to ` 0.92 lacs stolen from Katolu store, Jeaori on 28/12/1999. vide resolution number 5.05 dated 14.3.2011, We were explained that effect of the same have been given in the accounts but no documentary evidence was produced before us. In our opinion the inventories are overstated to that extent.

(iv) Repair and Maintenance Line and cable Net Works

It has been observed that company is charging the costs from above head to Revenue expenses pending allocation to capital works and Capital Work in progress at the close of the year. In the absence of sufficient information we are unable to comment on its effect to the profit and loss account and balance sheet.

(v) Old Un-reconciled entries in the Bank Reconciliation Statements

The company is carrying over the old un reconciled entries of Bank Reconciliations statements and the same has not been adjusted at the close of the year the details of the same is as under:-

Amount in � lacsCurrent Year Previous Year

Short credit given by banks 1,830.80 2,017.16

Excess amount debited by banks 1,447.16 1,214.64

3,277.96 3,231.80

Less amount debited by banks 71.89 74.84

Excess Credit by banks 3,296.27 3,494.35

3,368.16 3,569.19

In our opinion in the absence of complete information we are unable to comment on its effect on the Profit & Loss account and balance sheet.

(vi) Distribution Losses

167

Reference is invited to Note 2.33 (B) (41) regarding distribution losses. Some of the circles have very high distribution losses as compared to acceptable norms for electricity companies.

(vii) Leave Salary, Gratuity and PF Contributions

The company has not made any provisions in the books of accounts in respect of leave salary payable , gratuity payable, EPF contribution payable as on 31st March 2015 ( refer Note 2.33(A)(9) in respect of present employees as per AS 15 Accounting for Employees Benefits issued by the ICAI. In the absence of information we are unable to comment on its effect on the profit and loss account and balance sheet.

(viii) Contingent Liabilities in notes to accounts

The Company has made disclosure of contingent liabilities in notes to accounts, sufficient information has not been provided in respect of the Contingent Liabilities provided in the notes to accounts. (Refer Note no 2.33 (B) 17)

(ix) The Company has not provided any information of the suppliers / service providers who are registered as Micro, Small and Medium undertakings under "The Micro, Small and Medium Enterprises Development Act 2006" as on 31st March, 2015. In the absence of the information we are unable to comment on the same.

(x) The Company has not provided any information in respect of the following comment of AG for the year ended on 13/06/2010.

(a) ` 7,025.00 lacs being the principal amount of power bond issued to clear HPSEB’s dues towards Central Public Sector Undertakings (CPSU’s) up to 30 September 2001. The liability for this amount was cleared by crediting income in contravention of the orders (2005) of the Himachal Pradesh Government wherein it was stated that the liability on account of interest as well as repayment of Power Bonds had to be borne by the Board.

(b) The above has been understated by ` 121.00 lacs due to non-account of interest on Power Bonds of ` 7,025 lacs. This has resulted in understatement of above head as well as Deficit to that extent.

(c) ` 5075.00 lacs on account of Interest on Power Bonds of `7025.00 lacs (October 2001 to 2009-10). This has resulted in understatement of Accumulated Loss as well as Other Current Liabilities to the above extent.

(xi) No details has been provided for Non Provision of ` 160.00 lacs being the charges of power purchased from UPCL during December 1989 to 13 June 2010. This has resulted in understatement of above head of account and Deficit to that extent (prior period ` 153 lacs and current financial period `7.00 lakh) as reported by AG in their report for the year ended on 13/06/2010

(xii) Non Provision of ` 1374.00 lacs on account of royalty payable to the Government of H.P. at the rate of 12 per cent in respect of projects executed by the Board after 1990 as per the decision taken by the Government of H.P. in January 2006 . The other current liabilities are understated to the extent of above.

(xiii) Non Provision of ` 169.00 lacs incurred on abandoned Hydro Electric Project (Baspa I) and shown as recoverable. In our Opinion the tangible assets are overstated to the extent of above.

168

(xiv) Non Provision of assets valuing ` 243.00 lacs washed away due to flash floods (between 2003 to March 2009) and which were not in existence. In Our Opinion the tangible assets are over stated to the extent of above.

(xv) The erstwhile Board has transferred cost of Land measuring (113.06 & 149.04 Bighas) and Buildings (residential/non-residential) at Sainj Hydro Electrical Project amounting to ` 1,293.00 lacs transferred to M/s HPPCL/NHPC during 2009-10. In our Opinion the tangible assets are overstated to the extent of above.

(xvi) No provision of assets valuing ` 1,106 lacs created (2009-10) out of material provided by the consumers and being maintained by the Board in three Circles. The tangible assets and reserves and surpluses are understated to the extent of above.

(xvii) The Company has shown an amount of �113.00 lacs incurred on behalf of M/s J.P. Associates to provide power supply to cement plant over and above the deposited amount. The consumer had refused to deposit the amount. In accordance with the provisions of Expenditure Regulations 2005, the excess expenditure was not recoverable from the consumer and had to be borne by the Board. In Our Opinion the current assets are overstated to the extent of above

(xviii) The Company and its divisions has not provided to us Court cases details which are contingent in nature and in which contingent liability of the company is involved.

25 Non Compliance of Accounting Standards

The Company has not complied with the following mandatory accounting standards issued by the Institute of Chartered Accountants of India

1 Accounting Standard I- regarding disclosure of Accounting Policies:

i) Non disclosure of policy of conveyance for accounting of losses of stock due to theft, fire, floods etc.

ii) Non disclosure of any policy on write off & recovery of shortage from contractors and suppliers

iii) Non disclosure of any policy on write off & recovery of shortage from employees

iv) Accounting treatment of capital and revenue items v) No disclosure about the company whether its going concern or not.

2 Accounting Standard 2: Valuation of Inventories

Accounting policy on inventory valuation, where the cost is determined on weighted average method and storage cost @ 3% and freight is added to the cost is not in line with the Accounting standard issued by ICAI. (Refer Note 2.33(A)7)

The effect of noncompliance with accounting standard 2 on inventories stores and spares and Profit & Loss account is un-ascertainable due to non availability of information.

3 Accounting Standard 4: Contingencies and Events Occurring after the Balance Sheet Date

169

The Company has not provided to us with the information on contingencies and events occurring after balance sheet date, neither the same has been incorporated in the accounts statements nor the same has been disclosed by the management in the notes to accounts .

This may be noted that although this year Balance Sheet is approved u/s 134 of the Act) on 01st July 2016 and submitted to us for audit. The Material Contingencies and events occurring after balance sheet date which may affect the balance sheet at 31st March 2015 has not been disclosed in the notes to accounts

The effect of noncompliance with accounting standard 4 on profit & loss account is un-ascertainable due to non availability of information.

4 Accounting Standard 5: Net Profit or Loss for the period, Prior Period Items and changes in Accounting Policies

The Company has not complied with the requirements of Accounting standard 5 which deals with Prior period and extraordinary items, as the Company has no accounting policy for prior period items and changes in accounting policies and there is no disclosure of the same in the notes to accounts.

The effect of noncompliance with accounting standard 5 on profit & loss account is un-ascertainable due to non availability of information

5 Accounting Standard 6: Depreciation Accounting

The Company has not complied with the requirements of Accounting Standard 6 which deals with accounting of Depreciation. The company has changed the method of providing the depreciation rates which was previously adopted by the Board and the depreciation has not been recalculated retrospectively in accordance with the new rates.


6 Accounting Standard 9: Revenue recognition

The Company has not followed the accounting standard 9 as required for revenue recognition, The company has not disclosed any accounting policy in respect of violation charges, O & M Charges, Charges for interlinking facility, other O & M Charges and other charges recoverable.

7 Accounting Standard 10: Accounting for Fixed Assets

The Company has not complied with the requirements of the accounting standard 10 accounting for fixed assets while preparing the financial statements.


8 Accounting Standard 12: Accounting for Government Grant

The Company has not complied with the requirements of accounting standard 12 on accounting of Government Grants in relation to charging of the depreciation on the assets acquired from the grants


170

9 Accounting Standard 15: Accounting for Employee Benefits

The Company has not complied with the requirements of AS15 regarding accounting for employee Benefits while preparing the financial statements in respect of leave salary , gratuity and provident fund contributions payable to present employees.


10 Accounting Standard 16 Accounting of Borrowing Costs

The company has not complied with the requirements of AS 16 issued by the ICAI which states that only interest paid on loan which has been used for construction of Assets during construction period has to be capitalized as part of the cost and after that the interest has to be charged to revenue.


11 Accounting Standard 22: Accounting for Taxes on Income

The Company has not recognized the tax effect of timing differences arising on account of carry forward losses as per Accounting Standard 22 "Accounting for Taxes on Income" issued by ICAI on accounting of prudence.

12 Accounting Standard 26: Intangible Assets

The Company has not complied with the accounting standard 26 issued on the Intangible assets which states that “an intangible asset should be recognized if, it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and the cost of the asset can be measured reliably.”

13 Accounting Standard 28 : Impairment of Assets

The Company has not complied with the accounting standard issued on the Impairment of Assets issued by ICAI while preparing the financial statements

14 Accounting Standard 29: Provisions, Contingent Liabilities and Contingent assets

The Company has not complied with the accounting standard issued on the Provisions, Contingent Liabilities and Contingent Assets issued by ICAI while preparing the financial statements

The effect of the said qualifications where ascertainable the loss of current year ` 11351.11 lacs will be increased to loss of ` 219611.79 lacs. The reserves and surpluses will be ` (252107.81) lacs instead of ` -15801.25 lacs.The Share Capital will be ` 12550.18 instead of ` 52203.18. The Other long term liabilities will be ` 75176.65 lacs instead of ` 49418.38 lacs . The long term provisions will be ` 117420.67 lacs instead of ` Nil lacs.The Trade payables will be ` 190924.90 lacs instead of ` 190764.90 lacs. The other current liabilities will be ` 149395.96Lacs instead of ` 206567.85 lacs.The Tangible assets will be ` 517799.46 lacs instead of ` 512791.09 lacs. The Intangible Assets will be ` Nil instead of � 1603.23. The capital work in progress will be ` 101117.02 lacs instead of ` 93777.89 lacs. The non current Investments will be ` 44225.36 lacs lacs instead of ` 43077.51 lacs. The long term loan and advances will be ` 13027.97 lacs instead of `18577.25 lacs. The other noncurrent assets will be ` 57886.72 lacs instead of ` 16771.08 lacs . The current investments will be ` Nil lacs

171

instead of ` 1147.85 lacs. The inventories will be ` 6998.85 lacs instead of ` 7122.71 lacs. The Trade receivables will be ` 63924.54 lacs instead of ` 104596.13 lacs. The cash and cash equivalents will be ` 6221.08 lacs instead of ` 14546.68 lacs. The short term loans and advances will be ` 525.67 lacs instead of ` 46453.26 lacs . The other current assets will be ` (48374.03) instead of ` 92680.47 lacs

Opinion

In our opinion, because of the significance of the matter discussed in the Basis for disclaimer of opinion paragraph,

We report that the aforesaid standalone Financial Statements do not give the information as required by the Companies Act, 2013, in the manner so required and in conformity with accounting principles generally accepted in India and because of the significance of the matters described in para above and for those qualifications where the effects are unascertainable and are of material nature, and considering the qualifications in this report and audit reports of earlier years of erstwhile HP State Electricity Board we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion therefore we disclaim our opinion

(a) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2015.

(b) in the case of the Statement of Profit and Loss ,of the loss for the year ended on that date.

(c) in the case of the cash flow statement of the cash flows for the year ended on that date

Emphasis of the Matter

(i) We further report that the Company’s net worth as at the end of the financial year is completely eroded by its accumulated losses. However, the management has prepared the financial statements assuming that the Company will continue as a going concern. No sufficient information with regard to adequacy of resources in the operating cash flows to meet its future obligations has been provided by the management.

(ii) We draw attention to Note 2.33 (A) 6 (d) where in the CWIP has been capitalized irrespective of the date of commissioning of the assets.

(iii) We draw attention to Note 2.33 (A) 7 the practice of the company to value inventories.

(iv) We draw attention to Note 2.33 (B) 26 the practice of the company to keep both the assets owned by own funds and from consumer contributions towards cost of capital assets in one account head and should be accounted for separately.

As required by ‘The Companies (Auditor’s Report) order 2015, issued by central government of India in the terms of Sub Section (11) of Section 143 of the Act9 hereinafter referred to as the “Order”) and on the basis of Such checks of books and records of company as we considered appropriate and according to the information and explanations given to us, We give in the Annexure on the matters specified in Paragraphs 3 and 4 of the order.

Report on Other Legal and Regulatory Requirements

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

a) We have sought and obtained all the information and explanations which to the best of knowledge and belief were necessary for the purposes of our audit except the following:--

172

1. Provision of Liabilities and Expenditure

Year end provisions for liabilities / expenses booked at the close of the year are reversed in the subsequent accounting year by the Company.

We further report, that during the year under review Company has made provision for expenses on the basis of budgets approved for particular works irrespective of the fact that actual expense accrued/ incurred and same is reversed in the subsequent period on receipt of actual bill / invoice of the vendor/contractor. The same results in overstatement of other current liabilities and revenue expenses /capital work in progress. The sufficient information with regard to quantum of such liabilities provided in financial statements has not been made available to us.

2. It has been observed that expenses approved by Head Office till the year end are only provided in the financial statements. The work completed / services rendered / goods supplied till 31st March, 2015 and not approved by Head Office, has not been provided in the financial statements, however, the same have been recorded in the subsequent period on receipt of approval from Head Office. The information with regard to assets / expenses and liabilities has not been made available to us, therefore, impact of same on noncurrent assets / current assets/ noncurrent liabilities/ current liabilities / losses cannot be quantified.

3 Neither the Company has disclosed the facts in notes nor given any information as to settlement for those cases which were disclosed in earlier years balance sheet as notes to account / audit report / CAG comments /comments of works audit party/ comments of RA audit /pending court case / settlement where the Company had deposited deposits with various authorities amounts some of them may have been settled / awarded by the Court / Govt. / Arbitrator but the status was not disclosed by the Company. This may affect the profit & loss account and the balance sheet.

4 Old assets (recoverable) and old liabilities (Payables) in all the divisions being time barred mostly remained unconfirmed / un-reconciled. The adjustment required if any may affect the profit & loss account and the balance sheet.

5 The Company has not provided sufficient physical verification records in respect of Tangible Assets, Capital Work in progress and Contracts in progress at the Division level. The adjustment required if any may affect the profit & loss account and the balance sheet.

6 The Company has not taken any reasonable steps to remove the qualifications reported in previous year report and earlier year reports of HPSEB by CAG while adopting the accounts for the current year, therefore old material qualifications has been considered in the current year report where the same is quantifiable as no information for the same has been provided by the company.

7 The Un-reconciled Balances of Following Divisions which were not accepted by the concerned Divisions or their Successor divisions were taken into Suspense Account and are reflected by way of Gap. The difference in assets and liabilities of theses division were reflected as opening Surplus, however complete information was not provided to us whether the same relates to Surplus or inter-unit transactions. These balances are subject to reconciliation since the Subhead details of the concerned division were not produced before us for verification:-

- Khauli Construction Division. - Largi Construction Division. - Civil MTC Bawanagar.

173

- Investigation Division Recong Peo.

8 The Head Office has not provided complete details/ information of the closing balance of sub heads operated by them in respect of respective DDO’s except , banks section, loan section, investment section and Pension II. The subsidiary records / register of individual DDO has not been produced for our verification. No sufficient information has been provided in respect of the liability of expenses, other liabilities and provisions at Head Office Level

9 The reconciliation of the Fixed Assets Register and the Fixed Assets account in the account statement is pending since many years. The pendency is due to non availability of records/ information of earlier years or in some divisions the earlier years records has been burnt. The above pendency has been observed in Solan Circle, Rampur Circle, Rohroo Circle and other circles/ divisions also. The adjustment required if any may affect the profit & loss account and the balance sheet.

10 The reconciliation of the Works register and the Capital Work in progress account in the account statements is pending since many years. The pendency is due to non availability of records/ information of earlier years or in some divisions the earlier year’s records has been burnt. The above pendency has been observed in Solan Circle, Rampur Circle, Rohroo Circle and other circle also. The adjustment required if any may affect the profit & loss account and the balance sheet.

11 No sufficient information and evidence in support of revenue expenses pending allocation over Capital Works has been provided to us. The adjustment required if any may affect the profit & loss account and the balance sheet.

12 The subsidiary records in relation to consumer ledgers at the end of the year is pending for reconciliation at all divisions of the operation circles The adjustment required if any may affect the profit & loss account and the balance sheet.

13 The Company has not provided any information about those consumers who has gone to the courts on account of disputes in the bills raised for energy charges.

14 The Company has not settled the old un reconciled entries in the bank reconciliations statements . The adjustment required if any may affect the profit & loss account and the balance sheet.

15 The Head office has not supplied to us the employees wise details of loans and advances to staff and interest accrued thereon. The adjustment required if any may affect the profit & loss account and the balance sheet.

16 The Company has not provided complete details of amount recoverable on account of theft of property pending investigation (Account Code 28.885) . The adjustment required if any may affect the profit & loss account and the balance sheet.

17 The Company has not been able to provide sufficient information/ confirmation from the parties in respect amount payable for purchase of power. The adjustment required if any may affect the profit & loss account and the balance sheet.

18 The Company has not able to provide reconciliation in respect of deposits and retentions from suppliers and contractors with the subsidiary records maintained.

174

19 The Company has not been able to provide reconciliation in respect of Deposits for Electrification Services Connections Account Code 47.1 with the subsidiary records maintained.

20 No sufficient Information has been provided in respect of the Contingent Liabilities provided in the notes to accounts and further no information for contingent assets has been provided.

21 The divisions have not provided sufficient information in respect of those assets where the consumer has deposited the departmental charges and executed the work by their own. The adjustment required if any may affect the Value of assets created and the reserves on the other hand.

22 During the year under review the financial statements are prepared as per schedule III of the Companies Act 2013 .The basis for grouping of noncurrent liabilities/ assets and current liabilities and assets as per the requirements of Schedule III for the current and previous year has not been produced for our verification. It was also observed that Figures of previous year was also regrouped in the schedules of balance sheet but the basis of regrouping was not provided to us.

23 The Company is not complying with the latest provisions of the Service Tax Act in respect of service tax payable on taxable services availed (reverse charge mechanism) specified in the Service Tax Act .

(b) In view of following in our opinion, proper books of accounts as required by Law have not been kept by the company so far as it appears from our examinations of those statement, registers and related records produced for our verification.

i. The Divisions of the Company has maintained cash & bank book and no corresponding transactions are recorded in ledger accounts. The adjustment entries were passed in the memorandum statement maintained to compile these financial statements, which is in contrary to the double entry system of recording of transactions as required by the Companies Act 2013.

The Divisions extracts monthly Trial Balance (known as “TICHA”) for the purpose of consolidation of financials by Circle and Wings. The Head Office on the basis of memorandum statements submitted by Circles and Wings compile these financial statements. The adequacy and correctness of memorandum statements and transmission of financial data do not ensure the correctness and sufficiency of accounting and recording of transactions and compilation of Balance Sheet and Profit & Loss account of the Company.

ii. The Divisions do not compile the trial balance with balances of the previous accounting month. The Circles consolidates the Trial Balance provided by the Divisions on monthly basis and Head Office merges the monthly Trial Balance and at the end of year consolidated balances are drawn on the basis of memorandum record for the purpose of preparation of financial statements. The Company does not record balances provided by Divisions at Circle or at Head Office in proper financial books of accounts. These financial statements have been compiled on the basis of statements prepared on the basis of merged Trail Balances provided by Circles and not on the basis of books of accounts.

iii. The consolidated statements / record compiled at Head Office and Circle do not provide complete

details of Main Accounting Code and or Sub-Account Code’. The memorandum consolidated record does not provide Circle or Division wise detail of transactions disclosed in these financial statements.

iv. The cash book maintained at Division is not balanced on daily basis, therefore, the cash book do not

reflect the cash in hand on daily basis. ( c) The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with

the books of statements except our observations in Para 1((b)),23)(ii) (iii),(iv),and (v);

(d) Except for the effects of the matter described in the Basis for Disclaimer of Opinion paragraph and non compliance of accounting standard specified therein , in our opinion, the Balance Sheet,

175

Statement of Profit and Loss comply with the accounting standards referred to in section 133 of Companies Act, 2013 .read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) We were informed In terms of Exemption Notification Government of India, Ministry of Corporate Affairs

Notification No 372 dated 05 June2015 Government companies are exempted from the applicability of section 164 of Companies Act 2013, therefore, no written representation from Board of Directors have been obtained.

(f) The Company has not taken any reasonable steps to remove the qualifications reported in earlier year reports while adopting the accounts for the current year, therefore old qualifications has been considered in the current year report also. Other Matters

I) The Company has not disclosed the impact of of pending litigation on its financial position in financial statements.

II) The Company has not made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long term contract including derivative contracts.

III) No amount has been transferred to investor Education and Protection Fund by the Company during the year ended March 31,2015

For Anil K. Sood & Company

Chartered Accountants

Firm Registration Number: 607360N

Sd/-

CA Anil Kumar Sood

Partner

Membership No. 086068

Place: Shimla

Date: 27/12/2016 ANNEXURE TO INDEPENDENT AUDITOR’S REPORT ON THE STANDALONE FINANCIAL STATEMENTS

Forming part of auditors’ report on the Standalone financial statements of Himachal Pradesh State Electricity Board Limited for the year ended on 31st March, 2015.

Referred to in Paragraph 1 of the report on Legal & Regulatory Requirements of Independent Auditor’s Report of Even Date

(i) a) The Fixed assets Register maintained is not as per Companies Act showing the complete details of cost, location, identification code, transfer write off, accumulated depreciation etc in respect of each individual items. The Fixed Assets register maintained at division level does not tallied with the sub head wise accounts of Fixed Assets maintained in the account statements.

b) The assets have not been physically verified by the Company. Since the detailed records of Fixed assets at different locations are not maintained as prescribed, the question of comparison of Fixed Assets with book records and ascertaining the discrepancies out of physical verification does not arise and its impact upon accounts is not ascertainable.

176

(ii) a) As explained to us, stores and spare, at all locations, has been physically verified. In our opinion, the frequency of physical verification is reasonable and adequate.

b) The procedure for physical verification of inventories followed by the management is not reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory, i.e., Stores and spares. However, we were not provided with any report of physical verification, hence we are unable to comment on the same.

iii) The Company has not granted any loans secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of Companies Act 2013.

iv)a In our opinion and according to the information and explanations given to us, internal control system/procedures followed by the Company do not commensurate with the size of the Company and the nature of its business with regard to purchase of stores, Fixed Assets machinery or spare parts. The Company has piled up stocks of Rs 7099.06 lacs ( Previous Year Rs 7675.88 lacs) as at 31st March 2015, out of which stock amounting to Rs 735.55 lacs (Previous Year Rs 845.50 lacs) which are more than five years old and has not been utilized till the close of the year.

iv)b As regards our comments for the sale of goods and services the internal control over sale of power is lacking as reflected by high distribution losses in some operation circles , poor collection efficiency seen from rising level of debtors, non-classification of debtors into good, doubtful and bad, amount and not acting timely for recovery from permanently disconnected consumers and non-compliance of procedure for disconnection in case of default and non recovery of dues from government departments .

v) The company has not accepted any deposit from the public under section 73 to 76 of the Companies Act, 2013.

vi) With pursuant to Rule made by the Central Government of India, the maintenance of cost records have been prescribed under Section 128 of Companies Act2013 in respect of Electricity Supply. The Company has not prepared cost records as prescribed.

vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund,

employees' state insurance, income-tax, sales-Lax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities except the following dues which is in arrears for more than six months .


Electricity Duty 44898.63 Lacs 33084.40 Lacs

Municipal Taxes 746.85 Lacs 670.94 Lacs

Labour Cess 0.00 Lacs 0.00 Lacs

CPS Contribution 76.35 lacs 175.15 lacs

Service Tax 0 lacs 5.85 lacs

We further report that company has not transferred the GPF fund contributions to a separate trust or to EPF authorities as required by EPF Act 1956.( Refer para 3 of the Annexure III of main report of even date)

177

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and other cess were in arrears, as at 31.03.2015 for a period of more than six months from the date they become payable.

(c) According to the information & explanation given to us, details of disputed dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited as on March 31, 2015 is Nil:

viii) The accumulated losses of the company cannot be quantified due to quantum of qualifications involved and non availability of information and disclaimer of our opinion.

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company has opted for Financial Restructure Plan Issued by the Govt. of India where the short term loans issued by the Banks have been converted into long term loans.

x) The Company has not given any guarantees for loans taken by others from banks and financial institutions hence the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

xi) The term loans have been applied for the purpose for which they were raised.

xii) Based on audit procedures performed and information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year under review, nor have been informed of such case by the management

For Anil K Sood & Company,

Chartered Accountants

Firm No NR 607360N

Sd/-

CA Anil Kumar Sood

Partner


Place: Shimla,

Dated : 27/12/2016

178

Himachal Pradesh State Electricity Board Ltd ( A state Govt. Undertaking )

{Auditor’s Report} REPLIES TO THE AUDITOR’S REPORT ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2015

OBSERVATION REPLY

Independent Auditors’ Report To The Members of Himachal Pradesh State Electricity Board Limited.

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of Himachal Pradesh State Electricity Board Limited, Shimla (“the Company”) as on 31st March, 2015 which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information Management’s Responsibility for the Standalone Financial Statements The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Statement of facts, hence no comments are required.

179

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the financial statements An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial

180

statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit of disclaimer opinion. Basis for Disclaimer Opinion 1 Preparation of Financial Statements for the year under review:- a) The financial statements are prepared as per Schedule III of the Companies act 2013 during the year under review. During the year accounts statements at division levels are prepared on the basis of old schedule VI but the divisions, wings and circles balance sheets has been re casted as per schedule III for the year and also for the previous year. The previous year’s figures have been re casted and regrouped to comply with the requirements of schedule III of Companies Act 2013. The Companies Act, 2013 gives great importance to the compliance of the accounting standards by the Companies as evident from Section 129(1) wherein it has been stated that financial statements shall comply with the accounting standards the first proviso to said section also states that the items contained in financial statements shall be in accordance with the accounting standards. The Company has not complied with all the accounting standards as reported separately in Para 25 of this report. b) Consolidation of standalone Financial Statements at Head Office Level and Circle Level

The consolidated statements of assets and liabilities compiled on the basis of information provided by Divisions and Circles do not reconcile with consolidated balances used for compilation of these financial statements. We further report that the erstwhile Board transferred it assets and liabilities to Company in accordance with “Transfer Scheme”. The following balances have not been reconciled / traced in subsidiary records maintained at Divisions / Sub-Divisions and accounting treatment and impact thereof in financial statements of the Company is subject to confirmation

The financial statements of FY 2014-15 are consolidated on the basis of consolidated trial balances of Divisions/ Circles and Head Office. The balance sheet of Division level are prepared on revised schedule by the Internal Auditors of the Company and shown to Statutory Auditors during the course of Audit. The figures of previous years have been re-casted and re-grouped to comply with the requirement of revised schedule VI and disclosed in significant Accounting Policies under Sr. No 1. Hence the versions of Auditors for disclaimer opinion on this basis of are not acceptable. The erstwhile H.P. State Electricity Board was unbundled through a transfer schemes notified by the Govt. of H.P. vide order dated 10.6.2010 under which the undertaking assets , properties, liabilities, proceeding and personnel of erstwhile HPSEB which stand vested in Govt. of H.P. have been transferred to the HPSEBL and the Company started its operations w.e.f. 14th June , 2010. The Accounts of erstwhile HPSEB were audited by the CAG of India and audited figures of FY 2010-11 (1.4.2010 to 13.6.2010) of erstwhile Board have been transferred to HPSEB Ltd. books of accounts. The CAG of India had certified the final accounts of erstwhile HPSEB for FY 2010-11 (1.4.2010 to 13.6.2010) as true and fair. The subsidiary records maintained at Divisions / Sub-Divisions are being updated by the Units. Efforts have been made by the management to improve the accounts such as, reconciliation of differences, clearance of old advances and suspense balances by writing off petty and old

181

accounts etc. Besides, the management has formed a Committee to reconcile the differences in balances of books of accounts of Divisions, Circles and HO and provide training to Accounts Personnel up to Divisional level for Mtc. of Ledgers & subsidiaries records/ Journal Ledgers during FY 2014-15 as per requirement of Companies Act. The improvement in the accounts, as in any other sphere, is a continuing process and Company is making efforts for the same. However, complete disclosure has been made in Notes to Accounts 2.33 (B) (2).

182


Main HeadsDebit, ( -

)Credit Debit( Credit)

Reserves and SurplusesContributions, grants and Subsidies Tow ards Cost of Capital Assets -2,664.21 -2,664.21

Reserves -266.70 -266.70 Profit & Loss account -76,068.73 -76,068.73

-78,999.64 -78,999.64

Other Long term Liablilities - Deposits for electrif ication, service connection, etc. 439.18 439.18

439.18 439.18

Trade Payables -

Liability for Capital Supplies/Capital Works - - - -

Other Current LiabilitiesLiability for O&M Supplies/Works

Staff Related Liabilities & Provisions -166.15 -166.15

Other Liabilities and Provisions 102.35 102.35

Deposits for Electrif ication, Service connection etc. -8,535.82 -8,535.82 Security Deposits from Consumers -3,973.14 -3,973.14

-12,572.76 -12,572.76

Tangible Asssets -

Fixed Assets 841.79 841.79Capital Expenditure Resulting in An Asset Not Belonging To the Board

Depriciation

841.79 841.79

Capital work in progress - Capital Works in Progress Accounts. -9,617.34 -9,617.34Contracts – in-progress 182.93 182.93

-9,434.41 -9,434.41

Long term Loans and Advances -

Advances to Suppliers/ Contractors-- (Capital) 143.19 143.19Sundry Receivables 6192.26 6192.26

6,335.45 6,335.45

Other non current Assests -

Assets not in use 180.59 180.59Deferred revenue expenditure 3509.18 3509.18

3,689.77 3,689.77

Inventories -

Stock and Related Accounts. 58.71 58.7158.71 58.71

Trade Recivables -

Sundry debtors for sale of pow er 2749.53 2749.53

2,749.53 2,749.53

Cash and Cash Equivalents -

Investments Against Funds 76.32 76.32Cash and Bank -120.57 -120.57

-44.25 -44.25

Short term Loans and Advances -

Advances to Suppliers/ Contractors-- (O & M) 97.97 97.97Other Loans and Advances -72.87 -72.87

25.1 25.1

Other Current Assests -

Inter Unit accounts 86,911.53 86,911.53

Total 86,911.53 86,911.53Grand Total - -

(i) We are of the opinion that Reserves and Surpluses are Overstated to the extent of ` 78999.64 lacs, Other Long Term Liabilities are understated to the extent of ` 439.18 lacs, Other current Liabilities are overstated to the extent of ` 12572.76 lacs, Tangible assets are overstated to the extent of ` 841.79 lacs. Capital work in progress are understated to the extent of ` 9,434.41, Long term loans and advances are overstated to the extent of ` 6335.45 , lacs, Other noncurrent assets are overstated to

183

the extent of ` 3689.77 lacs, inventories are overstated to the extent of ` 58.71 lacs, Trade Receivables are overstated to the extent of ` 2,749.53, Cash and Cash equivalents are under stated to the extent of ` 44.25 lacs ,Short term loans and advances are overstated to the extent of ` 25.10 lacs and inter unit accounts are overstated to the extent of ` 86911.53 lacs. 2 Share Capital ( Note 2.1) In terms of provisions of Sec. 143 (1) of the Companies Act, 2013, we report that the Company has allotted 14,000 Equity shares of `. 100/- each for cash at par, the payment against allotment of 14,000 Equity Shares has been shown as recoverable from HP Govt. and report that payment against above Equity shares amounting to ` 1.40 Lacs (P.Y ` 1.40 Lacs) have not been received till date of audit and same has also been shown as recoverable from HP Govt. The Company has shown the same as short term loan and advances. In our opinion the same is in the nature of other noncurrent assets. Thus short term loans and advances are overstated and other noncurrent assets are understated to that extent. In terms of provisions of Sec. 143(1) of the Companies Act, 2013 we report that the Company has allotted 6310000 Equity) shares of ` 100/- each for cash at par, and Share Application Money Pending Allotment amounting to ` 3184.40 Lakhs was utilized for allotment of equity Shares . Share Application Money was originally worked out at the time of “Transfer Scheme “in respect of assets and liabilities of Board transferred from HP State Government to the Company and the difference of ` 39,653 lacs has been recognized and recorded as share application money pending for allotment of equity shares to Himachal Pradesh Govt. As reported in previous year Audit report, due to errors and incorrect consideration of accumulated losses assets in aggregate amounting to ` 7,48,893 lacs and liabilities amounting to ` 7,59,752 lacs has been transferred and a sum of ` 10,859 lacs is recoverable from HP Govt. whereas share application money of ` 39,653 lacs pending for allotment to HP Govt. has been disclosed in financial statements and that an accumulated loss also includes losses of ` 50,512 lacs pertaining to the tenure of Board. The same is summarized as under:

In reply to this para it is submitted that State Govt. has been released/ paid `1.40 Lac. during FY 2016-17 and advance amount has been settled. Hence para may be deleted. The matter regarding settlement of opening balance of the Company is under active consideration and after obtaining of the approval of Competent authority necessary action in this regard shall be taken accordingly.

184

Amount �. In lacs

Balance as on

13/06/2010

Amount not to be

considered

As per transfer scheme

Net Fixed assets 387,461 - 387,461 Capital expenditure in progress 107,927 - 107,927 Assets not in use 625 - 625 Deferred costs 12,706 - 12,706 Investment 196,567 57,524 139,043 Subsidy receivable from Govt. 4,970 - 4,970 Current Assets 96,161 - 96,161 Total Assests 806,417 57,524 748,893

Less LiablitiesSecurity from consumers 21,965 - 21,965 Other current liabilities 192,124 - 192,124 Borrowing for working capital 82,887 - 82,887 Payment due on capital liabilities 32 - 32 Capital Liabilities 225,629 - 225,629 Funds from state Govt. 7,749 - 7,749 Spl. ways and means advance on a/c of 49,808 - 49,808 Contributions, grants and subsides towards 95,014 - 95,014 Equity share of HPSEB in its own projects 57,524 57,524 - Reserves and reserves funds 84,543 - 84,543 Total Liabilities 817,276 57,524 759,752

Amount recoverable from Govt. of HP 10,859 - 10,859

Therefore as opined by previous auditor the deficit in profit and loss statement, share application money pending for allotment was overstated to the extent of ` 50,512 lacs and ` 39,653 lacs, respectively and other non-current assets (amount recoverable from HP Govt.) was understated to the extent of ` 10,859 lacs.

Since no compliance was made to the above mentioned Audit para of previous year and the company has allotted share Capital against the Share Application Money which was not Authentic and subject to confirmation we are of opinion that the deficit in profit and loss statement was overstated to the extent of ` 50,512 and equity Subscribed and Fully Paid up Share capital was overstated to the extent of ` 39653.Lacs and other non-current assets (amount recoverable from HP Govt.) was understated to the extent of ` 10,859 lacs. 3. Reserves and Surplus (Note 2.2) a) Capital Reserves/ Capital Grants from GoHP & GOI During the year under review the Company has Amortized ` 22153.52 Lakh on the assets created from Government Grants and Consumer Contribution. The Amount of Amortization has been arrived at after applying the Depreciation Rates on the cost of such assets on yearly basis as per the accounting policy on depreciation refer Note 2.33 (A) 6. The Company has no system in Place where the assets can be identified as if these were created from Government Grants / Consumer Contribution. There is no Fixed Assets Register from where the cost of these assets along with date of it being put to use can be

In order to comply the AS 12, the deprecation on Assets acquired out of subsidies / grants & consumers contribution has been charged to P&L accounts and reduced to the extent of grants/ subsidies while computing the deprecation during this year and amount amortized has treated as Revenue income disclosed in Notes 2.33 (A) 6 (g). The Fixed Assets Register are being updated by the Company through Retired Accounts personnel and cost of these assets along with date of it being put to use can be shown to the Audit in next year. As regards non transfer of

185

verified. The company has arrived at the cost of these assets on Adhoc basis where it has capitalized the Grant received to particular year in which it was received without verifying the actual creation of the assets and without having sufficient records to verify the actual cost of bringing the asset to use along with the date of it being put to use. It was also observed that in many Divisions the amount of Consumer Deposits was not transferred from Account Code 47 to Account Code 55 in the absence of Completion certificates therefore assets created from government grants are subject to confirmation. As such the depreciation worked out is subject to confirmation and in our opinion reserves and surplus are understated and profit is overstated to the extent of Rs 22153.52 Lakh.

deposit amount to consumer contribution accounts by the many divisions the same can not specified the names of Divisions where such lapse has been found by them. Hence para may be dropped.

(ii) Assets created from loans under Government Schemes. Refer Note 2.33(A)15 The Company and erstwhile Board have created assets under various Central Government and State Government schemes financed by government agencies. The assets created from such schemes are subject to reconciliations and confirmations. The Company has not disclosed the

In reply to this para it is submitted that sufficient detail of assets created from loans and Govt. grants are available with Divisions. However, efforts are being made to reconcile the assets created from Central/ state Govt. grants.

(i) the accounting policy adopted for government grants, including the methods of presentation in the Financial statements;

The necessary disclosure in this regards has been made in Note 2.33 (a) 15. Hence para may be settled.

(ii) The nature and extent of government grants recognized in the financial statements including grants of non monetary assets given at a concessional rate or free of cost

Reply as above.

b) Deficit in Profit and Loss Statement

The company has transferred the accumulated profit and loss of the erstwhile Board amounting to ` 50,512 lacs as on 13th June 2010 as accumulated profit and loss of the company ( also refer para 4 of this annexure ). In our opinion the Deficit account is overstated to the extent of above also refer para 2 of this report.

In reply to this para, it is submitted that mater in this regards is under consideration with Govt. of H.P. As and when a decision is communicated by Govt., necessary adjustment shall be made accordingly.

4 Share Application Money Pending Allotment (Note 2.3)

(i) It was observed that Company showed an amount of Rs 3126.40 Lacs as Share Application Money Pending Allotment. In case of share application money pending allotment, the terms and conditions including the number of shares proposed to be issued, the amount of premium, if any have to be disclosed. The Company has not made any such disclosure. It was Also Observed that during the year under review the Company has allotted shares amounting to Rs. 6310.00 Lakhs out of this an amount of Rs 3186.40 Lakhs has been allotted against the Share Application Money Pending Investigation whereas Share Application Money was subject to confirmation as pointed out in para 2

In reply to this para, it is submitted that the necessary disclosure in this regards has already been made in Notes to Accounts under Note 2.33 (b) 33. Hence para may be settled.

186

of this report. 5 Long Term Borrowings (Note 2.4) a) The Company has not complied with the requirements of revised schedule III of Companies Act 2013 in respect of disclosure requirement Long term Borrowings in:-

- Classification of Long Term Borrowing as:

(i)(a) Bonds/debentures;

(b) Term loans:

(A) from banks.

(B) from other parties.

(c) Deferred payment liabilities;

(d) Deposits;

(e) Loans and advances from related parties;

(f) Long term maturities of finance lease obligations;

(g) Other loans and advances (specify nature).

(ii) Nature of security was not specified separately in each

case of Secured Loans.

(iii) Bonds (along with the rate of interest and particulars of

redemption or conversion, as the case may be) was not

stated in descending order of maturity or conversion,

starting from farthest redemption or conversion date, as the

case may be. Where bonds/debentures are redeemable by

installments, the date of maturity for this purpose must be

reckoned as the date on which the first installment

becomes due.

(v) Particulars of any redeemed bonds/debentures which

the company has power to reissue was not disclosed.

(vi) Terms of repayment of term loans and other loans was

not stated.

(vii) Period and amount of continuing default as on the

balance sheet date in repayment of loans and interest, was

not specified separately in each case.

The Financial Institution wise Capital Liabilities, repayment period of long terms borrowing, each loan wise statement and rates of interest has been disclosured in Notes to Accounts against Sr. No 2.33 (B) 46. Hence para may be dropped.

b) Loans under APDRP Schemes Part A and B (i) The company has taken loans from APDRP(Part A) scheme amounting to ` 4309.49 ( previous year ` 5347.80) towards 100% financing of its approved projects

In reply to this para it is submitted that the company has taken loans from APDRP(Part A) scheme

187

which is subject to a condition requiring that projects to be completed within five years( extended up to 31st July 2016) of the awards with 100% conversion of loan along with interest into grant else otherwise the same will be treated as loans and interest will be paid on them.

amounting to ` 4309.49 and projects to be completed within five years( extended up to 31st April/ July 2016) of the awards with 100% conversion of loan along with interest into grant else otherwise the same will be treated as loans and interest. The repayment of loan and interest are being maid regularly and on receipt of final decision from Govt settlement of the APDRP schemes Part A & B loan shall be done accordingly. However complete disclosure has been made in Notes to Accounts 2.33 (B) (15) .

(ii) The company has taken loans from APDRP (Part A) scheme amounting to ` 12296.40 Lacs (previous year ` 10,168.40 lacs) towards 100% financing of its approved projects which is subject to a condition requiring that projects to be completed within five years( extended up to September, 2015 & December, 2016) of the awards with 100% conversion of loan along with interest into grant else otherwise the same will be treated as loans and interest will be paid on them.

The Company has requested State Govt. time and again to finalize the terms and PFC has intimated has been increased extension of time for implementation of RAPDRP Par- A (IT) Project loan & Part B projects up to March, 2017. However complete disclosure has been made in Notes to Accounts vide Note No. 2.33 (B) (15) .

(iii) The sanction letter stipulates the moratorium of principal and interest during moratorium period. The Company has made provision for the interest on loan amounting to ` 6253.18 Lac (P.Y ` 4293.01Lac) lacs in the books of account on provisional basis up to 31st March 2016 and same is subject to confirmation. (Refer Note 2.33(B)(15) ).

The provision of interest shall be made during current financial year. The Company has requested State Govt. time and again to finalize the terms and conditions of the loan under RGGVY schemes so that payment of interest thereon could be made.

c) Loans under RGGVY Scheme The Company has taken loan from the state Government under RGGVY scheme amounting to ` 500.00 lacs (previous year ` 500.00 lacs). The government has not yet provided the terms and conditions of the loan and the payment of interest thereon. (Refer Note 2.33 (B)16 ). No provision has been made for the interest payable.

The utilization of the funds is being given by the Company in respect of funds received from central Government and State Govt. in respect of schemes financed by government agencies. The Company has requested State Govt. time and again to finalize the terms and conditions of the loan under RGGVY schemes so that payment of interest thereon could be made.

d) Loans under ADB though GOHP Scheme The Company has taken loan under the scheme from the state Government under ADB Loan amounting to ` 840.46 lacs (previous year ` 840.46 lacs). The government has not yet provided the terms and conditions of the loan and the payment of interest thereon. (Refer Note 2.33 (B)(16) ).No provision has been made for the interest payable.

The State Govt. has not provided the terms and condition of the Loan and payment of interest thereon. However interst has been provided against this loan during FY 15 in average basis.

188

e) Financial Restructuring Plan

The Company has opted for Financial Restructuring Plan formulated by the Ministry of Power Government of India for State Owned Discoms for restructuring of debts refer note no (2.33(B)(48)). In this scheme the short term loans amounting to ` 123541.00 lacs was converted into long term borrowings for 10 years with moratorium period of three years for repayment of principal loan. The short term loans is converted into Bonds of ` 61280.54.00 lacs and Long term Loans amounting to ` 62260.46 lacs.

The same disclosure are already mentioned note no (2.33(B)(48) and auditor has been reported same . Hence, para be deleted.

6 Other Long Term Liabilities(Note 2.5) a) Security Deposits from Consumers

The Divisions of operation circles have not reconciled and balanced customer-wise Security Deposit received and interest payable thereon. No sufficient records and reconciliation of subsidiary records confirming the balance outstanding has been made available to us, therefore, we are unable to comment on the amount outstanding as Security Deposits to customers and accordingly interest accrued thereon.

The relevant record of customer-wise Security Deposit and interest payable thereon is available in Operation Circle/ Sub Divisions of the Company. As regards confirmation of balances outstanding, the Units have been directed to reconcile the outstanding balances of security deposit of the consumers.

b) Amount payable for Employees Provident Fund (GPF) We report that, contribution towards Provident Fund collected from employees have been retained and invested in Fixed Deposits with Banks by the Company. The Company has neither obtained registration with Employer’s Provident Fund Authorities’ nor exemption for creation of Trust as specified in Employer’s Provident Fund Act, 1952 and scheme framed there under. The Company has shown the same under other long term liabilities after netting off the investment made in the banks on account of GPF investments.

The amounts payable/ recoverable to employees GPF are subject to reconciliation and confirmations

During the year under review, the Company has neither made own contribution nor has made provision for same in these financial statements. The amount of contribution of employer’s share is subject to confirmation by Company.

The following is the position of Assets and Liabilities of the employees GPF at the close of the year and should be transferred to a trust and separate accounts of the same should be prepared as the same is not part of the accounts of the Company.

It is submitted that Govt of H.P. vide Notification No MPP-A (3)-1/2001-IV dated 10.6.2010 under Sr. No 5 (9) states that “ all statutory and other schemes and employment related matter including the provident fun, gratuity fun, Pension, leave encashment and any other superannuation fund or any other special fund created or existing for the benefit of the personnel, the HPSEB Ltd shall stand substituted for the Board for all purposes and all the reight powers and obligation of the Board in relation to any and all such matter shall become those of the HPSEBL . The services of the personnel shall be treated as having been continuous for the purpose of application of this sub rules”. HPSEBL has developed the GPF utility programs for maintaining the GPF record of the HPSEBL and all balances are reconciled and displayed online basis in the HPSEBL website for information of subscribers. There is no need to made Employers share contribution/ provision of equal amount of employee contribution for subscribers of GPF under GPF Rules. The Company is paying interest to GPF subscribers as per the rate fixed by the Govt..of H.P. and the fund is maintained by HPSEBL and ther is no separate fund/ trust for the same as such the excess interest earned on investment is Company income and less interest is expense of the Company . We do not concur with the version

189

Current Year PAssestsInvestments in Fixed deposits of Banks 107,233.62 Interest Accured on Investments 3,657.53 Recoverable from HPSEB Limited 18,437.70

129,328.85

LiabilitiesMembers Account 130,679.80 Excess of Expenditure over Income - Payable to HPSEB Limited 1,350.95

129,328.85

We further report that liabilities and corresponding assets transferred from Board to Company have not been deposited with EPF or Trust. In terms of information and explanations given to us, the Company has accumulated total contribution of ` 129328.85 lacs (previous year ` 1,10,572.22 lacs) and has deposits there against a sum of ` 110891.15 lacs (previous year ` 103,739.89 lacs) which has resulted in amount recoverable form company amounting to ` 18437.70 lacs. In our opinion, the said assets and liabilities do not relate to Company and sum of ` 18437.70 lacs is payable to General Provident Fund (GPF).

We further report that the Company has obtained Overdraft facility of ` 56365.51 lacs. (Previous year ` 73297.11lacs) against GPF Fixed Deposits which has been utilized for operations .Refer Note 2.33(B)(34)

We further report that during the year under review a sum of ` (1350.95) lacs (previous year ` 4162.33 lacs) has been debited to interest received on investments i.e. deficit of( interest received on deposits and interest paid to members on GPF) in our opinion, the said deficit interest do not relate to the operations of company, We report that company has shown the amounts in the balance sheet as under different head:-

Amount in lacs Current YearAmount payable to GPF Fund Other Long term Liablities 23,446.18 Income on investments Income 1,350.95 Interest Accured on FDR Short Term Loans and advances 3,657.53 Net Recoverable/Payable 18,437.70

The overall impact of the above is that long term

liabilities are overstated to the extent of ` 23446.18 Lacs, ( Previous year ` 14,834.38 lacs) income is understated to the extent of ` 1350.95 lacs (Previous year understated ` 4162.33 lacs) and

of the auditor that less interest accrued do not relate to the operations of company due to the peculiar position explained above. The needful in this regard shall be done in next financial year In view of above, the HPSEBL has no need to register with “ Employer Provident Fund authority. The GPD of employees is maintained by the Company at own level. The GPF corpus of employee is invested in FDRs to safeguard the interest of employees as per direction of HPERC. All the employees of HPSEBL are satisfied with retention of their GPF corpus with HPSEBL. As such, para may be dropped.

190

correspondingly the short term advances are overstated to the extent of ` 22095.23 lacs. (Previous year ` 10672.05 lacs)

We further report that the above amount payable is of current nature and should be shown under current liabilities. Thus Current liabilities and Short Term Loan & Advances are understated to the extent of ` 18437.70 lacs (Previous year ` 6832.33 lacs). c) Contributory Pension Scheme

In Account Code 57.180 and 57.181 an amount of Rs 319.35 was outstanding credit balance as on 31/03/2015. The amount has to be paid to the CPS authorities as and when demanded by them. In our opinion the liability is of current nature and should be shown under the head other current liabilities. Thus the other long term liabilities are overstated and Other Current liabilities are understated to the extent of above of ` 319.35 lacs (previous Year 1049.79 lacs).

The following is the assets and liabilities of CPS Fund:-

Current YearAssests �Fixed Deposits with Bank Interest Accured on FDR Amount Recoverbale from HPSEB Limited 3

3

LiablitiesCPS Employees Share 1 CPS Employer Share 1

3

In reply to this para it is submitted that necessary compliance shall be made in next financial year

d) Staff Benevolent Fund

The company has received contributions from employees on account of staff benevolent fund and the company is making payments to employees from this fund to the employees on superannuation.

We report that the company has showed `98.71 lacs (previous year ` 177.29 lacs) as recoverable from staff benevolent fund on account of excess payments done from the fund under the head other long term liabilities by netting off with other long term liabilities. In our opinion, to balance the fund account a contribution ` 98.71 lacs (previous year ` 177.29 lacs) is required from the company as on 31st March 2015. Thus the expenditure is understated to the extent of above and correspondingly the reserve fund/other funds is understated to the extent of

It is submitted that the matter for grant of matching fund on account of staff Benevolent Fund has now been settled in FY 2015-16. The account shall be adjusted by granting matching amount from the Company. Hence para may be settled.

191

above.

Amount in lacs


Assests ` `Investments in Fixed deposits of Banks - - Interest Accured on Investments -

- -

Liabilities

Fund Acccount 98.71 177.29 Excess of Expenditure over Income - - Fund Contribution due/From to HPSEB Limited 98.71 177.29

- -

We further report that the above liability does not belong to the company and the same is of the nature reserve fund. In our opinion the other long term liabilities are understated to that extent. e) Non refundable advances from industrial consumers for infrastructure development charges The erstwhile HPSEB and the company have received Non refundable advances from industrial consumers for infrastructure development charges from consumers.The company has received ` 14946.07 lacs (previous year `12191.28 lacs lacs) under the above head up to 31st march 2015. In our opinion the other long term liabilities are overstated to the extent of above as they are not payable to the consumers and is part of the revenue of the company and income of the company is understated to that extent.

In reply to this para it is submitted that the amount of NRA from industrial consumers for infrastructure development charges is collected as per the notification of HPERC and credited to this account. This amount is initially credited to this account as capital receipt for specific work. On completion of the work, the expenditure is transferred from CWIP to fixed assets after adjusting the NRA (Non refunded advances) from the consumers as per guidelines in this regards. Hence para may be settled.

h) Funds From ASIDE The funds received from ASIDE are subject to confirmation and reconciliation. The assets created from the ASIDE funds have been fully completed and the amount has not been transferred to the reserves for want of completion certificates from the divisions concerned. The reserves are overstated and long term liabilities are overstated to that extent. In the absence of complete information, the amount could not be quantified.

The concerned units have been directed to reconcile the funds received against ASIDE and confirmation in this regard shall be shown to the audit in the next year.

7 Long Term Provisions (a) Leave Salary Payable The Company has not made provision of Leave salary payable to present employees as per the requirements of AS15- Accounting for Employees Benefits issued by The Institute of Chartered Accountants of India. The estimated liability on account of leave salary at end of the year is ` 51429.40Lacs (P.Y ` 48515.3Lacs) against which

The company has decided to make provision of 2% from FY 2013-14 on ward to meet the requirement of AS-15. However, a complete disclosure in this regards has been made in Notes to Accounts 2.33 (A) (9) .

192

the comp any has created reserve fund of Rs 1147.84 lacs.(P.Y ` 1051.06 lacs) only. Thus in our opinion the long term provisions are understated and Income is overstated to the extent of 50281.56 Lackh (P.Y ` 47464.24 lacs) (b) Gratuity Payable to Employees

The Company has not made provision of gratuity payable to present employees as per the requirements of AS15- Accounting for Employees Benefits issued by The Institute of Chartered Accountants of India. The estimated liability on account of leave salary at end of the year is ` 69938.15.(previous year ` 61535.36 lacs) against which the company has created provision of ` 2799.04 (Previous year ` 1400.27 Lacs) . Thus in our opinion the long term provisions are understated to the extent of Rs.67139.11 (previous year ` 69,938.14 lacs.)

The company has decided to make provision of 2% from FY 2013-14 on ward to meet the requirement of AS15.However, a complete disclosure in this regards has been made in Notes to Accounts 2.33 (A) (9) .

9 Short Term Borrowings(Note 2.7)

Overdraft and Cash Credit from Banks (i) References invited to note no 2.33(B)(34) where the Company has obtained Overdraft facility/ Loans of ` 56365.51 lacs (previous year ` 73297.11 lacs) against GPF Fixed Deposits which has been utilized for operations refer Note 2.33B (34).

The relevant disclosure has already been disclosed in notes to accounts in Note No 2.33 (B) (34) and auditor has also been reported same. Hence the same is not acceptable and para be dropped.

9 Trade Payables (Note 2.8)

Liability for Purchase of Power

The company did not provide us sufficient information/ confirmation from all the parties in respect of amount payable to Parties/ (Sundry creditors for purchase of power) amounting to Rs 190764.90 Lacs. Account code 41 is subject to confirmation and reconciliation with the account statements of parties. In the absence of complete information we can neither quantify nor comments upon the correctness of the balances.

In reply to this para, it is submitted that party wise accounts were under reconciliation at the time of finalization of accounts for FY 2014-15 and sufficient information was not available at that time. The corrective measure has been taken in FY 2015-16 and proper party wise reconcile shall be shown to the Auditor during next audit. Hence para may be settled.

10 Other Current Liabilities( Note 2.9)

b) Interest accrued and due

(i) The above also includes the interest earned on surplus RGGVY and ARDRP Funds the details of the same is as under:

The point has been noted for future compliance in FY 2015-16.

193


` `Interest Accured and Due RGGVY Funds

46.127 56.78 958.48Interrest Accured and Due APDRP Funds

46.128 2,831.94 2750.982,888.72 3,709.46

The company has shown the interest accrued on surplus funds from the RGGVY fund and APRDP funds as current liabilities as it has been explained to us that the interest earned will be paid back to the agencies as and when they demand it. In our opinion the loans are for long term period and the interest due will be part of Long term loans. Thus in our opinion the interest due will be of the nature of other long term liabilities as a result the other current liabilities are overstated and long term liabilities are understated to the extent of ` 2888.72 lacs.

(ii) Interest Payable APRDP Loans (Code 46.734)

The company has shown ` 6253.18 lacs as interest accrued on APRDP part A and B loan up to 31st March 2015 and the same has been shown as current liabilities. In our opinion the interest payable is of long term nature as the same relates to the moratorium period of the loan. Thus other current liabilities are overstated and long term liabilities are understated to the extent of `6253.18 lacs. Refer note 2.33 (B)(15).

The point has been noted for future compliance in FY 2015-16

194

b) Liability for Purchases Capital and Others

The above account code shows a sum of ` 23185.37 lacs payable as liability on account of capital materials O & M Supplies/ Works. The Subsidiary record in respect of the below mentioned accounts codes at division level is not reconciled. The above liabilities are subject to confirmations from the Parties .In the absence of information we are unable to comment on the old liabilities which are not payable and have to be charged to revenue. The following are the details of the above:-

Particulars A/c Code Current Year

Liabilities for supply of Materials/Works – Capital 42.1 585.94

Liability for supply of Material / Works – O&M 43.1 10270.23

Stale cheques 46.91 2,710.18

Unclaimed Credit Balances 46.929 138.93

46.93 33.22

Provision for Outstanding Cheques 46.94 8369.85

Suppliers/Contractors Control A/c 42.2 176.71

Provision for Supply of Materials-Works 42.3 22.27

Sundry Creditors/Contractors Control A/C – O&M 43.2 810.03

Provision for supply of Materials -- works – Capital 43.3 68.01

23185.37

The outstanding liability shown on accounts of capital material /O&M suppliers/ works are current in nature , sufficient information are available in our Division and in our view does not include outstanding not payable to be charged to revenue. However, same shall be scrutinized for appropriate action.

(ii) It has been observed that divisions charge full liability of the bills of the suppliers when the materials are received. However in some case the bills are not fully passed by the Head Office and certain deductions on account of liquidity damages and price differences etc. from the final bills is being made. All such deductions which are done by the Head Office and not accounted for by the divisions may affect the other current liabilities and income of the company. In the absence of information we are unable to comment on the same.

In reply to this para, it is submitted that divisions book full liability of the bills of suppliers when the material is received, as per accounting procedure adopted by the Company. The deduction made by the head office on account of LD is revenue income of the Company and charged to concerned head of accounts. The Auditor has not specifically mentioned the name of the unit in which this has not accounted for such type of differences. Hence para may be dropped.

(iii) In certain cases the payment of bills of the The point has been noted for future compliance in FY

195

suppliers are to be made in phases on some percentage basis and will not be due at the end of the financial year. The Divisions has booked the bills with the full amount and no bifurcation has been made for current and noncurrent liability. In the absence of the information we are unable to comment on the same.

2015-16.

(iv) It has been observed that where the payments has been made by the CPC up to 31st March 2015 and the ATD for the same has been raised by them to the divisions the same has not been reconciled by the CPC department with the divisions on year to year basis. In the absence of the reconciliations we are unable to comment the amount of liabilities shown by the divisions.

All the Units/ divisions have been directed to reconcile the ATD with CPC Section on yearly basis. Hence para may be settled.

(v) The Company has executed contract with HCL for computerization of the sub divisions and implementation of SAP in the year 2009 and advanced ` 1,155.65 lacs at various intervals to the company. The said payment was made by the CPC and was accounted for by the Shimla Division no II as advance to the company under the account Head 26.5. The material has been supplied by the company and the same has been accounted for by the respective divisions and created the liability under the Head 43. The ATD raised by Shimla Division II for the amount advanced to the HCL to respective divisions was not produced before us for our verification. In our opinion the other current liabilities are overstated to the extent of ` 1,155.65 lacs and correspondingly the short term advances are overstated to that extent. This is old audit observation which was not rectified in the period under review.

The Shimla Division No-II has been requested to provide the copy of the adjustment made to the Auditor during the course of Audit. Hence para may be settled.

c) Earnest Money Deposits from Suppliers and Contractors.

The above account code shows a sum of ` 1964.97 lacs (Previous Year ` 1861.48Lacs) payable as earnest money deposits from suppliers and contractors. The subsidiary records in respect of above are pending for reconciliations at division level.

Particulars A/c Code Current Year

Earnest money deposits – capital

46.103 1195.23

Earnest money deposits – O&M

46.123 769.74

1,964.97

The Company is making efforts to reconcile the amount of EMD from subsidiary books of accounts and the reconciliation shall be shown in current financial year.

196

In the absence of reconciliations we are unable to comment on the authenticity of the amount payable. In A/C 46.926 Public Works Misc Deposit Rs.4.86 Lakh was shown as debit Balance. This is Negative balance and in our opinion other Current liabilities are understated to the extent of above. d) Electricity Consumptions Tax levied payable to MCs/NACs

The above account code shows a sum of ` 937.56 lacs (previous year ` 782.51 lacs) payable to different Municipal corporations and NAC as at 31st March 2014. It has been observed that certain amounts are also recoverable from them on account of energy dues and the above account has not been netted off with amount recoverable from them. Thus other current liabilities are overstated to the extent of above. Please refer para 19(A)5 of the report of this report.

In reply to this para , it is submitted that amount of Rs. 937.56 Lac is payable to MOC & NAC as on 31.3.2015 which are being paid regularly as per realization to MC/NAC by the field Units. The amount of energy charges can not be netted off with the amount payable to MC/NAC because adjustments are relating to different MCs/NACs pertaining to various Divisions/sub-divisions of the Company. Hence, the version of auditor is not acceptable and para may be dropped.

e) Amount Payable to GOHP/Other Departments-

The above includes An amount of ` 25.02 Lakh debit balance in A/c code 46.971 Amount Payable to H.P Government other than loan, Loan interest and electricity duty. This amount is negative balance for which proper explanations were not provided to us and in opinion other current liabilities and deficit is understated to ` 25.02. In A/c code 46.975 Other Local bodies ` 160.47 Lakh was shown as credit balance. This balance is also subject to confirmation since details of this balance were not provided to us and this balance is carried forward from previous year.

The detail of this expense is available with all DDOs of the Company and these liabilities are recurring in nature and discharged regularly. Therefore, these are no old liabilities. However, the same shall be securitized in detail and appropriate action shall be shown during the audit in current financial year.

f) Unclaimed Interest:

In the above head an amount of ` 64.00 Lakh in A/c Code 46.730 Unclaimed repayment of bond/debenture was shown as an outstanding balance as on 31.03.2015. The opening balance in this account code showed an amount of ` 74 Lakh . Since this amount is being carried forward from past year this liability is nature of noncurrent liability. In our opinion Other Current liabilities is overstated and noncurrent Liability is understated to the ` 64.00 Lakh.

The investor wise information are available with the Company and shown to the Auditor during the course of Audit. This amount is in respect of five investors and investors have been asked to submit original Bonds certificate for release the amount. Out of which Rs. 34 Lakh has been release to the investors as on 31.12.2016 and balance amount remain Rs. 30 Lakh in respect of three investor which shall be provided on receipt original Bonds certificate and the same amount cannot treated as noncurrent liability being there is no certainty . In view of above par be dropped

g) Security Deposits from Employees (A/c Code : 46.920 & 46.921)

In the above head of account an amount of ` 17.95 Lakh was shown as debit Balance. This is negative balance and

The necessary correction shall be made during FY 2015-16 accounts. Hence para may be dropped.

197

proper explanation for the same was not provided to us .In our pinion Other current liabilities is understated and income is also overstated to ` 17.95. h) Sundry Creditors for Expenses

The above account code shows a sum of ` 416.46 lacs (previous year ` 167.23 lacs) payable to different parties is subject to confirmation as at 31st March 2015.In the absence of information we are unable to comment on old liabilities which are to be charged to the revenue and may affect profit and loss account and the balance sheet.

The detail of this expense is available with all DDOs of the Company and these liabilities are recurring in nature and discharged regularly. Therefore, these not old liabilities. However, the same shall be scrutinized in detail and appropriate action shall be shown during the audit of current financial year.

i) Liabilities on account of cheques outstanding

The above account includes amounts pertaining to amount outstanding on account of cheques not presented for payments to banks by the parties to whom the same has been issued as at 31st March 2015 and are to be shown in bank reconciliations statements (Please refer para 20(b)). The details of the same are as under:-


` `1 Details as per Bank Reconclilations Statements

Outstanding Cheques 1,850.80 4,997.06 Less amount debited by bank 71.89 74.84 Excess amount Debited by bank 6,447.16 1,214.64

8,369.85 6,286.54

2 Amount for which details are not available - 0.20- 8,369.85 6,286.34

In our opinion the other current liabilities are overstated and bank balance is also overstated to ` 6286.54 Lacs that extent.

The old non-reconciled entries in above are subject to reconciliations which may affect profit and loss account and balance sheet.

The needful has been done during the financial year 2015-16. Hence, para may be settled.

j) Liability on account cheques outstanding others/ stale Cheques (A/c code 46.910)

The company showed a sum of ` 2710.18 lacs (previous year ` 2,781.70 lacs) under the Head stale cheques. No information in respect of the same has been provided by the company. In our opinion the other current liabilities are overstated and income is understated to sum of ` 2710.18 lacs.

The necessary rectification has been done in FY 2015-16 accounts. Hence para may be settled.

k) Deposits for Electrification Services

198

Connections Account

The above account code shows a sum of ` 47580.08 lacs (previous year ` 50608.43 lacs) on account of deposit amount received from consumer for Electrification Services Connections and other charges as at 31st March 2015. The company has not provided the details of the amount received under different sub heads under above head.

As per the practice of erstwhile board the amount kept under this head is transferred to grants and subsidies head when the work of the assets to be created from deposit work is completed. The subsidiary records at the divisions level is pending for reconciliation as at 31st March 2015. We have not been provided with the following information’s by the Divisions. 4 The details of those works where the work has been completed and the amount from deposit has not been transferred to the consumer contribution towards the cost of the capital assets. 5 The details of the parties from whom full amount has not been received for the deposit work completed till 31st March 2015. 6 The details of parties from whom full amount has been received but no work of deposit work has been done till 31st March 2015. In the absence of information we are unable to comment on the amount kept under this head of account.

The complete Sub Head wise detail of amount deposited for Electrification services connection are available in all Electrical Divisions of the Company and the amount received under sub head 47.320 NRA from industrial consumers for infrastructure development charges is being regulated as per HPERC directions and shall be rectified/ adjusted in next year accounts accordingly.

(i) It has been observed that in some divisions the consumers has deposited only the departmental charges and deposit work has been done by the consumer by their own. The charging of the departmental charges to revenue and charging of the value of fixed assets created and creation of reserves is subject to confirmations and reconciliations.

The instructions for accounting of departmental charges and deposit works have been issued to all concerned and reconciliation shall be done in next financial year. No specific unit has been mentioned by the Auditor as such no specific comments can not be offered.

(ii) The deposits received under this head is for capital works and in our opinion the deposits are also of long term nature. Thus other current liabilities are overstated and other long term Liabilities was understated to the extent of ` 47580.08 lacs.

Point has been noted for compliance and such type of liability shall be treated as Non current liability in the next year.

l) Provision for Losses The Company has shown the provision for losses under the head other Current Liabilities and the following heads are having debit balances

The balance appearing in this account is on account of obsolescence for assets, capital spares and stock represents losses pending investigation. On final outcome/ settlement the provision from these accounts shall be re-allocated to relevant heads. As regards version of auditor for no

199

Amount in lacs Current Year

Previous Year

` `Provision for Loss on obselance of Capital Assests

46.961 2.05 2.05 Provision for Loss on obselance of Capital Spares 46.962 11.97 11.97 Provision for losses pending investigation 46.939 0.33 0.35

14.35 14.37

No information in respect of above has been provided by the company. In our opinion the other current liabilities are understated and income is overstated to that extent.

information in this regards is not considerable, as sufficient information are available with concerned Units. Hence para may be dropped.

m) Unclaimed Credit Balance A/c code 46.929 The Company is showing ` 138.93 lacs (previous year ` 136.00 lacs) as unclaimed credit balance as at 31st March 2015. The company has not provided information in respect of the same. In our opinion the time barred credit balance should be charged to revenue.

The above amount was misclassification and correction has been made in FY 2015-16 accounts by the SE (OP) Circle, Solan . Hence, Para may be settled.

n) GPF Deduction Payable to other Account offices Account Code 44.411 The above account code shows debit balance of Rs ` 27.51 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated to the extent of above.

The above negative amount is due to misclassification by the AO (Funds) on a/c of NPS for the month of 11/2014 Units and correction shall made in FY 2014-15 accounts. Hence para may be settled.

o) Account code 46.921 The above account code shows debit balance of Rs ` 19.72 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to that extent.

The necessary correction has been made during FY 2015-16 accounts. Hence para may be settled.

p) Account code 44.413( Employees contribution towards GIS)

The above account code shows debit balance of Rs ` 7.10 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to that extent.

The necessary correction shall be made in FY 2015-16 accounts. Hence para may be settled.

q) Account code 44.414( Employees contribution towards Chief Minister relief Fund)

The above account code shows debit balance of Rs �1.27 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is

The necessary correction shall be made in FY 2015-16 accounts. Hence para may be settled

200

overstated to that extent.

r) Account code 44.416( Board contribution towards CPF Employee on deputation)

The above account code shows debit balance of `1.62 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to that extent.


s) Account code 44.418 ( Board contribution towards CPS deputation with HPSEB)



t) Account Code 46.976 (UPSEB) The above account code shows debit balance of ` 0.41 lacs for which no information and explanations has been provided to us. In our opinion the current liabilities are understated and income is overstated to that extent.

The necessary steps for re-conciliation of negative amount are being taken with UPSEBL now UPPCL and on final outcome adjustment shall be made accordingly

11 Short Term Provisions (Note 2.10) c) Interest accrued on Consumer Security Deposit The company has provided interest on security deposits of consumers amounting to ` 1576.67 lacs (Previous Year ` 1,916.25 lacs) during the year under review. The provision made is subject to reconciliations and confirmations.

The Company has charged interest on security deposit as per instructions issued by the HPERC and passed on / adjusted this amount to consumers during in July and August, 2016 bills of which have been accepted by the consumers. Hence para may be dropped.

d) 46.430 Provision for Liability of Expenses

The provision of Rs 9323.03 lacs made by the company on account of liability of expenses is subject to confirmations and reconciliations.

The detail of provision for liability of expenses is available with all DDOs but auditor has not specified the unit concerned in absence of which specified reply can not be given. Hence para may be dropped.

12 Tangible Assets (Note 2.11) (i) Depreciation on fixed assets owned by Board and transferred to Company is in accordance with “Transfer Scheme”. The Board charged depreciation at the rate of 2.50 percent on the opening balance of the assets except on vehicles which is being charged at the rate of 90% of cost of vehicles having 7 years life expectancy at division levels which is not in

We concur with the view of the auditor. However, Company has disclose detailed disclosure for depreciation & amortization in Notes to Accounts 2.33 (6). Besides, the Company is preparing Fixed Assets Register through Retainer Consultants (Retd Sr. AOs) and forming proper accounting policies in this regards. Thereafter, proper

201

accordance with Schedule II of Companies Act.

We further report that during the year under review and in previous year the Company has charged depreciation in accordance with rates notified by Himachal Pradesh Electricity Regulatory Commission on all assets, whereas the said depreciation should have only to be applied to assets acquired after 14th June, 2010 and depreciation on assets transferred from Board on the basis of rates computed on the basis of life expectancy of each assets or class of assets. In view that Company has not provided to us the sufficient information with regard to historical cost, date of purchase and expected life, we cannot comment on the adequacy of depreciation charged to revenue account. Depreciation and amortization expenses need to be arrived at as per Section 123 and Schedule II of the Companies Act,2013(earlier Schedule XIV of Companies Act,1956) . The Company has not complied with Schedule II of the Companies Act 2013.

We further report that the Company has not charged depreciation on addition made to any asset or where any asset has been sold, discarded, demolished or destroyed on pro rata basis during the year from the date of such addition or as the case may be up to the date on which such asset has been sold, discarded, demolished or destroyed.

procedure for deprecation, discarded, sold assets and life of assets, shall be adopted for Tangible assets as specified in Section 123 and Schedule II of the Companies Act,2013(earlier Schedule XIV of Companies Act,1956) .

(ii) We also report that the assets of the company except vehicles in use and assets created from REC loans have not been fully insured.

The same disclosure has been made in Note 2.33 (b) 10 . Hence para may be deleted.

(iii) The Board has received the assets and liabilities of Kashang Project from HPPCL (Himachal Pradesh Power Corporation Limited) as per Government of Himachal Pradesh decision in 2008. The HPPCL has charged the depreciation on the assets of the Kasang project as per the policy of the HPPCL. The Board has taken the provision of depreciation as provided by the HPPCL which is not in lines with depreciation policy of the Board. No depreciation has been provided by the Board and company from 1st April 2008 to 31st March 2011 on the assets of the project transferred to the Board.

The Company has not provided to us the amount of depreciation required to be adjusted on account of above. In the absence of information we are unable to comment on the same.

In reply to this para , it is submitted that complete disclosure has been made in Notes to Accounts 2.33 (B) (21) and supporting voucher was provided to the Auditor during the course of audit. Hence, para may be dropped

(iv) The Company has not made provision against assets valuing ` 13.67 lacs washed away due to flash floods and heavy rain in Chamba, Nurpur, and Jubbal Divisions in earlier years. In our opinion the assets and income are overstated to extent of above.

The accounts with HPPCL were under reconciliation during the period under report. Now, the same has been done and depreciation on the assets of the Kashang project has been recalculated as per HPSEBL procedure from 1st Apirl 2008 to 31st March 2011 during FYs 2014-14 & 2015-16 accounts. Hence para may be

202

dropped. (v) The Company has created assets valuing ` 966.45 lacs on the land the ownership of which does not belong either to the erstwhile HPSEB or the company.

The same has been disclosed in Notes to Accounts 2.31 (A) (2) under Fixed Assets (f). Hence para may be settled.

(vi) The Company has not made provision of assets valuing ` 20.40 lacs stolen from various lines /sites in the books of accounts. In our opinion the assets and income are overstated to the extent of above.

Needful has been done during FY 2015-16. Hence para may be dropped.

(vii) The accumulated depreciation as on 31st March 2015 is not adjusted on account of assets washed away in floods, assets not in use, assets stolen and impaired assets. In the absence of information we are unable to comment on the authenticity of the accumulated balance of depreciation at the end of the year.

In the cases where assets have been washed away in floods, stolen and impaired, the Company is regularly withdrawing the value of such assets and accumulated depreciation from the concerned head of accounts and the depreciated value of these assets has been placed in assets not in use accounts till these are not finally written off. The same shall be shown to auditors during FY 2015-16.

(viii) The Company had charged the cost of new energy meters installed in repair and maintenance account in earlier years , without writing off the cost of old meters and the corresponding depreciation from the Fixed Assets Register which is contrary to the AS10 – Accounting of Fixed Assets issued by the ICAI. In the absence of information we are unable to comment on the cost of written down of meters which are in the Fixed assets schedule which are of nonexistent nature.

In reply to this para it is submitted that as per Instruction No.31 of Manual of Instructions, the new energy meters installed have been charged to repair and maintenance account without writing off the cost of old meters as these are the replacements and we do not concur with version of the audit in this regard. Hence para be dropped.

(ix) During reconciliation of A/c Code 28.919 with respective divisions it was observed that ES Division of Bhawanagar has erroneously Credited Fixed Assets Amounting to ` 6608.00 Lakhs by debiting A/c code 28.919 in F.y 2013-14. This has resulted in the overstatement of Short Term Loan & Advances and understatement of Fixed Assets to the extent of ` 6608.00 Lakhs. Depreciation has also been less calculated on the said amount. The Amount of depreciation less charged is not ascertainable due to non availability of requisite information regarding the assets involved. The amount has still not been rectified. Refer note no 2.33 (B)36.

Necessary rectification has been made in FY 2015-16 accounts. Hence para may be dropped.

13. Intangible Assets (Note 2.12) (i) The cost of Computer software, SAP amounting to Rs. 2243.71 Lac was recognized as intangible assets and is being amortized on straight line method over a period of five years. The Company has not provided us with the details regarding whether the SAP is under Development Phase or it has completed Development Phase. Para 20 of AS 26 says intangible asset to be recognized only if

•Future economic benefits attributable to the asset will flow to the enterprise

•Cost of the asset can be measured reliable

The cost of Computer software are recognized as intangible asset according to AS 26 as it relates to future economic benefits to the Company. During the period under review, SAP has been implemented in Head Office, CE (OP) South with all modules of this system. All the module of SAP has been completed and implemented in Go Live Units and cost of this asset are reliable. Therefore, the version of the Auditors to consider it in development face under CWIP is not correct & denied. Hence, para may be dropped

203

–Positive answers to both the questions required In the absence of complete information we are unable to comment on whether the Intangible Asset has been created or is under Work in progress. The Company has also amortized Rs 640.48 on the Intangible Assets as per the accounting note No 2.33 (A) (2)(k), however the Company has amortized 1/5th of the Opening Balance ie Rs. 2243.71 Lacs. This Policy is however not in compliance with AS 26. In the absence of information regarding the Phase of Software development we are of the opinion that Intangible Assets & CWIP is understated o to extent of Rs 2243.71 . Amortization Expenditure is overstated to extent of Rs 640.48 Lacs and income is understated to extent of ` 640.48 lacs . 14 Capital Work in Progress (Note 2.13)

(a) Capital Works in Progress

(i) The above account head shows a sum of ` 88632.12 lacs (previous year ` 86900.45 lacs ) on account of work in progress of various capital works as on 31st March 2015 which is subject to reconciliation and confirmations.

No Information / explanations in respect of the same have been provided to us. In the absence of information we are unable to comment on the same.

Statement of facts, hence no comments. However efforts to reconcile are being made.

(ii) It has been observed that the works under capital work in progress has not been closed for want of completion certificates where as actually the work has been completed and the assets has been put to use by the company. No sufficient information in respect of completed capital work in progress has been provided to us. In the absence of information we are unable to comment on the same.

The Company is making efforts to transfer the completed work to fixed assets account after complying with the necessary codal formalities. All the Units have been directed to capitalize assets on put to use bases. Hence para may be settled.

(iii) It has also been observed that in some cases the expenditure on capital work in progress has been incurred in excess of the sanctioned amounts and the work is still going on.

In reply to this para, it is submitted that Auditor has not mentioned the specific Units which had incurred excess over the sanctioned amount. Hence para denied , may be dropped.

(iv) It has also been observed that in some cases the work in progress has been partly transferred to the fixed assets on yearly basis without verifying that whether the work on the assets has been completely finished or not.

In the absence of specific instance, we are unable to comment on the same. However, completed works are transferred to fixed assets a/c after obtaining the completion certificate from concerned Engineer. Hence, para denied and may be settled.

(v) Interest during Construction Period (IDC)

(a) It has been observed that divisions are charging IDC (Interest during Construction Period) on the works under capital work in progress

Interest During Construction Period (IDC) In reply to this para it is submitted that Company has changed the previous practice of IDC and has stopped charging IDC on those assets

204

at rates varing from 8% to 13 % ( previous year @21.71 %) on year to year basis without verifying whether the assets has been funded from the loan or not. In some cases the IDC charged on the assets is equivalent to the cost of the assets or even more than that.

actualized which are funded from Loan from FIs during FY 2014-15 and relevant disclosure has been made in Note 2.33 (B) 49. Hence para may be dropped.

b) IDC Calculations The Company has charged the IDC during the year on following basis:

Amount in lacs

IDC Charged by Head Off ice for the year 2013-14 4,918.14 IDC Reveresed By Head Office for the year 2012-13 11,981.58 IDC Charged by the Division for the year 2012-13 -11,981.58

IDC has not been charged to individual schemes by the concerned division.

In reply to this para it is submitted that all the Units/ divisions are charging the IDC which are under CWIP and interest are being paid on those works/ schemes which has been put to use by the Division. The less amount charged by the units has been written back to P&L accounts Hence, para may be dropped.

c) Contracts in Progress The Company is showing a sum of ` 530.98 lacs (previous year ` 887.93 lacs) as on 31st March 2015 as contract in progress at various divisions which is subject to reconciliation and confirmations.

The balances were under reconciliation and action to transfer the completed work shall be taken thereafter.

d) Revenue Expenses pending allocation over Capital Works The company is showing ` 4918.14 lacs (previous year ` 11677.99 lacs) as revenue expenses pending allocation over capital works .No sufficient evidence for charging the amount to this head has been shown for our verification. We are of the opinion that capital work in progress is overstated to the extent of ` 4918.14 Lacs.

As per the Accounting system adopted by the Company all the revenue expenses including the expenses which are chargeable to capital works shall be first booked under relevant expense head. Periodically, the amount of expenses chargeable to works shall be first transferred to this account through credit account provided for each expense account group. The amount of revenue expenses transferred to this account would later be transferred to capital work-in progress accounts and factual procedure for the same has been appraised to audit. Hence, para may be settled.

15 Long Term Loans and Advances (Note 2.15)

b) Advances to Supplies/ Contractors

(Capital)

The Company is showing a sum of ` 1766.17 lacs (previous year ` 2630.29 lacs) as advances to supplier and contractors as on 31st March 2015. The above amount is subject to confirmation and reconciliations in respect of works completed against advances sanctioned. It was also observed that in Head office in A/c Code 25.1 Advance to Suppliers /contractor (Capital) an amount of Rs 919.32 Lakh was shown as Advances to Suppliers &Contractor. On Examination it was found that this amount was Paid for Bills by CPC section of the head office and the this amount is not in nature of advance but incurred

The balances were under reconciliation due to implementation of SAP and some payments are released as advance to the Contractor due to non opening of period in SAP. The advance payment is cleared by the concerned Units time to time. Hence para may be dropped.

205

for Expenses Thus long term advances are overstated to the extent of Rs 919.32 Lakh and income is overstated to that extent. It was also observed that CPC section has not reconciled the Balances of Advances with the amount as appeared in the accounts of the head office. b) Loans and Advances to staff ( Interest Bearing)

(i) It has been observed that the individual divisions does not have the complete record of the loan sanctioned and amount recovered from the employees and it has been explained to us that the same is being reconciled and kept at head office level in the broad sheets of the employees. However the reconciliation with broadsheet cell of The Account code 27.101 House Building Advance, 27.102 Scooter Motor Cycle Advance and 27.103 Car Advance was not provided to us. In Account Code 27.102 Scooter motor Cycle Advance Rs 38.56 Lakh Appeared as credit Balance ie Negative balances. Thus in our opinion Long term Loan and advances is understated and income is overstated to the extent of Rs 38.56 Lakh..

The head office has prepared complete records of loan and advance to staff i.e. House Building Advance, Scootor / Car advance in the Broad Sheet Section of this office. The employee wise details of above advance are available which are tallied with the accounts of FY 2014-15 accounts . Hence, para may be dropped.

(ii) It has further observed that when an employee is transferred from one Division to other division his account is not transferred to the other division though ATD and as such partial accounts are being kept at different divisions on account of loan sanctioned and recovery made at different divisions.

Statement of facts, hence no comments.

(iii) No information regarding current and noncurrent portion of loans and advances to employees has been provided to us

The Outstanding balance of employee HBA and Car loan are available with HO and shown to auditor during the course of audit. Hence, para may be dropped.

(iv) It was observed that in company has showed Rs 96.27 Lakh as interest accrued but not due on Advances to Others under Long term Loans and advances. In this head it was observed that in Account code 28.330 income accrued and due on investment in subsidiary Rs 97.78 Lakhs appeared as opening balance, no Interest was provided during the year. It was also observed that in Account code 28.220 Rs 1.47 Lakh and in Account code 28.304 Rs 0.04 Lakh appeared as credit balance ie Negative balance. Thus in our opinion Long term Loan & Advances is understated and income is understated to the extent of Rs 1.51 Lakh.

In reply to this para it is submitted that the figure of Rs. 96.27 Lakh are misclassification and rectification of the same shall be made in FY 2015-16 accounts. Hence para may be dropped.

(v) It was observed that Company has Showed Rs.190.54 in A/c Code 28.860 & 28.861 as commitment Advance. Thus advance was given in year 2009 and the same was not adjusted till the finalization of audit.

In reply to this para it is submitted that the Company has given Committed advance amounting to Rs. 1.00 crore M/s Orrisa Mega Power Project and Rs. 45 .00 Lac to M/s Titaya Mega Power Projects for creation of wind project. The interest of Rs. 37,86,599/- has been accrued up to 31.3.2014 on these advance as per the statement supplied by the above firms. These projects are under survey and feasibility stage and final outcome is awaited. The entire relevant document has been shown to the auditor during

206

the course of audit. Hence para may be dropped. (C ) Loans and Advances to Others

16 Other Non Current Assets ( Note 2.16) Assets not in use The company is showing `2813.12 lacs (previous year ` 960.01 lacs) as assets not in use as at 31st March 2015. In our opinion the above assets has completed their use full life and will not help in generating any further revenue and should be charged to revenue. Thus other noncurrent assets and Income are overstated to the above extent. (Refer Note 2.33 (B)9)

In reply to this para it is submitted that amount shown under this head is written down value of obsolete/ scrapped assets. The accounts shall be closed in respect of particulars assets after write off/ sale. This is a continuous process and amount in this head are regularly written off after obtaining the approval of competent authority as per procedure prescribed by the Company. We do not concur with the version of auditor.

b) Special Repair to Vehicles

The above account code shows a sum of ` 4.41 lacs (previous year ` 5373 lacs) incurred on account of special repairs to vehicles as at 31st March 2015. The above cost does not qualify the definition of intangible assets as defined under AS 26 Accounting standard for Accounting of Intangible Assets issued by the ICAI. Thus other noncurrent assets and income are overstated to the above extent.

The expenditure on special repairs of vehicles and Residential Building has now been cleared and practice to defer the same has been withdrawn from the current year.

c) Expenditure on Survey/ Feasibility Studies Projects not yet sanctioned.

The above account code shows a sum of ` 11548.61 lacs (previous year ` 11,614.56 lacs) incurred on account of Expenditure on Survey/ Feasibility Studies Projects not yet sanctioned as at 31st March 2015.

It has been observed that expenditure on survey / feasibility studies on different Projects has been incurred by the erstwhile board since many years. The expenditure has been done as the HPSEB was the only nodal agency to do such kind of survey and feasibility studies on behalf of the Government. The expenditure has to be recovered from the party to whom the project will be allotted. The above cost pertains to 61 nos. of projects and the same has not been allotted to any agency by the GOHP.

In our opinion as no future economic benefit is available to the company as per AS 26 Accounting standard for Accounting of Intangible Assets issued by the ICAI the same should be charged to revenue. Thus, other noncurrent assets are overstated to the extent of above of ` 11548.61 lacs (previous year ` 9677.52 lacs) which was shown by the divisions for our verification.

As per the accounting policy in vogue, the expenditure on preliminary survey and investigation of new project not yet sanctioned is charged to this account and when the project is sanctioned/ allotted this expense are recovered from IPPs/ capitalized as the case may be. The projects mentioned by the audit have not yet been allotted to any agency by the Govt. however; the amount shall be scrutinized in detail for appropriate action, if any.

d) Trade Receivables (Non Current)

207

The Company is showing a sum of ` 1293.75 lacs (previous year ` 613.38 lacs) due from permanent defaulters as on 31st March 2015. The Company had made provision of Rs. 561.62 Lakh for bad and doubtful debts but the same has been reduced from current trade receivables. In our opinion non current trade receivables are overstated and trade receivables are understated to Rs. 561.62 Laskh

The point has been noted and necessary compliance in this regards has been done in FY 2015-16 accounts.

e) Inventories- Scrap/ other material/ excess/ shortages The Company is showing amounts under the following account codes under other noncurrent assets:-


` `22.7 Obsolete materials stock account 283.69 167.46 22.8 Materials short excess pending investigations 248.54 247.22

532.23 414.68

In our opinion other noncurrent assets are overstated to the extent of ` 532.23 lacs (P.Y ` 414.68 Lacs) for which no provisions has been made in the books of accounts.

In reply to this para, it is submitted that amount shown under this head pending for investigation in various units of the Company and reports of competent authority are awaited. The same has been regulated as per accounting policies of the Company and cost incurred on retirement, scrapping and sales of assets is charged to revenue account in the year in which cost is incurred.

f) Interest Accrued and Due and Interest Accrued but not due on staff Loans and others

The Company is showing the following amounts under the above head for which no sufficient details has been provided as such the same cannot be commented on:- Income accrued and due on Loans/ Advances to Staff & Others

Particulars A/c

code Current Year

Income accrued and due on Loans/Advances to staff 28.26 -11.60

Income accrued and due on loan and adv- HBA 28.261 173.29

Income accrued and due on loan and adv- CPS. 28.267 -0.01

Income accrued and due on loan and adv- other 28.290 0.43

Interest accrued but not due -HBA 28.361 313.83

Interest accrued but not 28.362 -0.14

The figures of interest accrued and due and interest accrued but not due on staff loans & other were under reconciliation while finalizing the accounts for 2014-15 which has now been reconciled with subsidiary record by all the DDOs and head Office (Broad Sheet Section) . The same shall be shown to auditor.

208

due -MC/ Scooter

Interest accured but not due -car 28.363 -0.32

Warm Clothing Advance 28.364 -0.76

Income Accrued & due--- CPS 28.367 -0.10

Income Accrued & due--- Others. 28.29 0.43

Income Accrued & due--- CPS 28.367 -0.10

Interest accured but not due - others 28.390 87.34

income accured but not due CPS 28.367 0.00

income accured but not due others 28.390 87.34

i) The account code 28.364 is of the nature of short term nature and should be shown under the head other short term loans and advances. This code showed credit balance of Rs.0.76 balance is subject to confirmation. Thus other non current advances and deficit are understated to that extent.

The point has been noted. The compliance in this regards shall be done in current year

17 Current Investments (Note 2.17) Leave Encashment Fund The Company is showing ` 1147.85 lacs (Previous Year ` 1,051.06 lacs) under the head Leave encashment fund which are of noncurrent nature. In our opinion the Current Investments are overstated to the extent of above and noncurrent Investments are understated to that extent.

In reply to this para it is submitted that Company has taken a policy for leave encashment from SBI & Canara bank for Rs. 15.00 Crore. the said amount shall be utilized for payment of leave encashment to employees on these superannuation/retirement. During the current years these funds have been partly utilized and remaining amount shall be utilized during 2015-16. Hence version of the adutor to consider it non current is not acceptable & denied. Hence para may be dropped.

18 Inventories (Note 2.18) a) The divisions are adding 3 % as storage charges and freight charges in the cost of the material purchased which is contrary to the Accounting Standard AS 2 Accounting of Inventories issued by ICAI. The Accounting standard states that stock has to be accounted for at cost or realisable value whichever is less. In the absence of complete information we are unable to comment on its affect

In this regards, it is submitted that instructions to withdraw 3% storage charges and freight charges in the cost of material have been issued during FY 2012-13. The auditor has not informed that unit which is adding 3% storage charges during the period under review and the version of auditor are not correct. Hence, para may be dropped.

209

to the Profit and Loss Account. b) The company has been transferred with stocks of the erstwhile Board which have been purchased in earlier years and the same has not been used till the close of the year and the same has resulted in over stocking of the stocks and pilling up of the stocks at Divisions level. The following is the details of stocks as provided by the company for which no provisions has been made in the books of accounts on account of obsolescence, shortages and reduction in the value.


` `22.6 Opening Diffrence 23.65 23.65 22.6 Stocks in hand more than five years Critical 670.40 750.35 22.6 Stocks in hand more than five years non Cri 65.15 95.45

759.20 869.45

In our opinion the inventories are overstated to the extent of ` 65.15 lacs for which no provisions has been made in the books of accounts.

The Management is taking steps for the settlement of these balances and most of the balances have been settled during 2015-16 accounts. It is further submitted that stock lying in various Divisions shown under this head purchased not been more than five years including critical and non critical items which are useful and can be use at any time in the Company. Hence, para may be settled.

c) It has been found that there is no systematic accounting of stocks in this account heads and some divisions has not made distinctions between the stocks of stores and other materials and it has been observed that in some cases the office equipment stocks and other office equipment has also been included in the above head which should have been part of the fixed assets. In the absence of sufficient information we are unable to comment on the overstatement of inventories.

In reply to this para, it is submitted that Company have systematic accounting procedure of stock and each item of stock are distinct in stock Registers. The Auditor has not pointed out specific units where the same has been found . Hence para may be dropped.

d) The Company has not provided details in respect of inventories which are of current and noncurrent nature. In the absence of information we are unable to comment on the current and noncurrent portion of inventories.

The details of current and noncurrent inventories are available with Divisions of the Company and instructions to provide the same have been issued to all concerned. Hence, para may be settled.

e) Physical verification reports of the inventories were not provided to us for verification at division level. In the absence of physical verification reports the balance of inventories are subject to confirmation. There is no system prevalent in the company to identify the obsolete Stock, company has not shown any loss by theft or natural calamity in stock. The System of reporting theft of Stock at the division level to H.O and its treatment in the accounts is not clearly specified. In the absence of complete information , its impact on profit / Loss could not be ascertained.

The physical verification Report of each Division is available with concerned Division and auditor has not mentioned the name of division which has not provided report of inventories. The Company has proper system to identify the obsolete stock or loss accrued due to natural calamity. Hence , the version of auditors is not correct and para be dropped.

19 Trade Receivables (Note 2.19) The Company has shown trade receivables from consumers and others under this head amounting to � 83537.99 lacs (P.Y � 56263.23 Lacs). No sufficient information was provided to us

The amount shown recoverable from consumers is against supply of Power which will be realized within credit period and sufficient information is available with the operation Divisions /Sub

210

regarding whether the trade receivables are of current nature (i.e. they are likely to be realized in next 12 months) or Trade receivable are of non Current Nature . Thus we are unable to comment on the non current nature of the trade receivables included in above amount. The Company has not provided to us the balance confirmation certificates / party statement from the concerned parties to confirm the balance as reflected in the books of the Company

Divisions of the Company and this amount shown current is in order. Hence, para may be settled.

A Sundry Debtors for Energy Bill (Other than Interstate Consumers) 1 The subsidiary records in relation to consumer ledgers at the end of the year is pending for reconciliation at all divisions of the operation circles. In the absence of the proper reconciliation we are unable to comment on the authenticity of the amount recoverable from the consumers as at 31stMarch 2015.

The instructions for reconciliation of consumer Ledgers/ subsidiary books at the end of the year have been issued to all the concerned.

2 The consumers having credit balances in accounts on account of energy dues, municipal taxes , electricity duty and other dues or who has made advance payments has not been shown separately as other current liabilities.

The consumers who made advance payment on account of energy charges, M/Tax, ED are shown as credit balances separately in consumer ledgers and New billing system implementing through TCS credit balances in accounts on account of energy dues, municipal taxes , electricity duty and other dues or who has made advance payments are being shown separately as other current liabilities. Efforts are being made to also modify HCL Billing system accoridnly.

3 The Trade Receivables also includes ` 28173.52 lacs (previous year ` 20280.50 lacs) as amount recoverable from different departments of Government of Himachal Pradesh. The breakup as per Note No 2.33 (B) (45)

The complete discloser has been made in Note No 2.33 (B) 45 and reporting of Auditor here again for the same are only repetition which is not acceptable. Hence para be dropped

4 The company has made provision for doubtful debts amounting to ` 561.52 Lacs .In our opinion the provision is less keeping in view the amount recoverable from Government departments and other consumers.

The company had made provision amounting to Rs. 561.52 Lac during the year under review for doubtful debts which is justified amount against the amount of Rs 5,61,51,665/- due from permanent disconnected consumers. Hence, para may be settled.

5 The sundry debtors includes Municipal committees and NACs from which amount is recoverable since many years correspondingly the amount is also payable to them on account of electricity consumption tax. The amount payable as on 31st March 2014 to different Municipal committees and NAC is ` 937.55 (previous year `782.51 lacs) which has not been adjusted from the amount recoverable from them. Thus Trade receivables are overstated to that extent and correspondingly the other current liabilities are overstated to that extent.

The matter regarding reconciliation of receivable/ payables with MC/NAC is under process and after settlement the same shall be adjusted with the MC/NAC in due course of time.

6 The Company has not provided to us information about amount receivables against bills raised but not accepted by the respective consumers and were sub-judice ` 635.00(P.Y it was `709.00 Lacs). In the absence of information we are unable to comment on amount of trade receivables which are overstated due to inclusion of above debtors in

The concerned accounting units have been directed to examine the matter and compliance be shown to audit in FY 2015-16.

211

sundry debtors. B Sundry Debtors for Interstate Sale of Power and for Wheeling / O & M Charges 1 The amount recoverable for interstate sale of power at Head Office amounting to ` 20010.04 lacs (previous year ` 3909.46 lacs) includes the accounts of following parties for which no sufficient information/ confirmations are available at Head Office.

Amount in lacs Amount in LacsCurrent Year Previous YearDebit Credit Debit Credit

23.601 PSEB 11,942.80 - 1,263.30 - 23.603 UPSEB 5656.95 - 949.69 - 23.610 NTPC 1.56 1.56 23.623 Malana Deve. Power 181.84 - 181.84 23.624 REC.CH. 749.54 - 981.65 23.630 PGCIL(UI) 1244.37 - 531.39 23.730 Open Access 232.98

Total 20,010.04 - 3,909.43 -

A/c Code Particulars Current Year

Previous Year

Debit Credit Debit

23.802 HVPNL 22.66 -

22.66

23.814 MALANA(W) 2.07 552.22

23.82 Handling charges of Govt. Free power

- 4217.93

23.821 MALANA(H)

10.89

-

10.89

23.826 HPPCL &BKG 220.60 1733.51

23.830

PTC System opt. ch.

10252.19

-

12986.51

23.831

Trans & System Operation

1.97 - 1.97

The accounts were not reconciled at the time of audit. Now the re-conciliation has been completed with concerned parties and account balances have been rectified/ adjusted accordingly which shall be shown to auditor during the course of audit for FY 2015-16.

212

We are further of the opinion that the trade receivable are overstated to the extent of ` 20010.04 lacs (previous year ` 3909.46 lacs) on account of debit balance in the parties account for which no sufficient confirmations / information is available with the company. However these figures are not reconciled with SLND hence it is subject to confirmation.

s Charges

TOTAL 14014.63 222.67 19525.69

2 The company is also showing a sum of ` 14014.63 lacs (previous year ` 19525.69) recoverable from different parties on account wheeling/ O&M Charges as on 31st March 2015.The following are the account balances of parties which were not confirmed. We are of the opinion that the trade receivables are overstated to the extent of ` 14014.63 lacs (previous year ` 19525.69 lacs) on account of debit balance in the parties account for which no sufficient confirmations/information is available with the company. However these figures are not reconciled with SLND hence it is subject to confirmation.

The accounts were not reconciled at the time of audit. Now the re-conciliation has been completed with concerned parties and accounts balances have been rectified/ adjusted accordingly which shall be shown to audit during the course of audit for FY 2015-16. Hence para may be settled.

3 O& M Charge Recoverable from HPTCL The Company has booked ` 1140.11 lacs (previous Year ` 848.68 lacs) as O & M Charges Recoverable from HPTCL during the year under Review. During the year under review ` 426.68 Lacs was debited and ` 135.25 lacs were credited. The Company has shown the ` 1140.11 as current trade receivable whereas the payment of opening Balance has not been received. Thus current trade receivables are overstated and noncurrent assets are understated to that extent.

The amount had been shown as recoverable from HPPTCL on account of Transmission charges as approved by the HPERC in its MYT order of HPPTCL for the Control period 12-14. The HPPTCL has not made the payment due to non reconciliation of receivable/ payable with HPSEBL. This has now been settled / adjusted during the current year.

C Court Cases by Consumers As explained by the company The erstwhile Board/Company has billed ` 1035.25 lacs (previous year ` 1280.40 lacs) and ` 1345.50 lacs (previous year ` 1475.10 lacs) to industrial consumers of Operation Circle, Solan and Nahan. The consumer had filed suits against the same and recovery had been stopped by the courts. No disclosure of the same has been made in notes to accounts. The Company has shown the above amounts as current trade receivable. Thus the current Trade Receivables are overstated to that extent.

The relevant disclosure in this regards has been made in Note No 2.33 (B) 43 and complete detail of consumers who have filed the suits against recovery are available in Operation Circle, Nahan and Solan which shall be shown to the Auditor in next audit.

20 Cash and Cash Equivalents (Note 2.20)

a) Balance with Banks

(i) The company has done the bank

It is submitted that presently the bank

213

reconciliations of all the Banks accounts at Head Office level and no reconciliation is being done at the division level. We have been provided with the bank reconciliations of the accounts maintained at Head office level bank wise consolidated and not by bank wise and branch wise individually. We have been explained that all collections received in the collection accounts maintained at Divisions level are being transferred to the Head Office account. We have not been provided with the bank reconciliation and balance confirmations certificates from the bank as on 31st March 2015 for all the collections accounts maintained at divisions and sub divisions levels in the fields. In the absence of the information we are unable to comment on the amount of collections not accounted for in the books of accounts during the period under review.

reconciliation are being done as per existing procedure laid down in HPSEB Banking Manual and no reconciliations are being done at Sub Division/ Division level and all Bank are reconciled at Head office level. The matter regarding modification of all the manuals is under process as and when the same is finalized the reconciliation shall be done accordingly.

(ii) Bank Reconciliations at Head Office Level

It has been observed that the head office have accounted for all the pending entries in the bank reconciliations statements of all banks in the financial statements which is not in line with the commercial accounting practice. The un reconciled entries on account of unrepresented cheques and cheques outstanding for clearing has to be shown in the reconciliations statements only and has not to be accounted for in the financial statements and to be settled in the bank reconciliations statements in succeeding months

Presently the bank reconciliations are being done as per existing procedure laid down in HPSEB Banking Manual .The point is noted and all the pending entries shall be shown in Bank reconciliation statement from current years

b) Cash in Transit

The company is showing a sum of ` 12040.63 lacs (Previous year ` 7703.47 lacs) as cash in transit as on 31st March 2015. The details of the same as under:-


` `1 Details as per Bank Reconclilation Statements

Bank Charges Excess Charged by Bank - - Outstanding Remittance 9,586.85 4,439.60 Short credit given by Banks 1,430.33 2,017.16 Excess amount debited by Banks 991.38 1,214.64

12,008.56 7,671.40

2 Cheuqe in transit since 1996-97 32.07 32.07 Total 12,040.63 7,703.47

The above amounts pertains to cheques outstanding for clearing by banks which has been included in this head and it should have been shown in the bank reconciliations statements instead

Presently the bank reconciliation has been done as per existing procedure laid down in HPSEB Accounts / Chart of Accounts/banking Manual and the matter regarding modification of the manuals is under process , as and when the same is finalized the necessary rectification shall be made accordingly.

214

of accounting for the same in the financial statements.

The Company has shown the cash in transit in bank balances. Thus Bank balances are overstated to that extent. The old un-reconciled entries in above are subject to reconciliations and it may affect the profit and loss account and balance sheet. In our opinion all old entries shown in the reconciliation statements should be reconciled and necessary adjustment entries may be passed in books of accounts. 21 Short Term Loans and Advances (Note 2.21)


The company showed ` 5829.84 lacs (Previous year ` 2807.51lacs) as loans and advances for supplies / works. The above advances also include advances which are old and require adjustments as the works has been completed at the close of the year and expenditure has not been booked. The company has not provided us any confirmations from the Parties for the amount due as such we are unable to comment on the above advances. The above advances have been shown as secured but no sufficient information in respect of the same has been provided. No Information in respect of noncurrent portion of advances has been shown for our verification. It eas also in books of head of office in A/c code 26.1 Advances to suppliers/ Contractors ` 579.15 Lakh was shown as advance to suppler/ contractors this amounts pertains to payment of bills by CPC Section and this amount pertain to Capital works in progress. In our opinion Short Term Loan & Advances are overstated and CWIP is understated to extent of Rs. 579.15

Efforts are being made to scrutinize & reconcile the same at the earliest for appropriate action.

(ii) The Binwa division of Generation wing has advanced ` 58.67 lacs to M/s Garg Engineering Industries Private Limited. The Advance has become bad as the party is not traceable. In our opinion the short term loans and advances and income is overstated to that extent.

The amount has been recovered from M/s Garg Engineer Industries Private Ltd. during FY 2014-15 and detail shall be provide to the audit in next audit Hence, para may be settled.

215

B Loans and Advances to Staff

It has been observed that the individual divisions

does not have the complete record of the loan

sanctioned and amount recovered from the

employees and it has been explained to us that the

same is being reconciled and kept at head office level

in the broad sheets of the employees.

It has also been observed that when an employee is

transferred from one Division to other division his

account is not transferred to the other division

though ATD and as such partial accounts are being

kept at different divisions on account of loan

sanctioned and recovery made at different divisions.

The company has not provided us the details in

Credit

`

Loans and advances to staff – Warm clothing 27.104 07.13

Loans and advances to staff – T.A 27.201 -4.11

Loans and advances to staff – pay 27.202 69.85

Loans and advances to staff – Festival 27.203 0.01

LTC advance 27.207 1.18

Medical advance 27.208 -2.30

warm clothing advance 28.264 -5.41

Fan Advance 28.266 3.02

Other 27.206 0.44

69.81

There is a complete record of loan and advances at H.O. level, the same shall be shown to auditors. There was some difference in some accounts, the same has now been rectified which shall be shown to auditor in FY 2015-16.

216

respect of the following account heads during the year review.

No information in respect of current and noncurrent portion of advances has been shown for our verification.

C Prepaid Expenses

It has been observed that the company has no precise policy of charging the expenses to prepaid expenses head. Most of the divisions are charging petrol and diesel of vehicles in hand at the close of the year. Some Divisions have charged Insurance on vehicles in the prepaid expenses. During the year under review prepaid expenses have not been booked at H.O Level.

In reply to this para it is submitted that Company has clear policy for prepaid expense, expenses not due but paid in advance such as insurance premium, annual taxes on building, Rent of Telephone charges & vehicles etc which are considered as prepaid expense. The prepaid expenses are reversed in the next year so that expense bills can be accounted for in the usual manner. Hence, the version of auditor is denied and para may be settled.

D Amount Recoverable from UPSEB Account code 28.831

The above account code shows credit balance of ` Nil (Previous Year ` 389.74lacs) during the year under review. No information in respect of same has shown for our verification. In our opinion the short term loans and advances and income are understated to the extent of above.

In reply to this para it is submitted that after reconciliation with UPPCL credit balance under this head has been settled and shown to the Auditors during the course of audit. Hence para be dropped.

E Advance Income Tax/ Tax Deductions at Source

(i) The Company has claimed ` 1191.99 lacs (P.Y 854.30 Lacs) as income tax refund in the income tax return filed for the financial year 2014-15 where as the company has accounted for ` 3158.94 lacs under the head TDS recoverable. No sufficient information in respect of the same has been provided to us. In the absence of information we are unable to comment on the same.

In reply to this para , it is submitted that the Company has made complete year wise disclosure for the same in Balance Sheet under Note No 2.21 and complete supporting documents/ information with detail has been provided to the Auditor during the course of Audit and the version of auditor is not correct & denied. Hence, para may be dropped.

(ii) The above account head shows ` 3158.94Lacs (P.Y` 2033.41 lacs) as short term loans and advances where as above amount includes ` 1665.78 TDS which are of noncurrent nature. Thus short term loans and advances are overstated to that extent.

The point has been noted and recoverable amount of TDS shall be considered noncurrent in future.

F) Amount Recoverable Government Departments A/c code 28.776 (iv) A sum of ` 1.40 lacs share application money recoverable from HP Government for the share allotted to the government has been shown under the head short term loan and advances. Refer para 2 of this report in which we have stated that short term loans and advances are overstated to the extent of above.

In reply to this para, it is submitted that amount of Rs. 1.40 Lac a/c of Share capital from state Govt. has been received in FY 2016-17 Hence para be deleted.

217

(ii) Amount Deposited with PWD Kullu

The Thalot division of Generation Wing(earlier Projects Wing) has deposited ` 100.00 lacs with PWD Kullu for construction of roads which is of non recoverable nature. In our opinion the amount short term loans and advances and income are overstated to the extent of above .

The matter is being examined and compliance shall be shown to audit accordingly

(iii) Amount Recoverable from HIMURJA The Company has shown a sum of `26.99 lacs (previous Year ` 26.99 lacs) as amount recoverable from Himurja on account of DPR Charges of the projects of the Himurja. The amount has not been paid by the Himurja hence provision for the same should be made in the books of accounts. In our opinion the short term loans and advances and income are overstated to the extent of above.

In reply to this para, it is submitted that the expenditure to the tune of Rs. 26.99 Lac was incurred for carrying out S&I works for preparation of DPRs of the six Projects of HIMURJA as per the decision of the Board conveyed by the CE (P&M). The matter regarding recovery of this expenditure is in active consideration with concerned agency/department. As and when any decision is reached the adjustment of above amount shall be made accordingly.

(iv.) Amount Recoverable from Revenue Department A/c code 28.872 The Company has shown a sum of ` 86.86 lacs (previous Year ` 87.20 lacs) as amount recoverable from Revenue Department. The amount has not been paid by the Revenue Department hence provision for the same should be made in the books of accounts. In our opinion the short term loans and advances and income are overstated to the extent of above.

The matter is under consideration and concerned Units has been asked to reconcile the same with concerned department. The appropriate action shall be taken on final outcome.

G) Amount recoverable Related Parties

II. BVPCL (Subsidiary Company) A/c code 28.761

The Company has incurred expenditure to the tune of ` 3596.64 lacs (previous year ` 3008.28 lacs) as on 31st March 2015 for which shares has to be issued by the BVPCL. The above balance is subject to reconciliation and confirmation. The Company has allotted only shares for ` 3000.00 lacs. Thus a sum of ` 596.64 lacs amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets. Thus Short Term Loans & Advances are overstated to that extent and other non current assets are understated to that extent.

The point noted & appropriate necessary action shall be taken in future.

H) Amount Recoverable Others

218

(i) Amount Recoverable from SJVNL A/c code 28.701 The Company showed a sum of ` 176.75 lacs (previous year ` 176.75 lacs ) recoverable from SJVNL as on 31st March 2015 as short term loans and advances Other . We were explained that SJVNL has not accepted the liability as such the amount is disputed and requires legal action/write off not current assets and is of the nature of non current assets. Thus short term loans and advances are overstated and other non current assets are understated to that extent.

The matter to recover said amount is under active consideration of SJVNL and HPSEBL and the claim has not been rejected by the SJVNL till date. Appropriate action will be taken after settlement of the above matter.

(ii) Expenditure incurred on Resident of Parbati HEP A/c code 28.704 The Company is showing a sum of ` 21.68 lacs (previous year ` 21.68 lacs) as amount recoverable from NHPC as on 31.03.2015. The amount has not been recovered till the approval of accounts. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

The matter is being examined and outcome shall be reported to Audit accordingly.

(iii) Amount Recoverable Himachal Pradesh Power Transmission Corporation Limited A/C 28.773. The company has transferred cost of transmission lines to the HPTCL (Himachal Pradesh Power Transmission Corporation Limited) as per the scheme of the transfer. A sum of ` 5936.18 lacs (previous Year ` 5916.05 lacs) has been shown as recoverable as at 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

The amount of transmission line transferred to HPPTCL as per scheme has been reconciled with HPPTCL and amount shall be adjusted from receivable and payable to State Govt. after obtaining the approval of Govt. The point noted for necessary action for appropriate classification in future. Hence para stand settled.

(iv) Theft of Property Pending Investigation The above head shows a sum of ` 23.35 lacs (previous Year ` 31.30 lacs) as on 31st March 2015. The above amount is to be shown under other non current assets. Thus Short Term Loan & Advances are overstated and other non current assets are understated to that extent.

The point noted for necessary action for appropriate classification in future.

(v) Expenses recoverable from Suppliers /Contractors.

The above head shows a sum of `1964.68 lacs (previous year ` 1901.44 lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. No sufficient information for showing the same as current assets

The complete details of these expenses are available with all the DDOs of the Company and these amounts are regular in nature and are recovered regularly from concerned. The version of the audit is denied. Hence, para may be dropped.

219

has been shown for our verification. Thus Short Term Loan & Advances are overstated and other non current assets are understated to that extent. (vi) Inspection charges related to material / equipment third party inspection

The above head shows a sum of ` 105.41 lacs (previous year `107.38lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of con firmations we are unable to comment on the same. No sufficient information for showing the same as current assets has been shown for our verification. In our opinion short term loans and advances are overstated to the extent of above.

The instructions to reconcile the inspection charges has been communicated to concerned and factual position shall be apprised to Auditor.

(vii) Amount Recoverable from PSEB

The above head shows a sum of ` 7.49 lacs (previous year ` 7.49 lacs) as on 31st March 2015 which is subject to reconciliation and confirmation. In the absence of confirmations we are unable to comment on the same. The amount recoverable is of noncurrent nature and should be shown under the head other noncurrent assets.

The matter is under reconciliation with PSPCL and compliance shall be shown thereafter. We do not concur with the version of the audit regarding the noncurrent nature of the amount.

(viii)(Leave & Pensionary Benefits Recoverable from outside Parties (A/c Code 28.880 & 28.881) The Above Account showed ` 2702.55 lacs (P.Y `2078.95 Lacs) recoverable on account of leave and pensionary contribution recoverable from outside parties. The above amount includes ` 1563.80 lacs which is of non current nature. Thus short term loans & advances are overstated to the extent of above.

The complete details of these amounts have been finalized which are being reconciled with outside parties and will be shown to the audit in next audit. Hence, para may be dropped.

II) Deposits (iii) The Company is showing a sum of Rs. 14190.65 Lacs (P.Y` 14190.65 lacs) under this head the details of which as under :

Current year

Previous Year

Deposits Rs. In Lacs Rs. In Lacs

Other deposits A/c 28.919

14,073.79 14,073.77

Security from 20.50


220

suppliers and contractor in FD form

20.50

Deposite with Hon'ble High Court/Court- Pending FD

96.38 96.38

14,190.67

14190.65

The amount is in the nature of long term loans and advances and should not be treated as current assets. Thus short term loans and advances are overstated to the extent of above. J) Amount Recoverable from Employees

(i) The above account includes a sum of ` 162.54 lacs (previous year ` 174.21 lacs) recoverable from employees / ex employees. The account is subject to reconciliation and confirmation. In the absence of reconciliations we are unable to comment on the recoverability of the amount due from employees/ ex employees. It has been observed that the above account includes amount recoverable from employees on account of shortages and other recoveries. In some cases the amount has been disputed and employees has gone to courts and in some cases the monthly installments has been fixed and in some cases the amount has been paid by the employees and in some cases the employees are not paying shortages. The current and noncurrent portion of the amount recoverable has not been disclosed by the company.

The employee wise detail of Interest accrued and due on Loan and advances from staff are available in Broad Sheet Section of this office as well as with all DDOs. Necessary clarification as appropriate shall be made available in future.

(ii) Non provision of ` 9.36 Lacs (previous Year ` 9.36 Lac) recoverable from employees who have been injured while performing their duties. In our opinion non provision of the same has resulted in overstatement of the short term loans and advances.

The amounts recoverable from injured employees are being recovered time to time by the concerned Division from their legal hire or pensioners/ family pensioners. The amount appearing in this head credited / debited regularly and is routine in nature. Hence the provision of this amount can not be made all these amounts are current nature. Hence par stand settled.

K) Interest Accrued but not due employees A/c code 28.365 The above account includes a sum of ` 1.14 lacs (previous year ` 1.14 lacs) for which no sufficient information has been provided to us. In the absence of complete information we are unable to comment on the same .

The detail of interest accrued but not due to employees are available with all DDO/ Broad Sheet Section of this office. Hence para may be dropped.

221

L) Interest Accrued but not due others A/c code 28.310. The above account includes interest accrued and due on GPF Fixed deposits amounting to ` 3839.72 lacs (previous year ` 3839.72 lacs). The FDR wise interest accrued as at opening of the year has not been shown for our verification. In the absence of information we are unable to comment on the same.

The point noted for necessary action and FDR interest accrued at the opening of the years shall be shown to auditor in future. Hence, para may be dropped.

M) Others In the following head of accounts balance confirmation from the concerned parties were not found on record. Hence these balances are subject to confirmation and reconciliation. In our opinion short term Loan And advances is overstated and other noncurrent assets is understated to the extent of ` 7366.45 Lakh

Efforts are being made to reconcile the balances and all DDOs has been requested to reconcile the balances with subsidiary records.

222

Name of Account A/c code

Amount Remarks

Advances to suppliers/contractors (O&M) – Interest Free


26.1 605.93 --do--

Suppliers/contractors Materials Accounts (O&M)

26.7 4378.34 --do--

Loan and advances to other

27.8 71.18 Opening Balance not adjusted

Loan and advances to CPS holders


Loan and advances to other

27.8 7.09 --do--

Exp incurred on deposit work HRTC


claim for loss damaged of materials - suppliers


28.821 537.56 Account head not mentioned

HPPWD 28.870 126.73 Current /Non Current portion no ascertained

Other deptt to be specified

28.875 677.84 --do--

Total 7366.45

22 Other Current Assets (Note 2.22)

223

(i) Receivables from Sale of Store, Rental property A/c code 28.103, 28.104

The above account includes a sum of ` -4.60 as credit balance in accounts receivable from sale of store, rental property. This is a negative balance. Proper explanation for the same was not provided to us. In our opinion other current assets are understated and income is understated to the extent of above.


(ii) Reimbursement of up front subsidy by GOHP

The above account shows a sum of ` 4,970.00 lacs (previous year ` 4,970.00 lacs) recoverable as upfront subsidy from the Government of Himachal Pradesh which has not been approved by the Government hence the amount is not recoverable. In our opinion the other current assets are overstated to the extent of above.

The amount of Rs. 4970.00 Lac is recoverable from GO HP on a/c of upfront subsidy determined by the Hon’ble HPERC in tariff orders and have been taken up with State Govt. regularly in the meeting of receivable/ payable and Govt. of HP never rejected the same. The version of auditor is not acceptable. The point noted for necessary action for appropriate classification in future. Hence para be dropped.

(iii) Revenue Subsidy Grant From Govt. of HP (Account Code 28.623 and 28.264 and 28.625)

The amount recoverable from HP Government amounting to ` 50035.30 (P.Y ` 45751.80.00 lacs) is of noncurrent nature. Out of above ` 12751.80 is of noncurrent nature. Thus the other current assets are overstated and other noncurrent assets are understated to the extent of above.

Point has been noted for future compliance.

iv) Inter Unit Transactions

The company is showing ` 36424.85 lacs (previous year ` 25387.25 lacs) on account inter unit transfers and the same has not been reconciled at the end of the year. It has been observed that the above practice of non reconciliation in inter unit accounts is pending since many years and same was not reconciled by the erstwhile Board and even by the Company. In our opinion the amount is not of recoverable nature as the inter units accounts has to be adjusted at the close of the year and amount should be Nil under this head. Thus other current assets are overstated to the extent of above.

Inter Unit Transfer is a regular process and all accounting Units under HPSEB Ltd have been directed to reconcile the IUT accounts at earliest and to ensure the balance under IUT should be NIL at the end of financial year.

23 Statement of Profit and Loss Account

(i) Income from Investments

The company has shown the following as interest earned on investments. The details of the same are

The interest earned by the Company on investment of GPF is netted off with the interest provided to subscribers and difference amount

224

as under:-


` `1 Net Interest recived/ (Paid) from GPF Fund 1,350.95- 4,162.34- 2 Interest on APRDP Fund - - 3 Interest on RGGVY Funds - - 4 Interest on Leave Encashment Fund -

1,350.95- 4,162.34-

In our opinion the income is understated to the extent of above since interest paid on GPF has been paid on the liability not related to Company.

charged to Revenue Expenditure/Income as per accounting policy of the Company. Besides, the HPSEBL has not created separate fund for the GPF. Hence, para may be dropped.

(ii) Prior Period Items 2014-15 Reference is invited to Note No2.33 (B) (47) regarding prior period items amounting to ` 1088.55 charged in accounts in financial Year 2014-15 The account for the year 2013-14 was approved by the Board on 1th July 2016 and the prior period items are known to the company before the finalization of the accounts for the year 2014-15 but no effect of the same has been made in the financial statements for the year 2014-15.

All the expense/ income are accounted for upto a cut-off date which are included in supplementary trail balance to be forwarded to H.O. There exists proper policy for the accountal of prior period Income/Expenditure. On the date of balance sheet all the expenses/income relating to the year of field units are not being charged to the concerned head of account, when the accounts of the year have been closed, all the receipt/expenses relating to previous years are being charged to prior period expenses/income as per Note 2.33 (B) 47. Hence para may be dropped.

(iii) Contingencies and Events Occurring after Balance Sheets Dates The Company has not accounted for material events incurred after balance sheet date till the approval of the accounts by the Board of Directors as the next year accounts are not complete till the finalization of the report. The material items which may affect the profit loss account and balance sheet cannot not be commented on in the absence of the information as per the requirements of AS 4 Contingencies and events Occurring after the Balance Sheet Date issued by the Institute of Chartered Accountants of India. Refer to note 2.33 (B)47. Reference is also invited to note no. 2.33B 17 . compensation paid to legal heirs of deceased students amounting to Rs. 2.28 crores pursuant to orders of H’ble High Court

The necessary disclosure has been made in Note No 2.31 (B) 46. The data for financial impact was not available at that time which has now been gathered and Rs. 76.03 crore estimated for “rehabilitation of 3x40 MW SVP . The revenue loss on own generation amounting to Rs. 144.84 Crore estimated (calculated @ 2.95/unit being purchase price from IPP's). Hence, para may be dropped please.

(iv) Reallocation costs of Employees and Repair and Maintenance to Capital works The method and calculation of reallocation of employee costs and repair and maintenance costs is subject to reconciliation as the basis for the same and the actual expenditure incurred has not been provided to us.

In this context, it is intimated that a proper procedure has been prescribed in Commercial Accounting System of HPSEB for reallocation of Employees & R&M to capital works which is done on the following basis:

1. The entire cost of employees at purely

225

construction units should be capitalized. This should include even the annual benefits like bonus, LTA etc.

2. The other units, the employee cost to be capitalised should includes (s) cost of employees, retained/ engaged specifically for one or more capital jobs (b) an estimated proportion of cost of employees (who are working on both capital and O&M) should be fixed on the proportion of time the employees are estimated to be spending on capital works

3. The employee who works only on the O&M works, no part of this employee’s cost be capitalized.

4. The entire expenditure transferred to capital works (i.e A/c group 15.2) should be allocated to the specific works at the year end no balance should be left unallocated. In view of above, the version of auditor is denied. Hence para may be settled.

(v) Losses on account of flood cyclone fire etc. Account Code 79.8 No expenditure was booked in this Account code during the year(Previous Year ` Nil ). It was explained to us that the expenditure incurred to restore the damage caused on account of loss on account of Flood, fire etc was booked in the Respective expenditure heads to which the loss pertained. During the year under review the Company has received Rs 700.00 Lacs under A/c Code 63.2 as Subsidy against loss on account of flood, cyclone, fire etc. However no expenditure was booked against this head. The expenditure incurred on the above account is subject to confirmation in the absence of complete information on the Nature of expenditure incurred to restore the losses whether it was revenue or capital expenditure.

In reply to this para it is submitted that loss on accounts of flood cyclone fire etc are shown in P&L Statement under Note No 2.30 ( Exceptional and Extraordinary item as per accounting policy of the Company and complete disclosure has been made in Notes to Accounts 2.33 (B) 31. During the year Company has been received Rs. 700.00 Lakh and incurred expenditure of Rs. 1297.05 Lakh which is clearly shown in P&L Statements Note No 2.30. Complete information in this regards has been supplied to the Auditors during the course of Audit. The version of Auditor is not correct and denied. Hence para may be dropped.

(vi) Prior Period Employee Costs The Company has charged arrears of D.A in prior period Employee. The Above accounting treatment of arrears of salary/ D.A is in contravention of the AS 5 Net Profit or Loss for the year , Prior Period items and Changes in Accounting Policies which states that prior period items refers only income and expenses which arise in current period as a result of errors or omissions in one or more prior periods. Thus current year employee costs are understated to the extent of ` 441.76 lacs and similarly the prior period expenses are overstated to that extent.

All the field Units has been directed to not charge arrear of DA in prior period in future. The point has been noted for future compliance.

24 Other Observations

226

(i) The BOD has sanctioned to write off the material washed away damaged due to flash flood in Andhra Khad and Pabbar River on 11 and 12.8.1997 amounting to ` 34.60 lacs vide resolution no 4.5 dated 16/12/2010 . We were explained that effect of the same have been given in the accounts but no documentary evidence was produced before us. In our opinion the Tangible assets are overstated to that extent.

The necessary accounting has been made by the units during FY 2014-15 & 2015-16 accounts and has not shown to the auditors by the Units. Hence, para may be settled.

(ii) Transfer of various HPSEB Limited Roads to HPPWD. c) The BOD vide resolution no 3.03 dated 17/09/2010 decided to transfer the ownership of lands free of cost to HPPWD and write off the cost in the books of HPSEB Limited. No sufficient information in respect of same has been provided. In the absence of information we are unable to comment on the same.

The necessary accounting adjustment has been made by the units. Hence para may be settled.

(b) The BOD vide resolution no dated 16.09 28/12/2013 has transferred Largi Barrage-Shilly Larji HPSEBL roads to HPPWD along with the title of the land free of cost amounting to ` 90.17 lacs. We were explained that effects of the same have been given in the accounts but no documentery evidence was produced before us. In our opinion the tangible assets are overstated to that extent.

The necessary accounting adjustment has been made in FY 2015-16 accounts by the units. Hence para may be settled.

(iii) The BOD has sanctioned to write off the stolen AAC amounting to ` 0.92 lacs stolen from Katolu store, Jeaori on 28/12/1999. vide resolution number 5.05 dated 14.3.2011, We were explained that effect of the same have been given in the accounts but no documentery evidence was produced before us.. In our opinion the inventories are overstated to that extent.

The necessary accountal adjustment has been made by the units. Hence para be settled..

(iv) Repair and Maintenance Line and cable Net Works It has been observed that company is charging the costs from above head to Revenue expenses pending allocation to capital works and Capital Work in progress at the close of the year. In the absence of sufficient information we are unable to comment on its effect to the profit and loss account and balance sheet.

We do not agree with the observations of Statutory Auditor. In this context, it is submitted that cost being charged on R&M of line and cable network is purely R&M cost of these lines and ultimately it is revenue expense being charged to P&L accounts of the Company. Hence para may be dropped.

(v) Old Un-reconciled entries in the Bank Reconciliation Statements The company is carrying over the old un reconciled entries of Bank Reconciliations statements and the same has not been adjusted at the close of the year the details of the same is as under:-

It is intimated that the necessary correspondence regarding reconciliation of old entries will be made after reconciliation/ reply from the bank concerned.

227

Amount in � lacsCurrent Year Previous Year

Short credit given by banks 1,830.80 2,017.16

Excess amount debited by banks 1,447.16 1,214.64

3,277.96 3,231.80

Less amount debited by banks 71.89 74.84

Excess Credit by banks 3,296.27 3,494.35

3,368.16 3,569.19

In our opinion in the absence of complete information we are unable to comment on its effect on the Profit & Loss account and balance sheet. (vi) Distribution Losses

Reference is invited to Note 2.33 (B) (41) regarding distribution losses. Some of the circles have very high distribution losses as compared to acceptable norms for electricity companies.

The distribution losses of the Company are within the limit fixed by the HPERC under acceptable norms for electricity Company. Hence para stand settled.

(vii) Leave Salary, Gratuity and PF Contributions

The company has not made any provisions in the books of accounts in respect of leave salary payable , gratuity payable, epf contribution payable as on 31st March 2015 ( refer Note 2.33(A)9) in respect of present employees as per AS 15 Accounting for Employees Benefits issued by the ICAI. In the absence of information we are unable to comment on its effect on the profit and loss account and balance sheet.

The policy of the Company with regards to accounting of leave salary, gratuity and PFcontribution has been disclosed at 2.33 (A) 9 of significaint Accounting Policies . However , action to follow AS 15 shall be taken in next year.

(viii) Contingent Liabilities in notes to accounts The Company has made disclosure of contingent liabilities in notes to accounts, sufficient information has not been provided in respect of the Contingent Liabilities provided in the notes to accounts. (Refer Note no 2.33 (B) 17

Complete disclosure on contingent liabilities has been made in Note 2.33 (b) 18 and sufficient information is made available with concerned Division, Hence para stand settled.

(ix) The Company has not provided any information of the suppliers / service providers who are registered as Micro, Small and Medium undertakings under "The Micro, Small and Medium Enterprises Development Act 2006" as on 31st March, 2015. In the absence of the information we are unable to comment on the same.

Point has been noted for future compliance.

(x) The Company has not provided any information in respect of the following comment of AG for the year ended on 13/06/2010.

(a) ` 7,025.00 lacs being the principal amount of power bond issued to clear HPSEB’s dues towards Central Public Sector Undertakings (CPSU’s) up to 30 September 2001. The liability for this amount was cleared by crediting income in contravention of the

The Management has constituted a Committee for settlement of old Para/ comments of CAG on annual accounts of the erstwhile Board and detailed reply of each comment is as per Annexure “A”. (a) In In reply to this Para, it is submitted that the Power bond worth Rs. 70.25 crore issued by the State Govt. in 2003 to enable HPSEB dues to discharge the outstanding liability of on accounts

228

orders (2005) of the Himachal Pradesh Government wherein it was stated that the liability on account of interest as well as repayment of Power Bonds had to be borne by the Board.

of purchase of power from CPSUs up to 30.9.2001 as per the provision of tripartite agreement between the Central Govt., RBI, and Govt. of H.P. as per clause -4 & 8.1 of the Tripartite Agreement executed by the State Govt. for settlement of SEB dues / securitization of past dues of CPSUs that the liability of Power Bonds is to be borne by the State Govt..The clause of TPA is reproduced as under:- Clause 4:- It is difficult to believe that SEBs can undertake reforms and simultaneously clear the overhang of past dues unless very large tariff increases are mandated, beyond levels justified by current costs to cover phase dues. In the circumstances, it is appropriate that a onetime settlement of outstanding dues should be attempted by shifting the burden of clearing these dues to state Govt. while providing a package of relief in this context and also a set of penalties and incentive favouring discipline and future reform. Clause 8.1:- All amount payable in accordance with the above shall be converted into long term loans to be repaid by the State Governments over a period of 15 years in 20 equal 6 monthly installments commencing from 1.10.2006 i.e. after a moratorium of 5 years. The State Govt. would issue bonds to the respective CPSUs who will be free to trade them in the market in a phased manner i.e. 10 percent of the bonds will be eligible for trading in the secondary market every year on a cumulative basis, thus releasing all the bonds for trading in a period of 10 years. Further, as per Sr. 18 & 19 of Ahluwalia Committee Report, the liability of Power Bonds is to be discharged by the State Govt. and extract of which is reproduced hereunder: “The Group felt that it was appropriate for the State Govt. to take on the liability of the SEBs and to discharge it in future from general revenues. Even if it is felt that future consumers of electricity should bears the burden of clearing past dues, it would be better for the State Govt. to achieve the outcome by levying a duty on electricity”. The above bonds were issued by the State Govt. in order to clear the HPSEB outstanding dues towards CPSU dues up to 30.9.2001 in terms of tripartite Agreement executed by Principal Secretary (Finance) to the Govt. of H.P on behalf of State Govt. The state Govt. is making repayment and interest of above amount regularly through RBI and Rs. 14.05 crore is outstanding up to September, 2014. Copy of statement enclosed against above is as per Annexure “D”. The agreement was to shift the burden of liabilities of HPSEB (PSU) to state Govt. as a onetime measures to facilitate initiation of

229

reforms in Power Sector as the tariff fixing/ determination mechanism being followed was arbitrary as Govt. would not allow the SEBs to fix the tariff in accordance with the input cost incurred for generation/ purchase of the power being supplied to the consumers. This had left a huge gap between the revenue receipt and expenditure. In view of the position, stated above, the Board is not liable to discharge the servicing of Power Bond. This liability is to be borne by the state Govt. out of Electricity duty imposed on electricity consumers and out of its general revenue. Thus withdrawing/ debiting the liabilities from accounts code 41.110, 41.112, 41.114 and 41.123 (Sundry creditor CPSUs) and crediting to Prior period income 65.2 is in order and version of the audit is not acceptable. In reply to this Para, it is submitted that the Power bond worth Rs. 70.25 crore issued by the State Govt. in 2003 to enable HPSEB dues to discharge the outstanding liability of on accounts of purchase of power from CPSUs up to 30.9.2001 as per the provision of tripartite agreement between the Central Govt., RBI, and Govt. of H.P. as per clause -4 & 8.1 of the Tripartite Agreement executed by the State Govt. for settlement of SEB dues / securitization of past dues of CPSUs that the liability of Power Bonds is to be borne by the State Govt..The clause of TPA is reproduced as under:- Clause 4:- It is difficult to believe that SEBs can undertake reforms and simultaneously clear the overhang of past dues unless very large tariff increases are mandated, beyond levels justified by current costs to cover phase dues. In the circumstances, it is appropriate that a onetime settlement of outstanding dues should be attempted by shifting the burden of clearing these dues to state Govt. while providing a package of relief in this context and also a set of penalties and incentive favouring discipline and future reform. Clause 8.1:- All amount payable in accordance with the above shall be converted into long term loans to be repaid by the State Governments over a period of 15 years in 20 equal 6 monthly installments commencing from 1.10.2006 i.e. after a moratorium of 5 years. The State Govt. would issue bonds to the respective CPSUs who will be free to trade them in the market in a phased manner i.e. 10 percent of the bonds will be eligible for trading in the secondary market every year on a cumulative basis, thus releasing all the bonds for trading in a period of 10 years. Further, as per Sr. 18 & 19 of Ahluwalia Committee Report, the liability of Power Bonds is to be discharged by the State Govt. and extract of which is reproduced hereunder:

230

“The Group felt that it was appropriate for the State Govt. to take on the liability of the SEBs and to discharge it in future from general revenues. Even if it is felt that future consumers of electricity should bears the burden of clearing past dues, it would be better for the State Govt. to achieve the outcome by levying a duty on electricity”. The above bonds were issued by the State Govt. in order to clear the HPSEB outstanding dues towards CPSU dues up to 30.9.2001 in terms of tripartite Agreement executed by Principal Secretary (Finance) to the Govt. of H.P on behalf of State Govt. The state Govt. is making repayment and interest of above amount regularly through RBI and Rs. 14.05 crore is outstanding up to September, 2014. Copy of statement enclosed against above is as per Annexure “D”. The agreement was to shift the burden of liabilities of HPSEB (PSU) to state Govt. as a onetime measures to facilitate initiation of reforms in Power Sector as the tariff fixing/ determination mechanism being followed was arbitrary as Govt. would not allow the SEBs to fix the tariff in accordance with the input cost incurred for generation/ purchase of the power being supplied to the consumers. This had left a huge gap between the revenue receipt and expenditure. In view of the position, stated above, the Board is not liable to discharge the servicing of Power Bond. This liability is to be borne by the State Govt. out of Electricity duty imposed on electricity consumers and out of its general revenue. Thus withdrawing/ debiting the liabilities from accounts code 41.110, 41.112, 41.114 and 41.123 (Sundry creditor CPSUs) and crediting to Prior period income 65.2 is in order and version of the audit is not acceptable.

(b) The above has been understated by ` 121.00 lacs due to non-account of interest on Power Bonds of ` 7,025 lacs. This has resulted in understatement of above head as well as Deficit to that extent

-As above-

(c) ` 5075.00 lacs on account of Interest on Power Bonds of ` 7025.00 lacs (October 2001 to 2009-10). This has resulted in understatement of Accumulated Loss as well as Other Current Liabilities to the above extent.

As above

(xi) No details has been provided for Non Provision of ` 160.00 lacs being the charges of power purchased from UPCL during December 1989 to 13 June 2010. This has resulted in understatement of above head of account and Deficit to that extent (prior period ` 153 lacs and current financial period ` 7.00 lakh) as reported by AG in their report for the year ended on 13/06/2010

Matter has been resolved in FY 2015-16 and be shown to Auditor. Hence para may be dropped.

231

(xii) Non Provision of ` 1374.00 lacs on account of royalty payable to the Government of H.P. at the rate of 12 per cent in respect of projects executed by the Board after 1990 as per the decision taken by the Government of H.P. in January 2006 . The other current liabilities is understated to the extent of above.

Entire payment of royalty has been booked and paid to State Govt. on a/c of royalty payable to Govt. of H.P. at the rate of Rs. 12 per cent in project executed by the Board after 1990. Hence, Para may be settled.

(xiii) Non Provision of ` 169.00 lacs incurred on abandoned Hydro Electric Project (Baspa I) and shown as recoverable. In our Opinion the tangible assets are overstated to the extent of above.

The expenditure incurred on abandoned HEP (Baspa-I) has been written off during the FY 2014-15 accounts after approval from competent authority. Hence, Para may be settled.

(xiv) Non Provision of assets valuing ` 243.00 lacs washed away due to flash floods (between 2003 to March 2009) and which were not in existence. In Our Opinion the tangible assets are over stated to the extent of above.

The assets value 243.00Lac washed away due to flash flood has been withdrawn from books of accounts in FY 2011-12 and matter was under investigation with police authority. The version of auditor to overstatement of tangible asset is denied. Hence, Para may be settled.

(xv) The erstwhile Board has transferred cost of Land measuring (113.06 & 149.04 Bighas) and Buildings (residential/non-residential) at Sainj Hydro Electrical Project amounting to ` 1,293.00 lacs transferred to M/s HPPCL/NHPC during 2009-10. In our Opinion the tangible assets are overstated to the extent of above.

The matter is under reconciliation and compliance shall be shown to auditor accordingly in due course.

(xvi) No provision of assets valuing ` 1,106 lacs created (2009-10) out of material provided by the consumers and being maintained by the Board in three Circles. The tangible assets and reserves and surpluses are understated to the extent of above.

The instruction for accounting of material provided by the consumers for capital works has been issued in FY 2014-15 and necessary accounting has been made by the all units. Hence, Para may be settled.

(xvii) The Company has shown an amount of ` 113.00 lacs incurred on behalf of M/s J.P. Associates to provide power supply to cement plant over and above the deposited amount. The consumer had refused to deposit the amount. In accordance with the provisions of Expenditure Regulations 2005, the excess expenditure was not recoverable from the consumer and had to be borne by the Board. In Our Opinion the current assets are overstated to the extent of above

The excess amount has been recovered from of M/s J.P. Associates to provide power supply to cement plant during FY 2014-14 by the ES Division, Solan. Hence, Para may be settled.

(xviii) The Company and its divisions has not provided to us Court cases details which are contingent in nature and in which contingent liability of the company is involved.

In reply to this para it is submitted that Company has complete detail of Court cases in division concerned which is contingent liability and sufficient disclosure in this regards has been made in Note 2.33 (B) 43. Hence para denied and may be dropped.

25 Non Compliance of Accounting Standards The Company has not complied with the following mandatory accounting standards issued by the Institute of Chartered Accountants of India

As already stated in Note No 2.33 of significant Accounting Policies of the Company, accounts of the Company are being prepared on accrual basis

232

1 Accounting Standard I- regarding disclosure of Accounting Policies:

vi) Non disclosure of policy of conveyance for accounting of losses of stock due to theft, fire, floods etc.

vii) Non disclosure of any policy on write off

& recovery of shortage from contractors and suppliers

viii) Non disclosure of any policy on write off

& recovery of shortage from employees

ix) Accounting treatment of capital and revenue items

x) No disclosure about the company

whether its going concern or not.

based on historical cost convention and are in line with the fundamental accounting principles of prudence, consistency and materiality except others wise stated. Financial Statement are prepared in accordance with the provision of the Companies Act, 2013 and relevant provision of Electricity Act, 2003. The improvement in accounts, as in any other shepre, is continuing process and there is always enterprises scope of minimizing the infirmities, more so in the case of a Company carved out from the predecessor entity operating for over four decades. The company has complete policy mentioned in Note 2.33 (A) 21 (h) (i) for accounting of losses of stock due to theft, fire, floods etc, write off & recovery of shortage from contractors and suppliers , treatment of capital and revenue items Caution has been taken to make appropriate disclosure either in the Accounting Policies or by way of Notes to Accounts, so that the transparency aspect is duly taken care of. Hence, the version of the Auditor for noncompliance to AS-I is correct & denied.

2 Accounting Standard 2: Valuation of Inventories

Accounting policy on inventory valuation, where the cost is determined on weighted average method and storage cost @ 3% and freight is added to the cost is not in line with the Accounting standard issued by ICAI . (Refer Note 2.33(A)7)

The effect of noncompliance with accounting standard 2 on inventories stores and spares and Profit & Loss account is un-ascertainable due to non availability of information.

The Company store/ inventories and spares are valued at cost or market value whichever is less. The cost is determined on weight age average method and cost of material at site is determined as per issue price. “Here the Company is deviates from the AS-2 and necessary disclosure has already been mentioned in Significant Accounting Policies & Notes forming parts of Accounts No 2.33 (A) 7. As regards version of Auditor for adding storage charges 3% are denied.

3 Accounting Standard 4: Contingencies and Events Occurring after the Balance Sheet Date The Company has not provided to us with the information on contingencies and events occurring after balance sheet date, neither the same has been incorporated in the accounts statements nor the same has been disclosed by the management in the notes to accounts .

This may be noted that although this year Balance Sheet is approved u/s 134of the Act) on 01th August 2016 and submitted to us for audit. The Material Contingencies and events occurring after balance sheet date which may affect the balance sheet at 31st March 2015 has not been disclosed in the notes to

The requisite disclosure/information has already been disclosed in Note No 2.33 (B) 17 of Notes to accounts. Hence version of Auditor for non compliance for AS-4 denied and point may be dropped.

233

accounts

The effect of noncompliance with accounting standard 4 on profit & loss account is un-ascertainable due to non availability of information. 4 Accounting Standard 5: Net Profit or Loss for the period, Prior Period Items and changes in Accounting Policies The Company has not complied with the requirements of Accounting standard 5 which deals with Prior period and extraordinary items, as the Company has no accounting policy for prior period items and changes in accounting policies and there is no disclosure of the same in the notes to accounts. The effect of noncompliance with accounting standard 5 on profit & loss account is un-ascertainable due to non availability of information

There exist proper policies for the accounting prior period income/ expenditure. On the date of balance sheet all the expense / income relating to year are being charged to the concerned head of account. When the accounts of the year have been closed, all the receipt/ expense relating to previous years are being charged to prior period expense/ income. However, the requisite information has already been given against Sr, 21 of significant accounting Policy of Company disclosed in Notes to Accounts.

5 Accounting Standard 6: Depreciation Accounting The Company has not complied with the requirements of Accounting Standard 6 which deals with accounting of Depreciation. The company has changed the method of providing the depreciation rates which was previously adopted by the Board and the depreciation has not been recalculated retrospectively in accordance with the new rates. The effect of noncompliance with accounting standard 6 on profit & loss account is un-ascertainable due to non availability of information.

The policy of Company in respect of depreciation & amortization has been disclosed at Note 2.33 (A) 6 of significant accounting policies.

6 Accounting Standard 9: Revenue recognition The Company has not followed the accounting standard 9 as required for revenue recognition, . The company has not disclosed any accounting policy in respect of violation charges, O & M Charges, Charges for interlinking facility, other O & M Charges and other charges recoverable.

The policy of Company in respect of Revenue Reorganization has been disclosed at Sr. No Sr. No 8 (a to K) of significant accounting policies & Notes to Accounts. Hence the version of the Auditor for non compliance is not acceptable and denied.

7 Accounting Standard 10: Accounting for Fixed Assets The Company has not complied with the requirements of the accounting standard 10 accounting for fixed assets while preparing the financial statements. The effect of noncompliance with accounting standard 10 on profit & loss account is un-ascertainable due to non availability of information.

The Policy of the Company in respect of Accounting Standard for fixed assets has been disclosed at Sr. No 2 of significant accounting policies and notes forming the parts of Accounts. Hence the version of the Auditor for non compliance is not acceptable and denied.

8 Accounting Standard 12: Accounting for Government Grant

234

The Company has not complied with the requirements of accounting standard 12 on accounting of Government Grants in relation to charging of the depreciation on the assets acquired from the grants The effect of noncompliance with accounting standard 12 on profit & loss account is un-ascertainable due to non availability of information.

The policy of the Company in respect of Government grants has been disclosed at Sr. No. 15 of significant accounting policies and notes forming the parts of Accounts. Hence the version of the Auditor for non compliance is not acceptable and denied.

9 Accounting Standard 15: Accounting for Employee Benefits The Company has not complied with the requirements of AS15 regarding accounting for employee Benefits while preparing the financial statements in respect of leave salary , gratuity and provident fund contributions payable to present employees. The effect of noncompliance with accounting standard 15 on profit & loss account is un-ascertainable due to non availability of information.

The policy of the Company in respect to accounting of terminal benefits has been disclosed at Sr. No 9 of significant accounting policies and notes forming the parts of Accounts. Here Company is partially comply the same.

10 Accounting Standard 16 Accounting of Borrowing Costs The company has not complied with the requirements of AS 16 issued by the ICAI which states that only interest paid on loan which has been used for construction of Assets during construction period has to be capitalized as part of the cost and after that the interest has to be charged to revenue. The effect of noncompliance with accounting standard 16 on profit & loss account is un-ascertainable due to non availability of information.

The policy of Company in respect of borrowing cost has been disclosed at Sr. No Sr. No 13 of significant accounting policies and notes forming the parts of Accounts. Hence the version of the Auditor for non compliance is not acceptable and denied.

11 Accounting Standard 22: Accounting for Taxes on Income

The Company has not recognized the tax effect of timing differences arising on account of carry forward losses as per Accounting Standard 22 "Accounting for Taxes on Income" issued by ICAI on accounting of prudence.

Needful shall be done during current year.

12 Accounting Standard 26: Intangible Assets

The Company has not complied with the accounting standard 26 issued on the Intangible assets which states that “an intangible asset should be recognized if, it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and the cost of the asset can be measured reliably.”

The Company has fully complied the AS 26 and cost of intangible assets has been measured/ recognized. The amortization period of these assets is five years. Hence the version of the Auditor for non compliance is not acceptable and denied.

13 Accounting Standard 28 : Impairment of Assets

The Company has not complied with the accounting standard issued on the Impairment of Assets issued

Needful shall be done as per requirement.

235

by ICAI while preparing the financial statements 14 Accounting Standard 29:Provisions,

Contingent Liabilities and Contingent assets

The Company has not complied with the accounting standard issued on the Provisions, Contingent Liabilities and Contingent Assets issued by ICAI while preparing the financial statements

The effect of the said qualifications where ascertainable the loss of current year ` 11351.11 lacs will be increased to loss of ` 219611.79 lacs. The reserves and surpluses will be ` (252107.81) lacs instead of ` -15801.25 lacs.The Share Capital will be ` 12550.18 instead of ` 52203.18. The Other long term liabilities will be ` 75176.65 lacs instead of ` 49418.38 lacs . The long term provisions will be ` 117420.67 lacs instead of ` Nil lacs.The Trade payables will be ` 190924.90 lacs instead of ` 190764.90 lacs. The other current liabilities will be `149395.96Lacs instead of ` 206567.85 lacs.The Tangible assets will be ` 517799.46 lacs instead of ` 512791.09 lacs. The Intangible Assets will be ` Nil instead of `1603.23. The capital work in progress will be ` 101117.02 lacs instead of ` 93777.89 lacs. The non current Investments will be ` 44225.36 lacs lacs instead of ` 43077.51 lacs. The long term loan and advances will be ` 13027.97 lacs instead of ` 18577.25 lacs. The other noncurrent assets will be ` 57886.72 lacs instead of ` 16771.08 lacs . The current investments will be ` Nil lacs instead of ` 1147.85 lacs. The inventories will be ` 6998.85 lacs instead of ` 7122.71 lacs. The Trade receivables will be ` 63924.54 lacs instead of ` 104596.13 lacs. The cash and cash equivalents will be ` 6221.08 lacs instead of ` 14546.68 lacs. The short term loans and advances will be ` 525.67 lacs instead of ` 46453.26 lacs . The other current assets will be ` (48374.03) instead of ` 92680.47 lacs.

The Company is complying this Accounting Standard and disclosed in Note No 2.33 (A) 12. Hence, para may be dropped. The CAG of India had certified the final accounts of the erstwhile HPSEB for FY 2010-11 by giving a true and fair view of the states of affairs with certain qualifications. The Accounts of the Company are being maintained as per old practice as such this is the 5rd Balance sheet of the Company and most of changes in accounts have been done by the Management as per requirement of the Companies Act thus complete changes/ status of the accounts of the HPSBL has not taken place during the period under audit. 20 Nos Accounting Slandered have been complied out of 29 AS in force and most of others are also partly complied. The reason for non compliance of these standards is primarily the fact that the accounts of the Company have been based on the provisions of Electricity Supply Accounts Rules, 1985. Caution has been taken to make appropriate disclosure either in the Accounting Policies or by the way of Notes to Accounts, so that the transparency aspect is duly taken care of. Neither mis-appropriation/ embezzlements have come to the notice of the Management nor pointed out by the auditors.

Opinion In our opinion, because of the significance of the matter discussed in the Basis for disclaimer of opinion paragraph, We report that the aforesaid standalone Financial Statements do not give the information as required by the Companies Act, 2013, in the manner so required and in conformity with accounting principles

236

generally accepted in India and because of the significance of the matters described in para above and for those qualifications where the effects are unascertainable and are of material nature, and considering the qualifications in this report and audit reports of earlier years of erstwhile HP State Electricity Board we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion therefore we disclaim our opinion

(a) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2015. (b) in the case of the Statement of Profit and Loss , of the loss for the year ended on that date.

(c) in the case of the cash flow statement of the cash flows for the year ended on that date Emphasis of the Matter (i) We further report that the Company’s net

worth as at the end of the financial year is completely eroded by its accumulated losses. However, the management has prepared the financial statements assuming that the Company will continue as a going concern. No sufficient information with regard to adequacy of resources in the operating cash flows to meet its future obligations has been provided by the management.

The Company has increased the authorized Share capital from 500 lac to 11000 lac and share capital of the Company is now Rs. 52203.18 Lac. The HPSEBL is State Govt. undertaking Company and Govt. is paying equity/ grants for the purpose of capital works every years. The Net worth of the Company as on 31.3.2015 is Rs 36401.92 Lac ( Equity 52203.18+ Reserves & surplus Rs.-15801.26 Lac ) and the version of the Auditor that the Company’s net worth is completely eroded by its accumulated losses is not correct and denied. Hence the para may be dropped.

(ii) We draw attention to Note 2.33 (A) 6 d where in the CWIP has been capitalized irrespective of the date of commissioning of the assets.

The expenditure on capital works in progress shall be transferred to appropriate assets at time of put to use in future and necessary instructions have been imparted to all concerned.

(iii) We draw attention to Note 2.33 (A) 7 the practice of the company is to value inventories at cost only.

Point noted necessary compliance shall be made in current year.

(iv) We draw attention to Note 2.33 (B) 26 the practice of the company to keep both the assets owned by own funds and from consumer contributions towards cost of capital assets in one account head and should be accounted for separately.

Point noted necessary compliance shall be made in current year

Report on Other Legal and Regulatory Requirements A. As required by the Section 143(3) of the Act, we report that:

237

c) We have sought and obtained all the

information and explanations which to the best of knowledge and belief were necessary for the purposes of our audit except the following:-.

3. Provision of Liabilities and Expenditure Year end provisions for liabilities / expenses booked at the close of the year are reversed in the subsequent accounting year by the Company. We further report, that during the year under review Company has made provision for expenses on the basis of budgets approved for particular works irrespective of the fact that actual expense accrued/ incurred and same is reversed in the subsequent period on receipt of actual bill / invoice of the vendor / contractor. The same results in overstatement of other current liabilities and revenue expenses / capital work in progress. The sufficient information with regard to quantum of such liabilities provided in financial statements has not been made available to us.

It is submitted that as per transfer scheme notified by the Govt ,of H.P. all assets and liabilities of erstwhile Board have been transferred to the Company and year end liabilities are reversed in the subsequent accounting year. Necessary instructions have been issued to the field units for booking of the expenditure based on actual expenses rather on budgeted expenses. However, system of providing liabilities on accrual basis at year end and appropriate system of accounting of the same shall be deliberated upon for necessary action.

2. It has been observed that expenses approved by Head Office till the year end are only provided in the financial statements. The work completed / services rendered / goods supplied till 31st March, 2015 and not approved by Head Office, has not been provided in the financial statements, however, the same have been recorded in the subsequent period on receipt of approval from Head Office. The information with regard to assets / expenses and liabilities has not been made available to us, therefore, impact of same on noncurrent assets / current assets/ noncurrent liabilities/ current liabilities / losses cannot be quantified.

All the information relating to the transactions made by the head office of the Company has been made available to the Auditors by the Company. As pointed out by Auditor in para, the work wise details of these expenses is available in our field units and shall be provided, if required by the auditors. However, system in this regard shall be reviewed & appropriately implemented.

3. Neither the Company has disclosed the facts in notes nor given any information as to settlement for those cases which were disclosed in earlier years balance sheet as notes to account / audit report / CAG comments / comments of works audit party/ comments of RA audit /pending court case / settlement where the Company had deposited deposits with various authorities amounts some of them may have been settled / awarded by the Court / Govt. / Arbitrator but the status was not disclosed by the Company. This may affect the profit & loss account and the balance sheet

The company shall disclose all the facts, as pointed out in para during the FY 2015-16 audit.

4 Old assets (recoverable) and old liabilities (Payables) in all the divisions being time barred mostly remained unconfirmed / unreconciled. The adjustment required if any may affect the profit &

Most of the old assets (recoverable) and old liabilities (payable) in all the Divisions being time barred have been got adjusted. Necessary action on remaining amount shall be taken after

238

loss account and the balance sheet.

completion of reconciliation process.

5 The Company has not provided sufficient physical verification records in respect of Tangible Assets, Capital Work in progress and Contracts in progress at the Division level. The adjustment required if any may affect the profit & loss account and the balance sheet.

The Company has provided all the records relating to fixed assets to the Statutory Auditors. However, where the records were not provided, the same shall be provided to the auditors. Point regarding physical verification of assets noted for future compliance.

6. The Company has not taken any reasonable steps to remove the qualifications reported in previous year report and earlier year reports of HPSEB by CAG while adopting the accounts for the current year, therefore old material qualifications has been considered in the current year report where the same is quantifiable as no information for the same has been provided by the company.

It is submitted that most of para/ qualifications of CAG on the earlier report of erstwhile HPSEB have been settled and compliance shown to Audit during FY 2012-13 & 2013-14. The version of the Auditor is denied Hence para may be settled.

7. The Unreconciled Balances of Following Divisions which were not accepted by the concerned Divisions or their Successor divisions were Taken into Suspense Account and are reflected by way of Gap. The difference in assets and liabilities of thses division were reflected as opening Surplus, however complete information was not provided to us whether the same relates to Surplus or inter unit transactions. These balances are subject to reconciliation since the Subhead details of the concerned division were not produced before us for verification:- - Khauli Construction Division. - Largi Construction Division. - Civil MTC Bawanagar. - Investigation Division Recong Peo.

In this regards, it is submitted that all these Units are defunct and closing balances of these units have been included in the consolidated Balance Sheet of the Company. the separate balances of these units are not being shown and the same has has been merged with Gap at Note 2.33 (B) 2 in FY 2013-14. The complete basis of adjustment has been shown to the Auditors during the course of Audit of FY 2013-14. Hence para denied and may be dropped.

8. The Head Office has not provided complete details/ information of the closing balance of sub heads operated by them in respect of respective DDO’s except , banks section, loan section , investment section , SLND and Pension II. The subsidiary records / register of individual DDO has not been produced for our verification. No sufficient information has been provided in respect of the liability of expenses, other liabilities and provisions at Head Office Level

The instructions have been issued to all the DDOs to produce the record to the Statutory auditors as per their requirement.

9. The reconciliation of the Fixed Assets Register and the Fixed Assets account in the account statement is pending since many years. The pendency is due to non availability of records/ information of earlier years or in some divisions the earlier years records has been burnt. The above pendency has been observed in Solan Circle, Rampur Circle, Rohroo Circle and other circles/ divisions also. The adjustment required if any may affect the profit & loss account and the balance sheet.

The Company is making efforts to get the fixed assets Registers at Divisional level through retired Accounts personnel and shall be complete in all respect during the current year. The necessary instructions in this regards stands issued/imparted to all the concerned to ensure compliance at the earliest please.

239

10. The reconciliation of the Works register and the Capital Work in progress account in the account statements is pending since many years. The pendency is due to non availability of records/ information of earlier years or in some divisions the earlier years records has been burnt. The above pendency has been observed in Solan Circle, Rampur Circle, Rohroo Circle and other circle also. The adjustment required if any may affect the profit & loss account and the balance sheet.

Instructions have been issued/imparted to all the concerned to reconcile the subsidiary record as per accounts.

11. No sufficient information and evidence in support of revenue expenses pending allocation over Capital Works has been provided to us. The adjustment required if any may affect the profit & loss account and the balance sheet.

All direct expenses allocable are booked in CWIP. The complete record of the same had been shown to auditors. Hence the version of the auditors is not correct. Hence para may be settled.

12. The subsidiary records in relation to consumer ledgers at the end of the year is pending for reconciliation at all divisions of the operation circles The adjustment required if any may affect the profit & loss account and the balance sheet.

Efforts are being made to reconcile the same at the earliest.

13. The Company has not provided any information about those consumers who has gone to the courts on account of disputes in the bills raised for energy charges.

The information with regards to those consumers who have gone to the courts on account of disputes in the bills raised for energy charges is available with concerned Divisions. Instructions have been issued to all to provide the information to the auditors.

14. The Company has not settled the old un reconciled entries in the bank reconciliations statements. The adjustment required if any may affect the profit & loss account and the balance sheet.

Efforts are being made to do Needful and various higher level meeting has been conducted by the Company with Bankers.

15 The Head office has not supplied to us the employees wise details of loans and advances to staff and interest accrued thereon . The adjustment required if any may affect the profit & loss account and the balance sheet.

Needful has been done and compliance of the same shall be shown by Head office during the audit of FY 2013-14 & 2014-15. Detail will be supplied during 2015-16 audit.

16 The Company has not provided complete details of amount recoverable on account of theft of property pending investigation( Account Code 28.885) . The adjustment required if any may affect the profit & loss account and the balance sheet.

The complete details of amount recoverable on account of theft of property pending investigation are available in all Units of the Company. However, where the detail of such amount not provided, the same shall be provided during FY 2015-16. Hence the para may be dropped.

17 The Company has not able to provide sufficient information/ confirmation from the parties in respect amount payable for purchase of power. The adjustment required if any may affect the profit & loss account and the balance sheet.

Efforts are being made to reconcile the amount of payable/receivable on a/c of purchase /sale of power. After reconciliation, the action shall be taken accordingly for adjustment of un-reconciled amount if any.

18 The Company has not able to provide reconciliation in respect of deposits and retentions from suppliers and contractors with the subsidiary records maintained.

The concerned DDOs are maintaining the subsidiary record of all the deposit/retention money received from suppliers and contractors. However, instructions have been issued to all the DDOs to complete the records in case the same

240

were not maintained and shown to auditors previously

19 The Company has not been able to provide reconciliation in respect of Deposits for Electrification Services Connections Account Code 47.1 with the subsidiary records maintained.

The concerned DDOs are maintaining the subsidiary record of all the deposit. However, instructions have been issued to all the DDOs to complete the records in respect of Deposits for Electrification Services Connections Account Code 47.1 with the subsidiary books.

20 No sufficient Information has been provided in respect of the Contingent Liabilities provided in the notes to accounts and further no information for contingent assets has been provided.

The contingent’s liabilities as on 31.3.2015 has been disclosed in Note No 2.33 (B) 18 which pertain to different Unit of the Company and sufficient information in this regards is with concerned Division. Hence para may be dropped.

21 The divisions has not provided sufficient information in respect of those assets where the consumer has deposited the departmental charges and executed the work by their own. The adjustment required if any may affect the Value of assets created and the reserves on the other hand.

The company has clear policy for those assets where the consumer has deposited the departmental of charges and executed the work on their own and latest instructions have been issued in FY 2014-15 to all concerned. Hence para may be settled.

22 During the year under review the financial statements are prepared on the revised schedule VI of the Companies Act 1956 .The basis for grouping of noncurrent liabilities/ assets and current liabilities and assets as per the requirements of revised Schedule VI for the current and previous year has not been produced for our verification. It was also observed that Figures of previous year was also regrouped in the schedules of balance sheet but the basis of regrouping was not provided to us.

The point has been noted for future compliance.

23. The Company is not complying with the latest provisions of the Service Tax Act in respect of service tax payable on taxable services availed (reverse charge mechanism) specified in the Service Tax Act .

The Company has fully complied with the lateswt provision of the services Tax Act in respect of service tax payable on taxable services availed (reverse charge mechanism) specified in the Service Tax Act and Auditors has not pointed out name of specific Unit who have not comply the same. Hence the version of the Auditor for non compliance is not acceptable and denied.

(b)In view of following in our opinion, proper books of accounts as required by Law have not been kept by the company so far as it appears from our examinations of those statement, registers and related records produced for our verification.

The books of accounts are being maintained as per Commercial Accounting system and all the DDO have been directed to prepare proper books of accounts as per requirement of law and Companies Act.

v. The Divisions of the Company has maintained cash & bank book and no corresponding transactions are recorded in ledger accounts. The adjustment entries were passed in the memorandum statement maintained to compile these financial statements, which is in contrary to the double entry system of recording of transactions as required by the Companies Act 2013. The Divisions extracts monthly Trial Balance (known

All the units of the Company are maintaining cash & bank book and record transaction in Ledger from April, 2015.Proper Trial Balance are prepared which is tailed with the subsidiary records. The compliance for the same shall be shown to the Auditors during the audit of FY 2015-16

241

as “TICHA”) for the purpose of consolidation of financials by Circle and Wings and Head Office on the basis of memorandum statements submitted by Circles and Wings compile these financial statements. The adequacy and correctness of memorandum statements and transmission of financial data do not ensure the correctness and sufficiency of accounting and recording of transactions and compilation of Balance Sheet and Profit & Loss account of the Company. vi. The Divisions do not compile the trial balance with balances of the previous accounting month. The Circles consolidates the Trial Balance provided by the Divisions on monthly basis and Head Office merges the monthly Trial Balance and at the end of year consolidated balances are drawn on the basis of memorandum record for the purpose of preparation of financial statements. The Company does not record balances provided by Divisions at Circle or at Head Office in proper financial books of accounts. These financial statements have been compiled on the basis of statements prepared on the basis of merged Trail Balances provided by Circles and not on the basis of books of accounts.

All the units has been directed to maintain / prepare trial balance with balances of the previous years accounting month. The proper books of accounts and Ledger as per Companies Act has been prepared in FY 2015-16 and shall be shown to the Audit during the audit of FY 2015-16

iii The consolidated statements / record compiled at Head Office and Circle do not provide complete details of Main Accounting Code and or Sub-Account Code’. The memorandum consolidated record does not provide Circle or Division wise detail of transactions disclosed in these financial statements.

The head office have been provided sub accounts code wise detail of Circle and head office (except suspense Accounts). The memorandum consolidated records of Circle/ Division shall be provided in FY 2015-16 accounts. Hence para stand settled.

iv The cash book maintained at Division is not balanced on daily basis, therefore, the cash book do not reflect the cash in hand on daily basis.

The cash book maintained at Divisions are now balanced on daily basis from FY 2013-14 and auditor has not making names of specific units where the cash book balances are not maintained on daily basis , Hence para may be dropped.

c) The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of statements except our observations in para 1(B), 23(ii) (iii), (iv) and (v);

Statement of facts, hence no comments

d) Except for the effects of the matter described in the Basis for Disclaimer of Opinion paragraph and non compliance of accounting standard specified therein , in our opinion, the Balance Sheet, Statement of Profit and Loss comply with the accounting standards referred to in section 133 of Companies Act, 2013 read with rule 7 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.

Efforts are being made & point noted. Necessary action shall be taken in current years

e) We were informed In terms of Exemption Notification Government of India, Ministry of Corporate Affairs Notification No 372 dated 05 June2015 Government companies are exempted from the applicability of section 164 of Companies Act 2013, therefore, no written representation from

Statement of facts, hence no comments

242

Board of Directors have been obtained. f) The Company has not taken any reasonable steps to remove the qualifications reported in earlier year reports while adopting the accounts for the current year, therefore old qualifications has been considered in the current year report also.

The management has formed various Committee (s) for settlement of old qualification reported by CAG, provided training to accounts personnel on Mtc. of books of accounts as per requirement of Companies Act, formed New Accounting Manual from M/s Deloitee and action taken report shall be shown to audit in next year.

Other Matters IV) The Company has not disclosed the impact

of of pending litigation on its financial position in financial statements.

V) The Company has not made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long term contract including derivative contracts

VI) No amount has been transferred to investor Education and Protection Fund by the Company during the year ended March 31,2015

Efforts are being made & point noted. Necessary action shall be taken in current years

ANNEXURE TO INDEPENDENT AUDITOR’S REPORT ON THE STANDALONE FINANCIAL STATEMENTS-

Forming part of auditors’ report on the Standalone financial statements of Himachal Pradesh State Electricity Board Limited for the year ended on 31st March, 2015. Referred to in Paragraph 1 of the report on Legal & Regulatory Requirements of Independent Auditor’s Report of Even Date (i) a) The Fixed assets Register maintained is not

as per Companies Act showing the complete details of cost, location, identification code, transfer write off, accumulated depreciation etc in respect of each individual items. The Fixed Assets register maintained at division level does not tallied with the sub head wise accounts of Fixed Assets maintained in the account statements.

b) The assets have not been physically verified by the Company. Since the detailed records of Fixed assets at different locations are not maintained as prescribed, the question of comparison of Fixed Assets with book records and ascertaining the discrepancies out of physical verification does not arise and its impact upon accounts is not ascertainable. (ii) a) As explained to us, stores and spare,

at all locations, has been physically verified. In our opinion, the frequency of physical verification is reasonable and adequate.

Efforts are being made to maintain the fixed assets register through retired Accounts personnel and GIS & GPS in process. Fixed assets register shall be updated on receipt of final report from firm and retainer Consultants who have assigned the preparation of FAR assignment by the Company. All the DDO’s have been directed to physically verify the fixed assets every year.

a) Statement of facts. Hence no comments

ii) Complete procedure to verify the store and spares have been prescribed by the Company.

243



iii) The Company has not granted any loans

secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of Companies Act 2013.

iv)a In our opinion and according to the information

and explanations given to us, internal control system/procedures followed by the Company do not commensurate with the size of the Company and the nature of its business with regard to purchase of stores, Fixed Assets machinery or spare parts. The Company has piled up stocks of Rs 7099.06 lacs ( Previous Year Rs 7675.88 lacs) as at 31st March 2015, out of which stock amounting to Rs 735.55 lacs (Previous Year Rs 845.50 lacs) which are more than five years old and has not been utilized till the close of the year.

iv)b As regards our comments for the sale

of goods and services the internal control over sale of power is lacking as reflected by high distribution losses in some operation circles , poor collection efficiency seen from rising level of debtors, non-classification of debtors into good, doubtful and bad, amount and not acting timely for recovery from permanently disconnected consumers and non-compliance of procedure for disconnection in case of default and non recovery of dues from government departments .

v) The company has not accepted any deposit

from the public under section 73 to 76 of the Companies Act, 2013.

vi) With pursuant to Rule made by the

Central Government of India, the maintenance of cost records have been prescribed under Section 128 of

Procedure for physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company as Stock Verifier verifies the same periodically. c) Verification reports are with concerned DDO and shall be shown to audit. iii) Statement of facts, hence no comments iv) Company has proper system of internal audit as per the size of the Company. Internal Audit party for commercial Audit and CA firms are engaged for internal audit. As regards piled up stocks these are critical items and used frequently for restoration of supply. iv) The distribution losses of the Company are with in the limit fixed by the HPERC and poor collection efficiency of the Company is due to non settlement of Govt. dues. v)Statement of facts. Hence no comments

vi) M/s Anirudh Joshi & Associate are the Cost Auditor of the Company and cost records are being prepared through outsourced Cost Audit firm M/s Anil Sharma & Company. Hence,

244

Companies Act2013 in respect of Electricity Supply. The Company has not prepared cost records as prescribed.

vii) a) The Company is generally regular in

depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-Lax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities except the following dues which is in arrears for more than six months . (IN Lakh)

Current

Year Previous Year

Electricity Duty 44898.63 33084.40 Municipal Taxes 746.85 670.94 Labour Cess 0.00 0.00 CPS Contribution 76.35 175.15

Service Tax 0.00 5.85


b) According to the information and

explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and other cess were in arrears, as at 31.03.2015 for a period of more than six months from the date they become payable.

c) According to the information &

explanation given to us, details of disputed dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited as on March 31, 2015 is Nil:

viii) The accumulated losses of the company

cannot be quantified due to quantum of qualifications involved and non availability of information and disclaimer of our opinion.

ix) In our opinion and according to the

information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company has opted for Financial Restructure Plan Issued by the

observations of audit are denied and para may be settled. vii) Statement of facts, hence no comments. b)Statement of facts, hence no comments c)Statement of facts, hence no comments viii) Efforts are being made to maintain the subsidiary records and to provide relevant information as per requirement of Companies Act. ix) Statement of facts, Hence no comments.

245

Govt. of India where the short term loans issued by the Banks have been converted into long term loans.

x) The Company has not given any guarantees

for loans taken by others from banks and financial institutions hence the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

xi) The term loans have been applied for the

purpose for which they were raised. xii) Based on audit procedures performed and

information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year under review, nor have been informed of such case by the management

x) Statement of facts, Hence no comments. xi) Statement of facts, Hence no comments. xii) Statement of facts, Hence no comments.

Place : Shimla Dated : 22-02-2017 Sd/- Chief Accounts Officer, F&A Wing, HPSEBL, Shimla-4

246


Consolidated Balance Sheet as at 31st March,2015.

(Amount in Lac) Particulars Note

No. As at 31st March,2015 As at 31st March,2014

1 2 3 4 5 6 I. EQUITY AND LIABILITIES

1 Shareholders’ Funds (a) Share Capital 2.1 52,203.18 45,893.18 (b) Reserves and Surplus 2.2 - 15,801.26 9,513.33

(c) Money Received against Share Warrants - 36,401.92 - 55,406.51 2

Share Application Money Pending Allotment

2.3

3,126.40

3,186.40

3 Non-Current Liabilities (a) Long-Term Borrowings 2.4 3,67,752.51 2,82,947.21

(b) Deferred Tax Liabilities (Net) - -

(c) Other Long Term Liabilities 2.5 49,418.38 38,857.76 (d) Long-Term Provisions 2.6 - 4,17,170.89 - 3,21,804.97 4 Current Liabilities (a) Short-Term Borrowings 2.7 1,11,880.46 1,81,103.30 (b) Trade Payables 2.8 1,90,764.91 1,58,677.93 (c) Other Current Liabilities 2.9 2,38,941.99 2,15,095.64 (d) Short-Term Provisions 2.10 16,628.86 5,58,216.22 14,604.03 5,69,480.90 TOTAL 10,14,915.43 9,49,878.78

II. ASSETS Non-current assets 1 (a) Fixed Assets (i) Tangible Assets 2.11 5,15,593.29 5,05,057.37 (ii) Intangible Assets 2.12 1,603.23 2,051.97

(iii) Capital Work-in-Progress

2.13 1,97,557.85

1,91,177.85

7,14,754.37 6,98,287.19 (b) Non-Current Investments 2.14 13,077.51 11,306.89 (c) Deferred Tax Assets (net) - -

(d) Long-Term Loans and Advances

2.15

2,347.87

4,375.19

(e) Other Non-Current Assets 2.16 16,844.79 7,47,024.54 14,316.58 7,28,285.85 2 Current Assets

(a) Current Investments 2.17 1,147.85 1,051.06 (b) Inventories 2.18 7,385.98 7,970.44

(c) Trade Receivables 2.19 1,04,596.13 79,961.79 (d) Cash and Cash equivalents 2.20 15,095.93 13,972.59 (e) Short-Term Loans and Adv. 2.21 47,049.04 42,351.30 (f) Other Current Assets 2.22 92,615.96 2,67,890.89 76,285.75 2,21,592.93 TOTAL 10,14,915.43 9,49,878.78

The accompanying notes form an integral part of these financial statements For and on behalf of Company Auditors Report Sd/- As per our report of even date (Er. P C Negi) Managing Director For Anil . K Sood & Company Sd/- Charterted Accountants FRN -007360N (Rajeev Sharma, IAS) Director( F&A) Sd/- (Gulshan Aggarwal) Sd/- Chief Accounts Officer ( CA Anil Sood))

Partner Place: Shimla M. No. 086068 Date 27.12.2016

247

HIMACHAL PRADESH STATE ELECTRICITY BOARD LTD. Consolidated Statement of Profit and Loss for the year ended 31st March, 2015

( Amount in Lacs)

Sl No. Particulars Refer Note No.


As at 31st March,2014

I. Revenue from Operations 2.23 558434.20 505090.40 II. Other Income 2.24 38241.68 17292.49

III. Total Revenue (I + II) 596675.88 522382.89

IV. Expenses:

Purchase of Power 2.25 370699.13 299272.73

Employee Benefits Expense 2.26 130594.07 125545.12

Finance Costs 2.27 53552.13 54617.27

Depreciation and Amortization expense 2.28 30532.24 30726.43

Other expenses 2.29 22052.36 27399.68

Total Expenses 607429.93 537561.23

V. Profit / (Loss) before exceptional and extraordinary items and tax (III-IV) (10754.05) (15178.34)

VI. Exceptional items 0.00 0.00

VII. Profit / (Loss) before extraordinary items and tax (V - VI) (10754.05) (15178.34)

VIII. Extraordinary Items 2.30 597.06 (1480.00)

IX. Profit / (Loss) before tax (VII- VIII) (11351.11) (13698.34)

X Tax expense:

(1) Current Tax 0.00 0.00

(2) Deferred Tax 0.00 0.00

XI Profit / (Loss) for the period from operations (VII-VIII)

(11351.11) (13698.34)

Earning (Loss) per equity share:

(1) Basic 2.31 (22.53) (44.09)

(2) Diluted (21.68) (33.28)

The accompanying notes form an integral part of these financial statements


Sd/- (Er. P C Negi) Auditors Report Managing Director As per our report of even date Sd/- For Anil K. Sood & Co. (Rajeev Sharma, IAS) Chartered Accountants Director( F&A) FRN 007360N

Sd/- (Gulshan Aggarwal)

Sd/- (Anil Kumar Sood)

Chief Accounts Officer Partner Place: Shimla M No. -086068 Date 27.12.2016

248


Consolidated Cash Flow statement for year ended 31st March, 2015

(Rs. In Lacs ) Sr. No. Description 2014-15 2013-14

A: Cash Flow from Operating Activities

(indirect method)

1 Net profit/(Loss) Before Tax. (11351.11) (13698.34)

2 Add:- Non Cash transactions:

Depriciation including adjustment 30819.12 30792.69

Interest Income (145.64) (527.85)

Deffered Revenue Expenses write back (477.22) (477.97)

Interest & finance charges 60361.62 60638.88

Unbilled Revenue (21619.65) (24252.28)

Loss on a/c of flood, cyclone, fire etc. (1275.95) (1570.90)

3 Operarting Profit/(Loss) Before Working Capital Changes (1+2) 56311.17 50904.23

4 Adjustment for

Decrease in trade & other Recoverables 5529.90 35769.18

Descrease in Store & spare 467.50 2258.57

Decrease in Trade Payable (32086.97) (57968.94)

5 Cash Generated from Operations (3+4) 30221.60 30963.04

6 Current liabilites & provision 8435.64 5546.72

7 Shoet terms provision (Adv tax) (42.60) 12.65

7 Sub-Total (5-6 & 7) 38614.64 36522.41

8 Net prior Period (Expenses/Income ( Net of Priod period Dep.) 9224.84 (13145.89)

9 Fringe benefit Tax 0.00 0.00

10 Net cash Flow from Operating Activities ( 7+8+9)(A) 47839.48 23376.52

11 B: Cash Flow From Investing Activities.

i) Purchase of fixed assets & CWIP-increased/(decreased) 23019.15 10161.21

ii) Disposal of fixed assets. 0.64 0.00

iii) Service line contribution- increased. (12813.02) 171.71

iv) purchase of investments- increased/(decreased) 1770.62 7960.52

v) Deffered revenue expenditure- increased (12992.56) (406.97)

vi) Interest Income 72.39 136.93

Net Cash Used in Investing Activities. (942.78) 18023.40

12 C: Net Cash Used in Financing activities

i) Proceeds from long term & Other Borrowings 88251.54 120444.02

ii) Repayment of Long Term & Other Borrowings (62480.58) (114781.29)

iii) Interest & finance Charges (paid) (60286.99) (60547.98)

iv) Consumer security deposits-increased 2185.65 1765.80

v) Grant-increased 700.00 1595.99

vi) Reserves funds (14142.92) (649.18)

vii) Equity . 0.00 1775.00

249

Net Cash generated from Financing Activities ( I to vii) (C ) (45773.30) (50397.64)

13 Net increase in Cash and cash equivalent ( A+B+C) 1123.40 (8997.72)

14 Opening balance of Cash and cash Equivalents 13972.59 22970.31

15 Closing Balance of Cash & Cash Equivalents. 15095.99 13972.59

Sd/-

(Er. P.C. Negi) For Anil K. Sood & Co.

Managing Director Chartered Accountants

( Firm No. 007360N)

Sd/- Sd/-

(Sh. Rajeev Sharma) (CA Anil K. Sood)

Director ( F&A) M. NO. 086068)

Sd/-

(Gulshan Aggarwal) Chief Accounts Officer Place: Shimla Date: 27-12-2016

CONSOLIDATED ANNUAL REPORT 2014-15 2 Notes to Accounts

The Amounts in consolidasted financial statements are presented in Indian Rupees and all figures have been rounded off to the neareast rupees lakh except when otherwise stated. The consolidaion with the balances of BVPCL have been made line itme wise.

The financial statement for the year ended 31st March, 2015 were prepared as per the provision under revised scheduled VI to the Companies Act, 1956. The previous year figures have also been reclassified/ regrouped/ rearranged wherever necessary to conform to this year's classification.

2.1 Share Capital (Amount in Lac)



Authorised

Equity Shares at par value ` 100/- each 110000000 1,10,000.00 110000000

1,10,000.00

EQUITY SUBSCRIBED AND FULLY PAID UP Equity Shares at par value ` 100/- each fully paid up 52203180

52,203.18 45893180

45,893.18

Total 52,203.18 45,893.18 \ 2.1. Disclosure pursuant to Note No 6 (A) (d) of Part I of Revised Schedule VI to the Companies Acts, 1956 - No of Shares at the beginning & at the end of reporting period

(Amount in Lac) Accounts Code

Name of Shareholder As at 31st March, 2015 As at 31st March, 2014


54.505 Number of shares Outstanding at the beginning 45893180

45,893.18 11400

11.40

Number of shares issued during the year. 6310000

6,310.00 45881780

45,881.78 Share bought back during the year 0 - 0 -

Number of shares outstanding at the end. 52203180 52,203.18 45893180 45893.18

250

2.1.2 Disclosure pursuant to Note No 6 (A) (g) of Part I of Revised Scheduled VI to the Companies Act, 1956-Details of Shareholding more than 5% shares in the company:

Name As at 31st March, 2015 As at 31st March, 2014

No. of Equity

Shares % of Shareholding

No. of Equity Shares

% of Shareholding

1. Governor of Himachl Pradesh 52201780 100.00 45891780 99.996

The remaining shares are in the name of nominee Directs of HP Govt

Total 99.996

2.2 Reserves & Surplus (Amount in Lac

Accounts Code


Capital Reserves / Capital Grants from Go HP & GOI

54.6, 55.3, Opening Balance

92,251.83

92,187.83

55.5 Add: addition during the year

-

64.00

Less : Utilised during the year

-

-

Closing balance

92,251.83

92,251.83

Capital Reserves / Other Grants and Subsidies

56,55.1, Opening Balance

1,02,843.53

1,03,728.42

55.2,55.5 Add: addition during the year

9,021.52

6,006.32

55.901 less: Utilised/ amortized during the year

22,153.52

6,891.21

Closing balance

89,711.53

1,02,843.53

General Reserves

Opening Balance ( Leave encashment fund)

1,979.33

1,849.84

57.182 Add: addition during the year -

831.49

129.49

less : Utilised during the year

-

-

Closing balance

1,147.85

1,979.33

Deficit

Opening Balance -1,87,561.37 -1,73,863.03

58 Add: Loss during the year as per statement of P & L A/c - 11,351.11 -13,698.34

Closing balance - 1,98,912.48 -1,87,561.37

Total - 15,801.26

9,513.33

251

2.3 Share Application Money Pending Allotment (Amount in Lac) Accounts Code


54.506 Application money pending allotment

3,126.40

3,186.40

2.4 Long Term Borrowings (Amount in Lac)

Accounts Code


Term Loans

A Secured

52, 53 Banks

-

-

54.2 Financial Institutions

1,65,653.15

1,64,572.32

Others

-

-

Total A

1,65,653.15

1,64,572.32

B Unsecured

Banks

8,495.72

14,500.00


93,462.15

51,980.43

Others

840.46

840.46

Loan Restructured under FRP

99,301.03

51,054.00

Total B

2,02,099.36

1,18,374.89

Total Long Term Borrowings (A+B)

3,67,752.51

2,82,947.21 2.41 Loans from Financial Institutions PFC / REC / LIC were obtained under different schemes for creation of fixed assets. The assets created with the loans are hypothecated with the REC/PFC/LIC.

Secured

REC

70,449.76

67,405.13

PFC

18,254.40

26,776.96

LIC

-

-

PFC ( APDRP Part-A)

4,139.49

5,347.80

PFC ( APDRP Part-B)

12,187.08

10,168.40

PFC ( APDRP Part-B) CP Loan

1,942.44

-

Total

1,06,973.17

1,09,698.29

BVPCL PFC Loan

58,679.98

54,874.03

1,65,653.15

1,64,572.32

252

Unsecured

Banks

H P State Coop. Bank, Shimla

8,495.72

14,500.00


-

-


-

-

Total

8,495.72

14,500.00


REC ( RGGVY )

2,245.15

2,741.43

Non SLR Bonds

83,717.00

39,239.00

LIC

7,500.00

10,000.00

Total

93,462.15

51,980.43

Others

ADB Loan through H P Government

840.46

840.46 APDRP Loan through H P Government incl. Interest accrued

-

-

RGGVY Loan H P Government

-

-

Total

840.46

840.46

Term Loan Restructure under FRP

51,054.00

Kangra Central Cooperative Bank 290 cro

29,000.00


30,084.00

Central Bank of India

5,000.00


9,477.00

Punjab & Sind Bank

25,740.03

99,301.03

51,054.00 The repayment of BVPCL loan shall start six month after the commissioning of Project & repayment of loan shall be completed in equal fourty quarterally installments after the commissioning the project. The terms of reference of HPSEBL has been shown in notes to accounts. 2.5 Other Long Term Liabilities (Amount in Lac)

Accounts code As at 31st March, 2015 As at 31st March, 2014

46101-128, 47.1, Deposits, Retention Money from Contractors and Others

9,221.67

9,359.40

57.11 Contributory Provident Fund

-

0.00

57.12 GPF

1,30,679.80

1,14,734.55

20.14 less : GPF Investments - 1,07,233.62 - 99,900.17

253

57.180-181 Other Funds-CPS

220.64

872.50

47.501,47.7, 47.9, 47.320

Advance for Infrastructure development / Others

16,529.88

13,791.49

Total

49,418.38

38,857.76

2.6 Long Term Provisions (Amount in Lac)


Provision for losses pending investigation 0.00 0.00 2.7 Short Term Borrowings (Amount in Lac)

Accounts code


Secured Loans

50.2, 50.3 Overdraft / Cash Credit limit from banks

61,635.63

73,297.11

Cash Credit limit from banks

-

-

Unsecured Loans

50.1 Over Draft / Cash Credit limits from banks

50,244.83

38,443.11

Short Term Loans from banks

-

69,363.08

Total

1,11,880.46

1,81,103.30 2.71 Overdraft from banks are secured against FDR's.

Over drafts

State Bank of India

9,065.34

6,408.75

UCO Bank

3,808.77

3,395.62

State Bank of Patiala

5,156.18

5,051.58

Bank of Baroda

3,695.49

3,670.89


16,862.71

16,794.79

H P Cooperative Bank

10,372.58

12,637.57

Indian Overseas bank

1,044.99

1,042.43

Punjab National Bank

1,868.13

12,003.77

Central bank of India 946.03 800.31

Punjab & Sind bank

3,545.30

4,282.15

Working Capital (50.3)

-

-

H.P. Co-op Bank

3,017.56

2,800.00

UCO Bank

-

2,000.00

Punjab national Bank

1,456.15

1,500.00


796.41

909.26

254

Total

61,635.63

73,297.11

Unsecured

Cash Credit limit against Escrow cover

State Bank of India

8,966.52

9,265.70


12,000.00

9,000.00

PNB

9,862.80

-

Cenara bank

19,415.51

20,177.41

Total

50,244.83

38,443.11

Short Term Loans from Banks


-

16,000.00


-

10,000.00

M/S PFC Ltd.

-

16,363.08

P& S bank

-

27,000.00

Total

-

69,363.08 2.8 Trade Payables (Amount in Lac)

Accounts code


Sundry Creditors

41 Purchase of Power

1,90,764.91

1,58,677.93

Others

-

-

Total

1,90,764.91

1,58,677.93 2.9 Other Current Liabilities (Amount in Lac)


Current Liabilities of Long Term debt

Secured

17,899.32

15,296.54

52, 53 Unsecured

20,346.35

12,910.48

54.2

Interest accrued but not due on :

46.710-735 Term loans

13,776.41

11,047.67

46.714 Bonds

2,080.37

1,196.09

Other Payables:

46.71-46.719, 46.31-35

Liability for employees remuneration and benefits

4,619.45

4,635.46

46.720 Unclaimed Interest

64.00

74.00

255

46.920 Security deposits from employees -17.95 - 17.99

46.922,934 Advances received from contractors / others

1,069.54

115.43

46.2, 46.3, Amounts payable to GoHP / other departments

62,607.72

61,543.37

44.406-420, 46.910

Other payable for expenses / employee deductions

761.87

560.74

42.1, 42.3, 43.1-2 Liability for Purchases -Capital / Others

23,835.22

19,578.14

46.924,925,46.901,46.902 TDS and other Statutory Taxes payable

487.69

550.51

46.9,47.3,47.5,47.6


62,128.16

60,846.60

48.1 Security deposits from consumers

29,283.83

26,758.60

Total

2,38,941.99

2,15,095.64

2.10 Short Term Provisions (Amount in Lac)

Accounts code


Unfunded Employee Benefits

44.340 Leave Salary

2,402.64

1,374.05

Others

-

-

44.320 Bonus

33.93

16.72

44.330 Medical expenses

493.55

438.97

48.3 Interest Payable on Consumer deposits

1,576.67

1,916.25

Provision of advance tax (BVPC)

-

42.60

46.430, 44.110 Provision for expenses

12,122.07

10,815.43

Total

16,628.86

14,604.03

256

HIMACHAL PRADESH STATE ELECTRICITY BOARD Note No. 2.11

FIXED ASSETS AND PROVISION FOR DEPRECIATION FOR FY 2014-15

(Amount in Lacs)

GROSS BLOCK

PROVISION FOR DEPRECIATION NET BLOCK

Sl.No.


OB as on 01.04.2014


Adjustments during FY 2014-15


Gorss Block At the end of March, 2015


Depreciation for the period 01.04.2014 to

31.03.2015

Adjustments or

deductions 2014-15




1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Land & Land Rights 10.101 9786.07 97.22 22.48 0.00 9860.80 0.00 0.00 0.00 0.00 9860.80 9786.07

2 Land held under lease 10.102

&103 590.01 0.00 17.95 0.00 572.06 96.70 1.62 0.00 98.33 473.73 527.82

3 Buildings 10.2 24192.87 424.41 0.00 0.00 24617.28 8908.94 1845.26 0.00 10754.20 13863.08 15283.93

4 Hydraulic Works 10.3 113045.66 1375.21 2037.52 0.00 112383.36 40994.40 5940.22 0.00 46934.63 65448.73 72051.26

5 Other Civil Works 10.4 54300.73 506.61 0.00 0.00 54807.34 10370.25 1952.23 0.00 12322.48 42484.87 43930.48

6 Plant & Machinery 10.5 223089.65 15580.96 1.42 0.00 238669.19 47550.58 10766.54 0.00 58317.12 180352.07 174898.53

7 Lines & Cable Net 10.6 222786.11 18689.63 0.00 0.00 241475.75 41550.42 7527.68 0.00 49078.10 192397.65 181231.37 8 Vehicles 10.7 1589.06 103.83 2.08 0.00 1690.81 1316.38 85.04 0.00 1401.42 289.38 277.00

9 Furniture & Fixtures 10.8 1081.03 21.52 0.00 0.00 1102.55 684.59 65.03 0.00 749.62 352.93 396.45

10 Office Equipments 10.9 5715.02 4869.93 0.00 0.00 10584.95 806.84 868.31 0.00 1675.15 8909.80 4906.97

11 Date Processing Euipments 10.95 318.48 0.00 0.00 0.00 318.48 0.00 0.00 0.00 0.00 318.48 319.68 10(s) 841.79 0.00 0.00 0.00 841.79 0.00 0.00 0.00 0.00 841.79 1447.81

Sub-Total 657336.49 41669.33 2081.45 0.00 696924.37 152279.11 29051.94 0.00 181331.05 515593.29 505057.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10 Capital expenditure resulting in an

assets not belonging to the Board. 11.101 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

11 11.102 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Assets Transfer I/Ward 13.4 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Grand Total 657336.49 41669.33 2081.45 0.00 696924.37 152279.11 29051.94 0.00 181331.05 515593.29 505057.37

Gross Block does not include value of small and low value assets each costing below Rs. 500/- charged to revenue accounts in the year in which they are first put to use.

Value of such assets charges to revenue accounts during the year 2014-15 Rs. Nil

257


Note No. 2.12 INTANGIBLE ASSETS AND PROVISION FOR DEPRECIATION FOR FY 2014-15.

(Amount in Lac) GROSS BLOCK PROVISI

ON FOR DEPRECI

ATION

NET BLOCK

Sl.No.


OB as on 01.04.2014


Adjustments during FY 2014-15


Gorss Block At the end of March, 2015


Depreciation for the period01.04.2014 to 31.03.2015

Adjustments or deductions 2014-15




1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Intangible Assets 18.301 2243.70 0.00 0.00 0.00 2243.70 191.74 448.74 0.00 640.48 1603.23 2051.97

Total 2243.70 0.00 0.00 0.00 2243.70 191.74 448.74 0.00 640.48 1603.23 2051.97

258


Note No. 2.13 Sr. No. Particulars Account

s Code As at 1st

April, 2014 Additions


Transfers/ Adjustment

Total Capitalised during the year

2014-15

As at 31st March,2015

1 Land & Land Rights 14.1 2217.91 223.02 0.00 2440.93 360.76 2080.17

2 Building& civil structure 14.2 2437.80 4281.15 44.57 6674.38 994.79 5679.59

3 Hydraulic Works 14.3 29492.83 2733.06 0.00 32225.89 241.85 31984.03

4 Other Civil Works 14.4 35814.43 2623.63 3.33 38434.72 600.18 37834.55

5 Plant & Machinery-T&D 14.5 22012.72 14008.77 0.00 36021.49 14151.39 21870.10

6 Lines & Cable Network etc. 14.6 56387.11 25040.38 0.00 81427.49 27296.46 54131.04

7 Vehicles 14.7 511.05 74.66 0.00 585.71 28.41 557.30

8 Furniture & Fixtures 14.8 10.41 149.82 0.00 160.23 5.50 154.74

9 Office Equipments 14.9 4.75 0.00 0.00 4.75 0.00 4.75

14s -9617.34 0.00 0.00 -9617.34 0.00 -9617.34

Sub-Total 139271.67 49134.50 47.90 188358.26 43679.33 144678.93

Other Assets at construction stage 0.00 0.00 0.00 0.00 0.00 0.00

1 Contract- in Progress 15.1 401.65 0.00 0.00 401.65 356.96 44.70

15 s 182.93 0.00 0.00 182.93 0.00 182.93

Incidential Exp. BVPC 39340.23 8392.92 0.00 47733.15 0.00 47733.15

2

Revenue Expense Reclassified Pending Allocation over capital works 15.2 11981.37 5352.20 0.00 17333.58 12415.44 4918.14

Sub Total 51906.19 13745.12 0.00 65651.31 12772.40 52878.92

Total:- 191177.85 62879.62 47.90 254009.58 56451.73 197557.85

0.00 0.00 0.00 0.00 0.00 0.00

Previous Year 178508.46 78933.41 0.29 257441.58 66263.72 191177.86

259

2.14 Non Current Investments (Amount in Lac)

Accounts code


Investments in Shares in :

20.340 Others ( HPPCL) 1307751 equity shares of ` 1000/- each

13,077.51

11,306.89

20.430

Investment in BBMB for upgradation / Moderation of Bhakra dam Power House Right Bank in H.P.

755.20

755.20

Investment in BBMB for Renovation & Moderation of BBMB Ptroject in H.P.

566.22

205.64

Less Diminuation

1,321.42

960.84

Balance investment in BBMB

-

-

Total

13,077.51

11,306.89

2.15 Long Term Loans & Advances (Amount in Lac) Accounts code As at 31st March, 2015 As at 31st March, 2014

Capital Advances

Secured

-

-

25 Unsecured - Considered Good

1,766.17

3,753.42

20.330 Loan to subsidary BVPCL-Considered Good

-

-

Loans & Advances to Employees

27.1 Secured

294.88

342.63

Unsecured - Considered Good

-

-

Loans & Advances Others

28.860-861 Unsecured - Considered Good

190.54

182.87



-

- 28.304,330, 220 Others

96.27

96.27

Total

2,347.87

4,375.19

2.16 Other Non Current Assets (Amount in Lac) Accounts code


16 Assets not in use

2,814.54

960.65

17 Deferred Miscellenous expenses

11,625.32

11,692.58

260

24 Trade receivables-defaulters

1,293.75

613.38

22.7, 22.8 Inventories-Scrap/other materials/excess/shortages

532.23

415.28

Interest Accrued & due on


-

-

28.290 Others

0.43

0.44


28.2, 28.3 Staff loans & advances

491.18

546.91

28.390 Others

87.34

87.34

Total

16,844.79

14,316.58 2.17 Current Investments (Amount in Lac)


20.112, 113 Leave Encashment and CPS fund Investment

1,147.85

1,051.06

2.18 Inventories (Amount in Lac)


22.6 Materials Stock

7,385.98

7,970.44

Less : Provision for Shortage and Obsolescence

-

-

Total

7,385.98

7,970.44 2.19 Trade Receivables (Amount in Lac)


23.1, 23.6, 23.7, 23.8 Outstandings for sale of power

83,537.99

56,263.23

23.4 Others (un billed Revenue )

21,619.65

24,252.28

23.9 Less: Provision for doubtful debts -

561.52 -

553.72

Total

1,04,596.13

79,961.79

Out of above Trade receivables outstanding for period exceeding six months from the date they were due for payment


69,654.43

44,654.43

Unbilled amount considered good 21,619.65 24,252.28

Other Trade Receivable


13,322.05

11,055.08 Total 1,04,596.13 79,961.79

2.19.1 In the opinion of Company, trade receivable are the value as stated in the accounts, if realised in the ordinary course of Business.

261

2.20 Cash and Bank Balances (Amount in Lac)

Accounts code


24.110 Cash and Cash equivalents

0.09

0.08

24.120 Postage stamps in Hand

1.81

1.79

24.2 Imprest with Staff

0.64

0.59 24.3,24.4

,24.5 Balances with Banks

14,515.07

11,043.81 20.290, 296 (s) FDR's > 3M

578.32

2,926.32

Total

15,095.93

13,972.59 2.21 Short Term Loans & Advances (Amount in Lac)

Accounts code



26 Secured Considered Good

6,059.23

2,947.24

Less : Provision for doubtful advances

-

-

Others 27.1, 27.2, 9 Advance recoverable from employees

82.06

67.27

28.820 Prepaid expenses

15.99

107.03

27.4 Advance tax and tax deducted at source

3,500.15

2,154.19 28.7, 28.8

Amount recoverable- Government departments

4,099.76

3,675.27

28.761,773 Amt recoverable- Related parties

5,936.18

7,686.56

287, 28.8 Amount recoverable others

8,640.48

6,767.74

Deposits

14,767.95

14,767.92

28.4 Amount recoverable from employees

179.51

191.59

Interest accrued but not due from

28.365 Employees

1.15

1.15

28.310 Others

3,766.58

3,985.34

Total

47,049.04

42,351.30 2.21.1 In the opinion of Company, trade receivable are the value as stated in the accounts, if realeised in the ordinary course of Business.

2.22 Other Current Assets (Amount in Lac) Accounts

code As at 31st March, 2015 As at 31st March, 2014

28.1 Receivables from scrap sale / miscellenous. - 4.53

447.28

23.2 Electricity duty recoverable from consumers

1,254.86

1,134.97

262

28.620-626 Grant /Subsidies receivable GoHP

55,005.29

50,721.73

30-39 Inter unit transactions

36,360.35

23,981.78

including Current assets other (BVPCL)

-

Total

92,615.96

76,285.75 Revenue from Operations Note 2.23 ( Amount in Lacs)


2015


Total Inter State Sale of Power

PSEB 61.101 0.00 0.00

UPSEB 61.103 0.00 0.00

Sangroli (NTPC) 61.110 0.00 0.00


Power Trading Corp. of India 61.114 2541.53 0.00

Through Banking-BRPL/BYPL 61.119 21459.38 19227.02

Through Banking-Haryana Power Corp. Ltd. 61.120 17318.40 15375.49

Through Banking-P.S.E.B 61.121 30885.84 20398.52

Consumers Deviation of Malana. 61.123 81.87 0.00

Reactive Engergy from various CPU's/SEBs 61.124 404.68 480.87

UI Charges /Sale of Power NREB Through PGCIL. 61.130 1176.22 3466.63

M/S Indian Energy Exchange & Power exc. Of India 61.148 20946.71 13514.84

UPPCL Bkg 7637.00 9494.96

Sale of Power UPPCL& other through MPPCL 61.149 20703.59 0.00

Chitassgarh 61.150 1055.25 0.00

Sub-Total(A) 124210.46 81958.33

REVENUE FROM SALE OF POWER OTHER CONSUMERS

Domestic 61.201 to 209 76619.34 70387.23

Commercial 61.211 to 219 26823.27 25647.52

Small Power 61.221 to 229 &

377 3473.88 3186.04

Medium Power 61.231 to 240 &

378 8897.83 9500.16

Large supply 61.241 to 250 &

379 238965.18 243483.15

Agriculture/Irrigation 61.251 to 259 2937.74 2524.47

Public Lighting 61.261 to 269 744.04 563.61

Bulk and Grid supply 61.271 to 290 10040.95 10402.09

263

Revenue from Sale of Power Non Domestic/Non commercial

61.301 to 309 8378.81 7216.60

Other (Water Works and sewerage) 61.350 to 357 &

376 33722.27 31017.67

Temporary Metered Supply 61.373 to 375 1460.94 1629.30

Total (B) 412064.24 4,05,557.84

Total Revenue (A+B)

5,36,274.70 4,87,516.17

Electricity Duty recovery 61.501 to 514 33937.19 37603.74

Meter Rent/Service Line Rentals 61.6 4402.86 4551.69

Recoveries for theft of power and Mal practice. 61.711 to 61.729 5.41 5.22

Peak Load vialotion charges 61.741 to 61.744 3549.47 41.71

Sub- Total 41894.93

42,202.36

Wheeling charges recoveries 61.8 13666.90 11978.76

Misc. Charges from consumers 61.9 534.87 996.31

Electricity consumption tax levied by MCs/NACS 61.941 to 953 376.04 362.99

Sub- Total 14577.80

13,338.06

GROSS REVENUE FROM SALE OF POWER 592747.43 5,43,057.13

Less: Electy. Duty Payable (Contra) 61.541 to 553 33937.19 37603.74

Electricity consumption tax (Contra) 61.961 to 973 376.04 362.99

Sub- Total 34313.23

37,966.73

Total

5,58,434.20 5,05,090.40 Other Income

( Amount in Lacs)


2015


Interest on staff loans and advances. 62.210 to 219 32.18 53.76

Income from investments 62.220 to 240 9.03 420.17

Delayed payment charges from consumers. 62.250 7361.10 5421.58

Interest on advances to suppliers / contractors. 62.260 71.01 136.93

Income from Trading. 62.3 107.70 264.05

Other Misc receipt from trading 62.4 0.00 0.00

Income from staff Welfare activities. 62.6 13.62 7.76

Miscellaneous receipts. 62.9 4070.25 3115.85

Total 11664.89 9420.10

Revenue grant and subsidies 63.121 0.00 0.00

264

Amortization of Govt. grants and consumers contributions

63.140 5317.50 2621.18

Prior Period income

Receipt from consumers relating to prior period 65.2 66.06 31.47

Interest income for prior period 65.4 401.58 0.00

Excess prov. for income tax p/year 65.5 16836.03 0.51

Excess prov of depriciation in prior period 65.6 3303.14 0.00

Excess prov. of Intt & Finance charges 65.7 28.58 (265.09)

Other excess prov in prior period 65.8 37.45 493.07

Other income relating to prior period 65.9 586.46 4991.22

Total Prior Period income 65 21259.30 5251.21

Total 38,241.68 17,292.49

Note 2.25 Purchase of Power ( Amount in Lacs)


Year ended 31st March,

2015


PSEB 70.101 0.00 0.00

HVPNL 70.102 36.63 0.00

U.P.P.C.L (through Banking ) 70.103 0.00 0.00

B.B.M.B 70.106 2511.16 1891.63

NTPC 70.11O 46329.43 41385.01

NPCC 70.112 2362.35 2349.96

Power Grid Corp. of Inda 70.114 33585.76 0.00

POP from Rajaystan atomic Power Project of NPCIL 70.119 3494.11 5430.69

Malana HEP 70.120 9.69 62.39

Uttranchal Power Corp. Ltd. 70.121 69.45 9389.63

7637.00 0.00


NHPC 70.123 10206.51 9289.85

Reactive Energy from various CPUs/SEB 70.124 0.00 353.84

Purchase of Power through banking-BRPL/BYPL 70.125 21459.38 23838.06 Purchase of Power through banking-Haryana Power Gen Corporation Ltd.

70.126 0.00 12747.49

Purchase of Power through banking-P.S.E.B. 70.127 35815.93 19925.50

Purchase of Power U.P.J.V.N.L. 70.129 3891.00 210.38

NREB Through PGCIL. 70.130 11731.38 3749.47

POP- Aravali power Co. 70.132 1414.00 1995.28

265

70.1 184514.94 135982.16

Wheeling chares 70.4 0.00 0.00

Wheeling charges -UPPCL Charges 70.401 0.00 0.00

Wheeling charges -PSPCL Charges 70.403 0.00 0.00

Kotlu HEP 70.801 98.78 0.00

Balij Ka nallah HEP 70.802 409.00 0.00

Tulang HEP 70.803 187.15 0.00

Kalm 70.804 87.69 0.00

Aello-II 70.805 107.18 0.00

Nanti 70.806 474.12 0.00

Kurtha 70.807 55.54 0.00

Jogni-II 70.811 181.37 0.00

Ubharah 70.812 46.92 0.00

Raskat HEP 70.816 96.24 94.93

Titang Mini HEP. 70.817 231.06 28.12

POP form Baspa-II HEP through Jai Prakash Ltd. 70.818 31976.96 32101.36

Satluj Jal Vidyut Nigam Ltd. 70.819 58522.82 15520.37

Manjhi HEP M/S Dharamshala Hydro Power Ltd. 70.820 348.73 288.65

Deher HEP M/S Astha Project India 70.821 1009.98 645.61 Baragaon HEP M/S K.K.K. Hydro Power Ltd.Faridabad

70.822 669.18 657.93

Ching HEP M/S Hateshwari Om Power Enterprises Ltd.

70.823 64.56 94.76

POP Aleo Hydro Project 70.824 359.61 348.15

POP Manal Hydro Project 70.825 440.92 575.55

POP from Power Trading Corp. of India Ltd. 70.826 22105.18 43843.32 POP Manjhal HEP M/S Virender Dogra Power Project.

70.827 121.16 99.88

POP- Salag HEP M/S Dhaluladar Hydro System Pvt. Ltd.

70.828 14.16 14.75

POP- Tehri Hydro Power Project. 70.829 6731.61 5195.84

POP- Jiwa Kothkhai HEP 70.830 159.07 141.40

POP- Marhi Mini hydro project 70.832 752.80 754.76

POP-Taraila HEP 70.833 33.39 595.17

POP- Kothi HEP 70.834 14.44 17.69

POP-JHTHED HEP 70.835 0.88 1.28

POP-Patikari HEP 70.836 1414.22 1459.58

POP-Salag HEP ( M/S -A-Himalya Ltd.) 70.837 110.22 0.00 POP- Braham ganga M/S Harison Hydel Construction (P) Ltd.

70.838 658.46 595.55

POP- Gharola HEP( Him Urja) 70.839 3.23 5.91

266

POP-Sahu HEP M/S. Him kailash Hydro Power Ltd. 70.840 473.19 521.97

POP- Sarabai HEP ( M/S DSL Hydrowati Ltd.) 70.842 761.74 705.64

POP- Awa HEP ( M/s Astha Project India Ltd.) 70.843 700.95 889.81

POP-Lingti HEP ( Him Unja) 70.844 0.00 0.00

POP- Sural HEP 70.845 8.03 7.27

IEX 70.846 502.81 0.00

POP_IKU-II HEP 70.848 602.87 548.89

POP- M/S Toss HEP 70.849 863.83 1000.64

POP- M/S Shyang HEP 70.850 36.61 245.85

POP- M/S Tarailla-II HEP 70.851 940.48 847.25

POP-M/S Luni-111 70.852 642.76 632.69

POP-M/S-Andhra Stage-11 70.853 513.28 573.58

POP-M/S-Changer Vidyut Karanti PVTLtd. 70.854 125.29 105.55

POP-M/S-A.T.Hydro Pvt-Ltd.(Upper Tarila) 70.855 783.31 691.82

POP-M/S -Sri Sai Krishna Hydro Eng.Pvt.Ltd. 70.856 779.84 682.25 POP-M/S-Vamshi Hydro Eng.Pvt.Ltd against Baner 111 HEP

70.857 503.68 407.26

POP- Manglar HEP 70.858 770.50 846.05

POP-Dirni Dhar HEP 70.859 864.65 685.09

POP- Sainj HEP 75.860 492.13 577.62

POP-Purthi HEP 70.861 4.85 4.75

POP-DSL Hydro HEP 70.862 876.39 834.35

POP-Gurcharan HEP 70.864 142.20 137.56

POP-Dharamshalla HEP 70.865 416.14 251.18

POP-Sach HEP 70.866 59.10 55.55

POP-Tanging HEP 70.867 422.56 345.62

POP-Polar-Ist HEP 70.868 214.59 266.94

POP-Bharhi HEP 70.869 557.89 509.67

POP-Gaj-IIrd HEP 70.870 146.31 232.47

POP-Jirah HEP 70.871 344.70 380.15

POP-Upper Khauli HEP 70.872 670.68 630.31

POP-Rikchad HEP 70.873 896.40 552.62

POP-Chirchand HEP 70.874 858.37 775.65

POP Koteshwar HEP 70.875 654.05 1439.25

POP-TimbiHEP 70.876 73.49 130.09

POP from Binwa parari HEP 70.877 705.44 661.36

POP from Dehar _II HEP 70.878 257.40 239.32

POP from Torela Power Ltd. 70.879 859.22 840.29

267

POP from Jaina HEP 70.880 698.31 701.93

POP from TATa Power Trading Company 70.881 0.00 0.00

POP from Knowledge Infrastructure system 70.882 0.00 0.00

POP from Rukti-II 70.883 638.72 633.45

POP from Sach HEP 70.884 449.67 481.53

POP from Sumer 70.885 834.48 786.60

POP from Chakshi HEP 70.886 209.93 255.02

POP from Beas Kund HEP 70.887 595.62 461.87

POP from Bely HEP 70.888 869.01 677.93

POP from Balso HEP 70.889 633.97 606.16

POP from Suman Suwari HEP 70.890 665.69 545.60

Purchase of power from M/sJala Shakti Ltd. Dunali. 70.891 616.64 406.31 Purchase of power from M/s Om power Corp. Ltd. HEP

70.892 603.58 494.39

Purchase of power from M/s Ascent Hydro Project. 70.893 421.41 338.23

POP from NSL Power Genration (P) Ltd. Rohru. 70.894 297.55 384.27

POP from M/s Mani MaheshHydro Project. 70.895 335.91 243.27

POP from M/s Bhavani Renewable Energy Pvt. Ltd. 70.896 426.01 249.21

POP from M/s hamal Hydel Pvt. Ltd. 70.897 226.30 0.00

70.898 1072.79 0.00

70.899 225.06 0.00

70.8 155832.98 128602.68

POP- Different utilities on a day ahead availibility 70.901 0.00 1700.00

Sub-Total 0.00 1700.00

O & M charges payable 70.5 0.00 0.00

HPPC 70.601 20917.48 0.00

BRPL/BYPL 70.601 574.68 0.00

NRLDC 70.601 7492.82 26318.50

MPPL 70.601 712.95 0.00

HMM 70.601 45.86 5217.04

HPPTCL 70.603 344.77 1192.00

70.6 30088.57 32727.54

Expenses related to ULDC Scheme in the north reasons under unified scheme.

70.731 0.00 112.34

System/ Marketing operation charges Power System (op) Ltd.

70.733 262.64 148.01

Sub-Total 60439.78 65715.43

Total 370699.13 299272.73

268

Note 2.26 Employee Benefits Expenses

( Amount in Lac)

Employee Benefits Expenses Account

Code Year ended 31st March,

2015


Dearness Pay 75.0 7.03 34.42

Grade Pay (Regular) 75.008 6411.42 6600.17

Grade Pay (work charged) 75.009 80.10 70.77

Salary 75.1 31686.13 32411.09

Overtime. 75.2 495.07 502.68

Dearness Allowance. 75.3 39615.18 32675.62

Other Allowances. 75.4 3303.84 3424.91

Bonus. 75.5 27.39 26.60

Sub-Total 81626.17 75746.25

Fee & Honorarium. 75.61O 2.32 6.99

Medical Expenses reimbursement. 75.611 982.01 998.08

Leave Travel Assistenance. 75.612 30.19 12.57

Salary/ wages of outsourced /contractor 75.613 874.13 526.42

Earned Leave Encashment. 75.617 4249.98 7426.42

Payment under Workmen's Compensation Act. 75.629 179.56 132.94

Leave Salary contributions.(Employees on Deputation) 75.633 0.00 0.00

Leave encashment Fund 75.635 0.00 0.00

Sub-Total 6318.19 9103.42

Staff welfare expenses. 75.7 71.03 70.59

Terminal Benefits. 75.8 47931.22 45377.15

Sub-Total 48002.25 45447.74

Total 135946.60 130297.41

Less: Expenses Capitalised 75.9 5352.53 4752.29

Net Employees Cost 130594.07 125545.12

Note 2.27 Finance Cost ( Amount in Lac)


2015


2014

Interest on State Government Loans. 78.1 0.00 0.00

Interest on Bonds 78.2. 0.00 0.00

Sub-Total 0.00 0.00

269

Interest on loans from LIC 78.501 932.33 1190.98

Interest on loans from REC 78.502 9810.43 9188.32

and other loans etc. 78.504 to 509

Interest on stock other loan 78.510 5205.04 8975.80

Interest on PFC Loan 78.511 5099.94 8313.39

Interest on stock PNB loan 78.512 0.00 0.00

Interest on stock canara Bank loan 78.513 0.00 0.00

Interest on stock Punjab & Sind Bank Loan 78.514 2870.25 3373.16

Interst on SIDBI 78.515 0.00 0.00

Interest on Private Bonds 78.516 3353.17 2747.27

Interest on UCO Bank Loan 78.517 0.00 0.00

Interest on loans from Bank of Maharashtra 78.522 0.00 0.00

Interest on loans from ADB against clean energy.

78.524 2430.78 914.06

Interest on loans from State Bank of India. 78.525 75.64 13.49

Interest on loans from RAPDRP Part-B PFC 78.526 0.00 0.00

Interst on loan from Vijay Bank 78.527 0.00 276.74

Interst on loan from Central Bank of India 78.529 966.79 1150.35

Sub-Total 78.5 30744.35 36143.56

Penal interest 0.00

Interest to consumers (securities) 78.601 1688.94 1684.05

Sub-Total 1688.94 1684.05

Total interest on capital liabilities 32433.30 37827.61

Interest on borrowing For working capital. 78.7 12646.70 13072.12

Sub-Total 12646.70 13072.12 Rebate allowed for timely payment to Inter-state SOP Bulk Supply under bilateral agreement

78.831 & 833 365.50 0.00

Sub-Total 78.82 & 78.831 365.50 0.00 Other interest and finance charges

Interest on GPF 78.852 1350.95 4162.29

Interest on Contributory Pension Fund. 78.854 20.44 76.28 Cost of raising finance. 78.861 to 869 123.21 675.72 Discount/ redumption premium on Bound 78.878 0.01 0.00 Surcharge on delayed payment of POP 78.880 11188.61 10784.63 Bank commission for collection from consumers

78.882 8.64 0.00

Other Bank charges 78.883 17.81 0.00

Margin money paid for SOP through trader 78.897 11.99 0.00

Sub-Total 12721.67 15698.92

Total 58167.16 66598.65

Less: Interest capitalised 78.9 4615.03 11981.38

Total 53552.13 54617.27

270

Note 2.28 Depreciation and Amortization expenses ( Amount in Lac)



2015


2014

Depreciation. 77.1&77.2 30532.89 30721.94

Sub-Total 30532.89 30721.94

Amortisation of lease hold assets 77.110 1.62 3.85

WDV of assets scrapped- Land & Land rights 77.711 0.00 0.00

WDVof assets scrapped- Buildings 77.712 0.00 0.00

WDV of assets scrapped -Other Civil Works 77.714 0.00 0.00

Written down value of assets scrapped-Plant & Mechinery

77.715 0.00 0.13

Written down value of assets scrapped-Vechile 77.717 0.13 1.73

Write off of deficits of fixed assets absorbed on physical verification –vehicles

77.727 0.00 0.00

Loss on sale on fixed assets ie. Plant Machniery 77.736 0.00 0.00

Loss on sale on fixed assets ie. Vechile 77.737 0.00 0.00

Sub-Total 1.75 5.71

Less: Amount capitalised 77.9 2.40 1.22

Sub-Total 2.40 1.22 Total 30532.24 30726.43

Note 2.29 Other Expenses ( Amount in Lac)


2015


Repair & Manitenance Plant & Machinery. 74.1 1310.24 1248.90 Buildings. 74.2 354.76 361.35

Civil Works. 74.3 367.92 553.50

Hydraulic Works. 74.4 250.05 242.66

Lines cables,Net works etc. 74.5 4850.65 4379.73

Vehicles. 74.6 2358.29 2080.85

Furniture & Fixtures. 74.7 6.24 17.95 Office Equipments. 74.8 359.00 200.63

Others i.e. cost of vehicle other than vehicle/ 74.9 (288.67) (225.72) Re-allocated to capital works Total cost ( including employee costs.) 9568.48 8859.83 Less:- Employee costs and Admn. & Gen. Expenses 229.44 1287.92 Less:- Other costs reallocated such as Depreication 3791.53 2586.12 Recovery of cost of vehicle from O&M and other Units.

0.00 0.00

Sub-Total 4020.97 3874.04

Total ( Net Repair and Maintenance ) 5547.50 4985.79

271

Administration and General expenses

Rent 76.101 185.00 92.58

Rates & Taxes. 76.102 12.27 42.20

Total 197.27 134.78

Insurance 76.104 to 107 1.44 2.32

Telephone charges,postage,telegrams & telex charges.

76.111 to 113 267.59 268.53

Legal charges. 76.121 109.63 67.44

Audit fee 76.122 60.17 27.25

Consultancy charges. 76.123 57.24 124.58

Technical fees. 76.124 5.08 4.11

Other professional Charges 76.125 57.62 389.08

Income Tax Uploading Charges. 76.126 7.95 5.87

Statutory Audit fee 76.127 1.69 1.71

Charges on a\c of service rendered by central board keeping agency under new pension scheme

76.128 6.05 6.32

Internal Audit Fee. 76.129 0.01 0.30

Conveyance & Travel expenses

76.131 to 139 & 76.141.

1826.05 1744.48

Expenditure on foreign travel. 76.14O 0.00 0.00

TA/ Das to Statutory Auditor 76.143 8.52 7.79

TA / DA to Internal Auditors 76.144 7.14 0.00

Sub-Total 2416.18 2649.76

Other expenses:-

Fee & Subscription. 76.151 156.72 19.00

Books & Periodicals 76.152 11.15 8.54

Printing & Stationary. 76.153 247.69 181.85

Exp. Under Right to Information Act- Paper & Processing fee.

76.154 0.15 0.00

Advertisement expenses. 76.155 68.39 43.01

Public Interaction Programme Expenses 76.156 15.84 20.04

Contribution/Donations. 76.157 0.00 10.00

Electricity charges. 76.158 378.86 380.40

Cold weather expenses/water charges. 76.159 & 160 32.18 32.09

Expenditure on Gift/Presentation. 76.161 0.06 0.00

Entertainment. 76.162 5.62 6.10

Incentives to informer regarding theft of energy etc. 76.163 0.01 0.00

Expenditure on display of Models. 76.164 0.00 0.08

Expenditure on training to staff within the state. 76.165 2.51 7.56

272

Expenditure on training to staff outside the state. 76.166 1.64 6.79

Petition fee payment to HPERC 76.167 93.28 97.96

& Consumer grievances redressal forum 76.168 44.90 66.42

Licence fee for Distribution & Trans payable to HPERC

76.169 25.00 25.00

Fees for SAS Examination 76.170 2.24 2.63

Exp. On promotion of energy effeiciency 76.171 0.00 0.00

Exp. On Geographically information system/Global Position System (GIS/GPS)

76.173 35.87 63.02

Transction charges to SCAs for collection of energy bills

76.174 70.94 41.95

Compensation paid for non compliance of Renewale Power purchase obligations compensation fund

76.175 500.00 0.00

Exp. On providing cost free CFL bulb to domestic Consumers

76.183 0.00 (0.02)

Exp. Incurred on capacity building for Poverty Reduction Projects CBPRS for sponser HPSEB personnel to attend training programme.

76.185 1.64 0.53

Misc Expenses 76.190 74.34 39.05

Publicity expenses 76.191 3.73 1.85

Sub-Total 1772.75 1053.86

Freight. 76.210 to 220 8.67 5.61

Other purchase related expenses. 76.230 to 299 262.22 238.91

Sub-Total 270.89 244.52

Total 4657.09 4082.93

Less : Expenses Capitalised 76.9 140.73 159.21

Net Expenditure 4516.36 3923.72

Short provision for power purchase previous year 83.1 0.00 10746.94

Operating expense of previous year 83.3 77.61 43.38

Employee cost relating to previous year 83.5 441.76 1098.40

Deprication under provided in previous year 83.6 3660.46 2465.00

Interest and other finance charges relating previous year

83.7 7302.15 2721.80

Other charges relating to previous year 83.8 352.48 1321.10

Total Prior Period Expenses 83 11834.46 18396.62

Other Debits

Cost Variance 79.1 0.00 0.00

Bad & Doubtful debts written off / provided for. 79.4 7.80 6.12

Miscellaneous Losses & write offs. 79.5 146.10 86.95

79.7 0.16 0.00

Total 22052.36 27399.20

273

Note 2.30 Exceptional and Extraordinary items ( Amount in Lac)



2015


Extra -Ordinary credits(including subsidies against loss on account of flood, cyclone, fire etc.

63.2 700.00 1,480

Total 700.00 1,480

Extra-Ordinary debits (including subsidies against 79.8 1297.05 0.00

loss on account of flood, cyclone, fire etc.)

Total 1297.05 0.00

Extraordinary items(Net) 597.05 (1480.00)

Note 2.31 Earning Per Share (EPS) ( Amount in Lac)

Particulars Year ended 31st March,

2015


I Net Profit as per Profit and Loss A/c available for equity Shareholder ( in Rupees)

(10,754) (15178.34)

II Weighted average number of equity shares for Earning Per Share Computation:

(A) For Basic Earning Per Share of Rs. 100/- each ( in Nos) 477.42 344.23

(B) For Diluted Earning Per Share of Rs. 100/- each No of Shares of Basic EPS as per II (A) ( in Nos)

477.42 344.23

Add: Weighted Average outstanding Shares related to Share Application Money ( in Nos)

18.54 111.87

Nos of Shares for Diluted Earning Per Share of Rs. 100- each ( in Nos)

495.96 456.10

III. Earning Per Share (Face Value of Rs. 100/- Each)

BASIC (in Rupees) (22.53) (44.09) DILUTED (in Rupees) -21.68 -33.28

274

Note 2.32

CONSOLIDATED ACCOUNTING POLICIES AND NOTES FOR THE FINANCIAL YEAR 2014-15.

(C) Significant Accounting Policies :

1. Basis of Accounting : Accounts of the Company are being prepared on accrual basis based on historical cost convention and

are in line with the fundamental accounting principles of prudence, consistency and materiality except otherwise stated. Financial statements are prepared in accordance with the provisions of the Companies Act, 2013, the relevant provisions of Electricity Act, 2003. The previous year’s figures have been recasted and regrouped to comply with the requirements of schedule III of Companies Act, 2013.

2. Fixed Assets :

(a) The Fixed Assets are carried forward at the original/ transfer cost including appropriate expenses

capitalized less depreciation thereof. (b) The interest on the borrowed funds attributable to the acquisition/ construction of fixed assets till

commissioning of such assets, is being capitalized. (c) Capital Expenditure on assets not owned by the company is reflected as a distinct item in the Fixed

Assets. (d) Payments made towards compensation and other expenses relatable to land are treated as cost of

land. (e) Leasehold Land is amortized over the period of the lease. (f) Fixed Assets value of Rs. 9.66 lacs in respective of following field Units have been created on

land which does not belong to HPSEB Ltd.:- (Amount in Lac.)

(i) Electrical Division, Bilaspur 117.49 (ii) Electrical Division, Ghumarwin 122.22 (iii) Electrical Division, Kangra 108.30 (iv) Electrical Division, Dharamshala 313.46 (v) Electrical Division, Palampur 9.98 (vi) Electrical Division, Baijnath 66.24 (vii) Electrical Division, Lambagaon 96.22 (viii) Electrical Division, Dehra 125.80 (ix) Electrical Division, Chopal 6.74

Total 966.45

(g) Residential and Non-Residential Building valuing Rs. 712.26 lacs and Rs. 93.34 lacs built in Sainj Project have been transferred to HPPCL on 16-01-2010 and 29-01-2010 respectively.

(h) Land measuring 113.06 Bighas situated in Sainj Project having value of Rs.358.49 lacs Project has been transferred to HPPCL on 29-01-2010. Out of above, Land measuring 14.04 Bigas valuing Rs. 11.63 lacs had already been transferred to NHPC, Parbati during 1998-99.

(i) Land measuring 3-06.74 Hectares situated in Mahal Chirgoan bearing Khatoni No. 433 occupied by HPSEB Ltd. is in the name of State Govt.

(j) In view of large distribution and Transmission Network scattered all over the State of Himachal Pradesh, the physical verification of the fixed assets of the Company is not being conducted due to the reasons that the GIS/ GPS final report is still awaited.

(k) The cost of Computer software, SAP amounting to Rs. 2243.71 Lacs recognized as intangible assets and is being amortized on straight line method over a period of five years.

275

3. Intangible Fixed Assets

Intangible assets are carried at cost less accumulated amortization and impairment. The cost of intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from tax authorities) any directly attributable expenditure on making the asset ready for its intended use, and net of any discount. Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense, when incurred, unless it is probable that such expenditure will enable the assets to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the assets reliably, in which case such expenditure is added to the cost of the assets.

4. Store & Machinery Spares :

Store and spare have been valued at cost or net realized value whichever is lower. The cost of capital spares purchased at any time after commissioning are charged to O&M expenditure and not capitalized.

5. Capital Work-in-Progress (CWIP) :

(a) Administrative and other general overheads at the head office attributable to the construction of fixed assets are identified and allocated on systematic basis on major assets.

(b) In respect of supply cum erection contracts, the value of supplies received and accepted is treated as capital work in progress.

(c) Expenditure against ‘Deposit Work’ is accounted for on the basis of statement of accounts received from the concerned agency and accepted by the company. Provision is made wherever necessary.

6. Depreciation and Amortization:

(a) Depreciation is charged on straight line method to the extent of 90% of the cost of asset following the rates notified by the H.P. State Electricity Regulatory Commission for the purpose of fixation of tariff with effect from 2009-10 . In respect of asset, where rate has not been notified by regulation of HPERC, depreciation is provided on straight line method at the rates corresponding to the rates laid down under the Companies Act, except in case of Computers and Peripherals which are depreciated @ 15% on SLM.

(b) Depreciation on vehicles is charged by the units to the extent of 90% of the cost of the asset. Life of vehicle is taken as 7 years, depreciation is charged on SLM basis.

(c) No depreciation is charged on addition to fixed assets during the year and depreciation is charged for the whole year in respect of assets ceased/sold during the year, as per accounting policy of the Company in this regard.

(d) The expenditure on capital work in progress is transferred to appropriate asset at the end of the financial year irrespective of the date of commissioning of asset.

(e) Intangible assets are amortized on straight line basis over their useful life. Software is amortized over 60 months.

(f) The depreciation of assets during the year has been adjusted for the less/ excess deprecation charged up to 31-3-2015 and effect of the same has been adjusted against prior period items.

(g) Assets acquired from govt. grants and consumers contributions have been amortized and recalculated retrospectively to comply the AS12 and amortized amount has been treated as Revenue Income.

h) Lease payment made upfront in respect of leased assets are amortized in equal installments over the period of lease.

(g) Annual lease rent payment are charged to revenue. 7. Inventories / Stores and Spares

(a) Inventories/ Stores and Spares are valued at cost or market value, whichever is less. The cost is determined on weighted average method. The cost of material at site however is determined as per

276

issue price. “Here the Company deviates from the Accounting Standared-2 “Valuation of Inventories” issued by ICAI which requires Inventories to be valued at the lower of cost and net reliable value.”

(b) The stock of low value items of consumables are not maintained and are fully charged to revenue.

8. Revenue Recognition: 2. Sale of Power is being accounted for on accrual basis on the basis of bills raised by the Company

except as under :—

a. Unbilled revenue is accounted for at the close of year on the basis of average billing of a year of concerned group by remaining days of numbers of unbilled period.

b. Difference on account of adjustments of undercharged/ overcharged billing with actual billing is adjusted in the year of rectification.

c. Earning from sale of electricity does not include Electricity duty payable to State Govt. and Municipal Taxes (Octori) payable to Municipal Committee/ Municipal Corporation.

d. Bills issued for theft of energy, whether on consumption or outsides are recognized in full as soon as assessment order is received from the competent authority. Payment made by the consumer under protest is treated as part payment against the bill raised.

e. Any surplus or deficit arising as result of truing up order on the basis of audited annual accounts is adjusted in the year of issue of truing up ordered by the HPERC.

f. The consumers having credit balances in accounts of energy dues, municipal tax, Electricity duty and other dues due to advance payments has been netted up in consumer’s ledger with trade receivable and not shown separately.

g. The sale of Power is the major source of revenue of the Company. The Tariff schedule is notified by the HPERC and rates mentioned in the respective scheduled tariff are applicable to the consumers. The electricity duty and taxes (EC) are levies as per notification of Govt. of HP in time to time.

h. The income arise for Peak Load violation charges, Demand charges, wheeling charges, open access charges and other fixed charges as per tariff schedules are in addition to energy charges and considered part / income for sale of Power.

i. Charges recovered from consumers for delayed payment shall be clubbed with revenue from sale of power shall be shown in separately since these are more in the nature of financial charges.

j. Operational and Mtc. charges are recovered from HPPTCL as per mutual agreement, interlinking facility charges recovered from IPPs are considered part of revenue income.

k. Income from investment are treated other revenue income for the year in which income has accrued. However, if the investment is held as earmarked investment against any Fun such as Pension Fund, Gratuity Fund, RGGVY Fund etc, the income from such investment are credited directly to reserves Fund. The General Provident Fund investment interest income is netted up with the interest paid to the Members.

9. Employee Retirement Benefits & Pension : (i)Actual liabilities in respect of Earned Leave and Gratuity are accounted for at the time of actual

encashment of leave/ payment of gratuity on death/ resignation/ superannuation. Pension is paid by the Company on cash basis. To comply the requirement of AS 15 Company has made provision of Rs. 5201.68 Lac (gratuity Rs. 2799.04 +Leave encashment Rs. 2402.64 Lac) on accounts of Leave encashment & gratuity payable to present employee @ 2.5% and actual provision shall be made after actuarial evaluation in this regards. “Here the Company deviates from the Accounting Standard 15 “Employee Benefits” issued by ICAI, which requires the contribution to be made on the basis of actuarial valuation and the company is partially complying with this requirement”.

(ii)Employees who have joined the Company on or after 01.04.2006 are covered under “ New Defined Contributory Pension Schemes (NDCPS” and Company contribution at fixed percentage of salary is ascertained and paid/ provided.

10. Amount Recoverable and payable from/ to GoHP/Local Authorities:

277

The above accounts are not being netted off, however, kept in separate recoverable and payable accounts, as per practice, in view of the nature of such accounts.

11. General Provident Funds (GPF) of employees: GPF of employees is being accounted for in books of accounts, as per government rules governing GPF.

No separate Fund/ Trust is being maintained, however, liabilities with respect of GPF and interest accrued thereon is met by the Company out of own resources.

12. Provisions, Contingent Liabilities, 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 on accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

13. Borrowing Cost: Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of

the cost of asset. All other borrowing costs are charged to profit and loss account. 14. Investments:

(ii) Current investments are valued at lower of cost and fair market value. (ii) Investments in BBMB have been shown to the extent of Company’s shares in power plant / fixed assets / Renovation/ Moderations / up gradation (RM& U) of the above entities. Diminution in the value of investment held in BBMB is being provided on yearly basis on entire amount invested in the year by taking these amount revenue expenses of the Company.

15. Government Grants: Grants received from Central/ State governments for the purpose of capital works are considered as

capital receipts and other grants in the shape of incentives/ subsidies etc. as revenue receipt and is shown separately in the Statement of Profit and Loss and Balance Sheet.

16. Use of Estimates The preparation of the financial statements in conformity with Indian GAAP requires the management to

make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Some of the estimations require higher degree of judgment to be applied than others. These include estimation for unbilled revenue etc. Management continually evaluates all its estimated and judgments based on available information and its experience and believes that the estimated used in the preparation of financial statements are prudent and reasonable. Future result could differ due to these estimates and differences between the actual result and the estimates are recognized in the periods in which the results are known/ materialize.

17. Segment Reporting: The Company identifies primary segments based on the dominant source, nature of risks and returns

and the internal organization and management structure. The operating segment are the segments for which separate information is available and for which operating profit/ loss amounts are evaluated regularly by the executive management in deciding how to allocate resources and in assessing performance.

The accounting policies used in the preparation of the financial statements of the Company are also

applied for segment reporting. Revenue & expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expense , assets and liabilities which relate to the Company as a whole are not allocable to segments on reasonable basis have been include under unallocated revenue/ expense/ assets/ liabilities.

18. Cash and Cash Equivalents ( for the purpose of cash flow statement)

278

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances ( with an original maturity of three months or less from the date of acquisition), highly liquid investment that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

19. Cash Flow statement Cash flow are reported using the indirect method whereby profit/ loss before extraordinary items and tax

is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company is segregated based on the available information.

20. Operating Cycle All assets and liabilities have been classified as current or non current as per Company’s normal

operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of business and the time between acquisition of assets for processing and their realization in cash and cash equivalents the Company has ascertained its operating cycle as 12 months for the purpose of current and non current classification of assets and liabilities.

21. Miscellaneous:

(a) Expenses on training and recruitment, research and development, if any are charged to revenue. (b) Expenses on raising of finance and financial loan are charged to revenue. (c) Income from surcharge levied on consumers for delayed payment of energy bills is accounted for

on actual realization basis. (d) Interest on loans and advances paid to the staff is recovered after full recovery of principal amount.

However, interest is accounted for on accrual basis in the accounts. The advance made to suppliers / contracts by the Company is secured advance on the progress made in turnkey works.

(e) Cost of new meter used to replace the damaged meter is charged to revenue and the cost of damaged meter and its accumulated depreciation is not withdrawn.

(f) Expenditure incurred on identification, survey & feasibility study of project, before project is considered for sanction or rejection, is accounted for under separate head and shown under deferred Cost. As and when the decision of competent authority is received, expenditure is adjusted accordingly by transferring expenditure to work concerned if accepted or written off to profit & Loss Accounts in case of rejection.

(g) Payment received against debtors from sale of power are adjusted as per their chronological order date i.e. old outstanding dues are cleared first.

(h) The Company has not formed its own Basic Accounting Policies but the basic accounting principles and policies Notified vide notification No GSR No 1134 of the Electricity (Supply) Annual Accounts Rules, 1985, adopted by the erstwhile Board for preparation of Annual Accounts are being considered till the adoption of new accounting Policies of the Company. Financial statements of the Company are drawn up on the premise that its business will continue indefinitely. The Policy on conveyance for losses of stock due to theft, fire flood etc, write off & recovery of shortage from contractors and suppliers, employees Accounting treatment of capital and revenue items and going concerned are detailed mentioned Annexure II, IV& V of above Basic Accounting Principles and Polices, 1985 and Commercial Accounting System /Operating instructions, notified by erstwhile Board, June,1993.

(i) All revenue expenses/ income pertaining to prior period and losses for which no provision was made in the previous year due to error or omission are treated Prior period revenue income/ expenditure which has been shown in separate accounts head. Detailed disclosure of prior period

279

expenses/ income till the finalization of balance sheet has disclosed in Notes forming part of the Accounts No 47 of 2.31 (B).

(j) Those items which arise from events or transactions outside ordinary activities of the Company and which are both material and expected not to recur frequently or regularly.

OTHER NOTES

BASIS OF CONSOLIDATION:-

1.1 The consolidated financial statement relates to HPSEB Ltd ( the Company) , its subsidiary namely Beas Valley Power Corporation Ltd. a) Basic of Accounting :

i) The financial statement of the subsidiary Companies in the consolidation are drawn up to the same reporting date as of the Company

ii) The Consolidated financial statements have been prepared in accordance with Accounting Standard (AS 21) “Consolidated Financial Statement” and AS-27 “Financial Reporting of interest in subsidiary as prescribed under Section 133 of the Companies Act, 2013 (Act) read with rule 7 of the Companies (Accounts) Rules, 2014 and general accepted accounting principles (GAAP).

b) Principles of Consolidation: (i) The financial statements of the Company and its subsidiary are combined on a line by line basis by

adding together the book value of lie items of assets, liabilities, cash flow statement after eliminating intra-group balances, intra group transactions, unrealized profit or losses. The Subsidiary Company is in construction stage, has not yet started commercial operations, therefore profit & loss accounts of the subsidiary has been not prepared.

(ii) The Consolidated financial statements include the interest of the Company in subsidiary, which has been accounted for using proportionate consolidation method of accounting and reporting whereby the Company’s share of each assets, liabilities of a subsidiary is considered as a separate line item after eliminating proportion share of unrealized.

(iii) The consolidated financial statement are prepared using uniform Accounting Policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the company’s separate financial statements except as otherwise stated in the notes to the accounts

(iv) There is no difference in Accounting Policies of the Company & its subsidiary which impact of materiality. The financial statement of subsidiary used for consolidation is audited.


Sd/- Sd/- Sd/-

(Gulshan Aggarwal) (Rajeev Sharma, IAS) (Er. P C Negi) Chief Accounts Officer Director (F&A) Managing Director

Auditors Report

As per our report of even date

Sd/- For Anil K. Sood & Co. (C.A. Anil Kumar Sood) Chartered Accountants Partner Firm No. MNo. 086068

Place: Shimla

Date : 27-12-2016

280

Independent Auditors’ Report

To

The Members of Himachal Pradesh State Electricity Board Limited.

Report on the Consolidated Financial Statements

We have audited the accompanying Consolidated financial statements of Himachal Pradesh State Electricity Board Limited, Shimla (“the Company”) as on 31st March, 2015 which comprise the Consolidated Balance Sheet as at March 31, 2015, the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information

Management’s Responsibility for the Financial Statements

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these Consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the consolidated financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company & its subsidiary Company have in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the

281

Company’s management and Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit of disclaimer opinion.

Basis for Disclaimer Opinion

1 Preparation of Consolidated Financial Statements for the year under review:-

a) The consolidated financial statements are prepared as per Schedule III of the Companies act 2013 during the year under review. During the year accounts statements at division levels are prepared on the basis of old schedule VI but the divisions, wings and circles balance sheets has been re casted as per new schedule III for the year and also for the previous year. The previous year’s figures have been re casted and regrouped to comply with the requirements of schedule III of Companies Act 2013. The Companies Act, 2013 gives great importance to the compliance of the accounting standards by the Companies as evident from Section 129(1) wherein it has been stated that financial statements shall comply with the accounting standards the first proviso to said section also states that the items contained in financial statements shall be in accordance with the accounting standards. The Company has not complied with all the accounting standards as reported separately in Para 25 of holding Company report.

b) Consolidation of Financial Statements at Head Office Level and Circle Level

The consolidated statements of assets and liabilities compiled on the basis of information provided by Divisions and Circles do not reconcile with consolidated balances of holding Company used for compilation of these financial statements.

Other Matters:

(a) We did not audit the Financial Statement of subsidiary Company (BVPCL) which reflect total assets of Rs. 112772.99 Lac as at March, 2015, total revenue nil being subsidiary Company has not started commercial operation, profit & Loss Accounts has not been prepared and net cash flow amounting to Rs. 549.31 Lac for the year ended as considered in the consolidated financial statements. This financial statement has been audited by the other auditor whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

Our Opinion on the consolidated financial statements and our report on other Legal and Regulatory requirements below is modified in respect of the above matters with respect to our reliance on the reports of the other auditors and the financial statement s/ financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

As required by “The Companies” (Auditor’s Report) order, 2015, issued by the Central Government of India in terms of sub Section (11) of Section 143 of the Act (hereinafter refereed to as the “ Order”) and on the basis of such checks of the books and records of the Company as we considered appropriate and accordingly to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order.

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

282

(a) We have sought and obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements.

(b) In our opinion, proper books of accounts as required by law relating to preparation of the aforesaid consolidated financial statements have not been kept so far as it appears from our examination of those books and the report of the other auditors.

(c) The consolidated Balance Sheet, the Consolidated Statements of Profit & Loss , and the Consolidated Cash Flow Statements dealt with by this report are not in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

(d) In our opinion, the aforesaid consolidated financial statements does not comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 refer to para 25 of standalone financial statements of holding Company.

(e) On the basis of the written representation received from the directors of the holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary Companies, none of directors of group Companies is disqualified as on 31st March, 2015 from being appointed as a directors in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and accordingly to the explanation given to us:

(i) Provisions have been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contract.

(ii) No amount has been transferred to the Investors Education and Protection Fund during the year ended.

For Anil K. Sood & Co Chartered Accountants Firm Registration Number-007360N

Sd/-

CA Anil Kumar Sood Partner

Membership No. 086068 Place: Shimla Date: 27.12.2016

ANNEXURE-A

Forming part of auditors’ report on Consolidated financial statements of Himachal Pradesh State Electricity Board Limited for the year ended on 31st March, 2015.

(i) a) The Fixed assets Register maintained by the holding Company is not as per Companies Act showing the complete details of cost, location, identification code, transfer write off, accumulated depreciation etc in respect of each individual items. The Fixed Assets register maintained at division level does not tallied with the

283

sub head wise accounts of Fixed Assets maintained in the account statements. The subsidiary Company (BVPCL) is in process of compilation of proper record to show full particulars including quantitative details and situations of fixed assets. b) The assets have not been physically verified by the Company. Since the detailed records of Fixed assets at different locations are not maintained as prescribed, the question of comparison of Fixed Assets with book records and ascertaining the discrepancies out of physical verification does not arise and its impact upon accounts is not ascertainable.

(ii) a) As explained to us, stores and spare, at all locations, has been physically verified. In our opinion, the frequency of physical verification is reasonable and adequate.



iii) The Company has not granted/taken any loans secured or unsecured from companies, firms or other parties listed in the register required to be maintained under section 189 of Companies Act 2013 .

iv) In our opinion and according to the information and explanations given to us, internal control procedures followed by the Company do not commensurate with the size of the Company and the nature of its business with regard to purchase of stores, Fixed Assets machinery or spare parts.

v) The company has not accepted any deposit from the public

vi) With pursuant to Rule made by the Central Government of India, the maintenance of cost records have been prescribed under Section 128 of Companies Act 2013 clause (d) of sub-section (1) of Section 209 of the Companies Act,1956 in respect of Electricity Supply. The Company has not prepared cost records as prescribed.

vii) a) The Company is generally regular in depositing with appropriate authorities statutory dues including

provident fund, Employees State Insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it, except the following dues which is in arrears for more than six months .


Electricity Duty 44898.63 Lacs 33084.40 Lacs Municipal Taxes 746.85 Lacs 670.94 Lacs Labour Ces 0.00 Lacs 0.00 Lacs CPS Contribution 76.35 lacs 175.15 lacs Service Tax 0 lacs 5.85 lacs We further report that company has not transferred the GPF fund contributions to a separate trust or to EPF authorities as required by EPF Act 1956.( Refer para 3 of the Annexure III of main report of even date)

b) According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and other cess were in arrears, as at 31.03.2015 for a period of more than six months from the date they become payable.

284

c) According to the information & explanation given to us, disputed dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited is Nil:

d) According to the information and explanation given to us. There is no amount required to be transferred to Investor Education and Protection fund in accordance with latest provision of the Companies Act, 2013.


ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company has opted for Financial Restructure Plan Issued by the Govt. of India where the short term loans issued by the Banks have been converted into long term loans.

x) The Company has not given any guarantees for loan taken by other from banks and financial institutions. Hence, no terms and condition are prima facie prejudiced to the interest of the Company

xi) Accordingly to the information and explanations given to us , all terms loan obtained are used for the purpose for which they have been obtained other then temporary deployment pending application.

xii) According to the information and explanation given to us no cases of fraud has been noticed or reported during the course of our audit.

For Anil K Sood & Co, Chartered Accountants Firm No -007360N Sd/- Place: Shimla CA Anil Kumar Sood Dated 27.12.2016 Partner


Form AOC-1

(Pursuant to first proviso to sub-section (3) of section129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures

Part A Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Rs.)

1. Sl. No. U40101HP2003SGCO25877 2. Name of the subsidiary:- Beas Valley Power Corporation Ltd. 3. The date since when subsidiary was acquired: 25th March, 2003 4. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period:-

The Reporting Period of Subsidiary and Holding Company are same.

285

5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. Reporting Currency : INR (Domestic Company)

6. Share capital Rs. 300,00,00,000/- 7. Reserves and surplus Nil 8. Total assets Rs. 1127,72,89,000/- 9. Total Liabilities Rs. 827,72,89,000/- 10. Investments Nil 11. Turnover Nil ( Being Company has not started commercial operation) 12. Profit before taxation P&L Accounts has not been prepared being yet to commence operation 13. Provision for taxation Nil 14. Profit after taxation NA 15. Proposed Dividend Since the Company has not yet started commercial operation

therefore the information is nil. 16. Extent of shareholding (in percentage) 100 percent Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations 2. Names of subsidiaries which have been liquidated or sold during the year. Note: This Form is to be certified in the same manner in which the Balance Sheet is to be certified”.

For Anil K Sood & Company,

Chartered Accountants Firm No NR Sd/- CA Anil Kumar Sood

Partner Membership No. 086068

Place: Shimla, Date : 16-01-2017

286

Himachal Pradesh State Electricity Board Ltd ( A state Govt. Undertaking )

{Auditor’s Report} REPLIES TO THE AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH, 2015

OBSERVATION Management REPLY

Independent Auditors’ Report To The Members of Himachal Pradesh State Electricity Board Limited.

Report on the Consolidated Financial Statements We have audited the accompanying Consolidated financial statements of Himachal Pradesh State Electricity Board Limited, Shimla (“the Company”) as on 31st March, 2015 which comprise the Consolidated Balance Sheet as at March 31, 2015, the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information Management’s Responsibility for the Financial Statements The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these Consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are

Statement of facts, hence no comments are required.

287

required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the consolidated financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company & its subsidiary Company have in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit of disclaimer opinion. . Basis for Disclaimer Opinion 1 Preparation of Consolidated Financial Statements for the year under review:- a) The consolidated financial statements are prepared as per Schedule III of the Companies act 2013 during the year under review. During the year accounts statements at division levels are prepared on the basis of old schedule VI but the divisions, wings and circles balance sheets has been re casted as per new schedule III for the year and also for the previous year. The previous year’s figures have been re casted and regrouped to comply with the requirements of schedule III of Companies Act 2013. The Companies Act, 2013 gives great importance to the compliance of the accounting standards by the Companies as evident from Section 129(1) wherein it has been stated that financial statements shall comply with the accounting standards the first proviso to said section also states that the items contained in financial statements shall be in accordance with the accounting standards. The Company has not complied with all the accounting standards as reported separately in Para 25 of holding Company report.

The Consolidated financial statements(CFS) relates to HPSEB Ltd (the Company), its Subsidiaries (BVPCL) for FY 2014-15 have been prepared in accordance with Accounting Standard (AS 21) “ Consolidated Financial Statements” on the basis of sub head wise consolidated trial balances of HPSEBL and BVPCL. The Consolidated financial Statement of the Company and its subsidiary are combined on a line by line basis by adding together of the like item of assets, liabilities, income and expenses after eliminating intra-group balances, intra-group transaction and unrealized profit & losses. The figures of previous years have been re-casted and re-grouped to comply with the requirement of revised schedule VI and disclosed in significant Accounting Policies Note 2.32 of Consolidated Accounting Policies and Notes under Sr. No 1 & other notes. The reply for accounts statements at division levels are prepared on the basis of old schedule VI are same as mention in reply of standalone financial

288

statement of the Company. The financial statement of subsidiary Company is also true & fair certified by the independent Auditors. Hence the versions of Auditors for disclaimer opinion on consolidated financial statements are not acceptable & denied.

b) Consolidation of Financial Statements at Head Office Level and Circle Level The consolidated statements of assets and liabilities compiled on the basis of information provided by Divisions and Circles do not reconcile with consolidated balances of holding Company used for compilation of these financial statements.

Reply of the same has already been given in standalone Financial Statement Auditors Report of the Company. The qualifications of Auditors are same as per standalone Financial Statement Auditors Report of the Company.

Other Matters: (A) We did not audit the Financial Statement of subsidiary Company (BVPCL) which reflect total assets of Rs. 112772.99 Lac as at March, 2015, total revenue nil being subsidiary Company has not started commercial operation, profit & Loss Accounts has not been prepared and net cash flow amounting to Rs. 549.31 Lac for the year ended as considered in the consolidated financial statements. This financial statement has been audited by the other auditor whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors. Our Opinion on the consolidated financial statements and our report on other Legal and Regulatory requirements below is modified in respect of the above matters with respect to our reliance on the reports of the other auditors and the financial statement s/ financial information certified by the Management.

Statement of facts, hence no comments are required

Report on Other Legal and Regulatory Requirements As required by “The Companies” (Auditor’s Report) order, 2015, issued by the Central Government of India in terms of sub Section (11) of Section 143 of the Act ( hereinafter refereed to as the “ Order”) and on the basis of such checks of the books and records of the Company as we considered appropriate and accordingly to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order. As required by Section 143 (3) of the Act, we report that:

(g) We have sought and obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements.

(h) In our opinion, proper books of accounts as required by law relating to preparation of the aforesaid consolidated financial statements

Statement of facts, hence no comments are required

289

have not been kept so far as it appears from our examination of those books and the report of the other auditors.

(i) The consolidated Balance Sheet, the Consolidated Statements of Profit & Loss, and the Consolidated Cash Flow Statements dealt with by this report are not in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

(j) In our opinion, the aforesaid consolidated financial statements does not comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 refer to para 25 of standalone financial statements of holding Company.

(k) On the basis of the written representation received from the directors of the holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary Companies, none of directors of group Companies is disqualified as on 31st March, 2015 from being appointed as a directors in terms of Section 164 (2) of the Act.

(l) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and accordingly to the explanation given to us:

(iii) Provisions have been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contract.

(iv) No amount has been transferred to the Investors Education and Protection Fund during the year ended.

290

ANNEXURE-A Forming part of auditors’ report on Consolidated financial statements of Himachal Pradesh State Electricity Board Limited for the year ended on 31st March, 2015. (i) a) The Fixed assets Register maintained

by the holding Company is not as per Companies Act showing the complete details of cost, location, identification code, transfer write off, accumulated depreciation etc in respect of each individual items. The Fixed Assets register maintained at division level does not tallied with the sub head wise accounts of Fixed Assets maintained in the account statements. The subsidiary Company (BVPCL) is in process of compilation of proper record to show full particulars including quantitative details and situations of fixed assets. b) The assets have not been physically verified by the Company. Since the detailed records of Fixed assets at different locations are not maintained as prescribed, the question of comparison of Fixed Assets with book records and ascertaining the discrepancies out of physical verification does not arise and its impact upon accounts is not ascertainable.

(ii) a) As explained to us, stores and spare, at all locations, has been physically verified. In our opinion, the frequency of physical verification is reasonable and adequate. b) The procedure for physical verification of inventories followed by the management is not reasonable and adequate in relation to the size of the Company and nature of its business. c) The Company is maintaining proper records of inventory, i.e., Stores and spares. However, we were not provided with any report of physical verification, hence we are unable to comment on the same.

iii) The Company has not granted/taken any loans secured or unsecured from companies, firms or other parties listed in the register required to be maintained under section 189 of Companies Act 2013 .

iv) In our opinion and according to the information and explanations given to us, internal control procedures followed by the Company do not commensurate with the size of the Company and the nature of its business with regard to purchase of stores, Fixed Assets machinery or spare parts.

v) The company has not accepted any deposit from

the public

Efforts are being made to maintain the fixed assets register through retired Accounts personnel (Retainer Consultants) of the Company and GIS & GPS in process. Fixed assets register shall be updated on receipt of final report from Retainer Consultants. All the DDO’s have been directed to physically verify the fixed assets every year.

a) Statement of facts. Hence no comments

ii) Complete procedure to verify the store and spares have been prescribed by the Company. b)Procedure for physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company as Stock Verifier verifies the same periodically. c) Verification reports are with concerned DDO and shall be shown to audit. iii) Statement of facts, hence no comments iv) Company has proper system of internal audit as per the size of the Company. Internal Audit party for commercial Audit and CA firms are engaged for internal audit. As regards piled up stocks these are critical items and used frequently for restoration of supply. v) Statement of facts, hence no comments

291

vi) With pursuant to Rule made by the Central Government of India, the maintenance of cost records have been prescribed under Section 128 of Companies Act 2013 clause (d) of sub-section (1) of Section 209 of the Companies Act,1956 in respect of Electricity Supply. The Company has not prepared cost records as prescribed.

vii) a) The Company is generally regular in

depositing with appropriate authorities statutory dues including provident fund, Employees State Insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it, except the following dues which is in arrears for more than six months. (Amount in Lakh)

Current Year

Previous Year

Electricity Duty 44898.63 33084.40 Municipal Taxes

746.85 670.94

Labour Cess 0.00 0.00

CPS Contribution

76.35 175.15

Service Tax

0.00 5.85


b) According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and other cess were in arrears, as at 31.03.2015 for a period of more than six months from the date they become payable.

c) According to the information & explanation given to us, disputed dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited is Nil:

d) According to the information and explanation given to us. There is no amount required to be transferred to Investor Education and Protection fund in accordance with latest provision of the Companies Act, 2013.


ix) In our opinion and according to the information

vi) M/s Anirudh Joshi & Associate are the Cost Auditor of the Company and cost records are being prepared through outsourced Cost Audit firm M/s Anil Sharma & Company. Hence, observations of audit are denied and para may be settled. vii) Statement of facts, hence no comments. b)Statement of facts, hence no comments c) Statement of facts, hence no comments

d) Statement of facts, hence no comments viii) Efforts are being made to maintain the subsidiary records the HPSEB Ltd (Company) and to provide relevant information as per requirement of Companies Ac ix) Statement of facts, Hence no comments.

292

and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company has opted for Financial Restructure Plan Issued by the Govt. of India where the short term loans issued by the Banks have been converted into long term loans.

x) The Company has not given any guarantees for loan taken by other from banks and financial institutions. Hence, no terms and condition are prima facie prejudiced to the interest of the Company

xi) Accordingly to the information and explanations given to us , all terms loan obtained are used for the purpose for which they have been obtained other then temporary deployment pending application.

xii) According to the information and explanation given to us no cases of fraud has been noticed or reported during the course of our audit.

x) Statement of facts, Hence no comments. xi) Statement of facts, Hence no comments. xii) Statement of facts, Hence no comments.

Place : Shimla Dated : 22-02-2017 Sd/-

Chief Accounts Officer, F&A Wing, HPSEBL, Shimla-4

298


(A State Govt. Undertaking) Replies to comments of the Comptroller and Auditor General of India under Section 143 (6) (B) read with Section 129 (40) of the Companies Act, 2013 on the Consolidated Financial Statement of Himachal Pradesh State Electricity Board Limited for the year ended 31st March, 2015.

CAG Comments Management Reply BALANCE SHEET 1. Current Assets Trade Receivable: ` 1,045.96 Crore

The above includes amount of ` 12.63 Crore being recoverable from Punjab State Power Corporation Limited for sale of power made in the previous years against actual recoverable amount of ` 1.14 Crore as on 31 March, 2015. This has resulted in overstated of Trades Receivables as well as Reserves & Surplus by ` 11.49 Crore.

In reply to this para, it is submitted that the amount of Rs. 12.63 crore being recoverable from Punjab State Electricity Board (PSEB) shown in the books of accounts of the HPSEB Ltd. was under reconciliation with the concerned Utility. Now, the same has been reconciled and settled in the financial year of 2015-16. Hence, para may be settled/ dropped.

b) The above includes ` 22.70 Lakh pertaining to embezzlement cases. This has resulted in overstatement of Trades Receivables as well as Revenue from Operation by ` 22.70 Lakh and understatement of Deficit to the same extent.

In this context, it is submitted that during the internal audit of HPSEBL for the FY 2014-15, Internal Audit Party has reported the misappropriation/ embezzlement of cash by the staff amounting to Rs. 28,71,746/- in ESD Kandaghat and Rs. 2,97,677/- in ESD, Nahan. Out of this Rs. 8, 99,485/- has been recovered/ deposited by the officials and for the remaining amount the matter is under investigation. The misappropriation/ embezzlement have not proved as yet and the department inquiry is in process. Therefore, the embezzled amounts have not been withdrawn from Trade Receivable. Hence, the para may be dropped please.

ii) Cash and Cash Equivalents: `145.47 crore The above includes ` 11.89 Crore recoverable on

M/s GNG Trading Co. Pvt. Ltd. was

299

account of energy bills for the period from January 2014 to April 2014 for which default in payment was made by the collecting agency. This has resulted in overstatement of Cash and Cash Equivalents by `11.89 crore as well as Reserves & Surplus by `11.16 crore and understatement of Deficit to the extent of �0.73 crore.

collecting energy bill payments from consumers through Lok Mitra Kendra (LMKs) on behalf of HPSEB Ltd. and depositing the collected proceeds with HPSEBL for the period ranging from June 2011 to April 2014. M/s GNG Ltd. had also submitted cheques amounting to Rs. 11.89 crore which were dishonored. A complaint has been filed in the court of Learned Chief Judicial Magistrate, Shimla and final outcome of the case is still awaited. The outstanding amount shown as Cash-in- Transit is as per Accounting Policies of the Companies. Hence the para may be dropped please.

2. Fixed Assets Capital Work –in- Progress ` 937.78 crore

The Work for supply and erection of 33/11 KV S/ Station at Bhraru was rescinded by the Contractor in April, 2014 and Bank Guarantee of ` 18.22 Lakh was forfeited by crediting Miscellaneous Receipt (Revenue) account. This should have been credited to Capital Work in Progress (CWIP) instead of Miscellaneous (Revenue) account. This has resulted in overstatement of Capital Work-in- progress (CWIP) by ` 18.22 Lakh and understatement of deficit to the same extent

In this regard, it is submitted that work for supply and erection of 33/11 KV S/ Station at Bhraru under ED, Jogindernagar was initially awarded to M/s Skoda Ltd. The firm supplied the material valuing of Rs. 60, 30,949/- and carried out the erection work of Rs.5,93,923/- (aggregating to Rs. 66,24,872/-). The work was rescinded by the firm and as per clause of award/ contract, the Bank Guarantee of Rs. 18.22 Lakh deposited by Contractor was forfeited and credited to BH 62. 922 (Other Income). Due to rescinding the works, the remaining work of the contract was award to M/s Sharika Enterprises Pvt. Ltd for Rs. 95,64,351/- & to M/s Sanjeev Contractor for Rs. 2010777/- which was within the contract amount of Rs. 1.82 crore. Hence, no capital cost was increased/ decreased and BG amount credited to “Other Income Head” is in order as per terms of award. Hence, the para be dropped please.

3. Current Liabilities Other Current Liabilities: ` 2,065.68

300

Crore i) The above does not include. ` 1,14,crore payable to the contractor of Khauli Hydel Electric Project (HEP) consequent upon decision of the Hon’ble Court in his favour. This has resulted in understatement of Other Current liabilities as well as Deficit by `1.14 crore.

In reply to this para it is submitted that decision of court case (Execution petition No. 3,4, and 5 of 2015) was received in January 2016 in favour of M/s SAB Industry. The accounts are generally closed in September, 2015 in the field Units. Therefore, the provisions of the audited amount could not be made in FY 2014-15. As per the direction of court, the payment has been made in FY 2015-16 in favour of SAB Industry. The facts of the same have been disclosed in Note No 2.33 (B) against Sr. 18 (a) (Disclosure of Contingent Liability). Hence para may be dropped.

ii) The above does not include. ` 0.82 crore on accounts of work done by the contractor of 33/11 KV Sub Station at Kalkhar in Distt. Mandi up to 31.3.2015. This has resulted in understatement of other Current Liabilities as well as Capital Works–in-Progress (CWIP) by `0.82 crore.

In reply to this para, it is submitted that M/s Sharika Enterprises Pvt. Ltd , Noida (not M/s Skoda Ltd ) has executed the balance work for construction of 33/11 KV substation at Kalkhar upto March, 2015 and firm raised a bill for Rs. 82.25 Lakh during July, 2015 . In the absence of bill, the provision could not be made in FY 2014-15 annual accounts. However, the payment has, now, been made in FY 2015-16 to the firm against available budget by charging the expenditure to the concerned schemes. Hence, para may be dropped

4. STATEMENT OF PROFIT AND LOSS Depreciation and amortization Expenses: ` 305.32 crore

The above includes ` 127.26 Crore on account of completed Civil Works of Ghanvi Stage-II Hydel Electric Project (HEP), which was commissioned during January, 2014. This has resulted in overstatement of Capital Work in Progress (CWIP) by ` 127.26 Crore and understatement of Fixed Assets to the same extent. Consequently, Depreciation and Amortization expense as well as Deficit is also understated to the extent of `6.68 crore.

In this context, it is submitted that Ghanvi Stage-II Hydel Electric Project (HEP) was commissioned November, 2014 and expenditure incurred upto Nov, 2014 was Rs. 12465.27 Lac ( Rs, 12021.14 + IDC Rs. 444.13 Lac). Out of which Rs. 6972.20 Lac has been capitalized and balance amount of Rs. 5493.07 Lac shall be capitalized after sanctioning of revised estimates. Hence para may be dropped.

301

5. SIGNIFICIANT ACCOUNTING POLICIIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31 March, 2015 i) Loss of ` 20.27 Crore occurred in January, 2015 due to fire in 120 MW Bhawa Hydel Electric Project. The above amount of ` 20.27 Crore has been included in the Assets not in use under the Head “Other Non Current Assets” in the Balance sheet. But the above facts have not been disclosed in the “Notes to the Accounts”. Thus they are deficient to that extent ,

In reply to this para, it submitted that the information regarding shut down of Bhaba Power Generating Plant burnt due to fire had already been disclosed in significant Accounting Policies & Notes forming part of the annual accounts under Sr. No 46 Note No 2.31 of FY 2013-14 as per the requirement of AS-4 (Contingency and event occurred after Balance sheet period). Now, the Generating Units No II & III have been repaired/ renovated and started Generation w.e.f 21.9.2016 & 22.11.2016 respectively as per water availability/capacity. The value of damaged/ burnt fixed Assets amounting to Rs. 20.27 crore which has been transferred to Account Head “Assets not in use”, is as per accounting policy of the Company. This amount shall be settled from accounts head (Assets not use) after the approval of the competent authorities and there is no need to disclose the same in Notes to the Accounts”. Hence para may be dropped please.

ii) A reference is invited to Note No 48, wherein it had been stated that “the company had restructured loan under Financial Restructured Plan (FRP) in Bonds/ Long term loans of Rs. 1235.41 Crore against Rs. ` 1462.50 Crore approved by State Government under FRP scheme of Ministry of Power dated 5.10.2012. But now FRP schemes has replaced by UJWAL Discom Assurance YOJANA (UDAY) Schemes for which Tripartite Memorandum of Undertaking (MOU) has been signed ( 08 December, 2016) amongst Ministry of Power, Govt. of India (GOI), Govt. of Himachal Pradesh (GOHP) and Himachal Pradesh State Electricity Board Limited (HPSEBL) for achieving turnaround of HPSEBL. Under this Schemes, GOHP will take over 2890.50 Crore (75% of outstanding debt) of HPSEBL as on 30

In reply to this para, it is intimated that Financial Restructuring Plan (FRP) and Ujwal Discom Assurance Yojna (UDAY) are different and distinct schemes introduced by the GOI for Discoms. The loans restructured under FRP schemes have also been taken into account. The annual accounts of the Company for Fy 2014-15 have been approved by the Board on dated 1.7.2016 whereas the MOU for UDAY has been signed on 8th December 2016. Therefore, the disclosure in notes to accounts for Tripartite MOU to take over of Rs. 2890.50 Crore (75% of outstanding debt) of HPSEBL as on 30 September, 2015by GoHP in the year 2016-17 has not been mentioned. Hence para may be dropped.

302

September, 2015 in the year 2016-17. But the above fact has not been disclosed in the notes to the accounts. Thus they are deficient to that extent. iii) HPSEBL has shown ` 340.34 Crore payable on account of free power royalty to Government of Himachal Pradesh (GoHP)against total payable of ` 365.23 crore, subject to reconciliation with Power Trading Corporation (PTC)/ Directorate of Energy. This being a material fact should have been disclosed in the “Notes to the Accounts’, which was not done. This they are deficient to that extent.

In this context, it is intimated that payment of free power royalty is being made through PTC and SJVNL. The reconciliation of outstanding amount payable to GOHP is process. A sum of Rs. 365.23 crore ( not 340.34 Crore) is payable to GOHP on account of free power royalty which is higher than the amount shown by the Government of Himachal Pradesh (GoHP)/ Director Energy Annexure “B”). The balance shown by the Directorate of Energy is not acceptable to us & shall be reconciled with PTC/ Directorate of Energy. Hence para may be settled.

iv) HPSEBL has shown `74.78 Crore payable to Power Trading Corporation (PTC) as Late Payment Surcharge (LPS) against total payable of ` 161.87 subject to reconciliation with Power Trading Corporation (PTC)/ Directorate of Energy. This being a material fact should have been disclosed in the “Notes to the Accounts’, which was not done. Thus they are deficient to that extent.

In reply to this para it is submitted that most of the free power payments are being adjusted with the amount of roll back subsidy receivable from Govt. after sanction of State Government. The late payment surcharge amounting to Rs. 74.78 Crore is for FY 2014-15 which has been calculated as per power purchase agreement for purchase of Free Power Share of Government of Himachal Pradesh (GoHP). The LPS charges payables as at 31.3.2015 to GOHP / Directorate of Energy through PTC are Rs. 161.87 Crore. & shall be reconciled with PTC/ Directorate of Energy. Hence para may be dropped.

6. ANNEXURE TO THE AUDITOR REPORT (Form AOC-1) Himachal Pradesh State Electricity Board is having 100 percent shareholding in its subsidiary Company Beas Valley Power Corporation Limited. Statement containing salient features of financial statements of subsidiaries in pursuant to Section 129 (3) of the Companies Act, 2013

In reply to this para it is submitted that the Form AOC-1 duly signed (Annexure C) regarding Statement pursuant to Section 129 (3) of the Companies Act, 2013 has been collected from Statutory Auditors of the Company and shall be incorporated with

303

requires that Audited AOC-1 is attached to financial statements in case of Companies with subsidiaries, associates and joint venture. However, the same has not annexed to the Auditor Report. Thus, the report is deficient to that extent.

Independent Auditor’s Report on the consolidated Financial Statement at the time of printing of Balance sheet of the Company. Hence, para may be dropped please.

7. IMPACT OF COMMENTS As a result of comments, current year loss of `113.51 crore had been understated by ` 8.96 crore. In case these adjustments are carried out, current year loss would increase to ` 122.47 crore as against �113.51 crore depicted currently.

No comments

Sd/- Chief Accounts Officer, F&A Wing, HPSEB Ltd., Shimla-171004. Place: Shimla Dated: 14.03.2017

jktdh; eqnz.kky;] fg0 iz0] f'keyk&2215&,p0ih0,l0bZ0ch0@2017&28&3&2017&200-

annual report 2014-15 - employee portal annual report 2014-15 himachal pradesh state electricity...

Documents