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CONTENTS

Page Nos.

Board of Directors 2

Notice 3-4

Director's Report 5-13

Managements replies to Comments of C & AG 14-18

Report of Comptroller & Auditor General 19-21

Statutory Auditors Report 22-36

Managements replies to Report of Statutory Auditors 37-58

Balance Sheet 59

Profit and Loss Account 60

Cash Flow Statement 61

Significant Accounting Policies & Notes on Accounts 62-107

CONTENTS

2

DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED

Board of Directors

Audit Committee Company Secretary

Auditors

Lead Banker Registered Office

1. Sh. Rajan Kumar Gupta, IAS ChairmanAddl. Chief Secretary (Power)

2. Sh. Arun Kumar Verma Managing Director

3. Sh. Nitin Kumar Yadav, IAS DirectorSecy./Power & MD, UHBVNL & HVPNL

4. Sh. Vijay Singh Dahiya, IAS DirectorSpl. Secy./Finance, GoH

5. Sh. Vineet Garg, IAS DirectorMD, HVPNL

6. Sh. M.K.V. Rama Rao DirectorMD, HPGCL

7. Sh. Suresh Kumar Bansal Director Projects

8. Sh. Ravinder Kumar Batra Director Operations

9. Sh. Kalyan Kumar Ghosh Director

10. Sh. R. P. Sasmal Director

11. Ms. Sanghamitra Pyne Director

12. Sh. Anil Gupta Director

Sh. M.K.V. Rama Rao Sh. Harjinder SinghDirector, DHBVNLChairman of the Committee

Sh. Kalyan Kumar GhoshDirector, DHBVNL

Member of the CommitteeM/s O. Aggarwal & Co

Ms. Sanghamitra Pyne Chartered AccountantsDirector, DHBVNLMember of the Committee

Oriental Bank of Commerce Vidyut Sadan, Vidyut Nagar,Hisar – 125 005 (Haryana)

3

Subject: Notice for holding Adjourned 16th Annual General Meeting of the Dakshin Haryana Bijli Vitran Nigam Ltd.

SHAREHOLDERS

Please find enclosed herewith the 16th Annual Report of the Company for the Financial Year 2014-15 containing the Notice for holding Adjourned 16th Annual General Meeting scheduled to be held on Monday, the 19th day of September, 2016 at 10:30 AM at the Registered office of the Company in Conference Hall, Vidyut Sadan, Vidyut Nagar, Hisar, Haryana.

You are requested to kindly make it convenient to attend the meeting.

By order of the BoardFor Dakshin Haryana Bijli Vitran Nigam Ltd

Sd/-(Harjinder Singh)

Memo No.-58/CS/AGM/DH-6 Dated: 19.09.2016

1. Hon'ble Governor of Haryana through Sh. Rajan Gupta, IASAdditional Chief Secretary (Power)Govt. of Haryana.

2. Sh. Rajan Gupta, IASChairman, DHBVNL.

3. Sh. Arun Kumar VermaManaging Director, DHBVNL.

4. Sh. Nitin Kumar Yadav, IASManaging Director, UHBVNL.

5. Sh. Chander Shekhar Khare, IASD. C. Hisar.

6. Sh. Rajnarayan Kaushik , IASADC, Hisar.

7. Sh. Manish Lohan, HCSEstate Officer, HUDA, Hisar.

8. M/S Haryana Vidyut Prasaran Nigam Ltd.through Sh. H. C. Gupta, Chief Engineer/ TS, HVPNL, Hisar.

Sd/-(Harjinder Singh)

COMPANY SECRETARY

Company Secretary

NOTICE

Endst. No.

Copy of notice is sent to the following with a request to attend the meeting:-

1. Sh. Rajan Gupta, IAS, Chairman, DHBVNL

2. Sh. Arun Kumar Verma, MD, DHBVNL

3. Sh. Vineet Garg, IASPrincipal Secretary & MD, HVPNL

4. Sh. Nitin Kumar Yadav, IASMD, UHBVN & Director DHBVN

5. Sh. C.G. Rajinikaanthan, IASAdditional Secretary Finance Govt. of Haryana, HPUs & Director, DHBVNL

6. Sh. M.K.V. Rama RaoMD, HPGCL & Director DHBVNL

7. Sh. Ravinder Kumar BatraDirector/Operations, DHBVNL

8. Sh. Anil GuptaDirector, DHBVNL

M/s O. Aggarwal & Co.

Chartered Accountant, Bhiwani

M/s Grish Madan & Associates

Company Secretaries, Panchkula

-Sd/-

(Harjinder Singh)

COMPANY SECRETARY

58/CS/AGM/DH-6 Dated: 19.09.2016

BOARD OF DIRECTORS

STATUTORY AUDITOR

SECRETARIAL AUDITOR

4

NOTICE

Notice is hereby given that the Adjourned 16th Annual General Meeting of Dakshin Haryana Bijli Vitran Nigam Ltd. will be held on Tuesday, the 19th day of September, 2016 at 10:30 AM at the Registered Office in Conference Hall, Vidyut Sadan, Vidyut Nagar, Hisar, (125001) Haryana to transact the following business:

ORDINARY BUSINESS:

To receive, consider and adopt the Audited Financial Statements of the Company for the Financial Year ending 31st March, 2015 alongwith Director's Report and Auditor's Report thereon.

Notes:

a) A member entitled to attend and vote at the Meeting, is entitled to appoint proxy to attend and vote instead of himself/herself and the proxy(s) need not be a member of the Company.

b) Proxies in order to be effective should be lodged with the Company at least 48 hours before the commencement of the Meeting.

By order of the Board

for Dakshin Haryana Bijli Vitran Nigam Ltd.

-Sd/-

(Harjinder Singh)

Company Secretary

Place: Hisar

Dated: 26.08.2016

INCOMES

Revenue from the sale of power 11170.03 9849.87(including FSA)Other Income including 2230.83 1604.19Revenue Subsidy & GrantsTotal Income 13400.86 11454.06

TOTAL EXPENSES 13386.55 11960.93

Gross Profit/ Loss before Interest, 14.31 (506.87)

Depreciation and TaxationLess : Interest 950.50 991.68Profit/(Loss) before depreciation (936.19) (1498.55)

& TaxationLess : Depreciation 180.38 149.87Provision for Taxation 0.01 0.01Net Prior Period Charges/Income -0.03 0.03Profit/(Loss) after Taxation (1116.55) (1648.46)

Add: Transfer to Regulatory Assets --------- --------Less: Amortization of regulatory assets --------- --------Exceptional Items/ Extraordinary Items -480.38 440.19Profit/(Loss) of Current Year (636.17) (2088.65)

Loss transferred from UHBVN (1356.27)

Losses upto FY 2013-14 (10726.59) -

Balance carried forward to next year (12719.03) (10726.59)

Financial Results:

Particulars 2014-2015

(Rs. in crore)

ToThe Members,Dakshin Haryana Bijli Vitran Nigam LimitedHissar

Your Directors present the Sixteenth Annual Report and the Audited Accounts of the

Company for the financial year ended 31st March, 2015

2013-2014(Rs. in crore)

5

Director's Report

6

Turnover( In Crores) `

AT&C Losses (%)

Distribution Losses (%)

Connected Load (In KWs)

Domestic

Commercial

Industries

Tube-Wells

Others

Sub Stations (In Numbers)

Distribution T/Fs (in Numbers)

Transmission & Distribution Lines (In KMs)

33 KV

11 KVLT

Net Profit & Loss( In Crores) `

-633.17 -791.94

-4599.44

-1352.40

-2088.65

2009-10 2010-11 2011-12 2012-13 2013-14

26.60

24.7424.28

23.29

24.25

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

26.97

22.9523.71

22.3823.66

2009-10 2010-11 2011-12 2012-13 2013-14

710.87621.99

389.61425.15

953.05

2009-10 2010-11 2011-12 2012-13 2013-14

5263.956211.35

7067.00

8407.39

11454.06

2009-10 2010-11 2011-12 2012-13 2013-14

Capital Expenditure

( In Crores) `

2302629

2658619

2848859

3073617

555703 540959 604403

1223351

2740642

31088783262733 3190625

18431441994785

21844112314698

584587 611116

802723715576

3671255

1360210

3544012

2841824

810397

2009-10 2010-11 2011-12 2012-13 2013-14

2202 2404 2470 2721

46206

4938852021

5431354746 54934 55094 55769

2009-10 2010-11 2011-12 2012-13

3088

6209564915

2013-14

3088

69157

62957

2014-15

179 190 197218

262

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

33 KV

Distribution T/Fs

125647144087

161177

199749218603

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

2014-15

24.47

26.11

13400.86

2014-15

2014-15

-636.16

3985856

3710023

3016063

910458

1464384

265

236953

704.58

2014-15

2014-15

OPERATIONAL PERFORMANCE

Remittance into Bank (RIB)

The Remittance into Bank during the year under review grew from Rs. 9262 crore in 2013-14 to Rs. 10397.93 crore in 2014-15, showing an increase of 12.26% over the previous year.

Increase in Revenue

The amount billed to consumers against supply of power increased by 13.41% to Rs. 11170 crore in 2014-15 from Rs. 9849 crore in FY 2013-14.

Increase in supply of power

The power supplied to the consumers of the Company during FY 2014-15 has been 24488 MU in comparison to 22056 MU supplied during FY 2013-14, which is 11.03% higher than the previous year.

Distribution Losses & AT&C Losses

The Distribution Losses have increased from 23.66% in 2013-14 to 24.47% in 2014-15 and the AT&C Losses increased from 24.25% in FY 2013-14 to 26.11% in FY 2014-15. This increase resulted due to merger of Jind Circle w.e.f. 03.07.2013.

Detection of theft and recovery thereof

Theft of energy is the major cause of loss of revenue. During the period, major emphasis was given on checking of theft of energy. Several teams of Operations and Vigilance Staff were deployed for checking the consumer premises to detect theft cases and FIRs were lodged against the guilty besides imposing penalty. A total of 116650 no. connections were checked during FY 2014-15, out of which 16273 theft cases were detected. A sum of Rs.47.19 crore as penalty was imposed on the consumers in 2014-15 who were found stealing the energy.

HVDS Projects

Under HVDS scheme, the work of 59 no. feeders amounting to Rs. 195 crores approx. for Gurgaon, Faridabad & Dadri town was allotted. Out of 59 nos., the work of 8 nos. feeders has been completed till 31.03.2015 & the work on the remaining feeders is under progress.

Bifurcation of 11 KV Mixed load feeders

Under Bifurcation of 11 KV mixed load feeders, the work of 113 no. feeders amounting to Rs. 73 Cr. Approx. for Gurgaon & Faridabad was allotted. Out of 113 nos., the work of 62 nos. feeders has been completed till 31.03.2015 & the work on the remaining feeders is under process.

11 KV Automatic Power Factor Corrector (APFC)

During the financial year 2014-15, the work of 11 KV APFC at 163 nos. 33 KV sub stations amounting to Rs. 29 Cr. approx., has been completed.

Creation of 33 KV sub-station alongwith associated lines and augmentation of 33 KV sub-station.

During the financial year 2014-15, four new 33 KV sub-station alongwith the associated lines commissioned and 68 no. sub-station were augmented with a cost amounting to Rs. 102.55 Cr. Approx.

Restructured Accelerated Power Development and Reforms Program (R-APDRP)

Restructured Accelerated Power Development and Reforms Program (R-APDRP) is introduced with the aim of reducing AT&C losses in selected 18 towns covering 49 sub-divisions and 49 other offices. This scheme is divided into 3 main parts i.e. Part A-covers IT applications & establishment of Base Line data and IT applications for energy accounting and IT enable consumer services. Part-B covers strengthening and

INFRASTRUCTURE ADDITIONS

reforms in power distribution system (11 KV feeders and below). DHBVN has declared 9 towns by March 15 and planned to go-live all the balance towns till September, 2015.

In Part A (IT), under R-APDRP, Rs. 90.47 Crores have been sanctioned by MoP, GoI through PFC New Delhi. M/s HCL Technology, Noida is appointed as an ITIA. In Part-A SCADA Project, Rs. 24.29 Crores have been sanctioned for one town namely Faridabad for which tendering has been initiated.

In Part B of R-APDRP, total DPR cost sanctioned is Rs. 589.94 crores (including SCADA Part-B Project).

As per the Haryana Electricity Regulatory Commission (Demand Side Management) Regulations 2014, notified on 19th November, 2014 for advancement and implementation of cost effective DSM Initiatives in state following activities had been carried out by DHBVNL:-

1. MOU Between DHBVN and BEE

For implementing the DSM program in DHBVN MOU had been signed between DHBVN and BEE (Bureau of Energy Efficiency) on 16/7/2014. Under the DSM program BEE will allocate funds and financial support to ESSL for providing manpower/consultancy support to DHBVN along with coordination with EESL for timely implementation of activities assigned under the "Capacity Building of DISCOMs" program.

2. Formulation of DSM cell

As per DSM regulation clause 7(1) a DSM cell has been formulated in DHBVN with below mentioned composition:-

i) CE/Commercial as Chairman

ii) CE/Operation as Member

iii) SE/Energy Audit as Member

iv) XEN/Energy Audit as Member Secretary

3. Activities of DSM Cell

The various activities which shall be carried-out under DSM program by DSM Cell will be as under:

wLoad and Market Research Design & Development of baseline data

For design and development Of DSM plan a detailed Load Research & Market Analysis work shall be carried-out by Survey agency M/S Darashaw & Co. (P) Ltd. hired by EESL.

wUJALA Program (Unnat Jyoti Affordable Lamps for All)

Under this scheme EESL will provide LED Bulb at affordable price up to maximum of 10 nos. The total target of LED Bulbs distribution under DHBVN is 1.25 Cr LED Bulb.

wEnergy Efficient Fan Program

DSM PROGRAMME

7

Under this scheme EESL will provide 50 Watts, 5-Star rated ceiling Fans having 2 years warranty at affordable price.

wThe Tube Light Program

Under this scheme, it is proposed to replace T12/T8 (55 Wtt) tube with T5/T8 (18 Wtt) tube light with 3 years replacement warranty.

wAgriculture Pump Set Program

Under this program old inefficient agriculture pump sets with be replaced with four or five star rated efficient agriculture pumps.

1. All new connections of HT & LT CT applicants were earlier required to be released after checking by M&P staff. In order to expedite the release of HT & LT CT connections, it was decided that henceforth all such connections would be released by 'OP' wing after the receipt of approval from CEI (wherever required) (Sales Circular No. D-22/2014).

2. Further in order to expedite release/sanction of load and approval of electrification plans it was decided vide sales Circular No. D-38/2014 that henceforth the committee comprising of CE/OP, SE/P&D, SE/T&S, SE/OP and SE/NCR shall examine and decide the technical feasibility of all load sanction cases above 2 MVA to 5 MVA and the cases of electrification plan upto 5 MVA except that of private builders, developers and cases involving creation of new substation of 33 KV and above. However, for the load sanction cases upto 2 MVA and where load is available, concerned SE/XEN/SDO/OP would sanction the load as per competency.

3. Keeping in view the large pendency of applications, Tatkal Scheme was launched in the first phase for release of connections to DS/NDS/LT/Industrial categories up to 20 KW irrespective of system constraints and for HT industrial connection of load upto 2000 KW where there were no system constraints (Sales circular No. D-41/2014).

4. To mitigate the problems of industrial/NDS consumers in the vicinity of urban areas, policy was made to shift/release industrial/NDS load from RDS/AP feeders to Urban/Mixed Urban/Industrial feeder (vide Sales Circular No. D-2/2015) stipulating that the HT/LT Industrial/NDS consumer cases having premises up to 2KM from the Municipal limit shall be allowed with the approval of CE/OP concerned subject to certain terms and conditions.

I M P O R TA N T P O L I C Y D E C I S I O N S REGARDING COMMERCIAL ACTIVITIES DURING THE FY 2014-15

5. The A&A (Application and Agreement) form in respect of new connection, reconnection, extension/reduction of load and change of name has been simplified /redesigned (only 4 pages) for the convenience of the applicants (Sales instruction No. D- 13/2014).

6. Regarding the revival of cancelled applications of AP connections for more than 12 months where demand notices have not been complied with and the requisite dues have not been deposited by the applicants, concerned CE/OP was authorized to accord approval for revival of such cases within 3 years of the cancellation (Sales instruction 15/2014).

7. Regarding shifting of HT/LT lines, it has been decided as under (vide Sales instruction No. 16/2014):-a) Shifting of HT/LT lines passing over the

residential buildings/Plotted areas, ponds, Schools etc shall be carried out by the Nigam if these fall within Lal Dora and Phirnies.

b) Shifting of HT/LT lines falling beyond Lal Dora and Phirnies is to be carried out at the cost of beneficiaries except HT/LT lines passing over Govt. schools and parks maintained by any public/Govt. Department/ Gram Panchayats and ponds (Duly certified by the Revenue authorities) for which special estimate shall be framed and the same shall be carried out by the Nigam.

c) Those iron poles which pose danger or may cause accident to human and animals would be replaced by the Nigam.

8. Various measures for consumers' services were taken vide Sales instruction No. 18/2014:-a) Creation of Help desk in the sub division for

issue of A&A forms & receipt of security etc. for the consumers/applicants.

b) The applicants may also intimate regarding new connections above 20 KW through Online, SMS. The total time allowed for release of the connection would be counted from the information received through Online.

9. Any person generating energy for his own use has been exempted from levy of ED (electricity duty) for 4 years from 01.04.2014 to 31.03.2018 (Sales instruction No. 2/2015).

1. Online Consumer Grievances Redressal System

As online consumer Grievances Redressal System is already place in DHBVNL. During the year 2014-15

IT INITIATIVES

8

total numbers of 3357 complaints have been lodged and resolved through Online Consumer Grievances Redressal System.

2. Centralized Call Centre

DHBVN has established a centralized call center as part of R-APDRP (Part-A) Project, for registering of complaints on 24X7 for all consumers falling under its administrative control. The operation of the call centre was started from 26.08.2014. To avoid any charges to the consumer a Toll Free number (i.e. 1800-180-4334) has been provided. A total of 1,02,046 nos. complaints have been received and resolved through call centers during the financial year 2014-15.

3. Court Case Monitoring System

It has been observed a substantial portion of revenue is getting blocked in the court cases. For better monitoring of court cases, DHBVN has implemented online Court Case Monitoring System (CCMS) wherein the synopsis of the entire consumer related court cases are entered by the field offices. Through the online system, the court cases are being monitored and prompt action against the high stake court cases is being taken up timely.

4. Online Cash Collection and Reconciliation System

The Company has a vast consumer base and for collection of revenue many collection centers are being operated in the field by Company's staff as well as outsourced staff. For better monitoring of revenue collection in the field an "Online Cash Collection and Reconciliation System" has been recently implemented in Company, wherein all the models of cash collection have been integrated on a single platform in order to facilitate real time monitoring. The facility of Online Payments has been extended to all the consumers of DHBVN, which was earlier provided to the consumers of Gurgoan, Faridabad & Hisar towns only.

5. Online application for HT/LT Connections

A transparent & visible system for submission of online application for industrial (HT/LT) connection as well as for other categories of connections wherein the applied load is more than 20 KW has been launched. The online system for submission of application facilitates better monitoring of pending applications by management and higher offices. This results into timely release of connection and greater consumer satisfaction.

Various Capex works have been undertaken by the Company such as construction of new sub stations, augmenting existing overloaded sub stations, bifurcation/trifurcation of overloaded 11 KV feeders,

CAPEX WORKS

shifting of connections to feeder pillar boxes, release of connections etc. An amount of Rs. 704.58 crore was spent as Capex works in 2014-15 as against Rs. 953 crore spent in 2013-14.

Your Directors have not recommended any dividend since the Company has incurred losses during the year under review.

During the year under review the Company has not accepted any deposit under Section 73 of the Companies Act, 2013.

The Haryana Electricity Regulatory Commission (HERC) has granted License to the Company for Distribution & Retail Supply of Power in the South of Haryana.

Haryana Vidyut Prasaran Nigam Limited being holder of 29.70% equity is associate company of your company pursuant to provisions of section 2(6) of the Companies Act 2013.

Haryana Vidyut Prasaran Nigam Limited (HVPNL) was incorporated as a company under the Companies Act, 1956 on 19th August 1997 and was granted the certificate to commence its business on 18th September 1997. Subsequently, the transmission and distribution businesses of the erstwhile HSEB were transferred to HVPNL on 14th August 1998. This was done through transfer scheme, notified by the Government, vide Notification No. SO/06/HA/98/S 23, 24 & 25/99, dated 14.08.1998 which entrusted HVPNL with the functions of Power transmission & distribution.

Another transfer scheme, vide Notification No. SO 156/HA.10/98/Ss 23, 24,25 & 55/99, dated 01.07.1999 further segregated HVPNL by carving out two more corporations- UHBVNL & DHBVNL. On 1st July 1999, the distribution business was transferred to Uttar Haryana Bijli Vitran Nigam Limited (UHBVNL) in the North Zone & Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL) in the South Zone.

The Company holds Business License issued by HERC for Transmission & Bulk supply of Power in Haryana. The Company has ownership interest in BBMB Power Project.

The information on conservation of Energy Technology Absorption as stipulated in section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Account) Rules 2014 is attached as Annexure-I.

DIVIDEND

FIXED DEPOSITS

LICENCE FOR CARRYING OUT BUSINESS

SUBSIDIARY, JOINT VENTURE & ASSOCIATE COMPANY

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

9

DIRECTORS AND KEY MANAGERIAL PERSONALS

The Board of Directors of the Company comprises of below mentioned Directors as on 31.03.2015:-

10

Sr. Name of Directors Designation Category Date of No. Appointment

1. Sh. Rajan Gupta ACS/Power & Chairman, Part Time Director 18.11.2014DHBVNL

2. Sh. Arun Kumar Verma Managing Director Whole Time Director 04.03.2014

3. Sh. Nitin Kumar Yadav Director Part Time Director Representing Power Utilities 24.11.2014

4. Sh. M. K.V. Rama Rao Director Part Time Director Representing Power Utilities 05.11.2013

5. Sh. Vijay Singh Dahiya Director Part Time Director Representing Power Utilities 29.12.2014

6. Sh. K. K. Ghosh Director- Independent Part Time Director 17.04.2013

7. Sh. R. P. Sasmal Director- Independent Part Time Director 17.04.2013

8. MS. Sanghamitra Pyne Director- Independent Part Time Director 17.04.2013

9. Sh. Kapil Kumar Marwha Chief Financial Officer /KMP Whole Time 23.07.2014

10. Sh. Harjinader Singh Company Secretary/KMP Whole Time 24.09.2014

The following changes had taken placed in the Board of Directors and Key Managerial Personals of your company since last financial year 2013-14.(i) Sh. Devender Singh, IAS was ceased to be Director

cum Chairman w.e.f. 13.11.2014.(ii) Sh. Rajan Gupta, IAS was nominated as Chairman

cum Director on 18.11.2014.(iii) Sh. Harinder Kumar, IRS was ceased to be Director

w.e.f. 23.08.2014.(iv) Sh. Anil Malik, IAS was ceased to be Director w.e.f.

24.11.2014.(v) Sh. Nitin Yadav, IAS was nominated as Director

w.e.f. 24.11.2014.(vi) Sh. V.K. Chaudhary was ceased to be Director w.e.f.

30.11.2014.(vii) Sh. Vijay Singh Dahiya, IAS, was nominated as

Director w.e.f. 29.12.2014.(viii)Sh. Anurag Agarwal, IAS was ceased to be Director

w.e.f. 12.01.2015.(ix) Sh. P.C. Gupta was ceased to be Director w.e.f.

19.01.2015.(x) Sh. S. B. Khyalia was ceased to be Director w.e.f.

05.03.2015.(xi) Sh. Kapil Kumar Marwaha was designated as Chief

Financial Officer w.e.f. 23.07.2014.(xii) Sh. Harjinder Singh was appointed as Company

Secretary on 24.09.2014The Board places on record its sincere appreciation and gratitude for the valuable contribution & support rendered by the outgoing Directors during their tenure in the Company.

The Board of Directors met six times during the financial year 2014-15. The meetings of the Board were conducted by the Company Secretary and majority of the Directors had attended each meeting.

All the Independent Directors meet the criteria of independence as provided in Section 149(6) of the

BOARD OF DIRECTORS MEETING

DECLARATION BY INDEPENDENT DIRECTORS

Companies Act, 2013, and necessary declarations under section 149(7) of the Companies Act 2013 have been received from them.

1. Audit CommitteeThe Board of Directors had constituted Audit Committee pursuant to the provisions of section 177 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of Board & its Powers) Rules 2014 with below mentioned compositions for the financial year 2014-15:-1. Sh. S. B. Khyalia Chairman2. Sh. V. K. Chaoudhary Member3. Sh. K.K. Ghosh Member During the financial year 2014-15 two meetings of Audit Committee had been conducted. All the recommendations made by the Audit Committee during the year had been accepted by the Board of Directors.

2. Whole Time DirectorsTo review the functional areas of business and other matters, the Whole Time Directors of the Company hold their meetings from time to time and twenty four such meetings were held during the financial year 2014-15. The Company Secretary acts as Secretary for conducting the meetings.

3. Nomination & Remuneration Committee The Board of Directors had constituted Nomination & Remuneration Committee pursuant to the provisions of section 178 of the Companies Act 2013 with below mentioned compositions as on 31.03.2015:-1. Sh. M.K.V. Rama Rao Chairman2. Sh. R. P. Sasmal Member3. Ms. Sanghamitra Pyne Member

4. Corporate Social ResponsibilityPursuant to the provision of 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, CSR

COMMITTEES OF THE BOARD OF DIRECTORS

Committee has been constituted by the Company with below mentioned members:-1. Sh. R. P. Sasmal Chairman2. Sh. Suresh Kumar Bansal, Member3. Sh. Ravinder Kumar Batra Member The Company has also formulated a Corporate Social Responsibility Policy which inter alia contains guidelines and mechanism for undertaking various projects for developments and welfare of Society at large.Due to non availability of profits no 4.Corporate Social Responsibility activities had been undertaken by the company during the financial year 2014-15.

Pursuant to the provision of section 177 of the Companies Act 2013 the company has formulated and adopted a Vigil Mechanism Policy. The policy provides a channel to Directors and employees to report their genuine concerns about any unethical or improper behavior of an employee of the company or malpractices or events which have taken place or suspected to take place. It also provides adequate safeguards against the victimization of an employee who has availed the Vigil Mechanism.

All transactions entered with Related Parties during the financial year were on arm's length basis and in ordinary course of business. The disclosure of related party transactions as required under Section 134 (3) (h) of the Companies Act 2013 in Form AOC -2 has been annexed as Annexure-II.

In accordance with the provisions of the section 134 (3) (a) of the Companies Act 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in form MGT-9 has been annexed as Annexure-III.

There are no loans given, guarantee issued or investment made by the Company to which provision of section 186 of the Companies Act, 2013 are applicable.

M/s O. Aggarwal & Co., Chartered Accountants, were appointed as Statutory Auditor to conduct audit of the books of Accounts for the financial year 2014-15 (had appointed the Comptroller and Auditor General of I n d i a , N e w D e l h i v i d e s i t s l e t t e r N o . CA.V/COY/HARYANA, DHBJLI(1)/457 dated 01.08.2014) The reports of the Statutory Auditor and the Comptroller General of India on the account for the financial year 2014-15 have been received.As required under Section 134(3) (f) of the Companies Act, 2013, your Directors also offer their fullest information and explanations on the reservations, qualifications and comments of the Statutory Auditors on the accounts of the Company for the year 2014-2015 in the addendum to this report.

VIGIL MECHANISM

RELATED PARTY TRANSACTIONS

ANNUAL RETURN

PERTICULERS OF LOANS, GUARRANTEE AND INVESTMENTS

STATUTORY AUDITORS

Further, M/s O. Aggarwal & Co., Chartered Accountants, have also been appointed as Statutory Auditors of the Company for the FY 2015-16 by the C&AG of India vide its letter No. CA.V/COY/HARYANA, DHBJLI (1)/1176 dated 05.08.2015.

The Comptroller Auditor General of India (CAG) has given comments on the accounts for the financial year ended 31.03.2015 under Section 143(6) of the Companies Act 2013. The comments of the Comptroller Auditor General of India along with replies of Management have been enclosed in an addendum to this report.

Pursuant to the provision of the section 204 of the Companies Act 2013 the Board of Directors had appointed M/s Girish Madan & Associates as Secretarial Auditors of the Company for the financial year 2014-15. M/s Girish Madan & Associates, Panchkula has submitted the Secretarial Audit Report in Form MR-3 for the financial year 2014-15 the copy of the same has been annexed as Annexure-IV. The Report submitted by M/s Girish Madan & Associates does not contain any qualification or adverse remarks for the financial year 2014-15. M/s. Girish Madan & Assocaites, Panchkula has also been appointed as Secretarial Auditor for the financial year 2015-16.

In accordance with the provisions of section148 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rule 2014 M/s R. K. Bhateja & Co., Cost Accountants were appointed as Cost Auditors by Board of Directors for the financial year 2014-15.The Cost Audit Report for the financial year 2014-15 had been submitted by M/s R. K. Bhateja & Co. and has been filed with Registrar of Company, Ministry of Corporate Affairs, New Delhi. Further, on the recommendations of the Audit Committee the Board of Directors had appointed M/s A.G. Aggarwal & Associates, Noida as Cost Auditors for the financial year 2015-16.

The Company has an internal audit system commensurate with the nature and size of the business of the company. The Chief Auditor, DHBVNL has been appointed as Internal Auditor of the Company under Section 138 of the Companies Act 2013 by the Board of Directors of the Company.

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge beliefs, ability and according to the information received confirms that:

(i) in the preparation of the annual accounts for the year ended 31st March, 2015 the applicable accounting standards have been followed and there are no material departures from the same;

COMMENTS OF THE COMPTROLLER AUDITOR GENERAL OF INDIA

SECRETARIAL AUDITORS

COST AUDITORS

INTERNAL AUDIT

DIRECTORS' RESPONSIBILITY STATEMENT

11

12

(ii) the Directors have 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 as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

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

(iv) the Directors have prepared the annual accounts on a 'going concern' basis;

(v) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The company has adequate internal financial controls. And these internal controls were operating effectively during the year.

As required under Electricity Act 2003 and HERC guidelines, DHBVN had established a Forum for Redressal of grievances of consumer in March, 2006. This Forum prepares monthly schedules to visit all Nine Circles in every month. During the financial year 2014-15, 218 number complaints had been received and decided by the Forum.

During the year 2014-15, detail of training provided to the employees of DHBVN in man days is as under:Category Period of No. of officers/officials Man days

training to which training provided

Gazetted FY 2014-2015 1618 4248& Non-Gazetted

In line with provision of "Sexual Harassment of Women (Prevention, Prohibition & Redressal) Act, 2013, an "Internal Complaints Committee" has been constituted in the Nigam for Redressal of complaint(s) against sexual harassment of women employees. During the financial year 2014-15, no complaint has been received in the Nigam.

The Ministry of Corporate Affairs vide its notification dated 05.06.2015 has exempted the Govt. Companies from the applicability of section 197 of the Companies Act, 2013. Hence no information is required to be given by the Company under this section.

Ujwal Discom Assurance Yojna (UDAY)The Govt. of India (Ministry of Power) notified Ujwal Discom Assurance Yojna (UDAY) on 20/11/2015 for

INTERNAL CONTROLS SYSTM AND THEIR ADEQUACY

CONSUMER REDRESSAL FORUM

TRAINING IN MAN DAYS

COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AT REDRESSAL) ACT, 2013

PARTICULARS OF EMPLOYEES

MATERIAL CHANGES AND COMMITMENTS

operational and financial turnaround of State Power Distribution Utilities. The tripartite MoU amongst Govt. of India, Govt. of Haryana and State DISCOMs (UHBVN & DHBVN) was signed at New Delhi on 11/03/2016. The scheme aims at reducing debt burden of DISCOMs, reduces cost of power & reduce losses to the level of 15% in next 3 years by 2018-19. Under the scheme, 75% of the loan liabilities of DISCOMs outstanding as on 30th September, 2015, are to be taken over by the State Govt. in two years i.e. 50% in FY 2015-16 and balance 25% in FY 2016-17 by issuing non SLR bonds and treating the same as loan from State Govt. to Power Utilities. The entire loan amount would be converted into equity & grant to Utilities over a period of 5 years starting from 2015-16 to 2019-20 @ 15% every year.First tranche of UDAY bonds for both the DISCOMs was issued by the State Govt. on 31/03/2016 at coupon rate of 8.21 % for Rs. 17300 crores. The 2nd, 3rd & 4th tranche of UDAY bonds for the balance amount of Rs. 8650 crores were issued from 15/06/2016 to 4/07/2016 through Reserve Bank of India at coupon rate ranging from 8.06% to 8.14%. The weighted average rate of interest for UDAY bonds of Haryana State comes to 8.1860%.The DHBVN loan liabilities covered under UDAY are Rs. 11149 crores including 75% of the loans of Rs. 1859 05 crores transferred from UHBVN on account of transfer of Jind distribution circle in FY 2013-14.The UDAY would result in significant reduction in interest cost for the DISCOMs. The loans in the books of the DISCOMs prior to take over by the State Govt. were carried interest at around 11.70% (Base Rate of Lead Bank +2%) which after issue of bonds reduced to 8.19% resulting into saving of 3.51% (approx.).The full benefit would, however come after conversion of entire State Govt. loan portion into equity and grant to DISCOMs by the year 2020 @ 15% every year.

During the year under review, the industrial relations with the employees remained cordial and peaceful. The Directors wish to place on the record their sincere appreciation for unstinted support provided to the Company by the employees at all levels.

The Board of Directors acknowledge with gratitude the co-operation and assistance rendered by the Haryana Electricity Regulatory Commission (HERC), Bankers, Financial Institutions and various Departments of the Central and State Governments. The Board also expresses its deep gratitude for the continued co-operation and support received from the Shareholders.

For and on behalf of the Board of Directorsof Dakshin Haryana Bijli Vitran Nigam Ltd.

Rajan Gupta, IAS Chairman, DHBVNL

Date: Place: Panchkula

INDUSTRIAL RELATIONS

ACKNOWLEDGEMENTS

Sd/-

PARTICULARS UNDER COMPANIES (DISCLOSURE

OF PARTICULARS IN THE REPORT OF BOARD OF

DIRECTORS) RULES 1988 FOR THE YEAR ENDED

31ST MARCH, 2014.

a) For conservation of energy a number of steps have been taken by the Company such as replacement of incandescent lamps with CFL, use of solar water heater system, use of energy efficient/ BEG level equipments, use of energy efficient/ star rated transformers, automatic power switching system, automatic power factor correction units, ESCO model for DSM of commercial, industrial and domestic sectors.

Besides the above, a number of other steps have also been taken by the Company such as distribution of leaflets and pamphlets on energy conservation on important occasions like India International Trade Fair, Gandhi Jayanti Samaroh, Inaugurat ion/ foundat ion s tone laying programmes of VIPs etc. for mass awakening. Messages were also disseminated through audio cassettes in various programmes.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

For reduction of consumption of energy new Distribution Transformers are being added wherever required. Rehabilitation and expansion of distribution system has been undertaken and overloaded feeders are being rehabilitated and new feeders are being energized. Rebate is being given in electricity bill of consumers using solar water heater system, Incentive for use of star rated/ energy efficient pump sets is also being given.

c) Impact of measures at (a) and (b) above for reduction in energy consumption and consequent impact on the cost of production of goods.

As a result of the above measures the following benefits have arisen:

?There is a reduction in technical and non-technical line losses and reduction in unauthorized tapping of power supply.

?Supply of quality power to consumers resulting to greater consumer satisfaction.

A. CONSERVATION OF ENERGY

?Reduction in damage rate of distribution transformers.

?Solution to Low Voltage problem and improved voltage to consumer.

?Reduction in overloading of Transformers and reduction in Peak Power Loss.

d) Total energy consumption per unit of production as per Form-A.

DHBVN is not covered in the category of Industries required to furnish the information as contained in the Schedule.

e) Research & Development (R&D): Nil.

(a) Efforts have been made in this regard such as providing high speed internet connections with Computers and Lap Tops to officer's/ offices, Installation of advance version of Electronic Energy Meters, Installation of upgraded Distribution Transformers, computerization of energy billing & various other functions of the Nigam.

(b) As a result of the above efforts, the Company has benefited in curbing theft of electricity and reduction in line losses. The above efforts have also lead to supply of quality power and accurate metering resulting to consumer satisfaction, increase in revenue and efficiency & transparency in working.

a) Earning in Foreign Exchange: Nil

b) Foreign Exchange outgo: Nil

For and on behalf of the Board of Directors

of Dakshin Haryana Bijli Vitran Nigam Ltd.

Rajan Gupta, IAS

Chairman, DHBVNL

Date:

Place: Panchkula

B. TECHNOLOGY ABSORPTION

C. FOREIGN EXCHANGE EARNING AND

OUTGO

ANNEXURE- I TO DIRECTOR'S REPORT

13

14

REPLIES OF THE MANAGEMENT ON THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (6) (B) OF THE COMPANIES ACT 2013 ON THE ACCOUNTS OF DAKSHIN HARYANA BIJLI VITRAN NIGAM LIMITED HISAR FOR THE YEAR ENDED 31ST MARCH 2015.

MANAGEMENT REPLYCOMMENTSPara No.

ANNEXURE-II TO THE DIRECTOR'S REPORT

The preparation of financial statements of Dakshin Haryana Bijli Vitran Nigam Limited, Hisar for the year ended 31 March 2015 in accordance with financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the Company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Companies Act, 2013 are responsible for expressing opinion on these financial statements under section 143 of the Companies Act, 2013 based on independent audit in accordance with the Standards on Auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 2 May 2016.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of Dakshin Haryana Bijli Vitran Nigam Limited for the year ended 31 March 2015. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquires of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) of the Companies Act, 2013 which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related Audit Report.

A. Comments on Financial Position

1. (i) Trade Receivables (Note 17) Rs. 2416.94 crore

Above includes an amount of Rs. 275.73 crore on account of 'Provision for Un-billed Revenue'. As per Schedule III of the Companies Act 2013, unbilled revenue should be shown under the head 'Other Current Assets (Note 20)'. This has resulted in overstatement of Trade Receivables and understatement of Other Current Assets by Rs. 275.73 crore.

No Comments

No Comments

The reclassification as suggested by the Audit shall be carried out in the financial statement for the FY 2015-16.

1. (ii) Current AssetsOther Current Assets (Note 20) Rs.84.76 croreOther receivable Rs. 46.52 crore

This includes Rs. 30.80 crore being the value of theft of property pending investigation. As these assets are in the nature of non-current assets, these should be disclosed under the head Other Non-Current Assets'. (Note 14)This has resulted in overstatement of other current assets and understatement of other non-current assets by Rs. 30.80 crore. Further, out of Rs. 30.80 crore the majority of the amount (Rs. 27.30 crore) is pending for more than one year and the chances of recovery are remote.

B. Comments on Profitability

2.1 Purchase of Power Rs. 12357.84 crore

Central Electricity Regulatory Commission vide its tariff order dated 27 January 2015 approved final tariff in respect of Tehri HPP of THDC India Limited for the period from 1 April 2009 to 31 March 2014. Based on the tariff order, Rs. 57.48 crore was payable by the Company in six instalment. Since the tariff order was approved during the year 2014-15, necessary liability of Rs. 57.48 crore for purchase of power should have been provided in the books of accounts. The Company has however provided liability of Rs. 19.16 crore only, based on the claim raised by THDC India Limited in instalment during February and March 2015.

This has resulted in understatement of liability and cost for Purchase of Power (Note No. 23) and losses by Rs. 38.32 crore as well as understatement of liabilities.

2.2 Other Current liabilities (Note No. 10) Rs. 1031.20 crore

(i) This does not include Rs. 13.10 crore being the liability toward capital supplies / works, for which invoices were raised during 2014-15, however, accounted and payment made by the Company during the month of April to May 2015.

The reclassification as suggested by the Audit shall be carried out in the financial statement for the FY 2015-16. Further a policy for making provision for losses by theft is being formulated and shall be placed before the BOD's of DHBVN's for consideration.

So long as the booking of these charges in the accounts is concerned, it is submitted that as per payment schedule, the amount of any bills for charges becomes due on 60th day from the day of presentation of bills by the generating company. Amount of any bill becomes due only when the bill of such amount is raised by the Generator/Power Supplier. Normally such claims are contested in the appropriate Court of Law. Accordingly, the bills of Ist and llnd installment were raised by Tehri during February 2015 and March 2015 which were booked in the accounts for FY 2014-15. Bills of supplementary energy charges for the rest four installments were raised during April 2015 to July 2015 and hence the same have been booked in the accounts for FY 2015-16.

(i) As per the payment terms, the amount becomes due after receipt of the bills and completion of other formalities. Accordingly the liability in accounts is recognized after receipt of bill and completion of other formalities. Hence the date of bill is irrelevant for the DHBVN. In most of the cases, the bills and other

15


This has resulted in understatement of liability and capital works in progress by Rs. 13.10 crore.

(ii) This does not include Rs. 1.64 crore being the liability toward material despatch / received and invoices issued by the supplier during 2014-15 and, the payment for which were made by the Company during May - June 2015. This has resulted in understatement of current liabilities and Inventories by Rs. 1.64 crore.

(iii) This does not include Rs. 2.57 crore being the liability towards consultancy and service charges, accounted and payment made by the Company during the month of April - June 2015. This has resulted in understatement of liability, other expenses (Note No. 27) and losses by Rs. 2.57 crore.

3 Inventories (Note 16) Rs. 231.67 croreStores and Spares in stores (Capital & O&M) Rs. 201.52 croreRead with Serial '1.6' titled Stock of Stores & Spares (Non-current Assets) of Note No. 1 'Significant Accounting Policies'.

A reference is invited to Company's Significant Accounting Policies (Note No. 1) on stock of stores and spares, which states "scraps are accounted for as and when these are sold". The Company however has valued scrap (capital & O&M items) amounting to Rs. 12.23 crore and included it in the above head. The valuation of scrap items is in violation of the Company's Accounting Policy referred above and should have been charged to revenue.

documents are delayed by the firm and hence it is not possible for this office to account far, this expenditure in the month when invoices were generated by the supplier. Besides, booking of expenditure in earlier months also increase the tax complications. In the instant para, the invoice of May 2014, Dec 14, Oct 14, Jan 15 , Feb 15 and March 15 are received in April/ May 2015 and considering the position explained above, . It will not be correct to book this expenditure in the month of invoice generation and will result in contravention of the basic accounting principal of liability recognition as well as facing tax complications and penalties. This practice is in vogue for the last so many years and not objected by the audit in the past.

(ii) & (iii) As explained above, the amount becomes due to the contractor after receipt of the bills and completion of other formalities as per the provision contained in the contract. Accordingly the liability in accounts is recognized after receipt of bill and completion of other formalities. Hence the date of bill is irrelevant for the DHBVN. In most of the cases, the bills and other documents are delayed by the firm and hence it is not possible for this office to account for this expenditure in the month when invoices were generated by the supplier. Besides, booking of expenditure in earlier months also increase the tax complications. Accordingly it will not be correct to book this expenditure in the month of invoice generation and will result in contravention of the basic accounting principal of liability recognition as well as facing tax complications and penalties. This practice is in vogue for the last so many years and not objected by the audit in the past.

Note No. 1.6(d) of the Significant Accounting Policies states that "Scraps are accounted for as and when these are sold". Further the Note 1.6(a) of the Significant Accounting Policies also provides that inventory is valued at cost. The joint reading of both the policy means that the profit or loss on sale of scraps is accounted for as & when these are sold. DHBVN is also following the same practice since beginning. In case the scrap is not accounted for at a value, this will affect the value of depreciation and complicate the other accounting aspects. However to bring more clarity in the matter, this

16


This has resulted in overstatement of Inventories and understatement of losses by Rs. 12.23 crore.

4 Comments on Notes to Accounts

Government of India (GoI), Ministry of Power (MoP) approved (November 2015) approved Ujjwal Discom Assurance Yojana (UDAY) Scheme for financial turnaround of power distribution Companies (DISCOMs) with an objective to improve financial and operation efficiency of the State DISCOMs. As per the scheme 75% of outstanding debt as on 30 September 2015 of the DISCOMs was to be taken over by the State Government. A t r i p a r t i t e M e m o r a n d u m o f Understanding (MOU) was signed on 11 March 2016 amongst GOl, State Government of Haryana and DISCOMs and 50% of the debt had already been taken over by the State Government on 31 March 2016. The signing of MOU as per UDAY scheme and taking over of debt is an important event for financial turnaround of DHBVNL, which occurred after the balance sheet date but before approval (28 March 2016) of accounts for the year 2014-15 by the Board of Directors of the Company. Thus necessary disclosure as per AS-4 should have been made in the books of accounts.

C. Comments on Auditor's Report on financial Statements

1. Independent Auditor's Report

A reference is invited to Independent Auditor's Report qualification at S.No. (ii) of Annexure II "UHBVN and DHBVN in a meeting held on 4 December 2015, mutually agreed on the balances of Jind Circle to be transferred from UHBVN to DHBVN. The mutually agreed balances have also been notified by the Government on 16 February 2016, which indicate that the loan shall be interest bearing in the books of DHBVN as per actual rate borne by UHBVN with effect from transfer date i.e. 3 July 2013. However, DHBVN has not made provision of interest for the period from 3 July 2013 to 31 March 2015 amounting to Rs.

accounting policy shall be reworded as under to reflect its true sense and spirit in the FY 15-16:- "The profit or loss on sale of scrap is accounted for, as and when these are sold".

The document signed between the parties on UDAY on 11/03/2016 was a memorandum of understanding only whereby the concerned parties agreed to take certain steps in the near future. The first cause of action under UDAY MoU was only arisen on 31/03/2016 when the State Govt. issued bonds for first tranche of UDAY regarding taking over of the DISCOMs loan liabilities. Thus on the date of approval of the accounts i.e. on 28/03/2016, there was no cause/action under the MoU occurred.As the first affect of actions agreed under UDAY MoU came only on 31/03/2016 i.e. after approval of the accounts by the Board.However, the requisite disclosures shall be addressed through the Directors Report.

So long as, the interest liability on the FRP bonds of Rs. 773 crore is concerned, it is submitted that the interest liability provisions on the loans transferred from UHBVN to DHBVN were governed under the State Govt. Notification dated 16/02/2016 where in the transfer of assets and liabilities took effect. As there was no mention of these liabilities in the transfer documents, the same was not provided in the accounts.

17


Already explained in Para B & C

391.57 crore on the loan amount of Rs.1859.05 crore transferred from UHBVN to DHBVN. Resultantly, the finance cost, losses and other current liabilities was understated by Rs. 391.57 crore". The above qualification is short to the extent that the Company has also not made any provision of interest for the period from 3 July 2013 to 21 November 2013 amounting to Rs. 36.84 crore on the loan amount of Rs. 773 crore pertaining to Jind Circle, which was subsequently converted into bonds under FRP scheme on 22 November 2013. As per the agreement of 4 December 2015, these bonds were to be kept with UHBVN, as they did not have any financial impact on account of interest being paid by the Government of Haryana after issue of the bonds. Thus, finance cost, Losses and Other Current Liabilities was further understated by Rs. 36.84 crore.

D. Net impact on comments on

profitability

The net impact of the above comments on Losses for the year works out to Rs. 89.96 crore. If this is taken into account, the Loss for the year of Rs. 636.17 crore would increase to Rs. 726.13 crore.

18

Sd/-Chief Accounts Officer,

DHBVNL, Hisar.


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OFFICE OF THE

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19

Sd/-

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF

THE COMPANIES ACT, 2013, ON THE FINANCIAL STATEMENTS OF DAKSHIN HARYANA BIJLI VITRAN stNIGAM LIMITED, HISAR FOR THE YEAR ENDED 31 MARCH 2015

The preparation of financial statements of Dakshin Haryana Bijli Vitran Nigam Limited, Hisar for the year ended 31

March 2015 in accordance with financial reporting framework prescribed under the Companies Act, 2013 is the

responsibility of the management of the Company. The statutory auditors appointed by the Comptroller and Auditor

General of India under Section 139(5) of the Companies Act, 2013 are responsible for expressing opinion on these

financial statements under Section 143 of the Companies Act, 2013 based on independent audit in accordance with

the Standards on Auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide

their Audit Report dated 2 May 2016. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section

143(6)(a) of the Act of the financial statements of Uttar Haryana Bijli Vitran Nigam Limited for the year ended 31 March

2015. This supplementary audit has been carried out independently without access to the working papers of the

statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective

examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the

following significant matters under section 143(6)(b) of the Companies Act, 2013 which have come to my attention and

which in my view are necessary for enabling a better understanding of the financial statements and the related Audit

Report :

A. Comments on Financial Position 1. Trade Receivables (Note 17) Rs. 2416.94 crore

(i) Above includes an amount of Rs. 275.73 crore on account of 'Provision for Un-billed Revenue'. As per Schedule

III of the Companies Act 2013, unbilled revenue should be shown under the head 'Other Current Assets (Note

20)'. This has resulted in overstatement of Trade Receivables and understatement of Other Current Assets by

Rs. 275.73 crore.

(ii) Current Assets Other Current Assets (Note 20) Rs.84.76 crore Other receivable Rs. 46.52 crore

This includes Rs. 30.80 crore being the value of theft of property pending investigation. As these assets are in

the nature of non-current assets, these should be disclosed under the head Other Non-Current Assets' (Note

14). This has resulted in overstatement of Other Current Assets and understatement of Other Non-Current Assets by

Rs. 30.80 crore. Further, out of Rs. 30.80 crore the majority of the amount (Rs. 27.30 crore) is pending for more than one year and

the chances of recovery are remote.

B. Comments on Profitability 2.1 Purchase of Power Rs. 12357.84 crore

Central Electricity Regulatory Commission vide its tariff order dated 27 January 2015 approved final tariff in

respect of Tehri HPP of THDC India Limited for the period from 1 April 2009 to 31 March 2014. Based on the tariff

order, Rs. 57.48 crore was payable by the Company in six installments. Since the tariff order was approved

during the year 2014-15, necessary liability of Rs. 57.48 crore for purchase of power should have been

provided in the books of accounts. The Company has, however, provided liability of Rs. 19.16 crore only, based

on the claim raised by THDC India Limited in installment during February and March. 2015. This has resulted in understatement of cost for Purchase of Power (Note No. 23) and losses for the year by

Rs. 38.32 crore as well as understatement of Liabilities.

2.2 Other Current liabilities (Note No. 10) Rs. 1031.20 crore

(i) This does not include Rs. 13.10 crore being the liability toward capital supplies / works, for which invoices

were raised during 2014-15, however, accounted and payment made by the Company during the month of

April to May 2015. This has resulted in understatement of Liability and Capital Works in Progress by Rs. 13.10

crore.

(ii) This does not include Rs. 1.64 crore being the liability toward material despatch / received and invoices issued

by the supplier during 2014-15 and, the payment for which were made by the Company during May - June 2015.

This has resulted in understatement of Current Liabilities and Inventories by Rs. 1.64 crore.

1820

iii) This does not include Rs. 2.57 crore being the liability towards consultancy and service charges, accounted and

payment made by the Company during the month of April —June 2015.

This has resulted in understatement of Liability, Other Expenses (Note No. 27) and Loss by Rs. 2.57 crore.

3. Inventories (Note 16) Rs. 231.67 crore Stores and Spares in stores (Capital & O&M) Rs. 201.52 crore Read with Serial '1.6' titled Stock of Stores & Spares (Non-current Assets) of Note No. 1 'Significant

Accounting Policies'.

A reference is invited to Company's Significant Accounting Policies (Note No. 1) on stock of stores and spares,

which states "scraps are accounted for as and when these are sold". The Company however has valued scrap

(capital & O&M items) amounting to Rs. 12.23 crore and included it in the above head. The valuation of scrap

items is in violation of the Company's Accounting Policy referred above and should have been charged to

revenue. This has resulted in overstatement of Inventories and understatement of Loss for the year by Rs.

12.23 crore.

4. Comments on Notes to Accounts

Government of India (GoI), Ministry of Power (MoP) approved (November 2015) Ujjwal Discom Assurance

Yojana (UDAY) Scheme for financial turnaround of power distribution Companies (DISCOMs) with an objective

to improve financial and operation efficiency of the State DISCOMs. As per the scheme 75% of outstanding

debt as on 30 September 2015 of the DISCOMs was to be taken over by the State Government. A tripartite

Memorandum of Understanding (MOU) was signed on 11 March 2016 amongst GoI, State Government of

Haryana and DISCOMs and 50% of the debt had already been taken over by the State Government on 31

March 2016. The signing of MOU as per UDAY scheme and taking over of debt is an important event for

financial turnaround of DHBVNL, which occurred after the balance sheet date but before approval (28 March

2016) of accounts for the year 2014-15 by the Board of Directors of the Company. Thus necessary disclosure as

per AS-4 should have been made in the books of accounts.

C. Comments on Auditor's Report on Financial Statements 1. Independent Auditor's Report

A reference is invited to Independent Auditor's Report qualification S.No. (ii) of Annexure II "UHBVN and

DHBVN in a meeting held on 4 December 2015, mutually agreed on the balances of Jind Circle to be

transferred from UHBVN to DHBVN. The mutually agreed balances have also been notified by the Government

on 16 February 2016, which indicate that the loan shall be interest bearing in the books of DHBVN as per actual

rate borne by UHBVN with effect from transfer date i.e. 3 July 2013. However, DHBVN has not made provision

of interest for the period from 3 July 2013 to 31 March 2015 amounting to Rs. 391.57 crore on the loan amount of

Rs.1859.05 crore transferred from UHBVN to DHBVN. Resultantly, the finance cost, losses and other current

liabilities was understated by Rs. 391.57 crore". The above qualification is short to the extent that the Company

has also not made any provision of interest for the period from 3 July 2013 to 21 November 2013 amounting to

Rs. 36.84 crore on the loan amount of Rs. 773 crore pertaining to Jind Circle, which was subsequently

converted into bonds under FRP scheme on 22 November 2013. As per the agreement of 4 December 2015,

these bonds were to be kept with UHBVN, as they did not have any financial impact on account of interest being

paid by the Government of Haryana after issue of the bonds. Thus, Finance cost, Losses and Other Current

Liabilities was further understated by Rs. 36.84 crore.

D. Net impact on comments on profitability The net impact of the above comments on Losses for the year works out to Rs. 89.96 crore. If this is taken into

account, the Loss for the year of Rs. 636.17 crore would increase to Rs. 726.13 crore.

For and on the behalf of the

Comptroller and Auditor General of India

(Mahua Pal)

Principal Accountant General (Audit)

Haryana

21

Place: Chandigarh

Date: 11-7-2016

The Members,

Dakshin Haryana Bijli Vitran Nigam Ltd

Hisar

1. Report on the Standalone financial statements

We have audited the accompanying standalone financial statements of Dakshin Haryana Bijli Vitran Nigam Ltd ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and 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.

2. Management's Responsibility for the Standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone 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 the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion on the standalone financial statements.

INDEPENDENT AUDITOR'S REPORT

O AGGARWAL & CO., Chartered Accountants(A Peer Reviewed Firm)Office: 22420688,22017315, Mob: 9891577403, Email: H-3/11-A, Krishna Nagar, Delhi-110051

[email protected]

22

mailto:[email protected]

4. Basis for Adverse Opinion

We draw attention to the matters described in Annexure II, the effects/possible effects of which, individually or in aggregate, are material and/or pervasive to the financial statements and matters where we are unable to obtain appropriate audit evidence. The effects of the matters described in Annexure II, which could be reasonably determined/ quantified, on the basis of accompanying financial statement are tabulated as under:

Profit & Loss A/c (Items) (Rs. In Crore)

23

Sr.

No.

Reference P & L Note

No.

Head of Account Overstated Understated

1. Annexure II,

Part – A,

Sr. No. (ii)

Note –

25,

Code –

78.602

Finance Cost :

Non making of provision

of Int erest on UHBVN

Loan

-

391.57

2. Annexure II,

Part – A, Sr. No. (iv)

Note –

25,

Code – 78.602

Finance Cost:

Non making of Interest

Provision on consumer

security deposit.

-

83.79

3. Annexure II,

Part – A,

Sr. No. (v)

Note –

22,

Code –

62.8,

62.9, 62.3

Other Income:

Overcharge of collection

charges on Municipal Tax

-

2.92

Total

-

478.28

Net Result is Under -

Statement of Losses

(Rs. In Crore)

478.28

On analysis of above table and keeping in mind the concept of "MATERIALITY" as per AS -1 & SA 320 issued by ICAI , the impact of above are further analysed according to different parameters as under:

Parameters Amount (Rs. in Crore) % of Impact

Net under statement of Loss/ Loss before tax for the FY 2014-15 478.28/636.16 75.18%

Net under-statement of Loss / Gross Turnover 478.28/11170.03 4.28%

Net under-statement of Loss / Total Assets 478.28/9059.45 5.28%

Net under-statement of Loss / Share capital 478.28/1439.12 33.23%

Net under-statement of Loss / Accumulated Losses 478.28/11613.52 4.12%

Sr. No. Reference B/s Note No. Head of Account Overstated Understated

1. Annexure II, Note - 10 Other Current Liabilities: - 83.79Part - A, Code - 48.3 Non making of InterestSr. No. (iv) Provision on consumer

security deposit.

Accordingly, the loss for the year is understated by Rs. 478.28 Crore and Accumulated Loss as at March 31, 2015 by Rs. 478.28 Crore. The effects/possible effects of the others qualifications described in Annexure II to the Report on financial statements are not ascertainable.

5. Adverse Opinion

In Our opinion, because of the significance of the matters discussed in Annexure II referred in our Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2015 and its profit/loss and its cash flows for the year ended on that date :

(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 the Profit and Loss, of the loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

24

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure I a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As the company is governed by the electricity Act, 2003, the Provisions of the said Act have prevailed wherever they have been inconsistent with the provisions of the Companies Act, 2013.

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

(a). We have sought and ,except for the possible effects of the matters described in the basis for Adverse Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b). Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us ]

(c) The Balance sheet, Statement of profit and loss and Cash flow statement dealt with by this report are in agreement with the books of account [ and with the returns received from the branches not visited by us];

(d) Except for the matter described in the basis for adverse opinion paragraph above, the Balance sheet, Statement of profit and loss and cash flow statement comply with the Accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules , 2013 ;

(e) The matter described in the basis for adverse opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on March 31, 2015, and taken on record by the Board of directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act.

(g) The adverse remarks relating to the maintenance of accounts and other matters connected therewith are as stated in the basis for Adverse Opinion paragraph above.With respect to the other matters to be included in the auditor's report in accordance with rule 11 of the Companies (Audit and auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 1 para 1.21 and para (vii) (b) of annexure-I to the financial statements;

(ii) Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term Contracts including derivative contracts.

(iii) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is required to be transferred to the Investor Education and Protection Fund by the Company. However, no such transfer took place so far.

For O. Aggarwal & Co.Chartered AccountantsFRN: 005755N

Sd/-CA. O. P. AGGARWALPartnerM.No.: 083862

Place : DelhiDate : 02 May 2016

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial

statements for the year ended 31 March 2015, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation

of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular

programme of verification which, in our opinion, is reasonable having regard to the size of the company and the

nature of its assets. No material discrepancies were noticed by the management on such verification.

(ii) (a) The company has a regular programme of physical verification of its inventory conducted at reasonable intervals

as informed to us. However, in our opinion DHBVN does not have inventory of traded or manufactured goods

(being a power distribution company) as described in AS-2, but having inventory of stores & spare parts of capital

goods.

(b) The company is maintaining quantitative records of inventory, the procedure of physical verification of inventory

followed by management is reasonable and adequate in relation to size of the company and the nature of its

business. As informed to us, no material discrepancies were noticed by management on such physical

verification.

(c) The Company could not provide us complete list of inventory of stores & spare parts of capital goods along with

valuation details of Rs. 231.67 Crore indicated in Note No. 16 of balance sheet as on 31.03.2015.

(iii) (a) The Company has granted advance to parties covered in the register maintained under section 189 of the

Companies Act, 2013 ('the Act'). The Closing outstanding balances are as under :

Sr. No. Name of Parties Amount as on 31.03.2015

1. HVPNL (Note-19, Code 41.156) 484,82,09,296.00

2. UHBVN (Note-13) 3,97,79,283.00

(Note-14, Code-28.877) 2,72,22,916.00

As informed, the above advances are interest free.We have noticed that DHBVN has paid/provided the interest on Bond from HVPNL as per detail given below during the F.Y. 2014-15. (Rs. In Crores)

Bond Amount Interest for the Rate of Interest Transmission Chargesas on 31.03.2015 F.Y. 2014-15 paid to HVPNL

626.25 24.84 9.45% to 9.83% 674.79

On analysis of above table, it is observed that while DHBVN has paid / provided interest on bonds to the tune of Rs. 24.84 Crore, it has provided interest free advance of Rs. 484.82 Crore to HVPNL during the year under audit by borrowing funds from banks and financial institutions. Thereby causing increase in avoidable loss to the tune of Rs. 45.82 Crore (approx) for the year even if we calculate interest at minimum rate of 9.45% on free advance of Rs. 484.82 Crore given by DHBVN during the year.

(iv) The internal control system for the purchase of stores, components and machinery or spare parts are commensurate with the size of the Company and nature of its business. However, company does not have inventory of traded goods, as the company is engaged in the business of distribution and supply of power.

As regards our comments for the sale of goods & services the internal control over sale of power is lacking as reflected in high distribution losses (i.e. 24.47%), high percentage of Un-metered consumption and defective/worn out meters, high element of cross subsidization, poor collection efficiency seen from rising level of debtors (Debtors more than six month is 75.97% of total debtors), amount recoverable from untraceable consumers, connections in the premises of defaulting consumers and not acting timely for recovery from permanently disconnected consumers and non-compliance of procedure for disconnection in case of default.

ANNEXURE '1' TO THE AUDITOR'S REPORT

25

(v) In our opinion and according to the information and explanations given to us, the company has not accepted/invited any deposits falling within the purview of sections 73 to 76 of the Companies Act, 2013 during the year.

(vi) The maintenance of cost records have been prescribed under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of Electricity Supply Companies. We have been informed that the preparation of cost records for the financial year 2014-15 are under process. Hence, we are unable to form any opinion about maintenance of cost records.

(vii) (a) According to the records and information from the company, following undisputed contributions/ statutory dues are payable as on 31.03.2015 as per detail given including old outstanding balances:

Nature of Dues Rs. (In Crore)

Pension Trust (HVPNL) (Note-10, Code-57.131) 86.65

Pension Trust (DHBVN) (Note-10, Code-57.141) 20.27

Unfunded Liability of Employees Terminal Benefits

(Note-7, Code-44.370) 138.02

Municipal Taxes (Note-10, Code-46.501) 94.78

Electricity Duty Payable to Govt. (Note-10, Code-46.3) 56.36

Further, in below cases proof of payment of statutory dues payable as on 31.03.2014 as well as on 31.03.2015 could not be provided to us (except mentioned below). Hence, we are not in the position to verify whether the payment of following statutory dues has been made timely or not.

(Rs. In Lakhs)

GH of Statutory Dues Payable as on Transactions Payable as on Payment Challan

Note-10 31.03.2014 during 2014-15 31.03.2015 Provided

46.924 Income Tax deducted 356.40 120.55 235.84 97.14 at source on payment Credit Debit Credit

46.927 Tax Collection at source 2.00 0.07 1.93 1.17

to contractors Credit Debit Credit

46.928 Collection of cess under 2.23 3.25 5.48 2.10

building and other Credit Credit Credit

workers welfare

Act, 1996

46.936 Service Tax Liabilities 52.43 3.99 56.43 9.91

Credit Credit Credit

46.937 Liability for central 2.52 0.00 2.52 0.00

sales tax Credit Credit Credit

46.938 Liability for Haryana 45.23 4.90 50.13 4.97

sales tax Credit Credit Credit

26

Sr. No. Nature of the Statute (In Crores)

1 Civil Suits Claim for price hike of raw material (Adani (PY-592.26) New DelhiPower & CGPL)

2 Income Tax FBT on pension fund 8.60 Delhi High Court

Act, 1961 contributio (PY-8.60)

3 Income Tax TDS on transmission 55.99 Punjab & Haryana Act, 1961 charges (PY-55.99) High Court vide order dated

(F.Y. 2008-09) 08. 05. 14remand back the case to A.O.

4 Civil Suits Penalty for MDI 5.27 Punjab & Haryana High Court(PY-5.60)

5 Income Tax Non deduction of 39.41 Punjab & Haryana Act, 1961 TDS on wheeling & High Court. On

transmission charges 30.03.2015 (AY 2007-08 & 08-09) adjourned the case

sine-die till the final decision in ITA 652 of 2010.

6 Income Tax Disallowance of 225.18 Hon'ble Apex Act, 1961 provision of delayed Court, New Delhi

payment of surcharge due but not realized.(AY 2006-07)

Nature of the Dispute Amount Forum where dispute is Pending

913.79 Hon'ble Apex Court,

In the following case DHBVN has not shown its contingent liability in notes to accounts, detail of which is as under:

A.Y. Particulars Demand Deposited Remarks

2005-06 Income tax

penalty raised on 26.03.2015 on 04.03.15 on 11.02.2015

31,71,09,410.00 7,83,21,730.00 Appeal filed before CIT(A) Hisar

(c) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is

required to be transferred to the Investor Education and Protection Fund by the Company. However, no

such transfer takes place so far.

(viii) The accumulated losses of the company are more than 100% of its net worth as at 31st March 2015. The

Company has incurred cash losses of Rs. 455.78 Crore in the current financial year and Rs. 1938.77 Crore in the

immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, the

company during the year has not delayed repayment of dues to banks and financial institutions towards working

capital facilities/terms loans. The Company has no outstanding dues from any debenture holders.

(x) In our opinion and according to the information and the explanations given to us, the Company has not given

any guarantee for loans taken by others from banks or financial institutions.

27

(b) As per information and explanation provided to us DHBVN has following disputed liabilities as on 31.03.2015.

(xi) As per information and explanation provided to us we are of the opinion that long term funds of Rs.

8,664.09 Crore and short term funds of Rs. 658.35 Crore has been utilized to meet out losses of the

Nigam or to say that funds converted into losses.

Nigam does not have enough current assets to meet its working capital/short term funds.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been

noticed or reported during the course of our audit except reported in Note No. 1.38 to 1.44 of significant

accounting policies & notes to the financial statements.

For O. Aggarwal & Co.Chartered AccountantsFRN: 005755N

Sd/-CA. O.P. AGGARWALPartnerM.No.: 083862

Place: DelhiDate : 02 May 2016

28

29

(i) Books of Accounts & Accounting Software:

(a) The Nigam has 126 no. of Sub-divisions, 52 no. of divisions and 9 no. of circles with Head Office at Hisar. The system of accounting followed by the Nigam is quite peculiar. To sum up, vouchers for all receipts / income, payments / expenditure are prepared in duplicate on day today at all divisions / sub - divisions indicating suitable a/c code only for debit & credit entries. Subsequently, punching / feeding of these vouchers is also done on daily basis by all sub divisions / divisions on excel sheet thereby respective debit or credit amount of relevant a/c code goes on updated indicating its progressive figure on daily basis. Thus, at the end of the month, a trial balance gets automatically prepared at each sub-division / division a/c code wise. All sub-divisions forward this trial balance to its controlling division along with original set of vouchers for the month as well as supporting documents to vouchers wherever available. The respective division punches / updates the debits / credits a/c code with figures of sub-divisions with their own debits / credits a/c code wise. Thus, a trial balance of a division incorporating the figures or its subordinate sub-division for a particular month is got ready on excel sheet. The respective division forwards this trial balance to Head Office along with original set of vouchers of sub-division and its own for the relevant month. This practice is followed by all sub-divisions & divisions each month for the year.

Thus, Head Office gets 12 no. of Trial balances for a year from each division. The Head Office also prepares its own trial balance a/c code wise each month in the manner explained above. At the end of the year, Head Office merges all trial balances received from Divisions with its own trial balance in Fox Pro and gets one consolidated Trial Balance a/c code wise for the whole organization based on which Profit & Loss a/c & Balance Sheet is prepared at the year end.

From the foregoing it will be evident that this system of accounts is devoid of the following :-

1. Vouchers prepared at different locations do not show as to which Head of A/c is being debited or credited.

2. No date wise posting of debit / credit entry is made under any Head of A/c.

3. In view of sl. (1) & (2) above, date wise debit / credit entries are not available in any Head of Account.

4. As a result of sl. No. (3) above, verification of correctness of amount appearing under any head of A/c is not possible and so also the closing balance thereof at the end of the year.

(b) Section 128 (1) of Companies Act 2013: Books of Account etc to be kept by company

The above section says that "Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting"

As we have already explained in para (i) (a) above, DHBVN has not maintained the books of accounts according to GAAP. Hence, in our opinion DHBVN has partly contravened the provisions of section 128(1) of Companies Act, 2013, as per point no. 1 & 2 of "Basis for Adverse Opinion" paragraph.

In view of the foregoing, we are of the strong opinion that Nigam may implement SAP Software for its accounting & control purposes on generally accepted accounting principles (GAAP) on top priority basis for which work order was issued in favor of M/s TCIL more than Six years back.

(ii) Violation of AS-4 - Contingencies and Events Occurring After the Balance Sheet Date:

A meeting between UHBVN & DHBVN was held on 04.12.2015 and both DISCOM's mutually agreed on the balances of Jind Circle to be transferred from UHBVN to DHBVN. The mutually agreed balances have also been notified vide notification no. 23/10/2016-04 Power dated 16.02.2016 which indicate that " the loan shall be interest bearing in the books of DHBVN (DISCOM-II) as per actual rate borne by UHBVN (DISCOM-I) with effect from transfer date i.e. 03.07.2013."

Despite above agreement between two DISCOM's and government notification dated 16.02.2016 indicating categorically that the actual rate borne by UHBVN with effect from transfer date i.e. 03.07.2013 shall be interest bearing in the books of DHBVN, the Nigam has not made provision of interest amounting to Rs. 391.57 Crore (as per detail given below) on loan amount of Rs. 1,859.05 Crore taken from UHBVN for the period 03.07.2013 to 31.03.2015 in the financial statements ending on 31.03.2015.

ANNEXURE 'II' PART-A

Sr. No. Particulars Financial Year Amount (In Crore)

1. Interest for the period 03.07.2013 to 31.03.2014 2013-14 167.20

2. Interest for the period 01.04.2014 to 31.03.2015 2014-15 224.37

Total 391.57

30

As per para no. 8.2 of AS-4, "Adjustments to assets and liabilities are required for events occurring after the balance sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing at the balance sheet date."

Keeping in view the requirement of AS-4 mentioned above, we are of the strong opinion that DHBVN should have made provision of interest amounting to Rs. 391.57 Crore in the financial statements ending on 31.03.2015 and by not doing so they have violated the requirement of AS-4.

Arising out of the above mutually agreed balances of Jind Circle as notified by the government mentioned above, it is relevant to point out that DHBVN has accounted for RE Subsidy of Rs. 334.50 Crore pertaining to the period 03.07.2013 to 31.03.2014 as prior period subsidy in note no. 28 under account code 65.9. Thus, has taken into account income relating to RE Subsidy of the transferred Jind Circle but ignored accountal of interest expense of Rs. 391.57 Crore on loan taken from UHBVN for the period 03.07.2013 to 31.03.2015. This again is in contravention of AS-1 which requires prudence to be exhibited in preparation of financial statements wherein possible expense/losses need to be considered and unearned/unrealized income/gains to be ignored till actual realization in case of uncertainty of income.

In the light of above facts, DHBVN has understated the Finance Cost, Losses and Other Current Liabilities by Rs. 391.57 Crore.

(iii) Jind Circle Balance Sheet as on 03.07.2013:

During the F.Y. 2013-14 the operational circle Jind was transferred from UHBVN to DHBVN on 03.07.2013. The provisional balances of Jind Circle has been incorporated in the balance sheet of DHBVN as approved by Board of Directors of DHBVN on 10.11.2014 vide agenda no. 159.39.

As per information provided to us the meeting was held on 04.12.2015 among the officials of UHBVN & DHBVN and both the DISCOM's mutually agreed on the balances of Jind Circle to be transferred from UHBVN to DHBVN. The mutually agreed balances of Jind Circle has been notified vide Notification No. 23/10/2016-4 Power on dated 16.02.2016. Such balances of Jind Circle have been disclosed in notes to accounts vide para no. 1.73.

Among the transferred balances of Jind Circle, there is a figure of Rs. 1.34 Crore included in other current liabilities under group code 48.3 which represents interest payable on consumer security deposits. A similar provision of Rs. 145.89 Crore upto F.Y. 2013-14 pertaining to interest on consumer security is also appearing in the DHBVN balance sheet as on 31.03.2014. Whereas DHBVN has reversed the provision of Rs. 145.89 Crore in the current year balance sheet, similar provision of Rs. 1.34 Crore transferred from Jind Circle has not been reversed. Hence, DHBVN has under-stated prior period income i.e. over-stated loss as well as other current liabilities.

We are unable to understand different accounting treatment of similar nature of transactions, one relating to DHBVN own balance sheet as on 31.03.2014 and the one transferred from Jind Circle and considered in their balance sheet as on 31.03.2015.

Further, as per information provided to us, there is a difference between interest on loan of Rs. 1859.05 Crore transferred from UHBVN to DHBVN towards Jind Circle, the difference between interest as per UHBVN & DHBVN is as follows:

Particulars Interest for the Period 03.07.2013 to 31.03.2015

Interest as per UHBVN 400.14 Crore

Interest as per DHBVN 391.57 Crore

Difference 8.57 Crore

Further, as per audited balance sheet of UHBVN as on 31.03.2015, there is a difference between the balances of DHBVN and UHBVN as under

Particulars Balance as on 31.03.2015 Reference/Note No.

Balance as per UHBVN 2238.19 Crore Note No. 15- Code 28.8

Balance as per DHBVN 1859.05 Crore Note No. 5

Difference 379.14 Crore

(iv) Non-Provision of Interest on Consumer Securities:

The Nigam has not made provisions on interest payable on consumer securities deposits during the F.Y. - 2014-15 which comes to Rs. 83,78,76,409.00 as mentioned in note no. 1.45 of notes to the financial statements.

31

Therefore, DHBVN has understated the Interest expenses as well as current liability on consumer security by Rs. 83,78,76,409.00 during the F.Y. 2014-15.

(v) Misc Receipt of Rs. 73.95 Crore (Note-22) (Code 62.8,9,3):

The above Misc Receipt includes collection charges of Rs. 5.31 Crore @ 11.10% on the amount of Rs. 47.84 Crore of Municipal Tax.

As per Sales circular No. D-26/2012 dated 27.08.2012 this should have been charged @ 5%. The overcharge of collection charges has resulted in overstatement of Misc Receipts and under-statement of Losses by Rs. 2.92 Crore respectively.

(vi) Diversion of Funds :

As per information and explanation provided to us we are of the opinion that long term funds of Rs. 8,664.09 Crore and short term funds of Rs. 658.35 Crore has been utilized to meet out losses of the Nigam or to say that funds converted into losses.


(vii) Inconsistency between Haryana VAT Returns and Profit & Loss Account :

During the course of audit we had some observations on HVAT Returns filed by DHBVN for the F.Y.2014-15 and same queries were emailed to them on 28.08.2015 but no reply received. Our observations on HVAT Returns are as under:

(a) Sale of power shown in excess by Rs. 1761.14 Crore in Haryana VAT Return in comparison to sale of power shown in Profit & Loss A/c. Detail is given as under:

Particulars Sale as per VAT Return Sale as per Profit & Loss Account Difference

Sale of Power (Local) 10511,75,12,562.78 7639,44,04,122.00 2872,31,08,440.78

Sale of Power (Central) 15,40,806.00 1111,32,81,771.00 (1111,17,40,965.00)

Total Sales 10511,90,53,368.78 8750,76,85,893.00 1761,13,67,475.78

(b) Haryana VAT short paid by Rs. 378741.10 during the F.Y. 2014-15 as per the details given below :

Quarters Taxable sales Rate of tax Tax as per Vat Tax as per Auditors Differenceas per Vat Return Return

I 41,038,181.00 4.20% 1,724,288.00 1723,603.60 (684.40)

II 168,076,389.00 5.25% 8,798,410.00 8,824,010.42 25,600.42

III 4,585,408.00 13.125% 248,009.00 601,834.80 353,825.80

IV 22,262,664.00 2.00% 445,254.00 445,253.28 (0.72)

TOTAL 235,962,642.00 11,215,961.00 11,594,702.10 378,741.10

(c) In Vat Return for the period from January to March, 2015 inter-state sale of Rs. 15,40,806.00 has not taken in Gross Turnover. Thus, return seems defective.

(viii) Prior Period Expenses:

(a) Telephone, Postage, Telegram, Maintenance of Website Expenses etc. of Rs. 5.37 Crore - (Note - 27, Code - 76.111-116): Telephone Expenses etc. of Rs. 5.37 Crore for the F.Y. 2014-15 as shown in Note 27 of Profit & Loss Account, includes the following bills amounting to 99.42 lakhs pertaining to F.Y. 2013-14:

Bill No. Dated Amount Particulars Remarks

TML1314/ 28.02.2014 39,06,986.41 Tech Mahindra Ltd. Bill for the period

118784 01.02.14 to 28.02.14

TML1314/ 28.03.2014 39,06,986.41 Tech Mahindra Ltd. Bill for the period 01.03.14 to

130403 31.03.14

691 12.03.2014 20,18,970.00 Haryana State Electronics

Development Corporation Ltd. Bill for the m/o March, 2014

CHD-13- 07.04.2014 84,811.00 HCL Services Ltd. AMC Period 17.12.13 to 16.03.14

140857

CHD-13- 07.04.2014 23,807.00 HCL Services Ltd. AMC Period 17.12.13 to 16.03.14

140856

Total 99,41,560.82

32

(b) Payment for SAP to TCIL:

DHBVN has made payment of Rs. 72,70,863.00 vide cheque no. 045179 dated 22.01.2015 to M/s TCIL towards SAP during the F.Y. 2014-15, after deducting Rs. 26,03,428.00 as penalty. However, scrutiny of the relevant bills disclose that following bills relate to prior period. Hence, should have been booked as per prior period expenses.

Bill No. Dated Amount Particulars

PJ106 n13-14164 27.08.2013 22,39,145.00 TCIL Bill

TCIL/IT/RI/09-10/0427 17.06.2009 8,96,928.00 Bill for the period 28.02.09 to 27.05.09

TCIL/IT/RI/09-10/0428 17.06.2009 8,96,928.00 Bill for the period 28.02.09 to 27.05.09

40,33,001.00

Further, vide Memo No. CH-14/IT-99/Vol.-VI dated 12.03.2015, BOD's in its meeting held on 28.01.2015 have waived off penalty amounting to Rs. 26,03,428.00

However, DHBVN could not provide us the minutes of BOD's meeting held on 28.01.2015 and no explanation provided justifying waiving off penalty amounting to Rs. 26,03,428.00 particularly in view of the fact that TCIL has already delayed the work awarded to them for years.

(ix) Sundry Debtors (Note-17):

The Company is having trade receivables of Rs. 5330.55 crore (before considering provisions of Rs.2913.61 crore) out of which trade receivables of Rs. 4551.44 crore are outstanding for more than 6 months as at 31st March 2015 being 85.38% of gross trade receivables. Details are as under:

Particulars Amount (In Crore) Percentage

Gross Trade Receivables 5330.55 -

Less: Total Provisions (2913.61) -

Net Trade Receivables 2416.94 100.00

More than 6 Months (Net of Provision) 1836.06 75.97

Less than 6 Months (Net of Provision) 580.88 24.03

However, the company has not been able to provide us individual age wise breakup of trade receivables and therefore we are neither able to form an opinion on the sufficiency of provision for debts nor to comment on correctness of the segregation of receivables of more than and less than six month old.

As the trade receivables outstanding for more than six months are very high, their recovery seems doubtful.

Further, the company has security deposits of Rs. 982.57 Crore as on 31.03.2015. However, consumer wise detail thereof is not available as the same could not be produced for our verification.

(x) Cash and Cash Equivalents (Note-18):

Out of the various balances included in note no. 18 as on 31.03.2015, Inter Unit Account-Remittance to Head Office amounting to Rs. 145.95 Crore deposited by the various field offices is yet to be reconciled. Similar remittance of Rs. 175.77 Crore as on 31.03.2014 also remained unreconciled during the current year as well.

It shows poor accounting and internal control system which make the Nigam vulnerable to fraud occurrences. In the absence of reconciliation and proper information/explanation we are unable to comment on the same.

(xi) Inter Unit Reconciliation:

Account Note Particulars Amount as on 31.03.2015 Amount as on 31.03.2014

Code No. (Rs. In Lakhs) (Rs. In Lakhs)

34 10 Inter Units Accounts - Funds 409.74 461.34

transferred from Head Office

31 10 IUT - Material Accounts 0.40 0.40

35 10 IUT - Head Office Transactions 47.07 48.29

36 20 IUT - Personnel Transactions 225.07 226.19

37 20 IUT - Other Transactions/ Adjustments 1112.67 116.95

33

Above mentioned IUT Accounts are pending reconciliations since long time the impact thereof on any assets, liabilities, Statement of Profit & Loss could not be quantified in the absence of required information.

(xii) R.E. Subsidy (Note-22) (Code-63.1):

Particulars Total Subsidy (Amount In Crore) DHBVN Share UHBVN Share

R. E. Subsidy from GOH during 5234.63 2098.04 3136.59

F.Y. 2014-15

Percentage (%) 100.00% 40.08% 59.92%

As per information and explanation provided to us DHBVN has booked R.E. Subsidy of Rs. 2098.04 Crore during the F.Y. 2014-15 as mutually decided by DHBVN and UHBVN as per Reconciliation of RE subsidy signed by Sr. AO/F&R of UHBVN and AO/Funds of DHBVN vide letter dated 09.07.2015. However, DHBVN could not provide us any order from HERC/GOH for distribution RE Subsidy.

Further, DHBVN has booked RE subsidy of Rs. 334.50 Lakhs during the F.Y. 2014-15 pertaining to F.Y. 2013-14 on the basis of mutually decided by DHBVN and UHBVN as per Reconciliation of RE subsidy Signed by Sr. AO/F&R of UHBVN and AO/Funds of DHBVN vide letter dated 09.07.2015.

However, Nigam could not provide us written order/approval of competent authority or authorization letter signed on behalf of DISCOM's about distribution of subsidy between DHBVN & UHBVN and therefore, we are unable to comment upon its impact on profitability of DHBVN.

(xiii) Balance Confirmation/Reconciliation:

The balances under Reserves & Surplus (Note No. 3) additions during the year, Long Term Borrowings (Note No. 5) except in few cases, Other Long Term Liabilities (Note No. 6), Trade Payables (Note No. 9), Other Current Liabilities (Note No. 10), Long Term Loans & Advances (Note No. 13), Other Non-Current Assets (Note No. 14), Trade Receivables (Note No. 17), Cash & Cash Equivalents (Note No. 18) (Code-33 & 20.280 ), Short Term Loans & Advances (Note No. 19), Other Current Assets (Note No. 20), in these cases DHBVN could not provide us confirmations. The impact of reconciliation/ confirmation, if any, on assets & liabilities could not be quantified in the absence of confirmation/ reconciliation and qualification as per point no. (i) (a) - Note on Books of Accounts & Accounting Software.

(xiv) Terminal/Retirement Benefits (Adhoc Provision)- (Note-24) (Code-75.632 & 75.633):

The pensionary liability for terminal/retirement benefits has been booked on estimated basis of Rs. 260.00 Crore for the year F.Y. 2014-15 whereas the provision was made of Rs. 132.00 Crore during the F.Y. 2013-14. There is a sharp increase of Rs. 128.00 Crore i.e. 96.97% in the provision on adhoc basis and no satisfactory reply given in this regard. The estimated provisions may affect the statement of profit & loss account and balance sheet as the same is not based on actuarial valuation and is not in accordance with the provisions of AS-15 (Accounting for retirement benefits) issued by the institute of Chartered Accountants of India. The effect of non-compliance of AS-15 on the Statement of Profit & Loss and Balance Sheet of the company cannot be Computed. (Reference note no.1.35 and 1.36 of significant accounting policies & notes to the financial statements.).

34

PART-BOther Observations on Financial Statements:

(i) Analyses of Transmission and Distribution losses of DHBVN:

Particulars 2014-15 (Units in MU) 2013-14 (Units in MU) 2012-13 (Units in MU)

Gross Units Purchased A 28618.60 26405.27 20522.69

Less: Transmission Losses B 1121.88 1038.80 894.66

Less: Inter State Sale of Power C 3008.48 3310.00 1240.54

Net Units Available for Sale D=(A-B-C) 24488.24 22056.47 18387.49

% of Loss on Purchase of Power E=(B/A) 3.92% 3.93% 4.36%

Units Sold F 18496.05 16838.30 14272.03

Transmission & Distribution Losses G=(D-F) 5992.20 5218.17 4115.46

% of Loss on T&D H=(G/D) 24.47% 23.66% 22.38%

The percentage of transmission & distribution loss on sale of units of power by DHBVN is quite high in comparison to percentage of loss on purchase of power. Further, there is increasing trend transmission & distribution losses year after year does not seems to have taken effective remedial steps to bring down the transmission and distribution losses.

(ii) Account Code Showing Same Opening & Closing Balances: (Rs. In Lakhs)

Sr. Account Note Particulars 2014-15 2013-14 2012-13No. Code No.

1 46.994 10 Payable to HPGCL 457.45 457.45 457.45

& 28.876 (Other than Power Purchase)

2 46.2 20 IUT Provisions 100.03 100.03 100.03

3 44.370 7 Unfunded Liability of Employees 13802.36 13802.36 13802.36

Terminal Benefits

On perusal of above table it would be seen that above account codes show same balances at the end of the year for a long time. DHBVN has not given attention/focus on above balances to clear them.

The above balances have been picked up from notes to balance sheet & profit & loss account. However, we are unable to comment on other individual balances/items which are grouped in notes and not easily available.

(iii) TDS Liability on Interest:

(a) TDS not deducted on Interest on World Bank Loan:

Date of Payment/Provision Amount in INR TDS Liability u/s 195

14.10.2014 27,80,534.00 TDS not deducted

27.03.2015 29,44,318.00 TDS not deducted

31.03.2015 9,54,142.00 TDS not deducted

Total 66,78,944.00

On perusal of above table it is evident that DHBVN has not deducted TDS on interest payment to World Bank through Govt. of Haryana during the F.Y. 2014-15. We have, however, been explained that as the interest payment is being done by Haryana Government to the World Bank, there is no TDS liability on DHBVN.

In our opinion the proviso of section 195 of the IT Act, 1961 is very clear on this point which says that even payment by Govt. to Non-Resident attracts section 195 of the IT Act, 1961 and therefore in our opinion DHBVN is liable for TDS liability.

35

(iv) Inconsistency in Notes to Accounts vis a vis Actual Practice:

Under sub para (a) of para 1.48 - Power Purchase, the purchase cost including transmission charges has been stated at Rs. 4.49 per unit for the F.Y. 2014-15. However, the above purchase cost is only the bare cost paid to the companies supplying power to the Nigam and does not include other overhead cost related thereto. If overhead cost is also included while working out the purchase cost the cost of power purchase will work out to Rs. 7.85 per unit (As per Annexure-A Attached).

As per generally accepted accounting principles the cost of any salable unit is to include direct as well as indirect cost and to that extent the accounting note given above and the practice being followed by Nigam needs review. Similarly, other notes forming part of accounts may also be reviewed once again to make them in accordance with practice/generally accepted accounting principles.

(v) Block of Assets not properly classified (Computer Block) :

It is observed that the block of computers neither shown in note 12(a) (Tangible Assets) of balance sheet nor in depreciation chart as per Income Tax Act, 1961. Since depreciation rates are different under Companies Act & Income Tax Act, the computer block of assets needs to be shown separately which has not been done despite our suggestion to the management.

(vi) Miscellaneous Deposits (Code-46.919):

The Nigam has shown Rs. 58,08,57,233.53 as on 31.03.2015 towards miscellaneous deposits under the head other liabilities & provisions vide note no. 10 under account code 46.9. However, it could not be clarified to us as to the nature of deposit received and therefore it is not possible for us to ensure whether its classification and presentation in accounts is proper or not.

(vii) Analysis of Net Working Capital, Current Ratio & Debt Equity Ratio: Table showing detail of Net Working Capital & Current Ratio: (Rs. In Crore)

Particulars F.Y. 2014-15 F.Y. 2013-14Current Assets 3552.96 3109.87Current Liabilities 4268.09 4638.35Net Working Capital (715.13) (1528.48)Current Ratio (CA/CL) 0.83 0.67

From above figures, it may noted that the Nigam is having negative working capital and current ratio is quite low.

Table showing detail of Debt-Equity Ratio: (Rs. In Crore)

Particulars F.Y. 2014-15 F.Y. 2013-14Total Debts 19,233.85 1,6338.44Total Shareholder's Fund (10,174.40) (8,229.59)Net Own Funds (29,408.26) (24,568.03)Debt Equity Ratio (Debts/Equity) (1.89) (1.99)

The above figures show that Nigam is having negative Own Funds and negative debt equity ratio.

(viii) Adhoc/Estimated Provision for Employee Terminal Benefits:

The Nigam has made a provision on adhoc/ estimated basis of Rs. 260.00 Crore towards Employees Terminal Benefits vide para no. 1.35 & 1.36 of significant accounting policies and notes to financial statements for the F.Y. 2014-15. However, to make such provision as allowable expense under the Income Tax Act, 1961, it has to be on the basis of actuarial valuation. Since, in this case the provision is on estimate basis, it will not be an allowable provision under Income Tax Act, 1961.

36

DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD.

ANALYSIS OF COST & SALES ANNEXURE-IPARTICULARS NOTE NO. 2014- 15

AMOUNT IN

LAKHS

UNITS IN

LAKHS

PER UNIT

COST IN `

LAKHS IN LAKHS COST IN `

2013-14

AMOUNT IN UNITS PER UNIT

Purchase cost including

charges and units after

Transmission Losses

Add: Other Attributable Expenses

Employee Benefit Expenses 23 89,070.89 68,714.75

Financial Cost 24 95,050.19 99,168.86

Depreciation 25 18,038.35 14,987.66

Other Expenses 26 13,797.66 14,244.70

Cost of Power Sold (A) 1,451,741.51 1,310,250.84

Gross Receipt/Sale of Power & 20 1,117,003.11 215,045.30 984,987.70 201,483.24

other operating revenue

Less: Inter state sale of power 20 111,132.82 30,084.80 3.69 99,601.69 33,100.00 3.01

& banking

Net Domestic Sale/Receipt (B) 1,005,870.29 184,960.50 5.44 885,386.01 168,383.24 5.26

Add: R.E. Subsidy 21 209,803.97 146,033.05

Net Domestic Sale/Receipt (C) 1,215,674.26 184,960.50 6.57 1,031,419.06 168,383.24 6.13

after Subsidy

Cost of Power Sold Per Unit of (A/C) 7.85 7.78

Units Sold

Gross per unit Sales Realization 6.57 6.13

Domestic T&D Lossses in Units 59,922.00 24.47% 52,181.45 23.66%

If DHBVN reduced its losses 12,243.97 11,027.36

by 5%

Extra revenue would be 66,586.37 57,983.60

(12243.97*5.44)

22 1,235,784.42 274,967.26 4.49 1,113,134.87 253,664.69 4.39

REPLIES OF THE MANAGEMENT TO THE COMMENTS OF STATUTORY AUDITORS ON THE ANNUAL ACCOUNTS OF DHBVNL FOR THE FINANCIAL YEAR 2014-15


1. Report on the Standalone financial statements

We have audited the accompanying standalone financial statements of Dakshin Haryana Bijli Vitran Nigam Ltd ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant account ing pol ic ies and other explanatory information.

2. Management's Responsibility for the Standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (A c coun t s ) Ru l e s , 2014 . Th i s responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's ResponsibilityOur responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the

No comments as a matter of facts.


37

REMARKS BY AUDITOR REPLIES OF DHBVNLSR. NO.


1. Non making of provision of Interest on UHBVN LoanThe nature of the loan liabilities i.e. interest bearing in the books of DHBVN and rates of interest on the loans transferred from UHBVN to DHBVN were only determined during

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 the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion on the standalone financial statements.

4. Basis for Adverse OpinionWe draw attention to the matters descr ibed in Annexure I I , the effects/possible effects of which, individually or in aggregate, are material and/or pervasive to the financial statements and matters where

38


we are unable to obtain appropriate audit evidence. The effects of the matters described in Annexure II, which could be reasonably determined/ quantified, on the basis of accompanying financial statement are tabulated as under:

On analysis of above table and keeping in mind the concept of "MATERIALITY" as per AS -1 & SA 320 issued by ICAI , the impact of above are further analysed according to different parameters as under:

Balance Sheet (Items)

Accordingly, the loss for the year is understated by Rs. 478.28 Crore and Accumulated Loss as at March 31, 2015 by Rs. 478.28 Crore. The effects/possible effects of the others qualifications descr-ibed in Annexure II to the Report on fina-ncial statements are not ascertainable.

December, 2015 & also notified by the State Govt. through its Notification dated 16/02/2016. Accordingly the interests on these loans were rightly provided in the year 2015-16

2. Non making of Interest Provision on consumer security deposit.BOD of DHBVN in its meeting held on 28/09/2015 has changed the policy on accounting of interest on consumer security deposit on actual basis being it is considered that the change would result in a more appropriate presentation of the financial statements of the enterprise. This is in accordance with the Para 29 of the AS-5 which prescribed that a change in accounting policy should be made for a more appropriate presentation of the financial statement of the company. Necessary disclosure in this regard has been made at para no. 1.45 of Significant Accounting Policies & Notes to the financial statement for the FY 2014-15.

3. Overcharge of collection charges on Municipal TaxTo maintain parity with the UHBVN in the regulatory environment, the collection charges were revised to 5% in term of Whole Time Directors decision (Agenda Item no. 113.30) conveyed vide CE/Commercial/ Hisar memo. No. Ch122/SE/C-720 dated 16/06/2015.

Already explained above.

39


As per our reply to Para 4 above.

No Comments as a matter of facts



5. Adverse OpinionIn Our opinion, because of the significance of the matters discussed in Annexure II referred in our Basis for Adverse Opinion paragraph, the financial statements do not give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March ,2015 and its profit/loss and its cash flows for the year ended on that date :

(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 the Profit and Loss, of the loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure I a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As the company is governed by the electricity Act, 2003, the Provisions of the said Act have prevailed wherever they have been inconsistent with the provisions of the Companies Act, 2013.

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

(a). We have sought and ,except for the possible effects of the matters described in the basis for Adverse Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

40


(b). Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us ]

(c) The Balance sheet, Statement of profit and loss and Cash flow statement dealt with by this report are in agreement with the books of account [ and with the returns received from the branches not visited by us];

(d) Except for the matter described in the basis for adverse opinion paragraph above, the Balance sheet, Statement of profit and loss and cash flow statement comply with the Accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules , 2013 ;

(e) The matter described in the basis for adverse opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On t he ba s i s o f t he w r i t t en representations received from the directors as on March 31, 2015, and taken on record by the Board of directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act.

(g) The adverse remarks relating to the maintenance of accounts and other matters connected therewith are as stated in the basis for Adverse Opinion paragraph above.

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







41





our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 1 para 1.21 and para (vii) (b) of annexure-I to the financial statements;

(ii) Except for the possible effects of the matters described in the basis for adverse opinion paragraph above, the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term Contracts including derivative contracts.

(iii) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is required to be transferred to the Investor Education and Protection Fund by the Company. However, no such transfer took place so far.

42

ANNEXURE '1' TO THE AUDITOR'S REPORT(Referred to in Paragraph (3) thereof)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed by the management on such verification.

(ii) (a) The company has a regular programme of physical verification of its inventory conducted at reasonable intervals as informed to us. However, in our opinion DHBVN does not have inventory of traded or manufactured goods (being a power distribution company) as described in AS-2, but having inventory of stores & spare parts of capital goods.

(b) The company is maintaining quantitative records of inventory, the procedure of physical verification of inventory followed by management is reasonable and adequate in relation to size of the company and the nature of its business. As informed to us, no material discrepancies were noticed by management on such physical verification.

(c) The Company could not provide us complete list of inventory of stores & spare parts of capital goods along with valuation details of Rs. 231.67 Crore indicated in Note No. 16 of balance sheet as on 31.03.2015.

(iii) (a) The Company has granted advance to parties covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act'). The Closing outstanding balances are as under :

As informed, the above advances are interest free.


Efforts are being made for physical verification by the concerned DDOs.



The Detail of Inventory could not be provided, due to the switching over the Inventory system from SAP to IMS in progress.


43

We have noticed that DHBVN has paid/provided the interest on Bond from HVPNL as per detail given below during the F.Y. 2014-15.

(Rs. In Crores)

Bond Amount Interest for the Rate of Transmission as on F.Y. 2015-16 Interest Charges31.03.2015 paid to HVPNL

626.25 24.84 9.45% 674.79to 9.83%

On analysis of above table, it is observed that while DHBVN has paid / provided interest on bonds to the tune of Rs. 24.84 Crore, it has provided interest free advance of Rs. 484.82 Crore to HVPNL during the year under audit by borrowing funds from banks and financial institutions. Thereby causing increase in avoidable loss to the tune of Rs. 45.82 Crore (approx) for the year even if we calculate interest at minimum rate of 9.45% on free advance of Rs. 484.82 Crore given by DHBVN during the year.

(iv) The internal control system for the purchase of stores, components and mach inery or spare par t s a re commensurate with the size of the Company and nature of its business. However, company does not have inventory of traded goods, as the company is engaged in the business of distribution and supply of power.

As regards our comments for the sale of goods & services the internal control over sale of power is lacking as reflected in high distribution losses (i.e. 24.47%), high percentage of Un-m e t e r e d c o n s u m p t i o n a n d defective/worn out meters, high element of cross subsidization, poor collection efficiency seen from rising level of debtors (Debtors more than six month is 75.97% of total debtors), a m o u n t r e c o v e r a b l e f r o m untraceable consumers, connections in the premises of defaulting consumers and not acting timely for r e c o v e r y f r o m p e r m a n e n t l y disconnected consumers and non-compliance of procedure for disconnection in case of default.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted/invited any deposits falling within the purview of sections 73 to 76 of the Companies Act, 2013 during the year.

(vi) The maintenance of cost records have been prescribed under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of Electr ic i ty Supply Companies. We have been informed that


Every efforts are being made to control and reduce the distribution losses and improve the collection efficiency.


Cost Records for FY 14-15 have been prepared and got audited by the Cost Auditor. The cost audit report filed with MCA GOI on 06/07/2016 also.

44

the preparation of cost records for the financial year 2014-15 are under process. Hence, we are unable to form any opinion about maintenance of cost records.

(vii) (a) According to the records and information from the company, following undisputed contributions/statutory dues are payable as on 31.03.2015 as per detail given including old outstanding balances:

Further, in below cases proof of payment of statutory dues payable as on 31.03.2014 as well as on 31.03.2015 could not be provided to us (except mentioned below). Hence, we are not in the position to verify whether the payment of following statutory dues has been made timely or not.

Rs. In Lakhs)

(b) As per information and explanation provided to us DHBVN has following disputed liabilities as on 31.03.2015.


All DDO's of DHBVN are deducting TDS (on payment as well as on liability against the work done/interest etc), Service tax/worker cess/ CST/VAT (as applicable on payment) & collecting TCS (on receipt of payment on selling of scrap), at their level and filing return thereof. All the relevant records in the matter is available with the concerned offices.


45

Rs. (In Crore)

46

In the following case DHBVN has not shown its contingent liability in notes to accounts, detail of which is as under:

(c) As informed to us Rs. 461.00 lying in share application money pending allotment since long time is required to be transferred to the Investor Education and Protection Fund by the Company. However, no such transfer takes place so far.

(viii) The accumulated losses of the company are more than 100% of its net worth as at 31st March 2015. The Company has incurred cash losses of Rs. 455.78 Crore in the current financial year and Rs. 1938.77 Crore in the immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, the company during the year has not delayed repayment of dues to banks and financial institutions towards working capital facilities/terms loans. The Company has no outstanding dues from any debenture holders.

(x) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) As per information and explanation provided to us we are of the opinion that long term funds of Rs. 8,664.09 Crore and short term funds of Rs. 658.35 Crore has been utilized to meet out losses of the Nigam or to say that funds converted into losses.


(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit except reported in Note No. 1.38 to 1.44 of significant accounting policies & notes to the financial statements.

This shall be taken care of in FY 2015-16.

This shall be taken care of in FY 2016-17.






Annexure II part A

REPLYCOMMENTSPara No.

(i) Books of Accounts & Accounting Software:

(a) The Nigam has 126 no. of Sub-divisions, 52 no. of divisions and 9 no. of circles with Head Office at Hisar. The system of accounting followed by the Nigam is quite peculiar. To sum up, vouchers for all receipts / income, payments / expenditure are prepared in duplicate on day today at all divisions / sub - divisions indicating suitable a/c code only for debit & credit entries. Subsequently, punching / feeding of these vouchers is also done on daily basis by all sub divisions / divisions on excel sheet thereby respective debit or credit amount of relevant a/c code goes on updated indicating its progressive figure on daily basis. Thus, at the end of the month, a trial balance gets automatically prepared at each sub-division / division a/c code wise. All sub-divisions forward this trial balance to its controlling division along with original set of vouchers for the month as well as supporting documents to vouchers wherever available. The respective division punches / updates the debits / credits a/c code with figures of sub-divisions with their own debits / credits a/c code wise. Thus, a trial balance of a division incorporating the figures or its subordinate sub-division for a particular month is got ready on excel sheet. The respective division forwards this trial balance to Head Office along with original set of vouchers of sub-division and its own for the relevant month. This practice is followed by all sub-divisions & divisions each month for the year.

Thus, Head Office gets 12 no. of Trial balances for a year from each division. The Head Office also prepares its own trial balance a/c code wise each month in the manner explained above. At the end of the year, Head Office merges all trial balances received from Divisions with its own trial balance in Fox Pro and gets one consolidated Trial Balance a/c code wise for the whole organization based on which Profit & Loss a/c & Balance Sheet is prepared at the year end.

The commercial accounting system as followed by us since FY 1986-87 was prepared by M/s A.F. FERGUSON & CO., New Delhi (amongst the Big5 during that time) & implemented in all power utilities of India on the recommendation of Central Electricity Authorities of India to have uniform procedure in power sector.The accounting system in power utilities is based upon "Branch Accounting". Under this system, the different DDOs are considered as Independent Branch and prepare their independent trial balance which are clubbed in the Head Office on monthly basis. Thus the

1. Vouchers are prepared at different locations stating respective head of accounts.

2. Posting made in the respective head of account on monthly basis.

3. M/s Ernst & Young, our consultant appointed by the World Bank, has also recommended the same system in FY 14-15.

As explained above, the proper books of accounts have been maintained in the branch offices as well as Head Office according to double entry system on accrual basis as per the accounting principles and policies adopted by the DHBVN.

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From the foregoing it will be evident that this system of accounts is devoid of the following :-

1. Vouchers prepared at different locations do not show as to which Head of A/c is being debited or credited.

2. No date wise posting of debit / credit entry is made under any Head of A/c.

3. In view of sl. (1) & (2) above, date wise debit / credit entries are not available in any Head of Account.

4. As a result of sl. No. (3) above, verification of correctness of amount appearing under any head of A/c is not possible and so also the closing balance thereof at the end of the year.

(b) Section 128 (1) of Companies Act 2013: Books of Account etc to be kept by company

The above section says that "Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting"

As we have already explained in para (i) (a) above, DHBVN has not maintained the books of accounts according to GAAP. Hence, in our opinion DHBVN has partly contravened the provisions of section 128(1) of Companies Act, 2013, as per point no. 1 & 2 of "Basis for Adverse Opinion" paragraph.

In view of the foregoing, we are of the strong opinion that Nigam may implement SAP Software for its accounting & control purposes on general ly accepted account ing principles (GAAP) on top priority basis for which work order was issued in favor of M/s TCIL more than Six years back.

(ii) Violation of AS-4 - Contingencies

and Events Occurring After the Balance Sheet Date:

A meeting between UHBVN & DHBVN was held on 04.12.2015 and both

The nature of the loan liabilities i.e. interest bearing in the books of DHBVN and rates of interest on the loans

48

DISCOM's mutually agreed on the balances of Jind Circle to be transferred from UHBVN to DHBVN. The mutually agreed balances have also been not i f ied v ide not i f i ca t ion no. 2 3 / 1 0 / 2 0 1 6 - 0 4 Po w e r d a t e d 16.02.2016 which indicate that " the loan shall be interest bearing in the books of DHBVN (DISCOM-II) as per actual rate borne by UHBVN (DISCOM-I) with effect from transfer date i.e. 03.07.2013."

Despite above agreement between two DISCOM's and government notification da t ed 16 .02 .2016 i nd i ca t i ng categorically that the actual rate borne by UHBVN with effect from transfer date i.e. 03.07.2013 shall be interest bearing in the books of DHBVN, the Nigam has not made provision of interest amounting to Rs. 391.57 Crore (as per detail given below) on loan amount of Rs. 1,859.05 Crore taken from UHBVN for the period 03.07.2013 to 31.03.2015 in the financial statements ending on 31.03.2015.

As per para no. 8.2 of AS-4, "Adjustments to assets and liabilities are required for events occurring after the balance sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing at the balance sheet date."

Keeping in view the requirement of AS-4 mentioned above, we are of the strong opinion that DHBVN should have made provision of interest amounting to Rs. 391.57 Crore in the financial statements ending on 31.03.2015 and by not doing so they have violated the requirement of AS-4.

Arising out of the above mutually agreed balances of Jind Circle as notified by the government mentioned above, it is relevant to point out that DHBVN has accounted for RE Subsidy of Rs. 334.50 Crore pertaining to the period 03.07.2013 to 31.03.2014 as prior period subsidy in note no. 28 under account code 65.9. Thus, has

transferred from UHBVN to DHBVN were only determined during December, 2015 & also notified by the State Govt. through its Notification dated 16/02/2016.

Accordingly the interests on these loans were rightly provided in the year 2015-16.

49

taken into account income relating to RE Subsidy of the transferred Jind Circle but ignored accountal of interest expense of Rs. 391.57 Crore on loan taken from UHBVN for the period 03.07.2013 to 31.03.2015. This again i s in contravention of AS-1 which requires prudence to be exhibited in preparation of financial statements wherein possible expense/losses need to be considered and unearned/unrealized income/ gains to be ignored till actual realization in case of uncertainty of income.

In the light of above facts, DHBVN has understated the Finance Cost, Losses and Other Current Liabilities by Rs. 391.57 Crore.

(iii) Jind Circle Balance Sheet as on 03.07.2013:

During the F.Y. 2013-14 the operational circle Jind was transferred from UHBVN to DHBVN on 03.07.2013. The provisional balances of Jind Circle has been incorporated in the balance sheet of DHBVN as approved by Board of Directors of DHBVN on 10.11.2014 vide agenda no. 159.39.

As per information provided to us the meeting was held on 04.12.2015 among the officials of UHBVN & DHBVN and both the DISCOM's mutually agreed on the balances of Jind Circle to be transferred from UHBVN to DHBVN. The mutually agreed balances of Jind Circ le has been noti f ied vide Notification No. 23/10/2016-4 Power on dated 16.02.2016. Such balances of Jind Circle have been disclosed in notes to accounts vide para no. 1.73.

Among the transferred balances of Jind Circle, there is a figure of Rs. 1.34 Crore included in other current liabilities under group code 48.3 which represents interest payable on consumer security deposits. A similar provision of Rs. 145.89 Crore upto F.Y. 2013-14 pertaining to interest on consumer security is also appearing in the DHBVN balance sheet as on 31.03.2014. Whereas DHBVN has reversed the provision of Rs. 145.89 Crore in the current year balance sheet, similar provision of Rs. 1.34 Crore transferred from Jind Circle has not been reversed. Hence, DHBVN has under-stated prior period income i.e. over-stated loss as well as other current

Rs. 1.34 crores on account of provision for interest payable on consumer security deposits received through Closing Balance Sheet as on 03/07/2013 in respect of Jind Circle, which were finalized vide GOH notification no. 23/10/2016/4 on dated 16/02/2016. This shall also be reversed during FY 2015-16.

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liabilities.

We are unable to understand different accounting treatment of similar nature of transactions, one relating to DHBVN own balance sheet as on 31.03.2014 and the one transferred from Jind Circle and considered in their balance sheet as on 31.03.2015.

Further, as per information provided to us, there is a difference between interest on loan of Rs. 1859.05 Crore transferred from UHBVN to DHBVN towards Jind Circle, the difference between interest as per UHBVN & DHBVN is as follows:

Further, as per audited balance sheet of UHBVN as on 31.03.2015, there is a difference between the balances of DHBVN and UHBVN as under

(iv) Non-Provision of Interest on Consumer Securities:

The Nigam has not made provisions on interest payable on consumer securities deposits during the F.Y. - 2014-15 which comes to Rs. 83,78,76,409.00 as mentioned in note no. 1.45 of notes to the financial statements.

Therefore, DHBVN has understated the Interest expenses as well as current liability on consumer security by Rs. 83,78,76,409.00 during the F.Y. 2014-15.

(v) Misc Receipt of Rs. 73.95 Crore (Note-22) (Code 62.8,9,3):

The above Misc Receipt includes collection charges of Rs. 5.31 Crore @ 11.10% on the amount of Rs. 47.84 Crore of Municipal Tax.

As per Sales circular No. D-26/2012

The figures are being reconciled and necessary entry shall be passed in FY 15-16.

The figures are being reconciled and necessary entry shall be passed in FY 15-16.

BOD of DHBVN in its meeting held on 28/09/2015 has changed the policy on accounting of interest on consumer security deposit on actual basis being it is considered that the change would result in a more appropriate presentation of the financial statements of the enterprise. This is in accordance with the Para 29 of the AS-5 which prescribed that a change in accounting policy should be made for a more appropriate presentation of the financial statement of the company. Necessary disclosure in this regard has been made at para no. 1.45 of Significant Accounting Policies & Notes to the financial statement for the FY 2014-15.

To maintain parity with the UHBVN in the regulatory environment, the collection charges were revised to 5% in term of Whole Time Directors decision (Agenda Item no. 113.30) conveyed vide CE/Commercial/ Hisar memo. No. Ch122/SE/C-720 dated 16/06/2015.

51

dated 27.08.2012 this should have been charged @ 5%. The overcharge of collection charges has resulted in overstatement of Misc Receipts and under-statement of Losses by Rs. 2.92 Crore respectively.

(vi) Diversion of Funds :

As per information and explanation provided to us we are of the opinion that long term funds of Rs. 8,664.09 Crore and short term funds of Rs. 658.35 Crore has been utilized to meet out losses of the Nigam or to say that funds converted into losses.Nigam does not have enough current assets to meet its working capital/short term funds.

(vii) Inconsistency between Haryana VAT Returns and Profit & Loss Account :

During the course of audit we had some observations on HVAT Returns filed by DHBVN for the F.Y.2014-15 and same queries were emailed to them on 28.08.2015 but no reply received. Our observations on HVAT Returns are as under:

(a) Sale of power shown in excess by Rs. 1761.14 Crore in Haryana VAT Return in comparison to sale of power shown in Profit & Loss A/c. Detail is given as under:

(b) Haryana VAT short paid by Rs. 378741.10 during the F.Y. 2014-15 as per the details given below :

(c) In Vat Return for the period from January to March, 2015 inter-state sale of Rs. 15,40,806.00 has not taken in Gross Turnover. Thus, return seems defective.

(viii) Prior Period Expenses:(a) Te lephone, Postage, Te legram,

Maintenance of Website Expenses etc. of Rs. 5.37Crore-(Note-27, Code-76.111 116): Telephone Expenses etc. of Rs. 5.37 Crore for the F.Y. 2014-15 as shown in Note 27 of Profit & Loss Account,


The Haryana VAT returns are being revised to align the sale figures with that of Profit and Loss Account.

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includes the following bills amounting to 99.42 lakhs pertaining to F.Y. 2013-14:

(b) Payment for SAP to TCIL:

DHBVN has made payment of Rs. 72,70,863.00 vide cheque no. 045179 dated 22.01.2015 to M/s TCIL towards SAP during the F.Y. 2014-15, after deducting Rs. 26,03,428.00 as penalty. However, scrutiny of the relevant bills disclose that following bills relate to prior period. Hence, should have been booked as per prior period expenses.

Further, vide Memo No. CH-14/IT-99/Vol.-VI dated 12.03.2015, BOD's in its meeting held on 28.01.2015 have waived off penalty amounting to Rs. 26,03,428.00

However, DHBVN could not provide us explanation justifying waiving off penalty amounting to Rs. 26,03,428.00 particularly in view of the fact that TCIL has already delayed the work awarded to them for years.

(ix) Sundry Debtors (Note-17):

The Company is having trade receivables of Rs. 5330.55 crore (before considering provisions of Rs.2913.61 crore) out of which trade receivables of Rs. 4551.44 crore are outstanding for more than 6 months as at 31st March 2015 being 85.38% of gross trade receivables. Details are as under:

However, the company has not been able to provide us individual age wise breakup of trade receivables and therefore we are neither able to form an opinion on the sufficiency of provision for debts nor to comment on correctness of the segregation of receivables of more than and less than six month old.


As per the provision of the contract, the bills become due in FY 14-15 and accordingly paid after deducting the penalty as provided in the contract.

The penalty was waived as per the decision of BOD's of DHBVN taken in its meeting held on 28/01/2015. Copy already provided


Individual Age wise Break Up of Trade Receivable and Consumer wise detail of security deposits available with Op/Sub division/Sub Office Level.

53

Development Corpn. Ltd.

As the trade receivables outstanding for more than six months are very high, their recovery seems doubtful.

Further, the company has security deposits of Rs. 982.57 Crore as on 31.03.2015. However, consumer wise detail thereof is not available as the same could not be produced for our verification.

(x) Cash and Cash Equivalents (Note-18):

Out of the various balances included in note no. 18 as on 31.03.2015, Inter Unit Account-Remittance to Head Office amounting to Rs. 145.95 Crore deposited by the various field offices is yet to be reconciled. Similar remittance of Rs. 175.77 Crore as on 31.03.2014 also remained unreconciled during the current year as well.

It shows poor accounting and internal control system which make the Nigam vulnerable to fraud occurrences. In the absence of reconciliation and proper information/explanation we are unable to comment on the same.

(xi) Inter Unit Reconciliation:

Above mentioned IUT Accounts are pending reconciliations since long time the impact thereof on any assets, liabilities, Statement of Profit & Loss could not be quantified in the absence of required information.

(xii) R.E. Subsidy (Note-22) (Code-63.1):

As per information and explanation provided to us DHBVN has booked R.E. Subsidy of Rs. 2098.04 Crore during the F.Y. 2014-15 as mutually decided by D H B V N a n d U H B V N a s p e r Reconciliation of RE subsidy signed by Sr. AO/F&R of UHBVN and AO/Funds of DHBVN vide letter dated 09.07.2015. However, DHBVN could not provide us any order from HERC/GOH for distribution RE Subsidy.

Further, DHBVN has booked RE subsidy of Rs. 334.50 Lakhs during the F.Y. 2014-15 pertaining to F.Y. 2013-14 on

Reconciliation is a continuous process and being done with all branches of DHBVN. Inter Unit Account-Remittance to Head Office has now been reconciled up to Feb. 2016.

The booking of IUT and its reconciliation between various offices is a continuous process as there are 52 accounting units in the company. Major IUT transaction are relating to stock & transfer of assets etc, which have took place normally in the month of March, & are reconciled in the subsequent year.All out efforts are made to bring the balance under IUT to bare minimum.


54

the basis of mutually decided by DHBVN and UHBVN as per Reconciliation of RE subsidy Signed by Sr. AO/F&R of UHBVN and AO/Funds of DHBVN vide letter dated 09.07.2015.However, Nigam could not provide us written order/approval of competent authority or authorization letter signed on behalf of DISCOM's about distri-bution of subsidy between DHBVN & UHBVN and therefore, we are unable to comment upon its impact on profitability of DHBVN.

(xiii) Balance Confirmation/ Reconcili ation:The balances under Reserves & Surplus (Note No. 3) additions during the year, Long Term Borrowings (Note No. 5) except in few cases, Other Long Term Liabilities (Note No. 6), Trade Payables (Note No. 9), Other Current Liabilities (Note No. 10), Long Term Loans & Advances (Note No. 13), Other Non-Current Assets (Note No. 14), Trade Receivables (Note No. 17), Cash & Cash Equivalents (Note No. 18) (Code-33 & 20.280 ), Short Term Loans & Advances (Note No. 19), Other Current Assets (Note No. 20), in these cases DHBVN could not provide us confirmations. The impact of reconciliation/ confirmation, if any, on assets & liabilities could not be quantified in the absence of confir-mation/ reconciliation and qualification as per point no. (i) (a) - Note on Books of Accounts & Accounting Software.

(xiv) Terminal/Retirement Benefits (Adhoc Provision)- (Note-24) (Code-75.632 & 75.633):T h e p e n s i o n a r y l i a b i l i t y f o r terminal/retirement benefits has been booked on estimated basis of Rs. 260.00 Crore for the year F.Y. 2014-15 whereas the provision was made of Rs. 132.00 Crore during the F.Y. 2013-14. There is a sharp increase of Rs. 128.00 Crore i.e. 96.97% in the provision on adhoc basis and no satisfactory reply given in this regard. The estimated provisions may affect the statement of profit & loss account and balance sheet as the same is not based on actuarial valuation and is not in accordance with the provisions of AS-15 (Accounting for retirement benefits) issued by the institute of Chartered Accountants of India. The effect of non-compliance of AS-15 on the Statement of Profit & Loss and Balance Sheet of the company cannot be Computed. (Reference note no.1.35 and 1.36 of significant accounting policies & notes to the financial statements.).

As regards sundry debtors and consumer security deposit, the details are available with the respective sub-division. In DHBVNL the total consumer base is more than twenty eight lacs and it is not feasible to have confirmation from each and every debtor. However, as regards other current assets, sundry creditors, loans and advances, all the records and proper schedule of advances to suppliers and employees are maintained and monitored by the respective DDO's.

During FY 2014-15 the Nigam has provided a sum of Rs. 260 crore on best estimate basis on account of terminal benefits of the employees. After getting final Actuarial valuation from the firm, the difference if any, for the period FY 2014-15 shall be adjusted in the annual accounts of FY 2015-16 or thereafter.

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Annexure II part B


Other Observations on Financial Statements:

(i) Analyses of Transmission and Distribution losses of DHBVN:

The percentage of transmission & distribution loss on sale of units of power by DHBVN is quite high in comparison to percentage of loss on purchase of power. Further, there is increasing trend transmission & distribution losses year after year does not seems to have taken effective remedial steps to bring down the transmission and distribution losses.

(ii) Account Code Showing Same Opening & Closing Balances:

On perusal of above table it would be seen that above account codes show same balances at the end of the year for a long time. DHBVN has not given attention/focus on above balances to clear them.

The above balances have been picked up from notes to balance sheet & profit & loss account. However, we are unable to commen t on o the r i nd i v i dua l balances/items which are grouped in notes and not easily available.

(iii) TDS Liability on Interest:

(a) TDS not deducted on Interest on World Bank Loan

As regards increasing trend in FY 2013-14 to onward as compared to FY 2012-13 is concerned. It was due to incorporation of Jind Circle in DHBVN w.e.f 03/07/2013 (T&D Losses of Jind Circle are about 51%). All out efforts are being made to reduce the T&D Losses.

1. Financial year wise detail alongwith allied documents of receivable/payable has been sent to HPGCL for reconciliation but pending at the end of HPGCL as yet.

2. IUT provisions remain the same being the IUT are almost equals as compared to FY 2013-14.

3. Liability of terminal benefits shall be looked into after finalization of actuarial valuation job as assigned to M/s Globle Risk Consulting, Mumbai for the FY 2014-15.

The interest payment is being made by the DHBVN to GOH and then by the GOH to World Bank. Thus there is no TDS liability on part of the DHBVN.

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On perusal of above table it is evident that DHBVN has not deducted TDS on interest payment to World Bank through Govt. of Haryana during the F.Y. 2014-15. We have, however, been explained that as the interest payment is being done by Haryana Government to the World Bank, there is no TDS liability on DHBVN.

In our opinion the proviso of section 195 of the IT Act, 1961 is very clear on this point which says that even payment by Govt. to Non-Resident attracts section 195 of the IT Act, 1961 and therefore in our opinion DHBVN is liable for TDS liability.

(iv) Inconsistency in Notes to Accounts vis a vis Actual Practice:

Under sub para (a) of para 1.48 - Power Purchase, the purchase cost including transmission charges has been stated at Rs. 4.49 per unit for the F.Y. 2014-15. However, the above purchase cost is only the bare cost paid to the companies supplying power to the Nigam and does not include other overhead cost related thereto. If overhead cost is also included while working out the purchase cost the cost of power purchase will work out to Rs. 7.85 per unit (As per Annexure-A Attached).

As per generally accepted accounting principles the cost of any salable unit is to include direct as well as indirect cost and to that extent the accounting note given above and the practice being followed by Nigam needs review. Similarly, other notes forming part of accounts may also be reviewed once again to make them in accordance with practice/generally accepted accounting principles.

(v) Block of Assets not properly classified (Computer Block) :

It is observed that the block of computers neither shown in note 12(a) (Tangible Assets) of balance sheet nor in

Power purchase cost as works out in para 1.45 of Note 1 of "Significant Accounting Policies & Notes to the financial statement for the FY 2014-15" is for quantifying the difference between the HERC approved rate (Rs. 3.69/unit) & actual cost of power purchase only.

3rd schedule of Companies Act, 2013 does not specify separate block for computers etc. So far as depreciation on computers for I.Tax purpose is concerned, we have already shown these items separately while filing I.Tax return with I.Tax department.

57


depreciation chart as per Income Tax Act, 1961. Since depreciation rates are different under Companies Act & Income Tax Act, the computer block of assets needs to be shown separately which has not been done despite our suggestion to the management.

(vi) Miscellaneous Deposits (Code-46.919):T h e N i g a m h a s s h o w n R s . 58,08,57,233.53 as on 31.03.2015 towards miscellaneous deposits under the head other liabilities & provisions vide note no. 10 under account code 46.9. However, it could not be clarified to us as to the nature of deposit received and therefore it is not possible for us to ensure whether its classification and presentation in accounts is proper or not

.

(vii) Analysis of Net Working Capital, Current Ratio & Debt Equity Ratio: Table showing detail of Net Working Capital & Current Ratio:

From above figures, it may noted that the Nigam is having negative working capital and current ratio is quite low.

The above figures show that Nigam is having negative Own Funds and negative debt equity ratio.

(viii) Adhoc/Estimated Provision for Employee Terminal Benefits:The Nigam has made a provision on adhoc/ estimated basis of Rs. 260.00 Crore towards Employees Terminal Benefits vide para no. 1.35 & 1.36 of significant accounting policies and notes to financial statements for the F.Y. 2014-15. However, to make such provision as allowable expense under the Income Tax Act, 1961, it has to be on the basis of actuarial valuation. Since, in this case the provision is on estimate basis, it will not be an allowable provision under Income Tax Act, 1961.

As the name suggests, it is an suspense account (GH-46.919) in which the deposits from employees, contractors etc are retained on temporary basis till their finalization by the concerned authority.



As per our reply to the Para XIV of Annexure 2 (Part A)

58

BALANCE SHEET AS AT 31st MARCH 2015

Particulars NoteNo.

As at 31st March, 2015(`) in Lacs

I. EQUITY AND LIABILITIES

(A) Shareholders' Funds

(a) Share Capital 2 143,911.76 143,911.76 (c) Reserves and Surplus 3 -1,161,352.00 -966,870.58

(B) Share Application Money 4 1,000.01 0.01

pending Allotment

(C) Non- Current Liabilities

(a) Long-term borrowings 5 1,337,057.57 1,023,550.23 (b) Deferred tax liabilities(net)(c) Other long term Liabilities 6 144,716.54 132,657.06 (d) Long term Provisions 7 13,802.36 13,802.36

(D) Current Liabilities

(a) Short term Borrowings 8 33,840.81 31,292.60 (b) Trade Payables 9 289,846.59 277,937.91 (c) Other current liabilities 10 103,120.40 147,505.33 (d) Short Term Provisions 11 1.11 7,098.95 TOTAL 905,945.14 810,885.65

II. ASSETS

(A) Non-Current assets

(a) Fixed Assets(i) Tangible Assets 12(a) 443,353.43 380,915.11 (ii) Intangible Assets 12(b)(iii) Capital Work in Progress 12{c) 82,918.79 101,652.70 (iv) Intangible assets under development(b) Non- Current Investments(c) Deferred Tax Assets (net)(d) Long -term Loans and Advances 13 9,273.57 8,922.52 (e) Other Non- Current Assets 14 15,102.89 8,408.64

(B) Current Assets

(a) Current Investments 15 - - (b) Inventories 16 23,166.77 28,667.70 (b) Trade Receivables 17 241,694.11 204,401.94 (c) Cash and cash equivalents 18 18,028.07 27,230.54 (d) Short term loans and advances 19 63,931.90 41,431.37 (e) Other current assets 20 8,475.62 9,255.12 TOTAL 905,945.14 810,885.65

As at 31st March, 2014(`) in Lacs

Notes to Accounts from 1 to 29 form integral part of the accounts.

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

FOR O. Aggarwal & Co. (R.K BATRA) (ARUN KUMAR VERMA)Chartered Accountants Director/Operations Managing DirectorF.R No.: 005755N DIN: 07167590 DIN: 03111696

(CA. O.P Aggarwal) (SUSHILA K BALODIA) (CA KAPIL K MARWAHA) Partner CGM/Accounts Chief Financial OfficerM. No. 083862

(HARJINDER SINGH)Place : Delhi Place : Hisar Company Secretary Date : 02 May 2016 Date : 26-04-2016

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Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

I. Revenue from Operations 21 1,117,003.11 984,987.70 II. Other Income 22 223,083.87 160,418.69 III. Total Revenue (I+II) 1,340,086.98 1,145,406.40

IV. Expenses

(a)Cost of materials consumed(b)Purchase of Power 23 1,235,784.42 1,113,134.87 (c)Changes in inventories of finished goods, work-in-progress and Stock-in-Trade(d)Employee benefit expense 24 89,070.89 68,714.75 (e)Financial costs 25 95,050.19 99,168.86 (f)Depreciation and amortization expense 26 18,038.35 14,987.66 (g)Other expenses 27 13,797.66 14,244.70 Total Expenses 1,451,741.51 1,310,250.84

V. Profit/ (Loss) before exceptional and

extraordinary items and tax(III-IV) -111,654.53 -164,844.44

VI. Exceptional Items 28 -48,039.00 VII. Profit/ (Loss) before extraordinary items and

tax (V - VI) -63,615.53 -164,844.44

VIII. Extraordinary Items 29 - 44,019.60 IX. Profit/ (Loss) before tax (VII - VIII) -63,615.53 -208,864.04

X. Tax expense:

(a) Current tax (b) Deferred tax - - (c) Wealth Tax 1.11 1.11

XI. Profit(Loss) from the period from continuing

operations(IX-X) -63,616.64 -208,865.16

XII. Profit/(Loss) from discontinuing operationsXIII. Tax expense of discounting operationsXIV. Profit/(Loss) from Discontinuing operations

(XII - XIII) - -

XV. Profit/(Loss) for the period (XI + XIV) -63,616.64 -208,865.16

XVI. Earning per equity share: 30(1) Basic & Diluted -442.05 -1,476.97

PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31st MARCH 2015

Sr.

No.Particulars

Ref. of

Schedule

31-3-2015 31-3-2014

(`) in Lacs (`) in Lacs

60

Notes to Accounts from 1 to 29 form integral part of the accounts.As per our report of even date attached For and on behalf of Board of Directors




Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

CASH FLOW STATEMENT FOR THE YEAR ENDING MARCH 2015

Description FY 2013-14FY 2014-15

A: Cash Flow From Operating Activities(Indirect method)

1 Net Profit Before Tax and Extraordinary items -63,615.53 -164,844.44

2 Add:- Operation ItemsDepreciation including Prior Period 18,038.35 14,987.66 Interest Income -912.63 -1,415.32 Loss from UHBVN on transfer of Jind Circle -135,627.30 - Interest & finance charges 95,050.19 99,168.86 Due to thefte/surveyed off/discarded assets 1,810.18 -21,641.22 901.36 113,642.57

3 Operating Profit/(Loss) Before Working Capital Changes (1+2) -85,256.75 -51,201.88

4 Changes in Working Capital:Decrease /(Increase) in Trade & Other Recoverable -65,113.71 -78,467.87 Decrease/ (Increase) in Stores & spares 5,500.94 -11,491.26 Increase /(Decrease) in Trade Payable -41,001.91 -100,614.69 94,988.20 5,029.07

5 Cash Generated From Operations (3+4) -185,871.45 -46,172.81

6 Taxes Paid -1.11 - Cash Flow before Extraordinary Items -185,872.56 -46,172.81 Extraordinary Items - -44,019.60

8 Net Cash Flow From (Used in) Operating Activities (A) -185,872.56 -90,192.41

9 B: Cash Flow From Investing Activities(I) Purchase of Fixed Assets & capital W.I.P.-(increased)/Decreased -70,809.79 -132,051.69 (ii) Disposal of Fixed Assets 589.17 809.57 (iii) Service line contribution-Increased 11,225.72 19,594.20 (iv) Purchase of Investments-(increase)/Decrease 3,265.42 8,566.15 (v) Interest Income 743.15 -54,986.34 1,119.68 -101,962.09

Net Cash Flow From (Used in) Investing Activities (i to v) (B) -54,986.34 -101,962.09

C: Net Cash Used In Financing Activities(I) Proceeds from Long Term & Other Borrowings (including foreign exchange fluctuation and loan from UHBVN) 349,926.71 461,690.46 (ii) Repayment of Long Term & Other Borrowings -22,033.18 -192,278.47 (iii) Interest & finance charges -102,226.36 -93,797.64 (iv) Consumer security deposits-increased 8,825.48 13,504.91 (v) Grant-increased -570.81 762.99 (vi) Equity Share Capital receivable from UHBVN - - (vi) Govt. equity - 3,255.00 (vii)Share application money 1,000.00 234,921.84 -3,255.00 189,882.26

Net Cash Flow from (Used in) Financing Activities (i to vii) (C) 234,921.84 189,882.26

Net Increase in Cash and Cash Equivalents (A+B+C) -5,937.06 -2,272.24

Opening Balance of Cash and Cash Equivalents 23,810.14 26,082.38

Closing Balance of Cash and Cash Equivalents 17,873.08 23,810.14

Cash and Bank balances as per Balance Sheet 18,028.07 27,230.54

Deposits (not cash and cash equivalents) 154.99 3,420.40

Cash and Cash equivalents 17,873.08 23,810.14

(`) in Lacs

61

Notes to Accounts from 1 to 29 form integral part of the accounts.As per our report of even date attached For and on behalf of Board of Directors




Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

SIGNIFICANT ACCOUNTING POLICIES:

1.1. The Nigam is governed by the provisions of the

Electricity Act, 2003. The provisions of that Act

prevails in preparing the Accounts wherever they

are inconsistent with the provisions of the

Companies Act, 2013.

1.2.BASIS OF ACCOUNTING:

Accounts of the Nigam are being prepared on

accrual basis based on the historical cost

convention except in case of surcharge levied on

delayed payments which are on actual realization

basis.

1.3.USE OF ESTIMATES:

The preparation of financial statements requires

estimates and assumptions to be made that affect

the reported amount of assets and liabilities on the

date of the financial statements and the reported

amount of revenues and expenses during the

reporting period. Difference between the actual

results and estimates are recognized in the period

in which the results are known / materialized.

1.4.FIXED ASSETS:

a) The Fixed Assets are carried at the original cost

including appropriate expenses capitalized less

depreciation thereof.

b) The interest on borrowed funds attributable to

acquisition/construction of fixed assets, till

commissioning of such assets, is being capitalized.

c) Consumer's contribution, grants and subsidies

towards cost of capital assets are not reduced from

the cost of assets but being treated as 'Capital

Reserves' and shall be amortized with the amount

of depreciation over the useful life of fixed assets

created out of consumer contribution/

grants/subsidies. The average rate of depreciation

of plant & machinery (T&D) is taken for

amortization.

d) The expenditure on capital work in progress is

transferred to appropriate asset at the end of

month irrespective of the date of commissioning of

project/work during that month.

e) During FY 2014-15, 36 Nos 33 KV sub stations are

capitalized. These sub stations are constructed on

the land, donated by the Gram Panchayat of

villages concerned to DHBVN through a

resolution.

1.5.DEPRECIATION:

The depreciation shall be calculated in the

following manners as per HERC MYT Regulation

2012 effective from 1/4/2013:

a) The value base of asset shall be the historical

capital cost of the assets as admitted by the

Commission. The historical capital cost shall

include additional capitalization including foreign

exchange rate variation, if any already allowed by

the Commission up to 31st March of the relevant

year.

b) The residual value of the asset shall be considered

as 10% and depreciation shall be allowed up to

maximum of 90% of historical capital cost of the

asset;

c) Depreciation shall be calculated annually over the

useful life of the asset at the rates specified in

Appendix II up to 31st March of the 12th year from

the date of commercial operation of the asset.

From 1st April of 13th year from the commercial

date of operation of the asset, the remaining

depreciable value if any out of the 90% of the

capital cost of the asset shall be equally spread

over the balance useful life of the asset.

The deprecation rates give in Appendix-II will be

applicable w.e.f. 1.4.2013 only. The depreciation,

in case of existing assets, up to 31.03.2013 shall

be considered as already allowed and shall not be

re-visited. The depreciation rates as per Appendix-

II for such assets shall be applicable w.e.f.

1.4.2013 up to 12th year from the date of COD

(Commencement Operation Date).

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE FINANCIAL STATEMENTS FOR FY 2014-15:-

62

d) Land shall not be considered as a depreciable

asset and cost shall be excluded from the capital

cost while computing depreciable value of asset.

e) Depreciation shall be chargeable from the first

year of commercial operation. In case of

commercial operation of the asset for part of the

financial year, then the depreciation shall be

charged on pro rata basis.

f) Depreciation shall not be allowed on assets (or

part of assets) funded by consumer contribution

(i.e. any receipts from consumers that are not

treated as revenue) and capital subsidies / grants.

Provision for replacement of such assets shall be

made in the capital investment plan.

1.6. STOCK OF STORES & SPARES (NON-

CURRENT ASSETS):

a) Inventory of stores & spares (Current Assets - Note

16, "Inventories") is valued at cost.

b) Cost is determined on Weighted Average

Method. Cost includes duties, taxes, freight, octroi,

insurance, handling, clearing charges and other

incidental expenses. Cost of Material at Site is,

however, determined as per issue price.

c) No provision has been made in the current year in

respect of obsolete stock.

d) Scraps are accounted for as and when these are

sold.

1.7. REVENUE RECOGNITION:

a) Revenue from sale of power is being accounted for

on accrual basis, in addition to this the unbilled

revenue equivalent to 50% of the amount billed

during the month of March is also added in

revenue from sale of power. However, differences

on account of adjustments of undercharge /

overcharged billing with actual billing are adjusted

in the year of rectification.

b) The subsidy from Govt. of Haryana is to be

accounted for on the basis of budget provision of

the GOH as well as its actual realization.

c) Material known liabilities are provided for on the

basis of available information/ estimates.

1.8. FUEL SURCHARGE ADJUSTMENT

The amount of difference between the actual

power purchase rate and the rate approved by

HERC vide its orders on Annual Revenue

Requirement for the relevant year is being filed with

Commission to claim as FSA in accordance with

mechanism devised by the Commission for

computing FSA, which is being allowed to recover

from the consumers in subsequent period i.e. in

monthly installments over a period of 2 to 4 year

The expenditure on account of Fuel Surcharge

Adjustment (FSA) is being accounted when its

incurred and revenue on its actual Billing.

1.9. RETIREMENT BENEFITS:

The retirement benefits are being provided on

actuarial valuation basis and as per the certificate

of the Actuary in accordance with the provision of

Accounting Standard 15 (Revised-2005) or

otherwise stated in notes on accounts. Pension

liabilities include liabilities on account of leave

encashment, gratuity, family pension and pension

of employees appointed before 1.7.99. The retrial

benefits of employees appointed on or after 1.7.99

are also being provided on the basis of actuarial

valuation certificate. The benefit of pension will not

be available to the employees joining service on or

after 01-01-2006 as they will be covered under

"New Pension Scheme" notified by Govt. of

Haryana vide its notification No. 01/01/2004-I

pension dated 04/12/2008 and adopted by

DHBVNL in the BOD meeting held on

31/07/2009.

However for FY 2014-15, the estimation of

retirement benefits have been done, based upon

past experience/liabilities. Accordingly Rs 260

crore have been provided in the books of accounts.

1.10. TRANSACTIONS IN FOREIGN CURRENCY:

a) Transactions in foreign currency are accounted for

at exchange rates prevailing on the date of

transaction.

b) Current Assets and Liabilities are translated at the

63

rates prevailing at the end of the year.

c) In the case of liabilities in respect of foreign

currency loans obtained for acquisition of fixed

assets, the variation in the liability arising out of the

variation in exchange rates at the year-end is

adjusted to the cost of the acquisition of fixed

assets. Further, during the FY 2014-15 exchange

fluctuation of Rs. 2,66,46,199.00 is capitalized in

capital work in progress and corresponding

increased the liabilities.

d) All transaction differences are recognized as

income / expense during the year in which they

arise.

1.11. PROVISIONS, CONTINGENT LIABILITIES

AND CONTINGENT ASSETS:

Provisions involving substantial degree of

estimation in measurement are recognized when

there is a present obligation as a result of past

events and it is probable that there will be an

outflow of resources. Contingent Liabilities are not

recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor

disclosed in the financial statements.

1.12. BORROWING COST:

The borrowing cost that are attributable to the

acquisition or construction of qualifying assets are

capitalized as the part of the cost of such assets.

The borrowing cost is capitalized on the basis of

weighted average formula as under:-

a) Average of opening & closing outstanding loans

for capital works.

b) Average of opening and closing balance of CWIP.

c) Interest paid and provided for the year on loans for

capital works.

d) Capitalization of borrowing cost = C X B/A.

1.13. INVESTMENTS:

No contingency reserve is created since financial

year 2008-09 as per Hon'ble Commission orders

dated 20-11-2008 on ARR for FY 2008-09.

However the said amount of investment has also

been realized during the FY 2013-14.

1.14. UNSECURED LOANS - GOVT./HVPNL

LOANS:

Receipt of loans, interest accrued thereon &

repayments regarding loans from Govt./HVPNL

(directly/indirectly) are accounted for on the basis

of advice/instructions of Govt./HVPNL.?

1.15. GOVERNMENT GRANTS:

Grants from Central/ State Government for the

purpose of Capital Works are considered as

Capital Receipts and other grants in the shape of

incentives/ subsidies etc. are considered as

Revenue Receipt are accounted on the basis of

advice/instructions of Govt. or Relevant

Authorities.

1.16. RESEARCH & DEVELOPMENT:

Revenue expenditure on research & development

is expenses as incurred and Capital expenditure

incurred on research & development is added to

respective fixed assets.

1.17. IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying

cost of asset exceeds its recoverable value. An

impairment loss is charged to the Profit and Loss

Account in the year in which an asset is identified as

impaired. The impairment loss recognized in prior

accounting period is reversed if there has been a

change in the estimate of recoverable amount.

Further, DHBVN has not done any impairment of

assets during the FY 2014-15.

1.18. PROVISION FOR CURRENT TAX, DEFERRED

TAX & WEALTH TAX:

a) Current Tax:

The DHBVN has not made any provision for

current tax for the FY 2014-15, since company has

incurred loss during the year.

b) Deferred Tax:

The AS-22 is applicable in the case of DHBVN for

timing differences, however, the provision for

deferred tax assets is not made for the FY 2014-15

and earlier years according to AS-22, since there is

no certainty of profits in future years.

64

c) Wealth Tax:

The DHBVN has made the provision for wealth tax

during the FY 2014-15 as per rates provided in

Wealth Tax Act.

1.19. MISCELLANEOUS:

a) Expenses on raising of finance and financial loans

are charged to revenue.

b) Income from Surcharge levied on consumers for

delayed payment of energy bills have been

accounted for on actual realization basis.

c) Interest on loans and advances advanced to the

staff is being recovered after the full recovery of

principal amount. However, interest is accounted

for on accrual basis in the accounts.

Accounts have been prepared as per Accounting

Standards prescribed by Institute of Chartered

Accountants of India from AS 1 to AS 29 and which

are relevant to DHBVNL.

1.20. The figures for this year and the previous year have

been shown in the relevant notes and regrouped

and rearranged for better presentation wherever

considered necessary.

1.21. CONTINGENT LIABILITY:-

Contingent Liabilities as on the date of Balance

Sheet:

i) Contingent liabilities in respect of civil suits filed by

the third parties against the Nigam are

approximately Rs. 91378.85 lacs (previous year

Rs. 59225.70 lac), Out of Rs. 91378.85 lacs,

contingent liability of Rs. 76346.06 Lacs arises due

to claiming of price hike of Raw Material by

generating Co (M/s Adani Power & CGPL). In lieu

of compensatory Tariff/Changes in Law Policy etc.

The case is pending with Hon'ble Apex Court, New

Delhi.

ii) The Nigam has filed a petition in Punjab &

Haryana High Court and the stay has been granted

by the Hon'ble Court with respect to payment of

Fringe Benefit Tax on pension fund contribution

(Rs.85986715.00). Now the matter has been

transferred to Delhi High Court by Hon'ble

Supreme Court of India. The case is admitted by

the Hon'ble Delhi High Court Any adverse decision

by the Court will affect the profitability of the

Nigam.

iii) During FY 2008-09, the Income Tax Department,

Hisar has raised a demand of tax Rs.

55,99,01,707/- on account of non deduction of

TDS under section 194J of Income Tax Act on

payment of transmission charges made to HVPNL

for FY 2005-06, 2006-07 and 2007-08. This

amount was shown as contingent liability in the FY

2008-09. The case was decided in favour of

DHBVNL by ITAT, New Delhi bench on dated

23.10.2009 & the appeal was allowed in full. But

there after the Income Tax Department had filed an

appeal in Punjab and Haryana High Court

Chandigarh. The Hon'ble Court, vide its order, ITA

No 652 of 2010 (O&M) dated 8/5/2014,

authorize the Assessing Officer to consider the

element of income in the transaction as well,

before passing a fresh order in accordance with

law. Further notice from Assessing Officer is

awaited.

iv) Commissioner of Income Tax Hisar have filed an

appeal against the ITAT Delhi "Bench B" order

dated 27/06/012 and 10/02/2012 in the Hon'ble

Pubjab & Haryana High Court Chandigarh vide

CRA No. 369 of 2014 and CRA No. 226 of 2014

for the Assessment Year 2007-08 and 2008-09

respectively on account of disallowance u/s 40(a)

(ia) for non-deduction of Tax on payment of

wheeling / transmission charges of Rs. 152.53 (AY

2007-08) and Rs. 241.55 (AY 2008-09). Both the

cases were heard by the Hon'ble Punjab & Haryana

High Court on dated 30/03/2015 and adjourned

sine-die till the final decision in ITA 652 of 2010.

v) Commissioner of Income Tax Hisar has filed an

appeal in the Hon'ble Apex court New Delhi

against the Judgement dated 01/10/2014 passed

by Hon'ble Punjab & Haryana Hight Court

Chandigarh in ITA No. 209/14 for the Assessment

Year 2006-07 on disallowance of provision of

65

delayed payment surcharge due but not realized

worth Rs. 225.18 crore. Next date of hearing is

01/04/2016.

vi) The Electricity Ombudsman, Haryana, HERC,

Panchkula in its decision dated 20 September

2012 had directed to charge the penalty for MDI,

exceeds on RICO Industries for one month Rs.

32.96 lacs (one month) only instead of 17 months

Rs. 5.60 crore (17 Months i.e. January 2010 to

May 2011). The Nigam has filed an appeal with

Punjab and Haryana High Court, Chandigarh

against the orders of Ombudsman, Haryana,

HERC, Panchkula and the case is still under trial.

The next date of the case is fixed on 04/09/2015.

The Nigam is contingently liable amounting to Rs.

5.27 crores.

1.22. The Fixed Assets as shown in Note 12 reflects the

classification of Fixed Assets on the basis of

functions of the Business and in accordance with

the FAR supplied by HVPNL as per opening

balances as on 1.7.99. The classification of Fixed

Assets as per requirement of schedule-III of

Company Act 2013 could not be shown in view of

such classification not received from HVPNL. The

physical verification of Fixed assets as per FAR

ending 31-3-2002 have been got done from

respective field Xens and differences have been

adjusted/rectified except in case of the following

Accounting Units due to certain ambiguities:-

During 2014-15, the physical verification of Fixed

Assets as per FAR ending 31/03/2014 in respect of

ibid units have also been got done from respective

field SE's/ Xen's and found no difference, which

requires any adjustment / rectification.

1.23. The fixed assets have not been insured. The cash in

transit and cash in chest has been insured. The

Fixed assets include some transformers which were

damaged during warranty period and lying un

attended at store for want of repairs. The suppliers

of transformers have refused to carry out the

repairs under warranty period. Amount in lieu of

these cases are included in Contingent liabilities

given in para 1.21 (i).

1.24. The assets allocated to other power utilities are

being utilized by DHBVNL and vice versa. The

accountings of rental payables/receivables

to/from have not been made in accounts of

DHBVNL in absence of specific agreement in this

regard.

1.25. In the opinion of the Nigam, the current assets and

loans and advances are of the value as stated in the

accounts, if realized in the ordinary course of

business.

1.26. Assets held for disposal as shown in the Note 14

amounting to Rs. 109.54 Lacs (previous year Rs.

92.93 lacs) represents the discarded/ surveyed off

assets and these have been taken at their written

down value. Further, loss or profit is accounted on

actual sale of assets.

1.27. R.E. SUBSIDY:

RE subsidy received from G.O.H during FY 2014-

15 is to the tune of Rs. 2098.04 crores and 334.50

crores for the FY 2013-14 received from UHBVN

on a/c of transfer of Jind Circle during the FY

2014-15 for providing electricity supply to

agriculture pump-set consumer at subsidized rates

and FSA relating to agriculture category.

1.28. The value of stores and spares as shown in note-16

has been taken on the basis of historical cost taken

in stock records.

1.29. The debit and credit balances appearing under

current assets and current liabilities are subject to

confirmation from respective parties.

1.30. SUNDRY DEBTORS:

As per balance sheet, the Gross debtors

outstanding as on 31-03-2015 are to the tune of

Rs. 5330.55 Crore out of which a sum of Rs.

1093.57 crore pertains to banking and interstate

sale of power. The age wise break-up of debtors

are as under:-

Sr.No. LC No. Name of Accounting Unit

1. 801

Controller of Stores, DHBVNL, Hisar

2. 901 Accounts Officer/EAD, DHBVNL, Hisar

3. 701 Sr.A.O./Workshop, DHBVNL, Hisar

66

After considering the provisions for bad and

doubtful debts and the amount of unrealized

surcharge the net debtors comes to Rs. 2416.94

crore shown in Note 17 of the Balance Sheet which

includes Rs. 1093.57 crore pertaining to banking

and interstate sale of power. Debtors upto

September 2014 plus debtors as on 3.7.2013 of

Op Circle Jind are included in the ageing for more

than six month.

1.31. MTC. EXPENSES OF VIDYUT NAGAR, HISAR.

A sum of Rs. 186.72 Lacs (previous year 135.95

lacs) has been charged as recoverable from

HVPNL on account of maintenance of Vidyut

Nagar, Hisar as 25% portion belongs to HVPNL.

1.32. INTEREST AND OTHER EXPENSES

CAPITALISED

Interest & Guarantee Charges amounting to Rs.

10689.50 lacs (Previous year Rs. 8699.15 lacs)

and employees cost and other expenses

amounting to Rs. 1650.95 lacs (Previous year Rs.

1239.54 lacs), out of current year expenses have

been capitalized and included in capital work in

progress as shown in the note 12 (c).

1.33. G P F D E D U C T I O N S / PAY M E N T S O F

EMPLOYEES RECRUITED BEFORE 01-07-

1999:-

At the beginning of the year, a sum of Rs. 4846.47

lacs was Receivable from HVPNL Provident Fund

Trust and at the end of this year it is Rs. 2576.98

lacs as "receivable from HVPNL Provident Fund

Trust"

1.34. G P F D E D U C T I O N S / PAY M E N T S O F

EMPLOYEES RECRUITED ON OR AFTER 01-

07-1999:

At the beginning of the year, a sum of Rs. 237.18

lacs was payable to DHBVN Provident Fund Trust of

and at the end of current financial year Rs. 30.88

lacs is receivable from Trust. The detail of the same

is given as under:-

1.35. P E N S I O N A R Y C H A R G E S O F O L D

EMPLOYEES:

Being the higher valuation given by the previous

Actuary, an amount of Rs. 240.00 crore on account

of terminal benefits of the employees recruited

before 1-7-1999 for FY 2014-15 has been

accounted for on estimate basis in absence of

actual valuation and has been shown as payable to

HVPNL Pension Fund Trust.. A new actuary has

Age of Debtors

Debtors more than 6 monthsDebtors other Total

(` in Crore)

Amount of Debtors

4551.44779.11

5330.55

Amount in Lacs

Sr.No

Particulars

1. Net amount receivable from HVPNL Employees Provident Fund Trust at the beginning of the year

2. Payable-GPF Subscription (GH 57.120) during the year

3 . Interest Receivable fro HVPNL Trust (57.122)

4. Total payable to HVPNL Employees Provident Fund Trust (2-1-3)

5. Receivable-GPF payments made (57.121) to Employees during the year

6. Amount paid/(received) to Trust/adjustment (57.123)

7. Receivable from Trust (5+6)

8. Net receivable from HVPNL Employees Provident

Fund Trust as on 31.3.2014 (7-4)

Current Year

Previous Year

4846.47

5979.86

470.53

662.86

8067.63

(4827.79)

3239.84

2576.98

2482.65

5560.04

299.97

2777.42

7623.89

0.00

7623.89

4846.47

Sr. No.

Particulars

Current

YearPrevious

Year

Amount in Lacs

1 Opening balance of GPF amount payable to Trust as

on 1.4.2013

2 Add GPF contribution payable during the year

(57.160)

3 Add Interest payable @ 8% during the year (57.162) 4 Payable amount of GPF (1+2+3)

5 Less paid to Employees on behalf of Trust during FY

(57.161) 6 Less paid to Trust during FY 2013 -14

(57.163)

7 Total paid amount of GPF (5+6)

8 Net payable amount to DHBVNL employees GPF Trust upto 31.3.2014 (4 -7)

237.18

389.68

11.97

638.83

227.61

442.10

669.71

(30.88)

243.44

306.73

14.50

564.67

145.49

182.00

327.49

237.18

The details of the same are given as under:-

67

been appointed by the Nigam through opening

tendering process for getting actual valuation and

the same is under process. The difference if any

will be accounted for in the next financial year after

getting the new valuation report from Actuaries

thus appointed by the Nigam.

1.36. P E N S I O N A R Y C H A R G E S O F N E W

EMPLOYEES:

A sum of Rs. 20.00 crore on account of pension

contribution in respect of employees recruited on

or after 1.7.1999 has been provided in the

accounts on estimated basis in absence of

valuation made by actuary and has been shown as

payable to DHBVN pension fund trust. If any

differences arise after getting the valuation from

new actuaries the same will be accounted for in

next financial year.

1.37. SURCHARGE LEVIED ON DELAYED

PAYMENT:

As per Nigam's decision, the income from

surcharge is to be accounted for on the basis of

actual realization. On the basis of actual

realization a sum of Rs. 49.34 crores has been

accounted far as Income from surcharge against

total assessment of Rs. 428.35 crores. A sum of Rs.

379.01 crores has not been recovered from the

consumers and the same has been written back

from the delayed payment surcharge income and

has been reduced from the gross debtors.

1.38. Cash embezzlement was detected in Op. S/Divn.

Adampur under Op. Divn. No. II, Hisar in April

2004 for which Sh. Karam Singh Kamboj and Sh.

Sita Ram LDC/C were found at fault. An FIR was

lodged against Sh. Karam Singh Kamboj SDO and

Sh. Sita Ram LDC/C, Now, Sh. Karam Singh

Kamboj SDO has already been retired and the

services of Sh. Sita Ram LDC/C has been dismissed

vide SE Op. Circle, DHBVN Hisar O/O No. 301

dated 29.03.2010. The total embezzled amount

was Rs. 43,39,836/-. The provision for the above

amount had already been made in the accounts for

FY 2004-05. No recovery from any officer/official

has been made so far. Besides, the criminal

proceedings against Sh. Sita Ram LDC/C

(dismissed) is under trial in Civil Court, Hisar and

the date of next hearing has been fixed on

07/09/2015. However, criminal proceeding

against Sh. Karam Singh Kamboj, AEE (Retd) has

been decided in his favour vide Hon'ble Pb &

Haryana High Court LPA No. 597 of 2011 &

Hon'ble Supreme Court in SLP No. 14313 of 2011.

Hence, recovery can not be made.

1.39. An embezzlement of Rs. 7,53,767/- was taken

place in Op. S/Divn. Taoru under O.C.C Divn.

Gurgaon during FY 2005-06, out of which a sum

of Rs. 27499/- were recovered from the officials

concerned so far and the remaining amount of Rs.

7,26,268/- is still pending for want of final

decision from the Court. However, the provision of

the loss was made in FY 2005-06.

1.40. An embezzlement of Rs. 20,18,341/- was detected

in Op. S/Divn. Taoru under Op. Divn. Sohna

during FY 2007-08 as intimated by Xen Op. Divn.

Sohna. A sum of Rs. 9,53, 432/- was deposited

by Sh. Deewan Chand SDO and Sh. Parveen

Kumar LDC, who was entrusted the duties of

cashier. The provision for loss on this account was

made during FY 2007-08. However, the figure of

embezzlement as intimated by CGM/Audit,

DHBVNL Hisar is Rs. 22.58 lacs. GM/Admn.,

DHBVN, Hisar vide his O/o No. 58/Conf/NG/DH-

337 dated 30/07/2012 orders for recovery worth

Rs. 17,71,120/- from Sh. Parveen Kumar, LDC.

Out of which Rs. 3,24,937/- already deposited by

him & recovery for the remaining amount is

commencing @ Rs. 7000/- PM w.e.f. 1/1/2013 till

date. (Rs. 22,500/- + Rs. 2,17,000/- has been

recovered upto 7/2015).

1.41. The work of bill collection was outsourced to HDFC

Bank, CBI, Vijaya Bank & M/s Suvidha in

Faridabad Circle. Some embezzlement were

noticed during June 2014, matter is under

investigation and exact amount involved will be

worked out in due course.

68

1.42. An embezzlement of Rs. 47.22 lacs in S/u

Ballabgarh Sector 25 under Op Circle Faridabad

has been detected & Chief Auditor DHBVN Hisar

vide his memo no. CA/RA/Misc/707 dated

29/12/2014 reported that Rs. 41.72 lac (with

surcharge Rs.5.31 lacs) stands recovered from the

consumer and balance of Rs. 10.81 lacs is to be

recovered. However delinquent official, Sh.

Balwan Singh, MR placed under suspension &

charge sheet issued to him vide SE/HR. DHBVN,

Hisar Memorandum No. Ch-2/RCS-112 dated

25/02/2014. The decision of charge sheet is

pending.

1.43. An embezzlement of Rs. 29.03 lacs in Op S/Divn

Badrola under Op Circle Faridabad has been

detected & Chief Auditor DHBVN Hisar vide his

memo no. CA/RA/Misc/707 dated 29/12/2014

reported that Rs. 14.26 lacs stands recovered from

the consumer and balance is being recovered.

Charge sheet has been served upon delinquent

official (Sh. Naresh Kumar Singla, ASSA working

as CA vide SE/Op Circle DHBVN Faridabad

Memorandum No. 43/ES/FC-59 dated

10/06/2014 and Sh. Maan Singh, L/Man working

as LDC vide SE/Op Circle, DHBVN, Faridabad

Memorandum No. 12/ES/FC-864 dated

10/06/2014). The decision of charge sheet is

pending.

1.44. FIR against contractor for execution of Piller Box

work order to the tune of Rs. 125.33 crores in

Faridabad Circle has now been transferred to

Director General, State Vigilance Bureau,

Haryana, Panchkula through Chief Secretary to

GOH, Vigilance Department vide his Memo No.

47/5/14-3VII dated 27/03/2015 for further

investigation. The investigation is in process.

1.45. As per past policy of the Nigam, the Nigam has

made provision for Rs. 70.98 Crores on account of

interest on total amount of consumer security @

8.5% per annum during FY 2013-14. Prior to the

FY 2013-14 i.e. upto FY 2012-13, provision was

Rs. 74.91 crore. Both has been reversed now.

For the FY 2014-15, the Interest on consumer

security comes out to Rs. 83,78,76,409/- (As per

sales instruction no. 6/2015) @9% p.a. on the

consumer security worth Rs. 974,55,52,985/-.

However no provision has been made in FY 2014-

15. Resultantly, due to non creation of provision for

the same, it affects the P&L A/c of DHBVN by an

understatement of loss for the FY 2014-15 by Rs.

83,78,76,409/-

1.46. SHARE CAPITAL:

The Authorized Share Capital of the Nigam is Rs.

2000.00 crores. As on 31-3-2015 the share

application money pending for allotment is Rs.

1,00,00,1461 /- against previous year of Rs.

1,461/-.

The breakup of paid up Capital is as under:-

1.47. INTER UNIT ACCOUNTS:-

The Inter Unit Accounts balances under IUT-33,

34, 36 & 37 as shown in Notes No. 10, 18 & 20

are in the process of reconciliation.

1.48. POWER PURCHASE:-

a) Government of Haryana, Power Department has

transferred the power trading business from

HPGCL to the Distributing Nigam i.e. DHBVNL and

UHBVNL with effect from 1st April 2008 vide its

notification dated 11th April 2008. As provided

with the notification, the Haryana Power Purchase

Cell (HPPC) be handled by the transferee

Companies on Single Buyer Model and the

functions of procuring short term and long term

power will be discharge by HPPC, Panchkula.

During FY 2014-15, the Nigam has purchased the

Power from short term and long term sources as

per detail given below. Power purchase cost

includes Rs. 190.59 crores on a/c of revision of

Sr. No.

Particulars

a) Govt. Total No. of Shares = 100,18,441 Nos.

b)HVPNL Total no. of Shares =43,72,735 Nos.Out of the 43,72,735 no. shares are allotted above as fully paid up pu payment received in cash.

rsuant to a contract without

Total:

Amount

1001,84,41,000

437,27,35,000

1439,11,76,000

69

purchase rates as per CERC / HERC order during

FY 2014-15.?

b) FUEL SURCHARGE ADJUSTMENT

The power purchase cost (including Transmission

charges) works out to Rs. 4.49 /-Unit against HERC

approved rate of Rs. 3.69 /- Unit for FY 2014-15.

The Difference between the HERC approve rate

and actual cost of power purchase (As per HERC

orders dated 29/05/2014) comes to Rs. 2199.74

crore which is treated as Fuel surcharge adjustment

(FSA). The Nigam has billed the amount of FSA to

consumers on quarterly basis during FY 2014-15

in compliance with the HERC orders dated

27.05.2010. If there is any difference between the

amounts billed to consumers and actual cost of

FSA, the same will be filed with HERC and after

getting its approval the same will be billed to the

consumers accordingly. True up shall be filed with

HERC on Quarterly Basis.

1.49. A sum of Rs. 4,00,000/- (Rs. 2,75,000/- as audit

fee & Rs. 1,25,000/- as traveling expenses out of

pocket expenses etc.) (Previous year Rs.4,00,000/-

) plus service tax as applicable has been provided

as audit fee of Statutory Auditors for FY 2014-15.

1.50. A sum of Rs. 23400/- (previous year Rs.23400/-)

have been provided for professional charges in

connection with maintenance of Cost Accounting

Records of DHBVNL. In addition, a sum of Rs.

25000/- (previous year Rs. 25000/-) (inclusive all

pocket expenses TA/DA and service tax) has been

provided as cost audit fees in the accounts for F.Y.

2014-15.

1.51. A sum of Rs. 2,00,50,000/- (Previous year Rs.

2,02,05,000/-) have been paid on account of

license fee for FY 2014-15 to the Haryana

Electricity Regulatory Commission.

1.52. FRINGE BENEFIT TAX:

The Nigam had filed a petition in Punjab and

Haryana High Court Chandigarh regarding

payment of Fringe Benefit Tax on contribution to

superannuation fund for FY 2005-06. The matter

has been stayed by the Hon'ble Punjab and

Haryana High Court. Later on, all the petitions of

similar nature from various High Courts of India

have been transferred to Delhi High Court by

Hon'ble Supreme Court of India. The amount of

Rs.8,07,84,000/- paid on account of FBT for FY

2005-06 was considered as an Advance Tax

during FY 2005-06 to be refunded by the Income

Tax Department. Proceedings are still pending in

High Court, Delhi. No payment of FBT in respect of

contribution to superannuation fund has been

made during FY 2006-07, 2007-08 & 2008-09.

however, the FBT case for FY 2005-06 has been

assessed by the Authority vide order dated

28.12.2008 and refund of deposited amount has

been claimed by the Nigam.

1.53. No provisions for Income Tax have been made as

the Nigam has incurred losses after taking into

account the accumulated losses up to the previous

year.

1.54. The provisions for depreciation and all known

liabilities are adequate and considered

reasonable.

1.55. As per HERC orders dated 20.11.2008 on the ARR

for FY 2008-09. The Nigam has stopped to create

contingency reserve from FY 2008-09.

1.56. Dakshin Haryana Bijli Vitran Nigam Ltd. was a

subsidiary of Haryana Vidyut Prasaran Nigam upto

Sr. No.

Particulars

)Unitin (MU Rupees in Crore

Rate Per Unit ( )`

1 Long Term 27134.38 10451.64 3.85

2 Short Term 1597.00 643.49 4.03

3 Unscheduled Interchange

-112.78

89.90 -7.97

4 Total Power Purchase (1+2+3) 28618.60 11185.03 3.90

5 Transmission charges PGCIL & open Access

498.02

6 Total Power Purchase (4+5)

28618.60 11683.05 4.08

7 Less (a) Transmission losses 1121.88 8 (b) Inter State sale of Power 3008.48

1111.33 3.69

9 Net Power Purchase (Delivery Point)

24488.24

10571.72 4.32

10 Add Inter state sale of power (1) 3008.48 1111.33 3.69

11 Total 27496.72 11683.05 4.25

12 Add Transmission charges of HVPNL 674.79

13 Total (11+12) 27496.72 12357.84 4.49

70

FY 2008-09. Now, the share capital of GOH has

been increased and it comes to more than 51% of

the total Share Capital. The HVPNL is holding

4372735 shares @ Rs.1000/- each amounting to

Rs.437,27,35,000/-.

1.57. DHBVNL is engaged in Distribution and Retail

Supply business on the license granted by HERC in

its orders dated 04-11-2004 bearing license no.2-

DR.

1.58. Aggregate amount of capital liabilities falling due

for repayment/redemption is NIL.

1.59. Nothing is due to Small Scale Industries as on 31-

3-2015 where the amount is due for payment

exceeding 30 days. The amount is paid to the small

scale Industries and non small scale Industries

within the contractual period. The amount payable

to the small scale Industries and non small scale

industries as on 31-3-2015 is within the

contractual period.

1.60. Loans & Advances as per Note 13 of Balance Sheet

given to Contractors/ Suppliers and Note 19 given

to Employees are secured against bank guarantee,

hypothecation of building and vehicles and surety

of confirmed employees of DHBVNL. Moreover,

unsecured advances given to employees are on

verification of confirmed employees of the Nigam.

1.61. No expenses of personal nature have been

charged to P&L Account of the Nigam during FY

2014-15.

1.62. Internal Audit is being conducted on rotational

basis by Chief Auditor of DHBVNL. Internal Audit

being perpetual in the Nigam, the audit of

accounting units which could not be taken up

during the current year, will be conducted in

subsequent year

1.63. SEGMENT REPORTING:

The Nigam has single business segment namely

"supply /distribution of electricity". The Nigam has

its distribution net work in nine operational circles

named Sirsa, Hisar, Bhiwani, Faridabad,

Gurgaon, Narnaul, Rewari, Palwal and Jind which

are identical in respect of geographical,

economical, political and operations etc. The

Nigam business, therefore, does not fall under

different business segments as defined under AS-

17. So segment reporting is not given here.

1.64. The Nigam has neither received direct information

from vendors nor Nigam has called as such

information from vendors regarding their status

under the Micro, Small and Medium Enterprises

Development Act, 2006 and hence disclosure

relating to amounts unpaid as at the year and

together with interest paid/payable under this Act

as required by Schedule III of Companies Act,

2013 have not been given.

1.65. RELATED PARTIES DISCLOSURES:

(1) (a) Director's Remuneration:

Information given in accordance with requirement

of Accounting Standard-18 in related parties

disclosures issued by the Institute of Chartered

Accountants of India:

(1) (b) Key management personnel:

The above members of Board of Directors are

availing the transport facility of 400 KMs against

deposit of Rs.400/- P.M through salary.

Nothing is due from Managing Director, Whole

Time Directors & Company Secretary as on

31.03.2015 relating to loans and advances.

Particulars

Basic payD.A.Elecy. All.Medical Allow.Pension, DCRG & Leave

TA BillMedical Bills Reimbursement

Total

Current year Previous year

2,63,422.00

41,98,953.0012,72,186.00

9,153.004,500.00

15,57,000.00

30,521.00

7499265.00

1,63,530.00

Encashment etc"2,25,625.00

9,27,510.008,21,569.00

5,610.006,000.00

0.00

10,12,238.00

29,98,552.00

0.00

1. Arun Kumar Verma, Managing Director 01-04-2014 to 31-03-20152. Sh. V. K. Chaudhary, Director/Projects/ 01-04-2014 to 30-11-2014

Operation3. Sh. P.C. Gupta, Director/Project 01-04-2014 to 19-01-20154. CA Kapil Kumar Marwaha, CFO 23-07-2014 to 31-03-20155. Sh. Harjinder Singh, Company 24-09-2014 to 31-03-2015

Secretary

LTC

71

(2) (a)(i) Name of Related Party: Haryana Vidyut Parasaran

Nigam Ltd.

(ii) Relationship: Share holder having substantial

interest of 30.38% share of Nigam.

(iii) Nature of Transaction: Use lines and system for

transport of electricity.

(iv) The HVPNL billed amounting to Rs. 674.79 crores

as wheeling charges and SLDC charges during FY

2014-15.

(v) Amount outstanding as on 31-03-2015:-

(a) Payable/(Receivable) against transmission

charges : Rs.(484.82) crore

(b) Receivable other than transmission charges

: Rs. 6.51 crore

(vi) As per 2nd Transfer scheme notified by Govt. of

Haryana on dated 01-07-1999, HVPNL is liable

for all payments and other obligations in respect of

all personnel related liabilities, whether statutory or

under the terms & conditions of service and/or

service rules and regulations applicable to the

personnel, but not limited to Provident Fund

(including contribution of the personnel and/or

where applicable, any employer contribution),

pension and other superannuation and/or

terminal benefits, accrued for and/or attributable

to the entire period of service of the personnel with

HVPNL and/or the Board prior to the effective date.

(b) Name of Related Party: Haryana Power

Generation Corporation Limited.

(i) Relationship: Fellow Generating Company.

Payable to HPGCL other than power purchase: Rs.

4.57 crores?

(c) Name of Related Party: Uttar Haryana Bijli Vitran

Nigam Limited:

(i) Relationship: Fellow Distribution Company.

(ii) Amount outstanding: A sum of Rs. 2.72 crore is

receivable from UHBVNL as on 31-03-2015.

(iii) Amount outstanding for Loans / Bonds on a/c of

transfer of Jind Circle Rs. 1859.04 Crore

(3) Name of Related Party: Govt. of Haryana:

Relationship: Majority shareholding of 69.61%.

1.66. ACCOUNTING FOR TAXES ON INCOME:

The Nigam has not created deferred tax assets in

the books of accounts because of huge amount of

losses carried forward, unabsorbed depreciation

and un-certainty of future taxable income against

which deferred tax assets can be realized. This is in

conformity with Accounting Standard-22 issued by

ICAI.

1.67. COST ACCOUNTING RECORDS & COST AUDIT:-

M/S Vandana Gupta & Co. Panchkula was

assigned the work of maintenance of cost

accounting records for FY 2013-14 by the Chief

Auditor, DHBVNL, Hisar which have been

completed and submitted by them. The said firm

has been assigned the job of preparing the cost

accounts for FY 2014-15 and the work of cost

records is under process.

1.68. The total of share capital, Reserve and Surpluses

and Capital consumer contribution & Grants works

out to Rs 2544.63 (previous year Rs. 2497.00)

Crores and the accumulated losses are Rs.

12719.03 (previous year Rs. 10726.59) Crores up

to 31/03/2015.

1.69. Due to financial crisis, the Nigam was not in a

position to make the repayment of loans as per

schedule agreed upon with the commercial banks.

The Nigam got re-structured the all working capital

loans from the commercial banks. As per re-

structuring schedule the repayment of principal

loans outstanding as on date will start from

January 2015 but the interest cost will be paid

regularly.?

72

67

Units

Units

` ` `

`

` ` ` ` ` Units

Units

Amount in Crore

Transmission Loss 112.19

Energy sold 1849.60

Revenue from operation / sale of energy 11170.03

Revenue from energy traded / Inter State sales

Opening debtors for sale of energy w/o deducting provision 4460.18

for doubtful debts or any amount written off

Closing debtors for sale of energy w/o deducting provision for 5330.55

doubtful debts or any amount written off

Total Expenditure including exceptional items 14037.02

Non-Tariff / Other Income 132.81

Subsidy received 2098.03

Subsidy Booked / Built in the Revenue 2098.03

Sundry debtors for energy traded & Inter State sale of power 1093.57

Energy Purchased 2861.86

Energy Traded / Inter State sales (Net) 300.85

Amount in `

Account Code Particulars 31.03.2015 31.03.2014

Secured

53.510 & 53.511

53.547 &53.548

1.71. The status of secured & unsecured loans as on 31-03-2015 are detailed hereunder

Commercial Banks for 1,82,01,41,054 1,88,75,22,207Electrification Schemes

Punjab Sind Bank of 1,60,65, 21,35,41, 1,66,65,88, 22,16,66,Bank Rajasthan 99,612 442 642 666

Working Capital Loans:- -

Syndicate Bank Hisar (10) 4,68,49,41,383 3,48,51,41,518

Indian Bank Hisar (9) 2,49,46,25,484 1,84,13,22,534

Allahabad Bank Hisar (9) 2,83,92,26,189 2,09,97,84,140

Vijay Bank Hisar (9) 2,81,25,69,135 2,10,52,14,538

Bank of India, Chandigarh (9) 2,32,76,39,222 1,73,65,99,530

Canara Bank, Hisar (10) 6,68,91,92,247 4,99,62,41,461

Central Bank of India, Hisar (11) 2,73,16,87,083 2,05,07,25,762

Dena Bank, Hisar (10) 3,48,55,68,388 2,34,15,84,553

UCO Bank, Zirakpur/Panchkula (7) 5,88,73,33,794 4,15,09,85,560

OBC Panchkula (8) 1,76,47,19,939 1,18,60,93,259

Punjab & Sind Bank Hisar (10) 1,85,52,85,129 98,14,95,558

Punjab National Bank, Hisar (8) 1,90,76,88,393 1,35,01,71,620

Indian Overseas Bank Panchkula / 3,17,08,97,393 2,35,31,19,757 Hisar (10)

1.70. The information becoming the part for evaluation of eligibility parameters for claiming interest subsidy etc required by

funding agencies viz REC/PFC etc

73

PFC for Working Capital 20,00,00,00,000 17,00,00,00,000

Bonds from Various Banks (FRP) 22,02,37,00,000 22,02,37,00,000

Cash Credit Limits from Banks

Vijaya Bank, Hisar 25,01,11,115 84,12,140

Indian Bank, Hisar 4,14,01,968 93,82,13,820

Oriental Bank of Commerce, 79,57,74,579 42,94,32,835 Panchkula Allahabad Bank, Hisar 60,97,12,625 27,18,02,961

Canara Bank, Hisar 1,68,70,80,685 1,48,13,98,519

Total Secured Loans from Banks (a) 89,87,92,95,805 74,71,89,62,273

REC for Re-financing of IBRD Loans 2,96,6,0603 5,61,96,198

PFC under R-APDRP 43,33,80,998 26,70,86,392

REC for capital works 13,45,01,63,387 12,33,18,46,713

REC for Working Capital 9,50,00,00,000 8,00,00,00,000

REC for Procurement of material Nil 53,03,03,024

Total Secured Loans from Others (b) 23,41,32,04,988 21,18,54,32,327

Total Secured Loan (c=a+b) 113,29,25,00,793 95,90,43,94,600

Unsecured

From Others

World Bank Project 1,05,45,52,060 92,66,73,648

NABARD Projects 36,46,00 26,91,000

APDRP Projects 28,04,96,405 31,50,38,545

PMGY Projects 74,88,001 83,77,180

PFC for capital works 4,25,97,500 6,36,77,500

NCR Planning Board 41,50,74,003 62,26,13,003

REC against RGGVY Scheme 7,58,50,579 8,92,91,963

Loan from HVPNL 6,26,25,00,000 4,93,40,00,000

Total Unsecured Loans from 8,13,89,23,148 6,96,23,62,839Others (d)

loans received from UHBVN (e) 18,59,04,60,820 4,39,10,38,992

Total (c+d+e) 140,02,18,84,761 107,25,77,96,431

74

The above figures are in consolidation of amount appearing in Note-5 (Rs. 133,705,756,783), Note-8 (Rs.

3,384,080,972), Note 10 (Rs. 3,199,439,745) current maturities of long term debt and excluding foreign exchange

fluctuation (Rs. 267,392,734) foot note-5.6.

1.72. Short term loans to employee: - As per Note No 19 the actual re-payment against the loans, received during FY are

termed as short term loans.

1.73. The annual accounts of the DHBVN for FY 2014-15 were considered by the Board of Directors in its meeting held on

28.9.15 and it was directed that the matter should be taken up with the Govt. of Haryana for issuing of necessary order

mentioning detail of assets and liabilities being taken over by DHBVN from UHBVN before completion of the statutory

audit. Accordingly the matter was taken up with the Govt. Of Haryana for issuance of the necessary notification.

Now the Govt. of Haryana vide its notification No. 23/10/2016-4 Power dated 16.2.16 has notified the transfer of

assets and liabilities from UHBVN to DHBVN. Accordingly aggregate value of assets and liabilities so transferred have

been included in the Balance Sheet of DHBVN as on 31.3.2015. However the value of these assets and liabilities are

incorporated in the books of respective accounting unit during FY 2015-16 through the monthly account in hand.

The Government Notification is reproduced as under:-

No .23/10/2016-4 Power:- In excise of the power conferred by Section 55 read with Section 23, 24 & 25 of Haryana

Electricity Reforms Act, 1997 (Haryana Act-10 of 1998), the Governor of Haryana hereby makes the following rules

further to amend the Haryana Electricity Reform {Transfer of Distribution Undertaking from Haryana Vidyut Prasaran

Nigam Limited to Distribution Companies) Rule 1999. namely-

1. These rules may be called the Haryana Electricity Reform (Transfer of Distribution Undertaking from Haryana Vidyut

Prasaran Nigam Limited to Distribution Companies) Amendment Rule, 2016.

2. In Haryana Electricity Reform (Transfer of Distribution Undertaking from Haryana Vidyut Prasaran Nigam Limited to

Distribution Companies) Rule -1999, the following assets and liabilities shall be excluded from Schedule-B and shall be

included in Schedule-C, namely -

Aggregate Value of Assets and Liabilities Transferred from Discom I to Discom II

Liabilities Assets

Consumer Contribution 521942633 Fixed Assets 3332913661Loans from UHBVN to DHBVN 18590460820 CWIP 388399893Other long term liabilities 451324660 Long term loans and advances 39779283Other current liabilities 491786783 Other non-current assets 70783272

Inventories 53442466Trade Receivables 2348556436Cash 532263Other current assets 258377669Accumulated losses 13562729953

Total 20055514896 Total 20055514896

The loans shall be interest bearing in the books of DHBVN (Discom-II) as per actual rate borne by UHBVN (Discom-I)

with effect from transfer date i.e. 03.07.2013.

1.74. As required by Accounting Standard 20 on Earning per Share issued by the Institute of Chartered Accountants of India

(ICAI), basic earning per share has been calculated by dividing Net Profit after Tax by the weighted average number of

equity shares outstanding during the year as per details given below:

75

Particulars

Current

F.Y. 2014-15Previous

F.Y. 2013-14

Profit/(-) Loss as per Profit & Loss A/c (6,36,16,63,993) (20,88,65,15,511)

Weighted average number of shares used in computing basic earning per equity share

Basic earning per share (Rs.) (on nominal value of (442.05) (1,476.97)Rs. 1000/- per share)

Weighted average number of shares used in 1,43,91,176 14141477computing diluted earning per equity share

Diluted earning per share (Rs.) (on nominal value of (442.05) (1,476.97)Rs. 1000/- per share)

1,43,91,176 14141477

1.75. Additional information pursuant to part-II of schedule III of company Act, 2013.

Sr. No.

Particulars

Current year Previous year

Amount inLakhs

Unit in Lakhs

A Total quantum of power purchased 1235784.42 286186.0 5 1113135 264052during the year

D Less: Transmission losses - 11218.79 10388

C Less: inter-state sale of power 30084.77 33100

D Total units of power available in 1235784.42 244882.49 111335 220564DHBVN

E Total quantum of power sold during 845351.91 184960.50 755560 168383the year (excluding FSA)

F T&D loss in units 59922.00 52181

G %age losses 24.47% 23.66%

76

Amount inLakhs

Unit in Lakhs

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




Sd/- Sd/-

Sd/- Sd/-

Sd/-

Sd/-

77

NOTES NO. 2SHARE CAPITAL

Particulars Account Code

As at 31st March, 2015

(a) Authorised :-

200,00,000 (Previous year 200,00,000) Equity Shares of ` 1000/- each

2,00,000

2,00,000

(b) Issued

14391176(Previous year-14065676) Equity Shares of

` 1000/- each54.502 143,911.76

143,911.76

14391176(Previous year-14056676) Equity Shares of 143,911.76

143,911.76

Grand Total 143,911.76

143,911.76

RECONCILIATION OF THE NUMBER OF SHARES AND AMOUNT OUTSTANDING AT THE END OF THEREPORTING PERIOD:

Note 2.1 : The paid up Share Capital includes 4372735 No. Equity Shares of ` 1000/- each issued to HVPNL and10018441 No. Equity Shares (previous year 10018441 No. shares) of `1000/- each issued to State Govt. which includes 6 Equity Shares issued to subscribers to the Memorandum of Association. Out of the shares issued to HVPNL, 4372725 No. shares were issued in pursuant to a contract without payment being received in cash.

BELOW ARE THE NAMES OF THE SHAREHOLDERS HOLDING MORE THAN 5% OF SHARES

Equity Share of Rs.1000/- each fully paid

No. of Share Holding

% of Share Holding

No. of Share Holding

% of Share

As at 31.03.2015 As at 31.03.2014

Total 14,391,176.00 99.99 14,391,176.00 99.99

Holding

1 Government of Haryana 10,018,441.00 69.61 10,018,441.00 69.61

2 Haryana Vidyut Prasaran Nigam Limited 4,372,735.00 30.38 4,372,735.00 30.38

Sr. No. Name


(`) in Lacs (`) in Lacs

c) Subscribed and paid up

` 1000/- each

Opening Balance of Issue, Subscribed & Paid up Equity Share Capital 143,911.76 140,656.76

Add: Issued, Subscribed & Paid up Equity Share

Capital during the year ended 31.03.2015 -

Add: Issued, Subscribed & Paid up Equity Share

Capital during the year ended 31.03.2014

1461000 equity shares of `1000/- per share(Fully paid up) 3,255.00

Closing Balance of Issued, Subscribed & Paid up

Equity Share Capital

143,911.76 143,911.76

78

NOTES NO. 3RESERVES AND SURPLUS

Particularsst As at 31 March,

2015

stAs at 31 March,

2014" in Lakhs"` " in Lakhs"`

Account

Code

Note No. 3.1 The Company has not provided any contingency reserve during the current financial year. However the amount of Rs. 272320700/- lying under contingency reserve represents the amount allowed by Haryana Electricity Regulatory Commission in different years upto the FY 2007-08.

Note No. 3.2 A sum of ` 59,42,19,501 (previous year ` 50,13,78,477/-) towards depreciation on consumer contribution has been reversed under GH 77.150 (also refer to Note 26).

Note No. 3.2 A sum of `7,62,62,853/- (previous year ` 6,94,90186/-) towards depreciation on assets created with the help of grant has been reversed under GH 77.150 (also refer to Note 26).

a

55.110 to 55.150

55.4

55.304

55.306

55.310

55.200

55.30155.302

55.303

55.305

55.31555.3

55.500

56.680 b

c

Capital reserve

(Capital reserve & Service line contributions

received under the Electricity (supply) act, 1948)

As per last financial statements 119,851.70 105,476.93

Add: Additions during the year 11,225.72 14,374.77

131,077.42 119,851.70

Add: Received from UHBVN 5,219.43 5,219.43

Total Capital Reserve 136,296.84 125,071.13

Less: Depreciation pertaining to assets created from Consumer 37,313.20 31,998.36

Contribution

Closing Balance 98,983.64 93,072.76

Other Reserves

Grant from Member Parliament

As per last financial statements 1,212.71 763.40

Add: Additions during the year 463.32 449.31


Grant under RGGVY Scheme.


Add: Additions during the year -1,034.44 313.25


Grant from GOH on a/c of 50% share of shifting of Dhani connections from

AP feeders to Rural Domestic feeders

As per last financial statements 17.07 16.63

Add: Additions during the year 0.32 0.44

Closing Balance 17.39 17.07

Subsidies towards Cost of Capital Assets (As per last financial Statements) 18.69 18.69

Grant from APDP (As per last financial Statements) 5,921.51 5,921.51

Grant from PMGY (As per last financial Statements) 65.32 65.32

Grant from Kutir Jyoti (As per last financial Statements) 265.18 265.18

Incentive from GOI/GOH for improvement of Distribution System (As per 286.20 286.20

last financial Statements)

Donated Land (As per last financial Statements) 0.00 0.00

Total Grants received towards cost of capital assets 14,811.11 15,381.91

Less: Depreciation pertaining to assets created from Grants 5,966.94 5,389.38

Total Other Reserves 8,844.17 9,992.53

Contingency Reserve


Add: Additions during the year - -


Surplus/ (Deficit) in Statement of Profit & Loss

As per last financial statements -1,072,659.08 -863,793.92

Add: Profit/(Loss) transferred from UHBVN -135,627.30

Add: Profit/(Loss) transferred from Profit & Loss account -63,616.64 -208,865.16

Closing Balance -1,271,903.02 -1,072,659.08

Total -1,161,352.00 -966,870.58

79

NOTES NO. 4SHARE APPLICATION MONEY PENDING ALLOTMENT

Particulars

As at 31st March,

2015

As at 31st March,

2 0 1 4

` in Lacs ` in Lacs

54.501 Share Application Money Pending Allotment

As per last financial statements

Application received during the year

Share Issued during the year

Closing Balance Total

0.01

1,000.00

3,255.00

1,000.01

1,000.01

3,255.01

-

0.01 0.01

Account

Code

-

80

NOTES NO. 5LONG TERM BORROWINGS

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

` in Lacs ` in Lacs

ParticularsAccount Code

Secured

From Banks

53.510 & 53.511 a Commercial Banks for Electrification Schemes 15,503.89 18,875.22 53.547 &53.548 b Working Capital Loans:- -

Syndicate Bank Hisar 46,532.81 34,851.42 Indian Bank Hisar 24,781.25 18,413.23 Allahabad Bank Hisar 28,204.15 20,997.84 Vijay Bank Hisar 27,936.93 21,056.23 Bank of India, Chandigarh 23,120.61 17,366.00 Canara Bank, Hisar 66,441.04 49,972.15 Central Bank of India, Hisar 27,132.69 20,507.26 Dena Bank, Hisar 34,646.54 23,415.85 UCO Bank, Zirakpur 58,458.25 41,509.86 OBC Panchkula 17,541.24 11,860.93 Punjab & Sind Bank Hisar 18,472.93 9,814.96 Punjab National Bank, Hisar 18,979.92 13,501.72 Indian Overseas Bank 31,495.27 23,531.20

53.549 PFC for Working Capital 193,095.24 170,000.00 51.139 Provision for repayment of Loan from CBI - - 52.114 Bonds from Various Banks (FRP) 220,237.00 220,237.00

Total Secured Loans from Banks 852,579.78 715,910.84 From Others

53.302 & 53.303 REC for Re-financing of IBRD Loans - 296.61 53.306 PFC under R-APDRP 3,837.04 2,176.67 53.300 & 53.301 REC for capital works 122,850.51 111,888.40 53.518 REC for Working Capital 90,410.71 80,000.00 53.519 REC for Procurement of material - -

Total Secured Loans from Others 217,098.27 194,361.68

Unsecured

From Others - 53.100 & 53.101 Loan from GOH (funded by world bank ) 13,219.45 11,674.20 53.400 & 53.401 NABARD Projects - 3.65 54.212 & 54.213 APDRP Projects 2,459.54 2,804.96 53.516 & 53.517 PMGY Projects 65.99 74.88 53.527 & 53.537 PFC for capital works 271.08 425.98 53.514 & 53.515 NCR Planning Board 2,075.35 4,150.74 53.551 & 53.552 REC against RGGVY Scheme 758.51 892.92 53.307 &53.309 Loan from HVPNL 62,625.00 49,340.00

Total Unsecured Loans from Others 81,474.91 69,367.33

Loan from UHBVN 185,904.61 43,910.39

Total 1,337,057.57 1,023,550.23

Note 5.1 :- Loan from REC for Refinancing of IBRD loan is secured against hypothecation of existing fixed assets of Operation Division Ch. Dadri to the extent of 130% of the loan amount.

Note 5.2 :- Loans from commercial banks for electrification schemes is against the security of T&D assets of the Nigam.Note 5.3 :- Loan from HVPNL was obtained as per decision of Govt of Haryana so as to adjustment of amount payable by DHBVN to HPGCL & HVPNL, against power

purchase & transmission charges respectively. Such amount was raised by HVPNL by issuing bonds-2012 series- I & II(Part-I&II) during FY 2012-13, HVPNL Bonds 2013 series-I(Part I & II) in FY2013-14 and HVPNL Bonds 2014-15 Series-I in F.Y 2014-15(other than cash).

Note 5.4 :- Loan from PFC was obtained for working capital to fund the 50% of the untied gap for FY 2012-13. The loan shall be repaid in 84 monthly installments after 3 years moratorium period from the date of first disbursement of each tranche. The interest shall be payable on monthly basis on 15th of every month after 1st disbursement.

Note 5.5 :- A transitional financial loan was raised from REC for working capital to fund the 50% of the untied cash gap for FY 2012-13. Period of moratorium for repayment of principal shall be 36 months form the 15th day of the month of disbursement of first installment of loan, but the entire loan shall be repaid within a period of 84 months (excluding the moratorium period ) from the date of disbursement of the first installment of loan.

Note: 5.6:- Loan from GOH (funded by world bank ) of GH-46.237 includes Rs. 267,392,734 (including Rs. 240,746,535 for previous year) on account of foregin exchane fluctuation.

81

NOTES NO. 6 OTHER LONG TERM LIABILITIES

As at 31st March, 2015` in Lacs

As at 31st March, 2014` in Lacs

ParticularsAccount

Code

Note 6.1 :- Amount of Security Deposit shown against GH-48.1 includes interest bearing meter security deposit from consumers.

46.1,46.2 Deposits and retention from suppliers and contractors 28,041.28 26,695.46

48.1 Security deposits from consumers-Interest bearing 93,743.89 85,585.65

47 Deposits for electrification/ service connection 18,418.12 16,529.94

Consumer Security & Other Deposit Receivable from

UHBVN on account of transfer of Jind Circle 4,513.25 3,846.01

Total 144,716.54 132,657.06

82

NOTES NO. 7LONG TERM PROVISIONS


` in Lacs


` in Lacs

a Provision for Employee Benefits

44.370 13,802.36

b Others

Total 13,802.36

13,802.36

13,802.36

Unfunded Liability of Employees Terminal Benefits

Account

CodeParticulars

83

NOTES NO. 8 SHORT TERM BORROWINGS

Note 8.1:- Cash Credit Limit from the Commercial Banks are secured against hypothecation of Book Debts/Receivables of the Nigam.

As at 31st March,

2015

As at 31st March,

2014` in Lacs

Secured

50.1 Cash Credit Limits

from Banks

Vijaya Bank, Hisar

` in Lacs

Particulars

Account

Code

Vijaya Bank, Hisar 2,501.11 84.12

Indian Bank, Hisar 414.02 9,382.14

Oriental Bank of Commerce, Panchkula 7,957.75 4,294.33

Allahabad Bank, Hisar 6,097.13 2,718.03

Canara Bank, Hisar 16,870.81 14,813.99

Total Secured Cash Credit

Limits from Banks

Total 33,840.81 31,292.60

33,840.81 31,292.60

84

NOTES NO. 9TRADE PAYABLES

As at 31st March, 2015 As at 31st March, 2014` in Lacs ` in Lacs

41.1, 41.2& 41.3 (except 41.156)

Total

289,846.59

289,846.59

277,937.91

277,937.91

(B) Liability for purchase of power (HPGCL &Others)

ParticularsAccount Code

85

NOTES NO. 10OTHER CURRENT LIABILITIES


` in Lacs ` in LacsAccount Codes Particulars

Note-10.1:- The net of amount of receivable/payable from/to as on 31-03-2015 becomes receivable from UHBVN amounting to Rs. 27,222,916 hence the same has been adjusted in Note-14 (Rs.993890226.53-(36121396.64+1892051805.61-42844703.65-10251771.33)

Note-10.1:- The net of amount of receivable/payable from/to as on 31-03-2015 becomes receivable from GPF trust of DHBVNL amounting to Rs. 3,087,659 hence the same has been adjusted in Note-14

a Current maturities of long term debt

51.110 Repayment due to Commercial Banks for elect. Schemes - -

b Current maturities of Long Term Borrowing 31,994.40 20,156.41

46.7 c Interest accrued but not due on borrowings 11,717.13 11,394.38

d Interest accrued and due on borrowings -

51.239 On Secured Working Capital Loan from Commercial Banks - 7.44

51.261 On State Govt Loan World Bank Project - -

Total Interest accrued and due on borrowings - 7.44

j Other payable

42.1 to 42.3 Liability for Capital supplies/Works 7,750.98 9,783.80

GH 43 (except 43.4) Liability for O&M supplies/Works 1,083.44 1,208.78

44.1 to 44.4 Staff related Liabilities and provisions 4,766.31 4,950.03

( Except 44.370)

51.209 Interest due on staff security 0.27 0.28

46.3 Electricity Duty Payable to Govt. 5,635.96 6,207.36

46.4 Liability for expenses 1,137.89 1,579.88

46.501 Municipal Tax payable 9,477.83 7,368.33

46.502 Amount payable to Govt. on account of compounding of 3,424.15 2,970.01

offence in case theft of elecy.

46.9 Other Liabilities and provision (except 46.993, 994 & 995) 9,607.58 8,870.35

46.994& 28.876 Payable to HPGCL(Other than Power Purchase) 457.45 457.45

46.995,28.877, Payable to UHBVNL(Other than Power Purchase) 0.00 8,539.64

28.103&43.4

48.3 Interest Payable on Consumers Securities Deposits -0.00 7,491.48

34 Inter Units Accounts - Funds Transfer from Head Office 409.74 461.34

31 IUT- Material Accounts 0.40 0.40

35 IUT-Head Office Transaction 47.07 48.29

57.131-57.132 & Payable to Pension Trust (HVPNL) 8,665.24 30,561.03

28.784

57.160-163 Payable to GPF Trust (DHBVNL) - 237.19

57.141&142 Payable to Pension Trust (DHBVNL) 2,026.69 399.99

Total Other payable 54,491.00 91,135.62

Liabilities and Provisions Receivable from UHBVN 4,917.87 24,811.47

on account of transfer of Jind circle

Total 103,120.40 147,505.33

86

NOTES NO. 11SHORT TERM PROVISIONS

` in Lacs ` in Lacs

a Provision for Wealth Tax 1.11

b Provision for Interest on Consumer Security

1.11

7,097.84

Total

As at 31st March,

2014Account

CodesParticulars

As at 31st March,

2015

-

1.117,098.95

46.801

46.238

87

NO

TES

NO

. 12

(a)

TAN

GIB

LE A

SSETS

A

S A

T

31.0

3.20

14

AS

ON

31.0

3.20

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DEP

REC

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ON

GR

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BLO

CKN

ET B

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AS

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01.0

4.20

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UPT

O

31.0

3.20

15

UPT

O

01.0

4.20

14

FOR

TH

E YE

AR

AS

AT

31.0

3.20

15

AD

JUST

MEN

TSPa

rtic

ula

rsA

DD

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Land

2,6

62.4

0 -

-

2

,662

.40

-

2,6

62.4

0 2

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Build

ing

& C

ivil

Stru

ctur

es 1

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0.12

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-

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76

3,57

1.55

4

25.3

9

3,99

6.94

1

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0.82

1

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8.56

-

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-

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Tran

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/Dis

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n 5

17,3

63.8

1 8

5,08

8.59

4

,485

.23

597

,967

.17

152

,263

.81

23,

317.

48

1,6

64.3

5 1

73,9

16.9

4 4

24,0

50.2

3 3

65,1

00.0

0

Syst

em(P

lant

& M

achi

nery

) -

-

-

-

-

Vehi

cles

1,3

51.8

8 2

3.33

2

.78

1,3

72.4

3 1,

126.

65

39.

89

2.5

0 1

,164

.04

208

.39

225

.23

-

-

-

-

-

Furn

iture

& F

ixtu

res

1,73

4.07

7

3.08

7

.39

1,7

99.7

6 7

35.1

5 1

47.9

8 4

.96

878

.17

921

.58

998

.92

(Incl

udin

g O

ffice

Equi

pmen

ts)

Tota

l 5

38,6

12.2

8

89,1

92.6

5

4,4

95.4

1

623,3

09.5

2

157,6

97.1

7

23,9

30.7

4

1,6

71.8

1

179,9

56.1

0

443,3

53.4

3

380,9

15.1

1

PR

EV

IOU

S Y

EA

R 4

41,2

20.7

0

100,3

59.4

7

2,9

67.8

9

538,6

12.2

8

138,0

68.8

7

20,6

96.3

6

1,0

68.0

6

157,6

97.1

7

380,9

15.1

1

314,7

68.9

5

Not

e-12

.1:-

Sinc

e th

e C

ompa

ny is

eng

aged

in th

e El

ectr

icity

Dis

trib

utio

n bu

sine

ss a

nd a

ll th

e as

sets

are

use

d in

this

bus

ines

s onl

y, th

e fu

nctio

n-w

ise

deta

ils o

f ass

ets a

re n

ot re

quire

d.

Not

e-12

.2:-

The

Ass

ets

crea

ted

out o

f con

sum

ers

cont

ribut

ion

am

ount

ing

to `

13,6

29,6

84,3

19/-

(Pre

viou

s Ye

ar `

12,

507,

112,

608/

-) in

clud

ed in

the

gros

s bl

ock

agai

nst

Pla

nt &

Mac

hine

ry

(T&

D) c

ateg

ory

and

depr

ecia

tion

of

53,1

4,83

,838

/- @

3.90

% a

vera

ge ra

te o

f dep

reci

atio

n on

T&

D c

ateg

ory

of a

sset

s (P

revi

ous

Year

5

0,13

,79,

462/

- @ 4

.75%

) Cha

rged

on

the

open

ing

bala

nce

of a

sset

s.

Not

e-12

.3:-

The

Ass

ets c

reat

ed w

ith G

ovt.

Gra

nt a

mou

ntin

g to

1

,481

,110

,734

/-(P

revi

ous Y

ear

153,

81,9

1,28

8/-)

incl

uded

in th

e gr

oss b

lock

aga

inst

Pla

nt &

Mac

hine

ry (T

&D

) cat

egor

y an

d de

prec

iatio

n of

5,

77,5

5,29

3/- @

3.9

0% a

vera

ge ra

te o

f dep

reci

atio

n on

T&

D c

ateg

ory

of a

sset

s (P

revi

ous

Year

6

,94,

90,3

23/-

@ 4

.75%

) Cha

rged

on

the

open

ing

bala

nce

of

asse

ts.

Not

e-12

.4:-

Th

e La

nd fo

r 33

KV S

ub S

tatio

n C

hang

don

ated

by

Gra

m P

anch

ayat

, Vill

age

Cha

ng is

reco

rded

at n

omin

al v

alue

of

100

/- in

abo

ve a

sset

s.

Not

e-12

.5:-

A

ccum

ulat

ed d

epre

ciat

ion

incl

ude

222

8917

26/-

rela

ted

to p

rior p

erio

d ad

just

men

t of e

arlie

r yea

rs.

88

NOTES NO. 12 (b)INTANGIBLE ASSETS

NOTES NO. 12 (c)CAPITAL WORK-IN-PROGRESS

As at 31st March,

2015

As at 31st March,

2014

` in Lacs ` in Lacs

- -

Account CodesParticulars

As at 31st March,

2015

As at 31st March,

2014

` in Lacs ` in Lacs


14 Capital Work in progress 82,918.79 101,652.70

Total 82,918.79 101,652.70

WORKING NOTE ON CAPITAL WORK-IN-PROGRESS:

2014-15 2013-14

At the beginning of the year 97,768.70 61,760.71

Added during the Year 59,502.78 80,314.58 Total (A): 157,271.49 142,075.30

Add:Capital Work in progress received from UHBVN on account of Jind Circle 3,884.00 3,884.00 Less: Transfer to Fixed Assets

1. Land - - 2. Building and Civil Structures 4,007.64 528.26 3. Plant & Machinery-T&D 85,088.59 54,755.43 4. Vehicles 23.33 61.05 5. Furniture & Fixture (Including Office Equipments) 73.08 68.47

Total Transferred to Fixed Assets (B): 89,192.65 55,413.21

Net Balance (C=A-B): 71,962.83 90,546.08

Add: Interest & Guarantee Charges Capitalized during the Year 10,689.50 8,699.15 Add: Exchange Fluctuation Fund Capitalized 266.46 2,407.47 Capital Work in progress received from UHBVN - - on account of Jind Circle Closing at the year end 82,918.79 101,652.70

89

NOTES NO. 13LONG TERM LOANS AND ADVANCES



` in Lacs ` in Lacs

Secured Considered Good

Account Codes

Particulars

27.101

27.102

27.103

25.1

25.5

46

House Building Advance 2,124.63 2,155.70 Scooter Advance 93.85 97.38 Car Advance 136.26 174.04

Capital Advances:- Secured Considered good - a) Interest bearing - 0.13 b) Interest free 6,521.03 6,097.68 d) Less : Provisions - 0.21

Loan and Advances Received from UHBVN on account of transfer of Jind circle 397.79 397.79

Total 9,273.57 8,922.52

90

NOTES NO. 14OTHER NON-CURRENT ASSETS



` in Lacs ` in Lacs

Particulars

Account Codes

Note-14.1:- The net of amount of receivable/payable from/to as on 31-03-2015 becomes receivable from UHBVN amounting to

Rs.27222916, hence the same has been adjusted against Note-10

Note 14.2 The net of amount of receivable/payable from/to as on 31-03-2015 becomes receivable from GPF trust of DHBVNL amounting

to Rs.3087659, hence the same has been adjusted against Note-10

28.2

28.3

28.4

28.7

28.6

28.9

57.120-123

57.160-163

28.879 & 46.993

28.877,46.995,28.103 & 43.4

16.1

46.2

(i) Interest accrued on Investments 0 0

(ii) Interest accrued but not due 1,529.52 1,360.04

(iii) Amount recoverable from employees 506.75 548.75

(iv) Other claims and receivable (except 28.784) 780.04 339.91

(v) Receivable from GOH against liabilities 7,687.18 511.98

(vi) Deposits 424.15 375.50

(vii) Receivable from HVPNL GPF Trust 2,576.98 4,846.47

Receivable from GPF Trust (DHBVNL) 30.88 -

(viii) Amount receivable from HVPNL 651.02 506.28

(ix) Receivable from UHBVNL (Other than

Power Purchase) 272.23 - -

Assets held for disposal 109.55 92.93

Less: Others Provisions 173.22 173.22

Other Non Current Assets Received from UHBVN

on account of transfer of Jind circle 707.83 -

Total 15,102.89 8,408.64

91

NOTES NO. 15CURRENT INVESTMENTS

As at 31st March,

2015

As at 31st March,

2014

` in Lacs ` in Lacs

Investments against Contingency Reserves With Banks

20.297 Contingency Reserve Investment -

Total -

-

-

ParticularsAccount Codes

92

NOTES NO. 16INVENTORIES


` in Lacs

Account Codes Particulars


` in Lacs

22.20 To 22.63 and 22.68 to 22.70,22.8 (a) Stores and Spares

In Stores(Capital, O &M) 20,151.76 25,824.19 22.640 & 22.650 (b) Stores and Spares

At Site (Capital & O&m) 2,858.72 2,664.05

23,010.47 28,488.24

46.201,46.222, Less : Provisions against Stock 300.00 276.83 46.233

Net Stock 22,710.47 28,211.41

Closing Stock receivables from UHBVN on account of transfer of Jind circle 456.30 456.30

Total 23,166.77 28,667.70

STORES AND SPARES


` in Lacs



` in LacsCapital stores and spares

22.201 Capital Material Purchase-Steel - - 22.22 & 22.32 Workshop Store/Spares - - 22.604 & 22.609 Meter Stock/Metering Equipment - -

Sub Total-1 Capital Store - - 22.5 Stock Adjustment - - 22.62 O&M stores and spares 12,585.54 19,972.64 22.639 O&M Material Stock-Others 211.11 208.17

Sub Total-2 O&M Store 12,796.65 20,180.81 22.64 Stores and spares at site(capital) 2,039.15 1,826.99 22.641 Stores and spares at site(World Bank) 18.49 3.69 22.65 Stores and spares at site(O&M) 801.08 833.36

Sub Total-3 MASA 2,858.72 2,664.05 22.68&22.69,22.7 Other Material A/C 7,291.12 5,632.63 22.8 Material Stock-Excess/shortages pending 63.98 10.74

investigations Sub Total-4 7,355.10 5,643.38 Grand Total(1+2+3+4) 23,010.47 28,488.24

46.201 Less: Provision against obsolete stock 300.00 276.83 Closing Stock received from UHBVN on 456.30 456.30 account of transfer of Jind circle Net Total 23,166.77 28,667.70

Note-1:- Stores & Spares includes slow moving and non moving stores worth 515.95 lacs (Previous year 656.45 Lacs) & 828.20 Lacs (Previous year 767.78 Lacs) respectively & the same have not been declared obsolete so far.

Note-2:- The existing provision amounting to 300.00 lacs is sufficient to meet with the value of Non-Moving items costing to 828.20 lacsNote-3:- No Stores & Spares have declared as obsolete by the committee constituted for the purpose during FY 2014-15.

93

NOTES NO. 17TRADE RECEIVABLES

As at 31st March,

2015 2014` in Lacs ` in Lacs


As at 31st March,

a Trade receivables outstanding for a period exceeding six months fromthe date they were due for paymenti) Secured, considered good 68,789.01 54,399.69 ii) Unsecured, considered good 91,331.82 41,604.20 iii) Doubtful 229,515.41 191,613.75 Less: Provision for doubtful trade receivables 229,515.41 191,613.75

b Other Trade Receivablesi) Secured, considered good 24,954.88 41,342.93 ii) Unsecured, considered good 33,132.84 31,618.55 Trade receivables Receivable from UHBVN 23,485.56 35,436.57 on account of transfer of Jind Circle

Total 241,694.11 204,401.94

23.1001-81, 3001-81 & 3101-81 Trade receivables for Sale of Power 12,597.83 17,426.40 23.1101-81, .3201-81 & 3301-81 Trade receivables for Fixed Charges 14,156.85 11,100.11 23.2001-81,3401-81 & 3501-81 Trade receivables for Electricity Duty 6,900.87 6,780.62 23.2301-81, 23.3601-81 & 3701-81 Trade receivables for Municipal Tax 1,863.45 1,869.72 23.1701-81, 23.7701-81,23.7801-81 Trade receivables for Surcharge 211,554.17 173,652.52 & 23.5301-8123.4 Provision for Un-billed Revenue 27,573.31 23,591.98 23.6 Trade receivables for Inter State Sale/ Banking of power 109,356.82 78,259.17

Dues from Permanently Disconnected consumers - - 23.5001-81 A) Sale of Power 21,748.66 17,334.78 23.5401-81 B) Electricity Duty 1,284.63 1,219.23 23.5601-81 C) Municipal Tax 158.21 154.76 23.7 Trade receivables for Misc. Receipts from consumers - - 23.1301-81, 23.7301-81,7401-81 Trade Receivables for FSA 40,529.17 29,189.84 & 5201-81 Gross Debtors Receivable from UHBVN on account 85,331.24 85,439.15

of transfer of Jind Circle Sub Total 533,055.20

23.971 Less: Advance receipt from GOH against EAWS 17,961.24 17,961.24 23.9 Less: Provision for doubtful trade receivables

(Except Surcharge)23.934 Less: Provision for Surcharge not Realised 211,554.17 173,652.52

Less: Provisions Receivable from UHBVN on 61,845.68 50,002.58 account of transfer of Jind Circle Total 241,694.11 204,401.94

446,018.28

Detail of Trade Receivables

Note:- 1. Existing provision for bad & doubtful debts in respect of Sale of Power is sufficient to meet with the amount of bad debts on this account.2.The Sundry Debtors for surcharge prior to 9/2003 includes in the Sundry Debtors for Sale of Power.

94

NOTES NO. 18

As at 31st March,

2015 2014` in Lacs ` in Lacs


As at 31st March,

a Balance with Banks

24.3&24.4 In Current Accounts 3,273.06 6,231.45

24.1 & 24.2 b Cash in Hand 4.56 1.61

c Others -

33 Inter Unit Accounts-Remittance to Head Office 14,595.46 17,577.07

20.280 In Deposit Accounts 131.77 2,163.78

20.281 Investment of amount received against 23.21 1,256.63

RGGVY Grant in fixed deposit.

Total 18,028.07 27,230.54

CASH AND CASH EQUIVALENTS

Note :- A sum of 1,459,546,039/- (Previous year 1,757,707,462/- ) deposited by the various field offices in the last days of March-2015 has not been received in the head office main bank account till 31/03/2015 as lying un-reconciled in GH-33.

a Loan and advances to related partiesb Others

i) Secured, considered good27.101 House Building Advance 907.08 812.54 27.102 Scooter Advance 96.58 94.88 27.103 Car Advance 99.76 86.07

Total Secured Advance 1,103.42 993.49 ii) Unsecured, considered good

41.156 Transmission of Power(HVPNL) 48,482.09 31,367.66 26.1 to 26.9 Advances for Purchase of Power and 10,296.14 6,108.73

Operation & Mtc. Supplies 27.104, 107, Cycle, Marriage & Computer Advance 1,419.97 1,409.17 108&10927.201&202 TA & Pay Advance (interest free) 4.17 2.12 27.203,204, Festival, Wheat advance, Other loans & 206 to 209 Adv. Of GIS Premium (interest free) 239.96 278.06 27.3 Loans and advances to Licensees 0.00 8.15 27.4 Except 27.411 Advance income Tax Deduction at source except 27.411 1,526.29 422.12 27.411 Advance Fringe Benefit Tax deposited with I.T. Deptt. 859.87 859.87 27.8 Loans and advances -others - 5.14 27.9 & 46.218-221 Less: Provision for doubtful loans and advances - 23.14

Total Unsecured Advance 62,828.48 40,437.88 Total 63,931.90 41,431.37

95

NOTES NO. 19

Account Codes Particulars As at 31st March,

2015

As at 31st March,

2014` in Lacs ` in Lacs

SHORT TERM LOANS AND ADVANCES

a Loan and advances to related parties

b Others

i) Secured, considered good

27.101 House Building Advance 907.08 812.54

27.102 Scooter Advance 96.58 94.88

27.103 Car Advance 99.76 86.07

Total Secured Advance 1,103.42 993.49

ii) Unsecured, considered good

41.156 Transmission of Power(HVPNL) 48,482.09 31,367.66

26.1 to 26.9 Advances for Purchase of Power 10,296.14 6,108.73

and Operation & Mtc. Supplies

27.104, 107, 108&109 Cycle, Marriage & Computer Advance 1,419.97 1,409.17

27.201&202 TA & Pay Advance (interest free) 4.17 2.12

27.203,204,206 to 209 Festival, Wheat advance, Other loans 239.96 278.06

& Adv. Of GIS Premium (interest free)

27.3 Loans and advances to Licensees 0.00 8.15

27.4 Except 27.411 Advance income Tax Deduction at 1,526.29 422.12

source except 27.411

27.411 Advance Fringe Benefit Tax deposited 859.87 859.87

with I.T. Deptt.

27.8 Loans and advances -others - 5.14

27.9 & 46.218-221 Less: Provision for doubtful - 23.14

loans and advances

Total Unsecured Advance 62,828.48 40,437.88

Total 63,931.90 41,431.37

96

NOTES NO. 20OTHER CURRENT ASSETS


` in Lacs ` in Lacs


28.8 Other receivable (except 28.876,877& 879) 4,652.04 3,805.65

28.860 & 46.940 Old balances to be re-stated (Net) 0.00 6.31

17.224 Deffered Revenue Expenditure-Mobile Handset 2.09 -

Sub Total-1 4,654.13 3,811.95

36 IUT -Personnel Transaction 225.07 226.19

37 IUT- Other Transaction/Adjustments 1,112.67 1,116.95

39 IUT- Transfer within division - -

Sub Total-2 1,337.74 1,343.15

(A) Total (1+2) 5,991.87 5,155.10

46.2 Less : IUT Provisions 100.03 100.03

Other Current Assets Receivable from

UHBVN on account of transfer of Jind Circle 2,583.78 4,200.05

Net Current Assets 8,475.62 9,255.12

NOTES NO. 21REVENUE FROM OPERATIONS

97

2014-15 2013-14` in Lacs ` in Lacs

Account

CodesParticulars

NOTES NO. 20.1 REVENUE FROM SALE OF POWER

Sr.No. Particulars

Account Code 31-3-2015 `

31-3-2014 `

Sale of ServicesSale of power and Banking Outside the state 111,132.82 99,601.69 Sale of power within the state 763,944.04 685,643.46

Total Sale of Services 875,076.86 785,245.16

Other Operating Revenue

Revenue against FSA 153,553.33 122,862.57 Fixed Charges 81,407.89 69,917.44 Meter Rent/ Service Rental 3,545.77 3,367.12 Recovery for theft of Power/Malpractices 1,598.88 1,675.74 Misc. Charges from consumers 1,820.39 1,919.68 Total Other Operating Revenue 88,372.92 76,879.98

Total 1,117,003.11 984,987.70

1 Revenue from inter state sale of power and Banking 61.1 111,132.82 99,601.69 2 Within state sale of power - a) Domestic supply 61.2001-07 174,826.46 171,529.14 b) Non domestic supply 61.2011-17 128,167.41 109,749.69 c) Industrial supply -

i) Industrial supply LT 61.2031-33 50,035.55 45,095.29 ii) Industrial supply HT 61.2021-26 310,539.90 255,562.16

d) Lift Irrigation 61.2041 11,605.28 11,842.81 e) Agriculture 61.2042-46 7,463.87 10,350.10 f) Bulk supply 61.2051-56 36,903.81 42,088.46 g) Railway Traction 61.2061-64 7,781.21 6,294.78 h) Metro (DMRC) 61.2065 1,868.87 1,316.78 i) Street Lighting 61.2071 3,419.07 3,422.14 j) Public water works 61.2081 31,332.60 28,392.12 2 SUB TOTAL (a to j) 763,944.04 685,643.46

3 Fixed Charges 61.2101-81 81,407.89 69,917.44 4 (a) FSA Assessed 61.2301-81 153,553.33 122,862.57 4 (b) FSA in lieu of Agri received from GOH 61.301 - - 4 Total FSA (a+b) 153,553.33 122,862.57

5 (a) Electricity duty recovery 61.50&51 13,297.34 12,362.31 5 (b) Municipal Tax 61.52&53 4,783.91 4,409.57 5 (c) Meter Service Charges/Line Service Charges 61.6 3,545.77 3,367.12 5 (d) Recovery for theft of power/ malpractices 61.7 1,598.88 1,675.74 5 SUB TOTAL(a to d) 23,225.90 21,814.74

6 Misc.charges from consumers 61.9 1,820.39 1,919.68 7 Gross revenue from sale of power(1 to 6) 1,135,084.36 1,001,759.58

Lessa) Elecy. duty payable as per contra 5 (a) above 61.54& 55 13,297.34 12,362.31 b) M.tax payable as per contra 5 (b) above 61.56& 57 4,783.91 4,409.57 8 SUB TOTAL (a+b) 18,081.25 16,771.88

Net total revenue (7-8) 1,117,003.11 984,987.70

98

NOTES NO. 22OTHER INCOME

Interest Income on

Account Code 2014-15 Particulars

Note:-21.1 Interest on fixed deposit with banks amounting to ` 74,46,434/- (previous year ` 1,06,60,062/-) represents gross amount and includes an amount of TDS of ` 7,50,859/- (previous year ` 10,75,122/-).

62.210 Staff Loans and advances 367.64 485.96

62.222 Fixed Deposits with Banks 74.46 207.92

62.229 Contingency Reserve Investments - 421.47

62.285 Provident Fund 470.53 299.97

912.63 1,415.32

62.6 Income from Staff welfare activities 6.01 5.61

62.901, 62.908 Rent from Residential Building 32.78 38.84

62.2401-2481 Delayed payment charges from consumers

(surcharge levied) 4,933.55 3,520.39

63.1 Subsidies from State Govt. for supply to

agriculture tube wells at subsidised tariff 209,803.97 146,033.05

62.8, 62.9 & 62.3 Misc.receipts(except 62.901&62.908) 7,394.93 9,405.47

Total 223,083.87 160,418.69

in Lacs` in Lacs`

2013-14

99

NOTES NO. 23PURCHASE POWER COST (GH-70)

Unit (In LU) Unit (in LU)Sr

No Particulars 2014-15 2013-14

` in Lacs ` in Lacs

A Power purchase

1 Long Term 271,343.89 1,045,163.60 251,774.23 1,004,931.65

2 Short Term 15,969.98 64,349.52 9,562.32 35,694.57

3 Unscheduled Intercharges -1,127.83 8,990.10 2,716.15 8,335.27

4 Total (1+2+3) 286,186.05 1,118,503.23 264,052.70 1,048,961.49

5 Add Transmission Charges PGCIl & Open Access 49,802.26 32,174.38

6 Total (4+5) 286,186.05 1,168,305.49 264,052.70 1,081,135.87

Less Transmission Losses 11,218.79 10,388.01

Net Power available after transmission Losses 274,967.26 1,168,305.49 253,664.69 1,081,135.87

B TRANSMISSION & SLDC CHARGES (HVPNL) 67,478.93 31,999.00

TOTAL (A+B) 1,235,784.42 1,113,134.87

C Net Cost of Power 1,235,784.42 1,113,134.87

Net cost of power after accountal of FSA 1,235,784.42 1,113,134.87

Total (A+B) 274,967.26 1,235,784.42 253,664.69 1,113,134.87

100

NOTES NO. 24EMPLOYEES BENEFIT EXPENSES

2014-15 2013-14` in Lacs ` in Lacs

Account Codes

Particulars

Note: 23.1- Employees cost of ` 90,645,613/- (previous year ` 67,913,676/-) relating to capital works has been capitalized.

75.1 Basic Salaries 20,452.99 19,828.64 75.3 Dearness allowance 20,654.68 17,023.86 75.4 Other allowance 6,501.96 4,374.91 75.5 Bonus including honorarium 10.74 9.00

SUB TOTAL 1 47,620.37 41,236.41

Other staff costs

75.611, Medical expenses reimbursement (Indoor & Outdoor) 1,216.79 993.74 613 & 614

75.612 Leave Travel Concession 858.75 2,082.23

75.617 Earned leave encashment 93.14 1.70

75.629 Payment under Workmen's Compensation Act. 55.18 26.22

75.630 Leave salary contribution. - 4.42

75.631 Pension contribution (staff on deputation with DHBVNL) 0.92 5.17

75.632 Pension, Leave, Gratuity contribution 24,000.00 13,000.00

75.633 Pension contribution of new staff 2,000.00 200.00

75.634 Adjustment of HRA not paid(notional) - -

75.640 to 75.643 Expenditure on Employees Engaged on Contractual Basis

(Data Entry Operator/SA/ALM) 10,511.07 8,978.43

75.7 Staff welfare expenses(On medical, canteen, education, uniform/livery & re-creation). 457.26 435.87

75.8 Terminal benefit. 3,163.86 2,429.70

SUB TOTAL 2 42,356.97 28,157.47

Total (1+2) 89,977.34 69,393.89

75.9 Less Expenses Capitalized 906.46 679.14

101

NOTES NO. 25FINANCE COST

2013-14

` in Lacs

Account

CodesParticulars

` in Lacs

2014-15

Interest on loans

78.2 Interest on Loan Recd. From HVPNL 2,484.10 3,060.80

78.502 a) Rural Electrification Corp. 15,912.63 13,635.20

78.505 b) State Govt. for NABARAD Projects 0.82 2.43

78.515 c) Power Finance Corp. 43.63 61.20

78.518 d)Payment of interest on loan from commercial bank for 2,283.37 2,285.42

Electrification schemes

78.527 e)Interest on loans from Comml. Banks for working capital 44,423.04 44,439.58

78.535 f) State Govt. under APDP/APDRP Projects 334.17 372.93

78.536 g)Interest on Loan from NCR 465.32 679.92

78.537 h)State Govt. under PMGY Projects 8.86 9.81

78.538 i)Interest on Loan from RECfor procurement of material 10,203.18 6,935.93

78.539 j)Interest on Loan from REC for re-financing of IBRD loans. 51.03 78.80

78.541 Interest on world bank loan 58.84 55.36

78.542 k)Interest on REC Loan against RGGVY scheme 102.75 -

78.545 l) Interest on loan from PFC under R-APDRP 294.64 108.20

78.549 m) Interest on Loan from PFC for working Capital 22,090.89 18,484.94

Sub Total (a to n) 98,757.28 90,210.53

78.601 Interest paid on consumer security 1,849.17 0.00

78.602 Provision for Interest on consumer security - 7,097.84

78.7 Interest on OD/CC from banks for working capital 4,434.05 4,633.42

78.8 Other interest and finance charges (except 78.884) 699.19 287.84

78.884 Guarantee Charges - 5,638.38

Gross Total 105,739.68 107,868.02

78.9 Less: Interest & Guarantee Charges Capitalized 10,689.50 8,699.15

Net Total 95,050.19 99,168.86

102

NOTES NO. 26DEPRECIATION

Account Code Particulars 2014-15 2013-14` in Lacs ` in Lacs

77.120 Building and civil structure 425.39 374.56

77.150,160 Transmission and Distribution 23,317.48 18,642.53

77.170 Vehicles 39.89 36.15

77.180 Furniture and Fixture 147.98 138.25

Depreciation on Fixed Assets from UHBVN - 1,504.86

Total 23,930.74 20,696.36

77.150 Less depreciation on assets contributed by 5,892.39 5,708.70 consumers and grants.

NET TOTAL 18,038.35 14,987.66

103

REPAIR & MAINTENANCE (R&M)

Note:26.1- Administrative and General expenses of ` 74,449,987/- (previous year ` 5,60,40,746/-) relating to capital works have been capitalized.

2014-15 2013-14` in Lacs ` in Lacs


NOTES NO. 27

74.3 Civil Works 1.80 1.69

74.1 & 74.5 Machinery 3,487.12 5,444.91

74.2,74.6 to 74.8 Others 454.72 444.60

Total Repair & Maintenance 3,943.64 5,891.19

Administrative & General Expenses (A&G)

76.101 Rent (including lease rentals) 349.67 298.13

76.102 Rate & Taxes 31.50 84.78

76.103-106 Insurance 39.19 35.18

76.111-116 Telephone charges,postage,tele-gram, telex charges & Mtc.of website

of internet, new instruments 537.11 205.84

76.120 Expenditure on Internal Audit carried out by Outsource Agencies 42.70 61.60

76.121 Legal charges. 605.38 415.17

76.122 Audit fees 4.49 4.49

76.123 Consultancy charges. 740.38 1,003.39

76.124 & 76.125 Other professional charges & technical Fees 16.18 6.92

76.126 Service charges for computerization 503.56 854.12

76.129 Exp. on training to staff for computer 13.96 13.60

76.130 License fee 200.50 202.05

76.131-139 Conveyance & travelling expenses. 1,536.42 1,578.69

76.153 Printing & Stationery 223.78 196.02

76.158 Electricity Charges 359.76 294.23

76.151, 152, Other expenses like watch & ward of building, photo state charges, 1,471.89 993.71

76.154-157, indexing & scanning of consumer case files and implementation of

76.159-191, online computerization etc.

193 & 194

76.195 Service Tax on Reverse Charge 711.93 526.91

76.170 Cash/Secret reward paid to Vigilance and Informer to detect the theft of electricity 14.16 7.95

76.192 Expenditure on GSM modems at DT meters - 1.15

76.210,30,40,50, Other material related expenses 525.00 433.72

60,70,71& 83

Total A&G Expenses 7,927.56 7,217.67

76.9 Less:- A&G Expenses Capitalized 744.50 560.41

Net A&G Expenses 7,183.06 6,657.26

Other Debits

79.480 to 483 Refund of Revenue 2.50 4.08

79.5(Except79.574) Misc. losses and write off 2,672.09 1,688.63

79.881 Losses on account of flood,cyclone,fire to fixed assets 0.00 -

79.882 Loss to Stock on account of flood, cyclone & fire. - -

Total Other Debits 2,674.59 1,692.71

Prior Period Items

Prior period Expenses (a)

83.8 c) Other charges relating to previous years (refer detail below) 19.72 3.29

83.9 d) Refund of Income to Prior Period - 0.24

Prior period Income (b)

65.8 and 65.9 Other excess provision in prior periods 23.35 -

Net Prior Period Items (a-b) -3.63 3.53

Total 13,797.66 14,244.70

104

NOTES NO. 28EXCEPTIONAL ITEMS

2014-15 2013-14` in Lacs ` in Lacs


65.9 Prior Period subsidy 33,449.68

65.8 Prior Period excess provision - Consumer Security 14,589.32

TOTAL 48,039.00 -

105

NOTES NO. 29EXTRAORDINARY ITEMS

2014-15 2013-14` in Lacs ` in Lacs


79.574 Unrealised Surcharge (Provision) - 44,019.60

TOTAL - 44,019.60

106

NOTES NO. 30EARNING PER SHARE (EPS)

2014-15 2013-14

` in Lacs ` in LacsParticulars

Current Year

2014-15

Previous Year

2013-14

I. Net Profit as per Profit & Loss A/c Available for Equity -63,616.64 -208,865.16Shareholders (in Rupees)

II. Weighted Average number of equity Shares for Earning per Share Computation:

(A) For Basic Earning Per Share of Rs.1000/-each (In Nos.) 143.91 141.41

(B) No. of Shares For Diluted Earning Per Share of Rs.1000/- each (in Nos.) 143.91 141.41

III. Earning Per Share (Face value of Rs.1000/- each)BASIC (in Rupees) -442.05 -1,476.97 DILUTED (in Rupees) -442.05 -1,476.97

Calculation of Basic Earning Per Share:

Previous Year Issued, Subscribed & Paid-up Shares 14,391,176.00 5,252,779,240Current Year Issued, Subscribed & Paid-up Shares - -

Total: 5,252,779,240

WEIGHTED AVG. NO OF BASIC SHARES 14,391,176

Particulars

Profit/(-) Loss as per Profit & Loss A/c -63,615.53 -208,864.04

Weighted average number of shares used in computing 143.91 141.41 basic earning per equity share

Basic earning per share (Rs.) (on nominal value of Rs. 1000/- per share) -442.05 -1,476.96

Weighted average number of shares used in computing 143.91 141.41 diluted earning per equity share

Diluted earning per share (Rs.) (on nominal value of Rs. 1000/- per share) -442.05 -1,476.96

SUMMARY

Current Year

2014-15

Previous Year

2013-14

I............................................, a member of.................................................................... do

hereby appoint........................................... of........................................................... (or

failing him/her)..................................................of..................................................... as my

proxy to attend and vote for me and on my behalf at the adjourned 15th Annual General Meeting

of the Company to be held on ..........................................the ..........................................day

of ............................................2015 at ..........................................am/pm at the Registered

Office of the Comany, Vidyut Sadan, Vidyut Nagar, Hisar and at any adjournment thereof.

As witness my hand, this.................................................. day of ..........................................

Signature by the said..........................................

(affix one rupee Revenue Stamp)

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