Gujarat Urja Vikas Nigam Limited - Welcome to GUVNL · 2019-04-26 · 3 Gujarat Urja Vikas Nigam...

CIN : U40109GJ2004SGC045195

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Gujarat Urja Vikas Nigam Limited

14th Annual Report 2017-18 CONTENTS Page No.

• Boards of Directors 002

• Notice 003

• Board's Report 012

• C&AG Comments on Standalone 090

Financial Statements

• Independents Auditor's Report on 091

Standalone Financial Statements

• Standalone Balance Sheet 100

• Standalone Statement of Profit & Loss 102

• Standalone Cash Flow Statement 103

• Statement of changes in equity 105

• Notes to Standalone Financial Statements 106

• C&AG Comments on 158

Consolidated Financial Statements

• Independents' Auditors' Report on 161

Consolidated Financial Statement

• Consolidated Balance Sheet 187

• Consolidated Statement of Profit & Loss 189

• Consolidated Cash Flow Statement 191

• Consolidated Statement of changes in equity 193

• Notes to Consolidated Financial Statements 195

• Form AOC.-1 : Statements Containing Salient Features 272

of Financial Statements of Subsidiary Companies /Associate Company

• Proxy Form 274

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Gujarat Urja Vikas Nigam Limited14th Annual Report 2017-18

Board of DirectorsShri Raj Gopal, IAS (DIN 02252358) Chairman (w.e.f. 07-08-2018)Shri Sujit Gulati, IAS (DIN 00177274) Chairman (upto 16-07-2018)Shri Pankaj Joshi, IAS (DIN 01532892) Managing DirectorMs. Mona Khandhar, IAS (DIN 06803015) Woman DirectorShri Sanjeev Kumar, IAS (DIN 03600655 Govt. Nominee Director (upto 15-07-2017)Shri Milind Torawane, IAS (DIN 03632394) Govt. Nominee Director (w.e.f. 15-07-2017)Shri S. B. Khyalia (DIN 02470485) Director (Finance)Shri K. M. Bhuva (DIN 07808731) Director (Technical)(w.e.f. 29-04-2017)Shri R. N. Singh (DIN 00032014) Independent Director (upto 12-03-2018)Shri Bimal N. Patel (DIN 03006605) Independent Director (upto 12-03-2018)Shri P. J. Mathew (DIN 06431096) Independent Director (upto 31-05-2017)Shri N. N. Mishra (DIN 00575501) Independent Director (w.e.f 01-11-2018)Shri R. C. Dhup (DIN 08275424) Independent Director (w.e.f. 24-12-2018)

I/C ADG OF POLICE (SECURITY) : COMPANY SECRETARY :Shri Manoj Sashidhar, IPS Shri Parthiv Bhatt

BANKERS : SR. EXECUTIVESUCO Bank Canara Bank 1. Shri K.P. Jangid, G.M. (Comm.)State Bank of India Allahabad Bank 2. Dr. Nilesh Munshi, GM(HR)Bank of India Syndicate Bank 3. Smt. Sailaja Vachhrajani, GM(IPP)Central Bank of India Bank of Baroda 4. Shri S. Sen, GM (F&A) & CFOUnion Bank of India Indian Oversease Bank 5. Shri B.B. Mehta, I/c GM (IT)Dena Bank Karur Vysya BankVijaya Bank Indian Bank

STATUTORY AUDITORS SECRETARIAL AUDITORS COST AUDITORSM/s. Mukund & Rohit M/s. Sandip K. Shukla M/s. Y.S.Thaker.Chartered Accountants, Practicing Company Secretary Cost Accountants,Vadodara Vadodara Vadodara

REGISTERED OFFICE SUBSIDIARY COMPANIESSardar Patel Vidyut Bhavan, 1. Gujarat State Electiricity Corp. Ltd.Race Course, 2. Gujarat Energy Transmission Corp. Ltd.Vadodara : 390 007. 3. Uttar Gujarat Vij Co. Ltd.Phone No. 0265-2310582-86, Fax : 0265-2337918 4. Dakshin Gujarat Vij Co. Ltd.Website : www.guvnl.com 5. Paschim Gujarat Vij Co. Ltd.CIN : U40109GJ2004SGC045195 6. Madhya Gujarat Vij Co. Ltd.

ASSOCIATE COMPANYGujarat Industries Power Company Ltd.,JV OF SUBSIDIARY COMPANY GSECLMahaguj Collieries Limited

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NOTICENotice is hereby given that the Fourteenth Annual General Meeting of the Members of Gujarat UrjaVikas Nigam Limited will be held (at shorter notice under Section 101(1) of the Companies Act, 2013,pursuant to consent received from all the members) on Saturday, the 29th December, 2018 at 1.00 P.M.at the Conference Room of the Company, Third Floor, Sardar Patel Vidyut Bhavan, Race Course Circle,Vadodara - 390 007, to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Financial Statements including Consolidated FinancialStatements of the Company for the financial year ended 31st March, 2018, together with the Board'sReport, the Report of Auditors' thereon and the Comments of the Comptroller & Auditor Generalof India, in terms of Section 143(6) of the Companies Act, 2013.

2. To authorize the Board of Directors of the Company to fix the remuneration payable to StatutoryAuditors of the Company appointed by the Comptroller and Auditor General of India (C & AG), NewDelhi, for the Financial Year 2018-19, in terms of the provisions of Section 139(5) read with Section142 of the Companies Act,2013 and if thought fit, to pass, with or without modification, the followingresolution as an Ordinary Resolution.

"RESOLVED THAT pursuant to Section 142 of the Companies Act, 2013, the Board of Directors ofthe Company be and is hereby authorized to decide and fix the remuneration and other terms andconditions including out of pocket expenses, to the Statutory Auditors appointed by the Comptrollerand Auditor General of India,(C & AG), for the financial year 2018-19."

SPECIAL BUSINESS

3. To consider and if thought fit, to pass, with or without any modification/s, the following Resolutionas an Ordinary Resolution:

"RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions ofthe Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutorymodifications or re-enactment thereof, for the time being in force), the remuneration ofM/s. Y S Thakar & Co., Cost Accountants, Vadodara (Firm Registration No.000318) as Cost Auditorsof the Company whose appointment and remuneration has been recommended by the AuditCommittee and approved by the Board to conduct the audit of the Cost Accounts / Records maintainedby the Company in respect of Electricity Industry for the Financial Year ending 31st March, 2019 (i.e.Financial Year 2018-19) at the remuneration of ̀ 50,000/- (Rupees Fifty Thousand only) plus applicableGST be and is hereby ratified and approved."

"RESOLVED FURTHER THAT the Board of Directors of the Company (including any Committeethereof) be and is hereby authorized to do all such acts, deeds, matters and things and take all suchsteps as may be necessary, proper and expedient to give effect to this resolution."

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4. To consider and if thought fit, to pass with or without modification(s), the following resolutionas an Ordinary Resolution:

"RESOLVED THAT pursuant to the provisions of Section 149, 152, read with Schedule IV and all otherapplicable provisions, if any, of the Companies Act, 2013, the Companies (Appointment andQualification of Directors) Rules, 2014, (including any statutory modification(s) or re-enactmentthereof for the time being in force), Shri Narendra Nath Misra, (DIN 00575501) who was appointedas an Additional Director and also as an Independent Director of the Company by the Board ofDirectors with effect from 1st November, 2018, and who holds the said office pursuant to theprovisions of Section 161 of the Companies Act, 2013 up to the date of this Annual General Meetingand who is eligible for appointment under the relevant provisions of the Companies Act, 2013, beand is hereby appointed as Independent Director of the Company, not liable to retire by rotation,to hold office for a term of 2 (two) consecutive years with effect from 1st November, 2018."

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

"RESOLVED THAT pursuant to the provisions of Section 149, 152, read with Schedule IV and all otherapplicable provisions, if any, of the Companies Act, 2013, the Companies (Appointment andQualification of Directors) Rules, 2014, (including any statutory modification(s) or re-enactmentthereof for the time being in force), Shri Rakesh Chander Dhup (DIN 08275424) who was appointedas an Additional Director and also as an Independent Director of the Company by the Board ofDirectors with effect from 24th December, 2018, and who holds the said office pursuant to theprovisions of Section 161 of the Companies Act, 2013 up to the date of this Annual General Meetingand who is eligible for appointment under the relevant provisions of the Companies Act, 2013, beand is hereby appointed as Independent Director of the Company, not liable to retire by rotation,to hold office for a term of 2 (two) consecutive years with effect from 24th December, 2018."

6. To consider and if thought fit, to pass, with or without any modification/s, the following Resolutionas an Ordinary Resolution:

"RESOLVED THAT pursuant to the provisions of Section 61 and other applicable provisions, if any,of the Companies Act, 2013, the Authorized Share Capital of the Company be and is hereby increasedfrom `20,000 Crores (Rupees Twenty Thousand Crores only) divided into 2000,00,00,000 (TwoThousand Crores) Equity Shares of ` 10/- (Rupees Ten only) each to `30,000 Crores (Rupees ThirtyThousand Crores only) divided into 3000,00,00,000 (Three Thousand Crores) Equity Shares of ` 10/- (Rupees Ten only) each"

"RESOLVED FURTHER THAT the existing Clause V of the Memorandum of Association of the Companybe and is hereby deleted and in its place, the following new Clause V be substituted:

Clause V:

The Authorized Share Capital of the Company is ` 30,000 Crores (Rupees Thirty Thousand Crores only)divided into 3000,00,00,000 (Three Thousand Crores) Equity Shares of ` 10/- (Rupees Ten) each."

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By Order of the Board

Date : 24-12-2018 Parthiv BhattPlace : Gandhinagar Company Secretary

REGISTERED OFFICE:Sardar Patel Vidyut Bhavan,Race Course,Vadodara - 390 007CIN : U40109GJ2004SGC045195

NOTES:

1. A member entitled to attend and vote at the Annual General Meeting (the "Meeting") is entitledto appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be amember of the Company. The instrument appointing the proxy should, however, be deposited atthe registered office of the Company not less than forty-eight hours before the commencementof the Meeting.

2. A Statement pursuant to Section 102(1) of the Companies Act, 2013, relating to the Special Businessto be transacted at the Meeting is annexed hereto.

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ANNEXURE TO THE NOTICE

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No. 3

As per the provisions of Section 148 of the Companies Act, 2013 and as required under the Companies(Audit and Auditors) Rules, 2014, the proposal for appointment of M/s. Y S Thakar & Co., Cost Accountants,Vadodara was placed before the 48th Meeting of the Audit Committee held on 12-03-2018 and asrecommended by the Audit Committee, the Board of Directors of your Company has at its 86th Meetingheld on 27th March, 2018 considered the recommendation and approved the said proposal for appointmentof M/s. Y S Thakar & Co., Cost Accountants, Vadodara as Cost Auditor to conduct the audit of the CostAccounts / Records maintained by the Company in respect of Electricity Industry for the Financial Yearending 31st March, 2019 (i.e. Financial Year 2018-19) at the remuneration of ` 50,000/- (Rupees FiftyThousand only) plus applicable service tax, however, that their remuneration shall be subject to theratification by the Members as required under the provisions of sub-section (3) of Section 148 of theCompanies Act, 2013.

Hence, as per the provisions of Section 148(3) of the Companies Act, 2013, the remuneration of the CostAuditor is required to be ratified by the Members of the Company. Hence, this Resolution.

None of the Directors and Key Managerial Personnel of the Company and their respective relatives is,in any way, concerned or interested, financially or otherwise, in passing of the Resolution set out at ItemNo. 3.

The Board commends the Resolution for approval of the Members as Ordinary Resolution.

Item No. 4

The second and final term of existing Independent Directors of the Company Shri Bimal Patel and ShriR.N.Singh expired on 12-03-2018 and accordingly they ceased to be the Independent Directors on expiryof their second term. Therefore, as approved by competent authority, a new panel of IndependentDirectors was suggested to Govt. of Gujarat well in advance vide letter No. GUVNL/CS/428 dated 11-07-2017 so that Govt. may get sufficient time to approve the panel of names for appointment asIndependent Directors on the Board of GUVNL and Subsidiaries.

The Energy & Petrochemicals Department, Govt. of Gujarat vide letter No. GUV-1108-3747-K dated 05-10-2018 from OSD (Power) informed that State Government has decided to appoint the IndependentDirectors as per the list attached with the aforesaid letter of Govt. on the Boards of GUVNL and itsSubsidiary Companies for two years.

Accordingly, Under the provisions of Section 161 of the Companies Act, 2013 and in terms of the Article77 of the Articles of Association of the Company, the Board has vide Resolution passed on 01-11-2018appointed Shri N.N.Misra (who gave his consent) as an Additional Director with effect from 01-11-2018and also appointed as an Independent Director for a first term of two years w.e.f. 01-11-2018 subjectto approval of Shareholders.

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Shri N.N.Misra shall hold office up to the date of this Annual General Meeting of the Company in termsof Article 77 of the Articles of Association of the Company and Section 161(1) of the Companies Act,2013 (the Act) and shall be eligible for appointment to the office of Director.

Pursuant to the Notification No. G.S.R. 163 (E) dated 05-Jun-2015 of the Central Government, theprovisions of Section 160 of the Companies Act, 2013 are not applicable to the Company and therefore,no notice under the said Section is required.

Pursuant to the provisions of Section 149(6)/(7) of the Companies Act, 2013 and the relevant Rules, theCompany has received necessary declaration from Shri N.N.Misra (DIN 00575501) for the FY 2018-19,confirming that he meets the criteria of independence as prescribed under the Act.

Further as per Schedule IV of the Companies Act, 2013 i.e. Code for Independent Directors, the appointmentof Independent Director(s) of the Company shall be approved at the meeting of the Shareholders. Hence,this resolution.

The brief profile of Shri N.N.Misra (DIN 00575501) is as under:

Shri N. N. Misra, graduated in Electrical Engineering with Honours from Regional Engineering College,Rourkela, in the year 1977. Shri Misra joined NTPC as an Executive Trainee. He has an experience of 34years in NTPC out of which 28 years were in Design Department looking after the various functions ofElectrical Design and Project Engineering beginning with the first project of NTPC. He is actively associatedwith BIS. Shri Misra represents India in CIGRE (International Conference on Large High Voltage ElectricSystem) for High Voltage equipment and has contributed in many Study Committees and working groupsof CIGRE. He was involved in selecting successfully implementing the first 765KV sub-station of India atSipat. He has a rich and varied experience having worked as Executive Director of National Capital Region,Executive Director looking after Corporate Contracts & Materials, Executive Director looking after HumanResources and lastly as Executive Director looking after Operation Services. Shri Misra represents NTPCas part- time Director in a number of Joint Ventures and Subsidiaries of NTPC.

Further as per Section 149(6) as applicable to the Govt. Company, in the opinion of the Energy &Petrochemicals Department, Govt. of Gujarat, Shri N.N.Misra (DIN 00575501) is a person of integrity andpossesses relevant expertise and experience. Moreover, having regard to his qualification, experience andknowledge, the Board considers that his appointment as Independent Director would be of immensebenefit to the Company and it is desirable to avail the services of Shri N.N.Misra as an IndependentDirector. In the opinion of the Board, Shri N.N.Misra fulfills the conditions for appointment as IndependentDirectors as specified in the Act and the Rules framed there under and they are independent of themanagement.

Relevant documents in respect of the said item are open for inspection by the members at the RegisteredOffice of the Company during normal business hours on any working day up to the date of this meeting.

Shri N.N.Misra, does not hold by himself or for any other person on a beneficial basis, any shares in theCompany.

Shri N.N.Misra, is interested in the resolutions set out at Item Nos. 04 of the Notice with regard to hisappointment.

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Save and except the above, none of the other Directors and Key Managerial Personnel of the Companyand their relatives are, in any way, concerned or interested, financially or otherwise, in this Resolution.

Shri N.N.Misra, if appointed as an Independent Director, will not be liable to retire by rotation.

The Board commends the Ordinary Resolution set out in Item No. 4 of the Notice for approval of theMembers.

Item No 5

The second and final term of existing Independent Directors of the Company Shri Bimal Patel and ShriR.N.Singh expired on 12-03-2018 and accordingly they ceased to be the Independent Directors on expiryof their second term. Therefore, as approved by competent authority, a new panel of IndependentDirectors was suggested to Govt. of Gujarat well in advance vide letter No. GUVNL/CS/428 dated 11-07-2017 so that Govt. may get sufficient time to approve the panel of names for appointment asIndependent Directors on the Board of GUVNL and Subsidiaries.

The Energy & Petrochemicals Department, Govt. of Gujarat vide letter No. GUV-1108-3747-K dated 05-10-2018 from OSD (Power) informed that State Government has decided to appoint the IndependentDirectors as per the list attached with the aforesaid letter of Govt. on the Boards of GUVNL and itsSubsidiary Companies for two years.

Accordingly, Under the provisions of Section 161 of the Companies Act, 2013 and in terms of the Article77 of the Articles of Association of the Company, the Board has vide Resolution passed on 24-12-2018appointed Shri Rakesh Chander Dhup (who gave his consent and submitted all requisite papers) as anAdditional Director with effect from 24-12-2018 and also appointed as an Independent Director for afirst term of two years w.e.f. 24-12-2018 subject to approval of Shareholders.

Shri R.C.Dhup shall hold office up to the date of this Annual General Meeting of the Company in termsof Article 77 of the Articles of Association of the Company and Section 161(1) of the Companies Act,2013 (the Act) and shall be eligible for appointment to the office of Director.

Pursuant to the Notification No. G.S.R. 163 (E) dated 05-Jun-2015 of the Central Government, theprovisions of Section 160 of the Companies Act, 2013 are not applicable to the Company and therefore,no notice under the said Section is required.

Pursuant to the provisions of Section 149(6)/(7) of the Companies Act, 2013 and the relevant Rules, theCompany has received necessary declaration from Shri R.C.Dhup (DIN 08275424) for the FY 2018-19,confirming that he meets the criteria of independence as prescribed under the Act.

Further as per Schedule IV of the Companies Act, 2013 i.e. Code for Independent Directors, the appointmentof Independent Director(s) of the Company shall be approved at the meeting of the Shareholders. Hence,this resolution.

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The brief profile of Shri R.C.Dhup (DIN 08275424) is as under:

Profile - R.C. Dhup (Former Exec.Dir, NTPC Ltd.), B.Sc. Elect. Engg. (Hons.)

Power and Energy professional with unique blend of experience of 44 years in entire value chain of powersector i.e. Generation (Nuclear, Thermal, Gas, Renewables etc.,) Transmission and Distribution. Had beenpart of NTPC's growth story from nil generation to 40000 MW in 2012 (superannuated) mostly as teamleader in any growing organization.

Lead the reform initiatives for and on behalf of Min. of Power, GOI, as Lead Advisor Cum consultant underAcc. Dev. & Reforms program in 10th & 11th Plan (APDRP & RAPDRP). Actively contributed in Nationallevel Policy formulations and it's advocacy for Power Sector.

Under APDRP objectives, comprehended sectoral issues and helped MOP strategize and formulatedtripartite and quadripartite MOU and MOA in the areas of policy formulation for administrative, commercialand technical matters and , thereafter overseen its implementation in states/utilities.

Under RAPDRP prepared system requirement specifications for IT enabling and automating the businessprocesses for reduction of aggregate technical and commercial losses by online energy auditing andaccounting in distribution business and convinced GoM to provide central grant to state utilities for itsimplementation.

Subsequent to superannuation in Sept.,12 worked in SARI, USAID project as Technical Director for almosta year(2012-2013) to push x-border energy trade in South-Asia region with objective of all rounddevelopment of sustainable, environmentally benign energies on regional basis. Formulated "Way Forward"for harmonizing policy, legal and regulatory issues to create the enabling conditions for a sustainablemarket for investment and implementation of Cross-Border Energy Trade.

From 2013 onwards had worked as advisor/consultant to Discoms of Rajasthan, Electricity Deptt. ofPuducherry State and helped EESL venturing in area of distribution for audit of AT&C losses. He isinstitution/team builder with zeal to learn and adapt latest state of art technologies in the country ina proficient and proactive manner. Delivered innovative and creative technologies and business modelsthat best served the organizations and the country on least cost basis and in time.

Further as per Section 149(6) as applicable to the Govt. Company, in the opinion of the Energy &Petrochemicals Department, Govt. of Gujarat, Shri R.C.Dhup is a person of integrity and possessesrelevant expertise and experience. Moreover, having regard to his qualification, experience and knowledge,the Board considers that his appointment as Independent Director would be of immense benefit to theCompany and it is desirable to avail the services of Shri R.C.Dhup as an Independent Director. In theopinion of the Board, Shri R.C.Dhup fulfills the conditions for appointment as Independent Directors asspecified in the Act and the Rules framed there under and they are independent of the management.

Relevant documents in respect of the said item are open for inspection by the members at the RegisteredOffice of the Company during normal business hours on any working day up to the date of this meeting.

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Shri R.C.Dhup, does not hold by himself or for any other person on a beneficial basis, any shares in theCompany.

Shri R.C.Dhup, is interested in the resolutions set out at Item Nos. 05 of the Notice with regard to hisappointment.

Save and except the above, none of the other Directors and Key Managerial Personnel of the Companyand their relatives are, in any way, concerned or interested, financially or otherwise, in this Resolution.

Shri R.C.Dhup, if appointed as an Independent Director, will not be liable to retire by rotation.

The Board commends the Ordinary Resolution set out in Item No. 5 of the Notice for approval of theMembers.

Item No 6

The Company was incorporated on 22-12-2004 with an Authorized Capital of `5 Crores which wassubsequently increased to `2500 Crores comprising of 250 Crore equity shares of `10/- each on 30-03-2005 to enable the Company to issue equity shares to Govt. of Gujarat as per opening capital notifiedw.e.f. 1-4-2005 being the effective date of implementation of unbundling/transfer scheme of erst. GEB.There after considering the budgeted capital infusions from the Govt. of Gujarat, Authorized Capital wasfurther increased to ` 5000/- Crores comprising of 500 crore equity shares of `10/- each on 18-03-2008.Considering budgeted capital contributions from Govt. of Gujarat every year, the authorized capital wasfurther increased to ` 10,000/- crores comprising of 1000 crore equity shares of `10/- each on 16-06-2012. Further considering budgeted capital contributions from Govt. of Gujarat every year, the authorizedcapital was further increased to ` 20,000/- crores comprising of 2000 crore equity shares of `10/- eachon 5-10-2015.

The status of the Authorized and Issued Capital as on 30-11-2018 is as under:

PRESENT AUTHORIZED CAPITAL : ` 20,000,00,00,000/-

ISSUED CAPITAL : ` 18235,67,35,950/-

Thus the present paid up capital is very close to the authorized capital.

Considering the approx. Share Capital Contribution of ` 3000/- Crores every year from Govt. of Gujarat, it is necessary for the Company to increase the authorized capital before further allotment of Sharesbeyond present authorized capital, as the issued and paid up capital can not exceed authorized capital.

The Company can not issue share beyond the Authorized capital of the Company. With a view tofacilitating the issue of such Equity Shares to the Govt. of Gujarat, the present Authorized Share Capitalof ` 20,000 crores is required to be increased. Considering the Equity Share Capital to be issued to Govt.of Gujarat from time to time in accordance with the share capital contribution likely to be made by Govt.

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of Gujarat over a period of next three years, the Board at its meeting held on 24-8-2018 approved toincrease the Authorized Share Capital from existing ` 20,000 Crores divided into 2000,00,00,000 EquityShares of ` 10/- each to `30,000 Crores divided into 3000,00,00,000 Equity Shares of ` 10/- each.

The increase in the Authorized Share Capital shall also necessitate the consequent amendment in ClauseV of the Memorandum of Association of the Company.

Pursuant to the provisions of Section 61 of the Companies Act, 2013, for the increase in Authorized ShareCapital and consequent amendment in Memorandum of Association, the approval of Shareholders in theGeneral Meeting is required. Hence, this Ordinary Resolution is submitted for your approval.

The Company's Memorandum of Association is available for inspection of the Members at the RegisteredOffice of the Company on any working day between 10.30 a.m. to 1.00 p.m. up to the date of the meeting.

None of the Directors/Key Managerial Personnel of the Company/their relatives are, in any way, concernedor interested financially or otherwise in the Ordinary Resolution set out at Item no 6 of the Notice.

The Board commends the Ordinary Resolution set out at Item no 6 of the Notice for approval by theMembers.

By Order of the Board

Date : 24-12-2018 Parthiv BhattPlace : Gandhinagar Company Secretary

REGISTERED OFFICE:Sardar Patel Vidyut Bhavan,Race Course,Vadodara - 390 007CIN : U40109GJ2004SGC045195

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BOARDS' REPORTTo,

The Members of

GUJARAT URJA VIKAS NIGAM LIMITED.

Your Directors are pleased to present the 14th ANNUAL REPORT together with Audited Stand Alone andConsolidated Financial Statements for the 14th Financial Year ended 31st March, 2018.

STANDALONE FINANCIAL PERFORMANCE :

The Company was operationalized w.e.f. FY 2005-06. The Company has continued its efforts to sustainthe performance and growth momentum over the years. The Company's financial performance for theyear under review along with previous year's figures is summarized below:

` in lakhsSr. No. Particular FY 2017-18 FY 2016-17

1 Total Income 37,84,218.52 34,39,890.072 Total Expenditure Before Depreciation, Interest & Tax 37,65,620.81 34,20,274.343 Profit Before Depreciation, Interest & Tax 18,597.71 19,615.734 Depreciation and Amortization Expenses 175.99 158.585 Finance Costs 2,547.06 2,795.626 Profit Before Tax 15,874.66 16,661.547 Tax Expenses 3,270.00 3,660.008 Profit After Tax 12,604.66 13,001.54

DIVIDEND

The Company being in consolidation phase and to conserve the resources of the Company for futuredevelopment, your Directors do not recommend any dividend on Equity Shares for the Financial Year2017-18.

OPERATIONS AND STATE OF COMPANY'S AFFAIRS:

1.1 Financial performance:

• The Company is in the business of bulk purchase and sale of power. During the year, the Companysold 89480.29 MUs as compared to 81961.73 MUs in the previous year to its own Distribution SubsidiaryCompanies viz. MGVCL, PGVCL, DGVCL, UGVCL and through bilateral arrangements and by puttingbids in Power Exchange (IEX & PXI) on day-do-day basis for and on behalf of 4 DISCOMs.

• The company earned total revenue from Sale of Power to the tune of ` 37,12,738.88 Lakhs as against`33,90,671.63 Lakhs in the previous year. Correspondingly, total expenditure incurred on Purchaseof Power is `37,60,111.52 lakhs as against `34,15,579.37 lakhs in the previous year. The increasein revenue from sale of power to the tune of `3,22,067.25 Lakhs (9.50%) and increase in expenditure

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on Purchase of Power to the tune of 3,44,532.15 Lakhs (10.09%) is attributable to increase in scaleof operations of the Company.

• The per unit power purchase cost has increased to `4.20 as compared to `4.17 in the previous year.While the per unit realization has gone up marginally to `4.15 as compared to `4.14 in the previousyear.

• The Company has earned Profit Before Tax (PBT) of `15,874.66 Lakhs as against `16,661.54 Lakhsin the previous year showing a decrease by `786.88 Lakhs (i.e. a down of 4.72 %). Since the IncomeTax Act, 1961 provides for payment of Minimum Alternate Tax (MAT) on book profit, a provision of`3270.00 Lakhs has been made towards MAT liability (Previous Year: ` 3660.00 Lakhs). This leavesa Profit After Tax (PAT) of `12,604.66 Lakhs (as against `13,001.54 Lakhs in the previous year) whichhas been transferred to Retained Earnings.

• The Company inherited a loss of `73724 Lakhs from erstwhile GEB. Now as a result of making Profitfor 13 consecutive years, the Company has accumulated profit (Retained Earnings) of `25,178.63Lakhs (Previous Year: `13,130.09 Lakhs).

1.2 Technical Performance:

For the year ended For the year endedSr. Particulars 31st March, 2018 31st March, 2017No. MUs Amount MUs Amount

( ` Lakhs) (` Lakhs)

1 Purchase of Power 89480.29 37,60,111.52 81961.73 34,15,579.37

2 Sale of Power 89480.29 37,12,738.88 81961.73 33,90,671.63

SHARE CAPITALThe authorized capital of the Company as on 31-03-2018 is ` 20,000 Crores divided into 2000 Crore equityshares of ` 10 each. The issued capital of the Company as on 31-03-2018 stood at ` 17402,73,97,950and subscribed and paid up equity share capital of your Company stood at` 16227,54,98,950 and share application money as on 31-03-2018 stood at ` 1175,18,99,000. During theyear 2017-18, 2512943900 no. of equity shares of `10/- each were allotted to Govt. of Gujarat on Rightsbasis at par against capital contribution to GUVNL for Capital Infusion in Subsidiary Companies/implementation of Govt. Schemes pursuant to various Govt. of Gujarat Resolutions.Further after the close of Financial Year 2017-18, the 2008123700 no. of equity shares of `10/- each wereallotted to Govt. of Gujarat on Rights basis at par against capital contribution to GUVNL for Capital Infusionin Subsidiary Companies/implementation of Govt. Schemes pursuant to various Govt. of Gujarat Resolutions.The Paid up Capital as on 30-11-2018 stood at ̀ 18235,67,35,950/- divided into 18235673595 equity sharesof ` 10/- each.During the year under review, the Company has not bought back any of its securities, nor issued anyshares as Sweat Equity or Bonus Shares or shares with differential voting rights nor granted any StockOption Scheme to the employees.

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SUBSIDY RECEIVABLE FROM GOVT. OF GUJARAT (GoG) :

The outstanding Subsidy Receivable from GoG as on 31st March, 2018 of ` 342141.57 Lakhs has reducedby ` 1,24,221.89 Lakhs compared to ` 466,363.46 Lakhs as on 31st March, 2017 due to receipt of additionalsubsidy during current year. The break-up of outstanding subsidy receivable amounting to ` 3,42,141.57Lakhs is tabulated as under:

Sr. No. Subsidy (` in Lakhs)

A. GERC Tariff Compensation of Ag. Consumers 6,2013.53

B. FPPPA Subsidy of Ag. Consumers 22,5458.63

C. Water Works (Gram Panchayats) Subsidy 1,4096.02

D. 50% Relief to Ag. Consumers in Elect. Bills 40,573.39

TOTAL 3,42,141.57

INVESTMENT IN SUBSIDIARY COMPANIES:

During FY 2017-18, GUVNL has invested ` 3,15,644.67 Lakhs in six Subsidiary Companies. The details ofinvestments made with Share Premium in Subsidiary Companies are shown as under:

Sr. No. Name of Subsidiary Share Capital Premium TotalCompanies (` in lakhs) (` in lakhs) (` in lakhs)

1. GSECL 10,280.54 34,389.46 44,670.002. GETCO 4,482.62 37,872.38 42,355.003. DGVCL 2,495.75 18,258.20 20,753.954. MGVCL 3,251.59 19,260.36 22,511.955. PGVCL 1,40,913.82 0.00 1,40,913.826. UGVCL 6,369.77 38,070.18 44,439.95

TOTAL 1,67,794.08 1,47,850.59 3,15,644.67

MAINTENANCE OF COST RECORDS:

The Company is required to maintain cost records as specified by the Central Govt. under Sub-section(1) of Section 148 of the Companies Act, 2013. Accordingly, the Company is maintaining requisite Costrecords and accounts.

SUBSIDIARY/ASSOCIATE COMPANIES:

The Company has following Subsidiary Companies:

1. Gujarat State Electricity Corp. Ltd. - engaged in the generation of electricity

2. Gujarat Energy Transmission Corp. Ltd. - engaged in the transmission of electricity

3. Uttar Gujarat Vij Company Ltd. - engaged in the distribution of electricity

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4. Dakshin Gujarat Vij Company Ltd. - engaged in the distribution of electricity

5. Paschim Gujarat Vij Company Ltd. - engaged in the distribution of electricity

6. Madhya Gujarat Vij Company Ltd. - engaged in the distribution of electricity

Further the Company has one Associate Company viz. Gujarat Industries Power Company Limited. TheSubsidiary Company GSECL has one Joint Venture Company viz. Mahaguj Collieries Ltd.

HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES ANDTHEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY DURING FY 2017-18.

The Performance highlights of the Subsidiaries and Associate included in the Consolidated FinancialStatement of the Company for F.Y. 2017-18 are covered in the separate statement in prescribed formAOC-1 containing salient features of the financial statements of Subsidiaries i.e. GSECL, GETCO, MGVCL,DGVCL, PGVCL, UGVCL and Associate Company GIPCL and Joint Venture of subsidiary company GSECLviz MGCL provided in the Annual Report. However brief highlights of performance of Subsidiaries/Associateand JV of subsidiary company are as under:

SUBSIDIARIES (` In Lakhs)

Reserves Profit Provision ProfitSr. Name of Share and Total Total Invest- Turnover before For AfterNo Subsidiary Capital Surplus Assets Liabilities ment Taxation Taxation Taxation

Gujarat StateElectricity

1 Corporation 1,98,177.24 4,35,328.68 17,66,414.84 11,32,908.92 12,557.84 10,04,024.37 59,607.13 10,496.55 22,936.88limited(GSECL)

Gujarat EnergyTransmission

2 Corporation 68,902.29 4,73,015.03 21,67,727.24 16,25,809.94 12,485.02 3,49,738.79 66,881.09 11,908.74 37,572.02Limited(GETCO)

MadhyaGujarat Vij

3 Company 40,068.96 1,41,989.36 4,70,516.93 2,88,458.61 — 5,60,683.34 10,515.61 1,210.81 9,304.80Limited(MGVCL)

DakshinGujarat Vij

4 Company 37,973.75 1,51,693.62 5,78,186.61 3,88,519.25 — 11,61,266.28 11,239.54 1,792.06 9,447.48Limited(DGVCL)

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PaschimGujarat Vij

5 Company 5,06,198.97 83,791.30 12,92,624.64 7,02,634.36 — 14,40,196.47 16,172.09 1,437.94 13,687.21Limited(PGVCL)

UttarGujarat Vij

6 Company 51,846.31 2,11,810.95 6,37,070.11 3,73,412.84 — 10,13,132.74 11,569.95 1,210.81 10,132.02Limited(UGVCL)

ASSOCIATE/JOINT VENTURE

Shares of Associate/Joint Venture held by the Profit/Loss for the yearcompany on the year end

Net worth Net worth Profit for DescriptionSr. Name of as per attributable the year as Considered of howNo Associate / latest to per latest in there is

Joint Balance Shareholding Statement Consolidation significantVenture Sheet as per latest of Profit (` in lakhs) influence

(` in lakhs) Balance Sheet and Loss(` in lakhs) (` in lakhs)

1 Gujarat Industries AssociatePower Company 2,38,068.70 63,888.92 16,604.78 4,456.11 (Note-1Limited (GIPCL) & 2)

2 Mahaguj Joint VentureCollieries 5,419.83 2,167.93 (166.44) (66.58) of SubsidiaryLimited Company

GSECL

Further, the Audited Financial statements and related information of the Subsidiary Companies, whereapplicable, will be made available to any member upon request. The Financial Statements of the subsidiarycompanies will also be kept open for inspection at the Registered Office of the Company and that ofthe respective subsidiary companies/JV of Subsidiary. The Annual Report of Subsidiary Companies andAssociate Company/JV of Subsidiary are also available on the web site of the respective subsidiary/associateCompany.

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CONSOLIDATED FINANCIAL RESULTS OF GUVNL AND ITS SIX SUBSIDIARIES & ASSOCIATE GIPCL ANDJOINT VENTURE OF SUBSIDIARY COMPANY GSECL viz MGCL:As per the provisions of Section 129(3) of the Companies Act, 2013, every Company having one or moreSubsidiaries, shall in addition to its Standalone Financial Statement has to prepare Consolidated FinancialStatements of the Company and all its Subsidiaries in the same form and manner as that of its own whichshall also be laid before the Annual General Meeting of the Company along with its Standalone FinancialStatements w.e.f. 01-04-2014.Accordingly, GUVNL has prepared the Consolidated Financial Statements for current FY 2017-18 byconsolidating the Annual Accounts of its six Subsidiaries, one Associate M/s. Gujarat Industries PowerCompany Ltd. (GIPCL) and Joint Venture (of GSECL) - M/s. Mahaguj Collieries Ltd. (MGCL) as per the principlesof Consolidation.This is the 13th year post operationalization of the Companies. The performance of GUVNL and its SubsidiaryCompanies (Sector as a whole) has sustained momentum. The Sector continued to undertake variousmeasures to improve the financial health as well as the internal efficiencies. Resultantly, the Sector hasrecorded Profit after Tax before Non-Controlling Interest & Share of Net Profits of Associate and JointVenture of ` 1,14,589.12 Lakhs for FY 2017-18 as against corresponding figure of ` 53,895.03 Lakhs forFY 2016-17. There is an increase in profits by ` 60,694.09 Lakhs i.e. by 112.62%.The sectoral performance of last two years are summarized as under: (` in Lakhs)

Particulars 2017-18 % 2016-17 %A INCOME:1 Revenue from Operation 42,86,121.40 97.55% 39,12,879.45 97.18%2 Other Income 1,07,502.57 2.45% 1,13,745.65 2.82%

TOTAL INCOME 43,93,623.97 100.00% 40,26,625.10 100.00%B EXPENSES:1 Cost of Fuel Consumed 7,09,970.21 16.16% 4,84,704.29 12.04%2 Purchase of Power 24,68,024.31 56.17% 24,02,675.51 59.67%3 Employee Benefits Expense 3,41,614.77 7.78% 3,31,095.67 8.22%4 Finance Costs 1,48,500.10 3.38% 1,85,340.28 4.60%5 Depreciation 3,08,800.44 7.03% 3,63,527.23 9.03%6 Other Expenses 1,89,372.90 4.31% 1,44,949.45 3.60%

TOTAL EXPENSES 41,66,282.74 94.83% 39,12,292.42 97.16Profit Before Prior Period 2,27,341.23 5.17% 1,14,332.68 2.84%Adjustments and Tax

7 Exceptional Items 36,577.09 -8 Profit Before Tax 1,90,764.14 1,14,332.689 Share of Profit of Associate 4,456.11 6,152.3210 Tax Expenses 76,175.02 60,437.6511 Profit for the Year 1,19,045.23 60,047.36

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CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to provisions of section 129 of the Companies Act, 2013 and in accordance with the applicableAccounting Standards, the Audited Consolidated Financial Statements for F.Y. 2017-18 are provided in theAnnual Report.

SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE/JV COMPANIES:

Pursuant to provisions of section 129(3) of the Companies Act, 2013 read with Companies(Accounts)Rules,2014, a separate statement in prescribed form AOC-1 containing salient features of the financialstatements of Subsidiaries i.e. GSECL,GETCO,MGVCL,DGVCL,PGVCL,UGVCL, Associate Company GIPCL andJoint Venture Company (of subsidiary company GSECL) viz. Mahaguj Collieries Limited for the F.Y. 2017-18 is provided in the Annual Report.

INDUSTRY OVERVIEW:

The economic growth of the country is very closely linked with Power Sector. Availability of quality powerat reasonable rates is essential for sustained socio economic development. However, being highly capitalintensive in nature, mobilizing adequate financial resources at competitive cost for developing generation,transmission and distribution infrastructure has always been a challenge for the Power Sector; and thishas been a major factor that contributed to less than required generation and transmission capacity additionin the Country. Although electricity generation has increased substantially in recent years, the demandfor electricity in India is still substantially higher than the available supply. The data of Nation as a wholewith respect to gap between demand and supply is given in following table:

Fiscal Year Energy Requirement Energy Availability Energy Shortage/ Surplus(Million units) (Million units) (Million units) (%)

2013-14 1002257 959829 42428 - 4.2

2014-15 1068923 1030785 38138 -3.6

2015-16 1114408 1090851 23557 -2.1

2016-17 1214642 1227895 13252 1.1

2017-18 1229661 1337828 108167 8.8

Source: - LGBR - Central Electricity Authority

POWER SUPPLY POSITION IN THE STATE:

The total generating capacity of the State from various conventional sources at the beginning of the year2017-18 was 19888 MW. The total installed conventional power generating capacity of the State at theend of financial year 2017-18 is as under:-

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(In MW)

Fuel / Capacity as on 31.3.2017 During FY 2017-18 Capacity

Sector GSECL State Pvt. Central Capacity Capacity as onOwned IPP Sector Sector de-rated added 31.3.2018

Coal/Lignite 4480 1250 5405 2865 480 147 13667

Gas 970 1354 1802 424 - - 4550

Nuclear - - - 559 - - 559

Hydro 547 - - 232 - - 779

Total 5997 2604 7207 4080 480 147 19555

During the year 2017-18, NTPC Mouda Stage II Unit 2 (GUVNL's share 147 MW) got commissioned.

During the year FY 2017-18, capacity to the tune of 480 MW has been de-rated owing to completionof useful life towards cost reduction measures, the details of which are as under:

Sr. No Generating Stations Fuel Capacity (MW)

1 GSECL Ukai TPS (Unit 1 & 2) Coal 240

2 GSECL Sikka TPS (Unit 1 & 2) Coal 240

TOTAL 480

The details of Renewable Capacity in the State at the end of FY 2017-18 are as under

(In MW)

Sr. Renewable Source As on Addition As onNo 31.3.2017 during year 31.3.2018

1 Wind 5316 259 5575

2 Solar (incl. Rooftop) 1267 381 1648

3 Biomass 41.2 - 41.2

4 Mini / Small Hydel 9.6 12 21.6

TOTAL 6634 652 7286

* Including Wheeling / private generators

POWER PURCHASE:

For meeting the demand of power in the State, power is purchased from all the available sources. Thedetails of power purchased during the year 2016-17 and 2017-18 is as under:

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(In Mus)

Sr. No. Name of Agency 2016-17 2017-18

1 NPC 3004 1831

2 NTPC 20104 22087

3 SSNNL (Hydro) 501 146

TOTAL CENTRAL SECTOR (1 to 3) 23609 24065

4 GSEG 248 189

5 GIPCL - Stage II 59 -

6 GIPCL - SLPP 2773 2895

7 GMDC 1159 1131

8 GSECL 14842 21620

9 GPPC 220 167

10 BECL 56 394

TOTAL STATE SECTOR (4 to 10) 19357 26397

11 Essar Power Gujarat Ltd 4586 2464

12 CLP India (erstwhile GPEC) 273 425

13 Adani - Mundra Power Project 13140 8023

14 ACB India Ltd 1486 1410

15 Coastal Gujarat Pvt. Ltd - Mundra UMPP 12281 11689

TOTAL IPPs (11 to 15) 31766 24012

16 Solar 1329 1590

17 Wind 4991 6451

18 Other Renewable 36 46

19 Power Exchanges & others 537 6268

20 Discoms 337 652

TOTAL OTHERS (16 to 20) 7230 15007

21 TOTAL POWER PURHCASE 81962 89490

DISTRIBUTION / SALE OF POWER:

The bulk power purchased by GUVNL has been supplied to Subsidiary Distribution Companies to meettheir power requirement and to M/s GACL under long term sale agreement. The details of power suppliedduring the year 2016-17 and 2017-18 are as under:-

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(In Mus)

Sr. No Name of Company 2016-17 2017-181 DGVCL 18610 193912 UGVCL 21825 238713 PGVCL 30535 340654 MGVCL 10410 113205 GACL 245 182

TOTAL 81625 88829

ACTIVITY OF POWER TRADING DURING THE YEAR:

In order to avoid the situation of keeping machine idle, to optimize power generation and to reduce overallpower purchase cost, GUVNL has been disposing surplus power of DISCOMs to other States / Utilitiesduring low demand period. GUVNL has been disposing DISCOMs' surplus power and also purchasing powerfor cost optimization purpose through bilateral agreements as well as through Power Exchanges.

In 2017-18, GUVNL has sold 635 Million Units through power exchanges amounting to ` 192 Crs at anaverage rate of ` 3.02/unit. The disposal of surplus power has reduced drastically in the current financialyear primarily due to increased power demand of the State.

During FY 2017-18, owing to non-availability of power from various projects under long term agreement,GUVNL had to purchase power from alternate sources like Power Exchanges, Bilateral arrangement etcto meet the intermittent power requirement. In FY 2017-18, GUVNL has purchased total 5647 MillionUnits at an average rate of ` 4.06/unit under short term arrangement through Power Exchanges & DEEPonline Portal, Govt. of India. GUVNL has made arrangement of adequate power for ensuring continuous& uninterrupted power supply by its Distribution Companies to the consumers.

SUPPLY / DEMAND SCENARIO:

The installed capacity from conventional sources in the State at the end of FY 2017-18 is 19555 MW (ason 31.3.2018) against the peak level demand of 17097 MW in FY 2017-18 (Source: SLDC)

Conventional Capacity to the tune of 1507 MW is planned to be added in next two financial years (i.e.by 31.3.2020) to cater the power demand in the State. Moreover, GUVNL shall be tying up RenewableCapacity from time to time to meet its RPO requirement.

AUGMENTATION OF RENEWABLE ENERGY SOURCES:

Recognizing the significance of pollution free Renewable Power & need of long term energy security, Statehas been rolling out the Renewable Energy Policies from time to time enabling a conducive frameworkfor development of Renewable Projects.

To provide a further impetus to Renewable Energy projects in the State, following Policies, Guidelines& Regulations are in place:

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• Solar Power Policy 2015

• Waste to Energy Policy 2016

• Small Hydel Policy 2016

• Wind Power Policy 2016

• Guidelines - Timelines for speedier installation of Rooftop Solar

• GERC Net Metering Regulations 2016

• Wind Solar Hybrid Policy 2018

Wind-Solar Hybrid Power .Policy would help to minimize generation variability apart from optimally utilizingrequired infrastructure including land and transmission system.

State has developed State of art Solar Park in the country. Solar Park is having 850 MW potential at Charanka,North Gujarat wherein 702 MW capacity is already operational. GUVNL is planning to initiate tenderingprocess for another two Solar Parks Radhanesda Solar Park (700+ MW) and Harshad Solar Park (500+MW).

At the end of FY 2017-18, 1648 MW Solar Capacity is operational in the State which includes 154 MWcapacity from Solar Rooftop Projects and 5575 MW capacity from Wind Energy sources is operational.

Other initiatives:

• Gujarat has become the first state in the country to implement the Flexible Utilization of Coal Policynotified by Ministry of Power, Govt. of India (Case 4). GUVNL has entered into contract for supplyof 500 MW wherein power would be generated by a Generator located in the State of Chhattisgarhand supplied to Gujarat. This has enabled savings in coal transportation cost and supply at competitiverates.

• From FY 2017-18, a special retail Tariff category has been introduced in the State for exclusive EVCharging infrastructure which would support development of infrastructure and promote usage ofE-vehicles in the State.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The details pertaining to Gujarat Electricity Regulatory Commission (GERC) are as under:

(i) GERC vide order dated 03.04.2017 & 29.09.2017 has determined Additional Surcharge to be recoveredby Distribution Companies from Consumers opting to purchase power from other than local DistributionCompany in order to mitigate their fixed cost burden

(ii) GERC vide order dated 23.10.2017 has extended the control period of its Generic Tariff order dated10.11.2016 for Municipal Solid Waste to Energy Projects in the State of Gujarat - from 31.3.2019to 31.3.2021

(iii) GERC vide tariff order dated 31.03.2018 has determined Retail tariff to be recovered by GUVNL'sDistribution companies from its consumers during FY 2018-19

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(iv) GERC vide Tariff order dated 15.03.2018 has determined generic tariff for Biomass based Power Projectsand Baggasse based co-generation Projects for control period upto 31.3.2020.

PROGRESS OF VARIOUS GOVT. SCHEMES :

1. ELECTRIFICATION UNDER TRIBAL AREA SUB-PLAN

Electrification of Agriculture Wells and Petaparas in Tribal Areas under Tribal Area Sub-Plan Schemeis being carried out by DISCOMs. For electrification of AG Wells under Tribal Area, State Governmentis providing Share capital for HT/LT lines, Transformer Centers and Service connection charge. Applicanthas to pay Registration Charge, Security deposit, agreement fee and test report fee only.

For Electrification of Petaparas under Tribal area, demand from minimum 10 applicants in a groupis necessary. For an average of 8 (Eight) poles, minimum 2 (Two) nos. of Lighting/street light connectionsdemand is necessary.

Share Capital of ` 28766.00 lakhs was given to GUVNL for the year 2017-18 to electrify 18,850 Nos.of wells and 12 Nos. of petaparas. Against this, 18,850 wells and 08 Nos. of petaparas were electrifiedat an expenditure incurred of `28766.12 lakhs.

2. AGRICULTURE CONNECTION (Share Capital)

State Govt. desires to electrify more wells to clear back log of huge pending Ag. applications underNormal scheme(including Darkzone). However, for release of such connection to Ag. applicants hugefinancial resources are required by DISCOMs. As the cost of HT, LT line, Transformer center and Serviceconnection charge etc. are not being recovered from the applicants under Normal scheme (includingDarkzone). To minimize the burden on the financial of DISCOMs , state Government has providedfinancial assistance to DISCOMs through GUVNL in the form of share capital contribution.

During the year 2017-18, it was planned to electrify 86,040 Agriculture Wells at an outlay of`1,48,073.20 lakhs under Agriculture Well (Normal & Dark Zone) Scheme. Against this, 88,831 AGWells have been electrified at an expenditure of ` 1,48,073.69 lakhs.

3. SCSP AG Scheme (Share Capital)

Electrification of Agriculture wells of SC Farmers under SCSP AG scheme is being carried out by DISCOMs.The certificate of caste issued by Social Welfare Department must be enclosed with the application.The expenditure of erection of HT- LT lines should be totally covered under the scheme. Applicanthas to pay only Registration Charge, Security Deposit, Agreement Fee and Test report fee. Underthis scheme Guidelines are as per the TASP Scheme.

Provision of ` 2,055.26 lakhs, to electrify 1,263 AG Wells under SCSP Ag. Scheme, is made for theyear 2017-18. Against this, 1,263 wells have been electrified at an expenditure of ` 2,055.26 Lakhs.

4. KUTIR JYOTI SCHEME

In this Scheme Beneficiaries of Tribal area will get connection free of cost with one point wiring,meter and LED/CFL bulb in the Huts. The BPL family or family whose maximum annual income is

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`1,50,000 for urban area and ̀ 1,20,000 for Rural area is eligible to avail Single phase lighting connection.List of beneficiaries will be provided by Prayojana Adhikari. 100% Grant is provided by State Governmentunder Kutir Jyoti scheme.

Grant of ` 570.00 lakhs was given to GUVNL to electrify 12,600 Nos. of Household connections forthe year 2017-18. Against this, 12,946 Nos. of Household connections were given at an expenditureof `570.14 lakhs.

5. ZUPDA VIJLIKARAN SCHEME

In this Scheme Beneficiaries will get connection with one point wiring, meter and one LED/CFL Bulbin the Huts. The BPL family or family whose maximum annual income is `1,50,000 for urban areaand `1,20,000 for Rural area is eligible to avail Single phase lighting connection. List of beneficiarieswill be provided by Nagarpalika / Municipal Corporation/TDO. Huts build on land of Gram Panchayat/ Government / Nagarpalika/Municipal Corporation can be covered but beneficiaries will not rightto be owner of land. 100% Grant is provided by State Government.

Grant of ` 2,300.00 lakhs was given to GUVNL to electrify 38,300 Nos. of household connectionsfor the year 2017-18. Against this, 41,405 Nos. of household connections were given at an expenditureof `2,300.65 lakhs.

6. SCHEDULE CAST SUB PLAN SCHEME

Applicable to Schedule Caste Beneficiaries residing urban & rural areas, without income limit. Theexpenditure of erection of LT lines should be covered under the scheme. If the numbers of applicationsare more than 20 Nos then expenditure of HT lines and Transformer can also be covered under thescheme. All Charges including infrastructure cost provided under this scheme from State Govt. Grant.The certificate of caste issued by Social Welfare Department must be submitted with the application.

Grant of ` 500.00 lakhs was given to GUVNL for the year 2017-18 for electrification of 5,500 Nos.of house hold connection of SC beneficiaries. Against this, 7,164 Nos. of house hold connectionsof SC beneficiaries were electrified at an expenditure of `501.43 lakhs.

7. SAGARKHEDU SARVANGI VIKAS YOJANA

Humidity and the saline atmosphere of the Coastal area cause corrosion of Conductors, corrosionof Poles, failure of Disk and Pin insulators, corrosion of Distribution Boxes, service lines, etc. whichin turn affect the quality of power supply. Therefore to improve the infrastructure and uplift thelife of the people living in the coastal belt, State Government has declared "Sagarkhedu SarvangiVikas Yojana" This Scheme is a 12 point Programme, Energy Development is one of them. This Schemecovers 15 Coastal Districts namely Valsad, Navsari,Devbhumi Dwarka,Gir Somnath, Surat, Bharuch,Anand, Ahmedabad, Jamnagar, Junagadh, Porbandar, Kutchh, Bhavnagar,Rajkot and Amreli comprisingof 42 Talukas. Under this scheme activities such as Strengthening of Distribution line, Strengtheningof Transmission Line with Replacement of Conductors, Erection of new 66 KV Substations are carriedout. Due to these activities people residing in coastal belt get benefit such as noticeable reductionin line faults, availability of quality power supply at adequate Voltage, reduction In losses to the

25


Industries in coastal area, reduction in accidents due to breakage of Conductors, reduction inTransformer failure and reduction in burning of electric motors, reduction in maintenance cost oflines, reduction in Transmission and distribution losses.

During the year 2017-18, ` 42,499.63 lakhs have been spent for strengthening of distribution linewith replacing Conductors, poles, insulators, distribution boxes, service lines, etc, Strengthening ofTransmission lines and creation of new 66 KV sub stations & AG wells under PGVCL's coastal area,against the contribution of ` 42,403.00 lakhs received from the State Govt. in the form of share capitaland grant.

8. Restructured Accelerated Power Development and Reforms Programme. (RAPDRP) Under XIth Plan

The RAPDRP schemes are to be implemented in towns during XI Five year plan as per GoI orderdated: 19.09.2008. The RAPDRP scheme is divided in to three parts i.e. Part-A, Part-B and Part C.The provision under RAPDRP for nation as whole, towards Part A is ` 10,000 Crs, Part B ` 40,000Crs and Part C ` 1177 Crs. during the 11th Five Year Plan. The nodal agency for implementing RAPDRPis Power Finance Corporation Limited (PFC), New Delhi.

The subsidiary companies of Gujarat Urja Vikas Nigam Ltd i.e. Dakshin Gujarat Vij Company Limited- DGVCL, Madhya Gujarat Vij Company Limited - MGVCL, Paschim Gujarat Vij Company Limited -PGVCL, Uttar Gujarat Vij Company Limited - UGVCL are entitled for Part A and Part B.

The part-A consists of converting existing system in to IT base, including consumer indexing, DTRmetering etc. This part is to be implemented within 5 years to avail the benefit of loan as a grant;otherwise it will be treated as loan only as per PFC letter dtd: 11.7.2013.

Total scheme include Data center, Disaster Recovery center, Customer care center, GPS survey,Consumer Indexing, AMR for DTR&HT consumers,GPRS Modem, Hand Held Equipment, Computers,Printers, Servers for Data Center & disaster center , Server at sub division for AMR, Upgradationof existing Network, connectivity Softwares for new applications as mentioned above etc.

Accordingly all the four DISCOMs have submitted their proposals for part A of RAPDRP to NodalAgency,PFC, GoI, New Delhi on 10.02.2009 amounting to `30.81 Crores, ` 89.49 Crores (includingData Center cost and Disaster Recovery cost), ` 75.11 Crores and ` 35.31 Crores respectively. ThePFC in turn released Amount of `195.10 Crores against total amount of ` 230.72 Crore under Part-A by end of 2017-18. Closure proposal considering actual work done worth ` 198.44 Cr. has beensubmitted to PFC.

The Part-B consists of renovation, modernization and strengthening of 11 KV system includingReconductoring, load bifurcation, feeder separation, HVDS, Replacement of Electro Magnetic energymeters with temper proof electronic meters along with strengthening of weak sub transmission systemif required. The loan shall be converted to grant up to 50% if target of AT&C loss is achieved in theproject areas and the project is completed within stipulated time, otherwise it will be treated asa part of central assistance to State.

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The DPR of the Part - B projects for 62 towns were submitted by all DISCOMs DGVCL, MGVCL, PGVCLand UGVCL amounting to ̀ 200.56 Crores, ̀ 177.86 Crores, 656.66 Crores and ̀ 89.12 Crores sanctionedrespectively by M/s PFC. Amount of ̀ 205.62 Crores released by PFC & ̀ 609.00 Cr. arranged by DISCOMs,by borrowing from Bank of Baroda. Closure proposal considering actual work done worth ` 830.99Cr. has been submitted to PFC and same has been approved by PFC.

Detail Project Report of 6 Towns (out of 84 towns selected under Part-A) are sanctioned by PFC at anestimated cost of ` 138.51 Crores for SCADA Part-A. Amount of ` 41.55 Crore have been released byPFC. Expenditure incurred under SCADA Part-A is amounting to `40.15 Crore by end of 2017-18.

The Part C is to be implemented by MOP / PFC.

9. Kisan Heet Urja Shakti Yojana ( KHUSY)

KHUSY is a High Voltage Distribution System of installing smaller size of Distribution Transformersand thereby reduction of LT Lines up to negligible level by converting it into HV Line.

In rural area the existing distribution systems consists of 11KV Lines with lengthy 3 Ph 4 wire LT lines,in this system, the Line Losses are very high; Voltage profile and reliability are also unsatisfactory.

So, to improve Voltage profile in rural area the small capacity of Distribution Transformers are to beinstalled by extending 11KV Line as possible as nearer to the load and Distribution Transformer of thecapacity of 10, 16 KVA are erected and supply is released to consumer through a short length of LTLines preferably through insulated overhead cables known as Aerial Bunched Cable (ABC)/PVC Cable.

In Order to ensure pilferage free system, one of several remedial measures is reducing LT line (System)being exposed to theft. The whole idea is to have Less LT system and gradually move on to LT Lesssystem. Even the short LT Lines are to be laid using ABC /PVC Cables.

During the year 2017-18, it was planned to install 4,750 small capacity transformers at an estimatedcost of ` 7,500 lakhs under Kisan Heet Urja Shakti Yojna (KHUSY) - HVDS, to improve the voltageprofile and reducing the LT line losses in PGVCL area. Against this, 6,369 Small capacity transformersat a cost of ` 7,502.25 lakhs have been installed.

10. Distribution Infrastructure Shifting Scheme (DISS):-

It is essential to shift/replace the distribution lines & related infrastructure in Municipal Corporation& Municipality areas if it is obstructing during road widening or obstructing to the existing roadsin order to provide the essential service of continuous & reliable power supply. During the year 2017-18, `10,076.56 lakhs have been spent for Shifting of Distribution Infrastructures like 11 KV or 22KV HT line, LT line & related infrastructure like Transformer Centers, Poles or replacement of overheadlines by underground cable/Aerial Bunched Cable, etc.

11. Solar Pump Set:-

A Scheme was introduced for providing solar pump set in Agriculture sector in FY 2014-15. Budgetaryprovision of `20,000 Lakhs was made to provide 5,000 Nos. of solar pump sets in Agriculture sectorfor the year 2017-18. Against this, 5,000 solar pumps have been commissioned at an expenditureof ` 21083.21 Lakhs.

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AWARDS/PRIZES:

The State of Gujarat and GUVNL & Subsidiary Companies received various awards/prizes for outstandingachievements in the Energy Sector. The details of 2017-18 further to the last Annual Report are givenhereunder.

• Subsidiary Company PGVCL received award of 5th Annual Integrated Rating of State Distribution Utilitiesby MoP (For very High Operational and Financial Performance Capability: A+ Rating) given by Ministryof Power, New Delhi in May 2017

• Subsidiary Company DGVCL received award of 5th Annual Integrated Rating of State Distribution Utilitiesby MoP (For very High Operational and Financial Performance Capability: A+ Rating) given by Ministryof Power, New Delhi in May 2017

• Subsidiary Company UGVCL received award of 5th Annual Integrated Rating of State Distribution Utilitiesby MoP (For very High Operational and Financial Performance Capability: A+ Rating) given by Ministryof Power, New Delhi in May 2017

• Subsidiary Company MGVCL received award of 5th Annual Integrated Rating of State Distribution Utilitiesby MoP (For very High Operational and Financial Performance Capability: A+ Rating) given by Ministryof Power, New Delhi in May 2017

• Subsidiary Company GSECL TPS Gandhinagar received award for Clean Generator of the year (ForEnvironmental Protection & clean energy generation - Trophy) given by Mission Energy Foundation,New Delhi on 22-09-2018

• Subsidiary Company GETCO-SLDC received IPPAI Power Award 2017 (For Innovations recognized incategory of innovation in improving the efficiency of load dispatch centre-Recognition) given byIndependent Power Producers Association of India on 28.10.2017

• Subsidiary Company DGVCL received IPPAI Power Award 2017 (For Best Performing DistributionCompany - Winner-Trophy & Certificate) given by Independent Power Producers Association of India- Award ceremony at Belgaum, Karnataka on 28.10.2017

• Subsidiary Company UGVCL received IPPAI Power Award 2017 (For Best Performing DistributionCompany -Winner-Trophy & Certificate) given by Independent Power Producers Association of India- Award ceremony at Belgaum, Karnataka on 28.10.2017

• Subsidiary Company PGVCL received IPPAI Power Awards 2017 (For Best Performing DistributionCompany-Trophy & Certificate) given by Independent Power Producers Association of India - Awardceremony at Belgaum, Karnataka on 28.10.2017

• GUVNL received (on behalf Govt. of Gujarat) 5th Innovation with Impact Awards for DISCOMs 2017by ICC (For Best State Power Utility Award where in Gujarat ranked FIRST among all Indian statesbased on the findings of ICC Power Rating Report - Trophy & Certificate) given by Indian Chamberof Commerce - Kolkata, at 11th India Energy Summit & Awards 2017 held in Delhi on 29.11.2017

• Subsidiary Company DGVCL received 5th Innovation with Impact Awards for DISCOMs 2017 by ICC(For Ranked 1st under category of 'Uday Performance Award' for progress made for various parameters

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- Trophy & Certificate) given by Indian Chamber of Commerce - Kolkata, at 11th India Energy Summit& Awards 2017 held in Delhi on 29.11.2017

• Subsidiary Company MGVCL received 5th Innovation with Impact Awards for DISCOMs 2017 by ICC(For Ranked 2nd under category of 'Uday Performance Award' for progress made for various parameters- Trophy & Certificate) given by Indian Chamber of Commerce - Kolkata, at 11th India Energy Summit& Awards 2017 held in Delhi on 29.11.2017

• Subsidiary Company DGVCL received 5th Innovation with Impact Awards for DISCOMs 2017 by ICC(For Ranked 3rd under category of Green Grid Award for new and positive steps to increase systemefficiency, effectively managing supply demand situation - Trophy & Certificate) given by IndianChamber of Commerce - Kolkata, at 11th India Energy Summit & Awards 2017 held in Delhi on 29.11.2017

• Subsidiary Company GSECL received Power Plant Performance-Expo Award 2018 (Award for Powerplant performance (Coal) category - Trophy) given by Mission Energy Foundation in the year 2018

• Subsidiary Company PGVCL received award for Urja Mitra application (For active participation in UrjaMitra Scheme & enhancing Transparency & Accountability in Power Distribution Sector -Certificate)given by REC-TPCL on Feb-2018

• Subsidiary Company DGVCL received ISGF Innovation Awards 2018 (For Won the Platinum level awardunder 'Best Rural Electrification Projects by Utility' category - Trophy) given by India Smart Grid Forum- New Delhi on 08.03.2018

BRIEF DETAILS OF E-URJA PROJECT & INITIATIVES TAKEN FOR VARIOUS IT ACTIVITIES:

• Mobile Application for 'payment through IOT' has been implemented for all DISCOM's.

• Mobile application for complaint redressal system has been developed in-House and integrated withCRM.

• Integration with CM Dash board for Generation, Transmission and Distribution data has been carriedout.

• 10 more new Hospitals covered under Medical portal 'e-Aarogyam' for online monitoring of patientsunder cashless scheme.

• Work is on for GSWAN connectivity for Digital Gujarat portal integration and Video conferencing facility.

• Initiative taken for on line vendor registration system, development is under process.

• Online GPRS based Spot-Billing system has been implemented in all DISCOMs through seamlessintegration with e-Urja & portal.

• SMS enabled service implemented to update the consumers about status of their transaction withthe company under 'ease of doing business'

• New Web based 'i-FAS' system developed for Finance & Accounting for all companies as per statutoryrequirement, replacing old legacy application.

• Renewal of Oracle Annual Technical Support (ATS) up to 24-02-2018 for smooth operation of existinge-Urja system.

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• Renewal of Maintenance support order to M/s. Wipro up to 05-08-2018 for smooth operation &to run the existing e-Urja application efficiently.

• Replacement of obsolete computing hardware & successful migration of database & application onnew P8 power sever has been carried out for strengthening of the existing implemented e-Urja system,

• Initiatives taken for review of Smart Grid pilot project with external committee members.

• Introduction of online payment collection of Electricity Bills of GUVNL DISCOMs on Paytm, VodafonemPesa Mobile App, wallet and sites.

• Implementation of Solar Roof-Top billing in the e-Urja system.

• Development of new designing in RAPDRP portal in line of the change in I.F. Portal for real-time datamonitoring, under ease of doing business.

• Development & incorporation of temporary consumer billing in the system.

• Incorporation of 'Ujala' LED bulb payment process in e-urja project.

• Development & implementation of GST including Meter Rent in e-Urja project.

• Development of new process for material transaction & accounting from sub- division & contractorhas been developed & implementation is under process.

• Standing winner of 'Infosec Maestros Awards-2017' for top 100 CIO in Information sector domainin India.

GETRI ACTIVITIES :

Gujarat Energy Training and Research Institute (GETRI) is an autonomous institute promoted by GujaratUrja Vikas Nigam Limited and its group companies and registered under Bombay Public Trust Act. Thisinstitute has been established with a view to provide a platform for continuous development of employeesby imparting various training, supported by research and documentation of best practices needed in themodern era.

To provide trainings at the GUVNL's subsidiary Companies' door step, GETRI has 12 numbers of trainingunits called Gujarat Energy Knowledge Centre (GEKCs) across Gujarat, which include 10 Nos. for Distribution,one for Transmission and one for Generation, located at Surat, Vadodara [1 No. of Transmission & 1 ofDistribution], Vallabh Vidyanagar, Wanakbori (Power station), Sabarmati, Mahesana, Rajkot, Jamnagar,Porbandar, Bhuj & Bhavnagar where various trainings are provided to employees.

The institute aims at improving efficiency of all employees working in GUVNL and its Group Companiesby imparting systematic training and to create learning in the organization. So that employees workingin different Group Companies can meet the need of modern organization and globalization. For this, GETRIorganises various Training Programmes covering Technical Subjects, HR, Finance & Accounts, Commerce,IT/Computer, Soft skill, Customer Care and Safety etc. also programmes on different important topicsof Power Sector through In-house/ External Faculty at GETRI as well as at GEKCs are regularly conducted.

Executives/ Officers and Staff are also nominated for training/ Conference/ Seminar conducted by externalagencies/ institutions located in different parts of India to upgrade their knowledge.

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In the Last two years, i.e. during 2016-18 along with the Canteen & hostel Rooms, GETRI renovated itsLibrary. It contains approx.. 6300 Books. New 5 PCs with Internet are installed in the Library to have approachof Global Knowledge. Also 45 Nos. of PCs are replaced having latest configurations in the Admin Block& also in Computer lab.

GETRI activities/achievements during Year 2017-18 are as under :-• GETRI has trained total 85,919 Employees of GUVNL & its Subsidiaries Company with total training

Man Days equal to 1,27,827.• GETRI has organized 8 batches of "Six weeks Induction Training" for newly recruited JE(VS) of DISCOMs

in which 311 engineers were trained.• GETRI has organized 3 batches of "One weeks Induction Training" for newly recruited JE(VS) of GETCO

in which 250 engineers were trained.• All 10 GEKC of DISCOMs have organized 10 Days Induction Training for newly recruited JA(VS), in

which 1,097 Junior Assistances were trained.• Seventh batch of Executive Certificate Programme in Power Management for 25 Engineers of all group

Companies was conducted at PDPU.• Total 58 National Training Programmes for C&D employees were conducted by four DISCOMs.• Total 2,480 Man Days achieved by deputing GUVNL and Companies Employee for External Training

programmes in various renowned Institutions like ESCI, NPTI, CIRE, PMI, CII, CBIP, ERDA, MSU, PDPU,SPIPA, BMA and at other Institutes.

• GETRI arranged "One Week Management Development Training Program" for Senior Officers ofDISCOMs at IIM Ahmadabad, 27 Engineers/ Senior Officers were trained.

• Safety program is introduced for Employees of GSECL & 4 DISCOMs at GEKC, and Total 2171 Employeesof GSECL & 3078 Employees of 4 DISCOMs were trained.

• Central Electricity Authority has certified GETRI as Category-I Grade "A" Training Institute in the fieldsof Thermal Generation, Transmission and Distribution.

Training Details during Year 2017-18:

Sr. Training Particulars No. of No. of No. ofNo. Training Employees Training

Programmes Trained Man-day01 GETRI 243 6,706 22,89502 External Training 168 839 3,44603 Generation Training (WTPS) 66 1,670 5,36204 GEKCs - (1-GETCO & 10-DISCOMs) 1,934 64,982 85,67205 Other in-house trainings (i.e. Corporate, 561 11,722 10,452

P.S, Zone, Circle, Division etc. level)TOTAL 2,972 85,919 1,27,827

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HUMAN RESOURCES :

Company endeavors to provide an environment so that each employee is motivated to contribute his/her best to achieve the Company's Goals/Objectives. The Company has taken series of proactive HRinitiatives including need based training and development programmes with special emphasis on developingcompetencies of employees and thereby enhancing organizational effectiveness. The number of employeesworking in GUVNL as on 01-04-17 were 304, during the year 15 employees were added and 25 employeesreduced and number of employees as on 31-03-18 were 294.

INDUSTRIAL RELATIONS DURING THE YEAR:

The overall Industrial Relations under GUVNL and its subsidiary companies remained harmonious andno major incidence of industrial unrest occurred during the whole year.

STAFF WELFARE ACTIVITIES:

Employee Welfare plays an important role to cultivate the qualities of greater involvement and deeperunity amongst the employees and also works as motivation to the employees. GUVNL has taken utmostcare and given ample importance in the field of welfare activities. Apart from Statutory Welfare Provisions,the Company has given due importance to the non-statutory welfare activities. A good number of welfareactivities have continued to be handled in GUVNL even for subsidiary companies for the sake of synergy,coordination and functional needs. A number of staff welfare activities were carried out during the yearlike sports, AIESCB tournaments, Grant to Employees Organization for cultural programmes, Inter CompanyMusic Competition, Inter Company Drama Competition, Loans to cooperative Society, Staff VoluntaryRetirement cum death Benevolent Fund Scheme, Merit Awards to the employees and their family membersfor their bright performance in the field of Education, Sports and Fine Arts, Sports Complex at Vidyutnagarcolony, Vadodara, Gymnasium at Corporate office, Colony and GETRI etc.

VIGILANCE ACTIVITIES/INITIATIVES:

The details of significant achievements and initiatives during the financial year 2017-18 are mentionedas per following.

Achievements:-

A. GUVNL Vigilance Department have arranged maximum mass checking drives in FY: 2017-18 comparedto previous FY:2016-17. The comparison mentioned in following table.

FY: 2016-17No. of Total Assessment

Discoms Drive Connections Detections In lakhChecked

DGVCL 14 39203 2889 996.03MGVCL 6 12459 1506 288.54UGVCL 6 16851 1600 426.36

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PGVCL 11 34522 5899 903.26Total 37 103035 7499 2614.19

FY: 2017-18

No. of Total AssessmentDis-com Drive Connections Detections In lakh

Checked

DGVCL 9 26912 2005 640.65

MGVCL 6 9657 1339 243.37

UGVCL 11 38995 4228 1023.66

PGVCL 14 48866 8502 1185.70

Total 40 124430 16074 3093.38

Total vigilance activity of all Dis-coms is as bellow.

IC report of all Dis-coms for FY: 2017-18

Sr. No. Dis-com Connection Detection AssessmentChecked in Crore

1 DGVCL 557662 14189 55.47

2 MGVCL 190649 30078 48.64

3 UGVCL 605453 14221 41.58

4 PGVCL 659172 99030 91.26

Total 2012936 157518 236.95

Total 11 Nos. of motive connections also booked in theft having an assessment of 363.59 lakhs duringthe FY: 2017-18.

Initiatives:-

• Consumer data collected in android mobile application in DGVCL and this app. is being experimentedin DGVCL. The results are satisfactory as the consumption history and all meter data of consumeris available on mobile and this data is very much useful in odd hours' checking in urban or remoteareas. Vigilance department, GUVNL is planning the availability of the same mobile app. to all Dis-coms.

• High unit loss feeders (MUS) focused instead of high % (percentage) loss feeders.

• Online FIR procedure for cases booked under section 135 and 138 of IE Act 2003 is under process.

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DIRECTORS

A. Changes in Directors and Key Managerial Personnel

Since the last 13th Annual General Meeting held on 26-12-2017, the changes among the Directorsand Key Managerial Personnel are as under:

In terms of Notification No. AIS\35.2018\24\G dated 12-July-2018 issued by the General AdministrationDepartment, the Government of Gujarat appointed Shri Raj Gopal, IAS (DIN 02252358) as PrincipalSecretary, Energy & Petrochemicals Department vice Shri Sujit Gulati,IAS (DIN 00177274) transferred.Consequently, Shri Sujit Gulati,IAS, tendered his resignation dated 16-07-2018 from the Board ofDirectors of the Company. The Board place on record its sincere appreciation for the valuable servicesrendered by Shri Sujit Gulati, IAS during his tenure as Chairman on the Board of the Company.

Further E&P Department , Govt. of Gujarat vide Resolution No. GUV-1108-1336-K dated 7th August,2018 nominated/appointed Shri Raj Gopal,IAS as Chairman of the Company vice Shri Sujit Gulati,IAS who has already tendered his resignation from the Board w.e.f. 16-07-2018. The nomination ofShri Raj Gopal,IAS as Chairman of the Company w.e.f. 07-08-2018 was noted vide Board Resolutionpassed on 24-08-2018.

The second and final term of existing Independent Directors of the Company Shri Bimal Patel andShri R.N.Singh expired on 12-03-2018 and accordingly they ceased to be the Independent Directorson expiry of their second term. Therefore, as approved by competent authority, a new panel ofIndependent Directors was suggested to Govt. of Gujarat well in advance vide letter No. GUVNL/CS/428 dated 11-07-2017 so that Govt. may get sufficient time to approve the panel of names forappointment as Independent Directors on the Board of GUVNL and Subsidiaries.

The Energy & Petrochemicals Department, Govt. of Gujarat vide letter No. GUV-1108-3747-K dated05-10-2018 from OSD (Power) informed that State Government has decided to appoint theIndependent Directors as per the list attached with the aforesaid letter of Govt. on the Boards ofGUVNL and its Subsidiary Companies for two years. Accordingly, the Company approached therespective Directors for obtaining their consent. Upon receipt of consent and all requisite statutorydocuments, Shri Narendra Nath Misra (DIN 00575501 ) was appointed as an Additional Director andalso as an Independent Director by the Board at its meeting held on 1-11-2018 for a first term oftwo years subject to approval of shareholders.

Further upon receipt of consent and all requisite statutory documents, Shri Rakesh Chander Dhup(DIN 08275424) was appointed as an Additional Director and also as an Independent Director bythe Board at its meeting held on 24-12-2018 for a first term of two years subject to approval ofshareholders.

Shri N.N.Misra (DIN 00575501) and Shri R.C.Dhup (DIN 08275424) will hold office as an AdditionalDirector till the date of ensuing AGM. The Notice convening the Meeting includes an item underSpecial Business relating to their appointment to the office of Director and also for approval to his

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appointment as Independent Director. Your Directors recommend their appointment to the officeof Director and also to approve their appointment as Independent Director of the Company.

B. Declaration of Independent Directors :

Pursuant to the provisions of Section 149(6)/(7) of the Companies Act, 2013 and the relevant Rules,the Company has received necessary declarations from each Independent Director for the FY 2017-18 confirming that they meet the criteria of independence as prescribed under the Act. The Companyalso received declaration of independence from Shri N.N.Misra and Shri R.C.Dhup who were appointedas an Independent Director w.e.f. 1-11-2018 and 24-12-2018 .

C. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board committeesand individual directors including Independent Directors pursuant to the provisions of the Act.

The performance of the Board was evaluated by the Board after seeking inputs from all the directorson the basis of the criteria such as the Board composition and structure, effectiveness of Boardprocesses, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from thecommittee members on the basis of the criteria such as the composition of committees, effectivenessof committee meetings, etc.

The Board reviewed the performance of the individual directors and Independent Directors on thebasis of the criteria such as the contribution of the individual director to the Board and committeemeetings like preparedness on the issues to be discussed, meaningful and constructive contributionand inputs in meetings, etc.

In a separate meeting of independent Directors, performance of non-independent directors,performance of the board as a whole and performance of the Chairman was evaluated, taking intoaccount the views of directors. The same was discussed in the Board meeting, at which the performanceof the Board, its committees and individual directors was also discussed.

D. Policy on Directors' Appointment etc.

The Company being a Government Company, the provisions of Section 134(3)(e) of the CompaniesAct, 2013 are not applicable in view of the Notification No. GSR-163(E) dated 05-Jun-2015 issuedby the Ministry of Corporate Affairs, Govt. of India.

E. Meetings of the Board and Committees thereof

As required under Clause-9 of the Secretarial Standard-1 (SS-1), the details of the number and dateof Meetings of Board of Directors and Committees of the Board held during the Financial Year 2017-18 and the attendance of Directors is as under:

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During 2017-18 During 2017-18 During 2017-18 During 2017-18Total Seven (7) Total Six (6) Total One (1) Total Two (2)Board Meetings Audit Committee meeting of CSR Committee

were held as Meetings were Independent Meetings wereunder : held as under: Directors was held as under:

held as under:

26-05-2017 12-03-2018 04-12-2017Name of 11-08-2017 26-05-2017 09-01-2018Director/Member 22-09-2017 22-09-2017of Committee 17-11-2017 17-11-2017

18-12-2017 18-12-201723-02-2018 23-02-201827-03-2018 12-03-2018

Meeting held Meeting held Meeting held Meeting heldduring tenure/ during tenure/ during tenure/ during tenure/

Attended Attended Attended Attended

Shri Sujit Gulati,IAS 7/7 -- --

Shri Pankaj Joshi, IAS 7/7 -- 2/2

Ms. Mona Khandhar,IAS 7/3 -- --

Shri R.N. Singh 6/6 6/6 1/1 --

Shri Bimal N. Patel 6/4 6/4 1/1 2/2

Shri Sanjeev Kumar, IAS 1/1 1/1 - --

Shri Milind Torawane,IAS 6/6 5/5

Shri P.J. Mathew 1/1 1/1 -- --

Shri S.B. Khyalia 7/7 6/5 2/2

Shri K.M.Bhuva 7/7 -- -- --

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION :

Since the company is engaged in power trading business, the provisions relating to above details are notapplicable to the Company. However brief details of energy conservation measures taken through Discomsare given hereunder for information.

For the year 2017-18, a total budget provision of `3,372.25 lacs was made under Energy ConservationProgramme.

HVDS is Conversion of Low Voltage Distribution System(LVDS) into High Voltage Distribution System(HVDS)by installing smaller size of Distribution Transformers and thereby reduction of LT Lines up to negligiblelevel by converting it into HV Line.

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To improve Voltage profile in rural area the small capacity of Distribution Transformers are to be installedby extending 11KV Line as nearer to the load as possible and Distribution Transformer of the capacityof 10, 16 KVA are erected and supply is released to consumer through a short length of LT Lines preferablythrough insulated overhead cables known as Aerial Bunched Cable (ABC)/PVC Cable. In Order to ensurepilferage free system, one of several remedial measures is reducing LT line (System) being exposed totheft. The whole idea is to have Less LT system and gradually move on to LT Less system. Even the shortLT Lines are to be laid using ABC/PVC Cables.

During the year 2017-18, Total 2,652 Nos. of small capacity transformers installed under KHUSY at theexpenditure of ` 3096.02 lacs.

Further, under Energy conservation a special fund is being allocated for IEC (Information, Education &Communication) purpose for public awareness activities like seminars, raily , urja rangoli, slogan / drawingcompetitions etc. During the year 2017-18, Expenditure of ` 276.23 Lacs has been booked against IECactivity.

RESEARCH AND DEVELOPMENT:

During the current Financial Year, the Company has started a Research & Development (R&D) Cell in thecampus of IIT, Gandhinagar. The details of expenditure incurred during the year is as under:

Particulars Amount (` in lakhs)Capital ExpenditureComputers and related Equipments 15.28Less: Depreciation for the year 1.14Total Capital Expenditure: 14.14Revenue Expenditure:Employee Benefits 105.70Material Consumed 0.80Administrative and Misc. Expenses 30.24Depreciation 1.14Total Revenue Expenditure: 137.67Total Research and Development Expenditure: 151.81

FOREIGN EXCHANGE EARNINGS AND OUTGO:During the year under review, there was no foreign exchange earning or outgo.

DIRECTORS' RESPONSIBILITY STATEMENT:To the best of knowledge, belief and according to the information received, the Board of Directors confirmas under for the financial year 2017-18 in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followedalong with proper explanation relating to material departures;

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

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

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

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

AUDIT COMMITTEE:

The Audit Committee was constituted on the terms of reference as prescribed under Section 177 of theCompanies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its powers) Rules,2014. There were six meetings held during the Financial Year 2017-18 The recommendations made bythe Audit Committee during the year were accepted by the Board. Composition of Audit Committee ason/up to 12/03/2018 was as under:

1 Shri Milind Torawane, IAS Chairman

2 Shri R.N. Singh Member

3 Shri Bimal N. Patel Member

4 Shri S.B. Khyalia Invitee

The second and final term of Shri Bimal Patel and Shri R.N.Singh, the existing non- executive IndependentDirectors, expired on 12/03/2018. Therefore, they ceased to be the member of the Audit Committee.

On appointment of new Independent Directors by the Board, the Audit Committee was re-constitutedw.e.f. 24-12-2018 consisting of the following members:

1 Shri Milind Torawane,IAS, FD Nominee Director, Chairman

2 Shri N.N.Misra, Independent Director, Member

3 Shri R.C.Dhup, Independent Director, Member

4 Shri S.B.Khyalia, Director(Finance), Invitee

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has constituted a 'Corporate Social Responsibility' (CSR) Committee In accordance with Section135 read with the Companies (CSR Policy) Rules, 2014. The Annual Report on Corporate Social Responsibilityactivities is attached as Annexure-1 which forms part of this Report. The CSR Policy adopted by the Companyis posted on the Company's website at www.guvnl.com.

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VIGIL MECHANISM WHISTLE BLOWER POLICY :

As required under the provisions of Section 177(9) of the Companies Act, 2013, the Company has establisheda Vigil Mechanism (Whistle Blower Policy). All employees of the Company and Directors on the Boardof the Company are covered under the Mechanism. The Vigil Mechanism (Whistle Blower Policy) of theCompany is available on the website of the Company at www.guvnl.com.

NOMINATION AND REMUNERATION COMMITTEE AND POLICY:

Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board of Directors has constitutedNomination and Remuneration Committee. The Ministry of Corporate Affairs, Govt. of India has videNotification No. GSR-163(E) dated 05-Jun-2015 has modified the application of provisions of Section 178for Government companies so as to apply the same with regard to appointment of 'senior management'and other employees. The Board has on the recommendation of the Committee formulated RemunerationPolicy for senior management and other employees.

The second and final term of Shri Bimal Patel and Shri R.N.Singh, the existing non- executive IndependentDirectors, expired on 12-03-2018. Therefore, they ceased to be the member of the Nomination &Remuneration Committee. On appointment of new Independent Directors by the Board, the Nominationand Remuneration Committee was re-constituted effective from 24th December, 2018 consisting of thefollowing members:

Shri Milind Torawane,IAS, FD Nominee Director, Chairman

Shri N.N.Misra, Independent Director, Member

Shri R.C.Dhup, Independent Director, Member

RISK MANAGEMENT:

The elements of risk threatening the Company's existence are very minimal. However, as required by Section134(3)(n) of the Companies Act, 2013, the Company has framed Risk Management Policy to identify variouselements of risk and steps taken to mitigate the same. As an enterprise engaged in trading of electricityand a holding Company of six subsidiary companies engaged in the business of generation, transmissionand distribution, the Company has always had a systems-based approach to Business Risk Management.The risk management includes identifying types of risks and their assessment, risk handling and monitoringand reporting. The Risk Management framework primarily focuses on following elements:

• Risk to Company's assets and properties

• Employees related risks

• Risks associated with non-compliance of statutory enactments

• Risk of Inflation and Cost Structure

• Credit Risk

• Liquidity Risk

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• Operational Risk

• Regulatory Risk

• Network Risk

• Fuel availability and price fluctuation Risk

• Risk of monsoon failure

• Risk of compensation to third parties due to electrical accidents and burning of crop

• Risk of dependence on Government of Gujarat for share capital contribution, grants and subsidies

EXTRACT OF ANNUAL RETURN:

The information required to be disclosed pursuant to Section 134(3)(a) of the Companies Act, 2013 withrespect to extract of Annual Return pursuant to the provisions of Section 92 read with Rule-12 of theCompanies (Management and Administration) Rules, 2014 is furnished in Form MGT-9 as Annexure-2and attached to and forming part of this Report.

RELATED PARTY TRANSACTIONS:

All transactions entered with related parties for the year were on arm's length basis and were in theordinary course of business. The Company has adopted a Related Party Transactions Policy and Procedure.All related party transactions were placed before the Board. Omnibus approval was obtained for transactionswhich are of repetitive nature.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statementscommensurate with the size and nature of its business.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION& REDRESSAL) ACT, 2013:

In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition& Redressal) Act, 2013, an 'Internal Complaints Committee' has been constituted in the Company forredressal of complaints against sexual harassment of women employees. During the year under review,the Company had received Nil complaint.

AUDITORS:

[A] STATUTORY AUDITORS AND THEIR REPORT:

As your Company is a Govt. Company , M/s. Mukund & Rohit, Chartered Accountants, Vadodara wereappointed as the Statutory Auditors of the Company by the Comptroller and Auditor General of India,New Delhi, (C&AG) to audit the accounts of the Company for the Financial Year 2017-18. They haveaudited the Financial Statements (Stand Alone and Consolidated) for the year ended 31-March-2018and submitted their Report.

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There were no qualifications, reservations or adverse remarks made by the Auditors (Stand Aloneand Consolidated) in their Report except as mentioned hereunder in case of Consolidated FinancialStatements. The Notes to the Financial Statements are self-explanatory and therefore, do not callfor any further comments.

In the Auditors' Report on Consolidated Financial Statements, the Auditors have reproduced thequalifications/emphasis, if any, of the respective Subsidiary Companies which do not call for anycomments in the Directors' Report of the Company. However as a prudent practice, the qualificationsof Statutory Auditors of Subsidiary Companies viz. GSECL and UGVCL alongwith management repliesof respective subsidiary company are reproduced as Annexure-3(i) and 3(ii).

The C&AG of India has appointed M/s Mukund & Rohit, Chartered Accountants, Vadodara as StatutoryAuditors (Stand Alone and Consolidated) for F.Y. 2018-19. Their remuneration is to be decided bythe Members as per section 142 of the Companies Act,2013. An item of ordinary business has beenincluded in the notice of ensuing Annual General Meeting in this regard.

[B] C&AG'S COMMENTS:

The Comptroller & Auditor General of India (C&AG) have conducted supplementary audit under Section143 of the Companies Act, 2013 of the Financial Statements(Stand Alone and Consolidated) of theCompany for the year ended on 31-March-2018.

The C&AG has issued Nil Comment on Stand Alone Financial Statementsvide Letter No. ES-I/A/cs/GUVNL(Stand)\2017-18\786 dated 29-11-2018, a copy of which is placed in this Annual Report.

Further C&AG has issued three Comments on Consolidated Financial Statements vide Letter No. ES-I/HQ II/A/cs/GUVNL/2017-18/859 dated 21-12-2018, a copy of which is placed in this Annual Report. Asrequired by the provisions of Section 134(3)(f), the management reply by the Board is furnished asAnnexure-4 and attached to and forming part of this Report.

The Subsidiary Companies viz. GSECL, GETCO, MGVCL, DGVCL,UGVCL and PGVCL havereceived comments from C&AG. As a prudent practice, the C&AG Comments of Subsidiary Companiesalongwith management reply of the Board of respective subsidiary company are reproduced asAnnexure 4(i) to 4(vi).

[C] COST AUDITOR:

In terms of the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Recordsand Cost Audit) Rules, 2014, the Board of Directors appointed M/s Y S Thakar & Co., Cost Accountants,Vadodara as Cost Auditors for the Financial Year 2017-18 for auditing the cost accounting recordsrelating to Electricity Industry product. The Cost Audit Report for the Financial Year 2017-18 wasfiled / uploaded on the MCA Portal on 9-10-2018 within stipulated time. The Board of Directors onrecommendation of Audit Committee appointed M/s. Y.S.Thakar as a Cost Auditor for the F.Y. 2018-19. As required under the Section 148 of the Companies Act, 2013 read with Companies (Audit andAuditors) Rules, 2014 ,the Directors recommend their remuneration for the Financial Year 2018-19for your ratification.

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[D] SECRETARIAL AUDITOR:

In terms of the provisions of Section 204 of the Companies Act, 2013, the Company has appointedM/s. Sandip.K.Shukla , Practicing Company Secretaries, Vadodara for conducting Secretarial Auditfor the Financial Year 2017-18. M/s. Sandip.K.Shukla, Practicing Company Secretaries, Vadodara haveissued Secretarial Audit Report (Form MR-3) for the Financial Year 2017-18 which is attached asAnnexure-5 and is forming part of this Report. There were no adverse comments, qualifications orreservations or adverse remarks in the Secretarial Audit Report.

OTHER DISCLOSURES:

a) There was no unpaid or unclaimed dividend declared and paid and therefore, no disclosure is requiredto be made pursuant to the provisions of Section 125 of the Companies Act, 2013.

b) There was no change in the nature of business of the Company during the year.

c) No material changes and commitments affecting the financial position of the Company occurredbetween the end of the financial year to which these financial statements relate and the date ofthis Report.

d) The Company is engaged in the trading of power which is covered under the exemption providedunder Section 186(11) of the Companies Act, 2013 read with Notification No. GSR-163(E) dated 05-Jun-2015 issued by the Ministry of Corporate Affairs, Govt. of India. Accordingly, details of loan given,investment made or guarantee or security provided by the Company are not required to be reported.

e) The Company has six subsidiary companies, one Associate Company and one Subsidiary CompanyGSECL has a Joint Venture Company as per the details given elsewhere in this report

f) The Company being a Government Company is exempted as per Gazette notification dated June 05,2015 issued by the Ministry of Corporate Affairs, Govt. of India, to furnish information as requiredunder Section 197 of the Companies Act, 2013 read with the Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014.

g) During the year under review, the Company has neither accepted nor renewed any deposits covered/as defined under Chapter-V of the Companies Act, 2013 read with the Companies (Acceptance ofDeposits) Rules, 2014.

h) There were no instances of frauds identified or reported by the Statutory Auditors during the courseof their audit pursuant to Section 143(12) of the Companies Act, 2013.

i) No Significant or material orders were passed by the Regulators or Courts or Tribunals which impactthe going concern status and the Company's operations in future except as stated elsewhere in thisreport.

j) The Company has complied with the applicable Secretarial Standards.

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ACKNOWLEDGEMENT:

Your Directors place on record their appreciation for the valuable guidance, support and assistance receivedfrom the Ministry of Power, Govt. of India, Government of Gujarat, GERC and other Central and StateGovt. Authorities/Departments, Banks, Financial Institutions, GSFS, GPCL,GIPCL and for the valuable servicesrendered by the employees of the GUVNL and its Subsidiary Companies.

For and on behalf of the Board

Raj Gopal,IASDate : 24-12-2018 ChairmanPlace: Gandhinagar DIN - 02252358

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1. A brief outline of the company's CSR policy, including overview of projects or programsproposed to be undertaken and a reference to the web-link to the CSR policy and projectsor programs.

'Corporate Social Responsibility (CSR) Policy of Gujarat Urja Vikas Nigam Limited (GUVNL)'encompasses the Company's philosophy for delineating its responsibility as a corporate citizenand lays down the guidelines and mechanism for undertaking socially relevant programs forwelfare and sustainable development of the community at large.

This Policy shall apply to all CSR initiatives and activities taken up by the Company at theCompany's areas of operations and also within the State of Gujarat and in any other partsof the country, for the benefit of the different segments of the society provided that thepreference shall be given to the local areas and areas where the Company operates forundertaking the CSR activities.

In alignment with vision of the Company, GUVNL, through its CSR initiatives, shall continueto enhance value creation in the society and in the community in which it operates, throughits services, conduct and initiatives, so as to promote sustained growth for the society andcommunity.

The CSR Projects and Programmes undertaken will be within the broad frame work of ScheduleVII of the Companies Act, 2013 and will be identified and funds allocated, on a yearly basis,as per the need assessment specific to the location, target beneficiary and agency partneringfor the implementation.

The CSR Policy may be accessed on the Company's website: http://www.guvnl.com

2. The Composition of the CSR Committee

1. Shri Pankaj Joshi, IAS, Managing Director …. Chairman

2. Shri Bimal Patel , Independent Director …. Member (up to 12-03-2018)

3. Shri S.B.Khyalia, Director (Finance) …. Member

4. Shri N.N.Misra, Independent Director …. Member (w.e.f. 01-11-2018)

3. Average net profit of the Company for last three financial years

Average Net Profit (2014-15 to 2016-17) ` 12228.03 Lakhs

4. Prescribed CSR Expenditure(two percent of the amount as in item 3 above)

` 244.56 Lakhs

Annexure -1Annual Report on Corporate Social Responsibility (CSR)

activities for the Financial Year 2017-18.

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(1) (2) (3) (4) (5) (6) (7) (8)Sr. CSR Project Sector in Projects or Amount Amount Cumulative AmountNo. or activity which the programs outlay spent on expenditure spent:

identified project is (1) Local area (budget) the Projects upto the Direct orcovered or other Projects or or programs reporting though

programs (1) Direct period implementing(2) specify the wise expenditure agency

state and (`) on projectsdistrict or programs

where projects (2) overheador programs (`)

was undertaken1 Contribution to Promotion

ShramMandir Trust of sanitationengaged in the especiallywelfare of leprosy increase inaffected persons for facilities Local 31.50 Lakhs 13.15 Lakhs 31.17 Lakhs ThroughRenovation/ for people Vadodara No overheads Project ShramMandirConstruction of with Completed TrustSanitation Blocks leprosy/at ShramMandir disabliltyTrust, Vadodara

2 Contribution to Promotion'Society for the of sanitationTraining and especially Vocational increase in ThroughRehabilitation of facilities Local 4.98 Lakhs 3.95 Lakhs 3.95 Lakhs 'Society for thethe Disabled' for for people Vadodara No overheads Project Training andConstruction of with Completed VocationalSanitation Blocks disablilty Rehabilitationand performance of the Disabled'stage forhandicapped

3 Contribution ThroughGujarat National Promotion to Gandhinagar 5 Lakhs 5 Lakhs 5 Lakhs GujaratLaw University for education No overheads Nationalconference support Law University

4 Contribution to PromotingGujarat CSR educationAuthority in including Through'GCSRA Special special Vadodara 60 Lakhs 25 Lakhs 60 Lakhs Gujarat CSRChildren's Fund' education, No overheads Authorityfor "Project for especiallySpecial Children" among specialimplementation children

5. Details of CSR spent during the financial year:-

a) Total amount to be spent for the financial year … ` 244.56 Lakhs

b) Amount unspent, if any … ` 135.96 Lakhs

c) Manner in which the amount spent during the financial year as given below:

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5 Contribution to Promoting Ahmedabad/ 50 Lakhs 50 Lakhs 50 Lakhs ThroughGujarat CSR employment Vadodara No overheads Gujarat CSRAuthority in enhancing Authority'GCSRA Vocational vocationalSkill Training Fund' skills

6 Contribution to Promoting Vadodara 14 Lakhs 11.49 Lakhs 11.49 lakhs ThroughLifeline Foundation Health Care No overheads Lifelinefor sponsoring FoundationLife SupportAmbulance

Total 165.48 108.59 Lakhs 161.61

6. In case, the Company has failed to spend two percent of the average net profit of the lastthree financial years or any part thereof, the Company shall provide the reasons for not/short spending the amount in its Boards' report:The financial year 2017-18 was the 4th year for CSR activities under the Companies Act, 2013.The Company has already spent ` 108.59 Lakhs during F.Y. 2017-18 against the stipulated 2%amount of ` 244.56 Lakhs for F.Y. 2017-18. Against the short spending of ` 135.95 Lakhs duringF.Y. 2017-18 , the CSR Committee has identified some CSR projects for which spending maybe in the F.Y. 2018-19 onwards by the Company and/or in participation with subsidiarycompany(ies).Last year, the North Gujarat, especially, Banaskantha and Patan were hit severely by catastrophicrains, leading to floods. A disaster of such mammoth magnitude and losses required moreefforts and aid for relief and rehabilitation to bring back normalcy. Accordingly the Companyas a responsible corporate citizen contributed ` 3 (Three) Crores to Chief Ministers' Relief Fund,Gujarat in August,2017.GUVNL being a Govt. utility has adopted an approach of supplementing Govt. schemes andinitiatives. This creates a very narrow space for identification and implementation of activities.The Company is in the process of exploring various options for CSR activities that can deliverthe maximum impact to society. The Company plans accelerating the pace of its CSR spendin coming years through structured programmes and projects.

7. Responsibility statement, of the CSR Committee, that the implementation and monitoringof CSR Policy, is in compliance with CSR objectives and Policy of the Company duly signedby Director and Chairperson of the CSR Committee.The CSR Committee of the Company hereby confirms that the implementation and monitoringof CSR Policy, is in compliance with CSR objectives and Policy of the Company.

Place : Gandhinagar (Pankaj Joshi,IAS)Date : 24-12-2018 Managing Director and

Chairman CSR Committee

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Annexure-2FORM NO. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31-March-2018

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

I REGISTRATION & OTHER DETAILS:

I CIN U40109GJ2004SGC045195

II. Registration Date 22-12-2004

III. Name of the Company GUJARAT URJA VIKAS NIGAM LIMITED

IV. Category/ Sub-Category of the Company Public Limited Company, Govt. Company

V. Address of the Registered office and Registered & Corporate Office,contact details Sardar Patel Vidyut Bhavan, Race Course,

Vadodara-390007.

VI. Whether listed company No

VII. Name, Address and Contact details of NOT APPLICABLERegistrar and Transfer Agent, if any

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing 10 % or more of the total turnover of the company shall bestated:-

Sr. Name and Description of NIC Code of the % to total turnoverNo. main products / services Product/ service of the company1 Purchase & Sale of Power 35109 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sr. Name and Address CIN/GLN Holding/ % of ApplicableNo. of the Company Subsidiary/ shares Section

Associate held

1 Gujarat State Electricity U40100GJ1993SGC019988 Subsidiary 100% 2(87)Corpn. Ltd.,Vidyut Bhavan, Race Course,Vadodara : 390 007

2 Gujarat Energy Transmission U40100GJ1999SGC036018 Subsidiary 98.18% 2(87)Corpn. Ltd.,Sardar Patel Vidyut Bhavan,Race Course, Vadodara : 390 007

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3 Madhya Gujarat Vij Co. Ltd., U40102GJ2003SGC042907 Subsidiary 100% 2(87)Sardar Patel Vidyut Bhavan,Race Course, Vadodara : 390 007

4 Dakshin Gujarat Vij Co. Ltd., U40102GJ2003SGC042909 Subsidiary 100% 2(87)Urja Sadan, Nana Varachha Road,Kapodara, SURAT : 395006.

5 Uttar Gujarat Vij Co. Ltd., U40102GJ2003SGC042906 Subsidiary 100% 2(87)Visnagar Road, Mehsana:384001

6 Paschim Gujarat Vij Co. Ltd., U40102GJ2003SGC042908 Subsidiary 100% 2(87)Paschim Gujarat Vij Seva Sadan, Off. Nana Mava Main Road,Laxminagar, Rajkot: 360004.

7 Gujarat Industries Power Co. Ltd., L99999GJ1985PLC007868 Associate 26.84% 2(6)P.O. Petrochemicals : 391346Dist, Vadodara, Gujarat

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)(i) Category-wise Share Holding: Category of No. of Shares held at year beginging 01-04-2017 No. of Shares held at year ended 31-03-2018 % Change Shareholders % of Total % of Total duringDemat Physical Total

SharesDemat Physical Total

Shares the year

A. Promoters

(1) Indian

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

b) Central Govt. 0 0 0 0 0 0 0 0 0

c) State Govt(s) 0 13714605995 13714605995 100 0 16227549895 16227549895 100 0

d) Bodies Corp. 0 0 0 0 0 0 0 0 0

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

f) Any Other…. 0 0 0 0 0 0 0 0 0

Sub-total (A) (1):- 0 13714605995 13714605995 100 0 16227549895 16227549895 100 0

(2) Foreign 0 0 0 0 0 0 0 0 0

a) NRI Individuals 0 0 0 0 0 0 0 0 0

b) Other Individuals 0 0 0 0 0 0 0 0 0

c) Bodies Corp. 0 0 0 0 0 0 0 0 0

d) Banks / FI 0 0 0 0 0 0 0 0 0

e) Any Other…. 0 0 0 0 0 0 0 0 0

Sub-total (A) (2):- 0 0 0 0 0 0 0 0 0

Total Shareholding ofPromoter (A) =(A)(1)+(A)(2) 0 13714605995 13714605995 100 - 16227549895 16227549895 100 0

B. Public Shareholding

(1) Institutions 0 0 0 0 0 0 0 0 0

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

b) Bank / FI. 0 0 0 0 0 0 0 0 0

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

d) State Govt. 0 0 0 0 0 0 0 0 0

e) Venture Capital Fund. 0 0 0 0 0 0 0 0 0

f) Insurance Companies 0 0 0 0 0 0 0 0 0

h) FIIS 0 0 0 0 0 0 0 0 0

i) Foreign Venture 0 0 0 0 0 0 0 0 0 Capital Fund.

ii) Others (Specify) 0 0 0 0 0 0 0 0 0

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

2. Non- Institutions

a) Bodies Corp.

i) Indian 0 0 0 0 0 0 0 0 0

ii) Overseas 0 0 0 0 0 0 0 0 0

b) Individuals

Individual 0 0 0 0 0 0 0 0 0shareholders holding

i) nominal share capitalin excess of` 1. lakhs

Individual 0 0 0 0 0 0 0 0 0shareholders holding

ii) nominal share capitalin excess of` 1. lakhs

c) Others (specify) 0 0 0 0 0 0 0 0 0

Sub-total (B)(2):- 0 0 0 0 0 0 0 0 0

Total Public 0 0 0 0 0 0 0 0 0Shareholding (B)=(B)( 1)+ (B)(2)

C. Shares held by

Custodian for GDRs&ADRs 0 0 0 0 0 0 0 0 0

Grand Total (A+B+C) 0 13714605995 13714605995 100 0 16227549895 16227549895 100 0

(ii) Shareholding of Promoters: Shareholding at the beginning of the year Shareholding at the end of the year

(01/04/2017) (31/03/2018) % change

Sr. Share-holder’s No. of % of total %of Shares No. of % of total % of Shares in share

No. Name Shares Shares of Pledged / Shares Shares of Pledged / holding

the encumbered the encumbered during

company to total shares company to total the

shares year

1 H.E.Governor ofGujarat and his 13714605995 100 0 16227549895 100 0 0Nominees

Total 13714605995 16227549895

49


(iii) Change in Promoters' Shareholding (please specify, if there is no change):

Shareholding at the beginning Cumulative Shareholdingof the year (01-04-2017) during the year

Particulars No. of % of total No. of % of totalShares shares of the Shares shares of the

Company CompanyAt the beginning ofthe yearH.E.Governor of 13714605995 100 13714605995 100Gujarat and hisnomineesDate wise Increase /Decrease in PromotersShare holding during theyear specifying thereasons for increase /decrease, e.g. allotment/transfer/bonus/sweatequity etc.:Increase by way ofallotment on:20/04/2017 819639200 0 14534245195 027/06/2017 694483600 0 15228728795 011/09/2017 120000000 0 15348728795 025/10/2017 507463000 0 15856191795 018/12/2017 208500000 0 16064691795 017/01/2018 43400000 0 16108091795 021/03/2018 119458100 0 16227549895 0At the End of the year 16227549895 100 16227549895 100(31/03/2018)

(iv) Shareholding Pattern of top ten Shareholders(other than Directors, Promoters and Holders of GDRs and ADRs):

Shareholding at the beginning Cumulative Shareholdingof the year (01-04-2017) during the year

For Each of the top No. of % of total No. of % of total10 Shareholders Shares shares of the Shares shares of the

Company Company

At the beginningof the year

50


Date-wise Increase/Decrease in Share holdingduring the year specifyingthe reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat Not Applicableequity etc.)

At the End of the year(or on the date ofseparation, if separatedduring the year)

(v) Shareholding of Directors and Key Managerial Personnel:

Shareholding at CumulativeSr. For Each the beginning Shareholding duringNo. of the Directors of the year the year and As

and KMP (01-Apr-2017) on 31-March-2018Name No. of % of total Date Increase/ Reason No. of % of total

Shares shares Decrease Shares Sharesof the of the

Company Company

DIRECTORS 00 00 00 00 00 00 00

KEY MANAGERIAL 00 00 00 00 00 00 00PERSONNEL

Note : None of the Directors and KMP hold any Equity Shares in the Company.

V. INDEBTEDNESS (AS ON 31-MARCH-2018):

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

(` In Lakhs)

Secured Loans Unsecured Totalexcluding Loans Deposits Indebtednessdeposits

Indebtedness at the beginningof the financial year (01-Apr-17)

i) Principal Amount 13872.56 18363.02 0.00 32235.58

ii) Interest due but not paid 0.58 0.00 0.00 0.58

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iii)Interest accrued but not due 0.00 469.35 0.00 469.35

Total (i+ii+iii) 13873.14 18832.37 0.00 32705.51

Change in Indebtedness duringthe financial year• Addition 0.00 0.00 0.00 0.00• Reduction 13869.55 2024.88 0.00 15894.43

Net Change 13869.55 2024.88 0.00 15894.43

Indebtedness at the end of theFinancial Year (31-March-18)i) Principal Amount 2.65 16430.75 0.00 16433.4ii) Interest due but not paid 0.94 0.00 0.00 0.94iii) Interest accrued but not due 0.00 376.74 0.00 376.74

Total (i+ii+iii) 3.59 16807.49 0.00 16811.08

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (F.Y.2017-18)

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: ( ` In Lakhs)

Name of MD/WTD/Manager TotalShri Pankaj Shri S.B. Shri K.M. Amount

Sr. Particulars of Joshi, IAS Khyalia Bhuva ` InNo. Remuneration MD Director Director Lakhs

(Finance) (Technical) (w.e.f. 29-4-17)

1 Gross salary

a) Salary as per provisions 27.31 30.02 25.67 83.00contained in section 17(1)of the Income-taxAct, 1961

b) Value of perquisites 2.26 2.96 2.30 7.52under section 17(2)

Income-tax Act, 1961

c) Profits in lieu of salary

under section 17(3) 0.00 0.00 0.00 0.00Income tax Act, 1961

2 Stock Option 0.00 0.00 0.00 0.00

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3 Sweat Equity 0.00 0.00 0.00 0.00

4 Commission 0.00 0.00 0.00 0.00- as % of profit- others, specify…

5 Others, please specify 0.00 0.00 0.00 0.00

Total (A) 29.57 32.98 27.97 90.52

Ceiling as per the Act Not applicable as Section 197 of Companies Act, 2013 shallnot apply to Government Companies.

B. Remuneration to other directors (F.Y.2017-18)

Name of DirectorsSr. Particulars of Independent Other Non-Executive TotalNo. Remuneration Directors Directors Amount

Shri R.N. Shri Bimal Shri P.J. Shri Milind Ms. Mona `Singh Patel Mathew Torawane Khandhar,

UPTO IAS w.e.f. IAS31-5-17 15-07-17

1 Independent Directors• Fee for attending

Board/committee . 35000 35000 5000 0 0 75000meetings in `

• Commission 0 0 0 0• Others, please specify 0 0 0 0Total (1) 35000 35000 5000 75000

2 Other Non-ExecutiveDirectors 0 0• Fee for attending

board / committeemeetings 0 0

• Commission 0 0• Others, please specify 0 0Total (2) 0 0Total (B)=(1+2) 35000 35000 5000 0 0 75000Total Managerial 0 0 0 0 0Remuneration

Overall Ceiling as Not applicable as Section 197 of Companies Act, 2013 shallper the Act not apply to Government Companies.

53


C. Remuneration to Key Managerial Personnel other than MD/ MANAGER / WTD: (` In Lakhs)

Key Managerial PersonnelCEO Company ED (F & A)

Sr. Particulars Secretary & CFO Totalno. of Remuneration (April 17 to (April 17

March 18) to March 18)1 Gross salary

a) Salary as per provisions 0 22.27 30.90 53.17 contained in section 17(1) of the Income-tax Act, 1961b) Value of perquisites u/s 0 0 0 0 17(2) Income-tax Act, 1961c) Profits in lieu of salary 0 0 0 0 under section 17(3) Income-tax Act, 1961

2 Stock Option 0 0 0 03 Sweat Equity 0 0 0 04 Commission 0 0 0 0

- as % of profit- others, specify..

5 Others, please specify 0 0 0 0Total 0 22.27 30.90 53.17

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Section Brief Details of Authority Appealof the Description Penalty / [RD / made,

Type Companies Act Punishment/ NCLT/ if anyCompounding COURT] (givefees imposed Details)

There were no penalties / punishment / compounding of offences for breach of any section of CompaniesAct against the Company or its Directors or other officers in default, if any, during the year.


Raj Gopal,IASDate: 24-12-2018 ChairmanPlace: Gandhinagar DIN - 02252358

54


Annexure 3(i)

GUJARAT STATE ELECTRICITY CORPORATION LIMITED

Sr. No Auditors' Qualifications Management Reply/Compliance

a. The company recognises replaceditems of Property, Plant and Equipment(PPE) as addition of PPE. However,carrying amount of such replaced partsare not derecognised from PPE. Thisis not in accordance with Ind AS - 16"Property, Plant and Equipment". Theeffect of non-compliance of Ind AS - 16is not ascertainable.

Capital spares are required to be maintained andreplaced as and when required at irregular interval.Depreciation on plant & machinery is charged as perthe applicable rates, whereas depreciation on capitalspares is charged over useful life of the Plant &Machinery. Therefore Plant and machinery as well ascapital spares are depreciated on regular basis asspecified under IND AS-16 At the time of replacementof capital spares, original cost for the whole equipmentmay be available but the cost of damaged spares partscannot be determined because the same werepurchased in lot along with group of machineries. Assuch, depreciation charged up to the date ofreplacement is also not ascertainable. The replacedspares has not utility and therefore market value isnot available. Negligible value is considered for thesespecified spares. This practice is commonly adoptedby all the Companies engaged in generation of power.Therefore, the company has also adopted the samesince beginning.

Further to state that Fixed assets are normally beinginstalled for more than 15 to 20 years and policesregarding treatment of fixed assets & the relatedcapital spares and its depreciation are beingconsistently followed since the inception of thecompany and any sudden change after completion ofsubstantial period of usage of fixed assets may distortthe profitability statement of the company.

Capital spares that can be used only in relation tospecific assets are to be discarded only when thespecific fixed assets is disposed off. In other wordsuch spares are an integral part of fixed assets whichalso get depreciated over a period of useful lifeof assets.

And when the related assets are discarded, the WDVof related capital spares is also to be written off. Hencein a broader sense the WDV of fixed assets would beconsidered rather than considering WDV of the capital

55


spares at the time of replacement.

Depreciation is being continually charged on thecapital spares even though replaced during any of theyear of the useful life of the assets instead of writingoff WDV in to the profit and loss account in the yearof replacement Hence expense are just postponedduring the residual life of the fixed assets Thus.Profitability will get set off at the end of life of therelevant fixed assets. Hence true and fair view of theprofitability of all respective years remains intact.While treating the item as capital or revenue companyhas to see its usefulness and benefits to be derivedover a period of time. Company has treated sparesas capital in nature and classified as property plantand equipment whose benefits are enduring in natureand met the definition of property plant andequipment. While the routine operation andmaintenance spares are classified under the inventoryand charged to revenue as and when consumed formaintenance purpose and accordingly pre-definedcode in e urja system is assigned.Balance under other financial assets is mainly relatedto deposit given to railways authority, Irrigationdepartment, other government department for landacquisition & depository work and loans and advancesgiven to employees which all are highly secured.

Balance under other financial liabilities mainly belongsto Staff Retirement cum Death Benefit Scheme, staffwelfare scheme and current liability belongs to loansfrom Banks and financial institution, retention in formof LD and provision for expenses. Bank Balances anddues to SECL and WCL are reconciled on regular basis.For other balances it is customary of the company towrite letter to parties for confirmation.

For and on behalf of the BoardFor Gujarat State Electricity Corporation Ltd.

Place : Vadodara Shri Pankaj Joshi, IAS Shri Pradip R DahakeDate : 25-09-2018 (Director) (Managing Director)

Registered Office: Vidyut Bhavan,Race Course, Vadodara-390 007CIN:U40100GJ1993SGC019988

b. The company recognizes capital sparesas PPE and other spares as inventorybased on pre-defined code system andnot in accordance with requirement ofInd AS - 2 'Inventories' and Ind - AS 16'Property, Plant and Equipment'. Theeffect of such non-compliance on PPE,inventory, depreciation, sparesconsumption, profit / loss on sale ofspares and sales is not ascertainable.

c. Balances under the group of Otherfinancial assets, other current financialliabilities and trade payables are subjectto confirmation and adjustment, if any,required upon such confirmation arenot determinable.

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Annexure 3(ii)UTTAR GUJARAT VIJ COMPANY LIMITED

Board's explanation on qualification made by the Statutory Auditors in their Audit Report for the FY2017-18, pursuant to Section 134(3)(f) of the Companies Act, 2013:

Qualification Board's Reply

We draw attention to policy No.1(c)(4) to the IndAS financial statements wherein the Companyhas changed the method of accounting regardingwriting back balances from grants/ consumercontribution related to certain depreciableassets from hitherto 10% on reducing balancebasis to 5.28% on straight line basis prospectivelycommencing from the previous financial year.However, in our opinion the effect of suchchange has to be worked out retrospectivelycommencing from the date on which thedepreciable assets related to which the grants/consumer contribution has been received havebeen capitalized in the books of account andeffect of such change be accounted for in theopening balance of grants/ consumercontribution; amount not determined bymanagement. The overall impact of the abovequalification on the balance of grants/ consumercontribution and balance of equity & reservesas on 31st March, 2018 is therefore undetermind.

The accounting treatment followed by UGVCL is aconsidered decision taken by GUVNL for all theDISCOM's and all four DISCOM's have followed thesame accounting treatment during the FY 2016-17 andFY 2017-18.

Further we reiterate the fact, that UGVCL has changedthe method of recognizing grants as income fromreducing balance method (RBM) to straight linemethod (SLM). The change in the rates isconsequential to the change i.e., 10% RBM to 5.28%SLM. The change in the method and consequentiallythe rates is to exactly match the depreciation methodand the rates where there was a mismatch. Thischange is not a change in the principle of recognitionof grants but only a change in the method, aspermissible and in compliance with the relevant IndianAccounting Standards (Ind AS) as applicable. Giventhat it is a change in estimate, the effect of the sameis required to be given prospectively notretrospectively. Hence the treatment given by theCompany is correct and in compliance with theapplicable Indian Accounting Standards (Ind - AS).


Date : 07-Dec-2018 V. N. Maira, IAS (Retd.)Place : Ahmedabad Chairman

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Annexure 4

GUJARAT URJA VIKAS NIGAM LIMITED

Management Reply to the Comment of the Comptroller and Auditor General of India received from AGOffice, Ahmedabad under section 143(6)(b) of the Companies Act, 2013 on the Consolidated FinancialStatements of Gujarat Urja Vikas Nigam Limited, Vadodara for the year ended 31st March, 2018.

C&AG's Comments Management Reply

A. Comments on Financial Position

1. Consolidated Balance Sheet -

Def. Govt. Grants, Subs. & ConsumerContribution (Note No.19) ` 7,657.83 crores.

With effect from 1st April 2016, the Company haschanged the method of computing the Grants/ consumer's contribution received againstdepreciable assets to be recognised in Statementof Profit and Loss from Reducing Balance Methodto the Straight Line Method and consequentlythe rates at which Grant is recognised in theStatement of Profit & Loss. The Companydetermined that the change to recognised Grantsin proportion of the depreciation expenses is achange in accounting estimates and is to beapplied prospectively.

As per Accounting Standard 12, Grants relatedto depreciable assets are treated as deferredincome which is recognised in the Profit and LossStatement on a systematic and rational basis overthe useful life of the asset. Indian AccountingStandard-20 also states that Grants related todepreciable assets are usually recognised inProfit or Loss over the periods and in theproportions in which depreciation expenses onthose assets is recognised.

The above change in method was made by theCompany as there was a mismatch of the Grantsrecognised in the Statement of Profit & Lossversus the related depreciation expenses. Thus,

This comment of C&AG has been retained fromC&AG's Final Comments of FY 2016-17. During FY2017-18, GUVNL have written letters dt. 18.07.2018and 16.08.2018 to C&AG, New Delhi (with copies toC&AG Ahmedabad) reiterating the stand taken by theentire Group w.r.t. the method of computing Grants/ Consumer Contribution received against DepreciableAssets to be recognised in the Statement of Profit &Loss.

It may be emphasized here that, during FY 2016-17,GUVNL & Group Companies had deliberated at lengthon this issue and finally decided to adopt a uniformAccounting Policy to apply the change prospectivelyand not retrospectively. All Auditors of our GroupCompanies including our Consultants agreed to thistreatment considering the various provisions of theAccounting Standards and technicalities of the matter.Unfortunately, the Statutory Auditor of UGVCL did notagree on the accounting treatment and thereforeretained it as a qualification in UGVCL's Auditor'sReport.

C&AG also while deliberating on the issue failed toappreciate the provisions of the relevant AccountingStandards, explanations provided by the SubsidiaryCompanies and GUVNL and also the variousexplanations given by GUVNL vide letters dt.18.07.2018 and 16.08.2018. In fact, the points putforth by GUVNL & its Subsidiary Companies andStatutory Auditors of DISCOMs (except UGVCL) andGETCO during the meeting held on 31.07.2018 in theConference Room of C&AG Office, Ahmedabad were

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the Company has changed the method ofrecognition of deferred income in order to alignthe recognition of deferred income with therelated depreciation expenses. As the provisionfor treatment of deferred income to berecognised in the Profit and Loss Statement ona systematic and rational basis over the usefullife of the asset are same in AS-12 and IndAS-20, the change was not mandated by IndAS-20.Hence, the Company changed the method inorder to correct an error.

Since the depreciable assets related to whichgrants/ consumers contribution received havebeen capitalised in the books of accounts, theeffects of such change should have been workedout retrospectively and accounted for in theopening balance of Deferred GovernmentGrants, Subsidies and Consumer Contribution.

This has resulted in overstatement of retainedearnings and understatement of balances ofDeferred Government Grants, Subsidies andConsumer Contribution towards Capital Assetsby ` 1302.51 crore as at 31st March 2017.

Despite being pointed out in previous year, nocorrective action has been taken by the Companyduring 2017-18.

also not appreciated. Further, it may be noted thatwhereas the accounting treatment proposed byC&AG and auditors of UGVCL is the same i.e.retrospective adjustment, the basis of conclusion tosuggest this accounting treatment varies. WhereasUGVCL audit qualification both in the previous andcurrent financial year does not conclude that theearlier method being followed as an error, C&AG hasconcluded it to be an error.

The views of five Auditors (of GUVNL, GETCO, DGVCL,MGVCL, & PGVCL) have not been appreciated andC&AG has continued to retain this comment in FY2017-18 also. Further, matter of concern, is a methodselected more than ten years back and appliedconsistently over the years, reviewed by manystatutory auditors of all companies over a very longperiod as well as subjected to supplementary auditby your esteemed office and found to be incompliance with the applicable accounting standardsof the time, has been considered as an error whichis being corrected and thereby possibly raisingquestions over accounting standards compliance inthe previous years.

This comment has no relevance / impact on thecurrent year's profitability and financial position ofthe Subsidiary Companies and the entire Group as awhole. Last year's observation was retained as acomment in the last year's C&AG Audit Certificate.Strictly speaking, the profitability / financial positionfor the year FY 2017-18 is not impacted by a decisionwhich has been implemented in the earlier years.Technically speaking, the Company's stand is very clearand is in accordance with the Accounting Standards.

Our explanations given last year and also vide ourletters dt. 18.07.2018 and 16.08.2018 are self-explanatory. However, the same has been once againsummarized as under:

1. Firstly, as per error definition, for anything to berecognized as a correction of error in any year,

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it must be first, an error in the earlier/prior year.To label any accounting treatment as a priorperiod error, it usually warrants substantivecorroboration and evidence explicitlydemonstrating the accounting treatment beingan error in view of the specific accountingframework as applicable. However, as can benoted from the audited financial statements ofFY 2015-16 including consideration of C&AG'sadditional comments, the accounting treatmentwas found to be in compliance with the relevantaccounting framework - Previous GAAP. Theaccounting treatment was found to be compliantnot just for the financial year ended 31st March2016, but even for financial statements ofprevious five years. Here, we would like to pointout that, had the accounting treatment - methodadopted, were to be an error, based on anobjective review of the relevant accountingframework, given the nature and impact of suchan error, would have been a subject matter ofaudit qualification by the statutory auditors/C&AG comments on the financial statements tothat effect. Hence, GUVNL is of the firm viewthat the change from WDV method to SLMmethod for recognition of government grants isperfectly appropriate in terms of generallyaccepted accounting principles, both IndAS andPrevious GAAP, and cannot be construed as acorrection of error by any means.

2. Thus, though there was no apparent error, asalready clarified in our previous submission(s),GUVNL Group Companies noted that the WDVmethod of recognizing grants though incompliance with AS-12 as well as IndAS 20, resultsinto a variation in the depreciation expenserecognized and the amount of grant recognizedin Statement of Profit & Loss every year. It wasalso considered that using the same method ofrecognizing grants would reduce the variation ofdepreciation and grants recognized during any

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year. Accordingly, GUVNL group companies haschanged the method of recognizing Grants in theStatement of Profit & Loss w.e.f 01.04.2016 tomore appropriately match with the method usedto depreciate the assets against which the grantswere received.

3. We disagree with C&AG's view that the changein the method is to correct an error because sucha change is not mandated by IndAS 20. Here, itmay be pointed out that IndAS 20 does notmandate any specific basis / method to recognizegrants, it only mandates a systematic basis. So,C&AG's office view that IndAS 20 does notmandate the change of a base used is notappropriate as there is no mandate for anyspecific base even otherwise.

4. As also noted in C&AG's comment as well as thebasis of qualification paragraph in UGVCL'sfinancial statements, the change is not a changein accounting policy but a change in method i.e.a change in accounting estimate. It may be furtherpointed out that, as per IndAS the use ofreasonable estimates is an essential part of thepreparation of financial statements and does notundermine their reliability. An estimate may needrevision if changes occur in the circumstances onwhich the estimate was based or as a result ofnew information or more experience. By itsnature, the revision of an estimate does not relateto prior periods and is not the correction of anerror. Hence, GUVNL disagrees with C&AG's viewthat a change in method is occasioned to correctan error particularly when an estimate has to bereviewed and revised even otherwise.

5. It also appears from the comment that, had theGroup persisted with the previous methodology(as in the earlier years), the Company would havebeen compliant with the accounting framework,but a change done in the methodology with aview to reduce the variation is now concludedby C&AG as a correction of error. This appearsto be contradictory.

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6. Lastly, our accounting is as required by IndAS,both in the previous year as well as in the currentyear. In our considered view, the proposition byC&AG and UGVCL auditor that the change inmethodology should be adjusted retrospectivelywould be a non-compliance of IndAS itself asIndAS 8 has clearly laid down how to accountfor a change in accounting policy versus changein accounting estimate.

This Final Comment is retained in the ConsolidatedFinancial Statements from Final Comment issued toDGVCL and PGVCL on their Standalone FinancialStatements.IndAS 19 para 9 governs Short Term Employee benefitswhich includes Profit Sharing and Bonus. The Standarddoes not define whether it is a Provision or a Liability.Further, the Guidance Note on Schedule III Para 7.9also states the same facts which is reproduced below:-"For the purpose of IndAS Schedule-III, a Company alsoneeds to classify its employee benefit obligations ascurrent and non-current categories. While IndAS 19Employee Benefits governs the measurement ofvarious employee benefit obligations, theirclassification as current and non-current liabilities willalso be governed by the criteria laid down in Notes 1to 3 to the General Instructions for Preparation ofBalance Sheet in IndAS Schedule-III, which areconsistent with IndAS 1. In accordance with thesecriteria, a liability is classified as "current" if a Companydoes not have an unconditional right as on the BalanceSheet date to defer its settlement for twelve monthsafter the reporting date. Each Company will need toapply these criteria to its specific facts andcircumstances and decide an appropriate classificationof its employee benefit obligations. Given below is anillustrative example on application of these criteria ina simple situation:(a) Liability towards Bonus, etc., payable within one

year from the Balance Sheet date is classified as"current"."

2. Current Liabilities:

Staff Related Liabilities (Note No. 28) ` 13.22crore

The above includes an amount of `3.19 croreprovided as Provision for Bonus. As perSchedule-III of Companies Act, 2013, provisionsfor employee benefits are under currentprovisions (short term provisions). Accordingly,an amount of `3.19 crore provided as Provisionfor bonus should have been included under'Provisions for employee benefit-Short TermProvision' instead of showing under 'OtherCurrent Financial Liability'. This has resulted inoverstatement of 'Other Current FinancialLiability' and understatement of 'Short TermProvision' by `3.19 crore.

The aforesaid incorrect classification was pointedout during Audit of Standalone FinancialStatements of DGVCL and PGVCL. However, theCompany has not rectified the incorrectclassification during the consolidation ofFinancial Statements.

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Whether the concerned expenditure is a "Provision"or "Liability" is defined in IndAS 37. Any liability is aprovision if the timing/amount or both of the relatedexpenditure is uncertain.

In case of Bonus, its accrual is a short term employeebenefit expense. The amount of Bonus to be paid andits timing of payment is certain and there is noambiguity or uncertainty regarding the same.Therefore, in true spirit and going by thecharacteristics of the expenditure, it is strictly a"Liability" and not a "Provision". In fact, it is a liabilitywhich is being provided for in the Books of Accountson accrual basis as per the basic principles ofaccounting.

Therefore, it is a correct classification and has notresulted into overstatement of Other FinancialLiabilities and understatement of Short Term Provision.

This audit observation was pointed out during theSupplementary Audit of Standalone FinancialStatement of DGVCL and PGVCL. The respectiveCompanies had replied to the Provisional Comment/ Draft Comment. However, this was nevercommunicated to the Holding Company GUVNL.Infact, all the Group Companies have uniformlyfollowed the same classification which is correct asper the relevant Accounting Standards, as statedabove.

The audit observation is retained from final commentof C&AG on the Standalone Financial Statements ofGSECL in the Consolidated Financial Statements.

The Board of GSECL had given an 'in principle'approval to consider the installation anddecommissioning and not an administrative approvalfor the same. The same can be observed from theBoard Resolution as mentioned below:

"RESOLVED THAT the 'in principle' approval be andis hereby accorded to for the following power projectand the Managing Director/Chief Engineer

B. Comments on Disclosure

3. Notes on Consolidated Financial Statement

Board of Directors (BoD) of Gujarat StateElectricity Corporation Limited (GSECL) in 152Meeting dated 13th July 2017 had accordedadministrative approval to phase out its eightnumber units of 200/ 210 Mega Watt (MW) withtotal generation capacity of 1670 MW to saveestimated Capital Expenditure of `1541 crorerequired to be incurred for compliance to thenorms of Ministry of Environment and Forests

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(Generation)/Chief Engineer (P&P) of the Company beand are hereby authorized to initiate necessary action.

To consider to install one unit of 800 MW at Ukai inplace of Unit No 1,2 and 3 at UTPS.

To consider to carry out turbine Retrofitting of Ukai-5 in line with Ukai - 4.

To consider to install one 800 MW unit either atWanakbori or Gandhinagar or Sikka and todecommission 7 units of 210 MW (1470 MW),Wanakbori (5 x 210 MW) and Gandhinagar (2 x 210MW) in phased manner."

Therefore, this was not a firm plan to phase out, butan approval to consider phasing out concomitant toinstallation of a new Unit.

For installation of 800 MW Unit at in place of UnitNo. 1, 2 & 3 at Ukai, a proposal to appoint Consultantis placed before the Board. However, GSECL Board haddeferred this agenda. Accordingly the decision to installnew units in place of old units has not been finalised.

Further, it may be noted that since the Boarddecisions were merely an in-principle approval andthere were no further positive developments in thisregard till the date of preparation of FinancialStatements, the same have not been disclosed eitherby GSECL in their Standalone Financial Statement orin the Consolidated Financial Statement. In fact, tilldate no positive development has happened in thisregard. Therefore, mere in-principle approval ofGSECL's Board was not disclosed as it did not triggerany future financial impact till the date ofpreparation of Consolidated Financial Statements.

(MoEF) and for effecting savings in the Fixed Costof ` 723 crore per year. GSECL had alreadyphased out two number units of 120 MW of Ukaiwith effect from 01 April 2017. Against these twophased out units and eight number of unitsplanned to be phased out, the BoD accordedadministrative approval for construction of twonumber units of 800 MW.

The above material fact has not been disclosedin the Notes on Consolidated FinancialStatement.

The comment was issued (17 September 2018)by Comptroller and Auditor General of Indiaunder section 143(6)(b) of the Companies Act,2013 on the Financial Statements of GujaratState Electricity Corporation Limited for the yearended 31st March 2018.

However, the Company has not rectified theincorrect classification during the consolidationof Financial Statements.

For & on behalf of the comptroller & AuditorGeneral of India

sd/-Archana GurjarAccountant General (E&RSA), Gujarat

Place : AhmedabadDate : 21-12-2018

For & on behalf of the board of director,Gujarat Urja Vikas Nigam Limited

sd/-Raj Gopal, IASChairman (DIN - 02252358)

Place : GandhinagarDate : 24-12-2018

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Annexure 4(i)

GUJARAT STATE ELECTRICITY CORPORATION LIMITED

Annexure-IISr.No. CAG Comments Management Reply

1 A. Comments on Financial PositionBalance Sheet

Statement of changes in Equity

Other Equity: (Note No. 17)` 4353.29 crore

Share Application Money PendingAllotment : ` 272.00crore.

The above includes an amount of ̀ 163.50crore which was received by the Companyfor the allotment of Equity Share Capitalon 26th October 2017 and remained un-allotted till the end of financial year(i.e.March 2018). Since more than 60 days(more than 150 days) has lapsed, suchamount should have been shown asDeposit (under the head Other CurrentFinancial Liability) instead of as ShareApplication Money pending for allotmentas per the Companies (Acceptance ofDeposits) Rules, 2014.

This has resulted in overstatement ofOther Equity and understatement of OtherCurrent Financial Liability by ` 163.50crore.

The Gujarat Urja Vikas Nigam Ltd (GUVNL), 100 %Government Company, invest money in form of equityshare capital in Gujarat state Electricity CorporationLtd (GSECL) as per directive of the GR of theGovernment of Gujarat. Further there are certaincondition stipulated in such GR for the utilization offund and allotment of shares. Hence in view of suchpeculiar circumstances of funds, such receipt of fundis not the receipt for share application moneyimmediately upon its receipt. Hence, such amountshould not be credited to share application moneyimmediately upon receipt of fund.

As regards the applicability of deposit provision to suchreceipt, it may noted that the said amount will becovered as exception under Rule 2(c)(i) or Rule 2(c)(vi) of the deposit Rules.

Rule 2(c) is re produced below:

"deposit" includes any receipt of money by way ofdeposit or loan or in any other form, by a company,but does not include -

(i) any amount received from the CentralGovernment or a State Government, or anyamount received from any other source whoserepayment is guaranteed by the CentralGovernment or a State Government, or anyamount received from a local authority, or anyamount received from a statutory authorityconstituted under an Act of Parliament or a StateLegislature;

(ii) to (v) not relevant

(vi) any amount received by a company from anyother company;

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Hence it is clearly evident that such money can neitherbe treated as share application money due to abovementioned reasons.

Further the amount received prior to offer for sharecannot be considered as share application money. Thesaid amount can be considered as share applicationmoney only after offer for share has been given. Inthis case, Board meeting held on March 14, 2018 hasoffered through letter of offer, issue of share to GUVNLand hence from that date, amount received wasconsidered as share application money. As till March31, 2018, sixty days were not completed, such amountreceived was shown as share application money whichis in compliance of the Companies Act, 2013 andfinancial statements shows correct amount of otherequity as well as other current financial liability.

We have disclosed the policy relating to capitalizationof directly attributable costs in PPE policy, RelevantExtract is as follow:

"The cost of PPE comprises of its purchase price orits construction cost or any cost directly attributableto bring the asset into the location and conditionnecessary for it to be capable of operating in themanner intended by the management andcommissioning costs. Directly attributable costs arecapitalized until the asset is ready for use". The amountof expenditure capitalized also has been disclosed inthe Note to account no 31 and 33 Here, we notethat the determination of directly attributable costsis a matter of estimate and judgement which is to bereviewed every year.

However, as per Audit observation, Company will moreelaborate and disclose the matter of estimation ofdirectly attributable costs (attributing commonexpenses to Capital work in progress) in accountingpolicy of the financial statements from next year.

The Board had given an 'in principle' approval toconsider the installation and decommissioning and notan administrative approval for installation and

2 Comments on Disclosure

Balance Sheet

Capital Work in Progress (Note no. 3):` 3606.15 crore.

The above includes Rs 53.49 croreallocated from common expenditure onaccount of Administration and EmployeeCost considering the same to be directlyattributable costs towards capitalization ofassets. However, the Company has notformulated and disclosed a policy onattributing common expenses to CapitalWork in Progress (CWIP).

Thus, the Notes to the FinancialStatements and significant AccountingPolicies are deficient to that extent.

3 Notes on Financial Statement

Board of Directors of the Company in its

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commissioning. This can be noted from the boardresolution itself, as brought out for ready reference.This was not a firm plan to phase out, but an approvalto consider phasing out concomitant to installationof a new unit. The Company notes that firm/committed plans have to be disclosed and not mattersbeing considered."RESOLVED THAT the 'in principle' approval be and ishereby accorded to for the following power projectand the Managing Director/Chief Engineer(Generation)/Chief Engineer (P&P) of the Company beand are hereby authorized to initiate necessary action.To consider to install one unit of 800 MW at Ukai inplace of Unit No 1,2 and 3 at UTPS.To consider to carried out turbine Retrofitting of Ukai-5 in line with Ukai - 4To consider to install one 800 MW unit either atWanakbori or Gandhinagar or Sikka and todecommission 7 units of 210 MW(1470 MW),Wanakbori (5 x 210 MW) and Gandhinagar (2 x 210MW) in phased manner."For installation of 800 MW unit at in place of unit no1, 2 & 3 at ukai, a proposal to appoint consultant isplaced before the board. However board has deferredthis agenda. And accordingly the decision to installnew units in place of old units is not finalised.Further to note that this is future related activity andthere is no such disclosure requirement mentionedin Ind AS as well as Schedule - III of Companies Act,2013.

152th Meeting dated 13th July 2017 hasgiven administrative approval for the planto phase out its 8 units of 200/210 MegaWatt (MW) totalled 1670 MW to save `1541 crore of estimated Capital.

Expenditure towards compliance ofMinistry of Environment and Forests(MoEF) norms and resulting in savings inFixed cost of ` 723 crore per year. TheCompany has already phased out 2 unitsof 120 MW of Ukai with effect from01.04.2017. Against these 2 phased outunits and 8 no. of units planned to bephased out, the Board of Directors havealso given administrative approval forconstruction of 2 units of 800 MW.

The above material fact should have beendisclosed in the Notes on Accounts.

For and on behalf of the BoardFor Gujarat State Electricity Corporation Ltd.

Place : Vadodara Shri Pankaj Joshi, IAS Shri Pradip R DahakeDate : 25-09-2018 (Director) (Managing Director)

Registered Office: Vidyut Bhavan,Race Course, Vadodara-390 007CIN:U40100GJ1993SGC019988

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Annexure 4(ii)Gujarat Energy Transmission Corporation Limited

Management Reply to the comment of the Comptroller and Auditor General of India under Section 143(6)(b)of the Companies Act, 2013 on the Accounts of Gujarat Energy Transmission Corporation Limited, Vadodarafor the year ended March 31, 2018

Sr.No. CAG Comments Reply

A. COMMENT ON FINANCIAL POSITION1. Balance SheetDeferred Government Grants, Subsidies &Consumer Contribution (Note No.19): -` 1660.80 crore

With effect from 01st April 2016, theCompany has changed the method ofcomputing the grants/consumercontribution received against depreciableassets to be recognized in statement ofprofit and loss from reducing balancemethod to the straight line method andconsequently the rates at which grant isrecognized in the statement of profit andloss. The Company has determined thatthe change to recognize grants inproportion of the depreciation expensesis a change in accounting estimates and isto be applied prospectively."

As per Accounting Standard AS-12, Grantsrelated to depreciable assets are treatedas deferred income which is recognised inthe profit and loss statement on asystematic and rational basis over theuseful life of the asset. Indian AccountingStandard AS 20 also state that grantsrelated to depreciable assets are usuallyrecognised in profit or loss over the periodsand in the proportions in whichdepreciation expense on those assets isrecognised.

It is to mention that the comment of the C&AG is therepeat comment which was mentioned by C&AG onthe financial position of F.Y. 2016-17. GETCO as wellas GUVNL (Holding Company) has replied to C&AG onvarious occasions which are as under;

1. GETCO Management reply on the comment of theC&AG on the accounts of GETCO for the year ended31st March 2017, also included in GETCO's AnnualReport of FY 2016-17.

2. GUVNL Management reply on the matter/comment of the C&AG on the consolidatedaccounts of GUVNL group for the year ended 31st

March 2017, also included in GUVNL Annual Reportof FY 2016-17.

We have made detailed submissions as mentionedabove stating GETCO's position and reasons behindthe same with specific reference to both Ind AS andPrevious GAAP (Indian GAAP) requirements, we brieflygive excerpts of detailed response as under.

The first Ind AS Financial Statements of GETCO werefor the Financial Year ended 31st March 2017 andhence for the preparation of Ind AS FinancialStatements, compliance with Ind AS 101: First timeAdoption of Indian Accounting Standards' wasmandatory. As per this standard, an opening Ind ASBalance Sheet and the first comparative period (in theinstant case Balance Sheet as on 1st April 2015 andthe financial statements for the year ended 31st March2016) was required to be prepared and presented asper Ind AS accounting policies which comply with theIndian Accounting Standards. The opening Ind AS

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The above change in method was madeby the Company as there was a mismatchof the grants recognized in the Statementof Profit and Loss versus the relateddepreciation expense. Thus, the Companyhas changed the method of recognition ofdeferred income in order to align therecognition of deferred income with therelated depreciation expense. As theprovision for treatment of deferred incometo be recognised in the profit and lossstatement on a systematic and rationalbasis over the useful life of the asset aresame in AS-12 and Ind AS 20, the changewas not mandated by Ind AS 20. Hence,the Company changed the method inorder to correct an error.

Since the depreciable assets related towhich grants/ consumer contributionreceived have been capitalized in thebooks of accounts, the effect of suchchange should be worked outretrospectively and accounted for in theopening balance of Deferred

Government Grants, subsidies andConsumer contribution.

This has resulted in overstatement ofretained earnings and understatement ofbalances of Deferred Government Grants,Subsidies and Consumer Contributiontowards capital assets by ` 403.57 croreas at 31 March 2017.

Despite being pointed out in previous year,no corrective action has been taken by theCompany during 2017-18.

Balance Sheet which is the starting point for Ind ASaccounting and the same was prepared in line withthe applicable Ind AS requirements including for thecomparative period.

The estimates to be used for preparation of openingInd AS Balance Sheet and the comparative period mustbe based on the estimates made in the Previous GAAPand cannot be changed on hindsight basis. Thesubsequent change in the estimate i.e. SLM from 1stApril 2016 had to be done prospectively from the yearwhen such estimate has changed. The change inmethod being a change in estimate had to beaccounted per Ind AS 8 i.e. change had to beaccounted on a prospective basis and cannot be ona retrospective basis.

As stated above, once the opening Ind AS BalanceSheet is made per Ind AS requirements, any changein accounting policy, estimate or error must be seenin the context of Ind AS and not compared withPrevious GAAP. There is disagreement with the viewsof C&AG that the change in the method is to correctan error because such a change is not mandated byInd AS 20. Here, it is to mention that Ind AS 20 doesnot mandate any specific basis / method to recognizegrants, it only mandates a systematic basis. So, C&AG'soffice view that Ind AS 20 does not mandate thechange of a base used is not appropriate as there isno mandate for any specific base even otherwise. Weagree with C&AG conclusion that this is a change inthe method, however not with C&AG view that thisis to correct an error.

As per error definition, for anything to be recognisedas a correction of error in any year, it must be first,an error in the earlier / prior year. To label anyaccounting treatment as a prior period error, it usuallywarrants substantive corroboration and evidenceexplicitly demonstrating the accounting treatmentbeing an error in view of the specific accountingframework as applicable. However, as can be notedfrom the audited financial statements of the earlier

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year i.e. financial year ended 31st March 2016including consideration of C&AG additional comments,the accounting treatment was found to be incompliance with the relevant accounting framework- Previous GAAP. The accounting treatment was foundto be compliant not just for the financial year ended31st March 2016, but even for previous 5-year financialstatements. Here it is to mention that, had theaccounting treatment - method adopted were to bean error, based on an objective review of the relevantaccounting framework, given the nature and impactof such an error, would have been a subject matterof audit qualification by the statutory auditors inaddition to C&AG comments on the financialstatements to that effect. Hence we are of the firmview that the change from WDV method to SLMmethod for recognition of government grants isperfectly appropriate in terms of generally acceptedaccounting principles, both Ind AS and Previous GAAP,and cannot be construed as a correction of error byany means.

Thus, though there was no apparent error, as alreadyclarified in previous submission, GETCO noted that theWDV method of recognizing grants though incompliance with AS-12 as well as Ind AS 20, resultsinto a variation in the depreciation expense recognizedand the amount of grant recognized in Statement ofProfit & Loss every year. It was also considered thatusing the same method of recognizing grants wouldreduce the variation of depreciation and grantsrecognized during any year. Accordingly, GETCO haschanged the method of recognizing Grants in theStatement of Profit & Loss w.e.f 01.04.2016 to moreappropriately match with the method used todepreciate the assets against which the grants werereceived.

Here, it appears from the comment, that, had theCompany persisted with the previous methodology asin the earlier years, the Company would have beencompliant with the accounting framework, but a

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change in the methodology with a view to reduce thevariation would be a correction of error. This appearsto be a contradiction.

Hence to conclude, GETCO's accounting is compliantwith Ind AS requirements, both in the previous yearas well as in the current year. In considered view, theproposition by C&AG that the change in methodologyto be applied retrospectively would be anoncompliance of Ind AS itself.

In view of above, Deferred Govt. Grants, Subsidies andConsumer Contribution and retained earnings arecorrectly reflected in the Financial Statements incompliance with IndAS and there is no over-statementof retained earnings and under-statement of balanceof Deferred Govt. Grant & Subsidies and Consumercontribution towards Capital Assets by ̀ 403.57 croresas at 31st March, 2017.

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Annexure 4(iii)MADHYA GUJARAT VIJ COMPANY LIMITED

Management Reply to the comment of the Comptroller and Auditor General of India received from AGOffice, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of the MadhyaGujarat Vij Company Limited, Vadodara for the year ended March 31, 2018.

Comment of the Comptroller andAuditor General of India

Management Reply

Balance Sheet, Equity and Liabilities,

Deferred Government Grants, Subsidies andContribution (Note No.18) ` 1259.42 crore

A reference is invited to the Comments of theComptroller and Auditor General (C&AG) ofIndia under Section 143(6) of the CompaniesAct, 2013 on the financial statements ofMadhya Gujarat V ij Company Limited(Company) for the year ended 31st March 2017.The Company with effect from 01st April 2016,has changed the method of computing thegrants/consumer contribution received againstdepreciable assets to be recognized inStatement of Profit and Loss from reducingbalance method to the straight line method andconsequently the rates at which grant isrecognized in the Statement of Profit and Loss.The Company has determined that the changeto recognize grants in proportion of thedepreciation expenses is a change in accountingestimates and is to be applied prospectively.

As per paragraph No. 8.4 of AS-12, Grants relatedto depreciable assets are treated as deferredincome which is recognised in the Profit and LossStatement on a systematic and rational basis overthe useful life of the asset. As per paragraph 17of Ind AS 20, grants related to depreciable assetsare usually recognised in Profit or Loss over theperiods and in the proportions in whichdepreciation expense on those assets isrecognised.

It is to point out with reference to Audit commentissued last year, and as brought out in this comment,that this is a repeat comment. The matter commentedupon had been thoroughly addressed by MGVCL aswell as GUVNL, our holding company. In this regardMGVCL has made detailed submissions and the matterhad also been discussed with C&AG Office stating ourposition and reasons behind our position with specificreference to both Ind AS and Previous GAAP (IndianGAAP) requirements.

We summarise the issue as also brought out in boldtext in comment issued by C&AG Office as follows:

1. The Company has changed the method as therewas a mismatch of grants recognized in Statementof Profit and Loss versus the related depreciationexpense; and

2. The change in the method is to correct an erroras the change was not mandated by Ind AS 20.

We would like to reiterate as already discussed andresponded to earlier:

1. Firstly, as per error definition, for anything to berecognised as a correction of error in any year,it must be first, an error in the earlier/prior year.To label any accounting treatment as a prior perioderror, it usually warrants substantive corroborationand evidence explicitly demonstrating theaccounting treatment being an error in view of thespecific accounting framework as applicable.However, as can be noted from the auditedfinancial statements of the earlier year i.e.

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The above change in method was made by theCompany as there was a mismatch of the grantsrecognized in the Statement of Profit and Lossversus the related depreciation expense. Thus,the Company has changed the method ofrecognition of deferred income in order to alignthe recognition of deferred income with therelated depreciation expense. As the provisionfor treatment of deferred income to berecognised in the Profit and Loss Statement ona systematic and rational basis over the usefullife of the asset are same in AS-12 and Ind AS20, the change was not mandated by Ind AS 20.Hence, the Company changed the method inorder to correct an error.

Since the depreciable assets related to whichgrants/ consumer contribution received havebeen capitalized in the books of accounts, theeffect of such change should be worked outretrospectively and accounted for in the openingbalance of Deferred Government Grants,Subsidies and Consumer contribution.


Despite being pointed out in previous year, nocorrective action has been taken by theCompany during 2017-18.

financial year ended 31 March 2016 includingconsideration of C&AG additional comments, theaccounting treatment was found to be incompliance with the relevant accountingframework - Previous GAAP. The accountingtreatment was found to be compliant not just forthe financial year ended 31 March 2016, but evenfor previous 5-year financial statements.

Here, it is to point out that, had the accountingtreatment - method adopted, were to be an error,based on an objective review of the relevantaccounting framework, given the nature andimpact of such an error, would have been a subjectmatter of audit qualification by the statutoryauditors in addition to C&AG comments on thefinancial statements to that effect. Hence, MGVCLis of the firm view that the change from WDVmethod to SLM method for recognition ofgovernment grants is perfectly appropriate interms of generally accepted accounting principles,both Ind AS and Previous GAAP, and cannot beconstrued as a correction of error by any means.

2. Thus, though there was no apparent error, asalready clarified in our previous submission,GUVNL Group Companies noted that the WDVmethod of recognizing grants though incompliance with AS-12 as well as IndAS 20, resultsinto a variation in the depreciation expenserecognized and the amount of grant recognized inStatement of Profit & Loss every year. It was alsoconsidered that using the same method ofrecognizing grants would reduce the variation ofdepreciation and grants recognized during anyyear. Accordingly, GUVNL group companies haschanged the method of recognizing Grants in theStatement of Profit & Loss w.e.f 01.04.2016 tomore appropriately match with the method usedto depreciate the assets against which the grantswere received.

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3. MGVCL disagree with the view of C&AG that thechange in the method was in order to correct anerror because such a change is not mandated byIndAS 20. Here, it is to point out that IndAS 20does not mandate any specific basis / method torecognize grants, it only mandates a systematicbasis. So, C&AG's office view that IndAS 20 doesnot mandate the change of a base used is notappropriate as there is no mandate for any specificbase even otherwise.

4. As also noted in C&AG's comment that thechange is not a change in accounting policy buta change in method i.e., a change in accountingestimate. It may be further pointed out that as perInd AS, the use of reasonable estimates is anessential part of the preparation of financialstatements and does not undermine theirreliability. An estimate may need revision ifchanges occur in the circumstances on which theestimate was based or as a result of newinformation or more experience. By its nature, therevision of an estimate does not relate to priorperiods and is not the correction of an error.Hence, MGVCL disagree with the view of C&AGthat a change in method is occasioned to correctan error particularly when an estimate has to bereviewed and revised even otherwise.

5. Lastly, our accounting is as required by Ind AS, bothin the previous year as well as in the current year.In our considered view, the proposition by C&AGthat the change in methodology should beadjusted retrospectively would be a non-compliance of Ind AS itself, as Ind AS 8 has clearlylaid down how to account for a change inaccounting policy versus change in accountingestimate.

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Annexure 3 (iv)Dakshin Gujarat Vij Company Limited

Management Reply to the comment of the Comptroller and Auditor General of India received from AGOffice, Ahmedabad under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of the DakshinGujarat Vij Company Limited, Surat for the year ended March 31, 2018.

Comment of the Comptroller andAuditor General of India

Management Reply

1) Balance Sheet, Equity and Liabilities,

Deferred Government Grants, Subsidies andContribution (Note No.17) ` 1483.86 crore

With effect from 01st April 2016, the Companyhas changed the method of computing thegrants/consumer contribution received againstdepreciable assets to be recognized in Statementof Profit and Loss from reducing balance methodto the straight line method and consequently therates at which grant is recognized in theStatement of Profit and Loss. The Company hasdetermined that the change to recognize grantsin proportion of the depreciation expenses is achange in accounting estimates and is to beapplied prospectively.

As per Accounting Standard-12, Grants relatedto depreciable assets are treated as deferredincome which is recognised in the Profit and LossStatement on a systematic and rational basisover the useful life of the asset. IndianAccounting Standard-20 also state that, grantsrelated to depreciable assets are recognised inProfit or Loss over the periods and in theproportions in which depreciation expense onthose assets is recognised.

The above change in method was made by theCompany as there was a mismatch of the grantsrecognized in the Statement of Profit and Lossversus the related depreciation expense. Thus,the Company has changed the method of

It is to point out with reference to Audit commentissued last year, and as is also brought out in thiscomment, that this is a repeat comment.

The matter commented upon had been thoroughlyaddressed by DGVCL as well as GUVNL, our holdingcompany. In this regard DGVCL has made detailedsubmissions and the matter had also been discussedwith C&AG Office stating our position and reasonsbehind our position with specific reference to bothInd AS and Previous GAAP (Indian GAAP)requirements.

We summarise the issue as also brought out in boldtext in comment issued by C&AG Office as follows:




1. Firstly, as per error definition, for anything to berecognised as a correction of error in any year,it must be first, an error in the earlier/prior year.To label any accounting treatment as a prior perioderror, it usually warrants substantive corroborationand evidence explicitly demonstrating theaccounting treatment being an error in view of thespecific accounting framework as applicable.However, as can be noted from the audited

75


recognition of deferred income in order to alignthe recognition of deferred income with therelated depreciation expense. As the provisionfor treatment of deferred income to berecognised in the Profit and Loss Statement ona systematic and rational basis over the usefullife of the asset are same in AS-12 and Ind AS20, the change was not mandated by Ind AS 20.Hence, the Company changed the method inorder to correct an error.

Since the depreciable assets related to whichgrants/ consumer contribution received havebeen capitalized in the books of accounts, theeffect of such change should have been workedout retrospectively and accounted for in theopening balance of Deferred GovernmentGrants, Subsidies and Consumer contribution.


Despite being pointed out in previous year, nocorrective action has been taken by theCompany during 2017-18.

financial statements of the earlier year i.e.financial year ended 31st March 2016 includingconsideration of C&AG additional comments, theaccounting treatment was found to be incompliance with the relevant accountingframework - Previous GAAP. The accountingtreatment was found to be compliant not just forthe financial year ended 31st March 2016, buteven for previous 5-year financial statements.Here, it is to point out that, had the accountingtreatment - method adopted, were to be an error,based on an objective review of the relevantaccounting framework, given the nature andimpact of such an error, would have been a subjectmatter of audit qualification by the statutoryauditors in addition to C&AG comments on thefinancial statements to that effect. Hence, DGVCLis of the firm view that the change from WDVmethod to SLM method for recognition ofgovernment grants is perfectly appropriate interms of generally accepted accounting principles,both Ind AS and Previous GAAP, and cannot beconstrued as a correction of error by any means.

2. Thus, though there was no apparent error, asalready clarified in our previous submission,GUVNL Group Companies noted that the WDVmethod of recognizing grants though incompliance with AS-12 as well as IndAS 20, resultsinto a variation in the depreciation expenserecognized and the amount of grant recognizedin Statement of Profit & Loss every year. It wasalso considered that using the same method ofrecognizing grants would reduce the variation ofdepreciation and grants recognized during anyyear. Accordingly, GUVNL group companies haschanged the method of recognizing Grants in theStatement of Profit & Loss w.e.f 01-04-2016 tomore appropriately match with the method usedto depreciate the assets against which the grantswere received.

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3. DGVCL disagrees with the view of C&AG that thechange in the method was in order to correct anerror because such a change is not mandated byIndAS 20. Here, it is to point out that IndAS 20does not mandate any specific basis / method torecognize grants, it only mandates a systematicbasis. So, C&AG's office view that IndAS 20 doesnot mandate the change of a base used is notappropriate as there is no mandate for any specificbase even otherwise.

4. As also noted in C&AG's comment that the changeis not a change in accounting policy but a changein method i.e., a change in accounting estimate.It may be further pointed out that as per Ind AS,the use of reasonable estimates is an essential partof the preparation of financial statements and doesnot undermine their reliability. An estimate mayneed revision if changes occur in thecircumstances on which the estimate was basedor as a result of new information or moreexperience. By its nature, the revision of anestimate does not relate to prior periods and isnot the correction of an error. Hence, DGVCLdisagrees with the view of C&AG that a change inmethod is occasioned to correct an errorparticularly when an estimate has to be reviewedand revised even otherwise.

5. Lastly, our accounting is as required by Ind AS, bothin the previous year as well as in the current year.In our considered view, the proposition by C&AGthat the change in methodology should beadjusted retrospectively would be a non-compliance of Ind AS itself, as Ind AS 8 has clearlylaid down how to account for a change inaccounting policy versus change in accountingestimate.

Ind AS 19 Para 9 governs Short term Employee benefitswhich includes Profit Sharing and Bonuses. TheStandard does not define whether it is a Provision ora Liability. Further, the Guidance note on Schedule IIIPara 7.9 also states the same facts as stated below:-

2) Other Current Financial Liability (Note no.24) - ` 526.51 crore

Staff Related Liabilities- ` 2.53 Crore

The above includes an amount of ` 1.51 crorebeing provided as Provision for Bonus. As per

77


Schedule III of Companies Act, 2013, provisionsfor employee benefits are under currentprovisions (short term provisions).The sameshould have included under 'Provision foremployee benefit -Short Term Provision' insteadof 'Other Current Financial Liabilities'. This hasresulted in overstatement of 'Other CurrentFinancial Liabilities' and understatement of'Short Term Provision by ` 1.51 crore.

"For the purpose of Ind AS Schedule III, a companyalso needs to classify its employee benefit obligationsas current and non-current categories. While Ind AS-19 Employee Benefits governs the measurement ofvarious employee benefit obligations, theirclassification as current and noncurrent liabilities willalso be governed by the criteria laid down in Notes1 to 3 to the General Instructions for Preparation ofBalance Sheet in Ind AS Schedule III, which areconsistent with Ind AS 1. In accordance with thesecriteria, a liability is classified as "current" if a companydoes not have an unconditional right as on the BalanceSheet date to defer its settlement for twelve monthsafter the reporting date. Each company will need toapply these criteria to its specific facts andcircumstances and decide an appropriate classificationof its employee benefit obligations. Given below is anillustrative example on application of these criteria ina simple situation:(a) Liability towards bonus, etc., payable within one

year from the Balance Sheet date is classified as"current"." The expense whether is a provision or liability isdefined in Ind AS 37. The liability is a provisionif the timing /amount or both of the relatedexpense is uncertain.The provision of bonus is a short term employeebenefit expense, the payment amount and timingof which is certain; and hence it is disclosed as aLiability and not Provision.However, since same is not considered by C&AG,the Provision for bonus will be disclosed underProvision for Employee Benefits -Short TermProvisions from FY 2018-19 onwards.

For & On behalf of the Comptroller &Auditor General of Indiasd/-H. K. DharmadarshiAccountant General (E&RSA),GujaratPlace: AhmadabadDated: 07-12-2018

For & On behalf OF the Board of Directors,Dakshin Gujarat Vij Company Limited,

Pankaj Joshi, IASChairman (DIN 01532892)Place : VadodaraDated: 21-12-2018

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Annexure 3 (v)

UTTAR GUJARAT VIJ COMPANY LIMITED

Comments of C&AG u/s 143 (6)(b) of the Companies Act, 2013 vide Letter No. ES-I/HQ II/A/cs/UGVCL/2017-18 / 781 dated 29-Nov-2018 on the Financial Statements for the FY 2017-18 and Board's explanationu/s 134 (3)(f) of the Act:

Comments

1. Balance Sheet, Current Liabilities

Other financial Liabilities (Note No. 25) -` 549.80 Crore

Deposits & Retentions from Suppliers/Contractors - ` 57.61 Crore

The above includes an amount of ` 2.83 crorebeing share application money received fromGujarat Urja Vikas Nigam Limited (GUVNL) on 6th

March 2018. The allotment Committee of Boardof Directors of the company in meeting held 20th

Apr, 2018 approved the allotment of Equityshares on Right basis at premium to GUVNL.However the company has shown ` 2.83 croreunder Other Financial Liabilities instead of ShareApplication Money pending for Allotment underother Equity (Note No.17).

This has resulted in overstatement of OtherFinancial Liabilities under Current Liabilities andunderstatement of Other Equity by ` 2.83 crore.

As per Section 42(6) of Companies Act, 2013 -

A company making an offer or invitation under thissection shall allot its securities within sixty days fromthe date of receipt of the application money for suchsecurities and if the company is not able to allot thesecurities within that period, it shall repay theapplication money to the subscribers within fifteendays from the date of completion of sixty days andif the company fails to repay the application moneywithin the aforesaid period, it shall be liable to repaythat money with interest at the rate of twelve percentper annum from the expiry of the sixtieth day.'

UGVCL has received ` 2.83 Crore (as provided inBudget by Govt. of Gujarat) from GUVNL on 06-Mar-2018 against the capital expenditure made by theCompany for release of New Agricultural Connectionsto SC farmers. The Board of Directors in its meetingheld on 23-Mar-2018 has approved the Rights Issuewhich opened on 27-Mar-2018 and closed on 09-Apr-2018. The Equity Shares have been allotted to GUVNLby the Allotment Committee at its meeting held on20-Apr-2018. To avoid non-compliance of Section42(6) of the Companies Act, 2013, GUVNL hasspecifically issued directives vide Letter No. ACCTTS/A/c Code/109 27-Apr-2018 along with new AccountHead i.e. 46202- "Advance from GUVNL against GR

Board's explanation

79


issued by GoG". So, amount paid by GUVNL on 06-Mar-2018 was treated as advance received against GRissued by GoG and not as share application money.

The comment of C&AG Office is noted and it is assuredthat due care will be taken in such type of transactionsin future.

For and on behalf of theComptroller and Auditor General of India

Sd/-

H. K. DharmadarshiPrincipal Accountant General(E&RSA), Gujarat



V. N. Maira, IAS (Retd.)Chairman


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Annexure 3(vi)PASCHIM GUJARAT VIJ COMPANY LIMITED

Management Reply to the comments of comptroller and Auditor General of India

Comments

1 Balance Sheet

Deferred Government Grants, Subsidies &Consumer Contribution- ` 2077.74 Crore(Note No.-18).

With effect from 1st April 2016 company haschanged the method of computing thegrants/consumer contribution receivedagainst depreciable assets to be recognizedin Statement of Profit and Loss from reducingbalance method to the straight line methodand consequently the rates at which grantis recognized in the Statement of Profit andLoss. The Company determined that thechange to recognize grants in proportion ofthe depreciation expenses is a change inaccounting estimates and is to be appliedprospectively."

As per Accounting Standard 12, Grantsrelated to depreciable assets are treated asdeferred income which is recognised in theProfit and Loss Statement on a systematicand rational basis over the useful life of theasset. Indian Accounting Standard 20 alsostate that grants related to depreciableassets are usually recognised in Profit or Lossover the periods and in the proportions inwhich depreciation expense on those assetsis recognised.

The above change in method was made bytheCompany as there was a mismatch of thegrants recognized in the Statement of Profitand Loss versus the related depreciationexpense. Thus, the Company has changedthe method of recognition of deferred

Reply

We would like to point out here with reference to yourcomment, and as brought out by you, that this is arepeat comment. The matter commented upon hadbeen thoroughly addressed by our Company as wellas GUVNL, our holding company, on various occasions.We have made detailed submissions and have haddiscussions stating our position and reasons behindour position with specific reference to both Ind AS andPrevious GAAP (Indian GAAP) requirements.

We summarise the issue as also brought out in boldtext in your comment as follows:




1. Firstly, as per error definition, for anything to berecognised as a correction of error in any year, itmust be first, an error in the earlier/prior year. Tolabel any accounting treatment as a prior perioderror, it usually warrants substantive corroborationand evidence explicitly demonstrating theaccounting treatment being an error in view of thespecific accounting framework as applicable.However, as can be noted from the auditedfinancial statements of the earlier year i.e. financialyear ended 31st March 2016 includingconsideration of C&AG additional comments, theaccounting treatment was found to be incompliance with the relevant accounting

81


income in order to align the recognition ofdeferred income with the relateddepreciation expense. As the provision fortreatment of deferred income to berecognised in the Profit and Loss Statementon a systematic and rational basis over theuseful life of the asset are same in AS-12 andInd AS 20, the change was not mandated byInd AS 20. Hence, the Company changed themethod in order to correct an error.

Since the depreciable assets related to whichgrants/ consumer contribution received havebeen capitalized in the books of accounts, theeffect of such change should be worked outretrospectively and accounted for in theopening balance of Deferred GovernmentGrants, Subsidies and Consumercontribution.

This has resulted in overstatement ofretained earnings and understatement ofbalances of Deferred Government Grants,Subsidies and Consumer Contributiontowards Capital Assets by `356.20 crore asat 31st March 2017.

Despite being pointed out in previous year,no corrective action has been taken by theCompany during 2017-18.

framework - Previous GAAP. The accountingtreatment was found to be compliant not just forthe financial year ended 31st March 2016, but evenfor previous 5-year financial statements. Here, wewould like to point out that, had the accountingtreatment - method adopted, were to be an error,based on an objective review of the relevantaccounting framework, given the nature andimpact of such an error, would have been a subjectmatter of audit qualification by the statutoryauditors in addition to C&AG comments on thefinancial statements to that effect. Hence, we areof the firm view that the change from WDVmethod to SLM method for recognition ofgovernment grants is perfectly appropriate interms of generally accepted accounting principles,both Ind AS and Previous GAAP, and cannot beconstrued as a correction of error by any means.

2. Thus, though there was no apparent error, asalready clarified in our previous submission,GUVNL Group Companies noted that the WDVmethod of recognizing grants though incompliance with AS-12 as well as IndAS 20, resultsinto a variation in the depreciation expenserecognized and the amount of grant recognized inStatement of Profit & Loss every year. It was alsoconsidered that using the same method ofrecognizing grants would reduce the variation ofdepreciation and grants recognized during anyyear. Accordingly, GUVNL group companies haschanged the method of recognizing Grants in theStatement of Profit & Loss w.e.f 01.04.2016 tomore appropriately match with the method usedto depreciate the assets against which the grantswere received.

3. We disagree with your view that the change in themethod is to correct an error because such achange is not mandated by IndAS 20. Here, wewould like to point out that IndAS 20 does notmandate any specific basis / method to recognize

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grants, it only mandates a systematic basis. So,C&AG's office view that IndAS 20 does notmandate the change of a base used is notappropriate as there is no mandate for any specificbase even otherwise.

4. As also noted in your comment that the changeis not a change in accounting policy but a changein method i.e., a change in accounting estimate.It may be further pointed out that per Ind AS theuse of reasonable estimates is an essential part ofthe preparation of financial statements and doesnot undermine their reliability. An estimate mayneed revision if changes occur in the circumstanceson which the estimate was based or as a resultof new information or more experience. By itsnature, the revision of an estimate does not relateto prior periods and is not the correction of anerror. Hence, we disagree with your view that achange in method is occasioned to correct an errorparticularly when an estimate has to be reviewedand revised even otherwise.

5. Here, it appears from the C&AG comment, that,had the Company persisted with the previousmethodology as in the earlier years, the Companywould have been compliant with the accountingframework, but a change in the methodology witha view to reduce the variation would be acorrection of error. This appears to be acontradiction.

6. Hence, to conclude, our accounting is as requiredby Ind AS, both in the previous year as well as thecurrent year. In our considered view, theproposition by C&AG that the change inmethodology should be adjusted retrospectivelywould be a noncompliance of Ind AS itself.

Ind AS 19 para 9 governs Short term Employee benefitswhich includes Profit Sharing and Bonuses. TheStandard does not define whether it is a Provision ora Liability. Further, the Guidance note on Schedule IIIPara 7.9 also states the same facts as stated below:-

"For the purpose of Ind AS Schedule III, a company alsoneeds to classify its employee benefit obligations as

2. Balance Sheet

Other Current Financial Liability (Note no. 25)- ` 1253.00 crore

Staff Related Liabilities- ` 8.19 Crore

The above includes an amount of ` 1.68 crore

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current and non-current categories. While Ind AS-19Employee Benefits governs the measurement ofvarious employee benefit obligations, theirclassification as current and noncurrent liabilities willalso be governed by the criteria laid down in Notes 1to 3 to the General Instructions for Preparation ofBalance Sheet in Ind AS Schedule III, which areconsistent with Ind AS 1. In accordance with thesecriteria, a liability is classified as "current" if a companydoes not have an unconditional right as on the BalanceSheet date to defer its settlement for twelve monthsafter the reporting date. Each company will need toapply these criteria to its specific facts andcircumstances and decide an appropriate classificationof its employee benefit obligations. Given below is anillustrative example on application of these criteria ina simple situation:(a) Liability towards bonus, etc., payable within one

year from the Balance Sheet date is classified as"current"."The expense whether is a provision or liability isdefined in Ind AS 37. The liability is a provisionif the timing /amount or both of the relatedexpense is uncertain.The provision of bonus is a short term employeebenefit expense, the payment amount and timingof which is certain; and hence it is disclosed as aLiability and not Provision.Since same is not considered by C&AG, theProvision for bonus will be disclosed underProvision for Employee Benefits -Short TermProvisions from the FY 2018-19.

being provided as Provision for Bonus. As perSchedule III of Companies Act, 2013, provisionsfor employee benefits are under currentprovisions (short term provisions).The sameshould have included under 'provision foremployee benefit (short term provision) insteadof showing under 'Other Current FinancialLiability'. This has resulted in overstatement of'Other Current Financial Liability' andunderstatement of 'Short Term Provision by` 1.68 crore.

For and on behalf of theComptoller and Auditor General of India

Sd/-H. K. DharmandarshiPrincipal Accountant General (E & R S A), Gujarat

Place: AhmedabadDate: 30-11-2018

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Annexure 5

SANDIP K SHUKLA

M.COM., LL.B., FCS, AICWA, CAIIB, ACIS (UK), IPR - GenevaPRACTISING COMPANY SECRETARIES

2nd Floor, City Complex, Opp: Golden Silver Apartment, Subhanpura, Vadodara-390023Email: [email protected] / [email protected]

(M) 9825087084 (O) 6535803 (R) 2397682

FORM NO. MR - 3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2018

[Pursuant to Section 204(1) of the Companies Act, 2013 read with Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rule, 2014]

To,The Members,Gujarat Urja Vikas Nigam Limited,Sardar Patel Vidyut Bhavan, Race Course,Vadodara - 390007.

I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherenceto good corporate practices by Gujarat Urja Vikas Nigam Limited (CIN U40109GJ2004SGC045195) (hereaftercalled "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basisfor evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

Based on my verification of the Company's books, papers, minute books, forms and returns filed andother records maintained by the Company and also the information provided by the Company, its officers,agents and authorized representatives during the conduct of the Secretarial Audit, I hereby report thatin my opinion, the Company has, during the audit period covering the financial year ended on 31st March,2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reportingmade hereinafter :

I have examined the books, papers, minutes books, forms and returns filed and other records maintainedby the Company having its registered office at Sardar Patel Vidyut Bhavan, Race Course, Vadodara - 390007 for the financial year ended on 31st March, 2018 according to the provisions of:

(i) The Companies Act, 2013 ("the Act") and the Rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made there under; -

85


NOT APPLICABLE

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

NOT APPLICABLE

(iv) Foreign Exchange Management Act, 1999 and the applicable rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and ExternalCommercial Borrowings; -

NOT APPLICABLE

(v) The Regulations and Guidelines prescribed under the Securities and Exchange Board of IndiaAct, 1992 (SEBI Act).

NOT APPLICABLE - The Company being an unlisted Company.

(vi) The other following laws to the extent specifically applicable to the Company:

(1) Electricity Act, 2003

(2) Gujarat Electricity Industry (Re-organisation and Regulation) Act, 2003

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India : (Effective from1st July, 2015 as mended from time to time)

(ii) The Listing Agreement

NOT APPLICABLE - The Company being an unlisted Company.

During the period under review, the Company has complied with the provisions of the Act, Rules,Regulations, Guidelines, standards etc mentioned above. For short spending of amount on Corporate SocialResponsibility activities as per Section 135 of the Act, the Company will ensure to specify the reasonsfor short spending the amount in its Board Report pursuant to the provisions of Section 135 of theAct and the Companies ( Corporate Social Responsibility Policy) Rules, 2014.

I further report that

(i) The Company is a holding Company of six subsidiary companies. The company is a GovernmentCompany under the provisions of the Act.

(ii) The Board of Directors of the Company is duly constituted with proper balance of ExecutiveDirectors, Non-Executive Directors and Independent Directors. The changes in the compositionof the Board of Directors that took place during the period under review were carried out incompliance with the provisions of the Act and as per the directives issued by the Governmentof Gujarat from time to time. The final term of two Independent Directors ended on 12-03-2018. The Company being wholly owned State Govt. Company, a proposal for appointment of

86


Independent Directors was submitted by the Company to State Govt. well in advance which wasunder consideration of the Government as on 31st March, 2018.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes onagenda were sent at least seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningful participationat the meeting.

There were no dissenting views on any matter.

I further report that there are adequate systems and processes in the company commensurate withthe size and operations of the company to monitor and ensure compliance with applicable laws, rules,regulations and guidelines.

I further report that during the audit period, specific events/ actions having a major bearing on theCompany's affairs are as under:

1. During the F.Y. 2017-18, the Company has allotted 2512943900 Equity Shares of `10/- each for cash,at par on rights basis u/s 62 of the Companies Act, 2013.

Place: Vadodara SANDIP K SHUKLADate: 25.10.2018 COMPANY SECRETARIES

FCS No: 2386C.P No: 3335

This report is to be read with our letter of even date which is annexed as Annexure and forms an integralpart of this report.

87


AnnexureTo,The Members,Gujarat Urja Vikas Nigam Limited,Sardar Patel Vidyut Bhavan, Race Course,Vadodara - 390007.

Our Secretarial Audit Report (F Y 2017-18) of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Ourresponsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assuranceabout the correctness of the contents of the Secretarial Records. The verification was done on testbasis to ensure that correct facts are reflected in secretarial records. We believe that the processesand practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accountsof the company.

4. Wherever required, we have obtained the management's representation about the compliance oflaws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standardsis the responsibility of management. Our examination was limited to the verification of procedureson test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company norof the efficacy or effectiveness with which the management has conducted the affairs of the Company.

Place: Vadodara SANDIP K SHUKLADate: 25.10.2018 COMPANY SECRETARIES

FCS No: 2386C.P No: 3335

SANDIP K SHUKLA

M.COM., LL.B., FCS, AICWA, CAIIB, ACIS (UK), IPR - GenevaPRACTISING COMPANY SECRETARIES

2nd Floor, City Complex, Opp: Golden Silver Apartment, Subhanpura, Vadodara-390023Email: [email protected] / [email protected]

(M) 9825087084 (O) 6535803 (R) 2397682

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STANDALONE FINANCIALSTATEMENTSF Y : 2017-18

90


COMMENTS OF THE COMPTROLLER AND AUDITRO GENERAL OF INDIA UNDER SECTION143 (6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF GUJARATVIKAS NIGAM LIMITED FOR THE YEAR ENDED 31ST MARCH 2018

The preparation of financial statements of Gujrat Urja Vikas Nigam Limited for the year ended 31st March2018 in accordance with the financial reporting framework prescribed under the Companies Act, 2013(Act) is the responsibility of the Management of the Company. The Stattutory Auditors appointed by theComptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressingopinion on the financial statements under Section 143 of the Act based on independent audit in accor-dance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to havebeen done by them vide their Audit Report dated 19th September 2018.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit undersection 143(6)(a) of the Act of the financial statemts of Gujarat Urja Vikas Nigam Limited for the yearended 31st March 2018. The supplementary audit has been carried out independently without access tothe working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditorsand Company personnel and a selective examination of some of the accounting records. On the basis ofmy audit nothing significant has come to my knowledge which would give rise to any comment upon orsupplement to Statutory Auditor’s Report.

For and on behalf of theComptroller and Auditor General of India

sd/-H. K. DharmadarshiPrincipal Accountant General (E&RSA), Gujarat


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INDEPENDENT AUDITOR'S REPORT

To the Members of Gujarat Urja Vikas Nigam Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of Gujarat Urja Vikas NigamLimited ('the Company'), which comprise the Balance Sheet as at 31st March, 2018, the Statementof Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statementof Changes in Equity for the year then ended, and a summary of the significant accounting policiesand other explanatory information (herein after referred to as "Standalone Ind AS Financial Statement").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the CompaniesAct, 2013 ("the Act") with respect to the preparation of these standalone Ind AS Financial Statementsthat give a true and fair view of the financial position, financial performance including other comprehensiveincome, cash flows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section133 of the Act, read with relevant rules issued thereunder.This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that are reasonableand prudent; and design,implementation and maintenance of adequate internal financial controls, thatwere operating effectively for ensuring the accuracy and completeness of the accounting records, relevantto the preparation and presentation of the standalone Ind AS financial statements that give a trueand fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements basedon our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards andmatters which are required to be included in the audit report under the provisions of the Act andthe Rules made thereunder.

No. 8 2nd Floor, Tower E, Avishkar,Old Padara Road, Vadodara - 390 007.

Gujarat, India.Ph. : +91-265-2357845, 2310448, 2313515

email : [email protected]

Mukund & RohitChartered Accoutants

92


We conducted our audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing specified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosuresin the standalone Ind AS financial statements. The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the standalone Ind AS financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considersinternal financial control relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on whether the Companyhas in place an adequate internal financial control system over standalone Ind AS financial reportingand operating effectiveness of such controls. An audit also includes evaluating the appropriatenessof the accounting policies used and the reasonableness of the accounting estimates made by theCompany's Board of Directors, as well as evaluating the overall presentation of the standalone IndAS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,the aforesaid standalone Ind AS financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accounting principles generallyaccepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, othercomprehensive income, cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by CentralGovernment of India in terms of sub-section(11) of section 143 of the Companies Act, 2013, wegive in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order,to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best ofourknowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the Companyso far asit appears from our examination of those books.

c) The reports on the accounts of the branch offices of the Company audited under Section143 (8) of the Act is not attached since the Company has no branches and the point is notapplicable to the Company for the year under the review.

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d) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report arein agreement with the relevant books of account.

e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act, read with relevant rules issuedthere under.

f) The Company being a Government Company, in view of Notification No. G.S.R. 463(E) dated5th July, 2015 issued by Government of India, the provisions of section 164(2) of the CompaniesAct, 2013 are not applicable to the Company.

g) With respect to the adequacy of the internal financial controls with reference to financialstatements of the Company and the operating effectiveness of such controls, refer to ourseparate report in "Annexure B";

h) With respect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion andto 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 positionin its standalone Ind AS financial statement - Refer Note 39 to the standalone Ind ASfinancial statements.

ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company.

3. As required by C&AG of India through directions / sub-directions issued under Section 143(5)of the Companies Act, 2013, we give our report in the attached "Annexure C"

For Mukund & RohitChartered Accountants

Registration No. 113375W

Vinay SehgalPlace : Gandhinagar PartnerDate : September 19,2018 Membership No. 109802

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Annexure A to the Independent Auditor's ReportThe Annexure referred to in our report to the members of Gujarat Urja Vikas Nigam Limited for the

year ended March 31, 2018, we report that:

I.

(a) The Company has compiled the Property, Plant and Equipment register in respect of Assetspurchased / constructed as well as assets of erstwhile GEB transferred to the Company underthe Notification dated 03/10/2006 issued by Government of Gujarat showing particulars includingquantitative details, except that certain details such as location, identification no. etc. of Property,Plant and Equipment are in the process of being updated.

(b) As informed to us, the Property, Plant and Equipment have been physically verified by themanagement during the year. According to the information & explanation given to us, no materialdiscrepancy was noticed on such verification.

(c) As per the information and explanations provided to us, the title deeds of immovable propertiesreflected in financial statement are held in the name of the Company.

II. The Company does not hold any inventory of goods. Accordingly sub-clauses (a), (b) & (c) of clause(ii) are not applicable.

III. In our opinion and according to the information & explanations given to us, the Company has notgranted loans, secured or unsecured to Companies, firms, LLP or other parties covered in registermaintained under section 189 of the Companies Act 2013, and therefore, the provisions of clauses(iii)(a) & (iii)(b) of the Order are not applicable to the Company.

IV. In our opinion and according to the information and explanations given to us, in respect of loans,investments, guarantees, and security, provisions of section 185 and 186 of the Companies Act, 2013have been complied with.

V. Based on our scrutiny of Company's record and according to the information and explanation providedby the management, in our opinion, the Company has not accepted any loans or deposits, whichare "Deposits" within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit's) Rules,2014.

VI. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1)(d)of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts andcost records have been maintained. We have, however, not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete.

VII. In respect of Statutory Dues:

(a) According to the records of the Company, undisputed statutory dues including Provident Fund,Employees' State Insurance, Income Tax, Service tax, Goods and Service Tax, Cess and any othermaterial statutory dues have been generally regularly deposited with the appropriate authorities.

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According to the information and explanations given to us, no statutory dues were outstanding,as at 31st March, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues of Income Tax orSales Tax or Wealth Tax or Service Tax or duty of customs or value added tax or cess, whichhave not been deposited on account of any dispute except as under:

Sr. Name of Nature of Forum whereNo. the Statute the Dispute Amount (`) Period dispute is

pending

1 Bombay Stamp Duty Demand Chief ControllerStamp on Mortgage 11,98,52,000 Pertaining to of RevenueAct Deed erstwhile GEB Authority,

Gandhinagar

2 Income Recomputed MATTax Act, and interest u/s 45,72,70,420 AY 2015-16 CIT (A), Baroda1961 234B & 234C

VIII. In our opinion and according to the information and explanations given by the management, theCompany has not defaulted in repayment of loans or borrowing to a Financial Institution, Bank,Government or dues to debenture holders.

IX. Based on our audit procedures and as per the information and explanations given by the management,Company has not raised money by initial public offer or further public offer (including debt instruments)and term loans during the period covered by our audit report.

X. In our opinion and according to the information and explanations given by the management, nomaterial fraud by the Company or on the Company by its officers or employees has been noticedor reported during the year.

XI. The Company being a Government Company, in view of the Notification No. G.S.R 463 (E) dated5th June, 2015 issued by Ministry of Corporate Affairs, the provisions of section 197 read with ScheduleV to the Companies Act, 2013 are not applicable to the Company. So the question of reporting onthe same does not arise.

XII. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) ofCompanies (Auditor's Report) Order, 2016 are not applicable.

XIII. All transactions with related parties are in compliance with sections 177 and 188 of Companies Act,2013 and the details have been disclosed in the Financial Statements, as required by the applicableaccounting standards at Note 44 of standalone Ind AS financial statements.

XIV. Based on our examination of records and information provided to us by the management, we reportthat the Company has issued shares on right basis during the year under review and the requirementof section 62(1)(a) of the Companies Act, 2013 have been complied with and the amount raised havebeen used for the purposes for which the funds were raised.

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XV. Based on our examination of records and information provided to us by management, the Companyhas not entered into any non-cash transactions with directors or persons connected with him.

XVI. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934. Therefore, the provisions of clause 3(xvi) of Companies (Auditor's Report) Order, 2016 are notapplicable.




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Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct, 2013 ("the Act")

We have audited the Internal Financial Controls with reference to financial statements of Gujarat UrjaVikas Nigam Limited("the Company") as of 31st March 2018 in conjunction with our audit of the standaloneInd AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controlsbased on the internal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). Theseresponsibilities include the design, implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of its business, includingadherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors,accuracy and completeness of the accounting records, and timely preparation of reliable financialinformation, as required under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with referenceto financial statements based on our audit. We conducted our audit in accordance with the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the CompaniesAct, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financial controls with referenceto financial statements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system with reference to financial statements and their operating effectiveness. Ouraudit of internal financial controls with reference to financial statements included obtaining anunderstanding of internal financial controls with reference to financial statements, assessing the risk thata material weakness exists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor's judgment, includingthe assessment of the risks of material misstatement of the standalone Ind AS financial statements, whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Company's internal financial controls system with reference to financialstatements.

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Meaning of Internal Financial Controls with reference to Financial Statements

A Company's internal financial controls with reference to financial statements is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to financial statements includes those policies and proceduresthat

1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the Company;

2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and

3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,use, or disposition of the Company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements,including the possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of the internalfinancial controls with reference to financial statements to future periods are subject to the risk thatthe internal financial controls over financial reporting may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Companyhas, in all material respects, an adequate internal financial control system over financial reporting andsuch internal financial controls with reference to financial statements were operating effectively as at31st March 2018, based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.



Vinay SehgalPlace : Gandhinagar PartnerDate : September 19, 2018 Membership No. 109802

99


1. Whether the Company has clear title / leasedeeds for freehold and lease hold respectively?If not please state the area of freehold andleasehold land for which title / lease deeds arenot available?

2. Whether there are any cases of waiver / writtenoff of debts / loans/ interest etc. If, yes, thereasons there for and the amount involved.

3. Whether proper records are maintained forinventories lying with third parties & assetsreceived as gift / grant(s) from the Governmentor other authorities.

Annexure C to the Independent Auditor's Report

The Annexure referred to in our report to the members of Gujarat Urja Vikas Nigam Limited for the yearended March 31, 2018:

S.No. Directions / Sub Directions Response / Remedial Measures

The title deeds of immovable propertiesreflected in the financial statements are held inthe name of the Company

Yes

HBA Loan and Interest of ` 3,47,908 is waivedduring the year in the event of death of theemployee while in service as per Company'spolicy for Staff Welfare.

Not Applicable




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Balance Sheet as at 31st March, 2018 (` in Lakhs)

Particulars Note As at 31st As at 31stNo. March, 2018 March, 2017

ASSETS

(1) Non-Current Assets

(a) Property, Plant and Equipment 2 4,430.90 1,890.81

(b) Intangible Assets 2 232.08 232.99

(c) Capital Work-In-Progress 2 - 58.14

(d) Financial Assets

(i) Investments 3 1,989,862.39 1,670,262.14

(ii) Loans 4 161.96 198.18

(iii) Other Financial Assets 5 1,473.70 1,463.85

Total Non-Current Assets 1,996,161.03 1,674,106.10

(2) Current Assets

(a) Financial Assets

(i) Trade Receivables 6 38.63 1,306.95

(ii) Cash and cash equivalents 7 116,694.07 6,031.11

(iii) Other Bank Balances 8 48.78 84.58

(iv) Loans 9 57.23 57.19

(v) Other Financial Assets 10 626,213.72 692,614.67

(b) Current Tax Assets (net) 11 2,391.33 -

(c) Other Current Assets 12 14,599.60 16,751.15

Total Current Assets 760,043.35 716,845.64

Total 2,756,204.39 2,390,951.74

EQUITY AND LIABILITIES

Equity

(a) Equity Share Capital 13 1,622,754.99 1,371,460.60

(b) Other Equity 14 164,367.11 112,807.92

Total Equity 1,787,122.10 1,484,268.52

Deferred Government Grants 15 14.14 -

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Liabilities

(1) Non-Current Liabilities

(a) Financial Liabilities

(i) Borrowings 16 14,498.49 16,430.75

(ii) Trade Payables 17 85.29 85.29

(iii) Other Financial Liabilities 18 691.80 660.56

(b) Provisions 19 1,173.03 31,697.88

(c) Deferred Tax Liabilities (Net) 20 - -

Total Non-Current Liabilities 16,448.61 48,874.49

(2) Current Liabilities

(a) Financial Liabilities

(i) Borrowings 21 2.65 13,872.56

(ii) Trade payables 22 537,465.86 508,275.77

(iii) Other Financial liabilities 23 408,461.84 320,198.38

(b) Other current liabilities 24 108.81 31.45

(c) Provisions 25 6,580.38 15,269.88

(d) Current Tax Liabilities (net) 26 - 160.69

Total Current Liabilities 952,619.54 857,808.72

Total 2,756,204.39 2,390,951.74

Significant Accounting Policies and Notes to Financial Statements 1-48

As per our Report of even date attached For and on behalf of the BoardFor Mukund & RohitChartered AccountantsFirm Registration No. 113375W RAJ GOPAL, IAS PANKAJ JOSHI,IAS CA. S.B. KHYALIA

Chairman Managing Director Director (Finance)VINAY SEHGAL DIN: 02252358 DIN:01532892 DIN:02470485PartnerMembership No. 109802 SHUBHADEEP SEN PARTHIV BHATT

General Manager (F&A) & CFO Company Secretary

Place : Gandhinagar Place : GandhinagarDate : September 19, 2018 Date : September 19, 2018

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Statement of Profit and Loss for the year ended 31st March, 2018 (` in Lakhs)

Note For the year For the yearParticulars No. ended 31st ended 31st

March, 2018 March, 2017I Revenue from operations 27 3,782,014.76 3,438,453.51II Other Income 28 2,203.76 1,436.56III Total Income (I+II) 3,784,218.52 3,439,890.07IV EXPENSES

Purchase of Power 29 3,760,111.52 3,415,579.37Employee Benefits Expense 30 3,674.84 3,153.86Finance Costs 31 2,547.06 2,795.62Depreciation and Amortization Expense 2 175.99 158.58Other Expenses 32 1,834.45 1,541.11Total Expenses (IV) 3,768,343.86 3,423,228.53

V Profit Before Tax (III-IV) 15,874.66 16,661.54VI Tax Expense: 33

(a) Current Tax 3,270.00 3,660.00(b) Deferred Tax - -

VII Profit for the Year (V-VI) 12,604.66 13,001.54VIII Other Comprehensive Income (OCI)

(a) Items that will not be reclassified to Profit and Loss(i) Re-measurement of the Defined Benefit Plans (556.12) (97.79)(ii) Equity Instruments through OCI 3,955.58 3,103.10Total of Other Comprehensive Income (OCI) (VIII) 3,399.46 3,005.30

IX Total Comprehensive Income for the Year (VII+VIII) 16,004.12 16,006.84X Earnings Per Equity Share (Refer Note No. 34):

Basic (in `) 0.08 0.10Diluted (in `) 0.08 0.10See accompanying Notes to the Financial Statements 1-48





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CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2018 (` in Lakhs)

For the year For the yearParticulars ended 31st ended 31st

March, 2018 March, 2017[A] CASH FLOW FROM OPERATING ACTIVITIES

Profit Before Tax 15,874.66 16,661.54Adjustments for:Depreciation and Amortization Expense 175.99 158.58Dividend Income (1,208.23) (1,207.96)Interest Income - -Deffered income (1.14) -Finance Cost 2,547.06 2,795.62(Profit)/Loss on Sale of Fixed Assets (Net) 0.13 (0.68)Operating Profit/(Loss) before changes in Working Capital 17,388.47 18,407.09Adjustment for (Increase)/Decrease in Operating AssetsTrade Receivables 1,268.32 16.28Loans and Other Financials Assets 50,374.14 127,281.56Other non Financial Assets 2,151.55 7,355.85

Adjustment for Increase/(Decrease) in Operating LiabilitiesTrade Payables 30,543.91 15,008.34Other Financial Liabilities 103,086.27 15,255.32Other Non-Financial Liabilities & Provisions (39,693.11) (13,714.02)Cash Flow from operations after changes in Working Capital 165,119.55 169,610.43Net Direct Taxes (Paid)/Refunded (5,822.02) (4,812.79)Net Cash Flow from/(used in) Operating Activities 159,297.53 164,797.64

[B] CASH FLOW FROM INVESTING ACTIVITIESPurchase of PPE including Capital Advances & CWIP (2,675.46) (113.88)Sale of PPE 18.30 1.27Investment in Subsidiary Companies (315,644.67) (258,820.14)Dividend Income 1,208.23 1,207.96Bank Balances not considered as Cash and Cash Equivalents 35.80 (41.30)Net Cash Flow from/(used in) Investing Activities (317,057.82) (257,766.09)

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[C] CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issue of Shares/Share Application Money 286,849.46 261,490.00Deferred Government Grants 15.28 -Proceeds from Borrowings - -(Repayment)/Proceeds from Borrowings (15,802.18) (161,155.15)Interest & Finance Expenses (2,639.32) (4,483.14)Net Cash Flow from/(used in) Financing Activities 268,423.24 95,851.71Net Increase/ (Decrease) in Cash and Cash Equivalents 110,662.96 2,883.26Cash & Cash Equivalents at beginning of period (see Note 1) 6,031.11 3,147.84Cash and Cash Equivalents at end of period (see Note 1) 116,694.07 6,031.11

Notes: 1 Cash and Cash equivalents comprise of:

Cash on Hand 0.93 2.55Balance with Banks 26,693.14 6,028.56Deposits with Banks (with maturity less than 3 months) 90,000.00 -Cash and Cash equivalents 116,694.07 6,031.11Effect of Unrealised foreign exchange (gain)/loss (Net) - -Cash and Cash equivalents as restated 116,694.07 6,031.11

2 The Cash Flow Statement has been prepared under the ‘Indirect Method’ set out in Indian AccountingStandards (Ind AS) - 7 “Statement of Cash Flows”

3 Figures of the previous year have been regrouped / reclassified wherever necessary.





105


Statement of Changes in Equity for the year ended on 31st March, 2018Equity Share Capital

Particulars Amount ` in LakhsBalance as on 1st April, 2016 1,075,470.65Changes during the year 295,989.95Balance as on 31st March,2017 1,371,460.60Changes during the year 251,294.39Balance as on 31st March,2018 1,622,754.99

Other Equity ( ` in Lakhs )Reserves Item of Other

and Share ComprehensiveSurplus Application Income

Particulars Money Equity Instruments TotalRetained Pending through OtherEarnings allotment Comprehensive

IncomeBalance as at 31st March, 2016 226.35 116,463.87 14,610.82 131,301.03Profit for the Year 13,001.54 - - 13,001.54Other Comprehensive Income for the Year (97.79) - 3,103.10 3,005.30(net of Tax)Total Comprehensive Income for the Year 12,903.74 - 3,103.10 16,006.84Add: Share Application Money pending allotment - 81,963.92 - 81,963.92Less: Shares Issues - (116,463.87) - (116,463.87)Balance as at 31st March, 2017 13,130.09 81,963.92 17,713.91 112,807.92Profit for the Year 12,604.66 12,604.66Other Comprehensive Income for the Year (556.12) 3,955.58 3,399.46(net of Tax)Total Comprehensive Income for the Year 12,048.54 3,955.58 16,004.12Add: Share Application Money pending allotment 117,518.99 117,518.99Less: Shares Issues (81,963.92) (81,963.92)Balance as at 31st March, 2018 25,178.63 117,518.99 21,669.49 164,367.11





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Note: 1 CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIESA Corporate information

Gujarat Urja Vikas Nigam Limited ('GUVNL' or 'the Company') is a wholly owned undertaking ofGovernment of Gujarat domiciled and incorporated in India having its registered office at "SardarPatel Vidyut Bhavan", Race Course, Vadodara, Gujarat -390007.

Govt. of Gujarat restructured Gujarat Electricity Board ("GEB") effective 1st April 2005, as per variousadministrative and statutory actions to implement the Financial Restructuring Plan of GEB and splitthe business and activity of Generation, Transmission and Distribution of electricity by demerger ofthe respective units and vested the same along with all its assets and liabilities (relating to the respectiveunits) in various Companies, viz. Gujarat State Electricity Corporation Ltd., Gujarat Energy TransmissionCorporation Ltd., Dakshin Gujarat Vij Company Ltd., Madhya Gujarat Vij Company Ltd., Paschim GujaratVij Company Ltd. and Uttar Gujarat Vij Company Ltd. on functional basis and the balance (residual)assets were allocated to the Company.

In terms of the Financial Restructuring Plan of GEB, Govt. of Gujarat notified the values of assetsand liabilities as on 01.04.2005, vested in the said six subsidiary companies as well as the Companyon 3rd October 2006. The Company is engaged in the business of purchase and sale of electricity(including bulk purchase and sale), hold shares in other companies, and acquire and hold residualassets and liabilities of erstwhile GEB. The principle place of business is at the registered office at"Vidyut Bhavan", Race Course, Vadodara, Gujarat -390007.

B Basis of Preparation and Measurement

1 Statement of Compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS),under the historical cost convention on accrual basis except for certain financial instruments whichare measured at fair values, the provisions of the Companies Act , 2013 ('the Act') (to the extentnotified) except in so far as the said provisions are inconsistent with the provisions of the ElectricityAct, 2003. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies(Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.

2 Application of new Indian Accounting Standard

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs underthe Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statementsare authorized have been considered in preparing these financial statements. There is no other IndianAccounting Standard that has been issued as of that date but was not mandatorily effective.

Recent Accounting Pronouncements:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28,2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian AccountingStandards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currencytransactions and advance consideration which clarifies the date of the transaction for the purpose

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of determining the exchange rate to use on initial recognition of the related asset, expense orincome, when an entity has received or paid advance consideration in a foreign currency. Theamendment is mandatorily effective from April 1, 2018. This amendment has no effect on thefinancial statements of the Company.

Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle ofthe new standard is that an entity should recognize revenue to depict the transfer of promised goodsor services to customers in an amount that reflects the consideration to which the entity expectsto be entitled in exchange for those goods or services. Further the new standard requires enhanceddisclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising fromthe entity's contracts with customers. This amendment is mandatorily effective from April 1, 2018.The effect on the Financial statements on adoption of Ind AS 115 is being evaluated by the Company.

3 Basis of Measurement

The Financial Statements have been prepared on historical cost basis except for certain financialinstruments that are measured at fair values at the end of each reporting period, as explained inthe Accounting Policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goodsand services.

As the operating cycle cannot be identified in normal course due to the special nature of industry,the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilitieshave been classified as current or non-current as per the Company's operating cycle and other criteriaset out in Ind AS-1 'Presentation of Financial Statements" and Schedule III to the Companies Act,2013.

The Financial Statements are presented in Indian Rupees and all values are rounded off to the nearesttwo decimal lacs except otherwise stated.

4 Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants on the measurement date. The fair value measurementis based on the presumption that the transaction to sell the asset or transfer the liability takes placeeither:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level input thatis significant to the fair value measurement as a whole:

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Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fairvalue measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fairvalue measurement is un-observable.

C Significant Accounting Policies

1 Property, Plant & Equipment

Property, Plant & Equipment (PPE) comprises of Tangible Assets and Capital Work- in-Progress. PPEare stated at cost after reducing accumulated depreciation.The cost of PPE comprises of its purchaseprice or its construction cost or any cost directly attributable to bring the asset into the locationand condition necessary for it to be capable of operating in the manner intended by the managementand decommissioning costs. Directly attributable costs are capitalized until the asset is ready for useand includes borrowing cost capitalised upto the commissioning of the asset.

Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheetare disclosed as "Capital Work in Progress".

Buildings held for use in the supply of goods or services or for administrative purposes are statedin the Balance Sheet at cost less accumulated depreciation and impairment losses, if any.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the itemwill flow to the Company and the cost of the item can be measured reliably. Subsequent costsrelating to day to day servicing of the item are not recognised in the carrying amount of an itemof Property, Plant and Equipment; rather these costs are recognised in the Statement of Profit&Loss as incurred.

An item of PPE is de-recognised upon disposal or when no future economic benefits are expectedto arise from the continued use of the PPE. Any gain or loss arising on the disposal or retirementof an item of PPE is determined as the difference between the sale proceeds and the carrying amountof the PPE and is recognised in the Statement of Profit and Loss.

2. Depreciation

Depreciation of these PPE commences when the assets are ready for their intended use.

The Company, being engaged in electricity business, is covered under the Electricity Act, 2003 andprovisions of the Electricity Act supersede the provisions of the Companies Act, 2013. Accordingly,the Company charges depreciation on straight line method at the depreciation rates, the methodologyand the residual value as prescribed in GERC (MYT) Regulations, 2016.

The rates/range of depreciation of Property, Plant and Equipment are as follows:

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Asset Description Rates/Range

Buildings 3.34 %

Plant & Machinery 5.28% to 9.50 %

Lines & Cable Net Work Upto 5.28 %

Vehicles 9.50 %

Furniture-Fix & Elect-Light & Fan Installations 6.33 %

Computers 15.00 %

Office Equipments 6.33 %

Depreciation on additions/deletions to PPE during the year is provided for on pro-rata basis withreference to the date of additions/deletions except low value items not exceeding ` 5,000/- whichare fully depreciated at the time of addition. Depreciation on subsequent expenditure on PPE arisingon account of capital improvement or other factors is provided for prospectively over the remaininguseful life.The depreciation methods, residual values, etc. are reviewed on annual basis and if necessary,changes in estimates are accounted for prospectively.

3 Intangible Assets

Intangible Assets with finite useful life are recognized only if it is probable that future economic benefitsthat are attributable to the assets will flow to the enterprise and the cost of assets can be measuredreliably. The Intangible Assets are recorded at cost and are carried at cost less accumulated amortizationand accumulated impairment losses, if any.

An Intangible Asset is derecognized on disposal, or when no future economic benefits are expectedfrom its use or disposal. Gains or losses arising from derecognition of an intangible asset, measuredas the difference between net disposal proceeds and carrying amount of the asset, are recognizedin the Statement of Profit and Loss when the asset is derecognized.

The Company charges depreciation on Computer Software on straight line method at the depreciationrate of 30%, as per the methodology and residual value in accordance with GERC (MYT) Regulations,2016.

4 Impairment of Tangible and Intangible Assets

The Company reviews at each reporting period whether there is any indication that an asset maybe impaired. If any such indication exists, the Company estimates the recoverable amount of theasset. If such recoverable amount of the asset or the recoverable amount of the Cash GeneratingUnit to which the asset belongs is less than its carrying amount, the carrying amount is reducedto its recoverable amount. The reduction is treated as an impairment loss and is recognized in theStatement of Profit and Loss. If at the reporting period, there is an indication that there is a changein the previously assessed impairment loss, the recoverable amount is reassessed and the asset isreflected at the recoverable amount.

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5 Non-Current Assets held for Sale

The Company classifies Non-Current Assets as held for sale if their carrying amounts will be recoveredprincipally through a sale rather than through continuing use of the assets and actions required tocomplete such sale indicate that it is unlikely that significant changes to the plan to sell will be madeor that the decision to sell will be withdrawn. Also, such assets are classified as held for sale onlyif the management expects to complete the sale within one year from the date of classification.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carryingamount and fair value less costs to sell.

Property, Plant and Equipment and intangible assets are not depreciated or amortized once classifiedas held for sale.

6 Government Grant

Government Grants (including Subsidies) are not recognized until there is reasonable assurance thatthey will be received and the Company will comply with the conditions associated with the Grant.

Grants that compensate the Company for the cost of an asset are initially set up as Deferred Incomeand recognized in the Statement of Profit and Loss on a systematic basis over the period and inproportions of depreciation expense of the related assets. Grants that compensate the Companyfor expenses incurred are recognizedin the Statement of Profit and Loss over the period in whichthe related costs are incurred and deducted from the related expenses.

7 Investments in Subsidiary and Associate

Investments in Subsidiaries and Associates are carried at cost less accumulated impairment losses,if any. Where an indication of impairment exists, the carrying amount of investment is assessed andwritten down immediately to its recoverable amount. On disposal of investments in Subsidiaries andAssociate, the difference between net disposal proceeds and the carrying amounts are recognizedin the Statement of Profit and Loss.

8 Revenue Recognition

Revenue is recognized when no significant uncertainty as to the measurability or collectability exists.Revenue is measured at the fair value of the consideration received or receivable.

Revenue from Sale of Power

Energy sales are accounted on the basis of billing on Bulk Supply Tariff (BST) agreements enteredinto with the Distribution Companies viz. Dakshin Gujarat Vij Co. Ltd., Madhya Gujarat Vij Co. Ltd.,Paschim Gujarat Vij Co. Ltd. and Uttar Gujarat Vij Co. Ltd. and the contracts entered into with theLicensees viz. Kandla Port Trust and Traders.

Surplus power, if any is sold through bilateral transactions or by putting bids in Power Exchangeson day to day basis and the same is accounted on acceptance of bids.

Other Revenue from Power related Activities

Rebate (Cash Discount) for Prompt Payment towards purchase of power (net), Interest on UI PoolAccount, Cash Discount and CDM Benefit from renewable energy are recognised on cash basis.

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Dividend Income

Dividend Income is accounted in the year in which the right to receive the dividend is established.

Penalty and Liquidated Damages

Penalty for delay in supply of materials is recovered as per the terms of purchase order at the timeof accounting the purchases whereas refund of penalty is accounted when the order is fully executedby the supplier and the refund is approved by the competent authority.

Liquidated Damages and Penalties in relation to purchase of power and completion of projects areaccounted on actual recovery.Other Income

Claims lodged with the Insurance Company in respect of risks covered are accounted for as and whenthe claim is received.

Other Incomes are recognized on accrual basis except when ultimate realization of such income isuncertain.

9. Functional and Presentation Currency

The Financial Statements are prepared in Indian Rupee (INR ̀ ) which is functional as well as presentationcurrency of the Company.

10. Employee Benefits

Employee Benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment,compensated absences and retirement benefits.

Short Term Employee Benefits

ShortTerm Employee Benefits expected to be paid in exchange for services rendered by the employeesare recognized as an expense during the period employee renders services. These benefits includeremuneration, bonus, incentives, etc.Long Term Employee Benefits

Defined Contribution Plans

Retirement benefits in the nature of employer's contribution towards Contributory Provident Fund,Employee's Pension Scheme and Group Insurance Scheme (EDLI), etc. are charged as an expenseon accrual basis and paid / deposited with the appropriate authorities during the year.

Defined Benefit Plans

The Company has maintained a Group Gratuity Cum Life Assurance Policy with M/s. Life InsuranceCorporation of India (LIC) managed by a separate Trust, towards which it annually contributes a sumbased on the actuarial valuation made by M/s. LIC. The liability or asset recognised in the BalanceSheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligationat the end of the reporting period less the fair value of plan assets. The year's liability is estimatedon the basis of actuarial valuation made by LIC using the Projected Unit Credit Method and is chargedto the Statement of Profit and Loss.

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Re-measurement gains and losses arising from experience adjustments and changes in actuarialassumptions are recognised in the period in which they occur, directly in Other Comprehensive Incomeand in the Balance Sheet.

Other Long Term Employee Benefits

Other Long Term Employee Benefitscomprise of leave encashment. The leave benefits are recognizedbased on the present value of defined obligation and the year's liability is estimated on the basisof actuarial valuations made by LIC using the Projected Unit Credit Method and is charged to theStatement of Profit and Loss.

11 Taxes on Income

Income Tax Expense represents the sum of Current Tax and Deferred Tax.

Current and Deferred Tax are recognized in the Statement of Profit and Loss, except when they relateto items that are recognized in Other Comprehensive Income or directly in Equity.

Current Tax

Tax currently payable is based on taxable profit for the year. Taxable profit differs from 'Profit BeforeTax' as reported in the Statement of Profit and Loss because of items of income or expense thatare taxable or deductible in other years and items that are never taxable or deductible. The Company'scurrent tax is calculated using tax rates that have been enacted or substantively enacted at the BalanceSheet date.

Deferred Tax

Deferred Tax is recognized on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred Tax Liabilities (DTL) are generally recognized for all taxable temporarydifferences. Deferred Tax Assets (DTA) are generally recognized for all deductible temporary differencesto the extent that it is probable that taxable profits will be available against which those deductibletemporary differences can be utilized.

The carrying amount of Deferred Tax Assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be availableto allow all or part of the deferred tax asset to be utilised.

Deferred Tax Liabilities and Deferred Tax Assets are measured at the tax rates that are expected toapply in the period in which the liability is settled or the asset realized, based on tax rates (and taxlaws) that have been enacted as at the Balance Sheet date.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent thereis convincing evidence that the Company will pay normal income tax during the specified period.Such asset is reviewed at each Balance Sheet date and the carrying amount of MAT credit asset iswritten down to the extent there is no longer a convincing evidence to the effect that the Companywill pay normal income tax during the specified period.

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12 Borrowing Costs

Borrowing Costs specifically identified to the acquisition or construction of qualifying assets is capitalizedas part of such assets. A qualifying asset is one that necessarily takes substantial period of time toget ready for intended use. All other borrowing costs are charged to the Statement of Profit andLoss.

13 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as aresult of a past event, it is probable that the Company will be required to settle the obligation, anda reliable estimate can be made of the amount of the obligation.

The amount recognized as provision is the best estimate of the consideration required to settle thepresent obligation at the end of the reporting period, taking into account the risks and uncertaintiessurrounding the obligation. When a provision is measured using the cash flows estimated to settlethe present obligation, its carrying amount is the present value of those cash flows.

Contingent Liabilities are disclosed in the financial statements by way of Notes to Accounts, unlesspossibility of an outflow of resources embodying economic benefit is remote.

Contingent Assets are not recognized but disclosed in the financial statements when an inflow ofeconomic benefit is probable.

14 Material Prior Period Errors

Material prior period errors are corrected retrospectively by restating the comparative amounts forthe prior periods presented in which the error occurred. If the error occurred before the earliestperiod presented, the opening balances of assets, liabilities and equity for the earliest period presented,are restated.

15 Earnings Per Share

Basic Earnings Per Share is computed by dividing the profit / (loss) by the weighted average numberof equity shares outstanding during the year.

Diluted Earnings Per Share is computed by adjusting the figures used in the determination of basicEPS to take into account:

After tax effect of interest and other financing costs associated with dilutive potential equity shares.

The weighted average number of additional equity shares that would have been outstanding assumingthe conversion of all dilutive potential equity shares into equity shares.

16 Segment Reporting

In accordance with IndAS 108, the operating segments used to present segment information areidentified on the basis of internal reports used by the Company's Management to allocate resourcesto the segments and assess their performance. The Board of Directors is collectively the Company's'Chief Operating Decision Maker' or 'CODM' within the meaning of IndAS 108.

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17 Financial Instruments

Financial Assets and Financial Liabilities are recognized when the Company becomes a party to thecontractual provisions of the instruments.

Financial assets and financial liabilities are initially recognised and measured at fair value, exceptwhen the effect is immaterial. Transaction costs that are directly attributable to the acquisition orissue of financial assets and financial liabilities (other than financial assets and financial liabilitiesat fair value through profit or loss) are added to or deducted from the fair value of the financialassets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributableto the acquisition of financial assets or financial liabilities at fair value through profit or loss arerecognized immediately in the Statement of Profit and Loss.

Financial Assets

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments which are readily convertible into knownamounts of cash that are subject to an insignificant risk of change in value and having original maturitiesof three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalentsconsist of balances with banks which are unrestricted for withdrawal and usage.

Financial Assets at amortized cost

Financial assets are subsequently measured at amortized cost using the Effective Interest Method(EIR), except when the effect of applying it is immaterial, if these financial assets are held withina business model whose objective is to hold these assets in order to collect contractual cash flowsand the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.

Financial Assets at fair value through Other Comprehensive Income (FVTOCI)

Financial Assets (including investments) are subsequently measured at fair value through othercomprehensive income if these financial assets are held within a business model whose objectiveis achieved by both collecting contractual cash flows and selling financial assets and the contractualterms of the financial asset gives rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.

The Company has made an irrevocable election to present in Other Comprehensive Income subsequentchanges in the fair value of equity investments not held for trading.

Financial Assets at fair value through Profit or Loss

Financial Assets (including investments) are subsequently measured at fair value through profit orloss unless it is measured at amortized cost or at fair value through Other Comprehensive Incomeon initial recognition.

Impairment of Financial Assets

The Company assesses at each balance sheet date whether a financial asset or a group of financial

115


asset is impaired. IndAS 109 requires expected credit losses to be measured through a loss allowance.The Company recognizes lifetime expected losses for all contract assets and all trade receivables thatdo not constitute a financing transaction. For all other financial assets, expected credit losses aremeasured at an amount equal to 12 months expected credit losses or at an amount equal to lifetimeexpected losses, if the credit risk on the financial asset has increased significantly since initialrecognition.

Derecognition of Financial Assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from theasset expire, or when it transfers the financial asset and substantially all the risks and rewards ofownership of the asset to another party.

On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI),the difference between the asset's carrying amount and the sum of the consideration received andreceivable is recognized in the Statement of Profit and Loss.

Financial Liabilities and Equity Instruments

Classification as Debt or Equity

Debt and Equity instruments issued by the Company are classified as either financial liabilities oras equity in accordance with the substance of the contractual arrangements and the definitions ofa financial liability and an equity instrument.

Financial Liabilities at amortized cost

Financial Liabilities are subsequently measured at amortized cost using the Effective Interest Method(EIR), except when the effect of applying it is immaterial. For trade and other payables maturingwithin one year from the balance sheet date, the carrying amounts approximate fair value due tothe short maturity of these instruments.

Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company afterdeducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceedsreceived.

Derecognition of Financial Liabilities

The Company derecognizes Financial Liabilities when and only when, the Company's obligations aredischarged, cancelled or have expired. The difference between the carrying amount of the financialliability derecognized and the consideration paid and payable is recognized in the Statement of Profitand Loss.

18 Power Purchase

Purchase of Power from Generation Subsidiary M/s. Gujarat State Electricity Corporation Ltd. (GSECL)is accounted on the basis of GERC Tariff Order as applicable from time to time for the power stationstransferred under the Financial Restructuring Plan approved by Govt. of Gujarat and for the existing

116


power stations with GSECL prior to unbundling, as per the provisions of respective Power PurchaseAgreements (PPAs).

Power purchased from Independent Power Producers(IPPs)are accounted (net of infirm power,wherever applicable) on the basis of Power Purchase Agreements entered into with the respectiveparties.

Power purchased from Central Sector is accounted on the basis of tariff determined by Central ElectricityRegulatory Commission (CERC) through various orders.

Surplus power of DISCOMs is purchased by the Company for trading.

Power purchased from Renewable Sources and Traders (Bilateral) is accounted on the basis of contractsentered into with the respective parties.

Need based power is purchased by putting bids in Power Exchanges on day to day basis and thesame is accounted on acceptance of bids.

The energy accounts in few cases are delayed for settlement due to complexity in transactionsinvolved in power sector. The Company receives receivable / payable claims for past period dueto delayed settlement. The Company accounts such claims in the year of receipt as per prevailingpractice followed.

19 Critical Accounting Judgments and Key Sources of Estimation Uncertainty

In the course of applying the policies outlined in all notes under Note 1 above, the managementof the Company are required to make judgements, estimates and assumptions about the carryingamount of assets and liabilities that are not readily apparent from other sources. The estimates andassociated assumptions are based on historical experience and other factors that are considered tobe relevant. Actual results may differ from these estimates.

Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects onlythat period, or in the period of the revision and future period, if the revision affects current andfuture periods.

Critical Judgments in applying Accounting Policies

Following are the critical judgements, apart from those involving estimations, that the Managementhave made in the process of applying the Company's Accounting Policies and that have significanteffect on the amounts recognized in the Financial Statements.

(a) Useful life of Property, Plant and Equipment1

Estimated useful life of Property, Plant and Equipment is based on a number of factors includingthe effects of obsolescence, demand, competition and other economic factors (such as the stabilityof industry and known technological advances) and the level of maintenance expenditures requiredto obtain the expected future cash flows from the asset.

(b) Evaluation of indicators for impairment of Property, Plant and Equipment2

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The evaluation of applicability of indicators for impairment of assets require assessment of externalfactors (significant decline in asset's value, economic or legal environment, market interest rates,etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performanceof the asset, etc.) which could result in significant change in recoverable amount of the Property,Plant and Equipment.

(c) Regulatory Deferral Accounts1

Ind AS - 114 "Regulatory Deferral Accounts" permits the Company to apply the requirements of thisstandard in its first Ind AS Financial Statements if and only if it conducts rate-regulated activitiesand recognised amounts that qualify as Regulatory Deferral Account Balances in its financial statementsin accordance with its previous GAAP. As the Company had consistently elected not to recognize theRegulatory Deferral Balances in its previous GAAP, the requirement of IndAS 114 does not apply tothe Company.

(d) Impairment of Trade receivables2

The Company estimates the credit allowance as per practical expedient based on historical creditloss experience as enumerated in Note-6.

(e) Impairment of Investments2

At the end of each reporting period, the Company reviews the carrying amounts of its investmentswhen there is indication for impairment. If the recoverable amount is less than its carrying amount,impairment loss is accounted for.

(f) Deferred Tax Assets2

Deferred Tax Assets (DTA) are recognised for unused tax losses / credits to the extent that it is probablethat taxable profit will be available against which the losses can be utilised. Management judgementis required to determine the amount of deferred tax assets that can be recognised, based upon thelikely timing and the level of future taxable profits together with future tax planning strategies.

(g) Defined Benefit Obligation (DBO)2

Management's estimate of Defined Benefit Obligation (DBO) is based on a number of critical underlyingassumptions such as standard rates of inflation, medical cost trends, mortality, discount rate andanticipation of future salary increases. Variation in these assumptions may significantly impact theDefined Benefit Obligation amount and the annual defined benefit expenses.

(h) Contingent Liabilities2

In the normal course of business, Contingent Liabilities may arise from litigation and other claimsagainst the Company. Potential liabilities that are possible but not probable of crystallizing or arevery difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosedin the Notes but are not recognised. Potential liabilities that are remote are neither recognized nordisclosed as contingent liability. The management decides whether the matters needs to be classifiedas 'remote', 'possible' or 'probable' based on expert advice, past judgments, experiences etc.

1 Critical Accounting Judgments2 Key Sources of Estimation uncertainty

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119


3 Investments ( ` in Lakhs )

Particulars As at 31st As at 31stMarch, 2018 March, 2017

Investment in Equity Instruments

Investment in Subsidiary Companies (Unquoted) (at cost)

204,09,02,859 (31 March 2017: 193,80,97,424) Equity Shares of 481,703.95 437,033.95`10/- each in Gujarat State Electricity Corporation Ltd., fully paid-up.

68,36,27,120 (31 March 2017: 63,88,00,961) Equity Shares of 336,960.65 294,605.65`10/- each in Gujarat Energy Transmission Corporation Ltd., fully paid-up.

37,98,02,649 (31 March 2017: 35,48,45,132) Equity Shares of 137,610.42 116,856.47`10/- each in Dakshin Gujarat Vij Company Ltd., fully paid-up.

40,17,72,934 (31 March 2017: 36,92,57,067) Equity Shares of 148,452.67 125,940.72`10/- each in Madhya Gujarat Vij Company Ltd., fully paid-up.

524,61,67,796 (31 March 2017: 383,70,29,596) Equity Shares of 610,062.26 469,148.44`10/- each in Paschim Gujarat Vij Company Ltd., fully paid-up.

51,88,61,696 (31 March 2017: 45,51,64,029) Equity Shares of 238,000.18 193,560.23`10/- each in Uttar Gujarat Vij Company Ltd., fully paid-up.

Total (A) 1,952,790.13 1,637,145.46

Investment in Associate Company (quoted) (at cost)

3,83,84,397 (31 March 2017: 3,83,84,397) Equity Shares of 9,092.35 9,092.35`10/- each in Gujarat Industries Power Co. Ltd., fully paid-up.

Total (B) 9,092.35 9,092.35

Investment in Other Companies (at Fair Value throughOther Comprehensive Income)

Quoted, Non-Trade

1,13,50,000 (31 March 2017: 1,13,50,000) Equity Shares of 21,355.03 18,279.18`10/- each in Gujarat State Petronet Ltd., fully paid-up.

53,289 (31 March 2017: 53,289) Equity Shares of `10/- 442.41 408.99each in Gujarat Gas Co. Ltd., fully paid-up.

Un-quoted, Non-Trade

19,30,013 (31 March 2017: 19,30,013) Equity Shares of 4,156.84 3,963.11`100/- each in Gujarat Power Corporation Ltd., fully paid-up.

2,90,03,636 (31 March 2017: 2,90,03,636) Equity Shares of `10/- 2,025.63 1,373.04each in Gujarat State Energy Generation Ltd., fully paid-up.

25,00,000 (31 March 2017: 25,00,000) Equity Shares of `10/- - -each in Power Exchange of India Ltd., fully paid-up

Total (C) 27,979.90 24,024.32

Total 1,989,862.39 1,670,262.14

120


Aggregate Cost of unquoted investments 1,957,960.54 1,642,315.87Aggregate Cost of quoted investment 10,232.35 10,232.35Aggregate Market Value of quoted investment 58,953.53 58,243.29A

Subsidiary Companies: Share Capital Share Premium TotalGujarat State Electricity Corporation Ltd. 204,090.29 277,613.66 481,703.95Gujarat Energy Transmission Corporation Ltd. 68,362.71 268,597.94 336,960.65Dakshin Gujarat Vij Company Ltd. 37,980.26 99,630.15 137,610.42Madhya Gujarat Vij Company Ltd. 40,177.29 108,275.38 148,452.67Paschim Gujarat Vij Company Ltd. 524,616.78 85,445.48 610,062.26Uttar Gujarat Vij Company Ltd. 51,886.17 186,114.01 238,000.18 Sub-Total 927,113.51 1,025,676.62 1,952,790.13Associate Company:Gujarat Industries Power Co.Ltd. 3,838.44 5,253.91 9,092.35Other Companies:Gujarat State Petronet Ltd. 1,135.00 - 1,135.00Gujarat Power Corporation Ltd. 1,930.01 - 1,930.01Gujarat State Energy Generation Ltd. 2,900.36 90.04 2,990.40Gujarat Gas Co. Ltd. 5.00 - 5.00Power Exchange Of India Ltd. 250.00 - 250.00 Sub-Total 6,220.38 90.04 6,310.41 Total Investment 937,172.32 1,031,020.57 1,968,192.90

B. The latest Audited Financials of Gujarat Power Company Limited (GPCL) available with the Companyis for 31 March 2017. For calculation of Fair Value as at 31 March 2018 the Company has consideredlatest availabe Audited Balance Sheet of GPCL i.e. for 31 March 2017.

C. Details of SubsidiariesPlace of Proportion of ownership

Incorporation interest/ voting rights heldName of Company and principal by the Company

place of As at 31st As at 31stbusiness March, 2018 March, 2017

Gujarat State Electricity Corporation Ltd. India 100.00% 100.00%Gujarat Energy Transmission Corporation Ltd. India 98.19% 98.05%Dakshin Gujarat Vij Company Ltd. India 100.00% 100.00%Madhya Gujarat Vij Company Ltd. India 100.00% 100.00%Paschim Gujarat Vij Company Ltd. India 100.00% 100.00%Uttar Gujarat Vij Company Ltd. India 100.00% 100.00%

121


D. Details of Associate

Place of Proportion of ownershipIncorporation interest/ voting rights held

Name of Company and principal by the Companyplace of As at 31st As at 31stbusiness March, 2018 March, 2017

Gujarat Industries Power Company Ltd. India 26.84% 26.84%

E. The Net Asset Value of Power Exchange Of India Ltd. (PXIL) for the year ended 31 March 2018 and31 March 2017 is negative and hence the Fair Value of such investment is Nil.

4. Loans ( ` in Lakhs )


Secured Considered Good

Loans to Staff 161.96 198.18

Total 161.96 198.18

A. Loans to staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for whichthe loans have been given.

5. Other Financial Assets ( ` in Lakhs )



Interest Accrued But Not Due on Staff Loans 179.94 173.84

Unsecured Considered Good

Deposit with Others 1,293.76 1,290.01

Total 1,473.70 1,463.85

6. Trade Receivables ( ` in Lakhs )



Trade Receivables 38.63 1,306.95

Total 38.63 1,306.95

122


6.1 The age of receivables at the end of the reporting period is as follows:


Less than or equal to 6 months 38.63 1,306.95More than 6 months but less than or equal to 1 Year - -More than one Year - -

Total 38.63 1,306.956.2 The Company assesses expected credit loss to be provided for from its customers by using a practical

expedient as permitted under Ind AS 109 i.e. expected credit loss allowance as computed based onhistorical credit loss experience and the ageing of the receivable balances.

6.3 Generally, the credit period on sale of electrical energy is upto 60 days. Delay Payment Surchargeis charged at agreed rate as per contractual terms on the overdue balance.

7. Cash and Cash Equivalents ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Balances with Banks 26,693.14 6,028.56Cash on hand 0.93 2.55Fixed Deposits with Banks (with maturity less than 3 months) 90,000.00 -

Total 116,694.07 6,031.11

8. Other Bank Balances ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Fixed Deposit with Banks (with maturity more than 3 months) 48.78 84.58

Total 48.78 84.58A. Deposit with Banks represents Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak

Dal `48.78 Lakhs.

9. Loans ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Loans and Advances to EmployeeSecured Considered GoodLoans & Advances to Staff - Interest Bearing* 44.84 53.54Unsecured considered goodOther Loans and Advances to Staff 12.39 3.65

Total 57.23 57.19

123


A. *Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for whichthe loans have been given.

10. Other Financial Assets ( ` in Lakhs )



Interest Accrued But Not Due on Staff Loans & others 425.91 285.53

Recoverable from Staff 1.44 1.44

Inter Company Receivable 282,942.81 225,027.72

Subsidy Receivable from Government (refer Note No. 43) 342,141.57 466,363.46

Loan to others 636.36 886.90

Deposits 65.62 27.08

Receivable from Gujarat Energy Training & Research Institute (GETRI) - 22.54

Total 626,213.72 692,614.67

11. Current Tax Assets (Net) ( ` in Lakhs )


Current Tax Assets

Tax Refund Receivable 39,004.50 -

Current Tax Liability

Income Tax Payable (36,613.16) -

Total 2,391.33 -

12. Other Current Assets ( ` in Lakhs )



Prepaid Expenses 2,155.67 135.98

Advances to Vendors 858.20 -

Electricity Duty Recovered in Advance by Govt. of Gujarat 3,490.50 6,613.53

Assets not in use 1.63 1.63

Advance to IPP against Power Purchase 8,093.59 10,000.00

Total 14,599.60 16,751.15

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13. Equity Share Capital

A. Equity Share Capital consist of the following: ( ` in Lakhs )


Share CapitalEquity Share CapitalAuthorised Share Capital2000,00,00,000 (31 March 2017: 2000,00,00,000) Equity Shares 2,000,000.00 2,000,000.00 of ` 10/- eachIssued Share Capital*1740,27,39,795 (31 March 2017: 1453,42,45,195) of ` 10/- each 1,740,273.98 1,453,424.52Subscribed & Paid up Share Capital*1622,75,49,895 (31 March 2017: 1371,46,05,995) of 1,622,754.99 1,371,460.60` 10/- each fully paid

Total 1,622,754.99 1,371,460.60

B. Reconciliation of number of shares outstanding at the beginning and at the end of reporting periodis as under:

Particulars No. of Shares Share Capital(` in Lakhs)

As at 1st April, 2016 10,754,706,495 1,075,471Additions/(Reductions) 2,959,899,500 295,990As at 31st March,2017 13,714,605,995 1,371,461As at 1st April, 2017 13,714,605,995 1,371,461Additions/(Reductions) 2,512,943,900 251,294As at 31st March, 2018 16,227,549,895 1,622,755

C. Shares in the Company held by Shareholders holding more than 5% is as under:

Particulars No. of Extent ofshares Holding

As at 31st March, 2018

Governor of Gujarat 16,227,549,895 100.00%


Governor of Gujarat 13,714,605,995 100.00%

125


D. Rights, preferences and restrictions attached to shares :

The Company has only one class of equity shares having par value of ` 10 each and is entitled toone vote per share.

14. Other Equity

A. Other Equity consist of the following: ( ` in Lakhs )


Share Application Money pending allotment 117,518.99 81,963.92

Retained Earnings 25,178.63 13,130.09

Other Comprehensive Income 21,669.49 17,713.91

Total 164,367.11 112,807.92

B. Particulars relating to Other Equity


Share Application Money pending allotment

Opening Balance 81,963.92 116,463.87

Add: Increase during the year 117,518.99 81,963.92

Less: Shares Issued (81,963.92) (116,463.87)

(A) 117,518.99 81,963.92

Retained Earnings

Opening Balance 13,130.09 226.35

Add: Net profit after tax transferred from Statement of Profit & Loss 12,604.66 13,001.54

Add: Other Comprehensive income arising from remeasurement of (556.12) (97.79)defined benefit obligation

(B) 25,178.63 13,130.09

Other Comprehensive Income

Opening Balance 17,713.91 14,610.82

Add: Increase during the year 3,955.58 3,103.10

(C) 21,669.49 17,713.91

Total 164,367.11 112,807.92

126


C. Share Application Money pending allotment

The Company has issued 117,51,89,900 Equity Shares of `10 each to Governor of Gujarat, the existingShareholder, for cash at par i.e. at ̀ 10/- per share, on rights basis on 21.04.2018. The Company receivedthe Share Application Money from Govt. of Gujarat during the Months of February & March, 2018and accordingly has complied with the provisions of the Companies Act, 2013 w.r.t. issue of Shares.

15. Deferred Government Grants ( ` in Lakhs )


Government Grants, Subsidies towards Capital Assets 14.14 -Total 14.14 -

A. Particulars relating to Deferred Government Grants, Subsidies and contributions (` in Lakhs)


Government Grants, Subsidies towards Capital AssetsAdd : Received during the year 15.28 -Less : Transferred to Statement of Profit and Loss 1.14 -

Closing Balance 14.14 -

16. Borrowings ( ` in Lakhs )


Loans from Related Party - Govt. of GujaratUnsecuredLoan for Power Purchase 9,450.00 9,800.00Loan from Asian Development Bank (No.1803) 5,048.49 6,630.75

Total 14,498.49 16,430.75

A. MATURITY PROFILE OF SECURED & UNSECURED LOANS

FY 2021-22 Particulars FY 2018-19 FY 2019-20 FY 2020-21 upto last

instalmentGovt. of Gujarata. Loan for Power Purchase 350.00 350.00 350.00 8,750.00

(10% p.a.---Repayment inYearly instalment of `3,50,00,000/- uptoFY 2046-47)

127


b. ADB---1803 (11.36% p.a.--- 1,582.26 1,582.26 1,582.26 1,883.96Repayment in Yearlyinstalment upto FY 2023-24)

TOTAL 1,932.26 1,932.26 1,932.26 10,633.96

B. The Company has not executed the Transfer Agreements in respect of following loans availed fromBanks, Financial Institutions, etc. though the loans are apportioned amongst all the SubsidiaryCompanies:


GSFS - 9,000.00Govt. of Gujarat 26,128.26 30,400.10

Total 26,128.26 39,400.10

17. Trade Payables ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Amount owing to Licensees 85.29 85.29

Total 85.29 85.29

18. Other Financial Liabilities ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Staff Voluntary Retirement cum Death Benefit 691.80 660.56

Total 691.80 660.56

19. Long Term Provisions ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Provision for Employee BenefitsProvision for Leave Encashment 1,173.03 1,114.73Gratuity - 30,583.15

Total 1,173.03 31,697.88

20. Deferred Tax Liabilities ( Net)The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet:

( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Deferred Tax Assets - -Deferred Tax Liabilities - -

Total - -

128


Deferred Tax Asset / Liability is worked out as under: (` in lakhs)

Recognized Recognized in Particulars Opening in profit Other Closing

Balance and loss Comprehensive BalanceIncome

2017-18

Deferred Tax Liability on account of:

Depreciation (513.12) (176.63) - (689.75)

Fair value of Investment at FVTOCI (6,130.43) - 6,130.43 -

Deferred Tax Asset on account of:

Employee Benefits 439.74 63.78 - 503.53

Carried forward of unused Tax Losses - - - -

Carried forward of unused Tax Credits 16,851.60 (5,147.57) - 11,704.03

Net Deferred Tax Asset/ (Liability) 10,647.79 (5,260.42) 6,130.43 11,517.80

Amounts recognised in BalanceSheet (Refer note A below) - - - -

2016-17

Deferred Tax Liability on account of:

Depreciation (512.89) (0.23) - (513.12)

Fair value of Investment at FVTOCI (5,056.51) - (1,073.92) (6,130.43)

Prior Period -

Deferred Tax Asset on account of:

Employee Benefits 428.85 10.89 - 439.74

Carried forward of unused Tax Losses 2,668.35 (2,668.35) - -

Carried forward of unused Tax Credits 13,318.67 3,532.93 - 16,851.60

Net Deferred Tax Asset/ (Liability) 10,846.46 875.25 (1,073.92) 10,647.79

Amounts recognised in Balance Sheet(Refer note A below) - - - -

A. Due to uncertainty about taxable income in foreseeable future, Deferred Tax Assets had beenrestricted to the extent of Deferred Tax Liabilities.

129


21. Short Term Borrowings ( ` in Lakhs )


Loans repayable on DemandSecuredCash Credit From Banks 2.65 13,872.56

Total 2.65 13,872.56

Cash Credit Limit is secured by hypothecation charge in favour of UCO Bank Consortium on the Stocks andBook Debts of the Company and its six Subsidiary Companies ranking pari-passu.

22. Trade Payables ( ` in Lakhs )


Liability for Purchase of Power 536,828.62 507,864.94Others 637.24 410.82

Total 537,465.86 508,275.77

A. Dues to SSIs and interest on Delayed Payments:

In view of their large number of accounts and in absence of segregated information, total outstandingdues to Small Scale Industrial Undertaking as defined under Micro, Small & Medium EnterprisesDevelopment Act, 2006 have not been disclosed separately.

However, based on the details available with the Company in respect of transactions incurred duringthe year, there are no undisputed overdues as such to Micro, Small and Medium enterprises as at31st March 2018.

23 Other Financial Liability ( ` in Lakhs )


Current maturities of Long-term Debt:Unsecured:Govt. of Gujarat (Related Party)Loan for Power Purchase 350.00 350.00Loan from Asian Development Bank (No.1803) 1,582.26 1,582.26Interest Accrued But Not Due on Loans 376.74 469.35Interest Accrued and Due on Loans from Banks 0.94 0.58Liability for O & M Supplies / Works 1.54 3.21Liability for Capital Supplies / Works 380.32 -

130


Staff Related Liabilities 0.69 1.43Staff Retirement cum Death Benefit Scheme 18.39 13.07Unclaimed amount relating to Bonds 306.80 684.40Inter Company Payable 282,393.15 243,453.85Payable to Gujarat Energy Training & Research Institute 182.33 -Deposits & Retentions from Suppliers / Contractors 120,474.51 71,502.71Deposits for Electrification & Service connection 10.11 10.11Outstanding liability for expenses 1,105.63 605.57Grant Unallocated 82.43 21.86Corpus Fund of Bal Urja Rakshak Dal 50.19 47.37Board of Trustees----CPF 1,129.18 1,435.80Other Liability 11.72 11.70Staff Welfare Schemes 4.92 5.08

Total 408,461.84 320,198.38

24. Other Current Liability ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Statutory Liabilities 107.56 30.20Tax on Electricity Duty payable to State Govt. 1.25 1.25

Total 108.81 31.45

25. Short Term Provisions ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Provision for Employee BenefitsProvision for Gratuity 6,358.95 15,150.30Provision for Leave Encashment 221.44 119.58

Total 6,580.38 15,269.88

26. Current Tax Liabilities (net) ( ` in Lakhs )Particulars As at 31st As at 31st

March, 2018 March, 2017Current Tax LiabilityIncome Tax Payable - 33,343.16Current Tax AssetsTax Refund Receivable - 33,182.48

Total - 160.69

131


27. Revenue from Operations ( ` in Lakhs )


March, 2018 March, 2017

Income from Operating ActivitySale of Power to Subsidiaries :Dakshin Gujarat Vij Company Ltd (DGVCL) 1,036,920.97 1,028,282.91Madhya Gujarat Vij Company Ltd (MGVCL) 474,493.98 423,686.14Paschim Gujarat Vij Company Ltd (PGVCL) 1,261,127.57 1,100,617.53Uttar Gujarat Vij Company Ltd (UGVCL) 914,276.20 817,568.78

Sub Total 3,686,818.71 3,370,155.37Sale of Power to Others:Sale of Power through Power Exchanges & Bilateral Agreements 25,920.16 20,516.27

Sub Total 25,920.16 20,516.27Total Revenue from Sale of Power to Licensees, 3,712,738.88 3,390,671.63Subsidiaries and OthersIncome from Other Operating ActivityRebate (Cash Discount) for Prompt Payment 68,589.70 46,361.38Liquidated Damages 196.14 1,127.58CDM Benefit from Renewable Energy Sources 463.43 292.91Miscellaneous Income 26.61 -

Total 3,782,014.76 3,438,453.51

28. Other Income ( ` in Lakhs ) For the year For the year

Particulars ended 31st ended 31st March, 2018 March, 2017

Interest IncomeInterest on Staff Loans and Advances 26.74 30.51Interest on Advances to Others 490.50 89.37Interest Income from Fixed Deposits 50.78 -Dividend Income- From Associate 1,036.38 1,036.38- From other Investments 171.85 171.58- Gain on sale of Fixed Asset (Net) - 0.68

132


Other Non Operating IncomeGrants received for R & D Expenses 136.52 -Deferred Income 1.14 -Penalties received from Suppliers (Net of Refund) 103.23 97.80Miscellaneous Income 186.61 10.24

Total 2,203.76 1,436.56

29. Purchase of Power ( ` in Lakhs )



Purchase of PowerFrom Central SectorNuclear Power Corporation of India Ltd. 51,269.55 71,615.49NTPC Ltd. 601,736.73 641,025.57Sardar Sarovar Narmada Nigam Ltd 2,960.23 10,283.03

Sub Total 655,966.51 722,924.09From Private SectorCLP India Pvt Ltd. 59,419.76 52,948.44Essar (Vadinar) Ltd. 82,695.58 165,203.20ACB India Ltd. 31,595.07 29,828.41Adani Power Ltd. 242,497.59 379,152.77Coastal Gujarat Pvt. Ltd. 307,218.12 271,238.04

Sub Total 723,426.12 898,370.86From State SectorGujarat Industries Power Company Ltd. 95,021.92 104,838.10Gujarat State Energy Generation Ltd. (Hazira) 32,791.43 29,400.58Gujarat Mineral Development Corporation (GMDC) 26,595.04 30,611.96Gujarat State Electricity Corporation Ltd. 991,860.92 786,365.62GPPC Pipavav 39,862.63 40,133.28Bhavnagar Energy Company Ltd. 22,786.78 2,366.50

Sub Total 1,208,918.72 993,716.03From OtherWind Farms 243,098.94 180,829.43Purchase of Solar Power 182,077.67 183,250.29

133


Purchase of Power from Renewable Sources 1,568.32 1,206.14Captive Power Plants 33.06 0.34Power Exchange of India Ltd. 8,439.74 2,768.08India Energy Exchange 204,478.10 11,126.38Short Term Purchase of Power 31,572.15 65.61Purchase of Power from DISCOMs 19,372.07 11,809.87

Sub Total 690,640.06 391,056.14

Wheeling / Transmission Charges:Power Grid Corporation Ltd. 188,363.68 182,279.90Gujarat Energy Transmission Corporation Ltd. 292,796.43 227,232.36Others - -

Sub Total 481,160.11 409,512.25Total 3,760,111.52 3,415,579.37

30. Employee Benefits Expense ( ` in Lakhs )



Salaries and Allowances 3,244.98 2,815.57Contribution to PF Trust 281.99 214.79Staff welfare expenses 88.34 96.50Retirement and other Benefits 59.53 27.00

Total 3,674.84 3,153.86

A. Defined contribution to Provident Fund, Employees Pension Scheme and Employees Death LinkedInsurance: ( ` in Lakhs )



EDLI Admn. Charges 0.03 0.02Company's Contribution to Provident Fund 200.09 160.89CPF Inspection & Audit Charges 3.99 3.16Pension Contribution for Company's Employees on deputation 41.37 18.12Company's Contribution to Pension Fund 36.54 32.62

Total 282.02 214.81

134


31. Finance Cost (` in Lakhs )



Interest ExpenseInterest on State Government Loans 1,861.10 2,081.32Interest on Bonds - 61.72Interest on Cash Credit and Working Capital 238.51 1.59Interest on Other loans 47.10 44.41Discount to Consumers for Timely Payment of Bills 116.28 383.08Other Borrowing CostGuarantee Fees / Charges - 28.88Bank Charges and Commission 284.07 194.61

Total 2,547.06 2,795.62

32. Other Expenses ( ` in Lakhs )



Repairs & MaintenanceBuilding and Civil Works - 51.70Others 126.95 77.23Administrative & General ExpensesRent, Rates and Taxes 307.65 357.06Insurance 6.47 5.58Telephone & Postage Expenses 19.65 19.27Audit Fees 8.93 8.31Travelling & Conveyance 102.78 104.03Printing & Stationery 32.20 30.92Expenses on Computer Billing & EDP Charges 15.46 5.75Advertisement 86.80 21.46Electricity Charges 0.40 190.43R & D Expenses (refer Note No. 42) 136.52 -Legal & Professional Fees 517.17 421.09Donations 300.00 -

135


Expenditure on Training to Staff 2.59 6.49Loss on Sale of Assets (Net) 0.13 -Corporate Social Expenditure (refer Note No.40) 108.60 63.02Expenses for Energy Conservation - -Miscellaneous Losses & Write-offs 18.16 -Security Expenses 0.03 122.43Miscellaneous Expenses 19.90 21.10Other Administration & General Expenses 24.08 35.23

Total 1,834.45 1,541.11

32.1 During the year, an expenditure of `56.59 Lakhs (Previous year ` 1063.17 lakhs) has been incurredtowards Energy Conservation and ̀ 0.01 Lakh (Previous year ̀ 1070.14 Lakhs) towards Ujala Scheme,both of which has been set off against the grant received from Govt. of Gujarat for this purpose.

33.2 Auditor's Remuneration ( ` in Lakhs )



Statutory Audit Fees 7.00 6.60Taxes on Statutory Audit Fees 1.26 0.99

Total 8.26 7.59

33. Tax Expense ( ` in Lakhs )



Current Tax 3,270.00 3,660.00Deferred Tax (Refer Note 20) - -

Total 3,270.00 3,660.00

33.1 Reconciliation of Current Tax ( ` in Lakhs )



Profit Before Tax 15,874.66 16,661.54"Current Tax expense calculated using MAT tax rate at 21.34%“(Previous year - 21.34%)" 3,387.91 3,555.84

136


Add:Other Comprehensive Expense (118.68) (20.87)

Adjustment of tax on prior period - -

Others 0.78 125.03

Current Tax Expense 3,270.00 3,660.00

The base tax rate used for the year ended 31st March, 2018 and year ended 31st March, 2017 reconciliationsgiven above is at the MAT tax rate of 21.34% (including surcharge 12% and cess 3%) payable by corporateentities in India on taxable book profits under the Indian Tax Law.

33.2 Unrecognised Deferred Tax Assets


Unused Tax Losses -Unused Tax Credits 11,704.03 16,851.60

34. Earnings per Equity share (` In Lakhs)



Profit After Tax for the year attributable to equity shareholders 12,604.66 13,001.54

Weighted average number of Equity shares Basic 15,378,415,302 12,554,200,262

Diluted 15,424,674,538 12,592,286,772

Basic and Diluted earnings per equity shares (`) Basic 0.08 0.10

Diluted 0.08 0.10

Face value per equity share (`) 10.00 10.00

35. Employee Benefit Plans

A. Defined Contribution Plans:

The Company has certain defined Contribution Plans. The Company makes contribution towardsEmployees’ Provident Fund, Employees’ Pension Scheme and Employees’ Deposit Linked InsuranceScheme as per the provisions of Employees Provident Fund & Misc. Provisions Act, 1952. Contributionsare made at specified percentage of salary as per regulations. PF contributions are made to registeredprovident fund trust administered by Employees Provident Fund Organisation (EPFO). The obligationof the Company is limited to the amount contributed and it has no further contractual or anyconstructive obligation. The expense recognised during the period towards Defined Contribution Planis `282.02 Lakhs (31st March 2017 : `214.81 Lakhs).

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B. Other Long Term Benefit Plan

The Company accounts for leave encashment on the basis of actuarial valuation carried out by LifeInsurance Corporation of India at each year end. Liability for the Current Year of `259.71 Lakhs (31stMarch 2017 : ` 296.53 Lakhs) has been charged to statement of Profit & Loss. Leave obligation asat 31st March, 2018 and 31st March, 2017 is ` 1,394.47 Lakhs and ` 1,234.31 Lakhs respectively.

The Company has a Staff Voluntary Retirement-Cum-Death Benevolent Fund Scheme wherein anemployee can become a member voluntarily. A monthly contribution is to be made by the members.Upon retirement employee will be eligible to get an amount equivalent to his total "Contribution"along with simple interest at a specified rate from the date of joining the scheme or ` 10,000/-whichever is higher. In case of death of an employee, the nominee of the member shall be eligibleto get a determined amount of compensation out of the fund, if the employee was the memberof the scheme. The charge to the statement of Profit and loss for the year ended is ` 31.23 Lakhs(31st March 2017 : ` 34.67 Lakhs). The balance of such fund as at 31st March, 2018 and 31st March,2017 is `691.80 Lakhs and `660.56 Lakhs.

C. Defined Benefits Plan

Gratuity

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees'who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuitypayable on retirement/termination is the employees last drawn basic salary per month computedproportionately for 15 days salary multiplied for the number of years of service. The Gratuity Planis a funded plan and the Company makes contributions to LIC. The Company does not fully fundthe liability and maintains a target level of funding to be maintained over a period of time basedon estimations of expected gratuity payments.

The Company makes annual contribution to the gratuity scheme administered by the Life InsuranceCorporation of India through its Gratuity Trust. The liability in respect of plan is determined on thebasis of an actuarial valuation.

D. Risk Exposure

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest RateRisk and Salary Risk.

Investment Risk The Present value of the Defined Benefit Obligation is calculated using thediscount rate determined by LIC of India as the fund is being managed underGratuity Assurance Plan

Interest Risk A decrease in the interest rate will increase the plan liability while increasein interest rate will decrease the plan liability

Salary Risk The present value of obligation is calculated by reference to future salary.

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The principal assumptions used for the purposes of the actuarial valuations were as follows:.

Assumptions (Current Period) For the year For the year

Particulars ended 31st ended 31stMarch, 2018 March, 2017

Expected Return on Plan Assets 8.00% 8.50%Rate of Discounting 7.50% 8.00%Rate of Salary Increase 10.00%Rate of Employee Turnover 1 to 3 % Depending on AgeMortality Rate During Employment LIC (2006-08) ultimateMortality Rate After Employment N.A.

(` In Lakhs)



I) Reconciliation in present value of obligations (PVO) -defined benefit obligation:Opening defined benefit obligation 1,397.95 1,237.95Current Service Cost 16.92 15.57Past service cost, including losses/(gains) on curtailments 39.16Interest Cost 111.84 99.04Remeasurement (gains)/Iosses:Actuarial gains and losses arising from changes in financial 587.71 89.19assumptions & experience adjustmentsBenefits paid 136.85 43.78Closing defined benefit obligation 2,016.73 1,397.95Current obligation 395.38 175.99Non-Current obligation 1,621.35 1,221.96

II) Change in fair value of assets:Opening fair value of plan assets 1,361.62 908.63Expected return on plan assets 108.93 87.54Remeasurement gain (loss):Actuarial gains and losses including Excess Return on plan 31.59 (8.61)assets (excluding amounts included in net interest expense)Contributions by the employer 604.95 417.84

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Benefits paid 136.85 43.78Closing fair value of plan assets 1,970.24 1,361.62

III) Reconciliation of Present value of obligation andfair value of assets:Present value of funded defined benefit obligation 2,016.73 1,397.95Fair Value of plan assets at end of year 1,970.24 1,361.62Funded status Funded FundedNet liability arising from defined benefit obligation 46.48 36.33

IV) Service CostCurrent Service cost 16.92 15.57Past service cost and (gain)/Ioss from settlements 39.16 -Net Interest expense 2.72 11.38Total Expenses to be recognised in P&L A/c 58.80 26.95Components of defined benefit costs recognised inEmployee Benefit expensesRemeasurement on the net defined benefit liability:Actuarial (gains) / losses arising from experience adjustments, 556.12 97.79changes in demographic assumptions and changes in financialassumptions including Excess Return on plan assets (excludingamounts included in net interest expense)Total Expenses to be recognised in OCI 556.12 97.79Total Expense (Provision for the Period) 614.92 124.74

V) Category of assets as at 31 st March: - --Life Insurance Corporation 1,970.24 1,361.62

Total 1,970.24 1,361.62

Experience Adjustment On Plan Liabilities On Plan Assets Loss/(Gain) Loss/(Gain)

As on 31st March,2018 587.71As on 31st March,2017 89.19

Maturity Analysis of Projected Benefit Obligation are as under:Particulars As at 31st As at 31st

March, 2018 March, 2017Less than 1 year 395.38 175.99One to Three Years 555.40 398.93Three to Five Years 201.55 210.40More than Five Years 864.40 612.63

Total 2,016.73 1,397.95

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Sensitivity Analysis:

Significant actuarial assumptions As at 31st As at 31stMarch, 2018 March, 2017

Discount Rate- Impact due to increase of 50 basis points (60.61) 47.99- Impact due to decrease of 50 basis points 64.87 113.91Salary increase- Impact due to increase of 50 basis points 65.31 47.17- Impact due to decrease of 50 basis points (61.55) 1,114.47

The sensitivity analysis presented above may not be representative of the actual change in the definedbenefit obligation as it is unlikely that the change in assumptions would occur in isolation of oneanother as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefitobligation has been calculated using the projected unit credit method at the end of the reportingperiod, which is the same as that applied in calculating the defined benefit obligation liability recognisedin the balance sheet.

36. Operating Segment

A. The Company’s operations fall under single segment namely “Purchase and Sale of Power”, takinginto account the different risks and returns, the organization structure and the internal reportingsystems.

B. Information about major customers

Company’s significant revenues (more than 95%) are derived from sales to Subsidiary DistributionCompany. The total sales to such companies amounted to `36,86,818.71 Lakhs in 2017-18 and ``33,70,155.37 Lakhs in 2016-17.

C. Information about geographical areas:

Segment revenue from "Sale of Power" represents revenue generated from Subsidiary and externalcustomers which is fully attributable to the Company's Country of domicile i.e. India.

All assets are located in the Company's Country of domicile.

D. Information about products and services:

The Company derives revenue from sale of power. The information about revenues fromSubsidiary and external customers about each product is disclosed in Note No. 27 of the FinancialStatements.

37. Financial instruments Disclosure

A. Capital Management

The Company’s objective when managing capital is to:

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1. Safeguard its ability to continue as going concern so that the Company is able to provide maximumreturn to shareholders and benefits for other stakeholders; and

2. Maintain an optimal capital structure to reduce the cost of capital.

Gearing Ratio

The gearing ratio at end of the reporting period is as follows. (` In Lakhs)


Debt 16,430.75 18,363.02Total Equity 1,787,122.10 1,484,268.52Debt to Equity Ratio 0.01 0.011. Debt is defined as all Long Term Debt outstanding + Current Maturity outstanding for such

Long Term Debt.2. Equity is defined as Equity Share Capital + Other Equity

B. Categories of Financial Instruments (` In Lakhs)


Financial Assets

Measured at amortised cost

(a) Trade and other receivables 38.63 1,306.95

(b) Cash and cash equivalents 116,694.07 6,031.11

(c) Other Bank balances 48.78 84.58

(d) Loans 219.19 255.37

(e) Other Financial Assets 643,740.56 694,078.52

Measured at cost

(a) Investments in Equity Instruments of Subsidiaries and 1,961,882.48 1,646,237.81Associates (designated on transition date)

Measured at FVTOCI

(a) Investments in Equity Instruments 27,979.90 24,024.32

Financial LiabilitiesMeasured at amortised cost(a) Borrowings 14,501.14 30,303.31

(b) Trade Payables 538,904.98 508,361.06

(c) Other Financial Liabilities 423,852.96 320,858.94

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C. Financial Risk Management Objectives

The Company’s principal financial liabilities comprise of borrowings, trade and other payables. Themain purpose of these financial liabilities is to finance the Company’s operations, routine and capitalexpenditure. The Company’s principal financial assets include loans, advances, trade and otherreceivables and cash and cash equivalents that derive directly from its operations.

The Company’s activities expose it to a variety of financial risks viz regulatory risk, interest rate risk,credit risk, liquidity risk etc. The Company’s primary focus is to foresee the unpredictability of financialmarkets and seek to minimize potential adverse effects on its financial performance. The Company’ssenior management oversees the management of these risks. It advises on financial risks andappropriate financial risk governance framework for the Company.

Regulatory Risk

"The Company’s substantial operations are subject to regulatory interventions, introduction of newlaws and regulations including changes in competitive framework. The rapidly changing regulatorylandscape poses a risk to the Company.“Regulations are framed by Central / State RegulatoryCommission as regard to Standard of Performance for utilities, Terms & Conditions for determinationof tariff, obligation of Renewable Energy purchase, grant of Open Access, Deviation SettlementMechanism, Indian Electricity Grid Code / Gujarat Grid Code, Power Market Regulations etc. Moreover,the State / Central Government are notifying various guidelines and policy for growth of the sector.These Policies / Regulations are modified from time to time based on need and development in thesector. Hence the policy / regulation is not restricted only to compliance but also have implicationsfor operational performance of utilities, Return on Equity, revenue, competitiveness, scope of supplyas consumer of 1 MW and above have an option to select the supplier, ceiling on trading margins,Regulatory charges, market etc."

To protect the interest of Utilities, State Utilities are actively participating in the process of framingof Regulations. ARR is regularly filed & FPPPA is levied on quarterly basis for any increase/decreasein power purchase cost.

Interest Rate Risk Management

Interest Rate Risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market interest rates. The Company’s exposure to the risk of changesin market interest rates is negligible as primarily to the Company’s long-term debt obligations withfixed interest rates.

Credit Risk Management

Credit Risk arises from cash and cash equivalents and deposits with banks as well as customers includingreceivables. Credit risk management considers available reasonable and supportive forward-lookinginformation including indicators like external credit rating (as far as available), macro-economicinformation (such as regulatory changes, government directives, market interest rate).

Major customer, being the Group Companies, Credit risk is negligible.

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"Liquidity Risk Management“"

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associatedwith its financial liabilities that are required to be settled by delivering cash or another financial asset.The Company manages liquidity risk by maintaining sufficient cash and cash equivalents includingbank deposits and availability of funding through an adequate amount of committed credit facilitiesto meet the obligations when due. The management prepares annual budgets for detailed discussionand analysis of the nature and quality of the assumption, parameters etc. Daily and monthly cashflows are prepared, followed and monitored at senior levels to prevent undue loss of interest andutilize cash in an effective manner.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financialliabilities with agreed repayment periods. The information included in the tables have been drawnup based on the undiscounted cash flows of financial liabilities based on the earliest date on whichthe Company can be required to pay. The tables include both interest and principal cash flows. Thecontractual maturity is based on the earliest date on which the Company may be required to pay.

(` In Lakhs)

Particulars Less than Between More than Total1 year 1 and 5 years 5 years


Non - Current Financial LiabilitiesBorrowings - 5,820.50 8,677.99 14,498.49

Trade Payables - - 85.29 85.29

Other Financial Liabilities - 691.80 - 691.80

- 6,512.30 8,763.28 15,275.58

Current Financial Liabilities

Borrowings 2.65 - - 2.65

Trade Payables 538,819.68 - - 538,819.68

Other Financial Liabilities 423,161.17 - - 423,161.17

961,983.49 - - 961,983.49

Total Financial Liabilities 961,983.49 6,512.30 8,763.28 977,259.07

As at 31st March, 2017Non - Current Financial Liabilities

Borrowings - 6,774.77 9,655.98 16,430.75

Trade Payables - - 85.29 85.29

Other Financial Liabilities - 660.56 - 660.56

- 7,435.33 9,741.27 17,176.61

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Current Financial LiabilitiesBorrowings 13,872.56 - - 13,872.56Trade Payables 508,275.77 - - 508,275.77Other Financial Liabilities 320,198.38 - - 320,198.38

842,346.71 - - 842,346.71Total Financial Liabilities 842,346.71 7,435.33 9,741.27 859,523.31

The Company has access to Cash Credit facilities as described below, of which ` 2,30,600.00 Lakhs(as at 31st March, 2017 : ` 2,23,455.32 Lakhs) were unused at the end of the reporting period . TheCompany expects to meet its other obligations from operating cash flows and proceeds of maturing financialassets.

Secured Cash Credit Facility , reviewed annually and payable at call: (` In Lakhs)


Amount used - 7,844.68Amount unused 230,600.00 223,455.32

D. Fair Value measurement

Fair Value of the Company’s financial assets on a recurring basis:

Some of the Company’s financial assets are measured at fair value at the end of each reporting period.The following table gives information about how the fair values of these financial assets are determined.

Financial assets at fair value through other comprehensive income (FVTOCI)

Fair Value as at Fair31st March, 31st March, Value

2018 2017 hierarchy

Investment in Equity 6,182.47 5,336.16 Level 3 Valuation techniques forInstruments (unquoted) which the lowest level input

that is significant to the fairvalue measurement isunobservable

Investment in Equity 21,797.43 18,688.17 Level 1 Quoted bid prices from StockInstruments (quoted) exchange - NSE / BSE

Financial Assets and Liabilities at amortised costThe fair value of cash and cash equivalent, other bank balances, trade receivables, loans, other financialassets, current borrowings, trade payables, other financial liabilities approximates their carryingamounts, due to their short-term nature.

Financial Assets/Financial Liabilities

Valuation technique(s)and key input(s)

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38. Disclosure under Indian Accounting Standard 36 – Impairment of Assets

In accordance with the Indian Accounting Standard (Ind AS-36) on “Impairment of Assets” the Companyduring the year carried out an exercise of identifying the assets that may have been impaired in respectof cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise,no impairment loss is required as at 31.03.2018.

39. Contingent Liabilities, Contingent Assets and commitments (to the extent not provided for):Contingent Liabilities not provided for: (` In Lakhs)


1. Claims against the erstwhile GEB & the Company notacknowledged as debts:

I. Purchase 130.29 157.67II. Leasing Finance availed by erstrwhile GEB 1,703.00 1,703.00III. Power Purchase 64,391.00 78,921.00IV. Stamp Duty on mortgage deed for loans availed 1,198.52 1,108.00

by erstwhile GEB from LICV. Employees 730.50 740.50VI. Disputed demand of Income Tax against erstwhile GEB Not Not

Ascertainable Ascertainable

VII. Disputed demand of Income Tax against the Company 4,572.70 11,565.622. GuaranteesI. Corporate Guarantees given by the Company to Consortium

Banks for and on behalf of Subsidiary Companies -a. For working capital facilities 794,185.00 794,185.00

II. Comfort Letter issued to GSFS by the Company for andon behalf of Subsidiary Companies -a. For Term Loans to Gujarat State Electricity Corporation Ltd. 114,111.11 141,500.00b. For Term Loans to Gujarat Energy Transmission Corporation Ltd. 268,235.29 350,666.67

3. Letters of Credit 151,533.00 151,799.35Total 1,400,790.41 1,532,346.81

In respect of the above, the expected outflow will be determined at the time of final resolution ofthe dispute. No reimbursement is expected.

B. A Contingent Asset is a possible asset that arises from past events and whose existence will be confirmedonly by the occurrence or non-occurrence of one or more uncertain future events not wholly withinthe control of the entity. During the normal course of business, several unresolved claims are currentlyoutstanding. The inflow of economic benefits, in respect of such claims cannot be measured dueto uncertainties that surround the related events and circumstances.

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C. Commitments

Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account:- (` In Lakhs)


A. Capital CommitmentsEstimated amount of Contract remaining to the executed on Nil Nilcapital accounts (Net of Advances)

Total Nil Nil

40. CSR Expenditure (` In Lakhs)



The CSR expenditure comprises the following:

a) Gross amount required to be spent by the Company 244.56 157.38during the year

b) Amount spent during the year 108.60 63.02

c) (` In Lakhs)

For the year ended For the year ended31st March, 2018 31st March, 2017

Particulars In Yet to Total In Yet to TotalCash be paid Cash be paid

in cash in cash

(i) Construction/acquisition 17.11 - 17.11 18.02 - 18.02of any asset

(ii) On purpose other 91.49 - 91.49 45.00 - 45.00than (i) above

Total 108.60 - 108.60 63.02 - 63.02

d) For CSR amount which has remained unspent during the year, suitable reasons would be providedin the Directors' Report.

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41. Quantitative information in respect of Purchase and Sale of Power

For the year ended For the year ended31st March, 2018 31st March, 2017

Particulars MUs Amount MUs Amount(`in Lakhs) (`in Lakhs)

Purchase of Power 89,480.29 3,760,111.52 81,961.73 3,415,579.37 Sale of Power 89,480.29 3,712,738.88 81,961.73 3,390,671.63

42. Research & Development ExpenditureThe details of Revenue Expenditure & Capital Expenditure incurred on Research and Development isas under:

For the year For the year Particulars ended 31st ended 31st


Capital Expenditure :Computers and related Equipments 15.28 -Less: Depreciation for the year 1.14

Total Capital Expenditure (Net of Depreciation) : 14.14 -Revenue Expenditure :Employee Benefits 105.70 -Material Consumed 0.58 -Administrative and Misc. Expenses 30.24 -Depreciation 1.14 -

Total Revenue Expenditure : 137.67 -Total Research and Development Expenditure : 151.81 -

Research and Development grant related income is disclosed under Note No. 28.

43. Subsidy Receivable from Government of Gujarat

The Company has reviewed the status of subsidies receivable as of 31st March, 2018 of ` 3,42,141.57Lakhs (31st March, 2017 : `4,66,363.46 Lakhs) in accordance with its policy on financial instrumentsand does not expect any credit loss.

44. Related Party Disclosures

A. Name of Related Parties and description of relationship:

Name of Related Parties Nature of Relationship

Gujarat State Electricity Corporation Limited Subsidiary Company

Gujarat Energy Transmission Corporation Limited Subsidiary Company

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Madhya Gujarat Vij Company Limited Subsidiary Company

Dakshin Gujarat Vij Company Limited Subsidiary Company

Paschim Gujarat Vij Company Limited Subsidiary Company

Uttar Gujarat Vij Company Limited Subsidiary Company

Gujarat Industries Power Company Limited Associate Company

Shri Sujit Gulati, IAS (01.04.2017 to 31.03.2018) Chairman

Shri Pankaj Joshi, IAS (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)

Ms. Mona Khandhar, IAS Woman Director

Shri R N Singh Independent Director

Shri Bimal N Patel Independent Director

Shri Sanjeev Kumar, IAS Director

Shri Milind Torawane, IAS Director

Shri P J Mathew Independent Director

Shri S B Khyalia (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)

Shri K M Bhuva (29.04.2017 to 31.03.2018) Key Management Personnel (KMP)

Shri M B Parikh (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)

Shri Parthiv Bhatt (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)

B. The following transactions were carried out with the related parties in ordinary course of businessduring the year: (` in lakhs)

Nature of Transaction Subsidiary Associate KMP TotalCompany Company

Transactions during the year

Sale of Power 3,686,818.71 - - 3,686,818.71 (3,370,155.37) - - (3,370,155.37)

Dakshin Gujarat Vij Company Limited 1,036,920.97 - - 1,036,920.97 (1,028,282.91) - - (1,028,282.91)

Madhya Gujarat Vij Company Limited 474,493.98 - - 474,493.98(423,686.14) - - (423,686.14)

Paschim Gujarat Vij Company Limited 1,261,127.57 - - 1,261,127.57 (1,100,617.53) - - (1,100,617.53)

Uttar Gujarat Vij Company Limited 914,276.20 - - 914,276.20 (817,568.78) - - (817,568.78)

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Allocation of Working Capital - - - -Processing Charge (146.63) - - (146.63)

Dakshin Gujarat Vij Company Limited - - - - (24.44) - - (24.44)

Madhya Gujarat Vij Company Limited - - - - (24.44) - - (24.44)

Paschim Gujarat Vij Company Limited - - - - (24.44) - - (24.44)

Uttar Gujarat Vij Company Limited - - - - (24.44) - - (24.44)

Gujarat Energy Transmission - - - -Corporation Limited (24.44) - - (24.44)

Gujarat State Electricity - - - -Corporation Limited (24.44) - - (24.44)

Allocation of Common - - - -Maintenance Expenses (305.03) - - (305.03)


Allocation of Dispensary Expenses - - - - (23.29) - - (23.29)


Allocation of E-Urja Expenses 1,894.92 - - 1,894.92 (2,431.08) - - (2,431.08)

Dakshin Gujarat Vij Company Limited 258.12 - - 258.12 (316.21) - - (316.21)

Madhya Gujarat Vij Company Limited 252.00 - - 252.00 (309.86) - - (309.86)

Paschim Gujarat Vij Company Limited 497.09 - - 497.09 (588.38) - - (588.38)

Uttar Gujarat Vij Company Limited 255.61 - - 255.61 (344.24) - - (344.24)

Gujarat Energy Transmission 442.36 - - 442.36Corporation Limited (548.15) - - (548.15)

Gujarat State Electricity 189.74 - - 189.74Corporation Limited (324.24) - - (324.24)

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Allocation of General 1,583.41 - - 1,583.41Insurance Premium (1,960.05) - - (1,960.05)



Paschim Gujarat Vij Company Limited 377.55 - - 377.55 (474.34) - - (474.34)

Uttar Gujarat Vij Company Limited 233.52 - - 233.52 (281.70) - - (281.70)


Gujarat State Electricity 207.80 - - 207.80Corporation Limited (272.33) - - (272.33)

Allocation of Interest 6,531.93 - - 6,531.93 (14,372.78) - - (14,372.78)



Paschim Gujarat Vij Company Limited 4,590.57 - - 4,590.57 (7,374.72) - - (7,374.72)

Uttar Gujarat Vij Company Limited 965.88 - - 965.88 (5,417.71) - - (5,417.71)



Government of Gujarat Guarantee Fees - - - - (282.14) - - (282.14)

Dakshin Gujarat Vij Company Limited - - - - (17.35) - - (17.35)


151


Paschim Gujarat Vij Company Limited - - - - (34.17) - - (34.17)

Uttar Gujarat Vij Company Limited - - - - (34.48) - - (34.48)

Gujarat Energy Transmission - - - -Corporation Limited (55.21) - - (55.21)


Delayed Payment Charges for - - - -Power Purchase (1,682.02) - - (1,682.02)

Gujarat State Electricity - - - -Corporation Limited (1,682.02) - - (1,682.02)

Purchase of Excess Electricity 19,372.07 - - 19,372.07 (11,809.87) - - (11,809.87)

Dakshin Gujarat Vij Company Limited 371.61 - - 371.61 - - - -


Paschim Gujarat Vij Company Limited 9,366.56 - - 9,366.56 (5,627.17) - - (5,627.17)

Uttar Gujarat Vij Company Limited 8,754.75 - - 8,754.75 (5,950.45) - - (5,950.45)

Transmission Charges 292,796.43 - - 292,796.43 (227,232.36) - - (227,232.36)

Gujarat Energy Transmission 292,796.43 - - 292,796.43Corporation Limited (227,232.36) - - (227,232.36)

Purchase of Electricity 991,860.92 95,021.92 - 1,086,882.84 (786,365.62) (104,838.10) - (891,203.72)

Gujarat State Electricity 991,860.92 - - 991,860.92Corporation Limited (786,365.62) - - (786,365.62)

Gujarat Industrial Power 95,021.92 - 95,021.92Company Limited (104,838.10) (104,838.10)Rebate (Cash Discount) on Prompt 6,504.56 - - 6,504.56Payment of Transmission Charges (4,544.65) - - (4,544.65)

Gujarat Energy Transmission 6,504.56 - - 6,504.56Corporation Limited (4,544.65) - - (4,544.65)

152


Rebate (Cash Discount) on Prompt 20,802.21 994.78 - 21,796.99Payment of Power Purchase (337.13) (864.69) - (1,201.83)

Gujarat Industrial Power 994.78 - 994.78Company Limited (864.69) - (864.69)

Gujarat State Electricity 20,802.21 - - 20,802.21Corporation Limited (337.13) - - (337.13)

Remuneration paid to 136.17 136.17KMP / Directors: (95.91) (95.91)

Shri Sujit Gulati, IAS - - - -

Shri Pankaj Joshi, IAS 27.31 27.31 (12.74) (12.74)

Smt. Shahmeena Husain, IAS - - (9.16) (9.16)

Shri S B Khyalia 30.02 30.02 (29.04) (29.04)

Shri K M Bhuva 25.67 25.67 - -

Shri M B Parikh 30.90 30.90 (26.42) (26.42)

Shri Parthiv Bhatt 22.27 22.27 (18.55) (18.55)

Perquisites paid to KMP / Directors: - - 7.52 7.52 - - (3.76) (3.76)

Shri Sujit Gulati, IAS - - - -

Shri Pankaj Joshi, IAS 2.26 2.26 - -

Smt. Shahmeena Husain, IAS - - (0.90) (0.90)

Shri S B Khyalia 2.96 2.96 (2.86) (2.86)

Shri K M Bhuva 2.30 2.30 - -

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Shri M B Parikh - - - -

Shri Parthiv Bhatt - - - -

Incidental Charges paid to : 1.46 1.46KMP / Directors 0.90 0.90

Shri L Chuaungo, IAS - - 0.02 0.02

Shri Sujit Gulati, IAS 0.13 0.13 0.05 0.05

Shri Pankaj Joshi, IAS 0.29 0.29 0.11 0.11

Smt. Shahmeena Husain, IAS - - 0.07 0.07

Shri Sanjeev Kumar, IAS 0.01 0.01 0.05 0.05

Shri Milind Torawane, IAS 0.14 0.14 -

Ms. Mona Khandhar, IAS 0.05 0.05 0.01 0.01

Shri R N Singh 0.27 0.27 0.19 0.19

Shri Bimal N Patel 0.12 0.12 0.05 0.05

Shri P J Mathew 0.03 0.03 0.18 0.18

Shri S B Khyalia 0.29 0.29 0.17 0.17

Shri K M Bhuva 0.13 0.13

Sitting Fees paid to 0.75 0.75Independent Directors: 0.90 0.90

Shri R N Singh 0.35 0.35 0.35 0.35

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Shri Bimal N Patel 0.35 0.35 0.25 0.25

Shri P J Mathew 0.05 0.05 0.30 0.30

Balance as at:

Receivable/Payable Subsidiary Associate KMP TotalCompany Company

Receivables 282,942.81 282,942.81 (225,027.72) (225,027.72)

Gujarat Energy Transmission 271,911.54 271,911.54Corporation Limited (136,436.28) (136,436.28)

Dakshin Gujarat Vij Company Limited - - (14,832.55) (14,832.55)

Paschim Gujarat Vij Company Limited 11,031.27 11,031.27 (73,758.88) (73,758.88)

Payables 282,393.15 17,726.02 300,119.17 (243,453.85) (18,591.01) (262,044.86)

Gujarat State Electricity 93,248.99 93,248.99Corporation Limited (176,285.84) (176,285.84)

Dakshin Gujarat Vij Company Limited 52,632.12 52,632.12 - -

Uttar Gujarat Vij Company Limited 82,741.08 82,741.08 (45,144.02) (45,144.02)

Madhya Gujarat Vij Company Limited 53,770.96 53,770.96 (22,023.99) (22,023.99)

Gujarat Industrial Power 17,726.02 17,726.02Company Limited (18,591.01) (18,591.01)

Note : Previous Year figures are mentioned in brackets.

a. As an annual closing procedure, Inter - Subsidiary Company balances' duly reconciled have beentransferred by all Subsidiary Companies to the debit / credit of the Company’s account (GUVNL) andare reflected in the above balances as appearing in Other Current Financial Assets / Other CurrentFinancial Liabilities.

b. The Company has not paid any remuneration to Chairman, Shri Sujit Gulati, IAS as he occupied theposition of Addl. Chief Secretary, Energy & Petrochemicals Dept., Govt. of Gujarat and was thereforedrawing salary from Govt. of Gujarat.

155


45 The Company did not have any long term contracts including derivative contracts for which therewere any material foreseeable losses. Further, some balances of Trade and Other Receivables, Tradeand Other Payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, willbe accounted for on confirmation/reconciliation of the same, which will not have a material impact.

46 Previous year figures have been reclassified and regrouped wherever necessary to confirm to currentyear’s classification.

47. Approval of Financial Statements

The Standalone Financial Statements were approved for issue by the Board of Directors on 19thSeptember, 2018.

48 Statement Of Management:

a) The Current Assets, Loans and Advances are good and recoverable and are approximately ofthe values as shown, if realized in the ordinary course of business unless and to the extent statedother wise in the Accounts. Subject to the notes and the method of accounting followed bythe Company, provision for all known liabilities is adequate. There are no contingent liabilitiesexcept those stated in the notes.

b) Balance Sheet, Statement of Profit & Loss and Cash Flow Statement read together with theNotes to the Accounts , are drawn up so as to disclose the information required under theCompanies Act, 2013 as well as give a true and fair view of the state of affairs of the Companyas at the end of the year and results of the Company for the year under review.





157


CONSOLIDATED FINANCIAL STATEMENTS 2017-18

CONSOLIDATED FINANCIALSTATEMENTSF Y - 2017-18

158



COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013, ON THECONSOLIDATED FINANCIAL STATEMENTS OF GUJARAT URJA VIKAS NIGAM LIMITED FORTHE YEAR ENDED 31st MARCH 2018The preparation of consolidated financial statements of Gujarat Urja Vikas Nigam Limited for the yearended 31st March 2018 in accordance with the financial reporting framework prescribed under the CompanyAct, 2013 (Act) is the responsibility of the Management of the Company. The Statutory Auditors appointedby the Comptroller and Auditor General of India under Section 139(5) read with Section 129(4) of theAct are responsible for expressing opinion on the financial statement under Section 143 read with Section129(4) of the Act based on independent audit in accordance with the Standards on Auditing prescribedunder Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated1st November 2018.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit ofthe Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited for the year ended 31st March2018 under Section 143(6)(a) read with Section 129(4) of the Act. We conducted a supplementary auditof the financial statements of Gujarat State Electricity Corporation Limited, Gujarat Energy TransmissionCorporation Limited, Uttar Gujarat Vij Company Limited, Madhya Gujarat Vij Company Limited, DakshinGujarat Vij Company Limited, Paschim Gujarat Vij Company Limited but did not conduct supplementaryaudit of the financial statements of associate Company Gujarat Industries Power Company Limited forthe year ended on the date. This working papers of the Statutory Auditors and is limited primarily toinquiries of the Statutory Auditors and Company personnel and selective examination of some of theaccounting records.

Based on my supplementary audit, I would like to highlight the following significant matters under Section143(6)(b) read with Section 129(4) of the Act which have come to my attention and which is my vieware necessary for enabling a better understanding of the Consolidated Financial Statements and the relatedAudit Report;

COMMENTS ON FINANCIAL POSITION

Consolidate Balance Sheet

Def. Govt. Granst. Subs. & Consumer Contribution (Note No. 19) ` 7,657.83 crore.

1. With effect from 1st April 2016, the Company has changed the method of computing the grants/consumer contribution received against depreciable assets to be recognised in Statement of Profitand Loss from reducing balance method to the straight line method and condequently the rates atwhich grants is recognised in the Statement of Profit & Loss. The Company determined that the changeto recognized grants in proportion of the depreciation expenses is a change in accounting estimatesand is to be applied prospectively.

As per Accounting Standard 12, Grants related to depreciable assets are treated as deferred incomewhich is recognised in the Profit and Loss Statement on a systematic and rational basis over the usefullife of the asset. Indian Accounting Standared-20 also states the grants related to depreciable assets

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18are usually recognised in Profit or Loss over the periods and in the proportions in which depreciationexpenses on those assets is recognised.

The above change in method was made by the Company as there was a mismatch of the grantsrecognised in the Statement of Profit & Loss versus the related depreciation expenses. Thus, theCompany has changed the method of recognition of deferred income in order to align the recognitionof deferred income with the related depreciation expenses. As the provision for treatment of deferredincome to be recognised in the Profit and Loss Statement on a systematic and rational basis overthe useful life of the asset are same in AS-12 and Ind AS-20, the change was not mandated by IndAS-20. Hence, the Company changed the method in order in correct an error.

Since the depreciable assets related to which grants/consumers contribution received has beencapitalised in the books of accounts, the effects of such change should have been worked outretrospectively and accounted for in the opening balance of Deferred Government Grants, Subsidiesand Consumer Contribution.

This has resulted in overstatement of retained earnings and understatement of balance of DeferredGovernment Grants, Subsidies and Consumer contribution towards Capital Assets by ` 1302.51 croreas at 31st March 2017.

Despite being pointed out in previous year, no corrective action has been taken by the Companyduring 2017-18.

Balance Sheet, Current Liabilities

Staff Related Liabilities (Note No. 28) ` 13.22 crore

2. The above includes an amount of ` 3.19 crore provided as provision for Bonus. As perSchedule-III of Companies Act, 2013, provisions for employee benefits are under current provisions(short term provisions). Accordingly, as amount of ` 3.19 crore provided as Provision for bonus shouldhave been included under ‘Provision for employee benefit-Short Term Provision’ instead of showingunder ‘Other Current Financial Liability’. This has resulted in overstatement of ‘Other Current FinancialLiability’ and understatement of ‘Short Term Provision’ by ` 3.19 crore.

The aforesaid incorrect classification was pointed out during Audit of Standalone Financial Statementof DGVCL and PGVCL. However, the Company has not rectified the incorrect classification during theconsolidation of Financial Statements.

Comments on Disclosure

Notes on Financial Statements

3. Board of Directors (BoD) of Gujarat State Electricity Corporation Limited (GSECL) in 152th Meetingdated 13rd July 2017 has accorded administrative approval to phase out its eight number units of200/210 Mega Watt (MW) with total generation capacity of 1670 MW to save estimated CapitalExpenditure of ` 1541 crore required to be incurred for compliance to the norms of Ministry ofEnvironment and Forests (MoEF) and for effective savings in the Fixed Cost of ` 723 crore per year.GSECL had already phased out two number units of 120 MW of Ukai with effect from 01 April 2007.

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18Against these two phases out units and eight number of units planned to be phased out, the BoDaccorded administrative approval for construction of two number units of 800 MW.

The above material fact has not been disclosed in the Notes on Consolidated Financial Statement.

The comments was issued (17th September 2018) by Comptroller and Auditor General of India undersection 143(6)(b) of the Companies Act, 2013 on the Financial Statements of Gujarat State ElectricityCorporation Limited for the year ended 31st March 2018.

However, the Company has not rectified the incorrect classification during the consolidation of FinancialStatements.

For and on behalf of the

Comptroller and Auditor General of India

sd/-

Archana Gurjar

Accountant General (E&RSA), Gujarat

Place : Ahmedabad

Date : 21-12-2018

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18No. 8 2nd Floor, Tower E, Avishkar,

Old Padara Road, Vadodara - 390 007.Gujarat, India.

Ph. : +91-265-2357845, 2310448, 2313515email : [email protected]

Mukund & RohitChartered Accoutants

INDEPENDENT AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTSTO THE MEMBERS OF GUJARAT URJA VIKAS NIGAM LIMITED

Report on the Consolidated Ind AS Financial Statements

We have audited the accompanying Consolidated Financial Statements of Gujarat Urja Vikas Nigam Limited(hereinafter referred to as "the Holding Company"), its six subsidiaries(the Holding Company and itssubsidiaries together referred to as "the Group"), one associate and one jointly controlled entity of oneof its subsidiaries which comprise the Consolidated Balance Sheet as at 31st March, 2018, the ConsolidatedStatement of Profit and Loss(Including Other Comprehensive Income),the Consolidated Cash FlowStatement, the Consolidated Statement of Changes in Equity, for the year then ended, and a summaryof the significant accounting policies and other explanatory information(hereinafter referred to as "theConsolidated Ind AS Financial Statements").

Management's Responsibility for the Consolidated Ind AS Financial Statements

The Holding Company's Board of Directors is responsible for the matters stated in Section 134(5) of theCompanies Act, 2013 ("the Act") with respect to the preparation of these Consolidated Ind AS FinancialStatements that give a true and fair view of the consolidated financial position, consolidated financialperformance including other comprehensive income, consolidated cash flows and change in equity ofthe Group, its associate and jointly controlled entity in accordance with the accounting principles generallyaccepted in India, including the Indian Accounting Standards(Ind AS) specified under Section 133 of theAct, read with the relevant rules issued thereunder. The respective Board of Directors of the Companiesincluded in the Group, of its associate and of the jointly controlled entity are responsible for maintenanceof adequate accounting records in accordance with the provisions of the Act for safeguarding of the assetsof the Group and for preventing and detecting frauds and other irregularities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable and prudent;and design, implementation and maintenance of adequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparationand presentation of the Consolidated Ind AS Financial Statements that give a true and fair view and arefree from material misstatement, whether due to fraud or error, which have been used for the purposeof preparation of the Consolidated Ind AS Financial Statements by the Board of Directors of the HoldingCompany, as aforesaid.

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18Auditor's Responsibility

Our responsibility is to express an opinion on these Consolidated Ind AS Financial Statements based onour audit. While conducting the audit, we have taken into account the provisions of the Act, the accountingand auditing standards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)ofthe Act. Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the consolidated Ind AS financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosuresin the consolidated Ind AS financial statements. The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the consolidated Ind AS financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internalfinancial control relevant to the Holding Company's preparation of the consolidated Ind AS financialstatements that give a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on whether the Holding Company hasin place an adequate internal financial controls with reference to financial statements and operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Holding Company's Boardof Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements.

We believe that the audit evidence obtained by us and by the other auditors in terms of their reportsreferred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis forour audit opinion on the consolidated Ind AS financial statements.

Basis for Qualified Opinion

1. In case of Gujarat State Electricity Corporation Limited ("the subsidiary company")

a. The company recognises replaced items of Property, Plant and Equipment (PPE) as addition ofPPE. However, carrying amount of such replaced parts are not derecognised from PPE. Thisis not in accordance with Ind AS - 16 "Property, Plant and Equipment". The effect of non-compliance of Ind AS - 16 is not ascertainable.

b. The company recognizes capital spares as PPE and other spares as inventory based on pre-definedcode system and not in accordance with requirement of Ind AS - 2 'Inventories' and Ind - AS16 'Property, Plant and Equipment'. The effect of such non-compliance on PPE, inventory,depreciation, spares consumption, profit / loss on sale of spares and sales is not ascertainable.

c. Balances under the group of Other financial assets, other current financial liabilities and tradepayables are subject to confirmation and adjustment, if any, required upon such confirmationare not determinable.

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CONSOLIDATED FINANCIAL STATEMENTS 2017-182. In case of Uttar Gujarat Vij Company Limited ("the subsidiary company")

The statutory auditor of the Company who audited the financial statements / financial informationof the subsidiary has reported that the Company has changed the method of accounting regardingwriting back balances from grants/ consumer contribution related to certain depreciable assets fromhitherto 10% on reducing balance basis to 5.28% on straight line basis prospectively commencingfrom the current financial year. However, as per opinion of the statutory auditor of the subsidiaryCompany,the effect of such change has to be worked out retrospectively commencing from the dateon which the depreciable assets related to which the grants/ consumer contribution has been receivedhave been capitalized in the books of account and effect of such change be accounted for in theopening balance of grants/ consumer contribution; amount not determined.

The overall impact of the above qualification on the profit for the year, balance of grants/ consumercontribution and balance of equity & reserves as on 31st March, 2018 is undetermined.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, exceptfor the effects of the matter described in the Basis for Qualified Opinion paragraph above the aforesaidconsolidated Ind AS financial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generally accepted in Indiaincluding Ind AS, of the consolidated state of affairs of the Group, its associate and jointly controlledentity as at March 31, 2018, and their consolidated profit and comprehensive income and their consolidatedcash flows and the consolidated changes in equity for the year ended on that date.

Emphasis of Matter

We draw the attention to the following matters:

1. In case of Gujarat State Electricity Corporation Limited ("the subsidiary company"),

a. Note No. 60 in respect of prior period error.

b. Note No.61 in respect of not accounting power purchase agreement as a lease arrangementin terms of "Appendix - C" of Ind As 17 "Leases" for the reason stated in the said note.

2. In case of Dakshin Gujarat Vij Company Limited ("the subsidiary company"),

a. Note - 57 of Ind AS financial statement, the management of the company has written off theentire amount receivables from Essar Steel India Limited (ESIL) amounting to ` 440.40 Croresconsidering it as bad and doubtful.

3. In case of Madhya Gujarat Vij Company Limited ("the subsidiaryCompany"),

The statutory auditor of the Company who audited the financial statements has drawn an attentionto Note 22.1 to the financial statements which describes that security deposit of consumers is updated,to the extent discrepancies brought to the notice of the Company, in subsidiary records and furtherreconciliation of the same with that as per books is under process.

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CONSOLIDATED FINANCIAL STATEMENTS 2017-184. In case of Pashchim Gujarat Vij Company Limited ("the subsidiary Company"),

Security Deposits from LT Consumers at some divisions & circles are subject to reconciliation withSubsidiary records.

Other Matter

In case of Gujarat State Electricity Corporation Limited ("the subsidiary Company"),

The financial statements of the Company for the year ended March 31, 2017, were audited by predecessorauditor whose report expressed a modified opinion on Financial Statements at September 22, 2017. Theopinion was modified in respect of non-compliance of Ind AS-2 and Ind AS-16.

Report on Other Legal and Regulatory Requirements

1. The company is governed by the provisions of the Electricity Act, 2003 read with rules and theregulations issued thereunder. Section 1(4)(d) of the Companies Act 2013 also provides that theElectricity Act will apply to the extent the provisions of the Companies Act are inconsistent with theprovisions of the Electricity Act, 2003. Accordingly, the Ind AS financial statements of the Companyfor the year 2017-18 are compiled and reported.

2. As per by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Governmentof India in terms of sub-section (11) of section 143 of the Companies Act, 2013, the statement referredin the section is not applicable to the Consolidated Ind AS Financial Statements of the Company forthe year under review.

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

a) We have sought and except for the matters described in the Basis of Qualified Opinion Paragraph,obtained all the information and explanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit of the aforesaid consolidated Ind As financialstatements.

b) In our opinion, except for the effect of the matters described in the Basis for Qualified Opinionparagraph above, proper books of account as required by law relating to preparation of theaforesaid consolidated Ind AS financial statements have been kept so far as it appears from ourexamination of those books and the reports of the other auditors.

c) The requirement of dealing with the reports on the accounts of the branch offices of the HoldingCompany, its subsidiaries, its associate and jointly controlled entity does not arise as the grouphas no branches and hence this point is not applicable for the year under review.

d) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including OtherComprehensive Income, Consolidated Statement of Changes in Equity and the Consolidated CashFlow Statement dealt with by this Report are in agreement with the relevant books of accountmaintained for the purpose of preparation of the consolidated Ind AS financial statements.

e) In our opinion, except for the effect of the matters described in the Basis for Qualified Opinionparagraph above, the aforesaid consolidated Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014.

165


CONSOLIDATED FINANCIAL STATEMENTS 2017-18f) The matters described in the Basis for Qualified Opinion paragraph, Emphasis of Matter paragraph

and report on adequacy of internal financial controls with reference to financial statement ofthe Group above, in our opinion, may not have an adverse effect on the functioning of the Groupexcept in case of Gujarat State Electricity Corporation Limited,as per the Statutory Auditor ofthe Company who have audited financial statement, may have an adverse effect on the functioningof the Company.

g) The Holding Company being a Government Company, in view of the Notification No G.S.R. 463(E)dated 05.06.2015 issued by Govt. of India; the provisions of section 164(2) of the CompaniesAct, 2013 are not applicable to the Company.

h) With respect to the adequacy of internal financial controls over financial reporting of the Group,its associate and jointly controlled entity and the operating effectiveness of such controls, referto our separate report in "Annexure A";

i) With respect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best ofour information and according to the explanations given to us:

i. The consolidated Ind AS financial statements disclose the impact of pending litigations onthe consolidatedInd AS financial position of the Group, its associate and jointly controlledcompany. Refer Note 49 to the consolidated financial statements relating to contingentliabilities have not been provided for.

ii. The Group,it's associate and jointly controlled entity did not have any material foreseeablelosses on long-term contracts including derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Group, its associate and jointly controlled entity incorporatedin India.

4. As required by C&AG of India through directions / sub-directions issued under Section 143(5) of theCompanies Act, 2013, we give our report in the attached "Annexure B".

For Mukund & RohitChartered AccountantsRegistration No. 113375W

Vinay SehgalPlace : Gandhinagar PartnerDate : 01.11.2018 M. No. 109802

166



Annexure - A to the Independent Auditor's ReportReport on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct, 2013 ("the Act")

We have audited the Internal Financial Controls with reference to financial statement reporting of GujaratUrja Vikas Nigam Limited (hereinafter referred to as "the Holding Company"), its subsidiaries (the HoldingCompany and its subsidiaries together referred to as "the Group"), its associate and jointly controlledentity which are companies incorporated in India, as of 31st March 2018 in conjunction with our auditof the consolidated Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The respective Board of Directors of the Holding Company, its subsidiaries, its associate & jointly controlledentity which are companies incorporated in India, are responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteria established by these entities,considering the essential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design, implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the orderly and efficient conduct of its business,including adherence to company's policies, the safeguarding of its assets, the prevention and detectionof frauds and errors, the accuracy and completeness of the accounting records, and the timely preparationof reliable financial information, as required under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with referenceto financial statement based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standardson Auditing, issued by ICAI and prescribed under section 143(10) of the Companies Act, 2013, to theextent applicable to an audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statement reporting wasestablished and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system with reference to financial statement and their operating effectiveness. Our auditof internal financial controls with reference to financial statement included obtaining an understandingof internal financial controls with reference to financial statement, assessing the risk that a materialweakness exists, and testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the Consolidated Ind AS financial statements, whetherdue to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditorsin terms of their reports referred to in the Other Matters Paragraph below, is sufficient and appropriate

167


CONSOLIDATED FINANCIAL STATEMENTS 2017-18to provide a basis for our audit opinion on the Holding Company, its subsidiaries, its associate & jointlycontrolled entity incorporated in India, internal financial controls system with reference to financialstatement.

Meaning of Internal Financial Controls with reference to Financial Statement

A Company's internal financial control with reference to financial statementis a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles. A company'sinternal financial control with reference to financial statement includes those policies and proceduresthat:

1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of the company;

2) Provide reasonable assurance that transactions are recorded as necessary to permit preparationof financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and

3) Provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statement

Because of the inherent limitations of internal financial controls with reference to financial statement,including the possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of the internalfinancial controls with reference to financial statement to future periods are subject to the risk that theinternal financial control with reference to financial statement may become inadequate because of changesin conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclaimer of Opinion

In case of Gujarat State Electricity Corporation Limited ("the Subsidiary Company"), the documents relatedto system of internal financial controls with reference to financial statement of the Company is underpreparation and hence same were not made available to us to enable us to determine if the Companyhas established adequate internal financial control with reference to financial statement and whethersuch internal financial controls were operating effectively as at March 31, 2018.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, theCompany and its subsidiary companies, which are companies incorporated in India, have, in all materialrespects, an adequate internal financial controls system with reference to financial statement and suchinternal financial controls with reference to financial statement were operating effectively as at March31, 2018, based on the internal control over financial reporting criteria established by the respective

168


CONSOLIDATED FINANCIAL STATEMENTS 2017-18companies considering the essential components of internal control stated in the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountantsof India.

However, in case of Dakshin Gujarat Vij Company Limited,("the Subsidiary Company") in our opinioninternal control in respect of movement of inventories during maintenance and capital works, materialissued/received to/from third parties and material lying with sub-divisions, needs to be reviewed andstrengthened. Further, we strongly recommend for implementation of real time integrated ERP software.

We have considered the matter reported above and disclaimer reported above in determining the nature,timing, and extent of audit tests applied in our audit of the financial statements of the Company, andthe disclaimer has affected our opinion on the financial statements of the Company and we have issuedqualified opinion on the financial statements.



169



Annexure B to the Independent Auditor's ReportThe Annexure referred to in our report to the members of Gujarat Urja Vikas Nigam Limited for theyear ended March 31, 2018:

Report on the Directions issued by The Comptroller & Auditor General of India under section 143(5) ofCompanies Act, 2013 for the F.Y. 2017-18

SrNo.

Directions /Sub Directions Response / Remedial Measures

A. General Directions

1 Whether the Companyhas clear title/ leasedeeds for freehold andleasehold respectively?

If not please state thearea of freehold andleasehold land for whichtitle/ lease deeds are notavailable?

In respect of the Holding Company, the title deeds of immovableproperties reflected in the financial statement are held in the nameof the Company.

In respect of Subsidiary Company (GSECL), as reconciliation related toquantity and value of immovable properties is under process, it is unableto verify title deeds of immovable properties and because of this itsimpact on the financial statements is not ascertainable.

Inrespect of Subsidiary Company (GETCO), the company holds title deedsof all freehold lands and lease deeds of all leasehold lands. The companyhas acquired most of the lands through Government acquisition mode/on lease from Government agencies and in case of lands for whichacquisition/lease process is going on, copies of competent authorityorders (as proof of ownership and possession) in this regards areavailable in records

In respect of Subsidiary Company (DGVCL), The details of clear title/leasedeed for freehold and leasehold property is given in Annexure - I.

In respect of Subsidiary Company (MGVCL), Government of Gujarat,vide notification No. GHU-2006-91-GUV-1106-590K dated 3rd October,2006 notified the final opening Balance Sheet of the 7 Companies ason 1st April, 2005, whereby certain assets and liabilities of the erstwhileGujarat Electricity Board (GEB) has been transferred to the Company,MGVCL. As informed to us, the company has received value of Land& Land Rights of ` 154.37 Lakhs as on 1st April, 2005 vide the saidnotification.

The above balance of Land & Land Rights include ` 116.99 Lakhs takenover from Vadodara Municipal Corporation vide order NO. GU/88/9/LBM/1185/4503/K dated 5th March, 1988.

The above balances have been transferred from erstwhile GujaratElectricity Board (GEB) vide notification and as informed to us, the

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18procedure for the registration and/or transfer in the name of companyis under progress.

The management of the company has provided following documentsin respect of Land & Land Rights Purchased / Acquired by the companyafter 1st April, 2005 -

Name of Division Amountin which Land & (` in Documents ProvidedLand Rights Lakhs)Reflected

Dahod Division 4.04 Municipal Tax Receipt

Lalbaug Division 59.85 Letter of allotment form GIDC

Vishwamitri East 99.04 Letter of allotment from VadodaraMunicipal Corporation

Vishwamitri West 1,976.16 Letter of allotment from VadodaraMunicipal Corporation

Nadiad Division 368.91 Possession Receipt form Nagarpalika

The Company has acquired these lands through Government acquisitionmode/ on lease from Government agencies and in these casesacquisition/lease process is going on and copies of competent authorityorders (as proof of ownership and possession) in this regards areavailable.

In respect of Subsidiary Company (PGVCL),following title deeds of landare not held in the name if the company:

Total No. Whether Gross blockof Cases lease hold or and net block Remarks

Free hold (` In Lakhs)

01 Free Hold 41.21 For details,please refer Sub

Annexure - II

In respect of Subsidiary Company (UGVCL), there is no leasehold landwith the Company. The freehold land prior to unbundling of GujaratElectricity Board ('GEB') is in the name of Gujarat Electricity Board,however post such unbundling scheme; the purchase of freehold landis in the name of the Company i.e. UGVCL. Refer the Sub Annexure -III.

In case of Holding Company,HBA Loan and Interest of ` 3,47,908 iswaived during the year in the event of death of the employee while

2 Whether there are anycases of waiver / write off

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in service as per Company's policy for Staff Welfare.In respect of the Subsidiary Company (GSECL) as per information andexplanations given and based on examination of the records of theCompany, there are no cases of any waiver of loan / debt / interestduring the year.In case of Subsidiary Company (GETCO),1. Cases of waiver:

As per GSO 327 Dated: 03-04-1999 of Clause No.21, in case of deathof employee, the balance outstanding loan amount and interest payableby the employee to the company are waived. Accordingly, during theyear 2017-18, principal amount of ` 14.39 Lakhs and interest amountof ` 4.35 Lakhs (Total amount ` 18.74 Lakhs was waived.)

2. Cases of write off debts:During the Financial Year 2017-18, the Company has written-off followingbalances, to be irrecoverable, based on the facts and circumstances asof the date of issue of these financial statements-

Sr. Name Nature Amount ReasonNo. of of (` in for

Debtor balance Lakhs) write-off1 Essar Trade 36577.09 The debtor went into

Steel receivable Insolvency and the amountLimited (debtor) seems to be irrecoverable

based on the facts andcircumstances.

2 Baroda Debit 18.73 The recoverable amountPower balance from the party was very oldTrans- of and time barred. Themission Creditor company went in toPrivate winding up procedure andLimited then taken over by other

company without the liabilityof the M/s BPTL in year 2004.Since the amount wasunsecured and there is nopersonal guarantee of theDirectors and hence theamount is irrecoverable basedon the facts and circum-stances.

of debts/ loan/ interestetc. If yes, the reasonsthere for and the amountinvolved.

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In respect of the Subsidiary Company (DGVCL),during the year, theCompany has written-off outstanding dues from Essar Steel India Limited(ESIL) amounting to ` 440.40 crores considering it as bad and doubtful.The detailed disclosure in this regard is given under Note-46. Furtherthe Company has also waived outstanding dues from consumersamounting to ` 94 lakhs due to cases settled in Lok Adalats andsettlement committee.

In respect of the Subsidiary Company (MGVCL), during the year thecompany has waived off delayed payment charges amounting to ̀ 17.74Lakhs through Lok- Adalat & Jurisdictional Court for consumers.

Further, the Company has also waived off HBA outstanding fromemployees amounting to ` 25.34 Lakhs due to death of employeeas per Company's Policy.

In respect of Subsidiary Company (PGVCL),the waiver / write off of debts/ loans / interest are underneath:

i) During the course of settlement with Consumers in Lok-Adalat andalso as per the judgment received from the Hon'ble Courts, theamount of Dues of ` 214.53 lacs is waived / written off during thefinancial year 2017-18.

ii) During the financial year 2017-18, ` 9.15 Lacs waived against HouseBuilding Advance and interest thereon due to death of Employeeas per policy laid down by GEB Circular No. Acctts/HBA/3275 Dated28.03.1989

In respect of the Subsidiary Company (UGVCL), during the year theCompany has written off an amount of ̀ 30,79,770.96/- being dues fromconsumers due to non-recoverability of such dues.

In case of Holding Company, this is Not Applicable.

In respect of the Subsidiary Company (GSECL),proper records aremaintained for material lying with third parties.

During the year company has not received any assets as gifts fromGovernment or other authorities.

In respect of the Subsidiary Company (GETCO),proper records aremaintained for material lying with third parties. The company has notreceived any assets as gift/grants from Government or other authoritiesduring the financial year 2017-18.

In respect of Subsidiary Company (DGVCL), according to informationand explanation provided to us, the company has maintained proper

3 Whether proper recordsare maintained forinventories lying withthird parties & assetsreceived as gift/ grant(s)from Govt. or otherauthorities?

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records for material lying with outside parties. However, the companyhas not received any gift / grant from Government or other authoritiesduring the financial year 2017-18.

In respect of the Subsidiary Company (MGVCL), On the basis ofinformation and explanations produced before us, the company ismaintaining proper records for inventories lying with third parties. TheCompany has not received any assets as gifts/grants from theGovernment or other Authorities.

In respect of Subsidiary Company (PGVCL),in general, for inventorieslying with transformer repairing agencies and fabricators, record areproperly maintained. Labour contractors are also issued materials asper the approved work quality only on producing material requisition,and after work completion, balance material are credited in the storerecords are maintained.

Company has not received any gifts from Government or any otherauthorities during 2017-18.

In respect of Subsidiary Company (UGVCL), proper records aremaintained for the inventories lying with third parties and confirmationsfor material lying with them as on 31-03-2018 have been taken on recordby the Company. The Company has not received any assets as gift fromGovernment or other authorities during the year 2017-18.

Remedial Measures

In respect of Subsidiary Company (GETCO), transmission network isavailable for evacuation of power from each generating stations undernormal operating conditions. In peculiar grid operating conditions likehigh renewable energy injection during off peak load conditions, fewwind farms have been asked to back down their generation in few rarecases. Such back down instruction are being given by SLDC looking into real time loading of associated network elements and grid security.There are no provisions for compensating such kind of losses due toback down of generation asked by SLDC to maintain grid stability andsecurity.

In respect of Subsidiary Company (GETCO), the Company has submittedto GERC the Transmission Loss of 3.80% for the year 2017-18 in thetariff petition. During the year 2017-18, Transmission Loss was 3.72%,which is lower than the target submitted to GERC.

B. Sector specificSub-directions

1 Is the system ofevacuation of powercommensurate withpower available fortransmission with thegenerating company? Ifnot, loss, if any, claimedby the generatingcompany may becommented.

2 How much transmissionloss in excess ofprescribed norms hasbeen incurred during theyear and whether the

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In respect of Subsidiary Company (GETCO),proper accounting is donein the cases where the assets constructed and completed on behalf ofother agencies and handed over to them.

In respect of Subsidiary Company (GSECL), the company has generallycomplied with the various Pollution Control Acts and there is no financialimpact thereof during the year.

As regards fly ash utilization during the year,100% fly ash utilization isachieved in all thermal power stations (TPS) except in Wanakbori TPS.As per the MoEF notification, the company has transferred ` 2065.10lacs related to fly ash sale income of Wanakbori TPS to Fly Ash UtilizationReserve Fund.

In respect of Subsidiary Company (GSECL),the Company has not enteredinto revenue sharing agreements with private parties for extraction ofcoal at pitheads.

In respect of Subsidiary Company (GSECL),the company has a propersystem of reconciliation of quantity / quality of coal ordered and receivedand grade of coal / moisture and demurrage etc. are properly recordedin the books of accounts.

same been properlyaccounted for in thebooks of accounts?

3 Whether the assetsconstructed andcompleted on behalf ofother agencies andhanded over to them hasbeen properly accountedfor in the financialstatements.

4 In cases of ThermalPower Projects,compliance of thevarious Pollution ControlActs and the impactthereof includingutilization and disposal ofash and the policy of thecompany in this regard,may be checked andcommented upon.

5 Has the company enteredinto revenue sharingagreements with privateparties for extraction ofcoal at pitheads and itadequately protects thefinancial interest of thecompany?

6 Does the company havea proper system ofreconciliation of quantity/ quality of coal orderedand received andwhether grade of coal /moisture and demurrageetc., are properlyrecorded in the books ofaccounts?

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In respect of Subsidiary Company (GSECL),during the year under audit,no share of free power was due to the State Government.

In respect of Subsidiary Company (GSECL), there is no discharge of waterby the company in case of Hydroelectric Projects.

In respect of Subsidiary Company (DGVCL), No, the company has notentered into any revenue sharing agreement with franchise fordistribution of electricity.In respect of Subsidiary Company (MGVCL), the company has neitherentered into any agreements with franchise for distribution of electricitynor for revenue sharing.In respect of subsidiary Company (PGVCL),in past efforts were takento engage franchisee for high loss areas by giving advertisement.However, no agency came forward and hence no such agreement hasbeen made.In respect of Subsidiary Company (UGVCL), the Company has not enteredinto any agreement with franchisees for distribution of electricity.

In respect of Subsidiary Company (DGVCL), during the course of Auditon sample basis, we have noticed that bills were issued to the consumersin time and collections have been achieved in timely manner.

In respect of Subsidiary Company (MGVCL), the Company comprisestwo categories of consumers i.e. HT and LT consumers:

The HT category consumers are billed and maintained at divisional level.The meter readings are collected by the Deputy / Junior Engineersphysically visiting the premises. Moreover, the high valued consumers

7 How much share of freepower was due to theState Government andwhether the same wascalculated as per theagreed terms anddepicted in the accountsas per acceptedaccounting norms?

8 In the case ofHydroelectric Projects,the water discharge is asper policy / guidelinesissued by the StateGovernment to maintainbiodiversity. For notmaintaining it penaltypaid / payable may bereported.

9. Has the companyentered into agreementswith franchise fordistribution of electricityin selected areas andrevenue sharingagreements adequatelyprotect financial interestof the company?

10. Report the efficacy of thesystem of billing andcollection of revenue inthe company.

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connections are equipped with AMR based meters, which are monitoredregularly from division offices by engineers and also readings are fetchedfrom those meters for the monthly billing purpose. Meter readingactivity, bill preparation and serving of bill is carried out regularly from15th to 18th of the month for normal consumers. In case of open accessconsumers, billing is done on the 1st of the every month by divisionoffices.The billing activity of LT category consumers are mainly bifurcated intwo parts, i.e. monthly billing (low tension high valued customers) andbi-monthly billing (LT residential and other low valued categoryconsumers). The billing activity is carried out by trained meter readers.The billing activity of LT consumers are carried out between 20th and10th of the next month. The bills are served to the consumers on thespot only, by the meter readers. Such spot billing method results intosaving in time, money and energy and also entails early realizationofrevenue by 5-7 days. Also, the company has initiated the GPRS mobilebased spot billing, in which the energy bills are calculated automaticallythrough computerized program and calculated bill data aretransferredthrough GPRS based servers to mobile PDA of meter readers and a printout of calculated bill is generated and served to the consumer on thespot, which ensures the correctness of energy bill calculations. Asexplained by the management, the company has initiated the processof endowing the mobile PDA GPRS based devices of all the Sub-Divisions.Moreover, to ensure the correctness of meter readings, every monththe meter readers are interchanged within one Sub-Division, i.e. if ameter reader has carried out the meter reading activity in a particulararea this month, then in next month other meter reader will beperforming the billing activity of that particular area.This ensuresautomatic cross verification of opening and closing meter readings.To improve the efficacy of collection of revenue, the company has madearrangements in system so that any consumer of any sub division canpay his energy bill at any sub division / division / circle / corporate office.Moreover company has provided collection rights to post offices, privatecash collection agencies, e-gram panchayats and also has providedfacility of any time payment (ATP Kiosks and various ATMs of Banks).Also company has provided online payment options on its website aswell as on various banks and payment wallets websites , whereconsumers can pay their bills online from any place through Credit Card/ Debit Card / Net banking facilities. The Company also conductsdisconnection drives, arranges for LOK-ADALATs for pending disputedarrears regularly to improve collection efficacy.

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In respect of Subsidiary Company (PGVCL),on random verification wehave noticed that bills were issued to the consumers and a collectionhas been achieved in timely manner.

In respect of Subsidiary Company (UGVCL), the consumer base comprisesof two categories i.e. HT and LT Consumers:

In HT Billing, billing (meter reading, bill preparation and serving the bill)is done from 15th to 18th of the month for normal consumers. In caseof Open access consumers, billing is done on 1st of the next month byDivision offices.

Due to huge numbers of consumers in LT category, LT Billing is bifurcatedin two way i.e. monthly billing cycle and bi-monthly billing cycle. Meterreading in Monthly billing cycle is carried out from every 15th to 20th

of the month & in bi-monthly billing cycle, meter reading is carried outfrom every 21st of month to 10th of succeeding month. After collectionof meter reading data, bill printing process is carried out and bills areserved to the consumers by sub-division offices

To improve Collection, the Company has made arrangements with postoffices, private cash collection agencies, e-gram panchayat's and alsoprovided facility of any time payment (ATP) kiosks, net banking facilityto facilitate payment of bills to the consumers. The Company alsoconduct disconnection drive, arrange LOK ADALAT for pending disputedarrears to improve collection efficiency.

In respect of Subsidiary Company (DGVCL), the Company has installedtemper proof energy meters for all the Consumers (except for agricultureunmetered consumers) and such meter box is duly sealed by theCompany.

In respect of Subsidiary Company (MGVCL), Company has installed26,16,839 numbers of tamperproof static meters out of total 30,70,072numbers of consumers as on 31-03-2018 (85.24%).The detail ofinstallations of tamperproof static meters for various categories ofconsumers is as below:

Category No. of No. of No. of % ofof consumer Consumers Electro- Electronic Static

Mechanical Meters MetersMeters (Static) Insta

llation

Residential 2558658 390664 2167994 84.73

11. Whether tamper proofmeters have beeninstalled for allconsumers? If not then,examine how accuracy ofbilling is ensured

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GLP 23964 - 23964 100.00

LT Industrial 303531 36424 267107 87.99and Commercial

HT Industrial 2067 - 2067 100.00

Public Lighting 7758 - 7758 100.00

Agriculture 153653 - 127508 82.98

Public Water Works 20441 - 20441 100.00

Total 3070072 427088 2616839 85.24

From the above table, it is clear that tamperproof static meters havebeen installed for all consumers (100%) in case of consumer's categoryGLP, HT Industrial, Public Lighting and Public Water Works consumers.In case of Residential consumers, the process of replacing the existingelectro mechanical meters with tamperproof meters is continued and21,67,994 Nos. of tamperproof static meters have been installed outof total 25,58,658 Nos. of Residential consumers.

Further, in case of Agricultural consumers, 26,145 Nos. are of thecategory of AG unmetered consumers, for which GERC has orderedseparate Flat rate HP based tariff.

In order to ensure accuracy of billing, company has taken the followingmeasures:-

i. It is ensured that all the meters (either Static or Electro-Mechanical)are properly housed and covered by Metal Meter Boxes or by SMCBoxes. Also, this boxes are sealed with a specialized plastic seals toavoid direct access to the basic meters.

ii. The company's meter readers, who used to take regular visits ofconsumers installations during their regular spot billing programs,are instructed to examine and observe the physical status of metersespecially for reporting as to broken seals, tampered meter boxes,faulty meters, burnt meters, zero consumption meters, overconsumption meters, locked premises etc. on regular basis forreporting to their concerned sub divisional heads. On the basis ofmeter readers report, the corrective actions are immediately initiatedby the Deputy Engineer of concerned sub division to ensure accuracyof metering.

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iii. The Company also arranges surprise theft checking drives periodicallyand the meter installations are being checked for tampering. Subdivisional theft drives are done twice in a week, to ensure theminimum theft of electricity. Mostly the areas comprising of highloss feeders are targeted.

In respect of Subsidiary Company (PGVCL), Yes, the company has installedmeters for all consumers except "unmetered agricultural consumers".The meters are installed after accuracy test of energy meter in metertesting Laboratory, meter body seals are provided and these energymeters are installed in tamper proof meter box and such meter boxis duly sealed by the company.

In respect of Subsidiary Company (UGVCL), the Company is havingtotal 34,31,982 nos. of Consumers as on 31-03-2018. Out of thesame 32,79,222 nos. of Consumers are metered and 1,52,760 nos.of Consumers are un-metered. For all the metered consumers asstated above the Company has installed the static meters andelectro mechanical meters. For remaining 1,52,760 nos. ofconsumers tariff is charged on the basis of contract load which isapproved by GERC.

In respect of Subsidiary Company (DGVCL), the company has recoveredand accounted Fuel and Power Purchase Adjustment cost.

In respect of Subsidiary Company (MGVCL), Yes, based on approval ofFPPCA formula by GERC on quarterly basis, the additional FPPCA chargesare levied or rebate is given in subsequent billing cycles to all theconsumers.

The FPPCA additional charges are being assessed through computerizedsystem and are duly debited / refunded in consumers account. TheFPPCA being a tariff item, the additional charges calculated is alsoaccounted automatically along with other tariff items in the books ofaccounts. Moreover, the additional FPPCA charges are beingproportionately calculated from its date of effectiveness.

In respect of Subsidiary Company (PGVCL), Yes, the company hasrecovered and accounted Fuel and Power Purchase Adjustment costduring the financial year 2017-18

In respect of Subsidiary Company (UGVCL), based on approval for FPPACby GERC on quarterly basis, the company recovers and accounts thesame in subsequent billing cycles to all consumers.

12. Whether the Companyrecovers and accounts,the State ElectricityRegulatory Commission(SERC) approved Fuel andPower PurchaseAdjustment Cost(FPPCA)?

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In respect of Subsidiary Company (DGVCL), Yes,the receivables andpayable between DGVCL & fellow subsidiary companies and Holdingcompany is reconciled and duly confirmed as on 31.03.2018.

In respect of Subsidiary Company (MGVCL), the receivables andpayables between the generation, transmission and distributioncompanies has been reconciled and confirmed by each of the associatecompanies.

In respect of Subsidiary Company (PGVCL), Yes, The receivables andpayable between PGVCL & fellow subsidiaries / holding companies isreconciled and duly confirmed as on 31.03.2018.

In respect of Subsidiary Company (UGVCL), The receivables and payablesbetween the generation, transmission and distribution companies hasbeen reconciled and confirmed by each of the associate company. Theconfirmations are also sought for amount payable for purchase of powerfrom wind farm and solar energy suppliers.

In respect of Subsidiary Company (DGVCL), Not Applicable.

In respect of Subsidiary Company (MGVCL), the company has nofranchisees for distribution of power.

In respect of Subsidiary Company (PGVCL), Not Applicable.

In respect of Subsidiary Company (UGVCL), the Company has nofranchisees for distribution of power.

In respect of Subsidiary Company (DGVCL), during the year companyhas been allocated following subsidies for Agriculture and Water Works(Gram Panchayats) consumers though holding company GUVNL:

1. AG-Tariff compensation - ` 4215.29 lakhs

2. AG- Subsidy of FPPPA - ` 7516.73 Lakhs

3. Water Works Subsidy - ` 3721.03 Lakhs

The claim of the subsidy has been made by the GUVNL, Holdingcompany on behalf of all the distribution companies. The claim ofsubject subsidy is reported and presented in the books of GUVNLitself and hence we are not able to comment on the short fall ofthe subsidy, if any.

In respect of Subsidiary Company (MGVCL), During the year, the followingtariff subsidies have been recognized in the books of accounts as perbudgetary allocation made by GOG as per details as under:

13. Whether thereconciliation ofreceivables and payablesbetween the generation,distribution andtransmission companieshas been completed. Thereasons for differencehave been examined.

14. Whether the company issupplying power tofranchisees, if so,whether the company isnot supplying power tofranchisees at below itsaverage cost of purchase

15. How much tariff roll backsubsidies have beenallowed and booked inthe accounts during theyear? Whether the sameis being reimbursedregularly by the StateGovernment shortfall ifany may be commented.

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Sr. No. Particulars (` In Lakhs)

1 GERC Tariff compensation 4,852.29

2 FPPPA 11,438.32

3 Water Works 4,679.99

4 50% AG Subsidy -

5 HP Based Subsidy 7,380.69

6 Primary Schools 481.41

Total 28,832.70

The GUVNL, on behalf of MGVCL deals with GOG in respect of subsidyclaims (except primary schools) and the outstanding position in GUVNLbooks as at 31st March, 2018 is as under:

(` In Lakhs)

Opening Recognized Amount ClosingParticulars balance in books received outstandingof as on during during as on 31stSubsidy 1st April, the the year March, 2018

2017 Year from GOG from GOG

GERCTariff 2840.20 4852.29 4852.29 2840.20compensation

FPPPA 21698.39 11438.32 11438.32 21698.39

Water Works 4141.36 4679.99 4679.99 4141.36

50% AG 2881.74 - - 2881.74Subsidy

HPBased - 7380.69 7380.69 -Subsidy

Relief toPrimary 324.13 481.41 481.41 324.13Schools

Total 31885.82 28832.70 28832.70 31885.82

In respect of Subsidiary Company (PGVCL), There are no tariff roll backsubsidies allowed during the year. However, various other subsidies as

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18mentioned underneath are received during the year from holdingcompany (GUVNL) are duly accounted.

(` in Lacs )

Sr. No. Subsidy Received Amount

1 Agriculture (HP based) 43537.27

2 Tariff Compensation 44230.92

3 FPPPA Subsidy 67287.26

4 Energy Conservation 41.86

5 Water Works 18152.14

6 Flood Relief 1930.96

In respect of Subsidiary Company (UGVCL), the Company has raised theclaim of FPPPA and tariff compensation to GUVNL amounting to`2,14,261.02 Lakhs. During FY 2017-18 `1,44,037.42 Lakhs has beenreceived from GUVNL.



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Annexure - I

Details of clear title/lease deed for freehold and leasehold property

1. Balance Transferred from erstwhile Gujarat Electricity Board (GEB) on 01st April, 2005

Government of Gujarat, vide notification NO. GHU-2006-91-GUV-1106-590-K dated 3rd October 2006notified the final opening Balance Sheet of the 7 Companies as on 1st April 2005, whereby certainassets and liabilities of the erstwhile Gujarat Electricity Board (GEB) has been transferred to theCompany, DGVCL. As informed to us, the company has received value of Land & Land Rights of` 31.11 lakhs and Building of ` 421.81 lakhs as on 1st April 2005 vide the said notification.

As informed to us, the procedure for the registration and/or transfer in the name of the companyis still in progress and hence, we are unable to comment on the title deed of the subject properties.

2. Land and Land Rights Purchased/Acquired on or after 01st April, 2005

The management of the company has provided following documents in respect of Land & Land RightsPurchased/Acquired by the company after 01st April, 2005 -

Name of Divisions Amountin which Land & Land (` in RemarksRights Reflected Lakhs)

Bardoli (O & M) 13.55 Land Allotment Order by Collector for Constructionof office Building

Ankleshwar Industrial 35.59 Land Allotment Letter from GIDC

Vapi (O & M) 15.58 Land Allotment Order by Collector for Constructionof office Building

Surat City Circle 850.00 Land Allotment letter from Collector

Surat Urban 39.09 Land Allotment Order by Collector for Constructionof office Building

Rander 325.55 Land Possession Receipts from Surat Municipal Corporation

Rander 226.35 Land Allotment Letter from Surat Municipal Corporation

Piplod 411.56 Land Allotment letter from Collector

Vapi Industrial Division 26.41 Lease deed from GIDC

Kadodara (O & M) 301.36 Land Allotment Order by Collector for Constructionof office Building

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18However, as informed to us, the company does not have any registered sale deed/transfer deed/conveyance deed in respect of aforesaid Land and Land Rights and hence, we are unable to commenton the title deed of the subject properties.

3. Buildings Constructed/ Acquired on or after 01st April, 2005

As per theinformation and explanation provided by the management, all the existing buildings ofthe company are constructed (not purchased) on the land either acquired/purchased by the companyitself or allotted by erstwhile GEB (now GUVNL) and its group companies.

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Annexure - IIList of Title deeds not held in the name of PGVCL

Circle Sr No. Name of Survey Lease Hold GrossPremises No. OR Block

Free Hold Amount (`)

Junagadh 1 Junagadh City Free 4,121,800Circle Servey No.1 Hold

Total 4,121,800

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Sub Annexure - II to Annexure "C" to Auditor's Report(` in Lakhs)

Sr No Name of Offices Details of land of which the account balanceshave been transferred as per GOG notificationno. GHU-2006-91-GUV-1106-590-K dated03-10-2006 to Company and are held in thename of the erstwhile GEB.

1 SABARMATI O & M DIVISION 8.01

2 BAVALA O & M DIVISION 4.89

3 GANDHINAGAR O & M DIVISION 2.11

4 KALOL (O & M) DIVISION 0.49

5 BOPAL (U & I) DIVISION 0.00

6 MODASA O & M DIVISION 0.54

7 IDAR O & M DIVISION 2.01

8 TALOD O & M DIVISION 0.36

9 HIMATNAGAR O & M DIVISION 0.27

10 MEHSANA O & M CIRCLE 0.24

11 KADI O & M DIVISION 0.51

12 MEHSANA O & M DIVISION 0.32

13 PATAN O & M DIVISION 0.93

14 VIJAPUR O & M DIVISION 1.47

15 VISNAGAR O & M DIVISION 0.53

16 PALANPUR O & M DIVISION 0.00

17 DEESA O & M DIVISION 0.81

18 SIDHPUR O & M DIVISION 0.00

19 RADHANPUR O & M DIVISON 0.39

20 DEESA-II DIVISION 0.00

21 PALANPUR-II DIVISION 0.84

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Particulars Note As at 31st As at 31stNo. March, 2018 March, 2017

ASSETS(1) Non-Current Assets

(a) Property, Plant and Equipment 2 4,792,807.38 4,475,423.42(b) Intangible Assets 2 2,100.21 2,847.48(c) Capital Work-In-Progress 3 899,590.08 759,785.14(d) Financial Assets

(i) Investments 4 114,776.41 105,702.15 (ii) Loans 5 14,691.24 17,276.68 (iii) Other Financial Assets 6 22,461.68 22,058.26

(e) Other non-current assets 7 10,924.60 16,241.79Total Non-Current Assets 5,857,351.60 5,399,334.91(2) Current Assets

(a) Inventories 8 277,792.27 303,532.41(b) Financial Assets

(i) Trade Receivables 9 320,838.48 330,145.68 (ii) Cash and cash equivalents 10 166,297.44 61,729.93 (iii) Other Bank Balances 11 13,766.96 3,463.80 (iv) Loans 12 4,096.84 3,276.66 (v) Other Financial Assets 13 446,665.85 559,725.85

(c) Current Tax Assets (net) 14 26,862.56 7,825.64(d) Other Current Assets 15 78,076.73 28,279.03(e) Assets classified as held for sale 16 11,313.39 6,066.68

Total Current Assets 1,345,710.52 1,304,045.66Total 7,203,062.12 6,703,380.58

EQUITY AND LIABILITIESEquity

(a) Equity Share Capital 17 1,622,754.99 1,371,460.60(b) Other Equity 18 656,660.63 529,304.48

Non-controlling Interests 9,708.83 8,969.85Total Equity 2,289,124.45 1,909,734.93

Consolidated Balance Sheet as at 31st March, 2018( ` in Lakhs )

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Deferred Government grants, subsidies & 19 765,783.35 691,708.81consumer contributionsLiabilities(1) Non-Current Liabilities

(a) Financial Liabilities (i) Borrowings 20 1,251,397.63 1,487,161.25 (ii) Trade Payables 21 85.29 85.29 (iii) Other Financial Liabilities 22 541,659.59 492,503.87

(b) Provisions 23 131,455.92 145,570.48(c) Deferred Tax Liabilities (Net) 24 193,061.63 164,086.56(d) Other Non Current Liabilities 25 17,517.45 16,520.34

Total Non-Current Liabilities 2,135,177.52 2,305,927.79(2) Current Liabilities

(a) Financial Liabilities (i) Borrowings 26 6,521.87 19,299.81 (ii) Trade payables 27 634,292.44 566,046.00 (iii) Other Financial liabilities 28 1,168,474.74 1,013,599.23

(b) Other current liabilities 29 182,908.93 165,096.63(c) Provisions 30 20,778.70 27,744.35(d) Current Tax Liabilities (net) 31 0.12 4,223.04

Total Current Liabilities 2,012,976.80 1,796,009.06Total 7,203,062.12 6,703,380.58

Significant Accounting Policies and Notes to 1- 68Financial Statements




Place : Gandhinagar Place : GandhinagarDate : November 1, 2018 Date : November 1, 2018

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Particulars Note For the year For the yearNo. ended 31st ended 31st

March, 2018 March, 2017I Revenue from operations 32 4,286,121.40 3,912,879.45II Other Income 33 107,502.57 113,745.65III Total Income (I+II) 4,393,623.97 4,026,625.10IV EXPENSES

Cost of Fuel consumed 34 709,970.21 484,704.29Purchase of Power 35 2,468,024.31 2,402,675.51Employee Benefits Expense 36 341,614.77 331,095.67Finance Costs 37 148,500.10 185,340.28Depreciation, Amortization and impairment Expense 2 308,800.44 363,527.23Other Expenses 38 189,372.90 144,949.45Total Expenses (IV) 4,166,282.74 3,912,292.42

V Profit Before Exceptional items and Tax (III-IV) 227,341.23 114,332.68VI Exceptional Items 39 36,577.09 -VII Profit before share of net profits of associate

and joint venture accounted for using equity 190,764.14 114,332.68method and tax (V-VI)

VIII Share of Profit of Joint Venture - -IX Share of Profit of Associate 4,456.11 6,152.32X Profit before tax (VII+VIII+IX) 195,220.26 120,485.00XI Tax Expense: 40

(a) Current Tax 32,714.04 25,690.58(b) Deferred Tax 43,460.98 34,747.06

XII Profit for the Year (X-XI) 119,045.23 60,047.36XIII Other Comprehensive Income (OCI)

(a) Items that will not be reclassified to Profit and Loss(i) Re-measurement of the Defined Benefit Plans (48,770.57) (13,437.29)(ii) Equity Instruments through OCI 5,520.33 4,497.35Less:

- tax impact 14,372.07 2,860.82

Consolidated Statement of Profit and Loss for the year ended 31st March, 2018 ( ` in Lakhs )

190



(iv) Share of other comprehensive income of 749.05 607.41associates accounted for using the equity method(b) Items that will be reclassified to profit or loss(i) Financial assets measured through OCI (325.82) 398.13- tax impact 113.85 (137.78)Total of Other Comprehensive Income (OCI) (XIII) (28,341.08) (5,211.37)

XIV Total Comprehensive Income for the Year (XII+XIII) 90,704.15 54,835.99Profit for the Year attributable to: - Owners of Equity 118,363.62 59,839.32 - Non Controlling Interests 681.62 208.04

119,045.23 60,047.36Other Comprehensive Income attributable to: - Owners of Equity (28,198.95) (5,162.29) - Non Controlling Interests (142.14) (49.08)

(28,341.08) (5,211.37)Total Comprehensive Income for theYear attributable to: - Owners of Equity 118,505.75 54,677.03 - Non Controlling Interests 539.48 158.96

119,045.23 54,835.99XV Earnings Per Equity Share : 41

Basic (in Rs.) 0.77 0.48Diluted (in Rs.) 0.77 0.48

See accompanying Notes to the Financial Statements 1- 68





191



Consolidated Cash Flow Statement for the year ended 31st March, 2018 ( ` in Lakhs)

Particulars For the year ended For the year ended31st March, 2018 31st March, 2017

[A] CASH FLOW FROM OPERATING ACTIVITIESNet Profit before tax 195,220.26 120,485.00Adjustments to reconcile profit before tax to net cash flows:Non-Cash Items 308,800.44 363,527.23Non Operating Items 117,732.58 118,388.14Exceptional Item 36,577.09 0.00Operating Profit/(Loss) before changes in Working CapitalWorking capital adjustments:(Increase)/ Decrease in Current Assets:Inventories 25,740.14 (61,023.05)Trade receivables (34,785.25) (12,508.40)Other financials assets 115,289.67 (10,141.02)Other non financial assets (52,769.84) 4,539.00Increase / (Decrease) in Current Liabilities:Trade Payables 68,246.44 28,313.88Other Financial Liabilities 212,397.16 278,328.81Other Non Financial Liabilities & Provisions (51,041.37) 14,824.43

941,407.32 844,734.03Exceptional Item (36,577.09) 0.00Income tax (paid)/ Refund (55,973.90) (29,192.13)Net cash flows from operating activities (A) 848,856.34 815,541.90

[B] CASH FLOW FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (including CWIP) (770,214.49) (784,913.92)Purchase of Evaluation and Exploration assets 0.00 0.00Sale/Adj. of fixed assets 30,158.50 66,875.99Redemption / Sale / (Purchase) Of Investment 6.37 459.71Dividend from Associate 1,095.94 1,014.76Dividend Income 254.42 254.12Interest received (finance income) (153.77) (158.46)Asset not in use (5,246.71) (5,173.78)Bank Balances not considered as Cash and Cash Equivalents (9,885.28) (159.12)Net cash flows used in investing activities (B) (753,985.01) (721,800.71)

192



[C] CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Shares/Share Application Money 286,849.46 261,490.00

Deferred Govt. Grants, Subsidy & Contributions 143,940.12 115,707.61

Proceeds / (Repayment) from borrowing (net) (247,776.88) (248,011.75)

Interest & financial charges (173,316.52) (207,420.10)

Net cash flows from/(used in) financing activities (C ) 9,696.18 (78,234.24)

Net increase/ (decrease) in cash andcash equivalents (A+B+C) 104,567.51 15,506.95

Cash and cash equivalents at the beginning of the year 61,729.93 46,222.98

Cash and cash equivalents at year end 166,297.44 61,729.93

Notes:

1 Cash & Bank Balances consists of the following:

Cash & Cash Equivalents

a. Balances with Banks 65,978.39 55,595.26

b. Cash on hand 635.95 522.23

c. Cheques on hand 6,604.35 3,859.16

d. Remittance in Transit 2,271.57 1,123.64

e. Deposits with banks 90,807.18 629.64

Closing Cash & Cash Equivalents 166,297.44 61,729.93

2 The Cash Flow Statement has been prepared under the 'Indirect Method' set out in Indian Accounting Standards(Ind AS) - 7 "Statement of Cash Flows"

3 Figures of the previous year have been regrouped / reclassified wherever necessary.





193


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Consolidated Statement of Changes in Equity (SOCIE) for

the year ended on 31st March, 2018Equity Share Capital (` in Lakhs)

Non EquityParticulars Total Controlling attributable

Interests to Owners

Balance as on 1st April, 2016 1,075,470.65 1,250.00 1,074,220.65

Changes during the year 295,989.95 - 295,989.95

Balance as on 31st March,2017 1,371,460.60 1,250.00 1,370,210.60

Changes during the year 251,294.39 - 251,294.39

Balance as on 31st March,2018 1,622,754.99 1,250.00 1,621,504.99

194



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1 Corporate information and Critical judgementsA Corporate and Group information

Gujarat Urja Vikas Nigam Limited ('GUVNL' or 'the Company') is a wholly owned undertaking ofGovernment of Gujarat, incorporated on 22.12.2004 as a Public Limited Company; domiciled andincorporated in India having its registered office at "Sardar Patel Vidyut Bhavan", Race Course, Vadodara,Gujarat -390007. The Consolidated Financial Statements relate to the Company and its Subsidiariesas follows:

1. Gujarat State Electricity Corporation Limited engaged in generation of power;

2. Gujarat Energy Transmission Corporation Limited engaged in transmission of power;

3. Uttar Gujarat Vij Company Limited engaged in distribution of power;

4. Dakshin Gujarat Vij Company Limited engaged in distribution of power;

5. Paschim Gujarat Vij Company Limited engaged in distribution of power; and

6. Madhya Gujarat Vij Company Limited engaged in distribution of power.

The Consolidated Financial Statements also include the Company's Associate viz. Gujarat IndustriesPower Company Limited and Joint Venture (JV) viz. Mahaguj Collieries Limited (JV of GSECL).

Government of Gujarat restructured Gujarat Electricity Board ("GEB") effective 1st April 2005, as pervarious administrative and statutory actions to implement the Financial Restructuring Plan of GEBand split the business and activity thereof of Generation, Transmission and Distribution of electricityby demerger of the respective units and vested the same alongwith all its assets and liabilities (relatingto the respective units) in various Companies, viz. the Holding Company and subsidiaries on functionalbasis and the balance (residual) assets were allocated to the Company.

B Basis of preparation

1 Statement of Compliance

These financial statements are prepared in accordance with Indian Accounting Standards (IndAS), under the historical cost convention on accrual basis except for certain financial instrumentswhich are measured at fair values, the provisions of the Companies Act , 2013 ('the Act') (tothe extent notified) except in so far as the said provisions are inconsistent with the provisionsof the Electricity Act, 2003. The Ind AS are prescribed under Section 133 of the Act read withRule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendmentrules issued thereafter.

2 Application of new Indian Accounting Standard

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs underthe Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statementsare authorized have been considered in preparing these financial statements. There is no other IndianAccounting Standard that has been issued as of that date but was not mandatorily effective.

196


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Recent Accounting Pronouncements:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28,2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards)Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advanceconsideration which clarifies the date of the transaction for the purpose of determining the exchangerate to use on initial recognition of the related asset, expense or income, when an entity has receivedor paid advance consideration in a foreign currency. The amendment is mandatorily effective forcefrom April 1, 2018. This amendment has no effect on the financial statements of the Group.

Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle ofthe new standard is that an entity should recognize revenue to depict the transfer of promised goodsor services to customers in an amount that reflects the consideration to which the entity expectsto be entitled in exchange for those goods or services. Further the new standard requires enhanceddisclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising fromthe entity's contracts with customers. This amendment is mandatorily effective force from April 1,2018. The effect on the Financial statements on adoption of Ind AS 115 is being evaluated by theGroup.

3 Basis of measurement

The consolidated financial statements have been prepared on the historical cost convention and asper accrual method of accounting except for certain financial instruments that are measured at fairvalues at the end of each reporting period and defined benefit plans which have been measuredat actuarial valuation as required by the relevant Ind AS as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goodsand services.

As the operating cycle cannot be identified in normal course due to the special nature of industry,the same has been assumed to have duration of 12 months. Accordingly, all assets and liabilitieshave been classified as current or non-current as per the Group's operating cycle and other criteriaset out in Ind AS-1 'Presentation of Financial Statements" and Schedule III to the Companies Act,2013.

The consolidated financial statements are presented in Indian Rupees and all values are roundedoff to the nearest two decimal lacs except otherwise stated.

All expenses and income are recognized and accounted for on accrual basis. Claims of suppliers/contractors for price variation are accounted for on its acceptance.

4 Fair Value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement isbased on the presumption that the transaction to sell the asset or transfer the liability takes placeeither:

197


CONSOLIDATED FINANCIAL STATEMENTS 2017-18- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

All assets and liabilities for which fair value is measured or disclosed in the consolidate financialstatements are categorised within the fair value hierarchy, described as follows, based on the lowestlevel input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is unobservable.

C Principles of Consolidation

1 The consolidated financial statements incorporate the financial statements of the Company and itssubsidiaries (collectively referred as "the Group"). The Group has investments in joint ventures andassociates which are accounted using equity method in these consolidated financial statements. ReferNote No.4 for the accounting policy of investment in joint ventures and associate in the consolidatedfinancial statements.

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed,or has rights to variable returns from its involvement with the entity and has the ability to affectthose returns through its power to direct the relevant activities of the entity. Subsidiaries areconsolidated from the date of their acquisition, being the date on which the Company obtains controland continue to be consolidated until the date that such control ceases.

The consolidated financial statements are prepared using uniform accounting policies consistentlyfor like transactions and other events in similar circumstances and are presented to the extent possible,in the same manner as the Company's Standalone Financial Statements except otherwise stated.When necessary, adjustments are made to the financial statements of subsidiaries to bring theiraccounting policies into line with the Group's accounting policies. The financial statements of all entitiesused for the purpose of consolidation are drawn up to same reporting date as that of the Parentcompany, i.e., year ended on 31st March

The Consolidated Financial Statements have been prepared by combining the financial statementsof the company and its subsidiaries on a line-by-line basis by adding together the book values oflike items of assets, liabilities, equity, income, expenses and cash flow after eliminating in full intra-group assets, liabilities, equity, income, expenses and cash flow relating to intra-group transactionsand unrealized profits. Unrealized losses are also eliminated unless the transaction provides evidenceof an impairment of the asset transferred.

Profit or loss and each component of other comprehensive income are attributed to the ownersof the Company and to the non-controlling interests. Total comprehensive income is attributed tothe owners of the Company and to the non-controlling interests even if this results in the non-controllinginterests having a deficit balance.

198


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Changes in the Group's ownership interests in subsidiaries that do not result in the Group losingcontrol over the subsidiaries are accounted for as equity transactions. The carrying amounts of theGroup's interests and the non-controlling interests are adjusted to reflect the changes in their relativeinterests in the subsidiaries. Any difference between the amount by which the non-controlling interestsare adjusted and the fair value of the consideration paid or received is recognised directly in equityand attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in the consolidated statementof profit and loss and is calculated as the difference between (i) the aggregate of the fair value ofthe consideration received and the fair value of any retained interest and (ii) the previous carryingamount of the assets (including goodwill) and liabilities of the subsidiary and any non-controllinginterests. All amounts previously recognised in other comprehensive income in relation to thatsubsidiary are accounted for as if the Group had directly disposed of the related assets or liabilitiesof the subsidiary (i.e. reclassified to the consolidated statement of profit and loss or transferred toanother category of equity as specified/permitted by applicable Ind AS). The fair value of any investmentretained in the former subsidiary at the date when control is lost is regarded as the fair value oninitial recognition for subsequent accounting under Ind AS 109, or, when applicable, the cost on initialrecognition of an investment in an associate or a joint venture.

2 Non Controlling interests

Non-controlling interests represent the proportion of income, other comprehensive income and netassets in subsidiaries that is not attributable to the Company's shareholders.

Non-controlling interests are initially measured at the non-controlling interests' proportionate shareof the recognised amounts of the acquiree's identifiable net assets. Subsequent to acquisition, thecarrying amount of non-controlling interests is the amount of the interest at initial recognition plusthe non-controlling interests' share of subsequent changes in equity

Non-controlling interests in the results and equity of subsidiaries are shown separately in theconsolidated statement of profit and loss, consolidated statement of changes in equity and balancesheet respectievly.

3 Goodwill on Consolidation

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortisedbut it is tested for impairment annually, or more frequently if events or changes in circumstancesindicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gainsand losses on the disposal of an entity include the carrying amount of goodwill relating to such entity.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocationis made to those cash-generating units or groups of cash-generating units that are expected to benefitfrom the business combination in which the goodwill arose.

A cash-generating unit is the smallest identifiable group of assets that generates cash inflows thatare largely independent of the cash inflows from other assets or groups of assets.

199


CONSOLIDATED FINANCIAL STATEMENTS 2017-184 Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is thepower to participate in the financial and operating policy decisions of the investee but is not controlor joint control over those policies.

A joint venture is a joint arrangement whereby the parties, that have joint control of the arrangement,have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharingof control of an arrangement, which exists only when decisions about the relevant activities requireunanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in the consolidatedfinancial statements using the equity method of accounting, except when the investment, or a portionthereof, is classified as held for sale, in which case it is accounted for in accordance with Ind AS -105 "Non-current Assets Held for Sale and Discontinued Operations". Under the equity method, aninvestment in an associate or a joint venture is initially recognised in the consolidated balance sheetat cost and adjusted thereafter to recognise the Group's share of the profit or loss and othercomprehensive income of the associate or joint venture. When the Group's share of losses of anassociate or a joint venture exceeds the Group's interest in that associate or joint venture, the Groupdiscontinues recognising its share of further losses. Additional losses are recognized to the extentthat the Group has incurred legal or constructive obligation or made payment on behalf of the associateor joint venture.

An investment in an Associate or a Joint Venture is accounted for using the equity method fromthe date on which the investee becomes an Associate or a Joint Venture. On acquisition of theinvestment in an Associate or a Joint Venture, any excess of the cost of the investment over theGroup's share of the net fair value of the identifiable assets and liabilities of the investee is recognisedas goodwill, which is included within the carrying amount of the investment. Any excess of the Group'sshare of the net fair value of the identifiable assets and liabilities over the cost of the investment,after reassessment, is recognised directly in equity as capital reserve in the period in which theinvestment is acquired.

After application of the equity method of accounting, the Group determines whether there is anyobjective evidence of impairment as a result of one or more events that occurred after the initialrecognition of the net investment in an associate or a joint venture and that event (or events) hasan impact on the estimated future cash flows from the net investment that can be reliably estimated.If there exists such an objective evidence of impairment, then Group recognise impairment loss withrespect to the Group's investment in an associate or a joint venture. When necessary, the entirecarrying amount of the investment (including goodwill) is tested for impairment in accordance withInd AS 36 'Impairment of Assets' as a single asset by comparing its recoverable amount (higher ofvalue in use and fair value less costs of disposal) with its carrying amount, Any impairment lossrecognised forms part of the carrying amount of the investment. Any reversal of that impairmentloss is recognised in accordance with Ind AS 36 to the extent that the recoverable amount of theinvestment subsequently increases.

200


CONSOLIDATED FINANCIAL STATEMENTS 2017-185 Disclosures

Significant Accounting policies and Notes to these Consolidated Financial Statements are intendedto serve as a means of informative disclosure and a guide for better understanding of the consolidatedposition of the Group. Recognizing this purpose, only such policies and notes from the individualfinancial statements have been disclosed which fairly represent the needed disclosures. Lack ofhomogeneity and other similar considerations made it desirable to exclude some of them, whichin the opinion of the management, could be better viewed when referred from the respectiveStandalone Financial Statements.

D Significant accounting policies

1 Property, Plant & Equipment

Property, Plant & Equipment (PPE) comprises of Tangible Assets and Capital Work- in- Progress. PPEare stated at cost after reducing accumulated depreciation. The cost of PPE comprises of its purchaseprice or its construction cost or any cost directly attributable to bring the asset into the locationand condition necessary for it to be capable of operating in the manner intended by the managementand decommissioning costs. Directly attributable costs are capitalized until the asset is ready for useand includes borrowing cost capitalised upto the commissioning of the asset.

Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheetare disclosed as "Capital Work in Progress".

Works under erection / installation /execution (including such work pertaining to a new project) areshown as Capital Work in Progress.

In case of PPE for new projects, extension or renovation and modernization, the related expensesand interest cost upto Commercial Operation Date (COD) as per Power Purchase Agreement,attributable to such projects or expansions or renovation and modernization are capitalized. Expensesincurred during project implementation and on trial run are treated as incidental expenditure duringconstruction and are accordingly capitalized.

Property Plant & Equipments also includes service equipments, at the time of initial recognition theGroup classifies these items as inventory. Subsequently these items are classified either in Property,Plant and Equipment through Capital Work in Progress or capitalised as service equipment.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materialsand direct labour, any other costs directly attributable to bringing the item to working condition forits intended use, and estimated costs of dismantling and removing the item and restoring the siteon which it is located. PPE are stated at cost, net of tax/duty credit availed, if any, after reducingaccumulated depreciation until the date of the Balance Sheet. Directly attributable costs are capitaliseduntil the asset is ready for use in accordance with the Group's accounting policy of capitalisation.(Refer note 18 - Critical Accounting Judgements and key source of estimation uncertainty.)

Buildings held for use in the supply of goods or services or for administrative purposes are statedin the Balance Sheet at cost less accumulated depreciation and impairment losses, if any.

201


CONSOLIDATED FINANCIAL STATEMENTS 2017-18As the frequency and the movement of the replacement of failed transformers is high and the samebeing regular ongoing process in distribution network, the cost of replaced transformer is not capitalizedand simultaneously the cost of failed transformer is not withdrawn from the asset account as perthe policy followed since the time of erstwhile GEB. The same is included under the head Inventoriesin Current Assets.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item willflow to the Group and the cost of the item can be measured reliably. Subsequent costs relating today to day servicing of the item are not recognised in the carrying amount of an item of Property,Plant and Equipment; rather these costs are recognised in Statement of Profit & Loss as incurred.

An item of PPE is de-recognised upon disposal or when no future economic benefits are expectedto arise from the continued use of the PPE. Any gain or loss arising on the disposal or retirementof an item of PPE is determined as the difference between the sale proceeds and the carrying amountof the PPE and is recognised in the Statement of Profit and Loss.

Depreciation

Depreciation of these PPE commences when the assets are ready for their intended use.

The Group, being engaged in electricity business, is covered under the Electricity Act, 2003 andprovisions of the Electricity Act supersede the provisions of the Companies Act, 2013. Accordingly,the Group charges depreciation on straight line method at the rates the methodology and the residualvalue as prescribed in GERC (MYT) Regulations or the Central Electricity Regulatory Commission (CERC),2016.

The depreciation on assets transferred under the transferred scheme of GOG has been charged asper the rates specified in the GERC MYT regulations from the date of transferred scheme as clarifiedby GERC petition no. 1651/2016 dated 26.05.2017.

The rates/range of depreciation of Property, Plant and Equipment are as follows:

Asset Description Rates/RangeBuildings 3.34%Plant & Machinery 5.28% to 9.50%Hydraulic Works 5.28%Other Civil Works 3.34%Lines & Cable Net Work Upto 5.28%Vehicles 9.50%Furniture-Fix & Elect-Light & Fan Installations 6.33%Leasehold Land 3.34%Office Equipments (including Computers) 6.33% to 15%Other Assets Not covered above 5.28%

202


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Depreciation on additions/deletions to PPE during the year is provided for on pro-rata basis withreference to the date of additions/deletions except low value items not exceeding ` 5,000/- whichare fully depreciated at the time of addition. Depreciation on subsequent expenditure on PPE arisingon account of capital improvement or other factors is provided for prospectively over the remaininguseful life. The depreciation methods, residual values, etc. are reviewed on annual basis and if necessary,changes in estimates are accounted for prospectively.

Lease Hold land including development cost is amortized as per the rate notified by GERC.

Capital spares mostly capable of being used in the power stations with near identical or similartechnology using similar plants and machineries and are expected to be used during more than oneaccounting period. These spares are, therefore, depreciated fully over the residual useful life of theplant.

2 Intangible Assets

Intangible Assets with finite useful life are recognized only if it is probable that future economic benefitsthat are attributable to the assets will flow to the enterprise and the cost of assets can be measuredreliably. The Intangible Assets are recorded at cost and are carried at cost less accumulated amortizationand accumulated impairment losses, if any. Intangible assets under development includes the costof assets.

An Intangible Asset is derecognized on disposal, or when no future economic benefits are expectedfrom its use or disposal. Gains or losses arising from derecognition of an intangible asset, measuredas the difference between net disposal proceed and carrying amount of the asset, are recognizedin the Statement of Profit and Loss when the asset is derecognized.

The Group charges depreciation on Computer Software on straight line method at the depreciationrate of 30%, as per the methodology and residual value in accordance with GERC (MYT) Regulations,2016.

3 Investment Property

Investment property is property held either to earn rental income or for capital appreciation or forboth, but not for sale in the ordinary course of business, use in the production or supply of goodsor services or for administrative purposes. Upon initial recognition, an investment property is measuredat cost. Subsequent to initial recognition, investment property is measured at cost less accumulateddepreciation and accumulated impairment losses, if any.

Investment property is de-recognised upon disposal or when Investment property is permanentlywithdrawn from its current use and no future economic benefits are expected from its disposal. Anygain or loss arising from de-recognition of the Property is measured as the difference between thenet disposal proceeds and the carrying amount and is recognised in the Statement of Profit and Losswhen the asset is de-recognised.

Investment properties, other than free hold land, are depreciated using straight line method overtheir estimated useful lives.

203


CONSOLIDATED FINANCIAL STATEMENTS 2017-184 Impairment of Tangible and Intangible Assets

The Group reviews at each reporting period whether there is any indication that an asset may beimpaired. If any such indication exists, the Group estimates the recoverable amount of the asset.If such recoverable amount of the asset or the recoverable amount of the Cash Generating Unit towhich the asset belongs is less than its carrying amount, the carrying amount is reduced to itsrecoverable amount. The reduction is treated as an impairment loss and is recognized in the Statementof Profit and Loss. If at the reporting period, there is an indication that there is a change in the previouslyassessed impairment loss, the recoverable amount is reassessed and the asset is reflected at therecoverable amount.

5 Exploration and Evaluation expenditures

Exploration and evaluation expenditure incurred after obtaining the legal right i.e. allotment of mineblock, to explore are capitalised as exploration and evaluation assets and stated at cost less impairment.The exploration and evaluation assets are classified into tangible and intangible assets according tothe nature of the assets.

Exploration and evaluation assets are transferred to property, plant and equipment when the technicalfeasibility and commercial viability has been determined. Exploration and evaluation assets are assessedfor impairment indicators at least annually. Exploration and evaluation expenditure incurred priorto obtaining the legal right to explore are expensed as incurred.

Exploration and evaluation expenditure includes costs associated with acquisition of licenses andrights to explore; costs of surveys and studies; expenses of geologists; exploratory drilling; activitiesin relation to determining technical feasibility and commercial viability of extracting a mineral resource.

6 Non-Current Assets held for Sale

The Group classifies Non-Current Assets as held for sale if their carrying amounts will be recoveredprincipally through a sale rather than through continuing use of the assets and actions required tocomplete such sale indicate that it is unlikely that significant changes to the plan to sell will be madeor that the decision to sell will be withdrawn. Also, such assets are classified as held for sale onlyif the management expects to complete the sale within one year from the date of classification.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carryingamount and fair value less costs to sell.

Property, Plant and Equipment and intangible assets are not depreciated or amortized once classifiedas held for sale.

7 Government Grant and Consumer Contributions

Government Grants (including Subsidies) are not recognized until there is reasonable assurance thatthey will be received and the Group will comply with the conditions associated with the Grant.

Grants that compensate for the cost of an asset and contributions by consumers towards items ofproperty, plant and equipment, which require an obligation to provide electricity connectivity to theconsumers are initially set up as deferred income and recognized in profit or loss on a systematic

204


CONSOLIDATED FINANCIAL STATEMENTS 2017-18basis over the period and in proportions of depreciation expense of the assets. Grants that compensatefor expenses incurred are recognized over the period in which the related costs are incurred andshown separately.

8 Revenue Recognition

Revenue is recognized when no significant uncertainty as to the measurability or collectability exists.Revenue is measured at the fair value of the consideration received or receivable.

Revenue from Sale of Power and Transmission

Revenue from Sale of Power and Transmission is recognized on accrual basis of energy supplied inaccordance with the tariff orders awarded by the Gujarat Electricity Regulatory Commission (GERC)as applicable to the consumers.

Surplus power, if any is sold through bilateral transactions or by putting bids in Power Exchangeson day to day basis and the same is accounted on acceptance of bids. Revenue recognised inexcess of billing has been reflected under "other financial assets" as unbilled revenue.

Other Revenue from Power related Activities

Rebate for Prompt Payment towards purchase of power (net), Interest on UI Pool Account, CashDiscount and CDM Benefit from renewable energy are recognised on cash basis.

Meter charges, recoveries from theft of power/malpractices, wheeling charges recoveries arerecognized on accrual basis.

Dividend Income

Dividend Income is accounted in the year in which the right to receive the dividend is established.

Interest Income

Interest on investments is booked on a time proportion basis taking into account the amounts investedand the rate of interest.

Penalty and Liquidated Damages

Penalty for delay in supply of materials is recovered as per the terms of purchase order at the timeof accounting the purchases whereas refund of penalty is accounted when the order is fully executedby the supplier and the refund is approved by the competent authority.

Liquidated Damages and Penalties in relation to purchase of power and completion of projects areaccounted on actual recovery.

Insurance Claims

Claims lodged with the Insurance Company in respect of risks covered are accounted for as and whenthe claim is received.

Miscellaneous Revenue from Consumers

Miscellaneous charges from consumers are recognized on cash basis except when ultimate realizationof such income is uncertain.

205


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Other Income

Income from sale of fly ash, interest income, income on O & M contract, Carbon Emission Reduction(CERs) and other incomes are recognized on accrual basis except when ultimate realization of suchincome is uncertain

Income received in respect of delayed payment charges is accounted for in the subsequent bill, uponrealization of the delayed payment made by the consumer.

Income from sale of scrap are accounted for on the basis of actual realization.

Amount in respect of unclaimed Security Deposit, Earnest Money Deposit and Misc. Deposit of suppliersand contractors which is pending for more than three years and which, in the opinion of management,is not payable, is considered as income.

9 Inventories

Inventories are valued at cost or net realizable value whichever is lower. The basis of determiningthe value of each class of inventory is as follows:

The inventories of the Group have been valued on following basis:

(a) Consumables, Stores and Spares - At cost (Weighted Average Method)

(b) Scrap - At cost or Net Realizable Value determined on the basis of realization made in the past periodwhichever is lower.

(c) Coal and Oil - Lower of grade based purchase cost plus freight and other fuel related cost on monthlyweighted average basis or Net Realisable Value (NRV).

(d) Scrap/Obsolete Assets - Estimated cost or Net Realisable Value, whichever is less

Inventory consists of stock of items which are used interchangeably for capital expenditure or forregular repairs and maintenance purposes. Since ultimate use of such stock items are indeterminateat the initial recognition, the Group classifies such items as inventory. These items are classifiedsubsequently either in Property, Plant and Equipment through Capital Work in Progress / as serviceequipment or expense in the Statement of Profit and Loss as and when it is so used.

The cost of inventories is on the weighted average method formula, and includes expenditure incurredin acquiring the inventories, production or conversion costs and other costs incurred in bringing themto their present location a condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimatedcosts of completion and selling expenses.

10 Functional and Presentation Currency

The Financial Statements are prepared in Indian Rupee (INR) which is functional as well as presentationCurrency of the Company and the Group.

Transactions in currencies other than the Group's functional currency (foreign currencies) arerecognized at the rates of exchange prevailing at the dates of the transactions. At the end of each

206


CONSOLIDATED FINANCIAL STATEMENTS 2017-18reporting period, monetary items denominated in foreign currencies are translated using closingexchange rate prevailing on the last day of the reporting period. Non-monetary items that are measuredin terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetaryitems are recognized in the Statement of profit and loss in the period in which they arise.

11 Employee Benefits

Employee Benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment,compensated absences and retirement benefits.

Short Term Employee Benefits

Short-Term Employee Benefits expected to be paid in exchange for the services rendered by theemployees are recognized as an expense during the period employee renders services. These benefitsinclude remuneration, bonus, incentives, etc.

Long Term Employee Benefits

Defined Contribution Plans

Retirement benefits in the nature of employer's contribution towards Contributory Provident Fund,Employee's Pension Scheme and Group Insurance Scheme (EDLI), etc. are charged as an expenseon accrual basis and paid / deposited with the appropriate authorities during the year.

Defined Benefit Plans

The Group has maintained a Group Gratuity Cum Life Assurance Policy with M/s. Life InsuranceCorporation of India (LIC) managed by a separate Trust, towards which it annually contributes a sumbased on the actuarial valuation made by M/s. LIC. The liability or asset recognised in the BalanceSheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligationat the end of the reporting period less the fair value of plan assets. The year's liability is estimatedon the basis of actuarial valuation made by LIC using the Projected Unit Credit Method and is chargedto the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarialassumptions are recognised in the period in which they occur, directly in Other Comprehensive Incomeand in the Balance Sheet.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefitsthat relates to past service ('past service cost' or 'past service gain') or the gain or loss on curtailmentis recognised immediately in profit or loss. The Group recognises gains and losses on the settlementof a defined benefit plan when the settlement occurs.

Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, thereturn on plan assets (excluding interest) and the effect of the asset ceiling (if any. excluding interest),are recognised in OCI. The Company determines the net interest expense (income) on the net definedbenefit liability (asset) for the period by applying the discount rate used to measure the definedbenefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset),taking into account any changes in the net defined benefit liability (asset) during the period as a

207


CONSOLIDATED FINANCIAL STATEMENTS 2017-18result of contributions and benefit payments. Net interest expense and other expenses related todefined benefit plans are recognised in profit or loss.

Other Long Term Employee Benefits

Other Long Term Employee Benefits comprise of leave encashment. The leave benefits are recognizedbased on the present value of defined obligation and the year's liability is estimated on the basisof actuarial valuations made by LIC using the Projected Unit Credit Method and is charged to theStatement of Profit and Loss.

12 Leases

Leases (including lease arrangements for land) are classified as finance leases whenever the termsof the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leasesare classified as operating leases. The leased assets are measured initially at an amount equal tothe lower of their fair value and the present value of the minimum lease payments. Subsequentto initial recognition, the assets are accounted for in accordance with the accounting policy applicableto similar owned assets.

Operating Lease (The Company as Lessee): Lease payments under an operating lease are recognizedas expense in the statement of profit and loss, on a straight-line or other systematic basis over thelease term. Where the rentals are structured solely to increase in line with expected general inflationto compensate for the Lessor's expected inflationary cost increases, such increases are recognisedin the year in which such liability accrues.

13 Taxes on Income

Income Tax Expense represents the sum of Current Tax and Deferred Tax.

Current and Deferred Tax are recognized in Statement of Profit and Loss, except when they relateto items that are recognized in Other Comprehensive Income or directly in equity.

Current Tax

Tax currently payable is based on taxable profit for the year. Taxable profit differs from 'Profit BeforeTax' as reported in the Statement of Profit and Loss because of items of income or expense thatare taxable or deductible in other years and items that are never taxable or deductible. The Group'scurrent tax is calculated using tax rates that have been enacted or substantively enacted at the BalanceSheet date.

Deferred Tax

Deferred Tax is recognized on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred Tax Liabilities (DTL) are generally recognized for all taxable temporarydifferences. Deferred Tax Assets (DTA) are generally recognized for all deductible temporary differencesto the extent that it is probable that taxable profits will be available against which those deductibletemporary differences can be utilized.

208


CONSOLIDATED FINANCIAL STATEMENTS 2017-18The carrying amount of Deferred Tax Assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be availableto allow all or part of the deferred tax asset to be utilised.

Deferred Tax Liabilities and Deferred Tax Assets are measured at the tax rates that are expected toapply in the period in which the liability is settled or the asset realized, based on tax rates (and taxlaws) that have been enacted as at the Balance Sheet date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would followfrom the manner in which the Group expects, at the end of the reporting period, to recover or settlethe carrying amount of its assets and liabilities.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent thereis convincing evidence that the Company will pay normal income tax during the specified period.Such asset is reviewed at each Balance Sheet date and the carrying amount of MAT credit asset iswritten down to the extent there is no longer a convincing evidence to the effect that the Companywill pay normal income tax during the specified period.

14 Borrowing Costs

Borrowing Costs specifically identified to the acquisition or construction of qualifying assets is capitalizedas part of such assets. A qualifying asset is one that necessarily takes substantial period of time toget ready for intended use. All other borrowing costs are charged to the Statement of Profit andLoss. The borrowing cost incurred on common funds borrowed generally and used for the purposeof obtaining a qualifying asset, is apportioned on rational basis to capital work in progress for theyear. All other borrowing costs are recognized as expense in the period in which they are incurred.

Income earned on the temporary investment of specific borrowings pending their expenditure onqualifying assets is deducted from the borrowing costs eligible for capitalisation.

15 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Group has a present obligation (legal or constructive) as a resultof a past event, it is probable that the Group will be required to settle the obligation, and a reliableestimate can be made of the amount of the obligation.

The amount recognized as provision is the best estimate of the consideration required to settle thepresent obligation at the end of the reporting period, taking into account the risks and uncertaintiessurrounding the obligation. When a provision is measured using the cash flows estimated to settlethe present obligation, its carrying amount is the present value of those cash flows.

Contingent Liabilities are disclosed in the financial statements by way of Notes to Accounts, unlesspossibility of an outflow of resources embodying economic benefit is remote. Contingent liabilitiesare possible obligations that arises from past events and whose existence will only be confirmedby the occurrence or non occurrence of one or more future events not wholly within the controlof the Group. Where it is not probable that an outflow of economic benefits will be required, orthe amount can not be estimated reliably the obligations are disclosed as a contingent liabilities,unless the probability of outflow of economic benefits is remote.

209


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Provisioning for Bad & Doubtful debts is made by class/group wise debtors based on periodic reviewof Debtors as well as considering decisions of Lok Adalats held during the year.

Contingent Assets are not recognized but disclosed in the financial statements when an inflow ofeconomic benefits is probable.

16 Material Prior Period Errors

Material prior period errors are corrected retrospectively by restating the comparative amounts forthe prior periods presented in which the error occurred. If the error occurred before the earliestperiod presented, the opening balances of assets, liabilities and equity for the earliest period presented,are restated.

17 Earnings Per Share

Basic Earnings Per Share is computed by dividing the profit / (loss) by the weighted average numberof equity shares outstanding during the year.

Diluted Earnings Per Share is computed by adjusting the figures used in the determination of basicEPS to take into account:

After tax effect of interest and other financing costs associated with dilutive potential equity shares.

The weighted average number of additional equity shares that would have been outstanding assumingthe conversion of all dilutive potential equity shares into equity shares.

18 Segment Reporting

In accordance with Ind AS 108, the operating segments used to present segment information areidentified on the basis of internal reports used by the Group's Management to allocate resourcesto the segments and assess their performance. The Board of Directors is collectively the Group's'Chief Operating Decision Maker' or 'CODM' within the meaning of Ind AS 108.

19 Events Occurring after balance sheet date

Material adjusting events (that provides evidence of condition that existed at the balance sheet date)occurring after the balance sheet date are recognized in the financial statements. Non adjustingevents (that are indicative of conditions that arose subsequent to the balance sheet date) occurringafter the balance sheet date that represents material change and commitment affecting the financialposition are disclosed in the reports of the Board of Directors.

20 Financial Instruments

Financial Assets and Financial Liabilities are recognized when the Group becomes a party to thecontractual provisions of the instruments.

Financial assets and financial liabilities are initially recognised and measured at fair value, exceptwhen the effect is immaterial. Transaction costs that are directly attributable to the acquisition orissue of financial assets and financial liabilities (other than financial assets and financial liabilitiesat fair value through profit or loss) are added to or deducted from the fair value of the financialassets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable

210


CONSOLIDATED FINANCIAL STATEMENTS 2017-18to the acquisition of financial assets or financial liabilities at fair value through profit or loss arerecognized immediately in the Statement of Profit and Loss.Financial AssetsCash and Cash EquivalentsThe Group considers all highly liquid financial instruments which are readily convertible into knownamounts of cash that are subject to an insignificant risk of change in value and having original maturitiesof three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalentsconsist of balances with banks which are unrestricted for withdrawal and usage.Financial Assets at amortized costFinancial assets are subsequently measured at amortized cost using the Effective Interest Method(EIR), except when the effect of applying it is immaterial, if these financial assets are held withina business model whose objective is to hold these assets in order to collect contractual cash flowsand the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.Financial Assets at fair value through Other Comprehensive Income (FVTOCI)Financial Assets (including investments) are subsequently measured at fair value through othercomprehensive income if these financial assets are held within a business model whose objectiveis achieved by both collecting contractual cash flows and selling financial assets and the contractualterms of the financial asset gives rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.The Group has made an irrevocable election to present in Other Comprehensive Income subsequentchanges in the fair value of equity investments not held for trading.Financial Assets at fair value through Profit or LossFinancial Assets (including investments) are subsequently measured at fair value through profit orloss unless it is measured at amortized cost or at fair value through other comprehensive incomeon initial recognition.Impairment of Financial AssetsThe Group assesses at each balance sheet date whether a financial asset or a group of financial assetis impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance.The Group recognizes lifetime expected losses for all contract assets and all trade receivables thatdo not constitute a financing transaction. For all other financial assets, expected credit losses aremeasured at an amount equal to 12 month expected credit losses or at an amount equal to lifetimeexpected losses, if the credit risk on the financial asset has increased significantly since initialrecognition.Derecognition of Financial AssetsThe Group derecognizes a financial asset when the contractual rights to the cash flows from theasset expire, or when it transfers the financial asset and substantially all the risks and rewards ofownership of the asset to another party.

211


CONSOLIDATED FINANCIAL STATEMENTS 2017-18On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI),the difference between the asset's carrying amount and the sum of the consideration received andreceivable is recognized in Statement of Profit and Loss.

Financial Liabilities and Equity Instruments

Classification as Debt or Equity

Debt and Equity instruments issued by the Group are classified as either financial liabilities or asequity in accordance with the substance of the contractual arrangements and the definitions of afinancial liability and an equity instrument.

Financial Liabilities at amortized cost

Financial Liabilities are subsequently measured at amortized cost using the effective interest method(EIR), except when the effect of applying it is immaterial. For trade and other payables maturingwithin one year from the balance sheet date, the carrying amounts approximate fair value due tothe short maturity of these instruments.

Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the Group afterdeducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceedsreceived.

Derecognition of Financial Liabilities

The Group derecognizes Financial Liabilities when, and only when, the Group's obligations aredischarged, cancelled or have expired. The difference between the carrying amount of the financialliability derecognized and the consideration paid and payable is recognized in the statement of Profitand Loss.

Derivatives

The Group enters into forward contracts to hedge the foreign currency risk of recognized assets,firm commitments and highly probable forecast transactions. Derivatives are initially recognized atfair value at the date the derivative contracts are entered into and are subsequently remeasuredto their fair value at the end of each reporting period. The resulting gain or loss is recognized inthe Statement of Profit and Loss immediately, unless the derivative is designated and effective asa hedging instrument, in which event the timing of the recognition in the Statement of Profit andLoss depends on the nature of the hedging relationship and the nature of the hedged items.

The Group does not hold Derivative for speculative purposes.

21 Power Purchase

Power purchased from IPPs is accounted (net of infirm power, wherever applicable) on the basis ofPower Purchase Agreements entered into with the respective parties.

212


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Power purchased from Central Sector is accounted on the basis of tariff determined by Central ElectricityRegulatory Commission (CERC) through various orders.

Power purchased from Renewable Sources and Traders (Bilateral) is accounted on the basis of contractsentered into with the respective parties.

Need based power is purchased by putting bids in Power Exchanges on day to day basis and thesame is accounted on acceptance of bids.

The energy accounts in few cases are delayed for settlement due to complexity in transactions involvedin power sector. The Group receives receivable / payable claims for past period due to delayedsettlement. The Group accounts such claims in the year of receipt as per prevailing practice followed.

22 Critical Accounting Judgments and Key Sources of Estimation Uncertainty

In the course of applying the policies outlined in all notes under Note 1 above, the managementare required to make judgements, estimates and assumptions about the carrying amount of assetsand liabilities that are not readily apparent from other sources. The estimates and associatedassumptions are based on historical experience and other factors that are considered to be relevant.Actual results may differ from these estimates.

Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects onlythat period, or in the period of the revision and future period, if the revision affects current andfuture periods.

Critical Judgments in applying Accounting Policies

Following are the critical judgements, apart from those involving estimations, that the Managementhave made in the process of applying the Group's Accounting Policies and that have significant effecton the amounts recognized in the Financial Statements.

(a) Useful life of Property, Plant and Equipment1

Estimated useful life of Property, Plant and Equipment is based on a number of factors includingthe effects of obsolescence, demand, competition and other economic factors (such as the stabilityof industry and known technological advances) and the level of maintenance expenditures requiredto obtain the expected future cash flows from the asset.

Useful life of the assets of the generation/transmission/distribution of electricity business is determinedby the CERC/GERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

The Group reviews at the end of each reporting date the useful life of property, plant and equipment,other than the assets of generation/transmission/distribution of electricity business which are governedby CERC/GERC Regulations, and are adjusted prospectively, if appropriate.

(b) Evaluation of directly attributable costs 2

The Group capitalizes the directly attributable costs to bring the Property, Plant and Equipment into

213


CONSOLIDATED FINANCIAL STATEMENTS 2017-18the location and condition necessary for it to be capable of operating in the manner intended bythe management. In assessing the directly attributable costs other than borrowing costs, themanagement has exercised judgement to evaluate a number of factors including the resources appliedfor direct construction related activity, enabling activities, ordinary operations of the Group, levelof construction related activity compared to Group's operating activity, consideration of the costscharged to external parties for similar works undertaken as well as experience of group companiesengaged in distribution business. Based on this assessment and particularly considering experienceacross the group companies engaged in distribution business, the management estimates acapitalisation rate of directly attributable costs to be applied on the expenditures on the relevantassets. The management reviews this capitalization rate on a periodic basis and any change in therate is applied prospectively.

(c) Evaluation of indicators for impairment of Property, Plant and Equipment2

The evaluation of applicability of indicators for impairment of assets require assessment of external factors(significant decline in asset's value, economic or legal environment, market interest rates, etc.) andinternal factors (obsolescence or physical damage of an asset, poor economic performance of theasset, etc.) which could result in significant change in recoverable amount of the Property, Plant andEquipment.

(d) Regulatory Deferral Accounts 1

Ind AS - 114 "Regulatory Deferral Accounts" permits the Group to apply the requirements of thisstandard in its first Ind AS Financial Statements if and only if it conducts rate-regulated activitiesand recognised amounts that qualify as Regulatory Deferral Account Balances in its financial statementsin accordance with its previous GAAP. As the Group had consistently elected not to recognise theRegulatory Deferral Balances in its previous GAAP, the requirement of IND AS 114 does not applyto the Group.

(e) Security deposits 2

Considering the historical experience and practical expediency, the Group has exercised its judgementon timing of settlement of security deposit collected from the customers and has accordingly classifiedthe undiscounted value of security deposit as non-current liability or current liability as the case maybe.

(f) Impairment of Trade receivables 2

The Group estimates the credit allowance as per practical expedient based on historical credit lossexperience as enumerated in Note-9.

(g) Impairment of Investments 2

At the end of each reporting period, the Group reviews the carrying amounts of its investments whenthere is indication for impairment. If the recoverable amount is less than its carrying amount, theimpairment loss is accounted for.

214


CONSOLIDATED FINANCIAL STATEMENTS 2017-18(h) Deferred Tax Assets 2

Deferred Tax Assets (DTA) are recognised for unused tax losses / credits to the extent that it is probablethat taxable profit will be available against which the losses can be utilised. Management judgementis required to determine the amount of deferred tax assets that can be recognised, based upon thelikely timing and the level of future taxable profits together with future tax planning strategies.

(i) Government grants & Consumer Contributions 1 2

The grants i.e. revenue subsidies are not recognized until there is reasonable assurance that the Groupwill receive the grants and will comply with the conditions attached to them. Management judgementis required to determine when reasonable assurance is attained, based on historical experience ofreceipts including the quantum of aggregation, approved budget estimates of Government of Gujarat,likely timing and consideration of claim acceptance/rejection. Based on this assessment, the Groupjudges that in the case of revenue subsidies, there is reasonable assurance of complying with theconditions and receiving the subsidies as approved in the budget estimates of every year and theremaining subsidies which are receivable/claimable would be recognized when reasonable assuranceis attained.

The Group is required to recognise grants/consumer contribution that compensate the cost of assetsto profit or loss on a systematic basis considering the amount of periodic consumption of the assets.This is based on the assessment of the present status of, and expected future benefits from the assets.The Group recognizes grants and consumer contributions that compensate the cost of an asset inthe Statement of Profit and Loss on the basis of straight line method and consequentially the ratesat which grant/consumer contribution is recognised in income.

(j) Defined Benefit Obligation (DBO) 2

Management's estimate of Defined Benefit Obligation (DBO) is based on a number of critical underlyingassumptions such as standard rates of inflation, medical cost trends, mortality, discount rate andanticipation of future salary increases. Variation in these assumptions may significantly impact theDefined Benefit Obligation amount and the annual defined benefit expenses.

(k) Contingent Liabilities 2

In the normal course of business, Contingent Liabilities may arise from litigation and other claimsagainst the Company. Potential liabilities that are possible but not probable of crystallising or arevery difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosedin the Notes but are not recognised. Potential liabilities that are remote are neither recognized nordisclosed as contingent liability. The management decides whether the matters needs to be classifiedas 'remote', 'possible' or 'probable' based on expert advice, past judgments, experiences etc.1 Critical Accounting Judgments2 Key Sources of Estimation uncertainty

215



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216


CONSOLIDATED FINANCIAL STATEMENTS 2017-183 Capital Work-in-Progress ( ` in Lakhs )


Capital Work-in-Progress 859,322.27 712,228.78Exploration and Evaluation assets (refer note 56) 10,281.30 9,772.49Interest Charges to be Capitalised 833.61 1,282.97Provision for unbilled capital works 29,152.89 36,500.90

Total 899,590.08 759,785.14

A The Company has evaluated the directly attributable cost capitalisation rate for the current financialyear ended 31 March 2018 and applied this to the expenditure on the relevant assets and the totalexpenditure thus capitalized during the current financial year is `91,816.44 (P.Y `86,386.94)

B The individual entities have capitalised the borrowing costs as per their respective rate of capitalisationranging from 7% to 9%.

4 Investments ( ` in Lakhs )


Investment in Equity Instruments(at Fair Value through Other Comprehensive Income)Quoted, Non-Trade- Gujarat State Petronet Limited (GSPL) 31,777.53 27,136.93

1,68,50,000 (P.Y. 1,68,50,000 ) Equity Shares of`10/- each, fully paid-up.

- Gujarat Gas Company Limited (GGCL) 442.41 408.9953,289 (P.Y. 53,289, ) Equity Shares of`10/- each, fully paid-up.

Un-quoted, Non-Trade- Gujarat Power Corporation Limited (GPCL) 4,156.84 3,963.11

19,30,013 (P.Y. 19,30,013) Equity Shares of`100/- each, fully paid-up.

- Gujarat State Energy Generation Limited (GSEG) 2,025.63 1,373.042,90,03,636 (P.Y. 2,90,03,636) Equity Shares of`10/- each, fully paid-up.

- Power Exchange of India Limited (PEIL) - -25,00,000 (P.Y.25,00,000) Equity Shares of`10/- each, fully paid-up

- Kalupur Commercial Co-Operative Bank Limited 0.05 0.08(200 (P.Y. 300) equity share of `25 each/-, fully paid up)

217



- Saraswat Co Operative Bank Limited - 0.25(Nil (P.Y. 2,500, 1 April 2015: 2,500) equity share of`25 each, fully paid up)

Total (A) 38,402.45 32,882.40Investment in Associate and Joint Venture CompaniesQuoted 63,888.94 60,008.91- Gujarat Industries Power Company Limited (GIPCL)

(Associate Company)(405,90,279 (P.Y. 405,90,279) equity share of`10 each, fully paid up)

Unquoted- Mahaguj Collieries Limited (MGCL)

(Joint Venture Company) 2.00 2.00Less: Share of Losses in Joint Venture -2.00 -2.00(20,000 (31 March 2016: 20,000 1 April 2015: 20,000)equity share of `10 each, fully paid up)

Total (B) 63,888.94 60,008.91Investment in Government securities (Quoted)((at Fair Valuethrough Other Comprehensive Income (OCI)) 12,485.02 12,810.84PARTICULARS No. of Units Rate Cost (` in lakhs)8.28% GoI 2027 11,36,000 96.64 1097.838.24% GoI 2027 15,00,000 96.64 1449.609.38% AP SDL 2023 15,00,000 102.34 1535.109.99% RAJ SDL 2028 5,00,000 107.82 539.109.67% Jharkhand SDL 2024 8,80,000 104.31 917.939.16% RAJ SDL 2028 1,08,000 108.08 116.738.57% UP SPECIAL SDL 10,00,000 102.52 1025.208.75% TN SDL 2022 20,00,000 102.68 2053.608.58% UP Special SDL 2024 5,00,000 102.18 510.908.96% RAJSTHAN SPECIAL 10,00,000 104.59 1045.90SDL 20248.32% CHHATISHGARH SDL 15,00,000 100.97 1514.559.99% RAJ SDL SPL 2,17,000 114.78 249.07Total Cost 12055.51

Total (C) 12,485.02 12,810.84Total 114,776.41 105,702.15

218


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Aggregate Market Value of quoted investment 83,996.34 82,197.17Aggregate Cost of unquoted investments 5,175.69 5,175.74Aggregate Cost of quoted investment 24,337.86 24,334.41Aggregate amount of Impairment in value of investment 2.00 2.00

A ( ` in Lakhs )

Companies other than Associate Share Share Totaland Joint Venture: Capital PremiumGujarat State Petronet Ltd. 1,685.00 - 1,685.00Gujarat Power Corporation Ltd. 1,930.01 - 1,930.01Gujarat State Energy Generation Ltd. 2,900.36 90.04 2,990.40Gujarat Gas Co. Ltd. 5.00 - 5.00Power Exchange Of India Ltd. 250.00 - 250.00Total Investment 6,770.37 90.04 6,860.41

B The latest Audited Financials of Gujarat Power Company Limited available with the Company is for31 March 2017. For calculation of Fair Value as at 31 March 2018 the Company has considered latestAudited Balance Sheet of GPCL i.e. for 31 March 2017.

C The Net Asset Value of PEIL for the Year ended 31 March 2018 and 31 March 2017 is negative andhence the Fair Value of such investment is nil.

D Details of SubsidiariesPlace of Proportion of ownership interest/

Name of Company Principal Incorporation voting rights held by the Companyactivity and principal As at 31st As at 31st

place of March, 2018 March, 2017business

Gujarat State Electricity Generation India 100.00% 100.00%Corporation Ltd. of PowerGujarat Energy Transmission Transmission India 98.19% 98.05%Corporation Ltd. of PowerDakshin Gujarat Vij Distribution India 100.00% 100.00%Company Ltd. of PowerMadhya Gujarat Vij Distribution India 100.00% 100.00%Company Ltd. of PowerPaschim Gujarat Vij Distribution India 100.00% 100.00%Company Ltd. of PowerUttar Gujarat Vij Distribution India 100.00% 100.00%Company Ltd. of Power

219


CONSOLIDATED FINANCIAL STATEMENTS 2017-18E Details of Associate ( ` in Lakhs )

Place of Proportion of ownership interest/Name of Company Principal Incorporation voting rights held by the Company

activity and principal As at 31st As at 31stplace of March, 2018 March, 2017business

Gujarat Industries Power Generation India 26.84% 26.84%Company Ltd. of Power

Equity accounted Associateviz. GIPCL:

Net Assets as at date of 12,970.65 12,970.65acquisition

Less: Acquisition Cost 10,592.35 10,592.35

Capital Reserve 2,378.30 2,378.30

Capital Reserve taken to 2,378.30 2,378.30Other Equity as per Equitymethod in Ind AS

Carrying amount of 63,888.94 60,008.91investment at the year end

Net Assets as at date of 12,970.65 12,970.65acquisition

Post acquisition share 50,918.29 47,038.26profits as at the date offinancial statements

ii. The Group has invested `10592.35 Lacs in Gujarat Industries Power Co. Ltd. (GIPCL) from 1988-89to 2005-06. The Group owns 26.84% which makes it Associate as per Ind AS 28 "Investments inAssociates and Joint Ventures in Consolidated Financial Statements" as of 31 March 2018.

F Details of Joint Venture

Place of Proportion of ownership interest/Name of Company Principal Incorporation voting rights held by the Company

activity and principal As at 31st As at 31stplace of March, 2018 March, 2017business

Mining and Mumbai,Mahaguj Collieries Limited agglomeration India 40% 40%

of hard coal

220


CONSOLIDATED FINANCIAL STATEMENTS 2017-18ii. Gujarat State Electricity Company Limited (GSECL), the wholly owned subsidiary of GUVNL, is a Company

covered under the Companies Act, 2013. GSECL has entered into a Joint Venture (JV) operation withMAHAGENCO viz. Mahaguj Collieries Limited for allocation of captive coal mining block in state ofOrissa and sharing of coal in ratio of 40:60 from extractable reserves. As per requirements of Section129(3) of the Companies Act, 2013, GSECL is required to prepare Consolidated Financial Statements(CFS) subject to exemption granted under Rule 6 of the Companies (Accounts) Rules, 2014 videNotification 742 (E) dated 27.07.2016. As per exemption granted, GSECL has not prepared the CFSbecause its Holding Company i.e. GUVNL prepares the CFS in compliance with the applicable AccountingStandards. GSECL has availed of this exemption and hence GUVNL has consolidated the Joint Venturein the CFS. Further, GUVNL has consolidated its wholly owned subsidiary GSECL as per applicableInd AS 110 and Ind AS 28 as is applicable to GSECL's interest in JV.

Further, disclosures in regard to this JV has been made in Note No.56(a).

iii. Based on audited accounts of Mahaguj Colleries Ltd (MGCL) the assets and liabilities are asunder:-

( ` in Lakhs )


ASSETSNon Current AssetsProperty, plant & Equipments 0.78 1.15Other non current assets 5,440.70 5,440.70Current AssetsFinancial AssetsCash and cash equivalents 4.03 1.64Other Current assets 0.05 0.04EQUITY AND LIABILITIESNon Current LiabilitiesFinancial LiabilitiesOther Financial liabilities 0.15 0.04Current LiabilitiesFinancial LiabilitiesTrade payables 0.30 0.30Other Current liabilities 25.28 1.35

Share in Net assets of Joint venture 2167.93 2176.74

Share in Profit for the year of Joint venture (66.58) (34.82)

221


CONSOLIDATED FINANCIAL STATEMENTS 2017-18iv. The share in the Net worth of the Joint Venture is `2,167.93 lakhs (P.Y. `2,176.74 lakhs) and in curent

year loss is Rs.66.58 lakhs(P.Y. `34.82 lakhs). The investment in the Joint Venture is `2 Lakhs; howeverthe share in net assets is restricted to the amount of carrying value of investments as the Companydoes not have any obligation for the liability of Joint Venture.

5 Loans ( ` in Lakhs )


Secured Considered GoodLoans & Advances to Staff 14,644.50 17,210.30

Total (A) 14,644.50 17,210.30Unsecured Considered Doubtful Loan to Joint Venture Company 2,316.67 2,252.45 Less: Provision for Loss (2,316.67) (2,252.45)Unsecured Considered GoodOther Loans And Advances 46.74 66.38

Total (B) 46.74 66.38Total (A+B) 14,691.24 17,276.68

A Loans to staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for whichthe loans have been given.

6 Other Financial Assets ( ` in Lakhs )



Interest Accrued But Not Due on Staff Loans 11,587.52 10,833.63

Interest Accrued & Due on Staff Loans 322.54 246.89


Deposits with Others 10,314.17 10,334.67

Deposit with Government and Local bodies 29.98 15.23

Deposits with banks for more than 12 months 50.15 468.04

Amount recoverable from employees / ex-employees 157.32 159.81

Total 22,461.68 22,058.26

222


CONSOLIDATED FINANCIAL STATEMENTS 2017-187 Other Non-Current Assets ( ` in Lakhs )


Capital Advances to Suppliers / Contractors 7,569.35 13,329.56Other Deposits 936.32 409.62Prepayments - Leasehold Land 2,418.93 2,502.61

Total 10,924.60 16,241.798 Inventories ( ` in Lakhs )


STORES, SPARES & LOOSE TOOLS;Stock of materials at stores 182,045.88 171,835.92(net of provision for non moving stock of`50.72 lakhs (P.Y. `147.91 lakhs))Materials at Site (O&M) 8,325.25 7,088.95Materials in Transit 27,900.64 8,912.93Materials pending Inspection 5,089.58 2,852.42Other Materials Accounts 28,985.87 43,366.72Fuel 27,006.05 70,985.76Material Stock pending Investigation 917.67 1,012.61Less: Provision for stock pending investigation (2,478.67) (2,522.89)

Total 277,792.27 303,532.41For basis of valuation refer Note No.1

9 Trade Receivables ( ` in Lakhs )



Trade Receivables 352,561.48 365,142.77

Trade receivables for misc. receipts from consumers 4,441.25 1,795.47

Less : Prov. for Doubtful Dues (25,366.46) (24,164.95)

Less : Unposted Receipts. (317.76) (158.35)

Less : Doubtful E D (15,229.69) (14,173.74)

Total (A) 316,088.82 328,441.20

223



Considered DoubtfulDues from PDC 119,603.90 112,373.23Less : Prov. for Doubtful Dues (113,411.81) (109,226.32)

(B) 6,192.09 3,146.91Less : Deferred ED & TSE from Consumers (C) (1,442.43) (1,442.43)

Total (A+B+C) 320,838.48 330,145.68

A The age of receivables at the end of the reporting period is as follows: ( ` in Lakhs )


Less than or equal to 6 months 267,235.29 219,836.51More than 6 months but less than or equal to 1 Year 38,673.84 94,571.86More than one Year 51,093.62 52,529.86

Total 357,002.75 366,938.23

B The Company assesses expected credit loss to be provided for from its customers by using a practicalexpedient as permitted under Ind AS 109 i.e. expected credit loss allowance as computed based onhistorical credit loss experience and the ageing of the receivable balances.

C Generally, the credit period on sale of electrical energy is upto 15-30 days in case of DistributionCompanies and 30-60 days in case of Other Group Companies. Delay Payment Surcharge is chargedat agreed rate as per contractual terms on the overdue balance.

D As there are large number of Consumers for Four Distribution companies, it is impracticable to obtainconfirmation of all balances. Further, since there is a stringent recovery mechanism of consumersdue as per GERC Regulations, the outstanding balances are considered good and recoverable; exceptthose provided for.

E In case of Distribution Companies, GOG, EPD has vide their GR NO GUV-2016-3170-K1-2842 dated12.10.2017 announced Amnesty Scheme-2017 as per which the PDC consumers/non consumers (Allcategories except Street Light & GLP Category consumers) as on 31.08.2017 are eligible for settlementof their outstanding dues for the purpose of availment of benefits of waiver of 100% DPC and furtherwaiver of 50% principle amount if they are Residential or Agriculture consumers/Non Consumers.The scheme was originally applicable for 3 months from 25.04.2018 to 24.07.2018. Further, the schemeis extended up to 30.09.2018.

10 Cash and Cash Equivalents ( ` in Lakhs )


Balances with Banks 65,978.39 55,595.26Cash on hand 635.95 522.23

224


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Cheques on hand 6,604.35 3,859.16Remittance-in-Transit 2,271.57 1,123.64Deposits with Banks 90,807.18 629.64

Total 166,297.44 61,729.93

11 Other Bank Balances ( ` in Lakhs )


Deposit with Banks 13,766.96 3,463.80(remaining maturity of more than 3 months but less than 12 months)

Total 13,766.96 3,463.80

A Deposit with Banks includes:

a. Fixed Deposit kept in Allahabad Bank on behalf of Bal Urja Rakshak Dal.

b. GETCO has deposited `7000 Lakhs at the Interest Rate of 5.10% p.a. and `3058 Lakhs at theInterest Rate of 5.85% p.a. with Bank of India, Mid-Corporate Branch, Vadoadara.

12 Loans ( ` in Lakhs )


Loans and Advances to EmployeeSecured Considered GoodLoans & Advances to Staff 1,226.04 804.66Unsecured considered goodOther loans and advances to staff 1,804.28 1,246.12Other loans and advances 1,066.52 1,225.88

Total 4,096.84 3,276.66A Loans to Staff are secured by way of hypothecation of house/ four wheeler/ two wheeler for which

the loans have been given.

13 Other Financial Assets ( ` in Lakhs )


Unsecured Considered GoodInterest Accrued But Not Due on Staff Loans 987.03 842.07Interest Accrued & Due on Staff Loans 918.56 857.51Amount recoverable from Staff 106.82 136.71

225



Fuel related Claims and Receivables 841.04 674.39Subsidy Receivable from Government 343,258.93 467,060.09Unbilled Revenue 83,477.02 72,285.97Deposits 5,385.06 5,563.78Interest Accrued But Not Due on Others 250.16 -Other recoverables 10,554.04 11,214.05Less: Provision made for doubtful recoveries (22.50) (22.50)Loan to others 636.36 886.90Receivable from Gujarat Energy Training & Research Institute (GETRI) 273.32 226.87

Total 446,665.85 559,725.85

14 Current Tax Assets ( Net) ( ` in Lakhs )


Current Tax AssetsTax Refund Receivable 178,856.80 79,929.19Current Tax LiabilityIncome Tax Payable (151,994.24) (72,103.55)

Total 26,862.56 7,825.64

15 Other Current Assets ( ` in Lakhs )



Prepaid Expenses 3,632.61 2,320.75

Postage stamp & stamped agreements on hand 60.71 61.13

Advances for O&M Supplies/Works 59,350.58 8,724.14

Balance with appellate authority 417.66 402.23

Electricity Duty Recovered in Advance by Govt. of Gujarat 6,414.63 6,665.52

Advance to IPP against Power Purchase 8,093.59 10,000.00

Pre-Payments Leasehold Land 106.95 105.25Total 78,076.73 28,279.03

226


CONSOLIDATED FINANCIAL STATEMENTS 2017-1816 Assets classified as held for sale ( ` in Lakhs )


Obsolete/scraped assets 11,313.39 6,066.68Total 11,313.39 6,066.68

During the current year, the assets have been sold for total consideration of `107.99 lakhs resulted intoloss on sale of non-current asset of `219.28 Lakhs recorded under 'Other Expense". (Note 38).

Sikka Unit 1 & 2, Ukai unit 1 & 2 and Utran 135 MW Power stations of Subsidiary - GSECL have beendecommissioned and hence assets related to such power stations are classified as held for sale. The assetswill be sold through e-auction

17 Equity Share Capital

A Equity Share Capital consist of the following: ( ` in Lakhs )


Share CapitalEquity Share CapitalAuthorised Share Capital2000,00,00,000 (P.Y. 2000,00,00,000) Equity Shares of Rs.10/- each 2,000,000.00 2,000,000.00Issued Share Capital1740,27,39,795 (P.Y. 1453,42,45,195) of Rs. 10/- each 1,740,273.98 1,453,424.52Subscribed & Paid up1622,75,49,895 (P.Y. 1371,46,05,995) of Rs. 10/- each fully paid 1,622,754.99 1,371,460.60

Total 1,622,754.99 1,371,460.60

B A Reconciliation of number of shares outstanding at the beginning and at the end of reportingperiod is as under:

Particulars No. of Share CapitalShares (` in Lakhs)

As at 1st April,2016 10,754,706,495 1,075,470.65

Additions/(Reductions) 2,959,899,500 295,989.95

As at 31st March,2017 13,714,605,995 1,371,460.60

As at 1st April,2017 13,714,605,995 1,371,460.60

Additions/(Reductions) 2,512,943,900 251,294.39

As at 31st March,2018 16,227,549,895 1,622,754.99

227


CONSOLIDATED FINANCIAL STATEMENTS 2017-18C Shares in the Company held by Shareholders holding more than 5% is as under:

As at 31st March, 2018Particulars No. of Extent of

shares HoldingGovernor of Gujarat 16,227,549,895 100.00%

As at 31st March, 2017Particulars No. of Extent of

shares HoldingGovernor of Gujarat 13,714,605,995 100.00%

D Right, preferences and restrictions attached to shares :

The Company has only one class of equity shares having par value of `10 each and is entitled toone vote per share.

18 Other Equity

A Other Equity consist of the following: ( ` in Lakhs )


Share Application Money pending allotment 117,518.99 81,963.92

Contingency Reserve Fund 12,048.23 12,048.23

Fly ash utilisation Reserve Fund 3,642.91 1,577.81

Capital Reserve 2,378.30 2,378.30

Securities Premium 3,750.00 3,750.00

Retained Earnings 492,008.22 410,737.61

Equity Instruments through Other Comprehensive Income 31,813.77 23,146.50

Reserve for financial asset measured at fair value through OCI 287.31 499.28

Share of OCI of associate accounted for using equity method 1,671.74 922.69

Total 665,119.46 537,024.33

Out of Above:

Equity belonging to the Non Controlling interests (refer SOCIE) 8,458.83 7,719.85

Equity belonging to the Owners 656,660.63 529,304.48

228


CONSOLIDATED FINANCIAL STATEMENTS 2017-18B Particulars relating to Other Equity ( ` in Lakhs )


Share Application Money pending allotmentOpening Balance 81,963.92 116,463.87Add: Increase during the year 117,518.99 81,963.92Less: Shares Issued (81,963.92) (116,463.87)Balance at the year end 117,518.99 81,963.92Contingency Rreserve FundOpening balance 12,048.23 12,400.00Less: Transferred to retained earning - (351.77)Balance at the year end 12,048.23 12,048.23Fly ash utilisation Reserve FundOpening balance 1,577.81 1,577.81Add: Increase during the year through sales 2,065.10 -Balance at the year end 3,642.91 1,577.81Capital ReserveOpening balance 2,378.30 2,378.30Add: Transferred to retained earning - -Balance at the year end 2,378.30 2,378.30Securities PremiumOpening balance 3,750.00 3,750.00Add: Transferred to retained earning - -Balance at the year end 3,750.00 3,750.00Retained EarningsOpening Balance 410,737.60 360,655.54Add: Net profit after tax transferred from Statement of Profit & Loss 114,589.12 53,895.03Add: Other Comprehensive income arising from remeasurement (37,545.42) (10,093.95)of defined benefit obligationAdd: Share of profit of Associate and Joint Venture 4,456.11 6,152.32Add: Share in other reserve of Associate (6.10) -Less: Share of CDT on dividend received from Associate (223.11) (223.11)Add: Transfer from Contingency Reserve Fund - 351.77Balance at the year end 492,008.22 410,737.61

229



Equity Instruments through Other Comprehensive IncomeOpening Balance 23,146.51 19,131.69Add: Increase / (Decrease) during the year 8,667.25 4,014.81Balance at the year end 31,813.77 23,146.50Reserve for Financial Asset measured at fair value through OCIOpening Balance 499.28 238.93Add: Increase / (Decrease) during the year (211.97) 260.35Balance at the year end 287.31 499.28Share of OCI of Associate accounted for using Equity MethodOpening Balance 922.69 315.28Add: Increase / (Decrease) during the year 749.05 607.41Balance at the year end 1,671.74 922.69

Total Other Equity 665,119.46 537,024.33

C Share Application Money pending allotment

The Company has issued 117,51,89,900 Equity Shares of `10 each to Governor of Gujarat, the existingShareholder, for cash at par i.e. at ̀ 10/- per share, on rights basis on 21.04.2018. The Company receivedthe Share Application Money from Govt. of Gujarat during the Months of February & March, 2018and accordingly has complied with the provisions of the Companies Act, 2013 w.r.t. issue of Shares.

D Contingency Reserve

As per provisions of GERC MYT Regulations read with Tariff orders passed by GERC, M/s GETCO makesan appropriation to the Contingency Reserve to meet with certain exigencies. Investments in securitiesauthorised under Indian Trust Act, 1882 was made against such reserve. During the year, as thereis sufficient fund for Contingencies, no appropriation is made to the Contingency Reserve Fund. (PY.` Nil).

E Fly ash utilisation Reserve Fund

As per notification of MoEF Dt. 03.11.2009, the M/s GSECL is required to maintain a separate Accountfor the amount collected from sale of fly ash and fly ash based products and this amount shouldbe kept in separate Account head and shall be utilized only for the development of infrastructureor facilities, promotional and facilitation activities for the use of fly ash until 100% fly ash utilizationis achieved.

As such the Company is maintaining a separate Account and deposits the amount received fromsale of fly ash and fly ash based products and utilizing the same regularly for O&M for the Fly ashutilisation & development of infrastructure facilities. The Company has achieved 100% utilizationof fly ash at Gandhinagar, Sikka, Ukai and KLTPS and hence no separate account is maintained forthese TPS.

230


CONSOLIDATED FINANCIAL STATEMENTS 2017-18During the year, fly ash utilisation at Wanakbori is less than 100 % and hence income from sale offly ash of `200 Lakhs (P.Y. `1577.81 Lakhs) is transferred to fly ash utilisation Reserve Fund.

F Capital Reserve

Capital Reserve is the reserve due to equity method of accounting of Associate-M/s GIPCL at thetime of acquisition of Associate.

G Securities Premium

Securities premium is the share of securities premium of the Non-controlling interests.

H Equity Instruments through Other Comprehensive Income

The Company has elected to recognise changes in the fair value of certain investments in equitysecurities in Other Comprehensive Income. This reserve represents the cumulative gains and lossesarising on the revaluation of equity instruments measured at fair value through Other ComprehensiveIncome. The Company transfers amounts from this Reserve to Retained Earnings when the relevantequity securities are disposed.

I Reserve for Financial Asset measured at fair value through OCI

The Company has elected to recognise changes in the fair value of certain investments in debt securitiesin Other Comprehensive Income. These changes are accumulated within FVTOCI reserve within equity.The Company transfers amounts from this reserve to retained earnings when the relevant debtsecurities are derecognised.

19 Deferred Government Grant, Subsidies and Consumer Contribution ( ` in Lakhs )


Government Grants, Subsidies towards Capital Assets 279,238.16 255,921.58Consumers' contribution towards Capital Assets 486,545.19 435,787.23

Total 765,783.35 691,708.81

A Particulars relating to Deferred Government Grants, Subsidies and Contributions ( ` in Lakhs )


Government Grants, Subsidies towards Capital Assets

Opening balance 255,936.86 236,413.00

Add : Received during the year 50,117.06 43,484.60

Less : Transferred to Statement of Profit and Loss (26,815.76) (23,976.03)

Closing Balance 279,238.16 255,921.57

231



Consumers' Contribution towards Capital AssetsOpening balance 435,787.24 401,853.81Add : Received/transferred during the year 93,807.78 72,223.32Less : Transferred to Statement of Profit and Loss (43,049.82) (38,289.90)Closing Balance 486,545.20 435,787.23

Total 765,783.36 691,708.80

20 Borrowings ( ` in Lakhs )


Secured(a) Term Loans

(i) From Banks 655,682.01 815,146.80 (ii) From Financial Institutions 256,754.35 321,248.34

Unsecured(a) Term Loans

(i) From Financial Institutions 3,005.88 2,067.69 (ii) From Gujarat State Financial Services 262,112.99 268,235.29

(b) Loans from Related Party - Govt. of Gujarat (i) Loan for Power Purchase 9,450.00 9,800.00 (ii) State Government Loan under APDRP 4,335.34 5,440.71 (iii) Loan from Asian Development Bank 21,768.54 26,460.30 (iv) Term Loan from Govt. of Gujarat - Foreign currency loans 37,488.51 37,562.10 (v) Kisan Hit Urja Shakti Yojna (KHUSHY) Loan 800.00 1,200.00

Total 1,251,397.63 1,487,161.25

A MATURITY PROFILE OF SECURED & UNSECURED LOANS ( ` in Lakhs )

Particulars 2018-19 2019-20 2020-21 2021-22& After

SECURED LOANSTerm Loan from Banks 115,751.71 150,989.25 147,827.86 356,864.90Term Loan from Financial Institutions 30,988.40 30,786.33 29,872.37 196,095.66UNSECURED LOANSGovt. of Gujarat (Related Party)Loan for Power Purchase 350.00 350.00 350.00 8,750.00

232



State Government Loan under APDRP 1,105.37 1,105.08 1,105.08 2,125.19Loan From Asian Development Bank 4,349.75 4,349.02 4,349.02 13,070.49Term Loan from Govt. of Gujarat - 2,142.22 2,142.20 2,142.20 33,204.11Foreign currency loansKisan Hit Urja Shakti Yojna 400.00 400.00 400.00 -(KHUSHY) LoanLoan from Financial Institutions 11.83 - - 3,005.88Loan from Gujarat State 120,233.41 105,418.30 101,418.30 55,276.39Financial Services

TOTAL 275,332.69 295,540.18 287,464.83 668,392.62

21 Trade Payables ( ` in Lakhs )


Amount owing to Licensees 85.29 85.29Total 85.29 85.29

22 Other Financial Liabilities ( ` in Lakhs )


Liability for Deposit of work 100.60 550.60Staff Welfare Schemes 456.78 438.69Security Deposit from Consumers 525,177.81 475,402.01Staff Retirement cum Death Benefit Scheme 15,924.40 16,112.57

Total 541,659.59 492,503.8722.1 During the current financial year, MGVCL has made repeated public advertisement stating to

confirm the security deposit amount as mentioned in last bill served to consumers and accordinglysecurity deposit as per subsidiary records is reconciled and further reconciliation of the samewith that of books is under process.

23 Long-term provisions ( ` in Lakhs )


Provision for Employee BenefitsProvision for Leave Encashment 131,455.92 114,987.33Gratuity - 30,583.15

Total 131,455.92 145,570.48

233


CONSOLIDATED FINANCIAL STATEMENTS 2017-1824 Deferred Tax Liabilities ( Net)

The following is the analysis of Deferred Tax Assets/(Liabilities) presented in the Balance Sheet:

( ` in Lakhs )


Deferred Tax Assets 260,343.59 232,166.51Deferred Tax Liabilities 453,405.22 396,253.07

Total 193,061.63 164,086.56

As at 31st March, 2018 ( ` in Lakhs )

Recognized Recognized inParticulars Opening in profit Other Closing


Deferred Tax Asset on account of: - -

Employee Benefits 37,721.99 (15,281.48) 11,225.15 33,665.66

Provision for Doubtful Debts 23,587.81 1,505.96 25,093.77

Deferred Income on Government Grant 26,978.29 (866.98) 26,111.31

Carried forward of unused Tax Losses 4,833.31 3,658.41 8,491.73

Unabsorbed Depreciation 49,183.90 5,220.57 54,404.47

MAT 89,765.71 22,752.09 112,517.80

Carried forward of unused Tax Credits - - -

Others 95.47 (36.63) 58.85

Deferred Tax Assets 232,166.48 16,951.94 11,225.15 260,343.58

Deferred Tax Liabilities -

Property, Plant and Equipment 393,115.31 60,410.38 - 453,525.69

Financial Assets at FVTOCI 3,137.73 2.55 (3,260.78) (120.50)

Others - - - -

Deferred Tax Liabilities 396,253.04 60,412.93 (3,260.78) 453,405.19

Net Deferred Tax Asset/(Liability)

Amounts recognised in Balance (164,086.56) (43,460.99) 14,485.93 (193,061.62)Sheet (Refer Note A below)

234


CONSOLIDATED FINANCIAL STATEMENTS 2017-18As at 31st March, 2017 ( ` in Lakhs )

Recognized Recognized inParticulars Opening in profit Other Closing


Deferred Tax Asset on account of: - -

Employee Benefits 34,850.17 (471.52) 3,343.34 37,721.99

Provision for Doubtful Debts 20,926.91 2,660.90 - 23,587.81

Deferred Income on Government Grant 19,652.25 7,326.03 - 26,978.29

Carried forward of unused Tax Losses 3,811.44 1,021.88 - 4,833.31

Unabsorbed Depreciation 54,868.12 (5,684.22) - 49,183.90

MAT 75,769.40 13,996.31 - 89,765.71

Carried forward of unused Tax Credits - - - -

Others 111.93 (16.46) - 95.47

Deferred Tax Assets 209,990.21 18,832.93 3,343.34 232,166.48

Deferred Tax Liabilities -

Property, Plant and Equipment 339,535.31 53,580.00 - 393,115.31

Financial Assets at FVTOCI 2,517.43 - 620.30 3,137.73

Others - - - -

Deferred Tax Liabilities 342,052.74 53,580.00 620.30 396,253.04

Amounts recognised in Balance (132,062.53) (34,747.07) 2,723.04 (164,086.56)Sheet (refer Note A below)

A In Holding Company GUVNL and Subsidiary Companies viz UGVCL, DGVCL and MGVCL due touncertainty about earnings sufficient taxable income in forseeable future to utilise such deferredtax asset, recognition of the same has been restricted to the extent of Deferred Tax Liabilities.

25 Other Non Current Liabilities ( ` in Lakhs )


Deposits for Electrification & Service connection 17,517.45 16,520.34Total 17,517.45 16,520.34

235


CONSOLIDATED FINANCIAL STATEMENTS 2017-1826 Short Term Borrowings ( ` in Lakhs )


Loans repayable on DemandSecuredCash Credit From Banks 6,521.87 19,299.81

Total 6,521.87 19,299.81

A Cash Credit Limit is secured against hypothecation charge in favour of UCO Bank Consortium onthe Stocks and Book Debts of the Holding Company and its six Subsidiary Companies ranking pari-passu.

27 Trade Payables ( ` in Lakhs )


Trade Payable for Fuel 94,845.54 55,649.03Liability for Purchase of Power 537,966.32 509,281.78Other 1,480.58 1,115.19

Total 634,292.44 566,046.00

A DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

In view of their large number of accounts and in absence of segregated information, total outstandingdues to Small Scale Industrial Undertaking as defined under Micro, Small & Medium EnterprisesDevelopment Act, 2006 have not been disclosed separately.

B However, based on the details available with the Company in respect of transactions incurred duringthe year, there are no undisputed over dues as such to micro, small and medium enterprises as at31st March 2018.

28 Other Financial Liabilities ( ` in Lakhs )


Current maturities of Long Term Debt:Secured:Term Loans From Banks 115,751.70 132,545.26Loan from Financial Institutions 30,988.41 40,250.25Interest Accrued and Due on Loans from REC - 89.31Unsecured:Govt. of Gujarat (Related Party)

236



(i) Loan for Power Purchase 350.00 350.00

(ii) Loan from Asian Development Bank 4,349.76 4,349.02

(iii) Loan from Asian Development Bank - Foreign Currency 2,142.22 2,030.38

(iv) KHUSHY Loan 400.00 400.00

(v) Loan under APDRP Scheme 1,105.37 1,105.08

Loan from Financial Institutions 11.83 521.25

Loan from Financial Institutions- Gujarat State 120,233.41 93,016.78Financials Services

Interest accrued but not due on Loans 21,173.20 22,342.67

Interest Accrued and Due on Loans from Banks 4,683.10 5,640.27

Interest payable on consumers security Deposit 27,878.47 29,045.36

Liability for O&M Supplies/Works 36,505.70 36,349.00

Staff Related Liabilities 1,322.15 1,506.96

Staff Retirement cum Death Benefit Scheme 887.98 789.54

Unclaimed amount relating to Bonds 307.39 684.99

Deposits & Retentions from Suppliers / Contractors 354,731.80 280,321.83

Outstanding liability for expenses 197,418.61 138,843.19

Grant Unallocated 7,863.94 10,008.70

Corpus Fund of Bal Urja Rakshak Dal 50.19 47.37

Board of Trustees----CPF 1,129.18 1,435.80

Liability for Capital Supplies / Works 55,552.12 62,603.95

Amount payable to EESL 304.84 -

Staff Welfare Scheme 879.50 646.76

Liabililty for deposit of work 126,957.40 101,143.83

Liability for pending utilisation of grant for solar energy 5,784.98 11,097.51pump set and solar home light (net of expenditure)

Deposits for execution of Job Works 42,508.76 36,156.34

Other Liability 7,202.74 277.84Total 1,168,474.74 1,013,599.23

237


CONSOLIDATED FINANCIAL STATEMENTS 2017-1829 Other Current Liabilities ( ` in Lakhs )


Statutory Liabilities 9,397.76 3,713.31

Subsidy/Grants received in advance 218.19 2,572.52

Advances received 4,748.65 -

Income Received in Advance 125,842.48 122,720.14

Deposits for Electrification & Service connection 41,446.57 35,470.25

Other Liability 1,178.28 573.46

Tax on Electricity Duty payable to State Govt. 77.01 46.95

Total 182,908.93 165,096.63

30 Short Term Provisions ( ` in Lakhs )


Provision for Employee Benefits

Provision for Gratuity 6,360.43 15,150.30

Provision for Leave Encashment 11,513.48 9,689.27

Others

Provision for Delayed Payment Charges 2,904.78 2,904.78

Total 20,778.70 27,744.35

31 Current Tax Liabilities (Net) ( ` in Lakhs )


Current Tax Liability

Wealth Tax payable 1.74 1.74

Income Tax Payable - 69,093.31

Current Tax Assets

Wealth Tax Refund Receivable 1.61 1.61

Tax Refund Receivable - 64,870.39

Total 0.12 4,223.04

238


CONSOLIDATED FINANCIAL STATEMENTS 2017-1832 Revenue from Operations ( ` in Lakhs )


March, 2018 March, 2017Income from Operating ActivityRevenue from Sale of PowerResidential General Purpose 591,626.83 543,918.45General Lighting Purpose 16,313.62 14,978.48Non-residential General Purpose & LT Medium Demand 818,470.81 756,692.51HT Industrial 1,991,000.19 1,689,466.71Public Lighting 14,748.45 15,783.84Traction Railways 658.29 3,607.06Irrigation Agricultural 400,046.38 392,709.60Public water works and sew.pumps 78,674.04 76,012.06Revenue from Sale of Electrical Energy 907.90 1,010.63Inter state sale of Power - 5.54Sale of Power through Power Exchanges & Bilateral Agreements 25,920.16 20,516.27Supply in Bulk-Licensee 1,479.67 1,300.07

Sub Total 3,939,846.35 3,516,001.22Electricity DutyElectricity Duty Assessed 421,252.04 377,547.86Less: Electricity Duty Assessed (Contra) -421,252.04 -377,547.86

Sub Total - -Sale of ServicesRevenue from Transmission Charges 48,142.85 31,211.16Parallel operation charge 4,995.29 4,294.35SLDC fees & charges 1,247.78 922.09Net Unscheduled Interchange Income 15,660.47 15,928.05

Sub Total 70,046.39 52,355.64Income from Other Operating ActivityMeter Charges / Service line charges 23,985.79 22,881.28Recoveries for theft of power / Malpractices 11,618.71 18,675.04Wheeling Charges Recoveries 316.88 1,394.67Delayed payment charges from consumers 17,330.85 16,320.67

239



Cross Subsidy Surcharge 28,139.65 85,694.06Addl. Surcharge - OA Consumers 7,869.29 25,361.23Agriculture Subsidy 110,000.00 110,000.00Misc. Charges from Consumers 21,235.75 16,307.47Misc. Revenue 26.61 -Rebate (Cash Discount) for Prompt Payment 41,315.56 41,513.24Liquidated Damages 196.14 1,159.11CDM Benefit from Renewable Energy Sources 463.45 292.91Supervision Income from O&M activity 557.85 529.47Sale of Fly Ash 4,264.05 3,704.38Reactive Charges Income 1,196.79 687.98Income from trading activity 7,711.30 1.08

Sub Total 276,228.66 344,522.59Total 4,286,121.40 3,912,879.45

The Deviation Settlement Mechanism charges (UI) (underdrawal/Overdrawal charges) have been accountedas provided by SLDC following the Deviation Settlement Mechanism (DSM).

33 Other Income ( ` in Lakhs )


March, 2018 March, 2017Interest IncomeInterest on Staff Loans and Advances 2,349.90 2,125.24Interest on Advances to Others 544.81 225.93Interest Income from Fixed Deposits 58.67 3.97Interest Income from Investments 1,073.28 1,043.98Dividend Income- From Investments 254.42 254.12Other Non Operating IncomeGain on sale of Fixed Assets (Net of Loss) 3,793.96 200.94Deferred Income towards Govt. Grants/ Subsidies and 69,865.58 62,265.92Consumer Contribution towards Cost of Capital AssetsGrant for energy conservation 237.64 3,372.47Grant received for R & D Expenses (refer note 53) 136.52 -Income from Sales -Stores, Scrap etc.. 1,279.37 659.78

Gain on Foreign Exchange Fluctuation 4.13 1,019.51Miscellaneous Income 27,904.28 42,573.78

Total 107,502.57 113,745.65

240


CONSOLIDATED FINANCIAL STATEMENTS 2017-1834 Cost of Fuel consumed ( ` in Lakhs )


March, 2018 March, 2017Materials/Fuel Consumed-Coal 652,216.10 451,252.95-Oil 8,384.55 7,404.88-Gas 27,432.86 12,650.45-Water 14,398.50 11,761.63-Lime 1.14 5.60Other Fuel related cost 194.69 229.65Cost of Trading activity 5,722.50 -Lubricants and Consumables 1,314.90 1,145.62Station Supplies 304.97 253.50

Total 709,970.21 484,704.29

35 Purchase of Power ( ` in Lakhs )


March, 2018 March, 2017From Central SectorNuclear Power Corporation of India Ltd. 51,269.55 71,615.49NTPC Ltd. 601,736.73 641,025.57Sardar Sarovar Narmada Nigam Ltd 2,960.23 10,283.03

Sub Total 655,966.51 722,924.09From Private SectorCLP India Pvt Ltd. 59,419.76 52,948.44Essar (Vadinar) Ltd. 82,695.58 165,203.20ACB India Ltd. 31,595.07 29,828.41Adani Power Ltd. 242,497.59 379,152.77Coastal Gujarat Pvt. Ltd. 307,218.12 271,238.04

Sub Total 723,426.12 898,370.86From State SectorGujarat Industries Power Company Ltd. 95,021.92 104,838.10Gujarat State Energy Generation Ltd. (Hazira) 32,791.43 29,400.58

241



Gujarat Mineral Development Corporation (GMDC) 26,595.04 30,611.96GPPC Pipavav 39,862.63 40,133.28Bhavnagar Energy Company Ltd. 22,786.78 2,366.50

Sub Total 217,057.80 207,350.41From OtherWind Farms 250,610.96 188,707.02Purchase of Solar Power 188,076.02 189,082.83Captive Power Plants 33.06 0.34Power Exchange of India Ltd. 8,439.74 2,768.08India Energy Exchange 204,478.10 11,126.38Short Term Purchase of Power 31,572.15 65.61

Sub Total 683,210.03 391,750.26Wheeling / Transmission Charges:Power Grid Corporation Ltd. 188,363.86 182,279.90

Sub Total 188,363.86 182,279.90Total 2,468,024.31 2,402,675.51

36 Employee Benefits Expense ( ` in Lakhs )


March, 2018 March, 2017Salaries and Allowances 328,542.76 316,457.29Leave Encashment 25,698.12 30,067.74Contribution to PF & Other Trusts 28,351.54 25,574.53Staff Welfare Expenses 5,404.57 5,065.33Retirement and Other Benefits 12,798.80 9,664.18

Sub Total 400,795.79 386,829.07Less : Directly attributable cost capitalised (59,181.01) (55,733.40)(refer note 1.(D) (22) (b))

Total 341,614.77 331,095.6737 Finance Cost ( ` in Lakhs )


March, 2018 March, 2017Interest ExpenseInterest on State Government Loans 5,451.67 5,373.04

242



Interest on Bonds 21,334.03 20,938.80Interest on Cash Credit and Working Capital 30,729.01 49,856.08Interest on Rural Electrification Corporation Loans and 24,578.81 6,785.92Power Finance CorporationInterest on NABARD Loans 10,484.61 17,501.33Interest on Term Loans 43,090.22 70,580.14Interest on Other loans 2,666.10 1,377.56Interest to Consumers on Security Deposits etc. 30,810.55 32,115.59Interest on Income Tax 954.60 246.31Discount to Consumers for Timely Payment of Bills 130.74 463.81Other Borrowing CostGuarantee Fees / Charges 21.04 495.90Bill Discounting - 1,627.22Loss on Foreign Exchange Fluctuation 51.99 -Bank Charges, Commission and Others 886.51 894.87

Total (A) 171,189.88 208,256.57Less : Directly attributable cost capitalised (22,689.78) (22,916.29)(refer note 1.(D) (22) (b))

Total 148,500.10 185,340.28

A Interest on PFC loan given for RAPDRP Project (as per the terms of the RAPDRP project), may bepartially converted into Grant by GOI on meeting the conditions of conversion from Loan to Grantand will be treated as forgivable loan to that extent. In view of above, the total fund disbursed byPFC is treated as Borrowings and interest liability is shown under the head "Other Financial Liabilities".

38 Other Expenses ( ` in Lakhs )


March, 2018 March, 2017Repairs & MaintenanceBuilding and Civil Works 5,912.17 6,876.05Plant and Machinery 44,550.08 37,903.95Sub Station Maintenance under Contract 15,704.82 12,609.43Lines, Cable Network etc. 16,365.64 16,797.27Others 4,151.37 3,730.22Administrative & General ExpensesRent, Rates and Taxes (Refer Note 42) 3,126.76 2,466.46

243



Insurance 1,992.63 1,490.21Testing Charges 368.15 432.36Telephone & Postage Expenses 1,791.51 1,947.91Remuneration to collection agencies 1,635.16 1,825.36Legal & Professional Fees 1,713.54 1,712.31Auditors' Remuneration 97.94 96.53Fee to Auditors for other works 1.11 2.75Technical Fees 206.56 221.27Consultancy Charges 707.57 442.24Other Professional fees and expenses 2,535.71 1,966.37Travelling & Conveyance 17,048.07 16,173.38Printing & Stationery 2,142.88 2,048.39Expenses on Computer Billing & EDP Charges 504.97 520.86Advertisement 774.48 616.55Entertainment Expense 34.18 42.99Electricity Charges 1,591.96 2,470.66Water Charges 539.42 521.06Corporate Social Responsibilities 825.29 615.47Waiver of Delayed Payment Charges 92.04 664.21Guest House Expenses 166.26 182.25Security Expenses 7,923.36 6,797.31Freight Expense 1,727.96 1,578.86Expenditure on Training to Staff 760.32 840.04Expenses for Energy Conservation 104.57 192.35R & D Expenses 136.52 -Energy Conservation Expenses for Ujala Scheme 0.01 2,405.74Directors fees 12.89 12.37GERC License Fees - 1,216.00Other Administration & general Expenses 10,362.78 7,917.92Bad & Doubtful debts write-off 5,730.66 13,952.68Miscellaneous Expenses 1,439.67 1,513.44Miscellaneous Losses & Write-offs 2,447.12 2,292.83Provision for -Bad & Doubtful debts 44,092.45 40.63Less : Directly attributable cost capitalised (9,945.65) (8,187.25) (Refer Note 1.(D) (22) (b))

Total (A-B) 189,372.90 144,949.45

244


CONSOLIDATED FINANCIAL STATEMENTS 2017-18A During the year, an expenditure of `56.59 Lakhs ( Previous year `1063.17 lakhs ) incurred towards

Energy Conservation activities has been set off against the grant received from Govt. Of Gujarat forthis purpose.

B During the year, an expenditure of `0.01 Lakhs ( Previous year `1070.14 ) incurred towards UjalaScheme has been set off against the grant received from Govt. Of Gujarat for this purpose.

C The subsidy towards flood relief amounting to `1930.96 Lakhs was received from GOG during theFY 2017-18.

A Payment to Auditors (Fees excluding applicable tax) ( ` in Lakhs )



Audit Fees 79.94 78.80

Certifications 1.38 1.25

Other Services, Taxation matters / Tax Audit 0.83 0.75

Out-of-pocket & Other Expenses 3.21 3.12

Total 85.36 83.92

39 Exceptional items ( ` in Lakhs )



Bad debts written off (refer note 63) 36,577.09 -

Total 36,577.09 -

40 Tax Expense ( ` in Lakhs )



Current Tax 32,531.20 25,374.36

Deferred Tax 43,460.98 34,747.06

Earlier Years 182.84 316.22

Total 76,175.02 60,437.65

245


CONSOLIDATED FINANCIAL STATEMENTS 2017-18A Reconciliation of Current Tax ( ` in Lakhs )



Profit Before Tax 195,220.26 120,485.00

Current Tax Expense calculated using applicable tax rate 41,663.91 25,713.91

Add:

(Income) / Expense (net) not (taxable) / deductible (10,143.67) (1,603.43)

Adjustment of tax on prior period - 371.21

Provision for Doubtful Debts 271.05 724.71

Tax impact on Transition Adjustment 213.76 167.94

Others 526.16 -

Current Tax Expense 32,531.21 25,374.34

Applicable Tax Rate : Normal - 34.61%

Applicable Tax Rate : MAT - 21.342%

41 Earnings per Equity share ( ` in Lakhs )



Profit After Tax for the year attributable to Owners of Equity 118,363.62 59,839.32

Weighted average umber of Equity Shares Basic 15,378,415,302 12,554,200,262

Diluted 15,424,674,538 12,592,286,772

Basic & Diluted earnings per Equity Shares (`) Basic 0.77 0.48

Diluted 0.77 0.48

Face Value Per Share (`) 10.00 10.00

42 Lease

A Operating Leases

The Group does not have any non-cancellable operating lease commitments.

The Group has taken various premises under operating lease or leave and license agreement. Thelease term in respect of such premises are on the basis of individual agreements entered into withthe respective land lords. The lease payments are recognised in the Statement of Profit and Lossunder Rent' in Note 38.

246


CONSOLIDATED FINANCIAL STATEMENTS 2017-1843 Employee benefit plans

A Defined Contribution plans:

The Group has certain defined contribution plans. Group Companies makes contribution towardsEmployees' Provident Fund, Employees' Pension Scheme and Employees' Death Linked InsuranceScheme. Contributions are made at specified percentage of salary as per regulations. The contributionsare made to registered provident fund administered by the government. The obligation of the Groupis limited to the amount contributed and it has no further contractual nor any constructive obligation.The expense recognised during the period towards defined contribution plan is `24898.57 Lakhs (P.Y.`22148.63 Lakhs).

B Other long term benefit plan

The Group accounts for leave encashment on the basis of actuarial valuation carried out by LifeInsurance Corporation of India at each year end. Liability for the current year of ` 28438.10 Lakhs(P.Y. `35007.45 Lakhs) has been charged to statement of Profit & Loss. Leave obligation as at 31stMarch, 2018 and 31st March, 2017 is `142969.39 Lakhs and `124676.59 Lakhs respectively.

The Group has a Staff Voluntary Retirement-Cum-Death Benevolent Fund Scheme wherein an employeecan become a member voluntarily. A monthly contribution is to be made by the members. Uponretirement employee will be eligible to get an amount equivalent to his total "Contribution" alongwith simple interest at a specified rate from the date of joining the scheme or `10,000/- whicheveris higher. In case of death of an employee, the nominee of the member shall be eligible to get adetermined amount of compensation out of the fund, if the employee was the member of the scheme.The charge to the statement of Profit and loss for the year ended is `638.10 Lakhs (P.Y. `734.09 lakhs).The balance of such fund as at 31st March, 2018 and 31st March, 2017 is `16405.72 Lakhs and`16339.11 Lakhs respectively.

C Defined Benefits Plan

Gratuity

The Group provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employeeswho are in continuous service for a period of 5 years. are eligible for gratuity. The amount of gratuitypayable on retirement/termination is the employees last drawn basic salary per month computedproportionately for 15 days salary multiplied for the number of years. of service. The gratuity planis a funded plan and the Group makes contributions to LIC. The Group does not fully fund the liabilityand maintains a target level of funding to be maintained over a period of time based on estimationsof expected gratuity payments.

Scheme is managed through own Gratuity Trust. The liability for gratuity is recognized on the basisof actuarial valuation.

D Risk Exposure

These plans typically expose the Group to actuarial risks such as: investment risk, interest rate risk,longevity risk and salary risk.

247



Investment risk The Present value of the Defined benefit obligation is calculated using the discountrate determined by LIC of India as the fund is being managed under GratuityAssurance Plan

Interest risk A decrease in the interest rate will increase the plan liability while increasein interest rate will decrease the plan liability

Salary risk The present value of obligation is calcuated by reference to future salary.

No other post-retirement benefits are provided to these employees.

In respect of the above plans, the most recent actuarial valuation of the plan assets and the presentvalue of the defined benefit obligation were carried out as at 31st March, 2018 by a member firm ofthe Institute of Actuaries of India. The present value of the defined benefit obligation, and the relatedcurrent service cost and past service cost, were measured using the projected unit credit method .

The principal assumptions used for the purposes of the actuarial valuations were as follows:.

Assumptions (Current Period)Particulars For the year ended 31st March

2018 2017Expected Return on Plan Assets 8.00% 8.50%Rate of Discounting 7.50% 8.00%Rate of Salary Increase 10.00%Rate of Employee Turnover 1 to 3 % Depending on Age

( ` in Lakhs ) Particulars As on As on

31.03.2018 31.03.2017GratuityI) Reconciliation in present value of obligations (PVO) -defined benefit obligation:Opening defined benefit obligation 151,960.14 137,834.15Current Service Cost 6,946.12 4,843.52Past service cost, including losses / (gain) on curtaiments 2,255.97 -Interest Cost 12,156.81 11,026.73Remeasurement (gains)/losses: Actuarial gains and losses arising from experience adjustments 51,235.15 13,141.61Benefits paid (15,783.86) (14,885.86)Closing defined benefit obligation 208,770.33 151,960.14Current obligation 22,110.35 15,150.30Non-Current obligation 186,659.99 136,809.84

248



II) Change in fair value of assets :

Opening fair value of plan assets 106,232.77 78,304.91

Expected return on plan assets 8,498.63 7,098.39

Remeasurement gain (loss):

Excess Return on plan assets (excluding amounts included innet interest expense) including actuarial (gains) / losses arising 2,464.57 (295.60)from experience adjustments

Contributions by the employer 101,005.36 36,010.97

Benefits paid (15,783.86) (14,885.86)

Closing fair value of plan assets 202,417.48 106,232.82

III) Funded plans in deficit:

Present value of funded defined benefit obligation 208,770.33 151,960.14

Fair Value of planned assets at end of year 202,417.47 106,232.77

Funded status Funded Funded

Net liability arising from defined benefit obligation 6,352.87 45,727.37

IV) Service Cost

Current Service cost 6,946.12 4,843.52

Past service cost and (gain)/loss from settlements 2,255.97 -

Net Interest expense 3,652.83 3,917.33

Total Expenses tobe recognised in P&L A/c 12,854.92 8,760.85

Components of defined benefit costs recognised inEmployee Benefit expenses Remeasurement on thenet defined benefit liability:

Actuarial (gains) / losses arising from experience adjustments,changes in demographic assumptions and changes 48,770.57 13,437.39in financial assumptions

Total Expenses to be recognised in OCI 48,770.57 13,437.39

Total Expense (Provision for the Period) 61,625.49 22,198.24

V) Category of assets as at 31st March:

Group Gratuity Cash Accumulation Scheme (Traditional Fund)

-Life Insurance Corporation 202,417.47 106,232.77

Net Current Assets

Total Gratuity 202,417.47 106,232.77

249


CONSOLIDATED FINANCIAL STATEMENTS 2017-18( ` in Lakhs )

On Plan On PlanExperience Adjustment Liabilities - Assets -

Loss/(Gain) Loss/(Gain)As on 31st March,2018 51,235.15 -As on 31st March,2017 13,141.61 -As on 31st March,2016 4,249.35 -

Maturity Analysis of Projected Benefit Obligation are as under: ( ` in Lakhs )Gratuity As at 31st As at 31st

March, 2018 March, 2017GratuityLess than One year 21,816.86 15,150.30One to Three Years 41,040.82 24,772.46Three to Five Years 29,585.21 21,950.34More than Five Years 116,033.96 90,087.05

Sensitivity analysis for Gratuity ( ` in Lakhs )Significant Actuarial Assumptions As at 31st As at 31st

March, 2018 March, 2017Discount Rate

- Impact due to increase of 50 basis points (8,578.85) (4,955.81)- Impact due to decrease of 50 basis points 9,248.39 5,799.91

Salary increase- Impact due to increase of 50 basis points 9,226.56 5,402.55- Impact due to decrease of 50 basis points (8,637.78) (4,014.48)

The sensitivity analysis presented above may not be representative of the actual change in the definedbenefit obligation as it is unlikely that the change in assumptions would occur in isolation of oneanother as some of the assumptions may be correlated.Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefitobligation has been calculated using the projected unit credit method at the end of the reportingperiod, which is the same as that applied in calculating the defined benefit obligation liability recognisedin the balance sheet.

44 Segment reportingOperating Segment

A The Group's operations fall under segment namely "Generation, Transmission, Distribution and BulkPurchase & Sale (Trading) of Power", taking into account the different risks and returns, the organizationstructure and the internal reporting systems.

250


CONSOLIDATED FINANCIAL STATEMENTS 2017-18B Information about major customers

The Group is not reliant on revenues from transactions with any single external customer and doesnot receive 10% or more of its revenues from transactions with any single external customer.

C Information about geographical areas:

Segment revenue from "Sale of Power" represents revenue generated from external customers whichis fully attributable to the Group's country of domicile i.e. India.

All assets are located in the Group's country of domicile.

D Information about products and services:

The Group derives revenue from sale of power. The information about revenues from externalcustomers about each product is disclosed in Note no.32 of the financial statements.

45 Financial instruments Disclosure

A Capital Management

The Group's objective when managing capital is to:

1. Safeguard its ability to continue as going concern so that the Group is able to provide maximumreturn to stakeholders and benefits for other stakeholders and

2. Maintain an optimal capital structure to reduce the cost of capital.

The Group's financial management committee reviews the capital structure on a regular basis. Aspart of this review, the committee considers the cost of capital, risks associated with each class ofcapital requirements and maintenance of adequate liquidity.

Gearing Ratio

The gearing ratio at end of the reporting period is as follows: ( ` in Lakhs )


Net debt 1,526,730.32 1,761,729.26

Total equity 3,054,907.80 2,601,443.73

Net debt to equity ratio 0.50 0.68

1. Debt is defined as all long term debt outstanding + current maturities debt outstanding in lieu oflong term debt.

2. Equity is defined as Equity share capital + Other equity + Deferred government grant and consumercontribution

251


CONSOLIDATED FINANCIAL STATEMENTS 2017-18B Categories of financial instruments ( ` in Lakhs )


Financial assets

Measured at fair value through Profit or Loss (FVTPL) - -(mandatorily measured)

Measured at amortised cost

(a) Trade and other receivables 320,838.48 330,145.68

(b) Cash and cash equivalents 166,297.44 61,729.93

(c) Bank 13,766.96 3,463.80(d) Loans 18,788.09 20,553.34

(e) Other financial assets 469,127.53 581,784.11

Measured at FVTOCI

(a) Investments in equity instruments (designated on transition date) 38,402.45 32,882.40

(b) Investment in Gol Special Bond 12,485.02 12,810.84Accounted under Equity Method

(a) Associate- GIPCL 63,888.94 60,008.91

(b) Joint Venture - MGCL - -Financial liabilities

Measured at amortised cost(a) Borrowings 1,257,919.50 1,506,461.06

(b) Trade Payables 634,377.73 566,131.30

(c) Other Financial Liabilities 1,710,134.33 1,506,103.10

Financial Guarantee Contracts

C Financial Risk Management Objectives

The Group's principal financial liabilities comprise borrowings, trade and other payables. The mainpurpose of these financial liabilities is to finance the Group's operations, routine and projects capitalexpenditure. The Group's principal financial assets include loans, advances, trade and other receivablesand cash and cash equivalents that derive directly from its operations.

The Group's activities expose it to a variety of financial risks viz regulatory risk, interest rate risk,credit risk, liquidity risk etc. The Group's primary focus is to foresee the unpredictability of financialmarkets and seek to minimize potential adverse effects on its financial performance. The Group'ssenior management ovesees the management of these risks. It advises on financial risks and theappropriate financial risk governance framework for the Group.

252


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Regulatory Risk

The Group's substantial operations are subject to regulatory interventions, introduction of new lawsand regulations including changes in competitive framework. The rapidly changing regulatory landscapeposes a risk to the Group.

Regulations are framed by Central / State Regulatory Commission as regard to Standard of Performancefor utilities, Terms & Conditions for determination of tariff, obligation of Renewable Energy purchase,grant of Open Access, Deviation Settlement Mechanism, Indian Electricity Grid Code / Gujarat GridCode, Power Market Regulations etc. Moreover, the State / Central Government are notifying variousguidelines and policy for growth of the sector. These Policies / Regulations are modified from timeto time based on need and development in the sector. Hence the policy / regulation is not restrictedonly to compliance but also have implications for operational performance of utilities, Return onEquity, revenue, competitiveness, scope of supply as consumer of 1 MW and above have an optionto select the supplier, ceiling on trading margins, Regulatory charges, market etc.

To protect the interest of Utilities, State Utilities are actively participating while framing of Regulations.ARR is regularly filed & FPPPA is levied on quarterly basis for any increase/decrease in power purchasecost.

Foreign Exchange Risk

The Subsidiary Company GETCO is exposed to foreign exchange risks arising from various currencyexposures, primarily with respect to the USD and EURO. Foreign exchange risks arise from futurecommercial transactions and recognized assets and liabilities, when they are denominated in a currencyother than Indian Rupee.

The Subsidiary Company GETCO's exposure with regards to foreign exchange risk which are not hedgedis given below. However, these risks are not significant to the company's operation.

Nature of transactions Currency As at 31st As at 31stMarch, 2018 March, 2017

Loan from KfW EURO 3,728,352.00 -

Loan from ADB USD 60,929,013.54 60,981,693.36

Interest and commitment charges payable - ADB USD 377,418.46 284,228.21

Interest and commitment charges payable - KfW Loan EURO 41,979.00 3,614.00

Interest Rate Risk Management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates. The Group's exposure to the risk of changes in marketinterest rates in negligible as primarily to the Group's long-term debt obligations with fixed interestrates.

253


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Credit Risk Management

Credit risk arises from cash and cash equivalents and deposits with banks as well as customers includingreceivables. Credit risk management considers available reasonable and supportive forward-lookinginformation including indicators like external credit rating (as far as available), macro-economicinformation (such as regulatory changes, government directives, market interest rate).

The concentration of credit risk is limited due to the fact that the customer base is large. None ofthe customers accounted for more than 10% of the receivables and revenue for the year ended31st March, 2018 and 31st March, 2017.

Bank balances are held with reputed and creditworthy banking institutions.

Liquidity Risk Management

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associatedwith its financial liabilities that are required to be settled by delivering the cash or another financialasset. The Group manages liquidity risk by maintaining sufficient cash and cash equivalents includingbank deposits and availability of funding through an adequate amount of committed credit facilitiesto meet the obligations when due. The management prepares annual budgets for detailed discussionand analysis of the nature and quality of the assumption, parameters etc. Daily and monthly cashflows are prepared, followed and monitored at senior levels to prevent undue loss of interest andutilize cash in an effective manner.

The following tables detail the Group's remaining contractual maturity for its non-derivative financialliabilities with agreed repayment periods. The information included in the tables have been drawnup based on the undiscounted cash flows of financial liabilities based on the earliest date on whichthe Group can be required to pay. The tables include both interest and principal cash flows. Thecontractual maturity is based on the earliest date on which the Group may be required to pay.

( ` in Lakhs )

Less than Between MoreParticulars 1 year 1 and than Total

5 years 5 yearsAs at 31st March, 2018Non - Current Financial LiabilitiesBorrowings - 817,081.77 434,315.86 1,251,397.63Trade Payables - - 85.29 85.29Other Financial Liabilities - 16,475.55 525,184.03 541,659.59

- 833,557.32 959,585.18 1,793,142.51Current Financial LiabilitiesBorrowings 6,521.87 - - 6,521.87Trade Payables 634,292.44 - - 634,292.44

254



Other Financial Liabilities 1,168,474.74 - - 1,168,474.74 1,809,289.05 - - 1,809,289.05

Total financial liabilities 1,809,289.05 833,557.32 959,585.18 3,602,431.56As at 31st March, 2017Non - Current Financial LiabilitiesBorrowings - 1,051,744.19 435,417.06 1,487,161.25Trade Payables - - 85.29 85.29Other Financial Liabilities - 16,861.13 475,642.73 492,503.87

- 1,068,605.32 911,145.09 1,979,750.41Current Financial Liabilities

Borrowings 19,299.81 - - 19,299.81Trade Payables 566,046.00 - - 566,046.00Other Financial Liabilities 1,013,599.23 - - 1,013,599.23

1,598,945.04 - - 1,598,945.04Total Financial Liabilities 1,598,945.04 1,068,605.32 911,145.09 3,578,695.45

The Group has access to Cash Credit facilities as described below, of which ̀ 2,50,980.78 Lakhs were unusedat the end of the reporting period (as at 31st March, 2017 `2,44,228.33 Lakhs). The Group expects tomeet its other obligations from operating cash flows and proceeds of maturing financial assets.

( ` in Lakhs )

Secured Cash Credit Facility, As at 31st As at 31streviewed annually and payable at call: March, 2018 March, 2017

Amount used 6,519.22 13,271.67

Amount unused 250,980.78 244,228.33

D Fair value measurement

Fair value of the Group's financial assets on a recurring basis:

Some of the Group's financial assets are measured at fair value at the end of each reporting period.The following table gives information about how the fair values of these financial assets are determined.

(a) Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets/ Fair value as at Fair Valuation technique(s)financial 31st March, 31st March, value and key input(s)liabilities 2018 2017 hierarchyInvestment in Equity 32,219.93 27,545.92 Level 1 Quoted bid prices from StockInstruments (quoted) exchange-NSE / BSE

255



Investment in 12,485.02 12,810.84 Level 1 Quoted bid prices from StockGovernement Securities exchange-NSE / BSE

Investment in Equity 6,182.52 5,336.48 Level 3 Valuation techniques for whichInstruments (unquoted) the lowest level input that is

significant to the fair valuemeasurement is unobservable.

(b) Financial assets and liabilities at amortised costThe carrying amounts of cash and cash equivalent, other bank balances, trade receivables, loans,other financial assets, current borrowings, trade payables, other financial liabilities are consideredto be the same as their fair values, due to their short-term nature.

46 Disclosure under Indian Accounting Standard 36 - Impairment of AssetsIn accordance with the Indian Accounting Standard (Ind AS-36) on "Impairment of Assets" the Groupduring the year carried out an exercise of identifying the assets that may have been impaired in respectof cash generating unit in accordance with the said Indian Accounting Standard.Based on the exercise, and as per Accounting policy the Subsidiary Company GSECL has carriedImpairment test for the year under consideration and ̀ 519.43 lakhs (PY ̀ 33075.10 lakhs) is recognisedas impairment loss.

47 The subsidy claims on Government of Gujarat are made by Gujarat Urja Vikas Nigam Limited (GUVNL),the Holding Cpmpany on behalf of our Group including all other Distribution Subsidiaries. The subsidyreceivable balances are recorded, reflected and presented as such in GUVNL's standalone financialstatements. Subsidies being government grants are recognised as revenue in the Statement of Profitor Loss in accordance with the accounting policy on government grants as stated in Note 1 (D) (7)to the financial statements.The Holding Company has reviewed the status of subsidies receivable as of 31st March, 2018 of`3,42,141.57 Lakhs (31st March, 2017 : `4,66,363.46 Lakhs) in accordance with its policy on financialinstruments and does not expect any credit loss.

48 OPGSAs Per requirements of the Electricity Act, 2003, captive power units are exempted from cross subsidyand additional surcharge. Such exemption is available as and when captive unit status is confirmedby the Chief Electrical Inspector, Gandhinagar based on factual records verification. Pursuant to grantingof Captive Status by the Chief Electrical Inspector (CEI), Gandhinagar to the Power Plant of M/s OPGSGujarat Pvt Ltd and its captive users situated in the State of Gujarat for F.Y 2015-16, 2016-17 and2017-18, the users situated in the jurisdiction of the Group have become eligible for exemptionsavailable in accordance with the orders of the CEI, Gandhinagar. Accordingly, the Cross-SubsidySurcharge and Additional Surcharge recovered during the said years is to be refunded alongwithdifferential Electricity Duty.Out of the aforesaid, refundable amounts aggregating to `18033.66 Lakhs have been recognised asa current liability in the current year financial statements with a consequential adjustment of ̀ 18620.90Lakhs in the revenues.

256


CONSOLIDATED FINANCIAL STATEMENTS 2017-1849 Contingent liabilities, Contingent Assets and Capital commitments (to the extent not provided for):

A Claims against the Group/ disputed demands not acknowledged as debt:- ( ` in Lakhs )


March, 2018 March, 2017A. Contingent Liabilities not provided in respect of :I. Purchase 130.29 157.67II. Leasing Finance availed by erstrwhile GEB 1,703.00 1,703.00III. Power Purchase 64,391.00 78,921.00IV. Stamp Duty on mortgage deed for loans availed 1,198.52 1,108.00 by erstwhile GEB from LICV. Employees 89,259.50 74,188.50VI. Disputed matters of Income Tax, Service Tax, 73,029.30 83,076.38 VAT & etc. (including against erstwhile GEB)VII. Disputed demand of Income Tax against erstwhile GEB Not AscertainableVIII. Claims against Companies not acknowledged as debts 53,842.06 42,492.06IX. Demand raised by Irrigation Department, Water 176,788.13 169,790.58 Reservation Charges & InterestX. Facility Management Charges - 1,742.392. Other money for which the Companies are contingently liablei. Letter of Credit 151,639.42 151,799.35ii. Guarantees issued by Banks & others on behalf of the Company 38,870.21 29,775.16Associate1. Claims against the Company not acknowledged as debtsi. Fuel Cost & Transportation Charge 156.34 156.34ii. Employees 0.27 0.27iii. Disputed matters of Income Tax, Excise duty & Property Tax 814.24 712.00iv. Claims against Company w.r.t. Mine Development 2,638.21 2,638.21v. Demand for Water Reservation Charges & Interest from 235.89 199.55 Narmada Water Resources and Water Supply Dept.vi. Claims in case of land acquisition 193.72 201.76vii. Others 5,178.25 1.08Joint Venture1. Claims against the Company not acknowledged as debtsA i. Claims against Company by M/s. AMPL regarding 15,991.60 15,991.60

Development of Coal BlockTotal 676,059.95 654,654.90

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CONSOLIDATED FINANCIAL STATEMENTS 2017-18B A Contingent Asset is a possible asset that arises from past events and whose existence will be confirmed

only by the occurrence or non-occurrence of one or more uncertain future events not wholly withinthe control of the entity. During the normal course of business, several unresolved claims are currentlyoutstanding. The inflow of economic benefits, in respect of such claims cannot be measured dueto uncertainties that surround the related events and circumstances, except the Contingent assetdisclosed by Subsidiary Company GSECL:

Contingent Assets ( ` in Lakhs )


Coal Claims related to its Quality 16,692.00 -

Total 16,692.00 -

C Capital Commitments ( ` in Lakhs )


A. Capital Commitments

Estimated amount of Contract remaining to be executed on 314,661.52 395,110.74capital accounts (Net of Advances)

Other Commitments 4,007.31 3,304.06

Associate

A. Capital Commitments 7,535.24 8,274.49

B. Other Commitments 2,581.84 910.41

Joint Venture

A. Capital Commitments - -

B. Other Commitments - -

50 CSR Expenditure ( ` in Lakhs )



The CSR expenditure comprises the following:

a) Gross amount required to be spent by the Group during the year 2,115.37 1,642.12

b) Amount spent during the year 825.32 615.47

258


CONSOLIDATED FINANCIAL STATEMENTS 2017-18c)

For the year ended 31-03-2018 For the year ended 31-03-2017Yet to be Yet to be

Particulars In Cash paid Total In Cash paid Totalin cash in cash

(i) Construction/acquisition 149.46 - 149.46 150.26 - 150.26of any asset

(ii) On purpose other than 601.61 74.25 675.86 465.21 - 465.21(i) above

Total 751.07 74.25 825.32 615.47 - 615.47

d) For CSR amount which has remained unspent during the year, suitable reasons would be providedin the Directors' Report.

51 The Group has a system of physical verification of Inventory, Fixed assets and Capital Stores in a phasedmanner to cover all items over a period of three years Adjustment differences, if any, are carriedout on completion of reconciliation.

52 The Group did not have any long term contracts including derivative contracts for which there wereany material foreseeable losses. Further, some balances of Trade and other receivables, Trade andother payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, will beaccounted for on confirmation/reconciliation of the same, which will not have a material impact.

53 Research & Development Expenditure as per GUVNLThe details of Revenue Expenditure & Capital Expenditure incurred on Research and Developmentis as under: ( ` in Lakhs )


March, 2018 March, 2017Capital Expenditure :Computers and related Equipments 15.28 -Less: Depreciation for the year 1.14Total Capital Expenditure (Net of Depreciation) : 14.14 -Revenue Expenditure :Employee Benefits 105.70 -

Material Consumed 0.58 -Administrative and Misc. Expenses 30.24 -Depreciation 1.14 -

Total Revenue Expenditure : 137.67 -Total Research and Development Expenditure : 151.81 -

Research and Development grant related income is disclosed under Note No. 33.

259


CONSOLIDATED FINANCIAL STATEMENTS 2017-1854 Foreign Currency Loan

During the year, GETCO has taken Foreign Currency Loan from Asian Development Bank (ADB)amounting to USD 31.58 lakhs (P.Y. USD 83.94 lakhs). Availment of Loan is Complete. The Total Loanavailed from ADB for Loan no. 2778-IND amounts to USD 656.16 lakhs. Interest and commitmentcharges for the year 2017-18 amounting to USD 11.25 lakhs (P.Y. USD 7.73 lakhs) is shown underFinance Cost.

Foreign currency fluctuation Gain / (loss) related to ADB Loan no. 2778-IND as on 31.03.2018 is `51.99lakhs (P.Y. (`1019.51 lakhs)). Foreign currency fluctuation Loss is accounted under the Finance Costas the projects are completed in FY 2016-17.

Also during the year, GETCO has taken Foreign Currency Loan from KfW amounting to Euro 37.28lakhs (P.Y. Nil). Availment of Loan is in progress. Interest and commitment charges for the year 2017-18 amounting to Euro 0.63 lakhs (P.Y. Euro 0.03 lakhs) is shown under Capital Work In Progress. Foreigncurrency fluctuation Gain / (loss) related to KfW Loan as on 31.03.2018 is `135.95 lakhs (P.Y. `Nil)).Foreign currency fluctuation Loss is capitalised to the dedicated projects funded by KfW as the projectare under implementation stage.

55 Capital Work In Progress by GETCO

The subsidiary company GETCO has provided General Establishment Charges (GEC) and Head OfficeSupervision Charges (HOSC) on amount of `4780.48 lakhs from current year on the expenditurerecorded under the head unbilled capital work in progress.

The rates of HOSC have been fixed as @ 5% for Construction division & @ 17% for Transmissiondivision, these are loaded on the cost of Material and labour incurred during the year.

In case of used transformers withdrawn from fixed assets and are being used in capital projects, thesame are shown as CWIP at Net Value and accordingly General Establishment Charges (GEC) andHead Office Supervision Charges (HOSC) for the year are allocated on it.

The company has proportionately loaded borrowing costs @ 4.83% (Previous Year 5.349%) on thevalue of opening Capital Work in Progress. During the year, the company has capitalized `10834.50towards the interest on the funds for meeting capital expenditure requirement.

56 Captive Mining by GSECL

a Ministry of Coal, Government of India has allotted the Machhakata & Mahanadi coal block in Odishajointly to GSECL and MSPGCL for the captive coal mining under Government Dispensation Route.The coal produced from the block was to be shared between GSECL and MSPGCL in the ratio of 40%and 60% respectively. The Joint Venture Group in the name of "Mahaguj Collieries Limited" (MGCL)has been incorporated on 01-11-2006 by MSPGCL and GSECL for development of Coal Block andM/s Adani Enterprises Ltd. (AEL) was appointed as MDO. The Hon'ble Supreme Court vide its orderdated 24-09-2014 has cancelled the allocated coal block. Subsequent to cancellation of the Coal Block,the MDO M/s Adani Enterprises Ltd. has raised a claim of `399.79 Crores against MGCL for theexpenditure incurred by them for the project. M/s AEL has invoked the Arbitration Proceeding due

260


CONSOLIDATED FINANCIAL STATEMENTS 2017-18to denial of claim by MGCL. with application u/s 17 for interim relief of `44.70 Crores to the ArbitralTribunal on 10th May, 2017. The Arbitral Tribunal has passed the first Interim Award and directedMGCL to pay to M/s. AEL a sum of ` 3279.60 Lakhs which is challenged by MGCL in the BombayHigh Court.

b Nominated authority, Ministry of Coal, Govt. Of India, declared the GSECL as Allottee of the GarePalma Sector I Coal Mine, in Raigarh District, Chattisgarh and Allotment Agreement was signed on30th March, 2015 and all the allotment conditions as per Allotment Agreement were completed bythe Group on 24/04/2015. GSECL has submitted Bank Guarantee of `29,700 Lakhs to the NominatedAuthority, Ministry of Coal, GOI as per the allotment conditions. GSECL has incurred pre-operativeexpenditure of `10,281.00 Lakhs (P.Y. `9,772.49 Lakhs) for the same upto March,2018 which includespayment of ̀ 6,514 Lakhs made to prior allottee of the mine and ̀ 2,500 Lakhs made to MOC as upfrontfee as per allotment agreement. Finalization of tender for Mining Developer and Operator is underprocess.

57 Regarding outstanding dues of M/s. Essar Steel India Limited:M/s. Essar Steel India Limited (ESIL) violated terms and conditions of the Minutes of Meeting (MoM)dated 01.02.2010 among Principal Secretary, Energy and Petrochemical Department (E&P Department),Government of Gujarat (GOG), GUVNL, GETCO, Chief Electrical Inspector, Essar Group & BhanderPower Ltd., the Group, has therefore, issued supplementary bill of `2311.02 crores to ESIL as perthe conditions of the mom for 2020.99 MUs during F.Y 2011-12. Subsequently, as per directives ofE&P Department vide their letter dated 05.01.2012, the revised supplementary bills of `192.59 croresfor 168.42 MUs was issued to ESIL till the case of total claim of original supplementary bill is finallysettled for breach of said MoM.During FY 2011-12, pending final settlement of the total claim as shown above and considering theprovisions of Accounting Standard-9 relating to Revenue Recognition issued by the Institute ofChartered Accountants of India (ICAI) and also as ESIL paid the amount of `192.59 crores of revisedsupplementary bills, revenue to the extent of `192.59 crores was recognized in the books andrecognition of balance Revenue of `2118.43 crores was deferred till the final settlement is madeby the E&P department, GOG, or appropriate judicial forum.In this regard, ESIL filed appeal under Section 127 of the Electricity Act before the Chief ElectricalInspector. The Chief Electrical Inspector passed order dated 01.11.2013 for revising bill for 25.23 MUsand for refunding the balance amount. Aggrieved by the order passed by the Chief Electrical Inspector,the Group challenged the order vide SCA No. 2859/2014 on 19.02.2014 before the Hon'ble High Court,Gujarat.The Hon'ble High Court of Gujarat has passed judgment on 22.01.2015 directing the refund of theexcess amount paid by M/s. ESIL pursuant to the revised supplementary bills over and above thequantity of unauthorized power used by M/s. ESIL. Aggrieved by the order, the Group challengedthe judgment vide LPA no. 465/15 & LPA no. 466/15. The High Court of Gujarat allowed the aforesaidLPAs filed by the Group and passed order in favour of the Group on 17.7.2015. Accordingly, orderpassed by the Chief Electrical Inspector dated 01.11.2013 as well as the judgement and order dated22.01.2015 passed by the learned single Judge have been quashed and set aside.

261


CONSOLIDATED FINANCIAL STATEMENTS 2017-18M/s. ESIL has challenged the aforesaid order and filed SLP Civil No.27920/2015 before Hon'ble SupremeCourt which is pending. Hence the Contingent liabilities are disclosed under note No. 49 which includesthe amount of `19258.54 lakhs of the SLP filed by M/s. ESIL.

Further to above, the amount of Cross subsidy surcharge relating to respective financial years tillF.Y 2016-17 has been assessed and accounted in books as receivable during relevant years whichhas been contested by M/s. ESIL as not payable by filing petition before GERC. M/s. ESIL had earlierfiled petition in the matter before the Central Electricity Regulatory Commission who dismissed thepetition on grounds that dispute raised falls within jurisdiction of GERC. Besides this claim whichhas been accounted in books as receivable, the Group also has other legal claims which are of arecurring nature, which have not been recognized and reflected in receivables as per the Group'saccounting policy in compliance with Ind AS.

The Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016(IBC) has been initiated against M/s Essar Steel Limited. The CIRP has been approved by the HonorableNational Group Law Tribunal, Ahmedabad and it is ongoing. The Group has filed its claim with thedesignated Resolution Professional for Rs. 5882.28 crores (including interest component of `2204.06crores ) for period upto 01.08.2017 and the same is of a recurring nature. The Management hasassessed the progress and status of CIRP including the number of bidders and the bid amounts andthe likely recovery of the Group's dues. Further, the Management also considered the provisionsof IBC as well as the broader experience of the insolvency proceedings. Notwithstanding the legaltenability of the Group's claims and litigation and without prejudice to the Group's rights to recoverthe aforementioned claims, the Management notes based on the facts and circumstances as of thedate of issue of these financial statements, the receivable to be irrecoverable. Hence, the Grouphas impaired the entire receivable of `440.40 crores as irrecoverable in these financial statementsin compliance with Ind AS 109 on "Financial Instruments". Accordingly the Balance of Trade Receivableis reduced to that extent.

58 Fixed Assets and Depreciation:

(i) Consequent upon unbundling of business of GEB, various lands & buildings of Group companies areshared / used by companies other than the owners. User charges thereof are not recovered or providedin absence of any mechanism for its determination and thus same cannot be quantified.

(ii) The Group has received the gross Fixed Assets as well as accumulated depreciation from erstwhileGEB vide the Notification by government. Accordingly the opening net block of all fixed assets hasbeen restated as on 31.03.2005. Further the depreciation has been accounted for subsequent yearsas per the depreciation policy.

As per Para 15 of Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations" Anentity shall measure a non-current asset (or disposal Group) classified as held for sale at the lowerof its carrying amount and fair value less costs to sell. However, the Group has not determined thefair value less cost to sell for assets retired from active use as the management is of the opinionthat the fair value of the same is higher than the Net Book Value due to very old assets and upwardtrend in scrap rates. As a result of this, Group has not recognized any expected loss, if any, in the

262


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Statement of Profit and Loss. Discarded assets are treated as 'assets classified as held for sale' onand from the date of approval by competent authority.

(iii) Land held under lease is amortized as per the rate notified by the GERC.

59 Long Term Contracts

The Company did not have any long term contracts including derivative contracts for which therewere any material foreseeable losses. Further, some balances of Trade and Other Receivables, Tradeand Other Payables and Loans are subject to confirmation/reconciliation. Adjustments, if any, willbe accounted for on confirmation/reconciliation of the same, which will not have a material impact.

60 Prior period Errors as per GSECL

The Group uses coal in its thermal power stations (TPS) which when acquired is recorded as inventory.Inventory of coal and consequently consumption of coal is based on technical estimates given thenature of item and the storage conditions. In the current year, there was a full coal stock consumptionin Wanakbori and Ukai TPS which led to discovery and recovery of scattered/piled stocks in excessof the inventory reflected in the financial statements. The Group notes that such excess inventorytraced is on account of technical mistake in recording of inventory and consumption in the earlieryears, and it is not practicable to determine the specific period in which such inventory was understated.This led to over statement of the amount of consumption of coal and the amount of sale of powerin the earlier years However there was no effect on the profits of any earlier period as fuel costinvoices were raised at the rate which approximate the actual cost of consumption. The Group hasdetermined the value of the scattered/piled stocks of `27,265 Lakhs based on the average coalconsumption rate for the financial year 2016-17. Given that the period specific effects are impracticableto determine, the Group has restated assets and liabilities as on March 31, 2017 as per requirementof Ind AS - 8 "Accounting Policies, Changes in Accounting Estimates and Errors" by increasing theamount of inventory and liability to customer with `27,265 lakhs. As there is no impact on profiton account of correction of this error, balance of equity has not been restated.

61 The Group has assessed applicability of Appendix C of Ind AS - 17 "Leases" with respect to its powerpurchase agreement (PPA) for its power generation plants. In assessing the applicability, judgementis required to evaluate the right to use the asset the underlying asset, substance of the transactionsand other significant terms and conditions of the arrangements to conclude whether the arrangementmeets the criteria under Appendix C. The Group has noted and considered the provisions of theElectricity Act, 2003, terms of its Power Purchase Agreement, power sector as organized in Gujarat,the nature and extent of regulation of the power sector etc. The Group has specifically consideredthe nature of the arrangement in terms of the PPA entered and it notes that Gujarat Urja Vikas NigamLimited (GUVNL), the holding Group, is purchasing power for four distribution licensees - MadhyaGujarat Vij Company Limited (MGVCL), Uttar Gujarat Vij Company Limited (UGVCL), Dakshin GujaratVij Company Limited (DGVCL) and Paschim Gujarat Vij Company Limited (PGVCL). The Company notesthat all these distribution licensees are fellow subsidiaries i.e. all are subsidiaries of GUVNL and allof the entities including the Companies are Gujarat State Government PSUs. The Group has particularlynoted from the PPA that the power procurer - GUVNL is authorized by the distribution licenses to

263


CONSOLIDATED FINANCIAL STATEMENTS 2017-18execute the PPA with the Group and this is a joint procurement arrangement involving multipleprocedures Based on the above factors, the Group concluded that the PPAs entered into are notarrangements that contain a lease.

62 Balance in respect of sundry creditors , sundry debtors , loans and advances (debit / credit) as at31.03.2018 have been taken as shown in the books of accounts and are subject to confirmation andreconciliation.

The deposit for electrification and service connections are transferred to Consumers ' Contributionon finalization of their bills.

The balances under the head Security Deposits from the consumer are subject to reconciliation withthe balances as per subsidiary records. As per the practice followed by the Group, interest on SecurityDeposits is provided only for balances of Security Deposit of regular consumers.

63 Exceptional Item:

Amount Receivable from Trade Receivables for wheeling charges includes an amount aggregatingto `36577.08 lakhs (P.Y. `36577.08 Lakhs) for period 2006 to 2011, due from M/s Essar Steel Limited.This is under litigation in the court of law. The Honorable High Court, Gujarat has passed order infavor of GETCO and currently matter is pending with Honorable Supreme Court. The Group has otherlegal claims including delayed payment charges of `49813.99 lakhs up to 31st March 2018, whichhave not been recognized and reflected in receivables as per the Group's accounting policy incompliance with Ind AS. The Corporate Insolvency Resolution Process (CIRP) under Insolvency andBankruptcy Code, 2016 (IBC) has been initiated against M/s Essar Steel Limited. The CIRP has beenapproved by the Honorable National Group Law Tribunal, Ahmedabad and it is ongoing. GETCO hasfiled its claim with the designated Resolution Professional. The Management has assessed the progressand status of CIRP including the number of bidders and the bid amounts and the likely recoveryof the Group's dues. Further, the Management also considered the provisions of IBC as well as thebroader experience of the insolvency proceedings. Notwithstanding the legal tenability of the Group'sclaims and litigation and without prejudice to the Group's rights to recover the aforementioned claims,the Management notes based on the facts and circumstances as of the date of issue of these financialstatements, the receivable to be irrecoverable in its likelihood. Hence, the Group has written off theentire receivable of `36577.08 lakhs in these financial statements.

The same is shown under the head Exceptional Items in Statement of Profit & Loss.

264


CONSOLIDATED FINANCIAL STATEMENTS 2017-1864. Related Party DisclosuresA. Name of related parties and description of relationship:

Name of Related Parties Nature of Relationship

Gujarat Industries Power Company Limited Associate CompanyMahaguj Collieries Limited Joint Venture Company of GSECLGujarat State Financial Services Limited Government Related EntityGujarat Urja Vikas Nigam LimitedShri Sujit Gulati, IAS (01.04.2017 to 31.03.2018) ChairmanShri Pankaj Joshi, IAS (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)Ms. Mona Khandhar, IAS Woman DirectorShri R N Singh Independent DirectorShri Bimal N Patel Independent DirectorShri Sanjeev Kumar, IAS DirectorShri Miling Torawane, IAS DirectorShri P J Mathew Independent DirectorShri S B Khyalia (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)Shri K M Bhuva (29.04.2017 to 31.03.2018) Key Management Personnel (KMP)Shri M B Parikh (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)Shri Parthiv Bhatt (01.04.2017 to 31.03.2018) Key Management Personnel (KMP)Gujarat State Electricity Corporation LimitedShri I. P. Gautam Nominee DirectorSmt. Mona Khandhar Nominee DirectorShri Sujit Gulati ChairmanShri K. M. Bhava Nominee DirectorShri Sanjeev Kumar Nominee DirectorShri Pankaj Joshi Nominee DirectorMr. P. H. Rana Independent DirectorMr. H. P. Desai Independent DirectorMr. N. N. Misra Nominee DirectorMr. M. B. Kaka Key Management Personnel (KMP)

(upto 28.02.2018)Mr. R. M. Bhadang Key Management Personnel (KMP)

(w.e.f 01.03.2018)Mr. V. P. Jani Key Management Personnel (KMP)Mr. Pradeep Dahake Key Management Personnel (KMP)Gujarat Energy Transmission Corporation LimitedShri B.B. Chauhan, Managing Director Key Management Personnel (KMP)Shri Nimesh A. Patel, General Manager (F&A) Key Management Personnel (KMP)Shri Nishant Shrivastava, Company Secretary Key Management Personnel (KMP)

265



Dakshin Gujarat Vij Company Limited

Ms. Ardra Agarwal,IAS Key Management Personnel (KMP)

Shri N.A. Dave Key Management Personnel (KMP)

Shri V.H. Vora Key Management Personnel (KMP)

Madhya Gujarat Vij Company Limited

Shri Rajesh Manjhu, IAS Key Management Personnel (KMP)

Shri K. R. Shah CFO

Shri K. M. Antani CS

Paschim Gujarat Vij Company Limited

Shri H R Suthar Key Management Personnel (KMP)

Shri Sandeep Kumar (Till the date 11th May,2016) Key Management Personnel (KMP)

Shri Kintu Kumar Malkan Key Management Personnel (KMP)

Shri Sudhir Bhatt Key Management Personnel (KMP)

Uttar Gujarat Vij Company Limited

Shri B. A. Shah, IAS Key Management Personnel (KMP)

Shri R.B. Kothari CFO

Shri N.M. Joshi CS

B. The following transactions were carried out with the related parties in ordinary course of businessduring the year: (` in lakhs)

Nature of Transaction KMP Government Total related Entity

Loan Received 20,000.00 20,000.00 - -

Gujarat State Financial Services Limited 20,000.00 20,000.00- -

Loan Repayment 129,820.25 129,820.25- -

Gujarat State Financial Services Limited 129,820.25 129,820.25- -

Water Charges 2,047.44 2,047.44 (2,424.93) (2,424.93)

Gujarat Water Supply and Sewearage Board 2,047.44 2,047.44(2,424.93) (2,424.93)

266



Remuneration paid to KMP / Directors: 561.76 - 561.76 (374.12) - (374.12)

Shri Sujit Gulati, IAS - - - - - -

Shri Pankaj Joshi, IAS 27.31 - 27.31 (12.74) - (12.74)

Smt. Shahmeena Husain, IAS - - - (9.16) - (9.16)

Shri S B Khyalia 30.02 - 30.02 (29.04) - (29.04)

Shri K M Bhuva 25.67 - 25.67 - - -

Shri M B Parikh 30.90 - 30.90 (26.42) - (26.42)

Shri Parthiv Bhatt 22.27 - 22.27 (18.55) - (18.55)

Shri Pradip Ramakrishna Rao Dahake 47.68 - 47.68- Short term employee benefit (23.43) - (23.43)

Shri V. P. Jani 24.24 - 24.24- Short term employee benefit (20.89) - (20.89)

Shri R. M. Bhadang 1.72 - 1.72- Short term employee benefit - - -

Shri M. B. Kaka 16.68 - 16.68-Short term employee benefit (24.13) - (24.13)

Shri M. B. Kaka 10.00 - 10.00- Post employment benefits - - -

Shri M. B. Kaka 21.66 - 21.66- Other Long Term benefits - - -

KMP- Shri B.B. Chauhan 28.34 - 28.34 (2.61) - (2.61)

KMP- Shri Nimesh A. Patel 23.85 - 23.85 (7.40) - (7.40)

KMP- Shri Nishant Shrivastava 15.50 - 15.50 (13.18) - (13.18)

267



Shri P.K. Solanki - - - (3.16) - (3.16)

Ms. Ardra Agarwal,IAS 11.75 - 11.75 (14.21) - (14.21)

Shri N.A. Dave 22.76 - 22.76 (21.12) - (21.12)

Shri V.H. Vora 20.17 - 20.17 (17.99) - (17.99)

Shri Rajesh Manjhu, IAS 17.74 - 17.74 (10.78) - (10.78)

Shri K. R. Shah 29.76 - 29.76 (26.29) - (26.29)

Shri K. M. Antani 24.24 - 24.24 (20.93) - (20.93)

Shri J J Gandhi- I/c Managing Director 3.23 - 3.23 - - -

Shri H R Suthar- Managing Director (till 31.1.2018) 12.99 - 12.99 (9.61) - (9.61)

Shri Kintu Kumar Malkan- GM (F&A) & CFO 23.33 - 23.33 (19.73) - (19.73)

Shri Sudhir Bhatt- Company Secretary 27.95 - 27.95 (20.76) - (20.76)

Shri B.A. Shah, lAS 17.04 - 17.04 - - -

Shri R.B. Kothari 24.96 - 24.96 - - -

Shri N.M. Joshi - - - (22.00) - (22.00)

Perquisites paid to KMP / Directors: 7.52 - 7.52 (3.76) - (3.76)

Shri Sujit Gulati, IAS - - - - - -

268



Shri Pankaj Joshi, IAS 2.26 - 2.26 - - -


Shri S B Khyalia 2.96 - 2.96 (2.86) - (2.86)

Shri K M Bhuva 2.30 - 2.30 - - -

Shri M B Parikh - - - - - -

Shri Parthiv Bhatt - - - - - -

Incidental Charges paid to KMP / Directors: 1.46 - 1.46 (0.90) - (0.90)

Shri L Chuaungo, IAS - - - (0.02) - (0.02)

Shri Sujit Gulati, IAS 0.13 - 0.13 (0.05) - (0.05)

Shri Pankaj Joshi, IAS 0.29 - 0.29 (0.11) - (0.11)


Shri Sanjeev Kumar, IAS 0.01 - 0.01 (0.05) - (0.05)

Shri Milind Torawane, IAS 0.14 - 0.14 - - -

Ms. Mona Khandhar, IAS 0.05 - 0.05 (0.01) - (0.01)

Shri R N Singh 0.27 - 0.27 (0.19) - (0.19)

Shri Bimal N Patel 0.12 - 0.12 (0.05) - (0.05)

269



Shri P J Mathew 0.03 - 0.03 (0.18) - (0.18)

Shri S B Khyalia 0.29 - 0.29 (0.17) - (0.17)

Shri K M Bhuva 0.13 - 0.13 - - -

Sitting Fees paid to Independent Directors: 2.71 - 2.71 (0.90) - (0.90)

Shri R N Singh 0.35 - 0.35 (0.35) - (0.35)

Shri Bimal N Patel 0.35 - 0.35 (0.25) - (0.25)

Shri P J Mathew 0.05 - 0.05 (0.30) - (0.30)

Shri P. H. Rana 0.89 - 0.89 - - -

Shri H. P. Desai 0.70 - 0.70 - - -

Shri N. N. Misra 0.37 - 0.37 - - -

Balances:

Payable 389,756.76 389,756.76 (148,910.35) (148,910.35)

Gujarat State Financial Services Limited 382,346.41 382,346.41 (141,500.00) (141,500.00)

Gujarat Water Supply and Sewearage Board 7,410.35 7,410.35 (7,410.35) (7,410.35)

a. Previous Year figures are mentioned in brackets.

b. The Company has not paid any remuneration to Chairman, Shri Sujit Gulati, IAS as he occupied theposition of Addl. Chief Secretary, Energy & Petrochemicals Dept., Govt. of Gujarat and was thereforedrawing salary from Govt. of Gujarat.

270


CONSOLIDATED FINANCIAL STATEMENTS 2017-1865 Additional Information on Consolidated Financial Statements under Schedule III of the Companies

Act, 2013.

Net Assets i.e. Total Assets Share inminus Total Liabilities Profit or Loss

Particulars As % of Amount As % of AmountConsolidated (` in Lakhs) Consolidated (` in Lakhs)

ParentGujarat Urja Vikas Nigam Ltd. 77.47% 1,773,355.86 9.72% 11,568.28SubsidiaryGujarat State Electricity 6.54% 149,607.12 19.22% 22,877.32Corporation LimitedGujarat Energy Transmission 9.21% 210,915.50 31.56% 37,572.02Corporation LimitedDakshin Gujarat Vij Company Limited 2.27% 52,056.95 7.94% 9,447.48Madhya Gujarat Vij Company Limited 1.47% 33,605.64 7.82% 9,304.80Paschim Gujarat Vij Company Limited -0.88% (20,071.99) 11.50% 13,687.21Uttar Gujarat Vij Company Limited 1.12% 25,657.08 8.51% 10,132.02AssociateGujarat Industries Power Group Limited 2.79% 63,888.94 3.74% 4,456.11Joint VentureMahaguj Collieries Limited 0.00% - 0.00% -

Share in Other Share in TotalComprehesive Income Comprehensive Income

Particulars As % of Amount As % of AmountConsolidated (` in Lakhs) Consolidated (` in Lakhs)

ParentGujarat Urja Vikas Nigam Ltd. 11.99% 3,399.46 16.50% 14,967.74SubsidiaryGujarat State Electricity Corp. Limited -11.28% -3,197.96 21.70% 19,679.35Gujarat Energy Transmission Corp. Limited -27.64% -7,834.84 32.78% 29,737.18Dakshin Gujarat Vij Company Limited -15.95% -4,519.86 5.43% 4,927.62Madhya Gujarat Vij Company Limited -19.34% -5,480.13 4.22% 3,824.67Paschim Gujarat Vij Company Limited -18.93% -5,365.60 9.17% 8,321.60Uttar Gujarat Vij Company Limited -21.49% -6,091.20 4.45% 4,040.81AssociateGujarat Industries Power Company Limited 2.64% 749.05 5.74% 5,205.17Joint VentureMahaguj Collieries Limited 0.00% - 0.00% -

271


CONSOLIDATED FINANCIAL STATEMENTS 2017-1866 Statement of Management

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

b. Balance Sheet, Statement of Profit & Loss and Cash Flow statement read together with the schedulesto the accounts and notes thereon, are drawn up so as to disclose the information required underthe Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Groupas at the end of the year and results of the Group for the year under review.

67 Previous year figure have been regrouped, recast and restated wherever necessary for comparativepurpose.

68 Approval of Financial Statements

The Consolidated Financial Statements were approved for issue by the Board of Directors on 1stNovember, 2018.





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273


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Note

1 There is significant influence due to percentage(%) of Share Capital.

2 Net worth attributable to Shareholding as per latest Balance Sheet

Net Worth of GIPCL as above 238,068.70

Add: Proposed Dividend including Corporate Dividend Tax by GIPCL -

Net Worth after above adjustment 238,068.70

GUVNL's group share in above Net Worth 63,888.92

Net worth attributable to Shareholding as per latest Balance Sheet 63,888.92

3 The share in the Net loss for the year of the Joint Venture of Rs.(66.58) lakhs is restricted to theamount of carrying value of investments as the Company does not have any obligation for the liabilityof Joint Venture.

As per our Report of even date attached For and on behalf of the BoardFor Mukund & RohitChartered AccountantsFirm Registration No. 113375W

RAJ GOPAL, IAS PANKAJ JOSHI, IAS CA. S.B. KHYALIAChairman Managing Director Director (Finance)

DIN: 02252358 DIN:01532892 DIN:02470485

VINAY SEHGAL SHUBHADEEP SEN PARTHIV BHATTPartner General Manager (F&A) & CFO Company SecretaryMembership No. 109802


274


CONSOLIDATED FINANCIAL STATEMENTS 2017-18Form No. MGT-11 PROXY FORM

GUJARAT URJA VIKAS NIGAM LIMITEDRegd. Office: Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390007.

Name of the Member/s :

Address :

E-mail Id :

Folio No. :

I/We, being a Member/s of _________ shares of Gujarat Urja Vikas Nigam Limited, Vadodara hereby appoint,

1. Name:

Address:

E-mail Id: Signature: ,or failing him/her

2. Name:

Address:


3. Name:

Address:


as my/our proxy to attend and vote for me/us and on my/our behalf at the FOURTEENTH ANNUALGENERAL MEETING of the Company to be held on Saturday , the 29th December, 2018 at 1.00 p.m.at Registered Office and any adjournment thereof in respect of such resolutions as are indicatedbelow:

Resolutions

Ordinary Business

1 Adoption of Audited Financial Statements including Consolidated Financial Statements of the Companyfor the financial year ended 31st March, 2018, together with the Board's Report, the Report of Auditors'thereon and the Comments of the Comptroller & Auditor General of India, in terms of Section 143(6)of the Companies Act,2013.

2 Fixation of the remuneration payable to Statutory Auditors appointed by the Comptroller & AuditorGeneral of India (C&AG), New Delhi for the audit of accounts of the Company for the Financial Year2018-19

275



Special Business

3 Ratification of remuneration of Cost Auditors appointed for F.Y. 2018-19 - Ordinary Resolution

4 Appointment of Shri N.N.Misra (DIN 00575501) as Independent Director - Ordinary Resolution

5 Appointment of Shri R.C.Dhup (DIN 08275424) as Independent Director - Ordinary Resolution

6 Increase in Authorized Capital of the Company - Ordinary Resolution

Signed this _______________ day of _____________ 2018.

Signature of Shareholder

Signature of Proxy holder/s

Note : This form of Proxy in order to be effective should be duly completed and deposited at theRegistered Office of the Company, not less than 48 hours before the commencement of theMeeting.

Gujarat Urja Vikas Nigam Limited - Welcome to GUVNL · 2019-04-26 · 3 Gujarat Urja Vikas Nigam...

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