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Comparative Analysis Of Financial Performance Of Two Fiscal Years
Submitted in partial fulfilment for the Award of degree of Master of Business Administration
Submitted By: Manpreet kaur MBA 2nd Sem.
Submitted To: Ms. Nisha Goyal Assistant Professor
ARYA INSTITUTE OF ENGINEERING &TECHNOLOGY KUKUS, JAIPUR
The underlying aim of the project of summer training as an integral part of M.B.A program is to give presentation by the students on the issue. The topic of my project report is “Comparative Analysis of Financial Performance of Two Fiscal Years” contains complete information about it. Although we have tried our best to prepare this report an error free report , every effort has been made to offer the most authenticate position of accuracy. This report provides an opportunity to students to learn and expand their knowledge that we evaluate & compare financial position of JVUNL. They would be able to know the exact reason behind this, methods taken to tackle it and hence take necessary steps for it. The report also helps the student to devote his/her skill to analyze the problem to suggest alternative solutions, to evaluate them and to provide feasible recommendations on the provided data.
I express my sincere thanks to my project guide Ms. Nisha Goyal (Faculty of MBA) Department for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge her for extending her valuable guidance, support for literature, critical reviews of project and the report and above all the moral support she had provided me with all stages of this project. I would also like to thank the supporting staff of JVUNL,at for their help and cooperation throughout the project.
MANPREET KAUR MBA Third Semester
Table of Contents
1. Executive summary 2. Introduction of industry 3. Industry profile of Raj. Rajya Vidhut Utpadan Nigam 4. Research methodology
a. Title of study b. Duration of study c. Objective of study d. Type of research e. Scope of study f. Limitation of study 5. Facts & findings 6. Analysis & interpretation 7. SWOT 8. Conclusion 9. Recommdations & 10. 11. Appendix Bibliography
The electricity sector in India is predominantly controlled by the Government of India's public sector undertakings (PSUs). Major PSUs involved in the generation of electricity include National Thermal Power Corporation (NTPC), Damodar Valley Corporation (DVC), National Hydroelectric Power Corporation (NHPC) and Nuclear Power Corporation of India (NPCI). Besides PSUs, several state-level corporations, such as Maharashtra State Electricity Board(MSEB), Kerala State Electricity Board, (KSEB),in Gujarat (MGVCL, PGVCL, DGVCL, UGVCL four distribution Companies and one controlling body GUVNL, and one generation company GSEC), are also involved in the generation and intra-state distribution of electricity. The Power Grid Corporation of India is responsible for the inter-state transmission of electricity and the development of national grid. The Ministry of Power is the apex body responsible for the development of electrical energy in India. This ministry started functioning independently from 2 July 1992; earlier, it was known as the Ministry of Energy. The Union Minister of Power at present is Sushilkumar Shinde of the Congress Party who took charge of the ministry on the 28th of May, 2009.
India is world's 6th largest energy consumer, accounting for 3.4% of global energy consumption. Due to India's economic rise, the demand for energy has grown at an average of 3.6% per annum over the past 30 years. In June 2010, the installed power generation capacity of India stood at 162,366 MWwhile the per capita energy consumption stood at 612 kWH. The country's annual energy production increased from about 190 billion kWH in 1986 to more than 680 billion kWH in 2006.The Indian government has set an ambitious target to add approximately 78,000 MW of installed generation capacity by 2012.The total demand for electricity in India is expected to cross 950,000 MW by 2030. About 70% of the electricity consumed in India is generated by thermal power plants, 21% by hydroelectric power plants and 4% by nuclear power plants More than 50% of India's commercial energy demand is met through the country's vast coal reserves. The country has also invested heavily in recent years on renewable sources of energy such as wind energy. As of 2008, India's installed wind power generation capacity stood at 9,655 MW. Additionally, India has committed massive amount of funds for the construction of various nuclear reactors which would generate at least 30,000 MW .In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020.
Electricity losses in India during transmission and distribution are extremely high and vary between 30 to 45%. In 2004-05, electricity demand outstripped supply by 7-11%. Due to shortage of electricity, power cuts are common throughout India and this has adversely effected the country's economic growth. Theft of electricity, common in most parts of urban India, amounts to 1.5% of India's GDP. Despite an ambitious rural electrification program, some 400 million Indians lose electricity access during blackouts. While 80 percent of Indian villages have at least an electricity line, just 52.5% of rural households have access to electricity.
In urban areas, the access to electricity is 93.1% in 2008. The overall electrification rate in India is 64.5% while 35.5% of the population still live without access to electricity. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. Multi Commodity Exchange has sought permission to offer electricity future markets.
Grand Total Installed Capacity is 162,366 MW. 1. Thermal Power Thermal Power in India is mainly generated through coal, gas and oil. India coal power forms a majority share of the source of power supply in India. The electric power in India is generated at various thermal power stations in India. The power generated at these thermal power plants is then distributed all over India through a network of power grid at regional and national levels. The power ministry organization responsible for the thermal power management in India is the NTPC. Current installed capacity of Thermal Power (as of 06/2010) is 104,424 MW which is 63.7% of total installed capacity.
Current installed base of Coal Based Thermal Power is 86,003 MW which comes to 53% of total installed base.
Current installed base of Gas Based Thermal Power is 17,221 MW which is 10.61% of total installed base.
Current installed base of Oil Based Thermal Power is 1,199 MW which is 0.74% of total installed base.
The state of Maharashtra is the largest producer of thermal power in the country.
2. Hydro Power India was one of the pioneering countries in establishing hydro-electricpower plants. The power plant at Darjeeling and Shimsha (Shivanasamudra) was established in 1898 and 1902 respectively and is one of the first in Asia.
Various hydropower projects and hydro power plants have been set up by the ministry of power for generation of hydro power in India. Various dams and reservoirs are constructed on major rivers and the kinetic energy of the flowing water is utilized to generate hydroelectricity. The power generator here is the running water. The hydroelectric power plants and the hydro power generation companies are managed by the National Hydro Electric Power Corporation (NHPC). The installed capacity as of 2008 was approximately 36,877. The public sector has a predominant share of 97% in this sector.
Nuclear Power Currently, seventeen nuclear power reactors produce 4,560 MW (2.81% of total installed base). Nuclear Power in India is generated at huge nuclear power plants and nuclear power stations in India. A nuclear power plant generates the electricity using nuclear energy. All the nuclear power plants in India are managed by the Nuclear Power Corp of India Ltd (NPCL). The electricity from all India nuclear plants is distributed by the NPCL as per the nuclear power project scheme. Renewable Power Current installed base of Renewable energy is 16,492.42 MW which is 10.12% of total installed base with the southern state of Tamil Nadu contributing nearly a third of it (5008.26 MW) largely through wind power. Wind Power Wind Power in India is available in plenty as India witnesses high intensity winds in various regions due to the topographical diversity in India. Efforts have been
made to utilize this natural source of energy available free of cost for wind power generation. Huge wind energy farms have been set up by the government for tapping the wind energy by using gigantic windmills and them converting the kinetic energy of the wind into electricity by the use of power converters. The wind power advantages start with the very fact that a wind energy power plant does not
require much infrastructure input and the raw material i.e. wind itself is available free of cost.
Solar Power Solar Power in India is being utilized to generate electricity on smaller scale by setting up massive solar panels and capturing the solar power. Solar power India is also being utilized by the power companies in India to generate solar energy for domestic and small industrial uses. Biogas Production in India is still in its infancy stage. Also the number of biogas plants in India is still very low. India being the largest domestic cattle producer has plenty of biogas fuel and thus utilization of the fuel for mass biogas production by setting up more biogas plants in India would solve the power shortage problem to some extend. Transmission Transmission of electricity is defined as bulk transfer of power over a long distance at high voltage, generally of 132kV and above. In India bulk transmission has increased from 3,708ckm in 1950 to more than 165,000ckm today. The entire country has been divided into five regions for transmission systems Northern Region North Eastern Region Eastern Region Southern Region Western Region.
The Interconnected transmission system within each region is also called the regional grid.
The total installed generating capacity in the country is over 148,700MW and the total number of consumers is over 144 million. Apart from an extensive
transmission system network at 500kV HVDC, 400kV, 220kV, 132kV and 66kV which has developed to transmit the power from generating station to the grid substations, a vast network of sub transmission in distribution system has also come up for utilisation of the power by the ultimate consumers.
POWER FOR ALL BY 2012 Government of India has an ambitious mission of POWER FOR ALL BY 2012. This mission would require that the installed generation capacity should be at least 200,000 MW by 2012 from the present level of 144,564.97 MW. Power requirement will double by 2020 to 400,000MW.
Sufficient power to achieve GDP growth rate of 8% Reliable power Quality power Optimum power cost
Power Generation Strategy with focus on low cost generation, optimization of capacity utilization, controlling the input cost, optimisation of fuel mix, Technology up gradation and utilization of Non Conventional energy sources Transmission Strategy with focus on development of National Grid including Interstate connections, Technology up gradation & optimization of
transmission cost. Distribution strategy to achieve Distribution Reforms with focus on System up gradation, loss reduction, theft control, consumer service orientation, quality
power supply commercialization, Decentralized distributed generation and supply for rural areas. Regulation Strategy aimed at protecting Consumer interests and making the sector commercially viable. Financing Strategy to generate resources for required growth of the power sector. Conservation Strategy to optimise the utilization of electricity with focus on Demand Side management, Load management and Technology up gradation to provide energy efficient equipment / gadgets.Communication Strategy for political consensus with media support to enhance the general public awareness.
Rural electrification Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttaranchal, Madhya Pradesh etc are some of the states where significant number (more than 10%) of villages are yet to be electrified.
Number of Villages (1991 Census) - 593,732 Villages Electrified (30 May 2006) - 488,173 Village level Electrification % - 82.2%
Several state governments in India provide electricity at subsidised rates or even free to some sections. This includes for use in agriculture and for consumption by backward classes. The subsidies are mainly as cross-subsidisation, with the other users such as industries and private consumers paying the deficit caused by the subsidised charges collected. Such measures have resulted in many of the state electricity boards becoming financially weak. At present (2009), the price per unit of electricity in India is about Rs. 4 (8 US cents) for domestic consumers, and Rs. 9 for the commercial supply.
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN)
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with the job of development of power projects under state sector, in the state along with operation & maintenance of state owned power stations. Government of
Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) under Companies Act-1956 on 19th July, 2000. The Nigam is since playing lead role in giving highest priority to the power generation for manifold and rapid development of the state.
The generating Stations of RVUN have acquired a distinctive reputation in the country for their efficient and economic power generation. RVUN has track record of completing the generation projects ahead of schedules. Present Installed capacity of Rajasthan Rajya Vidyut Utpadan Nigam is 4097.35 MW S.No. Power Station 1. 2. 3. 4. 5. 6. 7. 8. Suratgarh STPS,Suratgarh, Distt-Shriganganagar Kota STPS, Kota Present Capacity 1500 MW 1240 MW
Chhabra Thermal Power Station,Chhabra, Distt. Baran 500 MW Dholpur CCPS ,Dholpur Giral Lignite TPS ,Giral, Distt. Barmer Ramgarh Gas Thermal Power Station,Distt. Jaisalmer Mahi Hydel Power Station.Distt-Banswara Mini Micro Hydel Schemes Total 330 MW 250 MW 113.50MW 140 MW 23.85 MW 4097 .35 MW
RVUN is also managing and operating the following Inter State Projects 1. 2. Rana Pratap Sagar Hydel PS (4X43 MW) Jawahar Sagar Hydel PS (3X33 MW) Total 172 MW 99 MW 271 MW
Ongoing Projects of RVUN Commissioning Schedule S.No NAME OF UNIT CAPACITY EXPECTED DATE OF
COMMISSIONING 1 2 3 4 5 6 KALISINDH TPS UNIT-1 KALISINDH TPS UNIT-2 CHHABRA TPS PHASE 2 (UNIT-3) CHHABRA TPS PHASE 2 (UNIT-4) RAMGARH EXTN. PROJECT GT RAMGARH EXTN. PROJECT ST Total 600 MW 600 MW 250 MW 250 MW 110 MW 50 MW 1860 MW March 2012 July 2012 March 2012 June 2012 January 2012 May 2012
Rajasthan Rajya Vidyut Utpadan Nigam Ltd has been entrusted with the job of development of power projects under state sector, in the state along with operation and maintenance of state owned power stations by un bundling the erstwhile RSEB. Govt of Rajasthan continued the RVUNL under the companies Act 1956 on 19 July 2000. The nigam is since playing lead role in giving height priority to the power generation and manifold and rapid development of the state.
The Government of Rajasthan formed the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) in the year 2000, with an objective of power generation to cater to the growing need of the state. The company has a total installed capacity of of over 2500 MW.
There are various thermal and hydel power stations under RVUN. The Suratgarh Super Thermal Power Station has maximum capacity of 1250 MW. Kota Super Thermal Power Station I has a capacity of 1045 MW. Of its other projects, Ramgarh Combined.Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) was established upon unbundling of erstwhile Rajasthan State Electricity Board (RSEB) into separate companies for generation, transmission and distribution functions.The restructuring of RSEB was done with a view to bring about improvement in the efficiency of Power Generation, Transmission and Distribution in the State, to facilitate and attract private investments therein and to create an
environment of growth in the Power Sector for the overall benefit of the people of the State. Following is the information about the hydro-electric power station:
1. Type of Power House: Indoor Type Surface Station
2. Type of Turbine: Francis Vertical Shaft
3. Capacity of Turbine: 25MW
4. Type of Generator: Umbrella
5. Length of Penstock: 90 m
6. Diameter of Penstock: 4.2 m
Date & Mode of Incorporation:
19.6.2000. RVUN was incorporated as a Public Limited Company on 19.6.2000 and subsequently became a State Government Company, upon transfer of business pursuant to the Transfer Scheme, 2000 and allotment of entire equity share capital to the State Government & its nominees...
Subsidiary Companies –
(i) Giral Lignite Power Limited, a wholly owned Subsidiary incorporated on 23.11.2006. (ii) Dholpur Gas Power Limited, a wholly owned Subsidiary incorporated on 22.11.2006. (iii) Chhabra Power Limited, a wholly owned Subsidiary incorporated on 22.11.2006.
Business of the Company –
RVUN has been established to carry out the objectives Specified in the Memorandum & Articles of Association of the Company as amended from Time to time*. The main activities of RVUN are setting up of power plants and operation & maintenance thereof for power generation through its coal, gas, and lignite based thermal power plants as well as hydel power plants. (* The Main, Incidental and Other Objects of the Company are contained in the Memorandum of Association of The Company and the same can be obtained from the Office of Company Secretary.) The business portfolio of the company is as under: 1. Generation of Electric Power. 2. Power Project Construction. 3. Captive Mining of Coal through Joint Venture(s) To implement the Power Sector Reforms effectively in the state, Government of Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) under Companies Act-1956 on 19th July, 2000. The Nigam is since playing lead role in giving highest priority to the power generation for manifold and rapid development of the state. The total installed capacity of various Thermal and Hydel Power Stations owned and run by RVUN as on 30.11.2004 is 2569.35 MW having following station wise capacity:-
Name of Power House
1. 2. 3.
Suratgarh Super Thermal Power Station. Kota Super Thermal Power Station Ramgarh Station Combined Cycle Gas Power
Mahi Hydel Power Station Mini Hydel Schemes (10) Total
23.85 MW 2569.35 MW
Beside above, Utpadan Nigam is carrying out operation and maintenance of Rana Pratap Sagar Hydel power Station (172MW) and Jawahar Sagar Hydel power Station(99MW) owned by RVPN.
SALE OF POWER AND COST OF GENERATION:
As per financial restructuring plan formulated under power sector reforms, RVUN has to sell its entire generated power to RVPN on no loss no profit basis till 31.3 .2004. Consequent upon introduction of electricity act 2003 in the State, Rajasthan Rajya Uptadan Nigam has been selling its entire generated power directly to three Discoms i.e. Jaipur, Ajmer & Jodhpur in pre-assigned ratio of 36:36:28 respectively on no profit no loss basis and this policy of no profit no loss shall be adopted till March, 2005 as per FRP.
POWER & DUITES OF OFFICERS AND EMPLOYEES
1. PERSONNEL, ADMINISTRATION & LEGAL WING:-
The Joint Director (Personnel & Administration) is the head of Personnel, Administration & Legal Wing of RVUN. He mainly deals with all matters related with Human Resource Planning, Recruitment, Career Advancement through Promotion, Limited Direct Recruitment (LDR) & Selection grade / Assured Career Progression (ACP), Seniority, Transfers & Postings, Disciplinary Proceedings, APAR s, Legal & Court‟s related matters, Rules section, Trainings, Employees welfare schemes & activities, Sanction of terminal benefits, Pension, Industrial relations. 2. ACCOUNTS WING The Director (Finance) is the head of Accounts & Finance Wing of the Company, under whom there are mainly two sections at corporate office level – Ways & Means section and Accounts & Internal Audit section, which are headed by Chief Accounts Officers. The Director (Finance) arranges funds from governments & financial institution and gives guidance on all policy mater for proper financial management of the company. The work distribution between the two Chief Accounts Officer, posted at Corporate office is as follows:A. Chief Accounts Officer (W&M):1. Establishment of non-gazetted of Accounts Wing. 2. Establishment & Audit and Cash Section of Corporate office. 3. Ways & Means including disbursement of funds. 4. Matters related to RERC, determination & finalization of Tariff and issuance of Energy bills. 5. Financial & commercial related rules matters. B. Chief Accounts Officer (IA & Accounts):1. Works related to Internal Auditing, Assembly, PUC and CAG.
2. Preparation & Finalization of Annual Accounts and Income Tax &Sales Tax, etc. 3. Matters related to Statutory Audit & Tax Audit of the Company 4. Preparation of Annual Plan Resources / Budget Estimate and exercising of Budgetary Control Measures. 5. Financial concurrences of purchase and contract cases relating to O&M activities. 3. COMPANY SECRETARY:This office is responsible for dealing with matters related with Company affairs of RVUN and it‟s wholly owned subsidiary Companies, to ensure compliance with of various provisions of the Companies Act and other applicable laws. The office of Company Secretary is also responsible for convening & conducting the meetings of Shareholders, Board of Director and its various Subcommittees, besides maintaining the minutes of such meetings. 4. PPC &F WING:The Wing is headed by a Chief Engineer and is mainly responsible for new power projects, planning, commercial activities and fuel management. It also deals with long term fuel linkages, obtaining various approval/clearances from statutory & regulatory agencies, ABT, filling of ARR, etc. 5. TD WING:The Wing is headed by a Chief Engineer who looks after the work relating to designing of new power projects, awards of contracts for execution of projects, appointing design consultant, proper work execution including construction and procurement of equipments & material etc.
6. PUBLIC RELATIONS WING:-
Public Relations Officer (PRO) is the head of Public Relations Wing and is responsible for liaison & rapport with press, media & public repre entities. Public Relations Wing prepares & disseminates the Informative material & Press release for RVUN. PRO also arrange Publication of Brochures, participation in exhibitions & display material. Release of advertisement including Nits for publication in News Papers & other media. 7. POWER GENERATING STATIONS:These are headed by the Chief Engineer/ Addl. Chief Engineer an are required generating the electricity and arranging it‟s transmission to RVPN.
3.1 LINE TRAP It is also called "Wave trap". It is connected in series with the power (transmission) line. It blocks the high frequency carrier waves (24 kHz to 500 kHz) and let power waves (50Hz - 60 Hz) to pass through. It is basically an inductor of rating in mille Henry.
3.2 COUPLING CAPACITOR It provides low impedance path for carrier energy to HV line and blocks the power frequency circuit by being a high impedance path.
3.3 LINE MATCHING UNIT LMU is a composite unit consisting of Drain Coil, Isolation transformer with Lightning Arrester on its both the sides, a Tuning Device and an earth switch. Tuning Device is the combination of R-L-C circuits which act as filter circuit. LMU is also known as Coupling Device. Together with coupling capacitor, LMU serves the purpose of connecting effectively the Audio/Radio frequency signals to either transmission line or PLC terminal and protection of the PLCC unit from the over voltages caused due to transients on power system.
3.4 DIGITAL POWER LINE CARRIER A power line carrier using a power line as transmission media needs to change its transmission system from analog to digital to address rapid diffusion of IP devices and digital telecommunication devices. With this view, digital power line carrier (DPLC) was developed featuring several technological measures which enable digital transmission via power lines and performed a field evaluation test. As a result, DPLC has the required quality of bit error rate characteristics and transmission ability such as transmitting information from monitored electric-supply stations and images . Corporate Social Responsibility Activities:
The list of the activities covered under CSR policy is purely suggestive In nature and any other activities may also be taken up as per the Need of the Project Affected Persons/ Project Affected Areas to be Assessed at the Project level. The list of CSR activities will be as Under:
i) Education: with emphasis on Primary education, Girl education and Adult education;
ii) Drinking Water Supply: with emphasis on safe drinking water to Villagers and other water related facilities;
iii) Electrification of Villages / Electrification of Public Places;
iv) Health care, such as Mobile clinics and Community health related Services;
vi) Social Empowerment;
vii) Infrastructure development, such as construction of anicuts, roads,
Community halls, school buildings, health centres, sanitation facilities, Etc.;
viii) Sport(s) and cultural activities;
ix) Generation of employment / Capacity building such as vocational Training to local people;
x) Grant/donation/financial assistance/sponsorship to the reputed NGOs/societies/Local agencies involved in social development works; xi) Works related for preservation of „heritage sites‟ in the Project Affected Area;
xii) Empowerment of women for education, health & self employment;
xiii) Providing relief to victims of Natural Calamities like Earth Quake, Cyclone, Drought & Flood situation etc;
xiv) Distribution of efficient Chula(s) to the villagers;
xv) Adoption of village(s) for overall development;
xvi) Any other development works suggested by local Gram Panchyats/ Panchayat Samities/ District Administration / CSRI Committee;
xvii) All works for creating community assets.
Execution of the CSR Works
The CSRI Committee will identify the executing agency for CSR Activities / works. Government agencies such as Public Works Department (PWD), Irrigation Department, Public Health Engineering Department (PHED), Power Distribution Companies of the State,
Panchayat Raj Institutions / Local bodies, Education Department, etc. Shall generally be engaged to execute these CSR activities/ works. These agencies shall follow the relevant Rules/ Regulations/ Delegation Of Powers issued by the respective departments in respect of „Deposit Works‟. The CSRI Committee will also decide the modalities, payment Procedure and verification process, etc. for issuing grants/ donations/ Financial assistance/ sponsorship to reputed Non-Government Organizations (NGOs)/ societies/ Local agencies engaged in similar Social development works. The CSRI Committee shall restrict the total amount of such grants, Donations, etc. under Clause 10.2 to a maximum of 10% of the total Allocation to CSR activities/ works as per Clauses 7.1.1 and/ or 7.2.1,
The power industry in India derives its funds and financing from the government, some private players that have entered the market recently, World Bank, public issues and other global funds. The Power Ministry India has set up Power Finance Corporation of India that looks after the financing of the power sector in India. The Power Finance Corporation Limited provides finance to major power projects in India for power generation and conversion, distribution and supply of power in India.
Power Finance Corporation (PFC) Ltd India also looks after the installation of any new power projects as well as renovation of an existing power project India. The PFC in association with central electricity authority and the ministry of power facilitates the development in infrastructure of the power sector India. They have taken up construction of mega power projects that will answer to the power shortage in various states through power transmission through regional and national power grids.
The power management and implementation of the various power projects undertaken, formulation and amendments of the power laws in India, management
of the power supply in India, monitoring of the power plants in india, power companies in India, power generation in India and other power shortage problems etc.
The power management and implementation of the various power projects undertaken, formulation and amendments of the power laws in India, management of the power supply in India, monitoring of the power plants in india, power companies in India, power generation in India and other power shortage problems etc.
The Ministry of Power (MoP) is coordinated by Central Electricity Authority (CEA) in all technical and economic aspects. Along with the CEA, other subsidiary organizations of the Mop are:
National Thermal Power Corporation (NTPC) National Hydro Electric Corporation (NHEC) Power Finance Corporation of India (PFCI) Nuclear Power Corporation of India Limited North Eastern Electric Power Corporation (NEEPC) Rural Electrification Corporation (REC) Damodar Valley Corporation (DVC) Bhakra Beas Management Board (BBMB) Tehri Hydro Development Corporation (THDC) Satluj Jal Vidyut Nigam (SJVN) Power Grid Corporation of India Ltd (Power Grid India) Power Trading Corporation (PTC) Bureau of Energy Efficiency (BEE)
Power Companies in India:
Many government as well as private organizations have taken up the task of power generation in India. The major Indian power companies playing prime are: Bhakra Beas Management Board Enercon Systems India Essar Group GMR Group Gujarat State Petroleum Corporation Ltd Jindal Steel & Power Limited Karnataka Power Transmission Corporation Limited (KPTCL) Karnataka Renewable Energy Development Limited Konarka Magnum Power Generation Limited Nippo Batteries Reliance Energy Ltd. Shri Shakti Durgapur Projects Limited Satluj Jal Vidyut Nigam Ltd. United Power Ventral Systems Pvt. Ltd.
Under the provision of the Electricity Act, 2003, RVPN has been declared as State Transmission Utility (STU) by Govt. of Rajasthan. Section 39(1) of this act, prohibits the STU to undertake business of trading of electricity, however RVPN continued its function of transmission of bulk power from generating stations to inter-phase point of Discoms from 1st April 2004. Now the Distribution Companies are directly contracting with Generating Companies in accordance to the share allocated by the State Government. Rajasthan Power
Procurement Cell (RPPC) has been established for purchase of power on behalf of Discoms. RVPN Provides the pathway for power within whole of Rajasthan. RVPN owns, builds, maintains and operates the high-voltage electric transmission system that helps to keep the lights on, businesses running and communities strong. RVPN also owns the shared generating projects as representative of erstwhile RSEB.
Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN) a company under the Companies Act, 1956 and registered with Registrar of Companies as "RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LIMITED" vide No. 17-016485 of 2000-2001 with its Registered Office at VIDYUT BHAWAN, JYOTI NAGAR, JAIPUR-302005 has been established on 19 July, 2000 by Govt. of Rajasthan under the provisions of the Rajasthan Power Sector Reforms Act, 1999 as the successor company of RSEB. The RERC has granted RVPN a license for transmission and bulk supply vide RERC/Transmission and Bulk Supply License 4/2001 dated 30.4.2001 to function as Transmission and Bulk Supply Licensee in the State. Under the provision of the Electricity Act, 2003, RVPN has been declared as State Transmission Utility (STU) by Govt. of Rajasthan. Section 39(1) of this act, prohibits the STU to undertake business of trading of electricity, however RVPN continued its function of tranmission of bulk power from generating stations to inter-phase point of Discoms from 1st April 2004. Now the Distribution Companies are directly contracting with Generating Companies in accordance to the share allocated by the State Government.Rajasthan Power Procurement Cell (RPPC) has been established for purchase of power on behalf of Discoms. RVPN Provides the pathway for power within whole of Rajasthan. RVPN owns, builds, maintains and operates the high-voltage electric transmission system that helps to keep the lights on, businesses running and communities strong. RVPN also owns the shared generating projects as representative of erstwhile RSEB. Our customers include electricty generators, distribution companies and open access consumers who count on RVPN to deliver power from the location of generation to inter-phase point of Discoms enabling them to supply where it's
needed in the homes and businesses they serve. Our aim is to provide reliable electric transmission service to these customers. As a public utility whose infrastructure serves as the link in transporting electricity to millions of electricity users, RVPN has following duties and responsibilities: • Intra state transmission of electricity through Intra-State Transmission System • Planning and co-ordination relating to intra-state transmission with all concerned agencies such as CTU, State Govt., generating companies, licensees, Regional Power Committees etc. • Ensuring development of an efficient, co-ordinated and economical system of intra-state transmission of electricity from generating stations to Load Centres. • Non-discriminatory Open Access to its transmission system on payment of transmission charges • Complying with the directions of RLDC and SLDC, operating SLDC until any other authority is established by the State Govt. • Now RVPN is "An ISO 9001:2008 Certified Company" .
rajasthan Electricity Regulatory Commission The Rajasthan State Electricity Board was constituted with effect from 1st July, 1957 by Government of Rajasthan Notification No. F.11/OSD(PWD)/57 dated the 28th June,1957 under the Electricity (Supply) Act,1948 which enactment has for its object, the co-ordinated development and rationalisation of generation and supply of electricity on a regional basis throughout the country in the most efficient and economical way. The Rajasthan Electricity Regulatory Commission was constituted by the State Government under sub section (1) of section 17 of the Electricity Regulatory Commissions Act, 1998 and recognized as a duly established commission under Rajasthan Power Sector Reform Act, 1999 and Electricity Act, 2003. The objective/purpose of constituting RERC is to establish a credible, efficient and transparent regulatory authority responsible for overall development of power sector including approval of tariffs.
RERC is a body incorporated and was fully funded up to the year 2007-08 by the State Government and currently being funded by its own resources with its office located at Sahakar Marg Jaipur. It consists of a Chairperson and two Members one each from the technical and financial discipline. The Commission has a Secretary and other supporting staff to carry out its day-to-day functions.
The functions and duties assigned to the Commission
To determine the tariff for generation, transmission, distribution and wheeling
of electricity, in wholesale, bulk or retail, as the case may be, within the State of Rajasthan. (ii) To regulate electricity purchase and procurement process of distribution
licensees including the price at which electricity is to be procured from the generating companies or licensees or from other sources through agreements for power purchase for distribution and supply within the State. (iii) To facilitate intra State transmission and wheeling of electricity.
To issue licenses for transmission, distribution and for trading electricity
within the State of Rajasthan. (v) To promote cogeneration and generation of electricity from renewable
energy sources by providing suitable grid connectivity measures and sale of electricity besides specifying for power purchase from such sources, as a percentage of total electricity consumption in the area of a distribution licensee.
To adjudicate upon the disputes between the licensees and the generating
companies and to refer any dispute for arbitration. (vii) To levy fee for the purposes of this Act; (viii) To specify the State Grid Code consistent with the Grid Code specified under clause(h) of sub section(1) of section 79;
To specify or enforce standards of performance with regard to quality,
continuity and reliability of service by licensees; (x) (xi) To fix the trading margin in the intra State trading of electricity, if necessary; To discharge such other functions as are assigned to the Commission under
the Electricity Act, 2003.
(i) (ii) (iii)
Promotion of competition, efficiency and economy in the power sector; Promoting investment in the power sector; Reorganization and restructuring of power sector in the State of Rajasthan;
The State Commission in discharge of its functions gets guided by the National Electricity Policy, National Electricity Plan and Tariff Policy published under sub section(2) of section 3 of the Electricity Act,2003.
Rajasthan Renewable Energy Corporation Limited
Rajasthan Renewable Energy Corporation Limited (RRECL) had been formed by merging erstwhile REDA (Rajasthan Energy Development Agency) and the Rajasthan State Power Corporation Ltd (RSPCL) in August 2002. Corporation is registered under Companies Act 1956.
RRECL is working as a State Nodal Agency for promoting & developing Nonconventional Energy Sources in the State and as a State Designated Agency (SDA) for enforcement of provisions of Energy Conservation Act 2001 in the State. This agency co-ordinate the programme activities between various
programmes on Non-conventional Energy Sources and the Society. It is also engaged in creating awareness among people towards conservation of energy, protection of environment degradation through demonstration projects and other methods. The Corporation is headed by a Chairman & Managing Director, at the State H.Q. Jaipur who is assisted by Executive Director, two General Managers, two Project Managers in addition to other staff. There are nine block offices of the Corporation in the State headed by a Project Officer of Junior Engineer / Assistant Engineer rank. These Project Officers handle activities connected with non-conventional energy sources in all the 32 districts in Rajasthan. Vision, Mission and Core Values RRECL is committed to development and promotion of clean power generation in Rajasthan. Reflecting this committed, clear statement of Vision, Mission and Core values of company need to be written and widely made known to all the stake
holders. The vision, Mission and Core values of the company may typically be written as follows
To lay the foundation for generation of clean electrical power in Rajasthan.
Mission To emerge as a leading and sustainable company committed to promotion and generation of electricity through Renewable Sources of Energy, in Rajasthan.
Corevalues Continuous innovation - Updating professional knowledge and strive to achieve newer heights of technology development, pooling the unique competence of each team member.
Accept challenges - Face difficulties and overcome impediments to achieve the laid down goals.
Other related agencies
Rajasthan Rajya Vidyut Utpadan Nigam Limited
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with the job of development of power projects under state sector, in the state along with operation & maintenance of state owned power stations. Government of Rajasthan constituted the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) under Companies Act-1956 on 19th July,2000. The Nigam is since playing lead role in giving highest priority to the power generation for manifold and rapid development of the state. The generating Stations of RVUN have acquired a distinctive reputation in the country for their efficient and economic power generation. RVUN has track record of completing the generation projects ahead of schedules Present installed capacity of Rajasthan Rajya Vidyut Utpadan Nigam is 4097.35MW S.No. 1. 2. 3. 4. Power Station Suratgarh TPS Kota TPS Chhabra Super Thermal Power Station Ramgarh Gas Power Plant Capacity as on 31.03.09 1500 MW 1045 MW 113.50MW Present Capacity 1500 MW 1240 MW 500 MW 113.50MW
5. 6. 7. 8.
Mahi Hydel MMH Schemes Giral Lignite TPS Dholpur CCPP Total
140 MW 23.85 MW 250 MW 330 MW 3402.35 MW
140 MW 23.85 MW 250 MW 330 MW 4097 MW .35
RVUN is also managing and operating the following Inter State Projects 1. 2. Rana Pratap Sagar Hydel PS (4X43 MW) Jawahar Sagar Hydel PS (3X33 MW) Total 172 MW 99 MW 271 MW
Ajmer Vidyut Vitran Nigam limited
Ajmer Vidyut Vitran Nigam Ltd, (AJMER DISCOM) has been established under the Companies Act,1956 by Govt. of Rajasthan. The Ajmer Discom has been created with the principal object of engaging in the business of distribution and supply of electricity in 11 districts of Rajasthan, namely Ajmer, Bhilwara, Nagaur, Sikar, Jhunjhunu, Udaipur, Banswara, Chittorgarh, Rajsamand, Doongarpur and Pratapgarh. The area of operation of Ajmer Discom is 87256 sq. km. And the population in this area is 198 lacs as per 2001 census. The power supply in the Ajmer Discom is managed by 9 distribution circles i.e. Ajmer, Bhilwara, Nagaur, Udaipur, Chittorgarh, Banswara, Sikar,Rajsamand Jhunjhunu.
Jodhpur Vidyut Vitran Nigam ltd
Jodhpur Vidyut Vitran Nigam Ltd, (Jodhpur DISCOM) has been established under the Companies Act,1956 by Govt. of Rajasthan. The Jodhpur Discom has been created with the principal object of engaging in the business of distribution and supply of electricity in 9 districts of Rajasthan, namelyJODHPUR(CITY) ,JODHPUR(DIST.),BIKANER, BARMER,CHUR U,HANUMANGARH, JALORE ,PALI, SHRIGANGANAGAR . The area of operation of Ajmer Discom is 1.82Lacs. sq. km. the area of Jodhpur Discom is equivalent to area of Gujarat (1.96Lacs.sq.km.).The area of Jodhpur Discom is more than three times of area of Punjab(0.50 Lacs.sq.km.
Jaipur Vidyut Prasaran Nigam limited
JAIPUR VIDYUT VITRAN NIGAM LIMITED(Jaipur Discom) has been established under the Companies Act,1956 by Govt. of Rajasthan, Jaipur Discom has been created with the principal object of engaging in the business of distribution and supply of electricity in 12 districts of Rajasthan, namely Jaipur, Dausa, Alwar, Bharatpur, Dholpur, Kota, Bundi, Baran, Jhalawar, Sawaimadhopur, Tonk and Karoli. The area of operation of Jaipur Discom is 72474 sq. km. And the population in this area is 196 lacs as per 1991 census. The power supply in the Jaipur Discom is managed by 8 distribution circles i.e. Jaipur City , Jaipur Distt., Dausa, Alwar, Bharatpur, Kota , Jhalawar and Sawaimadhopur. Administrative Structure
Jaipur Discom is managed by the Board of Directors. CMD is controlling day to day affairs of the company. He is assisted by various Head of Departments at the corporate level. The field organisation is divided into 8 operation and maintenance circles. Each circle is further divided into divisions and sub divisions which are the lowest operational unit. The brief details of the organisational structure are as under:-
Circles Divisions Sub Divisions : 153
Besides O&M setup, the field set up also consists of metering & protection civil & vigilance etc.
Some of the important information for Jaipur Discom is as under:
-Population Density(Persons/sq.km) District Employees Electrical (As on 31.3.2006) (Tentative) Total connected load(MW) 33kV lines (kms)
289 12 15011
165 32 35,988
5395.856 8465 696/3357 MVA 31560 2366/10332 MVA
33/11 kV S/S (Nos./capacity in MVA)
Domestic connected load (MW) Agriculture connected load (MW) Mixed Load (MW) Industrial (Ind.+PWW) Domestic electrification connected load(MW)
1514.46 1411.91 819.43
Organizational Structure of RVPN
Chairman and Managing Director(CMD)
Zon.C.E (T&C) Jaipur
Zon.C.E (T&C) Jodhpur
Zon.C.E (T&C) Ajmer
Zon.C.E (civil) Jaipur
Chief Engg. (PPM& R)
Chief Engg. Protection
S.E. TCC -1 Jaipur
S.E. TCC-4 Jodhpur
S.E TCC-3 Jaipur
S.E. (400kv) Design
S.E. (Pro.) Jaipur
S.E. TCC-2 Jaipur
S.E. TCC8 Sirohi S.E. TCC-9 Bikaner
S.E. TCC-3 Udaipu r S.E. (400kv) Merta
S.E. (Civil Kota)
S.E.(Pr o.) Udaipur
S.E. TCC-5 Kota
S.E. TCC-6 Alwar
Sr.A O (Civi l)
S.E (P&P ) S.E. (Mainta nance)
S.E. (Pro.) Jodhpur
S.E. (4ookv) R. G.
S.E (4ookv ) Jaipur
Sr.AO (Mainta nace)
S.E. (400Kv) Jodhpur
SR.AO (T&C) Jaipur
S.E. Q.C. Design
Sr.AO (T&C) Jodhpur
Chairman and Managing Director(CMD)
Chairman and Managing Director(CMD)
Chief Eng. (IT-training)
Dy. Chief Eng.(RPPC) S.E.( M.I.S.) S.E.(I.S. P.)
Land Acqi. officer Trainin g centre
Dy.Director (Head qua.)
Assist.Sec. Dy.secratory (pension) Assist. Sec. Assist.sec. (G.A.D) A.C.P.
Title of project:Comparative analysisof financial performance of two fiscal years
As electricity works as blood in the body of any state. Power is an extremely important infrastructure for economic development of any state or nation. So study of agencies which are involved in electricity related functions as generation, transmission and distribution are very important and rationale enough. The objective of this study is to study the financial status of such large organization. In this study the financial performance of year 2009nd 2010 has been compare to find out the difference between them because being a government body with duty of transmission of electricity plays a important role in development, so improvement is essential. So the main concern of this study is to check out whether the performance of organization has improved or declined
Type of resarch Research
The methodology used is to gain an insight into various dimensions and aspects of the study so as to determine the feasibility and viability of the project for granting financial assistance. In Initial Stage, primary data was be collected through extensive literature study specific to financial papers to collect relevant information. The books and manuals of Rajasthan Vidyut Vitran Nigam have formed a part of secondary data along with many personal discussions and interviews with the people of the organization. It also includes study of various magazines and journals websites used as a
medium for collection of relevant information. Second Stage involves applying the knowledge gained and transforming it into real practice by having hands-on
experience. It also includes the study of related procedures – Documentation, Financial Analysis. Primary DataPrimary data is collected through observation method. Secondary Data Secondary data is collected through the manuals of organization as 1- Annual Reports Of Accounts. 2- Budget Estimates. Accept these manuals data is collected from websites of electricity departments.
Scope of the study
The study is concerned with Rajasthan Rajya Vidyut Vitran Nigam ltd. In rajasthan all electricity generation, transmission and distribution functions are taken care by 5 agencies they are RVPN, RVUN, AVVNL, JVVNL, and JDVVNL. Among them RVPN is concerned with transmission of generated electricity to all three Discoms. This organization takes care of transmission and substations . So this is a very important agency in electricity circulation in state so study on this agency covers a wide scope – Overview of electricity industry in India. Overview of electricity industry in Rajasthan. Overview of energy department of Rajasthan. Overview of all five agencies involved in electricity industry of Rajasthan. Overview of regulation authority i.e. RERC. Introduction of RVPN as whole. Deep insight of finance department of RVPN. Study of financial status of RVPN comprises of various revenue and expenditure sources. Study of financial performance of RVPN in 2010. Study of financial performance of RVPN in 2009. Comparision between both year‟s financial performance Purpose of the
Purposes of conducting this kind of study are-
To get work experience in such a big organization To add up practical knowledge with the theoretical knowledge. To understand the work practices which are followed in organization. To get exposure with corporate world.
The Company restricts sharing of important data, as most of the information is confidential and is not approachable.
Since all the systems in the division remains busy most of the time, there is limited access to computers during training hours that leads to certain problems while preparing the report.
Study is not very exhaustive and many concepts cannot be studied due to time and other constraints.
Senior Officers and Employees though very helpful, are not able to give much of their time due to their own time constraint
Facts & findingsRVUN registered healthy growth in revenues of about 48% from 880 crore in year 2008-09.
However, the company faced loss of 767 crore at operating level primarily due to Significant increase in employee costs on implementation of the sixth pay commission recommendations and actuarial valuation undertaken in 2009 to comply with AS-15 issued by ICAI. Loss for the year was 719 crore.
RVUN has filed a petition with RERC for reimbursement of additional employee costs incurred in FY2009.Total debt increased from 3,503 crore in FY2008 to 4,570 crore in FY2009. Gearing levels were high at 7.8 times in FY2009 on account of reduced networth due to losses in the year. Current assets include 690.8 crore (FY2009) of grants and subsidy receivable from GoR (`691.4 crore – FY2008). Current ratio declined from 0.95 in FY2008 to 0.65 in FY2009 mainly due to increase in pension liabilities post actuarial valuation and implementation of 6th pay commission.
Along that T&D and wheeling losses are main cause of losses .Electric power transmission and distribution losses include losses in transmission between sources of supply and points of distribution and in the distribution to consumers, including pilferage.
In 2007-08 T&D losses of RVUN were 4.61% and in 2008-09 the losses were declined to 4.34%. the reason behind decline in the losses is upgrading the transmission capacity and by establishing new grid station and increasing the transmission lines. Along that subsidies provided to agriculture and industries also cause a losses to RVUN. So we can say that while the performance of RVUN is improved in 2009 with comparison of 2008 but till is facing huge losses. The loan burden has increased on this organizations
Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm's overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation.
There are many different ways to measure financial performance, but all measures should be taken in aggregation. Line items such as revenue from operations, operating income or cash flow from operations can be used, as well as total unit sales. Furthermore, the analyst or investor may wish to look deeper into financial statements and seek out margin growth rates or any declining debt.
In this report the analysis of performance of RVUN is done on the following bases-
1) On the basis of Comparative Balance Sheet. 2) On the basis of Comparative Profit and Loss account. 3) Changes in Working Capital 4) Changes in Revenues and Expenditure.
Accept this the capital structure of RVUN is also described as
1) Share Capital and reserves and surpluses 2) Loan Financing
Rajasthan rajya vidhut utpadan nigam Ltd. SHEDULE NO 1: SHARE CAPITAL 31ST MARCH 2010
Authorized Capital 1500000000 equity shares of Rs. 10 Issued subscribed & paid up 1104000000(939000000) equity share of Rs. 10 each fully paid up & issued (out of this share) issued for consideration other than cash
31ST MARCH 2009
Under the Rajasthan Power Sector Reform Scheme 2009 the government of Rajasthan has restructured the whole power sector of Rajasthan, So RVPN has Constituted. For the purpose of providing financial soundness The Government of Rajasthan has floted share in the market every year. In 2007 and 2008 it was of amount 10,000,000,000 while in 2009 it was increased to 15,00,000,000 . From this authorized capital 9,390,000,000 in 2008 and 11,040,000,000 was subscribed. In 2009 it was 73.6% and in 2008 it was 93.9%.
SHEDULE NO. 2 .RESERVE FUND: RESERVE SURPLUS 31ST MARCH 2010 31ST MARCH 2009 NIL 120303872 120303872 120303872
PARTICULERS Subsidiary towards cost of capital asset As par last balance sheet Less_trasfer to schedule 3 Grants towards cost of capital asset As per last balance sheet Less _transfer schedule 3 Exchange varrince Surplus_ net revenue TOTAL
NIL 177574556 177574556
2503825 NIL 300,382,253
NOTE- Till 2008 contributions, grants and subsidies towards cost of capital assets have not been reduced from the cost of assets, but have been treated as “capital reserves”. Further, depreciation pertaining to such fixed assets is fully charged to revenue. Because of this in 2008 there was a capital reserve of Rs. 300,382,253 while in 2009 it was remain nil because grants and subsidies were not transferred .
Interpretation- Till 2009 except Consumer‟s Contribution for deposit works all grants and subsidies were transferred to Capital Reserve while from 2010in the absence of details for identification of these grants with specific assets , the average remaining useful life of such assets is estimated at seven year from 01.04.2009. Consequently the balances appearing in Reserves and surplus being rs. 29.79 crores is transferred to profit & loss account in seven equal installment commencing from 2010. Any grant and subsidy received thereafter shall be recognized in the P&L account in proportion to the useful life of the assets.
The capital structure of RVUN is also comprises of Loan funds. RVUN takes loans from both governments as state and central government. The loan structure of RVUN is as follows-
Secured Loans Short Term Long Term
Unsecured Loans Short Term Long Term
RVUN has to follow a long procedure for taking loan. The steps for approval and sanctioning a loan are as follows-
Preparation of scheme and sending letter to bank with Rate of Interest and conditions
Responding letter of bank with terms and condition
Presentation of proposal to board directors(Agenda)
Approval of Board Of Directors
Approval send to Energy Department for issuing concurrence of state govt. and request to FD to move to issue to issue for Government Guarantee in favor of bank on behalf of RVPN Approval of Government conditions checklist
Counter Guarantee by RVPN with signature of authorized officer
Irrecoverable and unconditional letter of authority for recoveries from P.D A/C of RVPN
Government Guarantee on behalf of RVPN
Demand Promissory Note
Agreement and Disbursement of Rupees
So, this is the procedure of receiving loan from banks.State and Central Governments also provides loan to RVUN .
Status of Loan Funs in 2008-09 and 2009-10
17% 40 60 12% LIC Comm. Banks 13% 58%
LIC Central Bank of India Bank Of Rajasthan oriental bank of commerce
Secured long term loan 2010 Secured long term loan 2009
Bank of Maharastra SBBJ Allahbad Bank
Bank of Maharastra 50% SBBJ Allahbad Bank
Secured short term loan 2010
Secured short term loan 2009
Long term loans Short term loans 83%
Long term loans short term loans
Secured loan2010 Secured loan 2009
Duration for short term loan is mostly for 2-3 years. Long term loans are for mostly more than 10 years duration
COMPARATIVE ANALYSIS OF FINAL ACCOUNT
Rajasthan rajya vidhut utpadan nigam ltd
Balance sheet at 31st march 2010 Particuler 31st march2010 31st march2009
COMPARED BALANCE SHEET AS AT 31st MAR.2010 Particulars SO URCES OF 31st March, 2010 31st Mar.2009 Difference %
FUNDS SHAREHOLDERS FUND Share Capital 11,040,000,000 9,390,000,000 1,650,000,000 17.57% Reserves and Surplus Nil 300,382,253 300,382,253 -100%
Deffered govt grands LOAN FUNDS
Total APPLICATION FUNDS FIXED ASSETS a) Gross Block Less: Accumulated OF
Depreciatin NET BLOCK Capital Progress Investments CURRENT ASSETS,LOANS ADVANCES inventories,stores .spears & Works in
17,845,630,972 16,776,933,661 35,421,844,063 28,045,218,337 7,376,625,726 26.30%
13,196,002,245 6,564,621,230 3,447,697 6,628,962
Sundary Debtors Cash& Bank Balance
loans and Advances
Other Current Assets
Total Current Assets Less: Liabilities, Provisions NET ASSETS Misc. Expenditures to the extent not written off Profit & Loss CURRENT Current
22,587,803,745 20,895,633,409 1,692,170,336
7,192,319,630 13,074,774,702 28.58%
Shareholder FundIn RVUN the shareholders funds comprises of Three elements which are 1) Share Capital- The share capital of RVUN is provided by Rajasthan Govt. under the Rajasthan Power Sector Reforms Scheme. In 2009 the share capital has increase around 18%. 2) In 2009 no reserves and surpluses were maintained. all amount related with reserves ia transferred to P&L account so reserves have gone 100% negative. 3) In 2009 deferred grants and subsidies have been increased with 102% 4) Loans have also increased in good percentage. The growth in secursd loan was recorded 26% and in unsecured loans it was 36%.
Application of funds 1) Fixed assets have increased with 27% in 2009 it indicates sufficient investment in capital works. 2) Current assets have increased with just around 8% which indicates no major changes in Working Capital. 3) Current liabilities in 2009 have increased with a huge difference of around 97% . The main part of these liabilities is of employees cost which has increased due to sixth pay commission. 5) Due to increases in expenditure mainly in employee cost huge losses were recorded inbalanse sheet . the loss of the fiscal is Rs.7,192,319,630.
To interpret the balance sheet of RVPN following ratios have been calculated
Current Ratio Liquidity Ratio Assets turn over ratio Fixed Assets turn over ratio Current Assets turn over ratio Net Profit Ratio
Current ratio of firm measures it short term solvancy and reflects its ability to meet short term obligations when they are due. Current Ratio of 2:1 is considered satisfactory. If this ratio is higher it is good from the creditors point of view.
2010 Current Assets 22587803745
The current ratio of RVUN in 2009 was 2:1 that is an ideal and satisfactory ratio but in this year the ratio has become down due to great changes in Current liabilities.
Liquidity Ratio is an indication of a firms ability to meet unexpected demand for working capital.A quick ratio of 1:1 is condsidered as an ideal ratio. A high liquidity ratio compared to current atio may indicate under-stocking while a low ratio indicates over stocking
2010 Quick Assets 20,269,476,241
The liquidity Ratio of RVPN in 2009 was 2:1 which was not good . it depicts the over stocking of assets. While in 2010 this ratio has come down to 1:1 that is the ideal ratio for any firm in coaping with need of working capital.
Total assets turn over ratio
This ratio expresseses the relationship b/w cost of goods sold or net sales and total assets or investments of a firm. A high total assets turn over ratio is the indicator of effective utilation of investment in assets whereas lower assets turn over ratio indicates that assets are not properly utilised incomparison to sales . 2010 Net sales 10597815083 2009 8766372522
Turnover 0.18 times
In both years the Total Assets Turnover Ratio was 0.18times which is not at the sufficient level . the main cause of this low ratio is the social concern of RVPN because it has to sale electricity on very cheaper rates.
Fixed assets turnover ratio
The atio expresses the relationshp b/w fixed assets and net sales . the higher the ratio,the greater is the intensive utilisation of fixed assets lower ratio means under utilisation of fixe assets ans accesive investment in these assets.
2010 Net sales 10597815083
Fixed Assets Turnover Ratio
In both years the Fixed Assets Ratio is also same but it‟s again not satisfactory
Current assets turn over ratio
The ratio expresses the relationship between current assets and net sales. Net profit ratio
2010 Net Sales 10597815083
Current Assets Turnover Ratio
Net Profit Margin Ratio
The ratio measures the relationsthip between net profit and sales of the firm a high net profit ratio would only meah addiquete retuens to the owner.
2010 Net Profit -7192319630
This ratio is an indication of overall profitability and efficincy of the business RVPN is going in huge losses in 2010 while in 2009 it was not in losses but there were no profits at all. This ratio shows the lower performance of the company.
COMPARITIVE PROFIT & LOSS ACCOUNT
S 31ST MARCH INCOME Revenue from sale of Power Revenue from Transmission &SLDC Charges Revenue Grants Other Income Sub-Total EXPENDITURE ULDC/NLDC Charges Generation of Powers Repaires & Maintenance Employees Cost Admin.& Other Expenses Depriciation Sub-Total Less. Incidencial expenses 953,054,147 583,270,744 369,783,403 63.40% 155,847,868 1,653,117,182 744,664,455 128,512,094 27,335,774 21.27% 57.75% 12.14% subsidies and 155,582,504 2,817,654,230 35,181,386 312,818,160 120,401,118 2,504,836,070 342.23% 800.73% 48.90% 8,798,444,355 7,232,576,407 1,565,867,948 21.65% 2010 1,799,370,728 2009 DIffrence % 17.31%
13,571,051,817 9,114,372,068 4,456,679,749
1,047,943,032 605,174,150 664,060,135 80,604,320
15,404,379,715 3,744,428,138 11,659,951,577 311.39% 466,295,323 1,330,027,044 347,178,046 119,117,277 34.31% 10.84%
19,754,331,587 7,132,081,326 12,622,250,261 176.98%
Transffered to capital A/C Net Expenditure Profit/Loss before Interest and Tax
18,801,277,440 6,548,810,582 12,252,466,858 187.09%
2,565,561,486 -7,795,787,109 2,067,173,403 174,930,067 588,506,603 -90,118,520 98,144,595 -348,770,308 -7,621,946,868 430,225,561
-303.86% 8.46% -59.26% 8457.69% 438.36%
Interest, finance,lease charges 2,242,103,470 Extraordinary Items Profit/Loss for the Year Add prior 239,736,295 -7,712,065,388 Period 528,370,156
Income/Expenses Profit/Loss before Tax Provision for Taxation 1)Fringe Benefit Tax 2)Income Tax Profit/Loss After Tax NET LOSS carried to B/S 8,624,398 0 -7,192,319,630 -7,192,319,630 8,026,076 0 0 0 598,322 0 -7,192,319,630 -7,192,319,630 7.45% -7,183,695,232 8,026,076 -7,191,721,308
The year 2010 has brought changes in the accounts of RVUN. Though before RVUN was not in great profits but it was covering its costs through revenues. But in 2009 RVUN has recorded great losses of rs.7192319630.This was mainly due to increased expenditures of RVUN. The comparative analysis of Profit and loss account of RVUN is as follows-
Changes in Revenues
There was a positive change in revenues in RVUN in comparision of year 2008. The revenues of RVUN have increased with around 48%. The improvement is sufficient enough which shows the increasing capacity of transmission and distribution. Except this in the head of income the income from other income has also increased with 800% which includes Interest on Loans and Advances to staff Interest Income from Investment/Deposites Income from trading-Stores & scrapes and so on
Changes in Expenditure
The main reason of occurring huge losses was the increase in expenditures. Expenditures of RVUN has been increased with around 187%. The main cause of increase in expenditure of employee cost. The employee cost has been increased with 311%.The company has adopted AS15 Employee Benefit from 1st April 2008.transitional obligation of in respect of Pension liability Rs.845.9 crores till 31.03.2008. is recognized as expense on a straight line basis of five years from the date of adoption . Consequently Rs 169.18 crores being 1/5 of transitional liability is charged to Profit and loss account.
In respect of leave enhancement company has obtained actuary valuation for liability as on 31.03.2009 only and in absence of actuary valuation as of 31.03.2008, the traditional liability could not be ascertained. Hence the entire liability of Rs. 62.16 crores as determined by actuary is recognized as expense of this year.
The obligations of the Pension and Gratuity trust towards retirement benefit as on 19.07.2000 of the employees of successor companies of RSEB and existing pensioners as notified in the transfer scheme dated 18.01.2002 issued by GOr. Was Rs. 1769 crores out of which liability of active employees of all companies was Rs.1444 crores. The liability of RVUN has been ascertained as Rs. 1155 crores for active employees of other successor companies as on 19.07.2000. This has also been recognized in 5 equal installments.
WORKING CAPITAL POSITION
Working Capital, in simple words, means the capital tied up in current assets. It is the capital, which is used to finance the day-to-day operations of the business. To know the WC position of RVPN a schedule of changes in working capital is prepared for the year 2008-09 and 2007-08
Year 2008-09 Inventories:the inventory of the company have been valued on the following basesConsumable stores and Spares Construction Stores Mandatory Spares of consumable nature Surplus Material At lower cost of NRV At lower Cost of NRV At Cost At Cost
In 2009 the value of Material Stock and related account was of Rs. 2,39,623,081 from which the provision of O&M expenses have been lessed according to the instruction of FRP act. So the value of inventory was Rs 2,318,327,504 in 2009 and the value of inventory in 2008 was Rs. 702,834,380.In other words, it increased by around 30% which depicts the increased investment in capital works and transmission channel expansion. Debtors:Debtors increased from 9,005,441,031 to 9,648,897,079 in 2009. He debtors have been increased around 7.14%. The debtors of the company are discoms and other electricity shared projects.
Cash & Bank Balance: In RVPN cash is managed just to manage day to day expenses so the amount of hard and core cash is less. The major amount of liquid assets is in banks which are scheduled banks. the amount of cash in 2009 was Rs 4,55,154,453 while in 2008 it was Rs.679,389,886. In 2009 Cash and Liquid assets came down around 33%. Other Current assets including loans and advances: Other current assets include loans and advances and other current assets. The amount of current assets was 10,16,54,24,709 in 2009 while in 2008 it was 10,50,79,68,112 in 2008. Current liabilities and Provisions:Current liabilities and provisions are Rs
19,689,082,842 in the current year.
2000 1800 1600 1400 1200 1000 800 600 400 200 0 Inventories Debtors Cash & Bank Balance Other Current assets Current liabilities and Provisions
Working Capital in progress Particular As at 31st march, As 2010
Capital works in progess Advances to suppliers 13,168,103,438 27,898,807
6,481,884,197 82,737 033
RVUN is in transmission work and it needs to invest in capital work. In 2009 the RVPN has invested Rs.6,481,884,197 for urgradation of capacity of transmission as well as generation. In 2010 the capital works have been increased with 33.83% in comparison of 2009.
At 31st march 2010 Long term investment Investment in govt. securities Investment in Bonds Immvoable properties Investment in capital of partnership firm Balance of unsitised money NIL 3,447,697 NIL NIL NIL At 31st march 2009 NIL 6,628,962 NIL NIL NIL
raised by issue TOTAL 3,447,697 6,628,962
RVUN being an government body invests in Govt. securities. RVUN has invested Rs 6628962 in 2009 in govt. bonds while in 2010 this investment has come down to Rs 3447697. The investment has been decreased with 77.39% in 2010 with comparison of 2009.
Comparison On the basis of Revenue and Expenditure and Interest and tax charges Rs in Lacs Difference 2656.71 110.19 % 17.32% 4.92%
Income(External) Revenue from sale of power Revenue from SLDC charges Revenue from transmission charges Recovery of generation cost Revenue from subsidy Other income Inter segment sales Total
2010 17993.71 2349.61 77836.39
2009 15337.00 2239.42 64761.33
13075.06 7798.44 1555.82 28176.54 NIL 135710.51 5325.00 351.813 3128.181 NIL 91142.74 2473.44 1204.01 25048.36 NIL
20.19% 46.45% 342.23% 800.73% NIL
80000 70000 60000 50000 40000 30000 20000 10000 0
Rs in Lacs
2010 2009 Expenditure Urldc/Nrldc charges Generation of power Repair & maintenance Employees cost Admin.& Gen. expenses Depreciation Extra ordinary items 2010 1558.48 16531.17 7446.64 145759.36 3416.86 13300.27 2397.36 190410.14 Total
160000 140000 120000 100000 80000 60000 40000 20000 0
2009 1285.12 10479.43 6640.60 37444.28 3471.78 11999.59 5885.06 77205.86
Difference 273.36 6051.74 806.04
% 21.27% 57.74% 12.13%
108315.08 289.27% -54.92 1300.68 -3487.7 -1.58% 10.83% -59.26%
Swot Analysis Strength RVUN registered healthy growth in revenue of about 48% from 880 crore in year 2008-09. To emergne as a leading &sustainable company committed to promotion & generation of electricity through renewable sources of energy, in Rajasthan. Transmission losses can be controlled by winding of the network of lines. By establishing more 400 &220 KV grid system the efficncy of system can be increased
Weakness . T&D & wheeling losses are mainly causes of losses. Electric power transmission & distribution losses include in transmission between sources of supply & points of distribution to consumers ,include pilferage A regular increase in the amount of loss year by year The basic reasons behind this are: a) Purchase cost of Electricity is higher than the Sales cost b) Tarries rates are not revised
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUN) has been entrusted with the job of development of power projects under state sector, in the state along with operation & maintenance of state owned power stations. The Nigam is since playing lead role in giving highest priority to the power generation for manifold and
rapid development of the state. The generating Stations of RVUN have acquired a distinctive reputation in the country for their efficient and economic power generation.
Government should provide enough subsidies to cover up the losses and for making accounts balanced.
Tariff planning should be improved. Low price should be given to just requiring section of society.
ssssss. Effective measures should be taken to prevent electricity theft.
With the comparison of various accounts it is true that in year 2008-09 major changes have taken place in accounts. In year 2007-08 the company was not in losses .In 2009 it has recorded huge losses. After seeing the Revenue account JVUNL always face a fiscal deficit year by year. In case of urgency the cost of purchase of electricity is higher which is bear by the company completly
A regular increase in the amount of loss year by year The basic reasons behind this are: c) Purchase cost of Electricity is higher than the Sales cost d) Tarries rates are not revised e) Budget estimates are mostly based on past data f) Taxes and duties imposed on government on the DISCOM is high
g) Transmission cost is high h) Theft of electricity in rural areas i) Low Maintenance of electrical equipments j) Distribution charges are fixed not based on distance supplied by electricity Unable in recovery of dues from the public on time
Transmission pricing should anticipate the emergence of an interstate and intrastatecompetitive power market. This pricing should be based on thefollowing principles: • The transmission system operator should provide access to the grid without Discriminating among types of users;
• There should be no discrimination among customers when connecting new customers to the transmission network; • Use-of-system charges should not restrict, distort or prevent competition in the generation, supply or distribution of electricity.
2. Inviting private sector in transmission Including private sector in the electricity department can reduce the losses because of Cost reduction Up gradation of technology Rational usages of assets
3. Transmission losses can be controlled by widening the network of lines. By establishing more 400 and 220 kv grid systems the efficiency of system can be increased.
4. Government should provide enough subsidies to cover up the losses and for making accounts balanced.
5 Tariff planning should be improved. Low price should be given to just requiring section of society.
6. Effective measures should be taken to prevent electricity theft.
www.rvpn.co.in www.rajenergy.com www.rerc.gov.in www.avvnl.com www.jvvnl.com www.jdvvnl.com www.rseb.com www.consumercourtforum.com www.economicfoundation.com
Referenced Book Management Accounting by Agarwal and Kiradoo
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