Kseb Annual Report2017-18 PDF

KERALA STATE ELECTRICITY BOARD LIMITED
THIRUVANANTHAPURAM
SEVENTH ANNUAL REPORT

2017-2018

Regd Office: Vydyuthi Bhavanam, Pattom, Thiruvananthapuram - 695004
CIN: U40100KL2011SGC027424
7th Annual Report 2017-18

THIRUVANANTHAPRUAM
Sl.No. Contents Page No.
1 Notice of Annual General Meeting 07
2. Directors Report 09
3. Independent Auditors Report on Stand alone financial statement 58
4 Independent Auditors Report on Consolidated financial statement 90
5. Comments of the C&AG of India on Stand alone financial statement 108
6. Comments of the C&AG of India on Consolidated financial statement 110
8. Secretarial Audit Report 113
10. Replies of the Management
1. Replies to comments of Independent Auditor 117
2. Replies to comments of C&AG 159
3. Replies to comments of Secretarial Auditor 167
11 Standalone Financial Statement 170
12 Consolidated Financial Statement 231
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(Incorporated under the Indian Companies Act, 1956)
Reg. Office: Vydyuthi Bhavanam, Pattom,
Thiruvananthapuram – 695 004, Kerala
CIN: U40100KL2011SGC027424, website: www.kseb.in.
Office of the Chairman & Managing Director
Reg. Office: Vydyuthi Bhavanam, Pattom, Thiruvananthapuram – 695 004, Kerala
Phone: +91 471 2514500, 2514680, Fax: 0471 2441328
E-mail: [email protected] website: www.kseb.in.
CHAIRMAN’S MESSAGE
I am happy to present the 7th Annual Report of the Board of Directors of Kerala State
Electricity Board Ltd. for the Financial Year 2017-18.
Kerala State Electricity Board Ltd. has initiated various steps for strengthening the
Distribution Network and has to an extend succeeded in elevating the Sector to global standards.
The Company could capture about 13 lakh GPS co-ordinates and associated data of Distribution
Network within a record time with the strenuous hard work of its manpower. During this period
the Company was able to bring down the T&D losses from 13.93% to 13.07% despite addition of
more than 3.5 lakh new consumers to the system. For achieving this, KSEBL has installed 2353
Distribution Transformers and has constructed 3130 kms of LT lines in the least possible time. KSEBL
could make substantial progress in its prestigious project TransGrid 2.0. The Company was able to
successfully commission the first stage of the Project utilizing tubular poles. About 16 Substations
including the 220 kV Substation at Kattakada and the Solar Park Substation at Ambalathara
were commissioned during the period. An addition of 167.38 ckt. km of lines, enhancement of
809.9 MVA of transformer capacity, Hybrid Switchgears and SCADA based Substation Automation
System (SAS), commissioning of Malappuram-Manjeri 110 kV DC line, etc. are other remarkable
achievements in the Transmission Sector during the period. The Company was able to increase its
generation capability by 74 MW from Renewable Energy Sources which includes its own Projects,
contribution from IPPs, consumers and the generation from Solar Park at Kasargod. About 9.261
MW could be added to the system through the Grid Connected Solar Plants owned by consumers.
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The KSEBL could successfully enhance the services provided to the consumers thereby
increasing consumer satisfaction which is evident from the considerable decrease in consumer
grievances recorded during the period. The Company has put safety and consumer satisfaction in
its top priority and has been able to reduce electrical accidents to a considerable extent and render
the best services to the consumers 24x7 throughout the period.
I am indeed glad to place on record my sincere and wholehearted appreciation for the
outstanding performance of the officers and employees of KSEBL in rendering exemplary services
for the well being of the Company and of the Society at large.
Sd/-
CHAIRMAN & MANAGING DIRECTOR.
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Registered Office: Vydyuthi Bhavanam
Pattom, Thiruvananthapuram - 695 004
CIN U40100KL2011SGC027424
No.CS/General Meeting/2/2018
All Members, Auditors and Directors
NOTICE OF ADJOURNED ANNUAL GENERAL MEETING

Ref: AGM dt 26.09.2018
Notice is hereby given that the Adjourned Seventh Annual General Meeting of the company relating
to the financial year 2017-18 will be held on 29thJune 2019 at 2.30 P.M, at the RegisteredOfficeofthecompany
at Vydyuthi Bhavanam Pattom, Thiruvananthapuram– 695 004 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the Financial Statements of the Company for the financial year
ended 31st March,2018, Consolidated Financial Statements for the said financial year along with
Director’s report and the Auditors’ report thereon, Comments of the Principal Secretary (Finance),
Government of Kerala and the Comments of the Comptroller & Auditor General of India.
Further to consider and, if thought fit, to pass with or without modification (s), the following resolution
as an Ordinary Resolution:
“RESOLVED that theFinancial Statements of the Company (Standalone &Consolidated) and the
schedules and annexure thereto for the financial year ended 31st March 2018, the Auditors’ Reportand
the Comments of the Comptroller & Auditor General of Indiathereon, replies of the Company to the
report of the Statutory Auditors and theComments of the Comptroller & Auditor General of India,
the Directors’ Report and annexure thereto and forming part thereof be and are hereby approved
and adopted.”
By order of the Board
For Kerala State Electricity Board Ltd
Sd/-
N.S.PILLAI IA & AS
Thiruvananthapuram CHAIRMAN & MANAGING DIRECTOR
06.06.2019 DIN: 07282785
NOTES:
1) A Member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend
and vote on behalf of himself and proxy need not be a member of the company. The proxy
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should be lodged with the Company at its Registered Office not less than 48 hours before the
commencement of the meeting.
2) The Explanatory Statement pursuant to Section 102 of the Companies Act 2013 is annexed
hereto.
3) Route Map of AGM venue, pursuant to the Secretarial Standard on General Meeting is also
annexed.
Ph: 0471 - 2442125 Fax: 0471 - 2441328 e-mail: [email protected], website: www.kseb.in
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Incorporated under the Companies Act, 1956
CIN : U40100KL2011SGC027424
Office of the Chairman & Managing Director
Reg. Office : Vydyuthi Bhavanam, Pattom,
Thiruvananthapuram – 695004, Kerala.
Phone No: +91 471 2442125, Mobile No:9446008002
Fax: 0471 2441328 E-Mail: [email protected] Website : www.kseb.in
REPORT OF THE BOARD OF DIRECTORS

Dear Members,
Your Directors have great pleasure in presenting the 7th Annual Report on the performance of
the Company for the year ended 31st March, 2018 together with the Audited Financial Statements
and the Auditors Report for the year ended 31st March, 2018.
The Kerala State Electricity Board Limited is a Public Limited Company fully owned by the
Government of Kerala, engaged in Generation, Transmission and Distribution of power, committed
in providing reliable supply of power delivering better services at reasonable tariff in line with the
Government objectives.
Being the agency in charge of distribution of electricity to almost the entire area of the state,
the Kerala State Electricity Board Limited has made several significant strides in the direction of
providing quality, reliable power to the people of Kerala. Two major achievements in this front
are ‘Total Electrification’ and preparation of high tension GIS map through participative mapping
process. As a result of the total electrification drive, Kerala attained the enviable position of being
the first state in the country having electrified all the households by May 2017.
This period saw a reduction in T&D losses from 13.93% to 13.07 %. This achievement is in spite
of the addition of 353642 numbers of new consumers to the system, for which 3130 km of LT lines
were drawn and 2353 Distribution Transformers were installed.
Transmission sector also saw remarkable achievements during 2017-18. TransGrid project got
momentum and the first TransGrid 2.0 project was successfully commissioned on utilizing tubular
poles for the first time in the state. 16 Substations could be commissioned during the year including
220 KV Substations at Kattakkada which was pending for long time and the 220 KV Solar Park
Substation at Ambalathara which were commissioned in record time for the power evacuation
of 50 MW Solar Park. Other achievements include addition of 167.38 Ckt.km of transmission lines
of and above 33KV and additional/enhancement of 809.9MVA transformation capacity. ‘Hybrid
switchgears’ and SCADA based Substation Automation System (SAS) were commissioned for the
first time. Also, the Malappuram – Manjeri 110 KV DC line, the first transmission line in the State
using monopoles was commissioned during the year under the TransGrid Project.
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In the Generation side, 74 MW was added to the grid from renewable sources which includes
projects by KSEBL, contributions from IPPs, Prosumers and the ‘Solar Park’ 14MW at Kasargode.
Consumers-owned-solar power plants connected to grid at HT and LT levels during this period
totals 9.261 MW.
A. HIGHLIGHTS OF KERALA POWER SYSTEM
Particulars 2017-18
Installed Generating capacity ( MW) 2956
Length of EHT lines(Ckm) 10385
Length of HT lines (11/12/33 KV)(km) 60892
Length of LT lines(km) 286784
No. of EHT substations (Nos) 255
No. of Distribution Transformers (Nos) 77724
Total consumers at the end of the year(Nos) 12320537
Employee Strength at the end of the year(Nos) 33808
*Inclusive of Power Purchase Agreement (PPA) with BSES that expired on 31.10.2015
B. FINANCIAL REVIEW
Financial statements are IndAS complied in accordance with the notifications issued by
the Ministry of Corporate affairs and prepared under the Indian Accounting Standards prescribed
under section 133 of the Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting
Standard) Rules 2015 and Companies (Indian Accounting Standards ) Amendment Rules, 2016 w.e.f
1st April,2016. A comparative statement showing revenue from operations, Net Profit/Loss of the
company for the year 2017-18 and 2016-17 is furnished below.
Sl. Particulars 2017-18 2016-17
No (in `Crore) (in `Crore)
1 Revenue from operations 12318.17 11218.83
2 Other Income 347.28 400.78
3 Total Income 12665.45 11619.60
4 Profit(Loss)before Depreciation Interest & Tax 1834.30 184.17
5 Depreciation & Amortization Expenses 803.70 718.88
6 Finance Cost 1814.69 959.92
7 Profit (Loss) before Tax (784.09) (1494.63)
8 Income Tax - -
9 Profit/(Loss) (784.09) (1494.63)
10
Revenue and Expenditure 2017-18 (In ₹ Crores)
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12
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C. OPERATIONAL REVIEW
During the year under review, revenue from the sale of power including other income amounted
to Rs. 12665.44 Core (PY ` 11619.60Cores). The Company generated 5505.73 MUs (PY 4369.54 MUs) of
energy (gross) from own sources and purchased 18717.23 (PY 19050.16 MUs) of energy from Central
Generating stations/Independent Power Producers (IPP)/Traders/Power Exchange. The energy
sold within the State was 20880.7MUs(PY 20038.25MUs). The Company’s overall transmission and
distribution losses are reported to the extent of 3181.61 MUs at 13.07% (PY-13.93%). The reduction
in T&D losses by 0.86% has been achieved through various measures like system strengthening,
replacement of conductors, capacity augmentation, better metering and good O&M activities.
The operational review shows that there is an increase in revenue to the tune of ₹1045.84crores
registering an increase of 9% on revenue during 2017-18 compared to the previous year in financial
terms. The increase in income reflects the overall improvement in performance of the company
especially due to the decrease in T&D losses and increase in the volume of sales. In energy terms
there is an increase in sale of power by 842.45MU, registering a growth of 4.2% compared to last
years figure.
E.SHARE CAPITAL
The Authorized Share Capital of the Company is Five Hundred Crore shares of face value ₹10/- each,
amounting to ₹5,000.00 Crore. The paid up share capital as on 31st March,2018 is ₹3,499.05 Crore,
which are subscribed by the Hon’ble Governor of Kerala and his nominees.
F.MANAGEMENT
F.1 DETAILS OF CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
In exercise of powers conferred on Government under the Articles of Association of the Company,
the Government at various times has ordered for reconstitution/Change in the Directorship of the
Company. The details of changes in Chairman & Managing Director and other Directors till date of
Report are given as under :
Sl. DIN Chairman & Managing Director Tenure
No.
1 5272476 Dr. K. Ellangovan IAS 24.10.2016 to 29.01.2018
2 7282785 Sri.N.S. Pillai IA & AS 29.01.2018 to till date
Sl.
No. DIN DIRECTORS TENURE
1 02239492 Sri.Paul Antony IAS 02.06.2016 to 28.12.2017
2 02103601 Sri.Manoj Joshi IAS 28.09.2017 to till date
3 5178826 Dr. K.M. Abraham IAS 27.09.2014 to 28.09.2017
4 7282785 Sri.N.S. Pillai IA & AS 24.07.2015 to 29.01.2018
14
5 7572823 Dr. V. Sivadasan 02.07.2016 to till date

6 7247504 Smt.P. Vijayakumari 30.05.2015 to till date
7 7558958 Sri.N. Venugopal 21.06.2016 to till date
8 7559017 Sri.S. Rajeev 21.06.2016 to 31.07.2018
9 7239765 Sri.O. Asokan 30.05.2015 to 31.05.2017
10 03134779 Sri.Kumaran. P 28.06.2017 to till date
11 1027983 Sri.Bishwanath Sinha IAS 27.02.2018 to 20.08.2018
12 01260911 Sri.Sanjay.M.Kaul IAS 20.01.2018 to 16.02.2019
13 00483635 Dr.Usha Titus IAS 16.02.2019 to 21.03.2019
14 08330131 Sri.P.K.Moni 03.12.2018 to 31.03.2019
15 05230812 Dr.B.Ashok IAS W.e.f 21.03.2019
Pursuant to the provisions of Section 203 of the Companies Act, 2013 Sri.Biju.R, Financial Adviser
has been designated as Chief Financial Officer. The Chairman and Managing Director, Chief
Financial Officer and Company Secretary have been designated as Key Managerial Personnel of
the Company.
F.2 NUMBER OF BOARD MEETINGS
The Board of Directors meet at regular intervals to discuss and decide on business strategies/
policies and review the operational and financial performance of the Company. The notice of
each Board Meeting along with the agenda has been given in writing to each Director separately
and in exceptional cases tabled at the meeting. This ensures timely and informed decision by the
Board. The interval between two consecutive meetings of the Board was not more than 120 days
as specified under Section 173 of the Companies Act, 2013.In the Financial Year 2017-18, the Board
of Directors met eight times with an Annual General Meeting for the financial year 2017-18 and
adjourned AGM for financial year 2014-15 and 2015-16.
14. The details are given as under
Sl No Type of Meeting Date of Meeting Total numbers of Number of Percentage
Members entitled to Members of total
attend the meeting attended shareholdings
1 Annual General
Meeting (2017-18) 27.09.2017 9 9
2 Adjourned Annual 18.07.2017 (2014-15) 9 8
3 General Meeting 15.11.2017
(2015-16) 9 9
15
1 12.04.2017 9 9
2 30.05.2017 9 9
3 18.07.2017 9 9
4 27.07.2017 9 9
5 Board Meeting 15.11.2017 9 9
6 14.12.2017 9 9
7 20.01.2018 8 8
8 28.02.2018 8 8
G.STRATEGIC BUSINESS UNITS
The Kerala State Electricity Board Limited performs the functions of Generation, Transmission
and Distribution through separate Strategic Business Units (SBU) headed by the respective
Directors.
G.1 GENERATION SBU
The Generation SBU operates and maintains 35 hydroelectric generating stations, 2 thermal
power plants, and the wind farm at Kanjikode. Renovation, modernization and up-rating of the old
hydroelectric projects which have surpassed their useful life are also being carried out by this wing.
Investigation, planning and design of all hydroelectric projects, land acquisition matters connected
with various hydel projects, works connected with the environmental and forest clearance aspects
of generation schemes, safety and maintenance of dams and connected structures, construction
works of all hydroelectric and thermal projects come under the Generation SBU. Other activities
include construction and maintenance of various office buildings, fabrication of line materials
for distribution, yard structures for substations and accessories for hydraulic structures. Total
generation under the Generation Strategic Business Units for the financial year 2017-18 is 5496.69
MU. This includes 5488.89MU generated by Hydel Power Stations, 1.86MU by Thermal Power
stations and 1.48MU by the Wind generating Stations and 4.46 MU by Solar Plants.
POWER PROJECTS IN KERALA as on 31-05-2019
Sl.No Installed Capacity of Date of Commissioning
of the plant (last machine)
No. of Generators Plant Capacity Original After
. X Capacity in (MW) in (MW) date Renovation
HEPs
1 Idukki 6 x 130 780 22.03.1986
2 Sabarigiri 4 x 55 + 2x 60 340 26.11.1967 06.05.2014
3 Idamalayar 2 x 37.5 75 03.02.1987
16
4 Sholayar 3x18 54 14.05.1968

5 Pallivasal 3 x 5+ 3x7.5 37.5 07.03.1951 26.08.2002
6 Kuttiyadi 3x25 75 28.11.1972
7 Kuttiyadi Extension 1x50 50 27.01.2001
8 Kuttiyadi Additional
Exten. Scheme 2x50 100 30.10.2010
9 Neriamangalam 3 x17.55 52.65 11.05.1963 31.11.2005
10 Lower Periyar 3 x 60 180 28.11.1997
11 Poringalkuthu 4x9 36 06.02.1960 29.05.2015
12 Sengulam 4 x 12.8 51.2 05.01.1955 30.11.2002
13 Kakkad 2x25 50 13.10.1999
14 Panniar 2 x 16.2 32.4 26.01.1964 01.02.2003
15 Neriamangalam
Extn Scheme 1x25 25 27.05.2008
Sub Total (HEP) 1938.75
Small HEPs
1 Kallada 2x7.5 15 05.09.1994
2 Malankara 3x3.5 10.5 23.10.2005
3 PLBE 1x16 16 20.03.1999
4 Peppara 1x3 3 15.06.1996
5 Madupatty 1x2 2 14.01.1998
6 Malampuzha 1x2.5 2.5 26.11.2001
7 Lower Meenmutty (1x0.5 + 2x1.5) 3.5 25.03.2006
8 Chembukadavu - 1 3x0.9 2.7 19.08.2003
9 Chembukadavu - 2 3x1.25 3.75 04.09.2003
10 Urumi -1 3x1.25 3.75 25.01.2004
11 Urumi -2 3x0.8 2.4 25.01.2004
12 KTR 3x1.25 3.75 23.10.2009
13 Poozhithode 3 x 1.6 4.8 25.06.2011
14 Ranni-Perinadu 2x2 4 16.02.2012
15 Peechi 1x1.25 1.25 07.01.2013
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16 Vilangad 3x2.5 7.5 19.01.2014

17 Chimmony 1x2.5 2.5 22.05.2015
18 Adyanpara 2x1.5+0.5 3.5 09.03.2015
19 Barapole 3x5 15 29.02.2016
20 Poringalkuthu Micro
(Screw Turbine) 1x 0.011 0.011 01.02.2016
21 Vellathooval 2x1.8 3.6 08.09.2016
22 Perunthenaruvi 2x3 6 24.10.2017
Sub Total (SHEP) 117.011
Total (Hydel) 2055.76
Thermal Plants
2 BDPP 3x21.32 63.96 24.11.1998
3 KDPP 6x16 96 06.11.1999
Sub Total (Thermal) 159.96
Wind farm
1 Kanjikode Wind Farm 9x0.225 2.025 18.05.1995
Solar (Grid Connected) (as on 30-08-2018)
1 Kanjikode Solar Project(Gr. mount) 1 1
2 Kollangode S/s 1 1
3 Idayar S/s 1.25 1.25
4 Thalakulathoor, Kozhikode 0.65 0.65
5 Manjeswaram, ground mounted 0.5 0.5
6 Kuttippuram 0.5 0.5
7 Pezhakkappally, Muvattupuzha 1.25 1.25
8 Pothencode 2 2
KSEB Variuos locations -
Groud mounted type 8.15 8.15
3 Barapole canal top &
Bank Grid connected 4 4
5 Padinjarethara - Dam top 0.44 0.44
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6 Banasurasagar reservoir
(floating Solar) 0.51 0.51
7 Buildings under
Generation wing (Roof Top) 0.7 0.7
8 Solar-Poringalkuthu
(Roof top) 0.05 0.05
9 Vydyuthi Bhavanam,
Pattom (Roof top) 0.03 0.03
10 Buildings under
Trans. wing(Roof top ) 0.91 0.91
11 Buildings under Dist.
wing (Roof top ) 0.46 0.46
Roof Top and others 7.264372 7.10
Sub Total (Solar) 15.914372 15.25
TOTAL (KSEB) KSEB owned stations 2233.00
II IPP/CPP/ Private
IN THE STATE
SHEPs-IPP and owner
of the plant
1 Maniyar - (Carborandum
Universal Ltd.) 3x4 12
2 Kuthungal - (INDSIL Hydro
Power & Manganese Ltd.) 3x7 21
3 Ullunkal -(EDCL Power
Projects Ltd.) 2x3.5 7
4 Iruttukanam - (Viyyat
Power Pvt.Ltd.) 3 x 1.5 4.5
5 Karikkayam -(Ayyappa
Hydro Power Ltd.) 3x3.5 10.5
6 Mankulam -(Mankulam
Grama Panchayat) 2x0.055 0.11
7 Meenvallom -(Palakkad
Small Hydro Co.Ltd.) 2x1.5 3
8 Kallar -(Idukki District
Panchayat) 1x0.05 0.05
19
9 Pathamkayam -
(Maniyar Renewable
Eenergy Projects Pvt.Ltd.) 2x3.5+1x1 8
Sub Total (SHEPs-IPP) 66.16
Thermal
4 BSES - (BKPL) 3x40.5+ 35.5 157.00
5 RGCCPS-NTPC 2x116.6+126.6 359.80
Sub Total (Thermal-IPP ) 516.80
Wind
1 Wind-Agali 31x0.6 18.6
2 Wind-Ramakkalmedu 19x0.75 14.25
3 Wind- Ahalya, Kanjikode 4x2.1 8.4
4 Wind-INOX, Kanjikode 2x8 16
5 Wind-Kosamattom,
Nedumkandam 1 1
Sub Total (Wind-IPP) 58.25
Solar -IPP(as on 30-08-2018)
1 Hindalco Industries Ltd.(Solar) 1MWp 1
2 CIAL(Solar) 30 28.58
3 CIAL -Roof Top 0.45 0.45
4 ANERT-Kuzhalmannam 2 2
5 SOLAR ENERGY CORPORATION 50 50
Sub Total (solar-IPP) 82.03
Sub Total (IPP/CPP/Private)-
KERALA
Hydel -KERALA 2121.92
Thermal-KERALA 676.76
Wind Total -KERALA 60.28
Solar total-KERALA 97.28
GRAND TOTAL -KERALA 2956.24
** Installed capacity reduced due to decommissioning of Unit # 2&3 of BDPP
*** Installed capacity reduced due to decommissioning of Unit # 1&4 of KDPP.
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G.1.2 RENEWABLE ENERGY & ENERGY SAVINGS (REES)

COMPLETED SOLAR PROJECTS
Sl.No Name of the projects Installed Date of
capacity (MW) completion
1 Thalakkulathoor, Kozhikode 0.65 22.04.2017
2 Roof top of Suitable buildings of KSEBL
Transmission wing (27 no.) 0.910 02/2018
3 Roof top of Suitable buildings of KSEBL
Distribution wing (12 no.) 0.46 21.12.2017
4 Roof top of Vythuthi bhavan , Trivandrum 0.03 17.05.2017
5 Manjeshwaram, Kasargod 0.50 30.05.2017
6 Kuttippuram 0.50 28.11.2017
7 Banasurasagar reservior/kakkayam
grid connect floating 0.50 04.12.2017
8 Pezhayikkapalli-Moovattupuzha,Ernakualm 1.25 15.01.2018
9 Premise of Pothencode substation 2.00 02.02.2018
On grid consumers as on 31.03.2018 15.453
On going solar projects
Sl No. Name of the projects Installed capacity Date of
(MW) completion
1 Peerumedu , Idukki 0.50 2018-19
2 Ponnani, Malappuram 0.50 2018-19
3. Kottiyam, kollam 0.60 2018-19
4. Ettumanoor, Kottayam 1.00 2018-19
5. Mylatti, Kasargode 1.00 2018-19
6 IPDS- RT KSEBL Bldg(South& Central) 0.445 2018-19
7. IPDS- RT KSEBL Bldg(North 0.675 Already issued
LOA cancelled.
Negotiation is
under processing
with 2nd lowest
bidder
8. Medical College, TVPM 1.1 Under tendering
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G 1.3 OTHER ACHIEVEMENTS IN GENERATION SECTOR

(i) Following power houses were awarded ISO Certification.
a) Poringalkuthu Left Bank Extension (PLBE)- was certified ISO-2015 in December,2017.
b) Poringalkuthu Power House –the Power house was conferred ISO 2015 on 26-12-2017.
(ii) Online Continuous Emission Monitoring System for three stacks at BDPP and
Online Effluent Quality Monitoring System with real line data transfer facility to Central
Pollution Control Board and Kerala State Pollution Control Board has been commissioned.
(iii) KDPP has bagged the safety award from Factories & Boilers and is the runner-up for
outstanding safety performance in National Safety Award. The statutory requirement of
installation of online Pollution Monitoring system(OPMS) has been implemented.
(iv) Perunthenaruvi (2x3MW) Project in Pathanamthitta district was dedicated to the nation on
23/10/2017.
(v) Restarted the work of three hydro electric projects with total installed capacity of 106 MW viz
Pallivasal Extension Scheme (60MW), Thottiar HEP (40MW) and Chathankottunada (6MW)
which were held up from 2015.
G.1.4. DAM SAFETY
Dam Rehabilitation and Improvement Project (DRIP) assisted by the World Bank/IDA, coordinated
by Central Water Commission, Ministry of Water Resources, Government of Kerala with a funding
pattern of 80% from World Bank and 20% from State/Central Government budgetary support .
DRIP envisages works under the following heads.
1) Physical and technical dam rehabilitation and improvement.
2) Managerial upgrading of dam operation and maintenance.3)Institutional reforms and
strengthening of regulatory measures. pertaining to safe and financially sustainable dam
operations.
DRIP in KSEB Ltd involves 37 dams from the 12 Hydro Electric Projects, Sabarigiri HE Project,
Sholayar HE Project, Poringalkuthu HE Project, Sengulam HE Project, Idukki HE Project, Idamalayar
HE Project, Pallivasal HE Project, Neriamangalam HE Project, Kuttiyadi HE Project, Lower Periyar
HE Project, Kakkad HE Project, Panniar HE Project.
As part of implementation of DRIP, works amounting to Rs.121 Crore approximately (works/goods/
consultancy) has been tendered in 84 packages and are under various stages of implementation/
processing.A total expenditure of Rs.69.44 Crore of work has been incurred up to 2017-18 under
DRIP combined for all the three components and so far an amount of Rs.49.20Crore has been
reimbursed from Government.
G.2 TRANSMISSION SBU
Transmission network, the backbone of any power system, enables the transfer of bulk power
from the place of generation to the load centers. The transmission SBU is responsible for the
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development and management of transmission network in the State. It administers the planning,
execution, operation and maintenance of EHT substations and lines. Also all activities in connection
with real time management of load dispatch, scheduling of power from various sources, merit
order dispatching, scheduling of annual maintenance of generation stations, protection and
communication systems, loss reduction programs etc. come under the responsibilities of the
transmission wing.
The year 2017-18 was the one in which the transmission sector of KSEBL was able to achieve major
milestones. The first scheme under Transgrid 2.0 project-Malappuram-Manjeri 110Kv DC lines-the
first transmission lines in the State using monopoles has been successfully commissioned. We
could complete as many as 16 Substations during the year. This includes two 220KV Substations of
which commissioning of Kattakkada 220KV substation, pending for long time, has added feather
in the cap. The other 220KV Substation, the solar park substation at Ambalathara for evacuating
the power from the 50MW solar park was commissioned in record time well ahead of the
commissioning of the solar park. An abstract of the achievements in transmission sector during
the year is attached.
The total capital expenditure in transmission for the year has crossed the 400 Crore mark for
the first time in the history of the Board. Any investment in transmission sector is to be seen as
an investment for the future as the same will be paid back over the years through reduction in
transmission losses.
The overall power position of the state remained satisfactory during the year. Even though
the internal generation contributes only less than 30% of the requirement, the system operation
wing which also comes under the Transmission SBU was successful in managing the grid in the
most professional way without any restrictions on consumers through meticulous planning of the
internal resources and exploring the market opportunities as well as through long /medium term
contracts. The quality of power has increased in terms of reliability and availability. Also, there has
been significant improvement in the voltage profile. The coordinated efforts put in by all wings for
managing the power position through meticulous planning in commendable.
Considering the over dependency of the state on imported power for meeting its energy
requirements, Ministry of power, GOI has sanctioned 2000MW HVDC corridor from Raigarh,
Chattisgarh to pugalur. Realising the fact the Kerala’s internal transmission network is not sufficient
enough to cater to the increasing demand, we have formulated a long term transmission plan to
strengthen the network to disburse the power available through internal generation as well as
through import from external sources. The second generation transmission network development
program, the transgrid 2.0 includes construction of new EHV substations/up gradation of existing
RoW in most of cases using specially designed towers. The project, estimated to cost ` 10000 Cr. is
planned for execution in two phases and is expected to bring stability to the Kerala grid. The first
phase of the project is targeted for completion by 2019-20.The transgrid 2.0 project is proposed to
be executed with the financial assistance from KIIFB.
The year was also characterised by the commissioning of many innovative concepts in our
system. ’Hybrid switchgears’ and SCADA based Substation Automation System (SAS) were
23
commissioned for the first time. Adding to its tally of many firsts, KSEBL became the first State
Transmission Utility to own Drones for surveillance of its transmission lines.
Projects Commissioned during 2017-18.
Sl No Particulars 220kV 110kV 66kV 33kV Total
1 Substations commissioned(Nos) 2 6 3 5 16
2 Lines Commissioned (Ckt .Km) 54.1 71.76 0.44 41.08 167.38
3 Capacity addition/Enhancement (MVA) 400 285.5 47.4 77 809.9
Abstract of the list of Substations and Transmission lines under the SBU as on 31.03.2017 is given
below.
Sl No Voltage level (kV) No of Substations Line length (in Ckt.Km)
1 400 *5(1No:KSEBL) 855.96
2 220 22 2856
3 110 154 4521.5
4 66 74 2151.12
5 33 149 1943.51
Total 404 12328.97
G.3 DISTRIBUTION SBU
Director (Distribution & IT) heads the Distribution SBU. The Distribution Licensing area of
KSEB are divided in to four regions and these regions are headed by Chief Engineer Distribution
(South), Chief Engineer Distribution (Central), Chief Engineer Distribution (North), Chief Engineer
Distribution (North Malabar).
Distribution SBU manages distribution of electricity business in the State other than in other
Licensees’ areas. The activities of the SBU include construction, operation and maintenance of
distribution network upto a voltage level of 11 kV (22 kV Distribution also is in existence in some part
of Palakkad District). It is directly supplying electricity to 99% of the consumers in the State (123
lakh consumers as on March 2018).
IT initiatives of KSEB and matters related to Customer Relations headed by Chief Engineer
(IT&CR) are also undertaken by this SBU.
G.3.A ACHIEVEMENT
Description Achievement during 2017-18
No. of service connections effected 353642
No. of street lights installed 4950
11 kV line constructed (km) 1744
24
LT line constructed (km) 3130

No. of distribution transformers installed(Nos.) 2353
Meter replacement (Nos) 1237110
HT re-conductoring (Ckt.Km) 950
LT re-conductoring (Ckt.Km) 9880
1Phase to 3Phase Conversion (km) 1478
a) Total Electrification
The success of the massive total electrification programme undertaken in the financial year 2016-
17 hoisted the state to the enviable position of being the first state in the country having electrified
all its house holds. In order to achieve this goal, KSEBL had constructed 65km 11kV Overhead line,
40km 11kV Underground cable, 3040 km LT line, 39 km LT Underground cable and installed 21
Transformers. The efforts included electrification of remote colonies such as Idamalakudy, Aryanad,
Ponginchuvadu, Rosemala, Arekkapu, etc as well where it was virtually impossible to transport
men and materials due to non-existence of access roads and adverse geographical terrain. Around
1,600 households were electrified through DDG projects jointly by KSEB Ltd, ANERT and EMC as
extending distribution mains was not feasible in those areas. A total of 1,50,384 connections were
effected as part of the Total Electrification Project. The state was declared totally electrified on the
29th of May 2017.
c) Medium term distribution plan 2018-2022
After achieving the total electrification status of all of its households in May 2017, aspiration of
the society has shifted from the requirement of having an electric connection to the necessity of
getting quality, reliable power. Five specific goals were identified for achieving this overall objective
– (i) enhancing reliability and quality of the power supplied, (ii) improving energy efficiency and
reducing system losses, (iii) ensuring safe installations, (iv) ensuring that the State remains totally
electrified (v) ensuring hassle free integration of renewable sources. This demanded a relook into
the distribution system management.
The usual practice of short term planning, i.e. preparation of Annual Plans covering one Financial
Year, was not appropriate to address the new requirements. Considering all these aspects, the
Board vide BO (FTD) No 3029/2017 (D(D&IT) / Plan Process/2017-18) dated 04.12.2017 has adopted
detailed guidelines for evolving the distribution plan up to the horizon year 2021 – 2022. The horizon
year was identified in consideration of Multi Year Tariff control period (2018-2022) envisaged by the
State Electricity Regulatory Commission also.
In order to bring the Distribution sector to Global standards, KSEB Ltd initiated steps for the
comprehensive revamping of the Distribution network. Effective revamping and up gradation
of the distribution system requires comprehensive high tension network planning. A proper GIS
map of the network was an essential tool for network planning, which required capturing of close
to 13 lakh GPS coordinates and associated attribute data of HT distribution network. Employing
25
participatory mapping techniques for the first time in India for mapping of power lines, the KSEB
Ltd utilised its skilled employee strength to complete the task. About 6000 employees of the
organization used their personal smart phones equipped by customized applications to capture
geo coordinates and attribute data of all high tension network assets, within a short time to
complete the task. Approximately 75 officers then traced the mapped points in a geo-referenced
map, capturing attributes like feeder names, Substations etc. The completed high tension grid
map was made available to all through internet platform from 15.03.2018. In spite of heavy odds,
the project turned out to be an unqualified success. This was a highly appreciated achievement
which is unparalleled in the country.
Project Management Units were formed exclusively for distribution planning equipped by network
planning tools like the GIS map above. Detailed Project Reports were prepared by organizing
workshops at various levels and identifying works.
G.3.B LOCAL AREA DEVELOPMENT (LAD) WORKS
The physical and financial status of work carried out through MLA LAD fund is given below.
Region Total no. of Completed Balance Amount Amount for Balance
work work work remitted which work Amount
(` lakh) was completed
(` lakh) (` lakh)
South 23 13 10 26.83304 21.53914 5.294
Central 49 32 17 330.587 280.949 49.637
North 9 5 4 25.3 8.12 17.18
North Malabar 5 2 3 18.26152 6.62459 11.63693
Total 86 52 34 400.9815 317.2327 83.7488
The physical and financial progress of works carried out using MP LAD fund is given below.
Region Total no. of Completed Balance Amount Amount Balance
works works work remitted for which Amount
(` lakh) work was (` lakh)
completed
(` lakh)
South 6 5 1 14.05 11.05 3
Central 19 19 0 75.91 75.91 NIL
North 1 1 0 1.25 1.25 NIL
North Malabar 1 0 1 19.34 18.14 1.20
Total 27 25 2 110.54 106.35 4.20
G.3.C KERALA DEVELOPMENT SCHEME
Kerala Development Scheme works are distribution activities taken up by local bodies with their
26
funds through KSEBL. The progress of work is given below.

Region Total Completed Balance Amount Amount Balance
no. of works work remitted for which amount
works (` lakh) work was (` lakh)
completed
(` lakh)
South 1412 731 681 3868.63 1762.79 2105.84
Central 1521 951 570 3913.181 1629.58 2283.60
North 410 205 205 1476.3 506.87 969.43
North Malabar 234 116 118 818.184 260.78 557.4
Total 3577 2003 1574 10076.29 4160.02 5916.27
G.3.D CENTRALLY AIDED PROJECTS
This office is the responsible office for the Centrally Aided Projects such as RAPDRP & IPDS (except
the IT portion), DDUGJY and any other such projects announced by the Ministry of Power, Govt.
of India, from time to time. Corporate project management activities such as obtaining sanction
for DPR, following up through the implementation stages, monitoring progress, co-ordination
with the nodal agencies appointed by GoI, facilitating for the timely funding requirement, and
all coordinating efforts till the closure of scheme are being carried out from the Centrally Aided
Projects ( CAP) wing.
G.3.e Restructured Accelerated Power Development and Reforms Programme
(R-APDRP) –Part B for Kerala
Sanctioned by Government of India, Focuses on actual demonstrable performance in terms of
sustained loss reduction. In Kerala, 43 schemes were sanctioned under RAPDRP Part B with an
outlay of `1078.3 Crore.
Funding pattern
25% of the sanctioned amount will be given by Ministry of Power (MoP) as loan, Balance 75% of
the outlay is to be raised by the utility as loan or own fund, Upto 50% of the scheme cost will be
converted to grant on successful completion of the scheme and reducing the AT&C loss to 15% or
below and sustaining it for a period of 5 years
KSEB has availed counterpart loan from M/s REC Ltd.
Works included
Drawing 11 KV OH lines, laying 11 KV UG Cable, Reconductoring of 11 KV lines, Installing new
distribution transformers, Capacity enhancement of distribution transformers, Drawing LT lines,
Reconductoring/conversion of LT lines, Installing Streetlight meters with controllers, Replacing
faulty/mechanical meters with electrostatic meters, Drawing LT/HT Arial Bunched Cables, Installing
Ring Main Units etc.
27
Execution of works
1. Works in the 40 towns with a total outlay of Rs.530.7 Crore are being done departmentally.
2. For the three schemes viz. Thiruvananthapuram, Kozhikode & Kochi, with a total outlay of
`547.5 Crore, work is being done on turnkey basis.
Sl. Name of City Project Name of Contract Contract Amount
No Cost in in ` Crs
`Crs
1 Thiruvananthapuram 178.77 M/s Leena Powertech 201.09(20.81%
Engineers Pvt. Ltd., Mumbai above PAC)
2 Kochi 207.96 M/s NCC, Hyderabad 243.97(15.13%
above PAC)
3 Kozhikode 160.78 M/s L&T Ltd, Chennai 198.54(15.06%
above PAC)
Financial details of the scheme is as shown below:
` In Cr
Financial Status
1. 25 % from PFC 269.58
Received as on March 2018 (15%) 161.74
Balance 10% on approval of Closure proposal 107.84
2. 65.25% from REC 697.63
Received as on 01.05.18 642.96
Balance to be claimed 54.67
Total fund received (PFC+REC) 804.7
Closure proposal for 38 schemes are submitted to PFC and the same for the remaining 5 schemes
are under preparation. Financial achievement of the scheme is as follows:
Rs. In Cr
Sl No Name of Project Sanctioned Total Loan Balance Total Counter
Project Cost executed received to be Amount part
(` crores) cost as from PFC received from loan
per closure (15%) from PFC PFC received
(10%) (25%) from
REC
1 35 Schemes 373.38 400.3794 56.0055 36.3915 92.397 231.2533
2 3 City schemes 547.51 599.388 82.1265 54.751 136.8775 341.4242
Total 920.89 999.7674 138.132 91.1425 229.274 572.6775
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3 Remaining 5
schemes for closure
proposal under
preparation 157.415 103.4 23.6081 2.2419 25.85 70.28709
Grand Total 1078.305 1103.167 161.740 93.3844 255.124 642.9645
G.3.f IPDS (Integrated Power Development scheme) for Urban & Semi-urban Areas
Ministry of Power (MoP) launched the IPDS in September 2015. It provides financial assistance
against capital expenditure to address the gaps in sub-transmission and distribution networks,
installation of Solar panels with net metering & metering including Smart meters in urban and
semi-urban areas, to supplement the available resources of Discoms. An amount of ` 592.07 Crore
have been sanctioned by the MoP for IPDS Kerala on 15.6.2016 for 25 Circles with 63 Towns. The
earlier RAPDRP scheme has been subsumed in the new scheme. PFC is the Nodal Agency. M/s.
Electrical Research and Development Association (ERDA) is the Project Management Agency
(PMA).
Funding pattern:
60% of the project cost – MoP Grant,
10% - Own fund,
30% - Loan / Own fund ( 50% of loan - ie; 15% project cost - convertible as Grant on achievement
of milestones)
DPR for the works have been sanctioned and Solar turnkey projects already started. Material
procurement for the works is in progress (as on 31.3.2018)
1. Mode of execution - Departmental + Turnkey
2. Timeline for completion – December 2018
3. Funds Received from MoP as on 31.3.2018 - ` 107.41 Cr
I. Total payment effected as on 31.3.2018 - ` 75.39 Cr
II. Total Physical Progress as on 31.3.18 - 15%
Physical Progress
Sl.No Major item of work Unit Sanction Achievement
as on 31.3.18
1 New Substation Nos. 3 0
2 33/11KV Additional transformer Nos. 2 0
3 Capacity enhancement Nos. 13 2
4 R&M of 33/11KV S/S Nos. 53 2
5 33KV New feeders Km 8 0
29
6 11KV New feeders Km 327 52

7 HT/LT ABC Km 1134 0
8 Installation of Distribution
Transformer including Capacity
enhancement Nos. 1211 22
9 LT line Km 215 18
10 UG Cable Km 192 11
10 Consumer metering Nos. 522587 287468
12 Feeder/DT meter Nos. 2919 19
13 Solar Panel KWp 5475 3870
G.3.g Deen Dayal Upadhyaya Gram Jyothi Yojana (DDUGJY)
Govt. of India launched DeenDayal Upadhyaya Gram Jyothi Yojana (DDUGJY) exclusively for
Rural areas with four components such as Sansad Adarsh Gram Yojana (SAGY), Connecting Un-
Connected House Holds, Metering and System Strengthening.
M/s. Rural Electrification Corporation (REC) is the Nodal Agency of the project. M/s. Electrical
Research and Development Association (ERDA) is the Project Management Agency (PMA). The
project period is 30 months.
Objectives of DDUGJY:
Providing electricity to all rural households, 24X7 power. AT&C Loss reduction, Executing works in
the Villages selected by MPs under Sansad Adarsh Gram Yojana (SAGY) for the holistic development
of Village
Funding pattern
60% grant from GoI, 10% KSEB contribution, 30% loan.
Project sanctioned.
The Monitoring Committee, MoP, GoI sanctioned a total amount of ` 485.37 crore for implementing
DDUGJY in Kerala on 05.01.2016. Work include 33kv Substations, 33kV line, 11kV line, Distribution
transformers, HT & LT lines, replacement of energy meters, BPL service connections etc. Inorder
to accommodate total electrification work, GoI permitted to re-allocate ` 100 Cr. from metering
component of the project to the Rural Electrification component. Accordingly DPR was revised in
March 2017 and REC conveyed approval on 10.07.2017.
Execution of work.
Works under DDUGJY are being executed departmentally as per the guidelines issued by REC/
MoP. Material required for the project are being procured separately.
30
Status as on 31.03.2018
• Sanctioned Project Cost : ` 485.37 Crore
• Amount Received as Got Grant : ` 173.87 Crore
• KSEBL Contribution : ` 48.296 Crore*
• Amount Received as Loan from FIIs/Others : ` 19.764 Crore
• Total amount utilized/spent ` 163.12 Crore
* Utility's own fund
Physical Progress:
DDUGJY: Component wise sanction and progress
Component Purpose Amount Progress
sanctioned (`Cr) (`Cr) % Progress
Sansad Adarsh Devolopmental works 59.14 23.17 39.18
Gram Yojana in the 27 Panchayaths
(SAGY) selected by MPs under
their constituencies
Metering Replacing 1778944 159.16 69.13 43.43%
faulty/electro mechanical
meters, Transformer/11 KV
feeder metering etc.
Connecting 98527 BPL connection 181.6 118.02 64.99%
unconnected along with infrastructure
Rural works
house holds
Sl.No Major Item of Work Unit Sanction Achievement
as on
31.03.2018
1 33/11 KV New Substations Nos. 2 0
2 Augmentation of 33/11 KV Substations Nos. 7 3
3 Distribution Transformers (DTRs) Nos. 581 356
5 LTLine Ckm 3368.11 2167.89
6 11 KV Line Ckm 1281.94 556.38
7 33 & 66 KVLine Ckm 17 0
8 Energy Meter -Consumer Nos. 1778944 1106896
31
9 Energy Meter - DTR Nos. 23655 283

10 Energy Meter - 11 KV Feeder Nos. 103 0
11 Intensive Electrification of Villages Nos. 1315 1315
12 SAGY Villages Nos. 27 3
13 Connection to BPL Nos. 98527 108105
G.3.H GRIEVANCE REDRESSAL MECHANISM IN THE ORGANISATION
G.3.i SAFETY
Chief Safety Commissioner in the rank of Chief Engineer is the head of Safety wing. The mission
of the Safety wing is to maintain a persistent and systematic safety culture in the organization
to reduce the accidents to zero level. Safety wing has its jurisdiction all over Kerala and across
Generation, Transmission and Distribution Sectors. The safety officers conduct periodic inspections
at various offices and ascertain safety preparedness and suggest improvements.
Major initiatives of Safety Wing
(i) With a view to minimize the accidents from Board’s installations, the slogan “ZERO ACCIDENT
YEAR – 2018” is approved by the Board and it is displayed in all field offices of KSEB Ltd. This is
a psychological approach to instill the message of safety at work in the minds of all staff and
this slogan has helped in strengthening the message of “Safety First” in the minds of all field
staff of KSEB Ltd.
(ii) It has been decided to implement equipotential bonding and grounding method to avoid
chain earthing at worksites in future and to implement worksite protective earthing by using
earth discharge rods / earth discharge rods with shorting clamps.
(iii) It has been decided to modify the existing Permit To Work (PTW) by developing a system of
issuing work authorization and permit to work in an electronic platform; preferably, smart
phone compatible, to ensure more safety in distribution works.
Achievement
(i) Conducted training on First aid, usage of Personal Protective Equipments and Safety awareness
classes to Board Staff and Contract Workers in subdivision level. Conducted ‘on the job training’ to
all staff in shift duty and maintenance wing in substations and generating stations.
(ii) Developed prototypes of two innovative safety equipments such as Non-Contact Hazardous
voltage detector, ACSR Detector on experimental basis by using innovative effort of board staff.
G.3.j .IT INITIATIVES
Awards & Recognition
KSEB received 'Smart InfraStructure Innovation Award' from Indian Express Group in
November 2017 based on the effective and efficient applications developed in Open Source
platform.
32
KSEB also received a special honour from Rural Electrification Corporation for the active
participation in 'Urja Mitra' programme (the Outage Management System of REC).
Newly Developed Applications
1. Mobile application named 'KSEB' was released to customers which helps to make easy
electricity bill payment through mobile devices just by employing their mobile numbers. The
App also disseminates electricity bill information like bill amount, due date, disconnection date
etc to the customers as soon as the bill is generated in the Centralised Billing System.
2. Online Transfer module including GIS location mapping was developed and Online General
Transfer for 2017-18 was successfully implemented in HRIS software.
3. ProMoS application developed for monitoring the progress of centrally funded projects,
DDUGJY, IPDS etc was modified to carry out the Consolidated annual plan process for the year
2018-19, 2019-2020,2020-2021 and 2021-2022 and to prepare a bankable DPR and to monitor
plan progress.
4. LD Permit work Management System is developed for managing the 'Permit to Work'
processes at EHT levels which are permitted from System Operations. Permit work request
and authorisation processes are traced and controlled by the system. A modified version of the
application to suit the revised requirements of stake holders are released for testing by end
users.
5. Key Performance Indices (KPIs), for Assessment of Distribution Offices based on, integration
of applications to capture KPIs namely Customer Complaint Redressal, Release of New Service
Connection, e-payments, Safety-Zero Fatality and Quality of Power-SAIFI &SAIDI to assess and
rank distribution offices by automated method was done.
Newly added online facilities for consumers
1. Automated remittance of electricity bill directly from Bank Account through National
Automated Clearing House (NACH) Facility has been facilitated in co-operation with National
Payment Corporation of India (NPCI) with M/s Corporation Bank as the sponsor bank. A
customer who has account in any commercial bank, can avail the facility by submitting the
mandate forms at Electrical Section Offices or branches of Corporation Bank. As the electricity
bill get prepared bill amount will be debited from the account.
2. State Service Delivery Gate (SSDG) has been integration with KSEB payment system through
which public can make electricity bill payment.
3. The integration with 'SWIFT' the portal of 'Ease of Doing Business' of KSIDC through which
prospective enterpreneurs can apply for services of various utilities in a single window is in
progress.
4. Reports in the form of e-registers have been added in OrumaNET which replaced manual
registers.
5. In Enrgise, the HT Billing Software, the modification in the software as suggested by IT Audit
team of STQC (Standandardisation, Testing and Quality Certification) was done.
33
6. The centralized corporate accounting software, SARAS, is migrated to a Central Server and all
ARUs are connected to the above Server.
Part-A of RAPDRP :
Part-A of RAPDRP (sponsored by Government of India and funded through Power Finance
Corporation (PFC) for building up a solid IT infrastructure is at closure stage. TPIEA verification by
M/s PGCIL was completed and reports are submitted to M/s PFC.
RAPDRP Phase-II :
The Detailed Project Report (DPR) for 22 Crore for implementing Phase-II Incremental IT in 21
towns as a continuation of implementation of RAPDRP IT projects has been approved by PFC under
IPDS on 20.2.2017. M/s KPMG Advisory Services Ltd has been appointed as Project Management
Agency. Tendering process is in progress
New Projects
1. Enterprise Resource Planning (ERP) : Enterprise Resource Planning (ERP) Project for KSEB
Ltd has been envisaged and M/s. KPMG was appointed as Project Management Agency (PMA)
to conduct gap analysis and DPR preparation. The DPR submitted to PFC was approved in with
a funding of ` 42.64 crore from PFC. Tender documents are being prepared.
2. Smart metering : Expression of Interest (EOI) for pilot implementation of Smart meters was
published and 15 bidders participated. Technical and Evaluation committee selected 5 bidders
and LoA was awarded to implement smart meters for 25 consumers each. Implementation
initiated.
DPR was submitted to PFC to implement smart meters under UDAY project for consumers
with consumption above 200 Units per month in 63 IPDS towns (as per the direction of PFC to
be included under IPDS) for an estimated amount of ` 241.41Cr to include 4,95,000 consumers.
Approval was received from PFC with sanction for ` 64.36 crore for 3,21,800 nodes with a grant of
60% i.e. ` 38.62 Cr. Revised DPR is being prepared.
IT Networking infrastructure projects
1. Dark fibre portion of the pilot project : KSEBL was entrusted to do the dark fibre portion of the
pilot project of the National Information Infrastructure meant to integrate the network and cloud
infrastructure in the country to provide high speed connectivity and cloud platform to various
government departments.
2. ADSS OFC cables have been utilized to extend the connectivity and the distribution
infrastructure of KSEBL was utilized to draw overhead ADSS OFC cables. The project work has
been successfully completed on 31.03.2018. About 380kms of OFC has been drawn for connecting
472 offices in Thiruvananthapuram District including 54 KSEBL offices. This connectivity can be
leveraged for Information Technology (IT) and Operational Technology (OT) Applications of KSEBL
in future.
34
H.COMMERCIAL & TARIFF

A.COMMERCIAL WING
I. Power Procurement during 2017-18
A. Long Term Power Procurement
(i) Supply of 150 MW RTC power commenced on 01-10-2017 (@ `4.29/kwh as on bid date) from
Jindal Power Ltd based on the LTA granted by PGCIL to the Power Supply Agreement executed
on 29-12-2014 through bidding route.
(ii) Supply of 100 MW RTC power commenced on on 01-10-2017 (@ ` 4.29/kwh as on bid date)
from Jhabua Power Ltd based on the LTA granted by PGCIL to the Power Supply Agreement
executed on 26-12-2014 through bidding route.
(iii) Supply of 100 MW RTC power commenced on 01-10-2017 (@ ` 4.29/kwh as on bid date) from
BALCO based on the LTA granted by PGCIL to the Power Supply Agreement executed on 26-
12-2014 through bidding route.
(iv) Supply of 150 MW RTC power commenced on 01-10-2017 (@ ` 4.29/kwh as on bid date) from
Jindal India Thermal Power Ltd based on the LTA granted by PGCIL to the Power Supply
Agreement executed on 29-12-2014 through bidding route.
(v) Supply of 8.4 MW wind power from Ahalia Alternate Energy Pvt Ltd commenced on 22-02-
2016 and the PPA was executed on 16-02-2018 for a rate of ` 5.23/kwh.
(a) Supply of solar power from the first unit of the 50 MW Solar PV Power Plant of IREDA at
Ambalathara, Kasargod commenced with effect from 15-12-2016. The firm started supplying 50
MW with effect from September 2017. Payment for the energy supplied by IREDA commenced
as per B O dated 27-03-2018 at an interim tariff of ` 3.90 per kWh.
(b) Supply of 8MW renewablepower from Pathamkayam SHEP by M/s MINAR Renewable Energy
Projects Pvt Ltd commenced from 14-08-2017@ ` 3.49 per unit and payment started as per
B.O. dated 08-01-2018.
B.Short Term Power Procurement
(i)Purchase of 200 MW RTC power arranged from 01.03.2017 to 30.06.2017 through M/s PTC India
Ltd as per the Power Purchase Agreement (PPA) executed on 31.03.2016 as shown below:
Period Duration hrs Quantum (MW) Rate at Delivery Point Source of Power
on Firm basis (`/kWh)
01.03.2017 to 00:00 to
30.06.2017 24:00 (RTC) 200 MW ` 3.08/- Jindal Power
Limited(JPL)/
Jindal Steel
Power Limited
(JSPL)
35
Period Duration hrs Quantum Rate at Kerala

(MW) on Periphery Source of Power
Firm basis (`/kWh)
01-03-2017 to 31-05-2017 00:00 to Jindal India Thermal
24:00 100 MW `3.25/- Power Ltd in
Eastern Region
01-03-2017 to 31-05-2017 18:00 to Jindal India Thermal
24:00 100 MW ` 3.65/- Power Ltd in Eastern
Region
Supply of this power was received during the entire contract period, till 30-06-2017.
(ii)Purchase of 100 MW RTC power and 100 MW Peak Power arranged from 01.03.2017 to 31-05-2017
through M/sTPTCL as per the Power Purchase Agreement(PPA) executed on 22.12.2016.
Supply of this power was received during the entire contract period till 31-05-2017.
(iii) 100MW power from 08-17 hrs arranged through banking mechanism from 1st November 2017
to 31st March 2018 by participating in the bid through M/s. GMR Energy Trading Ltd (GMRETL)
floated by HPPC (Haryana Power Purchase Committee) in the Northern region. This banked power
has to be returned to HPPC as follows:
Month Return percentage Quantum in MW Duration in Hrs Delivery Point
16.06.2018- (i) 50 MW 19:00-22:00 Regional
30.09.2018 100% of banked energy Periphery
Balance quantum
uniformly 00:00-04:00 &
distributed 22:00-24:00
month wise
II.Sale of Surplus power:
KSEB Ltd started participating in tenders for purchase of power through DEEP portal invited by
various Utilites/Discoms in India for the sale of surplus available and has received Letter of Award
against 2Nos of tenders, from Bihar State Power Holding Co. Ltd (BSPHCL) for the supply of power
from KSEB Ltd during the months of June, August, September and October 2018 as follows:
1. Tender floated by BSPHCL on 05-02-2018:
From Date To Date From Hours To Hours Quantum Tariff
in MW ` Ps.
01-06-2018 30-06-2018 19.00 24.00 50 5 95
01-08-2018 31-08-2018 19.00 24.00 100 6 00
01-09-2018 30-09-2018 19.00 24.00 100 6 00
01-10-2018 31-10-2018 18.00 24.00 100 6 50
36
4. Tender floated by BSPHCL on 28-03-2018:

From Date To Date From Hours To Hours Quantum Tariff
in MW ` Ps.
01-08-2018 31-08-2018 00.00 06.00 100 4 23
It is expected to commence the supply from KSEB Ltd to BSPHCL as above from 01-06-2018
onwards.
B.TARIFF WING
• Regulatory matters:
• ARR & True-up petitions:
• In FY 2017-18, the Company was able to file true-up petition for the years 2013-14 and 2014-15
before KSERC. The Company also filed fuel surcharge petition before KSERC for the first 2 quarters
for the year 2017-18 for recovering the additional power purchase cost due to increase in fuel prices
over that approved by KSERC in the suo-motu order dated 17-4-2017.
• The Company took initiation for filing before KSERC separate capital investment plan for its
Generation, Transmission and Distribution business for the year 2017-18 in accordance with the
directions of KSERC. The Company also filed compliance report on the directives issued by KSERC
in the suo-motu order and also quarterly performance reports for all its functional units for the four
quarters of 2017-18.
• The Company could also duly and timely file its counter affidavits before KSERC on the various
petitions filed by other licensees/generators/consumers safeguarding the Company’s interests as
well as protecting the interest of the consumers. This includes the counters on the petitions filed
by M/s.KMRL, M/s.HPLC, INDSIL, INOX, IREDA, BSES, Maithon Power Ltd, Jhabua Power Limited, GJ
Eco Power Ltd., Anakampoil Power Ltd. etc.
• The Company filed before Central Electricity Regulatory Commission petition seeking
clarification on the claim of ‘Other Charges’ made by NTPC and MPL in their claim on energy
charges. The Annual Fixed Charges approved by CERC for the tariff period 2014-19 vide order dated
27-10-2016 for Rajiv Gandhi Combined Cycle Power Project, Kayamkulam was very high. KSERC
had also not approved the increased fixed charges of RGCCPP, Kayamkulam in its suo-motu order.
Specific direction was given to the Company by KSERC, to approach CERC and seek a relaxation
of norms for the plant considering the fact that the plant is not scheduled by the Company due to
its high variable cost. Therefore the Company filed a petition before CERC seeking a review of the
Annual Fixed Charge of RGCCPP, Kayamkulam.
• The Company also filed a petition before CERC for determination of transmission tariff in respect
of Kerala portion of 220 kV Interstate transmission lines of KSEBL.
• The Company could also duly and timely filed its counter affidavits before CERC on the various
petitions filed by other generators/Transmission licensees safeguarding the Company’s interests
as well as protecting the interest of the consumers. The Company could also file its comments on
37
the various draft regulations issued by CERC.

• Appeal Petitions:
• The Company filed appeal petitions before Hon’ble APTEL against the true-up orders for the
year 2011-12, 2012-13 and 2013-14.
I.HRD Initiatives
a) Man Power
The Company takes pride in its well trained, efficient, experienced and committed
manpower.
b) Training & Development
The HRD Cell co-ordinates the training activities of Power Engineers Training and Research Centre
(PETARC) at Moolamattom, four Regional Power Training Institutes at Thiruvananthapuram,
Kottayam, Thrissur and Kozhikode and Southern Region Computer Training Center at Vydyuthi
Bhavanam, Thiruvananthapuram.
PETARC is a full- fledged training center of KSE Board imparting technical as well as management
training to the officers of KSE Board and has been recognized as a Category 1 training centre
by Central Electricity Authority. The four other Regional Power Training Institutes are working
under the control of the Deputy Chief Engineer, PETARC. All the training centers are provided with
adequate training facilities.
c) Human Resource Development wing deputes officers for attending external training
programmes. For matching the academic inspiration of the employee with the needs of the
organization, KSEBL has tied up with some reputed institutions like, CPRI Bangalore, PMI Noida,
TNEB Madurai, NPTIs, PSTI Bangalore, RECIPMT, Hyderabad etc. HRD Cell has deputed 14 officers
abroad and 131 persons for various training programmes outside the state and 171 persons for various
training programmes in the training centers inside the state. 19578 employees have been trained
on various subjects through own training centres of KSEBL during 2017-18. In addition to the above,
KSEBL has introduced numerous initiatives which helps to enhance creativity, functional aptitude,
innovation, leadership quality, teamwork, etc., of the employees.
d) The Company had constituted a committee for formulating a training policy as per the National
Training Policy 2012 issued by, Ministry of Personnel, GoI. KSEBL adopted this policy w.e.f April
2017.National Training programme to the C&D employees (Sub Engineer, Senior Assistant, Cashier,
Overseer, Lineman, Meter Reader, Electricity Worker etc.) with the financial assistance of Ministry
of Power, Government of India aims to improve the overall performance of the employees who
have more interfaces with the customers. KSEBL has executed MoU with REC-CIRE, the nodal
agency for implementing the programme.
Industrial Relations
A cordial and harmonious relationship exists between the company and its workmen, officers and
the pensioners.
38
J.CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS & OUTGO
The information pertaining to Conservation of Energy,Technology Absorption and Foreign
Earnings & Outgo as required under Section 134(3)(m) of the Companies Act 2013 read with Rule
8(3) of the Companies (Accounts) Rules,2014 is furnished in Annexure 1 attached to and forming
part of this Report.
K.EXTRACTS OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies (Management
and Administration) Rules 2014, the extract of Annual Return is enclosed as Annexure 2.
L. Internal Control System and their adequacy
The Company has a very effective internal control system commensurate with its size and
nature of business and complexity of its operation. The internal control system is designed through
providing adequate hierarchy of functional levels and Central information with greater stress on
the high value items .The internal audit is headed by the Chief Internal Auditor .There are Regional
Audit Officers to conduct audit at regional level. In addition, the Resident Concurrent Audit section
attached to the office of Chief Internal Auditor with three pre-check units across the state is
entrusted to carry out pre-check of major bills related to IT, System Operation, Civil, Transmission
and Generation Wings. This ensures that the internal audit is conducted in proper manner and is
also reviewed periodically. The Operational, compliance related financial and economic matters
are properly identified and managed overtime.
M.Risk Management policy
The Company, which is the Distribution Licensee & State Transmission Utility under Section 14
of the Electricity Act 2003 also owning power generating assets in the State of Kerala, is wholly
owned by Government of Kerala. The Company functions in accordance with the policies of the
State as well as Central Government in discharging its duties and responsibilities.
N.Policy of Director’s Appointment,etc
The Company being a Government Company, the provisions of Section 134(3)(e) of the Companies
Act 2013 are not applicable in view of the Notification No.GSR -463(E) dated 5.06.2015 issued by the
Ministry of Corporate Affairs, Government of India.
O.Details of joint venture / associates / subsidiary company
a)Baitarni West Coal Company Limited(BWCCL)
BWCCL (U401020R2008SGC009955)has its corporate office at Setu Bhawan,Plot No3(d)
Nayapally Bhubaneswar, Orissa. BWCCL is a Joint Venture Company between KSEBL,OHPCL and
GEL with contribution of 33.33 % Equity Share, holding 100000 number of equity shares of Rs.1000
each amounting to Rs.10 crore.
39
b) Kerala State Power and Infrastructure Finance Corporation limited(KSPIFCL)

KSPIFCL(U65910KL1998SGC012160) has its corporate Office at KPFC Bhavanam, Vellayambalam,
Trivandrum. KSEBL is an associate company with KSPIFCL having 40.6% Equity Shares, holding
10819470 equity shares of ₹ 10/- each amounting to ₹ 10,81,94,700.00
c) Renewable Power Corporation of Kerala Limited(RPCKL)
RPCKL(U40106KL2016PLC039891) has its head quarters at Vydyuthi Bhavanam,
Thiruvananthapuram and has an authorized and paid up capital of ` 1 crore of which KSEBL holds
50 % Shares( 5,000 Equity shares of ₹ 1000/- each).
P. Declaration by Independent Directors.
As per the provisions of Section 149 of the Companies Act 2013 read with notification dated
5.06.2015 issued by the Ministry of Corporate Affairs, Independent Director of the Government
Company shall be a person who is in the opinion of the Ministry or Department of the Central
Government which is administratively in charge of the Company or as the case may be the State
Government is a person of integrity and possess relevant expertise and experience. Accordingly,
the Government of Kerala had appointed Dr.V.Sivadasan as independent Director of the Company
on 2.07.2016. Hence the Declaration by Independent Directors has been furnished from the year
2016-17 onwards.
Q. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted on 17.05.2016, a “Corporate Social Responsibility Committee”
(CSR Committee) in accordance with Section 135 read with the Companies (CSR Policy) Rules 2014.
The Committee has formulated and recommended to the Board, a Corporate Social Responsibility
Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been
approved by the Board. The policy adopted by the company is posted on the Company’s website
at www.kseb.in.
R. AUDIT COMMITTEE
The Audit Committee has been reconstituted on 3.5.2016 with the terms of reference as
prescribed in Section 177 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings
of the Board and its Powers) Rules 2014.The Chairman of the Audit Committee is an Independent
Director.
S. ESTABLISHMENT OF VIGIL MECHANISM
As per requirement of Section 177 of the Companies Act 2013 and rules made there under
the Vigil mechanism for Directors and Employees has been established in KSEBL and the policy
documents have been published in the official Website of the Company. No complaints have been
received under vigil mechanism during the year.
T. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
MCA vide notification dated 05.06.2015, has exempted the applicability of Section 188(1)
(related Party transaction of the Companies Act, 2013 for a transaction entered into between two
40
Government Companies. The particulars of every contract or arrangements entered into by the
Company with related parties referred to Section 188(1) of the Companies Act,2013, disclosed in
Form No.AOC 2 is enclosed.
U. RIGHT TO INFORMATION ACT 2005 (RTI)
KSEBL has put in place an effective mechanism for implementation of RTI Act 2005. Public
Information Officers and Appellate Authority have been designated at all levels from Section Office
to the Head office for giving information to the public as per the requirements of the RTI Act 2005.
V. CONSUMER GRIEVANCES REDRESSAL FORUM:
The Company has set up the Consumer Grievance Redressal Forums as mandated by
the Electricity Act 2003 and the Regulations notified there under, within its jurisdiction for quick
disposal of consumer’s grievances.
Details of complaints received, settled and pending for disposal in three CGRFs are given
below.
South Central North Total
Complaints received 286 172 282 740
Complaints settled 247 99 224 570
Complaints to be settled 39 73 58 170
W. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding
sexual harassment.
Summary of Sexual harassment issues raised, attended and dispensed during the year 2017-18.
No: of complaints pending disposal at the beginning of the year- 04
No: of complaints received in 2017-18 – 10
No: of complaints disposed off during the year 2017-18 – 13
No: of complaints pending disposal at the end of the year- 01
X. AUDITORS
III. STATUTORY AUDITORS
The three Chartered Accountant Firms in Thiuvananthapuram-M/s G.Venugopal Kamath &
Co, M/s Issac & Suresh and M/s Ananthan & Sundaram were appointed as Statutory Auditors by
the Comptroller and Auditor General of India during the financial year under report. They have
audited the financial statements for the year ended 31st March 2018 and submitted their report.
No instances of fraud has been reported by the Auditors under Section 143(12) of the Companies
41
Act, 2013.The explanations/comments by the Board on every qualification, reservation or adverse

remarks or Disclaimer made by them is provided in Annexure-A attached.
IV. C&AG COMMENTS
The Comptroller and Auditor General of India (C&AG) have conducted supplementary Audit under
Section 143 of the Companies Act of the financial statements for the financial year ended 31st
March 2018.The comments vide report No dated is enclosed herewith. The explanations/comments
by the Board on every qualification, reservation or adverse remarks made by them is provided in
Annexure-B attached.
V. SECRETARIAL AUDITORS
In terms of the provisions of Section 204 of the Companies Act 2013, the Board has appointed
practicing Company Secretary Shri N.C Nair, Thiruvananthapuram for conducting Secretarial Audit
for the financial year 2017-18.Secretarial Audit Report (Form MR-3) for the Financial Year 2017-18
issued by the Secretarial Auditor is attached as Annexure-C .The replies to the adverse comments,
qualifications or reservation is furnished as Annexure-D.
Y.DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to clause (c) of subsection (3) read with sub section (5) of section 134 of the Companies
Act 2013, the Directors to the best of their knowledge and belief confirm that,
a. In preparation of the Annual Accounts for the year ended 31st March 2018, the applicable
accounting standards have been followed along with proper explanation relating to material
departures.
b. The Directors had selected such accounting policies and applied them consistently and made
judgement and estimates that are reasonable and prudent so as to give a true and fair view of
state of affairs of the company as at March 31 ,2018 and the profit or loss of the company for that
period.
c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act 2013 to the extent applicable
for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities.
d. The Directors had prepared the financial statements as a going concern basis.
e. The Directors had devised proper system to ensure compliance with the provision of all the
applicable laws and that such a system are adequate and operating effectively.
Z. GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items
as there were no transactions on these items during the year under review:
• Deposits covered/as defined under Chapter–V of the Companies Act 2013 read with the
Companies (Acceptance of Deposits) Rules 2014.
42
• Issue of Equity shares with differential rights as to dividend, voting or otherwise.

• Issue of Shares (including sweat equity shares) to employees of the Company under any scheme.
• Significant or material orders were passed by the Regulators or Courts or Tribunals which
impact the going concern status and Company's operations in future.
• Material Changes and Commitments affecting the financial position of the company occurred
subsequent to the date of Balance Sheet.
• The Company is engaged in the infrastructure sector which is covered under the exemption
provided under Section 186(11) of the Companies Act 2013.Accordingly the details of loan given
or guarantee or security provided by the Company are not required to be reported.
• The Company being a Government Company is exempted vide Notification No.GSR-463(E) dated
05-Jun-2015 issued by the Ministry of Corporate Affairs, Govt. of India, to furnish information as
required under section 197 of the Companies Act, 2013 relating to particulars of employees.
• There were no instance of frauds identified or reported by the Statutory Auditors during the
course of their audit pursuant to section 143(12) of the Companies Act, 2013.
ACKNOWLEDGEMENT
The Board wishes to place on record their gratitude to the Central and State Government
Department/Agencies, Central and State Electricity Regulatory Commissions, Appellate Tribunal,
Financial Institutions and Banks, Consumers and various other stakeholders for their continued
assistance, cooperation and patronage. The Board is thankful to Comptroller & Auditor General of
India, Statutory Auditors, Cost Auditor and Secretarial Auditors and Consultants/Advisors for their
suggestions and cooperation. Last but not least, the Board would also like to place on record its
deep sense of appreciation for the dedicated and committed services rendered by the employees
at all levels.
For and on behalf of the Board of Directors
Place: Thiruvananthapuram
Date: 29.06.2019
Sd/-
N.S.PILLAI
CHAIRMAN & MANAGING DIRECTOR
43
ANNEXURE-1
2017 - 18
Information on Conservation of Energy, Technology Absorption and Foreign Exchange

Earnings and Outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read
with Rule-8(3) of the Companies(Accounts)Rules , 2014.
(A) Conservation of energy –
i) The steps taken or impact on conservation of energy.

a) Implementation of energy loss reduction in Jaladhara/Jalanidhi, drinking water pumping
system at Erattupettah municipality with the financial support by EMC.
b) Completed the Energy Audit of Govt. Medical college, Thiruvananthapuram and the
report submitted to the Board and client. Discussion is in progress for entering as PMC
in the implementation of recommendations Completed and the report submitted to the
Board and client. Discussion is in progress for entering as PMC in the implementation of
recommendations.
c) Energy Audit of Kerala Science and Techconolgy Planetarium and Museum,
Thiruvananthapuram is completed and report preparation is in progress and Energy Audit at
Kariyavattom University buildings, Thiruvananthapuram is in progress.
d) Standardization of Distribution Transformer (DTR) stations- in ES-Adimaly, Rajakkad &
Rajakumary by using Government fund.
e) (High Voltage Distribution System) HVDS implemented at Konni Electrical Section under ED,
Pathanamthitta by using Govt fund.
f) Implementation of Energy Audit recommendations of 220 KV Substation Edappon
(Replacement of AC, yard lights, fans etc.)by using Govt. fund.
g) DELP Project cost- Distributed 4521241 LED Bulbs during this year to the consumers.
h) Vallachira LED Street Light project for retrofitting 407 street lights (Phase 1)-completed the
Project cost- Rs. 49.36 L.
i) Street light project at Alappuzha Municipality completed.
j) Capacity addition of wind projects-1 MW(4*250 KW) wind project developed by Kosamattom
Finance Ltd as IPP added to KSEBL grid.
k) Capacity addition of Small Hydro Electric projects- 8 MW Pathamkayam SHEP developed
M/s MINAR Renewable Energy Projects Pvt Ltd as IPP added to KSEBL grid.
m) Energy efficient local water pumping system installed at Erattupettah; 12.5 Hp motor
installation (sanctioned Amount- Rs.82,975/-)- Work completed.
44
ii) The steps taken by the company for utilizing alternate sources of energy.
COMPLETED SOLAR PROJECTS
Sl no. Name of the projects Installed capacity (MW) Date of completion
1 Thalakkulathoor, Kozhikode 0.65 22.04.2017
2 Roof top of Suitable buildings of

KSEBL Transmission wing (27 no.) 0.910 02/2018
3 Roof top of Suitable buildings of

KSEBL Distribution wing (12 no.) 0.46 21.12.2017
4 Roof top of Vythuthi bhavan,

Trivandrum 0.03 17.05.2017
5 Manjeshwaram ,Kasargod 0.50 30.05.2017
6 Kuttippuram 0.50 28.11.2017
7 Banasurasagar reservior/kakkayam
grid connect floating 0.50 04.12.2017
8 Pezhayikkapalli-Moovattupuzha,
Ernakualm 1.25 15.01.2018
9 Premise of Pothencode substation 2.00 02.02.2018
On grid consumers as on 31.03.2018 15.453
iii) The capital investment on conservation equipments.
--
(B) Technology absorption –
i) The efforts made towards • Development of IT infrastructure updation.

technology absorption ; • Implementation of SCADA and DMS
ii) The benefits derived like • Safety of Working Staff.

product improvement cost reduction, • Reduction in Power Interruptions.
product development or import • Consumer satisfaction on correct billing.
substitution.
iii) In case of imported technology

(imported during the last three Nill
years reckoned from the beginning
of the financing year).
45
(a) The details of technology imported.

(b) The year of import;
(c) Whether the technology
been fully absorbed;
(d) If not fully absorbed, areas
where absorption has not taken
places, and the reasons thereof, and
iv) The expenditure incurred on -
Research and Development.
(C) Foreign exchange earnings

and outgo
The Foreign Exchange earned in
terms of actual inflows during the
years and the Foreign Exchange - NIL -
outgo during the year in terms of
actual outflows.
For and on behalf of the Board
Date: 29.06.2019 Sd/-

Place : Thiruvananthapuram. CHAIRMAN AND MANAGING DIRECTOR
46
ANNEXURE –III 2017-18

FORM NO. AOC-2
Form for disclosure of particulars of contracts/arrangements entered into by the company with
related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including
certain arms length transactions under third proviso thereto (Pursuant to clause (h) of
sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
1. Details of contracts or arrangements or transactions not at arm's length basis
Sl. No. Particulars Details

A Name(s) of the related party and nature of relationship -
B Nature of contracts/arrangements/transactions -
C Duration of the contracts / arrangements / transactions -
D Salient terms of the contracts or arrangements or
transactions including the value, if any -
E Justification for entering into such contracts or
arrangements or transactions -
F Date of approval by the Board -
G Amount paid as advances, if any -
H Date on which the special resolution was passed in General
meeting as required under first proviso to section 188 -
2. Details of material contracts or arrangement or transactions at arm's length basis
Sl. No. Particulars Details

A Name(s) of the related party and nature of relationship
B Nature of contracts/arrangements/transactions
C Duration of the contracts /arrangements /transactions
D Salient terms of the contracts or arrangements or
transactions including the value, if any:
E Date(s) of approval by the Board, if any
F Amount paid as advances, if any:
Note: Form shall be signed by the persons who have signed the Board's report.
By the order of Board,
For Kerala State Electricity Board Limited
Sd/-
Chairman & Managing Director
47
FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration ) Rules, 2014.
I REGISTRATION & OTHER DETAILS:
i CIN U40100KL2011SGC027424
ii Registration Date 14/01/2011
iii Name of the Company KERALA STATE ELECTRICITY BOARD LIMITED
iv Category/Sub-category of the Company PUBLIC LIMITED BY SHARES /
KERALA STATE GOVERNMENT COMPANY
v "Address of the Registered office VYDYUTHI BHAVANAM, PATTOM,
& contact details" THIRUVANANTHAPURAM KERALA -695004,
INDIA
vi Whether listed company NO
vii Name , Address & contact details of the
Registrar & Transfer Agent, if any. Not Applicable
II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company shall
be stated
SL No Name & Description NIC Code of the % to total turnover
of main products/services Product /service of the company
1 Electricity,gas,steam and air
condition supply / Electric D-35-351 100%
power generation,transmission
and distribution
III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES
Sl Name & Address of the CIN/GLN HOLDING/ % OF APPLICABLE
No Company SUBSIDIARY/ SHARES SECTION
ASSOCIATE HELD
1 BAITARNI WEST COAL
COMPANY LIMITED U40102OR2008SGC009955 Joint Venture 33.33 Sec. 2(6)
2 KERALA STATE POWER
AND INFRASTRUCTU-
RAL FINANCE U65910KL1998SGC012160 Associate 40.6 Sec. 2(6)
CORPORATION
LIMITED
3 RENEWABLE POWER
CORPORATION OF U40106KL2016PLC039891 Joint Venture 50 Sec. 2(6)
KERALA
48
IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity) 2017-18
(i)Category of
Shareholders No. of Shares held at the No. of Shares held at the % change
beginning of the year end of the year during
the year
Demat Physical Total % of Total Demat Physical Total % of Total
Shares Shares
A. Promoters NIL
(1) Indian
a) Individual/HUF 6 6 0.00000017 6 6 0.00000017
"b) Central Govt.or
State Govt." 3499049994 3499049994 99.99999983 3499049994 3499049994 99.99999983
c) Bodies Corporates
d) Bank/FI
e) Any other
SUB TOTAL:(A) (1) 3499050000 3499050000 100.0000 0 3499050000 3499050000 100.0000
(2) Foreign
a) NRI- Individuals
b) Other Individuals
c) Bodies Corp.
d) Banks/FI
e) Any other…
SUB TOTAL (A) (2)
"Total Shareholding of Promoter
(A)= (A)(1)+(A)(2)"
B. PUBLIC SHAREHOLDING
(1) Institutions
a) Mutual Funds
b) Banks/FI
C) Cenntral govt
49
d) State Govt.
IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity) 2017-18
50
(i)Category of
Shareholders No. of Shares held at the No. of Shares held at the % change
beginning of the year end of the year during
the year
Demat Physical Total % of Total Demat Physical Total % of Total
Shares Shares
e) Venture Capital Fund
f) Insurance Companies
g) FIIS
"h) Foreign Venture
Capital Funds"
i) Others (specify)
SUB TOTAL (B)(1):
(2) Non Institutions
a) Bodies corporates
i) Indian
ii) Overseas
b) Individuals
i) Individual shareholders
holding nominal share
capital upto Rs.1 lakhs
ii) Individuals shareholders
holding nominal share
capital in excess of Rs. 1 lakhs
c) Others (specify)
SUB TOTAL (B)(2):
Total Public Shareholding
(B)= (B)(1)+(B)(2)"
C. Shares held by Custodian
for GDRs & ADRs"
Grand Total (A+B+C) 3499050000 3499050000 100.0000 0 3499050000 3499050000 100
Sl Shareholders Shareholding % of total % of shares Share % of total % of shares % change
No. Name at the shares pledged holding shares pledged in share
beginning of the encumb- at the of the pledged holding
of the year company ered to end of the company to total during the
total year shares year
NO of shares shares NO of shares
1 Governor of Kerala
represented by Sri Paul
Antony.IAS 3499049994 99.9999 3499049994 99.9999 NIL
2 N.S.Pillai 1 0.00000003 1 0.00000003
3 P.Vijayakumari 1 0.00000003 1 0.00000003
4 Dr.K.M.Abraham IAS 1 0.00000003 1 0.00000003
5 Dr.K.Ellangovan 1 0.00000003 1 0.00000003
6 N.Venugopal 1 0.00000003 1 0.00000003
7 S.Rajeev 1 0.00000003 1 0.00000003
Total 3499050000 99.99990017 3499050000 100.000
51
(iii) CHANGE IN PROMOTERS' SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)

Sl. Share holding at Cumulative Share
No. the beginning holding during
of the Year the year
No. of Shares % of total shares No of shares % of total shares
of the company of the company
At the beginning
of the year 3499050000 100.00000000 3499050000 100.00000000
Date wise
increase/decrease
in Promoters Share
holding during the
year specifying the
reasons for increase
/decrease (e.g.
allotment/transfer/
bonus/sweat
equity etc)
At the end of the year 3499050000 100.00000000 3499050000 100.00000000
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of
GDRs & ADRs)
Sl. Shareholding at Cumulative during
No the end Shareholding
of the year the year
For Each of the No.of shares % of total shares No of shares % of total shares
Top 10 Share of the company of the company
holders
At the beginning
of the year
Date wise increase/
decrease in Promoters
Share holding during
the year specifying the
reasons for increase/
decrease (e.g. allotment
/transfer/bonus/sweat
equity etc)
At the end of the year
(or on the date of
separation, if separated
during the year)
52
(v) Shareholding of Directors & KMP

Sl. Shareholding Cumulative during
No at the end of Shareholding
the year the year
For Each of the No.of shares % of total shares No of shares % of total shares
Directors & KMP of the company of the company
At the beginning of
the year
1 DR.K.ELLANGOVAN 1 0.00000003
2 K.M.ABRAHAM 1 0.00000003
3 SIVASANKARA PILLAI
NARAYANA PILLAI 1 0.00000003
4 PAROL VIJAYAKUMARI 1 0.00000003
5 SIVARAMAN RAJEEV 1 0.00000003
6 N.VENUGOPAL 1 0.00000003
At the end of the year
1 SIVASANKARA PILLAI
NARAYANA PILLAI 1 0.00000003
2 DR.K.ELLANGOVAN 1 0.00000003
3 MANOJ JOSHI 1 0.00000003
4 VENUGOPAL.N 1 0.00000003
5 P.VIJAYA KUMARI 1 0.00000003
6 S.RAJEEV 1 0.00000003
53
V INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Secured Loans Unsecured Total

excluding deposits Loans Indebtedness
Indebtness at the beginning
of the financial year
i) Principal Amount 44,80,36,94,843.00 18,87,50,00,000.00 63,67,86,94,843.00
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii) 44,80,36,94,843.00 18,87,50,00,000.00 63,67,86,94,843.00
Change in Indebtedness during
the financial year
Additions 9,55,27,71,786.00 3,03,79,15,597.00 12,59,06,87,383.00
Reduction 3,03,79,15,597.00 3,03,79,15,597.00
Net Change -
Indebtedness at the end of
the financial year -
i) Principal Amount 54,35,64,66,629.00 15,83,70,84,403.00 73,23,14,66,629.00
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii) 54,35,64,66,629.00 15,83,70,84,403.00 73,23,14,66,629.00
54
VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole time director and/or Manager:
Sl. Particulars of Remuneration Name of the MD/WTD/Manager

No Managing Director
1 Gross salary N.SIVASANKARAN DR. K. ELLANGOVAN
PILLAI IA& AS IAS
(a) Salary as per provisions 26,37,778.00 26,69,575.00
contained in section 17(1) of the
Income Tax. 1961.
(b) Value of perquisites u/s 17(2)
of the Income tax Act, 1961
(c ) Profits in lieu of salary under
section 17(3) of the Income
Tax Act, 1961
2 Stock option
3 Sweat Equity
4 Commission
as % of profit
others (specify)
5 Others, please specify
Total (A) - 26,37,778.00 26,69,575.00
Ceiling as per the Act - 60,00,000.00 60,00,000.00
B. Remuneration to other directors:
Sl. Particulars of Remuneration Name of the Directors
No
1 Independent Directors
(a) Fee for attending board
committee meetings 8,280.00
(b) Commission -
(c ) Others, please specify -
Director Remuneration
Director Remuneration
Total (1) -
2 Other Non Executive Directors
"(a) Fee for attending
board committee meetings" -
(b) Commission -
(c ) Others, please specify. -
Total (2) -
Total (B)=(1+2) -
Total Managerial Remuneration
Overall Cieling as per the Act.
55
Sl. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
56
No
Whole Time Director
1 Gross salary N.VENEUGOPAL P.VIJAYAKUMARI O.ASOKAN S.RAJEEV P.KUMARAN
(a) Salary as per provisions contained
in section 17(1) of the Income Tax. 1961. 20,23,968.00 20,01,808.00 5,01,063.00 41,75,789.00 13,55,425.00
(b) Value of perquisites u/s 17(2)
of the Income tax Act, 1961
(c ) Profits in lieu of salary under
section 17(3) of the Income
Tax Act, 1961
2 Stock option
3 Sweat Equity
4 Commission
as % of profit
others (specify)
5 Others, please specify
Total (A) 20,23,968.00 20,01,808.00 5,01,063.00 41,75,789.00 13,55,425.00
Ceiling as per the Act 60,00,000.00 60,00,000.00 60,00,000.00 60,00,000.00 60,00,000.00
VII PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
Type Section of Brief Details of Authority Appeall

the Companies Description Penalty/ (RD/NCLT/ made if any
Act Punishment/ Court) (give details)
Compounding
fees imposed
A. COMPANY
Penalty NIL
Punishment
Compounding
B. DIRECTORS
Penalty NIL
Punishment
Compounding
C. OTHER
OFFICERS IN
DEFAULT
Penalty NIL
Punishment
Compounding
sd/-
CHAIRMAN AND MANAGING DIRECTOR
57
G.Venugopal Kamath & Co Isaac & Suresh. Ananthan&Sundaram

Chartered Accountants Chartered Accountants Chartered Accountants
#273, 3rd Floor, DD VastraMahal, Thennala Towers, 123,Sivakarthi, SankarNagar,
Market Road, Ernakulam Thiruvananthapuram Neeramankara, Kaimanam
Thiruvananthapuram
Independent Auditors’ Report
To the Members of KERALA STATE ELECTRICITY BOARD LIMITED
Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of KERALA STATE
ELECTRICITY BOARD LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,
2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow
Statement and the Statement of Changes in Equity for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
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
Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS
financial statements that give a true and fair view of the state of affairs (financial position), profit
or loss (financial performance including other comprehensive income), cash flows and changes in
equity of the Company in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the standalone Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based
on our audit. We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the provisions
of the Act and the Rules made there under. We conducted our audit in accordance with the
Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the
disclosures in 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 financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the Company's preparation
58
of the standalone Ind AS financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the overall presentation of the
standalone Ind AS financial statements. We believe that the audit evidence obtained by us is
sufficient and appropriate to provide a basis for our audit qualified opinion on the standalone Ind
AS financial statements.
Basis for Qualified Opinion
1. In respect of Note 2 to accounts: “Property, Plant and Equipment”- Intangible Assets.
a) As per Appendix-III of CERC Notification No L-1/153/2014/CERC, ‘Softwares’ are subject to a
depreciation of 30%. Instead the Company follows the practice of pooling Software along with
item ‘IT Equipment’ which has a depreciation rate of 15%.
During the year, the Company has ascertained an amount of ₹ 815.89 Lakhs as the development
and implementation cost of software which has been included under Note No. 3- Capital Work
in progress as Revenue expenses pending allocation over capital works.
This is not in conformity with the Indian Accounting Standard (Ind AS) 38 – Intangible Assets.
In the absence of requisite details, we are unable to verify the correctness of the said amount
and the impact of the above on the depreciation/amortisation.
b) ‘Deferred Cost on Account of Feasibility/Survey’ amounting to ₹ 10,557.28 Lakhs being cost of
projects not yet sanctioned and accumulated over the years has been wrongly classified under
Note No.7- Other Non Current Assets, which is not in accordance with Ind AS 38 – Intangible
assets and Ind AS 16- Property Plant and Equipment. As the statuses of these projects are yet
to be ascertained, we are unable to comment the impact thereof on the financial statements.
c) Property Plant and Equipment and capital work in progress:
A. Depreciation on additions to fixed assets, except for capital works in progress capitalized, is
charged in the year in which it was purchased/ commissioned without considering date on
which the asset is ready for use. This is not in conformity with Ind AS -16 on “Property, Plant and
Equipment”, leading to understatement of Property, Plant and Equipment and overstatement
of depreciation and loss for the year; However due to lack of necessary information, the impact
of the same cannot be quantified.
B. As per Ind AS 16-Property Plant and Equipment, the asset should be recognized if it is probable
that future economic benefits associated with the item will flow to the entity; and the cost of
the item can be measured reliably.
The Company has capitalized `12592.87 Lakhs on 31/03/2018 in distribution units visited by
us without considering above criteria for recognition of assets. Also on verification of the
transmission and generation units visited by us and as per the representation received, it was
found that the capital work in progress has been capitalized as and when ‘Commissioned’
without considering the above criteria.
Further, we are not in a position to quantify the same and the impact of the above on the
depreciation.
C. (i) On verification of bills submitted during the course of audit it was found that the capitalization
was delayed for assets, amounting `2290.80 Lakhs including the assets to be capitalized under
59
RAPDRP and DDUGJY scheme, which have already satisfied the recognition criteria specified
in Ind AS 16 in previous years. Capitalization has been delayed in various projects and hence
there is a corresponding impact in depreciation, fixed assets, Capital work in progress and
current liabilities for capital assets during the previous years which cannot be quantified.
(ii) Based on the submitted bills and units visited by us during audit, we observed that, during
2017-18 certain assets satisfy the criteria for recognition, in compliance to Ind AS 16, but has not
capitalized an amount of ` 203.22 Lakhs including the assets to be capitalized under RAPDRP
and DDUGJY scheme. Capitalization has been delayed in various projects and hence there is
a corresponding impact in depreciation, fixed assets and capital work in progress for capital
assets during the year which cannot be quantified.
(iii) In units visited by us, revenue expenditure amounting to ₹ 524.38 Lakhs has been capitalized;
resulting in overstatement of assets and understatement of expenditure and the consequent
impact on depreciation could not be quantified.
(iv) In units visited by us, the capital expenditure amounting to ₹ 22.03 Lakhs has been charged to
the revenue, resulting in understatement of assets and overstatement of expenditure and the
consequent impact on depreciation could not be quantified.
D. In ARU 310, Electrical Circle, Kozhikode, the solar plant has been wrongly classified and
capitalized under account code 10205 – Buildings amounting to `450 Lakhs, which is not in
compliance to Ind AS 16. This has resulted in overstatement of building and understatement
of plant and equipment. This impact on depreciation of corresponding assets cannot be
quantified due to lack of details.
E. As per Ind AS 16 –‘Property Plant and Equipment’, an asset should be capitalized on satisfying
the criteria for recognition, considering all elements of cost. However, the units have capitalized
the solar equipments purchased under KSEB (REES) only to the extent of part payment
made to the suppliers, which has resulted in understatement of asset and current liabilities.
Since proper details for verification have not been submitted by the company, the impact of
understatement of asset and liabilities and depreciation thereon cannot be quantified.
F. As per the letter No. Annual Accounts 9/ capitalization /2017-18, in ARU 307, Electrical Circle,
Ernakulam has capitalized an amount of ₹406.75 Lakhs being interest and finance charges
and other expenses apportioned and proportionate advertisement expenditure under asset-
Lines and Cables without considering the recognition criteria in Ind AS 16. We observed that,
the ARU has not capitalized any assets during the year except the general purpose assets.
Similarly in ARU 204, an amount of ₹ 26.74 Lakhs has been allocated to land which has resulted
in overstatement of land and understatement of other assets.
The accounting treatments is not in compliance to Ind AS 23 on Borrowing Cost and Ind AS
16 on Property Plant and Equipment, results in over valuation of assets and corresponding
depreciation.
G. During the year, ARU 214 and ARU 203 capitalized amount of ₹ 2275.56 Lakhs and ₹3227.42
Lakhs respectively for which no necessary details and supporting documents have been
submitted for verification. Hence, we are not in a position to comment on the capitalization of
the said assets.
60
H. Attention is invited to Note No. 3 - Capital Work in Progress, which includes revenue expenses
pending allocation amounting to ₹ 40,243.99 Lakhs. The Company has capitalized borrowing
cost on weighted average basis without considering the daily balances of the loans and
borrowings held by the Company. The Company has also not allocated specific borrowing
costs applicable to specific projects as required in Ind AS 23- Borrowing cost. Further, the
Company does not cease to capitalize borrowing costs upon date when the qualifying asset is
ready for intended use which is also not in compliance to Ind AS 23. Due to lack of necessary
information, we are unable to comment on the capitalization of the amount and depreciation
thereon.
An amount of ₹ 23,496.41 Lakhs has been capitalized out of revenue expenses pending
allocation during the year without considering of the extent the work already completed or
ready to use. The details such as the basis of capitalization, the block under which the same
has been capitalized, depreciation provided on the same etc. were not made available for our
verification. Out of the above ₹ 1705.86 Lakhs relates to administration and general overheads
and ₹ 132.74 Lakhs relates to advertisement. However, the capitalization of administration and
general overheads and advertisement are not in compliance to Ind AS 16. As a result, property
plant and equipment are overstated by ₹ 1838.60 Lakhs and Loss / Reserves are understated
by ₹ 1838.60 Lakhs.
I. As per the Accounting policy, the Company allocates Employee cost, interest and financial
costs of various units to “Revenue expenses pending allocation over capital works” on the
basis of a specified ratio identified by the Company. However Company has not considered
an amount of ₹ 1,660.37 Lakhs being ‘Employee cost relating prior periods short provided’
and ₹ 900 Lakhs being DA arrear provided during current year while allocating the employee
cost. This has resulted in understatement of Capital Work in progress and overstatement of
expenditure and loss amounting to ₹ 2560.37 Lakhs
J. Title deeds of immovable properties were not produced for our verification.
K. As per paragraph 8 of Ind AS 16, Property, Plant and Equipment, items such as spare parts are
to be capitalized in accordance with recognition criteria, when they meet the definition of
‘property, plant and equipment’. Since the required details are not available, we are not able to
quantify the impact of the same in the Financial Statements.
L. As per note to accounts no 35.1 &35.15(i), the opening balance sheet for the Company as on
01/11/2013, has been adopted as per the Re-vesting second Transfer (Amendment) scheme (Re-
vesting) 2015. The company has not considered increase in the value of plant and machinery
as a result of such restatement amounting to Rs. ₹ 10,71,199.95 Lakhs while computing
depreciation. The disclosure made by the Company regarding the accounting treatment of
above assets and liabilities is incomplete.
M. As per the units visited by us and their explanations, the Units have capitalized the entire
material issued and consumed in various projects without considering the recognition criteria
in compliance to Ind AS 16. The accounting treatment thus resulted in over statement of the
property plant and equipment for the year 2017-18. In the absence of necessary information we
are unable to comment the impact thereof on the financial statements.
d) Sale, deletion or decommissioning of asset:
i) The Company has a system of accounting sale of Property, Plant and Equipment either in
miscellaneous receipts or in sale of scrap without giving effect to the fixed assets ledger. The
61
Company has also not disclosed the details of deletions and decommissioning during the year.
Thus the accounting treatment is found not in compliance to Ind AS 16-Property, Plant and
Equipment. In the absence of required information we are unable to quantify the impact on
Property, Plant and Equipment, Depreciation for the year and Other Income.
ii) As per Agenda no - 34-2-7/2017 of Board of Directors meeting held on 27/07/2017 Company
had decided to sell the dismantled materials of Eranad Lines Package- A and Northern Region
HTLS Package- B of trans grid 2.0 to Sterlite power transmission ltd for an amount of ₹ 1093.12
Lakhs and as per Agenda no 15-01/2018 Company had decided to sell the dismantled materials
of Kochi lines Package to L&T Ltd. for an amount of ₹ 1007.10 Lakhs. As per the information
available, the Company accounted the same as sale of scrap instead of showing as deletion of
fixed assets which has resulted in overstatement of fixed assets and miscellaneous income of
₹ 2100.22 Lakhs and overstatement of depreciation. Due to lack of detailed list of dismantled
items we are not in a position to quantify the depreciation amount.
2. The Company has not complied with Ind AS 36- Impairment of Assets. Due to lack of necessary
information we are not in a position to quantify the impact.
3. As per Ind AS 105- ‘Non Current Assets held for sale and Discontinued Operations’, the non-
current assets recognized as scrap should be separately disclosed. We observed that, the
company has not complied with the Ind AS, with regard to the assets recognized as scrap and
to be held for sale. Due to lack of necessary information we are not in a position to quantify the
impact of the same.
4. (a) In Note No.5 ‘Non Current Assets - Financial Assets – Loans’-includes an amount of ₹5250
Lakhs being Interest bearing loan to Energy Management Centre. The Company has provided
interest for the period 2010-11 and 2011-12 amounting to ₹ 476.90 Lakhs and ₹ 697.16 Lakhs
respectively. The Company has not provided interest on this loan henceforth, as there is an
uncertainty in the realization of interest. As per the terms and conditions, the loan is repayable
by Energy Management Centre only if the Certified Emission Reduction is available from
UNFCC to obtain Carbon credit. As per the information available from the management,
Energy Management Centre has not obtained carbon credit as on date. Hence there is
uncertainty in the realization of this advance. However, no provision has been created for this
balance, including the interest, which is doubtful of realization. As a result, non-current assets
is overstated and loss for the year is understated by ₹ 6424.06 Lakhs.
(b) Note No:7 Other Non Current Assets includes ‘Capital Advances Others’ amounting to ₹
10,896.01 Lakhs for which sub-schedule of various works, Stage of completion of works etc.
were not furnished for our verification. Due to lack of necessary information, we are unable to
quantify the impact of the same in the financial statements.
5. The amounts and balances lying under Non Current Financial Liabilities - Borrowings (Note
No 15), Other Non Current liabilities (Note No 18), Trade Payables (Note No 20), Non Current-
Other Financial liabilities (Note No 16), Current - Other Financial Liabilities (Note No 21), Trade
receivables (Note No 9), Non Current Assets - Financial Assets - Loans (Note No 5), Non Current
Assets - Other Financial Assets (Note No6), Other non-current assets (Note No 7), Other current
assets (Note No 12) are subject to confirmation and reconciliation. The effect of the adjustment
arising from reconciliation and settlement of old dues and possible losses which may arise on
account of non-recovery or partial recovery of such dues could not be ascertained. Hence, we
are unable to comment the impact thereof on the financial statements.
62
6. Account Code : 226 Material Stock and related accounts as on 31/03/2018

a. Attention is invited to Note 8 Inventories, The Company has not provided for damaged/obsolete
and slow moving items and goods as per Ind AS 2 on ‘Inventories’. Due to lack of necessary
information, we are unable to quantify the impact of the same in the financial statements.
b. Attention is invited to Accounting Policy No.1.10, that the Company changed the accounting
policy on Inventory from 01/07/2017. The Company has not complied with the disclosure
requirements as per Ind AS 8-‘Accounitng Policies, Changes in Accounting Estimates and
Errors’ in regard to the effect of the change in the financial statements.
c. Based on the units visited by us, we observed that there is no uniformity in accounting of
inventory including LED Bulbs. In certain units, the closing balances of inventory are negative
and LED bulbs are valued at Selling Price. We have also observed that there is difference
in stock balance as per confirmation and Trial balance in respect of units visited by us. For
instance, we observed a difference of ₹ 42.83 Lakhs in ARU 211, ₹ 7.05 Lakhs in ARU 103 and
₹ 156.47 Lakhs in ARU 203. Hence, we are not able to quantify the impact of the valuation of
inventory in Compliance with Ind AS-2-Inventories.
d. The management follows the procedure of physical verification of stock periodically by the
dedicated team in the O/o the Chief Engineer (SCM). However physical verification reports
by various ARUs have not been submitted to us to confirm whether stock valuation is in
compliance to Ind AS 2. Hence, we are not in position to comment on the impact on the
accounts resulting on the physical stock verification for any unaccounted stock, stock to be
converted as held for sale etc.
7. a) Other Current Assets (Note 12) read with note 35.15 (f) regarding Inter Unit Balance amounting
to ₹ 4,285.64 Lakhs. The said balance is subject to reconciliation and further adjustments, the
effect of which on the financial results of the Company is not ascertainable.
b) Note No 12 ‘Other current assets’ includes ₹ 942.16 Lakhs ‘Interest accrued but not due’ and
Note No 6 ‘Non Current Assets’ includes ₹ 106.10 Lakhs ‘Other Deposits Sundry Receivables’
at ARU 999 for which the company has not furnished necessary details. In the absence of
necessary details, we are unable to comment upon the impact of these items.
8. Cash and Cash Equivalents
A. The Company is not following the prudent business practice of accounting ‘Cheque received
not deposited in Bank’ as balance with Bank. On verification of units visited by us an amount
` 18.57 Lakhs, being cheque received but not deposited, was disclosed as Cash in Hand. This
has resulted in overstatement of Cash in Hand and understatement of bank balances as on
31/03/2018.
B. ARU 371, Electrical Division, Alappuzha
i. The actual cash balance as on 31/03/2018 was ` 7.43 Lakhs. But as per the financial statements
the Cash balance is ‘Zero’ thus resulting in understatement of Cash in Hand and overstatement
of Bank Balances.
ii. The Company has not accounted for an amount of ₹ 1.05 Lakhs which has been lost by theft,
resulting in over valuation of cash in hand and understatement of expenditure.
63
C. Bank Accounts
Bank balances including E- payment accounts, Akshaya e Pay collection accounts and certain
bank accounts maintained at Head Office, ARU’s and other offices are subject to confirmation
and reconciliation.
9. AGEING SCHEDULE
i. The reconciliation for ageing analysis of trade receivables were not submitted for our
verification. Hence, we are unable to comment on the recoverability of receivables and the
provision thereon.
ii. In the case of ARU 954 - “Special Officer Revenue”- Debt Collection Balance and Debtors
net balance as per accounts under account code 23 shows a difference of ` 3,189.94 Lakhs.
The difference has not been properly explained. Due to lack of information we are unable to
quantify the impact on provisioning for the debtors.
10. Rent Receivable: We observed that the rent receivable has not been accounted on accrual
basis at certain units visited by us. The accounting treatment is thus found not in compliance
to Ind AS 18 - Revenue. Due to lack of necessary details, we are not in position to quantify the
amount.
11. As per the scheme ‘Pooled power purchase – solar energy’, the Company purchases power
from the grid connected consumers, supplying solar power. We observed that, the power
purchase under this scheme has not been accounted on accrual basis during the year 2017-18
as per Ind AS-1. Due to lack of necessary details, we are not in position to quantify the impact
on the financial statements.
12. Compensation for injuries Death etc.
The ARU 326, Electrical Division, Kattakkada has paid ` 2 Lakhs for two parties as ex-gratia out of
their eligibility of ` 5 Lakhs each. The balance expenditure has not been accounted on accrual
basis during the year 2017-18 as per Ind AS-1. Thus, the Current liabilities and expenditure are
undervalued by ₹ 6 Lakhs.
13. Goods and Services Tax (GST)
Based on our visit in various units, the unit-wise details of Goods and Service Tax collected
and its subsequent remittance were not found proper and reconciled. Hence, we are unable
to comment on the correctness or otherwise in regard to the collection, remittance, input tax
credit, liability under reverse charge mechanism and payable amount with respect to GST. The
financial effect of the same cannot be quantified due to lack of information.
14. We observed, that in ARU 299, Electrical Circle, Shornur - the interest in Saving Bank account
for Fund from REC-RGGVY which is refundable to REC, shows a debit balance of ` 16.07 Lakhs.
On verification, the liability has not been provided in the accounts on accrual basis as per Ind
AS-1. Due to lack of information, we are unable to quantify the same.
15. Account Code 47 and Account code 55 :
A. As per the accounting procedure, the deposit collected (account code 47) should be accounted
as Grant under Consumer contribution (account code 55) based on the work completed or
corresponding asset creation. Based on our audit in the units visited by us, we observed that,
certain ARUs have not transferred the deposit to Grant under Consumer contribution and this
64
may also have an impact on amortization of grant.

Since the Company is undertaking work for specified large projects under ‘work deposit’ basis
and no information is readily available with the Company with respect to deposit received,
work completed, date of completion, balance payable / receivable etc, we are not in position
to comment on correctness of the deposit held by the Company as ‘work deposits’ and the
balance to be transferred to Grant. Due to lack of information, we are unable to quantify the
same.
B. In ARU 301, Electrical Circle, Thiruvananthapuram and in ARU 954 SOR, grant shows debit
balance of ₹ 238.11 Lakhs and ₹ 1497.35 Lakhs. In the absence of necessary details, we are
unable to quantify the impact on the financial statements
16. The Company has disclosed an amount of ₹ 35,832.26 Lakhs as Disputed Income-tax Matters
(Note No 35.2) under Contingent Liabilities. Out of the same, we have not received details
regarding disputed tax liability of ₹ 3462.23 Lakhs.
17. On verification of Financial Statements of Associates, it was found that, there was loss for three
consecutive years including current year in Baitarni West Coal Company Ltd. However, the
Company has not provided and disclosed provision for impairment, if any, as per Ind AS 28.
18. Receipts from maintenance charges for poles from Cable TV operators:
a. Based on the observation on audit of units, the receipts from maintenance charges for poles
from Cable TV Operators are not accounted on accrual basis in compliance to Ind AS 18-
Revenue. However due to lack of information, we are unable to quantify the impact on the
financial statements.
b. On verification of accounts, the pole rent receipts include interest portion for the delayed
receipts. The interest receipts should be separately accounted. The amount could not be
quantified as no details are submitted by the Company.
c. The Company has not provided information regarding dispute settlement with cable operators
regarding income from pole rent, balance amount receivable and amount written off, if any,
as decided in Board meeting dated 12-4-2017. Due to lack of information, we are unable to
quantify the impact on the financial statements
19. Previous year’s (2016-17) accounts have not been adopted in the Annual General Meeting till
date.
20. The Company follows the practice of providing interest on closing balance of customer deposits.
We observed that, the provision created in preceding years amounting to ₹ 33082.44 Lakhs
has been accumulated and no adjustment has been made in the financial statements. In the
absence of necessary details, we are unable to comment upon the same.
21. Accounting treatment of LED Bulbs
a) Trading of LED Bulbs to the customers is different from the normal business activity of the
Company. Hence, the Company should disclose the purchases, Sales and Closing Stock
separately in Statement of Profit and Loss.
b) The Company is not following the accrual basis of accounting while accounting expenses
relating to purchase of LED bulbs which is not in conformity with Ind AS 1. Due to non availability
of necessary information the impact of the same cannot be quantified.
65
c) Based on the verification of the accounts of units visited by us, it was found that the purchase
of LED Bulbs amounting to ₹ 320.19 Lakhs relating to prior period is accounted as current
year expenditure which is not in compliance with Ind AS 8 – ‘Accounting Policies, Changes in
Accounting Estimates and Errors’.
22. The impact of comments made by C&AG, the statutory auditors and errors or omissions for
the previous years has not been adjusted in accordance with Ind AS 8-Accounitng Policies,
Changes in Accounting Estimates and Errors. We are unable to quantify the impact of the
same in the financial statements due to lack of necessary details.
23. In ARU 954, as per the agreement no.28/17-18 dated 25/09/2017 M/s Philips Carbon Black Ltd.
is liable to pay the interest at the rate of 12% per annum based on actual delay from the due
date up to a period of 30 days and thereafter at the rate of 18% per annum for the entire period
of default from the due date. However as per the explanation from the Company the entire
payable accounted has been revised by the management and the due amount has been
restated. Due to lack of proper details, we are unable to quantify the impact in the financial
statements.
24. We observed that, at ARU 954, interest on demand on sale of power amounting to ₹8.97 Lakhs
was not accounted in compliance to Ind AS 18 resulting in understatement of interest income
and receivables.
25. As per 35th Board Meeting held on 15th November,2017 Board of Directors of the Company
decided for the one time settlement of recovery of arrear rent from occupants of Board
Quarters at various locations. However, no effect has been given in the financial statements
which is not in compliance to Ind AS 18. Due to lack of necessary information we are not in a
position to quantify the impact on the financial statements.
26. As per decision of Board of Directors, price escalation has been sanctioned for the works of
Bhoothathankettu Small Hydro Electric Project. Due to non availability of necessary information,
we are unable to comment upon the financial effect of the same, if any.
27. The Company has not revalued bonds at fair value issued to KSEB Master Trust amounting
to ₹ 11,23,929 Lakhs which is in not in conformity with Ind AS 109. Similarly, the other financial
assets and liabilities including loans / deposits have also not been recognized at fair value.
Further, the Company has revalued ‘Loan from REC - various schemes’ (Note No 15) incorrectly
resulting in negative balance of ₹ 47.06 Lakhs for the loan. Due to lack of necessary we are
unable to quantify the impact of the same in the financial statements
28. The aggregate effect of our qualifications described above from Point No 1 to 27, wherever
quantifiable, is that assets are overstated by ₹ 8296.94 Lakhs, Liabilities are understated by ₹ 6
Lakhs, Loss / Reserves are understated by ₹ 8302.94 Lakhs
Qualified Audit Opinion
In our opinion and to the best of our information and according to the explanations given to
us, except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, the aforesaid standalone Ind AS financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India of the state of affairs of the Company as
at 31st March, 2018, and its loss, total comprehensive income, its cash flows and the changes in
equity for the year ended on that date.
66
Emphasis of Matters
We draw attention to the following matters in the Notes to the standalone Ind AS financial
statements. Our Opinion is not modified in respect of these matters.
1. As per Note No 35.15(o), in the 42nd Meeting of Board of Directors held on 26.09.2018 it was
resolved to give in principle approval to incorporate the adjustment entries regarding the
amount payable to Government of Kerala towards electricity duty and guarantee commission
etc. as on 31.03.2018 against the amount receivable from the Government in the books of
accounts and to report the matter to the Government for concurrence. Accordingly, an amount
of ₹ 35099.74 Lakhs is netted off with the amount receivable from the Government.
2. As per Note Forming Part of Accounts No. 35.15(m), stating non adjustment of value of 45.715
cents of Land belonging to the company in Trivandrum was transferred to Trivandrum
Development Authority in the accounts of the Company.
3. As per Note Forming Part of Accounts No. 35.3, the company has accounted the fair value for
the long term loans and Borrowings except loan amounting to ₹ 37520.86 Lakhs for which
repayment schedule is not available.
4. As per Note forming part of account 35.15 (g), GPF balances as per financial statements is ₹
220733 lakhs. A difference of ₹ 22 lakhs with the party wise registers maintained at GPF section
was reported.
5. As per the Accounting Policy No.1.6 on, Property, Plant and Equipment (PPE), the company
follows rates notified by the CERC Tariff Regulations. As per item (a) and (b) under the heading
‘Land Under Lease’ of Appendix-III of CERC Notification No L-1/153/2014/CERC; land held under
lease and the cost incurred on land development on leasehold land are subject to depreciation
at the rate of 3.34%. However, the company has not depreciated the land under lease.
6. As per Note No 35.15 (r), the Company has not quantified the monetary impact of damage due
to floods in the month of August 2018.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act, we give in “Annexure I” a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit and referred to in the Other Matters
paragraphs above we report, to the extent applicable that:
a) We have sought and except for the matters described in the Basis for Qualified Opinion
paragraph above, obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit.
b) Except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, in our opinion, proper books of account as required by law have been
kept by the Company.
c) 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 are in agreement with the books of account.
67
d) Except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements
comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion,
may have an adverse effect on the functioning of the Company.
f) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5th
June 2015 issued by Ministry of Corporate affairs, Government of India, provisions of sub-
section (2) of Section 164 of the Act, are not applicable to the Company.
g) With respect to the adequacy of the internal financial controls over financial reporting
of the Company, refer to our separate Report in “Annexure II”. Our report expresses a
qualified opinion on the operating effectiveness of the Company’s internal financial
controls over financial reporting.
h) The qualification relating to the maintenance of accounts and other matters connected
therewith are as stated in the Basis for Qualified Opinion paragraph above.
i) With respect to the other matters to be included in the Auditor’s Report in accordance
with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion
and to the best of our information and according to the explanations given to us:
i. Since the Company has not furnished the details of pending litigations, we are not in a
position to confirm whether there are any litigations pending which would impact its
financial position.
ii. Since the Company has not furnished the details of long term contracts, we are not
in a position to confirm whether it has any long-term contracts including derivative
contracts for which there were any material foreseeable losses.
iii. The company has not transferred debentures and interest on debentures amounting to
₹ 743.44 Lakhs remained unclaimed and unpaid for a period of more than seven years
from the date it become due for payment to the Investor Education and Protection
Fund.
3. As required by section 143(5) of the Companies Act, 2013, our comments in regard to the
directions and sub-directions issued by the Comptroller and Auditor General of India are given
in “Annexure-III”.
For G Venugopal Kamath & Co For ISAAC & SURESH For ANANTHAN & SUNDARAM
REGN. 004674S FRN-001150 S FR 000148 S
Sd/- Sd/- Sd/-
RAVINATH R PAI, FCA SOBHA SETHUMADHAVAN, FCA CA.HARIKRISHNAN.R.S,
M.com, DISA, FCA
PARTNER PARTNER PARTNER
M. No. 226547 M. No.225166 M.No.230338
Date: 29 September 2018
68
Annexure –I to Independent Auditors' Report
Referred to in Para 1 under the heading “Report on other Legal and Regulatory Requirements”
of Independent Auditors’ report of even date of the Company on the standalone Ind AS Financial
Statements for the year ended March 31, 2018:
1. a) As per the information and explanation given to us, the Company is not maintaining
proper records showing full particulars, including quantitative details and situation of
fixed assets.
b) As informed to us, fixed assets have not been physically verified by the management
at regular intervals. However, Company informed us that major assets comprising of
line cable networks, Generating stations etc are periodically verified. Since inspection
reports are not available, discrepancies, if any, could not be ascertained and reported.
c) Title deeds of immovable properties were not produced for our verification.
2. a) As per the information and explanation given to us, the Company has a system of
periodical physical verification of inventory. However physical verification reports by
various ARUs were not furnished for our verification. Hence we are not in a position
to comment on whether the physical verification of inventory has been conducted at
reasonable intervals by the management.
b) Due to non availability of physical verification reports we are not in a position to

comment whether any material discrepancies were noticed on physical verification of
inventory and if so, whether the same have been properly dealt with in the books of
account.
3. As per the information and explanation given to us, the Company has not granted any loans,
secured or unsecured, to companies, firms, and limited liability partnerships or other parties
covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly,
the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company and
hence not commented upon.
4. As per the information and explanation given to us the Company has not advanced loans,
given guarantees or security or made any investment in contravention of section 185 and/or
section 186 of the Companies Act, 2013
5. According to information and explanation given to us, during the year, the Company has
not accepted any deposit from the public within the provisions of Sections 73 to 76 of the
Companies Act, 2013 and the directives issued by the Reserve Bank of India or any other
relevant provisions of the Companies Act, 2013 and rules framed there under.
69
6. We have broadly reviewed the accounts and records maintained by the Company pursuant
to the Rules made by the Central Government for the maintenance of cost records under
subsection (1) of Section 148 of the Act and we are of the opinion that, prima facie, the
prescribed accounts and records have been made and maintained. We have not, however,
made detailed examination of the records with a view to determine whether they are accurate
and complete.
7. a) As per the information and explanation provided by the Company, the primary books
of accounts are maintained at ARU level. Information regarding depositing of undisputed
statutory dues including provident fund, employees’ state insurance, income-tax, sales-
tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax,
cess and any other statutory dues with the appropriate authorities were not available at
the Head Office level except for sales tax liability of ₹ 1.89 Lakhs and Works Contract Tax
under Kerala VAT of ₹ 66.54 Lakhs accounted at Head Office which has been outstanding
for a period of 6 months from the due date under applicable laws. Since the Company
does not have a centralized system / records for the same, we are not in a position
to comment whether the Company is regular in depositing undisputed statutory dues
including provident fund, employees’ state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, goods and service tax, cess and any
other statutory dues with the appropriate authorities. Accordingly, the arrears if any
of outstanding statutory dues as on the last day of the financial year concerned for
a period of more than six months from the date they became payable could not be
ascertained and reported except for amount mentioned above.
b) As per the information and explanation provided by the Company, the primary books
of accounts are maintained at ARU level. Information regarding the dues of income tax,
sales tax, service tax, customs duty and excise duty which have not been deposited on
account of any dispute were not available at the Head Office level, except for information
provided to us and given below. Since the Company does not have a centralized system
/ records, we are not in a position to comment on the dues of income tax or sales tax or
service tax or duty of customs or duty of excise or value added tax, goods and service
tax or cess which have not been deposited on account of any dispute. Accordingly, the
amounts involved and the forum where dispute is pending could not be ascertained and
reported. As per information and explanations provided to us the following statutory dues of
the company which have not been deposited on account of any dispute are as follows:
70
Statute Year to which Amount not Forum where dispute

dispute relates deposited is pending
(₹ Lakhs)
Income Tax Act 2001-02 to 2004-05 16,701.20 Supreme Court
Income Tax Act 2007-08 8,864.85 CIT (Appeals)
Income Tax Act 2008-09 6,803.98 Income Tax Appellate

Tribunal
8. In our opinion and according to the information and explanation given to us, the Company
has not defaulted in repayment of loans or borrowings to a financial institution or bank
or government. Debentures and interest on debentures amounting to `743.44 Lakhs has
remained unclaimed and unpaid for a period of more than seven years from the date it became
due for payment.
9. The Company did not raise any money by way of initial public offer or further public offer
(including debt instruments) during the year. According to the information and explanations
given to us, term loans were applied for the purposes for which those were raised.
10. We have been informed that a separate department under the Chief Vigilance Officer is
regularly investigating frauds and other irregularities involved in the Company’s transactions.
To the best of our knowledge and belief and according to the information and explanations
given to us, no fraud by the Company or any fraud on the Company by its officers or employees
has been noticed or reported during the year.
11. In view of exemption given vide Notification G.S.R.463(E) dated 5th June 2015 issued by Ministry
of Corporate Affairs, provisions of Section 197 read with Schedule V of the Act regarding
managerial remuneration are not applicable to the company.
12. The provisions of clause 3(xii) of the Order, for Nidhi Company, are not applicable to the
Company.
13. As per the information and explanation given to us, in our opinion all transactions with the
related parties are in compliance with the provision of section 177 and 188 of Companies Act,
2013 wherever applicable and the details have been disclosed in the Financial Statements etc.,
as required by the applicable accounting standards.
14. According to the information and explanations provided to us, the Company has not made any
preferential allotment or private placement of shares or fully or partly convertible debentures
during the year under review.
71
15. In our opinion and according to the information and explanation given to us the Company has
not entered into any non-cash transactions with directors or persons connected with him as
referred to in section 192 of the Companies Act, 2013.
16. In our opinion and according to the information and explanation given to us the Company is
not carrying any activities which require registration under section 45-IA of the Reserve Bank
of India Act, 1934.
REGN. No.004674S FRN-001150 S FRNo.000148 S
Sd/- Sd/- Sd/-

M.com, DISA, FCA
M. No. 226547 M. No.225166 M.No.230338
Date: 29-09-2018
72
Annexure-II to Independent Auditors’ Report
Referred to in Para 2(g) under ‘Report on Other Legal and Regulatory Requirements’
section of our report of even date to the members of KERALA STATE ELECTRICITY BOARD
LIMITED on the standalone financial statements for the year ended 31 March 2018.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143
of the Companies Act, 2013.
We have audited the internal financial controls over financial reporting of KERALA STATE
ELECTRICITY BOARD LIMITED (“the Company”) as of 31st March 2018 in conjunction with our
audit of the 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 controls with reference to standalone financial statements based on the internal controls
over financial reporting criteria established by the Company considering the essential components
of internal control stated in the Guidance Note on Audit of Internal Financial 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 financial controls 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 detection
of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Act.
Our responsibility is to express an opinion on the Company’s internal financial controls with
reference to standalone financial statements based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed
under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls,
both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards
and the Guidance Note require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate internal financial controls
with reference to standalone financial statements was established 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 internal financial control system with reference
to standalone financial statements and their operating effectiveness.
Our audit of internal financial control with reference to standalone financial statements
included obtaining an understanding of internal financial control with reference to standalone
73
financial statements, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks
of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion on the Company’s internal financial controls system with reference to
standalone financial statements.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating effectiveness. Our
audit of internal financial controls over financial reporting included obtaining an understanding
of internal financial controls over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified audit opinion on the Company’s internal financial controls system over
financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company’s internal financial control with reference to standalone financial statements is
a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of standalone financial statements for external purposes in accordance with
generally accepted accounting principles. A Company’s internal financial control with reference
to standalone financial statements includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of standalone financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management 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
standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls with reference to standalone
financial statements, including the possibility of collusion or improper management override
of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls with reference to standalone
74
financial statements to future periods are subject to the risk that the internal financial controls
with reference to standalone financial statements may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for qualified opinion
Property Plant and Equipment
1. The Company has not conducted physical verification of its fixed assets.
2. The scrap / sale of fixed assets are not shown as deletion of assets in the books of account.
3. There is no process for evaluation of impairment of assets.
4. The Company does not follow the recognition criteria given under Ind AS 16 for capitalisation
of assets
Qualified Opinion
A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial
control over financial reporting, such that there is a reasonable possibility that a material
misstatement of the company's annual or interim financial statements will not be prevented or
detected on a timely basis.
In our opinion, the Company has, in all material respects, except for the possible effects of
the matters described in the Basis for Qualified Opinion paragraph above, an adequate internal
financial controls system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2018, based on the internal control over
financial reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported above in determining
the nature, timing and extent of audit tests applied in our audit of the standalone Ind AS financial
statements of the Company for the year ended 31st March, 2018 and the material weakness has
affected our opinion on the said standalone Ind AS financial statements of the Company and we
have issued a qualified opinion on the standalone Ind AS financial statements of the Company.
Sd/- Sd/- Sd/-
RAVINATH R PAI, FCA SOBHA SETHUMÀDHAVAN, FCA CA.HARIKRISHNAN.R.S,
M.com, DISA, FCA
M. No. 226547 M. No.225166 M.No.230338
Date: 29-09-2018
75
Annexure III
The Comptroller and Auditor General of India has issued directions indicating the areas to be
examined in terms of section 143(5) of Companies Act 2013 for the financial year 2017-18
Accordingly, we report that :
Impact in accounts
Directions under section143(5) of the
Report and financial
Companies Act, 2013
statements
If the Company has been selected

for disinvestment, a complete status
report in terms of valuation of Assets
(including intangible assets and land) No disinvestment made by
and Liabilities (including Committed NIL
the company during the year
& General Reserves) to be submitted,
including the mode and present stage
of disinvestment process
During the financial year the
company written off ₹ 810.84
Due to lack of proper
lakhs and out of this ₹ 790.89
Details regarding any cases of waiver/ lakhs reconciliation with the
being receivables
write off of debts/loans/interest etc; from HT/EHT consumers. In ARUs for the amount
if yes, reasons thereof and amount addition to that, liability of written off, we are
involved. unable to comment on
ex-employees amounting to
the impact of the same
₹ 19.76 lakhs was written off
during the year.
The Company have a Supply
Chain Management (SCM)
software for inventory
management. However,
discrepancies are observed
and have been reported
under our Independent The impact in
Whether proper record are maintained Auditors Report. accounts could not be
for inventories lying with third
With regard to the assets ascertained due to lack
parties & assets received as Gift from received as Gift from of proper documents
Government or other authorities. Government or other authori- and explanations.
ties, as we reported in our
audit report, the title deeds of
immovable properties were
not produced for verification
and proper fixed assets are
not maintained.
76
Age wise analysis of pending legal/ As per the information Company has
arbitration cases, including the submitted by the Company, not furnished the
reasons of pendency and existence/ Age wise analysis of cases supporting documents
effectiveness of a monitoring pending before various for the cases. As a
mechanism for expenditure on all legal Courts, Fora and Tribunals is result, the reliability
cases (foreign and local) may be given. shown below: of the estimated
amount involved could
Period No. of cases/ not be ascertained.
arbitration The Company has
not provided for the
Up to 2000 2995 same in the financial
2001 to 2005 2637 statements required if
any.
2006 to 2010 2946
2011 1352
2012 1459
2013 1548
2014 1447
2015 860
Total 15244
These cases are pending

for hearing/disposal at the
respective Courts, Fora and
Tribunals. The company have
a system for monitoring
expenditure on legal cases.
Power Sector
Adequacy of steps to prevent As per the explanation Since the consolidated

encroachment of idle land owned by received from the Company, details of litigations
the custodians of the land
Company may be examined. In case pending before various
are exercising adequate steps
land of the Company is encroached to prevent encroachment of courts regarding the
upon, under litigation, not put to use land owned by the Company encroachments are
or declared surplus, details may be (KSEB Ltd.). not available at Head
provided According to section 3 of the office level , the impact
Kerala Land Conservancy of the same could not
Act 1957 & the Kerala Land be detailed.
Conservative Rules 1958, land
belonging to KSEB shall be
deemed to be property of
the Government. But at the
77
same time, officers of KSEB

are still not empowered under
the provisions of Rule 3(b) of
the Kerala Land Conservancy
Rules, 1958 which empowers
an officer who is authorised
under section 15 of the Act
with all or any of the powers
conferred on Collector under
the Act.
Considering the essential
need to empower the officers
of KSEB and bring under the
ambit of the provisions of
Rule 3(b) of the Kerala Land
Conservancy Rules 1958,
KSEB had approached the
Government for issue of a
notification in this regard
which is yet to be issued.
Steps have been initiated for
issue of the said notification
through follow up action by
KSEB Ltd. The matter has
been brought to the attention
of the Honourable Electricity
Regulatory Commission vide
letter dated 26.09.2017 & before
the Principal AG of Kerala in
its meeting held on 27th June
2017. The consolidated details
with respect to the litigation
pending before various court
regarding encroachments are
not available at Head office
level. However no land owned
by KSEBL has been declared
as “Surplus”.
As explained by the company,

being fully owned by
Government of Kerala, there
Where land acquisition is involved is an effective mechanism for
in setting up new projects, report Land acquisition .
whether settlement of dues were done Land acquisition is involved NIL
expeditiously and in a transparent in setting up of new hydro
manner in all cases. the cases of electric projects. The private
deviation may please be detailed land required for the project
was purchased through
78
negotiation. For this, the

Government had constituted
District Level Negotiated
Purchase Committee (DLPC)
with District Collector
as the Chairman of the
committee. The committee
will recommend reasonable
land value duly considering
the land value of the area after
negotiation with land holders/
owners of land. The claims are
settled expeditiously by the
company and in a transparent
manner as per the decision
taken in DLPC meetings.
As per the information and
explanation given by the
Company there is no deviation
during the year 2017-18.
The Company have an
effective system for recovery
of revenue as per contractual
agreement except from
Whether the Company has any effective
Government departments,
system for recovery of revenue as per
Medical colleges High security
contractual terms and the revenue is areas, police stations etc. NIL
properly accounted for in the books
of accounts in compliance with the Though Company properly
applicable Accounting Standards accounts the same in
the books of accounts
in compliance with the
applicable accounting
standards, the discrepancies
observed by us have been
reported in our Independent
Auditors’ report.
How much cost has been incurred on As per the explanation

abandoned projects and out of this received from the Company, NIL
how much has been written off? no cost has been incurred on
abandoned projects during
the financial year
79
GENERATION
As explained by the Company,
KSEBL owns two thermal
stations based on LSHS
at Brahmapuram and
In the cases of Thermal Power Projects, Kozhikode. As per the direction
compliance with the various Pollution of the state and Central
Control Acts and the impact thereof pollution control Boards,
including utilization and disposal online pollution Monitoring NIL
of ash and the policy of Company system should be installed at
in this regard, may be checked and these stations. The installation
of online monitoring system
commented upon.
has been completed at both
the stations and the system
was commissioned at KDPP
on 26.12.2017 and BDDP on
22.08.2017.
KSEBL has no coal fired
thermal power plants.
Has the Company entered into revenue No, the Company has not
sharing agreements with private entered into revenue sharing
parties for extraction of coal at pitheads agreements with private NIL
and if so, whether they adequately parties for extraction of coal
protect the financial interests of the at pitheads
Company?
Does the Company have a proper

system for reconciliation of quantity/
quality of coal ordered and received The Company has no coal
NIL
and whether grade of coal/moisture fired thermal power plants
and demurrage etc., are properly
recorded in the books of accounts?
How much share of free power was due
to the State Government and whether There is no such agreements
the same was calculated as per the and these norms are not
NIL
agreed terms and depicted in the applicable to the Company
accounts as per accepted accounting
norms?
In the case of Hydroelectric Projects As per the explanation from
whether the water discharges is as per the Company, as regards the
policy/guidelines issued by the State Hydroelectric Projects, The
Government to maintain biodiversity. Kerala State has formulated NIL
Cases of deviation and penalty paid/ the “Kerala Irrigation and
payable may be reported. Water Conservation Act, 2003”
80
which imposes restrictions

on regulating the flow of
water downstream by the
construction of structures.
Prior clearance from state
Government is obtained for
implementing the scheme
including usage of water NIL
resources.
MoEF&CC while according
environmental clearance
is also stipulating the
average minimum flow to
be maintained in the river
during the lean months.
These policies and guidelines
to maintain the biodiversity is
informed to be strictly followed
in the preparation of detailed
project report for the scheme
and no deviation and penalty
paid in this regard during the
Financial Year 2017-18.
It has been informed that
KSEBL is familiar with all
statutory laws pertaining to
the development of hydro
electric project issued by
CEA/MoEF. Environmental
auditing undertaken by the
Principal Accountant General
in report has not pointed out
any statutory lapses by KSEBL
for the financial year 2017-18.
TRANSMISSION
Is the system of power commensurate As explained by the company,

with power available for transmission the transmission network
with the generating Company? If not of KSEBL is capable of NIL
loss, if any, claimed by the generating transmitting the power
Company may be commented. generated within the state.
However, as per the
information available from
the Company, there are
81
constraints due to severe

line loading limitation
for evacuating power
generated from Kakkayam
HEP under full dispatch
condition, thereby leading
to loss of generation from
Kakkayam HEP. As of now,
power to the extent of 40
MW is occasionally getting
stranded under full dispatch
condition in the Kakkayam
complex. However no loss is
claimed by the Generating
Company.
How much transmission loss in excess Percentage loss fixed by Due to lack of
of prescribed norms has been incurred KSERC for the transmission proper explanation
during the year and whether the same sector is 4.5% max and as or documents , the
has been properly accounted for in the explained by the company, impact of the same in
books of accounts? the value of transmission loss the accounts could not
for the Company is less than be detailed.
the prescribed value.
Whether the assets constructed and As per the observations The impact in the
completed on behalf of other agencies during the course of audit accounts couldnot be
and handed over to them has been and explanation from ascertained due to lack
properly accounted for in the financial the Company, the assets of proper documents
statements. constructed and completed explanation.
on behalf of other agencies
and handed over to them
on completion does not
form part of the assets of
KSEBL. Hence Company has
not capitalized the same in
the financial statements.
However , the assets created
out of contribution and work
deposits are capitalized and
properly accounted in the
financial statements except
for the qualifications made in
our audit report.
82
DISTRIBUTION
Has the Company entered into As informed by the Company,

agreements with franchise for Distribution of electricity
distribution of electricity in selected under franchisee system is not NIL
areas and whether the revenue sharing in vogue in Kerala and hence
agreements adequately protect the the query is not applicable to
financial interests of the Company? KSEBL.
Report on the efficacy of the system of As informed to us, the

billing and collection of revenue in the Company has attained 100%
Company. Consumer billing. In general NIL
all services are disconnected
soon after the disconnection
date, if the dues are not paid
within that time. However,
considering the social
obligation it is always not
possible to disconnect the
services to Drinking water
Supply Schemes, Government
Hospitals, High security area
,Police station etc.
Whether tamper proof meters have As informed to us, the

been installed for all consumers? If not Company is directly supplying
then, examine how accuracy of billing electricity to 99% of the NIL
is ensured. consumers in the state. At
present, the Company caters
to the consumer base of 124
Lakhs and these consumers,
who are spread over every
nook and corner of the state
under 771 Electrical sections,
are all provided metered
supply.
The Company has been
procuring energy meters
as per the prevailing
BEE/IS standards. The
amendments in metering
standards and regulations
are being incorporated in
the subsequent purchase
83
orders. At present, the

Company is procuring only
good quality energy meters
having tampering indicators.
These meters are capable of
displaying the parameters viz.
present status of abnormality,
number of tamper events,
latest tamper details(with date
time and duration) related to
phase sequence reversal, by
passing of current coil, missing
potential, current reversal in
current coil, magnetic tamper
and cover open etc.
We are informed that the
Company has been taking
necessary steps to replace
all faulty meters including
old and sluggish mechanical
meters with electronic meters.
For this the Company have
purchased 15.06 lakhs single
phase meters and 70000
three phase meters and 11.84
lakhs single phase meters and
52840 three phase meters
were replaced during the year
2017-18. Further, Purchase
orders for procuring 9.07 lakhs
single phase meters and 1.03
lakhs three phase meters were
placed additionally during
2017-18. Tendering process of
procuring 6 lakhs single phase
meters and 70000 three phase
meters is now in progress.
Directions have been given to
the field officers to replace all
the defective meters on a war
footing. The old meters in the
system are also being replaced
in phased manner.
84
However, in order to ensure that

consumers are not resorting to
unfair means, the field officers
are regularly inspecting the
consumer premises during
the site inspections and
corrective actions are taken
expeditiously.
As informed to us the
Company recovers and
accounts the fuel surcharge
Whether the Company recovers
ordered to be recovered from Due to lack of
and accounts, the State Electricity
consumers by the KSERC. proper explanation
Regulatory Commission (SERC)
Approval of Fuel surcharge is or documents ,the
approved Fuel and Power Purchase
granted in line with the MYT impact of the same in
Adjustment Cost (FPPCA)?
Tariff Regulations notified the accounts could not
by Kerala State Electricity be detailed.
Regulatory Commission in
2014. During the year 2017-
18, KSERC approval was not
received for the recovery of
fuel cost adjustment.
KSEB Ltd functioning as

a single utility in the state
of Kerala. Generation,
Whether the reconciliation of
transmission and distribution The Company has
receivables and payables between
of electricity done by the KSEB not reconciled the
the generation, distribution and
Ltd hence the reconciliation inter unit transactions
transmission companies has been
between these segments is amounting to ₹
completed. The reasons for difference,
irrelevant. 4285.64 lakhs as on
if any, may be examined.
31st March 2018.
However, the Company
has inter unit transactions
between the Generation,
transmission and distribution
units, which remains
unreconciled as on 31st March
2018.
85
Whether the Company is supplying As informed to us the

power to franchisees? If so, whether Company does not have
the Company is supplying power to a system of distribution of NIL
franchisees at below its average cost of power through franchisees.
purchase? The query is not applicable.
Section 65 of the Electricity Act

2003 deals with tariff subsidy.
As informed by the company,
How much tariff roll back subsidies
the subsidy extended to
have been allowed and booked in the
the consumers is netted off
accounts during the year? Whether
periodically against the sums NIL
the same is being reimbursed regularly
payable to the Government by
by the State Government? Shortfall, if
KSEBL. During the financial
any, may be commented.
year 2017-18 an amount of
₹ 391.67 crores is booked as
subsidy in this account.
Service Sector
(i) As per section 43 of The impact in

the Electricity Act, 2003, accounts could
distribution licensees are cast not be acertained
upon with universal supply due to lack of
obligation and section 45 proper documents/
confers power to recover explanation,
charges for the supply of
electricity. However, section
62 empowers State Electricity
Whether the Company’s pricing Regulatory Commission to
policy absorbs all fixed and variable determine tariff. For this
cost of production and the overheads purpose, State Electricity
allocated at the time of fixation of Regulatory Commission
price? shall notify the Terms and
Condition for determination
of Tariff under section 61 of
the Act.
(ii). Hon’ble KSERC, initiated
suo moto determination of
tariff for 2016-17 and 2017-18. In
order to facilitate the process,
KSEBL had submitted
estimated ARR & ERC
containing expected revenue
86
and expenditure and revenue

gap for the these years,
prepared in accordance with
the provisions of Electricity
Act 2003, provisions in
National Electricity Policy and
National Tariff Policy, Tariff
Regulation notified by the
KSERC etc. The revenue gap
estimated by KSEBL was ₹
2498.47 crores and ₹ 2714.31
crores respectively for 2016-17
and 2017-18. After accounting
for the entire fixed and
variable cost of production
and over heads.
(iii) KSERC as per order
dated 17th April 2017 has
approved a revenue gap at
₹ 400.12 crores for the year
2016-17 and revenue surplus
of ₹ 490.92 crores for 2017-
18. Hon’ble Commission has
also approved tariff revision
fetching an additional revenue
of ₹ 550 crores annually and
thereby allowing recovery of a
portion of past approved and
un-bridged revenue gap to
the tune of ₹ 1040.92 crores,
after adjusting the approved
surplus of ₹ 490.92 crores for
2017-18.
The company is collecting

Whether the Company recovers supervision charges for the
Commission for work executed work executed on behalf
on behalf of Government/other of Government/other
organizations that is properly recorded NIL
organization and a proper
in the books of accounts? Whether the mechanism exist for recording
Company has an efficient system for in the books of accounts. As
billing and collection of revenue? informed, the Company has
an efficient system for billing
and collection of revenue.
87
Whether the Company regularly As per explanation by the The impact cannot
monitors timely receipt of subsidy from Company, the receipt of be ascertained as the
government and is properly recording subsidy have been properly subsidy received have
them in its books? monitored. No records or financial impact over
registers were made available many previous years.
to verify the capital and
revenue subsidies received by
the Company during the year
under audit. Hence we are not
in a position to report whether
the recording of the same by
the Company is correct or not
Whether interest earned on parking Yes, Interest earned on parking

of funds received for specific projects of funds received for specific
NIL
from government was properly projects from government
accounted for? was properly accounted.
Whether the Company has entered As explained by the Company,

into Memorandum of Understanding the Company has executed
NIL
with its Administrative Ministry, if so, tripartite agreement
whether the impact thereof has been amongst Nodal Agency, State
properly dealt with in the financial Government and Government
statements. of India for undertaking
and agreeing the stipulated
roles / responsibilities as per
provisions of the scheme
guidelines.
OTHER
Details of Grants/Subsidies/ Due to lack of

Contributions received and proper explanation
Examine the system of effective utilized during the year or documents , the
utilization of Loans/Grant-in-Aid/ were not furnished for our impact of the same in
Subsidy. List the cases of diversion of verification. Hence we are not the accounts could not
funds. in a position to report whether be ascertained.
there exists an effective
system for the utilization of
Loans/Grant-in-aid/subsidy.
88
Examine the cost benefit analysis of As explained by the Company, NIL

major capital expenditure/expansion the cost benefit analysis of
including IRR and payback period. major capital expenditure/
expansion including the
IRR and pay back period of
projects are carried before
the implementation of such
projects.
If the audited entity has computerized The company is working in the NIL
its operations or part of its, assess computerized environment.
and report, how much of the data in There is a separate
the Company is in electronic format, department under the Chief
which of the areas such as accounting, engineer (IT) to supervise the
sales personnel information, pay roll, computerization. ORUMA
inventory etc. have been computerized software used for revenue
and whether the company has evolved billing and its collection.
proper security policy for data/software/ SARAS software used for the
hardware? accounting all income and
expenditure of the company
through the real time
accounting. Supply Chain
Management (SCM) software
used for the inventory
management and HRIS
software for the all employee
related matters such as
payroll, incumbency etc. Now
all these software are working
in the independent platform.
We are informed that action is
being taken to bring all these
software in a single platform.
FRN. 004674S FRN-001150 S FRNo.000148 S
Sd/- Sd/- Sd/-
M.com, DISA, FCA
M. No. 226547 M. No.225166 M.No.230338
Date: 29-09-2018
89
G.Venugopal Kamath & Co Isaac & Suresh. Ananthan & Sundaram

#273, 3rd Floor, DD VastraMahal, Thennala Towers, 123,Sivakarthi, SankarNagar,
Market Road, Ernakulam Thiruvananthapuram Neeramankara, Kaimanam
Thiruvananthapuram
Independent Auditors’ Report
To the Members of KERALA STATE ELECTRICITY BOARD LIMITED
Report on the Consolidated Financial Statements

We have audited the accompanying consolidated Ind AS financial statements of KERALA
STATE ELECTRICITY BOARD LIMITED ("hereinafter referred to as “the Holding Company") and its
associates and its joint ventures (together referred to as “the Group”), comprising the Consolidated
Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including Other
Comprehensive Income), the Consolidated Cash Flow Statement, the Consolidated Statement
of Changes in Equity for the year then ended, and a summary of the significant accounting
policies and other explanatory information (hereinafter referred to as “the consolidated financial
statements”).
Management's Responsibility for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated
financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred
to as “the Act”) that give a true and fair view of theconsolidated financial position, consolidated
financial performance (including other comprehensive income), consolidated cash flows and
consolidated changes in equity of the Group including its associates and its joint ventures in
accordance with the accounting principles generally accepted in India, including the Indian
Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
The respective Board of Directors of the Holding Companies included in the Group and of its
associates and its joint ventures are responsible for maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Group and its associates
and joint ventures and for preventing and detecting frauds and other irregularities; the selection
and application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and presentation of the Ind AS financial
statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error which have been used for the purpose of preparation of the consolidated financial
90
statements by the Directors of the Holding Company, as aforesaid.
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based
on our audit. While conducting the audit, we have taken into account the provisions of the Act,
the accounting and auditing standards and matters which are required to be included in the audit
report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the
disclosures in 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 financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the Holding Company's
preparation of the consolidated Ind AS financial statements that give a true and fair view in order
to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of the
accounting estimates made by the Holding Company's 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 the audit evidence obtained by the other
auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph
below is sufficient and appropriate to provide a basis for our qualified audit opinion on the
consolidated Ind AS financial statements.
Basis for Qualified Opinion
1. In respect of Note 2 to accounts: “Property, Plant and Equipment”- Intangible Assets.
a) As per Appendix-III of CERC Notification No L-1/153/2014/CERC, ‘Softwares’ are subject to a

depreciation of 30%. Instead the Holding Company follows the practice of pooling Software
along with item ‘IT Equipment’ which has a depreciation rate of 15%.
During the year, the Holding Company has ascertained an amount of ₹ 815.89 Lakhs as the
development and implementation cost of software which has been included under Note No.
3- Capital Work in progress as Revenue expenses pending allocation over capital works.
This is not in conformity with the Indian Accounting Standard (Ind AS) 38 – Intangible Assets.In
the absence of requisite details, we are unable to verify the correctness of the said amount and
the impact of the above on the depreciation/amortisation.
91
b) ‘Deferred Coston Account of Feasibility/Survey’ amounting to ₹ 10,557.28 Lakhs being cost of

projects of Holding Company not yet sanctioned and accumulated over the years has been
wrongly classified under Note No.7- Other Non Current Assets, which is not in accordance with
Ind AS 38 – Intangible assets and Ind AS 16- Property Plant and Equipment. As the statuses of
these projects are yet to be ascertained, we are unable to comment the impact thereof on the
Consolidated Financial Statements.
c) Property Plant and Equipment and capital work in progress:
A. Depreciation on additions to fixed assets of Holding Company, except for capital works in
progress capitalized, is charged in the year in which it was purchased/ commissioned without
considering date on which the asset is ready for use. This is not in conformity with Ind AS -16 on
“Property, Plant and Equipment”, leading to understatement of Property, Plant and Equipment
and overstatement of depreciation and loss for the year; However due to lack of necessary
information, the impact of the same cannot be quantified.
B. As per Ind AS 16-Property Plant and Equipment, the asset should be recognized if it is probable
that future economic benefits associated with the item will flow to the entity; and the cost of
the item can be measured reliably.
The Holding Company has capitalized `12592.87 Lakhs on 31/03/2018 in distribution units
visited by us without considering above criteria forrecognition of assets. Also on verification of
the transmission and generation units visited by us and as per the representation received, it
was found that the capital work in progress has been capitalized as and when ‘Commissioned’
Further, we are not in a position to quantify the same and the impact of the above on the
depreciation.
C. (i) On verification of bills submitted during the course of audit of Holding Company it was
found that thecapitalization was delayedfor assets, amounting `2290.80 Lakhs including the
assets to be capitalized under RAPDRP and DDUGJY scheme, which have already satisfied the
recognition criteria specified in Ind AS 16 in previous years. Capitalization has been delayed
in various projects and hence there is a corresponding impact in depreciation, fixed assets,
Capital work in progress and current liabilities for capital assets during the previous years which
cannot be quantified.
(ii) Based on the submitted bills and units visited by usduring audit of Holding company, we
observed that,during 2017-18 certain assets satisfy the criteria for recognition, in compliance
to Ind AS 16, but has not capitalized an amount of `203.22 Lakhs including the assets to be
capitalized under RAPDRP and DDUGJY scheme.Capitalization has been delayed in various
projects and hence there is a corresponding impact in depreciation, fixed assets andcapital
work in progress for capital assets during the year which cannot be quantified.
92
(iii) In units of Holding Company visited by us, revenue expenditure amounting to ₹ 524.38 Lakhs
has been capitalized; resulting in overstatement of assets and understatement of expenditure
and the consequent impact on depreciation could not be quantified.
(iv) In units of Holding Companyvisited by us, the capital expenditure amounting to ₹ 22.03 Lakhs
has been charged to the revenue, resulting in understatement of assets and overstatement of
expenditure and the consequent impact on depreciation could not be quantified.
D. In ARU 310, Electrical Circle,Kozhikode of Holding Company,the solar plant has been wrongly
classified and capitalized under account code 10205 – Buildings amounting to `450 Lakhs,
which is not in compliance to Ind AS 16. This has resulted in overstatement of building and
understatement of plant and equipment. This impact on depreciation of corresponding assets
cannot be quantified due to lack of details.
E. As per Ind AS 16 –‘Property Plant and Equipment’, an asset should be capitalized on satisfying
the criteria for recognition, considering all elements of cost. However,the unitshave capitalized
the solar equipments purchasedunder KSEB (REES) only to the extent of part payment made
to the suppliers, which has resulted in understatement of asset and current liabilities.Since
proper details for verification have not been submitted by the Holding Company, the impact of
understatement of asset and liabilities and depreciation thereon cannot be quantified.
F. As per the letter No. Annual Accounts 9/ capitalization /2017-18, in ARU 307, Electrical Circle,
Ernakulamof Holding Company has capitalized an amount of ₹406.75 Lakhs being interest
and finance charges and other expenses apportioned and proportionate advertisement
expenditureunder asset- Lines and Cables without considering the recognition criteria in Ind
AS 16. We observed that, the ARU has not capitalized any assets during the year except the
general purpose assets.
Similarly in ARU 204 of Holding Company, an amount of ₹ 26.74 Lakhs has been allocated to
land which has resulted in overstatement of land and understatement of other assets.
The accounting treatments is not in compliance to Ind AS 23 on Borrowing Cost and Ind AS
16 on Property Plant and Equipment, results in over valuation of assets and corresponding
depreciation.
G. During the year, ARU 214 and ARU 203of Holding Company capitalized amount of ₹ 2275.56
Lakhs and ₹3227.42 Lakhs respectively for which no necessary details and supporting
documents have been submitted for verification. Hence, we are not in position to comment on
the capitalization of the said assets.
H. Attention is invited to Note No. 3 - Capital Work in Progress, which includes revenue expenses
pending allocation amounting to ₹ 40,243.99 Lakhs. The Holding Company has capitalized
borrowing cost on weighted average basis without considering the daily balances of the loans
93
and borrowings held by the Holding Company. The Holding Company has also not allocated
specific borrowing costs applicable to specific projects as required in Ind AS 23- Borrowing
cost. Further, the Holding Company does not cease to capitalize borrowing costs upon date
when the qualifying asset is ready for intended use which is also not in compliance to Ind AS
23. Due to lack of necessary information, we are unable to comment on the capitalization of the
amount and depreciation thereon.
An amount of ₹ 23,496.41 Lakhs has been capitalized by the Holding Company out of revenue
expenses pending allocation during the year without considering of the extent the work already
completed or ready to use. The details such as the basis of capitalization, the block under
which the same has been capitalized, depreciation provided on the same etc. were not made
available for our verification.Out of the above ₹ 1705.86 Lakhs relates to administration and
general overheads and ₹ 132.74 Lakhs relates to advertisement. However, the capitalization of
administration and general overheads and advertisement are not in compliance to Ind AS 16.As
a result, property plant and equipment are overstated by ₹ 1838.60 Lakhs and Loss / Reserves
are understated by ₹ 1838.60 Lakhs.
I. As per the Accounting policy, the Holding Company allocates Employee cost, interest and
financial costs of various units to “Revenue expenses pending allocation over capital works”
on the basis of a specified ratio identified by the Holding Company. However, the Holding
Company has not considered an amount of ₹ 1,660.37 Lakhs being ‘Employee cost relating
prior periods short provided’ and ₹ 900 Lakhs being DA arrear provided during current year
while allocating the employee cost. This has resulted in understatement of Capital Work in
progress and over statement of expenditure and loss amounting to ₹ 2560.37 Lakhs.
J. Title deeds of immovable properties of the Holding Company were not produced for our
verification.
K. As per paragraph 8 of Ind AS 16, Property, Plant and Equipment, items such as spare parts
are to be capitalized in accordance with recognition criteria, when they meet the definition
of ‘property, plant and equipment’. Since the required details are not available in respect of
the Holding Company, we are not able to quantify the impact of the same in the Consolidated
Financial Statements.
L. As pernote to accounts no 34.1 &34.12(i), the opening balance sheet for the Holding Company
as on 01/11/2013, has been adopted as per the Re-vesting second Transfer (Amendment)
scheme (Re-vesting) 2015.The Holding company has not considered increase in the value of
plant and machinery as a result of such restatement amounting to Rs. ₹ 10,71,199.95 Lakhs
while computing depreciation. The disclosure made by the Holding Company regarding the
accounting treatment of above assets and liabilities is incomplete.
M. As per the units visited by us and their explanations, the Units of Holding Companyhave
94
capitalized the entire material issued and consumed in various projects without considering
the recognition criteria in compliance to Ind AS 16. The accounting treatment thus resulted
in over statement of the property plant and equipment for the year 2017-18.In the absence of
necessary information we are unable to comment the impact thereof on the Consolidated
d) Sale, deletion or decommissioning of asset:
i) The Holding Company has a system of accounting sale of Property, Plant and Equipment either
in miscellaneous receipts or in sale of scrap without giving effect to the fixed assets ledger. The
Holding Company has also not disclosed the details of deletions and decommissioning during
the year. Thus the accounting treatment is found not in compliance to Ind AS 16-Property, Plant
and Equipment. In the absence of required information we are unable to quantify the impact
on Property, Plant and Equipment, Depreciation for the year and Other Income.
ii) As per Agenda no -34-2-7/2017 of Board of Directors meeting held on 27/07/2017 of Holding
Company had decided to sell the dismantled materials of Eranad Lines Package- A and Northern
Region HTLS Package- B of trans grid 2.0 to Sterlite power transmission ltd for an amount
of ₹1093.12 Lakhs and as per Agenda no 15-01/2018 Holding Company had decided to sell the
dismantled materials of Kochi lines Package to L&T Ltd. for an amount of ₹ 1007.10 Lakhs. As per
the information available, TheHolding Company accounted the same as sale of scrap instead
of showing as deletion of fixed assets which has resulted in overstatement of fixed assets and
miscellaneous income of ₹ 2100.22 Lakhs and overstatement of depreciation. Due to lack of
detailed list of dismantled items we are not in a position to quantify the depreciation amount.
2. The Holding Company has not complied with Ind AS 36- Impairment of Assets.Due to lack of
necessary information we are not in a position to quantify the impact.
3. As per Ind AS 105-‘Non Current Assets held for sale and Discontinued Operations’,the non-
current assets recognized as scrap should be separately disclosed. We observed that, the
Holding Company has not complied with the Ind AS, with regard to the assets recognized as
scrap and to be held for sale.Due to lack of necessary information we are not in a position to
quantify the impact of the same.
4. (a) In Note No.5 ‘Non Current Assets - Financial Assets – Loans’-includes an amount of ₹5250
Lakhs being Interest bearing loan to Energy Management Centre. The Holding Company has
provided interest for the period 2010-11 and 2011-12 amounting to ₹ 476.90 Lakhs and ₹ 697.16
Lakhs respectively. The Holding Company has not provided interest on this loan henceforth,
as there is an uncertainty in the realization of interest. As per the terms and conditions, the
loan is repayable by Energy Management Centre only if the Certified Emission Reduction
is available from UNFCC to obtain Carbon credit. As per the information available from the
management, Energy Management Centre has not obtained carbon credit as on date. Hence
95
there is uncertainty in the realization of this advance. However, no provision has been created
for this balance, including the interest, which is doubtful of realization. As a result, non-current
assets is overstated and loss for the year is understated by ₹ 6424.06 Lakhs.
(b) Note No:7 Other Non Current Assets includes ‘Capital Advances Others’ amounting to ₹
10,896.01 Lakhs for which sub-schedule of various works, Stage of completion of works etcof
Holding Company were not furnished for our verification. Due to lack of necessary information,
we are unable to quantify the impact of the same in the Consolidated Financial Statements.
5. The amounts and balances lying under Non Current Financial Liabilities - Borrowings (Note
No 15), Other Non Current liabilities (Note No 18), Trade Payables (Note No 20), Non Current-
Other Financial liabilities (Note No 16),Current - Other Financial Liabilities (Note No 21), Trade
receivables (Note No 9), Non Current Assets - Financial Assets - Loans (Note No 5), Non Current
Assets - Other Financial Assets (Note No6), Other non-current assets (Note No 7), Other current
assets (Note No 12) are subject to confirmation and reconciliation. The effect of the adjustment
arising from reconciliation and settlement of old dues and possible losses which may arise on
account of non-recovery or partial recovery of such dues could not be ascertained. Hence, we
are unable to comment the impact thereof on the Consolidated Financial Statements.
6. Account Code : 226 Material Stock and related accounts as on 31/03/2018
a. Attention is invited to Note 8 Inventories, The Holding Company has not provided for damaged/
obsolete and slow moving items and goods as per Ind AS 2 on ‘Inventories’. Due to lack of
necessary information, we are unable to quantify the impact of the same in the Consolidated
b. Attention is invited to Accounting Policy No.1.10, that the Holding Company changed the
accounting policy on Inventory from 01/07/2017. The Holding Company has not complied with
the disclosure requirements as per Ind AS 8-‘Accounitng Policies, Changes in Accounting
Estimates and Errors’inregard to the effect of the change in the Consolidated Financial
Statements.
c. Based on the unitsvisited by us, we observed that there is no uniformity in accounting of

inventory including LED Bulbs. In certain units, the closing balances of inventory are negative
and LED bulbs are valued at Selling Price. We have also observed that there is difference in stock
balance as per confirmation and Trial balance in respect of units visited by us. For instance, we
observed a difference of ₹ 42.83 Lakhs in ARU 211, ₹ 7.05 Lakhs in ARU 103 and ₹ 156.47 Lakhs
in ARU 203. Hence, we are not able to quantify the impact of the valuation of inventory in
Compliance with Ind AS-2-Inventories.
d. The management of Holding Company follows the procedure of physical verification of stock
periodically by the dedicated team in the O/o the Chief Engineer (SCM). However physical
verification reports by various ARUs of Holding Companyhave not been submitted to us to
96
confirm whether stock valuation isin compliance to Ind AS 2. Hence, we are not in position to
comment on the impact on the accounts resulting on the physical stock verification for any
unaccounted stock, stock to be converted as held for sale etc.
7. a) Other Current Assets(Note 12) read with note 34.12 (f) regarding Inter Unit Balance amounting
to ₹ 4,285.64 Lakhsof Holding Company. The said balance is subject to reconciliation and
further adjustments, the effect of which on the financial results of the Holding Company is not
ascertainable.
b) Note No 12 ‘Other current assets’ includes ₹ 942.16 Lakhs ‘Interest accrued but not due’ and
Note No 6 ‘Non Current Assets’ includes ₹ 106.10 Lakhs ‘Other Deposits Sundry Receivables’ at
ARU 999 for which the Holding Company has not furnished necessary details. In the absence of
necessary details, we are unable to comment upon the impact of these items.
8. Cash and Cash Equivalents
A. The Holding Company is not following the prudent business practice of accounting ‘Cheque
received not deposited in Bank’ as balance with Bank.On verification of units visited by us an
amount `18.57 Lakhs,being cheque received but not deposited,was disclosed as Cash in Hand.
This has resulted in overstatement of Cash in Hand and understatement of bank balances as
on 31/03/2018.
B. ARU 371, Electrical Division, Alappuzha of Holding Company
i. The actual cash balance as on 31/03/2018 was `7.43 Lakhs. But as per the financial statements
the Cash balance is ‘Zero’thus resulting in understatement of Cash in Hand and overstatement
of Bank Balances.
ii. The Holding Company has not accounted for an amount of ₹ 1.05 Lakhs which has been lost by
theft, resulting in over valuation of cash in hand and understatement of expenditure.
C. Bank Accounts
Bank balances includingE- payment accounts, Akshaya e Pay collection accounts and certain
bank accounts maintained at Head Office, ARU’s and other offices of Holding Companyare
subject to confirmation and reconciliation.
9. AGEING SCHEDULE
i. The reconciliation for ageing analysis of trade receivables were not submitted for our
verification. Hence, we are unable to comment on the recoverability of receivables and the
provision thereon.
ii. In the case of ARU 954-“Special Officer Revenue”of Holding Company- Debt Collection Balance
and Debtors net balance as per accounts under account code 23 shows a difference of `3,189.94
Lakhs. The difference has not been properly explained. Due to lack of information we are unable
97
to quantify the impact on provisioning for the debtors.
10. Rent Receivable: We observed thatthe rent receivable has not been accounted on accrual
basis at certain units of Holding Companyvisited by us. The accounting treatment is thus found
not in compliance to Ind AS 18- Revenue. Due to lack of necessary details, we are not in position
to quantify the amount.
11. As per the scheme ‘Pooled power purchase – solar energy’, the Holding Company purchases
power from the grid connected consumers, supplying solar power. We observed that, the
power purchase under this scheme has not been accounted on accrual basis during the year
2017-18 as per Ind AS-1.Due to lack of necessary details, we are not in position to quantify the
impact on the Consolidated Financial Statements.
12. Compensation for injuries Death etc.
The ARU 326, Electrical Division, Kattakkada of Holding Company, has paid ` 2 Lakhs for two
parties as ex-gratia out of their eligibility of ` 5 Lakhs each. The balance expenditure has not
been accounted on accrual basis during the year 2017-18 as per Ind AS-1. Thus, the Current
liabilities and expenditure are undervalued by ₹ 6 Lakhs.
13. Goods and Services Tax (GST)
Based on our visit in various units of Holding Company, the unit-wise details of Goods and
Service Tax collected and its subsequent remittance were not found proper and reconciled.
Hence, we are unable to comment on the correctness or otherwise in regard to the collection,
remittance, input tax credit, liability under reverse charge mechanism and payable amount with
respect to GST. The financial effect of the same cannot be quantified due to lack of information.
14. We observed, that inARU 299, Electrical Circle, Shornur of Holding Company -the interest in
Saving Bank account for Fund from REC-RGGVY which is refundable to REC, shows a debit
balance of `16.07 Lakhs.On verification,the liability has not been provided in the accounts on
accrual basis as per Ind AS-1. Due to lack of information, we are unable to quantify the same.
15. Account Code 47 and Account code 55 :
A. As per the accounting procedure, the deposit collected (account code 47) should be accounted
as Grant under Consumer contribution (account code 55) based on the work completed or
corresponding asset creation. Based on our audit in the units visited by usof Holding Company,
we observed that, certain ARUs have not transferred the deposit to Grant under Consumer
contribution and this may also have an impact on amortization of grant.
Since the Holding Company is undertaking work for specified large projects under ‘work
deposit’ basis and no information is readily available with the Holding Company with respect
to deposit received, work completed, date of completion, balance payable / receivable etc, we
are not in position to comment on correctness of the deposit held by the Holding Company as
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‘work deposits’ and the balance to be transferred to Grant.Due to lack of information, we are
unable to quantify the same.
B. In ARU 301, Electrical Circle,Thiruvananthapuram of Holding Company and in ARU 954 SOR,
grant shows debit balance of₹ 238.11 Lakhs and ₹ 1497.35 Lakhs. In the absence of necessary
details, we are unable to quantify the impact on the Consolidated Financial Statements
16. The Holding Company has disclosed an amount of ₹ 35,832.26 Lakhs asDisputed Income-tax
Matters (Note No 34.2)under Contingent Liabilities. Out of the same, we have not received
details regarding disputed tax liability of ₹ 3462.23 Lakhs.
17. On verification of Financial Statements of Associates, it was found that, there was loss for
three consecutive years including current year in Baitarni West Coal Company Ltd and it
has abandoned its project. However, the Holding Company has not provided and disclosed
provision for impairment, if any, as per Ind AS 28.
18. Receipts from maintenance charges for poles from Cable TV operators:
a. Based on the observation on audit of unitsof Holding Company, the receipts from maintenance
charges for poles from Cable TV Operators are not accounted on accrual basis in compliance to
Ind AS 18- Revenue. However due to lack of information, we are unable to quantify the impact
on the Consolidated Financial Statements.
b. On verification of accounts, the pole rent receipts include interest portion for the delayed
receipts. The interest receipts should be separately accounted. The amount could not be
quantified as no details are submitted by the Holding Company.
c. The Holding Company has not provided information regarding dispute settlement with cable
operators regarding income from pole rent, balance amount receivable and amount written
off, if any, as decided in Board meeting dated 12-4-2017. Due to lack of information, we are
unable to quantify the impact on the Consolidated Financial Statements
19. The Holding Company follows the practice of providing interest on closing balance of customer
deposits. We observed that, the provision created in preceding years amounting to ₹ 33082.44
Lakhs has been accumulated and no adjustment has been made in the Consolidated Financial
Statements. In the absence of necessary details, we are unable to comment upon the same.
20. Accounting treatment of LED Bulbs
a) Trading of LED Bulbs to the customers is different from the normal business activity of the
Holding Company. Hence,theHolding Company should disclose the purchases, Sales and
Closing Stock separately in Consolidated Statement of Profit and Loss.
b) The Holding Company is not following the accrual basis of accounting while accounting
expenses relating to purchase of LED bulbs which is not in conformity with Ind AS 1.Due to
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nonavailability of necessary information the impact of the same cannot be quantified.
c) Based on the verification of the accounts of units visited by usof Holding Company, it was
found that the purchase of LED Bulbs amounting to ₹ 320.19 Lakhs relating to prior period is
accounted as current year expenditure which is not in compliance with Ind AS 8 – ‘Accounting
Policies, Changes in Accounting Estimates and Errors’.
21. The impact of comments made by C&AG, the statutory auditors and errors or omissions for
the previous years has not been adjusted in accordance with Ind AS 8-Accounitng Policies,
Changes in Accounting Estimates and Errors. We are unable to quantify the impact of the
same in the financial statements due to lack of necessary details.
22. In ARU 954,as per the agreement no.28/17-18 dated 25/09/2017 M/s Philips Carbon Black Ltd.
is liable to pay the interest at the rate of 12% per annum based on actual delay from the due
date up to a period of 30 days and thereafter at the rate of 18% per annum for the entire period
of default from the due date.However as per the explanation from the Holding Company the
entire payable accounted has been revised by the management and the due amount has been
restated. Due to lack of proper details, we are unable to quantify the impact in the Consolidated
23. We observed that, at ARU 954of Holding Company,interest on demand on sale of

poweramounting to ₹8.97 Lakhs was not accounted in compliance to Ind AS 18 resulting in
understatement of interest income and receivables.
24. As per 35th Board Meeting held on 15th November,2017 Board of Directors of the Holding
Company decided for the one time settlement of recovery of arrear rent from occupants of Board
Quarters at various locations. However, no effect has been given in the Consolidated Financial
Statements which is not in compliance to Ind AS 18. Due to lack of necessary information we
are not in a position to quantify the impact on the Consolidated Financial Statements.
25. As per decision of Board of Directorsof Holding Company, price escalation has been sanctioned
for the works of Bhoothathankettu Small Hydro Electric Project. Due to non availability of
necessary information, we are unable to comment upon the financial effect of the same, if any.
26. The Holding Company has not revalued bonds at fair value issued to KSEB Master Trust
amounting to ₹ 11,23,929 Lakhs which is in not in conformity with Ind AS 109. Similarly, the
other financial assets and liabilities including loans / deposits have also not been recognized at
fair value. Further, the Company has revalued ‘Loan from REC - various schemes’ (Note No 15)
incorrectly resulting in negative balance of ₹ 47.06 Lakhs for the loan.Due to lack of necessary
we are unable to quantify the impact of the same in the Consolidated Financial Statements
27. One of the Associate companies, Baitarni West Coal Company Ltd, has shown an amount of ₹
1307.89 Lakhs under "other financial liabilities" against the name of three promoter companies
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including KSEB Ltd for an amount of₹ 435.96 Lakhs each. No corresponding entry has been
made in the books of KSEB Ltd.
28. Transactions between Holding Company and the Associates have not been disclosed properly.
Confirmation of balances and reconciliation among the Holding Company and Associates also
is not available for verification. In the absence of full information we are unable to comment
on the impact on of the same on the consolidated financial statements.Also as per Ind AS
28 ‘Investments in Associates’ investor’s share in profits of any upstream / downstream
transactions within the group should be eliminated in the Consolidated Financial Statements.
In the absence of necessary information, we are unable to determine whether the same has
been complied with.
29. The aggregate effect of our qualifications described above from Point No 1 to 28, wherever
quantifiable, is that assets are overstated by ₹ 8296.94 Lakhs, Liabilities are understated by ₹ 6
Lakhs, Loss / Reserves are understated by ₹ 8302.94 Lakhs
Qualified Audit Opinion
In our opinion and to the best of our information and according to the explanations given to
us, except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, the aforesaid Consolidated Ind AS financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India of the state of affairs of the Company as
at 31st March, 2018, and its loss, total comprehensive income, its cash flows and the changes in
equity for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the Consolidated Ind AS financial
statements. Our Opinion is not modified in respect of these matters.
1. As per Note No 34.12 (o), in the 42nd Meeting of Board of Directors held on 26.09.2018 it was
resolved to give in principle approval to incorporate the adjustment entries regarding the
amount payable to Government of Kerala towards electricity duty and guarantee commission
etc. as on 31.03.2018 against the amount receivable from the Government in the books of
accounts and to report the matter to the Government for concurrence. Accordingly, an amount
of ₹ 35099.74 Lakhs is netted off with the amount receivable from the Government.
2. As per Note Forming Part of Accounts No. 34.12 (m), stating non adjustment of value of 45.715
cents of Land belonging to the Holding company in Trivandrum was transferred to Trivandrum
Development Authority in the accounts of the Holding Company.
3. As per Note Forming Part of Accounts No. 34.3, the Holding company has accounted the fair
value for the long term loans and Borrowings except loan amounting to ₹ 37520.86 Lakhs for
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which repayment schedule is not available.
4. As per Note forming part of account 34.12 (g), GPF balances as per financial statements is₹
220733 lakhs. A difference of ₹ 22 lakhs with the party wise registers maintained at GPF section
was reported.
5. As per the Accounting Policy No.1.6 on, Property, Plant and Equipment (PPE), the Holding
company follows rates notified by the CERC Tariff Regulations. As per item (a) and (b) under
the heading ‘Land Under Lease’ of Appendix-III of CERC Notification No L-1/153/2014/CERC; land
held under lease and the cost incurred on land development on leasehold land are subject to
depreciation at the rate of 3.34%. However, the Holding company has not depreciated the land
under lease.
6. As per Note No 34.12 (r), the Holding Company has not quantified the monetary impact of
damage due to floods in the month of August 2018.
7. As per Note No 34.12.u an amount of Rs 1891.41 Lakhs has been setoff with the Preoperative
Expenses carried forward in the Financial statement of the Associate company Baitarni West
Coal Company Ltd. The same has not been considered as Income of the current year, as per the
opinion of the management of the Associate company Baitarni West Coal Company Ltd.
8. Attention is drawn toAccounting policy1.3.b the Associate company Renewable Power

Corporation of Kerala Ltd in connection with managements revenue recognitions and
accounting estimates drawn on the basis of the DPR and other accounting implications on
transactions with IREDA (a Govt of India Enterprise under the administrative control of Ministry
of New and Renewable Energy), as a formal agreement or MOU is yet to be executed.
Other Matters
The consolidated financial statements also include the Group's share of net profit of ` 2027.87
Lakhs for the year ended 31st March, 2018, as considered in the consolidated financial statements,
in respect of 3 associates / joint ventures whose financial statements / financial information
have not been audited by us. These financial statements / financial information have been
audited by other auditors whose reports have been furnished to us by the Management and
our opinion on the consolidated financial statements, in so far as it relates to the amounts and
disclosures included in respect of these associates / joint ventures and our report in terms of
sub-section (3) of Section 143 of the Act, insofar as it relates to the aforesaid associates / joint
ventures, is based solely on the reports of the other auditors.
Subsequent to the completion of audit of associate Renewable Power Corporation of Kerala

Ltd on 19 July 2018, the Comptroller & Audit General Audit has pointed out certain defects
requiring restatement of accounts in respect of Provision for Deferred Tax Liability and Cash
Flow Statement. This has necessitated a restatement of accounts and revision of original audit
report dated 20th July 2017 by the concerned auditor.
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Our opinion above on the consolidated financial statements, and our report on Other Legal
and Regulatory Requirements below, is not modified in respect of the above matters with
respect to our reliance on the work done and the reports of the other auditors and the financial
statements/ financial information certified by the Management.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit and referred to in the Other Matters
paragraphs above we report, to the extent applicable that:
a) We have sought and except for the matters described in the Basis for Qualified Opinion
paragraph above, obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated
b) Except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, in our opinion, proper books of account as required by law have been kept by
the Holding Company.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including
Other Comprehensive Income), the Consolidated Cash Flow Statement and Consolidated
Statement of Changes in Equity dealt with by this Report are in agreement with the books of
account.
d) Except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraph above, in our opinion, the aforesaid Consolidated Ind AS financial statements
comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may
have an adverse effect on the functioning of the Company.
f) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5th June
2015 issued by Ministry of Corporate affairs, Government of India, provisions of sub-section (2)
of Section 164 of the Act, are not applicable to the Holding Company.
g) With respect to the adequacy of the internal financial controls over financial reporting of the
Holding Company, refer to our separate Report in “Annexure I”. Our report expresses a qualified
opinion on the operating effectiveness of the Group’s internal financial controls over financial
reporting.
h) The qualification relating to the maintenance of accounts and other matters connected
therewith are as stated in the Basis for Qualified Opinion paragraph above.
i) With respect to the other matters to be included in the Auditor’s Report in accordance with
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Rule 11 of the Holding Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion
and to the best of our information and according to the explanations given to us:
i. Since the Holding Company has not furnished the details of pending litigations, we are not in a
position to confirm whether there are any litigations pending which would impact its financial
position. The Associate Company Baitarani West Coal Company Ltd has pending litigation
towards Bank Guarantee encashed matter before High Court.
ii. Since the Holding Company has not furnished the details of long term contracts, we are not in
a position to confirm whether it has any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. The Holding company has not transferred debentures and interest on debentures amounting
to ₹ 743.44 Lakhs remained unclaimed and unpaid for a period of more than seven years from
the date it become due for payment to the Investor Education and Protection Fund.
Sd/- Sd/- Sd/-

RAVINATH R PAI, FCA Suresh K., FCA CA.HARIKRISHNAN.R.S,
M.com, DISA, FCA
M. No. 226547 M. No. 23554 M.No.230338
Date: 29-09-2018
104
Annexure-I to Independent Auditors’ Report
Referred to in Para 1(g) under ‘Report on Other Legal and Regulatory Requirements’section
of our report of even date to the members of KERALA STATE ELECTRICITY BOARD LIMITED on
the Consolidated financial statements for the year ended 31 March 2018.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of
the Companies Act, 2013.
In conjunction with our audit of the consolidated Ind AS financial statements of the Group as of
and for the year ended 31 March 2018, we have audited the internal financial controls over financial
reporting of KERALA STATE ELECTRICITY BOARD LIMITED, its associates and joint ventures,
which are Companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The Respective Board of Directors of the Holding Company and its associate companies and
joint ventures, which are companies incorporated in India, are responsible for establishing and
maintaining internal financial controls based on the internal control over financial reporting
criteria established by the Holding Company considering the components of internal control
stated in the Guidance Note on Audit of Internal Financial 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 financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to
the respective company’s policies, the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Act.
Our responsibility is to express an opinion on the Group’s internal financial controls over financial
reporting based on our audit. We conducted our audit in accordance with the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the
ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls,
both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial reporting
was established 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
internal financial controls system with reference to consolidated financial statements and their
operating effectiveness.
105
Our audit of internal financial controls with reference to consolidated financial statements included
obtaining an understanding of internal financial control with reference to consolidated financial
statements, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the
other auditors of the subsidiaries and joint ventures, incorporated in India, in terms of their reports
referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis
for our qualified audit opinion on the Group’s internal financial controls system with reference to
consolidated financial statements.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control with reference to consolidated financial statements is a

process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal financial control with reference to
consolidated financial statements includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of consolidated financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company;
and (3) provide reasonable assurance regarding prevention or timely deduction of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the
consolidated financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may occur and not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting to future periods are subject to the risk that the
internal financial control over financial reporting may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for qualified opinion

Property Plant and Equipment
1. The Holding Company has not conducted physical verification of its fixed assets.
2. The scrap / sale of fixed assets are not shown as deletion of assets in the books of account of
the Holding Company.
106
3. There is no process for evaluation of impairment of assets by the Holding Company.
4. The Holding Company does not follow the recognition criteria given under Ind AS 16 for
capitalisation of assets
Qualified Opinion
A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control

over financial reporting, such that there is a reasonable possibility that a material misstatement of
the Group's annual or interim financial statements will not be prevented or detected on a timely
basis.
In our opinion, to the best of our information and according to the explanation given to us, except
for the possible effects of the matters described in the Basis for Qualified Opinion paragraph
above, the Holding Company, associates and joint ventures are incorporated in India, have, in all
material respects, an adequate internal financial controls system over financial reporting and
such internal financial controls over financial reporting were operating effectively as at 31 March
2018, based on the internal control over financial reporting criteria established by the Holding
Company considering the essential components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
We have considered the material weakness identified and reported above in determining the
nature, timing and extent of audit tests applied in our audit of the consolidated Ind AS financial
statements of the Group for the year ended 31st March, 2018 and the material weakness has affected
our opinion on the said consolidated Ind AS financial statements of the Group and we have issued
a qualified opinion on the consolidated Ind AS financial statements of the Group.
Sd/- Sd/-
RAVINATH R PAI, FCA Suresh K., FCA CA.HARIKRISHNAN.R.S,
M.com, DISA, FCA
M. No. 226547 M. No. 23554 M.No.230338
Date: 21-02-2019
107
OFFICE OF THE ACCOUNTANT GENERAL (ECONOMIC AND REVENUE SECTOR

AUDIT) KERALA, THIRUVANANTHAPURAM
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)
(b) OF THE COMPANIES ACT,2013 ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF
KERALA STATE ELECTRICITY BOARD LIMITED, THIRUVANANTHAPURAM FOR THE YEAR ENDED
31 MARCH 2018.
The preparation of Standalone Ind AS financial statements of Kerala State Electricity Board Limited,
Thiruvananthapuram (Company) for the year ended 31 March 2018 in accordance with the financial
reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the
management of the Company.The statutory auditors appointed by the Comptroller and Auditor
General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial
statements under Section 143 of the Act based on independent audit in accordance with the Standards
on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them
vide their Audit Report dated 29 September 2018.
I, on behalf of the Comptroller and Auditor General of India have conducted a supplementary audit
under Section 143(6)(a) of the Act of the Standalone Ind AS financial statements of Kerala State
Electricity Board Limited, Thiruvananthapuram for the year ended 31 March 2018. This supplementary
audit has been carried out independently without access to the working papers of the Statutory
Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and
a selective examination of some of the accounting records. Based on my supplementary audit,I
would like to highlight the following significant matters under Section 143(6)(b) of the Act which
have come to my attention and which in my view are necessary for enabling a better understanding
of the financial statements and the related Audit Report.
A. COMMENTS ON FINANCIAL POSITION
Balance Sheet
Assets
Non-current assets
Capital work in progress (Note 3)- ` 2448.89 crore
1. The above is overstated by `55.93 crore due to non capitalization of the Perumthenaruvi Small
Hydro Electric Project commissioned in current year. This has also resulted in understatement
of Fixed Assets by `55.93 crore and depreciation as well as loss for the year by `0.88 crore.
108
Equities and Liabilities

Financial Liabilities
Other Non-current Liabilities (Note 18)-Decommissioning liability-`20.56 crore
2. The above represents the decommissioning liability recognised by the Company @ 0.1 percent
of value of assets. The Decommissioning liability was added to the cost of the Property, Plant
and Equipment without considering the present value of the liability which is not in compliance
with Ind AS 16. The provision of Ind AS 16 that periodic unwinding of discount should be charged
to Profit and loss account as Finance Cost has also not been complied with. The Company has
not disclosed the methodology adopted for provision of decommissioning liability and limitations
if any, in adhering to the provisions of Ind AS 16 in this regard.
B. COMMENTS ON CASH FLOW STATEMENT
3. Cash and cash equivalents at the year was overstated by `70.07crore due to inclusion of fixed
deposits against Guarantees and other commitments (as disclosed under Note 11). Treatment
of such deposits which were not highly liquid in nature as cash equivalent was against the
provisions of Ind AS 7-Statement of Cash flows.
4. As per provisions of Ind AS 7, investing and financing activities that do not require use of cash
or cash equivalents should be excluded from the statement of cash flows. Non cash item of
`11336.67 crore representing changes in provisions/provision for interest has been included
under cash flow from financing activities which is not in compliance with Ind AS.
C. COMMENTS ON DISCLOSURE
5. According to the Kerala State Electricity Regulatory Commission Regulations,the Company
had to meet renewable purchase obligation of 5378.73 MU during the period 2011-12 to 2017-18
of which 4071.47 MU was achieved, leaving a deficit of 1307.26 MU. The liability on account of
this based on the floor price of renewable energy certificates worked out `130.73 crore. This fact
has not been disclosed by the Company.
6. The Company has disclosed under Para 1.9 under Note 1 Company Information and Significant
accounting policies that in terms of Ind AS 114- Regulatory Deferral Accounts it had opted to
continue with previous GAAP (Guidance Note on accounting for rate regulated activities) for
such balances.
However, the disclosure is silent as to the accounting policy itself and hence is deficient to that
extent. Further, as per disclosure requirements detailed in Para 45 of the Guidance Note, an
entity should disclose information that enables the users of the financial statements to understand
the nature and the financial effects of rate regulation on its activities. As per final True Up orders
issued by KSERC on 14.9.18, the regulatory asset as on 2015-16 stood at `5655.12 crore which
should have been disclosed in the notes forming part of the accounts.
For and on behalf of the
Comptroller and Auditor General of India
Sd/-
Thiruvananthapuram K.P.ANAND
21.03.2019 ACCOUNTANT GENERAL (E&RSA), KERALA
109
OFFICE OF THE ACCOUNTANT GENERAL (ECONOMIC AND REVENUE SECTOR

AUDIT) KERALA, THIRUVANANTHAPURAM
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER
SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED IND
AS FINANCIAL STATEMENTS OF KERALA STATE ELECTRICITY BOARD LIMITED
FOR THE YEAR ENDED 31 MARCH 2018
The preparation of Consolidated Ind AS financial statements of Kerala State Electricity Board
Limited, Thiruvananthapuram(Company) for the year ended 31 March 2018 in accordance with
the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility
of the management of the Company. The statutory auditors appointed by the Comptroller and
Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on
the financial statements under Section 143 of the Act based on independent audit in accordance
with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have
been done by them vide their Audit Report dated 21 February 2019.
I, on behalf of the Comptroller and Auditor General of India have conducted a supplementary audit
under Section 143(6)(a) of the Act of the Consolidated Ind AS financial statements of Kerala State
Electricity Board Limited, Thiruvananthapuram for the year ended 31 March 2018. This supplementary
audit has been carried out independently without access to the working papers of the Statutory
Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and
a selective examination of some of the accounting records. Based on my supplementary audit,I
would like to highlight the following significant matters under Section 143(6)(b) of the Act which
have come to my attention and which in my view are necessary for enabling a better understanding
of the financial statements and the related Audit Report.
A. COMMENTS ON FINANCIAL POSITION
Balance Sheet
Assets
Non-current assets
Capital work in progress (Note 3)-`2448.89 crore
1. The above is overstated by `55.93 crore due to non capitalization of the Perumthenaruvi Small
Hydro Electric Project commissioned in current year. This has also resulted in understatement
of Fixed Assets by `55.93 crore and depreciation as well as loss for the year by `0.88 crore.
110

Other Non-current Liabilities (Note 18)-Decommissioning liability-`20.56 crore
2. The above represents the decommissioning liability recognised by the Company @ 0.1 percent
of value of assets. The Decommissioning liability was added to the cost of the Property, Plant
and Equipment without considering the present value of the liability which is not in compliance
with Ind AS 16. The provision of Ind AS 16 that periodic unwinding of discount should be charged
to Profit and loss account as Finance Cost has also not been complied with. The Company has
not disclosed the methodology adopted for provision of decommissioning liability and limitations
if any, in adhering to the provisions of Ind AS 16 in this regard.
B. COMMENTS ON CASH FLOW STATEMENT
3. Cash and cash equivalents at the year was overstated by `70.07 crore due to inclusion of fixed
deposits against Guarantees and other commitments (as disclosed under Note 11). Treatment
of such deposits which were not highly liquid in nature as cash equivalent was against the
provisions of Ind AS 7-Statement of Cash flows.
4. As per provisions of Ind AS 7, investing and financing activities that do not require use of cash
or cash equivalents should be excluded from the statement of cash flows. Non cash item of
`11336.67 crore representing changes in provisions/provision for interest has been included
under cash flow from financing activities which is not in compliance with Ind AS.
5. According to Para 18 (b) of Ind AS 7, an entity may report cash flows from operating activities
using the indirect method whereby profit or loss is adjusted for the effects of transactions of a
non cash nature. Non adjustment of `20.28 crore being the Holding company's share of profit
of associates/joint venture (a non-cash item) against profit before tax while arriving at operating
profit before working capital changes resulted in overstatement of cash inflow from operating
activities by `20.28 crore.
6. According to the Kerala State Electricity Regulatory Commission Regulations, the Company
had to meet renewable purchase obligation of 5378.73 MU during the period 2011-12 to 2017-18
of which 4071.47 MU was achieved, leaving a deficit of 1307.26 MU. The liability on account of
this based on the floor price of renewable energy certificates worked out `130.73 crore. This fact
has not been disclosed by the Company.
7. The Company has disclosed under Para 1.10 under Note 1 Company Information and Significant
accounting policies that in terms of Ind AS 114- Regulatory Deferral Accounts it had opted to
continue with previous GAAP (Guidance Note on accounting for rate regulated activities) for
such balances.
However, the disclosure is silent as to the accounting policy itself and hence is deficient to that
extent. Further, as per disclosure requirements detailed in Para 45 of the Guidance Note, an
entity should disclose information that enables the users of the financial statements to understand
the nature and the financial effects of rate regulation on its activities. As per final True Up orders
issued by KSERC on 14.9.18, the regulatory asset as on 2015-16 stood at `5655.12 crore which
111
should have been disclosed in the notes forming part of the accounts.
8. While de-allocating the coal block allotted to the associate company M/s Baitarani West Coal
Company Ltd (BWCCL), Ministry of Coal, Govt. Of India invoked 50 percent of the Bank Guarantee
of `75 crore (`37.5 crore) submitted by BWCCL. The matter is under litigation and the Honourable
High Court of Odisha had issued (March 2013) interim order not to encash the Bank Guarantee.
As the case is pending disposal, the contingent liability on this account should have been
disclosed in notes forming part of Consolidated Financial Statements.
For and on behalf of the

Comptroller and Auditor General of India
Sd/-
Thiruvananthapuram K.P.ANAND
04.06.2019 ACCOUNTANT GENERAL (E&RSA), KERALA
112
CS
N.C. Nair, FCS., LLB., CAIIB
Form No.MR-3
SECRETARIAL AUDIT REPORT

For the Financial Year ended 31st March 2018
[Issued in pursuance of Section 204(I) of the Companies Act, 2013 and Rule No.9 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with
modifications as deemed necessary, without changing the substance of format given in
MR-3]
To
The Members,
Kerala State Electricity Board Limited,
Vydyuthi Bhavanam,
Pattom, Thiruvananthapuram – 695 004.
I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and
adherence to good corporate practices by the KERALA STATE ELECTRICITY BOARD LIMITED (CINU
40100KL2011SGC027424), (hereinafter - called the “Company”), for the financial year ended on 31st
March 2018. Secretarial Audit was conducted in a manner that provided me a reasonable basis for
evaluating the corporate conduct/statutory compliances and expressing an opinion thereon.
A. In expressing my opinion it must be noted that:
(i) Maintenance of Secretarial Record is the responsibility of the Management of the Company.
My responsibility is to express an opinion based on Audit.
(ii) I have followed the Audit practices and processes as were appropriate to obtain reasonable
assurances about the correctness of the contents of the Secretarial Records. I believe that the
processes and practices I followed, provide a reasonable basis for my opinion.
(iii) I have not verified the correctness and appropriateness of the financial statements of the
Company.
(iv) The Company being a wholly owned Government Company under the Ministry of Power
Government of Kerala, the power to appoint Directors [including Independent (Directors)]
and the terms and conditions of such appointment including remuneration and evaluation
vests with the Government of Kerala and the personal confidential records maintained by the
Company.
(v) Wherever required I have obtained management representation pertaining to compliance of
laws, rules, regulations, happening of events etc.,
(vi) The compliance with the provisions of Corporate and other Laws Rules, Regulations, Standards
is the responsibility of the Management.
My examination was limited to the verification of procedures, happening of events etc.
113
(vii) The Secretariat Audit Report is neither an assurance as to the future viability of the Company
nor of the efficacy or effectiveness with which the Management has conducted the affairs of
the Company.
B. Based on my verification of the Company’s Books, Papers, Minutes Book, Forms and Returns
filed and other records maintained by the Company, its officers and agents,
I hereby report that in my opinion the Company has during the audit period covering the
Financial Year ended on 31st March 2018, complied with the statutory provisions relating to the
Companies Act, 2013 and also the Company has proper Board processes duly evolved and a
compliance mechanism in place to the extent, in the manner and subject to reporting made
hereunder.
C. Being a fully owned unlisted Government Company, the under mentioned Acts, Rules,
Regulations are not applicable to the Company.
(i) The Securities Contracts (Regulations) Act, 1996 and the Rules framed thereunder.
(ii) The Depositories Act, 1996 and the Regulations, Bye-laws framed thereunder.
(iii) Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunder.
(iv) The following Regulations and Guidelines prescribed under the Securities and Exchange
Board of India (SEBI) Act, 1992.
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Take over)
Regulations, 2011 as amended from time to time.
(b) The Securities and Exchange Board of India (Prohibition of Insider Training) Regulations, 2015.
(c) The Securities and Exchange Board of India (Issue and Listing of Securities) Regulations, 2008.
(d) The Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents)
Regulations, 1993.
(e) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2004.
(f) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2014.
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations) 2009.
(h) The Securities and Exchange Board of India (Buy back of Securities) Regulations) 1998 and
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
(LODR), 2015.
The Company has generally complied with the provisions of the Electricity Act, 2003 and
the regulatory provisions thereunder except that a single entity is engaged in generation,
distribution and transmission as per policy decisions of the Government of Kerala.
I have also examined the Compliance with the provisions of Secretarial Standards in respect of
meetings of the Board of Directors.
During the period under review the Company has complied with the provisions of the Act
except to the extent noted below:
1. There is only one Independent Director.
2. The Audit Committee constituted is consequently not in conformity with Section 177(2) of the
Companies Act. The Company has an internal Audit Wing; but no report from the Internal
114
Auditor has ever been placed above the Audit Committee.

3. The Company has not constituted a Nomination and Remuneration Committee as envisaged
in Section 178(1) of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of
the Board and its Powers) Rules, 2014.
The Departmental Promotion Committee on which the Board relies, shall not be a substitute
for Nomination and Remuneration Committee. The Remuneration of Directors, Key Managerial
Personnel and Senior Executives must have a balance between fixed and incentive components
and it should be aligned to the short and long term goals of the Company. All such policies
as are formulated by the Nomination and Remuneration Committee shall be disclosed in the
Board’s Report as prepared under Sec.134 of the Act – Vide proviso to Section 178(4) of the Act.
4. As per Section 203(1) of the Act, the Company shall have a Company Secretary who shall be
a Key Managerial Person. The Chief Internal Audit Officer who is holding a higher post is
holding additional charge of Company Secretary. This is not in conformity with the relative
provisions of Companies Act, 2013.
D. I further report that the Board of Directors of the Company is duly constituted with Six Full
Times Directors, Two Senior IAS Officers and One Independent Director. Under Rule 4 of
Companies (Appointment and Qualification of Directors) Rules, 2014, the Company shall have
at least two independent Directors. The changes in the composition of the Board that took
place during the period under review were carried out in compliance with the provisions of
the Act and the Articles of Association of the Company.
2. Generally a week’s notice is given to all Directors to schedule Board Meetings Agenda and
detailed notes are sent and a system for recording views observations and dissent, exists
where necessary, though decisions are generally taken by consenss.
3. There is a Committee of Full Time Directors to carry on the day to day functioning/oversee
working of the routine functions. The committee meets every Wednesday and a take decision
on day to day affairs. As required in Section 118(1) of the Companies Act, 2013 read with Rule
3(12) (c) of the Companies (Meetings of the Board and its Powers).
Rules 2014, the Company is keeping a record of the meetings of this Committee and its
decisions where necessary are placed before the Board of Directors for approval to implement
the decision of the Committee. These minutes are not however recorded in a separate book
kept for the purpose, but are kept in a separate file.
4. I further report that there are adequate systems and processes in the Company commensurate
with its size and operations to monitor and ensure compliance with all applicable laws, Rules
and guidelines.
Trivandrum,
29.01.2019.
Sd/-
N.C. NAIR,
Company Secretary,
FCS 750, CP No.312,
Unique Code Number 11981. KE006000
Note:- This report shall be read with my letter of even date annexed as Appendix A which forms an
internal part of this report.
115
CS
N.C. Nair, FCS., LLB., CAIIB
Practising Company Secretary
Appendix – A
29.01.2019
To
The Members,
Kerala State Electricity Board Limited,
Vydyuthi Bhavanam,
Pattom, Thiruvananthapuram – 695 004.
My report of even date is to be read along with this letter.
Management’s responsibility
1. It is the responsibility of the Management of the Company to maintain Secretarial records,
devise proper systems to ensure compliance with the provisions of all applicable Laws and
Regulations and to ensure that the systems are adequate and operate effectively.
Auditor’s Responsibility
2. My responsibility is to express an opinion on these Secretarial Records, Standards and
procedures followed by the Company with respect to secretarial compliances.
3. I believe that audit evidence and information obtained from the Company’s Management is
adequate and appropriate for me to provide a basis for my opinion.
4. Wherever required I have obtained Management’s representation about the compliance of
laws, rules and regulations and happening of events etc.
5. I have not verified the correctness and appropriateness of financial records and Books of
Accounts of the Company.
6. The compliance of the provisions of corporate and other laws, Rules, regulations and standards
is the responsibility of the management, My responsibility was limited to the verification of
procedures on test basis.
Disclaimer
7. The Secretarial Audit Report is neither an assurance as to the future viability of the Company
nor of the efficacy with which the Management has conducted the affairs of the Company.
Trivandrum,
29.01.2019
Sd/-
N.C. NAIR,
Company Secretary,
FCS 750, CP No.312,
Unique Code Number 11981, KE006000
116
REPLIES TO THE INDEPENDENT AUDIT REPORT OF THE STATUTORY AUDITORS ON THE

STANDALONE FINANCIAL STATEMENT OF THE KERALA STATE ELECTRICITY BOARD
LIMITED, THIRUVANANTHAPURAM FOR THE YEAR ENDED 31ST MARCH 2018
COMMENTS ON ACCOUNTS REPLIES OF THE COMPANY
1. In respect of Note 2 to accounts:Property,Plant Most of the softwares used by the company are
and Equipment internally developed ones. The Company vide
order B.O (DF) No.3177 (Annual Accounts/ Ind AS-
a) As per Appendix-III of CERC Notification No
2016-17/2017-18) dated 18.12.2017 had entrusted
L-1/153/2014/CERC, ‘Softwares’ are subject to
Chief Engineer (IT&CR), who is the head of IT
a depreciation of 30%. Instead the Company
wing in KSEBL to segregate and capitalise
follows the practice of pooling Software
the expenditure incurred for development of
along with item ‘IT Equipment’ which has a
softwares. Accordingly, Chief Engineer (IT&CR)
depreciation rate of 15%.
vide letter No. ITCU/HRIS/2018-19/387 dated
During the year, the Company has 12.07.2018 had reported that `8.15 Cr has been
ascertained an amount of ₹ 815.89 Lakhs as incurred as employee cost for the Software
the development and implementation cost Development &Implementation. Hence the
of software which has been included under same has been capitalised in the Head office
Note No. 3- Capital Work in progress as vide journal no.88 and booked under the
Revenue expenses pending allocation over account head 15.2 - Revenue expenses pending
capital works. allocation over Capital Works.
This is not in conformity with the Indian
Accounting Standard (Ind AS) 38 – Intangible
Assets. In the absence of requisite details, we
are unable to verify the correctness of the
said amountand the impact of the above on
the depreciation/amortisation.
b ‘Deferred Cost on Account of Feasibility/ The deferred cost is the expenditure related
Survey’ amounting to ₹ 10,557.28 Lakhs to the feasibility study of the projects
being cost of projects not yet sanctioned and and the expenditure incurred before the
accumulated over the years has been wrongly commencement of a project. As per the policy
classified under Note No.7- Other Non regularly being followed by the Board, the survey
Current Assets, which is not in accordance and investigation expenditure pertaining to
with Ind AS 38 – Intangible assets and Ind project not yet sanctioned is being booked under
AS 16- Property Plant and Equipment. As the Account Head 17.3. Once the projects are
the statuses of these projects are yet to be sanctioned this expenditure will be transferred
ascertained, we are unable to comment the transferred to work in progress(Capital) and if
impact thereof on the financial statements. the project is not sanctioned,the expenditure
will be written off as in fructuous Capital
Expenditure.
The amounts were verified and the expenditure
incurred for the projects to which the
investigation/ survey is being carried out as
117
reported by the ARUs only is retained in this

account. The balance in the books of accounts
will be transferred to the CWIP on sanctioning
the project.
C. Property Plant and Equipment and capital The depreciation is being calculated at the Head
work in progress: office on the basis of yearly addition of fixed
assets made at the ARUs. In this connection it
A. Depreciation on additions to fixed assets,
may also be noted that depreciation calculation
except for capital works in progress
as mentioned in the accounting policy is on the
capitalized, is charged in the year in which
asset addition as a whole during the year. Pro-
it was purchased/ commissioned without
rata depreciation is not being calculated due to
considering date on which the asset is ready
the complex number and nature of assets. The
for use. This is not in conformity with Ind
same methodology is being regularly followed
AS -16 on “Property, Plant and Equipment”,
by KSEBL during past two decades and
leading to understatement of Property,
approved by statutory and C&AG audit during
Plant and Equipment and overstatement of
these years
depreciation and loss for the year; However
due to lack of necessary information, the
impact of the same cannot be quantified
B. As per Ind AS 16-Property Plant and The company is having a detailed manual on
Equipment, the asset should be recognized Commercial Accounting System VOLUME
if it is probable that future economic III – 'Capital Expenditure and Fixed Asset’ to
benefits associated with the item will flow establish consistent and effective policies and
to the entity; and the cost of the item can be procedures in the area of capital expenditure
measured reliably. and fixed assets accounting at all levels in the
Company. In addition, the company vide Letter
The Company has capitalized `12592.87
No.609/Annual Accounts/2017-18 had directed
Lakhs on 31/03/2018 in distribution units
all Account Rendering Units to follow the ready
visited by us without considering above
to use concept in line with the Ind As -16 without
criteria for recognition of assets. Also
considering the commissioning of the project. It
on verification of the transmission and
may be noted that generally the commissioning
generation units visited by us and as per
date and ready to use date will be one.
the representation received, it was found
that the capital work in progress has been
capitalized as and when ‘Commissioned’
Further, we are not in a position to quantify
the same and the impact of the above on
the depreciation.
118
C (i) On verification of bills submitted during Noted. It has been decided to convene a
the course of audit it was found that the regional level meeting of ARU to discuss the
capitalization was delayed for assets, audit queries raised by the auditors and to give
amounting `2290.80 Lakhs including the awareness to the field units the importance of
assets to be capitalized under RAPDRP timely capitalisation.
and DDUGJY scheme, which have already
satisfied the recognition criteria specified
in Ind AS 16 in previous years. Capitalization
has been delayed in various projects and
hence there is a corresponding impact in
depreciation, fixed assets, Capital work in
progress and current liabilities for capital
assets during the previous years which
cannot be quantified.
(ii) Based on the submitted bills and units
visited by us during audit, we observed
that, during 2017-18 certain assets satisfy
the criteria for recognition, in compliance
to Ind AS 16, but has not capitalized an
amount of ` 203.22 Lakhs including the
assets to be capitalized under RAPDRP
and DDUGJY scheme. Capitalization has
been delayed in various projects and
hence there is a corresponding impact
in depreciation, fixed assets and capital
work in progress for capital assets during
the year which cannot be quantified.
(iii) In units visited by us, revenue expenditure
amounting to ₹ 524.38 Lakhs has been
capitalized; resulting in overstatement
of assets and understatement of
expenditure and the consequent impact
on depreciation could not be quantified.
In units visited by us, the capital
expenditure amounting to ₹ 22.03
Lakhs has been charged to the revenue,
resulting in understatement of assets and
overstatement of expenditure and the
consequent impact on depreciation could
not be quantified.
119
D. In ARU 310, Electrical Circle, Kozhikode, the This will be verified. Necessary adjustment will
solar plant has been wrongly classified be provided during the year 2018-19.
and capitalized under account code 10205
– Buildings amounting to `450 Lakhs,
which is not in compliance to Ind AS 16.
This has resulted in overstatement of
building and understatement of plant and
equipment. This impact on depreciation of
corresponding assets cannot be quantified
due to lack of details.
E. As per Ind AS 16 –‘Property Plant and Necessary Directions are being issued to ARUs
Equipment’, an asset should be capitalized to verify this in detail and capitalise as per the
on satisfying the criteria for recognition, Accounting Standards.
considering all elements of cost. However,
the unitshave capitalized the solar
equipments purchased under KSEB
(REES) only to the extent of part payment
made to the suppliers, which has resulted
in understatement of asset and current
liabilities. Since proper details for verification
have not been submitted by the company,
the impact of understatement of asset and
liabilities and depreciation thereon cannot
be quantified.
F. As per the letter No. Annual Accounts 9/ This will be verified
capitalization /2017-18, in ARU 307, Electrical
Circle, Ernakulam has capitalized an amount
of ₹406.75 Lakhs being interest and finance
charges and other expenses apportioned
and proportionate advertisement expendi-
ture under asset- Lines and Cables without
considering the recognition criteria in Ind
AS 16. We observed that, the ARU has not
capitalized any assets during the year
except the general purpose assets.
Similarly in ARU 204, an amount of ₹ 26.74
Lakhs has been allocated to land which
has resulted in overstatement of land and
understatement of other assets.
The accounting treatments is not in
compliance to Ind AS 23 on Borrowing
Cost and Ind AS 16 on Property Plant and
Equipment, results in over valuation of
assets and corresponding depreciation.
120
G. During the year, ARU 214 and ARU It is reported from the ARU that the details are
203capitalized amount of ₹ 2275.56 Lakhs available with them for verification.
and ₹3227.42 Lakhs respectively for which
no necessary details and supporting
documents have been submitted for
verification. Hence, we are not in position to
comment on the capitalization of the said
assets.
H. Attention is invited to Note No. 3 - Capital KSEB Ltd is following the rules, policies and
Work in Progress, which includes revenue standards prescribed in Electricity Supply
expenses pending allocation amounting Annual Accounts rules [ESAAR] 1985, saved as
to ₹ 40,243.99 Lakhs. The Company has per Section 185(2) (d) of Electricity Act 2003 for
capitalized borrowing cost on weighted capitalisation of expenditure.
average basis without considering the
daily balances of the loans and borrowings The capitalisation of expenditure is specified in
held by the Company. The Company has following paras of Annexure III- Basic Accounting
also not allocated specific borrowing costs Policies and Principles in the ESAAR 1985, the
applicable to specific projects as required relevant part are reproduced for easy reference.
in Ind AS 23- Borrowing cost. Further, the “2.9 All employee costs in respect of the
Company does not cease to capitalize construction units shall be fully charged as cost
borrowing costs upon date when the of capital assets.
qualifying asset is ready for intended use
which is also not in compliance to Ind AS 23. 2.11 All expenses in respect of construction units
Due to lack of necessary information, we are shall be fully charged as cost of Capital assets.
unable to comment on the capitalization of 2.94 Every year, a portion of the interest payable
the amount and depreciation thereon. on the interest bearing borrowings which relate
An amount of ₹ 23,496.41 Lakhs has to financing of capital assets at construction
been capitalized out of revenue expenses stage i.e. till the point of commissioning of assets
pending allocation during the year without shall be computed in the manner prescribed
considering of the extent the work already in paragraph 1.42 Annexure V, if so directed by
completed or ready to use. The details Central Government, be capitalized.
such as the basis of capitalization, the
2.95 The amount of interest so computed and
block under which the same has been
capitalized shall be reduced from the amount
capitalized, depreciation provided on the
of interest for the year and only the balance
same etc. were not made available for our
amount shall be chargeable to the Revenue
verification. Out of the above ₹ 1705.86
Lakhs relates to administration and general Account for the year.
overheads and ₹ 132.74 Lakhs relates to Para 1.42 of Annexure V is as follows
advertisement. However, the capitalization
“1.42 In computing the interest on funds
of administration and general overheads
utilised during construction stage of capital
and advertisement are not in compliance
to Ind AS 16. As a result, property plant and assets, the following factors shall be taken into
equipment are overstated by ₹ 1838.60 consideration:
Lakhs and Loss / Reserves are understated (1)The full amount of interest payable for the
by ₹ 1838.60 Lakhs.
121
year would be considered for the purpose.

(2) Arrears of interest shall not distort the
computation of interest on funds utilized in
construction as these arrears are required to
be debited to a Restructuring Account and
then adjusted to surplus/ losses.
(3) In view of the difficulties in identifying a
source to its use, no attempt shall be made for
source-use identification.
(4). The exercise of computation of capitalisable
interest shall be carried out at the head office
of the Board.
(5)This exercise shall be carried out considering
rupees in thousands only”.
Similarly, Para 1.4 &1.5 of annexure V is as follows.
1.4 Staff costs, material related expenses and
other expenses which are chargeable to capital
works shall be:
(1)Identified to specific capital job wherever
possible.
(2) Failing which, identified to a specific group
of capital jobs wherever possible (and within
the group allocated on an ad-valorem basis).
(3)Failing which, identified to a project wherever
possible (and allocated on an ad-valorem basis
over various jobs within the project).
(4)Failing which, allocated on an ad-valorem
basis over various projects and various jobs
within each project.
Identification to one or more jobs should
be done only if possible to identify without
any allocation. In all other cases, ad-valorem
allocation shall be adopted.
1.5 By ad- valorem basis is meant allocation
of capitalisable expenses as a per cent of the
capital expenditure incurred during the period
on that job/ project (and not as a per cent of
total capital expenditure on that job/ project
including the expenditure including the
122
expenditure incurred in the previous periods of

allocation.
KSEB Ltd is consistently following the above
accounting policies prescribed. Accordingly the
expenditure incurred in construction ARUs are
being fully capitailsed by the ARU itself. In the
case of other ARUs, where both capital and O&M
works are being undertaken, the employee cost
&expenditure is being capitalised at a pre set
percentage as below.
Transmission 25%
Distribution 14%
Head Office Units 5%
Similarly interest and finance charges is being
capitalised at the head office as prescribed in
the above accounting policies. These amounts
are later allocated to the ARUs on the basis of
actual capital expenditure incurred during
the period for capitalisation in the concerned
project/ assets. All the workings and details are
available with the Company.
I. As per the Accounting policy, the Company As per the accounting policy regularly being
allocates Employee cost, interest and followed by the company as detailed in clause
financial costs of various units to “Revenue 17(2) of the part I chapter III of manual on
expenses pending allocation over capital Commercial Accounting System Volume-
works” on the basis of a specified ratio III-Capital Expenditure and Fixed Assets
identified by the Company. However Accounting.
Company has not considered an amount
“If the increase/decrease in staff costs and other
of ₹ 1,660.37 Lakhs being ‘Employee cost
expenses has taken place in the accounting
relating prior periods short provided’ and ₹
years subsequent to the accounting year
900 Lakhs being DA arrear provided during
in which the relevant staff costs and other
current year while allocating the employee
expenses were incurred, the amount increase/
cost. This has resulted in understatement of
decrease shall be ignored for the purpose of
Capital Work in progress and overstatement
capitalisation of expenses in the subsequent
of expenditure and loss amounting to ₹
years”
2560.37 Lakhs
During the year an amount of `2560.37 has
been booked in the ARU as employee cost
relating to previous years. It consists of salary of
employees relating to previous years deferred
due to various reasons and dearness allowance
of employees due in the previous year. The
123
same will be adjusted with the provision created

on respective years and the short fall if any will
be charged to the revenue account. However
the increase/decrease will not be considered for
capitalisation as per the policy detailed above.
J. Title deeds of immovable properties were KSEB Ltd. is having land and land rights with
not produced for our verification. book value of `1783.79 crore as on 31.03.2018
spread across Kerala. The land is accounted in
various ARUs and is under the control of various
ARU Officers. SeparateLandManagement Unit is
functioning at the head office where the details
of land are being maintained and monitored.
Reasonable internal control is being exercised
over the landed property. The title deed of the
property randomly selected by the audit were
furnished for verification.
K. As per paragraph 8 of Ind AS 16, Property, The audit was requested to furnish the details
Plant and Equipment, items such as spare on which the opinion is framed to have detailed
parts are to be capitalized in accordance verification of the items and its materiality.
with recognition criteria, when they meet However the item is not quantified by the
the definition of ‘property, plant and auditors.
equipment’. Since the required details are
not available, we are not able to quantify
the impact of the same in the Financial
Statements.
L. As per note to accounts no 35.1 &35.15(i), the Vide G.O(P) No.46/2013/PD dated 31 October 2013
opening balance sheet for the Company as published in Kerala Gazette dated 31st October
on 01/11/2013, has been adopted as per the 2013, the Government of Kerala revested all the
Re-vesting second Transfer (Amendment) Assets and liabilities of the erstwhile KSE Board
scheme (Re-vesting) 2015. The company in the new company Kerala State Electricity
has not considered increase in the value Board limited. Then the Government of Kerala
of plant and machinery as a result of such issued the final transfer scheme vide G.O.(P)
restatement amounting to Rs. ₹ 10,71,199.95 No.3/2015/PD dated 28.01.2015 by issuing a new
Lakhs while computing depreciation. The opening Balance Sheet for the company as on
disclosure made by the Company regarding 01.11.2013.In the Balance sheet the value of Plant
the accounting treatment of above assets and Machinery notified as `15263.94Cr against
and liabilities is incomplete. the closing balance as on 31.10.2013 amounting
to `4551.95 Cr. Hence the value Plant and
Machinery was increased by `10711.99 Cr as part
of creation of pension fund. Depreciation is not
being provided for the above increased value of
assets and is disclosed as such in the notes to
accounts.
124
M. As per the units visited by us and their Majority of the observation noticed by the audit
explanations, the Units have capitalized may be in Distribution SBU where normally
the entire material issued and consumed works are completed within a short period of
in various projects without considering the time compared to other SBU of KSEB Ltd. Apart
recognition criteria in compliance to Ind AS from this, in distribution sector, majority of the
16. The accounting treatment thus resulted works are small in size and also the chances
in over statement of the property plant of spill over to another financial year for the
and equipment for the year 2017-18. In the completion of the work are remote. Hence
absence of necessary information we are there may not be a material impact in the
unable to comment the impact thereof on capitalisation done by the ARUs. The procedure
the financial statements. for capitalization is detailed in manual on
Commercial Accounting System VOLUME III –
'Capital Expenditure and Fixed Asset’.Which is
being regularly followed by the ARUs.
d. Sale, deletion or decommissioning of I As per the accounting procedure followed

asset: by the company, whenever the assets are
decommissioned, the fixed assets are to be
i) The Company has a system of accounting
withdrawn. The non compliance in the ARU
sale of Property, Plant and Equipment
will be looked into
either in miscellaneous receipts or in sale
of scrap without giving effect to the fixed
assets ledger. The Company has also not
disclosed the details of deletions and
decommissioning during the year. Thus
the accounting treatment is found not in
compliance to Ind AS 16-Property, Plant
and Equipment. In the absence of required
information we are unable to quantify the
impact on Property, Plant and Equipment,
Depreciation for the year and Other Income.
ii) As per Agenda no - 34-2-7/2017 of Board ii. The Eranad Lines Package-A and Northern
of Directors meeting held on 27/07/2017 Region HTLS Package- B are part of the
Company had decided to sell the dismantled Transgrid project, which is in the initial stage
materials of Eranad Lines Package- A and of implementation. The said Board order is
Northern Region HTLS Package- B of trans on the finalisation of the tender formalities
grid 2.0 to Sterlite power transmission ltd for dismantling of the existing lines and
for an amount of ₹ 1093.12 Lakhs and as per erection of the new one. The deletion of fixed
Agenda no 15-01/2018 Company had decided assets and capitalisation of new line will be
to sell the dismantled materials of Kochi lines made on actual execution of the activities in
Package to L&T Ltd. for an amount of ₹ 1007.10 the field ARU.
Lakhs. As per the information available, The
Company accounted the same as sale of
scrap instead of showing as deletion of fixed
assets which has resulted in overstatement
125
of fixed assets and miscellaneous income

of ₹ 2100.22 Lakhs and overstatement of
depreciation. Due to lack of detailed list of
dismantled items we are not in a position to
quantify the depreciation amount.
2. The Company has not complied with Ind Noted.

AS 36- Impairment of Assets. Due to lack
of necessary information we are not in a
position to quantify the impact
3. As per Ind AS 105- ‘Non Current Assets held for Noted.

sale and Discontinued Operations’, the non-
current assets recognized as scrap should
be separately disclosed. We observed that,
the company has not complied with the Ind
AS, with regard to the assets recognized as
scrap and to be held for sale. Due to lack
of necessary information we are not in a
position to quantify the impact of the same.
4. (a) In Note No.5 ‘Non Current Assets - Financial As per the Accounting standard if there is any
Assets – Loans’-includes an amount of uncertainty in the realization of revenue that
₹5250 Lakhs being Interest bearing loan to amount need not be accounted as revenue.
Energy Management Centre. The Company Hence provision for interest is not credited in
has provided interest for the period 2010- the accounts.
11 and 2011-12 amounting to ₹ 476.90
As per the terms and condition, the loan
Lakhs and ₹ 697.16 Lakhs respectively. The
is repayable only if the Certified Emission
Company has not provided interest on this
Reduction (CER) is available from UNFCC (to
loan henceforth, as there is an uncertainty
obtain Carbon Credit). If the CER is not being
in the realization of interest. As per the
allotted to EMC, EMC cannot be requested to
terms and conditions, the loan is repayable
repay the advanced by KSEB and the entire
by Energy Management Centre only if the
cost will be borne by KSEB from its budgetary
Certified Emission Reduction is available
resources. Action is being taken to ascertain
from UNFCC to obtain Carbon credit. As
the possibility of obtain Carbon Credit with the
per the information available from the
EMC. EMC being a fully owned Government
management, Energy Management Centre
of Kerala undertaking and the company has
has not obtained carbon credit as on date.
no doubt about its realization, provision has
Hence there is uncertainty in the realization
not been made.The matter had been taken up
of this advance. However, no provision has
with the Government of Kerala vide letter dated
been created for this balance, including the
05.03.2018.
interest, which is doubtful of realization. As a
result, non-current assets is overstated and
loss for the year is understated by ₹ 6424.06
Lakhs.
126
(b) Note No:7 Other Non Current Assets includes (b). The expenditure incurred under capital
‘Capital Advances Others’ amounting to advance booked in the field units. All details are
₹ 10,896.01 Lakhs for which sub-schedule of available in the field units.
various works, Stage of completion of works
etc. were not furnished for our verification.
Due to lack of necessary information, we are
unable to quantify the impact of the same
in the financial statements.
5. The amounts and balances lying under Non The long term borrowings are taken from
Current Financial Liabilities - Borrowings nationalised/ scheduled banks, Power Finance
(Note No 15), Other Non Current liabilities Corporation, Rural Electrification Corporation
(Note No 18), Trade Payables (Note No 20), and Life Insurance Corporation of India. These
Non Current-Other Financial liabilities balances are fully reconciled and the balance
(Note No 16), Current - Other Financial confirmation is available with KSEB Ltd. There
Liabilities (Note No 21), Trade receivables is a system of periodical reconciliation of trade
(Note No 9), Non Current Assets - Financial payables in respect of power purchase liabilities
Assets - Loans (Note No 5), Non Current and the duly signed reconciliation statement is
Assets - Other Financial Assets (Note No6), available with KSEB Ltd. In KSEBL, the procedures
Other non-current assets (Note No 7), Other of balance confirmation from the debtors are
current assets (Note No 12) are subject to
not in vogue. Being fully owned government
confirmation and reconciliation. The effect
entity, working under regulatory environment
of the adjustment arising from reconciliation
and the consumers are being billed at the rate
and settlement of old dues and possible
specified by the Regulatory Commission, the
losses which may arise on account of non-
supply invoices are being issued under statutory
recovery or partial recovery of such dues
could not be ascertained. Hence, we are forms in which the consumer dues are clearly
unable to comment the impact thereof on mentioned, the demand cum disconnection
the financial statements. notice issued to the consumers itself can
be considered as the balance conformation
certificate. It may also be noted that the
consumer strength of KSEBL is more than 1.25
crore. Hence obtaining all balance confirmation
is not practically possible. In the case of advance
to suppliers/ contractors, normally no advance
is being given to the contractors. Even if the
advance is given in certain cases, the advance
is against Bank Guarantee/ other corporate
guarantees. Strict internal control procedures
are there in KSEBL for advance payments as
well as its recovery. However KSEBL was ready
to collect the balance confirmation certificate
from randomly selected parties by the audit.
127
6. Account Code : 226 Material Stock and a The company is having a detailed manual
related accounts as on 31/03/2018 on Commercial Accounting System VOLUME
II – MATERIAL ACCOUNTING to establish
a. Attention is invited to Note 8 Inventories, The
consistent and effective policies and procedure
Company has not provided for damaged/
to ensure proper financial management –
obsolete and slow moving items and goods
especially in the area of Material Accounting
as per Ind AS 2 on ‘Inventories’. Due to lack
at all levels in the Company. The policies and
of necessary information, we are unable
procedures contained in the manual is followed
to quantify the impact of the same in the
in the company unless specific exception is
given under certain peculiar circumstances.
b. Attention is invited to Accounting Policy The treatment of obsolete stock is detailed in
No.1.10, that the Company changed the Section 14 of Chapter 1 Part II of the said manual.
accounting policy on Inventory from
b. Change in accounting policy on inventory has
01/07/2017. The Company has not complied
been suitably disclosed in the accounting policy.
with the disclosure requirements as per
Ind AS 8-‘Accounitng Policies, Changes in
Accounting Estimates and Errors’ in regard
to the effect of the change in the financial
statements.
c. Based on the units visited by us, we observed c. This will be verified.
that there is no uniformity in accounting of
inventory including LED Bulbs. In certain
units, the closing balances of inventory
are negative and LED bulbs are valued at
Selling Price. We have also observed that
there is difference in stock balance as per
confirmation and Trial balance in respect of
units visited by us. For instance, we observed
a difference of ₹ 42.83 Lakhs in ARU 211, ₹
7.05 Lakhs in ARU 103 and ₹ 156.47 Lakhs in
ARU 203. Hence, we are not able to quantify
the impact of the valuation of inventory in
d The management follows the procedure d. Physical verification of the stock is being
of physical verification of stock periodically conducted by the dedicated team in the O/o the
by the dedicated team in the O/o the Chief Engineer (SCM). The physical verification
Chief Engineer (SCM). However physical of the stock done by the SCM during the period
verification reports by various ARUs have not has been provided to the auditors.
been submitted to us to confirm whether
stock valuation is in compliance to Ind AS 2.
Hence, we are not in position to comment
on the impact on the accounts resulting
on the physical stock verification for any
unaccounted stock, stock to be converted as
held for sale etc.
128
7. a) Other Current Assets (Note 12) read with Inter Unit balance in the accounts consists of
note 35.15 (f) regarding Inter Unit Balance balance in the Account group 31 to 39 in the 140
amounting to ₹ 4,285.64 Lakhs. The said ARUs of KSE Board. These Account group are
balance is subject to reconciliation and being used for booking transaction between
further adjustments, the effect of which on different Account Rendering Units (ARUs) as
the financial results of the Company is not well as between ARUs and Head office. The
ascertainable. balance of Inter unit transaction is amount
booked in the 140 ARUs and it is available in the
b) Note No 12 ‘Other current assets’ includes
Trial balance of ARUs. The reconciliation of inter
₹ 942.16 Lakhs ‘Interest accrued but not
unit balance is a continuous process and the
due’ and Note No 6 ‘Non Current Assets’
company is in the process of identifying and
includes ₹ 106.10 Lakhs ‘Other Deposits
clearing the inter unit balances. It is true that
Sundry Receivables’ at ARU 999 for which
there is lot of items to be identified and cleared
the company has not furnished necessary
in the inter unit balances. However due to the
details. In the absence of necessary details,
large number of transactions between the
we are unable to comment upon the impact
ARUs, the company was not able to clear the
of these items.
balances in full. The company is in the process
of identifying and clearing inter unit balances
by introducing online accounting system and
once the same in fully functional automatic
inter unit reconciliation will occur.
b. This will be verified.
8. Cash and Cash Equivalents As per the policy being regularly followed by
the company detailed in para 2.130 of the
A.The Company is not following the prudent
Volume V – Finance of manual on CAS states
business practice of accounting ‘Cheque
that “Cheques and bank drafts received will be
received not deposited in Bank’ as balance
treated as cash until they are deposited in bank
with Bank. On verification of units visited
and will be included as cash on hand in the
by us an amount ` 18.57 Lakhs, being
accounts. Banking of such cheques and drafts
cheque received but not deposited, was
will, therefore, be considered as deposit of cash
disclosed as Cash in Hand. This has resulted
in the Bank Account”
in overstatement of Cash in Hand and
understatement of bank balances as on
31/03/2018.
B. ARU 371, Electrical Division, Alappuzha i It is reported by the ARU that the remittance
journal for the month of 03/18 has wrongly been
i. The actual cash balance as on 31/03/2018
account in the month of 04/18. Hence there
was ` 7.43 Lakhs. But as per the financial
was huge cash balance in the account of 24110.
statements the Cash balance is ‘Zero’ thus
Necessary correction Journal incorporated in
resulting in understatement of Cash in Hand
the consolidation of accounts to give a true and
and overstatement of Bank Balances.
fair view.
ii. The Company has not accounted for an
ii. The procedure is explained in the Commercial
amount of ₹ 1.05 Lakhs which has been lost
Accounting System Manuals the non
by theft, resulting in over valuation of cash in
compliance by the ARU is being looked into.
hand and understatement of expenditure.
129
C. Bank Accounts In ARUs, two types of bank accounts are

being maintained viz Collection accounts and
Bank balances including E- payment
disbursement accounts. The collection accounts
accounts, Akshaya e Pay collection accounts
are in the nature of non operative collection
and certain bank accounts maintained at
accounts, where only remittances are permitted.
Head Office, ARU’s and other offices are
As per the agreement executed with banks the
subject to confirmation and reconciliation.
entire amounts remitted into the collection
accounts per day have to be sweep transferred
to the central collection account and then to the
operative account maintained at head office
on the same day itself. As per the agreement
condition, the balance in collection account at
the end of a particular day should be zero. As
per the procedure in vogue, the reconciliation
of collection accounts are being made at the
ARUs. The central collection accounts are duly
reconciled.
The disbursements of the funds are being made
through the operative accounts maintained
at the head office as well as ARUs. All the
disbursement accounts are properly reconciled.
The audit is requested to furnish the details of
Bank accounts which are not reconciled and
the differences in the bank balances with that
of the ledger balance in respect of those bank
accounts to initiate further action.
9. AGEING SCHEDULE i The details of age wise analysis was submitted

for verification for the auditors. Moreover the
i. The reconciliation for ageing analysis of
difference in reconciliation disclosed in the
trade receivables were not submitted for
notes to accounts as 35.15.(q).
our verification. Hence, we are unable to
comment on the recoverability of receivables ii. The ARU reported that the details are
and the provision thereon. furnished and explained to the auditors.
However this will be verified in detail.
ii. In the case of ARU 954 - “Special Officer
Revenue”- Debt Collection Balance and
Debtors net balance as per accounts
under account code 23 shows a difference
of `3,189.94 Lakhs. The difference has not
been properly explained. Due to lack of
impact on provisioning for the debtors.
130
10. Rent Receivable: We observed that the Noted. Necessary directions will be given to the
rent receivable has not been accounted on field units.
accrual basis at certain units visited by us.
The accounting treatment is thus found not
in compliance to Ind AS 18 - Revenue. Due
to lack of necessary details, we are not in
position to quantify the amount.
11. As per the scheme ‘Pooled power purchase Detailed procedure for the grid connection by
– solar energy’, the Company purchases the consumers have already been issued by the
power from the grid connected consumers, company. Accordingly agreements are being
supplying solar power. We observed that, executed at section offices with the consumers
the power purchase under this scheme has who joined the scheme. Energy supplied and
not been accounted on accrual basis during consumed by the consumers are metered
the year 2017-18 as per Ind AS-1. Due to lack separately and the details are captured in the
of necessary details, we are not in position ORUMANETsoftware used for billing by the
to quantify the impact on the financial company.
statements.
12.Compensation for injuries Death etc. The ARU has reported that the balance of ` 8 lakh
will be sanctioned after necessary documents
The ARU 326, Electrical Division, Kattakkada
required to ascertain the eligibility of ex-gratia
has paid `2 Lakhs for two parties as ex-
as per the Vydyuthi Sureksha scheme. Hence it
gratia out of their eligibility of `5 Lakhs
is not provided in the accounts.
each. The balance expenditure has not been
accounted on accrual basis during the year
2017-18 as per Ind AS-1. Thus, the Current
liabilities and expenditure are undervalued
by ₹ 6 Lakhs
13.Goods and Services Tax (GST) As per the procedure in vogue the GST collected
in the field units and remittance has been
Based on our visit in various units, the
arranged from the Head office. A separate wing
unit-wise details of Goods and Service Tax
in the head office is closely monitoring the GST
collected and its subsequent remittance
collection and its timely remittance and availing
were not found proper and reconciled.
of Input tax credit. The reports by the auditors
Hence, we are unable to comment on the
that subsequence remittance of GST collection
correctness or otherwise in regard to the
not found proper is without considering/lack
collection, remittance, input tax credit,
of under standing the system followed in the
liability under reverse charge mechanism
company regarding the GST. However this will
and payable amount with respect to GST.
be verified.
The financial effect of the same cannot be
quantified due to lack of information.
131
14. We observed, that in ARU 299, Electrical Noted. This will be verified.
Circle, Shornur - the interest in Saving Bank
account for Fund from REC-RGGVY which is
refundable to REC, shows a debit balance
of ` 16.07 Lakhs. On verification, the liability
has not been provided in the accounts on
accrual basis as per Ind AS-1. Due to lack of
information, we are unable to quantify the
same.
15. Account Code 47 and Account code 55 : The procedure for accounting the amount
A. As per the accounting procedure, the collected under deposit work and the transfer
deposit collected (account code 47) should of the amount to the Grant under under
be accounted as Grant under Consumer consumer contribution is clearly explained in
contribution (account code 55) based on the Accounting Manuals of the Company. The
the work completed or corresponding asset procedure lapse if any by the ARU will be looked
creation. Based on our audit in the units into and internal audit team will be instructed
visited by us, we observed that, certain ARUs to verify the matter during the course of audit.
have not transferred the deposit to Grant The amount of work deposit under various
under Consumer contribution and this may schemes are collected and accounted in the
also have an impact on amortization of field units. All the details are available in the
grant. field units.
Since the Company is undertaking work
for specified large projects under ‘work
deposit’ basis and no information is readily
available with the Company with respect
to deposit received, work completed, date
of completion, balance payable / receivable
etc, we are not in position to comment
on correctness of the deposit held by the
Company as ‘work deposits’ and the balance
to be transferred to Grant. Due to lack of
same.
B.
In ARU 301, Electrical Circle, Noted. This will be examined.
Thiruvananthapuram and in ARU 954 SOR,
grant shows debit balance of ₹ 238.11 Lakhs
and ₹ 1497.35 Lakhs. In the absence of
necessary details, we are unable to quantify
the impact on the financial statements
132
16. The Company has disclosed an amount The Disputed MAT claim on the erstwhile
of ₹ 35,832.26 Lakhs as Disputed KSE Board, which was decided in favour of
Income-tax Matters (Note No 35.2) under KSE Board by the Hon,ble High court of the
Contingent Liabilities. Out of the same, kerala is shown under Contingent Liability
we have not received details regarding as the Income Tax department had filed
disputed tax liability of ₹ 3462.23 Lakhs. appeal before the Hon'ble Supreme Court.
17. On verification of Financial Statements of Noted.

Associates, it was found that, there was loss
for three consecutive years including current
year in Baitarni West Coal Company Ltd.
However, the Company has not provided
and disclosed provision for impairment, if
any, as per Ind AS 28.
18. Receipts from maintenance charges for a&b. Instruction had already been issued vide
poles from Cable TV operators: circular No.FA/Tax cell/GST/Pole Rent/2017-18
dated 21/03/2018 to provide provision as per GST
a. Based on the observation on audit of units,
rules in this reagrd.
the receipts from maintenance charges
for poles from Cable TV Operators are not c. The Board in its 27th meeting held on
accounted on accrual basis in compliance 29.07.2016 had approved the dispute settlement
to Ind AS 18- Revenue. However due to lack mechanism for drawal of cables by M/s Asianet
of information, we are unable to quantify Satellite Communication Ltd and other cable TV
the impact on the financial statements. operators. During the deliberations in the 30th
Board of Directors meeting held on 04.01.2017,
b. On verification of accounts, the pole rent
it was directed to submit a status report on
receipts include interest portion for the
the action initiated for the dispute settlement
delayed receipts. The interest receipts should
mechanism approved by the Board in the
be separately accounted. The amount
27th meeting , to be placed in the next Board
could not be quantified as no details are
meeting
submitted by the Company.
It was reported in the board meeting vide
c. The Company has not provided information
agenda No.18-04/2017 that as per the details
regarding dispute settlement with cable
furnished by the Deputy Chief Engineers it is
operators regarding income from pole rent,
seen that 581 cases have been fully settled and
balance amount receivable and amount
instalment facilities have been accorded to 214
written off, if any, as decided in Board
cases, from which an amount of `3.34 Cr has
meeting dated 12-4-2017. Due to lack of
been realised.
impact on the financial statements
133
19. Previous year’s (2016-17) accounts have Adjourned Annual General Meeting held on
not been adopted in the Annual General 08.11.2018 adopted the previous year's (2016-17)
Meeting till date. accounts.
20. The Company follows the practice of The Board vide order B.O (FB) No. 3159/ 2005/
providing interest on closing balance of KSEB/TRAC/S Code/05/R2 dated 11.11.2005 had
customer deposits. We observed that, ordered that interest at bank rate prevailing
the provision created in preceding years as on 1st April 2004 on the amount of security
amounting to ₹ 33082.44 Lakhs has been deposit at credit as on 1st April 2004 is to be
accumulated and no adjustment has been credited to the consumer’s account during the
made in the financial statements. In the first quarter of 2005-06 and this process shall
absence of necessary details, we are unable be repeated every year. A detailed circular on
to comment upon the same. accounting procedures to be followed in this
regard were also issued. As per the procedure,
the interest accrued during a financial year shall
be adjusted in the energy bill of the consumer
during the first quarter of the ensuing financial
year. Accordingly the interest on opening
balance of the security deposit as on 01.04.2017
at the specified bank rate will be provided in the
accounts of 2017-18 on accrual basis. The actual
disbursement of the amount will be made to
the consumers in the first quarter of the next
financial year(i.e first quarter of 2018-19).The
actual disbursement details will be accounted
by the ARUs only in the financial year 2018-19.
21. Accounting treatment of LED Bulbs Detailed accounting procedure in respect of

LED bulb has already been issued vide circular
a. Trading of LED Bulbs to the customers is
No. AA-IV/AC/II/29/2015-16 dated 25/02/2016.
different from the normal business activity
However the matter will be verified in detail and
of the Company. Hence, the Company
further directions if any required will be issued.
should disclose the purchases, Sales and
Closing Stock separately in Statement of
Profit and Loss.
b) The Company is not following the accrual
basis of accounting while accounting
expenses relating to purchase of LED
bulbs which is not in conformity with Ind
AS 1. Due to non availability of necessary
information the impact of the same cannot
be quantified.
c) Based on the verification of the accounts
of units visited by us, it was found that the
134
purchase of LED Bulbs amounting to ₹ 320.19

Lakhs relating to prior period is accounted
as current year expenditure which is not
in compliance with Ind AS 8 – ‘Accounting
Policies, Changes in Accounting Estimates
and Errors’.
22. The impact of comments made by C&AG, the Regarding the comments in the nature of
statutory auditors and errors or omissions errors and omission ,necessary direction has
for the previous years has not been adjusted been given to the field units.
in accordance with Ind AS 8-Accounitng
In the case of Accounting policies, change in
Accounting Estimates and Errors is noted for
and Errors. We are unable to quantify
future.
the impact of the same in the financial
statements due to lack of necessary details.
23. In ARU 954, as per the agreement no.28/17- The Special Officer(Revenue) reported that the
18 dated 25/09/2017 M/s Philips Carbon Black documents/details called for by the auditors are
Ltd. is liable to pay the interest at the rate of furnished at the time of audit.
12% per annum based on actual delay from
the due date up to a period of 30 days and
thereafter at the rate of 18% per annum for
the entire period of default from the due
date. However as per the explanation from
the Company the entire payable accounted
has been revised by the management and
the due amount has been restated. Due
to lack of proper details, we are unable
to quantify the impact in the financial
statements.
24. We observed that, at ARU 954, interest on This has been explained to the auditors at
demand on sale of power amounting to ₹8.97 the time of audit. Considering the materiality
Lakhs was not accounted in compliance to aspect this will not affect the true and fair view
Ind AS 18 resulting in understatement of of the financial statements of the company.
interest income and receivables.
25. As per 35thBoard Meeting held on Director (Generation-Civil) has already given
15thNovember,2017 Board of Directors of direction to all ARUs to report the status.
the Company decided for the one time
settlement of recovery of arrear rent from
occupants of Board Quarters at various
locations. However, no effect has been
given in the financial statements which
is not in compliance to Ind AS 18. Due to
135
lack of necessary information we are not

in a position to quantify the impact on the
26. As per decision of Board of Directors, price Vide letter No. CECCS/BHEP/1/2013 dated
escalation has been sanctioned for the 25.07.2018 Chief Engineer (Civil Construction-
works of Bhoothathankettu Small Hydro South) reported that all invoices received up to
Electric Project. Due to non availability of 31.03.2018 have been paid at agreed rate
necessary information, we are unable to
comment upon the financial effect of the
same, if any.
27.
The Company has not revalued bonds These bonds are issued for specific purpose to
at fair value issued to KSEB Master Trust meet the terminal liability of employees of KSEB
amounting to ₹ 11,23,929 Lakhs which is in Ltd to the Master Trust. The interest rates are
not in conformity with Ind AS 109. Similarly, fixed and specified in the Government order
the other financial assets and liabilities itself. There is no comparable bonds issued by
including loans / deposits have also not the Government of Kerala to ascertain the fair
been recognized at fair value. Further, the value. Hence fair valuation was not done.
Company has revalued ‘Loan from REC -
Negative balance of `47.06 lakh was an error
various schemes’ (Note No 15) incorrectly
occurred due to wrong treatment of fair
resulting in negative balance of ₹ 47.06
valuation under INDAS.
Lakhs for the loan. Due to lack of necessary
we are unable to quantify the impact of the
same in the financial statements
28. The aggregate effect of our qualifications Noted.

described above from Point No 1 to 27,
wherever quantifiable, is that assets are
overstated by ₹ 8296.94 Lakhs, Liabilities are
understated by ₹ 6 Lakhs, Loss / Reserves
are understated by ₹ 8302.94 Lakhs
Sd/-
DIRECTOR (FINANCE)
136
REPLIES TO THE INDEPENDENT AUDIT REPORT OF THE STATUTORY AUDITORS ON THE

CONSOLIDATED FINANCIAL STATEMENT OF THE KERALA STATE ELECTRICITY BOARD
LIMITED, THIRUVANANTHAPURAM FOR THE YEAR ENDED 31ST MARCH 2018
COMMENTS ON ACCOUNTS REPLIES OF THE COMPANY
1. In respect of Note 2 to accounts: Property, Most of the softwares used by the company are
Plant and Equipment internally developed ones. The Company vide
order B.O (DF) No.3177 (Annual Accounts/ Ind AS-
a) As per Appendix-III of CERC Notification No
2016-17/2017-18) dated 18.12.2017 had entrusted
L-1/153/2014/CERC, ‘Softwares’ are subject to
Chief Engineer (IT&CR), who is the head of IT
a depreciation of 30%. Instead the Holding
wing in KSEBL to segregate and capitalise
Company follows the practice of pooling
the expenditure incurred for development of
Software along with item ‘IT Equipment’
softwares. Accordingly, Chief Engineer (IT&CR)
which has a depreciation rate of 15%.
vide letter No. ITCU/HRIS/2018-19/387 dated
During the year, the Holding Company has 12.07.2018 had reported that `8.15 Cr has been
ascertained an amount of ₹ 815.89 Lakhs as incurred as employee cost for the Software
the development and implementation cost Development & Implementation. Hence the
of software which has been included under same has been capitalised in the Head office
Note No. 3- Capital Work in progress as vide journal no.88 and booked under the
Revenue expenses pending allocation over account head 15.2 - Revenue expenses pending
capital works. allocation over Capital Works.
This is not in conformity with the Indian
Accounting Standard (Ind AS) 38 – Intangible
Assets. In the absence of requisite details, we
are unable to verify the correctness of the
said amount and the impact of the above on
the depreciation/amortisation.
b ‘Deferred Cost on Account of Feasibility/ The deferred cost is the expenditure related
Survey’ amounting to ₹ 10,557.28 Lakhs to the feasibility study of the projects
being cost of Holding Company projects and the expenditure incurred before the
not yet sanctioned and accumulated over commencement of a project. As per the policy
the years has been wrongly classified regularly being followed by the Board, the survey
under Note No.7- Other Non Current Assets, and investigation expenditure pertaining to
which is not in accordance with Ind AS 38 project not yet sanctioned is being booked under
– Intangible assets and Ind AS 16- Property the Account Head 17.3. Once the projects are
Plant and Equipment. As the statuses of sanctioned this expenditure will be transferred
these projects are yet to be ascertained, we to work in progress (Capital) and if the project is
are unable to comment the impact thereof not sanctioned, the expenditure will be written
on the Consolidated financial statements. off as in fructuous Capital Expenditure.
The amounts were verified and the expenditure
incurred for the projects to which the
investigation/ survey is being carried out as
reported by the ARUs only is retained in this
137
account. The balance in the books of accounts

will be transferred to the CWIP on sanctioning
the project.
c. Property Plant and Equipment and capital The depreciation is being calculated at the Head
work in progress: office on the basis of yearly addition of fixed
assets made at the ARUs. In this connection it
A. Depreciation on additions to fixed assets of
may also be noted that depreciation calculation
Holding Company, except for capital works
as mentioned in the accounting policy is on the
in progress capitalized, is charged in the year
asset addition as a whole during the year. Pro-
in which it was purchased/ commissioned
rata depreciation is not being calculated due to
without considering date on which the
the complex number and nature of assets. The
asset is ready for use. This is not in conformity
same methodology is being regularly followed
with Ind AS -16 on “Property, Plant and
by KSEBL during past two decades and
Equipment”, leading to understatement
approved by statutory and C&AG audit during
of Property, Plant and Equipment and
these years.
overstatement of depreciation and loss for
the year; However due to lack of necessary
information, the impact of the same cannot
be quantified.
B. As per Ind AS 16-Property Plant and The company is having a detailed manual on
Equipment, the asset should be recognized Commercial Accounting System VOLUME
if it is probable that future economic III – 'Capital Expenditure and Fixed Asset’ to
benefits associated with the item will flow establish consistent and effective policies and
to the entity; and the cost of the item can be procedures in the area of capital expenditure
measured reliably. and fixed assets accounting at all levels in
the Company. In addition, the company vide
The Holding Company has capitalized
Letter No.609/Annual Accounts/2017-18 had
`12592.87 Lakhs on 31/03/2018 in distribution
directed all Account Rendering Units to follow
units visited by us without considering
the ready to use concept in line with the Ind As
above criteria for recognition of assets. Also
-16 without considering the commissioning of
on verification of the transmission and
the project. It may be noted that generally the
generation units visited by us and as per
commissioning date and ready to use date will
the representation received, it was found
be one.
that the capital work in progress has been
capitalized as and when ‘Commissioned’
Further, we are not in a position to quantify
the same and the impact of the above on
the depreciation.
138
C (i) On verification of bills submitted during Noted. It has been decided to convene a
the course of audit of Holding Company regional level meeting of ARU to discuss the
it was found that the capitalization audit queries raised by the auditors and to give
was delayed for assets, amounting awareness to the field units the importance of
`2290.80 Lakhs including the assets to be timely capitalisation.
capitalized under RAPDRP and DDUGJY
scheme, which have already satisfied the
recognition criteria specified in Ind AS 16
in previous years. Capitalization has been
delayed in various projects and hence there
is a corresponding impact in depreciation,
fixed assets, Capital work in progress
and current liabilities for capital assets
during the previous years which cannot be
quantified.
(ii) Based on the submitted bills and units
visited by us during audit of Holding
Company, we observed that, during 2017-
18 certain assets satisfy the criteria for
recognition, in compliance to Ind AS 16,
but has not capitalized an amount of
` 203.22 Lakhs including the assets to be
capitalized under RAPDRP and DDUGJY
scheme. Capitalization has been delayed
in various projects and hence there is a
corresponding impact in depreciation,
fixed assets and capital work in progress for
capital assets during the year which cannot
be quantified.
(iii) In units of Holding Company visited by
us, revenue expenditure amounting to
₹ 524.38 Lakhs has been capitalized;
resulting in overstatement of assets and
understatement of expenditure and the
consequent impact on depreciation could
not be quantified.
(iv). In units of Holding Company visited by
us, the capital expenditure amounting
to ₹ 22.03 Lakhs has been charged to the
revenue, resulting in understatement of
assets and overstatement of expenditure
and the consequent impact on depreciation
could not be quantified.
139
D. In ARU 310, Electrical Circle, Kozhikode of This will be verified. Necessary adjustment will
Holding Company, the solar plant has been be provided during the year 2018-19.
wrongly classified and capitalized under
account code 10205 – Buildings amounting
to `450 Lakhs, which is not in compliance to
Ind AS 16. This has resulted in overstatement
of building and understatement of plant and
equipment. This impact on depreciation of
corresponding assets cannot be quantified
due to lack of details.
E. As per Ind AS 16 –‘Property Plant and Necessary Directions are being issued to
Equipment’, an asset should be capitalized ARUs to verify this in detail and capitalise the
on satisfying the criteria for recognition, Accounting Standards.
considering all elements of cost. However,
the units have capitalized the solar
equipments purchased under KSEB
(REES) only to the extent of part payment
made to the suppliers, which has resulted
in understatement of asset and current
liabilities. Since proper details for verification
have not been submitted by the Holding
company, the impact of understatement
of asset and liabilities and depreciation
thereon cannot be quantified.
F. As per the letter No. Annual Accounts 9/ This will be verified.

capitalization /2017-18, in ARU 307, Electrical
Circle, Ernakulam of Holding Company
has capitalized an amount of ₹406.75
Lakhs being interest and finance charges
and other expenses apportioned and
proportionate advertisement expenditure
under asset- Lines and Cables without
considering the recognition criteria in Ind
AS 16. We observed that, the ARU has not
capitalized any assets during the year
except the general purpose assets.
Similarly in ARU 204 of Holding Company,
an amount of `26.74 Lakhs has been
allocated to land which has resulted in
overstatement of land and understatement
of other assets.
The accounting treatments is not in compliance
140
to Ind AS 23 on Borrowing Cost and Ind AS 16

on Property Plant and Equipment, results in
over valuation of assets and corresponding
depreciation.
G. During the year, ARU 214 and ARU 203 of It is reported from the ARU that the details are
Holding Company capitalized amount available for verification.
of ₹ 2275.56 Lakhs and ₹3227.42 Lakhs
respectively for which no necessary details
and supporting documents have been
submitted for verification. Hence, we
are not in position to comment on the
capitalization of the said assets.
H. Attention is invited to Note No. 3 - Capital KSEB Ltd is following the rules, policies and
Work in Progress, which includes revenue standards prescribed in Electricity Supply
expenses pending allocation amounting to Annual Accounts rules [ESAAR] 1985, saved as
₹ 40,243.99 Lakhs. The Holding Company per Section 185(2) (d) of Electricity Act 2003 for
has capitalized borrowing cost on weighted capitalisation of expenditure.
average basis without considering the
The capitalisation of expenditure is specified
daily balances of the loans and borrowings
in following paras of Annexure III- Basic
held by the Company. The Company has
Accounting Policies and Principles in the
also not allocated specific borrowing costs
ESAAR 1985, the relevant part are reproduced
applicable to specific projects as required
for easy reference.
in Ind AS 23- Borrowing cost. Further,
the Holding Company does not cease to “2.9 All employee costs in respect of the
capitalize borrowing costs upon date when construction units shall be fully charged as
the qualifying asset is ready for intended use cost of capital assets.
which is also not in compliance to Ind AS 23. 2.11 All expenses in respect of construction units
Due to lack of necessary information, we are shall be fully charged as cost of Capital assets.
unable to comment on the capitalization of
the amount and depreciation thereon. 2.94 Every year, a portion of the interest payable
on the interest bearing borrowings which relate
An amount of ₹23,496.41 Lakhs has been to financing of capital assets at construction
capitalized by the Holding Company out of stage i.e. till the point of commissioning of assets
revenue expenses pending allocation during shall be computed in the manner prescribed
the year without considering of the extent in paragraph 1.42 Annexure V, if so directed by
the work already completed or ready to use. Central Government, be capitalized.
The details such as the basis of capitalization,
the block under which the same has been 2.95 The amount of interest so computed and
capitalized, depreciation provided on the capitalized shall be reduced from the amount
same etc. were not made available for our of interest for the year and only the balance
verification. Out of the above ₹ 1705.86 amount shall be chargeable to the Revenue
Lakhs relates to administration and general Account for the year.
overheads and ₹132.74 Lakhs relates to Para 1.42 of Annexure V is as follows
141
advertisement. However, the capitalization “1.42 In computing the interest on funds

of administration and general overheads utilised during construction stage of capital
and advertisement are not in compliance assets, the following factors shall be taken into
to Ind AS 16. As a result, property plant and consideration:
equipment are overstated by ₹1838.60
(1) The full amount of interest payable for the
Lakhs and Loss / Reserves are understated
year would be considered for the purpose.
by ₹1838.60 Lakhs.
(2) Arrears of interest shall not distort the
computation of interest on funds utilized in
construction as these arrears are required
to be debited to a Restructuring Account
and then adjusted to surplus/ losses.
(3) In view of the difficulties in identifying a
source to its use, no attempt shall be made
for source-use identification.
(4) The exercise of computation of capitalisable
interest shall be carried out at the head
office of the Board.
(5) This exercise shall be carried out considering
rupees in thousands only”.
Similarly, Para 1.4 & 1.5 of annexure V is as follows.
1.4 Staff costs, material related expenses and
other expenses which are chargeable to capital
works shall be:
(1) Identified to specific capital job wherever
possible.
(2) Failing which, identified to a specific
group of capital jobs wherever possible
(and within the group allocated on an ad-
valorem basis).
(3) Failing which, identified to a project
wherever possible (and allocated on an ad-
valorem basis over various jobs within the
project).
(4) Failing which, allocated on an ad-valorem
basis over various projects and various jobs
within each project.
Identification to one or more jobs should
be done only if possible to identify without
any allocation. In all other cases, ad-valorem
allocation shall be adopted.
142
1.5 By ad- valorem basis is meant allocation

of capitalisable expenses as a per cent of the
capital expenditure incurred during the period
on that job/ project (and not as a per cent of
total capital expenditure on that job/ project
including the expenditure including the
expenditure incurred in the previous periods of
allocation.
KSEB Ltd is consistently following the above
accounting policies prescribed. Accordingly the
expenditure incurred in construction ARUs are
being fully capitalised by the ARU itself. In the
case of other ARUs, where both capital and O&M
works are being undertaken, the employee cost
& expenditure is being capitalised at a pre set
percentage as below.
Transmission 25%
Distribution 14%
Head Office Units 5%
Similarly interest and finance charges is being
capitalised at the head office as prescribed in
the above accounting policies. These amounts
are later allocated to the ARUs on the basis of
actual capital expenditure incurred during
the period for capitalisation in the concerned
project/ assets. All the workings and details are
available with the Company.
I. As per the Accounting policy, the Holding As per the accounting policy regularly being
Company allocates Employee cost, interest followed by the company as detailed in clause
and financial costs of various units to 17(2) of the part I chapter III of manual on
“Revenue expenses pending allocation over Commercial Accounting System Volume-
capital works” on the basis of a specified III-Capital Expenditure and Fixed Assets
ratio identified by the Company. However Accounting.
Company has not considered an amount
“If the increase/decrease in staff costs
of ₹1,660.37 Lakhs being ‘Employee cost
and other expenses has taken place in the
relating prior periods short provided’ and
accounting years subsequent to the accounting
₹900 Lakhs being DA arrear provided
year in which the relevant staff costs and other
during current year while allocating
expenses were incurred, the amount increase/
the employee cost. This has resulted in
decrease shall be ignored for the purpose of
understatement of Capital Work in progress
capitalisation of expenses in the subsequent
and overstatement of expenditure and loss
year”
amounting to ₹2560.37 Lakhs
143
During the year an amount of `2560.37has

been booked in the ARU as employee cost
relating to previous years. It consists of salary of
employees relating to previous years deferred
due to various reasons and dearness allowance
of employees due in the previous year. The same
will be adjusted with the provision created on
respective years and the short fall if any will be
charged to the revenue account. However the
increase/decrease will not be considered for
capitalisation as per the policy detailed above.
J. Title deeds of immovable properties of the KSEB Ltd. is having land and land rights with
Holding Company were not produced for book value of `1783.79 crore as on 31.03.2018
our verification. spread across Kerala. The land is accounted in
various ARUs and is under the control of various
ARU Officers. Separate Land Management
Unit is functioning at the head office where
the details of land are being maintained and
monitored. Reasonable internal control is being
exercised over the landed property. The title
deed of the property randomly selected by the
audit were furnished for verification.
K. As per paragraph 8 of Ind AS 16, Property, The audit was requested to furnish the details
Plant and Equipment, items such as spare on which the opinion is framed to have detailed
parts are to be capitalized in accordance verification of the items and its materiality.
with recognition criteria, when they meet However the item is not quantified by the
the definition of ‘property, plant and auditors.
equipment’. Since the required details are
not available in respect of Holding Company,
we are not able to quantify the impact of
the same in the Consolidated Financial
Statements.
L. As per note to accounts no 35.1 &35.15(i), Vide G.O(P) No.46/2013/PD dated 31 October 2013
the opening balance sheet for the Holding published in Kerala Gazette dated 31st October
Company as on 01/11/2013, has been adopted 2013, the Government of Kerala revested all the
as per the Re-vesting second Transfer Assets and liabilities of the erstwhile KSE Board
(Amendment) scheme (Re-vesting) 2015. in the new company Kerala State Electricity
The Holding company has not considered Board limited. Then the Government of Kerala
increase in the value of plant and machinery issued the final transfer scheme vide G.O.(P)
as a result of such restatement amounting No.3/2015/PD dated 28.01.2015 by issuing a new
144
to Rs. ₹ 10,71,199.95 Lakhs while computing opening Balance Sheet for the company as on
depreciation. The disclosure made by the 01.11.2013.In the Balance sheet the value of Plant
Holding Company regarding the accounting and Machinery notified as `15263.94Cr against
treatment of above assets and liabilities is the closing balance as on 31.10.2013 amounting
incomplete. to `4551.95 Cr. Hence the value Plant and
Machinery was increased by `10711.99 Cr as part
of creation of pension fund. Depreciation is not
being provided for the above increased value of
assets and is disclosed as such in the notes to
accounts.
M. As per the units visited by us and their Majority of the observation noticed by the audit
explanations, the Units of Holding Company may be in Distribution SBU where normally
have capitalized the entire material issued works are completed within a short period
and consumed in various projects without of time compared to other SBU of KSEB Ltd.
considering the recognition criteria in Apart from this, in distribution sector, majority
compliance to Ind AS 16. The accounting of the works are small in size and also the
treatment thus resulted in over statement chances of spill over to another financial year
of the property plant and equipment for for the completion of the work is remote. Hence
the year 2017-18. In the absence of necessary there may not be a material impact in the
information we are unable to comment capitalisation done by the ARUs. The procedure
the impact thereof on the Consolidated for capitalization is detailed in manual on
financial statements. Commercial Accounting System VOLUME III –
'Capital Expenditure and Fixed Asset’, which is
being regularly followed by the ARUs.
d. Sale, deletion or decommissioning of asset: i. As per the accounting procedure followed

by the company, whenever the assets are
i) The Holding Company has a system of
decommissioned, the fixed assets are to be
accounting sale of Property, Plant and
withdrawn. The non compliance in the ARU is
Equipment either in miscellaneous receipts
being looked into.
or in sale of scrap without giving effect to the
fixed assets ledger. The Holding Company
has also not disclosed the details of deletions
and decommissioning during the year. Thus
the accounting treatment is found not in
compliance to Ind AS 16-Property, Plant
and Equipment. In the absence of required
impact on Property, Plant and Equipment,
Depreciation for the year and Other Income.
ii. The Eranad Lines Package-A and Northern
ii) As per Agenda no - 34-2-7/2017 of Board Region HTLS Package- B are part of the
of Directors meeting held on 27/07/2017 Transgrid project, which is in the initial stage
of Holding Company had decided to sell of implementation. The said Board order is on
the dismantled materials of Eranad Lines the finalisation of the tender formalities for
145
dismantling of the existing lines and erection of

Package- A and Northern Region HTLS
the new one. The deletion of fixed assets and
Package- B of trans grid 2.0 to Sterlite power
capitalisation of new line will be made on actual
transmission ltd for an amount of ₹1093.12
execution of the activities in the field ARU.
Lakhs and as per Agenda no 15-01/2018
Holding Company had decided to sell the
dismantled materials of Kochi lines Package
to L&T Ltd. for an amount of ₹ 1007.10 Lakhs.
As per the information available, The Holding
Company accounted the same as sale of
scrap instead of showing as deletion of fixed
assets which has resulted in overstatement
of fixed assets and miscellaneous income
of ₹2100.22 Lakhs and overstatement of
depreciation. Due to lack of detailed list of
dismantled items we are not in a position to
quantify the depreciation amount.
2. The Holding Company has not complied Noted.

with Ind AS 36- Impairment of Assets. Due
to lack of necessary information we are not
in a position to quantify the impact.
3. As per Ind AS 105- ‘Non Current Assets held Noted.

for sale and Discontinued Operations’, the
non- current assets recognized as scrap
should be separately disclosed. We observed
that, the Holding company has not complied
with the Ind AS, with regard to the assets
recognized as scrap and to be held for sale.
Due to lack of necessary information we are
not in a position to quantify the impact of
the same.
4. (a) In Note No.5 ‘Non Current Assets - Financial As per the Accounting standard if there is any
Assets – Loans’-includes an amount of ₹5250 uncertainty in the realization of revenue that
Lakhs being Interest bearing loan to Energy amount need not be accounted as revenue.
Management Centre. The Holding Company Hence provision for interest is not credited in
has provided interest for the period 2010-11 the accounts.
and 2011-12 amounting to ₹ 476.90 Lakhs
As per the terms and condition, the loan
and ₹ 697.16 Lakhs respectively. The Holding
is repayable only if the Certified Emission
Company has not provided interest on this
Reduction (CER) is available from UNFCC (to
loan henceforth, as there is an uncertainty
obtain Carbon Credit). If the CER is not being
in the realization of interest. As per the
allotted to EMC, EMC cannot be requested to
146
terms and conditions, the loan is repayable repay the advanced by KSEB and the entire
by Energy Management Centre only if the cost will be borne by KSEB from its budgetary
Certified Emission Reduction is available resources. Action is being taken to ascertain
from UNFCC to obtain Carbon credit. the possibility of obtain Carbon Credit with the
As per the information available from EMC. EMC being a fully owned Government of
the management, Energy Management Kerala undertaking and the company has no
Centre has not obtained carbon credit doubt about its realization, provision has not
as on date. Hence there is uncertainty in been made. The matter had been taken up
the realization of this advance. However, with the Government of Kerala vide letter dated
no provision has been created for this 05.03.2018.
balance, including the interest, which is
doubtful of realization. As a result, non-
current assets is overstated and loss for the
year is understated by ₹ 6424.06 Lakhs.
(b) Note No:7 Other Non Current Assets (b). The expenditure incurred under capital
includes ‘Capital Advances Others’ advance booked in the field units. All details are
amounting to ₹ 10,896.01 Lakhs for which available in the field uni
sub-schedule of various works, Stage
of completion of works etc. of Holding
Company were not furnished for our
verification. Due to lack of necessary
impact of the same in the Consolidated
5. The amounts and balances lying under Non The long term borrowings are taken from
Current Financial Liabilities - Borrowings nationalised/ scheduled banks, Power Finance
(Note No 15), Other Non Current liabilities Corporation, Rural Electrification Corporation
(Note No 18), Trade Payables (Note No 20), and Life Insurance Corporation of India. These
Non Current-Other Financial liabilities (Note balances are fully reconciled and the balance
No 16),Current - Other Financial Liabilities confirmation is available with KSEB Ltd. There
(Note No 21), Trade receivables (Note No is a system of periodical reconciliation of trade
9), Non Current Assets - Financial Assets payables in respect of power purchase liabilities
- Loans (Note No 5), Non Current Assets - and the duly signed reconciliation statement
Other Financial Assets (Note No6), Other is available with KSEB Ltd. In KSEBL, the
non-current assets (Note No 7), Other
procedures of balance confirmation from the
current assets (Note No 12) are subject to
debtors are not in vogue. Being fully owned
confirmation and reconciliation. The effect
government entity, working under regulatory
of the adjustment arising from reconciliation
environment and the consumers are being
and settlement of old dues and possible
billed at the rate specified by the Regulatory
losses which may arise on account of non-
recovery or partial recovery of such dues Commission, the supply invoices are being
could not be ascertained. Hence, we are issued under statutory forms in which the
unable to comment the impact thereof on consumer dues are clearly mentioned, the
the Consolidated financial statements. demand cum disconnection notice issued
147
to the consumers itself can be considered as

the balance conformation certificate. It may
also be noted that the consumer strength of
KSEBL is more than 1.25 crore. Hence obtaining
all balance confirmation is not practically
possible. In the case of advance to suppliers/
contractors, normally no advance is being
given to the contractors. Even if the advance is
given in certain cases, the advance is against
Bank Guarantee/ other corporate guarantees.
Strict internal control procedures are there
in KSEBL for advance payments as well as its
recovery. However KSEBL was ready to collect
the balance confirmation certificate from
randomly selected parties by the audit.
6. Account Code : 226 Material Stock and a. The company is having a detailed manual
related accounts as on 31/03/2018 on Commercial Accounting System VOLUME
a. Attention is invited to Note 8 Inventories, II – MATERIAL ACCOUNTING to establish
The Holding Company has not provided for consistent and effective policies and procedure
damaged/obsolete and slow moving items to ensure proper financial management –
and goods as per Ind AS 2 on ‘Inventories’. especially in the area of Material Accounting
Due to lack of necessary information, we are at all levels in the Company. The policies and
unable to quantify the impact of the same procedures contained in the manual is followed
in the Consolidated financial statements. in the company unless specific exception is
given under certain peculiar circumstances.
b. Attention is invited to Accounting Policy The treatment of obsolete stock is detailed in
No.1.10, that the Holding Company changed Section 14 of Chapter 1 Part II of the said manual.
the accounting policy on Inventory from
01/07/2017. The Company has not complied b. Change in accounting policy on inventory
with the disclosure requirements as per has been suitably disclosed in the accounting
Ind AS 8-‘Accounitng Policies, Changes policy.
in Accounting Estimates and Errors’ in
regard to the effect of the change in the
Consolidated financial statements.
c. Based on the units visited by us, we observed
that there is no uniformity in accounting of c. This will be verified.
inventory including LED Bulbs. In certain
units, the closing balances of inventory
are negative and LED bulbs are valued at
Selling Price. We have also observed that
there is difference in stock balance as per
confirmation and Trial balance in respect of
units visited by us. For instance, we observed
148
a difference of ₹ 42.83 Lakhs in ARU 211, ₹

7.05 Lakhs in ARU 103 and ₹ 156.47 Lakhs in
ARU 203. Hence, we are not able to quantify
the impact of the valuation of inventory in
d The management of the Holding Company d. Physical verification of the stock is being
follows the procedure of physical verification conducted by the dedicated team in the O/o the
of stock periodically by the dedicated Chief Engineer (SCM). The physical verification
team in the O/o the Chief Engineer (SCM). of the stock done by the SCM during the period
However physical verification reports by has been provided to the auditors.
various ARUs of Holding Company have not
been submitted to us to confirm whether
stock valuation is in compliance to Ind AS 2.
Hence, we are not in position to comment
on the impact on the accounts resulting
on the physical stock verification for any
unaccounted stock, stock to be converted
as held for sale etc.
7. a) Other Current Assets (Note 12) read with Inter Unit balance in the accounts consists of
note 35.15 (f) regarding Inter Unit Balance balance in the Account group 31 to 39 in the 140
amounting to ₹ 4,285.64 Lakhs of Holding ARUs of KSE Board. These Account group are
Company. The said balance is subject to being used for booking transaction between
reconciliation and further adjustments, the different Account Rendering Units (ARUs) as
effect of which on the financial results of the well as between ARUs and Head office. The
Holding Company is not ascertainable. balance of Inter unit transaction is amount
b) Note No 12 ‘Other current assets’ includes booked in the 140 ARUs and it is available in the
₹ 942.16 Lakhs ‘Interest accrued but not Trial balance of ARUs. The reconciliation of inter
due’ and Note No 6 ‘Non Current Assets’ unit balance is a continuous process and the
includes ₹ 106.10 Lakhs ‘Other Deposits company is in the process of identifying and
Sundry Receivables’ at ARU 999 for which clearing the inter unit balances. It is true that
the Holding company has not furnished there is lot of items to be identified and cleared
necessary details. In the absence of necessary in the inter unit balances. However due to the
details, we are unable to comment upon the large number of transactions between the
impact of these items. ARUs, the company was not able to clear the
balances in full. The company is in the process
of identifying and clearing inter unit balances
by introducing online accounting system and
once the same in fully functional automatic
inter unit reconciliation will occur.
b. This will be verified.
149
8. Cash and Cash Equivalents As per the policy being regularly followed
A. The Holding Company is not following the by the company detailed in para 2.130 of the
prudent business practice of accounting Volume V – Finance of manual on CAS states
‘Cheque received not deposited in Bank’ that “Cheques and bank drafts received will be
as balance with Bank. On verification of treated as cash until they are deposited in bank
units visited by us an amount ` 18.57 Lakhs, and will be included as cash on hand in the
being cheque received but not deposited, accounts. Banking of such cheques and drafts
was disclosed as Cash in Hand. This has will, therefore, be considered as deposit of cash
resulted in overstatement of Cash in Hand in the Bank Account”
and understatement of bank balances as on
31/03/2018.
B. ARU 371, Electrical Division, Alappuzha i It is reported by the ARU that the remittance
i. The actual cash balance as on 31/03/2018 journal for the month of 03/18 has wrongly been
was ` 7.43 Lakhs. But as per the financial account in the month of 04/18. Hence there
statements the Cash balance is ‘Zero’ thus was huge cash balance in the account of 24110.
resulting in understatement of Cash in Necessary correction Journal incorporated in
Hand and overstatement of Bank Balances. the consolidation of accounts to give a true and
fair view.
ii. The Holding Company has not accounted for
an amount of ₹ 1.05 Lakhs which has been ii. The procedure is explained in the Commercial
lost by theft, resulting in over valuation Accounting System Manuals the non
of cash in hand and understatement of compliance by the ARU is being looked into.
expenditure.
C. Bank Accounts In ARUs, two types of bank accounts are

Bank balances including E- payment being maintained viz Collection accounts
accounts, Akshaya e Pay collection accounts and disbursement accounts. The collection
and certain bank accounts maintained at Head accounts are in the nature of non operative
Office of Holding Company, ARU’s and other collection accounts, where only remittances are
offices of Holding Company are subject to permitted. As per the agreement executed with
confirmation and reconciliation. banks the entire amounts remitted into the
collection accounts per day have to be sweep
transferred to the central collection account
and then to the operative account maintained
at head office on the same day itself. As per the
agreement condition, the balance in collection
account at the end of a particular day should
be zero. As per the procedure in vogue, the
reconciliation of collection accounts are being
made at the ARUs. The central collection
accounts are duly reconciled.
The disbursements of the funds are being made
through the operative accounts maintained
150
at the head office as well as ARUs. All the

disbursement accounts are properly reconciled.
The audit is requested to furnish the details of
Bank accounts which are not reconciled and
the differences in the bank balances with that
of the ledger balance in respect of those bank
accounts to initiate further action.
9. AGEING SCHEDULE i The details of age wise analysis was submitted

i. The reconciliation for ageing analysis of for verification for the auditors. Moreover the
trade receivables were not submitted for difference in reconciliation disclosed in the
our verification. Hence, we are unable to notes to accounts as 35.15.(q).
comment on the recoverability of receivables ii. The ARU reported that the details are furnished
and the provision thereon. and explained to the auditors. However this will
ii. In the case of ARU 954 - “Special Officer be verified in detail.
Revenue”- of Holding Company Debt
Collection Balance and Debtors net balance
as per accounts under account code 23
shows a difference of ` 3,189.94 Lakhs. The
difference has not been properly explained.
Due to lack of information we are unable to
quantify the impact on provisioning for the
debtors.
10. Rent Receivable: We observed that the Noted. Necessary directions will be given to the
rent receivable has not been accounted field units.
on accrual basis at certain units of Holding
company visited by us. The accounting
treatment is thus found not in compliance
to Ind AS 18 - Revenue. Due to lack of
necessary details, we are not in position to
quantify the amount.
11. As per the scheme ‘Pooled power purchase Detailed procedure for the grid connection by
– solar energy’, the Holding Company the consumers have already been issued by the
purchases power from the grid connected company. Accordingly agreements are being
consumers, supplying solar power. We executed at section offices with the consumers
observed that, the power purchase under who joined the scheme. Energy supplied and
this scheme has not been accounted on consumed by the consumers are metered
accrual basis during the year 2017-18 as per separately and the details are captured in the
Ind AS-1. Due to lack of necessary details, we ORUMANET software used for billing by the
are not in position to quantify the impact on company.
the Consolidated financial statements.
151
12. Compensation for injuries Death etc. The ARU has reported that the balance of ` 8 lakh
The ARU 326, Electrical Division, Kattakkada will be sanctioned after necessary documents
of Holding Company has paid ` 2 Lakhs for required to ascertain the eligibility of ex- gratia
two parties as ex-gratia out of their eligibility as per the Vydyuthi Sureksha scheme. Hence it
of ` 5 Lakhs each. The balance expenditure is not provided in the accounts.
has not been accounted on accrual basis
during the year 2017-18 as per Ind AS-1. Thus,
the Current liabilities and expenditure are
undervalued by ₹ 6 Lakhs.
13. Goods and Services Tax (GST) As per the procedure in vogue the GST collected
Based on our visit in various units of Holding in the field units and remittance has been
Company, the unit-wise details of Goods and arranged from the Head office. A separate wing
Service Tax collected and its subsequent in the head office is closely monitoring the GST
remittance were not found proper and collection and its timely remittance and availing
reconciled. Hence, we are unable to of Input tax credit. The reports by the auditors
comment on the correctness or otherwise that subsequence remittance of GST collection
in regard to the collection, remittance, input not found proper is without considering/lack
tax credit, liability under reverse charge of understanding the system followed in the
mechanism and payable amount with company regarding the GST. However this will
respect to GST. The financial effect of the be verified
same cannot be quantified due to lack of
information.
14. We observed, that in ARU 299, Electrical Noted. This will be verified.
Circle, Shornur of Holding Company - the
interest in Saving Bank account for Fund
from REC-RGGVY which is refundable to
REC, shows a debit balance of ` 16.07 Lakhs.
On verification, the liability has not been
provided in the accounts on accrual basis as
per Ind AS-1. Due to lack of information, we
are unable to quantify the same.
15. Account Code 47 and Account code 55 : The procedure for accounting the amount
A. As per the accounting procedure, the collected under deposit work and the transfer
deposit collected (account code 47) should of the amount to the Grant under consumer
be accounted as Grant under Consumer contribution is clearly explained in the
contribution (account code 55) based on Accounting Manuals of the company. The
the work completed or corresponding procedure lapse if any by the ARU will be looked
asset creation. Based on our audit in the into and internal audit team will be instructed
units visited by us of Holding Company, to verify the matter during the course of audit.
we observed that, certain ARUs have not The amount of work deposit under various
152
transferred the deposit to Grant under schemes are collected and accounted in the
Consumer contribution and this may also field units. All the details are available in the
have an impact on amortization of grant. field units.
Since the Holding Company is undertaking
work for specified large projects under
‘work deposit’ basis and no information is
readily available with the Holding Company
with respect to deposit received, work
completed, date of completion, balance
payable / receivable etc, we are not in
position to comment on correctness of
the deposit held by the Company as ‘work
deposits’ and the balance to be transferred
to Grant. Due to lack of information, we are
unable to quantify the same.
B.
In ARU 301, Electrical Circle, Noted. This will be examined.
Thiruvananthapuram of Holding Company
and in ARU 954 SOR, grant shows debit
balance of ₹238.11 Lakhs and ₹1497.35
Lakhs. In the absence of necessary details,
we are unable to quantify the impact on the
Consolidated financial statements.
16. The Holding Company has disclosed an The Disputed MAT claim on the erstwhile
amount of ₹ 35,832.26 Lakhs as Disputed KSE Board, which was decided in favour of
Income-tax Matters (Note No 35.2) under KSE Board by the Hon,ble High court of the
Contingent Liabilities. Out of the same, we Kerala is shown under Contingent Liability as
have not received details regarding disputed the Income Tax department had filed appeal
tax liability of ₹3462.23 Lakhs. before the Hon'ble Supreme Court.
17. On verification of Financial Statements of As per para 41A of Ind AS 28, the net investment
Associates, it was found that, there was in an associate or joint venture is impaired and
loss for three consecutive years including impairment losses are incurred if, and only if,
current year in Baitarni West Coal Company there is objective evidence of impairment as a
Ltd. However, the Holding Company has result of one or more events that occurred after
not provided and disclosed provision for the initial recognition of the net investment
impairment, if any, as per Ind AS 28. (a ‘loss event’) and that loss event has impact
on the estimated future cash flows from the
net investment that can be reliably estimated.
The net loss of BWCCL for the current year was
due to write off of preliminary expenses and
otherwise the net operating results would have
been positive. Since a significant and prolonged
153
deterioration in the value of investment of

the company is unlikely in the near future,
no provision for impairment is made in the
accounts
18. Receipts from maintenance charges for a&b. Instruction had already been issued vide
poles from Cable TV operators: circular No. FA/Tax cell/GST/Pole Rent/2017-18
a. Based on the observation on audit of units dated 21/03/2018 to provide provision as per GST
of Holding Company, the receipts from rules in this regard.
maintenance charges for poles from Cable c. The Board in its 27th meeting held on
TV Operators are not accounted on accrual 29.07.2016 had approved the dispute settlement
basis in compliance to Ind AS 18- Revenue. mechanism for drawal of cables by M/s Asianet
However due to lack of information, we Satellite Communication Ltd and other cable TV
are unable to quantify the impact on the operators. During the deliberations in the 30th
Consolidated financial statements. Board of Directors meeting held on 04.01.2017,
b. On verification of accounts, the pole rent it was directed to submit a status report on
receipts include interest portion for the the action initiated for the dispute settlement
delayed receipts. The interest receipts should mechanism approved by the Board in the
be separately accounted. The amount could 27th meeting , to be placed in the next Board
not be quantified as no details are submitted meeting
by the Holding Company. It was reported in the board meeting vide
c. The Holding Company has not provided agenda No.18-04/2017 that as per the details
information regarding dispute settlement furnished by the Deputy Chief Engineers it is
with cable operators regarding income seen that 581 cases have been fully settled and
from pole rent, balance amount receivable instalment facilities have been accorded to 214
and amount written off, if any, as decided in cases, from which an amount of `3.34 Cr has
Board meeting dated 12-4-2017. Due to lack been realised.
of information, we are unable to quantify
the impact on the Consolidated financial
statements.
19. The Holding Company follows the practice The Board vide order B.O (FB) No. 3159/ 2005/
of providing interest on closing balance KSEB/TRAC/S Code/05/R2 dated 11.11.2005 had
of customer deposits. We observed that, ordered that interest at bank rate prevailing
the provision created in preceding years as on 1st April 2004 on the amount of security
amounting to ₹ 33082.44 Lakhs has been deposit at credit as on 1st April 2004 is to be
accumulated and no adjustment has credited to the consumer’s account during the
been made in the Consolidated financial first quarter of 2005-06 and this process shall
statements. In the absence of necessary be repeated every year. A detailed circular on
details, we are unable to comment upon the accounting procedures to be followed in this
same. regard were also issued. As per the procedure,
the interest accrued during a financial year shall
be adjusted in the energy bill of the consumer
154
during the first quarter of the ensuing financial

year. Accordingly the interest on opening
balance of the security deposit as on 01.04.2017
at the specified bank rate will be provided in the
accounts of 2017-18 on accrual basis. The actual
disbursement of the amount will be made to
the consumers in the first quarter of the next
financial year (i.e. first quarter of 2018-19). The
actual disbursement details will be accounted
by the ARUs only in the financial year 2018-19.
20. Accounting treatment of LED Bulbs Detailed accounting procedure in respect of

a. Trading of LED Bulbs to the customers is LED bulb has already been issued vide circular
different from the normal business activity of No. AA-IV/AC/II/29/2015-16 dated 25/02/2016.
the Holding Company. Hence, the Holding However the matter will be verified in detail and
Company should disclose the purchases, further directions if any required will be issued
Sales and Closing Stock separately in
Consolidated Statement of Profit and Loss.
b) The Holding Company is not following
the accrual basis of accounting while
accounting expenses relating to purchase
of LED bulbs which is not in conformity with
Ind AS 1. Due to non availability of necessary
information the impact of the same cannot
be quantified.
c) Based on the verification of the accounts of
units visited by us of Holding Company , it
was found that the purchase of LED Bulbs
amounting to ₹ 320.19 Lakhs relating to
prior period is accounted as current year
expenditure which is not in compliance with
Ind AS 8 – ‘Accounting Policies, Changes in
Accounting Estimates and Errors’.
21. The impact of comments made by C&AG, the Regarding the comments in the nature of
statutory auditors and errors or omissions errors and omission, necessary direction has
for the previous years has not been adjusted been given to the field units.
in accordance with Ind AS 8-Accounitng
In the case of Accounting policies, change in
Accounting Estimates and Errors is noted for
and Errors. We are unable to quantify
future.
the impact of the same in the financial
statements due to lack of necessary details.
155
22. In ARU 954, as per the agreement no.28/17- The Special Officer (Revenue) reported that the
18 dated 25/09/2017 M/s Philips Carbon documents/details called for by the auditors are
Black Ltd. is liable to pay the interest at the furnished at the time of audit.
rate of 12% per annum based on actual delay
from the due date up to a period of 30 days
and thereafter at the rate of 18% per annum
for the entire period of default from the
due date. However as per the explanation
from the Holding Company the entire
payable accounted has been revised by
the management and the due amount has
been restated. Due to lack of proper details,
we are unable to quantify the impact in the
23. We observed that, at ARU 954 of Holding This has been explained to the auditors at
Company, interest on demand on sale the time of audit. Considering the materiality
of power amounting to ₹8.97 Lakhs was aspect this will not affect the true and fair view
not accounted in compliance to Ind AS 18 of the financial statements of the company.
resulting in understatement of interest
income and receivables.
24. As per 35th Board Meeting held on 15th Director (Generation-Civil) has already given
November, 2017 Board of Directors of the direction to all ARUs to report the status.
Holding Company decided for the one time
settlement of recovery of arrear rent from
occupants of Board Quarters at various
locations. However, no effect has been given
in the Consolidated Financial Statements
which is not in compliance to Ind AS 18. Due
to lack of necessary information we are not
in a position to quantify the impact on the
25. As per decision of Board of Directors Vide letter No. CECCS/BHEP/1/2013 dated
of Holding Company, price escalation 25.07.2018 Chief Engineer (Civil Construction-
has been sanctioned for the works of South) reported that all invoices received up to
Bhoothathankettu Small Hydro Electric 31.03.2018 have been paid at agreed rate
Project. Due to non availability of necessary
information, we are unable to comment
upon the financial effect of the same, if any.
156
26. The Holding Company has not revalued These bonds are issued for specific purpose
bonds at fair value issued to KSEB Master to meet the terminal liability of employees of
Trust amounting to ₹11,23,929 Lakhs which KSEB Ltd to the Master Trust. The interest rates
is in not in conformity with Ind AS 109. are fixed and specified in the Government order
Similarly, the other financial assets and itself. There is no comparable bonds issued by
liabilities including loans / deposits have also the Government of Kerala to ascertain the fair
not been recognized at fair value. Further, value. Hence fair valuation was not done.
the Company has revalued ‘Loan from REC
Negative balance of `47.06 lakh was an error
- various schemes’ (Note No 15) incorrectly
occurred due to wrong treatment of fair
resulting in negative balance of ₹ 47.06
valuation under IND AS.
Lakhs for the loan. Due to lack of necessary
we are unable to quantify the impact of
the same in the Consolidated Financial
Statements
27. One of the Associate companies, Baitarni The compensation received by M/s Baitarni
West Coal Company Ltd, has shown an West Coal Company Ltd. (BWCCL) in terms
amount of ₹ 1307.89 Lakhs under "other of Section 16 of the Coal Mines (Special
financial liabilities" against the name of Provisions) Act, 2016 on de-allocation of coal
three promoter companies including KSEB block was netted off against the pre-operative
Ltd for an amount of ₹435.96 Lakhs each. No expenditure by BWCCL and the balance is
corresponding entry has been made in the treated as unsecured loan of `435.96 crore
books of KSEB Ltd. each from three promoter companies and
classified as ‘other financial liabilities’ in their
books of accounts. KSEB Ltd. is of the view that
the amount of compensation received towards
cost of consent of `1307.98 lakhs cannot be
credited to the Unsecured Loan in the name of
shareholder companies in equal proportion as
it is not permissible under Companies Act 2013
to distribute the compensation received among
the shareholders. Hence corresponding entries
has not been provided in the accounts of KSEB
Ltd. The same has been suitably disclosed in the
Notes No. 34.12(u) forming parts of Consolidated
28. Transactions between Holding Company Except normal business transactions with
and the Associates have not been disclosed Kerala State Power Infrastructure Finance
properly. Confirmation of balances and Corporation, there is no other transaction
reconciliation among the Holding Company between the holding company and associate
and Associates also is not available for companies during the financial year. Except
verification. In the absence of full information the item reported in para 27 above, for which
we are unable to comment on the impact reason reported, all the transaction are properly
on of the same on the consolidated accounted in the books of accounts.
157
financial statements. Also as per Ind AS 28

‘Investments in Associates’ investor’s share
in profits of any upstream / downstream
transactions within the group should be
eliminated in the Consolidated Financial
Statements. In the absence of necessary
information, we are unable to determine
whether the same has been complied with.
29. The aggregate effect of our qualifications Noted.

described above from Point No 1 to 27,
wherever quantifiable, is that assets are
overstated by ` 8296.94 Lakhs, Liabilities are
understated by ` 6 Lakhs, Loss / Reserves
are understated by ` 8302.94 Lakhs
Sd/-
DIRECTOR (FINANCE)
158
REPLIES TO THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE STAND ALONE
IND AS FINANCIAL STATEMENT OF KERALA STATE ELECTRICITY BOARD LIMITED,
THIRUVANANTHAPURAM FOR THE YEAR ENDED 31ST MARCH 2018
COMMENTS ON FINANCIAL STATEMENT REPLIES OF THE COMPANY
A.COMMENTS ON FINANCIAL POSITION

Balance Sheet
Assets
Non Current Assets
Capital work in Progress(Note 3)- ` 2448.89 crore
1. The above is overstated by ` 55.93 crore due This has been capitalised vide UJE No.7 of
to non capitalization of the Perumthenaruvi 12/2018 of Civil Circle, Pallom.
Small Hydro Electric Project commissioned
in current year. This has also resulted in
understatement of Fixed Assets by `55.93
crore depreciation as well as loss for the year
by ` 0.88 crore.

Other Non-current Liabilities (Note 18)-Decommissioning liability- - ` 20.56 crore
2. The above represents the decommissioning The decommissioning liability recognised

liability recognised by the Company by the company @ 0.1% as per the B.O. D (F)
@ 0.1 percent of value of assets. The No.34/2018(Annual Accounts/Ind As 2016-
Decommissioning liability was added to the 17/2017-18) TVPM dated 04/1/2018. The rate was
cost of the Property, Plant and Equipment fixed after a detailed internal discussion and
without considering the present value of the considering the complexities in the nature
liability which is not in compliance with Ind as well as life of assets and the complexities
AS 16. The provision of Ind AS 16 that periodic in the electricity sector. An estimated
unwinding of discount should be charged to decommissioning liability was fixed and the
Profit and loss account as Finance Cost has same has been provided as decommissioning
also not been complied with. The Company liability on adoption of Ind AS in the company
has not disclosed the methodology adopted and to comply with the Ind AS 16.
for provision of decommissioning liability
and limitations if any, in adhering to the
provisions of Ind AS 16 in this regard.
159
B.COMMENTS ON CASH FLOW STATEMENT
3. Cash and cash equivalents at the year was The Current Financial Assets- Cash and cash
overstated by ` 70.07 crore due to inclusion equivalents are disclosed under Note No.10.
of fixed deposits against Guarantees and Rs.7007.15 lakh disclosed in the Note No.11 as
other commitments (as disclosed under Bank balance other than cash equivalents.
Note 11). Treatment of such deposits which Adequate disclosure is there in the financial
were not highly liquid in nature as cash statements.
equivalent was against the provisions of Ind
AS 7-Statement of Cash flows
4. As per provisions of Ind AS 7, investing and Change in provisions in the cash flow statement
financing activities that do not require use of represents the bond issued to the Pension
cash or cash equivalents should be excluded Master Trust to meet the pension obligation
from the statement of cash flows. Non cash of the employees of KSEB Ltd. The change in
item of ` 11336.67 crore representing changes provision includes the change in cash out flow
in provisions/provision for interest has been to the master trust due to principal repayment
included under cash flow from financing of the bond. Hence change in provision
activities which is not in compliance with represents change in cash out flows.
Ind AS.
Rs.81140 lakh was the interest on bond issued
to the pension Master Trust. The amount was
transferred to the pension master trust to
meet the pension obligation and hence cash
outflow. Hence the item is shown as cash flow
in investment and financing activities.
5. According to the Kerala State Electricity KSEBL has been taking earnest efforts to meet
Regulatory Commission Regulations,the the non-solar and solar RPO targets stipulated
Company had to meet renewable purchase by KSERC vide the KSERC (Renewable
obligation of 5378.73 MU during the period Energy) Regulations,2015 and its subsequent
2011-12 to 2017-18 of which 4071.47 MU was amendment. Hon’ble Commission vide the
achieved, leaving a deficit of 1307.26 MU. amendment to the above Regulation issued
The liability on account of this based on the on 2-11-2017 has adopted the RPO trajectory
floor price of renewable energy certificates notified by MoP on 22-7-2016.
worked out ` 130.73 crore. This fact has not
The RE achievement of KSEBL are being
been disclosed by the Company.
monitored by the State Agency ANERT as well
as the State Commission. Quarterly reports on
RE achievement are forwarded to the State
Agency, who is the nodal agency as per the
Regulation to monitor the RPO achievement
of the obligated entities in the State and for
reporting the same before KSERC.
160
The RPO targets stipulated in the Regulations

are considerably high compared to the RE
potential of the State. Therefore KSEBL could
not achieve the RPO targets in the Regulation.
Duly considering this, KSERC has also not taken
any penal actions against KSEBL.
Further as per Regulation 12 of the KSERC
(Renewable Energy) Regulations, 2015, the
obligated entity may, in the case of genuine
difficulty in complying with its renewable
purchase obligation in full in any financial year,
apply to the Commission for permission to carry
forward to the next financial year, the short fall
in its renewable purchase obligation.
KSEBL is yet to file the true-up petition for
the year 2017-18. As per the Regulations of
KSERC, the true-up petition for 2017-18 has
to be filed by January 1, 2019. In the true-up
petition, KSEBL will be applying for permission
to carry forward the RPO shortfall of 2017-18 to
the subsequent years invoking the provisions
under Regulation 12 of the KSERC (Renewable
Energy) Regulations, 2015.
Further, KSEBL in the MYT petition filed for the
control period 2018-19 to 2021-22 has submitted
before KSERC, the RPO achievement plan of
KSEBL, in which KSEBL expects to meet the
RPO targets stipulated in KSERC Regulations
fully through own generation and purchase
from RE sources.
Considering the above, it is felt that creation
of provision for REC purchase in the accounts of
2017-18 is a per-mature action which would be
unrealistic hence not disclosed separately.
6.The Company has disclosed under Para 1.9 KSEB Limited has been following the schedule
under Note 1 Company Information and III of the Companies Act 2013 and relevant
Significant accounting policies that in terms Accounting Standards applicable for the
of Ind AS 114- Regulatory Deferral Accounts company for the preparation of financial
it had opted to continue with previous statement from 2013-14.The audit comment is
GAAP (Guidance Note on accounting for noted.
rate regulated activities) for such balances.
161
However, the disclosure is silent as to

the accounting policy itself and hence is
deficient to that extent. Further, as per
disclosure requirements detailed in Para
45 of the Guidance Note, an entity should
disclose information that enables the users
of the financial statements to understand
the nature and the financial effects of rate
regulation on its activities. As per final
True Up orders issued by KSERC on 14.9.18,
the regulatory asset as on 2015-16 stood
at ` 5655.12 crore which should have been
disclosed in the notes forming part of the
accounts.
Sd/-
DIRECTOR (FINANCE)
162
REPLIES TO THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED
IND AS FINANCIAL STATEMENT OF KERALA STATE ELECTRICITY BOARD LIMITED,
THIRUVANANTHAPURAM FOR THE YEAR ENDED 31ST MARCH 2018
COMMENTS ON FINANCIAL STATEMENT REPLIES OF THE COMPANY
A.COMMENTS ON FINANCIAL POSITION

Balance Sheet
Assets
Non Current Assets
Capital work in Progress(Note 3)-` 2448.89 crore
1. The above is overstated by ` 55.93 crore due This has been capitalised vide UJE No.7 of
to non capitalization of the Perumthenaruvi 12/2018 of Civil Circle, Pallom.
Small Hydro Electric Project commissioned
in current year. This has also resulted in
understatement of Fixed Assets by `55.93
crore and depreciation as well as loss for the
year by ` 0.88 crore.

Other Non-current Liabilities (Note 18)-Decommissioning liability- -` 20.56 crore
2. The above represents the decommissioning The decommissioning liability recognised

liability recognised by the Company by the company @ 0.1% as per the B.O. D (F)
@ 0.1 percent of value of assets. The No.34/2018(Annual Accounts/Ind As 2016-
Decommissioning liability was added to the 17/2017-18) TVPM dated 04/1/2018. The rate was
cost of the Property, Plant and Equipment fixed after a detailed internal discussion and
without considering the present value of the considering the complexities in the nature
liability which is not in compliance with Ind as well as life of assets and the complexities
AS 16. The provision of Ind AS 16 that periodic in the electricity sector. An estimated
unwinding of discount should be charged to decommissioning liability was fixed and the
Profit and loss account as Finance Cost has same has been provided as decommissioning
also not been complied with. The Company liability on adoption of Ind AS in the company
has not disclosed the methodology adopted and to comply with the Ind AS 16.
for provision of decommissioning liability
and limitations if any, in adhering to the
provisions of Ind AS 16 in this regard.
163
B.COMMENTS ON CASH FLOW STATEMENT
3. Cash and cash equivalents at the year was The Current Financial Assets- Cash and cash
overstated by ` 70.07 crore due to inclusion equivalents are disclosed under Note No.10.
of fixed deposits against Guarantees and Rs.7007.15 lakh disclosed in the Note No.11 as
other commitments (as disclosed under Bank balance other than cash equivalents.
Note 11). Treatment of such deposits which Adequate disclosure is there in the financial
were not highly liquid in nature as cash statements.
equivalent was against the provisions of Ind
AS 7-Statement of Cash flows
4. As per provisions of Ind AS 7, investing and Change in provisions in the cash flow statement
financing activities that do not require use of represents the bond issued to the Pension
cash or cash equivalents should be excluded Master Trust to meet the pension obligation
from the statement of cash flows. Non cash of the employees of KSEB Ltd. The change in
item of ` 11336.67 crore representing changes provision includes the change in cash out flow
in provisions/provision for interest has been to the master trust due to principal repayment
included under cash flow from financing of the bond. Hence change in provision
activities which is not in compliance with represents change in cash out flows.
Ind AS.
Rs.81140 lakh was the interest on bond issued
to the pension Master Trust. The amount was
transferred to the pension master trust to
meet the pension obligation and hence cash
outflow. Hence the item is shown as cash flow
in investment and financing activities.
5. According to Para 18 (b) of Ind AS 7, an Noted.
entity may report cash flows from operating
activities using the indirect method
whereby profit or loss is adjusted for the
effects of transactions of a non cash nature.
Non adjustment of `20.28 crore being
the Holding company's share of profit of
associates/joint venture (a non-cash item)
against profit before tax while arriving at
operating profit before working capital
changes resulted in overstatement of cash
inflow from operating activities by `20.28
crore.
164
6. According to the Kerala State Electricity KSEBL has been taking earnest efforts to meet
Regulatory Commission Regulations,the the non-solar and solar RPO targets stipulated
Company had to meet renewable purchase by KSERC vide the KSERC (Renewable
obligation of 5378.73 MU during the period Energy) Regulations, 2015 and its subsequent
2011-12 to 2017-18 of which 4071.47 MU was amendment. Hon’ble Commission vide the
achieved, leaving a deficit of 1307.26 MU. amendment to the above Regulation issued
The liability on account of this based on the on 2-11-2017 has adopted the RPO trajectory
floor price of renewable energy certificates notified by MoP on 22-7-2016.
worked out ` 130.73 crore. This fact has not The RE achievement of KSEBL are being
been disclosed by the Company. monitored by the State Agency ANERT as well
as the State Commission. Quarterly reports on
RE achievement are forwarded to the State
Agency, who is the nodal agency as per the
Regulation to monitor the RPO achievement
of the obligated entities in the State and for
reporting the same before KSERC.
The RPO targets stipulated in the Regulations
are considerably high compared to the RE
potential of the State. Therefore KSEBL could
not achieve the RPO targets in the Regulation.
Duly considering this, KSERC has also not taken
any penal actions against KSEBL.
Further as per Regulation 12 of the KSERC
(Renewable Energy) Regulations, 2015, the
obligated entity may, in the case of genuine
difficulty in complying with its renewable
purchase obligation in full in any financial year,
apply to the Commission for permission to carry
forward to the next financial year, the short fall
in its renewable purchase obligation.
KSEBL is yet to file the true-up petition for
the year 2017-18. As per the Regulations of
KSERC, the true-up petition for 2017-18 has
to be filed by January 1, 2019. In the true-up
petition, KSEBL will be applying for permission
to carry forward the RPO shortfall of 2017-18 to
the subsequent years invoking the provisions
under Regulation 12 of the KSERC (Renewable
Energy) Regulations, 2015.
Further, KSEBL in the MYT petition filed for the
control period 2018-19 to 2021-22 has submitted
before KSERC, the RPO achievement plan of
165
KSEBL, in which KSEBL expects to meet the

RPO targets stipulated in KSERC Regulations
fully through own generation and purchase
from RE sources.
Considering the above, it is felt that creation
of provision for REC purchase in the accounts of
2017-18 is a per-mature action which would be
unrealistic hence not disclosed separately.
7. The Company has disclosed under Para 1.10 KSEB Limited has been following the schedule
under Note 1 Company Information and III of the Companies Act 2013 and relevant
Significant accounting policies that in terms Accounting Standards applicable for the
of Ind AS 114- Regulatory Deferral Accounts company for the preparation of financial
it had opted to continue with previous statement from 2013-14.The audit comment is
GAAP (Guidance Note on accounting for noted.
rate regulated activities) for such balances.
However, the disclosure is silent as to
the accounting policy itself and hence is
deficient to that extent. Further, as per
disclosure requirements detailed in Para
45 of the Guidance Note, an entity should
disclose information that enables the users
of the financial statements to understand
the nature and the financial effects of rate
regulation on its activities. As per final
True Up orders issued by KSERC on 14.9.18,
the regulatory asset as on 2015-16 stood
at ` 5655.12 crore which should have been
disclosed in the notes forming part of the
accounts.
8. While de-allocating the coal block allotted Noted.

to the associate company M/s Baitarani
West Coal Company Ltd (BWCCL), Ministry
of Coal, Govt. Of India invoked 50 percent of
the Bank Guarantee of `75 crore (`37.5 crore)
submitted by BWCCL. The matter is under
litigation and the Honourable High Court
of Odisha had issued (March 2013) interim
order not to encash the Bank Guarantee.
As the case is pending disposal, the
contingent liability on this account should
have been disclosed in notes forming part Sd/-
of Consolidated Financial Statements.
DIRECTOR (FINANCE)
166
REPLIES OF THE MANAGEMENT TO THE OBSERVATIONS OF

SECRETARIAL AUDITOR FOR THE YEAR 2017-18
Sl.No. Observations in the Replies/Comments of the Management

Secretarial Audit Report
1 There is only one Independent Director. Kerala State Electricity Board Limited being a
company fully owned by Government of Kerala
the appointment of Independent Directors are
made by the Government of Kerala. Hence, the
company as per letter No.CS/Independence
Director/2015-16 dated 03.05.2016 had requested
the Government of Kerala to appoint two
Independent Directors so as to comply with the
provisions of the Companies Act, 2013. But the
Government as per G.O. (MS) No.13/2016/Power
dated 02.07.2016 appointed Dr.V.Sivadasan as
Independent Director. The appointment of the
other Independent Director is pending with the
Government of Kerala.
2 The Audit Committee constituted is The appointment of one more independent

consequently not in conformity with Sec. director is pending with Government of
177(2) of the Companies Act. The company Kerala. Based on the existing Board structure,
has an internal Audit wing; but no report compliance with provisions of Companies Act
from the Internal Auditor has ever been 2013 is ensured. The reports from the internal
placed before the Audit Committee. Audit were not placed in the meeting of Audit
Committee and the same shall be placed in
future meetings.
3 The Company has not constituted a The appointment of one more independent
Nomination and Remuneration Committee director is pending with Government of
as envisaged in Sec 178 (1) of the Companies Kerala. Based on the existing Board structure,
Act, 2013 read with Rule 6 of the Companies compliance with provisions of Companies Act
(Meetings of the Board and its Powers) Rules, 2013 is ensured. The reports from the internal
2014. Audit were not placed in the meeting of Audit
Committee and the same shall be placed in
The Departmental Promotion Committee
future meetings.
on which the Board relies, shall not be a
substitute for Nomination and Remuneration
Committee. The Remuneration of Directors,
Key Managerial Personnel and Senior
Executives must have a balance between
fixed and incentive components and it
should be aligned to the short and long
167
term goals of the Company. All such policies Kerala State Electricity Board Limited being a
as are formulated by the Nomination and Company fully owned by Government of Kerala,
Remuneration Committee shall be disclosed the power of appointment of the Directors is
in the Board’s Report as prepared under vested on the Government of Kerala and for
Sec.134 of Act-Vide proviso to Section 178(4) permanent employees at the entry level other
of the Act. than compassionate and sports recruitment
are done through Kerala Public Service
Commission (KPSC). All rules applicable for
State Government employee viz., KSR, KS &
SSR etc are made applicable to employees
of Kerala State Electricity Board Limited.
Promotion to officer cadre are done through
Departmental Promotion Committee in line
with in KS & SSR and for all other promotions
are based on seniority. For Workmen category,
wages and other conditions of services are
decided through wages negotiation between
recognized Trade Unions & Management as
per Industrial Dispute Act, 1947. In case of
officers their salary & Allowances are decided
as per the recommendation of management
committee after approval from Government.
In view of the above, a separate Nomination
and Remuneration Committee has not been
constituted in the company. However, action
would be taken in due course to constitute
Nomination and Remuneration Committee as
per the observations.
4 As per Sec. 203(1) of the Act, the Company Necessary steps has already been taken up
shall have a Company Secretary who shall be with the Kerala Public Service Commission
a Key Managerial Person. The Chief Internal for the appointment of Company Secretary.
Audit Officer who is holding a higher post Since the post of Company Secretary could
is holding additional charge of Company not be left vacant due to statutory obligations
Secretary. This is not in conformity with the the Board vide B.O. (FTD) No.2613/2017 (Estt.
relative provisions of Companies Act 2013. III/9395/2008) dated 23.10.2017 ordered to give
full additional charge of the Company Secretary
to Smt. Lekha.G, Chief Internal Auditor till a new
Company Secretary is appointed.
168
D I further report that the Board of Directors of As requested by the company for appointing
the Company is duly constituted with Six Full two Independent Directors the Government as
Time Directors, Two Senior IAS Officers and per G.O. (MS) No.13/2016 Power dated 02.07.2016
One Independent Director. Under Rule 4 of appointed Dr.V.Sivadasan as Independent
Companies (Appointment and Qualification Director. Steps have already been taken up with
of Directors) Rules, 2014, the Company shall the Government for the appointment of one
have at least two independent Directors. The more Independent Director.
Changes in the composition of the Board
that took place during the period under
review were carried out in compliance with
the provisions of the Act and the Articles of
Association of the Company.
D(3) There is a Committee of Full Time Directors The present practice is that the minutes
to carry on the day to day functioning/ in respect of the meeting of the Full Time
oversee working of the routine functions. Directors are being maintained in separate files
The Committee meets every Wednesday and the same are being placed and noted in the
and takes decisions on day today affairs. subsequent meeting of the Board of Directors.
As required in Sec 118(1) of the Companies
Minutes Book are maintained in respect of
Act 2013 read with Rule 3(12) (c) of the
the meeting of the Full Time Directors with
Companies (Meetings of the Board and
effect from 01.07.2018 in the same manner the
its Powers). Rules 2014, the Company
minutes of the meeting of the Board of Director
is keeping a record of the meetings of
are being maintained.
this Committee and its decisions where
necessary are placed before the Board of
Directors for approval to implement the
decision of the Committee. These minutes
are not however recorded in a separate
book kept for the purpose, but are kept in
the separate file.
Sd/-
Chairman & Managing Director
169

Balance Sheet as at 31.03.2018
Particulars Note No. (Rs. in lakhs)

As at 31.03.2018 As at 31.03.2017
ASSETS
Non current assets
Property, Plant and Equipment 2 20,37,705.61 20,68,736.35
Capital work-in-progress 3 2,44,889.91 1,78,329.19
Financial Assets
Investments 4 2,000.01 2,000.01
Loans 5 8,295.03 8,389.85
Others 6 6,331.70 55,070.04
Deferred Tax Assets (Net) -
Other non-current assets 7 4,31,060.49 4,93,289.29
Current assets
Inventories 8 48,590.36 31,018.91
Trade receivables 9 2,29,926.20 1,92,339.65
Cash and cash equivalents 10 27,588.78 23,603.23
Bank balances Other than Cash Equivalents 11 7,007.15 6,827.98
Other current assets 12 12,649.65 8,046.66
Total Assets 30,56,044.89 30,67,651.15
Equity
Equity Share capital 13 3,49,905.00 3,49,905.00
Other Equity 14 -9,77,660.67 -7,40,788.01
Liabilities
Non-current liabilities
Borrowings 15 15,93,454.49 4,26,656.76
Other Financial Liabilities 16 3,17,045.02 3,11,596.98
Provisions 17 9,76,539.72 20,28,767.16
Other non-current liabilities 18 1,92,276.19 1,42,922.30
170
Current liabilities
Borrowings 19 2,73,758.98 2,76,746.30
Trade payables 20 96,836.56 81,846.53
Other financial liabilities 21 2,32,989.60 1,89,998.14
Provisions 22 900.00 -
Total Equity and Liabilities 30,56,044.89 30,67,651.15
See accompanying notes to the financial statements

Sd/- Sd/-
N.S.PILLAI IA&AS N. VENUGOPAL
CHAIRMAN&MANAGING DIRECTOR DIRECTOR (Corp. Planning, SCM, Safety &GE)
DIN:07282785 DIN: 07558958
Sd/- Sd/-
BIJU.R FCA LEKHA.G FCA ACS
FINANCIAL ADVISER&CHIEF FINANCIAL OFFICER COMPANY SECRETARY I/C

SUBJECT TO OUR REPORT OF EVEN DATE

For ISAAC&SURESH For ANANTHAN &SUNDARAM
Chartered Accountants Chartered Accountants
FRN:001150S FRN:000148S
Sd/- Sd/-
SOBHA SETHUMADHAVAN FCA C.A.HARIKRISHNAN.R.S.M.Com,DISA, FCA
Partner Partner
M.No.225166 M.No.230338
For G.VENUGOPAL KAMATH &Co.

Chartered Accountants
FRN:004674S
Sd/-
RAVINATH R. PAI FCA
Partner
M.No.226547
Place:Thiruvananthapuram
Date:29.09.2018
171

Statement of Profit and Loss for 2017-18

For the year ended For the year ended
31st March 2018 31st March 2017
REVENUE
I Revenue From Operations 23 12,31,817.31 11,21,882.81
II Other Income 24 34,727.52 40,077.69
III Total Income (I+II) 12,66,544.83 11,61,960.50
IV EXPENSES
Purchase of Power 25 7,52,602.69 7,39,332.42
Generation of Power 26 207.84 2,344.63
Repairs & Maintenance 27 27,734.87 26,512.85
Employee benefits expense 28 2,63,806.15 3,36,077.22
Finance costs 29 1,81,469.02 95,991.86
Depreciation and amortization expense 30 80,370.49 71,887.92
Other Expenses
Administrative Expenses 31 53,038.86 37,479.10
Others 32 -1,416.98 8,363.77
ADD CHANGES IN FAIR VALUATION
AND OTHER ADJ 33 -12,858.65 -6,566.42
Total expenses (IV) 13,44,954.29 13,11,423.35
V Profit/(loss) before exceptional
items and tax (III- IV) -78,409.46 -1,49,462.85
VI Exceptional Items - -
VII Profit/(loss) before tax (V-VI) -78,409.46 -1,49,462.85
VIII Tax expense:
(1) Current tax - -
(2) Deferred tax - -
IX Profit (Loss) for the period from
continuing operations (VII-VIII) -78,409.46 -1,49,462.85
X Profit/(loss) from discontinued
operations - -
XI Tax expense of discontinued operations - -
XII Profit/(loss) from Discontinued
operations (after tax) (X-XI) - -
XIII Profit/(loss) for the period (IX+XII) -78,409.46 -1,49,462.85
XIV Other Comprehensive Income
A (i) Items that will not be reclassified
to profit or loss -1,07,632.86 -
(ii) Income tax relating to items that
will not be reclassified to profit or loss - -
172

For the year ended For the year ended
31st March 2017 31st March 2016
B (i) Items that will be reclassified to
profit or loss - -
(ii) Income tax relating to items that
will be reclassified to profit or loss - -
XV Total Comprehensive Income for the
period (XIII+XIV)(Comprising Profit
(Loss) and Other Comprehensive
Income for the period) -1,86,042.32 -1,49,462.85
XVI Earnings per equity share
(for continuing operation):
(1) Basic ( `) -5.32 -4.27
(2) Diluted ( `) -5.32 -4.27
XVII Earnings per equity share
(for discontinued operation):
(1) Basic - -
(2) Diluted - -

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S

Sd/- Sd/-
Partner Partner
M.No.225166 M.No.230338
FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
Partner
M.No.226547
Date:29.09.2018
173
Cash Flow Statement for the period ended 31st March 2018
Particulars Amount (` In lakhs)
2017-18 2016-17
CASH FLOW FROM OPERATING ACTIVITIES

PROFIT BEFORE TAX -1,86,042.32 -1,49,462.85
CAPITAL CHANGES -1,86,042.32 -1,49,462.85
Depreciation 80,370.49 71,887.92
Finance cost 1,81,469.02 95,991.86
Investment income -23.94
Interest Income -546.59 -719.34
Prior period interest and finance charges 6.66 17.93
Operating profit before working capital changes 75,257.27 17,691.58
Adjustments for:
Changes in Inventories -17,571.45 -1,814.93
Changes in Sundry Debtors -37,586.55 -33,060.09
Changes in Other Current Asset -4,602.99 -300.14
Changes in Current Liabilities and Provisions 40,904.14 -3,23,851.47
Changes in Trade Payable 14,990.03 12,442.65
Cash generated from Operations 71,390.45 -3,28,892.40
Net cash flow from /(used in) Operating Activities(A) 71,390.45 -3,28,892.40
CASH FLOW FROM INVESTMENT ACTIVITIES
Change in Fixed Asset -99,238.28 -1,48,592.43
Changes in Capital Work-in Progress -66,560.72 -4,836.21
Income from Investment - 23.94
Change in Investments - -
Interest from Banks 546.59 719.34
Change in Non Current Assets-Other Financial Assets 48,738.34 -1,989.38
Non Current Assets Financial Assets-Loans 94.81 335.63
Other Non Current Assets 62,228.79 2,24,495.75
Net cash flow from / (used in) Investment Activities (B) -54,190.47 70,156.63
CASH FLOW FROM FINANCING ACTIVITIES
Changes in Equity Capital -931.80 -3,72,834.37
Changes in Provisions -10,52,227.44 3,69,925.26
Changes in Financial Liabilties 5,448.04 31,969.09
Changes in Long Term Borrowings 11,66,797.74 2,74,141.31
Interest and Other cost of raising Finance -1,81,469.02 -95,991.86
Changes in Other Non Current Liabalities 49,353.88 57,812.56
Prior Period Interest and Finance charges -6.66 -17.93
Net cash flow from / (used in) Financing Activities(C) -13,035.26 2,65,004.06
174
Particulars Amount (` In lakhs)

2017-18 2016-17
NET CHANGE IN CASH & CASH EQUIVALENTS 4,164.72 6,268.29
-
CASH AND CASH EQUIVALENTS AT THE BEGINNING 30,431.21 24,162.91
CASH AND CASH EQUIVALENTS AT THE END 34,595.93 30,431.20

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S

Sd/- Sd/-
Partner Partner
M.No.225166 M.No.230338
FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
Partner
M.No.226547
Date:29.09.2018
175
176
Statement of Changes in Equity for the year ended on 31st March 2018
A: Equity Share Capital Amount ` in lakhs

Note No :13
Balance as at 1st April 2017 Changes in equity share Balance as at 31st March 2018
capital during the year
3,49,905.00 - 3,49,905.00
B. Other Equity
` in lakhs
Particulars Reserve & Surplus Debt income Equity income Other items
Note Capital Security Other Retained through Other through of other
No. Reserve Premium Reserve earnings Comprhensive Other Comprhensive Total

Reserve Income Comprehensive Income
Income
Balance as
at1st April
2017 - - - -7,40,788.01 - - - -7,40,788.01
Profit for the
year - - - -78,409.46 - - - -78,409.46
Changes in
accounting
policy and
prior period
errors - - - - - - - -
Other Comp-
rehensive
Income - - - -1,07,632.86 - - - -1,07,632.86
Total Comp- 14
rehensive
Income - - - -1,86,042.32 - - - -1,86,042.32
Dividends - - - - - - -
Transfer to
Retained
Earnings - - -54,850.76 - - - -54,850.76
Transfer from
Retained
Earnings - - - 4,020.42 - - - 4,020.42
Any other
changes
(To be speciifed) - - - - - - - -
Balance as at
31st March 2018 - - - -9,77,660.67 - - - -9,77,660.67

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S

Sd/- Sd/-
Partner Partner
M.No.225166 M.No.230338

FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
177
Partner
M.No.226547
Date:29.09.2018

Note 1: COMPANY INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
1.1. Corporate information
Kerala State Electricity Board Limited is incorporated under the Companies Act, 2013 and is a
Government Company within the meaning of Section 2(45) of the Companies Act, 2013. It is the
successor entity of Kerala State Electricity Board which was constituted by the Government of
Kerala, as per order no. EL1-6475/56/PW dated 7-3-1957 of the Kerala State Government, under
the Electricity (Supply) Act, 1948 for carrying out the business of Generation, Transmission and
Distribution of electricity in the State of Kerala.
1.2. Statement of Compliance
These standalone financial statements are prepared on accrual basis of accounting and comply
with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting
Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the
extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions
of the Electricity Act, 2003 to the extent applicable.
1.3. Basis of Measurement & Use of Management Estimates
The financial statements have been prepared on the historical cost basis except for certain financial
assets and liabilities that are measured at fair value as laid out by Ind AS 109 Financial Instruments
(refer accounting policy regarding financial instruments) and certain fixed assets which were
capitalised in-order to reflect the actual position in the balance sheet at written down value. The
methods used to measure fair values and written down value are discussed further in notes to
The preparation of these financial statements in conformity with Ind AS requires management to
make judgments, estimates and assumptions that may affect the application of accounting policies
and the reported value of assets, liabilities, income and expenses and related disclosures, including
contingent assets and liabilities at the balance sheet date. The estimates and management’s
judgments are based on previous experience and other factors are considered reasonable and
prudent in the circumstances and such assumptions are reviewed on an ongoing basis
1.4. Current & Non-current Classification
The company presents assets and liabilities in the balance sheet based on the current and non-
current classification. An asset is current when it is expected to be realized or intended to be sold
or consumed in normal operating cycle; held primarily for trading; expected to be realized within
twelve months after the reporting period or cash or cash equivalent unless restricted from being
exchanged or used to settle liability for at least 12 months after the reporting period and any other
asset that do not belong to the former categories are classified as non-current.
A liability is current when, it is expected to be settled in normal operating cycle; it is held primarily
for trading, it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer settlement of the liability for at least 12 months after the reporting
period and any liability other than what has been mentioned above shall be non-current liability.
178
1.5. Critical Judgments and Assumptions

a) Useful Life of Property, Plant and Equipment
The useful life of property, plant and equipment are generally based on factors including
obsolescence, demand and such other economic factors including the required maintenance
expenditure to ensure the future cash flow from the asset. Useful life of the asset, used for the
generation, transmission and distribution of electricity is determined by the Central Electricity
Regulatory Commission, as mentioned in part in part B of Schedule II of the Companies, 2013.
Machinery spares acquired with the equipment are depreciated using the same rates and method
applicable for the original machinery. In the case of Machinery spares procured separately for future
use, rate equivalent to accumulated depreciation for the expired life of the relative machinery are
charged in the year of acquisition along with depreciation for the year.
b) Capital work in progress
The amount of capital work in progress is estimated based on the bills that are accounted towards
capital expenditure but to be capitalized. Such capital expenditure shall remain till the asset is
ready to use and capitalized.
c) Post-retirement benefit plans
Employee benefit obligations are measured based on actuarial assumptions which include
mortality and withdrawal rates as well as assumptions concerning future development in discount
rates, the rate of salary increase, inflation rate and expected rate of return of planned asset. The
company considers that the assumptions used to measure its obligations are appropriate and
documented. However, any changes in these assumptions may have an impact on the resulting
calculations.
d) Revenue
Revenue from sale of power within the State is recognized on accrual basis at the tariff as notified
by the Kerala State Regulatory Commission from time to time. Revenue from Interstate sale of
power is recognized on accrual basis.
e) Provisions and Contingencies
The assessment undertaken in recognizing provisions and contingencies have been made in
accordance with Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. The evaluation
of the likelihood of the contingent events has been made best judgment by management regarding
probable outflow of economic resources. Such estimation can change after unforeseeable
development.
f) Impairment of Trade Receivables
Considering the historical credit loss experience for trade receivables, the Company does not
envisage any either impairment in the value of receivables from beneficiaries or loss due to time
value of money owing to delay in realization of trade receivables. However, the company, in respect
of the concept of prudence, provides for the debts that are doubtful, based on a policy.
g) Investment in Subsidiaries, Associates and Joint Ventures
Investment has been carried at cost and as per the assessment by the company and there is
179
no indication of impairment of such investments. Only a change in the assumptions will have a
material impact in the recoverability of the amount.
1.6. Property, Plant and Equipment (PPE)
Since there is no change in the functional currency, the Company has elected to continue with
the carrying value for all its property, plant and equipment as recognised in its IGAAP financial
statements as deemed cost at the transition date, viz., April 1, 2015.
Property, plant and equipment are stated at cost, net of accumulated depreciation and
accumulated impairment loss, if any. Such cost includes expenditure that is directly attributable to
the acquisition/construction of the asset. In cases where final settlement of bills with contractors
is pending, but the asset is complete and available for use, capitalisation is done on estimated
basis subject to necessary adjustments. Cost also includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term projects if the recognition criteria are met in
accordance with Ind AS 23 Borrowing Cost. When significant parts of plant and equipment are
required to be replaced at intervals, the company depreciates them separately based on their
specific useful lives.
The present value of the expected cost for the decommissioning of the asset after its use is included
in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation on the assets which belongs to generation of electricity business and on the assets of
Corporate & other offices is charged on straight line method following the rates notified by the CERC
Tariff Regulations and in accordance with Schedule II of the Companies Act, 2013. Depreciation is
calculated on straight-line method up to 90% of the original cost of assets at the rates notified by
the Central Electricity Regulatory Commission. Claw back of depreciation has been provided in the
accounts on the assets created out of the contribution received from consumers and government
grants and subsidies.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference at the net disposal proceeds and the carrying amount of
the asset) is included in the Statement of Profit and Loss when the asset is derecognised.
1.7.Capital Work in Progress
Capital work-in-progress comprises of the cost of PPE that are not yet ready for their intended
use as at the balance sheet date. Expenditure incurred on assets under construction (including a
project) is carried at cost under Capital Work in Progress (CWIP). Such costs comprise purchase
price of assets including import duties and non-refundable taxes (after deducting trade discounts
and rebates), expenditure in relation to survey and investigation activities of projects, cost of site
preparation, initial delivery and handling charges, installation and assembly costs, etc.
Employee cost of various units are allocated to “Revenue expenses pending allocation over capital
works” on the basis of following ratio
180
Units Employee cost

Generation 100% for offices exclusive for Civil works.
Transmission 25%
Distribution 14%
HO 5%
Interest and finance cost related to capital expenditure are also allocated to Revenue expenses
pending allocation over capital works.
1.8. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction/exploration/
development or erection of qualifying assets are capitalized as part of cost of such asset until such
time the assets are substantially ready for their intended use. Qualifying assets are assets which
take a substantial period to get ready for their intended use or sale.
When the Company borrows funds specifically for obtaining a qualifying asset, the borrowing
costs incurred are capitalized. When Company borrows funds generally and uses them for
obtaining a qualifying asset, the capitalization of the borrowing costs is computed based on the
weighted average cost of general borrowing that are outstanding during the period and used for
the acquisition, construction/exploration or erection of the qualifying asset.
Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare
the qualifying assets for their intended uses are complete. Borrowing costs consist of interest
and other costs that an entity incurs about the borrowing of funds. Income earned on temporary
investment of the borrowings pending their expenditure on the qualifying assets is deducted from
the borrowing costs eligible for capitalization. The quantum of borrowing cost is measured based
on the weighted average cost of capital.
1.9 Regulatory Deferral Accounts
The Company is mainly engaged in generation and sale of electricity. The price to be charged
by the Company for electricity sold to its customers is determined by the KSERC which provides
extensive guidance on the principles and methodologies for determination of the tariff for sale of
electricity. The tariff is based on allowable costs like interest, depreciation, operation & maintenance
expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service
regulations which provide the Company to recover its costs of providing the goods or services
plus a fair return. The Company is eligible to apply Ind AS 114, Regulatory Deferral Accounts. The
standard permits an eligible entity to continue previous GAAP (Guidance Note on accounting for
Rate Regulated Activities) accounting policy for its policy for such balances. Hence Company has
opted to continue with its previous GAAP accounting policy for such balances.
1.10 Inventory
Up to 30.06.2017 fast moving stores and spares are valued at standard rates, determined by the
company, in respect of items for which standard rates are fixed. Other items are valued at actual
price. The difference between actual cost and standard rate is debited or credited to Material cost
variance as the case may be. The difference between actual cost and standard rate is debited or
181
credited to Material cost variance debit balance if any in the account is charged to profit and loss
account. From 01.07.2017 onwards, the company dispensed the policy of standard rate method and
adopted the policy of FIFO (First in First Out) method on implementation of material management
software in the company.
1.11 Fair Valuation
The Company measures financial instruments, such as, long term loans at fair value at each balance
sheet date. Fair value is the price that would be received by selling an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair
value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:
1. In the principal market for the asset or liability, or
2. In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest. A fair value measurement of a non-financial asset considers a market
participant’s ability to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best
use. The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole
1. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
2. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable.
value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the Company determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
The company management determines the policies and procedures for recurring and non-
recurring fair value measurement. Involvement of external valuers is decided upon annually by
company management. The management decodes after discussion with external valuers, about
valuation technique and inputs to use for each case. At each reporting date, the Company’s
management analyses the movements in the values of assets and liabilities which are required
to be re-measured or re-assessed as per the Company’s accounting policies. For this analysis, the
Company verifies the major inputs applied in the latest valuation by agreeing the information in the
182
valuation computation to contracts and other relevant documents. The Company, in conjunction
with the Company’s external valuers, also compares the change in the fair value of each asset and
liability with relevant external sources to determine whether the change is reasonable. For the
purpose of fair value disclosures, the Company has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given
in the relevant notes.
l Quantitative disclosures of fair value measurement hierarchy
l Investment properties
l Financial instruments
1.12 Government Grant
Grants and subsidies from the government are recognised when there is reasonable assurance
that (i) the Company will comply with the conditions attached to them, and (ii) the grant / subsidy
will be received. When the grant or subsidy relates to revenue, it is recognised as income on a
systematic basis in the statement of profit and loss over the periods necessary to match them with
the related costs, which they are intended to compensate. Where the grant relates to an asset, it is
recognised as deferred income and released to income in equal amounts over the expected useful
life of the related asset.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded
at fair value amounts and released to profit or loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset i.e. by equal annual instalments. When loans
or similar assistance are provided by governments or related institutions, with an interest rate
below the current applicable market rate, the effect of this favourable interest is regarded as a
government grant. The loan or assistance is initially recognised and measured at fair value and the
government grant is measured as the difference between the initial carrying value of the loan and
the proceeds received. The loan is subsequently measured as per the accounting policy applicable
to financial liabilities.
1.13 Provisioning of Debtors
Revenue is recognised only when it is probable that the economic benefits associated with the
transaction will flow to the entity. In some cases, this may not be probable until the consideration
is received or until an uncertainty is removed. When an uncertainty arises about the collectability
of an amount already included in revenue, the uncollectible amount or the amount in respect of
which recovery has ceased to be probable is recognised as an expense in profit and loss account.
Such amount shall be reduced from the gross arraying amount of a financial asset when no
reasonable expectations of recovering a financial asset in its entirety or a portion thereof.
Total provision for bad and doubtful debts amounting to Rs.789.31 crores were made up to 2008-09
based on the age wise analysis of debtors at the rates mentioned below. As adequate provision is
already there, no further provision for bad and doubtful debts is made during the period.
183
Age of debtors Provisioning rate (%)

More than 5 years 75
Between 3 to 5 years 40
Between 6 months to 1 year 5
Less than 6 months 0
1.14 Retirement and Other Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed
or included in the carrying amount of an asset if another standard permits such inclusion as the
related service is provided. A liability is recognised for the amount expected to be paid under short-
term performance related cash bonus if the Company has a present legal or constructive obligation
to pay this amount because of past service provided by the employee and the obligation can be
estimated reliably. The KSEB Limited Employees Welfare Fund maintains the short-term welfare
fund and is an autonomous institution registered under Travancore Cochin Literary Scientific
and Charitable Societies Registration Act 1955 under Registration No. T 925 dated 16.10.1996. KSEB
Limited is contributing Rs.30 /- per employee per month to the KSEB Limited employee welfare
fund.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Retirement benefits in the form of gratuity is defined benefit obligations and is provided for based
on an actuarial valuation, using projected unit credit method as at each balance sheet date. The
present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation. The net interest cost
is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee benefit expense in the statement
of profit and loss or included in the carrying amount of an asset if another standard permits such
inclusion. Re-measurement gains and losses arising from experience adjustments and changes
in actuarial assumptions are recognised in the period in which they occur, directly in Other
Comprehensive Income. They are included in retained earnings in the Statement of Changes in
Equity and in the Balance Sheet.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on the net defined benefit liability), are
recognised immediately in the balance sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Re-measurements are not reclassified to
statement of profit and loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
National Pension Scheme (NPS) was implemented in KSEB Limited vide B.O (FB) No.843/2013
184
(PRC/335/2013) dated 09.04.2013. All employees appointed on or after 01.04.2013 come under the
coverage of NPS. The NPS will work on defined contribution basis and will have two tiers Viz.,
Tier I and Tier II. Contribution to Tier I will be mandatory for all employees appointed on or after
01.04.2013 whereas the Tier II will be optional and at the discretion of Board employees. In Tier I,
the Board Employees shall make a contribution of 10% of (Basic pay + DA) from the salary every
month. The company is also making equal matching contribution. The company is not making
any contribution towards Tier II.
The employees who are recruited on or after 1st April 2013 are included in the new national pension
scheme and do not come under the regular pension scheme. The company has no further
obligation beyond the monthly contributions.
Vide G.O (P) No.14/2015/PD dated 27.04.2015 Government of Kerala notified that General provident
fund scheme existed in the KSE Board is applicable to the KSEB Ltd also. This scheme is applicable
for all employee of KSEB Ltd. Minimum employee contribution to the scheme is fixed as 6% of
the basic salary. The contribution made by the employees for general Provident Fund is credited
to General Provident Fund Account There is no contribution by the company to this scheme.
Company is providing interest to the deposit in this scheme at the rate applicable to the provident
fund scheme of the Kerala Government Employees.
As per section 6(8) & 6(9) of the Kerala State Electricity Second Transfer Scheme a Master Trust was
registered on 12/02/2015. This Trust was formed to disburse the pension of pensioners of erstwhile
KSE Board. As per the transfer scheme the Trust was operationalized and the pension has been
disbursed to the pensioners from the Master Trust. The Master Trust made operational with effect
from 01.04.2017 and the bonds were issued on that date.
1.15 Revenue Recognition
Revenue is recognised when the significant risks and rewards of ownership have been transferred to
the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably,
there is no continuous management involvement and the amount of revenue can be measured
reliably. Revenue from the sale of power is measured at the fair value of the consideration received
or receivable.
Revenue from sale of power within the State is recognized on accrual basis at the tariff as notified by
the Kerala State Regulatory Commission from time to time. Revenue from Interstate sale of power
is recognized on accrual basis. Customers are billed on a periodic and regular basis. As at each
reporting date, revenue from sale of power includes an accrual for sales delivered to customers but
not yet billed (unbilled revenue). Recovery/ refund towards foreign currency variation in respect of
foreign currency loans and recovery towards Income Tax are accounted for on year to year basis.
Interest/Surcharge recoverable from customers, liquidated damages /interest on advances to
contractors and Income from Investment in other Companies is recognised on receipt basis since
management expects that measurability and collectability of such items are uncertain and cannot
be estimated.
1.16 Taxes on income
Tax expense comprises current and deferred tax. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in
185
India. The tax rates and tax Laws used to compute the amounts are those that are enacted, at the
reporting date. Deferred tax reflects the effect of temporary timing differences between the assets
and liabilities recognized for financial reporting purposes and the amount that are recognized
for current tax purposes. As a matter of prudence deferred tax assets are recognized and carried
forward only to the extent, there is a reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
1.17 Impairment of asset
The Company assesses at each balance sheet date whether there is any indication that an asset
may be impaired. If any such indication exists, the Company estimates the recoverable amount of
the asset. If such recoverable amount of the asset or recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced
to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the
Statement of Profit and Loss.
1.18 Segment Reporting
In accordance with Ind AS 108, the operating segments used to present segment information are
identified based on policy formulated from internal reports used by the Company’s Management
to allocate resources to 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 Ind
AS 108. The indicators used for internal reporting purposes may evolve performance assessment
measures put in place.
Electricity generation, transmission and distribution is the principal business activity of the
Company. Other operations do not form a reportable segment as per the Ind AS -108 - ‘Operating
Segments’. Segment revenue, segment result, segment assets and segment liabilities include
the respective amount identified to each of the segments on reasonable basis from the internal
reporting system. The Company is having a single geographical segment as all its Power Stations
and Transmission/Distribution channels are located within the state.
1.19 Secured and Unsecured Loans
All non-current secured loans are subject to fair valuation under Ind AS 109: Financial Instruments.
For fair valuation, market rate is taken from the rate notified for the appropriate class of the
company based on the purpose of the loan and subject to the credit rating given to Kerala State
Electricity Board Limited by the external credit rating agency (CRISIL). Such notified interest rate
is taken and discounted to arrive at the present value of future obligations and compared with the
carrying value of the loan to identify the effect of time value of money and has been appropriately
dealt through Fair Value Through Profit and Loss Account.
However, if the actual rate of interest charged by the lending institutions is less than the notified
market rate, such benefit of concessional rate of interest is computed and recognized as a grant as
defined under Ind AS 20 Government Grants and amortized in proportion to the expense incurred
towards the loan by way of giving effect through Fair Value Through Profit and Loss Account.
1.20 Transactions Foreign currency
Transactions in foreign currency are initially recorded at the functional currency the date the
186
transaction first qualifies for recognition. At each Balance Sheet date, monetary items denominated
in foreign currency are translated at the functional currency exchange rates prevailing on that
date. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Company has not entered into
transactions in foreign currency during the financial year 2017-18 or in the reported comparative
periods.
1.21 Provisions and Contingent Liabilities
In accordance with Ind AS 37: Provisions, Contingent Liabilities and Contingent Assets, a provision
is required to be recognised to settle a future obligation, both legal and constructive, by way of an
economic outflow, resulting out of a past event and which can be reliably estimated. The amount
of provision is recognised as the best estimate of present value of any obligation that need to be
settled. The provision is discounted if the effect of time value of money for the provision is material
and shall be recognised as a finance cost in profit and loss account.
Contingent liabilities, on the other hand is not recognised, but disclosed adequately as parts of
the financial statement. A contingent liability is disclosed unless the possibility of an outflow
of resources embodying economic benefit is remote. A contingent liability is disclosed unless
the possibility of an outflow of resources embodying economic benefits is remote. Contingent
liabilities are disclosed based on judgment of the management/independent experts with careful
understanding of the circumstance of each case.
These are reviewed at each balance sheet date and are adjusted to reflect the current management
estimate.
1.22 Earnings Per Share
Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity
shareholders of the Company by the weighted average number of equity shares outstanding
during the financial year. Diluted earnings per equity share is computed by dividing the net profit
or loss attributable to equity shareholders of the Company by the weighted average number of
equity shares considered for deriving basic earnings per equity share and the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares. Basic and diluted earnings per equity share are also computed using the earnings
amounts excluding the movements in regulatory deferral account balances.
1.23 Micro, Small and Medium Enterprises
Disclosure, if any, relating to amounts unpaid as on date of balance sheet together with interest
paid/ payable as required under the Micro, Small and Medium Enterprises Development Act 2006
which came into effect from 2nd October 2006 is being provided only on receipt of information
from its suppliers regarding their status under the Act.
1.24 Statement of Cash Flows
Cash flow statement is prepared in accordance with the indirect method prescribed in Indian
Accounting Standard (IND AS) 7 “Statement of Cash Flows”.
187
Kerala State Electricity Board Limited
188
Note 2 : Property, Plant and Equipment
Particulars (` In Lakhs)
Plant & Machinery Others
Land & Buildings Other Plant Hydraulic Lines, Furnit- Veh- Office Seig-
Land Civil & Works Cable & ure & icles Equip- norage Total
Rights Works Machinery Network Fixtures ments Value
Cost/Deemed Cost
At 1 - April - 2016 1,71,218.08 67,990.96 51,474.50 15,99,101.20 1,17,102.95 7,40,843.82 3,200.37 2,079.63 9,909.48 1.36 27,62,922.36
Additions 6,126.96 10,746.92 7,766.80 35,006.82 15,972.71 68,902.03 830.35 143.32 3,096.07 0.45 1,48,592.43
Deductions - - - - - - - - - - -
Other Adjustments 1,037.51 -47.12 -3.04 23.30 60.16 159.83 - - - - 1,230.63
At 31 - March - 2017 1,77,345.04 78,737.88 59,241.31 16,34,108.02 1,33,075.67 8,09,745.85 4,030.72 2,222.95 13,005.55 1.81 29,11,514.79
Additions 1,046.74 4,788.66 3,502.16 41,952.70 4,855.11 80,836.59 349.28 278.02 1,447.75 - 1,39,057.00
Deductions -
Other Adjustments 12.56 7,696.73 226.71 30,434.63 731.38 506.88 156.22 42.58 11.03 39,818.72
At 31 - March - 2018 1,78,379.21 75,829.81 62,516.76 16,45,626.09 1,37,199.40 8,90,075.56 4,223.78 2,458.38 14,442.28 1.81 30,10,753.07
Accumulated Depreciation
& Impairment of Asset -
At 1 - April - 2016 - 28,393.63 13,901.68 3,01,067.42 47,609.49 3,70,773.12 1,691.09 1,638.43 5,815.66 - 7,70,890.52
Depreciations Expenses - 2,211.57 1,838.01 23,606.94 6,342.54 36,367.24 204.03 97.87 1,219.71 - 71,887.92
Deductions - - - - - - - - - - -
Other Adjustments - - - - - - - - - - -
At 31 - March - 2017 - 30,605.20 15,739.69 3,24,674.36 53,952.03 4,07,140.36 1,895.12 1,736.30 7,035.38 - 8,42,778.44
Depreciations Expenses 2,339.06 2,142.80 23,661.25 7,007.75 43,440.04 234.69 131.05 1,413.85 - 80,370.49
Deductions - -
Other Adjustments 1,622.34 1,984.86 10,484.89 5,722.93 29,590.14 59.01 -25.20 459.56 - 49,898.53
At 31 - March - 2018 34,566.60 19,867.35 3,58,820.51 66,682.71 4,80,170.54 2,188.82 1,842.15 8,908.79 - 9,73,047.46
Carrying Value - - - - - - - - - - -
At 31 - March - 2018 1,78,379.21 41,263.21 42,649.41 12,86,805.58 70,516.69 4,09,905.02 2,034.96 616.23 5,533.49 1.81 20,37,705.61
At 31 - March - 2017 1,77,345.04 48,132.68 43,501.62 13,09,433.66 79,123.63 4,02,605.49 2,135.60 486.64 5,970.17 1.81 20,68,736.35

Note 3 : Capital Work in Progress
As at 31.03.2018 As at 31.03.2017
Capital Work in Progress 2,04,645.92 1,54,832.78
Revenue Expenses Pending

Allocation over capital works 40,243.99 23,496.41
Total 2,44,889.91 1,78,329.19
Note 4 : Investment (Non Current )
Particulars
As at 31.03.2018 As at 31.03.2017
Face No. of Shares Face Value "No. of Amount

Value (In lakhs) Amount Shares
(` In lakhs) (In lakhs) (Ìn lakhs)

INVESTMENT IN EQUITY
INSTRUMENTS
Unquoted Investments
Fully Paid Up - Kerala

Power Finance
Corporation Ltd. 10.00 95.00 950.00 10.00 95.00 950.00
Baitarani West Coal

Company Ltd. 1,000.00 1.00 1,000.00 1,000.00 1.00 1,000.00
Investment in Renewable
Power Corporation of
Kerala 1,000.00 0.05 50.00 1,000.00 0.05 50.00
Other Investments 0.01 - - 0.01
Total 2,000.01 2,000.01
189

Note 5 : Non Current Assets - Financial Assets - Loans
Particulars (` In lakhs)
As at 31.03.2018 As at 31.03.2017
Loans Including Interest Accrued
Loans to related parties
Secured Loans - -
Unsecured Loans Considered Good - -
Doubtful Loans - -
Loans to Employees - -
Secured Loans - -
Doubtful Loans - -
Other Loans - -
Secured Loans - -
Advance given to licensee - -
Advance given to others 8,295.03 8,389.85
Doubtful Loans - -
Total 8,295.03 8,389.85
Loans Due from Directors and Officers of the Company
Loans to Directors - -
Loans to Officers - -
Total - -
Loans to Related Parties Include
Subsidiaries - -
Associates - -
Joint Ventures - -
Structured Entities - -
Total
Grand Total 8,295.03 8,389.85
Note 6 : Non Current Assets - Other Financial Assets
As at 31.03.2018 As at 31.03.2017
BANK DEPOSITS WITH MORE THAN
12 MONTHS MATURITY
Interest Accrued
On Loan to Government & Others - -
On Bank Deposits with more than 12 months - -
Security Deposits 6,331.70 55,070.04
Total 6,331.70 55,070.04
190

Note 7 : Other Non Current Assets
As at 31.03.2018 As at 31.03.2017
OTHER NON CURRENT ASSETS
Capital Advances
Secured Advances
Unsecured Advances Considered Good
Covered by Bank Guarantee
Others 10,896.01 13,660.90
Advances Considered Doubtful
ADVANCES OTHER THAN CAPITAL ADVANCES
Advances to Related Parties
Advances to Employees
Advance to Contractors & Suppliers
Other Advances
Others
Deferred Cost on Employee Loans
Secured considered good
Unsecured considered good
Deferred Cost Account of Feasibility/Survey 10,557.28 10,238.65
Receivable from Government 4,09,607.20 4,69,389.73
Total 4,31,060.49 4,93,289.29
CAPITAL ADVANCE INCLUDES ADVANCE GIVEN TO COMPANIES IN WHICH ONE OR MORE OF
THE DIRECTORS ARE INTERESTED
Note 8 : Inventories
Particulars Ind As (` In lakhs)

As at 31.03.2018 As at 31.03.2017
Fuel Stocks -
Heavy Duty Oil 623.20 749.85
Stock of Materials at Construction Stores 17,992.53 5,610.49
Stock of Materials at other stores 1,046.73 5,024.79
Material at Site (Cap) -
Material at Site (O & M) 26,407.20 18,365.36
Other Materials Account 2,550.43 1,295.33
(Less) Provision for Shortages and Obsolescence 29.72 26.92
Total 48,590.36 31,018.91
191

Note 9 Current Financial Assets : Trade Receivables
As at 31.03.2018 As at 31.03.2017
Trade Receivables
Secured, considered good
Sundry Debtors for Sale of Power 2,80,260.32 2,42,240.34
Sundry Debtors for Inter State Sale of Power 293.36
Sundry Debtors for Electricity Duty 16,499.09 14,991.37
Sundry Debtors (Miscellaneous) 12,097.51 13,745.31
Doubtful. -
(Less) Allowance for Bad and Doubtful Debts 78,930.73 78,930.73
Total 2,29,926.20 1,92,339.65
Note 10 : Current Financial Assets - Cash & Cash Equivalents
As at 31.03.2018 As at 31.03.2017
Balances with Banks (of the nature of cash
and cash equivalents)
Balance with Bank/Treasury 2,222.84 2,209.57
Disbursement Bank Accounts 18,928.70 17,878.10
Drawing Account with Treasury 2,293.36 238.44
Current Accounts
Deposits with original maturity upto three months 2,783.14 2,819.63
Cheques, drafts on hand
Cash on hand
Cash In Hand 1,354.89 433.63
Cash Imprest with Staff 5.84 23.86
Others -
Total 27,588.78 23,603.23
192

Note 11: Financial Assets - Current - Bank Balances Other Than Cash and Cash Equivalents
Financial Assets - Current - Bank Balances Other Than Cash and Cash Equivalents
As at 31.03.2018 As at 31.03.2017
Balances with Banks includes
Deposits with original maturity more than
3 months but within 1 year - -
Earmarked Balance with Banks - Unpaid Dividend - -
Guarantees & Other commitments 7,007.15 6,827.98
Total 7,007.15 6,827.98
Deatails of Bank Deposits

Year 2017-18
Name of the bank Amount Date of
(` In lakhs) Maturity
1,782.39 20/05/18
744.49 24-04-2018
872.00 01-01-2019
10.40 15-02-2019
33.13 17-12-2018
State bank of India 67.30 31-03-2019
95.00 31-03-2019
80.50 06-08-2018
205.30 06-02-2018
313.35 06-01-2018
20.90 04-06-2018
184.53 23-05-2018
371.89 02-08-2019
12.35 22-05-2018
2.49 02-02-2019
362.93 30-01-19
0.12 17-06-2018
Canara Bank 37.63 10-05-2018
91.26 10-05-2018
28.90 10-07-2018
336.03 25-12-2018
4.60 31-05-2018
193
9.95 23-02-2019
978.17 16-12-2018
326.06 16-12-2018
4.43 05-07-2018
12.28 30-07-2018
Vijaya Bank 8.81 04-10-2018
8.18 24-05-2018
0.78 21-06-2018
1.00 24-05-2018
Punjab & Sind Bank 2,500.00 01-09-2018
Kerala Gramin Bank Peroorkada 76.20 25/05/2020
Kerala Gramin Bank Kollam Branch 206.94 31-03-2018

Note 12 : Other Current Assets
As at 31.03.2018 As at 31.03.2017
Security Deposits -
Advances to Related Parties -
Advances to Employees 940.90 813.92
Advance to Contractors & Suppliers 930.70 750.82
Other Advances 1,838.21 1,737.61
Advance Income Tax/Deductions at source
Others
Secured considered good -
Unsecured considered good -
Rent Receivable 6.54 7.65
Income Accrued But Not Due 2,083.40 2,166.52
Other Recoverable 2,564.25 1,033.56
Inter Unit Balance 4,285.64 1,536.57
Total 12,649.65 8,046.66
194
Note 13 : Equity Share Capital
Particulars As at 31 - March 2018 As at 31-03-2017

No. of Shares Amount No. of Shares Amount
( In Lakhs) ( ` In lakhs) ( In Lakhs) ( ` In lakhs)
Equity Share Capital
Authorised (face value `10/-) 50,000.00 5,00,000.00 50,000.00 5,00,000.00
Issued Subscribed and Paid Up (face value `10/-) 34,990.50 3,49,905.00 34,990.50 3,49,905.00
Reconciliation of No. Shares and Share capital outstanding
Opening number of shares outstanding 34,990.50 3,49,905.00 34,990.50 3,49,905.00
Add: Number of shares issued or subscribed during the year - - - -
(Less) Reduction in number of shares on buyback of shares - - - -
Closing Number of shares outstanding 34,990.50 3,49,905.00 34,990.50 3,49,905.00
Total 34,990.50 3,49,905.00 34,990.50 3,49,905.00
The Company has issued only one kind of equity shares with voting rights proportionate to the share holding of the
shareholders. These voting rights are exercisable at meeting of shareholders. The holders of the equity shares are also entitled
to receive dividend as declared from time to time for them.

Shares in the company held by each shareholder holding more than 5 percent specifying the number of shares held

195
196
Particulars As at 31 - March - 2018 As at 31.03.2017
% Amount % Amount
( ` In lakhs) ( ` In lakhs)
His Excellency the Honourable Governor of Kerala
100 349905 100 349905
"Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the
terms and
amounts : NIL
In preceding five financial years immediately preceding 31.03.2018, Company has not allotted any equity share as fully paid up
pursuant to contract(s) without payment being received in cash/ not allotted any equity share as fully paid up by way of bonus
share(s).
Terms of any securities convertible into equity shares issued along with the earliest date of conversion in descending order
starting from the farthest such date:- NIL
Calls unpaid (showing aggregate value of calls unpaid by directors and officers) : NIL
Forfeited shares (amount originally paid up) :NIL

Note 14 : Other Equity
OTHER EQUITY
Statement of Changes in Equity (` In lakhs)

Particulars As at 31.03.2018 As at 31.03.2017
Capital Reserve 0 -
Security Premium Account 0 -
Bonds/Debenture Redemption Reserve 0 -
General Reserve 0 -
Retained Earnings -9,77,660.67 -7,40,788.01
Other Reserves 0 -

General reserve
As per Last Balance Sheet - -
Add: Additions and Transfers - -
(Less) : Utilisation - -
As at Balance Sheet Date - -
- -
Retained Earning Surplus
As per Last Balance Sheet -3,67,872.89 -2,18,410.04
Add: Profit During the Year -78,409.46 -1,49,462.85
Add: Additions and Transfers -50,830.34 -
(Less) : Transfer to Reserves - -
(Less) : Dividend and Corporate Dividend Tax - -
As at Balance Sheet Date -4,97,112.69 -3,67,872.89
Other Reserves - Fair Value through Other
Comprehensive Income
As per Last Balance Sheet -3,72,915.13 -80.75
Add: Fair value gain/(loss) During the Year -1,07,632.86 -3,72,834.37
Total -9,77,660.67 -7,40,788.01
197

Note 15 : Non Current Financial Liabilities - Borrowings
(` In lakhs)
Bonds or Debentures
Secured Bonds or Debentures 11,23,929.00 -
Unsecured Bonds or Debentures - -
Term Loans*
From Banks
Secured Loans - -
Unsecured Loans - -
From Others
Secured Loans 4,69,525.49 4,26,656.76
Unsecured Loans - -
Loans from related parties
Secured Loans - -
Total 15,93,454.49 4,26,656.76
*Details of terms of repayment and rate of interest

Loan Name (` In lakhs)

2017-18 2016-17
Loan from L I C - 200.00
Loan from REC on Various Schemes -47.06 1,610.82
Loan from REC R-APDRP PART-B 51,393.79 38,625.60
Loan from R E C - RGGVY 1,396.26 1,427.40
Loan from PFC-Pallivasal Generation Project 17,674.96 18,552.50
Loan from PFC R-APDRP 32,600.13 29,086.13
Loan from SOUTH INDIAN BANK 8,099.89 8,512.50
Loan from PFC GEL Kakkayam 1,920.32 1,225.21
Loan from REC-TRAN.Kattakkada -Pothencode Scheme 9,612.43 9,528.53
Loan from REC-TRAN-Group I 5,951.65 5,530.65
Loan from REC-Distriburion - 23 Circle Scheme 59,990.47 49,408.15
Loan from REC- Distriburion - Meter Scheme 3,903.09 4,997.90
198
Loan from REC-Thottiyar Gene. Scheme 5,373.42 5,373.42

Special Loan Assistance from REC 1,30,000.00 1,25,000.00
Loan from REC for the DDG Scheme 13.42 13.42
Special Loan Assistance from PFC 1,32,801.74 1,25,000.00
Loan from PFC GEL Perumthenaruvi 3,513.87 1,659.92
Dam Rehabilitation and Improvement Project (DRIP) 4,920.73 859.59
Loan from RIDF of NABARD 406.40 45.00
Total 4,69,525.49 4,26,656.76
199

Note 16 : Non Current-Other Financial liabilities
As at 31.03.2018 As at 31.03.2017
Security deposit from consumers 2,83,696.07 2,59,751.30
Security deposit from consumers other than cash* 212.83 18,748.52
Interest payable on consumers deposit 33,136.12 33,097.16
Total 3,17,045.02 3,11,596.98
* Previous year figure includes BG of 18538.08 lakh furnished KSEB L by consumers.
Note 17 : Non Current Provisions

As at 31.03.2018 As at 31.03.2017
Provision for Employee Benefits - -
Contributory Provident Fund - -
As at Balance Sheet Date 3.79 3.79
General provident Fund - -
As at Balance Sheet Date 2,20,733.00 2,02,992.84
Staff Pension Fund - -
Others - -
Provision for Interest on bonds adjustable
against Electricity duty - -
Provision for Pay revision - -
200

Provision for pension revision - -
Total 9,76,539.72 20,28,767.16

Note 18 : Other Non Current Liabilities
Particulars As per Ind AS (` In lakhs)
As at 31.03.2018 As at 31.03.2017
Decommissioning Liability 2,056.07 1,837.88
Interest payable on consumers deposit - -
Grants in Aid from Government - Deferred Income
Add: Grants Received during the year - -
(Less) : Amortisation/Grants Paid Back - -
As at Balance Sheet Date 74,871 51,808.51
Grants to be Amortised - Concessional
Loan from Government
Add: Grants recognised during the year - -
Add/Less : Fair Value Changes - -
As at Balance Sheet Date 7,097.43 4,987.83
Consumer Contribution
Add: Received during the year - -
(Less) : Amortisation - -
As at Balance Sheet Date 1,08,251 84,288
- -
Total 1,92,276.19 1,42,922.30
201

Note 19 : Current Financial Liabilities - Borrowings
As at 31.03.2018 As at 31.03.2017
Loans repayable on demand
From Banks
Secured Loans -
Current maturities of long term debt 26,318.70 21,380.19
Unsecured Loans 2,47,440.28 2,55,366.11
From Others
Secured Loans
Unsecured Loans
Secured Loans
Unsecured Loans
Total 2,73,758.98 2,76,746.30
Note 20 : Current Financial Liabilities - Trade Payables

Particulars (`. In lakhs)
As at 31.03.2018 As at 31.03.2017
Trade Payable 96,836.56 81,846.53
202

Note 21 : Current - Other Financial Liabilities
As at 31.03.2018 As at 31.03.2017
Current Maturities of Long-Term Debt
Current Maturities of Finance Lease Obligations
Interest Accrued
Unpaid Dividends
Others
Fuel related liabilities 0.00 0.00
Liability for capital supply/works 3,608.30 4,505.05
Liability for O&M supply/works 6,573.86 8,149.07
Staff related liabilities and provisions 14,128.56 14,674.02
Deposit and Retentions from Suppliers/Contractors 41954.00 71669.87
Electricity Duties and Other levies payable to Government 0.00 -
Liability for Expenses 3,990.73 2,466.41
Amount owing to Licensees 16.03 16.03
Accrued/Unclaimed amount relating to borrowings 18,905.97 15,557.30
Other liability(Lease amount of RCKPL) 8.07
Other Liabilities & Provisions 15,011.23 10,340.56
Amount payable to Master Trust 51,874.38 -
Deposit for Electrification, Service connection etc 76,918.46 62,619.83
Total 2,32,989.60 1,89,998.14
Note 22 : Current Provisions
Previous year figure included BG of ` 30204.10 lakh furnished to KSEB L by suppliers/
contracters/ consumers
Particulars (`. In lakhs)
As at 31.03.2018 As at 31.03.2017
Provision for Employee Benefits
Dearness Allowance
As per Last Balance Sheet -
Add: Additions and Transfers 900.00
(Less) : Utilisation
As at Balance Sheet Date 900.00 -
Dearness Relief to Pensioners
As per Last Balance Sheet
Add: Additions and Transfers
Income Tax
As at Balance Sheet Date
Total 900.00 -
203

Note 23 : Revenue from operations
2017-18 2016-17
Interstate -
Domestic 4,31,698.73 3,95,333.50
Commercial 2,87,669.32 2,70,904.46
Public Lighting 16,984.80 15,663.55
Irrigation & Dewatering 6,328.62 10,201.32
Industrial L T 80,919.44 75,471.70
Railway Traction 16,001.27 13,051.75
Bulk Supply 38,458.80 36,325.43
Miscellaneous 9.42 90.85
H. T. 2,60,181.85 2,36,138.46
E. H. T. 62,355.01 49,269.79
NVVN/ Others 5,118.27 1,226.61
Reactive Energy Charges 5,543.03 544.01
Electricity Duty Recovery 80,904.99 76,223.03
Other State Levies Recovery 1,474.65 1,398.26
Meter Rent/Service Line Rental 9,317.09 9,203.58
Wheeling Charges Recoveries 10.21 39.63
Misce. Charges from Consumers 11,221.45 8,417.87
GROSS SALE OF POWER 13,14,196.95 11,99,503.81
Less: Electricity Duty Payable (Contra ) 80,904.99 76,223.00
Less: Other State Levies Payable (Contra ) 1,474.65 1,398.00
Total 12,31,817.31 11,21,882.81
Note 24. a) Other Operating Income
2017-18 2016-17
Rebate Received 13,349.87 14,246.34
Interest Advances to Suppliers/Contractors 1,416.00 85.32
Income from sale of Scrap/Tender form etc 6,408.93 7,884.77
Miscellaneous Receipts 12,931.60 17,095.54
Total 34,106.40 39,311.97
204
Note 24. b) Other Income
2017-18 2016-17
Interest Income
Staff Loans and Advances 16.40 22.44
Income From Loans &others 58.14 23.94
Banks 546.59 719.34
Total 621.12 765.72
Total (a+b) 34,727.52 40,077.69
Note 25 : Purchase of Power
2017-18 2016-17
Power purchased from Central Generating Stations 2,75,225.59 2,57,310.09
Power purchased from Others 4,19,492.44 4,28,978.60
Power purchased from Wind Generating Stations 3,525.90 2,965.88
Wheeling Charges (Less - UI Charges Received) 54,252.35 48,535.52
Other charges on Sale through Power Exchange 106.40 1,542.33
Total 7,52,602.69 7,39,332.42
Note 26: Generation of Power
2017-18 2016-17
FUEL CONSUMPTION
Oil 97.46 2,066.54
HSD Oil 27.78 133.47
Lub Oil 7.77 56.66
LUBRICANTS & CONSUMABLE STORES 74.21 87.38
STATION SUPPLIES 0.61 0.58
Total 207.84 2,344.63
Note 27: Repairs & Maintenance
2017-18 2016-17
Plant and Machinery 4,833.94 5,112.41
Buildings 1,029.54 971.17
Civil Works 1,328.61 1,141.72
Hydraulic Works 308.78 319.73
Lines, Cable Network etc. 19,363.69 18,433.99
Vehicles 266.69 233.35
Furniture and Fixtures 42.84 56.49
Office Equipments 560.79 244.00
Total 27,734.87 26,512.85
205

Note 28 : Employee Benefits
2017-18 2016-17
Salaries 2,31,628.42 1,75,552.13
Over Time/Holiday Wages 33.92 41.54
Dearness Allowance 45,235.06 37,810.12
Other Allowances 7,764.49 7,851.87
Bonus 983.27 910.28
Medical Expenses Reimbursement 1,083.28 1,034.51
Leave Travel Assistance 21.21 12.79
Earned Leave Encashment 15,310.02 14,567.08
Payment under Workmen's Compensation Act 13.78 50.04
Leave Salary & Pension Contribution Paid by the
Company to the Employees and Other Departments 1,327.81 1,378.17
Funeral Allowance 5.05 5.40
Staff Welfare Expenses 434.25 433.48
Terminal Benefits - 1,20,721.63
(Less) Expenses Capitalised 40,034.41 24,291.84
Total 2,63,806.15 3,36,077.22
Note 29 : Finance Cost
2017-18 2016-17
Finance Charges on Financial Liabilities Measured
at Amortised Cost
INTEREST
Interest on State Govt. Loans
Interest on Bonds
Interest on other loans/deferred credits 61098.20 43,579.39
Interest to Consumers 17,533.21 17,726.70
Interest on Borrowings for Working Capital 9500.24 24,894.08
Interest on Fair Valuation of Concessional Loan 2,227.76
OTHER INTEREST AND FINANCE CHARGES
Rebate allowed for prompt payment to NVVN
Discount to Consumers for timely payment of bills 164.36 147.55
Interest To Suppliers/Contractors 506.01
Interest on General Provident Fund 15,626.00 14,345.16
Cost of Raising Finance 0.20 0.06
Other Charges 12.51 1,761.58
Interest on bond isuued to master Trust 81,440.00
Less: Other Borrowing Costs 6,639.47 6,462.66
Total 1,81,469.02 95,991.86
206

Note 30 : Depreciation, Amortisation and Impairment Expenses
2017-18 2016-17
Depreciation - Buildings 2,331.10 2,211.57
Depreciation - Hydraulic Works 7,015.71 6,342.54
Depreciation - Other Civil Works 2,142.80 1,838.01
Depreciation - Plant & Machinery 23,661.25 23,606.94
Depreciation - Line Cable & Network 43,440.03 36,367.24
Depreciation - Vehicles 131.04 97.87
Depreciation - Furniture & Fixtures 234.69 204.03
Depreciation - Office Equipments 1,413.85 1,219.71
Total 80,370.49 71,887.92
Note 31 : Administrative Expenses
2017-18 2016-17
Rent 867.08 1,219.00
Rates and Taxes 177.05 180.77
Insurance 17.61 24.91
Telephone Charges, Postage, Telegram & Telex charges 530.72 405.55
Internet charges 18.20 12.90
Legal Charges 196.55 895.31
Audit Fees - Statutory audit 37.77 38.00
Audit Fees - others 1.81 111.00
Consultancy Charges 10.61 37.80
Technical Fees 211.78 66.46
Other Professional Charges 127.96 90.01
Notary fee and other exopenses relating to CGRF and ERC 366.00
Conveyance and Travel 6195.56 6,015.40
Expenses towards National Pension Scheme 6.80
Expenses in respect of ESCOT 16.74 0.93
Salary and other allowance of Appellet Authority 6.26 4.45
Online payment transation charges 0.03 106.81
Fees and Subscriptions 53.33 62.23
Freight 675.90 920.56
Books and Periodicals 6.25 5.99
Printing and Stationary 620.13 963.43
Data Processing Charges 5.46 9.79
Advertisements,Exhibition and Publicity 529.94 131.22
Electricity Charges 805.61 730.28
Water Charges 58.88 49.35
Entertainment 93.90 73.35
Ele. Duty u/s 3(i) of KED Act 12,010.94 11,527.45
Miscellaneous Expenses 551.84 301.11
Other Expenses 29,250.67 16,028.85
Less: Expenses capitalised 412.50 2,533.81
TOTAL 53038.86 37,479.10
207

Note 32 : Others
Sl. No. Particulars (` In lakhs)
2017-18 2016-17
1 Material Cost Variance -2,646.32 6,432.12
2 Research and Development Expenses 21.14 19.81
3 Cost Of Trading/Manufacturing Activity 5.72
4 Bad and Doubtful Debts Written off / Provided for 810.84 854.18
5 Miscellaneous Losses and Write Offs 276.33 1,555.09
6 Sundry Expenses 0.19 -
7 Loss/(compensation) on account of flood cyclone etc -52.92 2.02
TOTAL(A) -1,585.01 8,863.22
Prior Period Expenses or Losses
2017-18 2016-17
1 Other Excess Provision in Prior Periods 42.67 15.27
2 Other Income relating to Prior Periods 713.36 2,599.84
INCOME RELATING TO PREVIOUS YEARS(1) 756.03 2,615.11
4 Operating Expenses of Previous Years 309.06 12.09
5 Interest on Other Financial Charges in Previous Years 6.66 17.93
6 Other Charges 608.35 2,085.64
EXPENSE RELATING TO PREVIOUS YEARS(2) 924.06 2,115.66
NET PRIOR PERIOD CREDITS/(CHARGES) (1-2)(B) -168.03 499.45
TOTAL(A-B) -1,416.98 8,363.77
Note 33 : Changes in fair valuation and Other Adjustments
2017-18 2016-17
1 Income on account of Fair Valuation Changes 908.02 3,389.82
2 Clawback of Grant 11,950.63 3,176.60
Total 12,858.65 6,566.42
208
Note 34:Trifurcated Balance sheet and Profit and Loss Account
KERALA STATE ELECTRICITY BOARD LIMITED Trifurcated Balance sheet
BALANCE SHEET AS AT 31 ST MARCH 2018 (ìn Lakhs)
ìn Lakhs Generation Transmission Distribution TOTAL
Sl. Particulars Note As at 31.03.2018
No No
A ASSETS
Non Current Assets
Property Plant and Equipment 20,37,705.61 14,10,217.17 2,45,603.94 3,81,884.50 20,37,705.61
Capital Work in Progress 2,44,889.91 1,13,089.30 44,071.32 87,729.29 2,44,889.91
Financial Assets
Investments 2,000.01 856.81 399.33 743.87 2,000.01
Loans 8,295.03 962.07 1,259.06 6,073.90 8,295.03
Others 6,331.70 3,479.38 1,351.96 1,500.36 6,331.70

Other Non Current Assets 4,31,060.49 37,316.80 41,950.58 3,51,793.11 4,31,060.49

Current Assets
Inventories 48,590.36 5,459.91 4,174.94 38,955.51 48,590.36
Trade receivables 2,29,926.20 - - 2,29,926.20 2,29,926.20
Cash and cash equivalnts 27,588.78 2,503.34 2,558.65 22,526.79 27,588.78
Bank balances other than
Cash Equivalents 7,007.15 - - 7,007.15 7,007.15
Other current assets 12,649.65 8,255.27 7,296.26 (2,901.88) 12,649.65
TOTAL ASSETS 30,56,044.89 15,82,140.06 3,48,666.03 11,25,238.80 30,56,044.89

EQUITY&LIABILITIES
B Equity
Equity Share Capital 3,49,905.00 83,126.92 85,704.62 1,81,073.46 3,49,905.00
Other Equity (9,77,660.67) 51,640.16 7,969.94 (10,37,270.77) (9,77,660.67)

Liabilities - -
Non Current liabilities - -
Borrowings 15,93,454.49 12,30,145.66 92,189.86 2,71,118.97 15,93,454.49
209
(ìn Lakhs)
210
ìn Lakhs Generation Transmission Distribution TOTAL
Sl. Particulars Note As at 31.03.2018
No No
Other financial libailities 3,17,045.02 - - 3,17,045.02 3,17,045.02
Provisions 9,76,539.72 1,13,844.74 12,921.97 8,49,773.01 9,76,539.72
Other non current liabilities 1,92,276.19 8,031.36 19,261.08 1,64,983.76 1,92,276.20
Current Liabilities
Borrowings 2,73,758.98 64,895.41 77,465.13 1,31,398.44 2,73,758.98
Trade payables 96,836.56 - - 96,836.56 96,836.56
Other financial libailities 2,32,989.60 30,408.40 53,064.41 1,49,516.79 2,32,989.60
Provisions 900.00 47.41 89.02 763.57 900.00
Total Equity and Liabilities 30,56,044.89 15,82,140.06 3,48,666.03 11,25,238.80 30,56,044.89
Trifurcated Profit and Loss Account

REVENUE
I Revenue from operations 12,31,817.31 68061.82 1,00,382.72 12,31,817.31 14,00,261.85
II Other Income 34,727.52 2499.42 2,805.89 29,422.21 34,727.52
III Total Income(I+II) 12,66,544.83 70,561.24 1,03,188.61 12,61,239.52 14,34,989.37
IV Expenses
Purchase of power 7,52,602.69 - - 9,21,047.22 9,21,047.22
Generation of power 207.84 207.84 - 207.84
Repairs and Maintenance 27,734.87 2930.50 4,226.87 20,577.50 27,734.87
Employee benefit expenses 2,63,806.15 14028.97 29,731.27 2,20,045.91 2,63,806.15
Finance Cost 1,81,469.02 18451.82 22,327.99 1,40,689.21 1,81,469.02
Depreciation and Amortisation 80,370.49 18001.01 23,286.61 39,082.87 80,370.49
Other expenses
Administrative Expnses 53,038.86 2511.21 8,270.48 42,257.18 53,038.87
Others (1,416.98) (91.94) 383.80 (1,708.84) (1,416.98)
Change in fair valuation and
other adjustments (12,858.65) (862.26) (1,128.51) (10,867.87) (12,858.65)
Total Expenses 13,44,954.29 55,177.15 87,098.51 13,71,123.17 15,13,398.83
V Profit/(Loss) before exceptional
and extra ordinary items and
tax(III-IV+V) (78,409.46) 15,384.09 16,090.10 (1,09,883.65) (78,409.46)
VI Exceptional items
VII Profit/(Loss) before tax(V-VI) (78,409.46) 15,384.09 16,090.10 (1,09,883.65) (78,409.46)
VIII Tax Expenses
(i)Current Tax
(ii) Deferred Tax
IX Profit/(Loss) for the period from
continuing operations(VII-VIII) (78,409.46) 15,384.09 16,090.10 (1,09,883.65) (78,409.46)
X Profit/(loss) from discontinued
operations
XI Tax expense of discontinued
operations
XII Profit/(loss) from Discontinued
operations (after tax) (X-XI)
XIII Profit/(loss) for the period (IX+XII)
XIV Other Comprehensive Income (1,07,632.86) (5,686.65) (10,660.88) (91,285.33) (1,07,632.86)
A (i) Items that will not be
reclassified to profit or loss
(ii) Income tax relating to items
that will not be reclassified
to profit or loss
B (i) Items that will be
reclassified to profit or loss
(ii) Income tax relating to items
that will be reclassified to
profit or loss
XV Total Comprehensive Income
for the period (XIII+XIV)

(Comprising Profit (Loss) and
Other Comprehensive Income
211
for the period) (1,86,042.32) 9,697.44 5,429.22 (2,01,168.98) (1,86,042.32)
Note 35: NOTES TO ACCOUNTS

35.1. Opening Balance on revesting
Vide G.O(P) No.46/2013/PD dated 31 October 2013 published in Kerala Gazette dated 31st October
2013, the Government of Kerala revested all the Assets and liabilities of the erstwhile KSE Board in
the new company Kerala State Electricity Board limited. Then the Government of Kerala issued the
final transfer scheme vide G.O.(P) No.3/2015/PD dated 28.01.2015 by issuing a new opening Balance
Sheet for the company as on 01.11.2013.The statement of accounts for 2013-14 of the company has
been prepared based on the value of Assets & Liabilities notified by the Government of Kerala vide
notification dated 28.01.2015.
35.2. Contingent liabilities and capital commitments
[ ` in Lakhs]
Particulars 2017-18 2016-17
A. Contingent Liabilities not provided for in respect of:
1. Capital liabilities becoming due for re-payment/redemption 4,65,420.76 3,92,411.97
2. Disputed Income-tax Matters 35,832.26 35,832.26
3. Claims against Company pending Court Orders/
Government orders 40340.61 10,401.00
4. NTPC 1,979.74
5. KPTCL 3.98
B. Capital Commitments
1. Contracts placed but not executed 37357.18 28567.53
35.3. Secured and unsecured loans
The following table summarizes future cash flows.
Particulars Upto 1 Year 2-5 years Above 5 years Total
Secured Loan
March 31,2018 26318.7 476622.92 502941.62
March 31, 2017 20650.74 424209.38 444860.12
Unsecured Loan
March 31,2018 244992.74 244992.74
March 31, 2017 188750.00 188750.00
Total
March 31,2018 271364.7 476622.92 747934.36
March 31, 2017 209400.74 424209.38 633610.12
212
The list of loans taken and the purpose of loan is given as follows.
Sl. Name of the Purpose of loan Nature of security
No lender
1 PFC RAPDRP Part- A (Distribution Existing and future assets
scheme) created from the loans
2 PFC RAPDRP Part- B Existing and future assets
(Distribution scheme) created from the loans
3 REC Transmission scheme Future assets created
(Kattakada, Pothencode) from the loans
4 PFC Pallivasal Extension Scheme Immovable and movable
(Generation Scheme) properties present and future
assets created from the loans
5 REC Meter Scheme (Distribution) Future assets created from
the loans
6 REC R-APDRP Part-B Counterpart Funding Future assets created from the
(Distribution scheme) loans
7 REC 8 Nos. Transmission schemes Future moveable assets created
from the loans
8 REC Distribution Schemes Future assets created from the
loans
9 REC Thottiyar HEP(Generation scheme) Future assets created from the
loans
10 PFC GEL Kakkayam SHEP (Generation Scheme) Immovable and movable
properties present and
future created from the loans
11 South Indian BARAPOLE SHEP(Generation) Hypothecation of movable assets
Bank & lodgment of title deed of
landed properties
12 LIC Renovation of Sabarigiri Hydro Government Guarantee
Electric Project
13 REC-RGGVY Development of rural household Future assets created from the
loans
14 REC-Medium Purchase of power Hypothecation of assets of
Term loan Transmission circle
15 REC-Various System improvement schemes Future assets created from the
Schemes loans and Govt. Guarantee.
16 REC-Special General Purpose Future assets created from the
Loan loans
213
17 PFC-Special General Purpose Future assets created from the

Loan loans
Loans of `37520.86 lakh is not considered for revaluation as repayment liability is not confirmed.
35.4. Related Party Disclosures
List of related parties and nature of relationships where control exists.
Sl. No Name of the Related Party Nature of Relationship
1 Renewable Power Corporation of Kerala Ltd. Associate
2 Kerala State Power and Infrastructure Finance Corporation Associate
3 Baitarani West Coal Company Ltd. Joint Venture
Transactions between company and related entities through co-holder of third party entity during
the year and the status of outstanding balances as on the given dates. The period of restriction for
disposal of investment has also been given.
Particulars Year Period of Subsidiaries JCE Associate
Restriction for
disposal of
investment as
per related
agreements
Investment in equity 31.03.2018 Nil Nil Nil Nil
shares and 31.03.2017
preference shares
Impairment 31.03.2018 Nil Nil Nil Nil
allowance on 31.03.2017
Investments
List of Key Managerial Personnel as defined in 2(51) of Companies Act, 2013 and disclosure of
transaction entered with key managerial personnel.
[ ` in Lakhs]
No. Name Designation Gross Salary Others Total
1 N.S.Pillai IA&AS CMD 2.49 2.49
2 Dr. K. Ellangovan IAS CMD 25.94 0.75 26.69
3 N.S. Pillai IA & AS Director 23.71 0.16 23.87
4 Vijaya Kumari. P Director 19.83 0.18 20.01
5 Asokan. O Director 4.88 0.1 4.98
6 Venugopalan. N Director 20.05 0.18 20.23
7 Kumaran.P Director 13.2 0.19 13.39
8 Rajeev. S Director 18.3 23.4 41.7
214
35.5. Interest and finance charges/Employee cost capitalized

a. Interest and finance charges capitalized @ 9.28%.
b. The company was capitalising 5% of the employee costs during previous financial years as
incurred for capital additions. However the percentage of capitalisation in distribution SBU
is found on the lower side and hence the percentage of capitalisation of employee cost in
distribution SBU 0has increased to 14%.Accordingly an amount of ` 26241.75 lakh is capitalised
as employee cost in distribution SBU during the year. There is an impact of ` 16869.70 lakh in
the current year profit/(Loss) due to the above change.
35.6. Transactions in Foreign currency
a) Expenditure in foreign currency (on accrual basis)
Particular March 31,2018 March 31,2017
Travelling NIL NIL
Professional & Consultation fee NIL NIL
Interest NIL NIL
Others NIL NIL
Total NIL NIL
b) CIF Value of Imports
Raw materials NIL NIL
Capital goods NIL NIL
Components & Spares NIL NIL
Total NIL NIL
35.7. Segment Reporting
Disclosure as per Ind AS 108 is given below.
Particulars F
or the year ended 31 March, 2018
Business segments Inter Total
Generation Transmission Distribution Segment
` in lakhs ` in lakhs ` in lakhs Eliminations ` in lakhs
Segment Revenue
Sale of energy & Meter rent 68061.82 100382.72 1231817.31 168444.54 1231817.31
Inter-segment revenue
Total 68061.82 100382.72 1231817.31 168444.54 1231817.31
Segment result
allocable expenses (net) 12884.67 13284.21 -139350.86 -113136.98
Operating income
Other income (net) 2499.42 2805.89 29422.21 34727.52
215
Profit before taxes -78409.46

Tax expense
Net profit for the year -78409.46
Other comprehensive
income -107632.86
Total comprehensive
income -186042.32
Particulars For the year ended 31 March, 2017

Segment Revenue
Sale of energy & Meter rent 74439.5 95127.00 1121882.81 169566.5 1121882.81
Total 74439.5 95127.00 1121882.81 169566.5 1121882.81
Segment result
Allocable expenses (net) 26651.53 11636.13 -227828.21 -189540.55
Operating income
Other income (net) 2222.71 3546.37 34308.62 40077.69
Tax expense
Net profit for the year
Particulars For the year ended 31 March, 2018 Total

Business segments ` in lakhs
Generation Transmission Distribution
` in lakhs ` in lakhs ` in lakhs
Segment assets
Allocable assets 1469050.76 304594.71 1037509.51 2811154.98
Total assets
Segment liabilities
Allocable liabilities 1582140.06 348666.03 1125238.8 3056044.89
Total liabilities
Other information
Capital expenditure
Capital expenditure
(Allocable) 113089.3 44071.32 87729.29 244889.91
216
Depreciation and
amortisation (allocable) 14080.63 24419.51 41870.35 80370.49
Depreciation and amortisation
(unallocable)
Other significant non-
cash expenses

Business segments ` in lakhs
` in lakhs ` in lakhs ` in lakhs
Segment assets
Total assets 1527162.84 310665.84 1051493.28 2889321.96
Segment liabilities
Total liabilities 1602554.65 345899.91 1119196.59 3067651.15
Other information
Capital expenditure
Capital expenditure (Allocable) 75391.81 35234.07 67703.31 178329.19
(allocable) 15374.36 21097.02 35416.54 71887.92
(unallocable)
Other significant non-cash
expenses

35.8. Earnings per Share
Earnings per share are calculated by dividing the profit attributable to the equity shareholders
by the weighted average number of equity shares outstanding during the year. Numbers used
for calculating diluted earnings per equity share includes the amount of Equity Share Application
Money. The details as follows:
No.
1 Earnings Available to Equity Share Holders (` in lakhs) -186042.32 -149462.85

2 Number of weighted equity shares 3499050000 3499050000
217
3 Face value per share (Rs.) 10 10

4 Earnings per Share (Basic) -5.32 -4.27
5 Earnings per Share (Diluted) -5.32 -4.27
35.9. Taxation
The company reported loss during the period and provision for current tax or deferred tax not
provided in the accounts.
35.10. Micro, Small and Medium Enterprises
The company has not received any information from its supplier regarding their status under
the Micro, Small and Medium Enterprises Development Act 2006 which came into effect from
2nd October 2006 and hence disclosure, if any, relating to amounts unpaid as on 31st March 2018
together with interest paid/ payable as required under the Act, have not been given.
35.11. Statutory Auditors’ Remuneration
[ ` in Lakhs]
Particulars For the year ended For the year ended
March 31, 2018 March 31, 2017
Remuneration of statutory auditors 37.77 37.77
Total 37.77 37.77
35.12. Generation, Purchase and Sale of Power (in Million Units) :

Current Year (2017-18) Previous Year (2016-17)
Unit Auxiliary Unit Auxiliary
Generated consu- Net(A-B) Generated consu- Net(A-B)
mption mption
(A) (B) (A) (B)
Hydel 5488.94 29.95 5458.99 4319.08 26.97 4292.11
Thermal 1.86 1.31 0.55 43.55 2.61 40.94
Wind 1.48 0 1.48 1.71 0.00 1.71
Solar 13.45 0 13.45 5.20 0.03 5.17
Sub Total 5505.73 31.26 5474.47 4369.54 29.61 4339.93
Purchase 19426.74 19426.74 19734.92 19734.92
Total 24932.47 31.26 24901.21 24104.46 29.61 24074.85
Auxiliary consumption
(Substations) 14.12 14.84
218
Total 24932.47 45.38 24887.09 24104.46 44.45 24060.01

Energy injected by Private 45.15 45.08
IPPs at generator end
for sale outside state
through open access
Energy purchased by 284.96 435.60
consumers through
open access at Kerala
periphery
Total Generation and 25217.2 24540.69
power purchased
Energy sale outside the
state by KSEBL at Kerala 117.51 49.30
periphery
Swap return 6.31
Sale outside the state 43.07 43.06
by Private IPPs through
open access
External PGCIL loss 709.51 684.76
Net energy available 24340.8 23763.57
in Kerala Grid for
consumption with in state
Energy sale within the state 20880.7 20038.25
by KSEBL alone
Energy consumed by open 269.86 414.66
access consumers
Energy Given to RGCCPP
for auxiliary consumption 8.63
Energy consumption
within the state 21159.19 20452.91
Loss in KSEBL system 3181.61 3310.66
Loss % in KSEBL system 13.07% 13.93%
219
35.13. Generating Stations:

a) Plants in operation since the beginning of the year.
Sl. No. LOCATION Unit Capacity Installed
(in MW) Capacity (MW)
1 Pallivasal 3X5+3X7.5 37.50
2 Poringalkuthu 4X8 32.00
3 Sengulam 4X12 48.00
4 Neriamangalam 3X17.5 52.50
5 Panniyar 2X16 32.00
6 Sholayar 3X18 54.00
7 Sabarigiri 4X55+2X60 340.00
8 Kuttiyadi 3X25 75.00
9 Idukki 6X130 780.00
10 Idamalayar 2X37.5 75.00
11 Kallada 2X7.5 15.00
12 Kanjikode (Wind Farm) 9X0.225 2.03
13 Peppara 1X3 3.00
14 Lower Periyar 3X60 180.00
15 Madupetty 1X2 2.00
16 Brahmanapuram (Diesel) 5X21.32 106.60
17 Poringalkuthu Left Bank 1X16 16.00
18 Kozhikode (Diesel) 8X16 128.00
19 Kakkad 2X25 50.00
20 Malampuzha 1X2.5 2.5
21 Kuttiadi Extension 1X50 50.00
22 Chembukadavu I 3X0.90 2.70
23 Chembukadavu II 3X1.25 3.75
24 Urumi I&II 3X1.25+3X0.8 6.15
25 MSHEP Malankara 3X3.5 10.50
26 Lower Meenmutty 2X1.5+1X0.5 3.50
27 NeriamangalamExtn Scheme 1X25 25.00
28 Kuttiadi Tail Race 3X1.25 3.75
29 Kuttiadi Addl. Extn. Scheme 2X50 100
30 Poohithodu 3X1.6 4.80
31 Ranni- Perunadu 2X2 4.00
220
32 Peechi- HEP 1X1.25 1.25

33 Vilangad HEP 3X2.5 7.5
35 Chimmony SHEP 1X2.5 2.5
36 Adyanpara SHEP 2X1.5+.5 3.5
37 Barapole 3X5 15.00
38 PoringalKuthu Micro SHEP 0.011X1 0.011
39 Vellathooval 1.8x2 3.6
Total 2278.64
b) Projects commissioned during the Year :

Sl. No. LOCATION Unit Capacity Installed Capacity
(in MW) (MW)
1 Perumthenaruvi 3X2 6
Total 6
c) Other Private Captive & IPPs (in MW)

Hydro
1 Maniyar 3X4 12.00
2 Kuthungal 3X7 21.00
IPP
1 NTPC Kayamkulam 2X116.6+1X126.38 359.58
2 KPCL Kasargode 3X7.31 21.93
3 BSES Kochi 3X40.5+1X35.5 157.00
4 Ramakkalmedu (Wind IPP) 19 X 0.750 14.25
5 Agali (Wind IPP) 31X0.60 18.60
6 Ullumkal (IPP Hydro) 2X3.50 7.00
7 MPS Steel (IPP-Co-Gen) 1X10 10.00
8 PCBL 1X10 10.00
9 Iruttukanam 3X1.50 4.50
Total 635.86
35.14. Purchase of Power

In the case of power purchase related expenditure from Central Utilities, the utilities
are raising invoices based on provisional tariff order/relevant notification of the concerned
authorities, which are subject to final orders for the relevant tariff period. Out of the total power
purchase related expenditure, the following claims has been provided in the accounts for the
financial year 2017-18 though the claims are not fully admitted by the Company ` in lakhs.
221
Sl No. Supplier Amount

1 MAITHON 615.98
2 Jindal Power Limited 4812.05
3 Jindal Thermal Power Limited 155.6
4 KAIGA 0.37
5 JHABUA POWER 8508.58
6 BALCO 59.98
7 DVC 914.25
8 NTECL 15.84
9 PGCIL 977.77
10 PTC 2.21
11 NTPC 671.82
12 KPTCL (RE charges) 2.77
35.15. Actuarial Valuation

Actuarial valuation of employee related liabilities were carried out as on 31.03.2018 and provided
in the accounts as detailed below.
a. Actuarial valuation of the earned leave liability for the period from 01/04/2017 to 31/03/2018 as per
IND AS-19
Change in benefit Obligations ` in lakhs
Present Value of obligation at the
beginning of the period 65566.41
Acquisition Adjustment Nil
Interest Cost 4786.34
Service Cost 5564.91
Past Service Cost including
curtailing gains/losses Nil
Benefits paid -3964.05
Total Actuarial(Gain)/Loss on obligation 5976.69
Present Value of obligation as at the end
of the period 77930.29
Actuarial Assumptions
i) Economic Assumptions
The principal assumptions are the discount rate & salary growth rate. The discount rate is
generally based upon the market yields available on Government bonds at the accounting date
222
relevant to currency of benefit payments for a term that matches the liabilities. Salary growth rate
is company’s long term best estimate as to salary increases & takes account of inflation, seniority,
promotion, business plan, HR policy and other relevant factors on long term basis as provided in
relevant accounting standard.
31/03/2017 31/03/2018
i) Discounting Rate 7.30 7.70
ii) Future salary Increase 10.00 10.00
ii) Demographic Assumption
Attrition rates are the company’s best estimate of employee turnover in future determined
considering factors such as nature of business & industry, retention policy, demand & supply in
employment market, standing of the company , business plan, HR Policy etc as provided in the
Leave availment / encashment / lapse rates are entity’s best estimate for future based on past
historical experience & its HR policy.
i) Retirement Age (Years) 56 56
ii) Mortality rates inclusive of
provision for disability ** 100 % of IALM (2006 - 08)
iii) Ages Withdrawal Withdrawal
Rate (%) Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
Above 44 years 1.00 1.00
iv) Leave 28,39,936 28,38,339
Leave Availment Rate 2.50% 2.50%
Leave Lapse rate while in service Above 300 days Above 300 days
Leave Lapse rate on exit -- --
Leave encashment Rate while in service 5.00% 5.00%
It should be noted that in case of employees above retirement age, for the purpose of valuation it
is assumed they will retire immediately & benefit is considered up to actual retirement age.
Mortality & Morbidity rates - 100% of IALM (2006-08) rates have been assumed which also includes
the allowance for disability benefits.
Mortality Rates inclusive of disability for specimen ages
Age Rate Age Rate Age Rate
15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
223
25 0.000984 55 0.007888 85 0.091982

30 0.001056 60 0.011534 90 0.138895
35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
b. Actuarial valuation of the gratuity liability for the period from 01/04/2017 to 31/03/2018, as per IND
AS-19.
Present Value of obligation at the beginning of the period 126550.08
Past Service Cost including curtailing gains/losses 12516.08
Present Value of obligation as at the end of the period 182790.95
The principal assumptions are the discount rate & salary growth rate. The discount rate is generally
based upon the market yields available on Government bonds at the accounting date relevant
to currency of benefit payments for a term that matches the liabilities. Salary growth rate is
company’s long term best estimate as to salary increases & takes account of inflation, seniority,
31/03/2017 31/03/2018
31/03/2017 31/03/2018
224
provision for disability ** 100% of IALM (2006 - 08)

iii) Attrition at Ages Withdrawal
Rate (%) Withdrawal
Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
In case of employees above retirement age, for the purpose of valuation it is assumed they
will retire immediately & benefit is considered up to actual retirement age.
Mortality & Morbidity rates - 100% of IALM (2006-08) rates have been assumed which also
includes the allowance for disability benefits.
Mortality Rates for specimen ages
15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
25 0.000984 55 0.007888 85 0.091982
30 0.001056 60 0.011534 90 0.138895
35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
c. Actuarial valuation of the Pension liability for the period from 01/04/2017 to 31/03/2018, as per IND
AS-19.
Present Value of obligation at the
beginning of the period 1422654.02
Past Service Cost including curtailing gains/losses Nil
225
31/03/2017 31/03/2018
31/03/2017 31/03/2018
provision for disability ** 100% of IALM (2006 - 08)
iii) Attrition at Ages Withdrawal Withdrawal
Rate (%) Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
It should be noted that in case of employees above retirement age, for the purpose of valuation
it is assumed they will retire immediately & benefit is considered up to actual retirement age.
15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
25 0.000984 55 0.007888 85 0.091982
226
30 0.001056 60 0.011534 90 0.138895

35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
35.15.Other Matters
a. Commercial Tax Department had disallowed the concessional tax of 4% given to M/s KPCL and
directed BPCL to collect differential amount with retrospective effect from 2001-02. M/s KPCL in
turn had claimed an amount of `4031 lakh vide invoice dated 20-3-2016. The matter was referred
to the high-power committee constituted by Government of Kerala for granting concessional
rate to KPCL as the entire power is being drawn by KSEBL. The high-power committee had
decided that KSEBL shall reimburse the differential tariff and to waive the interest and penal
interest elements after taking approval of the council of Ministers. The differential tax was
estimated as `3070 lakh. However as per section 26 of the KVAT Act, the department can
claim only the differential tax for five years from 2006-07 to 2010-11 amounting to `1334 lakh.
Accordingly, an amount of `1384 lakh is provided in the accounts though the claim is not
admitted by the Company. KSEBL had approached the Government to waive the interest claim
in this regard amounting to `7865 lakh and to withdraw the claim of balance differential tax
amounting to `2536 lakh. The Company is expecting favourable orders from the Government
of Kerala. Accordingly, an amount of `10401 lakh is shown under contingent liabilities.
b. Annual fixed cost payable by KSEB ltd to NTPC for RGCCP, kayamkulam has been negotiated
and fixed as `20000 lakh per year for the Tariff control period 2014-19 with the liberty of review
in 2018-19 vide B.O.(FTD) No.1491/2018/KSEB/TRAC/CERC/RGCCPP/18-19 dated 14.06.2018.The
excess amount paid to NTPC in previous years has not been adjusted in the accounts of the
year 2017-18.
c. M/s Balco-PTCIL has claimed `3890.59 lakh towards reimbursement as per Article 10 of
PPA(change in law) of additional expenditure incurred until 30.8.2016 and ` 5749.18 lakh towards
ECR revision due to change in escalation rates for domestic coal as per CERC amendment
dated 08/02/2017 for the period from 03/2015 to 02/2017 vide invoice dated 20/12/2017.Since the
final decision has not been taken the same has not been provided in the accounts.
d. Letter of credit facility is offered to the suppliers of power as per the agreement conditions. The
LC charges in this regard, being directly attributable to purchase of power, is being accounted
as power purchase costs.
e. KSEB Limited has executed 2 Nos of swap agreements. As per PPA1 the company swapped
63.06 lakh units during the period 2017-18 to BRPL as against power swapped during the year
2016-17.As per PPA2 company swapped 1359 lakh units from HPPC and this shall be return
during the year 2017-18
f. Inter Unit balances amount to `4285.64Lakhs (Previous year Rs.1536.57Lakhs) has been
considered as Sundry Receivables pending complete reconciliation of such balances reported
in the Note:12-Other current Assets-Inter Unit balance.
227
g. The GPF balances as per financial statements is `220733 lakhs reported in the Note:17-General
Provident Fund. A difference of `22lakhs with the party wise registers maintained at GPF
section are reported and the same is being verified.
h. The Kerala Power Finance Corporation has issued 1319440 Nos. of Equity Shares of `10/- each as
Bonus Share to the erstwhile KSE Board during the Year 2004-05.
i. For preparation of the Financial statements, the value of asset and liabilities notified under the
re-vesting second Transfer (Amendment) Scheme (Re-vesting) 2015, have been duly adopted.
The fixed asset of erstwhile KSE Board revested to KSEB Ltd. is taken at the value notified vide
Government notification G.O.(P).No.3/2015/PD dated 28.01.2015
j. For monthly as well as bi-monthly billed consumers under various tariff categories, an
estimated amount of `68064 lakhs is recognized as unbilled revenue as on 31.03.2018(Previous
year `62298 lakhs) and the amount is debited to sundry debtors for sale of power.
k. The Board along with Orissa and Gujarat has taken steps to sets up a 1000 MW Power Plant at
Orissa. In this connection a company has been formed under the name Baitarani West Coal
Company Limited. The Board has made share contribution of Rs. 10 Crores. The following share
certificates have been issued by the company.
Folio No. Share Certificate No. Face Value Amount
[ Ìn Lakhs]
00 004 Rs.1000 /- 29
00 005 Rs.1000/- 1
00 009 Rs.1000/- 970
Further the Board has deposited `25 Crores on 01.09.2012 with Punjab & Sind Bank,
Thiruvananthapuram for enabling Punjab & Sind Bank, Bhubaneswar to issue Bank Guarantee to
Government of India Favoring the company. On 10.12.2012 Ministry of Coal, Government of India de-
allocated the Baitarani West Coal Block citing delay in developing the coal block. KSEB has filed
appeal to the Ministry of Coal to revoke the decision of de- allocation. The matter has also been
taken up with the Union Government through letters written by the Chief Minister to the Prime
Minister and the Union Coal Minister. A petition has also been filed by the allocates before the High
Court of Odisha challenging the decision of Union Government on de-allocating the Baitarani coal
block. The case is yet to be finally heard by the Court.
l. Government of Kerala vide order G.O (M.S) No.13/07/PD dated 05.07.2007 has ordered to transfer
100 acres of land originally acquired by KSEB for the Brahmapuram Diesel Power Plant at Kochi
to the Revenue Department in Government subject to the conditions that
(i) The value of Land will be determined and paid by Government to KSEB later.
(ii) Additional compensation ordered to be paid by Government in Revenue Department.
The Government had fixed the compensation for acquisition at `757 lakh and the Board had
requested the Government to enhance the compensation and for giving value of land at current
228
market rate. No amount has been received till date and physical transfer of land has not taken
place. Hence Accounting adjustments were also not made
m. 45.715 cents of Land belonging to the company in Thiruvananthapuram was transferred to
Thiruvananthapuram Development Authority for widening the road as per the decision of the
Government of Kerala. Since the value of the land is not yet received from the Government,
necessary adjustments are yet to be made in the Books of Accounts.
n. Vide G.O.(M.S) No.34/2017/PD dated 04/04/2017 Government of Kerala ordered that 20 acres
of land owned by TCCL, which is currently under the lease to BSES Kerala Power Ltd shall be
transferred to KSEBL with full ownership in lieu of the outstanding dues as on date to KSEBL
subject to the condition that KSEBL shall not alienate the land under any circumstances.
However the property of 20 Acres of land owned by TCCL not yet transferred to the ownership
of the company. Hence the adjustment of transfer of land against dues towards current charge
not incorporated during the year.
o. In the 42nd Meeting of Board of Directors held on 26.09.2018 it was resolved to give in principle
approval to incorporate the adjustment entries regarding the amount payable to Government
of Kerala towards electricity duty and guarantee commission etc. as on 31.03.2018 against the
amount receivable from the Government in the books of accounts and to report the matter to
the Government for concurrence. Accordingly an amount of `35099.74lakh is netted off with
the amount receivable from the Government.
p. During the financial year an amount of ` 815 lakh has been incurred as employee cost for the
software development and implementation. This amount has been charged to the Revenue
expenses pending allocation over capital works for capitalisation in the financial year 2018-19.
q. As per the Accounting policy of the company the provision for debtors is being provided on the
basis of age wise analysis of debtors. As per the details furnished by the ARUs of the company,
the age wise analysis is as follows.
` in lakhs
Age of Debtors Amount
More than 5 years 26605.51
Between 3 to 5 years 40197.92
Between 6 months to 1 year 20765.24
Less than 6 months 111674.88
As adequate provision is already there,no further provision is created during the year. Age wise
reported from the Special Officer(Revenue) is not tally with the accounts and a special task has
been entrusted to reconcile the same.
r. Kerala State suffered a heavy damage due to natural calamity and flood during the month
of August 2018 and the company also suffered damages. The power restoration work had been
carried out on war foot basis and more than 90% of the connections were restored in time.
However the monetary value of loss suffered to the company not quantified.
229
s. The Company has issued two series of bonds to The Kerala State Electricity Board Limited
Employees Pension and Gratuity Trust as per G.O.(P).No.3/2015/PD dated 28.01.2015 as on
01.04.2017.
i) 20 years bond with a coupon of rate 10% p.a. For ` 814400 lakh.
ii) 10 year bond with a coupon of rate 9% p.a. For ` 375100 lakh.
t. The Board of Directors in the 42nd meeting held on 26.09.2018 approved the financial statement.
The power to amend the accounts vests with Board of Directors.
u. Figures for the previous year have been re arranged and regrouped wherever necessary.

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S

Sd/- Sd/-
Partner Partner
M.No.225166 M.No.230338
FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
Partner
M.No.226547
Date:29.09.2018
230

Consolidated Balance Sheet as at 31st March 2018
2017-18 2016-17
Standalone Consolidated Standalone Consolidated
Particulars Note 17-18 17-18 16-17 16-17
No. (` In Lakhs) (` In Lakhs) (` In Lakhs) (` In Lakhs)
ASSETS

Non current assets
Property, Plant and
Equipment 2 20,37,705.61 20,37,705.61 20,68,736.35 20,68,736.35
Capital work-in-progress 3 2,44,889.91 2,44,889.91 1,78,329.19 1,78,329.19
Financial Assets
Investments 4 2,000.01 4,027.88 2,000.01 3,531.74
Loans 5 8,295.03 8,295.03 8,389.85 8,389.85
Others 6 6,331.70 6,331.70 55,070.04 55,070.04
Deffered Tax Assets (Net)
Other non-current assets 7 4,31,060.49 4,31,060.49 4,93,289.29 4,93,289.29
Current assets
Inventories 8 48,590.36 48,590.36 31,018.91 31,018.91
Trade receivables 9 2,29,926.20 2,29,926.20 1,92,339.65 1,92,339.65
Cash and cash equivalents 10 27,588.78 27,588.78 23,603.23 23,603.23
Bank balances Other than
Cash Equivalents 11 7,007.15 7,007.15 6,827.98 6,827.98
Other current assets 12 12,649.65 12,649.65 8,046.66 8,046.66
Total Assets 30,56,044.89 30,58,072.76 30,67,651.16 30,69,182.88
Equity
Equity Share capital 13 3,49,905.00 3,49,905.00 3,49,905.00 3,49,905.00
Other Equity 14 -9,77,660.67 -9,77,660.67 -7,40,788.01 -7,40,788.01
Total Equity attributable
to parent -6,27,755.67 -3,90,883.01
Share of Profit of
Associate/Joint Venture 2,027.87 1,531.72
Total Equity -6,25,727.80 -3,89,351.29
Liabilities
Non-current liabilities
Borrowings 15 15,93,454.49 15,93,454.49 4,26,656.76 4,26,656.76
Other Financial Liabilities 16 3,17,045.02 3,17,045.02 3,11,596.98 3,11,596.98
Provisions 17 9,76,539.72 9,76,539.72 20,28,767.16 20,28,767.16
231
Other non-current liabilities 18 1,92,276.19 1,92,276.19 1,42,922.30 1,42,922.30

Current liabilities
Borrowings 19 2,73,758.98 2,73,758.98 2,76,746.30 2,76,746.30
Trade payables 20 96,836.56 96,836.56 81,846.53 81,846.53
Other financial liabilities 21 2,32,989.60 2,32,989.60 1,89,998.14 1,89,998.14
Provisions 22 900.00 900.00 - -
Total Equity and Liabilities 30,56,044.89 30,58,072.76 30,67,651.16 30,69,182.88

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Suresh K. FCA C.A.HARIKRISHNAN.R.S.M.Com,DISA, FCA
Partner Partner
M.No. 23554 M.No.230338
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RAVINATH.R.PAI FCA
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M.No.226547
Date:21.02.2019
232

Consolidated Statement of Profit and Loss for the year ended 31st March 2018
2017-18 2016-17
Standalone Consolidated Standalone Consolidated
Particulars Note P&L P&L P&L P&L
No. (` In Lakhs) (` In Lakhs) (` In Lakhs) (` In Lakhs)
REVENUE
I Revenue From
Operations 23 12,31,817.31 12,31,817.31 11,21,882.81 11,21,882.81
II Other Income 24 34,727.52 34,727.52 40,077.69 40,077.69
III Total Income (I+II) 12,66,544.83 1266544.83 11,61,960.50 11,61,960.50
IV EXPENSES
Purchase of Power 25 7,52,602.69 7,52,602.69 7,39,332.42 7,39,332.42
Generation of Power 26 207.84 207.84 2,344.63 2,344.63
Repairs & Maintenance 27 27,734.87 27,734.87 26,512.85 26,512.85
Employee benefits
expense 28 2,63,806.15 2,63,806.15 3,36,077.22 3,36,077.22
Finance costs 29 1,81,469.02 1,81,469.02 95,991.86 95,991.86
Depreciation and
amortization expense 30 80,370.49 80,370.49 71,887.92 71,887.92
Other Expenses - -
Administrative
Expenses 31 53,038.86 53,038.86 37,479.11 37,479.11
Others 32 -1,416.98 -1,416.98 8,363.77 8,363.77
ADD Changes in fair
valuation and other
adjustments 33 -12,858.65 -12,858.65 -6,566.42 -6,566.42
Total expenses (IV) 13,44,954.29 13,44,954.29 13,11,423.35 13,11,423.35
V Profit/(loss) before
exceptional items
and tax (III- IV) -78,409.46 -78,409.46 -1,49,462.85 -1,49,462.85
VI Exceptional Items - - -
VII Profit/(loss) before
tax (V-VI) -78,409.46 -78,409.46 -1,49,462.85 -1,49,462.85
VIII Tax expense:
(1) Current tax - - -
(2) Deferred tax - - -
IX Profit (Loss) for the
period from continuing
operations (VII-VIII) -78,409.46 -78,409.46 -1,49,462.85 -1,49,462.85
233
X Profit/(loss) from
discontinued operations -
XI Tax expense of
discontinued operations -
XII Profit/(loss) from
Discontinued operations
(after tax) (X-XI) -
XIII Profit/(loss) for the
period (IX+XII) -78,409.46 -78,409.46 -1,49,462.85 -1,49,462.85
XIV Share of profit/Loss of
associates/Joint venture
accounted for using
equity method 2,027.87 - 1,531.72
XV Consolidated Profit/
(Loss) for the period -78,409.46 -76,381.59 -1,49,462.85 -1,47,931.13
XVI Other Comprehensive
Income/(Expenses) - -
A (i) Items that will
not be reclassified to
profit or loss -1,07,632.86 -1,07,632.86 - -
(ii) Income tax relating
to items that will not be
reclassified to profit
or loss - - - -
B (i) Items that will be
or loss - - - -
(ii) Income tax relating to
items that will be
or loss - - - -
XVII Total Comprehensive
Income/(Loss) for
the period (XV+XVI) -1,86,042.32 -1,84,014.45 -1,49,462.85 -1,47,931.13
Profit attributable:
Owners of the Parent -78,409.46 -1,49,462.85
Share of Joint
venture/Associate 2,027.87 - 1,531.72
Other Comprehe-
nsive Income/
Expenses attrib-
utable:
Owners of the Parent -1,07,632.86 - -
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Share of Joint
venture/Associate -
Total Comprehensive
Income/(Loss) attributable
Owners of the Parent -1,86,042.32 - -1,49,462.85
Share of Joint
venture/Associate 2,027.87 - 1,531.72
XVIII Earnings per equity
share (for continuing
operation):
(1) Basic -5.32 -5.26 -4.27 -4.23
(2) Diluted -5.32 -5.26 -4.27 -4.23
XIX Earnings per equity
share (for discontinued
operation):
(1) Basic - -
(2) Diluted - -
XX Earnings per equity
share(for discontinued &
continuing operations)
(1) Basic - -
(2) Diluted - -
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M.No.226547
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Consolidated Statement of Cash flow statement for the
year ended 31st March 2018
` In Lakhs ` In Lakhs
Particulars Stand Alone Consolidated Stand Alone Consolidated
2017-18 2017-18 2016-17 2016-17
CASH FLOW FROM

OPERATING ACTIVITIES
PROFIT BEFORE TAX -1,86,042.32 -1,84,014.45 -1,49,462.85 -1,47,931.13
PROFIT BEFORE TAX BEFORE
NON CASH ITEM AND WORKING
CAPITAL CHANGES -1,86,042.32 -1,84,014.45 -1,49,462.85 -1,47,931.13
Depreciation 80,370.49 80,370.49 71,887.92 71,887.92
Finance cost 1,81,469.02 1,81,469.02 95,991.86 95,991.86
Investment income - - -23.94 -23.94
Interest Income -546.59 -546.59 -719.34 -719.34
Prior period interest and
finance charges 6.66 6.66 17.93 17.93
Operating profit before
working capital changes 75,257.27 77,285.13 17,691.58 19,223.30
Adjustments for:
Changes in Inventories -17,571.45 -17,571.45 -1,814.93 -1,814.93
Changes in Sundry Debtors -37,586.55 -37,586.55 -33,060.09 -33,060.09
Changes in Other
Current Asset -4,602.99 -4,602.99 -300.14 -300.14
Changes in Current
Liabilities and Provisions 40,904.14 40,904.14 -3,23,851.47 -3,23,851.47
Changes in Trade Payable 14,990.03 14,990.03 12,442.65 12,442.65
Cash generated from
Operations 71,390.45 73,418.31 -3,28,892.40 -3,27,360.68
Income Tax - - - -
Net cash flow from /(used in)
236
Operating Activities(A) 71,390.45 73,418.31 -3,28,892.40 -3,27,360.68

CASH FLOW FROM
INVESTMENT ACTIVITIES
Change in Fixed Asset -99,238.28 -99,238.28 -1,48,592.43 -1,48,592.43
Changes in Capital
Work-in Progress -66,560.72 -66,560.72 -4,836.21 -4,836.21
Income from Investment - - 23.94 23.94
Interest Income 546.59 546.59 719.34 719.34
Change in Non Current
Assets-other Financial Assets 48,738.34 48,738.34 -1,989.38 -1,989.38
Non Current Assets-Financial
Assets Loan 94.81 94.81 -1,989.38 -1,989.38
Other Non Current Assets 62,228.79 62,228.79 2,24,831.39 2,24,831.39
Net cash flow from / (used in)
Investment Activities(B) -54,190.47 -54,190.47 68,167.25 68,167.25
CASH FLOW FROM
FINANCING ACTIVITIES
Changes in Equity Capital -931.80 -2,959.67 -3,72,834.37 -3,72,834.37
Changes in Provisions -10,52,227.44 -10,52,227.44 3,69,925.26 3,69,925.26
Changes in Financial Liabilties 5,448.04 5,448.04 31,969.09 31,969.09
Changes in Long Term
Borrowings 11,66,797.74 11,66,797.74 2,74,141.31 2,74,141.31
Interest and Other cost
of raising Finance -1,81,469.02 -1,81,469.02 -95,991.86 -95,991.86
Changes in Other Non
Current Liabalities 49,353.88 49,353.88 57,812.56 56,280.84
Prior Period Interest and
Finance charges -6.66 -6.66 -17.93 -17.93
Net cash flow from /
(used in) Financing
Activities(C) -13,035.26 -15,063.13 2,65,004.06 2,63,472.34
NET CHANGE IN CASH &
CASH EQUIVALENTS 4,164.72 4,164.72 4,278.91 4,278.91
237
CASH AND CASH EQUIVALENTS

AT THE BEGINNING 30,431.21 30,431.21 24,162.91 24,162.91
CASH AND CASH EQUIVALENTS
AT THE END 34,595.93 34,595.93 28,441.83 28,441.83

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M.No. 23554 M.No.230338
FRN:004674S
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Partner
M.No.226547
Date:21.02.2019
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239
240
Consolidated Statement of Changes in Equity for the year ended on 31st March 2018
A: Equity Share Capital
Note No :13
( ` In Lakhs)
Balance as at 1st April 2017 Changes in equity share capital Balance as at 31st March 2018
during the year
3,49,905.00 - 3,49,905.00
B.OTHER EQUITY
` in lakhs
Particulars Attributable to owners of parent Other equity Share of profit
attributable of Associate/
Debt Equity Other

to owners of Joint Venture Total
income income items of
the parent Joint Venture
Reserve & Surplus through through Other
under equity

Note Capital Security Other Retained Other Other Comprh method
No Reserve Premium Reserve earnings Comprh- Comprh- ensive
Reserve ensive ensive Income
Income Income
Balance as at1st
April 2017 - - - -7,40,788.01 - - - -7,40,788.01 1,531.72 -7,39,256.29
Profit for the year - - - -78,409.46 - - - -78,409.46 2,027.87 -76,381.59
Changes in accounting
policy and prior
period errors - - - - - - - - -
Other Comprehe-
nsive Income - - - -1,07,632.86 - - - -1,07,632.86 -1,07,632.86
Total Comprehe-
nsive Income 14 - - - -1,86,042.32 - - - -1,86,042.32 2,027.87 -1,84,014.45
Dividends - - - - - - - -
Transfer to Retai-
ned Earnings - - -54,850.76 - - - -54,850.76 -1,531.72 -56,382.48
Transfer from
Retained Earnings - - - 4,020.42 - - - 4,020.42 4,020.42
Any other changes
(To be speciifed) - - - - - - - - -
Balannce as at
31st March 2018 - - - -9,77,660.67 - - - -9,77,660.67 2,027.87 -9,75,632.80

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M.No.226547
Date:21.02.2019

Note 1: ACCOUNTING POLICIES ON CONSOLIDATED FINANCIAL STATEMENTS
1.1. Corporate information of Reporting Company

Kerala State Electricity Board Limited is incorporated under the Companies Act, 2013 and is a
Government Company within the meaning of Section 2(45) of the Companies Act, 2013. It is the
successor entity of Kerala State Electricity Board which was constituted by the Government of
Kerala, as per order no. EL1-6475/56/PW dated 7-3-1957 of the Kerala State Government, under
the Electricity (Supply) Act, 1948 for carrying out the business of Generation, Transmission and
Distribution of electricity in the State of Kerala.
1.2. Statement of Compliance
These Consolidated financial statements are prepared on accrual basis of accounting and comply
with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting
Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the
extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions
of the Electricity Act, 2003 to the extent applicable.
1.3. Basis of Measurement & Use of Management Estimates
a.The Consolidated financial statements have been prepared on the historical cost basis except
for certain financial assets and liabilities that are measured at fair value as laid out by Ind AS 109
Financial Instruments (refer accounting policy regarding financial instruments) and certain fixed
assets which were capitalised in-order to reflect the actual position in the Consolidated Balance
Sheet at written down value. The methods used to measure fair values and written down value are
discussed further in notes to consolidated financial statements.
The preparation of these consolidated financial statements in conformity with Ind AS requires
management to make judgments, estimates and assumptions that may affect the application of
accounting policies and the reported value of assets, liabilities, income and expenses and related
disclosures, including contingent assets and liabilities at the Consolidated Balance Sheet date. The
estimates and management’s judgments are based on previous experience and other factors are
considered reasonable and prudent in the circumstances and such assumptions are reviewed on
an ongoing basis
b. The Associate company Renewable Power Corporation of Kerala Ltd recognizes income from
various sources and accounting estimates on the basis of DPR duly considering applicable Ind AS
18 and 17.Recognition of income from Central Finance Assistance from MNRE is also estimated on
the basis of same DPR and recognised in accordance with Ind AS 20.
1.4. Current & Non-current Classification
The Group presents assets and liabilities in the Consolidated Balance Sheet based on the current
and non-current classification. An asset is current when it is expected to be realized or intended to
be sold or consumed in normal operating cycle; held primarily for trading; expected to be realized
within twelve months after the reporting period or cash or cash equivalent unless restricted from
242
being exchanged or used to settle liability for at least 12 months after the reporting period and any
other asset that do not belong to the former categories are classified as non-current.
A liability is current when, it is expected to be settled in normal operating cycle; it is held primarily
for trading, it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer settlement of the liability for at least 12 months after the reporting
period and any liability other than what has been mentioned above shall be non-current liability.
1.5. Basis of Consolidation:
The financial statements of Associates/ Joint Ventures are drawn up to the same reporting date as
of the KSEB Ltd. for the purpose of consolidation.
1.5.1 Associates/Joint Venture :
An associate is an enterprise in which the investor has significant influence and which is neither
subsidiary nor joint venture of the investor. Investments in associates/ Joint Venture are accounted
for using the equity method of accounting. The investment is initially recognized at cost, and the
carrying amount is increased or decreased to recognize investor’s share of profit and loss of the
investee after the acquisition date. The group’s investment in associates/ Joint venture includes
goodwill identified on acquisition.
Name of the entity Last Audited BS date No. of shares Amount of
held by KSEB investment (%)
Renewable Power
Corporation of Kerala Ltd 2017-18 5,000 shares of ` 50,00,000
`1000 each (50%)
Kerala State Power and 1,08,19,440 Shares `10,81,94,400
Infrastructure Finance 2017-18 of ` 10 each (40.60%)
Corporation Ltd.
Baitarni West Coal 1,00,000 shares of `10,00,00,000
Company Ltd. 2017-18 ` 1000 each (33.33%)
1.6. Critical Judgments and Assumptions
a) Useful Life of Property, Plant and Equipment
The useful life of property, plant and equipment are generally based on factors including
obsolescence, demand and such other economic factors including the required maintenance
expenditure to ensure the future cash flow from the asset. Useful life of the asset, used for the
generation, transmission and distribution of electricity is determined by the Central Electricity
Regulatory Commission, as mentioned in part B of Schedule II of the Companies, 2013.
Machinery spares acquired with the equipment are depreciated using the same rates and method
applicable for the original machinery. In the case of Machinery spares procured separately for future
use, rate equivalent to accumulated depreciation for the expired life of the relative machinery are
charged in the year of acquisition along with depreciation for the year.
243
b) Capital work in progress

The amount of capital work in progress is estimated based on the bills that are accounted towards
capital expenditure but to be capitalized. Such capital expenditure shall remain till the asset is
ready to use and capitalized.
c) Post-retirement benefit plans
Employee benefit obligations are measured based on actuarial assumptions which include morality
and withdrawal rates as well as assumptions concerning future development in discount rates,
the rate of salary increase, inflation rate and expected rate of return of planned asset. The Group
considers that the assumptions used to measure its obligations are appropriate and documented.
However, any changes in these assumptions may have an impact on the resulting calculations.
d) Revenue
Revenue from sale of power within the State is recognized on accrual basis at the tariff as notified
by the Kerala State Regulatory Commission from time to time. Revenue from Interstate sale of
power is recognized on accrual basis.
e) Provisions and Contingencies
The assessment undertaken in recognizing provisions and contingencies have been made in
accordance with Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. The evaluation
of the likelihood of the contingent events has been made best judgment by management regarding
probable outflow of economic resources. Such estimation can change after unforeseeable
development.
f) Impairment of Trade Receivables
Considering the historical credit loss experience for trade receivables, the Group does not envisage
any either impairment in the value of receivables from beneficiaries or loss due to time value of
money owing to delay in realization of trade receivables. However, the Group, in respect of the
concept of prudence, provides for the debts that are doubtful, based on a policy.
g) Investment in Subsidiaries, Associates and Joint Ventures
Investment has been carried at cost and includes share of profit/Loss of Associates/Joint Ventures
as per the assessment by the Group and there is no indication of impairment of such investments.
Only a change in the assumptions will have a material impact in the recoverability of the amount.
1.7 Property, Plant and Equipment (PPE)
Since there is no change in the functional currency, the Group has elected to continue with
the carrying value for all its property, plant and equipment as recognised in its IGAAP financial
statements as deemed cost at the transition date, viz., April 1, 2015.
Property, plant and equipment are stated at cost, net of accumulated depreciation and
accumulated impairment loss, if any. Such cost includes expenditure that is directly attributable to
the acquisition/construction of the asset. In cases where final settlement of bills with contractors
is pending, but the asset is complete and available for use, capitalisation is done on estimated
basis subject to necessary adjustments. Cost also includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term projects if the recognition criteria are met in
244
accordance with Ind AS 23 Borrowing Cost. When significant parts of plant and equipment are
required to be replaced at intervals, the Group depreciates them separately based on their specific
useful lives.
The present value of the expected cost for the decommissioning of the asset after its use is included
in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation on the assets which belongs to generation of electricity business and on the assets of
Corporate & other offices is charged on straight line method following the rates notified by the CERC
Tariff Regulations and in accordance with Schedule II of the Companies Act, 2013. Depreciation is
calculated on straight-line method up to 90% of the original cost of assets at the rates notified by
the Central Electricity Regulatory Commission. Claw back of depreciation has been provided in the
accounts on the assets created out of the contribution received from consumers and government
grants and subsidies.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the Statement of Profit and Loss when the asset is derecognised.
1.8 Capital Work in Progress
Capital work-in-progress comprises of PPE that are not yet ready for their intended use as at the
balance sheet date.Expenditure incurred on assets under construction (including a project) is
carried at cost under Capital Work in Progress (CWIP). Such costs comprise purchase price of assets
including import duties and non-refundable taxes (after deducting trade discounts and rebates),
expenditure in relation to survey and investigation activities of projects, cost of site preparation,
initial delivery and handling charges, installation and assembly costs, etc.
Employee cost expenses of various units are allocated to “Revenue expenses pending allocation
over capital works” on the basis of following ratio.
Units Employee cost
Generation 100% for offices exclusive for Civil works.
Transmission 25%
Distribution 14.00%
HO 5%
Interest and finance cost related to capital expenditure are also allocated to Revenue expenses
pending allocation over capital works.
1.9 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction/exploration/
development or erection of qualifying assets are capitalized as part of cost of such asset until such
time the assets are substantially ready for their intended use. Qualifying assets are assets which
take a substantial period to get ready for their intended use or sale.
245
When the Group borrows funds specifically for obtaining a qualifying asset, the borrowing costs
incurred are capitalized. When Group borrows funds generally and uses them for obtaining a
qualifying asset, the capitalization of the borrowing costs is computed based on the weighted
average cost of general borrowing that are outstanding during the period and used for the
acquisition, construction/exploration or erection of the qualifying asset.
Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare
the qualifying assets for their intended uses are complete. Borrowing costs consist of interest
and other costs that an entity incurs about the borrowing of funds. Income earned on temporary
investment of the borrowings pending their expenditure on the qualifying assets is deducted from
the borrowing costs eligible for capitalization. The quantum of borrowing cost is measured based
on the weighted average cost of capital.
1.10 Regulatory Deferral Accounts
The Group is mainly engaged in generation and sale of electricity. The price to be charged for
electricity sold to its customers is determined by the KSERC which provides extensive guidance on
the principles and methodologies for determination of the tariff for sale of electricity. The tariff is
based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a
stipulated return. This form of rate regulation is known as cost-of-service regulations which provide
to recover its costs of providing the goods or services plus a fair return. The Group is eligible to
apply Ind AS 114, Regulatory Deferral Accounts. The standard permits an eligible entity to continue
previous GAAP (Guidance Note on accounting for Rate Regulated Activities) accounting policy for
its policy for such balances. Hence Group has opted to continue with its previous GAAP accounting
policy for such balances.
1.11 Inventory
Up to 30.06.2017 fast moving stores and spares are valued at standard rates, determined by the
Group, in respect of items for which standard rates are fixed. Other items are valued at actual
price. The difference between actual cost and standard rate is debited or credited to Material cost
variance, as the case may be. The difference between actual cost and standard rate is debited or
credited to Material cost variance debit balance if any in the account is charged to Consolidated
profit and loss account.From 01.07.2017 onwards, the group dispensed the policy of standard rate
method and adopted the policy of FIFO (First in First Out) method on implementation of material
management software in the company.
1.12 Fair Valuation
The Group measures financial instruments, such as, long term loans at fair value at each balance
sheet date. Fair value is the price that would be received by selling an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair
value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:
1. In the principal market for the asset or liability, or
2. In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
246
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest. A fair value measurement of a non-financial asset considers a market
participant’s ability to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorised within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole
1. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
value measurement is directly or indirectly observable.
value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the
Group determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.
The Group management determines the policies and procedures for recurring and non-recurring
fair value measurement. Involvement of external valuers is decided upon annually by respective
companies’ management. The management decodes after discussion with external valuers,
about valuation technique and inputs to use for each case. At each reporting date, the Company’s
management analyses the movements in the values of assets and liabilities which are required to
be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, the Group
verifies the major inputs applied in the latest valuation by agreeing the information in the valuation
computation to contracts and other relevant documents. The Group compares the change in
the fair value of each asset and liability with relevant external sources to determine whether the
change is reasonable. For the purpose of fair value disclosures, the Group has determined classes
of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given
in the relevant notes.
 Quantitative disclosures of fair value measurement hierarchy.
 Investment properties
 Financial instruments
1.13 Government Grant
Grants and subsidies from the government are recognised when there is reasonable assurance
that (i) the Group will comply with the conditions attached to them, and (ii) the grant / subsidy
247
will be received. When the grant or subsidy relates to revenue, it is recognised as income on a
systematic basis in the statement of consolidated profit and loss over the periods necessary to
match them with the related costs, which they are intended to compensate. Where the grant
relates to an asset, it is recognised as deferred income and released to income in equal amounts
over the expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded
at fair value amounts and released to consolidated profit or loss over the expected useful life in
a pattern of consumption of the benefit of the underlying asset i.e. by equal annual instalments.
When loans or similar assistance are provided by governments or related institutions, with an
interest rate below the current applicable market rate, the effect of this favourable interest is
regarded as a government grant. The loan or assistance is initially recognised and measured at fair
value and the government grant is measured as the difference between the initial carrying value
of the loan and the proceeds received. The loan is subsequently measured as per the accounting
policy applicable to financial liabilities.
1.14 Provisioning of Debtors
Revenue is recognised only when it is probable that the economic benefits associated with the
transaction will flow to the entity. In some cases, this may not be probable until the consideration
is received or until an uncertainty is removed. When an uncertainty arises about the collectability
of an amount already included in revenue, the uncollectible amount or the amount in respect of
which recovery has ceased to be probable is recognised as an expense in Consolidated profit and
loss account. Such amount shall be reduced from the gross carrying amount of a financial asset
when no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.
Total provision for bad and doubtful debts amounting to Rs.789.31 crores were made up to 2008-09
based on the age wise analysis of debtors at the rates mentioned below. As adequate provision is
already there, no further provision for bad and doubtful debts is made during the period.
Age of debtors Provisioning rate (%)
More than 5 years 75
Between 6 months to 1 year 5
Less than 6 months 0
1.15 Retirement and Other Employee Benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed
or included in the carrying amount of an asset if another standard permits such inclusion as the
related service is provided. A liability is recognised for the amount expected to be paid under short-
term performance related cash bonus if the Company has a present legal or constructive obligation
to pay this amount because of past service provided by the employee and the obligation can be
estimated reliably. The KSEB Limited Employees Welfare Fund maintains the short-term welfare
fund and is an autonomous institution registered under Travancore Cochin Literary Scientific
and Charitable Societies Registration Act 1955 under Registration No. T 925 dated 16.10.1996. KSEB
Limited is contributing Rs.30 /- per employee per month to the KSEB Limited employee welfare
fund.
248
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Retirement benefits in the form of gratuity is defined benefit obligations and is provided for based
on an actuarial valuation, using projected unit credit method as at each balance sheet date. The
present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation. The net interest cost
is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee benefit expense in the statement
of profit and loss or included in the carrying amount of an asset if another standard permits such
inclusion. Re-measurement gains and losses arising from experience adjustments and changes
in actuarial assumptions are recognised in the period in which they occur, directly in Other
Comprehensive Income. They are included in retained earnings in the Statement of Changes in
Equity and in the Consolidated Balance Sheet.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets
(excluding amounts included in net interest on the net defined benefit liability), are recognised
immediately in the Consolidated balance sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Re-measurements are not reclassified to
consolidated statement of profit and loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
National Pension Scheme (NPS) was implemented in KSEB Limited vide B.O (FB) No.843/2013
(PRC/335/2013) dated 09.04.2013. All employees appointed on or after 01.04.2013 come under the
coverage of NPS. The NPS will work on defined contribution basis and will have two tiers Viz.,
Tier I and Tier II. Contribution to Tier I will be mandatory for all employees appointed on or after
01.04.2013 whereas the Tier II will be optional and at the discretion of Board employees. In Tier I, the
Board Employees shall make a contribution of 10% of (Basic pay + DA) from the salary every month.
The Group is also making equal matching contribution. The Group is not making any contribution
towards Tier II.
The employees who are recruited on or after 1st April 2013 are included in the new national pension
scheme and do not come under the regular pension scheme. The Group has no further obligation
beyond the monthly contributions.
Vide G.O (P) No.14/2015/PD dated 27.04.2015 Government of Kerala notified that General provident
fund scheme existed in the KSE Board is applicable to KSEB Ltd also. This scheme is applicable
for all employee of KSEB Ltd. Minimum employee contribution to the scheme is fixed as 6% of the
basic salary. The contribution made by the employees for general Provident Fund is credited to
General Provident Fund Account. There is no contribution by the KSEB Ltd. to this scheme. KSEB
Ltd. is providing interest to the deposit in this scheme at the rate applicable to the provident fund
scheme of the Kerala Government Employees.
As per section 6(8) & 6(9) of the Kerala State Electricity Second Transfer Scheme a Master Trust was
registered on 12/02/2015. This Trust was formed to disburse the pension of pensioners of erstwhile
KSE Board. As per the transfer scheme the Trust should be operationalized during the financial
year 2014-15 and the pension to be disbursed through this Trust. Though the Master Trust was
249
registered the procedural formalities for full operationalization of trust is not yet completed and
hence trust could not be functioned as per the scheme notified in the Second Transfer Scheme.
Hence the pension was disbursed to the pensioners from the cash flow of KSEB Ltd. However,
KSEB Ltd. started distributing pension through the Master Trust with effect from 01.01.2016. The
Master Trust made operational with effect from 01.04.2017 and the bonds were issued on that date.
1.16 Revenue Recognition
Revenue is recognised when the significant risks and rewards of ownership have been transferred to
the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably,
there is no continuous management involvement and the amount of revenue can be measured
reliably. Revenue from the sale of power is measured at the fair value of the consideration received
or receivable.
Revenue from sale of power within the State is recognized on accrual basis at the tariff as notified by
the Kerala State Regulatory Commission from time to time. Revenue from Interstate sale of power
is recognized on accrual basis. Customers are billed on a periodic and regular basis. As at each
reporting date, revenue from sale of power includes an accrual for sales delivered to customers but
not yet billed (unbilled revenue). Recovery/ refund towards foreign currency variation in respect of
foreign currency loans and recovery towards Income Tax are accounted for on year to year basis.
Interest/Surcharge recoverable from customers, liquidated damages /interest on advances to
contractors and Income from Investment in other Companies is recognised on receipt basis since
management expects that measurability and collectability of such items are uncertain and cannot
be estimated.
Kerala State Power and Infrastructure Finance Corporation Ltd. is a Non Banking Finance Company
and it recognises interest income from loans based on RBI Guidelines.
1.17 Taxes on income
Tax expense comprises current and deferred tax. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in
India. The tax rates and tax Laws used to compute the amounts are those that are enacted, at the
reporting date. Deferred tax reflects the effect of temporary timing differences between the assets
and liabilities recognized for financial reporting purposes and the amount that are recognized
for current tax purposes. As a matter of prudence deferred tax assets are recognized and carried
forward only to the extent, there is a reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
1.18 Impairment of asset
The Group assesses at each balance sheet date whether there is any indication that an asset may
be impaired. If any such indication exists, the Group estimates the recoverable amount of the
asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit
to which the asset belongs is less than its carrying amount, the carrying amount is reduced to
its recoverable amount. The reduction is treated as an impairment loss and is recognized in the
Statement of Profit and Loss.
250
1.19 Secured and Unsecured Loans

All non-current secured loans are subject to fair valuation under Ind AS 109: Financial Instruments.
For fair valuation, market rate is taken from the rate notified for the appropriate class of the Group
based on the purpose of the loan and subject to the credit rating given to Kerala State Electricity
Board Limited by the external credit rating agency (CRISIL). Such notified interest rate is taken and
discounted to arrive at the present value of future obligations and compared with the carrying
value of the loan to identify the effect of time value of money and has been appropriately dealt
through Fair Value Through Profit and Loss Account.
However, if the actual rate of interest charged by the lending institutions is less than the notified
market rate, such benefit of concessional rate of interest is computed and recognized as a grant as
defined under Ind AS 20 Government Grants and amortized in proportion to the expense incurred
towards the loan by way of giving effect through Fair Value Through Profit and Loss Account.
1.20 Transactions Foreign currency
Transactions in foreign currency are initially recorded at the functional currency the date the
transaction first qualifies for recognition. At each Balance Sheet date, monetary items denominated
in foreign currency are translated at the functional currency exchange rates prevailing on that
date. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Group has not entered into
transactions in foreign currency during the financial year 2017-18 or in the reported comparative
periods.
1.21 Provisions and Contingent Liabilities
In accordance with Ind AS 37: Provisions, Contingent Liabilities and Contingent Assets, a provision
is required to be recognised to settle a future obligation, both legal and constructive, by way of an
economic outflow, resulting out of a past event and which can be reliably estimated. The amount
of provision is recognised as the best estimate of present value of any obligation that need to be
settled. The provision is discounted if the effect of time value of money for the provision is material
and shall be recognised as a finance cost in consolidated profit and loss account.
Contingent liabilities, on the other hand is not recognised, but disclosed adequately as parts of
the consolidated financial statements. A contingent liability is disclosed unless the possibility of an
outflow of resources embodying economic benefit is remote. Contingent liabilities are disclosed
based on judgment of the management/independent experts with careful understanding of the
circumstance of each case.
These are reviewed at each balance sheet date and are adjusted to reflect the current management
estimate.
Kerala State Power and Infrastructure Finance Corporation Ltd. is a Non Banking Finance Company
and it follows on RBI norms.
1.22 Earnings Per Share
Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity
shareholders of the Group by the weighted average number of equity shares outstanding during
the financial year. Diluted earnings per equity share is computed by dividing the net profit or loss
251
attributable to equity shareholders of the Group by the weighted average number of equity shares
considered for deriving basic earnings per equity share and the weighted average number of equity
shares that could have been issued upon conversion of all dilutive potential equity shares. Basic
and diluted earnings per equity share are also computed using the earnings amounts excluding
the movements in regulatory deferral account balances.
1.23 Micro, Small and Medium Enterprises
Disclosure, if any, relating to amounts unpaid as on date of balance sheet together with interest
paid/ payable as required under the Micro, Small and Medium Enterprises Development Act 2006
which came into effect from 2nd October 2006 is being provided only on receipt of information
from its suppliers regarding their status under the Act.
1.24 Statement of Cash Flows
Consolidated Cash flow statement is prepared in accordance with the indirect method prescribed
in Indian Accounting Standard (IND AS) 7 “Statement of Cash Flows”.
252
Note 2 : Property, Plant and Equipment
Particulars Ind AS (` In Lakhs)
Plant & Machinery Others
Land & Buildings Other Plant Hydraulic Lines, Furnit- Veh- Office Seig-
Land Civil & Works Cable & ure & icles Equip- norage Total
Rights Works Machinery Network Fixtures ments Value
Cost/Deemed Cost
At 1 - April - 2016 1,71,218.08 67,990.96 51,474.50 15,99,101.20 1,17,102.95 7,40,843.82 3,200.37 2,079.63 9,909.48 1.36 27,62,922.36
Additions 6,126.96 10,746.92 7,766.80 35,006.82 15,972.71 68,902.03 830.35 143.32 3,096.07 0.45 1,48,592.43
Deductions - - - - - - - - - - -
Other Adjustments 1,037.51 -47.12 -3.04 23.30 60.16 159.83 - - - - 1,230.63
At 31 - March - 2017 1,77,345.04 78,737.88 59,241.31 16,34,108.02 1,33,075.67 8,09,745.85 4,030.72 2,222.95 13,005.55 1.81 29,11,514.79
Additions 1,046.74 4,788.66 3,502.16 41,952.70 4,855.11 80,836.59 349.28 278.02 1,447.75 1,39,057.00
Deductions -
Other Adjustments 12.56 7,696.73 226.71 30,434.63 731.38 506.88 156.22 42.58 11.03 39,818.72
At 31 - March - 2018 1,78,379.21 75,829.81 62,516.76 16,45,626.09 1,37,199.40 8,90,075.56 4,223.78 2,458.38 14,442.28 1.81 30,10,753.07
Accumulated Depreciation
& Impairment of Asset -
At 1 - April - 2016 - 28,393.63 13,901.68 3,01,067.42 47,609.49 3,70,773.12 1,691.09 1,638.43 5,815.66 - 7,70,890.52
Depreciations Expenses - 2,211.57 1,838.01 23,606.94 6,342.54 36,367.24 204.03 97.87 1,219.71 - 71,887.92
Deductions - - - - - - - - - - -
Other Adjustments - - - - - - - - - - -
At 31 - March - 2017 - 30,605.20 15,739.69 3,24,674.36 53,952.03 4,07,140.36 1,895.12 1,736.30 7,035.38 - 8,42,778.44
Depreciations Expenses 2,339.06 2,142.80 23,661.25 7,007.75 43,440.04 234.69 131.05 1,413.85 - 80,370.49
Deductions - -
Other Adjustments 1,622.34 1,984.86 10,484.89 5,722.93 29,590.14 59.01 -25.20 459.56 - 49,898.53
At 31 - March - 2018 34,566.60 19,867.35 3,58,820.51 66,682.71 4,80,170.54 2,188.82 1,842.15 8,908.79 - 9,73,047.46
Carrying Value - - - - - - - - - - -
At 31 - March - 2018 1,78,379.21 41,263.21 42,649.41 12,86,805.58 70,516.69 4,09,905.02 2,034.96 616.23 5,533.49 1.81 20,37,705.61
At 31 - March - 2017 1,77,345.04 48,132.68 43,501.62 13,09,433.66 79,123.63 4,02,605.49 2,135.60 486.64 5,970.17 1.81 20,68,736.35
253

Note 3 : Capital Work in Progress
As at 31.03.2018 As at 31.03.2017
Capital Work in Progress 2,04,645.92 1,54,832.78
Revenue Expenses Pending

Allocation over capital works 40,243.99 23,496.41
Total 2,44,889.91 1,78,329.19
Note 4 : Investment (Non Current )
As at 31.03.2018 As at 31.03.2017
INVESTMENT IN EQUITY
INSTRUMENTS
Unquoted Investments
Fully Paid Up - Kerala State
Power Infrastructure and Finance
Corporation Ltd. 2,985.78 2,487.59
Baitarni West Coal Company Ltd. 971.59 994.14
Investment in Renewable Power
Corporation of Kerala 70.50 50.00
Other Investments 0.01 0.01
Total 4,027.88 3,531.74
254

Note 5 : Non Current Assets - Financial Assets - Loans
As at 31.03.2018 As at 31.03.2017
Loans Including Interest Accrued
Loans to related parties
Secured Loans - -
Doubtful Loans - -
Loans to Employees - -
Secured Loans - -
Doubtful Loans - -
Other Loans - -
Secured Loans - -
Advance given to licensee - -
Advance given to others 8,295.03 8,389.85
Doubtful Loans - -
Total 8,295.03 8,389.85
Loans Due from Directors and
Officers of the Company
Loans to Directors - -
Loans to Officers - -
Total - -
Loans to Related Parties Include
Subsidiaries - -
Associates - -
Joint Ventures - -
Structured Entities - -
Total
Total 8,295.03 8,389.85
Note 6 : Non Current Assets - Other Financial Assets

As at 31.03.2018 As at 31.03.2017
BANK DEPOSITS WITH MORE
THAN 12 MONTHS MATURITY
Interest Accrued
On Loan to Government & Others - -
On Bank Deposits with more than 12 months - -
Security Deposits* 6,331.70 55,070.04
Total 6,331.70 55,070.04
255

Note 7 : Other Non Current Assets
As at 31.03.2018 As at 31.03.2017
OTHER NON CURRENT ASSETS
Capital Advances
Secured Advances
Unsecured Advances Considered Good
Covered by Bank Guarantee
Others 10,896.01 13,660.90
Advances Considered Doubtful
Advances to Related Parties
Advances to Employees
Advance to Contractors & Suppliers
Other Advances
Others
Secured considered good
Deferred Cost Account of Feasibility/Survey 10,557.28 10,238.65
Receivable from Government 4,09,607.20 4,69,389.73
Total 4,31,060.49 4,93,289.29
Capital advance includes advance given to companies in which one or more of the Directors
are interested
Note 8 : Inventories
Particulars Ind AS (` In lakhs)

As at 31.03.2018 As at 31.03.2017
Fuel Stocks -
Heavy Duty Oil 623.20 749.85
Stock of Materials at Construction Stores 17,992.53 5,610.49
Stock of Materials at other stores 1,046.73 5,024.79
Material at Site (Cap) -
Material at Site (O & M) 26,407.20 18,365.36
Other Materials Account 2,550.43 1,295.33
(Less) Provision for Shortages and Obsolescence 29.72 26.92
Total 48,590.36 31,018.91
256

Note 9 Current Financial Assets : Trade Receivables
As at 31.03.2018 As at 31.03.2017
Trade Receivables
Secured, considered good
Sundry Debtors for Sale of Power 2,80,260.32 2,42,240.34
Sundry Debtors for Inter State Sale of Power 293.36
Sundry Debtors for Electricity Duty 16,499.09 14,991.37
Sundry Debtors (Miscellaneous) 12,097.51 13,745.31
Doubtful. -
(Less) Allowance for Bad and Doubtful Debts 78,930.73 78,930.73
Total 2,29,926.20 1,92,339.65
Note 10 : Current Financial Assets - Cash & Cash Equivalents
As at As at
As at 31.03.2018 As at 31.03.2017
Balances with Banks (of the nature of cash and

cash equivalents)
Balance with Bank/Treasury 2,222.84 2,209.57
Disbursement Bank Accounts 18,928.70 17,878.10
Drawing Account with Treasury 2,293.36 238.44
Current Accounts
Deposits with original maturity upto three months 2,783.14 2,819.63
Cheques, drafts on hand
Cash on hand
Cash In Hand 1,354.89 433.63
Cash Imprest with Staff 5.84 23.86
Others
Total 27,588.78 23,603.23
257

Note 11: Financial Assets - Current - Bank Balances Other Than Cash and Cash Equivalents
Financial Assets - Current - Bank Balances Other Than Cash and Cash Equivalents
As at 31.03.2018 As at 31.03.2017
Balances with Banks includes
Deposits with original maturity more than
3 months but within 1 year - -
Earmarked Balance with Banks - Unpaid Dividend - -
Guarantees & Other commitments 7,007.15 6,827.98
Total 7,007.15 6,827.98
Bank Balances year wise

Year 2017-18
Name of the bank Amount Date of
(` In lakhs) Maturity
State bank of India 1,782.39 20/05/18
744.49 24/4/2018
872.00 1-1-19
10.40 15/2/2019
33.13 17-12-2018
67.30 31-03-2019
95.00 31-03-2019
80.50 06-08-2018
205.30 06-02-2018
313.35 06-01-2018
20.90 04-06-2018
Canara Bank 184.53 23/05/2018
371.89 2-8-19
12.35 22/05/2018
2.49 2-2-19
362.93 30/1/19
0.12 17/06/2018
37.63 10-5-18
91.26 10-5-18
28.90 10-7-18
336.03 25/12/2018
4.60 31-05-2018
9.95 23-02-2019
Vijaya Bank 978.17 16/12/2018
258
326.06 16/12/2018
4.43 05-07-2018
12.28 30-07-2018
8.81 04-10-2018
8.18 24-05-2018
0.78 21-06-2018
1.00 24-05-2018
Punjab & Sind Bank 2,500.00 1-9-18
Kerala Gramin Bank Peroorkada 76.20 25/05/2020
Kerala Gramin Bank Kollam Branch 206.94 31-03-2018

Note 12 : Other Current Assets
As at 31.03.2018 As at 31.03.2017
Security Deposits -
Advances to Related Parties -
Advances to Employees 940.90 813.92
Advance to Contractors & Suppliers 930.70 750.82
Other Advances 1,838.21 1,737.61
Advance Income Tax/Deductions at source
Others
Secured considered good -
Unsecured considered good -
Rent Receivable 6.54 7.65
Income Accrued But Not Due 2,083.40 2,166.52
Other Recoverable 2,564.25 1,033.56
Inter Unit Balance 4,285.64 1,536.57
Total 12,649.65 8,046.66
259

Note 13 : Equity Share Capital
OTHER EQUITY
Particulars As at 31 - March - 2018 As at 31.03.2017
No. of Shares Amount ` No. of Shares Amount `
( In Lakhs) in lakhs ( In Lakhs) in lakhs
Equity Share Capital
Authorised (face value `10/-) 50,000.00 5,00,000.00 50,000.00 5,00,000.00
Issued Subscribed and Paid Up
(face value `10/-) 34,990.50 3,49,905.00 34,990.50 3,49,905.00

Reconciliation of No. Shares and
Share capital outstanding
Opening number of shares
outstanding 34,990.50 3,49,905.00 34,990.50 3,49,905.00
Add: Number of shares issued or
subscribed during the year - - - -
(Less) Reduction in number of
shares on buyback of shares - - - -
Closing Number of shares
outstanding 34,990.50 3,49,905.00 34,990.50 3,49,905.00
Total 34,990.50 3,49,905.00 34,990.50 3,49,905.00
The Company has issued only one kind of equity shares with voting rights proportionate to the
share holding of the shareholders. These voting rights are exercisable at meeting of shareholders.
The holders of the equity shares are also entitled to receive dividend as declared from time to time
for them.
Shares in the company held by each shareholder holding more than 5 percent specifying the
number of shares held
% Amount ` % Amount `
in lakhs in lakhs
"His Excellency the Honourable
Governor of Kerala 100 3,49,905.00 100 3,49,905.00
"Shares reserved for issue under options and contracts/commitments for the sale of shares/
disinvestment, including the terms and
amounts : NIL"
260
In preceding five financial years immediately preceding 31.03.2017, Company has not allotted
any equity share as fully paid up pursuant to contract(s) without payment being received in
cash/ not allotted any equity share as fully paid up by way of bonus share(s).
Terms of any securities convertible into equity shares issued along with the earliest date of
conversion in descending order starting from the farthest such date:- NIL
Calls unpaid (showing aggregate value of calls unpaid by directors and officers) : NIL
Forfeited shares (amount originally paid up) :NIL
Note 14 : Other Equity
OTHER EQUITY
Particulars ( ` in lakhs)
As at 31.03.2018 As at 31.03.2017
Capital Reserve 0 0
Security Premium Account 0 0
Bonds/Debenture Redemption Reserve 0 0
General Reserve 0 0
Retained Earnings -4,97,112.69 -3,67,872.89
Other Reserves -4,80,547.98 -3,72,915.12
Total -9,77,660.67 -7,40,788.01
Particulars ( ` in lakhs)
As at 31.03.2018 As at 31.03.2017
General reserve
- -
Retained Earning Surplus
As per Last Balance Sheet -3,67,872.89 -2,18,410.04
Add: Profit During the Year -78,409.46 -1,49,462.85
Add:Adjustments attributale in Standalone financials
Less:Profit included in the previous year
Add:Transfer to Retained earnings -54,850.76 -
Less:Transfer from Retained earnings 4,020.42 -
(Less) : Dividend and Corporate Dividend Tax - -
Other Reserves - Fair Value through Other
Comprehensive Income
As per Last Balance Sheet -3,72,915.12 -80.75
Add: Fair value gain/(loss) During the Year -1,07,632.86 -3,72,834.37
Total -9,77,660.67 -7,40,788.01
261

Note 15 : Non Current Financial Liabilities - Borrowings
Particulars ( ` In lakhs)
As at 31.03.2018 As at 31.03.2017
Bonds or Debentures
Secured Bonds or Debentures 11,23,929.00 -
Unsecured Bonds or Debentures - -
Term Loans*
From Banks
Secured Loans - -
Unsecured Loans - -
From Others
Secured Loans 4,69,525.49 4,26,656.76
Unsecured Loans - -
Secured Loans - -
Total 15,93,454.49 4,26,656.76
Details of terms of repayment and rate of Interest

Loan Name ( Ìn lakhs)
2017-18 2016-17
Loan from L I C - 200.00
Loan from REC on Various Schemes -47.06 1,610.82
Loan from REC R-APDRP PART-B 51,393.79 38,625.60
Loan from R E C - RGGVY 1,396.26 1,427.40
Loan from PFC-Pallivasal Generation Project 17,674.96 18,552.50
Loan from PFC R-APDRP 32,600.13 29,086.13
Loan from SOUTH INDIAN BANK 8,099.89 8,512.50
Loan from PFC GEL Kakkayam 1,920.32 1,225.21
Loan from REC-TRAN.Kattakkada -
Pothencode Scheme 9,612.43 9,528.53
Loan from REC-TRAN-Group I 5,951.65 5,530.65
Loan from REC-Distriburion - 23 Circle Scheme 59,990.47 49,408.15
Loan from REC- Distriburion - Meter Scheme 3,903.09 4,997.90
Loan from REC-Thottiyar Gene. Scheme 5,373.42 5,373.42
Special Loan Assistance from REC 1,30,000.00 1,25,000.00
Loan from REC for the DDG Scheme 13.42 13.42
Special Loan Assistance from PFC 1,32,801.74 1,25,000.00
Loan from PFC GEL Perumthenaruvi 3,513.87 1,659.92
Dam Rehabilitation and
Improvement Project (DRIP) 4,920.73 859.59
Loan from RIDF of NABARD 406.40 45.00
Total 4,69,525.49 4,26,656.76
262

Note 16 : Non Current-Other Financial liabilities
As at 31.03.2018 As at 31.03.2017
Security deposit from consumers 2,83,696.07 2,59,751.30
Security deposit from consumers other than cash* 212.83 18,748.52
Interest payable on consumers deposit 33,136.12 33,097.16
Total 3,17,045.02 3,11,596.98
*Previous year figure includes BG of `18538.08 lakh furnished to KSEBL by Consumers
Note 17 : Non Current Provisions
As at 31.03.2018 As at 31.03.2017
Provision for Employee Benefits - -
Contributory Provident Fund - -
As at Balance Sheet Date 3.79 3.79
General provident Fund - -
Staff Pension Fund - -
Others - -
Provision for Interest on bonds adjustable
against Electricity duty - -
Provision for Pay revision - -
263
Provision for pension revision - -
Total 9,76,539.72 20,28,767.16
Note 18 : Other Non Current Liabilities
As at 31.03.2018 As at 31.03.2017
Decommissioning Liability 2,056.07 1,837.88
Interest payable on consumers deposit - -
Grants in Aid from Government - Deferred Income
Add: Grants Received during the year - -
Grants to be Amortised - Concessional
Loan from Government
Add: Grants recognised during the year - -
Add/Less : Fair Value Changes - -
Consumer Contribution
Add: Received during the year - -
(Less) : Amortisation - -
As at Balance Sheet Date 1,08,251 84,288
- -
Total 1,92,276.19 1,42,922.30
264
Note 19 : Current Financial Liabilities - Borrowings
As at 31.03.2018 As at 31.03.2017
Loans repayable on demand
From Banks
Secured Loans -
Current maturities of long term debt 26,318.70 21,380.19
Unsecured Loans 2,47,440.28 2,55,366.11
From Others
Secured Loans
Unsecured Loans
Secured Loans
Unsecured Loans
Total 2,73,758.98 2,76,746.30
Note 20 : Current Financial Liabilities - Trade Payables
As at 31.03.2018 As at 31.03.2017
Trade Payable 96,836.56 81,846.53
265
Note 21 : Current - Other Financial Liabilities
As at 31.03.2018 As at 31.03.2017
Current Maturities of Long-Term Debt
Current Maturities of Finance Lease Obligations
Interest Accrued
Unpaid Dividends
Others
Fuel related liabilities 0.00 0.00
Liability for capital supply/works 3,608.30 4,505.05
Liability for O&M supply/works 6,573.86 8,149.07
Staff related liabilities and provisions 14,128.56 14,674.02
Deposit and Retentions from Suppliers/Contractors* 41,954.00 71,669.87
Electricity Duties and Other levies payable to Government 0.00 -
Liability for Expenses 3,990.73 2,466.41
Amount owing to Licensees 16.03 16.03
Accrued/Unclaimed amount relating to borrowings 18,905.97 15,557.30
Other liability(Lease amount of RCKPL) 8.07
Other Liabilities & Provisions 15,011.23 10,340.56
Amount payable to Master Trust 51,874.38
Deposit for Electrification, Service connection etc 76,918.46 62,619.83
Total 2,32,989.60 1,89,998.14
*Previous year figure includes BG of `30204.10 lakh furnished to KSEBL by Suppliers/
Contractors/ Consumers
Note 22 : Current Provisions
As at 31.03.2018 As at 31.03.2017
Provision for Employee Benefits
Dearness Allowance
Add: Additions and Transfers 900.00
As at Balance Sheet Date 900.00 -
Dearness Relief to Pensioners
Income Tax
As at Balance Sheet Date
Total 900.00 -
266
Note 23 : Revenue from operations
2017-18 2016-17
Interstate -
Domestic 4,31,698.73 3,95,333.50
Commercial 2,87,669.32 2,70,904.46
Public Lighting 16,984.80 15,663.55
Irrigation & Dewatering 6,328.62 10,201.32
Industrial L T 80,919.44 75,471.70
Railway Traction 16,001.27 13,051.75
Bulk Supply 38,458.80 36,325.43
Miscellaneous 9.42 90.85
H. T. 2,60,181.85 2,36,138.46
E. H. T. 62,355.01 49,269.79
NVVN/ Others 5,118.27 1,226.61
Reactive Energy Charges 5,543.03 544.01
Electricity Duty Recovery 80,904.99 76,223.03
Other State Levies Recovery 1,474.65 1,398.26
Meter Rent/Service Line Rental 9,317.09 9,203.58
Wheeling Charges Recoveries 10.21 39.63
Misce. Charges from Consumers 11,221.45 8,417.87
GROSS SALE OF POWER 13,14,196.95 11,99,503.81
Less: Electricity Duty Payable (Contra ) 80,904.99 76,223.00
Less: Other State Levies Payable (Contra ) 1,474.65 1,398.00
Total 12,31,817.31 11,21,882.81
Note 24. a) Other Operating Income
2017-18 2016-17
Rebate Received 13,349.87 14,246.34
Interest Advances to Suppliers/Contractors 1,416.00 85.32
Income from sale of Scrap/Tender form etc 6,408.93 7,884.77
Miscellaneous Receipts 12,931.60 17,095.54
Dividend Income
Total 34,106.40 39,311.97
267
Note 24. b) Other Income
2017-18 2016-17
Interest Income
Staff Loans and Advances 16.40 22.44
Income From Loans &others 58.14 23.94
Banks 546.59 719.34
Total 621.12 765.72
Total (a+b) 34,727.52 40,077.69
Note 25 : Purchase of Power
2017-18 2016-17
Power purchased from Central Generating Stations 2,75,225.59 2,57,310.09
Power purchased from Others 4,19,492.44 4,28,978.60
Power purchased from Wind Generating Stations 3,525.90 2,965.88
Wheeling Charges (Less - UI Charges Received) 54,252.35 48,535.52
Other charges on Sale through Power Exchange 106.40 1,542.33
Total 7,52,602.69 7,39,332.42
Note 26: Generation of Power
2017-18 2016-17
FUEL CONSUMPTION
Oil 97.46 2,066.54
HSD Oil 27.78 133.47
Lub Oil 7.77 56.66
LUBRICANTS & CONSUMABLE STORES 74.21 87.38
STATION SUPPLIES 0.61 0.58
Total 207.84 2,344.63
268
Note 27: Repairs & Maintenance
2017-18 2016-17
Plant and Machinery 4,833.94 5,112.41
Buildings 1,029.54 971.17
Civil Works 1,328.61 1,141.72
Hydraulic Works 308.78 319.73
Lines, Cable Network etc. 19,363.69 18,433.99
Vehicles 266.69 233.35
Furniture and Fixtures 42.84 56.49
Office Equipments 560.79 244.00
Total 27,734.87 26,512.85
Note 28 : Employee Benefits
2017-18 2016-17
Salaries 2,31,628.42 1,75,552.13
Over Time/Holiday Wages 33.92 41.54
Dearness Allowance 45,235.06 37,810.12
Other Allowances 7,764.49 7,851.87
Bonus 983.27 910.28
Medical Expenses Reimbursement 1,083.28 1,034.51
Leave Travel Assistance 21.21 12.79
Earned Leave Encashment 15,310.02 14,567.08
Payment under Workmen's Compensation Act 13.78 50.04
Leave Salary & Pension Contribution Paid by the
Company to the Employees and Other Departments 1,327.81 1,378.17
Funeral Allowance 5.05 5.40
Staff Welfare Expenses 434.25 433.48
Terminal Benefits - 1,20,721.63
(Less) Expenses Capitalised 40,034.41 24,291.84
Total 2,63,806.15 3,36,077.22
269
Note 29 : Finance Cost
2017-18 2016-17
Finance Charges on Financial Liabilities
Measured at Amortised Cost
INTEREST
Interest on State Govt. Loans
Interest on Bonds
Interest on other loans/deferred credits 61,098.20 43,579.39
Interest to Consumers 17,533.21 17,726.70
Interest on Borrowings for Working Capital 9,500.24 24,894.08
Interest on Fair Valuation of Concessional Loan 2,227.76
OTHER INTEREST AND FINANCE CHARGES
Rebate allowed for prompt payment to NVVN
Discount to Consumers for timely payment of bills 164.36 147.55
Interest To Suppliers/Contractors-O&M 506.01
Interest on General Provident Fund 15,626.00 14,345.16
Cost of Raising Finance 0.20 0.06
Other Charges 12.51 1,761.58
Interest on bond isuued to master Trust 81,440.00
Less: Other Borrowing Costs 6,639.47 6,462.66
Total 1,81,469.02 95,991.86
Note 30 : Depreciation, Amortisation and Impairment Expenses
2017-18 2016-17
Depreciation - Buildings 2,331.10 2,211.57
Depreciation - Hydraulic Works 7,015.71 6,342.54
Depreciation - Other Civil Works 2,142.80 1,838.01
Depreciation - Plant & Machinery 23,661.25 23,606.94
Depreciation - Line Cable & Network 43,440.03 36,367.24
Depreciation - Vehicles 131.04 97.87
Depreciation - Furniture & Fixtures 234.69 204.03
Depreciation - Office Equipments 1,413.85 1,219.71
Total 80,370.49 71,887.92
270
Note 31 : Administrative Expenses
2017-18 2016-17
Rent 867.08 1,219.00
Rates and Taxes 177.05 180.77
Insurance 17.61 24.91
Telephone Charges, Postage, Telegram & Telex charges 530.72 405.55
Internet charges 18.20 12.90
Legal Charges 196.55 895.31
Audit Fees - Statutory audit 37.77 38.00
Audit Fees - others 1.81 111.00
Consultancy Charges 10.61 37.80
Technical Fees 211.78 66.46
Other Professional Charges 127.96 90.01
Notary fee and other expenses relating to CGRF and ERC 366.00
Conveyance and Travel 6,195.56 6,015.40
Expences towards National Pension Scheme 6.80
Expenses in respect of ESCOT 16.74 0.93
Salary and other allowance of Appellet Authority 6.26 4.45
Online payment transation charges 0.03 106.81
Fees and Subscriptions 53.33 62.23
Freight 675.90 920.56
Books and Periodicals 6.25 5.99
Printing and Stationary 620.13 963.43
Data Processing Charges 5.46 9.79
Advertisements 529.94 131.22
Electricity Charges 805.61 730.28
Water Charges 58.88 49.35
Entertainment 93.90 73.35
Ele. Duty u/s 3(i) of KED Act 12,010.94 11,527.45
Miscellaneous Expenses 551.84 301.11
Other Expenses 29,250.67 16,028.85
Less: Expenses capitalised 412.50 2,533.81
TOTAL 53,038.86 37,479.10
Note 32 : Others
2017-18 2016-17
1 Material Cost Variance -2,646.32 6,432.12
2 Research and Development Expenses 21.14 19.81
Cost Of Trading/Manufacturing Activity 5.72
3 Bad and Doubtful Debts Written off / Provided for 810.84 854.18
4 Miscellaneous Losses and Write Offs 276.33 1,555.09
5 Sundry Expenses 0.19 -
6 Loss on account of flood cyclone etc -52.92 2.02
TOTAL(A) -1,585.01 8,863.22
271
Prior Period Expenses or Losses
2017-18 2016-17
1 Other Excess Provision in Prior Periods 42.67 15.27
2 Other Income relating to Prior Periods 713.36 2,599.84
INCOME RELATING TO PREVIOUS YEARS(1) 756.03 2,615.11
3 Fuel Related Losses and Expenses Relating to Prior Period - -
4 Operating Expenses of Previous Years 309.06 12.09
5 Interest on Other Financial Charges in Previous Years 6.66 17.93
6 Other Charges 608.35 2,085.64
EXPENSE RELATING TO PREVIOUS YEARS 924.06 2,115.66
NET PRIOR PERIOD CREDITS/(CHARGES) (1-2)(B) -168.03 499.45
TOTAL(A-B) -1,416.98 8,363.77
Note 33 : Changes in fair valuation and Other Adjustments
2017-18 2016-17
1 Income on account of Fair Valuation Changes 908.02 3,389.82
2 Clawback of Grant 11,950.63 3,176.60
Total 12,858.65 6,566.42
272
Note 34: Notes Forming Part Of Consolidated Financial Statements
34.1 Opening Balance on revesting

Vide G.O(P) No.46/2013/PD dated 31 October 2013 published in Kerala Gazette dated 31st October
2013, the Government of Kerala revested all the Assets and liabilities of the erstwhile KSE Board in
the new company Kerala State Electricity Board limited. Then the Government of Kerala issued the
final transfer scheme vide G.O.(P) No.3/2015/PD dated 28.01.2015 by issuing a new opening Balance
Sheet for the company as on 01.11.2013.The statement of accounts for 2013-14 of the company has
been prepared based on the value of Assets & Liabilities notified by the Government of Kerala vide
notification dated 28.01.2015.
34.2 Contingent liabilities and capital commitments
[ ` in Lakhs]
Particulars 2017-18 2016-17
A. Contingent Liabilities not provided for in respect of:
1. Capital liabilities becoming due for
re-payment/redemption 4,65,420.76 3,92,411.97
2. Disputed Income-tax Matters 35,832.26 35,832.26
3. Claims against Company pending
Court Orders/Government orders 40340.61 10,401.00
4. NTPC 1,979.74
5. KPTCL 3.98
B. Capital Commitments
1. Contracts placed but not executed 37357.18 28567.53
34.3 Secured and unsecured loans
The following table summarizes future cash flows.
Particulars Upto 1 Year 2-5 years Above 5 years Total
Secured Loan
March 31,2018 26318.7 476622.92 502941.62
March 31, 2017 20650.74 424209.38 444860.12
Unsecured Loan
March 31,2018 244992.74 244992.74
March 31, 2017 188750.00 188750.00
Total
273
March 31,2018 271364.7 476622.92 747934.36

March 31, 2017 209400.74 424209.38 633610.12
The list of loans taken and the purpose of loan is given as follows.
Sl. Name of the lender Purpose of loan Nature of security
No
1 PFC RAPDRP Part- A Existing and future assets
2 PFC RAPDRP Part- B Existing and future assets
3 REC Transmission scheme Future assets created
(Kattakada, Pothencode) from the loans
4 PFC Pallivasal Extension Immovable and movable
Scheme(Generation properties present and future
Scheme) assets created from the loans
5 REC Meter Scheme ( Distribution) Future assets created
from the loans
6 REC R-APDRP Part-B Counterpart Future assets created
Funding (Distribution scheme) from the loans
7 REC 8 Nos. Transmission schemes Future moveable assets
created from the loans
8 REC Distribution Schemes Future assets created
from the loans
9 REC Thottiyar HEP Future assets created from
(Generation scheme) the loans
10 PFC GEL Kakkayam SHEP Immovable and movable
(Generation Scheme) properties present and future
created from the loans
11 South Indian Bank BARAPOLE SHEP(Generation) Hypothecation of movable
assets & lodgment of title
deed of landed properties
12 LIC Renovation of Sabarigiri Government Guarantee
Hydro Electric Project
13 REC-RGGVY Development of rural Future assets created from
household the loans
14 REC-Medium Term loan Purchase of power Hypothecation of assets of
Transmission circle
15 REC-Various Schemes System improvement schemes Future assets created from
the loans and Govt. Guarantee.
274
16 REC-Special Loan General Purpose Future assets created

from the loans
17 PFC-Special Loan General Purpose Future assets created
from the loans
Loans of `37520.86 lakh is not considered for revaluation as repayment liability is not confirmed.
34.4 Related Party Disclosures
List of related parties and nature of relationships where control exists.
Sl. No Name of the Related Party Nature of Relationship
1 Renewable Power Corporation of Kerala Ltd. Associate
2 Kerala State Power and Infrastructure Finance Corporation Associate
3 Baitarni West Coal Company Ltd. Joint Venture
Transactions between company and related entities through co-holder of third party entity during
the year and the status of outstanding balances as on the given dates. The period of restriction for
disposal of investment has also been given.
Particulars Year Period of Subsidiaries JCE Associate
Restriction for
disposal of
investment as
per related
agreements
Investment in 31.03.2018 Nil Nil Nil Nil
equity shares and 31.03.2017
preference shares
Impairment 31.03.2018 Nil Nil Nil Nil
allowance on 31.03.2017
Investments
List of Key Managerial Personnel as defined in 2(51) of Companies Act, 2013 and disclosure of
transaction entered with key managerial personnel.
[ ` in Lakhs]
No. Name Designation Gross Salary Others Total
1 N.S.Pillai IA&AS CMD 2.49 2.49
3 Dr. K. Ellangovan IAS CMD 25.94 0.75 26.69
4 N.S. Pillai IA & AS Director 23.71 0.16 23.87
5 Vijaya Kumari. P Director 19.83 0.18 20.01
6 Asokan. O Director 4.88 0.1 4.98
7 Venugopalan. N Director 20.05 0.18 20.23
275
8 Kumaran.P Director 13.2 0.19 13.39

9 Rajeev. S Director 18.3 23.4 41.7
34.5 Interest and finance charges/Employee cost capitalized
a. Interest and finance charges capitalized @ 9.28%.
b. The company was capitalising 5% of the employee costs during previous financial years
as incurred for capital additions. However the percentage of capitalisation is found on the
lower side and hence the percentage of capitalisation of employee cost in distribution SBU
has increased to 14%.Accordingly an amount of ` 26241.75 lakh is capitalised as employee cost
in distribution SBU during the year. There is an impact of `16869.70 lakh in the current year
profit/(Loss) due to the above change.
34.6 Transactions in Foreign currency
a) Expenditure in foreign currency (on accrual basis)
Travelling NIL NIL
Professional & Consultation fee NIL NIL
Interest NIL NIL
Others NIL NIL
Total NIL NIL
b) CIF Value of Imports
Raw materials NIL NIL
Capital goods NIL NIL
Components & Spares NIL NIL
Total NIL NIL
34.7 Segment Reporting
Disclosure as per Ind AS 108 is given below.
Particulars F
or the year ended 31 March, 2018
Segment Revenue
Sale of energy & 68061.82 100382.72 1231817.31 168444.54 1 2 3 1 8 1 7. 3 1
Meter rent
Total 68061.82 100382.72 1231817.31 168444.54 1231817.31
276
Segment result
allocable expenses (net) 12884.67 13284.21 -139305.86 -113136.98
Operating income
Other income (net) 2499.42 2805.89 29422.21 34727.52
Tax expense
Net profit for the year -78409.46
Other comprehensive
income -107632.86
Total comprehensive
income -186042.32
Particulars For the year ended 31 March, 2017

Segment Revenue
Sale of energy & 74439.5 95127.00 1121882.81 169566.5 1121882.81
Meter rent
Total 74439.5 95127.00 1121882.81 169566.5 1121882.81
Segment result
Allocable expenses (net) 26651.53 11636.13 -227828.21 -189540.55
Operating income
Other income (net) 2222.71 3546.37 34308.62 40077.69
Tax expense
Net profit for the year

Business segments
` in lakhs ` in lakhs ` in lakhs ` in lakhs
Segment assets
277
Total assets
Segment liabilities
Total liabilities
Other information
Capital expenditure
Depreciation and
amortisation (allocable) 14080.63 24419.51 41870.35 80370.49
(unallocable)
expenses

Business segments
` in lakhs ` in lakhs ` in lakhs ` in lakhs
Segment assets
Total assets 1527162.84 310665.84 1051493.28 2889321.96
Segment liabilities
Total liabilities 1602554.65 345899.91 1119196.59 3067651.15
Other information
Capital expenditure
(allocable) 15374.36 21097.02 35416.54 71887.92
(unallocable)
expenses
34.8 Earnings per Share
Earnings per share are calculated by dividing the profit attributable to the equity shareholders
by the weighted average number of equity shares outstanding during the year. Numbers used
for calculating diluted earnings per equity share includes the amount of Equity Share Application
Money. The details as follows:
278

No.
1 Earnings Available to Equity Share Holders
( ` in lakhs) -184014.46 -147931.13
2 Number of weighted equity shares 3499050000 3499050000
3 Face value per share (Rs.) 10 10
4 Earnings per Share (Basic) -5.26 -4.23
5 Earnings per Share (Diluted) -5.26 -4.23
34.9 Statutory Auditors’ Remuneration

[ ` in Lakhs]
Particulars For the year ended For the year ended
March 31, 2018 March 31, 2017
Remuneration of statutory auditors 37.77 37.77
Total 37.77 37.77
34.10 Purchase of Power
In the case of power purchase related expenditure from Central Utilities, the utilities are raising
invoices based on provisional tariff order/relevant notification of the concerned authorities, which
are subject to final orders for the relevant tariff period. Out of the total power purchase related
expenditure, the following claims has been provided in the accounts for the financial year 2017-18
though the claims are not fully admitted by the Company.
( `. in lakhs)
Sl No. Supplier Amount
1 MAITHON 615.98
2 Jindal Power Limited 4812.05
3 Jindal Thermal Power Limited 155.6
4 KAIGA 0.37
5 JHABUA POWER 8508.58
6 BALCO 59.98
7 DVC 914.25
8 NTECL 15.84
9 PGCIL 977.77
10 PTC 2.21
11 NTPC 671.82
12 KPTCL (RE charges) 2.77
279
34.11. Actuarial Valuation

Actuarial valuation of employee related liabilities were carried out as on 31.03.2018 and provided in
the accounts as detailed below.
a. Actuarial valuation of the earned leave liability for the period from 01/04/2017 to 31/03/2018 as per
IND AS-19
31/03/2017 31/03/2018
Leave availment / encashment / lapse rates are entity’s best estimate for future based on past
historical experience & its HR policy.
provision for disability ** 100 % of IALM (2006 - 08)
280
iii) Ages Withdrawal Withdrawal

Rate (%) Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
iv) Leave 28,39,936 28,38,339
Leave Availment Rate 2.50% 2.50%
Leave Lapse rate while in service Above 300 days Above 300 days
Leave Lapse rate on exit -- --
Leave encashment Rate while in service 5.00% 5.00%
It should be noted that in case of employees above retirement age, for the purpose of valuation it
is assumed they will retire immediately & benefit is considered up to actual retirement age.
Mortality Rates inclusive of disability for specimen ages
15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
25 0.000984 55 0.007888 85 0.091982
30 0.001056 60 0.011534 90 0.138895
35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
b. Actuarial valuation of the gratuity liability for the period from 01/04/2017 to 31/03/2018, as per IND
AS-19.

Past Service Cost including curtailing gains/losses 12516.08
281

31/03/2017 31/03/2018
31/03/2017 31/03/2018
ii) Mortality rates inclusive of provision for disability ** 100% of IALM (2006 - 08)
Rate (%) Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
In case of employees above retirement age, for the purpose of valuation it is assumed they
will retire immediately & benefit is considered up to actual retirement age.
282

15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
25 0.000984 55 0.007888 85 0.091982
30 0.001056 60 0.011534 90 0.138895
35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
c. Actuarial valuation of the Pension liability for the period from 01/04/2017 to 31/03/2018, as per IND
AS-19.
31/03/2017 31/03/2018
283
employment market, standing of the company, business plan, HR Policy etc as provided in the
31/03/2017 31/03/2018
ii) Mortality rates inclusive of provision for disability ** 100% of IALM (2006 - 08)
Rate (%) Rate (%)
Up to 30 Years 6.00 6.00
From 31 to 44 years 3.00 3.00
It should be noted that in case of employees above retirement age, for the purpose of
valuation it is assumed they will retire immediately & benefit is considered up to actual retirement
age.
15 0.000614 45 0.002874 75 0.039637
20 0.000888 50 0.004946 80 0.060558
25 0.000984 55 0.007888 85 0.091982
30 0.001056 60 0.011534 90 0.138895
35 0.001282 65 0.017009 95 0.208585
40 0.001803 70 0.025855 100 0.311628
34.12.Other Matters
a. Commercial Tax Department had disallowed the concessional tax of 4% given to M/s KPCL
and directed BPCL to collect differential amount with retrospective effect from 2001-02. M/s
KPCL in turn had claimed an amount of `4031 lakh vide invoice dated 20-3-2016. The matter
was referred to the high-power committee constituted by Government of Kerala for granting
concessional rate to KPCL as the entire power is being drawn by KSEBL. The high-power
committee had decided that KSEBL shall reimburse the differential tariff and to waive the
interest and penal interest elements after taking approval of the council of Ministers. The
differential tax was estimated as `3070 lakh. However as per section 26 of the KVAT Act, the
department can claim only the differential tax for five years from 2006-07 to 2010-11 amounting
to `1334 lakh. Accordingly, an amount of `1384 lakh is provided in the accounts though the
claim is not admitted by the Company. KSEBL had approached the Government to waive the
284
interest claim in this regard amounting to `7865 lakh and to withdraw the claim of balance
differential tax amounting to `2536 lakh. The Company is expecting favourable orders from
the Government of Kerala. Accordingly, an amount of `10401 lakh is shown under contingent
liabilities.
b. Annual fixed cost payable by KSEB Ltd to NTPC for RGCCP, Kayamkulam has been negotiated
and fixed as `20000 lakh per year for the Tariff control period 2014-19 with the liberty of review
in 2018-19 vide B.O.(FTD) No.1491/2018/KSEB/TRAC/CERC/RGCCPP/18-19 dated 14.06.2018.The
excess amount paid to NTPC in previous years has not been adjusted in the accounts of the
year 2017-18.
c. M/s Balco-PTCIL has claimed `3890.59 lakh towards reimbursement as per Article 10 of
PPA(change in law) of additional expenditure incurred until 30.8.2016 and `5749.18 lakh towards
ECR revision due to change in escalation rates for domestic coal as per CERC amendment
dated 08/02/2017 for the period from 03/2015 to 02/2017 vide invoice dated 20/12/2017.Since the
final decision has not been taken the same has not been provided in the accounts.
d. Letter of credit facility is offered to the suppliers of power as per the agreement conditions. The
LC charges in this regard, being directly attributable to purchase of power, is being accounted
as power purchase costs.
e. KSEB Limited has executed 2 Nos of swap agreements. As per PPA1 the company swapped
63.06 lakh units during the period 2017-18 to BRPL as against power swapped during the year
2016-17. As per PPA2 company swapped 1359 lakh units from HPPC and this shall be return
during the year 2017-18
f. Inter Unit balances amount to `4285.64Lakhs (Previous year Rs.1536.57Lakhs) has been
considered as Sundry Receivables pending complete reconciliation of such balances reported
in the Note:12-Other current Assets-Inter Unit balance.
g. The GPF balances as per financial statements is `220733 lakhs reported in the Note:17-General
Provident Fund. A difference of `22lakhs with the party wise registers maintained at GPF
section are reported and the same is being verified.
h. The Kerala Power Finance Corporation has issued 1319440 Nos. of Equity Shares of `10/- each
as Bonus Share to the erstwhile KSE Board during the Year 2004-05.
i. For preparation of the Financial statements, the value of asset and liabilities notified under the
re-vesting second Transfer (Amendment) Scheme (Re-vesting) 2015, have been duly adopted.
The fixed asset of erstwhile KSE Board revested to KSEB Ltd. is taken at the value notified vide
Government notification G.O.(P).No.3/2015/PD dated 28.01.2015
j. For monthly as well as bi-monthly billed consumers under various tariff categories, an
estimated amount of `68064 lakhs is recognized as unbilled revenue as on 31.03.2018(Previous
year `62298 lakhs) and the amount is debited to sundry debtors for sale of power.
285
k. The Board along with Orissa and Gujarat has taken steps to sets up a 1000 MW Power Plant at
Orissa. In this connection a company has been formed under the name Baitarani West Coal
Company Limited. The Board has made share contribution of Rs. 10 Crores. The following share
certificates have been issued by the company.
Folio No. Share Certificate No. Face Value Amount
[ Ìn Lakhs]
00 004 Rs.1000 /- 29
00 005 Rs.1000/- 1
00 009 Rs.1000/- 970
Further the Board has deposited `25 Crores on 01.09.2012 with Punjab & Sind Bank,
Thiruvananthapuram for enabling Punjab & Sind Bank, Bhubaneswar to issue Bank Guarantee to
Government of India Favoring the company. On 10.12.2012 Ministry of Coal, Government of India de-
allocated the Baitarani West Coal Block citing delay in developing the coal block. KSEB has filed
appeal to the Ministry of Coal to revoke the decision of de- allocation. The matter has also been
taken up with the Union Government through letters written by the Chief Minister to the Prime
Minister and the Union Coal Minister. A petition has also been filed by the allocates before the High
Court of Odisha challenging the decision of Union Government on de-allocating the Baitarani coal
block. The case is yet to be finally heard by the Court.
l. Government of Kerala vide order G.O (M.S) No.13/07/PD dated 05.07.2007 has ordered to
transfer 100 acres of land originally acquired by KSEB for the Brahmapuram Diesel Power
Plant at Kochi to the Revenue Department in Government subject to the conditions that
(i) The value of Land will be determined and paid by Government to KSEB later.
(ii) Additional compensation ordered to be paid by Government in Revenue Department.
The Government had fixed the compensation for acquisition at `757 lakh and the Board had
requested the Government to enhance the compensation and for giving value of land at current
market rate. No amount has been received till date and physical transfer of land has not taken
place. Hence Accounting adjustments were also not made
m. 45.715 cents of Land belonging to the company in Thiruvananthapuram was transferred to
Thiruvananthapuram Development Authority for widening the road as per the decision of the
Government of Kerala. Since the value of the land is not yet received from the Government,
necessary adjustments are yet to be made in the Books of Accounts.
n. Vide G.O.(M.S) No.34/2017/PD dated 04/04/2017 Government of Kerala ordered that 20 acres
of land owned by TCCL, which is currently under the lease to BSES Kerala Power Ltd shall be
transferred to KSEBL with full ownership in lieu of the outstanding dues as on date to KSEBL
subject to the condition that KSEBL shall not alienate the land under any circumstances.
However the property of 20 Acres of land owned by TCCL not yet transferred to the ownership
286
of the company. Hence the adjustment of transfer of land against dues towards current charge
not incorporated during the year.
o. In the 42nd Meeting of Board of Directors held on 26.09.2018 it was resolved to give in principle
approval to incorporate the adjustment entries regarding the amount payable to Government
of Kerala towards electricity duty and guarantee commission etc. as on 31.03.2018 against the
amount receivable from the Government in the books of accounts and to report the matter to
the Government for concurrence. Accordingly an amount of `35099.74lakh is netted off with
the amount receivable from the Government.
p. During the financial year an amount of ` 815 lakh has been incurred as employee cost for the
software development and implementation. This amount has been charged to the Revenue
expenses pending allocation over capital works for capitalisation in the financial year 2018-19.
q. As per the Accounting policy of the company the provision for debtors is being provided on the
basis of age wise analysis of debtors. As per the details furnished by the ARUs of the company,
the age wise analysis is as follows.
` in lakhs
Age of Debtors Amount
More than 5 years 26605.51
Between 6 months to 1 year 20765.24
Less than 6 months 111674.88
As adequate provision is already there,no further provision is created during the year. Age wise
reported from the Special Officer(Revenue) is not tallying with the accounts and a special task has
been entrusted to reconcile the same.
r. Kerala State suffered a heavy damage due to natural calamity and flood during the month
of August 2018 and the company also suffered damages. The power restoration work had been
carried out on war foot basis and more than 90% of the connections were restored in time. However
the monetary value of loss suffered to the company not quantified.
s. The Group has issued two series of bonds to The Kerala State Electricity Board Limited Employees
Pension and Gratuity Trust as per G.O.(P).No.3/2015/PD dated 28.01.2015 as on 01.04.2017.
i) 20 years bond with a coupon of rate 10% p.a. For ` 814400 lakh.
ii) 10 year bond with a coupon of rate 9% p.a. For ` 375100 lakh.
t. The Board of Directors in the 42nd meeting held on 26.09.2018 had approved the financial
statements. The power to amend the accounts vests with Board of Directors.
287
u. An amount of ` 1891.41 lakhs has been set off with the Preoperative Expenses carried forward
in the Financial Statement of the Associate company Baitarni West Coal Company Ltd.
The same has not been considered as income of the current year,as per the opinion of the
management of the Associate company Baitarni West Coal Company Ltd. The Associate
Company has shown an amount of `1307.89 lakhs under “Other Financial Liabilities” against
the name of three promoter companies including KSEB Ltd for an `435.96 lakhs each. The
KSEB has not made any accounting entry in this regard in its books of accounts.
v. Figures for the previous year have been re arranged and regrouped wherever necessary.

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S
Sd/- Sd/-
Suresh K FCA C.A.HARIKRISHNAN.R.S.M.Com,DISA, FCA
Partner Partner
M.No.23554 M.No.230338
FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
Partner
M.No.226547
Date:21.02.2019
288
Note-35 Disclosure as per schedule III to the Companies Act
Net Assetie total asset Share in profit or loss Share in other Share in total comprehensive
minus total liability as at for the year ended comprehensive income income for the year ended
for the year ended
Name of the entity As a % of As a % of As a % of As a % of
in the group consolidated Amount consolidated Amount consolidated Amount income total Amount
net assets Profit or Loss other comprehensive
Comprehensive income
income
Parent
KSEB Limited
31-Mar-18 100.32 -6,27,755.67 102.65 -78,409.46 100 -1,07,632.86 101.10 -1,86,042.32
31-Mar-17 100.39 -3,90,883.01 101.03543 -1,49,462.85 - 101.04 -1,49,462.85
Associate
Kerala Power
Infrastructure
finance
Corporation Ltd
31-Mar-18 -0.33 2,035.78 -2.67 2035.78 - -1.11 2035.78
31-Mar-17 -0.39 1537.59 -1.04 1537.59 -1.04 1537.59
Renewable power
Corporation Kerala Ltd
31-Mar-18 -0.003 20.50 -0.03 20.50 - -0.01 20.50
31-Mar-17 - - - - - -
Joint Venture
Baitarani West
Coal Company Ltd
31-Mar-18 0.005 -28.42 0.04 -28.42 - 0.02 -28.42
31-Mar-17 0.002 -5.87 0.004 -5.87 0.004 -5.87

Total
31-Mar-18 100.00 -6,25,727.81 100.00 -76,381.60 100.00 -1,07,632.86 100.00 -1,84,014.46
31-Mar-17 100.00 -3,89,351.29 100.00 -1,47,931.13 - - 100.00 -1,47,931.13
289
Statement containing salient features of the financial statements of Associate

Companies/Joint Ventures of KSEB LTD
PART"B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013
Sl Name of Associates/ Joint Venture Renewable Kerala State Baitarani West
No Power Corporation Power and Coal Company
of Kerala Ltd Infrastructure Ltd.
Finance
Corporation Ltd.
1 Latest Audited Balance Sheet Date 31st March 2018 31st March 2018 31st March 2018
2 Date on which the Associate or 31st March 2016 20th March 1998 14th August 2008
Joint venture was associated
or acquired
3 Shares of Associates/ Joint 5,000 1,08,19,440 1,00,000
Venture held by the Company
on the year end as at 31.03.2018
Number
Amount of Investment in `50 lakh ` 1081.944 lakh `1000 lakh
Associates/Joint Venture
Extent of Holding (%) 50% 40.60% 33.33%
4 Description of how there is
significant influence NA NA NA
5 Reason why the Joint Venture
is not consolidated NA NA NA
6 Networth atributable to
Shareholding as per latest
audited Balance Sheet `70.5 lakh `3117.78 lakh `971.49 lakh
7 Profit/ Loss for the year
(Total Comprehensive Income)
i Shares of Associates/Joint
Venture held by the Company
considered for consolidation `41 lakh `596.97 lakh ( `67.49lakh)
ii "Not Consisdered in
Consolidation" NA NA NA
Summarised financial information
of the associate/ Joint Venture
RPCL KSPIFC BWCL
Current assets 2,276.07 7,654.69 4,242.46
290
Non-current assets 2,432.03 168.69 5.48

Total assets [A] 4,708.10 7,823.38 4,247.94
Current liabilities 1,520.65 54.87 10.24
Non-current liabilities 3,046.45 89.26 1,322.95
Total liabilities [B] 4,567.10 144.13 1,333.19
Equity [A-B] 141.00 7,679.25 2,914.75
Summarised statement of profit and loss
Revenue from operations 202.12 903.22
Other income 65.48 101.69 189.67
Total Income 267.60 1,004.91 189.67
Employee benefit expenses 28.57 29.38 33.16
Other expenses 98.61 142.55 222.79
Finance costs - 9.67 0.05
Depreciation 50.96 8.18 1.16
Tax expense 48.46 222.05
Defered Tax Income -3.89
Total Expenses 226.60 407.94 257.16
Profit for the year 41.00 596.97 -67.49
Group's share of profit/(loss) for the year 20.50 242.37 -22.49
Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-


FRN:001150S FRN:000148S
Sd/- Sd/-
Partner Partner
M.No.23554 M.No.230338
FRN:004674S
Sd/-
RAVINATH.R.PAI FCA
Partner
M.No.226547
Date:21.02.2019
291
292

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KERALA STATE ELECTRICITY BOARD LIMITED

SEVENTH ANNUAL REPORT

KERALA STATE ELECTRICITY BOARD LIMITED

KERALA STATE ELECTRICITY BOARD LIMITED

Sl.No. Contents Page No.

1 Notice of Annual General Meeting 07

3. Independent Auditors Report on Stand alone financial statement 58

4 Independent Auditors Report on Consolidated financial statement 90

5. Comments of the C&AG of India on Stand alone financial statement 108

6. Comments of the C&AG of India on Consolidated financial statement 110

8. Secretarial Audit Report 113

10. Replies of the Management

1. Replies to comments of Independent Auditor 117

2. Replies to comments of C&AG 159

3. Replies to comments of Secretarial Auditor 167

11 Standalone Financial Statement 170

12 Consolidated Financial Statement 231

KERALA STATE ELECTRICITY BOARD LIMITED

KERALA STATE ELECTRICITY BOARD LIMITED

NOTICE OF ADJOURNED ANNUAL GENERAL MEETING

KERALA STATE ELECTRICITY BOARD LIMITED

REPORT OF THE BOARD OF DIRECTORS

Revenue and Expenditure 2017-18 (In ₹ Crores)

5 7572823 Dr. V. Sivadasan 02.07.2016 to till date

4 Sholayar 3x18 54 14.05.1968

16 Vilangad 3x2.5 7.5 19.01.2014

G.1.2 RENEWABLE ENERGY & ENERGY SAVINGS (REES)

G 1.3 OTHER ACHIEVEMENTS IN GENERATION SECTOR

LT line constructed (km) 3130

funds through KSEBL. The progress of work is given below.

6 11KV New feeders Km 327 52

9 Energy Meter - DTR Nos. 23655 283

H.COMMERCIAL & TARIFF

Period Duration hrs Quantum Rate at Kerala

4. Tender floated by BSPHCL on 28-03-2018:

the various draft regulations issued by CERC.

J.CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

b) Kerala State Power and Infrastructure Finance Corporation limited(KSPIFCL)

Act, 2013.The explanations/comments by the Board on every qualification, reservation or adverse

• Issue of Equity shares with differential rights as to dividend, voting or otherwise.

Information on Conservation of Energy, Technology Absorption and Foreign Exchange

(A) Conservation of energy –

i) The steps taken or impact on conservation of energy.

COMPLETED SOLAR PROJECTS

Sl no. Name of the projects Installed capacity (MW) Date of completion

1 Thalakkulathoor, Kozhikode 0.65 22.04.2017

2 Roof top of Suitable buildings of

3 Roof top of Suitable buildings of

4 Roof top of Vythuthi bhavan,

5 Manjeshwaram ,Kasargod 0.50 30.05.2017

6 Kuttippuram 0.50 28.11.2017

9 Premise of Pothencode substation 2.00 02.02.2018

On grid consumers as on 31.03.2018 15.453

iii) The capital investment on conservation equipments.

(B) Technology absorption –

i) The efforts made towards • Development of IT infrastructure updation.

ii) The benefits derived like • Safety of Working Staff.

iii) In case of imported technology

(a) The details of technology imported.