6th Annual Report 2016-17-17014092761851082664

KERALA STATE ELECTRICITY BOARD LIMITED
THIRUVANANTHAPURAM
SIXTH ANNUAL REPORT

2016-2017

Regd Office: Vydyuthi Bhavanam, Pattom, Thiruvananthapuram - 695004
CIN: U40100KL2011SGC027424
6th Annual Report 2016-17
2

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 88
5. Comments of the C&AG of India on Stand alone financial statement 103
6. Comments of the C&AG of India on Consolidated financial statement 106
7 Comments of Principal Secretary (Finance) Government of Kerala 110
8. Secretarial Audit Report 111
9. Cost Audit Report 115
10. Replies of the Management
1. Replies to comments of Independent Auditor 120
2. Replies to comments of C&AG 148
3. Replies to comments of Principal Secretary (Finance) 158
4. Replies to comments of Secretarial Auditor 161
11 Standalone Financial Statement 164
12 Consolidated Financial Statement 226
3
4

(Incorporated under the Indian Companies Act, 1956)
Reg. Office: Vydyuthi Bhavanam, Pattom, Thiruvananthapuram – 695 004, Kerala
CIN: U40100KL2011SGC02742
Office of the Chairman & Managing Director
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 6th Annual Report of Board of Directors of Kerala State Electricity
Board Limited for the Financial Year 2016-17.
During the period from 1.04.2016 to 31.03.2017, the company has been able to improve its
performance substantially from that of the previous years through the whole hearted support and
the dedicated work of the officers and employees of the company. The Company has adopted a
comprehensive approach for reducing power consumption through energy efficiency methods.
As part of these measures, one crore LED bulbs has been distributed to the consumers under
Domestic Efficiency Lighting Programme(DELP). These efforts has helped the company to reduce
its Transmission and Distribution losses from the previous year figure of 14.37% to 13.93% during
current year.
Transmission sector has become promising with the Government agreeing to fund the
“Transgrid 2.0” project which has a long term objective of revamping the Transmission Infrastructure
of the Company. The commissioning of three 110kV substations, seven 33 kV Substations, addition
of 143.43 ckt.km of lines of and above 33 kV, addition of 280.5 MVA transformation capacity and the
resumption of the work at Edamon – Kochi 400 kV Line being executed by PGCIL after a gap of 19
months are the major achievements in the Transmission sector of the company.
In the Generation sector, the emphasis of the Company to generate electricity through
renewable sources has given great results. During the current year, 63 MW was added to the grid
which included 6.19MW of electricity generated through Consumer – Owned - Solar power plants
connected to grid at HT and LT levels and 36 MW from Solar Park connected to the grid.
The decreasing trend in the consumer grievances during the period in comparison to the
earlier periods shows that the consumer satisfaction and the safety aspects have been fully taken
care of and it is heartening to understand that the company has taken the consumer satisfaction
as the first priority in all its endeavours.
I once again place on record my wholehearted appreciation for the invaluable contribution
made by the officers and employees at every level and thank them for their good work for the
wellbeing of the Company and the Society at large.
Sd/-
N.S.Pillai.IA&AS
Chairman and Managing Director
5
6

Registered Office: Vydyuthi Bhavanam
Pattom, Thiruvananthapuram - 695 004
CIN U40100KL2011SGC027424
CS/Adj.General Meeting/6
All members, Auditors and Directors
Notice of Adjourned Annual General Meeting
Ref: AGM dt 27.09.2017
Notice is hereby given that the Adjourned 6th Annual General Meeting of Kerala State Electricity
Board Ltd, relating to the Financial Year 2016-17 will be held on Thursday, 8th November, 2018 at
11.00 am at the Registered Office of the Company at Vydyuthi Bhavanam, Pattom, Thiruvananthapuram
695004 to transact the following business:
ORDINARY BUSINESS:
1. To receive and adopt the Balance Sheet, the Profit & Loss Account, Cash Flow Statement of
the Company and the Annexures and Schedules thereto for the year ended 31st March, 2017
together with the report of the Statutory Auditors, the Comments of the Comptroller & Auditor
General of India and Additional Chief Secretary(Finance) thereon, and the replies of the Company
to the report of the statutory auditors, comments of the Comptroller & Auditors General of
India and Additional Chief Secretary(Finance) and the Report of the Directors and annexures
thereto and forming part thereof.
Further to consider and, if thought fit, to pass with or without modification(s), the following
resolution as an Ordinary Resolution:
“RESOLVED that the Financial statement of the Company (Standalone & Consolidated) and
the Schedules and Annexure thereto for the year ended 31st, March 2017, the Auditors’ Report,
the Comments of the Comptroller & Auditors General of India and Principal Secretary (Finance)
thereon, replies of the Company to the report of the Statutory Auditors, the comments of the
Comptroller & Auditor General of India and Principal Secretary (Finance) , 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
N.S.PILLAI IA&AS
Thiruvananthapuram CHAIRMAN & MANAGING DIRECTOR
15 .10.2018 DIN:07282785

Ph: 0471 - 2442125 Fax: 0471 - 2441328 e-mail: [email protected], website: www.kseb.in
7
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.
2) The proxy should be lodged with the Company at its Registered Office not less than 48 hours
before the commencement of the meeting.
3) The 6th Annual General meeting which was held on 27.09.2017 for consideration and adoption
of audited financial statements for 2016-17 was adjourned sine die pending receipt of the
comments of the Comptroller and Auditor General of India.
4) Route map enclosed.
8

(Incorporated under the Indian Companies Act, 1956)
Reg. Office: Vydyuthi Bhavanam, Pattom,
Thiruvananthapuram – 695 004, Kerala
CIN: U40100KL2011SGC02742
Office of the Chairman & Managing Director

Phone: +91 471 2514500, 2514680, 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 6th Annual Report on the performance of
the Company for the year ended 31st March, 2017 together with the Audited Financial Statements
and the Auditors Report for the year ended 31st March,2017.
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. As part of the commitment of the Government of India to provide
access of power for all citizens of India for improvement of the standard of living and social
welfare, Government of Kerala, through its “Total Electrification Programme,” brought the unique
distinction of being the first state in the country to have electrified all its households.
Signing of MOU for UDAY (Ujwal Discom Assurance Yojana) scheme, with Ministry of Power, has
motivated the company to take a comprehensive approach on the distribution business especially
in reducing the system losses and improving efficiency in every operational area. These efforts has
helped the company to reduce its Transmission and Distribution losses from the previous year
figure of 14.37% to 13.93% during current year. In the energy efficiency front, distribution of LED
bulbs to domestic consumers under Domestic Efficiency Lighting programme (DELP) reached
one crore mark.
Transmission sector has become promising with the Government agreeing to fund the “Transgrid
2.0” project which has a long term objective of revamping the Transmission infrastructure of the
company. The commissioning of three 110kV substations, seven 33 kV substations, addition of
143.43 ckt.km of lines of and above 33 kV, addition of 280.5 MVA transformation capacity and the
resumption of the work at Edamon – Kochi 400 kV Line being executed by PGCIL after a gap of 19
months are the major achievements in the Transmission sector of the company.
In the Generation sector, the emphasis of the Company to generate electricity through
renewable sources has given good results. During the current year,36 MW was added to the grid
which included 6.19MW of electricity generated through Consumer – Owned - Solar power plants
9
connected to grid at HT and LT levels and 36 MW from Solar Park connected to the grid.
A. HIGHLIGHTS OF KERALA POWER SYSTEM
Particulars 2016-17 2015-16

Installed Generating capacity ( MW) *2,915.80 2,880.18
Length of EHT lines(km) 9,417.38 9,367.97
Length of HT lines (11/12/33 KV)(km) 61,398.43 59,476.66
Length of LT lines(km) 2,91,328 2,85,970
No. of EHT substations (Nos) 258 250
No. of Distribution Transformers (Nos) 75,580 73,460
Total consumers at the end of the year(Nos) 1,19,94,816 1,16,68,031
Per Capita Consumption (kWh) 592 569
Connected load at the end of the year (MW) 22040.62 20,980.82
Employee Strength at the end of the year(Nos) 33030 36742
*Inclusive of Power Purchase Agreement (PPA) with BSES that expired on 31.10.2015
B. FINANCIAL REVIEW
This is the Company’s first IndAS complied Financial statements, 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. Also the Financial Statement for the year ended, 31st
March, 2016 has accordingly been restated. A comparative statement showing revenue from
operations, Net Profit / Loss of the company for the year 2016-17 and 2015-16 is furnished below.
Sl. Particulars 2016-17 2015-16
No (in Rs Crores) (in Rs Crores)
1 Revenue from operations 11218.83 10,914.44
2 Other Income 400.78 316.03
3 Total Income 11619.60 11,230.47
4 Profit(Loss)before Depreciation Interest & Tax 184.17 (854.06)
5 Depreciation & Amortization Expenses 718.88 699.62
6 Finance Cost 959.92 851.41
7 Profit (Loss) before Tax (1494.63) (696.97)
8 Income Tax - -
9 Profit/(Loss) (1494.63) (696.97)
10
Revenue and Expenditure 2016-17 (In ₹ Crores)
Consumer Category wise Source of income 2016-17 (in percentage)
11
Revenue and Expenditure 2016-17 (In ₹ Crores)

Consumer Category wise source of income 2015-16 (in percentage)
Composition of Cost Structure in Percentage (2016-17)
12
Composition of Cost Structure in Percentage (2015-16)
Value of Assets at the end of the year 2016-17 (in ₹ Crores)
13
Liabilities at the close of the year 2016-17 (in ₹ Crores)
C. OPERATIONAL REVIEW
During the year under review, revenue from the sale of power including other income amounted
to Rs.11619.60 Crores (PY Rs 11230.47Cores). The Company generated 4369.54 MUs (PY 6791.85
MUs) of energy (gross) from own sources and purchased 19050.16 (PY 15897.76 MUs) of energy
from Central Generating stations/Independent Power Producers(IPP)/Traders / Power Exchange.
The energy sold within the state was 20038.25 MUs(PY 19325.07MUs). The Company’s overall
transmission and distribution losses are reported to the extent of 3310.67 MUs at 13.93% (PY-14.37%).
The reduction in T&D losses by 0.44% 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 income to the tune of ₹
389.13 crores registering an increase of 3.46% on revenue during 2016-17 compared to the previous
year in financial terms.The increase in income reflecting 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 713.18MU, registering a growth of 3.69%
compared to last years figures.
D.ACHIEVEMENT
 Thermal Power Station, KDPP was awarded certificate for outstanding performance in Industrial
14
safety by National Safety Council, Kerala Chapter for Medium Size Engineering Industry
 Sabarigiri HEP was given the Safety Award 2016 under Small Factory-Category 2, Department
of Factories and Boilers by Government of Kerala.
 KSEB won e-Governance Award of Government of Kerala for its ‘Customer Friendly IT Initiatives’
in the category of ‘e-Citizen Service Delivery’ based on the many e-Citizen services delivered
by KSEB Ltd. Hon’ble Chief Minister of Kerala presented the award on 13.02.2017.
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 Crores. The paid up share capital as on 31st March,2017 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.
No. DIN Chairman & Managing Director Tenure
1 1987180 Sri.M. Sivasankar IAS 21.12.2012 to 02.06.2016
2 2239492 Sri.Paul Antony IAS 02.06.2016 to 23.10.2016
3 5272476 Dr. K. Ellangovan IAS 24.10.2016 to 29.01.2018
4 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
5 3604278 Advocate B. Babu Prasad 14.06.2011 to 02.07.2016
6 7572823 Dr. V. Sivadasan 02.07.2016 to till date
7 7247504 Smt.P. Vijayakumari 30.05.2015 to till date
8 7239762 Smt.B. Nina 30.05.2015 to 31.05.2016
9 7558958 Sri.N. Venugopal 21.06.2016 to till date
10 7242641 Sri.C.V. Nandan 30.05.2015 to 21.06.2016
11 7559017 Sri.S. Rajeev 21.06.2016 to 31.07.2018
12 7239765 Sri.O. Asokan 30.05.2015 to 31.05.2017
15
13 03134779 Sri.Kumaran. P 20.06.2017 to till date

14 1027983 Sri.Bishwanath Sinha IAS 27.02.2018 to 20.08.2018
15 1260911 Sri.Sanjay.M.Kaul IAS 20.08.2018 to till date
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 2016-17, the
Board of Directors met six times with an Annual General Meeting for the financial year 2015-16 and
adjourned AGM for financial year 2013-14
14. The details are given as under
Sl.
No. Type of Meeting Date Total Number of Number of Percentage
of Meeting Members entitled Members of Total
to attend the attended share holding
Meeting
1 Annual General
Meeting(2015-16) 29.09.2016 8 8 100.00
Adjourned Annual
2 General Meeting 04.01.2017 9 9 100.00
(2013-14)
1 03.05.2016 8 7 87.50
2 17.05.2016 8 7 87.50
3 29.07.2016 8 8 100.00
4 Board Meeting 29.09.2016 8 8 100.00
5 08.11.2016 8 8 100.00
6 04.01.2017 9 9 100.00
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.
16
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 2016-17 is 4369.35MU. This
includes 4324.076MU generated by Hydel Power Stations, 43.545MU by Thermal Power stations
and 1.714MU by the Wind generating Stations.
G 1.1 OTHER ACHIEVEMENTS IN GENERATION SECTOR
• Following power houses were awarded ISO Certification.
(a) Peringalkuthu Left Bank Extension(PLBE) was certified ISO- 9001- 2008 in October 2016
(b) Neriamangalam Power house was certified ISO 9001-2008 in August 2016.
(c) Idukki Power House was certified ISO 9001-2016 in January 2017.
• Commissioned a new project, Vellathooval SHEP, Idukki, with an installed capacity of
2X1.8MW in September, 2016.
G.1.2 Details of Station wise Annual Generation Capability / Generation, in Keral Power
System, for the year 2016-17
17
Sl. Name of Station Unit Capacity Date of Commissioning Station Annual Generation Design
18
No (MW) Capacity (MW) Generation For the PLF (%)
Original After Capability year (MU)
date renovation (MU)
PART A - HYDEL
Unit #1 - 5 19.03.1940 19.11.2001
Unit #2 - 5 02.02.1941 17.11.2001
1 Pallivasal Unit #3 - 5 10.02.1942 20.11.2001 37.50 284 166.01 86.67
Unit #4 - 7.5 01.05.1948 26.08.2002
Unit #5 - 7.5 01.10.1949 21.08.2002
Unit #6 - 7.5 07.03.1951 19.08.2002
Unit #1 - 12.8 01.05.1954 30.11.2002
2 Sengulam Unit #2 - 12.8 25.07.1954 04.10.2002 51.20 182 115.58 43.33
Unit #3 - 12.8 11.11.1954 05.12.2001
Unit #4 - 12.8 05.01.1955 01.12.2001

Unit #1 - 17.55 27.01.1961 20.10.2004
3 Neriamangalam Unit #2 - 17.55 09.04.1961 31.11.2005 52.65 237 196.25 60
Unit #3 - 17.55 11.05.1963 29.09.2006
4 Panniar Unit #1 - 16.2 29.12.1963 01.02.2003 32.40 158 62.17 60
Unit #2 - 16.2 26.01.1964 23.11.2001
Unit #1 - 9 06.03.1957 23.04.2014
5 Poringalkuthu Unit #2 - 9 13.01.1958 15.08.2014 36.00 170 100.52 61.25
Unit #3 - 9 24.04.1959 08.02.2015
Unit #4 - 9 06.02.1960 29.05.2015
Unit #1 - 18 09.05.1966
6 Sholayar Unit #2 - 18 26.01.1968 54.00 233 167.11 38.15
Unit #3 - 18 14.05.1968
Unit #1 - 55 18.04.1966 08.11.2009
Unit #2 - 55 14.06.1966 07.02.2009
7 Sabarigiri Unit #3 - 55 29.12.1966 17.03.2008 340.00 1338 797.83 51
Unit #4 - 60 22.06.1967 06.05.2014
Unit #5 - 55 09.09.1967 05.05.2006
Unit #6 - 60 26.11.1967 01.07.2005
Unit #1 - 25 11.09.1972
8 Kuttiyadi Unit #2 - 25 01.11.1972 NA 75.00 268 465.44 40.80
Unit #3 - 25 28.11.1972
Unit #1 - 130 12.02.1976
Unit #2 - 130 07.06.1976
9 Idukki Unit #3 - 130 24.12.1976 NA 780.00 2398 1379.05 35.92
Unit #4 - 130 04.11.1985
Unit #5 - 130 22.03.1986
Unit #6 - 130 09.09.1986
10 Idamalayar Unit #1 - 37.5 03.02.1987 NA 75.00 380 171.96 57.73
Unit #2 - 37.5 28.02.1987
11 Kallada Unit #1 - 7.5 05.09.1994 NA 15.00 65 44.36 40.33
Unit #2 - 7.5 05.01.1994
12 Peppara 3 15.06.1996 NA 3.00 11.50 11.50 43.33
13 Lower Periyar Unit #1 - 60 27.09.1997
Unit #2 - 60 22.10.1997 NA 180.00 493 31.28
Unit #3 - 60 28.11.1997 308.22
14 Mattupetty 2 14.01.1998 NA 2.00 6.40 2.30 35
15 Poringalkuthu 16 20.03.1999 NA 16.00 74 94.37 61.25
Left Bank
Extension
16 Kakkad Unit #1 - 25 13.10.1999 NA 50.00 262 130.63 60
Unit #2 - 25
17 Kuttiyadi 50 27.01.2001 NA 50.00 75 17.12
Extension
18 Malampuzha 2.5 26.11.2001 NA 2.50 5.60 0.63 25.60
19 Chembukadavu Unit #1 - 0.9 19.08.2003
Stage I Unit #2 - 0.9 19.08.2003 NA 2.70 6.59 28
Unit #3 - 0.9 19.08.2003

20 Chembukadavu Unit #1 - 1.25 04.09.2003 8.64
Stage II Unit #2 - 1.25 04.09.2003 NA 3.75 9.03 28
19
Unit #3 - 1.25 04.09.2003
20
21 Urumi Stage I Unit #1 - 1.25 25.01.2004
Unit #2 - 1.25 25.01.2004 NA 3.75 9.72 30
Unit #3 - 1.25 25.01.2004
22 Urumi StageII Unit #1 - 0.8 25.01.2004 9.03
Unit #2 - 0.8 25.01.2004 NA 2.40 6.28 30
Unit #3 - 0.8 25.01.2004
23 Malankara Unit #1 - 3.5 23.10.2005 24.74
Unit #2 - 3.5 23.10.2005 NA 10.50 65 70
Unit #3 - 3.5 23.10.2005
24 Lower Unit #1 - 1.5 25.03.2006 2.48

Meenmutty Unit #2 - 1.5 25.03.2006 NA 3.50 7.63 30
Unit #3 - 0.5 25.03.2006
25 Neriamangalam
Extension 25 27.05.2008 NA 25.00 58.27 102.08 30
26 Kuttiadi Unit #1 - 1.25 19.06.2008 6.35

Tailrace Unit #2 - 1.25 22.06.2008 NA 3.75 17.01 50
Unit #3 - 1.25 23.10.2009
27 Kuttiadi Unit #1 - 50 11.10.2010 NA 100.00 223 465.44 30
Additional Unit #2 - 50 30.10.2010
Extension
Unit #1 - 1.6 25.06.2011 10.45
28 Poozhithode Unit #2 - 1.6 25.06.2011 NA 4.80 10.97 26
Unit #3 - 1.6 25.06.2011
29 Ranni perinad Unit #1 - 2 16.02.2012
Unit #2 - 2 16.02.2012 NA 4.00 16.73 5.85 48
30 Peechi 1.25 07.01.2013 NA 1.25 3.21 0.40 30
Unit #1 - 2.5 15.78
31 Vilangad Unit #2 - 2.5 26.07.2014 NA 7.50 22.63 34
Unit #3 - 2.5
32 Chimony 2.5 25.05.2015 NA 2.50 6.7 1.56 30
Unit #1 - 1.5 03.09.2015
33 Adyanpara Unit #2 - 1.5 03.09.2015 NA 3.50 9.01 5.01 30
Unit #3 - 0.5 03.09.2015
Unit #1 - 5 29.02.2016 19.32
34 Barapole Unit #2 - 5 29.02.2016 NA 15.00 36 27
Unit #3 - 5 29.02.2016
35 Vellathooval Unit #1 - 1.8
Unit #2 - 1.8 26.5.2016 NA 3.60 12.7 3.05 40
Total 2049.75 7160.98
PART B - WIND
1 Kanjikode 9 x 0.225 MW 18.05.1995 NA 2.03 4 1.71
Total 2.03 4
PART C – THERMAL
1 Brahmapuram Unit #1 - 21.32 06.05.1997
Diesel Power Unit #4 - 21.32 17.12.1997 NA 63.96 606 5.54 68.50
Plant (BDPP) Unit #5 - 21.32 24.11.1998
Unit #2 - 16 11.09.1999
Unit #3 - 16 18.09.1999
2 Kozhikode Unit #5 - 16 30.09.1999
Diesel Power Unit #6 - 16 11.09.1999 96.00 896 38.01 80
Plant (KDPP) Unit #7 - 16 25.10.1999 NA
Unit #8 - 16 06.11.1999
Total 159.96 1502.00
3 Kayamkulam Unit #1 - 116.6 02.11.1999
(NTPC) Unit #2 - 116.6 28.02.1999 359.58 2158 68.50
Unit #3 - 126.6 11.12.1999 NA

PART D - SOLAR
1 Kanjikode Ss 1.00 10.08.2015 NA 1.00 1.63 1.03 18
21
2 Chaliyoor
Colony, Agali 0.096 31.08.2015 NA 0.096 0.15 0.16 18
22
3 Poringalkuthu
Powerhouse 0.05 10.09.2015 NA 0.05 0.06 0.06 14
4 Banasurasagar,
Wayanad 0.01 21.01.2016 NA 0.01 0.01 0.03 17
5 Kollengode
Substation 1.00 08.08.2016 NA 1.00 1.66 0.80 19
6 Padinjarethara
Dam Top 0.44 29.08.2016 NA 0.44 0.73 0.37 19
7 Edayar
Substation 1.25 05.09.2016 NA 1.25 2.08 1.03 19

premises
8 Barapole
Canal bank 1.00 7.11.2016 NA 1.00 1.66 0.50 19
9 Barapole
Canal top 3.00 17.11.2016 NA 3.00 4.99 0.49 19
10 Roof top of
Generation 0.70 3.1.2017 NA 0.70 3.00 8.19 14
buildings
(18 nos)
Total 8.55 15.97
PART D PRIVATE HYDRO
Unit #1 - 4 31.03.1994
1 Maniyar Unit #2 - 4 30.12.1994 NA 12.00 36 1.66 30.83
Unit #3 - 4 29.12.1994
Unit #1 - 7 01.06.2001
2 Kuthungal Unit #2 - 7 01.06.2001 NA 21.00 79 14.03 42.94
Unit #3 - 7 01.06.2001
3 Ullunkal Unit #1 - 3.5 13.11.2008 NA
Unit #2 - 3.5 13.11.2008 7.00 32.22 13.10 53
4 Iruttukkanam Unit #1 - 1.5 18.09.2010

Unit #2 - 1.5 19.09.2010 NA 4.50 15.86 20.08 50
Unit #3 - 1.5 4.04.2012
5 Pampumkayam Unit #1 - 0.055 3.8.2012 NA
(Mankulam) Unit #2 - 0.055 0.11 0.29 0.69 -
Unit #1 - 3.5 29.08.2013
6 Karikkayam Unit #2 - 3.5 2.09.2013 NA 10.50 43.69 21.93 -
Unit #3 - 3.5 28.09.2013
7 Meenvallom Unit #1 - 1.5 17.6.2014 NA
Unit #2 - 1.5 3.00 8.37 5.99 -
8 Kallar 0.05 31.3.2015 NA 0.05 0.13 0.03 -
Total 58.16 215.56
PART E - PRIVATE THERMAL
Unit #1 - 40.5 15.06.2001

Unit #2 - 40.5 15.06.2001 NA NA 80
1 BSES** Unit #3 - 40.5 15.06.2001 157.00 1099
Unit #4 - 35.5 01.03.2002
23
24
2 Kasargode Unit #1 - 7.3

Power Unit #2 - 7.3 01.01.2001 NA NA
Corporation* Unit #3 - 7.3
3 MPS Steel
Castings Ltd 10 19.02.2009 NA 10.00 67.63 NA 77.20
(Co-generat-
ion plant)
4 Phillips Carbon
Black Ltd (Co- 10 31.03.2011 NA 10.00 70.08 NA -
generation
plant)
Total 177.00 1236.71
PART F - PRIVATE WIND
6 x 0.75 MW 31.03.2008 NA
1 Ramakkalmedu 2 x 0.75 MW 31.03.2009 14.25 32.46 28.75 26
1 x 0.75 MW 31.03.2010
7 x 0.6 MW 31.03.2008
2 Agali 16 x 0.6 MW 31.03.2010 NA 18.60 37.47 46.47 23
2 x 0.6 MW 29.09.2010
6 x 0.6 MW 31.10.2010
3 Ahalia Alternate 1 x 2.1 MW 22.02.2016

Energy Pvt Ltd, 3 x 2.1 MW 23.03.2016 NA 8.40 16.19 17.39 22
Kanjikode
Total 41.33 86.12
PART G - PRIVATE SOLAR
1 Cochin Intern_ 1MW 30.11.13
ational Airport 12MW 18.08.15 NA 20.53 32.37 10.99 18
Ltd 2.4 MW 5.1273 26.5.16
9.3.17
2 Solar park,
Ambalathara 4 MW 14.12.2016 36.00 56.76 7.55
16 MW 04.01.2017
8 MW 07.02.2017
8 MW 30.03.2017
3 Anert,
Kuzhalmandam 2MW 9.12.2016 2.00 3.15 0.93
4 Hindalco 1MW 31.03.2016 1.00 1.58 1.61
Total 59.53 93.86
GRAND TOTAL 2915.89 12473.20

**PPA ended on 31-10-2015

*PPA ended on 13-05-2016
25
G.1.3 RENEWABLE ENERGY & ENERGY SAVINGS (REES)

A. SOLAR PROJECTS COMMISSIONED / ADDED DURING 2016 -17
Sl. No Name of Project Installed Date of

capacity (MW) Commissioning
1 Solar power plant at Kollengode Sub
Station premises 1 08.08.2016
2 Solar power plant at Padinjarethara Dam Top 0.44 29.08.2016
3 Solar power plant at Edayar Sub station premises 1.25 05.09.2016
4 Generation Roof Top 18 Nos 0.7 2016-17
5 Palakkad Tribal Colonies 7 nos (off grid) DDG 0.065 2016-17
6 Barapole Canal Bank 1 07.11.2016
7 Barapole Canal Top 3 17.11.2016
8 Roof top Transmission Buildings (27 Nos)
of KSEBL 0.075 Work completed
energisation awaiting.
9 Roof top Distribution Buildings (12 Nos) 0.05 Work completed
of KSEBL energisation awaiting.
10 Total Electrification (off grid) 0.0042 Completed
11 Solar Garden at Padinjarethara and solar Decorative solar Completed
flower in front of Vydyuthi Bhavanam , Pattom installation
12 Grid connected Solar power plants 417 Nos
through consumers 6.19 2016-17
B. ON- GOING SOLAR PROJECTS
Location of solar Project Installed Status
capacity (KW)
1 Ettumannoor Substation premises 1000 Work in progress
2 Thalakulathur Substation premises 650 Inspectorate approval
pending
3 Muvattupuzha Substation premises 1250 Work in progress
4 Pothencode Substation premises 2000 Work in progress
5 Peerumed Substation premises 500 Work in progress
6 Kuttipuram, Substation premises 500 Work in progress
7 Ponnani Substation premises 500 Work in progress
8 Nenmara Substation premises 1500 Work in progress
9 Vydyuthi Bhavanam Inspectorate
Thiruvananthapuram (rooftop ) 30 approval
pending
10 Kottiyam Substation premises 500 Tendered
11 Mylatty Substation premises 1000 Tendered
12 Peruthenaruvi Generating station premises 450 Tendered
26
13 As part of IPDS scheme 1120 Tendered

14 Distribution office buildings Work in progress and
(Roof Top) 460 nearing to
completion
15 Transmission office buildings (rooftop) 910 Work in progress and
nearing to completion
16 5kw rooftop project in 8 schools 40 Tendered
17 Implementation of Grid Tied Roof Top Solar
Projects for Government buildings under 1285.5 Tendered
District Panchayat
18 Madakkathara Substation premises & Pole 1500 Re-Tendered
Casting yard at Choolissery
C. IMPLEMENTATION OF SOLAR PARKS

(1) 200MW Kasargode Solar Parks
M/s Renewable Power Corporation of Kerala Ltd., the Joint Venture Company of Solar Energy
Corporation of India and Kerala State Electricity Board Limited designated as the 200MW Kasargode
Solar Power Park Developer (SPPD) has commenced its functioning. KSEBL has completed the
taking over of entire land identified by the Revenue Department, for the Park and is in advance
possession of 1086.66 acres of land. The formal assignment process is under process with State
Government. The implementation of 50 MW on behalf of Indian Renewable Energy Development
Agency (IREDA) has been commenced during April 2016 and has commissioned 36MW by the end
of the financial year KSEBL has signed the draft Power Sale Agreement with IREDA on 31st March,
2017.
(2) 200MW Cheemeni Solar park
The Ministry of New and Renewable Energy vide its order no.30/26/2014-15/ NSM dtd 21.3.2017 has
notified the scheme for enhancement of capacity from 20,000MW to 40,000MW for Development
of Solar Parks and Ultra Mega Solar Power projects. Government of Kerala has intimated the
requirement for the additional Solar Park of 200MW capacity in Kasargode District at Cheemeni.
The process for transfering of the identified 1000 acres of Government land at Cheemeni to State
Utility is in progress.
D. ESCOT activities 2016 -17
 Investment grade Energy Audit of Govt. Medical College, Thiruvananthapuram conducted.
 Conducted Energy Audit of Kerala State Science and Technology Museum and Planetarium
and audit of Sastra Bhavan, Thiruvananthapuram, Kariavattom University, NORKA building,
Thiruvananthapuram, Guatham Hospital, Ernakulam has been started .
 As part of Agricultural DSM activity, replaced agriculture pump set with energy efficient
agriculture pump set at Kerala Agricultural University at Vellayani, Thiruvananthapuram.
27
 Approximately one crore LED bulbs were distributed through Electrical Sections as part of
DELP programme.
 Programme on installation of LED streetlight at Alappuzha Municipality has been completed.
 Project for installation of 407 numbers of 18 watts LED street light at Vellachira at Thrissur
District has been completed .
 As part of Energy Efficient Fans and Tubes (EEFT) Project, purchase order has been issued for
1000 fans to retrofit fans in KSEB buildings with energy efficient fans the first phase.
• As part of Empowering consumers for Energy Efficiency (ECEE), pilot survey has completed in
Malappuram District in co - ordination with NSS Technical Cell.
• Preliminary works for installation of solar panels on schools has commenced inconnection with
the Labha Prabha Season – 3 programme.
G.2 TRANSMISSION SBU
Transmission SBU manages the construction, operation and maintenance of EHT substations
and transmission lines and the supply of power to EHT consumers. Transmission SBU is responsible
for the implementation of transmission loss reduction programs and co ordinating the activities
for system development. Transmission SBU has absolute control over all load dispatch activities,
with full responsibility for real time management and matters pertaining to protection system and
the communication system. Scheduling of generation, annual maintenance, import of power from
independent power producers and central generating stations and export of power are managed
by this SBU. Other important activities include monitoring of daily system statistics, implementing
policy matters related to merit-order dispatching, communication planning, networking of
computers and co-ordination of activities under the system operation circles.
An 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 circuit kms)
1 400 *5(1No: KSEB) **571.96
2 220 20 2801.89
3 110 148 4434.00
4 66 73 2208.75
5 33 143 1904.13
* The 400 kV Substations at Pallippuram (Thiruvananthapuram), Pallikkara (Ernakulam), Areakode and

Mannukkadu(Palakkadu) are owned by PGCIL.
** Lines within Kerala periphery (owned by PGCIL)
28
G. 2. a TRANSGRID
The TransGrid project is the largest ever transmission project in the history of the Company
which envisages to fulfill the load requirement of the State and ensure reliable and stable supply
of power across the state. The project is planned for execution in two phases and is targeted
for completion by 2022. Sanction was accorded for the - TRANSGRID 2.0 plan for an amount of
Rs.10000 crores vide B.O (DB)No.868 D(T&SO)/PSE/LTTP/2015-16 dated 16.03.2016. Out of the above
estimated amount, Rs.8447 Crore is proposed to be funded from different agencies like PSDF,
KIIFB, MNRE etc. Two projects costing Rs. 466 Crore are proposed to be funded through PSDF
scheme. Projects worth Rs.1788 Crore are targeted for funding from MNRE through the Green
corridor Fund and Projects totaling to Rs. 6193 crore were submitted to M/s KIIFB for financial
assistance out of which KIIFB has conditionally approved Rs. 5200 Crore.
Salient features of the project are:
• Overcoming RoW constraints in Kerala through use of narrow based towers, state of the art
technologies like tubular towers, insulated cross arms etc.
• Land constraints in urban areas overcome by use of GIS technology.
• Adopting use of HTLS conductors and technologies like OPGW, modern protection and
control systems
• Turn-key project execution method with empanelment of contractors with proven technical
and commercial strength in executing projects of similar nature
• Sizing the individual contracts manageably high to attract top players in the field
• Offering payment terms of 75% within one month of bill submission, 15% within two months
and 10% on commissioning
• Strong quality management with seven-year post-commissioning warranty.
The first phase works are under various stages of execution and progressing at good pace. Action
plans are in place to scheduling shutdown/alternatives for the uninterrupted power during the
execution of the project.
Transmission SBU is utilising modern technology options to overcome the inherent challenges of
the state. Technological solutions using drones and hot line maintenance have also been adopted
for better performance of the lines.
G.3 DISTRIBUTION SBU
Distribution SBU manages distribution of electricity in the State other than in other Licensee’s
areas. The activities of the SBU include construction, operation and maintenance of distribution
network upto a voltage level of 11 kV. Implementation of Central Sector Schemes like RAPDRP Part
B, RGGVY, DDUGJY, IPDS etc. Distribution Sector Projects funded like MP LAD/MLA LAD Kerala
Development Schemes are also undertaken by this SBU.
29
G.3 a Total Electrification

The Distribution SBU went all out to realise the Government of Kerala mission to electrify all
households in the state by March 2017.Since accurate data pertaining to unelectrified households
was not available, initially, beneficiaries had to be identified through registration channels such
as Section offices and people’s representatives. More than 1.52 lakh applicants registered in the
project, out of which around 1.24 lakh households belonged to BPL category. The number of
households coming under SC and ST categories was 32,000 and 17,500 respectively.
Major hurdles faced in the project execution included obtaining forest clearance for construction of
electric lines through forest to provide electricity to inhabitants residing inside forests and clearing
objections from property owners in case of stringing lines through their properties. Requisite
orders/clearances were obtained by co ordination with Revenue and Forest Departments with the
help of the State Government. Another major impediment, a large number of unwired households,
was overcome when KSEBL decided to carry out the wiring in households coming under BPL
or ST category, in anticipation of CSR funds from central and state PSUs; various associations of
officers and trade unions in KSEBL as well as employees of various offices also put in their efforts
to carry out the internal wiring for a considerable number of houses.
Administrative Sanction was accorded to the project for an estimate amount of ₹174 Crore, of which
KSEB Ltd had to bear ₹63.82 Crore (50% of the estimated cost in each LA constituency, subject
to a maximum of Rs One Crore per Constituency) under Annual Plan / Normal Development of
KSEB Ltd; balance amount of ₹110 Crore was to be shared by GoK using funds allotted to various
Departments.
Distribution network was extended wherever possible and where extension of distribution
network was not feasible as in the case of remote colonies / habitats, supply was effected through
Decentralised & Distributed Generation (DDG) and Micro-Grids.
Majority of the works related to the total electrification mission were completed by March 2017 and
electricity connections were provided to all the households and Anganwadis which were occupied
or ready for occupation, but for the few cases where statutory approvals were pending from other
departments.
G.3. b Simplification of procedures
As it was inferred that requirement of various documents for obtaining electricity connection
was causing delay in releasing connections and hardship to the beneficiaries, and as part of the
Business Reform Action Plan 2016 proposed by the MoP, GoI, KSERC approved the simplified
application procedures and forms suggested by KSEB Ltd as per GoK directive and this ensured
that electricity connections could be released based on maximum 2 documents – proof of identity
and proof of ownership. The rules were further liberalized when KSEB Ltd as per GoK directive
issued BO to release electricity connections to residential structures of plinth area not more than
100m2 without insisting proof of ownership. Also, Local self government helped the cause by
modifying rules to release electricity connections to households of plinth area not more than 1500
sq. ft on the basis of temporary residential certificate. Further, online facility for filing LT service
30
connection applications has also been introduced which enables applicants to fulfill their need
without visiting section offices.
G.3.b.SCHEMES FUNDED BY CENTRAL / STATE / OTHER AGENCIES
(1) DEEN DAYAL UPADHYA GRAM JYOYHI YOJANA (DDUGJY)
Government of India sanctioned a total amount of Rs.485.37 Cr. for implementing DDUGJY in
Kerala on 5.1.2016 as detailed below.Work include 33KV substations,33KV lines,11KV lines,distribution
transformers, HT and LT lines, replacement of energy meters, BPL service connections etc.
Sl. Name of District * Sansad Adarsh ** Metering Connecting System Total
No Gram Yojna (Cr) (Cr) Unconnected Strength sanctioned
Hhs(Cr) ening (Cr) Cost (In Cr.)
1 Alappuzha 5.33 13.85 9.26 5.13 33.57
2 Ernakulam 3.23 11.66 8.37 10.5 33.76
3 Idukki 0.14 7.62 19.19 12.36 39.31
4 Kannur 2.67 14.06 16.21 3.46 36.40
5 Kasaragod 1.79 3.58 8.3 1.06 14.73
6 Kollam 3.64 15.80 9.58 8.58 37.60
7 Kottayam 4.03 11.43 11.54 11.64 38.64
8 Kozhikode 10.40 13.94 17.43 1.89 43.66
9 Malappuram 2.71 7.55 20.54 5.55 36.35
10 Palakkad 2.76 12.99 13.03 3.49 32.27
11 Pathanamthitta 5.03 3.61 11.10 6.02 25.76
12 Thiruvananthapuram 15.75 15.10 16.53 6.15 53.53
13 Thrissur 0.41 20.96 6.55 4.84 32.76
14 Wayanad 1.25 7.01 13.96 2.40 24.62
Total 59.14 159.16 181.59 83.07 482.96
* Works exclusively for the Panchayats selected by the representative member of Parliament under Saansad Adarsh
Gram Yojana (SAGY).
** Replacement of faulty and electro-mechanical meters with static meters to reduce AT & C loss.
2) R- APDRP(Part B)
The following works have been completed under R-APDRP Part-B amounting to ₹ 456 Cr against
target amount of ₹1078.3Cr.
Description Quantity
33KV substations 5 nos
33KV OH line 19Km
33KV UG cable 9Km
Construction of HT OH line 1629 km
Laying of HT UG Cable 1141km
Reconductoring of HT OH line 629 km
31
HT ABC 89Km
Installation of distribution transformers 2846Nos.
Construction of LT line 270 km
Reconductoring/conversion of LT line 8312 km
LT ABC 411Km
Replacing faulty/mechanical meters with
electrostatic meters. 1333788 Nos.
Street lights meters installed 38811 Nos
3) INTEGRATED POWER DEVOLOPMENT SCHEME (IPDS) (for Urban & semi urban Areas)
An amount of ₹ 592.07 Crore have been sanctioned by the MoP for IPDS Kerala on 15.6.2016, for 63
towns under 25 Circles. DPR for the works have been sanctioned and Solar turnkey projects already
started. Material procurement for the works is in progress.
4)LOCAL AREA DEVELOPMENT (LAD) WORKS
(a) The physical and financial status of work carried out through MLA LAD fund is given below
Region
Total no. Completed Balance Amount Amount for Balance
of work work work remitted which work Amount
(Rs. lakh) was (Rs. lakh)
completed
(Rs. lakh)
South 46 45 1 73.306 72.84 0.4665
Central 27 21 6 352.19 349.07 3.11
North 31 30 1 46.79 44.79 2
North Malabar 3 3 0 29.25 29.25 0
Total 107 99 8 501.53 495.95 5.58
(b) The physical and financial Progress of works carried out u sing MP LAD fund is given below
Region
Total no. Completed Balance Amount Amount for Balance
completed
(Rs. lakh)
South 3 3 0 16.30 16.30 0
Central 9 4 5 25.04 2.20 22.83951
North 1 1 0 1.28 1.28 0
North Malabar Nil Nil Nil Nil Nil Nil
Total 13 8 5 42.62 19.77 22.839
32
5) KERALA DEVELOPMENT SCHEME

Kerala Development Scheme works are distribution activities taken up by local bodies with their
funds through KSEBL. The progress of work is given below.
Region Total no. Completed Balance Amount Amount for Balance
completed
(Rs. lakh)
South 663 359 304 1615.57 616.47 999.10
Central 658 484 174 1483.01 768.15 714.86
North 162 76 86 342.90 29.66 313.23
North Malabar 146 68 78 590.96 268.52 322.44
Total 1629 987 642 4032.44 1682.80 2349.63
G.3.d SAFETY
a) The Safety Week 2016 has been observed from 1st to 7th May,,2016 in order to “Strengthen Safety
Movement to Achieve Zero Harm” with the co-operation of Department of Electrical Inspectorate,
Bureau of Indian Standards, Institution of Engineers (India), Energy Management Centre, ANERT
and Department of Factories and Boilers. In connection with Safety Week 2016, following activities
were observed during 2016-17
• Conducted first aid training to KSEBL Staff.
• Conducted safety awareness class for contract workers.
• Conveyed safety messages through FM Radio.
• Conducted Road Show to convey Electrical safety messages.
• Distributed Safety slips, brochures etc. among public.
• Displayed Safety Cartoons in front of Cash Counters of all Electrical Sections.
• Awareness programme on usage of Earth-leakage circuit breaker (ELCB) to public and
fabrication/ welding/ truss work contractors conducted.
b) As per BO (DB) No. 3549/2016, [CE (CAPS& Safety)/S/Electrical Accidents/ FB/2016 / Tvm dated
20.12.2016, it was decided to take measures to curb lapses in the compliance of safety measures
and to issue appropriate directions in this regard and to audit all accidental death henceforth to
understand the cause and to strengthen the institutional mechanism to prevent such occurences.
c) A new safety application (SMART – Safety Monitoring And Reporting Tool) has been developed
by IT wing of KSEB Ltd. and inaugurated by the Hon`ble Minister for Electricity on 15.02.2017. This
software module is implemented to create authentic base line data for intensifying the safety
related activities. The key functionalities of this application are creating safety awareness, accident
reporting, monitoring the availability of safety tools, materials and equipments etc.
33
G.3.e. IT INITIATIVES
• All Electrical Sections have been migrated to OrumaNET, the centralised LT Billing software by
October 2016.
• New module ‘Online New Connection Service’ has been integrated to receive and process
online applications for new connection’.
• Another module ‘Grid Connected Solar Billing Management ‘ has been integrated for ongrid
solar consumers.
• Mobile App based on OrumaNET and HRIS was developed and released for employees in order
to enable them to use OrumaNET during field work, travel, conferences etc.
• Mobile wallets like Paytm and Vodafone M-Paisa are also integrated with KSEB billing system.
• Payment integration with Apna CSC (the Central Common Service Center) was also done
enabling consumers to remit KSEB bill from any Apna CSC center in India.
• A complete module of Online Transfer including GIS location mapping is ready.
• Integration of Attendance Management System and Biometric Tracking system has been
successfully implemented in Vydyuthi Bhavanam, Thiruvananthapuram.
• The centralized corporate accounting software, SARAS,is migrated to a Central Server and all
ARUs are connected to the above Server.
• Pilot Implementation of e-Office (Paperless office) package has been done in about 25 KSEBL
offices including corporate offices.
• The 24x7 customer care number, 1912 is made toll free since November, 2016. A Whats App no
9496001912 has been released for customers to register their complaints. Complaints received
from Face book, e-mail etc are also registered and followed-up in customer care centre(CCC).
• A Disaster Recovery Center is functional at InfoPark, Cherthala in order to provide redundancy
for the Data Center.
• As part of the project, PDA (spot billing machines) have been deployed in all RAPDRP towns. As
per Board’s decision, PDAs are implemented in Non-RAPDRP area also covering all Electrical
Sections across the state.
• Third Party Independent Evaluation Agency (TPIEA) verification by M/s PGCIL for RAPDRP
Part-A IT implementation was initiated in February’17.
• Urja Sowhrida, the Bill Information System has been implemented which disseminates electricity
bill information like bill amount, due date, disconnection date etc to the customers via SMS and
e-mail as soon the bill has been prepared in the Centralised Billing System. Reminder SMS are
also sent in case of non-payment before due date and disconnection date.
• An Outage Management System (OMS), Urja Doothu has been implemented to send
power outage information up to distribution transformer level to all the consumers through
34
automated SMS. It is also integrated with Urja Mitra, the OMS of MoP is being undertaken so
that power outage information up to feeder level will be sent as SMS/call/web portal/mobile-
app to consumers by Urja Mitra Application. About 76 lakhs consumers have registered to avail
free bill alerts and outage information through Urja Sowhrida and Urja Doothu.
• 11 kV Rural Feeder Monitoring scheme implemented by REC to install communicating modems
in rural/mixed feeders of KSEBL is also progressing.
• The Detailed Project Report (DPR) for 22 Crores 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. Tendering process for appointing Project Management Agency has
been initiated.
• A project to implement Enterprise Resource Planning (ERP) in KSEB Ltd has been envisaged
and a Project Management Agency (PMA) has been appointed to conduct gap analysis and
DPR preparation.
• For performance assessment of distribution offices based on Key Performance Indices (KPIs), e
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 is being done.
• An application, ‘Power for All’ to monitor the progress of Total Electrifications was developed
and used in field offices and Corporate offices.
• An application, ProMoS is being developed for monitoring the progress of centrally funded
projects, DDUGJY and IPDS.
• Video Conferencing System has been set up in 10 locations, viz. Vydyuthi Bhavanam, Trivandrum,
220kV S/S, Brahmapuram, 220kV S/S, Vadakara, 110 kV S/S, Kundara, 220 kV S/S, Edappon, 220kV
S/S , Pallom, LD, Kalamassery, 400 kV S/S,Madakkathara, 220kV S/S Areekkode, 220kV S/S,
Kanjhilode.
• A Security Audit has been conducted by M/s STQC at the Data Center and Certificate was issued
in proof of compliance.
H. COMMERCIAL & TARIFF
H. (1)REGULATORY ISSUES
a. ARR & True-up petitions:
In FY 2016-17, the Company was able to file petition before KSERC, seeking consequential orders on
the true-up of accounts for the year 2009-10 as per APTEL judgment dated 10-11-2014 in Appeal No
1 and 19 of 2013, which has a significant impact on the employee cost of KSEBL. The Company also
filed petition before KSERC for truing up of accounts for the year 2013-14.
The Company could not file ARR&ERC petition for the year 2016-17 as the Company had
challenged the validity of the Tariff Regulations, 2014, by filing Writ Petition No.465/2015(G) before
the Hon’ble High Court of Kerala, since the norms for expenditure specified in the Tariff Regulations,
35
2014 are inadequate resulting in under recovery of the expenses. In the absence of ARR petition, for
the first time in the history of Regulatory framework in the State, KSERC initiated suo-motu tariff
determination procedure. The Company filed all the details sought for by KSERC for suo-motu
tariff determination including the capital expenditure plan for 2016-17. Suo-motu order approving
the ARR of the Company for the year 2016-17 was issued on 17-4-2017.
b. Appeal Petitions before the Honourable Supreme Court of India:
In FY 2016-17, KSEBL filed second appeal petition before Hon’ble Supreme Court of India against
APTEL judgment dated 18-11-2015 & 5-2-2016 in Appeal No.247 of 2014 filed by HT & EHT Association
challenging the equity amount approved for KSEBL. The outcome of the appeal has significant
financial impact on KSEBL.
c. Other Major Matters/Orders
• As part of ‘Ease of doing Business’, a proposal for simplification of procedures for availing
service connection, was submitted before KSERC.
• The Company had been taking earnest efforts to meet the Renewable Purchase Obligation. To
meet the RPO shortfall, the Company as per the direction of KSERC purchased REC for Rs.15Cr
in FY 2016-17.
• KSEBL was also successful in obtaining orders in favour of KSEBL in the petition filed by Cochin
Special Economic Zone in the matter of availing open access by other distribution licensees
in the State who purchase bulk power from KSEBL, thereby avoiding huge financial loss to
KSEBL.
• The tariff order of CERC for RGCCPP, Kayamkulam for the tariff period 2014-19 was issued in
October 2016. Since there was considerable increase in Annual Fixed Cost(AFC) as per the
new tariff order, KSERC had disallowed the same in the ARR approved for the FY 2016-17 and
directed KSEBL to approach CERC for lowering the AFC. KSEBL subsequently filed petition
before CERC and as per the direction of CERC, negotiations for reducing the AFC, were held
between NTPC and KSEBL.
• KSEBL had submitted its counter affidavit on the tariff petitions filed by Central Generating
Stations, IPPs and PGCIL before CERC submitting KSEBL’s objections on the various tariff
parameters adopted, so that the power purchase cost from these Stations are prudent.During
the year KSEBL was also successful in getting disposed off the petition filed by NLC claiming
interest on arrears of wage revision expenses incurred by them. KSEBL has also filed an appeal
petition on before APTEL challenging the order of CERC on IT reimbursement of mines of NLC
power station.
H.2 Power Procurement during 2016-17
a) Long Term Power Procurement
i. Supply of 200 MW RTC power commenced on 10-01-2017 (@ Rs3.60/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.
36
ii. Supply of 115 MW RTC power commenced on 22-12-2016 (@ Rs 4.15/kwh as on bid date) from
Jhabua Power Ltd based on the LTA granted by PGCIL to the Power Supply Agreement
executed on 31-12-2014 through bidding route.
iii. Supply of 156.5 MW RTC power (infirm power at CERC tariff) commenced on 29-08-2016 from
Kudamkulam Unit 2 based on the CGS allocation of MoP.
iv. Supply of 100 MW RTC Power commenced on 01-04-2016 at CERC tariff from DVC – Meija
Power station based on the LTA granted by PGCIL to the Power Supply Agreement executed
on 24-04-2014 through MoU route.
v. Supply of 50 MW RTC Power commenced on 02-05-2016 at CERC tariff from DVC – Reghunathpur
Power station based on the LTA granted by PGCIL to the Power Supply Agreement executed
on 24-04-2014.
vi. Supply of 8.4 MW wind power commenced on 22-02-2016 (@ Rs3.95/kwh) from Ahalia Alternate
Energy Pvt Ltd and payment started as per B.O. dated 04-10-2016.
b) Medium Term Power Procurement
1. Supply of 165 MW RTC power commenced on 01.06.2016 (@ Rs3.60/kwh as on bid date)from
Jindal Power Ltd based on the MTOA granted by PGCIL to the Supplementary Power Supply
Agreement executed on 27.06.2015 for advancing date of commencement of supply to 01-06-
2016 from the initial start date i.e.01.12.2016. This MTOA was relinquished subsequent to the
grant of LTA for 200 MW.
2. Supply of 122MW RTC power commenced on 01-06-2016 at CERC tariff from Maithon Power Ltd
started based on the MTOA granted by PGCIL to the PPA executed on 29.06.2015 for purchase
of 150 MW RTC power on long term basis for a period of 30 years from the date of CoD of the
Station.
c) Short Term Power Procurement
• By participating in the e-tender through DEEP Portal, KSEBL purchased 100MW power during
peak hours and 50MW power during off peak hours from 05.05.2016 to 31.05.2016 through PTC
India Ltd from DVC in eastern region.
Period Duration Quantum (MW) Rate at Kerala
on Firm basis Periphery per kWh Source of Power
05.05.2016 22:30 hrs to 50 MW Rs. 3.21/- DVC in Eastern
to 01.06.2016 00:00 hrs Region
05.05.2016 to 05:00 hrs to 50 MW Rs. 3.14/- DVC in Eastern
31.05.2016 18:30 hrs Region
05.05.2016 18:30 hrs to 100 MW Rs. 3.40/- DVC in Eastern
to 31.05.2016 22:30 hrs Region
• 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:
37
Period
Duration Quantum Rate at Delivery Source of Power
hrs (MW) on Point (Rs/kWh)
Firm basis
01.03.2017 00:00 to Jindal Power
to 30.06.2017 24:00 (RTC) 200 MW Rs 3.08/- Limited(JPL)/
Jindal Steel Power
Limited(JSPL)
MTOA was granted to the supply of above 200MW by PGCIL and supply commenced from 01-03-
2017 and continuing.
• 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 as
shown below:
Period Duration hrs Quantum (MW) Rate at Kerala Source of Power
on Firm basis Periphery (Rs/kWh)
01-03-2017 00:00 to 100 MW Rs. 3.25/- Jindal India
to 31-05-2017 24:00 Thermal Power Ltd in
Eastern Region
01-03-2017 18:00 to 100 MW Rs. 3.65/- Jindal India Thermal
to 31-05-2017 24:00 Power Ltd in Eastern
Region
Short term open access not obtained for this PPA. However the contracted quantum is supplied by
TPTCL on day-ahead basis except during transmission corridor constraints.
50MW power from 00:00-05.00 hrs arranged through banking mechanism from March 6th to
March 31st 2017 by participating in the bid through M/s. GMR Energy Trading Ltd (GMRETL) floated
by BRPL (BSES Rajdhani Power Ltd.) in the Northern region. This power has to be returned to
BRPL between July 2017 and September 2017.
Other Matters
i. MTOA of 100 MW RTC power and 297 MW RTC Power from PTC_ BALCO and NVVN_ CSPDCL
respectively on medium term basis expired on 28-02-2017.
ii. Commercial Operation of Kudamkulam Unit 2 (1000MW) declared on 31-03-2017. Allocation to
KSEB Ltd is 13.33%
iii. SRPC vide letter dated 23-03-2017, communicated allocation of 5.15% (41.18MW) from Kudgi
stage 1- 800MW (NTPC Station) from the date of CoD. (CoD declared in 2017-18))
38
I. HRD Initiatives
a) Man Power
The Company takes pride in its well trained, efficient, experienced and committed manpower.
b) Training & Development
Human Resource Development (HRD) Cell coordinates the training activities conducted
at Power Engineers Training and Research Centre (PETARC) at Moolamattom, 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 KSEBL, imparting technical as well as management training to the officers of
KSEBL and has been recognized as a Category 1 training centre by Central Electricity Authority.
Human Resource Development wing deputes officers for attending training programmes outside
state to institutions such as ESCI Hyderabad, CIRE Hyderabad, CPRI Bangalore, PMI Noida, TNEB
Madurai, NPTI Neyveli, PSTI Bangalore, etc.
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.
During 2016-17, PETARC had conducted 83 programmes and trained 2,133 persons. It has been
decided to introduce the integrated Induction cum Statutory Training Programme for the newly
recruited Assistant Engineers of KSEBL at PETARC w.e.f 2017-18 as per the Central Electricity
Authority Guidelines. PETARC conducted need based trainings for the Electricity Department Staff
of Lakshadweep Electricity Department during 2016-2017.Regional Power Training Institutes have
conducted 658 programmes on various subjects and trained 19,920 employees. A total of 22,447
employees were trained during the financial year 2016-2017.
Outside training was imparted to 346 employees by deputing 99 of them for attending various
training programmes outside the state and 247 persons for training programmes within the state.
Many organizations and professional students have identified KSEBL for doing their project work
at graduate and postgraduate level. Accordingly 106 students from professional colleges have done
their project works, 3 students have done their research works and 4,886 students have done their
industrial training in various powerhouses, substations and field offices of KSEBL during the year
2016-17. In addition to the above, students from ITI, Malampuzha and ITI, Aryanadu were permitted
to undergo industrial training at free of cost.
c) Industrial Relations
A cordial and harmonious relationship exists between the company and its workmen, officers and
the pensioners.
39
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 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 Shares , holding 100000 number of equity shares of Rs.1000 each amounting to Rs.10 crore.
b) Kerala State Power and Infrastructure Finance Corporation limited (KSPIFCL)
KSPIFCL has its corporate Office at KPFC Bhavanam,Vellayambalam,Trivandrum .KSEBL is an
40
associate company with KSPIFCL) having 40.6% Equity Shares ,holding 10819470 equity shares of
Rs.10/- each amounting to Rs.10,81,94,700.00
c) Renewable Power Corporation of Kerala Limited(RPCKL)
RPCKL has its head quarters at Vydyuthi Bhavanam,Thiruvananthapuram and has an authorized
and paid up capital of Rs.1 crore of which KSEBL holds 50 % Shares( 5,000 Equity shareas 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
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
41
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 the number of consumer complaints received, settled and pending for disposal
Region South Central North Total
Complaints received 329 197 257 783
Complaints settled 257 173 212 642
Complaints to be settled 72 24 45 141
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 2016-17.
No: of complaints received in 2016-17 – 5
No: of complaints disposed off during the year 2016-17 –1
X. AUDITORS
I. 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 2017 and submitted their report.
No instances of fraud has been reported by the Auditors under Section 143(12) of the Companies
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.
II. 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
42
March 2017.The comments vide report No dated 13/06/2018 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.
III. 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 2016-17.Secretarial Audit Report (Form MR-3) for the Financial Year 2016-17
issued by the Secretarial Auditor is attached as Annexure-C .The replies to the adverse comments,
qualifications or reservation is furnished as Annexure-D.
IV. COST AUDITORS
In terms of the provisions of the Companies Act, 2013, the Board has to maintain cost records
and conduct cost audit. In accordance with the applicability of Rule 14 of Companies (Audit and
Auditors) Rules 2014, M/s Murthy & Co ,LLP Cost Accountants, Bangalore has been appointed
as the Cost Auditors of KSEBL for the Financial Year 2016-17.The Cost Auditor has submitted the
unqualified Cost Audit Report in form CRA -3 (Annexure E).
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 2017, 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 ,2017 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.
43
• 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: 26.09.2018 sd/-
N.S.PILLAI
CHAIRMAN & MANAGING DIRECTOR
44
ANNEXURE-1
2016 - 17
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.
• Energy savings co-ordination team (ESCOT) has been constituted for effective implementation
of energy conservation activities.
• The “Innovation Group” has been set up, in coordination with Power
Department, Government of Kerala and the “Start up Village” in Kochi, for implementation of
project concepts with innovative ideas.
• DELP project has been implemented. Under this programme, 85 lakh LED bulbs have been
sold at a very low and affordable price of ₹ 65.00 per bulb with the objective of conserving
energy.
• Programme of LED street lighting in Aalappuzha Municipality has been completed.
• Project for installation of 407 numbers of 18 watts LED street light at Vellachira at Thrissur
district has been completed.
• As part of the Energy Efficient Fans and Tubes (EEFT) project, steps have been taken to retrofit
fans in KSEBL buildings with energy efficient fans and as a first phase, orders have been given
for 1000 energy efficient fans.
• For empowering consumers for Energy Efficiency, pilot survey has been conducted in
Malappuram District ,in Co- ordination with NSS technical team.
• In connection with the Labha Prabha Season-3 Programme, preliminary work for installation
of solar panels in schools has been started.
• Investment grade Energy Audit of Government Medical College, Thiruvananthapuram
conducted.
• Conducted Energy Audit of Kerala State Science and Technology and plannetorium and Sastra
Bhavan, Thiruvananthapuram, Kariavattom University, NORKA building,Thiruvananthapuram
and Guatham Hospital, Ernakulam.
• As part of the Agricultural DSM activity, replaced agricultural pump set with energy efficient
agriculture pump set at Kerala Agricultural University, Vellayani, Thiruvananthapuram.
ii) The steps taken by the company for utilizing alternate sources of energy.
a) Twelve new Solar projects, having a total installed capacity of 13.77 MW has been commissioned
/ added during the year 2016-17
45
b) Commissioning of eighteen Solar projects, with a total installed capacity of 15195.5 KW is under
process.
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 product • Safety of Working Staff.
improvement cost reduction, product • Reduction in Power Interruptions.
development or import substitution. • Consumer satisfaction on correct billing.
iii) In case of imported technology
(imported during the last three years
reckoned from the beginning of the - NIL -
financing year).
(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 - NIL -
Foreign Exchange outgo during the year in
terms of actual outflows.
For and on behalf of the Board
Date: 26.09.2018
Place : Thiruvananthapuram. Sd/-
CHAIRMAN AND MANAGING DIRECTOR
46
FORM NO. AOC-2 2016-17

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
as on financial year ended on 31.03.2017
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, Not Applicable
if any.
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)
(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
(1) Indian
a) Individual/HUF 66 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.
e) Venture Capital Fund
50
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
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’ SHARE HOLDING ( 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
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)

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)
52
At the end of
the year (or on
the date of
separation, if
separated during
the year)
(iii) CHANGE IN PROMOTERS’ SHAREHOLDING ( SPECIFY IF THERE IS NO CHANGE)
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 SIVASANKARA
MADHAVAN 1 0.00000003
2 Dr.K.M.ABRAHAM 1 0.00000003
3 C.V.NANDAN 1 0.00000003
4 NINA BALAGURU
SOMAN 1 0.00000003
5 PAROL
VIJAYAKUMARI 1 0.00000003
6 ADV B.BABUPRASAD 1 0.00000003
At the end 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
V INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
53
Secured Loans Unsecured Total

excluding deposits Loans Indebtedness
Indebtness at the beginning
of the financial year
i) Principal Amount 20,52,07,72,480.00 19,00,00,00,000.00 39,52,07,72,480.00
ii) Interest due but not paid -
iii) Interest accrued but not due 1,31,03,76,148.00 19,73,37,13,574.00 21,04,40,89,722.00
Total (i+ii+iii) 21,83,11,48,628.00 38,73,37,13,574.00 60,56,48,62,202.00
Change in Indebtedness during
the financial year -
Additions 20,42,42,44,979.00 20,42,42,44,979.00
Reduction 28,73,37,13,574.00 28,73,37,13,574.00
Net Change -
Indebtedness at the
end of the financial year -
i) Principal Amount 42,25,53,93,607.00 10,00,00,00,000.00 52,25,53,93,607.00
ii) Interest due but not paid 99,56,81,217.00 99,56,81,217.00
iii) Interest accrued but not due 1,55,26,20,019.00 8,87,50,00,000.00 10,42,76,20,019.00
Total (i+ii+iii) 44,80,36,94,843.00 18,87,50,00,000.00 63,67,86,94,843.00
54
Sl. Particulars of Name of the MD/WTD/Manager Name of the
No Remuneration MD/WTD/
Manager
Managing Director Whole Time
Director
1 Gross salary M.SIVASANKAR PAUL ANTONY DR. K. ELLANGOVAN N.SIVASANKARAN
MADHAVAN IAS IAS IAS PILLAI IA& AS
(a) Salary as per provisions
contained in section 17(1)
of the Income Tax. 1961. 6,25,748.00 11,81,439.00 9,02,079.00 23,81,866.00
(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) 6,25,748.00 11,81,439.00 9,02,079.00 23,81,866.00
Ceiling as per the Act 60,00,000.00 60,00,000.00 60,00,000.00 60,00,000.00
55
Sl. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
56
No
Whole Time Director
1 Gross salary B.NINA P.VIJAYAKUMARI C.V.NANDAN O.ASOKAN S.RAJEEV N.VENEUGOPAL
(a) Salary as per provisions 10,06,710.00 24,32,638.00 12,70,940.00 24,29,720.00 14,87,882.00 24,56,412.00
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) 10,06,710.00 24,32,638.00 12,70,940.00 24,29,720.00 14,87,882.00 24,56,412.00
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 60,00,000.00
PENALTIES/PUNISHMENT/COMPPOUNDING 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
Independent Auditors’ Report
G. Venugopal Kamath & Co. Isaac & Suresh Aananthan & Sundaram
Chartered Accountants Chartered Accountants Chartered Accountants
# 273, 3rd Floor, DD Vastra Mahal Thennala Towers 123, Siva Karthi, Sankar Nagar
Market Road, Ernakulam Thiruvananthapuram Neeramankara, Kaimanam
Thiruvananthapuram
To the Members of KERALA STATE ELECTRICITY BOARD LIMITED

Report on the Standalone Ind AS 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, 2017, 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.
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
58
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
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 opinion on the standalone Ind AS
financial statements.
Basis for Qualified Opinion
1. In respect of Note 2 to accounts: “Property, Plant and Equipment”
a) The Company is following a policy, wherein wrong grouping of assets are reversed in the year
in which it is detected and negative depreciation is provided on the assets from thereon on
SLM basis. The net value of the assets amounting to ` 1,14,41.08 Lakhs is negative as a result of
wrong grouping, its subsequent reversal and negative depreciation. The impact in depreciation
cannot be quantified as per the new accounting policy adopted by the Company.
b) 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% resulting in overvaluation of Property,
Plant and Equipment which cannot be quantified due to lack of necessary information. Also the
Company has not disclosed any accounting policy for intangible assets as prescribed in Ind AS
38.
c) 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 Indian Accounting Standard (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
59
necessary information, the impact of the same cannot be quantified.
As per the information provided by the Company, the Company has provided depreciation on
Capital work in progress capitalized during the year on the date on which the asset is ready for use,
based on the data collected from the ARUs. We are not in a position to verify the authenticity of
data provided by the Management.
d) As per the Note 2 to accounts: “Property, Plant and Equipment”, the total Carrying value of the
Property, Plant and Equipment amounts to `20,68,736 Lakhs. We observed a difference of `
47,584 Lakhs to the Net Block of assets as per the working submitted for verification. Similarly,
a difference of `46,964 Lakhs is observed for the year 2015-16. No explanation is received from
the Management in respect of the above differences observed.
e) Title deeds of immovable properties were not produced for our verification.
f) 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
Company has also not disclosed the details of deletions and decommissioning during the year.
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.
g) During the year, the Company has written back `1,596.21 Lakhs being “fixed asset value realized
pending adjustment account” under the head ‘other liabilities and provisions’ as Miscellaneous
income instead of adjusting the same against Property, Plant and Equipment. The wrong
accounting of same has resulted in overstatement of miscellaneous income and Property, Plant
and Equipment amounting to `1,596.21 Lakhs. The amount of depreciation to be reversed, if any,
on such Property, Plant and Equipment could not be ascertained due to lack of information.
h) As per paragraph-8 of Ind AS 16, Property, Plant and Equipment, items such as spare parts are
to be recognized in accordance with recognition criteria as per paragraph 7 of Ind AS 16, when
they meet the definition of ‘property, plant and equipment’. The depreciation on such an item
of spare part will begin when the asset is available for use i.e, when it is in the location and
condition necessary for it to be capable of operating in the manner intended by management.
In case of spare parts, as readily available for use, it may be depreciated from the date of
purchase of the spare part. The Company has not followed the above recognition criteria. Since
the details are not available, we are not able to quantify the impact of the same in the Financial
Statements.
i) In ARU 301, the total CRCS of APDRP Thiruvananthapuram City Scheme has 76 rings amounts
60
to `12,663.56Lakhs. However the Electrical Circle capitalized only an amount of `12,620.76

Lakhs towards the same. This has resulted in under-capitalization of Property, Plant and
Equipment by `42.80 Lakhs.
2. The Company has not complied with Ind AS 36- Impairment of Assets.
3. (a) In Note No.5 Non Current Assets - Financial Assets - Loans-includes an amount of `5,250/-
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.7includes Deferred Cost on Account of Feasibility/Survey amounting to `10,238.65

Lakhs being cost of projects not yet sanctioned and accumulated over the years. As the
statuses of these projects are yet to be ascertained, we are unable to comment the impact
thereof on the financial statements.
(c) Note No:7 Other Non Current Assets includes ‘Capital Advances Others’ amounting to `13,660.90
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.
4. The amounts and balances lying under Non Current borrowings (Note No 15), Other Non Current
liabilities (Note No 18), Trade payables (Note No 20), Other Financial liabilities- Non Current
(Note No 16) and Current (Note No 21), Trade receivables (Note No 9), Non Current Loans (Note
No 5), Financial Assets- Others (Note no-6), 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.
5. a) Attention is invited to Note 12 Other Current Assets read with note 35.16 (d) regarding
Inter Unit Balance amounting to `1536.57 Lakhs. The said balance is subject to reconciliation
61
and further adjustments, the effect of which on the financial results of the Company is not
ascertainable.
b) Bank balances include bank accounts maintained at Head Office, ARU’s and other offices and
certain bank accounts maintained are subject to confirmation and reconciliation.
c) In the case of ARU 954-“Special Officer Revenue”, The Debt Collection Balancing (DCB) report
generated by the ARU and the Debtors net balance as per accounts, under account code 23
shows a huge difference amounting to `19,271.23/- Lakhs.
d) Cash balances in respect of Expenditure Division under ARUs- 437 and 414 and Revenue
Division under ARUs -322 and 404 shows negative balance for which management has not
given any explanation.
e) The Company has not disclosed the ageing schedule of Trade Receivables as per Schedule
III of the Companies Act 2013. As the age wise breakup of the receivables is not available for
verification, we are unable to comment on the recoverability of receivables.
f) The Company is undertaking work for specified large projects under ‘work deposit’ basis. No
information with respect to deposit received, work completed, date of completion, balance
payable / receivable etc on deposits is maintained. Hence correctness of the deposit held by
the Company on ‘work deposits’ could not be verified. In the absence of required information
we are unable to quantify the impact of the same on financials of the Company.
6. Attention is invited to Note No 33 Changes in Fair Valuation and Other Adjustments. The
Company has recognised `3,177 Lakhs as Claw back of Grant. Since the Company has not
submitted the reconciliation of Grant and Consumer contribution and amortisation thereof,
we are unable to comment on the Claw back of Grant shown under Note No 33 Changes in Fair
Valuation and Other Adjustments for the year.
7. a) Attention is invited to Note No. 3 Capital Work in Progress, which includes revenue expenses
pending allocation amounting to ` 23,496.41 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. Due to lack of necessary
information, we are unable to quantify the impact of the same in the financial statements.
An amount of ` 36,897.21 Lakhs has been capitalized out of revenue expenses pending
allocation during the year without considering the extent the work already completed or
62
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.
Hence we are not in a position to comment on the capitalization of the amount and the
balance amount of revenue expenses pending allocation over capital works amounting to
` 23,496.41 Lakhs.
b) In ARU 301, An amount of `99.51 Lakhs has been charged to P&L as prior period expenditure
being payment of retention amount recovered from APDRP Bills of IRCON during 4-2011 to
6-2011. Supporting documents for the same were not provided for audit verification.
8. The Company has provided outstanding expenses, amounting to `2,699.47 Lakhs. The said
amount is compiled based on the statements submitted by 51 ARUs. However due to lack of
necessary information from other ARUs we are not in a position to comment whether there is
any omission in accounting of outstanding expenses of these units. However, out of the ARUs
visited by us, the Company has not provided outstanding expenses amounting to `5.72 Lakhs
and `4.03 Lakhs in ARU 304 and ARU 385 respectively.
9. Company has not provided supporting documents for the data disclosed under Contingent
liabilities and commitments in the Note forming part of accounts No 35.2.
10. As per Company Information and Significant Accounting Policies No. 1.5 (g) Company disclosed
that,” Investment has been carried at cost and as per the assessment by the company and there
is no indication of impairment of such investments”. 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.
11. 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) As per the information and explanation available, Material consumption statement (MCS)
should be valued and adjusted on the basis of standard rates as prescribed by the Board
instead of the rates generated from the Supply Chain Management (SCM). Based on audit
procedures carried out in the ARUs visited by us, it is seen that the Material consumption
statements (MCS) have not been valued as per the directions as stated above and instead
63
they have valued the MCS as per the rates generated from the SCM. Due to huge volume of
transactions and non availability of data we are unable to quantify the same.
12. Previous year’s (2015-16) accounts have not been adopted in the Annual General Meeting. The
Adjourned 4thAnnual General Meeting held on 18.07.2017, adopted the financial Statements for
the year 2014-15, without cash flow statement, which is not in compliance with Section 2(40) of
the Companies Act, 2013.
13. a) Other income of the Company includes income from sale of LED Bulbs. Supporting
documents such as authorized copy of the stores ledger for the period 2016-17, Duly authorized
supporting for issue of LED Bulbs to units, Confirmation of receipt of LED Bulbs by the recipient,
Certificate of closing stock etc were not available for our verification at all the ARUs visited by
us . Hence we are not in a position to confirm the value of sale of LED bulbs.
Further adequate supporting documents were not made available for verifying the Material
Purchase, Material Issue and Expenditure in connection with purchase of LED Bulbs.
b) No records such as sale order, tender documents etc were available for verification, relating to
the Sale of Scrap during the year, in most of the ARUs.
c) The Company has not accounted income receivable from maintenance of poles on accrual
basis. In the absence of necessary information we are unable to quantify the impact of the
same on the accounts of the Company for the year.
d) In some of the ARUs visited by us it was found that the tax collected such as sales tax , Service
tax , Tax Collected at source etc were accounted along with the income which has resulted in
understatement of liabilities and over statement of income.
e) In ARU 414, Sale value of Scrap `2.20 Lakhs has been accounted under Sales tax collections
(`0.61 Lakhs), EMD (`0.65 Lakhs) and TDS on payment to contractors (`0.94 Lakhs) which has
resulted in understatement of income and overstatement of current liabilities.
14. On verification of Provisions-For Pension ledger 44120, there is Credit balance amounting
to `305.14 Lakhs which pertains to previous years. No adjustments have been made for the
balance.
15. The impact for comments made by the C&AG on the financial statements of 2014-15 amounting
to `2,379.32 lakhs, `55,789.28 Lakhs and ` 58,168.6 lakhs being understatement of expenses and
loss, overstatement of liability and overstatement of assets respectively has not brought in to
64
accounts by the Company while preparing its opening Ind AS balance sheet as at 1st April 2015.
Further, impact for comments made by the C&AG on the financial statements of2015-16,amounting
to `8036.07 lakhs, `9014.14 lakhs and `978.07 lakhs being understatement of expenses and loss,
understatement of liability and understatement of asset has not adjusted by the Company while
preparing its comparative amounts for the year ended 31 March 2016.
Other Matters
The comparative financial information of the Company for the year ended 31 March 2016
and the transition date opening balance sheet as at 1 April 2015 included in these Standalone
Ind AS financial statements, are based on the previously issued statutory financial statements
prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us/
the predecessor auditors, whose audit report for the year ended 31 March 2016 and 31 March 2015
dated 30 January 2017 and 03 October 2016 respectively expressed a qualified opinion on those
Standalone financial statements, as adjusted for the differences in the accounting principles
adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of above matter.
Qualified 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, 2017, 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 standalone Ind AS financial
statements:
1. As per the accounting policy No 1.6 of KSEBL, Assets are depreciated on straight line basis to
the extent of 90% of the cost and 10% is retained as residual value. The Company has changed
the accounting policy, in compliance to the Indian Accounting Standards (Ind AS) Prior to the
current year remaining depreciable value of the assets as on 31st March of the year after a
period of 12 years from the date of commercial operation was spread over the balance useful
life of the asset.
65
2. As per Note Forming Part of Accounts No. 35.16(n), in the 32nd Meeting of Board of Directors held
on 30.05.2017 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 31.03.2017 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 ` 2,67,821 Lakhs is netted off with the amount receivable from the Government.
In line with the decision of the Board this has been reported to Government for concurrence..
3. As per Note Forming Part of Accounts No. 35.16(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.
4. 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 `30,014 Lakhs for which
repayment schedule is not available.
5. Attention is invited to Note forming part of account 35.16 (e), GPF balances as per financial
statements are `2029.93 crores. A difference of `42.98 lacs with the party wise registers
maintained at GPF section are reported.
6. 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%. As per the Accounting PolicyNo.1.6
on, Property, Plant and Equipment (PPE), the company follows rates notified by the CERC Tariff
Regulations. However, the company has not depreciated the land under lease
Our Opinion is not modified in respect of the above matters.
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
66
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.
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
67
for which there were any material foreseeable losses.
iii. The company has not transferred debentures and interest on debentures amounting to `
708.51 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.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial
statements as regards its holding and dealings in Specified Bank Notes as defined in the
Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during
the period from 8th November 2016 to 30th December 2016. Based on audit procedures
performed and the representations provided to us by the management we report that the
disclosures are in accordance with the books of account maintained by the Company.
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. No.004674S FRN-001150 S FRNo.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
Place: Thiruvananthapuram
Date: 01-03-2018
68
Annexure –1 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, 2017:
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 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.
6. We have broadly reviewed the accounts and records maintained by the Company pursuant
69
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, cess and any other
statutory dues with the appropriate authorities were not available at the Head Office
level. 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, 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.
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. 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 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.
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 `708.51 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.
70
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.
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.
sd/- sd/- sd/-

M. No. 226547 M. No.225166 M.No.230338
Date: 01-03-2018
71
Annexure-II to Independent Auditors’ Report
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 as of 31st March 2017 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 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. 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
Our responsibility is to express an opinion on the Company’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”) 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
applicable to an audit of Internal Financial Controls and, 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 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.
72
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 over financial
reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company’s internal financial control over financial reporting is a process designed to

provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting
principles. A Company’s internal financial control over financial reporting 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 financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with authorisations
of management and directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s
assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls 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
The Company has not conducted physical verification of its fixed assets. The scrap / sale of
fixed assets are not shown as deletion of assets in the books of account. There is no process for
evaluation of impairment 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
73
financial controls system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2017, 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, 2017 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/-

M. No. 226547 M. No.225166 M.No.230338
Date: 01-03-2018
74
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 the Companies Act, 2013.
As required by Section 143(5) of the Act, we give a statement on the compliance to the
Directions issued by the Comptroller and Auditor General of India for the year 2016-17, wereport
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 `745.91
Due to lack of proper
lakhs and `5.07 lakhs being
Details regarding any cases of waiver/ receivables from HT/EHT reconciliation with the
write off of debts/loans/interest etc; consumers. In addition to ARU for the amount
if yes, reasons thereof and amount that an old balance carried written off, we are
involved. unable comment on
over from previous years
the impact
amounting to `103.20 lakhs
written off during the year.
Though the Company have
Supply Chain Management
(SCM) software is used for
the inventory management,
the discrepancies observed
by us have been reported
under our Independent The impact in
Whether proper record are maintained
Auditors Report. With regard accounts could not be
for inventories lying with third
to the assets received as Gift obtained due to lack of
parties & assets received as Gift from
from Government or other proper documents or
Government or other authorities.
authorities, as we reported explanation
in our audit report, the
title deeds of immovable
properties were not produced
for our verification and no
proper fixed asset registers
are maintained.
75
Age wise analysis of pending legal/ As per information submitted The Company has not
arbitration cases, including the by the Company, age wise furnished supporting
reasons of pendency and existence/ analysis of cases pending documents for the
effectiveness of a monitoring before various Courts, Forum cases. Thus the
mechanism for expenditure on all legal and Tribunal is shown below: reliably estimated
cases (foreign and local) may be given. amount involved
Period No. of cases/ cannot be obtained.
arbitration The Company has
not provided for the
Up to 2010 8578
same in the financial
2011 1352 statements, required if
2012 1459 any.
2013 1548
2014 1447
2015 860
TOTAL 15244
These cases are pending

for hearing /disposal at the
respective court, forum, and
tribunal. The Company has
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 given by the Company, the details with respect to
Company may be examined. In case custodians of the land are the litigation pending
land of the Company is encroached exercising adequate steps to before various
upon, under litigation, not put to use prevent the encroachment courts regarding
or declared surplus, details may be of the land owned by KSEB encroachments are
provided Ltd. According to section 3 of not available at Head
the Kerala Land Conservancy office level , the impact
Act 1957 & the Kerala Land of the same could not
Conservative Rules 1958, land be detailed.
belonging to KSEB shall be
deemed to be the property of
Government. But at the same
time, officers of KSEB are still
not empowered under the
provisions of Rule 3(b) of the
Kerala Land Conservancy
76
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. 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 courts
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,

Where land acquisition is involved
being fully owned by
in setting up new projects, report
Government of Kerala, there
whether settlement of dues were done
is an effective mechanism
expeditiously and in a transparent NIL
for land acquisition process.
manner in all cases. the cases of Land acquisition is involved in
deviation may please be detailed setting up of new hydro electric
projects and for transmission
77
substation project. The

private land required for
the project is purchased
through negotiation. For
this, the Government had
constituted District Level
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.
The company has an effective
system for recovery of
revenue as per contractual
terms except government
departments, medical
Whether the Company has any effective colleges, High security area,
system for recovery of revenue as per Police station etc
contractual terms and the revenue is
properly accounted for in the books Though company properly NIL
of accounts in compliance with the accounts the same in
applicable Accounting Standards the books of accounts
in compliance with the
applicable accounting
standards, the discrepancies
observed by us have been
reported in our Independent
auditors report.
As per the explanation given

by the Company, Rs.475.01
Lakhs has been incurred for
How much cost has been incurred on the abandoned projects and Profit and Loss account
abandoned projects and out of this an amount of Rs.3.30 Cr was debited to the extent
how much has been written off? written off from the books of amounts written off.
of accounts against the
expenses incurred for Silent
Valley Project.
78
GENERATION

KSEBL owns two thermal
stations based on LSHS at
Brahmapuram and Kozhikode.
In the cases of Thermal Power Projects, As per the direction of the
compliance with the various Pollution state and Central pollution
Control Acts and the impact thereof control Boards, online
including utilization and disposal pollution Monitoring system NIL
of ash and the policy of Company should be installed at these
in this regard, may be checked and stations. The installation of
commented upon. online monitoring system is
complete at BDPP and is in
progress at KDPP. 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
the same was calculated as per the 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

whether the water discharges is as per from the Company, in
policy/guidelines issued by the State the case of Hydro Electric NIL
Government to maintain biodiversity. Power Projects,The Kerala
Cases of deviation and penalty paid/ State has formulated the
payable may be reported “Kerala Irrigation and Water
79
Conservation Act,2003”
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. NIL
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 and no
deviations or penalty paid in
this regard.
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.
As far as the transmission loss

How much transmission loss in excess is considered, norms are not
of prescribed norms has been incurred in place for benchmarking
during the year and whether the same the same. As informed by the NIL
has been properly accounted for in the Company, the loss figures are
books of accounts? considered while filing the
ARR for any particular year.
As per the observations

during our course of audit
Whether the assets constructed and and explanation from the The impact in
completed on behalf of other agencies Company, the asset created accounts could not be
and handed over to them has been on behalf of other agencies obtained due to lack of
properly accounted for in the financial and handed over to them on proper documents or
statements. completion of works does explanation
not form part of the assets
of KSEBL. Hence Company
80
has not capitalized and

accounted the same in
the financial statements.
However the asset created
out of contribution and
work deposit are capitalized
and properly accounted in
the financial statements of
the KSEBL except for the
qualifications made in our
audit report.
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.
As informed to us the
Company has attained 100%
Consumer billing. In general,
services are disconnected
soon after the disconnection
date, if the dues are not paid
Report on the efficacy of the system of
within that time. However
billing and collection of revenue in the NIL
considering the social
Company.
obligation it is always not
possible to disconnect the
services like Drinking water
Supply Schemes, Government
Hospitals, High security area
,Police station etc.
As informed to us, the

Company is directly supplying
electricity to 99% of the
consumers in the state (122
lakh consumers) as on date.
All electricity consumers in
Whether tamper proof meters have
the state are provided supply
been installed for all consumers? If not NIL
through energy meters.
then, examine how accuracy of billing
is ensured.
81
These consumers are spread

over every nook and corner of
the state under 770 electrical
sections.
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 orders.
In case of newly purchased
meters, company has also
taken measures to prevent
tampering, by adding anti
tampering features in the
specifications of meters in the
purchase orders. The meters
purchased recently are
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 taken
necessary steps to replace all
faulty meters and also old and
sluggish mechanical meters
with electronic meters.
For this the Company has
purchased 15.06 lakh single
phase meters and 70000
three phase meters. The
same have been allocated to
82
field offices for replacement

of faulty meters on a war
footing. The old meters in the
system are being replaced in
a phased manner.
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
and accounts, the State Electricity
consumers by the KSERC.
Regulatory Commission (SERC)
Approval of Fuel surcharge is NIL
approved Fuel and Power Purchase
granted in line with the MYT
Adjustment Cost (FPPCA)?
Tariff Regulations notified
by Kerala State Electricity
Regulatory Commission in
2014.
KSEB Ltd functioning as

a single utility in the state
of Kerala. Generation,
transmission and distribution
of electricity done by the KSEB
Whether the reconciliation of Ltd hence the reconciliation The Company has
receivables and payables between between these segments is not reconciled the
the generation, distribution and irrelevant. Inter unit transactions
transmission companies has been amounting to ` 1536.57
completed. The reasons for difference, However, the Company
lakhs (debit) as on 31st
if any, may be examined. has inter unit transactions
March 2017.
between the Generation,
transmission and distribution
units, which remains
unreconciled as on 31st March
2017.
83
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 the
have been allowed and booked in the
consumers is being 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 2016-17 an amount of
`396.83 crores is booked as
subsidy in this account.
Service Sector

even though KSEBL is a
company registered under
the Companies Act, 1956,
being a regulated entity as
per statute, recovery of cost by
way of tariff is decided by the
State Electricity Regulatory
Commission.
Whether the Company’s pricing The present two part tariff
policy absorbs all fixed and variable structure comprises of load
cost of production and the overheads based fixed charges and NIL
allocated at the time of fixation of consumption based energy
price? charges. Fixed charges like
interest, depreciation, Return
on equity etc generally
constitute approximately
30% of the expenses. This
is recovered as Capacity
charges/fixed charges and
accounts for almost 20% of
the revenue from sale of
power. Power purchase cost is
recovered as energy charges.
84
Thus overall recovery of cost

is ensured in a composite
manner comprising of CC &
EC.
Historically, fixed charges
were not recovered from
Domestic consumers,
consuming more than 50%
of the energy supplied. The
situation has since been
changed as the matter had
been properly appraised
before the Hon’ble KSERC
and recovery of fixed charges
from domestic consumers
was started wef 01.07.2012.
In short, electricity business
being a regulated activity,
the utilities do not have
power to fix a pricing policy
for the supply of electricity.
Section 43, 45, 61 and 62 of
the Electricity Act, 2003 deals
with the subject matter.
The company is collecting

supervision charges for the
Whether the Company recovers
work executed on behalf
Commission for work executed
of Government/other
on behalf of Government/other
organization and a proper
organizations that is properly recorded NIL
mechanism for recording in
in the books of accounts? Whether the
the books of accounts. The
Company has an efficient system for
company has an efficient
billing and collection of revenue?
system for billing and
collection of revenue.
As per the explanation by

the Company, the receipt of The impact could not
Whether the Company regularly subsidy has been properly
be obtained, as the
monitors timely receipt of subsidy from monitored. No records/ subsidy received have
government and is properly recording registers were available for
financial impact over
them in its books? us to verify the capital and many previous years
revenue subsidies received
by the Company during the
85
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.

the Company has executed
Whether the Company has entered tripartite agreement
into Memorandum of Understanding amongst Nodal Agency, State
with its Administrative Ministry, if so, Government & Government
NIL
whether the impact thereof has been of India for undertaking
properly dealt with in the financial and agreeing the stipulated
statements. roles / responsibilities as per
provisions of the scheme
guidelines.
OTHER
Details of Grants /subsidies/
contributions received and
utilized during the year
Examine the system of effective were not furnished for our The impact could not
utilization of Loans/Grant-in-Aid/ verification. Hence we are not be ascertained as the
Subsidy. List the cases of diversion of in a position to examine and relevant information is
funds. report whether there exists not available
an effective system for the
utilization of Loans/Grant-in-
Aid/Subsidy.
the Cost benefit analysis of
Examine the cost benefit analysis of major capital expenditure/
major capital expenditure/expansion expansion including the
NIL
including IRR and payback period. IRR and payback period of
projects are carried before
the implementation of such
projects.
86
The Company is working in the

computerized environment.
There is a separate
department headed by a
Chief Engineer to supervise
the computerization.
ORUMA software is used
for revenue billing and its
If the audited entity has computerized
collection. SARAS software
its operations or part of its, assess
is used for the accounting
and report, how much of the data in
all income and expenditure
the Company is in electronic format,
of the company through
which of the areas such as accounting,
the real time accounting. NIL
sales personnel information, pay roll,
Supply chain Management
inventory etc. have been computerized
(SCM) software is used for
and whether the company has evolved
the inventory management
proper security policy for data/software/
and HRIS software for the all
hardware? –
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
integrate all these software in
a single platform.
sd/- sd/- sd/-

M. No. 226547 M. No.225166 M.No.230338
Date: 01-03-2018
87
G.Venugopal Kamath & Co Isaac & Suresh. Ananthan & Sundaram

#273, 3rd Floor, DD Vastra Mahal, Thennala Towers, 123,Sivakarthi, Sankar Nagar,
Market Road, Ernakulam Thiruvananthapuram Neeramankara, Kaimanam
Thiruvananthapuram
Independent Auditors’ Report
To the Members of KERALA STATE ELECTRICITY BOARD LIMITED
Report on the Consolidated Ind AS 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, 2017, 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 the consolidated 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 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
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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
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”
a) KSEB Limited is following a policy, wherein wrong grouping of assets are reversed in the year
in which it is detected and negative depreciation is provided on the assets from thereon on
SLM basis. The net value of the assets amounting to ` 1,14,41.08 Lakhs is negative as a result of
wrong grouping, its subsequent reversal and negative depreciation. The impact in depreciation
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cannot be quantified as per the new accounting policy adopted by KSEB Limited.
b) As per Appendix-III of CERC Notification No L-1/153/2014/CERC, ‘Softwares’ are subject to a

depreciation of 30%. Instead KSEB Limited follows the practice of pooling Software along with
item ‘IT Equipment’ which has a depreciation rate of 15% resulting in overvaluation of Property,
Plant and Equipment which cannot be quantified due to lack of necessary information. Also
KSEB Limited has not disclosed any accounting policy for intangible assets as prescribed in
Ind AS 38.
c) In KSEB Limited, 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 Indian Accounting
Standard (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.
As per the information provided by KSEB Limited, the Company has provided depreciation on
Capital work in progress capitalized during the year on the date on which the asset is ready
for use, based on the data collected from the ARUs. We are not in a position to verify the
authenticity of data provided by the Management.
d) As per the Note 2 to accounts of Holding Company: “Property, Plant and Equipment”, the
total Carrying value of the Property, Plant and Equipment amounts to `20,68,736 Lakhs. We
observed a difference of ` 47,584 Lakhs to the Net Block of assets as per the working submitted
for verification. Similarly, a difference of `46,964 Lakhs is observed for the year 2015-16. No
explanation is received from the Management in respect of the above differences observed.
e) Title deeds of immovable properties were not produced for our verification.
f) KSEB Limited 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. KSEB
Limited has also not disclosed the details of deletions and decommissioning during the year.
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.
g) During the year, KSEB Limited has written back `1,596.21 Lakhs being “fixed asset value
realized pending adjustment account” under the head ‘other liabilities and provisions’ as
Miscellaneous income instead of adjusting the same against Property, Plant and Equipment.
The wrong accounting of same has resulted in overstatement of miscellaneous income and
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Property, Plant and Equipment amounting to `1,596.21 Lakhs. The amount of depreciation to
be reversed, if any, on such Property, Plant and Equipment could not be ascertained due to
lack of information.
h) As per paragraph-8 of Ind AS 16, Property, Plant and Equipment, items such as spare parts
are to be recognized in accordance with recognition criteria as per paragraph 7 of Ind AS
16, when they meet the definition of ‘property, plant and equipment’. The depreciation on
such an item of spare part will begin when the asset is available for use i.e, when it is in the
location and condition necessary for it to be capable of operating in the manner intended by
management. In case of spare parts, as readily available for use, it may be depreciated from
the date of purchase of the spare part. KSEB Limited has not followed the above recognition
criteria. Since the details are not available, we are not able to quantify the impact of the same
in the Financial Statements.
i) In ARU 301 of KSEB Limited, the total CRCS of APDRP Thiruvananthapuram City Scheme has
76 rings amounts to `12,663.56Lakhs.Howeverthe Electrical Circle capitalized only an amount
of `12,620.76Lakhs towards the same. This has resulted in under-capitalization of Property,
Plant and Equipment by`42.80Lakhs.
2. KSEB Limited has not complied with Ind AS 36- Impairment of Assets.
3. (a) In Note No.5 Non Current Assets - Financial Assets - Loans- of KSEB Limited includes an
amount of `5,250/- Lakhs being Interest bearing loan to Energy Management Centre. KSEB
Limited has provided interest for the period 2010-11 and 2011-12 amounting to `476.90 Lakhs
and `697.16 Lakhs respectively. KSEB Limited 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 of KSEB Limited, includes Deferred Cost on Account of Feasibility/Survey amounting
to `10,238.65Lakhs being cost of projects not yet sanctioned and accumulated over the years.
As the statuses of these projects are yet to be ascertained, we are unable to comment the
impact thereof on the financial statements.
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(c) Note No:7 Other Non Current Assets includes ‘Capital Advances Others’ of KSEB Limited
amounting to `13,660.90 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.
4. The amounts and balances in Holding Company lying under Non Current borrowings (Note
No 15), Other Non Current liabilities (Note No 18), Trade payables (Note No 20), Other Financial
liabilities- Non Current (Note No 16) and Current (Note No 21), Trade receivables (Note No 9),
Non Current Loans (Note No 5), Financial Assets- Others (Note no-6), 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.
5. a) Attention is invited to Note 12 Other Current Assets read with note 34.12 (d) of Holding
Company regarding Inter Unit Balance amounting to `1536.57 Lakhs. The said balance is
subject to reconciliation and further adjustments, the effect of which on the financial results
of KSEB Limited is not ascertainable.
b) Bank balances in KSEB Limited, include bank accounts maintained at Head Office, ARU’s
and other offices and certain bank accounts maintained are subject to confirmation and
reconciliation.
c) In the case of ARU 954-“Special Officer Revenue” of KSEB Limited, The Debt Collection Balancing
(DCB) report generated by the ARU and the Debtors net balance as per accounts, under
account code 23 shows a huge difference amounting to `19,271.23/- Lakhs.
d) Cash balances, in KSEB Limited, in respect of Expenditure Division under ARUs- 437 and 414 and
Revenue Division under ARUs -322 and 404 shows negative balance for which management
has not given any explanation.
e) KSEB Limited has not disclosed the ageing schedule of Trade Receivables as per Schedule III
of the Companies Act 2013. As the age wise breakup of the receivables is not available for
verification, we are unable to comment on the recoverability of receivables.
f) KSEB Limited is undertaking work for specified large projects under ‘work deposit’ basis. No
information with respect to deposit received, work completed, date of completion, balance
payable / receivable etc on deposits is maintained. Hence correctness of the deposit held by
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KSEB Limited on ‘work deposits’ could not be verified. In the absence of required information
we are unable to quantify the impact of the same on financials of KSEB Limited.
6. Attention is invited to Note No 33 Changes in Fair Valuation and Other Adjustments. KSEB
Limited has recognised `3,177 Lakhs as Claw back of Grant. Since KSEB Limited has not
submitted the reconciliation of Grant and Consumer contribution and amortisation thereof,
we are unable to comment on the Claw back of Grant shown under Note No 33 Changes in Fair
Valuation and Other Adjustments for the year.
7. a) Attention is invited to Note No. 3 Capital Work in Progress of KSEB Limited, which includes
revenue expenses pending allocation amounting to ` 23,496.41 Lakhs.
KSEB Limited has capitalized borrowing cost on weighted average basis without considering
the daily balances of the loans and borrowings held by KSEB Limited. Due to lack of necessary
information, we are unable to quantify the impact of the same in the financial statements.
An amount of ` 36,897.21 Lakhs has been capitalized out of revenue expenses pending allocation
during the year without considering 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.
Hence we are not in a position to comment on the capitalization of the amount and the balance
amount of revenue expenses pending allocation over capital works amounting to` 23,496.41
Lakhs.
b) In ARU 301 of KSEB Limited, An amount of `99.51 Lakhs has been charged to P&L as prior period
expenditure being payment of retention amount recovered from APDRP Bills of IRCON during
4-2011 to 6-2011. Supporting documents for the same were not provided for audit verification.
8. KSEB Limited has provided outstanding expenses, amounting to `2,699.47 Lakhs. The said
amount is compiled based on the statements submitted by 51 ARUs. However due to lack of
necessary information from other ARUs we are not in a position to comment whether there is
any omission in accounting of outstanding expenses of these units. However, out of the ARUs
visited by us, KSEB Limited has not provided outstanding expenses amounting to `5.72 Lakhs
and `4.03 Lakhs in ARU 304 and ARU 385 respectively.
9. KSEB Limited has not provided supporting documents for the data disclosed under Contingent
liabilities and commitments in the Note forming part of accounts No 34.2.
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10. a) Attention is invited to Note 8 Inventories, KSEB Limited 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) As per the information and explanation available from KSEB Limited, Material consumption
statement (MCS) should be valued and adjusted on the basis of standard rates as prescribed
by the Board instead of the rates generated from the Supply Chain Management (SCM).
Based on audit procedures carried out in the ARUs visited by us, it is seen that the Material
consumption statements (MCS) have not been valued as per the directions as stated above
and instead they have valued the MCS as per the rates generated from the SCM. Due to huge
volume of transactions and non availability of data we are unable to quantify the same.
11. Previous year’s (2015-16) accounts, of KSEB Limited, have not been adopted in the Annual
General Meeting. The Adjourned 4thAnnual General Meeting held on 18.07.2017, adopted the
financial Statements of KSEB Limited for the year 2014-15, without cash flow statement, which
is not in compliance with Section 2(40) of the Companies Act, 2013.
12. a) Other income of KSEB Limited includes income from sale of LED Bulbs. Supporting
documents such as authorized copy of the stores ledger for the period 2016-17, Duly authorized
supporting for issue of LED Bulbs to units, Confirmation of receipt of LED Bulbs by the recipient,
Certificate of closing stock etc were not available for our verification at all the ARUs visited by
us . Hence we are not in a position to confirm the value of sale of LED bulbs.
Further adequate supporting documents were not made available for verifying the Material
Purchase, Material Issue and Expenditure in connection with purchase of LED Bulbs.
b No records such as sale order, tender documents etc were available for verification, relating to
the Sale of Scrap during the year, in most of the ARUs of KSEB Limited.
c) KSEB Limited has not accounted income receivable from maintenance of poles on accrual
basis. In the absence of necessary information we are unable to quantify the impact of the
same on the accounts of KSEB Limited for the year.
d) In some of the ARUs, of KSEB Limited, visited by us it was found that the tax collected such
as sales tax , Service tax , Tax Collected at source etc were accounted along with the income
which has resulted in understatement of liabilities and over statement of income.
e) In ARU 414 of KSEB Limited, Sale value of Scrap `2.20 Lakhs has been accounted under Sales tax
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collections (`0.61 Lakhs), EMD (`0.65 Lakhs) and TDS on payment to contractors (`0.94 Lakhs)
which has resulted in understatement of income and overstatement of current liabilities.
13. In KSEB Limited, on verification of Provisions-For Pension ledger 44120, there is Credit balance
amounting to `305.14 Lakhs which pertains to previous years. No adjustments have been
made for the balance.
14. The impact for comments made by the C&AG on the financial statements of KSEB Limited,
for 2014-15 amounting to `2,379.32 lakhs, `55,789.28 Lakhs and ` 58,168.6 lakhs being
understatement of expenses and loss, overstatement of liability and overstatement of assets
respectively has not brought in to accounts by KSEB Limited while preparing its opening Ind
AS balance sheet as at 1st April 2015 .
Further, impact for comments made by the C&AG on the financial statements of KSEB Limited
for the year 2015-16,amounting to `8036.07 lakhs, `9014.14 lakhs and `978.07 lakhs being
understatement of expenses and loss, understatement of liability and understatement of asset
has not adjusted by KSEB Limited while preparing its comparative amounts for the year ended 31
March 2016.
15. As per the Independent Auditors Report for the Associate- Renewable Power Corporation
of Kerala Limited, the financial statements has been restated based on the C& AG audit and
revised Audit Report has been issued.
16. The Holding Company has prepared the consolidated financial statements for the first time.
The previous year’s figures in the consolidated financial statements are not subject to audit.
Since the Holding Company has not prepared and presented the Consolidated Financial
Statements for the previous years, we are unable to comment on whether the share of profit
or loss is recognised properly and distributions received from associates and Joint venture has
considered for reducing the carrying amount of the investment in the previous year figures.
Qualified 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, 2017,
and its loss total comprehensive income, its cash flows and the changes in equity for the year
ended on that date.
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Emphasis of Matters
We draw attention to the following matters in the Notes to the standalone Ind AS financial
statements:
1. As per the accounting policy No 1.6 of KSEB Limited, Assets are depreciated on straight line
basis to the extent of 90% of the cost and 10% is retained as residual value. KSEB Limited has
changed the accounting policy, in compliance to the Indian Accounting Standards (Ind AS)
Prior to the current year remaining depreciable value of the assets as on 31st March of the year
after a period of 12 years from the date of commercial operation was spread over the balance
useful life of the asset.
2. As per Note Forming Part of Accounts No. 34.12(o), in the 32nd Meeting of Board of Directors held
on 30.05.2017 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 31.03.2017 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 ` 2,67,821 lakh is netted off with the amount receivable from the Government. In
line with the decision of the Board this has been reported to Government for concurrence..
3. As per Note Forming Part of Accounts No. 34.12(m), stating non adjustment of value of 45.715
cents of Land belonging to KSEB Limited in Trivandrum was transferred to Trivandrum
Development Authority in the accounts of KSEB Limited.
4. As per Note Forming Part of Accounts No. 34.3, KSEB Limited has accounted the fair value
for the long term loans and Borrowings except loan amounting to ` 30,014 Lakhs for which
repayment schedule is not available
5. Attention is invited to Note forming part of account 34.12 (e) , GPF balances as per financial
statements are `2029.93 crores. A difference of `42.98 lacs with the party wise registers
maintained at GPF section are reported.
6. 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%. As per the Accounting PolicyNo.1.6
on, Property, Plant and Equipment (PPE), KSEB Limited follows rates notified by the CERC Tariff
Regulations. However, KSEB Limited has not depreciated the land under lease
Our Opinion is not modified in respect of the above matters.
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Other Matters
The consolidated financial statements also include the Group's share of net profit/loss of ` 93.76
Lakhs for the year ended 31st March, 2017, 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, the
Comptroller & Audit General pointed out certain discrepancies in the Indian Accounting Standards
compliance non accounting of certain Capital Work in Progress and discrepancy in disclosure of
cash flow statement. This has necessitated a restatement of accounts and revision of original audit
report dated 20th July 2017 by the concerned auditor.
The consolidated financial statements include financial statements of Renewable Power

Corporation of Kerala Ltd which cover the period 15-1-2017 to 31-3-2017.
The audited financial statements of the associate Kerala State Power & Infrastructure Finance
Corporation have been restated in accordance with Ind AS for the limited purpose of preparation
of these consolidated financial statements. Such restated financial statements which have been
consolidated have not been subject to audit.
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 on the consideration of report
of the other auditors on separate financial statements and the other financial information of
associates / joint ventures 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
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paragraph above, obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated
financial statements.
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 relating to
preparation of the aforesaid consolidated financial statements have been kept so far as it
appears from our examination of those books and the reports of the other auditors.
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 maintained for the purpose of preparation of the consolidated financial statements.
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 and Emphasis of Matters
paragraphs above, in our opinion, may have an adverse effect on the functioning of the Group.
f) 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 Group Companies.
g) With respect to the adequacy of the internal financial controls over financial reporting of the
Holding Company and its associate companies / joint ventures, refer to our separate Report in
“Annexure I”. Our report expresses a qualified opinion on the operating effectiveness of 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
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 and based on
the consideration of the report of the other auditors on separate financial statements as also
the other financial information associates and joint ventures as noted in the ”Other matters”
paragraph:
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i. Since the details of pending litigations on consolidated financial position of the Group and
its associates are not furnished, we are not in a position to confirm whether there are any
litigations pending which would impact its financial position.
ii. Since the details of long term contracts are not furnished, we are not in a position to confirm
whether 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 `708.51 Lakhs remained unclaimed and unpaid for a period more than seven years from the
date it become due for payment to the Investor Education and Protection Fund
iv. The Group and its associates / joint ventures have provided requisite disclosures in the
consolidated Ind AS financial statements as regards its holding and dealings in Specified Bank
Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry
of Finance, during the period from 8th November 2016 to 30th December 2016. Based on
audit procedures performed and the representations provided to us by the management and
based on consideration of the report of the other auditors on separate financial statements
as also the other financial information of associates and joint ventures as noted in the ”Other
matters” paragraph we report that the disclosures are in accordance with the books of account
maintained by the Group and its associates and joint ventures.
sd/- sd/- sd/-

M. No. 226547 M. No.225166 M.No.230338
Date: 01-03-2018
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Annexure-I to Independent Auditors’ Report
[Referred to in paragraph 1(g) under ‘Report on Other Legal and Regulatory Requirements’ in the
Independent Auditors’ Report of even date on the consolidated Ind AS Financial Statements of
KERALA STATE ELECTRICITY BOARD LIMITED, its Associates and joint venture]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of
In conjunction with our audit of the consolidated Ind AS financial statements of the Group as of
and for the year ended 31 March 2017, 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 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 over financial reporting and their operating effectiveness. Our
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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 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 audit opinion on the Group’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal financial control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly are
recorded as necessary to permit preparation of 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 unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls 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
The KERALA STATE ELECTRICITY BOARD LIMITED has not conducted physical verification of its
fixed assets. The scrap / sale of fixed assets are not shown as deletion of assets in the books of
account. There is no process for evaluation impairment of assets
Qualified Opinion
A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control
101
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, 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, which are companies 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 2017, 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 consolidated Ind AS financial
statements of the Group for the year ended 31st March, 2017 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.
Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness
of the internal financial controls over financial reporting insofar as it relates to two associates and
one joint venture incorporated in India, is based on the corresponding reports of the auditors of
such companies incorporated in India.
sd/- sd/- sd/-

M. No. 226547 M. No.225166 M.No.230338
Date: 01-03-2018
102
प्रधान महालेखाकार (आ�थर्क एवं राजस्व �ेत्र लेखापर��ा) का कायार्लय केरल,

�तरुवनंतपुरम
ECONOMIC AND REVENUE SECTOR AUDIT)

OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL (E&RSA) KERALA,
THIRUVANANTHAPURAM
31 माचर् 2017 को समाप्त वषर् के �लए केरल राज्य �बजल� बोडर् �ल�मटे ड, �तरुवनंतपुरम
के Stand alone Ind As �वत्तीय �ववरणो� पर कंपनीअ�ध�नयम 2013 क� धारा 143(6)
(6) के अधीन भारत के �नयंत्रक महालेखापर�क्क क� �टप्प�णयाॅ।
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 2017
The preparation of Standalone Ind AS financial statements of Kerala State Electricity Board
Limited, Thiruvananthapuram for the year ended 31 March 2017 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 01 March 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 2017. 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.
103
A COMMENTS ON PROFITABILITY
Statement of Profit and Loss for 2016-17
IV Expenses
Purchase of Power- `7393.32 crore (Note no.25)
The above does not include:
1. `11.41crore being tariff arrears in respect to NLC TPS II based on Central Electricity Regulatory
Commission’s final tariff order dated 24 July 2017 for the period upto March 2017.
2. `5.49 crore being deviation charges payable to Power Grid Corporation of India Limited by the
Company from July 2016 to March 2017.
3. `2.26 crore payable to Ahalia Alternate Energy Private Limited based on the revision (16 February
2018) of cost of power purchased for the period up to March 2017.
These resulted in understatement of both the expense on purchase of power and the loss for
the year by `19.16 crore.
Employee benefits Expenses - ` 3360.77 crore (Note no. 28)
4. The above does not include `25.86 crore being salary arrears payable for the period up to 31
March 2017, which was accounted only in the period April 2017 to February 2018.
5. The above does not include `0.22 crore being salary arrears payable to members of Board of
Directors for the period up to 2016-17 which was paid in July 2017.
These resulted in understatement of both employee benefit expenses and the loss for the
year by `26.08 crore.
Other Expenses- Others- `83.64 crore (Note no. 32)
6. The above does not include `1.04 crore refunded by the Company as per KSERC interim order
dated 27 April 2017 to Cochin International Airport Limited being 80 per cent of registration
fee collected in 2015-16 for solar plants installed by them.
This resulted in understatement of other expenses and the loss for the year by `1.04 crore.
B. COMMENTS ON FINANACIAL POSITION

Balance sheet as at 31 March 2017
Equities and Liabilities
Equity
Other Equity (Note no.14)
Retained Earnings – (`7,407.88 crore)
7. The Company did not rectify wrong accounting of `3.90 crore received from Government of
104
Kerala for installation of six digital Seismic stations which was accounted as other receipts
(Account Head 62999) during 2015-16 instead of Grant in aid from Government - Deferred
Income. This resulted in understatement of Grant in aid from Government- Deferred Income
and with equal understatement of the negative balance in retained earnings for the year by
`3.90 crore.
C COMMENTS ON INDEPENDENT AUDITORS’ REPORT

Report on the Standalone Ind AS Financial Statements
Basis of Qualified Opinion
8. statement (Para no.12 of basis of qualified opinion) that previous year’s (2015-16) accounts had
not been adopted in the Annual GeneTheral Meeting (AGM) was factually incorrect as it was
adopted in the adjourned fifth AGM held on 15 November 2017.
9. The Company did not account income receivable from maintenance of poles on accrual basis,
which resulted in noncompliance of Ind AS 18- Revenue and also was in violation of the Company’s
Accounting Policy on revenue recognition. The Independent Auditors did not mention about
these while providing opinion on revenue from poles in Para no.13 (c) of basis of qualified
opinion, making the opinion incomplete to that extent.
10. Independent Auditors vide Para no.13 (d) of basis of qualified opinion reported that in few of
the ARUs visited by them, it was found that tax collected such as sales tax, service tax, tax
collected at source were accounted along with the income which resulted in understatement
of liabilities and overstatement of income.
The opinion was incomplete as the Independent Auditor neither quantified the effect of
misstatement nor stated impracticability in quantifying its financial effects, as required in
Para 21 of SA 705.
11. Independent Auditors did not amend the opinion paragraph heading to “basis for qualified
opinion” as required in Para 20 (a) of SA 705.
12. Independent Auditors did not quantify the aggregate possible effect(s) of the 15 individual
qualifications made on financial statements, though so required by SA 705.
For and on behalf of

The Comptroller and Auditor General of India
Sd/-
Eäò.{ÉÒ. +ÉxÉÆnù
K.P ANAND
Thiruvananthapuram महालेखाकार(आ.एवं.र.क्षे.ले.प)
Dated: .06.2018 ACCOUNTANT GENERAL (E&RSA),
KERALA
105
महालेखाकार (आ�थर्क एवं राजस्व �ेत्र लेखापर��ा) का कायार्लय, केरल,

�तरुवनन्तपरु म
OFFICE OF THE ACCOUNTANT GENERAL (ECONOMIC AND REVENUE SECTOR AUDIT)
KERALA, THIRUVANANTHAPURAM
31 माचर् 2017 को समाप्त वषर् के �लए केरल राज्य �बजल� बोडर् �ल�मटे ड,
�तरुवनन्तपरु म, के Consolidated Ind AS �वत्तीय �ववरण� पर कंपनी अ�ध�नयम
2013 क� धारा 143(6)(b) के अधीन भारत के �नयंत्रक –महालेखापर�क्क क� �टप्प�णयॉ
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, THIRUVANANTHAPURAM FOR THE YEAR ENDED
31 MARCH 2017
The preparation of Consolidated Ind AS financial statements of Kerala State Electricity Board
Limited, Thiruvananthapuram for the year ended 31 March 2017 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 01 March 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 Consolidated Ind AS financial statements of Kerala
State Electricity Board Limited, Thiruvananthapuram for the year ended 31 March 2017. 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
106
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 PROFITABILITY
Consolidated Statement of Profit and Loss for 2016-17
IV Expenses
Purchase of Power- ₹7393.32 crore (Note no.25)
The above does not include:
1. ₹11.41 crore being tariff arrears in respect to NLC TPS II based on Central Electricity Regulatory
Commission’s final tariff order dated 24 July 2017 for the period up to March 2017.
2. ₹5.49 crore being deviation charges payable to Power Grid Corporation of India Limited by the
Company from July 2016 to March 2017.
3. ₹2.26 crore payable to Ahalia Alternate Energy Private Limited based on the revision (16 February
2018) of cost of power purchased for the period up to March 2017.
These resulted in understatement of both the expense on purchase of power and the loss for the
year by ₹19.16 crore.
Employee benefits Expenses - ₹3360. 77 crore (Note no. 28)
4. The above does not include ₹25.86 crore being salary arrears payable for the period up to 31
March 2017, which was accounted only in the period April 2017 to February 2018.
5. The above does not include ₹ 0.22 crore being salary arrears payable to members of Board of
Directors for the period up to 2016-17 which was paid in July 2017.
These resulted in understatement of both employee benefit expenses and the loss for the year
by ₹26.08 crore.
Other Expenses- Others- ₹83.64 crore (Note no. 32)
6. The above does not include ₹1.04 crore refunded by the Company as per KSERC interim order
dated 27 April 2017 to Cochin International Airport Limited being 80 per cent of registration
fee collected in 2015-16 for solar plants installed by them.
This resulted in understatement of other expenses and the loss for the year by ₹1.04 crore.
107
B. COMMENTS ON FINANACIAL POSITION
Consolidated Balance sheet as at 31 March 2017

Equity
Other Equity (Note no.14)
Retained Earnings – (₹7392.56 crore)
7. The Company did not rectify wrong accounting of ₹3.90 crore received from Government of
Kerala for installation of six digital Seismic stations which was accounted as other receipts
(Account Head 62999) during 2015-16 instead of Grant in aid from Government - Deferred
Income. This resulted in understatement of Grant in aid from Government- Deferred Income
and with equal understatement of the negative balance in retained earnings for the year by
₹3.90 crore.
C. COMMENTS ON INDEPENDENT AUDITORS’ REPORT
8. The statement (Para no.11 of basis of qualified opinion) that previous year’s (2015-16) accounts
had not been adopted in the Annual General Meeting (AGM) was factually incorrect as it was
adopted in the adjourned fifth AGM held on 15 November 2017.
9. The Company did not account income receivable from maintenance of poles on accrual basis,
which resulted in noncompliance of Ind AS 18- Revenue and also was in violation of the Company’s
Accounting Policy on revenue recognition. The Independent Auditors did not mention about
these while providing opinion on revenue from poles in Para no.12 (c) of basis of qualified opinion,
making the opinion incomplete to that extent.
10. Independent Auditors vide Para no.12 (d) of basis of qualified opinion reported that in few of the
ARUs visited by them, it was found that tax collected such as sales tax, service tax, tax collected
at source were accounted along with the income which resulted in understatement of liabilities
and overstatement of income.
The opinion was incomplete as the Independent Auditor neither quantified the effect of
misstatement nor stated impracticability in quantifying its financial effects, as required in Para
21 of SA 705.
11. Independent Auditors did not amend the opinion paragraph heading to “basis for qualified
108
opinion” as required in Para 20 (a) of SA 705.
12. Independent Auditors did not quantify the aggregate possible effect(s) of the 16 individual
qualifications made on financial statements, though so required by SA 705.
For and on behalf of the

Comptroller and Auditor General of India
के. पी. आनंद

K.P ANAND
तिरुवनंतपुरम /Thiruvananthapuram महालेखाकार (आ. एवं रा. क्षे. ले.प) केरल
Dated: 13 .06.2018 ACCOUNTANT GENERAL (E&RSA), KERALA
109
GOVERNMENT OF KERALA
No.PU-A2/141/2018-Fin Finance (PU-A) Department
COMMENTS OF PRINCIPAL SECRETARY (FINANCE) ON THE AUDITED ANNUAL ACCOUNTS

OF KERALA STATE ELECTRICITY BOARD LIMITED FOR THE YEAR ENDED 31.03.2017.
1. The Current Ratio is 0.48:1 as against the standard ratio of 2:1, the Quick Ratio is 0.41:1 while
standard ratio is 1:1 and the Net Working Capital is a negative figure. It means that the liquidity
position of the organisation is very unsound. The firm is seen to be not in a position to meet its
current obligations which will affect the credit worthiness of the entity and this cannot be
recovered in an overnight. Hence, the management shall take all earnest efforts to improve its
liquidity position.
2. Delayed payment without affecting the relationship with suppliers is a good indicator of working
capital management. This has been materialised in the case of management of Trade Payables.
Easy recovery of cash from the customers is also a measure of effective working capital management.
But the Trade Receivables showed an increasing trend over the last two years which is not
desirable in the interest of the organization. Hence, the management shall look into this matter.
3. The deposit under Disbursement Bank Accounts has been increased manifolds. If this is in the
form of current/savings bank account, increase in such deposits are not desirable. In such a
situation, the management shall think of investing amount in more economic way like term
deposits, investment in short -term marketable securities etc.
4. The firm has incurred a net loss of Rs.1494.63 crore during the year under review. The loss is
more than double of the previous year. The loss is mainly due to increase in employee benefit
expenses, especially salary cost. The Company shall take all possible steps to improve the operating
efficiency of the organisation especially in the distribution wing so as to reduce unit cost of the
electricity generated and distributed with an ultimate aim of making profit.
5. The management shall also look into disproportionate change in ‘Rent’ and ‘Other Expenses’
under the head ‘Administrative Expenses’.
6. The EPS is also further worsened to Rs.(-4.27)from (-1.99) in 2015-16. This will also adversely affect
the credit worthiness of the organisation.
Sd/-
MANOJ JOSHI
PRINCIPAL SECRETARY (FINANCE)
Thiruvananthapuram
Date : 08.10.2018
110
CS
N.C. Nair, FCS., LLB., CAIIB
Practising Company Secretary
Form No.MR-3
SECRETARIAL AUDIT REPORT

For the Financial Year ended 31st March 2017
[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 (CIN
40100KL2011SGC027424), (hereinafter called “the Company”), for the financial year ended on 31st
March 2017. 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.,
111
(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.
(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 2017, 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.
112
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
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.
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 having
additional charge of Company Secretary. This is not in conformity with the spirit of 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. 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 consensus.
3. There is a Committee of Full Time Directors to carry on the day to day functioning/oversee
working of the routine functions. 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 not keeping a record of the meetings of this Committee and its decisions are
not placed before the Board of Directors except in circumstances where it is necessary to get
Board approval to implement the decision of the Committee.
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,
02.04.2018.
Sd/-
N.C. NAIR
Company Secretary,
FCS 750, CP No.312,
Unique ID 11981.KE006000
Note:- This report shall be read with my letter of even date annexed as Appendix A which forms an
integral part of this report.
113
CS
N.C. Nair, FCS., LLB., CAIIB
Practising Company Secretary
Appendix – A
02/04/2018
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. Whenever 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 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 Company nor
the efficacy with which the Management has conducted the affairs of the Company.
Trivandrum,
02.04.2018.
Sd/-
N.C. NAIR,
Company Secretary,
FCS 750, CP No.312,
Unique ID 11981.KE006000
114
FORM CRA 3
COST AUDIT REPORT
We, MURTHY & CO. LLP, Cost Accountants, having been appointed as Cost Auditors under
Section 148(3) of the Companies Act, 2013 (18 of 2013) of M/s. KERALA STATE ELECTRICITY BOARD
LIMITED having its registered office at VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-
695004 (hereinafter referred to as the company), have audited the Cost Records maintained under
section 148 of the said Act, in compliance with the Cost AuditingStandards, in respect of Products-
Generation, Transmission and Distribution of Power for the year 2016-17, maintained by the company
and report that,
(i) We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purpose of this audit.
(ii) In our opinion, proper cost records, as per rule 5 of the Companies (Cost Records and Audit)
Rules, 2014, have been maintained by the company in respect of products/services under
reference.
(iii) In our opinion, proper returns adequate for the purpose of the Cost Audit have been received
from the branches not visited by us.
(iv) In our opinion and to the best of my information, the said books and records give the information
required by the Companies Act, 2013, in the manner so required.
(v) In our opinion, the company has adequate system of internal audit of cost records which to
our opinion is commensurate to its nature and size of its business.
(vi) In our opinion, information, statements in the annexure to this cost audit report gives a true
and fair view of the cost of production of products/ services, cost of sales, margin and other
information relating to products/ services under reference.
(vii) Detailed unit-wise and product/service wise cost statements and schedules thereto in respect
of the products under reference of the company duly audited and certified by us are kept in
the company.
2. Observations and suggestions, if any, of the Cost Auditor, relevant to the cost audit.
Budgetary Control System
The company is preparing both Capital Budgets and Revenue Budgets to monitor and control
both capital and revenue expenditure. The capital budget is prepared based on approved plan
outlay of the company and the revenue budget is prepared based on past figures and trends. The
budget estimates are finalized based on aggregate revenue requirement furnished to Kerala State
Electricity Regulatory Commission.
Internal Financial Controls over Financial Reporting
The company has an adequate internal financial control system over financial reporting and
such internal financial controls were operating effectively as at 31st March 2017.
Other observations
Cost accounting records maintained by the company are in accordance with the Generally
115
Accepted Cost Accounting Principles and applicable Cost Accounting Standards issued by the
Institute of Cost Accountants of India.
Annexure A4, D3 and D4 of the Cost Audit Report, which are required to be reported “Company
as a whole” are based on the Audited Financial Statements.
Figures for reconciliation of indirect taxes (Annexure D6) are based on the monthly/quarterly/
half-yearly returns submitted by the company to various authorities. However, we have not carried
out the detailed audit of the same.
Sd/-
FOR MURTHY & CO. LLP
Cost Accountants
FRN 000648
M.R. KRISHNA MURTHYDesignated Partner

FCMA 7568
116
Performance Appraisal Report to the Management
A. Key Contribution Analysis – Company as a Whole as per Cost Records for 2016-17 as compared
with 2015-16(For Generation, Transmission and Distribution Activity)

Rs. In Lakhs % Rs. In Lakhs %
Revenue
Revenue from Sale of Power 1121883 100.00 1091444 100.00
Total 1121883 100.00 1091444 100.00
Variable Costs
Material Cost 2345 0.21 10426 0.96
Power Purchase Cost 739332 65.90 649491 59.51
Direct Employee Costs 100823 8.99 93137 8.53
Repairs & Maintenance 26513 2.36 26050 2.39
Total Variable Costs 869013 77.46 779103 71.38
Contribution 252870 22.54 312341 28.62
Fixed Costs
Employee Costs 235254 20.97 217318 19.91
Depreciation 71888 6.41 69962 6.41
Administrative Overheads 37479 3.34 32958 3.02
Interest 95992 8.56 85139 7.80
Total Fixed Costs 440614 39.27 405377 37.14
Margin as per Cost Records -187743 -16.73 -93036 -8.52
Add: Income not considered in
Cost Records 49259 33463
Less: Expenses not considered in
Cost Records 10979 10124
Profit/ (Loss) as per Financial Accounts -149463 -69697
It can be seen from the above analysis that the net revenue from sale of power has increased
by 2.79% over previous year. Variable costs as a percentage to net revenue has substantially increased
from 71.38% to 77.46%% in the current year. The main reason for the same is due to increase in power
purchase cost which as a percentage to net revenue has increased by 6.39%.The average power
purchase cost per unit has marginally reduced from Rs. 3.95 per MU to Rs. 3.75 per MU in the current
year.
117
Fixed costs during the current year has increased by 8.69%. Fixed costs as a percentage to net
revenue has increased from 37.14% to 39.27%. With the present costs and selling prices, the breakeven
revenue required to be achieved has to increase by 1.74 times over present revenue of Rs. 1121883
lakhs.
B. Segment wise analysis as per Cost Records
Distribution Activity

Revenue
Revenue 1121883 100.00% 1091444 100.00%
Less: Variable Costs 878796 78.33% 782036 71.65%
Contribution 243087 21.67% 309408 28.35%
Less: Fixed Costs 430830 38.40% 402444 36.87%
Margin as per Cost Records -187743 -16.73% -93036 -8.52%
Generation Activity

Variable Costs 11089 25.34% 19292 37.91%
Fixed Costs 32673 74.66% 31600 62.09%
Total Cost transferred to Distribution 43762 100.00% 50891 100.00%
Transmission Activity

Variable Costs 16848 21.97% 14796 23.49%
Fixed Costs 59833 78.03% 48201 76.51%
Total Cost transferred to Distribution 76681 100.00% 62997 100.00%
C. Ratio Analysis

Current Ratio 0.48:1 0.26:1
Value Added to Net Revenue 28.03 % 33.37 %
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Current Ratio position has improved from 0.26 to 0.48. Value Added to Net Revenue has
reduced from 33.37% to 28.03% in the current year.
D. Quantity Analysis
In Million units
Power Generated
Hydel Energy 4319.08 6639.02
Thermal Energy 43.55 150.63
Wind Energy 1.71 1.38
Solar Energy 5.20 0.81
Total Power Generated 4369.54 6791.84
Power Purchased from other sources 19734.92 16448.36
Power Sold
Domestic 10386.46 9943.48
Commercial 2856.78 2735.36
Industrial 915.83 1103.23
Agriculture 527.81 279.48
Streetlights 381.44 366.62
Others- HT 4969.93 4896.90
Total Power Sold 20038.25 19325.07
It can be seen from the analysis that there is a reduction in the quantity of power generated
from 6791.84 MU to 4369.54 MU in the current year. Power purchased from outside source has
increased by 19.98% over previous year and the total power sold has increased by 3.69% over previous
year.
FOR MURTHY & CO. LLP

Cost Accountants
FRN 000648
Sd/-
M.R. Krishna Murthy
Designated Partner
FCMA 7568
119
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 2017
COMMENTS ON ACCOUNTS REPLIES OF THE COMPANY
In respect of Note 2 to accounts:Property,Plant The addition of fixed assets is being carried

and Equipment out at 140 ARUs spread all over Kerala. The
wrong grouping in fixed assets account groups
a)The Company is following a policy, wherein
if any in any of the ARUs will be corrected on
wrong grouping of assets are reversed in
detection of the errors. Such corrections may
the year in which it is detected and negative
result in additional depreciation in one asset
depreciation is provided on the assets from
group as well as deduction of depreciation in
thereon on SLM basis. The net value of the
another group. However it may be noted that
assets amounting to `1,14,41.08 Lakhs is
the reported corrections is only 0.022% of the
negative as a result of wrong grouping,
total depreciation for the year 2016-17 and will
its subsequent reversal and negative
not affect the true and fair view of the statement
depreciation. The impact in depreciation
of accounts. Wherever errors are occurred in
cannot be quantified as per the new
booking, which are subsequently detected, the
accounting policy adopted by the Company.
same is corrected in the subsequent accounts
to present realistic picture.
b. As per Appendix-III of CERC Notification No The company has not capitalised the expenses
L-1/153/2014/CERC, ‘Softwares’ are subject to incurred on the development of software and
a depreciation of 30%. Instead the Company related expenses. The Board vide order B.O.D(F)
follows the practice of pooling Software No.3177(Annual Accounts/Ind As-2016-17/2017-18
along with item ‘IT Equipment’ which dated18.12.2017 had entrusted Chief Engineer
has a depreciation rate of 15% resulting (IT) to segregate and capitalise the expenditure
in overvaluation of Property, Plant and incurred on IT related activities based on the
Equipment which cannot be quantified due number of employees engaged for software
to lack of necessary information. Also the development.
Company has not disclosed any accounting
policy for intangible assets as prescribed in
Ind AS 38.
c)Depreciation on additions to fixed assets, The depreciation is being calculated at the head
except for capital works in progress office on the basis of yearly addition of fixed
capitalized, is charged in the year in which assets made at the ARUs. In this connection it
it was purchased/ commissioned without may also be noted that depreciation calculation
considering date on which the asset is as mentioned in the accounting policy is on the
ready for use. This is not in conformity asset addition as a whole during the year. Pro-
with Indian Accounting Standard (Ind AS) rata depreciation is not being calculated due
-16 on “Property, Plant and Equipment”, to the complex number of assets. The same
leading to understatement of Property, methodology is being regularly followed by
Plant and Equipment and overstatement of KSEB during past two decades and approved
depreciation and loss for the year; However by statutory and C&AG audit during these years.
120
due to lack of necessary information, the

impact of the same cannot be quantified.
As per the information provided by the
Company, the Company has provided
depreciation on Capital work in progress
capitalized during the year on the date on
which the asset is ready for use, based on the
data collected from the ARUs. We are not in
a position to verify the authenticity of data
provided by the Management.
d) As per the Note 2 to accounts: “Property, Plant Difference is occurred in the working of net
and Equipment”, the total Carrying value of block of asset as per the workings of depreciation
the Property, Plant and Equipment amounts and net asset in the books of accounts.This
to `20,68,736Lakhs. We observed a difference difference is identified and will be rectified in
of ` 47,584 Lakhsto the Net Block of assets as the year 2017-18.
per the working submitted for verification.
Similarly, a difference of `46,964 Lakhsis
observed for the year 2015-16.No explanation
is received from the Management in respect
of the above differences observed.
e) Title deeds of immovable properties were KSEB Ltd. is having land and land rights with
not produced for our verification book value of `1773.32 crore as on 31.03.2017
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 were the details
of land are being maintained and monitored.
Reasonable internal control is being exercised
on the maintenance of title deeds of immovable
properties.
f) The Company has a system of accounting Detailed instructions has been issued to all
sale of Property, Plant and Equipment either ARUs on the procedure to be followed when an
in miscellaneous receipts or in sale of scrap asset is decommissioned. As per the procedure
without giving effect to the fixed assets the fixed assets value has to be withdrawn
ledger. The Company has also not disclosed from accounts in the event of decommission of
the details of deletions and decommissioning assets. The non compliance in the ARU is being
during the year. In the absence of required looked into
information we are unable to quantify the
impact on Property, Plant and Equipment,
Depreciation for the year and Other Income.
121
g)During the year, the Company has written This is very old balance carried over from
back `1,596.21 Lakhs being “fixed asset value previous years consists of non adjustments of
realized pending adjustment account” under fixed asset value pending for realization. This
the head ‘other liabilities and provisions’ as has been adjusted in the financial statements
Miscellaneous income instead of adjusting vide B.O.D(F) No.3177/Annual Accounts/Ind As
the same against Property, Plant and -2016-17/2017-18 dated 18.12.2017.
Equipment. The wrong accounting of
same has resulted in overstatement of
miscellaneous income and Property, Plant
and Equipment amounting to `1,596.21
Lakhs. The amount of depreciation to be
reversed, if any, on such Property, Plant and
Equipment could not be ascertained due to
h) As per paragraph-8 of Ind AS 16, Property, This will be verified and corrective actions will
Plant and Equipment, items such as spare be taken after analysing the complexity and
parts are to be recognized in accordance materiality.
with recognition criteria as per paragraph 7
of Ind AS 16, when they meet the definition
of ‘property, plant and equipment’. The
depreciation on such an item of spare part
will begin when the asset is available for use
i.e, when it is in the location and condition
necessary for it to be capable of operating
in the manner intended by management.
In case of spare parts, as readily available for
use, it may be depreciated from the date of
purchase of the spare part. The Company has
not followed the above recognition criteria.
Since the details are not available, we are not
able to quantify the impact of the same in
the Financial Statements.
i) In ARU 301, the total CRCS of APDRP It is reported by the ARU that the under
Thiruvananthapuram City Scheme has capitalisation as reported by the audit during the
76 rings amounts to `12,663.56Lakhs. previous year was happened due to duplication
Howeverthe Electrical Circle capitalized and incorrect CRCS. The above duplication and
only an amount of `12,620.76Lakhs towards mistakes were identified and rectified by the
the same. This has resulted in under- ARU in the monthly accounts of 04/16 itself.
capitalization of Property, Plant and
Equipment by`42.80Lakhs.
122
2. The Company has not complied with Ind AS Noted

36- Impairment of Assets.
3. (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
`5,250/- 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 2010-11 the accounts.
and 2011-12 amounting to `476.90 Lakhs and
As per the terms and condition, the loan
`697.16 Lakhs respectively. The Company
is repayable only if the Certified Emission
has not provided interest on this loan
Reduction (CER) is available from UNFCC (to
henceforth, as there is an uncertainty in
obtain Carbon Credit). If the CER is not being
the realization of interest. As per the terms
allotted to EMC, EMC cannot be requested to
and conditions, the loan is repayable by
repay the advanced by KSEB and the entire
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 of
management, Energy Management Centre
Kerala undertaking and the company has no
has not obtained carbon credit as on date.
doubt about its realization, provision has not
Hence there is uncertainty in the realization
been made.
of this advance. However, no provision has
been created for this balance, including the The matter had been taken up with the
interest, which is doubtful of realization. As a Government of Kerala vide letter dated
result, non-current assets is overstated and 05.03.2018.
loss for the year is understated by `6424.06
Lakhs.
b. Note No.7includes Deferred Cost on The deferred cost is the expenditure related
Account of Feasibility/Survey amounting to to the feasibility study of the projects
`10,238.65Lakhs being cost of projects not yet and the expenditure incurred before the
sanctioned and accumulated over the years. commencement of a project. The amounts
As the statuses of these projects are yet to be were verified and the expenditure incurred
ascertained, we are unable to comment the for the projects to which the investigation/
impact thereof on the financial statements. survey is being carried out as reported by the
ARUs only is retained in this account and the
balance amounts were already written off in the
accounts. The balance in the books of accounts
will be transferred to the CWIP on sanctioning
the project.
123
c). Note No:7 Other Non Current Assets includes The payment of capital advances and its
‘Capital Advances Others’ amounting to recovery are being done at the field units and
`13,660.90 Lakhs for which sub-schedule of all details of capital advances are available in
various works, Stage of completion of works the respective field ARUs. The audit observation
etc. were not furnished for our verification. is made without verifying the details available
Due to lack of necessary information, we are at the Accounting Rendering Units of the
unable to quantify the impact of the same in company.
the financial statements.
4. The amounts and balances lying under Non The long term borrowings are taken from
Current borrowings (Note No 15), Other Non nationalised/ scheduled banks, Power Finance
Current liabilities (Note No 18), Trade payables Corporation, Rural Electrification Corporation
(Note No 20), Other Financial liabilities- Non and Life Insurance Corporation of India. These
Current (Note No 16) and Current (Note No 21), balances are fully reconciled and the balance
Trade receivables (Note No 9), Non Current confirmation is available with KSEB Ltd. There
Loans (Note No 5), Financial Assets- Others is a system of periodical reconciliation of trade
(Note no-6), Other non-current assets (Note payables in respect of power purchase liabilities
No 7), Other current assets (Note No 12) are and the duly signed reconciliation statement
subject to confirmation and reconciliation. is available with KSEB Ltd. In KSEBL, the
The effect of the adjustment arising from procedures of balance confirmation from the
reconciliation and settlement of old dues and debtors are not in vogue. Being fully owned
possible losses which may arise on account government entity, working under regulatory
of non-recovery or partial recovery of such environment and the consumers are being
dues could not be ascertained. Hence we are billed at the rate specified by the Regulatory
unable to comment the impact thereof on Commission, the supply invoices are being
the financial statements. issued under statutory forms in which the
consumer dues are clearly mentioned, the
demand cum disconnection 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 1.10 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.
124
5.a) Attention is invited to Note 12 Other Current Inter Unit balance in the accounts consists of
Assets read with note 35.16 (d) regarding balance in the Account group 31 to 39 in the 140
Inter Unit Balance amounting to `1536.57 ARUs of KSE Board. These Account group are
Lakhs. 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 well as between ARUs and Head office. The
the Company is not ascertainable. balance of Inter unit transaction is amount
booked in the 140 ARUs and it is available in
the Trial balance of ARUs. The reconciliation of
inter unit balance is a continuous process and
the company is in the process of identifying and
clearing the inter unit balances. It is true that
there is lot of items to be identified and cleared
in the inter unit balances. However due to the
large number of transactions between the
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). Bank balances include bank accounts In ARUs, two types of bank accounts are
maintained at Head Office, ARU’s and being maintained viz Collection accounts
other offices and certain bank accounts and disbursement accounts. The collection
maintained are subject to confirmation accounts are in the nature of non operative
and reconciliation. collection accounts, where only remittances are
permitted. As per the agreement executed with
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 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
125
the differences in the bank balances with that

of the ledger balance in respect of those bank
accounts to initiate further action.
c). In the case of ARU 954-“Special Officer Regarding the audit observation, Special
Revenue”, The Debt Collection Balancing Officer (Revenue) has reported that a functional
(DCB) report generated by the ARU and the committee is being entrusted to verify and
Debtorsnet balance as per accounts,under reconcile the difference in DCB and accounts.
account code 23 shows a huge difference It will be rectified based on report by the
amounting to `19,271.23/- Lakhs committee.
d).Cash balances in respect of Expenditure The credit balance in the ARUs as on 31.03.2017
Division under ARUs- 437 and 414 and is as under
Revenue Division under ARUs -322
ARU Credit balance
and 404 shows negative balance for
which management has not given any 322 61310
explanation. 404 6299
414 685566
437 438180.52
The credit balance may be due to the bifurcation

of ARUs and the non receipt of opening IUTN
from the parent ARU. Similarly the wrong
journal entries in transferring the amount to
bank accounts may also be the reason. Reports
have been called for from the ARUs and the
internal audit wing is being intimated to verify
the items in detail.
e).The Company has not disclosed the ageing The lion share of sundry debtors constitutes
schedule of Trade Receivables as per sundry debtors for sale of power. In respect of
Schedule III of the Companies Act 2013. As customers, adequate security deposit is there
the age wise breakup of the receivables with KSEBL for adjusting any dues if any and as
is not available for verification, we are per procedure disconnection is to be effected
unable to comment on the recoverability of if dues are not paid in time. Hence majority
receivables. of the sundry debtors are secured and good.
However in respect of Kerala Water Authority
and certain other government departments,
the disconnection procedure is not being
effected due to the reasons beyond the control
of the Company. Similarly in some cases, the
126
disconnection and recovery of arrears is pending

due to court cases. Except these three items, the
other debtors are secured and good. It may be
noted that out of the total receivables of `2712.70
crores as on 31.03.2017, a provision to the tune of
`789.31 crore is already created in the previous
years (i.e. a total provision of 29.10% of the gross
receivable is already created).
f). The Company is undertaking work for The amount of work deposit under various
specified large projects under ‘work schemes are collected and accounted in the
deposit’ basis. No information with respect field units. All details are available in the field
to deposit received, work completed, units. The audit is requested to furnish details
date of completion, balance payable / of specific cases instead of general comments.
receivable etc on deposits is maintained. Since all details of work deposit is available at
Hence correctness of the deposit held by ARUs, company is ready to furnish the details
the Company on ‘work deposits’ could requested by audit.
not be verified. In the absence of required
impact of the same on financials of the
Company.
6. Attention is invited to Note No 33 Changes The details of amount booked under grant and
in Fair Valuation and Other Adjustments. workings of claw back of grant and amortisation
The Company has recognised `3,177 Lakhs were furnished to the statutory auditors for
as Claw back of Grant. Since the Company verification
has not submitted the reconciliation of
Grant and Consumer contribution and
amortisation thereof, we are unable to
comment on the Claw back of Grant shown
under Note No 33 Changes in Fair Valuation
and Other Adjustments for the year.
7. a) 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
`23,496.41 Lakhs. per Section 185(2) d of Electricity Act 2003 for
capitalisation of expenditure.
The Company has capitalized borrowing
The capitalisation of expenditure is specified
cost on weighted average basis without
in following paras of Annexure III- Basic
considering the daily balances of the loans
Accounting Policies and Principles in the
and borrowings held by the Company. Due
ESAAR 1985, the relevant part are reproduced
to lack of necessary information, we are
for easy reference.
unable to quantify the impact of the same
“2.9 All employee costs in respect of the
in the financial statements.
construction units shall be fully charged as cost
127
An amount of `36,897.21 Lakhs has been of capital assets.

capitalized out of revenue expenses 2.11 All expenses in respect of construction units
pending allocation during the year without shall be fully charged as cost of Capital assets.
considering the extent the work already 2.94 Every year, a portion of the interest payable
completed or ready to use. The details on the interest bearing borrowings which relate
such as the basis of capitalization,the to financing of capital assets at construction
block under which the same has been stage i.e. till the point of commissioning of assets
capitalized, depreciation provided on the shall be computed in the manner prescribed
same etc. were not made available for our in paragraph 1.42 Annexure V, if so directed by
verification. Central Government, be capitalized.
2.95 The amount of interest so computed and
Hence we are not in a position to comment
capitalized shall be reduced from the amount of
on the capitalization of the amount and
interest for the year and only the balance amount
the balance amount of revenue expenses
shall be chargeable to the Revenue Account for
pending allocation over capital works
the year.
amounting to`23,496.41 Lakhs.
Para 1.42 of Annexure V is as follows
“1.42 In computing the interest on funds utilised
during construction stage of capital assets, the
following factors shall be taken into consideration:
(1) The full amount of interest payable for the
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
128
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 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-5%
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.
129
b) In ARU 301, An amount of `99.51 Lakhs The ARU has reported that the supporting
has been charged to P&L as prior period documents and details are made available to
expenditure being payment of retention the Audit team.
amount recovered from APDRP Bills of
IRCON during 4-2011 to 6-2011. Supporting
documents for the same were not provided
for audit verification
8. The Company has provided outstanding All ARUs has been directed to furnish the
expenses, amounting to `2,699.47 Lakhs. details of expenditure which are accrued but
The said amount is compiled based on the not accounted during the year for inclusion
statements submitted by 51 ARUs.However in the accounts at the time of compilation of
due to lack of necessary information from accounts. The expenditure reported by the
other ARUs we are not in a position to ARUs upto the consolidation of accounts has
comment whether there is any omission been provided at the head office. As the audit
in accounting of outstanding expenses team had made very detailed audit of ARUs,
of these units. However, out of the ARUs audit was requested to quantify the omission if
visited by us, the Company has not provided any in accounting the expenditure.
outstanding expenses amounting to `5.72
Lakhs and `4.03 Lakhs in ARU 304 and ARU
385 respectively.
9. Company has not provided supporting The contingent liability in the notes forming
documents for the data disclosed under part of accounts are disclosed in the financial
Contingent liabilities and commitments in statement on the basis of details collected from
the Note forming part of accounts No 35.2. the field units and the collected details has
been given to the auditors at the time of audit.
10. As per Company Information and This will be verified. It may also be noted
Significant Accounting Policies No. 1.5 that the investment in Baitarani West Coal
(g) Company disclosed that,"Investment Compnay Ltd as on 31.03.2017 in the books of
has been carried at cost and as per the accounts is `10 crore only.
assessment by the company and there
is no indication of impairment of such
investments”. 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.
11.a) Attention is invited to Note 8 Inventories, The company is having a detailed manual on
The Company has not provided for Commercial Accounting System VOLUME II –
damaged/obsolete and slow moving items MATERIAL ACCOUNTING to establish consistent
130
and goods as per Ind AS 2 on ‘Inventories’. and effective policies and procedure to ensure
Due to lack of necessary information, we proper financial management – especially in
are unable to quantify the impact of the the area of Material Accounting at all levels
same in the financial statements. in the Company. The policies and procedures
contained in the manual is followed in the
b) As per the information and explanation
Board unless specific exception is given under
available, Material consumption statement
certain peculiar circumstances .The treatment
(MCS) should be valued and adjusted on
of obsolete stock is detailed in Section 14 of
the basis of standard rates as prescribed by
Chapter 1 Part II of the said manual.
the Board instead of the rates generated
from the Supply Chain Management (SCM). b. The auditors has been generalising the
Based on audit procedures carried out in comments without specifying the details of
the ARUs visited by us, it is seen that the ARU in which anomaly found and without
Material consumption statements (MCS) even quantifying the impact in the financial
have not been valued as per the directions statements.
as stated above and instead they have
valued the MCS as per the rates generated
from the SCM. Due to huge volume of
transactions and non availability of data we
are unable to quantify the same.
12. Previous year’s (2015-16) accounts have The Annual Financial statement of the company
not been adopted in the Annual General for the financial year 2015-16 has been adopted
Meeting. The Adjourned 4thAnnual General in the Annual General Meeting held on 15.11.2017.
Meeting held on 18.07.2017, adopted the
The cash flow statement is the part of the
financial Statements for the year 2014-15,
financial statements adopted by the Board.
without cash flow statement, which is not
Mentioning ‘approval of cash flow statement’
in compliance with Section 2(40) of the
specifically in the minutes of the meeting will
be considered in future.
13. a) Other income of the Company includes 13.a.All accounting in connection with the sale
income from sale of LED Bulbs. Supporting of LED bulbs and expenditure in connection
documents such as authorized copy of the with LED bulbs are being done at the Electrical
stores ledger for the period 2016-17, Duly Circles based on the Register of material cum
authorized supporting for issue of LED liability statement received from the Electrical
Bulbs to units, Confirmation of receipt of sections. The sale proceeds received are
LED Bulbs by the recipient, Certificate of accounted with the IUTN received from the
closing stock etc were not available for our concerned Electrical Divisions. Accounting of
verification at all the ARUs visited by us . LED bulb purchase and issue are also being
Hence we are not in a position to confirm accounted at Electrical Circles only. Detailed
the value of sale of LED bulbs. accounting procedure in this regard has issued
vide circular No. AA-IV/AC-II/29/2015-16 dated
Further adequate supporting documents
25/02/2016. All documents in connections with
were not made available for verifying the
the above transactions are available at Electrical
Material Purchase, Material Issue and
131
Expenditure in connection with purchase Circleoffices. The audit observation seems

of LED Bulbs. made without considering the above and is
not correct. The details of audit requisition and
b). No records such as sale order, tender
the concerned officer to whom it was served
documents etc were available for
were requested from the auditors for further
verification, relating to the Sale of Scrap
departmental action for not furnishing the
during the year, in most of the ARUs.
required documents to auditHowever the
c) The Company has not accounted income same was not made available.
receivable from maintenance of poles on
b. All documents relating to the sales
accrual basis. In the absence of necessary
order,tender documents are kept in the field
units.
impact of the same on the accounts of the
Company for the year. c. The matter is being verified.
d) In some of the ARUs visited by us it was d. The auditors were requested to furnish the
found that the tax collected such as sales details of such cases and so as to get the same
tax , Service tax , Tax Collected at source corrected by the ARUs. The company is having
etc were accounted along with the income tax audit system and these details are being
which has resulted in understatement of verified by the tax auditors in detail.
liabilities and over statement of income.
e) In ARU 414, Salevalue of Scrap `2.20 Lakhs has
been accounted under Sales tax collections
(`0.61 Lakhs), EMD (`0.65 Lakhs) and TDS on
payment to contractors (`0.94 Lakhs) which
has resulted in understatement of income
and overstatement of current liabilities.
14. On verification of provisions for Pension The credit balance under the account head
ledger 44120, there is credit balance 44.120 is an old balance carrying over from
amounting to `305.14 lakhs which pertains previous years. Prior to the disbursement of
to previous years. No adjustments have pension from the Pension Master Trust, the
been made for made for the balance. terminal liability has been accounted and paid
from the company's own books of accounts.
Now the terminal liability is being paid from
the pension master trust. The details are being
verified and rectification if any needed will be
provided in the accounts
15.The impact for comments made by the Noted

C&AG on the financial statements of 2014-15
amounting to `2,379.32 lakhs, `55,789.28 Lakhs
and `58,168.6 lakhs being understatement of
expenses and loss, overstatement of liability
and overstatement of assets respectively has
132
not brought in to accounts by the Company These observations are addressed in the
while preparing its opening Ind AS balance reconciliation of Ind AS financial statements
sheet as at 1stApril 2015 .
Further, impact for comments made by the
C&AG on the financial statements of2015-
16,amounting to `8036.07 lakhs, `9014.14 lakhs
and `978.07 lakhs being understatement
of expenses and loss, understatement of
liability and understatement of asset has not
adjusted by the Company while preparing its
comparative amounts for the year ended 31
March 2016.
Sd/-
DIRECTOR (FINANCE)
133
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 2017
In respect of Note 2 to accounts:Property,Plant The addition of fixed assets is being carried

and Equipment out at 140 ARUs spread all over Kerala. The
wrong grouping in fixed assets account groups
a)The KSEB Limited is following a policy,
if any in any of the ARUs will be corrected on
wherein wrong grouping of assets are
detection of the errors. Such corrections may
reversed in the year in which it is detected
result in additional depreciation in one asset
and negative depreciation is provided on
group as well as deduction of depreciation in
the assets from thereon on SLM basis.
another group. However it may be noted that
The net value of the assets amounting to
the reported corrections is only 0.022% of the
`1,14,41.08 Lakhs is negative as a result of
total depreciation for the year 2016-17 and will
wrong grouping, its subsequent reversal
not affect the true and fair view of the statement
and negative depreciation. The impact in
of accounts. Wherever errors are occurred in
depreciation cannot be quantified as per the
booking, which are subsequently detected, the
new accounting policy adopted by the KSEB
same is corrected in the subsequent accounts
Limited .
to present realistic picture.
b) As per Appendix-III of CERC Notification No The company has not capitalised the expenses
L-1/153/2014/CERC, ‘Softwares’ are subject to incurred on the development of software and
a depreciation of 30%. Instead the Company related expenses. The Board vide order B.O.D(F)
follows the practice of pooling Software No.3177(Annual Accounts/Ind As-2016-17/2017-18
along with item ‘IT Equipment’ which dated18.12.2017) had entrusted Chief Engineer
has a depreciation rate of 15% resulting (IT) to segregate and capitalise the expenditure
in overvaluation of Property, Plant and incurred on IT related activities based on the
Equipment which cannot be quantified due number of employees engaged for software
to lack of necessary information. Also the development.
Company has not disclosed any accounting
policy for intangible assets as prescribed in
Ind AS 38.
c) In KSEB Limited, Depreciation on additions The depreciation is being calculated at the head
to fixed assets, except for capital works in office on the basis of yearly addition of fixed
progress capitalized, is charged in the year assets made at the ARUs. In this connection it
in which it was purchased/ commissioned may also be noted that depreciation calculation
without considering date on which the asset as mentioned in the accounting policy is on the
is ready for use. This is not in conformity asset addition as a whole during the year. Pro-
with Indian Accounting Standard (Ind AS) rata depreciation is not being calculated due
-16 on “Property, Plant and Equipment”, to the complex number of assets. The same
leading to understatement of Property, methodology is being regularly followed by
Plant and Equipment and overstatement of KSEB during past two decades and approved
by statutory and C&AG audit during these years.
134
depreciation and loss for the year; However

due to lack of necessary information, the
impact of the same cannot be quantified.
As per the information provided by KSEB
Limited, the Company has provided
depreciation on Capital work in progress
capitalized during the year on the date on
which the asset is ready for use, based on
the data collected from the ARUs. We are
not in a position to verify the authenticity of
data provided by the Management.
d) As per the Note 2 to accounts: “Property, Plant Difference is occurred in the working of net
and Equipment”, the total Carrying value of block of asset as per the workings of depreciation
the Property, Plant and Equipment amounts and net asset in the books of accounts.This
to `20,68,736Lakhs. We observed a difference difference is identified and will be rectified in
of ` 47,584 Lakhs to the Net Block of assets as the year 2017-18.
per the working submitted for verification.
Similarly, a difference of `46,964 Lakhs is
observed for the year 2015-16. No explanation
is received from the Management in respect
of the above differences observed.
e) Title deeds of immovable properties were KSEB Ltd. is having land and land rights with
not produced for our verification book value of `1773.32 crore as on 31.03.2017
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 were the details
of land are being maintained and monitored.
Reasonable internal control is being exercised
on the maintenance of title deeds of immovable
properties.
f). KSEB Limited has a system of accounting Detailed instructions has been issued to all
sale of Property, Plant and Equipment either ARUs on the procedure to be followed when an
in miscellaneous receipts or in sale of scrap asset is decommissioned. As per the procedure
without giving effect to the fixed assets the fixed assets value has to be withdrawn
ledger. KSEB Limited has also not disclosed from accounts in the event of decommission of
the details of deletions and decommissioning assets. The non compliance in the ARU is being
during the year. In the absence of required looked into.
impact on Property, Plant and Equipment,
Depreciation for the year and Other Income.
135
g) During the year, KSEB Limited has written This is very old balance carried over from
back `1,596.21 Lakhs being “fixed asset value previous years consists of non adjustments of
realized pending adjustment account” fixed asset value pending for realization. This
under the head ‘other liabilities and has been adjusted in the financial statements
provisions’ as Miscellaneous income instead vide B.O.D(F) No.3177/Annual Accounts/Ind As
of adjusting the same against Property, Plant -2016-17/2017-18 dated 18.12.2017.
and Equipment. The wrong accounting
of same has resulted in overstatement of
miscellaneous income and Property, Plant
and Equipment amounting to `1,596.21
Lakhs. The amount of depreciation to be
reversed, if any, on such Property, Plant and
Equipment could not be ascertained due to
h) As per paragraph-8 of Ind AS 16, Property, This will be verified and corrective actions will
Plant and Equipment, items such as spare be taken after analysing the complexity and
parts are to be recognized in accordance materiality.
with recognition criteria as per paragraph 7
of Ind AS 16, when they meet the definition
of ‘Property, Plant and Equipment’. The
depreciation on such an item of spare part
will begin when the asset is available for use
i.e, when it is in the location and condition
necessary for it to be capable of operating
in the manner intended by management.
In case of spare parts, as readily available for
use, it may be depreciated from the date of
purchase of the spare part. KSEB Limited has
not followed the above recognition criteria.
Since the details are not available, we are not
able to quantify the impact of the same in
the Financial Statements.
i) In ARU 301 of KSEB Limited, the total CRCS of It is reported by the ARU that the under
APDRP Thiruvananthapuram City Scheme capitalisation as reported by the audit during the
has 76 rings amounts to `12,663.56Lakhs. previous year was happened due to duplication
However the Electrical Circle capitalized and incorrect CRCS. The above duplication and
only an amount of `12,620.76Lakhs towards mistakes were identified and rectified by the
the same. This has resulted in under- ARU in the monthly accounts of 04/16 itself.
capitalization of Property, Plant and
Equipment by `42.80Lakhs.
2. The KSEB Limited has not complied with Ind Noted

AS 36- Impairment of Assets.
136
3. (a) In Note No.5 Non Current Assets - Financial As per the Accounting standard if there is any
Assets - Loans- of KSEB Limited includes uncertainty in the realization of revenue that
an amount of `5,250/- Lakhs being Interest amount need not be accounted as revenue.
bearing loan to Energy Management Centre. Hence provision for interest is not credited in
KSEB Limited has provided interest for the the accounts.
period 2010-11 and 2011-12 amounting to As per the terms and condition, the loan
`476.90 Lakhs and `697.16 Lakhs respectively. is repayable only if the Certified Emission
KSEB Limited has not provided interest on Reduction (CER) is available from UNFCC (to
this 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
terms and conditions, the loan is repayable to repay the advance 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 of
management, Energy Management Centre Kerala undertaking and the company has no
has not obtained carbon credit as on date. doubt about its realization, provision has not
Hence there is uncertainty in the realization been made.
of this advance. However, no provision has
been created for this balance, including the The matter had been taken up with the
interest, which is doubtful of realization. As a Government of Kerala vide letter dated
result, non-current assets is overstated and 05.03.2018.
loss for the year is understated by `6424.06
Lakhs.
(b) Note No.7 of KSEB Limited, includes The deferred cost is the expenditure related
Deferred Cost on Account of Feasibility/ to the feasibility study of the projects
Survey amounting to `10,238.65Lakhs being and the expenditure incurred before the
cost of projects not yet sanctioned and commencement of a project. The amounts
accumulated over the years. As the statuses were verified and the expenditure incurred
of these projects are yet to be ascertained, for the projects to which the investigation/
we are unable to comment the impact survey is being carried out as reported by the
thereof on the financial statements ARUs only is retained in this account and the
balance amounts were already written off in the
accounts. The balance in the books of accounts
will be transferred to the CWIP on sanctioning
the project.
(c) Note No:7 Other Non Current Assets The payment of capital advances and its
includes ‘Capital Advances Others’ of KSEB recovery are being done at the field units and
Limited amounting to `13,660.90 Lakhs for all details of capital advances are available in
which sub-schedule of various works, Stage of the respective field ARUs. The audit observation
completion of works etc. were not furnished is made without verifying the details available
for our verification. Due to lack of necessary at the Accounting Rendering Units of the
information, we are unable to quantify the company.
impact of the same in the financial statements
137
4. The amounts and balances in Holding The long term borrowings are taken from
Company lying under Non Current nationalised/ scheduled banks, Power Finance
borrowings (Note No 15), Other Non Current Corporation, Rural Electrification Corporation
liabilities (Note No 18), Trade payables (Note and Life Insurance Corporation of India. These
No 20), Other Financial liabilities- Non balances are fully reconciled and the balance
Current (Note No 16) and Current (Note No 21), confirmation is available with KSEB Ltd. There
Trade receivables (Note No 9), Non Current is a system of periodical reconciliation of trade
Loans (Note No 5), Financial Assets- Others payables in respect of power purchase liabilities
(Note no-6), Other non-current assets (Note and the duly signed reconciliation statement is
No 7), Other current assets (Note No 12) are available with KSEB Ltd. In KSEBL, the procedures
subject to confirmation and reconciliation. of balance confirmation from the debtors are
The effect of the adjustment arising from not in vogue. Being fully owned government
reconciliation and settlement of old dues and entity, working under regulatory environment
possible losses which may arise on account and the consumers are being billed at the rate
of non-recovery or partial recovery of such specified by the Regulatory Commission, the
dues could not be ascertained. Hence we are supply invoices are being issued under statutory
unable to comment the impact thereof on forms in which the consumer dues are clearly
the financial statements. mentioned, the demand cum disconnection
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 1.10
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
138
5.a) Attention is invited to Note 12 Other Inter Unit balance in the accounts consists of
Current Assets read with note 34.12 (d) of balance in the Account group 31 to 39 in the 140
Holding Company regarding Inter Unit ARUs of KSE Board. These Account group are
Balance amounting to `1536.57 Lakhs. The being used for booking transaction between
said balance is subject to reconciliation and different Account Rendering Units (ARUs) as
further adjustments, the effect of which on well as between ARUs and Head office. The
the financial results of KSEB Limited is not balance of Inter unit transaction is amount
ascertainable. booked in the 140 ARUs and it is available in
the Trial balance of ARUs. The reconciliation of
inter unit balance is a continuous process and
the company is in the process of identifying and
clearing the inter unit balances. It is true that
there is lot of items to be identified and cleared
in the inter unit balances. However due to the
large number of transactions between the
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) Bank balances in KSEB Limited, include bank In ARUs, two types of bank accounts are
accounts maintained at Head Office, ARU’s being maintained viz Collection accounts
and other offices and certain bank accounts and disbursement accounts. The collection
maintained are subject to confirmation and accounts are in the nature of non operative
reconciliation. collection accounts, where only remittances are
permitted. As per the agreement executed with
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 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
139
of the ledger balance in respect of those bank

accounts to initiate further action.
c) In the case of ARU 954-“Special Officer Regarding the audit observation, Special
Revenue” of KSEB Limited, The Debt Officer (Revenue) has reported that a functional
Collection Balancing (DCB) report generated committee is being entrusted to verify and
by the ARU and the Debtors net balance as reconcile the difference in DCB and accounts.
per accounts, under account code 23 shows It will be rectified based on report by the
a huge difference amounting to `19,271.23/- committee.
Lakhs.
d) Cash balances, in KSEB Limited, in respect of The credit balance in the ARUs as on 31.03.2017
Expenditure Division under ARUs- 437 and is as under
414 and Revenue Division under ARUs -322 ARU Credit balance
and 404 shows negative balance for which
management has not given any explanation. 322 61310
404 6299
414 685566
437 438180.52
The credit balance may be due to the bifurcation

of ARUs and the non receipt of opening IUTN
from the parent ARU. Similarly the wrong
journal entries in transferring the amount to
bank accounts may also be the reason. Reports
have been called for from the ARUs and the
internal audit wing is being intimated to verify
the items in detail.
e) KSEB Limited has not disclosed the ageing The lion share of sundry debtors constitutes
schedule of Trade Receivables as per sundry debtors for sale of power. In respect of
Schedule III of the Companies Act 2013. As customers, adequate security deposit is there
the age wise breakup of the receivables with KSEBL for adjusting any dues if any and as
is not available for verification, we are per procedure disconnection is to be effected
unable to comment on the recoverability of if dues are not paid in time. Hence majority
receivables. of the sundry debtors are secured and good.
However in respect of Kerala Water Authority
and certain other government departments,
the disconnection procedure is not being
effected due to the reasons beyond the control
of the Company. Similarly in some cases, the
disconnection and recovery of arrears is pending
140
due to court cases. Except these three items,

the other debtors are secured and good. It
may be noted that out of the total receivables
of `2712.70 crores as on 31.03.2017, a provision
to the tune of `789.31 crore is already created
in the previous years (i.e. a total provision
of 29.10% of the gross receivable is already
created).
f) KSEB Limited is undertaking work for The amount of work deposit under various
specified large projects under ‘work deposit’ schemes are collected and accounted in the
basis. No information with respect to field units. All details are available in the field
deposit received, work completed, date of units. The audit is requested to furnish details
completion, balance payable / receivable etc of specific cases instead of general comments.
on deposits is maintained. Hence correctness Since all details of work deposit is available at
of the deposit held by KSEB Limited on ARUs, company is ready to furnish the details
‘work deposits’ could not be verified. In the requested by audit
absence of required information we are
unable to quantify the impact of the same
on financials of KSEB Limited.
6. Attention is invited to Note No 33 Changes in The details of amount booked under grant and
Fair Valuation and Other Adjustments. KSEB workings of claw back of grant and amortisation
Limited has recognised `3,177 Lakhs as Claw were furnished to the statutory auditors for
back of Grant. Since KSEB Limited has not verification
submitted the reconciliation of Grant and
Consumer contribution and amortisation
thereof, we are unable to comment on the
Claw back of Grant shown under Note No
33 Changes in Fair Valuation and Other
Adjustments for the year.
7. a) Attention is invited to Note No. 3 Capital KSEB Ltd is following the rules, policies and
Work in Progress of KSEB Limited, which standards prescribed in Electricity Supply
includes revenue expenses pending Annual Accounts rules [ESAAR] 1985, saved as
allocation amounting to `23,496.41 Lakhs. per Section 185(2) d of Electricity Act 2003 for
capitalisation of expenditure.
KSEB Limited has capitalized borrowing
cost on weighted average basis without The capitalisation of expenditure is specified in
considering the daily balances of the loans following paras of Annexure III- Basic Accounting
and borrowings held by KSEB Limited. Due Policies and Principles in the ESAAR 1985, the
to lack of necessary information, we are relevant part are reproduced for easy reference.
unable to quantify the impact of the same in “2.9 All employee costs in respect of the
the financial statements. construction units shall be fully charged as cost
141
An amount of `36,897.21 Lakhs has been of capital assets.

capitalized out of revenue expenses
2.11 All expenses in respect of construction units
pending allocation during the year without
shall be fully charged as cost of Capital assets.
considering the extent the work already
completed or ready to use. The details 2.94 Every year, a portion of the interest payable
such as the basis of capitalization,the block on the interest bearing borrowings which relate
under which the same has been capitalized, to financing of capital assets at construction
depreciation provided on the same etc. were stage i.e. till the point of commissioning of assets
not made available for our verification. shall be computed in the manner prescribed
in paragraph 1.42 Annexure V, if so directed by
Hence we are not in a position to comment
Central Government, be capitalized.
on the capitalization of the amount and
the balance amount of revenue expenses 2.95 The amount of interest so computed and
pending allocation over capital works capitalized shall be reduced from the amount
amounting to`23,496.41 Lakhs. of interest for the year and only the balance
amount shall be chargeable to the Revenue
Account for the year.
Para 1.42 of Annexure V is as follows
“1.42 In computing the interest on funds
utilised during construction stage of capital
assets, the following factors shall be taken into
consideration:
(1) The full amount of interest payable for the
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:
142
(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 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-5%
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.
143
b) In ARU 301 of KSEB Limited, An amount of The ARU has reported that the supporting
`99.51 Lakhs has been charged to P&L as documents and details are made available to
prior period expenditure being payment of the Audit team.
retention amount recovered from APDRP
Bills of IRCON during 4-2011 to 6-2011.
Supporting documents for the same were
not provided for audit verification.
8 KSEB Limited has provided outstanding All ARUs has been directed to furnish the details
expenses, amounting to `2,699.47 Lakhs. of expenditure which are accrued but not
The said amount is compiled based on the accounted during the year for inclusion in the
statements submitted by 51 ARUs.However due accounts at the time of compilation of accounts.
to lack of necessary information from other The expenditure reported by the ARUs upto the
ARUs we are not in a position to comment consolidation of accounts has been provided at
whether there is any omission in accounting of the head office. As the audit team had made
outstanding expenses of these units. However, very detailed audit of ARUs, audit was requested
out of the ARUs visited by us, KSEB Limited has to quantify the omission if any in accounting
not provided outstanding expenses amounting the expenditure.
to `5.72 Lakhs and `4.03 Lakhs in ARU 304 and
ARU 385 respectively
9. KSEB Limited has not provided supporting The contingent liability in the notes forming
documents for the data disclosed under part of accounts are disclosed in the financial
Contingent liabilities and commitments in the statement on the basis of details collected from
Note forming part of accounts No 34.2. the field units and the collected details has
been given to the auditors at the time of audit.
10. a) Attention is invited to Note 8 Inventories, a. The company is having a detailed manual on
KSEB Limited has not provided for damaged/ Commercial Accounting System VOLUME II –
obsolete and slow moving items and goods MATERIAL ACCOUNTING to establish consistent
as per Ind AS 2 on ‘Inventories’. Due to lack and effective policies and procedure to ensure
of necessary information, we are unable to proper financial management – especially in
quantify the impact of the same in the financial the area of Material Accounting at all levels in
statements. the Company. The policies and procedures
contained in the manual is followed in the
b) As per the information and explanation
Board unless specific exception is given under
available from KSEB Limited, Material
certain peculiar circumstances .The treatment
consumption statement (MCS) should be valued
of obsolete stock is detailed in Section 14 of
and adjusted on the basis of standard rates as
Chapter 1 Part II of the said manual.
prescribed by the Board instead of the rates
generated from the Supply Chain Management b. The auditors has been generalising the
(SCM). Based on audit procedures carried out in comments without specifying the details of
the ARUs visited by us, it is seen that the Material ARU in which anomaly found and without
consumption statements (MCS) have not been even quantifying the impact in the financial
valued as per the directions as stated above statements.
and instead they have valued the MCS as per
144
the rates generated from the SCM. Due to huge

volume of transactions and non availability of
data we are unable to quantify the same.
11. Previous year’s (2015-16) accounts, of KSEB The Annual Financial statement of the company
Limited, have not been adopted in the Annual for the financial year 2015-16 has been adopted
General Meeting. The Adjourned 4thAnnual in the Annual General Meeting held on 15.11.2017.
General Meeting held on 18.07.2017, adopted
The cash flow statement is the part of the
the financial Statements of KSEB Limited
financial statements adopted by the Board.
for the year 2014-15, without cash flow
Mentioning ‘approval of cash flow statement’
statement, which is not in compliance with
specifically in the minutes of the meeting will
Section 2(40) of the Companies Act, 2013.
be considered in future.
12. a) Other income of KSEB Limited includes a.All accounting in connection with the sale
income from sale of LED Bulbs. Supporting of LED bulbs and expenditure in connection
documents such as authorized copy of the with LED bulbs are being done at the Electrical
stores ledger for the period 2016-17, Duly Circles based on the Register of material cum
authorized supporting for issue of LED Bulbs liability statement received from the Electrical
to units, Confirmation of receipt of LED Bulbs sections. The sale proceeds received are
by the recipient, Certificate of closing stock accounted with the IUTN received from the
etc were not available for our verification at concerned Electrical Divisions. Accounting of
all the ARUs visited by us . Hence we are not LED bulb purchase and issue are also being
in a position to confirm the value of sale of accounted at Electrical Circles only. Detailed
LED bulbs. accounting procedure in this regard has issued
vide circular No. AA-IV/AC-II/29/2015-16 dated
Further adequate supporting documents
25/02/2016. All documents in connections with
were not made available for verifying the
the above transactions are available at Electrical
Material Purchase, Material Issue and
Circleoffices. The audit observation seems
Expenditure in connection with purchase of
made without considering the above and is
LED Bulbs.
not correct. The details of audit requisition and
b) No records such as sale order, tender the concerned officer to whom it was served
documents etc were available for verification, were requested from the auditors for further
relating to the Sale of Scrap during the year, departmental action for not furnishing the
in most of the ARUs of KSEB Limited. required documents to auditHowever the same
c) KSEB Limited has not accounted income was not made available.
receivable from maintenance of poles on b. All documents relating to the sales
accrual basis. In the absence of necessary order,tender documents are kept in the field
information we are unable to quantify the units.
impact of the same on the accounts of KSEB
c. The matter is being verified.
Limited for the year.
d. The auditors were requested to furnish the
d) In some of the ARUs, of KSEB Limited,
details of such cases and so as to get the same
visited by us it was found that the tax
corrected by the ARUs. The company is having
collected such as sales tax , Service tax ,
tax audit system and these details are being
Tax Collected at source etc were accounted
verified by the tax auditors in detail.
145
along with the income which has resulted e. ARU 414 has rectified the same vide JL 32 of
in understatement of liabilities and over 04/17
statement of income.
e) In ARU 414 of KSEB Limited, Sale value of
Scrap `2.20 Lakhs has been accounted
under Sales tax collections (`0.61 Lakhs),
EMD (`0.65 Lakhs) and TDS on payment
to contractors (`0.94 Lakhs) which has
resulted in understatement of income and
overstatement of current liabilities.
13. In KSEB Limited, on verification of Provisions- The credit balance under the account head
For Pension ledger 44120, there is Credit 44.120 is an old balance carrying over from
balance amounting to `305.14 Lakhs which previous years. Prior to the disbursement of
pertains to previous years. No adjustments pension from the Pension Master Trust, the
have been made for the balance. terminal liability has been accounted and paid
from the company's own books of accounts.
Now the terminal liability is being paid from
the pension master trust. The details are being
verified and rectification if any needed will be
provided in the accounts
14. The impact for comments made by the These observations are addressed in the
C&AG on the financial statements of KSEB reconciliation of Ind AS financial statements.
Limited, for 2014-15 amounting to `2,379.32
lakhs, `55,789.28 Lakhs and `58,168.6 lakhs
being understatement of expenses and loss,
overstatement of liability and overstatement
of assets respectively has not brought in to
accounts by KSEB Limited while preparing
its opening Ind AS balance sheet as at 1stApril
2015 .
Further, impact for comments made by the
C&AG on the financial statements of KSEB
Limited for the year 2015-16,amounting to
`8036.07 lakhs, `9014.14 lakhs and `978.07
lakhs being understatement of expenses
and loss, understatement of liability and
understatement of asset has not adjusted
by KSEB Limited while preparing its
comparative amounts for the year ended 31
March 2016.
146
15. As per the Independent Auditors Report for Noted

the Associate- Renewable Power Corporation
of Kerala Limited, the financial statements
has been restated based on the C&AG audit
and revised Audit Report has been issued.
1. The Holding Company has prepared the KSEB Limited has been prepared the
consolidated financial statements, in terms consolidated financial statement for the first
of the requirements of the Companies time and hence the share of profit or loss of the
Act, 2013for the first time. The previous associate/Joint venture for the previous years is
year’s figures in the consolidated financial not being worked.
statements are not subject to audit. Since
the Holding Companyhas not prepared
and presented the Consolidated Financial
Statements for the previous years, we are
unable to comment on whetherthe share
of profit or loss is recognised properly and
distributions received from associates and
Joint venture has considered for reducing
the carrying amount of the investment in
the previous year figures.
Sd/-
DIRECTOR (FINANCE)
147
REPLIES TO THE 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 31ST MARCH 2017
COMMENTS ON FINANCIAL STATEMENTS REPLIES OF THE COMPANY
A. COMMENT ON PROFITABILITY
Statement of Profit and Loss 2016-17
IV Expenses
Purchase of Power-`7393.32 crore (Note no.25)

The above does not include
1. `11.41crore being tariff arrears in The arrear on account of final Tariff order dated
respect to NLC TPS II based on Central 24.07.2017 was claimed by M/s NLC vide invoice
Electricity Regulatory Commission’s dated 04.08.2017 and admitted by the company on
final tariff order dated 24 July 2017 25.08.2017 and paid in three instalments on
for the period upto March 2017. 31.08.2017, 03.10.2017 and 03.11.2017. It may be
noted that the claim was accrued based on the
final tariff order pronounced in the financial
year 2017-18 and ascertained only on the basis
on the invoice raised in the financial year 2017-
18 and hence accounted by the company in the
financial year 2017-18. The above accounting
policy is being regularly followed by the
company in accounting the power purchase
claims due to the tariff revision orders of CERC.
2. `5.49 crore being deviation charges payable The accounting policy followed by the company
to Power Grid Corporation of India Limited by as detailed above may please be noted. In this
the Company from July 2016 to March 2017. case, M/s PGCIL has raised the invoice as per the
Revised Regional Transmission Charges only on
10.01.2018 for the period from July 16 to November
2017 based on the CERC tariff revision orders
issued in the financial year 2017-18. The liability
was ascertained only on the basis of claim raised
vide invoice dated 10.01.2018 and accounted
in the financial year 2017-18 as per the policy
is being regularly followed by the company.
3. `2.26 crore payable to Ahalia Alternate M/s Ahalya was being paid an interim payment
Energy Private Limited based on the revision and accounted regularly at `3.95 per unit
(16 February 2018) of cost of power purchased from 22.02.2016 to 31.01.2018 as per B.O. (FTD)
for the period up to March 2017.
148
These resulted in understatement of both No.2821/2016 dated 04.10.2016 till KSERC

the expense on purchase of power and the approved the Power Purchase Agreement with
loss for the year by `19.16 crore. them. It may please be noted that the final tariff
of `5.23 per unit was agreed and Power Purchase
Agreement was executed between M/s AAEPL
and KSEBL only on 16.02.2018 and hence the
additional liability is accrued and ascertained
only in the financial year 2017-18 and hence
accounted in the financial year 2017-18.
Employee benefits Expenses - `3360.77 crore (Note no. 28)
4 The above does not include `25.86 crore An amount of `567 Crore on estimate basis has
being salary arrears payable for the period been provided as provision for the pay revision
up to 31 March 2017, which was accounted due from July 2013 in the books of accounts
only in the period April 2017 to February 2018. from 2013-14 to 2015-16. The entire provision was
adjusted during the financial year 2016-17 on
implementation of the pay revision as the pay
revision effected in the month of May 2016. It
may be noted that the actual expenditure on
account of pay revision ascertained in 2016-17
was `568.03 Crore only and the said amount
was adjusted against the provision made for the
pay revision and the balance amount of `1.03
core was charged as the current year expenses.
Even though the pay revision was effected
from the month of May 2016, the pay revision
of some employees may not be completed due
to various reasons such as disciplinary action,
LWA and other employee related matters. Pay
revision of such employees can be effected
only in subsequent period. The expenses
incurred on account of the pay revision of
such employees can be ascertained only on
implementation of pay revision to their credit
and can be accounted accordingly. If there is
no sufficient provisions available to meet the
pay revision arrears of such employees the
expenditure will be charged to the current year
expenses. It may please be noted that the total
employee strength of KSEB Ltd. is more than
33,000 and the provision required was already
provided in the previous years on estimate basis
and accurately projected by the company. In
149
the reported cases, as there is no provision left

to meet the amount booked in the employee
cost of past years the amount was charged as
current year expenses. It may be noted that the
total employee benefit expenditure charged
in the profit and loss account of the company
is `3360.77 crore and compared to the volume
of business of the company, the reported
understatement, if any, is only 0.77% and hence
not material. The amount is correctly accounted
on ascertaining the liability.
5 The above does not include `0.22 crore Two pay revision arrear and salary arrear of one
being salary arrears payable to members of of the Board members was due since there was
Board of Directors for the period up to 2016- an objection of C&AG. This objection was cleared
17 which was paid in July 2017. and disbursement of arrear salary sanctioned
and payment was effected in the month of July
These resulted in understatement of both
2017.
employee benefit expenses and the loss for
the year by ` 26.08 crore.
Other Expenses- Others- ` 83.64 crore (Note no. 32)
6. The above does not include `1.04 crore The amount became refundable on the basis of
refunded by the Company as per KSERC the interim order of KSERC issued in the financial
interim order dated 27 April 2017 to Cochin year 2017-18 and the payment was effected on
International Airport Limited being 80 per 29.05.2017 i.e in the financial year 2017-18 and
cent of registration fee collected in 2015-16 accounted accordingly. It may be noted that the
for solar plants installed by them. liability was accrued in the financial year 2017-18
only.
This resulted in understatement of other
expenses and the loss for the year by `1.04
crore.
B. COMMENTS ON FINANCIAL POSITION

Balance Sheet as 31st March 2017
Equity
Other Equity(Note No.14)
Retained Earnings(`7,407.88 crore)
150
7.The Company did not rectify wrong The rectification entry to this effect is already
accounting of `3.90 crore received from provided in the Office of the CE (HRM) vide
Government of Kerala for installation of journal No.18 of 12/2017.
six digital Seismic stations which was
accounted as other receipts (Account Head
62999) during 2015-16 instead of Grant in aid from
Government - Deferred Income. This resulted
in understatement of Grant in aid from
Government- Deferred Income and with equal
understatement of the negative balance in
retained earnings for the year by `3.90 crore.
C. COMMENTS ON
INDEPANDENT AUDITORS REPORT REPLIES OF THE STATUTORY AUDITORS
Report on the Standalone Ind AS
Financial Statements
8. statement (Para no.12 of basis of qualified The factually incorrect statement is noted.
opinion) that previous year’s (2015-16)
accounts had not been adopted in the
Annual General Meeting (AGM) was factually
incorrect as it was adopted in the adjourned
fifth AGM held on 15 November 2017.
9. The Company did not account income
receivable from maintenance of poles
on accrual basis, which resulted in non
compliance of Ind AS 18- Revenue and
also was in violation of the Company’s
Accounting Policy on revenue recognition.
The Independent Auditors did not mention
about these while providing opinion on
revenue from poles in Para no.13 (c) of basis
of qualified opinion, making the opinion
incomplete to that extent.
10. Independent Auditors vide Para no.13 (d) We have reported the above case based on the
of basis of qualified opinion reported that ARU visited by us. Since we could not get similar
in few of the ARUs visited by them, it was information from those units visited by us, we
found that tax collected such as sales tax, could not quantify the effect.
service tax, tax collected at source were Since we have furnished clear description of
accounted along with the income which the deviations and could not quantify the effect
resulted in understatement of liabilities and due to reason stated above. We note this for our
overstatement of income. future compliance.
151
The opinion was incomplete as the Noted for future guidance.

Independent Auditor neither quantified
the effect of misstatement nor stated
impracticability in quantifying its financial
effects, as required in Para 21 of SA 705.
11 Independent Auditors did not amend the Noted for future guidance.
opinion paragraph heading to “basis for
qualified opinion” as required in Para 20 (a)
of SA 705.
12. Independent Auditors did not quantify The impact of the qualifications,wherever
the aggregate possible effect(s) of the 15 possible has been done and its effect on the
individual qualifications made on financial reported net loss could be inferred. Based on
statements, though so required by SA 705. the ARU audited by us effect on account of non
availability of information on similar items may
not be very significant compared to the volume
of business of the company. Noted the same for
future compliance.
Sd/-
DIRECTOR (FINANCE)
152
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 STATEMENTS OF KERALA STATE ELECTRICITY BOARD LIMITED,
THIRUVANANTHAPURAM FOR THE YEAR ENDED 31ST MARCH 2017
COMMENTS ON FINANCIAL STATEMENTS REPLIES OF THE COMPANY
A. COMMENT ON PROFITABILITY
Consolidated Statement of Profit and Loss 2016-17
IV Expenses
Purchase of Power- ₹7393.32 crore (Note no.25)
The above does not include The arrear on account of final Tariff order dated
24.07.2017 was claimed by M/s NLC vide invoice
1. ₹11.41crore being tariff arrears in respect to
dated 04.08.2017 and admitted by the company
NLC TPS II based on Central Electricity
on 25.08.2017 and paid in three instalments on
Regulatory Commission’s final tariff order dated
31.08.2017, 03.10.2017 and 03.11.2017. It may be
24 July 2017 for the period upto March 2017.
noted that the claim was accrued based on the
final tariff order pronounced in the financial
year 2017-18 and ascertained only on the basis
on the invoice raised in the financial year 2017-
18 and hence accounted by the company in the
financial year 2017-18. The above accounting
policy is being regularly followed by the
company in accounting the power purchase
claims due to the tariff revision orders of CERC.
2.₹5.49 crore being deviation charges payable The accounting policy followed by the company
to Power Grid Corporation of India Limited by as detailed above may please be noted. In this
the Company from July 2016 to March 2017. case, M/s PGCIL has raised the invoice as per
the Revised Regional Transmission Charges
only on 10.01.2018 for the period from July 16
to November 2017 based on the CERC tariff
revision orders issued in the financial year 2017-
18. The liability was ascertained only on the basis
of claim raised vide invoice dated 10.01.2018 and
accounted in the financial year 2017-18 as per
the policy is being regularly followed by the
company
153
3.₹2.26 crore payable to Ahalia Alternate Energy M/s Ahalya was being paid an interim payment
Private Limited based on the revision (16 and accounted regularly at `3.95 per unit
February 2018) of cost of power purchased for from 22.02.2016 to 31.01.2018 as per B.O. (FTD)
the period up to March 2017. No.2821/2016 dated 04.10.2016 till KSERC
approved the Power Purchase Agreement with
These resulted in understatement of both the
them. It may please be noted that the final
expense on purchase of power and the loss for
tariff of `5.23 per unit was agreed and Power
the year by ₹19.16 crore.
Purchase Agreement was executed between
M/s AAEPL and KSEBL only on 16.02.2018 and
hence the additional liability is accrued and
ascertained only in the financial year 2017-18
and hence accounted in the financial year 2017-
18.
Employee benefits Expenses - ₹3360.77 crore (Note no. 28)
4. The above does not include `25.86crore being An amount of `567 Crore on estimage basis has
salary arrears payable for the period up to 31 been provided as provision for the pay revision
March 2017, which was accounted only i the due from July 2013 in the books of accounts
period April 2017 to February 2018. from 2013-14 to 2015-16. The entire provision
was adjusted during the finanacial year 2016-17
on implementation of the pay revision as the
pay revision effected in the month of May 2016.
It may be noted that the actual expenditure on
account of pay revision ascertained in 2016-17
was `568.03 Crore only and the said amount
was adjusted against the provision made for
the pay revision and the balance amount of
` 1.03 core was charged as the current year
expenses. Even though thepay revision was
effected from the month of May 2016, the
pay revision of some employees may not be
completed due to various reasons such as
disciplinary action, LWA and other employee
related matters. Pay revision of such employees
can be effected only in subsequent period.
The expenses incurred on account of the pay
revison of such employees can be ascertained
only on implementation of pay revision to their
credit and be accounted accordingly. If there
is no sufficient provision available to meet the
pay revision arrears of such employees the
expenditure will be charged to the current year
expenses. It may please be noted that to total
employee strength of KSEB Ltd. is more than
154
33,000 and the provision required was already

provided in the previous years on estimate basis
and accurately projected by the company. In
the reported cases, as there is no provision left
to meet the amount booked in the employee
cost of past ears the amount was charged as
current year expenses. It may be noted that the
total employee benefit expenditure charged
in the profit and loss account of the company
is `3360.77 crore and compared to the volume
of business of the company, the reported
understatement, if any, is only 0.77% and hence
not material. The amount is correctly accounted
on ascertaining the liability.
5. The above does not include ₹ 0.22 crore being Two pay revision arrear and salary arrear of one
salary arrears payable to members of Board of of the Board members was due since there was
Directors for the period up to 2016-17 which was an objection of C&AG. This objection was cleared
paid in July 2017. and disbursement of arrear salary sanctioned
and payment was effected in the month of July
These resulted in understatement of both
2017.
employee benefit expenses and the loss for the
year by ₹26.08 crore.
Other Expenses- Others- ₹83.64 crore (Note no. 32)
6.The above does not include ₹1.04 crore The amount became refundable on the basis of
refunded by the Company as per KSERC interim the interim order of KSERC issued in the financial
order dated 27 April 2017 to Cochin International year 2017-18 and the payment was effected on
Airport Limited being 80 percent of registration 29.05.2017 i.e in the financial year 2017-18 and
fee collected in 2015-16 for solar plants installed accounted accordingly. It may be noted that the
by them. liability was accrued in the financial year 2017-18
only
This resulted in understatement of other
expenses and the loss for the year by ₹1.04 crore.
B. COMMENTS ON FINANCIAL POSITION

Consolidated Balance Sheet as 31st March 2017
Equity
Other Equity(Note No.14)
Retained Earnings(`7,392.56 crore)
155
7. The Company did not rectify wrong The rectification entry to this effect is already
accounting of ₹3.90 crore received from provided in the Office of the CE (HRM) vide
Government of Kerala for installation of six journal No.18 of 12/2017.
digital Seismic stations which was accounted
as other receipts (Account Head 62999)
during 2015-16 instead of Grant in aid from
Government - Deferred Income. This resulted
in understatement of Grant in aid from
Government- Deferred Income and with equal
understatement of the negative balance in
retained earnings for the year by ₹3.90 crore.
C.COMMENTS ON INDEPANDENT AUDITORS REPLIES OF THE STATUTORY AUDITORS

REPORT

8. statement (Para no.12 of basis of qualified The factually incorrect statement is noted.
opinion) that previous year’s (2015-16) accounts
had not been adopted in the Annual General
Meeting (AGM) was factually incorrect as it was
adopted in the adjourned fifth AGM held on 15
November 2017.
9. The Company did not account income Noted for future guidance.
receivable from maintenance of poles on
accrual basis, which resulted in non compliance
of Ind AS 18- Revenue and also was in violation
of the Company’s Accounting Policy on revenue
recognition. The Independent Auditors did not
mention about these while providing opinion
on revenue from poles in Para no.13 (c) of
basis of qualified opinion, making the opinion
incomplete to that extent.
10. Independent Auditors vide Para no.13 (d) of We have reported the above case based on the
basis of qualified opinion reported that in few ARU visited by us. Since we could not get similar
of the ARUs visited by them, it was found that information from those units visited by us, we
tax collected such as sales tax, service tax, tax could not quantify the effect.
collected at source were accounted along with Since we have furnished clear description of
the income which resulted in understatement the deviations and could not quantify the effect
of liabilities and overstatement of income. due to reason stated above. We note this for our
The opinion was incomplete as the Independent future compliance.
Auditor neither quantified the effect of
156
misstatement nor stated impracticability in

quantifying its financial effects, as required in
Para 21 of SA 705.
11. Independent Auditors did not amend Noted for future guidance.
the opinion paragraph heading to “basis for
qualified opinion” as required in Para 20 (a) of
SA 705.
12. Independent Auditors did not quantify the The impact of the qualifications, wherever
aggregate possible effect(s) of the 16 individual possible has been done and its effect on the
qualifications made on financial statements, reported net loss could be inferred. Based on
though so required by SA 705. the ARU audited by us effect on account of non
availability of information on similar items may
not be very significant compared to the volume
of business of the company. Noted the same for
future compliance.
Sd/-
DIRECTOR (FINANCE)
157
REPLIES TO THE COMMENTS OF PRINCIPAL SECRETARY (FINANCE) ON THE AUDITED

ACCOUNTS OF KERALA STATE ELECTRICITY BOARD LIMITED, THIRUVANANTHAPURAM
FOR THE YEAR ENDED 31ST MARCH 2017
. The Current Ratio is 0.48:1 as against the Even though the Current Ratio and Quick ratio
standard ratio of 2:1, the Quick Ratio is is less than the bench mark standard ratio,
0.41:1 while standard ratio is 1:1 and the Net the company has been successful in meeting
Working Capital is a negative figure. It means its current obligations without any default.
that the liquidity position of the organisation The ratio will be improved on realising the
is very unsound. The firm is seen to be not revenue gaps approved by the Hon’ble KSERC.
in a position to meet its current obligations The company is following prudent norms for
which will affect the credit worthiness of meeting its current obligations and utilising
the entity and this cannot be recovered in its internal resources for meeting financial
an overnight. Hence, the management shall obligations. However every earnest effort will
take all earnest efforts to improve its liquidity be taken to improve credit worthiness of the
position. company.
2. Delayed payment without affecting the The company has been taking all efforts to
relationship with suppliers is a good meet the financial obligation like trade payable,
indicator of working capital management. interest expenses, payment to employees etc. in
This has been materialised in the case a time bound manner.
of management of Trade Payables. Easy Regarding Trade Receivables i.e, sundry
recovery of cash from the customers is debtors for sale of power, adequate security
also a measure of effective working capital deposit is there with KSEBL for adjusting any
management. But the Trade Receivables dues of the consumers. Similarly, as per the
showed an increasing trend over the last two procedure in vogue, disconnection is to be
years which is not desirable in the interest of effected if dues are not paid in time. Hence
the organization. Hence, the management majority of the sundry debtors are secured
shall look into this matter. and good. However in respect of Kerala Water
Authority and certain other government
departments, the disconnection procedure is
not being effected due to the reasons beyond
the control of the Company. Similarly in some
cases, the disconnection and recovery of arrears
is pending due to court cases. Except these
three items, the other debtors are secured
and good. The company is taking all effort to
reduce the trade receivables by forming the
arrear clearance cell, dedicated revenue wing at
section level etc
158
3. The deposit under Disbursement Bank The balance lying in the Disbursement Bank
Accounts has been increased manifolds. If this Accounts pertains to the amount disbursed
is in the form of current/savings bank account, to the field units for payment to the passed
increase in such deposits are not desirable. bills. As per the procedure in vogue, the fund
In such a situation, the management shall disbursement to the disbursement bank
think of investing amount in more economic accounts of the field ARUs are being made
way like term deposits, investment in short only for the bills passed by the ARUs and
-term marketable securities etc. kept ready for disbursement to the suppliers/
contractors. On assigning the funds, normally
the ARUs are releasing the payments to the
suppliers/ contractors on the same day itself or
by the next day. The increased balance in the
disbursement bank account is analyzed and
the major amounts pertains to the DDUGJY/
IPDS grant received from Government of India,
which is to be kept under the interest bearing
accounts as per the guidelines. This fund is
exclusively for meeting the expenditure under
the DDUGJY / IPDS projects. The interest earned
on these funds are to be remitted back to the
Government of India.
4. The firm has incurred a net loss of Rs.1494.63 The increase in loss to the tune of `1494.63
crore during the year under review. The loss crore has occurred mainly due to the increase
is more than double of the previous year. The in power purchase cost and employee cost. The
loss is mainly due to increase in employee power purchase cost increased to the tune of
benefit expenses, especially salary cost. `899crore compared to the previous year. The
The Company shall take all possible steps power purchase cost increased mainly due to
to improve the operating efficiency of the the increase in consumption and decrease in
organisation especially in the distribution hydel generation due to shortfall in monsoon.
wing so as to reduce unit cost of the During the period, energy consumption
electricity generated and distributed with an increased by around 992 MU, at the same time
ultimate aim of making profit. the unit generated from our generating stations
decreased by 2422 Mu. Hence to meet the
shortage, the power was purchased at higher
cost resulted in huge increase of power purchase
cost. Increase in employee cost is mainly due
to the implementation of pay/pension revision
due from 07/2013. The employee benefits were
disbursed from 04/2016 and this has reflected in
the employee cost during the period.
159
5. The management shall also look into The increase in Rent during the period compared
disproportionate change in ‘Rent’ and ‘Other to the previous year is due to the payment of
Expenses’ under the head ‘Administrative arrear lease rent to the forest department. The
Expenses’. increase in Other expenses is being verified.
6. The EPS is also further worsened to Rs.(- The EPS of the company worsened due to the
4.27)from (-1.99) in 2015-16. This will also heavy loss during the period. As pointed out
adversely affect the credit worthiness of the above, the increase in loss was occurred mainly
organisation. due to increase in power purchase cost which
is dependent to the consumption and own
generation of power. However all efforts are
being taken by the company to reduce the
operating expenses in future.
Sd/-
DIRECTOR (FINANCE)
160
REPLIES OF THE MANANGEMENT TO THE OBSERVATIONS OF

SECRETARIAL AUDITOR FOR THE YEAR – 2016-17.
Sl. Observations in the Replies/Comments of the Management
No 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 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 and 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. The reminder vide letter
No. CS/Independent Director/2015-16 dated
07.02.2017&22.03.2018 has also been sent to the
Government for the appointment of one more
Independent Director.
2 The Audit Committee constituted is On the appointment of Dr. Sivadasan as

consequently not in conformity with Independent Director of Kerala State Electricity
Sec.177 (2) of the Companies Act, 2013. Board Limited, the already constituted Audit
Committee without having Independent
Director as member, had been reconstituted
in the 27th meeting of the Board of Directors
held on 29.07.2016, vide proceedings on
Agenda No.34-07/2016 with Dr. V. Sivadasan,
Independent Director as Chairman and Sri. N.S.
Pillai IA&AS, Director (Finance) & Sri. O. Asokan
Director (CP&SCM) as members. Consequent
to the retirement of Sri. O. Asokan Director
(CP&SCM) on Superannuation as on 31.05.2017,
this Audit Committee is again reconstituted in
the 33rd meeting of the Board of Directors held
on 18.07.2017, vide proceedings on Agenda
No. 04-07/2017 with Dr. V. Sivadasan,
Independent Director as Chairman and Sri. N. S.
Pillai, Director (Finance) &
Sri. N. Venugopal, Director (CP, G-E, SCM & Safety)
as members. Presently the Audit Committee
161
conducts meetings regularly in compliance

with the provisions of Companies Act, 2013.
3 The Company has not constituted a Kerala State Electricity Board Limited being a
Nomination and Remuneration Committee Company fully owned by Government of Kerala,
as envisaged in Sec 178 (1) of the Companies the power of appointment of the Directors is
Act, 2013 read with Rule 6 of the Companies vested on the Government of Kerala and for
(Meetings of the Board and its Powers) permanent employees at the entry level other
Rules, 2014. than compassionate and sports recruitment
are done through Kerala Public Service
Commission (KPSC). All rules applicable for
State Government employee viz., KSR and 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 wage negotiation between
recognized Trade Union & 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.
4 As per Sec. 203(1) of the Act, the Company The Government of Kerala vide G.O.(MS)
shall have a company Secretary who shall be No.25/2015/PD dated 08.06.2015 had accorded
a Key Managerial Person. The Chief Internal sanction to create one post each of Company
Audit Officer who is holding a higher post Secretary and Assistant Company Secretary
is having additional charge of Company with Pay scale of Deputy Chief Engineer and
Secretary. This is not in conformity with the Assistant Executive Engineer respectively.
Further the Government vide G.O.(MS)
spirit of relative provisions of Companies
No.32/2015 ordered to fill up the post of Assistant
Act, 2013.
Company Secretary from qualified hands
within Kerala State Electricity Board Limited.
Accordingly Smt. Lekha. G, Finance Officer was
appointed as the Assistant Company Secretary
since she was the lone qualified candidates
among servicing employees and she has also
been entrusted the with full additional charge
of Company Secretary until further orders.
162
Meanwhile Smt. Lekha. G., was appointed as

the Chief Internal Auditor with Pay scale above
that of Company Secretary through Kerala
Public Service Commission. Since the post of
Company Secretary could not be left vacant
due to statutory obligations the Board vide B.O.
(FTD) No. 2613/2017 (Estt.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. Necessary steps has
already been taken up with the Kerala Public
Service Commission for the appointment of
Company Secretary.
D(3) There is a Committee of Full Time Directors In erstwhile Kerala State Electricity Board,
to carry on the day to day functioning/ Full Time Member (FTM) Meetings were held
oversee working of the routine functions. from time to time to manage the day to day
As required in Sec 118(1) of the Companies and operational matter of the Board. After
Act, 2013 read with Rule 3(12) (c) of the coporatization of Kerala State Electricity Board,
Companies (Meetings of the Board and its the Board of Directors in its 12th meeting held
on 12.12.2013 decided to constitute a committee
Powers) Rules 2014, the Company is not
of Full Time Directors (Similar to the (FTM)
keeping a record of the meetings of this
of erstwhile KSEB) to ensure the smooth
Committee and its decisions are not placed
functioning of the day to day and operational
before the Board of Directors except in
maters of the company. The Government as per
circumstances where it is necessary to get
G.O (Rt.) No.71/2014/PD Thiruvananathapuram
Board approval to implement the decision dated 26.02.2014 have ratified the formation
of the Committee. of the committee of Full Time Directors in
accordance with Clause 37 of Articles of
Association of Kerala State Electricity Board
Limited.
The Full Time Directors, being a Committee of
Directors, though are required to comply with
the provisions of Companies Act, procedure
of maintaining minutes was not followed due
to the administrative inconvenience as most
of the decisions are to be taken urgently.
The practice being followed is that Full Time
Directors Meetings are convened by the
Committee to discuss day to day matters of the
Company without sticking on to any fixed date
and time. The decisions of Full Time Directors
are communicated in the form of Board Order
and hence transparency is ensured.
Sd/-
CHAIRMAN & MANAGING DIRECTOR
163

Balance Sheet for 2016-17
Particulars Note No As at As at As at
31.03.2017 31.03.2016 31.03.2015
(`.in Lakhs) (`.in Lakhs) (`.in Lakhs)
ASSETS
Non current assets
Property, Plant and Equipment 2 2,068,736 1,992,032 1,980,016
Capital work-in-progress 3 178,329 173,493 127,805
Financial Assets
Investments 4 2,000 2,000 1,950
Loans 5 8,390 8,725 8,486
Others 6 55,070 53,081 51,215
Deferred Tax Assets (Net) - - -
Other non-current assets 7 493,289 717,785 683,857
Current assets
Inventories 8 31,019 29,204 24,183
Trade receivables 9 192,340 159,280 138,867
Cash and cash equivalents 10 23,603 16,643 15,936
Bank balances Other than Cash Equivalents 11 6,828 7,520 5,525
Other current assets 12 8,047 7,747 10,629
Total Assets
3,067,651 3,167,509 3,048,470
Equity
Equity Share capital 13 349,905 349,905 349,905
Other Equity 14 -740,788 -218,491 -148,729
Liabilities
Non-current liabilities
Borrowings 15 426,657 152,515 120,996
Other Financial Liabilities 16 311,597 279,628 247,907
Provisions 17 2,028,767 1,658,842 1,608,779
Deferred tax liabilities (Net) - - -
Other non-current liabilities 18 142,922 85,110 46,636
Current liabilities
164
Particulars Note No As at As at As at
31.03.2017 31.03.2016 31.03.2015
(`.in Lakhs) (`.in Lakhs) (`.in Lakhs)
Financial Liabilities
Borrowings 19 276,746 435,468 459,988
Trade payables 20 81,847 69,404 60,948
Other financial liabilities 21 189,998 353,043 299,957
Provisions 22 - 2,085
Total Equity and Liabilities 3,067,651 3,167,509 3,048,470
Sd/- Sd/-
N.S.PILLAI IA & AS N. VENUGOPAL
CHAIRMAN AND MANAGING DIRECTOR DIRECTOR
DIN:07282785 (Corp. Planning, SCM, Safety &GE)
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 ISSAC&SURESH FOR ANANTHAN&SUNDARAM For G.VENUGOPAL KAMATH &Co.

FRN:001150S FRN:000148S FRN:004674S
Sd/- Sd/- Sd/-

SOBHA SETHUMADHAVAN FCA C.A.HARIKRISHNAN.R.S.M.Com,DISA, FCA RAVINATH.R.PAI FCA
M. No.225166 M.No.230338 M.No.226547
Date:01.03.2018
165

Statement of Profit and Loss for 2016-17
Particulars Note No. (Rs. in lakhs)

For the year ended For the year ended
31st March 2017 31st March 2016
REVENUE
I Revenue From Operations 23 1,121,883 1,091,444
II Other Income 24 40,078 31,603
III Total Income (I+II) 1,161,960 1,123,047
IV EXPENSES
Purchase of Power 25 739,332 649,491
Generation of Power 26 2,345 10,426
Repairs & Maintenance 27 26,513 26,050
Employee benefits expense 28 336,077 310,455
Finance costs 29 95,992 85,139
Depreciation and amortization expense 30 71,888 69,962
Other Expenses - -
Administrative Expenses 31 37,479 32,958
Others 32 8,364 9,560
ADD CHANGES IN FAIR
VALUATION AND OTHER ADJ 33 -6,566 -1,296
Total expenses (IV) 1,311,423 1,192,743
V Profit/(loss) before exceptional items
and tax (III- IV) -149,463 -69,697
VI Exceptional Items - -
VII Profit/(loss) before tax (V-VI) -149,463 -69,697
VIII Tax expense:
(1) Current tax - -
(2) Deferred tax - -
IX Profit (Loss) for the period from
continuing operations (VII-VIII) -149,463 -69,697
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) -149,463 -69,697
XIV Other Comprehensive Income - -
166
Particulars Note No. (Rs. in lakhs)

For the year ended For the year ended
31st March 2017 31st March 2016
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 for the period) -149,463 -69,697
XVI Earnings per equity share
(for continuing operation):
(1) Basic (`) -4.27 -1.99
(2) Diluted (`) -4.27 -1.99
XVII Earnings per equity share
(for discontinued operation):
(1) Basic - -
(2) Diluted - -
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167
Cash Flow Statement for the period ended 31st March 2017
Particulars Amount (` In lakhs)
2016-17 2015-16
CASH FLOW FROM OPERATING ACTIVITIES
PROFIT BEFORE TAX (As per Ind AS) -149,463 -69,697
CAPITAL CHANGES -149,463 -69,697
Depreciation 71,888 69,962
Finance cost 95,992 85,139
Investment income -24 -22
Interest Income -719 -965
Prior period interest and finance charges 18 1,427
Operating profit before working capital changes 17,692 85,845
Adjustments for:
Changes in Inventories -1,815 -5,021
Changes in Sundry Debtors -33,060 -20,413
Changes in Other Current Asset -300 2,884
Changes in Current Liabilities and Provisions -323,851 28,567
Changes in Trade Payable 12,443 8,456
Cash generated from Operations -328,892 100,319
Income Tax 0 0
Net cash flow from /(used in) Operating Activities(A) -328,892 100,319
CASH FLOW FROM INVESTMENT ACTIVITIES
Change in Fixed Asset -148,592 -83,015
Other Adjustments in fixed assets - 1,038
Changes in Capital Work-in Progress -4,836 -45,688
Income from Investment 24 22
Change in Investments - -50.00
Interest from Banks 719 965
Change in Capital Advance -1,989 -1,865
Long Term Loans & Advances 224,831 -34,153
Net cash flow from / (used in) Investment Activities(B) 70,157 -162,747
CASH FLOW FROM FINANCING ACTIVITIES
Changes in Equity Capital -372,834 -81
Changes in Provisions 369,925 50,063
Changes in Financial Liabilties 31,969 31,721
Changes in Long Term Borrowings 274,141 31,519
168
Particulars Amount (` In lakhs)

2016-17 2015-16
Interest and Other cost of raising Finance -95,992 -85,139
Changes in Other Non Current Liabalities 57,812.56 38,474.24
Prior Period Interest and Finance charges -18 -1,427
Net cash flow from / (used in) Financing Activities(C) 265,004 65,131
6,268 2,703
NET CHANGE IN CASH & CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING 24,163 21,460
CASH AND CASH EQUIVALENTS AT THE END 30,431 24,163
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169

Statement of Changes in Equity for the year ended on 31st March 2017

A: EQUITY SHARE CAPITAL Amount Rs.in lakhs
Balance as at 1st April 2015 Changes in Balance as at Changes in Equity Balance as at

equity share 31st March 2016 share capital 31st March 2017
capital during during the year
the year
349,905.00 - 349,905.00 - 349,905.00
B. OTHER EQUITY
Statement of Changes in Equity Amount (Rs. In lakhs)

Particulars As at 31.03.2017 As at 31.03.2016 As at 01.04.2015
Capital Reserve - - -
Security Premium Account - - -
Bonds/Debenture Redemption Reserve - - -
General Reserve - - -
Retained Earnings -740,788.01 -218,490.79 -148,729.00
Other Reserves - - -

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 -218,410.04 -148,729.00 -
Add: Profit During the Year -149,462.85 -69,681.04 -
(Less) : Transfer to Reserves - - -
(Less) : Dividend and Corporate Dividend Tax - - -
As at Balance Sheet Date -367,872.89 -218,410.04 -148,729.00
170

Other Reserves - Fair Value through
Other Comprehensive Income
As per Last Balance Sheet -80.75 - -
Add: Fair value gain/(loss) During the Year -372,834.37 -80.75 -
As at Balance Sheet Date -372,915.13 -80.75 -
Total -740,788.01 -218,490.79 -148,729.00
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171

Reconciliation as on Transition Date - 01.04.2015
Sl. Amount
No Particulars (Rs. In lakhs)
A Total equity(shareholders's funds) as per previous GAAP on 01.04.2015 219,862

Add/(Less): Adjustments under Ind AS
1 Audit Qualification Adjustments -21,151
2 Policy Changes on Amortisation of Grant -
Consumer Contribution 2,100
Regular Grant 365
B Total Adjustments -18,686
C Total equity(shareholders's funds) as per Ind AS on 01.04.2015 (A+B) 201,176
Reconciliation as on Comparable Date - 31.03.2016 (2015-16)

Sl. Amount
Add/(Less): Adjustments under Ind AS -
1 Previous year adjustments -18,686
Current year adjustments -
2 Adjustments on Qualifications -39,729
3 Policy Changes on Amortisation of Grant 1,299
4 Changes in the Fairvalue of interest -2
C Total equity (shareholders's funds) as per Ind AS on 31.03.2016 (A+B) 131,414
Reconciliation as on Balance Sheet Date - 31.03.2017
Sl. Amount
Add/(Less): Adjustments under Ind AS -
1 Previous year adjustments -57,119
Current year adjustments -
2 Adjustments on Qualifications 9,128
3 Adjustment on Fair value changes of interest 3,372
4 Adjustment on Fair value changes of loan 1,025
5 Adjustment on Fair value changes of grant -1,008
6 Policy Changes on Amortisation of Grant 3,177
7 Adjustment on account of OCI -372,747
C Total equity(shareholders's funds) as per Ind AS on 31.03.2017 (A+B) -390,883
172
RECONCILIATION OF BALANCE SHEET ITEM AS REPORTED UNDER IGAAP AND IND AS
Particulars 2016-17 2015-16 2014-15
Amount (Rs. in Lakhs) Amount (Rs. in Lakhs) Amount (Rs. in Lakhs)
IGAAP Adjust- IND AS I GAAP Adjust- IND AS IGAAP Adjust- IND AS
16-17 ments 16-17 15-16 ments 15-16 14-15 ments 14-15
ASSETS
Non current assets

Property, Plant and Equipment 2,088,841 20,104 2,068,736 2,005,523 -13,491 1,992,032 1,980,801 -786 1,980,01
Capital work-in-progress 218,921 40,592 178,329 200,380 -26,887 173,493 148,137 -20,332 127,805
Financial Assets - - - - - -
Investments 2,000 - 2,000 2,000 - 2,000 1,950 - 1,950
Loans 8,585 196 8,390 8,672 54 8,725 8,450 37 8,486
Others (to be specified) 55,139 69 55,070 53,081 - 53,081 51,215 - 51,215
Deferred Tax Assets (Net) - - - - - - - - -
Other non-current assets 493,595 306 493,289 717,828 -43 717,785 683,857 - 683,857
Current assets - - - - - -
Inventories 30,999 -20 31,019 29,011 193 29,204 23,990 193 24,183
Trade receivables 192,340 - 192,340 159,280 - 159,280 138,867 - 138,867
Cash and cash equivalents 23,603 - 23,603 16,643 - 16,643 15,936 - 15,936
Bank balances Other than
Cash Equivalents 6,828 - 6,828 7,520 - 7,520 5,525 - 5,525
Other current assets 8,075 28 8,047 9,076 -1,330 7,747 10,586 43 10,629
Total Assets 3,128,925 3,067,651 3,209,013 3,167,509 3,069,314 3,048,470

Equity - - -
Equity Share capital 349,905 - 349,905 349,905 - 349,905 349,905 - 349,905
173
174
Other Equity -326,617 414,171 -740,788 -161,372 -57,119 -218,491 -130,043 -18,686 -148,729
Liabilities - - - - -
Non-current liabilities - - - - -
Financial Liabilities - - - - -
Borrowings 453,692 27,035 426,657 172,018 -19,502 152,515 169,935 -48,939 120,996
Other Financial Liabilities 311,597 - 311,597 279,628 - 279,628 247,907 - 247,907
Provisions 1,656,020 -372,747 2,028,767 1,657,416 1,426 1,658,842 1,608,779 - 1,608,779
Other non-current liabilities 143,298 376 142,922 83,206 1,904 85,110 50,012 -3,376 46,636
Current liabilities - - - - -
Financial Liabilities - - - - -
Borrowings 255,366 -21,380 276,746 420,527 14,941 435,468 411,048 48,939 459,988
Trade payables 91,964 10,117 81,847 52,614 16,790 69,404 60,948 - 60,948
Other financial liabilities 193,700 3,702 189,998 352,986 57 353,043 298,738 1,219 299,957
Provisions - - - 2,085 - 2,085 2,085 - 2,085
Total Equity and Liabilities 31,28,925 30,67,651.15 32,09,012.96 31,67,508.97 30,69,314 30,48,470
RECONCILIATION OF STAEMENT OF PROFIT OR LOSS AS REPORTED UNDER IGAAP AND IND AS
S. Particulars I GAAP Adjustments IND AS 16-17 I GAAP 15-16 Adjustments IND AS 15-16
No 16-17
REVENUE
I Revenue From Operations 11,21,912 -29 11,21,883 10,91,444 - 10,91,444
II Other Income 36,775 3,302 40,078 33,271 -1,668 31,603
III Total Income (I+II) 11,58,687 3,273 11,61,960 11,24,715 -1,668 11,23,047
IV EXPENSES
Purchase of Power 7,66,440 -27,108 7,39,332 6,33,682 15,809 6,49,491
Generation of Power 2,345 - 2,345 10,426 - 10,426
Repairs & Maintenance 26,690 -177 26,513 25,976 75 26,050
Employee benefits expense 3,37,376 -1,298 3,36,077 3,10,453 1 3,10,455
Finance costs 92,293 3,699 95,992 85,141 -2 85,139
Depreciation and amortization
expense 52,066 19,822 71,888 49,122 20,840 69,962
Other Expenses - - - - - -
Administrative Expenses 37,872 -393 37,479 32,788 170 32,958
Others 8,851 -487 8,364 8,458 1,102 9,560
ADD CHANGES IN FAIR VALUATION
AND OTHER ADJ - -6,566 -6,566 - -1,296 -1,296
Total expenses (IV) 13,23,933 -12,509 13,11,423 11,56,044 36,699 11,92,743
V Profit/(loss) before exceptional items
and tax (III- IV) -1,65,245 15,782 -1,49,463 -31,329 -38,367 -69,697
VI Exceptional Items - - -
VII Profit/(loss) before tax (V-VI) -1,65,245 15,782 -1,49,463 -31,329 -38,367 -69,697
VIII Tax expense:
(1) Current tax - -

(2) Deferred tax - -
IX Profit (Loss) for the period from
175
continuing operations (VII-VIII) -1,65,245 15,782 -1,49,463 -31,329 -38,367 -69,697
176
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) -1,65,245 15,782 -1,49,463 -31,329 -38,367 -69,697
XIV Other Comprehensive Income -
A (i) Items that will not be
reclassified to profit or loss -
will not be reclassified to profit
or loss -
B (i) Items that will be reclassified

to profit or loss -
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) -1,65,245 15,782 -1,49,463 -31,329 -38,367 -69,697

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.
These are the Kerala State Electricity Board Limited’s first Ind AS compliant financial statements
and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied. For all the
periods upto and including 31 March 2016, the Company had prepared its financial statements
in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting
standards specified under Section 133 of the Companies Act, 2013, 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. The Company followed the
provisions of Ind AS 101 in reinstating its opening Balance Sheet in Ind AS Framework as of the
date of transition, viz. 1 April 2015. Some of the Company’s Ind AS accounting policies used in
the opening Balance Sheet are different from its previous GAAP policies applied as at 31 March
2015, and accordingly the adjustments were made to restate the opening balances as per Ind
AS. The resulting adjustments arose from events and transactions before the date of transition
to Ind AS. Therefore, as required by Ind AS 101, those adjustments were recognized directly
through retained earnings as at 1 April 2015. This is the effect of the general rule of Ind AS 101
which is to apply Ind AS retrospectively.
The Company has elected to avail the exemption granted by IND AS 101, “First time adoption
of IND AS” to regard those heads at the date of the transition to IND AS (i.e. as on April 1, 2015)
wherever applicable.
An explanation of how the transition to Ind AS has affected the reported financial position,
financial performance and cash flows of the Company is provided as a reconciliation statement
annexed.
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
177
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 financial statements.
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.
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.
178
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 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
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
179
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 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.
1.7. 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. Capital work in Progress up to March 31, 2015 were carried in
the Balance Sheet in accordance with Indian GAAP.
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 and General Administration expenses of various units are allocated to “Revenue
expenses pending allocation over capital works” on the basis of following ratio
Units Employee cost Admn. & General Exps.
Generation 100% for offices exclusive 100% for offices
for Civil works. exclusive for Civil works.
Transmission 25% 25%
Distribution 5% NIL
HO 5% 5%
Advertisement charges relating to capital equipment and 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
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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
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 credited to Material cost variance debit balance if any in the account is charged to profit and
loss account.
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.
181
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 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.
• Quantitative disclosures of fair value measurement hierarchy
• Investment properties
• Financial instruments
1.12. Government Grant
Grants and subsidies from the government are recognised when there is reasonable assurance
182
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. The age wise analysis and corresponding provisions for the period is not incorporated
in the accounts.
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
183
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
(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
184
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 should be operationalisedoperationalized
during the financial year 2014-15 and the pension to be disbursed through this Trust. Though
the Master Trust was 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 the company. However, the company 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.
1.15. 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.
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 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.
185
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
InstrumentsSecurities details of secured loans:. 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 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 2016-
186
17 or in the reported comparative periods.
1.21. .CProvisions 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.Reinstatement of figures of comparative years
Account balances of the previous year has been reinstated on account of compliance with Ind
AS requirements. The reconciliation has been given in the respective note.
1.24. 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.
1.25.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 Ind AS (Rs. 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 - 2015 1,67,379 66,747 48,329 15,81,080 1,16,402 6,87,005 2,981 1,897 9,123 1 26,80,944
Additions 3,945 1,044 2,905 15,616 638 48,570 214 140 771 0 73,844
Deductions - - - - - - - - - - -
Other Adjustments -1,038 47 3 4 -60 6 - - - - -1,038
At 31 - March - 2016 1,71,218 67,991 51,475 15,99,101 1,17,103 7,40,844 3,200 2,080 9,909 1 27,62,922
Additions 6,127 10,747 7,767 35,007 15,973 68,902 830 143 3,096 0 1,48,592
Deductions - - - - - - - - - - -
Other Adjustments 1,038 (47) (3) 23 60 160 - - - - 1,231
At 31 - March - 2017 1,77,345 78,738 59,241 16,34,108 1,33,076 8,09,746 4,031 2,223 13,006 2 29,11,515
Accumulated
Depreciation &
Impairment of Asset
At 1 - April - 2015 - 26,376 12,297 2,75,960 42,047 3,36,464 1,513 1,549 4,722 - 7,00,929
Depreciations Expenses - 2,018 1,604 25,107 5,563 34,309 178 89 1,093 - 69,962
Deductions - - - - - - - - - - -
Other Adjustments - - - - - - - - - - -
At 31 - March - 2016 - 28,394 13,902 3,01,067 47,609 3,70,773 1,691 1,638 5,816 - 7,70,891
Deductions - - - - - - - - - - -
At 31 - March - 2017 - 30,605 15,740 3,24,674 53,952 4,07,140 1,895 1,736 7,035 - 8,42,778
Carrying Value - - - - - - - - - - -
At 31 - March - 2017 1,77,345 48,133 43,502 13,09,434 79,124 4,02,605 2,136 487 5,970 2 20,68,736
At 31 - March - 2016 1,71,218 39,597 37,573 12,98,034 69,493 3,70,071 1,509 441 4,094 1 19,92,032
At 01 - April - 2015 1,67,379 40,371 36,032 13,05,120 74,356 3,50,541 1,468 348 4,401 1 19,80,016

Note 3 : Capital Work in Progress
Particulars (Rs. In Lakhs)
As at 31.03.2017 As at 31.03.2016 As at 31.03.2015
Capital Work in Progress 1,54,833 1,36,596 1,03,485
Revenue Expenses Pending

Allocation over capital works 23,496 36,897 24,321
Total 1,78,329 1,73,493 1,27,805
Note 4 : Investment (Non Current )
Particulars
As at 31.03.2017 As at 31.03.2016 As at 01.04.2015
Face No. of Amo- Face No. of Amo- Face No. of Amo-

Value Shares unt Rs. Value Shares unt Rs. Value Shares unt Rs.
(in (in (in (in (in (in
lakhs) lakhs) lakhs) lakhs) lakhs) lakhs)
INVESTMENT IN
EQUITY
INSTRUMENTS
Unquoted
Investments
Fully Paid Up - Kerala
Power Finance
Corporation Ltd. 10 95 950 10 95.001 950 10.00 95.001 950
Baitarani West Coal

Company Ltd. 1,000 1 1,000 1,000 1 1,000 1,000.00 1 1,000
Investment in
Renewable Power
Corporation
of Kerala 1,000 0.05 50 1,000.00 0.05 50 - - -
Other Investments 0.01 - - - - - -
Total 2,000.01 2,000.01 1,950.01
189

Note 5 : Non Current Assets - Financial Assets - Loans
Particulars (Rs. In lakhs)

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Loans Including Interest Accrued
Loans to related parties
Secured Loans 0 0 0
Unsecured Loans Considered Good 0 0 0
Doubtful Loans 0 0 0
Loans to Employees
Secured Loans 0 0 0
Other Loans
Secured Loans 0 0 0
Advance given to licensee - 103 103
Advance given to others 8,390 8,622 8,383
Doubtful Loans - - -
Total 8,390 8,725 8,486
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 - - -
Note 6 : Non Current Assets - Other Financial Assets

As at As at As at
31.03.2017 31.03.2016 01.04.2015
BANK DEPOSITS WITH MORE THAN 12
MONTHS MATURITY
Interest Accrued
On Loan to Government & Others 0 0 0
On Bank Deposits with more than 12 months 0 0 0
Security Deposits 55,070 53,081 51,215
Total 55,070 53,081 51,215
190

Note 7 : Other Non Current Assets

As at As at As at
31.03.2017 31.03.2016 01.04.2015
OTHER NON CURRENT ASSETS
Capital Advances
Secured Advances
Unsecured Advances Considered Good
Covered by Bank Guarantee
Others 13,661 10,493 12,678
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 10,239 9,368 8,361
Receivable from Government 4,69,390 6,97,924 6,62,818
Total 4,93,289 7,17,785 6,83,857
CAPITAL ADVANCE INCLUDES ADVANCE GIVEN TO COMPANIES IN WHICH ONE OR MORE OF
THE DIRECTORS ARE INTERESTED
Note 8 : Inventories
Particulars Ind As (Rs. In lakhs)

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Fuel Stocks 0 584 1116
Heavy Duty Oil 750 0 0
Stock of Materials at Construction Stores 5610 7967 6150
Stock of Materials at other stores 5025 4922 2169
Material at Site (Cap) 0 0 0
Material at Site (O & M) 18365 13490 12541
Other Materials Account 1295 2259 2225
(Less) Provision for Shortages and Obsolescence 27 18 17
Total 31019 29204 24183
191

Note 9 Current Financial Assets : Trade Receivables

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Trade Receivables
Secured, considered good
Sundry Debtors for Sale of Power 2,42,240 2,11,853 1,95,600
Sundry Debtors for Inter State Sale of Power 293 293 307
Sundry Debtors for Electricity Duty 14,991 13,611 11,917
Sundry Debtors (Miscellaneous) 13,745 12,453 9,974
Doubtful. - - -
(Less) Allowance for Bad and Doubtful Debts 78,931 78,931 78,931
Total 1,92,340 1,59,280 1,38,867
Note 10 : Current Financial Assets - Cash & Cash Equivalents

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Balances with Banks (of the nature of cash and
cash equivalents)
Balance with Bank/Treasury 2,210 1,937 1,082
Disbursement Bank Accounts 17,878 2,542 1,411
Drawing Account with Treasury 238 8,314 8,507
Current Accounts
Deposits with original maturity upto three months 2,820 2,743 3,720
Cheques, drafts on hand
Cash on hand
Cash In Hand 434 1,049 1,163
Cash Imprest with Staff 24 59 54
Others
Total 23,603 16,643 15,936
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 As at As at
31.03.2017 31.03.2016 01.04.2015
Balances with Banks includes
Deposits with original maturity more than 3
months but within 1 year 0 0 0
Earmarked Balance with Banks - Unpaid Dividend 0 0 0
Margin Money or Security Against the Borrowings,
Guarantees & Other commitments 6,828 7,520 5,525
Total 6,828 7,520 5,525
Bank Balances year wise
Year 14-15
Name of the bank Amount Date of
(Rs. In lakhs) Maturity
State bank of Travancore 1,421 20.05.2015
Canara Bank 242 01.11.2015
Punjab & Sind Bank 2,500 01.09.2015
South Malabar Gramin Bank 76 16.03.2016
North Malabar Gramin bank 162 25.03.2016
Year 15-16
State bank of Travancore 1,555 20-May-16
Canara Bank 263 11-Jan-17
Vijaya Bank 332 16-Dec-16
State Bank Of India 58 29-Mar-17
Punjab & Sind Bank 2,500 09-Jan-17
South Malabar Gramin Bank 254 28-Mar-17
Year 16-17
State bank of Travancore 1,676.6 20-May-17
Canara Bank 172.8 31-May-17
State Bank Of India 89.3 30-Mar-18
Vijaya Bank 940.1 17-Dec-17
Punjab & Sind Bank 2,500.0 09-Jan-17
Kerala Gramin Bank Peroorkada 76.2 25-May-20
Kerala Gramin Bank Kollam Branch 192.1 29-Mar-18
193

Note 12 : Other Current Assets

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Security Deposits 0 0 0
Advances to Related Parties 0 0 0
Advances to Employees 814 677 593
Advance to Contractors & Suppliers 751 1,030 1,078
Other Advances 1,738 1,689 3,295
Advance Income Tax/Deductions at source
Others
Secured considered good 0 0 0
Unsecured considered good 0 0 0
Rent Receivable 8 8 8
Income Accrued But Not Due 2,167 2,281 2,455
Other Recoverable 1,034 750 812
Inter Unit Balance 1,537 1,312 2,390
Total 8,047 7,747 10,629
194
Note 13 : Equity Share Capital
Particulars As at 31 - March - 2017 As at 31 - March 2016 As at 01 - April - 2015

No. of Shares Amount No. of Shares Amount No.of Shares Amount
(In Lakhs) (Rs. In Lakhs) (In Lakhs) (Rs. In Lakhs) (In Lakhs) (Rs. In Lakhs)
Equity Share Capital
Authorised (face value `10/-) 50,000.00 5,00,000.00 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 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 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 34,990.50 3,49,905.00
Total 34,990.50 3,49,905.00 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 - 2017 As at 31.03.2016 As at 01 - April - 2015
Amount Amount Amount
% (Rs. In Lakhs) % (Rs. In Lakhs) % (Rs. In Lakhs)
His Excellency the Honourable
Governor of Kerala 100 349905 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 31.03.2017, 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 As at As at As at
31.03.2017 31.03.2016 01.04.2015
Capital Reserve 0 0 0
Security Premium Account 0 0 0
Bonds/Debenture Redemption Reserve 0 0 0
General Reserve 0 0 0
Retained Earnings -7,40,788 -2,18,491 -1,48,729
Other Reserves 0 0 0
31.03.2017 31.03.2016 01.04.2015
General reserve
As per Last Balance Sheet 0 0 0
Add: Additions and Transfers 0 0 0
(Less) : Utilisation 0 0 0
As at Balance Sheet Date 0 0 0
0 0 0
As per Last Balance Sheet -2,18,410 -1,48,729 0
Add: Profit During the Year -1,49,463 -69,681 0
(Less) : Transfer to Reserves 0 0 0
(Less) : Dividend and Corporate Dividend Tax 0 0 0
As at Balance Sheet Date -3,67,873 -2,18,410 -1,48,729
Other Reserves - Fair Value through Other
Comprehensive Income
As per Last Balance Sheet -81 - 0
Add: Fair value gain/(loss) During the Year -3,72,834 -81 0
As at Balance Sheet Date -3,72,915 -81 0
Total -7,40,788 -2,18,491 -1,48,729
197

Note 15 : Non Current Financial Liabilities - Borrowings

31.03.2017 31.03.2016 01.04.2015
Bonds or Debentures
Secured Bonds or Debentures - - -
Unsecured Bonds or Debentures - - -
Term Loans*
From Banks
Secured Loans - - -
Unsecured Loans - - -
From Others
Secured Loans 4,26,657 1,52,515 1,20,996
Loans from related parties
Secured Loans - - -
Unsecured Loans Considered Good - - -
Total 4,26,657 1,52,515 1,20,996
*Details of terms of repayment and rate of interest
Loan Name (Rs. In lakhs)

2016-17 2015-16 2014-15
Loan from L I C 200 400 800
Loan from REC on Various Schemes 1,611 4,304 7,341
Loan from REC R-APDRP PART-B 38,626 27,571 20,581
Loan from R E C - RGGVY 1,427 1,090 1,412
Loan from REC - Medium Term Loan - - 13,333
Loan from PFC-Pallivasal Generation Project 18,553 18,290 18,851
Loan from PFC R-APDRP 29,086 25,100 25,100
Loan from SOUTH INDIAN BANK 8,513 9,000 -
Loan from PFC GEL Kakkayam 1,225 880 -
Loan from REC-TRAN.Kattakkada -
Pothencode Scheme 9,529 10,740 13,659
Loan from REC-TRAN-Group I 5,531 4,137 2,214
Loan from REC-Distribution - 23 Circle Scheme 49,408 39,405 10,238
198
Loan from REC- Distribution - Meter Scheme 4,998 6,224 7,468

Loan from REC-Thottiyar Gene. Scheme 5,373 5,373 -
Special Loan Assistance from REC 1,25,000 - -
Loan from REC for the DDG Scheme 13 - -
Special Loan Assistance from PFC 1,25,000 - -
Loan from PFC GEL Perumthenaruvi 1,660 - -
Dam Rehabilitation and Improvement Project (DRIP) 860 - -
Loan from RIDF of NABARD 45 - -
Total 4,26,657 1,52,515 1,20,996
199

Note 16 : Non Current-Other Financial liabilities
Particulars Amount (Rs. In lakhs)
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Security deposit from consumers 2,59,751 2,28,732 1,97,531
Security deposit from consumers other than cash 18,749 19,171 20,075
Interest payable on consumers deposit 33,097 31,725 30,301
Total 3,11,597 2,79,628 2,47,907
Note 17 : Non Current Provisions
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Provision for Employee Benefits - - -
Contributory Provident Fund - - -
General provident Fund - - -
As at Balance Sheet Date 2,02,993 1,48,152 1,32,025
Staff Pension Fund - - -
Others - - -
Provision for Interest on bonds adjustable
against Electricity duty - - -
Provision for Pay revision - - -
As at Balance Sheet Date - 49,500 15,600
Provision for pension revision - - -
Total 20,28,767 16,58,842 16,08,779
200

Note 18 : Other Non Current Liabilities
Particulars As per Ind AS (Rs. In lakhs)
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Decommissioning Liability 1,838 1,617 -
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 51,809 18,236 9,744
Grants to be Amortised - Concessional Loan
from Government
Add: Grants recognised during the year - - -
Add/Less : Fair Value Changes - - -
As at Balance Sheet Date 4,988 4,561 -
Consumer Contribution
Add: Received during the year - - -
(Less) : Amortisation - - -
- - -
Total 1,42,922 85,110 46,636
201

Note 19 : Current Financial Liabilities - Borrowings
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Loans repayable on demand
From Banks
Secured Loans - 33,190 19,407
Current maturities of long term debt 21,380 14,941 48,939
Unsecured Loans 2,55,366 3,87,337 3,91,641
From Others
Secured Loans
Unsecured Loans
Secured Loans
Unsecured Loans
Total 2,76,746 4,35,468 4,59,988
Note 20 : Current Financial Liabilities - Trade Payables

As at As at As at
01-04-2015 01-04-2016 01-04-2017
Trade Payable 60,947.55 69,403.87 81,846.53
202

Note 21 : Current - Other Financial Liabilities
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Current Maturities of Long-Term Debt
Current Maturities of Finance Lease Obligations
Interest Accrued
Unpaid Dividends
Others
Fuel related liabilities 0 618 530
Liability for capital supply/works 4,505 3,502 3,435
Liability for O&M supply/works 8,149 8,991 3,772
Staff related liabilities and provisions 14,674 20,116 27,419
Deposit and Retentions from Suppliers/Contractors 71,670 60,387 49,491
Electricity Duties and Other levies payable to Government 0 1,79,434 1,46,781
Liability for Expenses 2,466 2,105 1,561
Amount owing to Licensees 16 16 16
Accrued/Unclaimed amount relating to borrowings 15,557 13,104 9,736
Other Liabilities & Provisions 10,341 11,419 11,520
Deposit for Electrification, Service connection etc 62,620 53,350 45,694
Total 1,89,998 3,53,043 2,99,957
Note 22 : Current Provisions

Particulars As per Ind As(Rs. In lakhs)
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Provision for Employee Benefits
Dearness Allowance
As per Last Balance Sheet
Add: Additions and Transfers
(Less) : Utilisation
As at Balance Sheet Date - 1,365.00 1,365.00
Dearness Relief to Pensioners
As at Balance Sheet Date - 720.00 720.00
Income Tax
As at Balance Sheet Date -
Total - 2,085.00 2,085.00
203

Note 23 : Revenue from operations

2016-17 2015-16
Interstate - 3
Domestic 3,95,334 3,74,410
Commercial 2,70,904 2,44,850
Public Lighting 15,664 15,636
Irrigation & Dewatering 10,201 6,562
Industrial L T 75,472 74,663
Railway Traction 13,052 12,086
Bulk Supply 36,325 34,704
Miscellaneous 91 24
H. T. 2,36,138 2,26,147
E. H. T. 49,270 55,518
NVVN/ Others 1,227 4,167
Reactive Energy Charges 544 180
Electricity Duty Recovery 76,223 70,926
Other State Levies Recovery 1,398 1,330
Meter Rent/Service Line Rental 9,204 9,013
Wheeling Charges Recoveries 40 19
Misce. Charges from Consumers 8,418 33,461
GROSS SALE OF POWER 11,99,504 11,63,700
Less: Electricity Duty Payable (Contra ) 76,223 70,926
Less: Other State Levies Payable (Contra ) 1,398 1,330
Total 11,21,883 10,91,444
Note 24. a) Other Operating Income

2016-17 2015-16
Rebate Received 14,246 12,355
Interest Advances to Suppliers/Contractors 85 176
Income from sale of Scrap/Tender form etc 7,885 4,986
Miscellaneous Receipts 17,096 13,073
Dividend Income - 22
Total 39,312 30,612
204
Note 24. b) Other Income

2016-17 2015-16
Interest Income
Staff Loans and Advances 22 27
Income From Loans &others 24 -
Banks 719 965
Total 766 991
Total (a+b) 40,078 31,603
Note 25 : Purchase of Power

2016-17 2015-16
Power purchased from Central Generating Stations 2,57,310 2,69,823
Power purchased from Others 4,28,979 3,33,492
Power purchased from Wind Generating Stations 2,966 1,833
Wheeling Charges (Less - UI Charges Received) 48,536 44,285
Other charges on Sale through Power Exchange 1,542 57
Total 7,39,332 6,49,491
Note 26: Generation of Power

2016-17 2015-16
FUEL CONSUMPTION
Oil 2,067 9,653
HSD Oil 133 423
Lub Oil 57 225
LUBRICANTS & CONSUMABLE STORES 87 125
STATION SUPPLIES 1 1
Total 2,345 10,426
Note 27: Repairs & Maintenance

2016-17 2015-16
Plant and Machinery 5,112 5,439
Buildings 971 818
Civil Works 1,142 849
Hydraulic Works 320 434
Lines, Cable Network etc. 18,434 17,908
Vehicles 233 331
Furniture and Fixtures 56 41
Office Equipments 244 231
Total 26,513 26,050
205

Note 28 : Employee Benefits

2016-17 2015-16
Salaries 1,75,552 1,15,044
Over Time/Holiday Wages 42 23
Dearness Allowance 37,810 93,042
Other Allowances 7,852 4,159
Bonus 910 826
Medical Expenses Reimbursement 1,035 853
Leave Travel Assistance 13 -
Earned Leave Encashment 14,567 14,669
Payment under Workmen’s Compensation Act 50 8
Leave Salary & Pension Contribution Paid by the
Company to the Employees and Other Departments 1,378 18
Funeral Allowance 5 4
Staff Welfare Expenses 433 189
Terminal Benefits 1,20,722 1,00,450
(Less) Expenses Capitalised 24,292 18,829
Total 3,36,077 3,10,455
Note 29 : Finance Cost

2016-17 2015-16
Finance Charges on Financial Liabilities Measured
at Amortised Cost
INTEREST
Interest on State Govt. Loans
Interest on Bonds
Interest on other loans/deferred credits 43,579 40,331
Interest to Consumers 17,727 16,790
Interest on Borrowings for Working Capital 24,894 22,943
OTHER INTEREST AND FINANCE CHARGES
Rebate allowed for prompt payment to NVVN
Discount to Consumers for timely payment of bills 148 162
Interest To Suppliers/Contractors-O&M
Interest on Contributory Provident Fund
Interest on General Provident Fund 14,345 10,625
Other Interest - 16
Cost of Raising Finance 0 4
Other Charges 1,762 42
Less: Other Borrowing Costs 6,463 5,773
Total 95,992 85,139
206

Note 30 : Depreciation, Amortisation and Impairment Expenses

2016-17 2015-16
Depreciation - Buildings 2,212 2,018
Depreciation - Hydraulic Works 6,343 5,563
Depreciation - Other Civil Works 1,838 1,604
Depreciation - Plant & Machinery 23,607 25,107
Depreciation - Line Cable & Network 36,367 34,309
Depreciation - Vehicles 98 89
Depreciation - Furniture & Fixtures 204 178
Depreciation - Office Equipments 1,220 1,093
Total 71,888 69,962
Note 31 : Administrative Expenses

2016-17 2015-16
Rent 1,219 684
Rates and Taxes 181 119
Insurance 25 117
Telephone Charges, Postage, Telegram & Telex charges 406 401
Internet charges 13 14
Legal Charges 895 594
Audit Fees - Statutory audit 38 37
Audit Fees - others 111 1
Consultancy Charges 38 9
Technical Fees 66 49
Other Professional Charges 90 60
Conveyance and Travel 6,015 5,713
Expenses in respect of ESCOT 1 91
Salary and other allowance of Appellet Authority 4 4
Bank Charges 107 6
Fees and Subscriptions 62 55
Freight 921 970
Books and Periodicals 6 5
Printing and Stationary 963 1,080
Data Processing Charges 10 10
Advertisements 131 66
Electricity Charges 730 657
Water Charges 49 34
Entertainment 73 55
Ele. Duty u/s 3(i) of KED Act 11,527 11,137
Miscellaneous Expenses 301 507
Other Expenses 16,029 12,103
Less: Expenses capitalised 2,534 1,621
TOTAL 37,479 32,958
207

Note 32 : Others
Sl. No. Particulars (Rs. In lakhs)
2016-17 2015-16
1 Material Cost Variance 6,432 6,861
2 Research and Development Expenses 20 9
3 Bad and Doubtful Debts Written off / Provided for 854 1,306
4 Miscellaneous Losses and Write Offs 1,555 396
5 Sundry Expenses - 2
6 Loss on account of flood cyclone etc 2 -
TOTAL(A) 8,863 8,575
Prior Period Expenses or Losses
2016-17 2015-16
1 Other Excess Provision in Prior Periods 15 2
2 Other Income relating to Prior Periods 2,600 561
INCOME RELATING TO PREVIOUS YEARS 2,615 564
3 Fuel Related Losses and Expenses Relating
to Prior Period - 2
4 Operating Expenses of Previous Years 12 3
5 Interest on Other Financial Charges in Previous Years 18 1,427
6 Other Charges 2,086 117
EXPENSE RELATING TO PREVIOUS YEARS 2,116 1,549
NET PRIOR PERIOD CREDITS/(CHARGES) (1-2)(B) 499 -985.69
TOTAL(A+B) 8,364 9,560
Note 33 : Changes in fair valuation and Other Adjustments
2016-17 2015-16
1 Income on account of Fair Valuation Changes 3,390 -2
2 Clawback of Grant 3,177 1,299
Total 6,566 1,296
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 2017 (ìn Lakhs)
Generation Transmission Distribution TOTAL
Sl. Particulars Note As at 31.03.2017
No No
A ASSETS
Non Current Assets
Property Plant and Equipment 20,68,736 14,52,517 2,38,266 3,77,954 20,68,736
Capital Work in Progress 1,78,329 75,392 35,234 67,703 1,78,329
Financial Assets
Investments 2,000 815 485 700 2,000
Loans 8,390 575 962 6,853 8,390
Others 55,070 9,687 1,723 43,660 55,070
Deferred Tax Assets(Net) - -
Other Non current assets 4,93,289 58,782 60,544 3,73,964 4,93,289
Current Assets - -
Inventories 31,019 2,305 5,682 23,031 31,019
Trade receivables 1,92,340 - - 1,92,340 1,92,340
Cash and cash equivalents 23,603 490 695 22,418 23,603
Bank balances other than
Cash Equivalents 6,828 142 201 6,485 6,828
Other current assets 8,047 1,850 2,109 4,088 8,047
TOTAL ASSETS 30,67,651 16,02,555 3,45,900 11,19,197 30,67,651
EQUITY&LIABILITIES
B Equity
Equity Share Capital 3,49,905 1,71,945 75,072 1,02,888 3,49,905
Other Equity (7,40,788) - - (7,40,788) (7,40,788)
Liabilities - -
Non Current liabilities - -
Borrowings 4,26,657 1,04,056 1,18,386 2,04,215 4,26,657
Other financial liabilities 3,11,597 - - 3,11,597 3,11,597
209
Provisions 20,28,767 11,84,856 7,980 8,35,931 20,28,767
Deferred Tax liabilities(Net) - -
210
Other non current liabilities 1,42,922 - 9,494 1,33,428 1,42,922
Current Liabilities - -
Financial Liabilities - -
Borrowings 2,76,746 1,10,699 83,024 83,024 2,76,746
Trade payables 81,847 - - 81,847 81,847
Other financial liabilities 1,89,998 30,999 51,944 1,07,055 1,89,998
Provisions
Total Liabilities 30,67,651 16,02,555 3,45,900 11,19,197 30,67,651
KERALA STATE ELECTRICITY BOARD LIMITED Trifurcated Balance sheet

STATEMENT OF PROFIT AND LOSS FOR THE YEAR
ENDED 31ST MARCH 2017 (ìn Lakhs)

Generation Transmission Distribution TOTAL
Sl. Particulars Note As at 31.03.2017
No No
REVENUE
I Revenue from operations 11,21,883 74,440 95,127 11,21,883 12,91,449
II Other Income 40,078 2,223 3,546 34,309 40,078
III Total Income(I+II) 11,61,961 76,662 98,673 11,56,191 13,31,527
IV Expenses - - -
Purchase of power 7,39,332 - - 9,08,899 9,08,899
Generation of power 2,345 2,345 - 2,345
Repairs and Maintenance 26,513 2,770 4,721 19,021 26,513
Employee benefit expenses 3,36,077 17,299 38,736 2,80,043 3,36,077
Finance Cost 95,992 5,005 5,628 85,359 95,992
Depreciation and Amortisation 71,888 15,374 21,097 35,417 71,888
Other expenses
Administrative Expenses 37,479 969 6,499 30,011 37,479
Others 8,364 4,211 7,190 (3,037) 8,364
Change in fair valuation and
other adjustments (6,566) (185) (379) (6,002) (6,566)
Total Expenses 13,11,423 47,788 83,491 13,49,711 14,80,990
V Profit/(Loss) before exceptional
and extra ordinary items and
tax(III-IV+V) (1,49,463) 28,874 15,183 (1,93,520) (1,49,463)
VI Exceptional items
VII Profit/(Loss) before tax(V-VI) (1,49,463) 28,874 15,183 (1,93,520) (1,49,463)
VIII Tax Expenses
(i)Current Tax
(ii) Deferred Tax
IX Profit/(Loss) for the period from
continuing operations(VII-VIII) (1,49,463) 28,874 15,183 (1,93,520) (1,49,463)
X Profit/(Loss) from discontinuing
operations
XI Tax Expenses of discontinuing
operations
XII Profit/(loss) from Discontinuing
operations after tax(X-XI)
XIII Profit/(Loss) for the period(IX-XII)
XIV Other Comprehensive Income -
211
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]
A. Contingent Liabilities not provided for in respect of:
1. Capital liabilities becoming due for re-payment/redemption 3,92,411.97 3,75,350.89
2. Disputed Income-tax Matters 35,832.26 35,832.26
3. Claims against Company pending Court Orders/
Government orders 10,401.00 -
4. NTPC 1,979.74 -
5. KPTCL 3.98 -
B. Capital Commitments
1. Contracts placed but not executed 28,567.53 20,986.89
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, 2017 20650.74 424209.38 444860.12
March 31, 2016 48130.88 152515.45 200646.33
April 01, 2015 68346.34 120996.02 189342.36
Unsecured Loan
March 31, 2017 188750.00 188750.00
March 31, 2016 190000.00 190000.00
April 01, 2015 199999.90 199999.90
Total
March 31, 2017 209400.74 424209.38 633610.12
March 31, 2016 238130.88 152515.45 390646.33
April 01, 2015 268346.24 120996.02 389342.26
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 (Distribution scheme) Existing and future assets
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 presentpresent,
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
(Distribution scheme) the loans
7 REC 8 Nos. Transmission schemes Future moveable assets
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
Term loan of Transmission circle
15 REC-Various System improvement schemes Future assets created from the
Schemes loans and Govt. Guarantee.
Loans of `30014 lakh is not considered for revaluation as repayment liability is not confirmed.
213
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 31.03.2017 Nil Nil Nil Nil
equity shares 31.03.2016
and preference 01.04.2015
shares
Impairment 31.03.2017 Nil Nil Nil Nil
allowance on 31.03.2016
Investments 01.04.2015
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 M. Sivasankar IAS CMD 4.86 1.34 6.20
2 Paul Antony IAS CMD 9.98 1.99 11.97
3 Dr. K. Ellangovan IAS CMD 9.02 9.02
4 N.S. Pillai IA & AS Director 22.13 1.88 24.01
5 Vijaya Kumari. P Director 19.25 5.07 24.32
6 Asokan. O Director 18.93 5.36 24.29
7 Venugopalan. N Director 17.57 6.99 24.56
8 Rajeev. S Director 13.70 1.18 14.88
214
35.5. Interest and finance charges capitalized

Interest and finance charges capitalized @ 9.60%.
35.6. Transactions in Foreign currency
a) Expenditure in foreign currency (on accrual basis)
Particular March 31, 2017 March 31, 2016
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

Disclosure as per Ind AS 108 is given below.
Particulars For the year ended 31 March, 2017
Business segments Inter Total
Generation Transmission Distribution Segment
Rs. in lakhs Rs. in lakhs Rs. in lakhs Eliminations Rs. in lakhs
Segment
Revenue
Sale of energy
& Meter rent 74439.51 95127.00 1121882.81 1291449.31
Inter-segment
revenue
Total 74439.51 95127.00 1121882.81 1291449.31
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
Profit before taxes -149462.85
Tax expense
Net profit for the year
215

Rs. in lakhs Rs. in lakhs Rs. in lakhs Eliminations Rs. in lakhs
Segment Revenue
Sale of energy &
Meter rent 65618.07 78994.22 1091443.60 1236055.90
Inter-segment revenue
Total 65618.07 78994.22 1091443.60 1236055.90
Segment result
Allocable expenses (net) 14379.16 15747.33 -131426.38 -101299.89
Operating income
Other income (net) 1860.08 3204.48 26538.73 31603.29
Tax expense
Particulars For the year ended 31 March, 2017 Total

Business segments
Generation Transmission Distribution
Rs. in lakhs Rs. in lakhs Rs. in lakhs Rs. in lakhs
Segment assets
Allocable assets 1527162.84 310665.84 1051493.28 2889321.96
Total assets 1527162.84 310665.84 1051493.28 2889321.96
Segment liabilities
Allocable liabilities 1602554.65 345899.91 1119196.59 3067651.15
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
Depreciation and
amortisation (allocable) 15374.36 21097.02 35416.54 71887.92
Depreciation and
amortisation (unallocable)
Other significant
non-cash expenses

216

Business segments
Segment assets
Total assets 1511481.59 302310.23 1180224.17 2994015.99
Segment liabilities
Other information
Capital expenditure
Capital expenditure
(Allocable) 87399.57 35957.55 50135.86 173492.98
Depreciation and
Depreciation and
amortisation
(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) (149462.85) (69696.60)
2 Number of weighted equity shares 3499050000 3499050000
3 Face value per share (Rs.) 10 10
4 Earnings per Share (Basic) (4.27) (1.99)
5 Earnings per Share (Diluted) (4.27) (1.99)
217
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. Details of Specified Bank Notes (SBN) held and transacted during the period 8 November
2016 to 30 December 2016 Pursuant to MCA Notification No. GSR 308(E) dated 30 March
2017.
`.in lakhs
Particulars Specified Bank Other Total
Notes Denomination
Notes
Closing cash in hand as on 08.11.2016 87983500 7929397 95912897
Add: Permitted Receipts 2402236050 5248520020 7650756070
: Non-permitted Receipts
Less: Permitted Payments
Less: Amount Deposited in Banks 2490219550 5155968821 7646188371
Closing Cash in Hand as on 30.12.2016 0 100480596 100480596
Balance available and receipts at various offices of the Company, as per separate records.
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 2017
together with interest paid/ payable as required under the Act, have not been given.
35.12. Statutory Auditors’ Remuneration
[ ` in Lakhs]
Particulars For the year ended For the year ended
March 31, 2017 March 31, 2016
Remuneration of statutory auditors 37.77 36.65
Total 37.77 36.65
35.13. Generation, Purchase and Sale of Power (in Million Units) :
218
Current Year (2016-17) Previous Year (2015-16)

Unit Auxiliary Net Unit Auxiliary Net
Generated consumption Generated consumption
Hydel 4319.08 26.97 4292.11 6639.02 33.35 6605.67
Thermal 43.55 2.61 40.94 150.63 5.11 145.52
Wind 1.71 0.00 1.71 1.38 0.00 1.38
Solar 5.20 0.03 5.17 0.81 0.00 0.81
Sub Total 4369.54 29.61 4339.93 6791.84 38.46 6753.38
Purchase 19734.92 0 19734.92 16448.36 0 16448.36
Total 24104.46 29.61 4339.93 23240.2 38.46 23201.74
Less: Auxiliary
consumption 14.84 14.84 0 14.14 14.14 14.84
Total 24104.46 44.45 24060.01 23240.20 52.60 23187.6
Energy injected
by Private IPPs
sale outside s
tate through
open access 45.08 40.44
Energy purchased
by consumers
through open
access at Kerala
periphery 435.60 142.00
Total Generation
and power
purchased 24540.69 23370.04
Energy sale
outside the
state by KSEBL
at Kerala
periphery 49.30 53.48
Sale outside
the state by
Private IPPs
through open
access 43.06 38.63
External PGCIL
loss 684.76 550.60
Net energy
available in
Kerala Grid for
219
consumption
with in state 23763.57 22727.33
Energy sale
within the
state by KSEBL
alone 20038.25 19325.07
Energy
consumed
by open access
consumers 414.66 135.25
Energy
consumption
within the state 20452.91 19460.32
Loss in KSEBL
system 3310.66 3267.01
Loss % in KSEBL
system 13.93% 14.37%
35.14. Generating Stations:

a) Plants in operation since the beginning of the year.
Sl. No. LOCATION Unit Capacity (in MW) Installed 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
220
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
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
Total 2275.041
b) Projects commissioned during the Year :

Sl. No. LOCATION Unit Capacity (in MW) Installed Capacity (MW)
1 Vellathooval 1.8X2 3.6
Total 3.6
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
221
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
35.15. 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 2016-17
though the claims are not fully admitted by the Company.
(`. in lakhs)
Sl No. Supplier Amount
1 MAITHON 427
2 NPCIL-MAPs 285
3 KAIGA 2
4 JHABUA POWER 553
5 DVC 2293
6 KPCL 3720
7 APCPL 419
8 KPTCL (Wheeling) 1786
9 KPTCL (RE charges) 14
10 NLC 15830
35.16. 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 `40.31 crores 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 `30.70 crores. 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
222
to `13.34 crores. Accordingly, an amount of `13.84 crore 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 `78.65 crores and to withdraw the claim of balance
differential tax amounting to `25.36 Crores. The Company is expecting favourable orders from
the Government of Kerala. Accordingly, an amount of `104.01 crore is shown under contingent
liabilities.
b. NTPC has claimed revision of fixed charges of RGCCPP, Kayamkulam from the month of 10/16
onwards. As the company has not accepted the revision claims and KSERC has adversely
commented on the additional claim of fixed charges, the company is paying the fixed charges
at the old rates. A total claim of `265.57 crores in this regard is not admitted and accounted by
the company.
c. 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.
d. Inter Unit balances amount to Rs.1536.57 Lakhs (Previous year Rs.1311.85Lakhs) has been
considered as Sundry Receivables pending complete reconciliation of such balances.
e. The GPF balances as per financial statements is `2029.93 crores. A difference of `42.98 lacs
with the party wise registers maintained at GPF section are reported and the same is being
verified.
f. The Kerala Power Finance Corporation has issued 1319440 Nos. of Equity Shares of Rs.10/- each
as Bonus Share to the erstwhile KSE Board during the Year 2004-05.
g. Old outstanding balances lying in the books of accounts without proper adjustments were
written off/ written back based on the audit observations and net amount of `8.12 crore is
written back as income during the current financial year.
h. 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
i. For monthly as well as bi-monthly billed consumers under various tariff categories, an estimated
amount of Rs.622.98 crores is recognized as unbilled revenue as on 31.03.2017(Previous year
Rs.589.62crores) and the amount is debited to sundry debtors for sale of power.
j. 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.
223
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 Rs. 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.
k. 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 Rs.7.57 crores 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
l. 45.715 cents of Land belonging to the company in Trivandrum was transferred to Trivandrum
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.
m. 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. Since
the Government order pertains to the financial year 2017-18 this has not been adjusted during
the year.
n. In the 32nd Meeting of Board of Directors held on 30.05.2017 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 31.03.2017 against the
amount receivable from the Government in the books of accounts and to report the matter to
224
the Government for concurrence. Accordingly an amount of 267821lakh is netted off with the
amount receivable from the Government. In line with the decision of the Board this has been
reported to Government for concurrence.
o. Figures for the previous year have been re arranged and regrouped wherever necessary.

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
FIANCIAL ADVISER&CHIEF FINANCIAL OFFICER COMPANY SECRETARY I/C

SUBJECT TO OUR REPORT OF EVEN DATE
For ISAAC&SURESH For ANANTHAN &SUNDARAM
Chartered Accountants FRN:001150S Chartered Accountants FRN:000148S

Sd/- Sd/-
SOBHA SETHUMADHAVAN FCA C.A.HARIKRISHNAN.R.S.M.Com, DISA, FCA
Partner M.No.225166 Partner M.No.230338
For G.VENUGOPAL KAMATH &Co.

Chartered Accountants
FRN:004674S

Sd/-
RAVINATH.R.PAI FCA
Partner M.No. 226547
Place : Thiruvananthapuram
Date : 01.03.2018
225
226
Consolidated Balance Sheet as on 31st March 2017
Particulars 2016-17 2015-16 2014-15
Note No. Amount Amount Amount
(Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs)
Standalone Consolidated Standalone Consolidated Standalone Consolidated

16-17 BS 16-17 15-16 BS 15-16 14-15 BS 14-15
ASSETS
Non current assets
Property, Plant and Equipment 2 20,68,736 20,68,736 1992032 1992032 1980016 1980016
Capital work-in-progress 3 1,78,329 1,78,329 173493 173493 127805 127805
Financial Assets
Investments 4 2,000 3,532 2000 3,628 1950 3714
Loans 5 8,390 8,390 8725 8725 8486 8486
Others 6 55,070 55,070 53081 53081 51215 51215
Deffered Tax Assets (Net) - - 0 0 0 0
Other non-current assets 7 4,93,289 4,93,289 717785 717785 683857 683857
Current assets
Inventories 8 31,019 31,019 29204 29204 24183 24183
Trade receivables 9 1,92,340 1,92,340 159280 159280 138867 138867
Cash and cash equivalents 10 23,603 23,603 16643 16643 15936 15936
Bank balances Other than
Cash Equivalents 11 6,828 6,828 7520 7520 5525 5525
Other current assets 12 8,047 8,047 7747 7747 10629 10629
Total Assets 30,67,651 3069183 3167509 3169137 3048470 3050234
Equity
Equity Share capital 13 3,49,905 3,49,905 349905 349905 349905 349905
Other Equity 14 -7,40,788 -7,39,256 -218491 -216864 -148729 -146965
Liabilities
Non-current liabilities
Borrowings 15 4,26,657 4,26,657 152515 152515 120996 120996
Other Financial Liabilities 16 3,11,597 3,11,597 279628 279628 247907 247907
Provisions 17 20,28,767 20,28,767 1658842 1658842 1608779 1608779
Other non-current liabilities 18 1,42,922 1,42,922 85110 85110 46636 46636
Current liabilities
Borrowings 19 2,76,746 2,76,746 435468 435468 459988 459988
Trade payables 20 81,847 81,847 69404 69404 60948 60948
Other financial liabilities 21 1,89,998 1,89,998 353043 353043 299957 299957
Provisions 22 - 0 2085 2085 2085 2085
Total Equity and Liabilities 30,67,651 3069183 3167509 3169137 3048470 3050234

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-
For ISAAC&SURESH For ANANTHAN & SUNDARAM

Sd/- Sd/-
SOBHA SETHUMADHAVAN FCA C.A.HARIKRISHNAN.R.S.M.Com,DISA, FCA
Chartered Accountants FRN:004674S

Sd/-
RAVINATH.R.PAI FCA
Partner M.No.226547
227
Date:01.03.2018
228
Consolidated Statement of Profit and Loss for the year ended 31st March 2017
2016-17 2015-16
Standalone Consolidated Standalone Consolidated
P&L P&L P&L P&L
S.No Particulars Note Amount Amount Amount Amount
No. (Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs) (Rs. In Lakhs)
REVENUE
I Revenue From Operations 23 11,21,883 11,21,883 10,91,444 10,91,444
II Other Income 24 40,078 40,078 31,603 31,581
III Total Income (I+II) 11,61,960 11,61,960 11,23,047 11,23,025
IV EXPENSES
Purchase of Power 25 7,39,332 7,39,332 6,49,491 6,49,491
Generation of Power 26 2,345 2,345 10,426 10,426

Repairs & Maintenance 27 26,513 26,513 26,050 26,050
Employee benefits expense 28 3,36,077 3,36,077 3,10,455 3,10,455
Finance costs 29 95,992 95,992 85,139 85,139
Depreciation and amortization expense 30 71,888 71,888 69,962 69,962
Other Expenses - - - -
Administrative Expenses 31 37,479 37,479 32,958 32,958
Others 32 8,364 8,364 9,560 9,560
ADD CHANGES IN FAIR VALUATION AND OTHER ADJ 33 -6,566 -6,566 -1,296 -1,296
Total expenses (IV) 13,11,423 13,11,423 11,92,743 11,92,743
V Profit/(loss) before exceptional items and tax (III- IV) -1,49,463 -1,49,463 -69,697 -69,719
VI Exceptional Items - - -
VII Profit/(loss) before tax (V-VI) -1,49,463 -1,49,463 -69,697 -69,719
VIII Tax expense:
(1) Current tax - - -
(2) Deferred tax - - -
IX Profit (Loss) for the period from continuing
operations (VII-VIII) -1,49,463 -1,49,463 -69,697 -69,719
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) -1,49,463 -1,49,463 -69,697 -69,719
Share of net profit/Loss of associates
accounted for using equity method 1,532 - 1,649
XIV Other Comprehensive Income - -
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 for the period) -1,49,463 -1,47,931 -69,697 -68,069
XVI Earnings per equity share (for continuing operation):
(1) Basic -4.27 -4.23 -1.99 -1.95
(2) Diluted -4.27 -4.23 -1.99 -1.95
XVII Earnings per equity share (for discontinued operation):
(1) Basic - -
(2) Diluted - -
XVIII Earnings per equity share(for discontinued &
continuing operations)
(1) Basic - -
(2) Diluted - -
Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-
Sd/- Sd/-

Sd/-
RAVINATH.R.PAI FCA
229
Partner M.No.226547
Date:01.03.2018

Consolidated Statement of Cash flow statement for the
year ended 31st March 2017

Amount Amount
(Rs. In lakhs) (Rs. In lakhs)
Particulars Stand Alone Consolidated Stand Alone Consolidated
2016-17 2016-17 2015-16 2015-16
CASH FLOW FROM OPERATING
ACTIVITIES
PROFIT BEFORE TAX (As per Ind AS) -1,49,463 -1,47,931 -69697 -68069
PROFIT BEFORE TAX BEFORE NON
CASH ITEM AND WORKING CAPITAL
CHANGES -1,49,463 -1,47,931 -69697 -68,069
Depreciation 71,888 71,888 69962 69962
Finance cost 95,992 95,992 85139 85139
Investment income -24 -24 -22 -22
Interest Income -719 -719 -965 -965
Prior period interest and finance
charges 18 18 1427 1427
Operating profit before working
capital changes 17,692 19,223 85845 87472
Adjustments for:
Changes in Inventories -1,815 -1,815 -5021 -5021
Changes in Sundry Debtors -33,060 -33,060 -20413 -20413
Changes in Other Current Asset -300 -300.14 2884 2884
Changes in Current Liabilities and
Provisions -3,23,851 -3,23,851 28567 28567
Changes in Trade Payable 12,443 12,443 8456 8456
Cash generated from Operations -3,28,892 -3,27,361 100319 101946
Income Tax - 0 0 0
Net cash flow from /(used in)
Operating Activities(A) -3,28,892 -3,27,361 100319 101946
CASH FLOW FROM INVESTMENT
ACTIVITIES
Change in Fixed Asset -1,48,592 -1,48,592 -83015 -83015
Other Change in Fixed Asset - - 1038 1038
Changes in Capital Work-in Progress -4,836 -4,836 -45688 -45688
Income from Investment 24 24 22 22
Change in Investments - -50 -50
230
Interest from Banks 719 719 965 965

Change in Capital Advance -1,989 -1,989 -1865 -1865
Long Term Loans & Advances 2,24,831 2,24,831 -34153 -34153
Net cash flow from / (used in)
Investment Activities(B) 70,157 70,157 -162747 -162747
CASH FLOW FROM FINANCING
ACTIVITIES
Changes in Equity Capital -3,72,834 -3,72,834 -81 -81
Contribution & Grants towards cost
of capital assets 3,69,925 3,69,925 50063 50063
Changes in Long Term Borrowings 31,969 31,969 31721 31721
Changes in Other Long Term
Liabilities & Provisions 2,74,141 2,74,141 31519 31519
Interest and Other cost of raising
Finance -95,992 -95,992 -85139 -85139
Changes in Other Liabalities 57813 56281 38474 36847
Prior Period Interest and Finance
charges -18 -18 -1427 -1427
Net cash flow from / (used in)
Financing Activities(C) 2,65,004 2,63,472 65131 63504
NET CHANGE IN CASH & CASH
EQUIVALENTS 6,268 6,268 2703 2,703
CASH AND CASH EQUIVALENTS
AT THE BEGINNING 24,163 24,163 21460 21460
CASH AND CASH EQUIVALENTS
AT THE END 30,431 30,431 24163 24,163

Sd/- Sd/-
DIN:07282785 DIN: 07558958
Sd/- Sd/-
Sd/- Sd/-
Sd/-
RAVINATH.R.PAI FCA
Partner M.No.226547
Date:01.03.2018
231

Statement of Changes in Equity for the year ended on 31st March 2017
A: Equity Share Capital Amount Rs.in lakhs
Balance as at Changes in equity Balance as at Changes in equity Balance as at
1 April 2015
st
share capital during 31st March 2016 share capital during 31st March 2017
the year the year
3,49,905.00 - 3,49,905.00 - 3,49,905.00
B. OTHER EQUITY

Bonds/Debenture Redumption
Reserve 0 0 0
General reserve
Add: Adjustments attributable in
StandAlone Financials - 16
Less: Profit Included in the
previous year -1,627 -1,764
(Less) : Dividend and Corporate
Dividend Tax 0 0 0
Other Reserves - Fair Value through
Other Comprehensive Income:
Opening Balance
Total -7,39,256 -2,16,864 -1,46,965
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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.
These are the Kerala State Electricity Board Limited’s first Ind AS compliant consolidated
financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has
been applied. For all the periods upto and including 31 March 2016, the Group had prepared
its consolidated financial statements in accordance with Generally Accepted Accounting
Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies
Act, 2013, 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. The Group followed the provisions of Ind AS 101 in reinstating its opening Balance
Sheet in Ind AS Framework as of the date of transition, viz. 1 April 2015. Some of the Group’s
Ind AS accounting policies used in the opening Balance Sheet are different from its previous
GAAP policies applied as at 31 March 2015, and accordingly the adjustments were made to
restate the opening balances as per Ind AS. The resulting adjustments arose from events and
transactions before the date of transition to Ind AS. Therefore, as required by Ind AS 101, those
adjustments were recognized directly through retained earnings as at 1 April 2015. This is the
effect of the general rule of Ind AS 101 which is to apply Ind AS retrospectively.
1.3. Basis of Measurement & Use of Management Estimates
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
233
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
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 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 No. of shares Amount of investment
BS date held by KSEB (%)
Renewable Power 2016-17 5,000 shares of Rs. 50,00,000
Corporation of Kerala Ltd * Rs. 1000 each (50%)
Kerala State Power and 2016-17 1,08,19,440 Shares of Rs.10,81,94,400
Infrastructure Finance Rs. 10 each (40.60%)
Corporation Ltd.
Baitarani West Coal 2016-17 1,00,000 shares of Rs.10,00,00,000
Company Ltd. Rs. 1000 each (33.33%)
*The FS of the company is for the period of 15 months (ie., 15th Jan 2016 to 31st March 2017).
1.6. Critical Judgments and Assumptions
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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
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
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.
235
g) Investment in Subsidiaries, Associates and Joint Ventures

Investment has been carried at cost and 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 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 the cost of PPE that are not yet ready for their intended
use as at the Consolidated Balance Sheet date. Capital work in Progress up to March 31, 2015
were carried in the Consolidated Balance Sheet in accordance with Indian GAAP. The Group
has elected to avail the exemption granted by IND AS 101, “First time adoption of IND AS” to
regard those amounts as deemed cost at the date of the transition to IND AS (i.e. as on April 1,
2015).
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
236
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 and General Administration expenses of various units are allocated to “Revenue
expenses pending allocation over capital works” on the basis of following ratio.
Units Employee cost Admn. & General Exps.
Generation 100% for offices 100% for offices
exclusive for Civil works. exclusive for Civil works.
Transmission 25% 25%
Distribution 5% NIL
HO 5% 5%
Advertisement charges relating to capital equipment and 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.
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
237
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
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.
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.
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.
238
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
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
239
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. The age wise analysis and corresponding provisions for the period is not incorporated
in the consolidated accounts.
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.
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.
240
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.
a. 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 operationalisedoperationalized
during the financial year 2014-15 and the pension to be disbursed through this Trust. Though
the Master Trust was 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.
241
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.
1.19. Secured and Unsecured Loans
All non-current secured loans are subject to fair valuation under Ind AS 109: Financial
InstrumentsSecurities details of secured loans:. 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
242
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 2016-17 or in the
reported comparative periods.
1.21. .CProvisions 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. 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.
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 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. Reinstatement of figures of comparative years
Account balances of the previous year has been reinstated on account of compliance with Ind
243
AS requirements. The reconciliation has been given in the respective note.

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.
1.25. 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”.
244
Note 2 : Property, Plant and Equipment
Particulars Ind AS (Rs. 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 - 2015 1,67,379 66,747 48,329 15,81,080 1,16,402 6,87,005 2,981 1,897 9,123 1 26,80,944
Additions 3,945 1,044 2,905 15,616 638 48,570 214 140 771 0 73,844
Deductions - - - - - - - - - - -
Other Adjustments -1,038 47 3 4 -60 6 - - - - -1,038
At 31 - March - 2016 1,71,218 67,991 51,475 15,99,101 1,17,103 7,40,844 3,200 2,080 9,909 1 27,62,922
Additions 6,127 10,747 7,767 35,007 15,973 68,902 830 143 3,096 0 1,48,592
Deductions - - - - - - - - - - -
Other Adjustments 1,038 (47) (3) 23 60 160 - - - - 1,231
At 31 - March - 2017 1,77,345 78,738 59,241 16,34,108 1,33,076 8,09,746 4,031 2,223 13,006 2 29,11,515
Accumulated
Depreciation &
Impairment of Asset
At 1 - April - 2015 - 26,376 12,297 2,75,960 42,047 3,36,464 1,513 1,549 4,722 - 7,00,929
Deductions - - - - - - - - - - -
At 31 - March - 2016 - 28,394 13,902 3,01,067 47,609 3,70,773 1,691 1,638 5,816 - 7,70,891
Deductions - - - - - - - - - - -
At 31 - March - 2017 - 30,605 15,740 3,24,674 53,952 4,07,140 1,895 1,736 7,035 - 8,42,778
Carrying Value - - - - - - - - - - -
At 31 - March - 2017 1,77,345 48,133 43,502 13,09,434 79,124 4,02,605 2,136 487 5,970 2 20,68,736
245
At 31 - March - 2016 1,71,218 39,597 37,573 12,98,034 69,493 3,70,071 1,509 441 4,094 1 19,92,032
At 01 - April - 2015 1,67,379 40,371 36,032 13,05,120 74,356 3,50,541 1,468 348 4,401 1 19,80,016

Note 3 : Capital Work in Progress
As at 31.03.2017 As at 31.03.2016 As at 31.03.2015
Capital Work in Progress 1,54,833 1,36,596 1,03,485
Revenue Expenses Pending

Allocation over capital works 23,496 36,897 24,321
Total 1,78,329 1,73,493 1,27,805
Note 4 : Investment (Non Current )
As at 31.03.2017 As at 31.03.2016 As at 01.04.2015
INVESTMENT IN EQUITY
INSTRUMENTS
Unquoted Investments
Fully Paid Up - Kerala Power
Finance Corporation Ltd. 2,488 2,582 2,718
Baitarani West Coal Company Ltd. 994 996 996
Investment in Renewable Power
Corporation of Kerala 50 50 -
Other Investments - -
Total 3,532 3,628 3,714
246

Note 5 : Non Current Assets - Financial Assets - Loans
As at 31.03.2017 As at 31.03.2016 As at 31.03.2015
Loans Including Interest Accrued
Loans to related parties
Secured Loans 0 0 0
Unsecured Loans
Considered Good 0 0 0
Loans to Employees
Secured Loans 0 0 0
Unsecured Loans
Other Loans
Secured Loans 0 0 0
Unsecured Loans
Advance given to licensee - 103 103
Advance given to others 8,390 8,622 8,383
Doubtful Loans - - -
Total 8,390 8,725 8,486
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 - - -
Note 6 : Non Current Assets - Other Financial Assets

As at 31.03.2017 As at 31.03.2016 As at 31.03.2015
BANK DEPOSITS WITH MORE
THAN 12 MONTHS MATURITY
Interest Accrued
On Loan to Government & Others 0 0 0
On Bank Deposits with
more than 12 months 0 0 0
Security Deposits 55,070 53,081 51,215
Total 55,070 53,081 51,215
247

Note 7 : Other Non Current Assets
(Rs. In lakhs)
31.03.2017 31.03.2016 01.04.2015
OTHER NON CURRENT ASSETS
Capital Advances
Secured Advances
Unsecured Advances Considered Good
Covered by Bank Guarantee
Others 13,661 10,493 12,678
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 10,239 9,368 8,361
Receivable from Government 4,69,390 6,97,924 6,62,818
Total 4,93,289 7,17,785 6,83,857
CAPITAL ADVANCE INCLUDES ADVANCE GIVEN TO COMPANIES IN WHICH ONE OR MORE OF
THE DIRECTORS ARE INTERESTED
Note 8 : Inventories
Particulars Ind AS (Rs. In lakhs)

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Fuel Stocks 0 584 1116
Heavy Duty Oil 750 0 0
Stock of Materials at Construction Stores 5610 7967 6150
Stock of Materials at other stores 5025 4922 2169
Material at Site (Cap) 0 0 0
Material at Site (O & M) 18365 13490 12541
Other Materials Account 1295 2259 2225
(Less) Provision for Shortages and Obsolescense 27 18 17
Total 31019 29204 24183
248

Note 9 Current Financial Assets : Trade Receivables

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Trade Receivables
Secured, considered good
Sundry Debtors for Sale of Power 2,42,240 2,11,853 1,95,600
Sundry Debtors for Inter State Sale of Power 293 293 307
Sundry Debtors for Electricity Duty 14,991 13,611 11,917
Sundry Debtors (Miscellaneous) 13,745 12,453 9,974
Doubtful. - - -
(Less) Allowance for Bad and Doubtful Debts 78,931 78,931 78,931
Total 1,92,340 1,59,280 1,38,867
Note 10 : Current Financial Assets - Cash & Cash Equivalents

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Balances with Banks (of the nature of
cash and cash equivalents)
Balance with Bank/Treasury 2,210 1,937 1,082
Disbursement Bank Accounts 17,878 2,542 1,411
Drawing Account with Treasury 238 8,314 8,507
Current Accounts
Deposits with original maturity upto three months 2,820 2,743 3,720
Cheques, drafts on hand
Cash on hand
Cash In Hand 434 1,049 1,163
Cash Imprest with Staff 24 59 54
Others
Total 23,603 16,643 15,936
249

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 As at As at
31.03.2017 31.03.2016 01.04.2015
Balances with Banks includes
Deposits with original maturity more than 3 months
but within 1 year 0 0 0
Earmarked Balance with Banks - Unpaid Dividend 0 0 0
Guarantees & Other commitments 6,828 7,520 5,525
Total 6,828 7,520 5,525
Bank Balances year wise

Year 14-15
State bank of Travancore 1,421 20.05.2015
Canara Bank 242 01.11.2015
Punjab & Sind Bank 2,500 01.09.2015
South Malabar Gramin Bank 76 16.03.2016
North Malabar Gramin bank 162 25.03.2016
Year 15-16
State bank of Travancore 1,555 20-May-16
Canara Bank 263 11-Jan-17
Vijaya Bank 332 16-Dec-16
State Bank Of India 58 29-Mar-17
Punjab & Sind Bank 2,500 09-Jan-17
South Malabar Gramin Bank 254 28-Mar-17
Year 16-17
State bank of Travancore 1,676.6 20-May-17
Canara Bank 172.8 31-May-17
State Bank Of India 89.3 30-Mar-18
Vijaya Bank 940.1 17-Dec-17
Punjab & Sind Bank 2,500.0 09-Jan-17
Kerala Gramin Bank Peroorkada 76.2 25-May-20
Kerala Gramin Bank Kollam Branch 192.1 29-Mar-18
250

Note 12 : Other Current Assets

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Security Deposits 0 0 0
Advances to Related Parties 0 0 0
Advances to Employees 814 677 593
Advance to Contractors & Suppliers 751 1,030 1,078
Other Advances 1,738 1,689 3,295
Advance Income Tax/Deductions at source
Others
Secured considered good 0 0 0
Unsecured considered good 0 0 0
Rent Receivable 8 8 8
Income Accrued But Not Due 2,167 2,281 2,455
Other Recoverable 1,034 750 812
Inter Unit Balance 1,537 1,312 2,390
Total 8,047 7,747 10,629
251
252
Note 13 : Equity Share Capital

No. of Shares Amount No. of Shares Amount of Shares Amount
(In Lakhs) (Rs. In Lakhs) (In Lakhs) (Rs. In Lakhs) (In Lakhs) (Rs. In Lakhs)
Equity Share Capital
Authorised (face value `10/-) 50,000.00 5,00,000.00 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 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 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 34,990.50 3,49,905.00
Total 34,990.50 3,49,905.00 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 Amount
% (Rs. In Lakhs) % (Rs. In Lakhs) % (Rs. In Lakhs)
His Excellency the Honourable
Governor of Kerala 100 349905 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 31.03.2017, 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

253

Note 14 : Other Equity
OTHER EQUITY

31.03.2017 31.03.2016 01.04.2015
Bonds/Debenture Redemption Reserve 0 0 0
31.03.2017 31.03.2016 01.04.2015
General reserve
Add: Adjustments attributable in
StandAlone Financials - 16
Less: Profit Included in the previous year -1,627 -1,764
(Less) : Dividend and Corporate Dividend Tax 0 0 0
Other Reserves - Fair Value through Other
Comprehensive Income
As per Last Balance Sheet -81 - 0
Total -7,39,256 -2,16,864 -1,46,965
254

Note 15 : Non Current Financial Liabilities - Borrowings

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Bonds or Debentures
Secured Bonds or Debentures - - -
Unsecured Bonds or Debentures - - -
Term Loans*
From Banks
Secured Loans - - -
From Others
Secured Loans 4,26,657 1,52,515 1,20,996
Secured Loans - - -
Unsecured Loans Considered Good - - -
Total 4,26,657 1,52,515 1,20,996
*Details of terms of repayment and rate of interest
255
Loan Name (Rs. In lakhs)

2016-17 2015-16 2014-15
Loan from L I C 200 400 800
Loan from REC on Various Schemes 1,611 4,304 7,341
Loan from REC R-APDRP PART-B 38,626 27,571 20,581
Loan from R E C - RGGVY 1,427 1,090 1,412
Loan from REC - Medium Term Loan - - 13,333
Loan from PFC-Pallivasal Generation Project 18,553 18,290 18,851
Loan from PFC R-APDRP 29,086 25,100 25,100
Loan from SOUTH INDIAN BANK 8,513 9,000 -
Loan from PFC GEL Kakkayam 1,225 880 -
Loan from REC-TRAN.Kattakkada -
Pothencode Scheme 9,529 10,740 13,659
Loan from REC-TRAN-Group I 5,531 4,137 2,214
Loan from REC-Distribution - 23 Circle Scheme 49,408 39,405 10,238
Loan from REC- Distribution - Meter Scheme 4,998 6,224 7,468
Loan from REC-Thottiyar Gene. Scheme 5,373 5,373 -
Special Loan Assistance from REC 1,25,000 - -
Loan from REC for the DDG Scheme 13 - -
Special Loan Assistance from PFC 1,25,000 - -
Loan from PFC GEL Perumthenaruvi 1,660 - -
Dam Rehabilitation and Improvement Project (DRIP) 860 - -
Loan from RIDF of NABARD 45 - -
Total 4,26,657 1,52,515 1,20,996
256

Note 16 : Non Current-Other Financial liabilities
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Security deposit from consumers 2,59,751 2,28,732 1,97,531
Security deposit from consumers other than cash 18,749 19,171 20,075
Interest payable on consumers deposit 33,097 31,725 30,301
Total 3,11,597 2,79,628 2,47,907
Note 17 : Non Current Provisions
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Provision for Employee Benefits - - -
Contributory Provident Fund - - -
General provident Fund - - -
Staff Pension Fund - - -
Others - - -
Provision for Interest on bonds adjustable
against Electricity duty - - -
Provision for Pay revision - - -
257

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Provision for pension revision - - -
Total 20,28,767 16,58,842 16,08,779
Note 18 : Other Non Current Liabilities

As at As at As at
31.03.2017 31.03.2016 01.04.2015
Decommissioning Liability 1,838 1,617 -
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 - - -
As at Balance Sheet Date 4,988 4,561 -
Consumer Contribution
Add: Received during the year - - -
(Less) : Amortisation - - -
Total 1,42,922 85,110 46,636
258

Note 19 : Current Financial Liabilities - Borrowings
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Loans repayable on demand
From Banks
Secured Loans - 33,190 19,407
Current maturities of long term debt 21,380 14,941 48,939
Unsecured Loans 2,55,366 3,87,337 3,91,641
From Others
Secured Loans
Unsecured Loans
Secured Loans
Unsecured Loans
Total 2,76,746 4,35,468 4,59,988
Note 20 : Current Financial Liabilities - Trade Payables
As at As at As at
01.04.2015 01.04.2016 01.04.2017
Trade Payable 60,947.55 69,403.87 81,846.53
259

Note 21 : Current - Other Financial Liabilities
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Current Maturities of Long-Term Debt
Current Maturities of Finance Lease Obligations
Interest Accrued
Unpaid Dividends
Others
Fuel related liabilities 0 618 530
Liability for capital supply/works 4,505 3,502 3,435
Liability for O&M supply/works 8,149 8,991 3,772
Staff related liabilities and provisions 14,674 20,116 27,419
Deposit and Retentions from Suppliers/Contractors 71,670 60,387 49,491
Electricity Duties and Other levies payable
to Government 0 1,79,434 1,46,781
Liability for Expenses 2,466 2,105 1,561
Amount owing to Licensees 16 16 16
Accrued/Unclaimed amount relating to borrowings 15,557 13,104 9,736
Other Liabilities & Provisions 10,341 11,419 11,520
Deposit for Electrification, Service connection etc 62,620 53,350 45,694
Total 1,89,998 3,53,043 2,99,957
Note 22 : Current Provisions

Particulars As per Ind As (Rs. In lakhs)
As at As at As at
31.03.2017 31.03.2016 01.04.2015
Provision for Employee Benefits
Dearness Allowance
As at Balance Sheet Date - 1,365.00 1,365.00
Dearness Relief to Pensioners
As at Balance Sheet Date - 720.00 720.00
Income Tax
As at Balance Sheet Date -
Total - 2,085.00 2,085.00
260

Note 23 : Revenue from operations

2016-17 2015-16
Interstate - 3
Domestic 3,95,334 3,74,410
Commercial 2,70,904 2,44,850
Public Lighting 15,664 15,636
Irrigation & Dewatering 10,201 6,562
Industrial L T 75,472 74,663
Railway Traction 13,052 12,086
Bulk Supply 36,325 34,704
Miscellaneous 91 24
H. T. 2,36,138 2,26,147
E. H. T. 49,270 55,518
NVVN/ Others 1,227 4,167
Reactive Energy Charges 544 180
Electricity Duty Recovery 76,223 70,926
Other State Levies Recovery 1,398 1,330
Meter Rent/Service Line Rental 9,204 9,013
Wheeling Charges Recoveries 40 19
Misce. Charges from Consumers 8,418 33,461
GROSS SALE OF POWER 11,99,504 11,63,700
Less: Electricity Duty Payable (Contra ) 76,223 70,926
Less: Other State Levies Payable (Contra ) 1,398 1,330
Total 11,21,883 10,91,444
Note 24. a) Other Operating Income

2016-17 2015-16
Rebate Received 14,246 12,355
Interest Advances to Suppliers/Contractors 85 176
Income from sale of Scrap/Tender form etc 7,885 4,986
Miscellaneous Receipts 17,096 13,073
Dividend Income - 22
Total 39,312 30,612
261
Note 24. b) Other Income

2016-17 2015-16
Interest Income
Staff Loans and Advances 22 27
Income From Investments 24 -
Banks 719 965
Total 766 991
Total (a+b) 40,078 31,603
Note 25 : Purchase of Power

2016-17 2015-16
Power purchased from Central Generating Stations 2,57,310 2,69,823
Power purchased from Others 4,28,979 3,33,492
Power purchased from Wind Generating Stations 2,966 1,833
Wheeling Charges (Less - UI Charges Received) 48,536 44,285
Other charges on Sale through Power Exchange 1,542 57
Total 7,39,332 6,49,491
Note 26: Generation of Power

2016-17 2015-16
FUEL CONSUMPTION
Oil 2,067 9,653
HSD Oil 133 423
Lub Oil 57 225
LUBRICANTS & CONSUMABLE STORES 87 125
STATION SUPPLIES 1 1
Total 2,345 10,426
Note 27: Repairs & Maintenance

2016-17 2015-16
Plant and Machinery 5,112 5,439
Buildings 971 818
Civil Works 1,142 849
Hydraulic Works 320 434
Lines, Cable Network etc. 18,434 17,908
Vehicles 233 331
Furniture and Fixtures 56 41
Office Equipments 244 231
Total 26,513 26,050
262

Note 28 : Employee Benefits

2016-17 2015-16
Salaries 1,75,552 1,15,044
Over Time/Holiday Wages 42 23
Dearness Allowance 37,810 93,042
Other Allowances 7,852 4,159
Bonus 910 826
Medical Expenses Reimbursement 1,035 853
Leave Travel Assistance 13 -
Earned Leave Encashment 14,567 14,669
Payment under Workmen’s Compensation Act 50 8
Leave Salary & Pension Contribution Paid by the
Company to the Employees and Other Departments 1,378 18
Funeral Allowance 5 4
Staff Welfare Expenses 433 189
Terminal Benefits 1,20,722 1,00,450
(Less) Expenses Capitalised 24,292 18,829
Total 3,36,077 3,10,455
Note 29 : Finance Cost

2016-17 2015-16
Finance Charges on Financial Liabilities
Measured at Amortised Cost
INTEREST
Interest on State Govt. Loans
Interest on Bonds
Interest on other loans/deferred credits 43,579 40,331
Interest to Consumers 17,727 16,790
Interest on Borrowings for Working Capital 24,894 22,943
OTHER INTEREST AND FINANCE CHARGES
Rebate allowed for prompt payment to NVVN
Discount to Consumers for timely payment of bills 148 162
Interest To Suppliers/Contractors-O&M
Interest on Contributory Provident Fund
Interest on General Provident Fund 14,345 10,625
Other Interest - 16
Cost of Raising Finance 0 4
Other Charges 1,762 42
Less: Other Borrowing Costs 6,463 5,773
Total 95,992 85,139
263

Note 30 : Depreciation, Amortisation and Impairment Expenses

2016-17 2015-16
Depreciation - Buildings 2,212 2,018
Depreciation - Hydraulic Works 6,343 5,563
Depreciation - Other Civil Works 1,838 1,604
Depreciation - Plant & Machinery 23,607 25,107
Depreciation - Line Cable & Network 36,367 34,309
Depreciation - Vehicles 98 89
Depreciation - Furniture & Fixtures 204 178
Depreciation - Office Equipments 1,220 1,093
Total 71,888 69,962
Note 31 : Administrative Expenses

2016-17 2015-16
Rent 1,219 684
Rates and Taxes 181 119
Insurance 25 117
Telephone Charges, Postage, Telegram & Telex charges 406 401
Internet charges 13 14
Legal Charges 895 594
Audit Fees - Statutory audt 38 37
Audit Fees - others 111 1
Consultancy Charges 38 9
Technical Fees 66 49
Other Professional Charges 90 60
Conveyance and Travel 6,015 5,713
Expenses in respect of ESCOT 1 91
Salary and other allowance of Appellet Authority 4 4
Bank Charges 107 6
Fees and Subscriptions 62 55
Freight 921 970
Books and Periodicals 6 5
Printing and Stationary 963 1,080
Data Processing Charges 10 10
Advertisements 131 66
Electricity Charges 730 657
Water Charges 49 34
Entertainment 73 55
Ele. Duty u/s 3(i) of KED Act 11,527 11,137
Miscellaneous Expenses 301 507
Other Expenses 16,029 12,103
Less: Expenses capitalised 2,534 1,621
TOTAL 37,479 32,958
264

Note 32 : Others
Sl. Particulars (Rs. In lakhs)

No.
2016-17 2015-16
1 Material Cost Variance 6,432 6,861
2 Research and Development Expenses 20 9
3 Bad and Doubtful Debts Written off / Provided for 854 1,306
4 Miscellaneous Losses and Write Offs 1,555 396
5 Sundry Expenses - 2
6 Loss on account of flood cyclone etc 2 -
TOTAL(A) 8,863 8,575
Prior Period Expenses or Losses

No.
2016-17 2015-16
1 Other Excess Provision in Prior Periods 15 2
2 Other Income relating to Prior Periods 2,600 561
INCOME RELATING TO PREVIOUS YEARS 2,615 564
3 Fuel Related Losses and Expenses Relating to Prior Period - 2
4 Operating Expenses of Previous Years 12 3
5 Interest on Other Financial Charges in Previous Years 18 1,427
6 Other Charges 2,086 117
EXPENSE RELATING TO PREVIOUS YEARS 2,116 1,549
NET PRIOR PERIOD CREDITS/(CHARGES) (1-2)(B) 499 -985.69
TOTAL(A+B) 8,364 9,560
Note 33 : Changes in fair valuation and Other Adjustments

No.
2016-17 2015-16
1 Income on account of Fair Valuation Changes 3,390 -2
2 Clawback of Grant 3,177 1,299
Total 6,566 1,296
265

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]
A. Contingent Liabilities not provided for in respect of:
1. Capital liabilities becoming due for re-payment/redemption 3,92,411.97 3,75,350.89
2. Disputed Income-tax Matters 35,832.26 35,832.26
3. Claims against Group pending Court Orders/
Government orders 10,401.00 -
4. NTPC 1,979.74 -
5. KPTCL 3.98 -
6. Bank Guarantee of BWCCL 3750.00 3750.00
B. Capital Commitments
1. Contracts placed but not executed 28,567.53 20,986.89
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, 2017 20650.74 424209.38 444860.12
March 31, 2016 48130.88 152515.45 200646.33
April 01, 2015 68346.34 120996.02 189342.36
Unsecured Loan
March 31, 2017 188750.00 188750.00
March 31, 2016 190000.00 190000.00
266
April 01, 2015 199999.90 199999.90

Total
March 31, 2017 209400.74 424209.38 633610.12
March 31, 2016 238130.88 152515.45 390646.33
April 01, 2015 268346.24 120996.02 389342.26
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
(Distribution 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 from
(Kattakada, Pothencode) the loans
4 PFC Pallivasal Extension Scheme Immovable and movable
(Generation Scheme) properties presentpresent,
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 Future assets created
Funding (Distribution scheme) from the loans
7 REC 8 Nos. Transmission schemes Future moveable assets
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 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 household Future assets created from
the loans
14 REC-Medium Term loan Purchase of power Hypothecation of assets of
267
Transmission circle
15 REC-Various Schemes System improvement schemes Future assets created from
the loans and Govt.
Guarantee.
Loans of `30014 lakh is not considered for revaluation as repayment liability is not confirmed.
34.4. Related Party Disclosures
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 M. Sivasankar IAS CMD 4.86 1.34 6.20
2 Paul Antony IAS CMD 9.98 1.99 11.97
3 Dr. K. Ellangovan IAS CMD 9.02 9.02
4 N.S. Pillai IA & AS Director 22.13 1.88 24.01
5 Vijaya Kumari. P Director 19.25 5.07 24.32
6 Asokan. O Director 18.93 5.36 24.29
7 Venugopalan. N Director 17.57 6.99 24.56
8 Rajeev. S Director 13.70 1.18 14.88
34.5. Interest and finance charges capitalized
Interest and finance charges capitalized @ 9.60%.
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
268

Disclosure as per Ind AS 108 is given below.
Rs. in lakhs Rs. in lakhs Rs. in lakhs Elimina- Rs. in lakhs
tions
Segment Revenue
Sale of energy &
Meter rent 74439.51 95127.00 1121882.81 1291449.31
Total 74439.51 95127.00 1121882.81 1291449.31
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

Rs. in lakhs Rs. in lakhs Rs. in lakhs Elimina- Rs. in lakhs
tions
Segment Revenue
Sale of energy &
Meter rent 65618.07 78994.22 1091443.60 1236055.90
Total 65618.07 78994.22 1091443.60 1236055.90
Segment result
Allocable expenses (net) 14379.16 15747.33 -131426.38 -101299.89
Operating income
Other income (net) 1860.08 3204.48 26538.73 31603.29
269
Tax expense

Business segments
Segment assets
Total assets 1527162.84 310665.84 1051493.28 2889321.96
Segment liabilities
Other information
Capital expenditure
Capital expenditure (Allocable) 75391.81 35234.07 67703.31 178329.19
Depreciation and amortisation
(allocable) 15374.36 21097.02 35416.54 71887.92
Depreciation and
Other significant non-
cash expenses

Business segments
Segment assets
Total assets 1511481.59 302310.23 1180224.17 2994015.99
Segment liabilities
Other information
Capital expenditure
Capital expenditure (Allocable) 87399.57 35957.55 50135.86 173492.98
Depreciation and
270
Depreciation and
Other significant non-
cash 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:
No.
1 Earnings Available to Equity
Share Holders (` in lakhs) (147931) (68069)
2 Number of weighted equity shares 3499050000 3499050000
3 Face value per share (Rs.) 10 10
4 Earnings per Share (Basic) (Rs.) (4.23) (1.95)
5 Earnings per Share (Diluted) (Rs.) (4.23) (1.95)
34.9 Details of Specified Bank Notes (SBN) held and transacted during the period 8 November
2016 to 30 December 2016 Pursuant to MCA Notification No. GSR 308(E) dated 30 March 2017.
`.in lakhs
Particulars Specified Bank Other Denomination
Notes Notes Total
Closing cash in hand as on 08.11.2016 87988000 7944665 95932665
Add: Permitted Receipts 2402236050 5248614113 7650850163
: Non-permitted Receipts
Less: Permitted Payments 79218 79218
Less: Amount Deposited in Banks 2490224050 5155968821 7646192871
Closing Cash in Hand as on 30.12.2016 0 100510739 100510739
Balance available and receipts at various offices of the Company, as per separate records.
34.10 Statutory Auditors’ Remuneration
[ ` in Lakhs]
Particulars For the year ended For the year ended
March 31, 2017 March 31, 2016
Remuneration of statutory auditors 37.77 36.65
Total 37.77 36.65
271
34.11. 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 2016-17
though the claims are not fully admitted by the Company.
(`. in lakhs)
Sl No. Supplier Amount
1 MAITHON 427
2 NPCIL-MAPs 285
3 KAIGA 2
4 JHABUA POWER 553
5 DVC 2293
6 KPCL 3720
7 APCPL 419
8 KPTCL (Wheeling) 1786
9 KPTCL (RE charges) 14
10 NLC 15830
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 `40.31 crores 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 `30.70 crores. 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 `13.34 crores. Accordingly, an amount of `13.84 crore is provided in the accounts though
the claim is not admitted by KSEB Ltd. KSEBL had approached the Government to waive the
interest claim in this regard amounting to `78.65 crores and to withdraw the claim of balance
differential tax amounting to `25.36 Crores. KSEB Ltd. is expecting favorable orders from the
Government of Kerala. Accordingly, an amount of `104.01 crore is shown under contingent
272
liabilities.
b. NTPC has claimed revision of fixed charges of RGCCPP, Kayamkulam from the month of 10/16
onwards. As the company has not accepted the revision claims and KSERC has adversely
commented on the additional claim of fixed charges, the KSEB Ltd. is paying the fixed charges
at the old rates. A total claim of `265.57 crores in this regard is not admitted and accounted by
the KSEB Ltd..
c. 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.
d. Inter Unit balances amount to Rs.1536.57 Lakhs (Previous year Rs.1311.85Lakhs) has been
considered as Sundry Receivables pending complete reconciliation of such balances.
e. The GPF balances of KSEB Ltd. as per financial statements is `2029.93 crores. A difference of `
42.98 lacs with the party wise registers maintained at GPF section are reported and the same
is being verified.
f. The Kerala Power Finance Corporation has issued 1319440 Nos. of Equity Shares of Rs.10/- each
as Bonus Share to the erstwhile KSE Board during the Year 2004-05.
g. Renewable Power Corporation of Kerala has not started commercial operation during the year
and therefore has not recognized any revenue for the year ended 31 March 2017.
h. Old outstanding balances lying in the books of accounts without proper adjustments were
written off/ written back based on the audit observations and net amount of `8.12 crore is
written back as income during the current financial year.
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 Rs.622.98 crores is recognized as unbilled revenue as on 31.03.2017(Previous year
Rs.589.62crores) and the amount is debited to sundry debtors for sale of power.
k. KSEB Ltd. 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.
273
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 KSEB Ltd. has deposited Rs. 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 Ltd. 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 Rs.7.57 crores 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 KSEB Ltd. in Trivandrum was transferred to Trivandrum
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. Since
the Government order pertains to the financial year 2017-18 this has not been adjusted during
the year.
274
o. In the 32nd Meeting of Board of Directors of KSEB Ltd. held on 30.05.2017 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 31.03.2017
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 267821lakh is netted
off with the amount receivable from the Government. In line with the decision of the Board
this has been reported to Government for concurrence.
p. Figures for the previous year have been re arranged and regrouped wherever necessary.

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

Sd/- Sd/-

For ISAAC&SURESH For ANANTHAN &SUNDARAM


Sd/- Sd/-
SOBHA SETHUMADHAVAN FCA C.A.HARIKRISHNAN.R.S.M.Com, DISA, FCA

Chartered Accountants
FRN:004674S

Sd/-
RAVINATH.R.PAI FCA
Partner M.No. 226547
Place : Thiruvananthapuram
Date : 01.03.2018

275
Part "B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013
Sl. Name of Associates/ Renewable Power Kerala State Power Baitarani West
No. Joint Ventre Corporation of Infrastructure Coal Company
Kerala Ltd. Finance Ltd.
Corporation Ltd.
1. Latest Audited balance Sheet 31 st March 2017 31 st March 2017 31 st March 2017
Date
2. Date on which the Associate
or Joint venture was 31st March 2016 20th March 1998 14th August 2008
associated or acquired
3 Shares of Associates/Joint Venture held by the Company on the year end as at 31.03.2017
Number 5,000 10,819,440 100,000
Amoun of Investment in
Associates/Joint Venture 5,000,000 Rs, 10,81,94,400 Rs, 10,00,00,000
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 Rs, 5,000,000 Rs, 285,015,638 Rs, 99,402,571
Shareholding as per latest
audited Balance Sheet
7. Profit/Loss for the year (Total Comprehensive Income)
i. Shates of Associates / Joint
Venture held by the Company 0 28,285,963 -531,482
on the year end as at 31.03.2017
i Not Consisdered in NA NA NA
Consolidation
276
Summarised financial information 50% 40.60% 33.33%

of the associate/Joint Venture
RPCL KSPIFC BWCL
Current assests 18,773,325 400,168,098 92,625,225
Non-current assets 387118866 386,994,723 207,877,048
Total assets (A) 405,892,191 787,162,821 300,502,273
Current liabilities 375,892,191 75,449,529 934,338
Non-current liabilities 20,000,000 9,704,332 1,330,399
Total liabilities (B) 395,892,191 85,153,861 2,264,737
Equity (A-B) 10,000,000 702,008,960 298,237,536
Summarised statement of Profit and loss
Revenue from operations 0 92,649,180 0
Other income 0 5,449,621 6,482,558
Other expenses 0 13,725,851 5870432
Fianance costs 0 12,538,728 4333
Depreciation 0 966,707 139221
Tax expenses 0 42795925
Defered Tax Income -214373 0
0
Profit for the year 0 28,285,963 -531,428
Group's share of profit/(Loss) for the year 0 11,484,101 -177,125

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

Sd/- Sd/-
Sd/-
RAVINATH.R.PAI FCA
Partner M.No.226547
Date:01.03.2018
277
278

6th Annual Report 2016-17-17014092761851082664

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KERALA STATE ELECTRICITY BOARD LIMITED

SIXTH 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 88

5. Comments of the C&AG of India on Stand alone financial statement 103

6. Comments of the C&AG of India on Consolidated financial statement 106

7 Comments of Principal Secretary (Finance) Government of Kerala 110

8. Secretarial Audit Report 111

9. Cost Audit Report 115

10. Replies of the Management

1. Replies to comments of Independent Auditor 120

2. Replies to comments of C&AG 148

3. Replies to comments of Principal Secretary (Finance) 158

4. Replies to comments of Secretarial Auditor 161

11 Standalone Financial Statement 164

12 Consolidated Financial Statement 226

KERALA STATE ELECTRICITY BOARD LIMITED

KERALA STATE ELECTRICITY BOARD LIMITED

All members, Auditors and Directors

Notice of Adjourned Annual General Meeting

Ref: AGM dt 27.09.2017

By order of the Board

KERALA STATE ELECTRICITY BOARD LIMITED

Office of the Chairman & Managing Director

REPORT OF THE BOARD OF DIRECTORS

Particulars 2016-17 2015-16

Revenue and Expenditure 2016-17 (In ₹ Crores)

Consumer Category wise Source of income 2016-17 (in percentage)

Revenue and Expenditure 2016-17 (In ₹ Crores)

Composition of Cost Structure in Percentage (2016-17)

Composition of Cost Structure in Percentage (2015-16)

Value of Assets at the end of the year 2016-17 (in ₹ Crores)

Liabilities at the close of the year 2016-17 (in ₹ Crores)

13 03134779 Sri.Kumaran. P 20.06.2017 to till date

G.1 GENERATION SBU

Unit #4 - 12.8 05.01.1955 01.12.2001

Unit #3 - 0.9 19.08.2003

24 Lower Unit #1 - 1.5 25.03.2006 2.48

26 Kuttiadi Unit #1 - 1.25 19.06.2008 6.35

Unit #3 - 126.6 11.12.1999 NA

Substation 1.25 05.09.2016 NA 1.25 2.08 1.03 19

4 Iruttukkanam Unit #1 - 1.5 18.09.2010

Unit #1 - 40.5 15.06.2001

2 Kasargode Unit #1 - 7.3

3 Ahalia Alternate 1 x 2.1 MW 22.02.2016

**PPA ended on 31-10-2015

G.1.3 RENEWABLE ENERGY & ENERGY SAVINGS (REES)

Sl. No Name of Project Installed Date of

13 As part of IPDS scheme 1120 Tendered

C. IMPLEMENTATION OF SOLAR PARKS

* The 400 kV Substations at Pallippuram (Thiruvananthapuram), Pallikkara (Ernakulam), Areakode and

G.3 a Total Electrification

5) KERALA DEVELOPMENT SCHEME

J.CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE