A PROJECT REPORT ON Funds Flow Statement With Reference To Genting Lanco Power (India) Pri ate Limited !

i"a#awada In Partial Fulfillment of the Requirement For The Award of the Degree In MA T!R OF "# IN! ADMINI TRATION $M"A% u&mitted "' ()R#*MAN+ADA RAO
$nder t%e Guidance o& 'R( E )aga Anil *a+u (+enting ,anco Power $India% Pri-ate ,imited)

,(!(R(POST GRA,$ATIO) I)STIT$TE OF 'A)AGE'E)T ST$,IES Jul# -../ 0 'a#-..1

CERTIFICATE

Thi. i. to certif' that Mr) ()R#*MAN+ADA RAO +RAD#ATION IN TIT#T! OF MANA+!M!NT T#DI!

of

D)()R

PO T

ha. ucce..full'

com/leted the /ro0ect wor1 titled !(A,#ATION OF FINAN2IA, P!RFORMAN2! in /artial fulfillment of requirement for the award of $PO T +RAD#AT! MANA+!M!NT PRO+RAM% /re.cri&ed &' the D)()R P+ IN TIT#T! OF MANA+!M!NT T#DI! ) Thi. /ro0ect i. the record of authentic wor1 carried out during the academic 'ear $3445 6 3447%)

Pro&('rs( An"ali !am+ur2ar

Pro&( (G3 Ca3t) ,(P(APTE

Internal Pro0ect +uide

A..ociate Director

,ECLARATIO)

I4 'r(55 555 %ere+# declare t%at t%is 3ro"ect is t%e record o& aut%entic wor2 carried out +# me during t%e academic #ear -../0 -..1 and %as not +een su+mitted to an# ot%er $ni ersit# or Institute towards t%e award o& an# degree(

Signature o& t%e student

AC6)O7LE,GE'E)T
I am -er' much o&liged and inde&ted to 'r( S Anand4 +eneral Manager of +enting ,anco Power $India% Pri-ate ,imited for hi. a//ro-al and -alua&le .ugge.tion. to ta1e u/ the /ro0ect) I al.o e8tend m' gratitude to 'r) R Srini asa Rao9 Manager $Finance : Account.% for hi. a//ro-al and -alua&le .ugge.tion. to ta1e u/ the /ro0ect in +enting ,anco Power $India% Pri-ate ,imited) I e8/re.. m' dee/ .en.e of gratitude to 'r( E )aga Anil *a+u4 Asst 'anager for hi. -alua&le .ugge.tion.9 con.i.tent hel/ and /er.onal intere.t during m' /ro0ect wor1) I am al.o than1ful to 'r( G( Ra"es%4 Accountant for hi. .u//ort and .ugge.tion. during the /ro0ect) I am -er' /lea.ed to e8/re.. m' dee/ .en.e of gratitude to ;;;;;;;;;;;;;;;;;; $Profe..or% for her con.i.tent encouragement) I .hall fore-er cheri.h m' a..ociation with her for e8u&erant encouragement9 /erennial a//roacha&ilit'9 a&.olute freedom of thought and action I ha-e en0o'ed during the cour.e of the /ro0ect)

Chapter 1

I)TRO,$CTIO)

Introduction
Financial 'anagement i. the ./ecific area of finance dealing with the financial deci.ion cor/oration. ma1e9 and the tool. and anal'.i. u.ed to ma1e the deci.ion.) The di.ci/line a. a whole ma' &e di-ided &etween long;term and .hort;term deci.ion. and technique.) "oth .hare the .ame goal of enhancing firm -alue &' en.uring that return on ca/ital e8ceed. co.t of ca/ital9 without ta1ing e8ce..i-e financial ri.1.) Capital investment decisions com/ri.e the long;term choice. a&out which /ro0ect. recei-e in-e.tment9 whether to finance that in-e.tment with equit' or de&t9 and when or whether to /a' di-idend. to .hareholder.) hort;term cor/orate finance deci.ion. are called working capital management and deal with &alance of current a..et. and current lia&ilitie. &' managing ca.h9 in-entorie.9 and .hort;term &orrowing. and lending $e)g)9 the credit term. e8tended to cu.tomer.%) 2or/orate finance i. clo.el' related to managerial finance9 which i. .lightl' &roader in .co/e9 de.cri&ing the financial technique. a-aila&le to all form. of &u.ine.. enter/ri.e9 cor/orate or not)

Role o& Financial 'anagers< The role of a financial manager can &e di.cu..ed under the following head.< =) Nature of wor1 3) Wor1ing condition. >) !m/lo'ment ?) Training9 Other qualification. and Ad-ancement 5) @o& outloo1 7) !arning. A) Related occu/ation.

,et u. di.cu.. each of the.e in a detailed manner) =) )ature o& wor2 Almo.t e-er' firm9 go-ernment agenc' and organiBation ha. one or more financial manager. who o-er.ee the /re/aration of financial re/ort.9 direct in-e.tment acti-itie.9 and im/lement ca.h management .trategie.) A. com/uter. are increa.ingl' u.ed to record and organiBe data9 man' financial manager. are ./ending more time de-elo/ing .trategie. and im/lementing the long;term goal. of their organiBation)

The dutie. of financial manager. -ar' with their ./ecific title.9 which include controller9 trea.urer or finance officer9 credit manager9 ca.h manager9 and ri.1 and in.urance manager) Controllers direct the /re/aration of financial re/ort. that .ummariBe and foreca.t the organiBationC. financial /o.ition9 .uch a. income .tatement.9 &alance .heet.9 and anal'.e. of future earning. or e8/en.e.) Regulator' authoritie. al.o in charge of /re/aring ./ecial re/ort. require controller.) Often9 controller. o-er.ee the accounting9 audit9 and &udget de/artment.) Treasurers and finance officers direct the organiBationC. financial goal.9 o&0ecti-e.9 and &udget.) The' o-er.ee the in-e.tment of fund. and manage a..ociated ri.1.9 .u/er-i.e ca.h management acti-itie.9 e8ecute ca/ital;rai.ing .trategie. to .u//ort a firmC. e8/an.ion9 and deal with merger. and acqui.ition.) Credit managers o-er.ee the firmC. i..uance of credit) The' e.ta&li.h credit;rating criteria9 determine credit ceiling.9 and monitor the collection. of /a.t;due account.) Manager. ./ecialiBing in international finance de-elo/ financial and accounting .'.tem. for the &an1ing tran.action. of multinational organiBation.) Cash managers monitor and control the flow of ca.h recei/t. and di.&ur.ement. to meet the &u.ine.. and in-e.tment need. of the firm) For e8am/le9 ca.h flow /ro0ection. are needed to determine whether loan. mu.t &e o&tained to meet ca.h requirement. or whether .ur/lu. ca.h .hould &e in-e.ted in intere.t;&earing in.trument.) Risk and insurance managers o-er.ee /rogram. to minimiBe ri.1. and lo..e. that might ari.e from financial tran.action. and &u.ine.. o/eration. underta1en &' the in.titution) The' al.o manage the organiBationC. in.urance &udget) Financial in.titution.9 .uch a. commercial &an1.9 .a-ing. and loan a..ociation.9 credit union.9 and mortgage and finance com/anie.9

a. lending9 tru.t.9 mortgage.9 and in-e.tment.9 or /rogram.9 including .ale.9 o/eration.9 or electronic financial .er-ice.) The.e manager. ma' &e required to .olicit &u.ine..9 authoriBe loan.9 and direct the in-e.tment of fund.9 alwa'. adhering to tate law. and regulation.) "ranch manager. of financial in.titution. admini.ter and manage all of the function. of a &ranch office9 which ma' include hiring /er.onnel9 a//ro-ing loan. and line. of credit9 e.ta&li.hing a ra//ort with the communit' to attract &u.ine..9 and a..i.ting cu.tomer. with account /ro&lem.) Financial manager. who wor1 for financial in.titution. mu.t 1ee/ a&rea.t of the ra/idl' growing arra' of financial .er-ice. and /roduct.) In addition to the general dutie. de.cri&ed a&o-e9 all financial manager. /erform ta.1. unique to their organiBation or indu.tr') For e8am/le9 go-ernment financial manager. mu.t &e e8/ert. on the go-ernment a//ro/riation. and &udgeting /roce..e.9 wherea. healthcare financial manager. mu.t &e 1nowledgea&le a&out i..ue. .urrounding healthcare financing) Moreo-er9 financial manager. mu.t &e aware of ./ecial ta8 law. and regulation. that affect their indu.tr') Financial manager. /la' an increa.ingl' im/ortant role in merger. and con.olidation. and in glo&al e8/an.ion and related financing) The.e area. require e8ten.i-e9 ./ecialiBed 1nowledge on the /art of the financial manager to reduce ri.1. and ma8imiBe /rofit) Financial manager. increa.ingl' are hired on a tem/orar' &a.i. to ad-i.e .enior manager. on the.e and other matter.) In fact9 .ome .mall firm. contract out all accounting and financial function. to

The role of the financial manager9 /articularl' in &u.ine..9 i. changing in re./on.e to technological ad-ance. that ha-e .ignificantl' reduced the amount of time it ta1e. to /roduce financial re/ort.) Financial manager. now /erform more data anal'.i. and u.e it to offer .enior manager. idea. on how to ma8imiBe /rofit.) The' often wor1 on team.9 acting a. &u.ine.. ad-i.or. to to/ management) Financial manager. need to 1ee/ a&rea.t of the late.t com/uter technolog' in order to increa.e the efficienc' of their firmC. financial o/eration.)

-( 7or2ing conditions Financial manager. wor1 in comforta&le office.9 often clo.e to to/ manager. and to de/artment. that de-elo/ the financial data the.e manager. need) The' t'/icall' ha-e direct acce.. to .tate;of;the;art com/uter .'.tem. and information .er-ice.) Financial manager. commonl' wor1 long hour.9 often u/ to 54 or 74 /er wee1) The' generall' are required to attend meeting. of financial and economic a..ociation. and ma' tra-el to -i.it .u&.idiar' firm. or to meet cu.tomer.)

8( Em3lo#ment While the -a.t ma0orit' i. em/lo'ed in /ri-ate indu.tr'9 nearl' = in =4 wor1. for the different &ranche. of go-ernment) In addition9 although the' can &e found in e-er' indu.tr'9 a//ro8imatel' = out of ? are em/lo'ed &' in.urance and finance e.ta&li.hment.9 .uch a. &an1.9 .a-ing. in.titution.9 finance com/anie.9 credit union.9 and

?) Training4 Ot%er 9uali&ications and Ad ancement A &achelorC. degree in finance9 accounting9 economic.9 or &u.ine.. admini.tration i. the minimum academic /re/aration for financial manager.) Dowe-er9 man' em/lo'er. now .ee1 graduate. with a ma.terC. degree9 /refera&l' in &u.ine.. admini.tration9 economic.9 finance9 or ri.1 management) The.e academic /rogram. de-elo/ anal'tical .1ill. and /ro-ide 1nowledge of the late.t financial anal'.i. method. and technolog') !8/erience ma' &e more im/ortant than formal education for .ome financial manager /o.ition.Enota&l'9 &ranch manager. in &an1.) "an1. t'/icall' fill &ranch manager /o.ition. &' /romoting e8/erienced loan officer. and other /rofe..ional. who e8cel at their 0o&.) Other financial manager. ma' enter the /rofe..ion through formal management training /rogram. offered &' the com/an') 2ontinuing education i. -ital for financial manager.9 who mu.t co/e with the growing com/le8it' of glo&al trade9 change. in tate law. and regulation.9 and the /roliferation of new and com/le8 financial in.trument.) Firm. often /ro-ide o//ortunitie. for wor1er. to &roaden their 1nowledge and .1ill. &' encouraging em/lo'ee. to ta1e graduate cour.e. at college. and uni-er.itie. or attend conference. related to their ./ecialt') Financial management9 &an1ing9 and credit union a..ociation.9 often in coo/eration with college. and uni-er.itie.9 ./on.or numerou. national and local training /rogram.) Per.on. enrolled /re/are e8ten.i-el' at home and then attend .e..ion. on .u&0ect. .uch a. accounting management9 &udget management9 cor/orate ca.h management9 financial anal'.i.9 international &an1ing9 and information .'.tem.) Man' firm. /a' all or /art of the co.t. for em/lo'ee.

who .ucce..full' com/lete cour.e.) Although e8/erience9 a&ilit'9 and leader.hi/ are em/ha.iBed for /romotion9 thi. t'/e of ./ecial .tud' ma' accelerate ad-ancement) In .ome ca.e.9 financial manager. al.o ma' &roaden their .1ill. and e8hi&it their com/etenc' &' attaining /rofe..ional certification) There are man' different a..ociation. that offer /rofe..ional certification /rogram.) For e8am/le9 the A..ociation for In-e.tment Management and Re.earch confer. the 2hartered Financial Anal'.t de.ignation on in-e.tment /rofe..ional. who ha-e a &achelorC. degree9 /a.. three .equential e8amination.9 and meet wor1 e8/erience requirement.) The A..ociation for Financial Profe..ional. $AFP% confer. the 2ertified 2a.h Manager credential to tho.e who /a.. a com/uter;&a.ed e8am and ha-e a minimum of 3 'ear. of rele-ant e8/erience) The In.titute of Management Accountant. offer. a 2ertified in Financial Management de.ignation to mem&er. with a "A and at lea.t 3 'ear. of wor1 e8/erience who /a.. the in.tituteC. four;/art e8amination and fulfill continuing education requirement.) Al.o9 financial manager. who ./ecialiBe in accounting ma' earn the 2ertified Pu&lic Accountant de.ignation.) 2andidate. for financial management /o.ition. need a &road range of .1ill.) Inter/er.onal .1ill. are im/ortant &ecau.e the.e 0o&. in-ol-e managing /eo/le and wor1ing a. /art of a team to .ol-e /ro&lem.) Financial manager. mu.t ha-e e8cellent communication .1ill. to e8/lain com/le8 financial data) "ecau.e financial manager. wor1 e8ten.i-el' with -ariou. de/artment. in their firm9 a &road o-er-iew of the &u.ine.. $2PA% or 2ertified Management Accountant $2MA%

.ol-er.9 a//l'ing their anal'tical .1ill. to &u.ine..) The' mu.t &e comforta&le with the late.t com/uter technolog') A. financial o/eration. increa.ingl' are affected &' the glo&al econom'9 financial manager. mu.t ha-e 1nowledge of international finance) Proficienc' in a foreign language al.o ma' &e im/ortant) "ecau.e financial management i. critical for efficient &u.ine.. o/eration.9 well;trained9 e8/erienced financial manager. who di./la' a .trong gra./ of the o/eration. of -ariou. de/artment. within their organiBation are /rime candidate. for /romotion to to/ management /o.ition.) ome financial manager. tran.fer to clo.el' related /o.ition. in other indu.trie.) Tho.e with e8ten.i-e e8/erience and acce.. to .ufficient ca/ital ma' .tart their own con.ulting firm.)

/( Jo+ outloo2 ome com/anie. ma' hire financial manager. on a tem/orar' &a.i.9 to .ee the organiBation through a .hort;term cri.i. or to offer .ugge.tion. for &oo.ting /rofit.) Other com/anie. ma' contract out all accounting and financial o/eration.) !-en in the.e ca.e.9 howe-er9 financial manager. ma' &e needed to o-er.ee the contract.) 2om/uter technolog' ha. reduced the time and .taff required to /roduce financial re/ort.) A. a re.ult9 foreca.ting earning.9 /rofit.9 and co.t.9 and generating idea. and creati-e wa'. to increa.e /rofita&ilit' will &ecome a ma0or role of cor/orate financial

Financial manager. who are familiar with com/uter .oftware that can a..i.t them in thi. role will &e needed)

:( Earnings The A..ociation for Financial Profe..ional.C =7th annual com/en.ation .ur-e' .howed that financial officer.C a-erage total com/en.ation in 34479 including &onu.e. and deferred com/en.ation9 wa. F37=9G44) elected financial manager /o.ition. had a-erage total com/en.ation a. follow.< # F (ice /re.ident of finance Trea.urer A..i.tant -ice /re.ident;finance 2ontrollerHcom/troller Director A..i.tant trea.urer A..i.tant controllerHcom/troller Manager 2a.h manager >7A9444 >4=9344 3G39744 37G9744 33A9344 33>9G44 3>=9444 =7A9444 =3I9?44

,arge organiBation. often /a' more than .mall one.9 and .alar' le-el. al.o can de/end on the t'/e of indu.tr' and location)

manager. in &oth /u&lic and /ri-ate indu.tr' recei-e additional com/en.ation in the form of &onu.e.9 which al.o -ar' .u&.tantiall' &' .iBe of firm) Deferred com/en.ation in the form of .toc1 o/tion. i. &ecoming more common9 e./eciall' for .enior le-el e8ecuti-e.)

1( Related occu3ations Financial manager. com&ine formal education with e8/erience in one or more area. of finance9 .uch a. a..et management9 lending9 credit o/eration.9 .ecuritie. in-e.tment9 or in.urance ri.1 and lo.. control) Wor1er. in other occu/ation. requiring .imilar training and .1ill. include accountant. and auditor.J &udget anal'.t.J financial anal'.t. and /er.onal financial ad-i.or.J in.urance underwriter.J loan coun.elor. and officer.J .ecuritie.9 commoditie.9 and financial .er-ice. .ale. agent.J and real e.tate &ro1er. and .ale. agent.)

Need For tud'

The .tud' ha. great .ignificance and /ro-ide. &enefit. to -ariou. /artie. whom directl' or indirectl' interact with the com/an') It i. &eneficial to management of the com/an' &' /ro-iding cr'.tal clear /icture regarding im/ortant a./ect. li1e liquidit'9 le-erage9 acti-it' and /rofita&ilit' The .tud' i. al.o &eneficial to em/lo'ee. and offer. moti-ation &' .howing how acti-el' the' are contri&uting for com/an'C. growth)

The in-e.tor. who are intere.ted in in-e.ting in the com/an'C. .hare. will al.o get &enefited &' going through the .tud' and ea.il' ta1e a deci.ion whether to in-e.t or not in-e.t in the com/an'C. .hare.)

Objectives of the Study

To .tud' the financial .oundne.. of +enting ,anco $India% Pri-ate ,imited) To .tud' and anal'.e the fund. management in the organiBation) To e-aluate the -ariou. .ource. and a//lication. in the organiBation) To gi-e .ugge..ion. if an' the mea.ure for a &etter fund. management in the organiBation)

Methodology

The re.earch methodolog' i. collecting the data in two wa'.) Primar' Data econdar' Data

Primar' Data<

The Primar' data are tho.e which are collected a fre.h and for the fir.t time)

econdar' Data< The .econdar' data are tho.e which ha-e alread' &een collected &' .omeone el.e and which ha-e alread' &een /a..ed through the .tati.tical /roce..) The' are 2om/an' re/ort.9 !8i.ting re/ort.9 @ournal.9 We&.ite. and "alance .heet. are the .econdar' data)

,imitation. of the .tud'

=)

The .tud' /ro-ide. an in.ight into the financial9 /er.onnel9 mar1eting and other a./ect. of ,AN2O) !-er' .tud' will &e &ound with certain limitation.)

3)

The &elow mentioned are the con.traint. under which the .tud' i. carried out)

>)

One of the factor. of the .tud' wa. lac1 of a-aila&ilit' of am/le information) Mo.t of the information ha. &een 1e/t confidential and a. .uch a. not a..ed a. art of /olic' of com/an') Time i. an im/ortant limitation) The whole .tud' wa.

conducted in a /eriod of 74 da'.9 which i. not .ufficient to carr' out /ro/er inter/retation and anal'.i.)

Chapter 2

T;E ELECTRICIT< REG$LATOR< CO''ISSIO) A)AL<SIS (S$*STA)TI!E ISS$ES RAISE, *<

T;E

P$*LIC)

Andhra Prade.h !lectricit' Regulator' 2ommi..ion wa. con.tituted on >=)4>)=III under the A)P) !lectricit' Reform Act9 =IIG) ince it. ince/tion9 the AP!R2 ha. ta1en .e-eral initiati-e. to im/ro-e the functionalit' of the Power ector in the .tate of AP to ma1e it -ia&le and more im/ortantl' to /rotect the intere.t. of the con.umer.) The commi..ion i..ued ,icen.e. to the APTRAN 2O9 the four Di.tri&ution 2om/anie. and the nine Rural !lectric 2oo/erati-e. in the .tate) &een i..ued) i8 Tariff Order. ha-e e-eral /ath &rea1ing document. ha-e &een formulated and

relea.ed relating to the /erformance of the ,icen.ee. and /rotection of the intere.t. of the con.umerC. -iB)9 2u.tomerC. right to information9 ,icen.eeK. com/laint handling /rocedure9 the grid code9 +uideline. for In-e.tment /ro/o.al.9 ,oad Foreca.ting and Power Procurement /rocedure9 Merit Order Di./atch and ,ong Term tariff Princi/le. $,TTP% etc) 2on.equent to the enactment of the !lectricit' Act 344>9 the 2ommi..ion formulated and notified a num&er of Regulation. on im/ortant a./ect. of u//l' of !lectricit' to the con.umer.) 2ommi..ion ha. facilitated com/etition in Power .ector &' notif'ing regulation. on Term. and 2ondition. of O/en Acce.. $uH. ?3% and i. in the /roce.. of notif'ing regulation. for Trading in !lectricit' $uH. 53%) 2ommi..ion i. al.o contem/lating to introduce A-aila&ilit' "a.ed Tariff $A"T% at the .tate le-el from 3447;4A onward. a. required in the National !lectricit' Polic' notified &'

The 2ommi..ion i. al.o .et to introduce Multi'ear tariff regime from 3447;4A onward. .o a. to en.ure Regulator' 2ertaint' and to im/ro-e the financial and o/erational efficienc' of the Di.tri&ution ,icen.ee.) The We&.ite i. /art of the endea-or. of the 2ommi..ion to u.her in and function in an en-ironment of tran./arenc' in it. o/eration.) ugge.tion. for im/ro-ement of the we&.ite are welcome)

Regulation )o( = o& -..1 TRA)S'ISSIO) LICE)SEE STA),AR,S OF PERFOR'A)CE In e8erci.e of the /ower. conferred &' .ection. =G= read with .ection 5A $=%9 5A $3% and G7 $=% $i% of the !lectricit' Act9 344> $>7 of 344>%9 the Andhra Prade.h !lectricit' Regulator' 2ommi..ion ma1e. the following Regulation9 namel'< =( S;ORT TITLE A), CO''E)CE'E)T

=)= Thi. Regulation ma' &e called the Andhra Prade.h !lectricit' Regulator' 2ommi..ion $Tran.mi..ion tandard. of Performance% Regulation9 344A) =)3 Thi. Regulation .hall &e a//lica&le to the tate Tran.mi..ion #tilit'H Tran.mi..ion ,icen.ee in the tate of Andhra Prade.h) =)> Thi. Regulation e8tend. to the whole of the tate of Andhra Prade.h) =)? Thi. Regulation .hall come into force on the date of it. /u&lication in the official +aBette of Andhra Prade.h)

-(

,EFI)ITIO)S

-(= In thi. Regulation9 unle.. the conte8t otherwi.e require.< $a% Act mean. the !lectricit' Act9 344> $2entral Act No) >7 of 344>%J $&% APTRAN 2O mean. Tran.mi..ion 2or/oration of Andhra Prade.h ,imited regi.tered under the 2om/anie. Act9 =I57J $c% 2!A mean. the 2entral !lectricit' Authorit'J $d% 2ommi..ion mean. Andhra Prade.h !lectricit' Regulator' 2ommi..ionJ $e% 2on.umer in the conte8t of thi. Regulation mean. an' /er.on who i. /ro-ided with the tran.mi..ion .er-ice. &' the tran.mi..ion licen.ee and include. an' /er.on who.e /remi.e. are for the time &eing connected for the /ur/o.e of /ro-iding tran.mi..ion .er-ice. from the licen.ee9 and /er.on. who ha-e a//lied for a-ailing tran.mi..ion .er-ice. from a tran.mi..ion licen.ee) $f% !D(H!DT mean. !8tra Digh (oltageH!8tra Digh Ten.ion $-oltage le-el a&o-e >>9444 -olt.%J $g% +rid 2ode mean. the .et of /rinci/le. and guideline. /re/ared in accordance with the term. of ection G7 $=% $h% of the !lectricit' Act 344>J $h% I!+2 mean. the Indian !lectricit' +rid 2ode a//ro-ed &' 2entral !lectricit' Regulator' 2ommi..ion $2!R2% and

+rid 2ode ./ecified &' 2entral 2ommi..ion under clau.e $h% of .u&; .ection $=% of .ection AI of the ActJ $i% P+2I, mean. Power +rid 2or/oration of India ,imited9 a 2entral Tran.mi..ion #tilit' notified under .u&;.ection $=% of .ection >G of the ActJ $0% Rule. mean. the Indian !lectricit' Rule.9 =I57 andHor an' other rule. made under ActJ $1% tate mean. the tate of Andhra Prade.h $l% tate Tran.mi..ion '.tem mean. the .'.tem of !D( electric line. and electrical equi/ment o/erated andHor maintained &' tate Tran.mi..ion #tilit' andHor an' Tran.mi..ion ,icen.ee for the /ur/o.e of the tran.mi..ion of electricit' among generating .tation.9 e8ternal interconnection.9 di.tri&ution .'.tem. and an' other u.er connected to it with in the .tate of Andhra Prade.hJ $m% #.er mean. a /er.on9 including +enerating tation. within the tate9 Tran.mi..ion ,icen.ee. or Di.tri&ution ,icen.ee. within the tate and o/en acce.. cu.tomer who u.e the tate Tran.mi..ion '.tem and who mu.t com/l' with the /ro-i.ion. of the +rid 2odeJ -(- 7ords and e8/re..ion. u.ed &ut not defined herein .hall ha-e the meaning a..igned to them in !lectricit' Act 344>9 Indian !lectricit' +rid 2ode9 Andhra Prade.h !lectricit' +rid 2ode and Indian !lectricit' Rule.9 =I57)

8(

O*JECTI!E Thi. Regulation la'. down the /erformance .tandard. to

maintain certain critical grid /arameter. within the /ermi..i&le limit.) The.e .tandard. .hall .er-e a. guideline. for tate Tran.mi..ion #tilit' $ T#%HTran.mi..ion ,icen.ee to o/erate the Intra; tate Tran.mi..ion '.tem for /ro-iding an efficient9 relia&le9 coordinated and economical .'.tem of electricit' .u//l' and tran.mi..ion) The main o&0ecti-e. of the.e /erformance .tandard. are< $a%) To en.ure that the grid /erformance meet. minimum .tandard. e..ential for the #.er.C .'.tem demand and /ro/er functioning of equi/mentJ $&%) To ena&le the #.er. to de.ign their .'.tem. and equi/ment to .uit the electrical en-ironment that the' o/erate inJ and $c%) To enhance the qualit' .tandard. of the tate Tran.mi..ion

'.tem in order to mo-e toward. .tandard. .ti/ulated in or e.ta&li.hed under the authorit' of National and tate Act. and Rule. in the .hort term and graduall' toward. the international .tandard. in the long term)

>(

STA),AR,S OF PERFOR'A)CE

>(= The Tran.mi..ion /erformance .tandard. are cla..ified under the following two categorie.<

$a% Mandator' tandard. ; Tho.e /erformance .tandard.9 the failure to maintain which attract. the /ro-i.ion. of .u&;.ection $3% of the .ection 5A) $&% De.ira&le tandard. ; Tho.e /erformance .tandard.9 which are

de.ira&le for /ro-iding qualit'9 continuit' and relia&ilit' of .er-ice. &' the ,icen.ee.9 and though al.o ./ecified &' the 2ommi..ion do not9 unle.. /ro-ided otherwi.e &' the 2ommi..ion from time to time9 attract the /ro-i.ion. of .u&;.ection $3% of the .ection 5A) >(- The following .tandard. are the mandator' .tandard.< $a% (oltage (ariation $&% afet' tandard. The.e are .tatutor' .tandard. to &e com/lied with &' the ,icen.ee a. /er !lectricit' Rule. =I57 where-er not incon.i.tent with the Act) The new Rule. under .ection 5> of Act are 'et to &e i..ued &' the 2!A in con.ultation with the tate +o-ernment) The .tandard. ./ecified in thi. Regulation .hall therefore &e re-i.ed after new Rule. under the Act come into effect) >(8 De.ira&le .tandard. too ha-e &een ./ecified herein under .ection G7 $=% $i% of the Act9 with the main o&0ecti-e of /ro-iding qualit'9 continuit' and relia&ilit' of .er-ice. to the con.umer.) The 2ommi..ion .hall fi8 the time; &ound .chedule for im/lementationHcom/liance ofHwith each /arameter of the.e .tandard.) The following .tandard. are ./ecified herein a. de.ira&le of achie-ement<

$a% Feeder A-aila&ilit' $&% u&;.tation A-aila&ilit'

$c% (oltage #n&alance $d% Neutral (oltage Di./lacement $N(D% $e% (oltage (ariation Inde8 $((I% $f% $g% '.tem Adequac' '.tem ecurit'

/(

P;ASI)G OF I'PLE'E)TATIO) tandard.9

/(= The /erformance .tandard. e8ce/ting the Mandator' follow.< $a% Preliminar'

./ecified herein .hall &e im/lemented in a /ha.ed manner in three .tage. a.

tage $,e-el;=%< The time /eriod of two $3% 'ear.

immediatel' after the.e .tandard. come into force .hall &e con.idered a. Preliminar' tage) During thi. /reliminar' .tage9 tandard. mar1ed a. ,e-el = .hall &e achie-ed9 unle.. ./ecified otherwi.e) $&% Tran.ition tage $,e-el;3%< Time /eriod ./reading u/ to three $>% 'ear. after the Preliminar' tage .hall &e con.idered a. Tran.ition tage) During thi. /eriod9 the licen.ee i. e8/ected to u/grade it. .'.tem.) tandard. mar1ed a. ,e-el 3 .hall &e achie-ed during Tran.ition ./ecified otherwi.e) tage9 unle..

$c% Final tage $,e-el;>%< Two 'ear. after e8/ir' of the Tran.ition tage when .u&.tantial im/ro-ement. .hould ha-e &een carried out and the .'.tem con.idered to &e in .ati.factor' condition with nece..ar' ca/a&ilit' im/ro-ement) tandard. mar1ed a. ,e-el > .hall &e achie-ed during thi. Final tage) /(- In all ca.e.9 where .tandard. are ./ecified &' a//ro/riate authoritie.9 for e8am/le !lectricit' Rule. =I579 .uch .tandard. .hall &e required to &e com/lied with a. ./ecified &' that authorit'9 ma' &e from the /reliminar' .tage it.elf) Standards to +e com3lied wit%? /(8 The 2ommi..ion ./ecifie. the following .tandard. for

T#HTran.mi..ion ,icen.ee.< (a) !oltage !ariation? $i% (oltage (ariation i. defined a. the de-iation of the root;mean; .quare $RM % -alue of the -oltage from it. nominal RM -alue9 e8/re..ed in term. of /ercentage) (oltage (ariation ma' &e either of .hort duration not e8ceeding one minute or of long duration for a time greater than one minute) $ii% For the /ur/o.e of the.e .tandard.9 the .u.tained -ariation in .tead' .tate -oltage e8ceeding one minute duration .hall &e con.idered) The ./ecified /ermi..i&le limit. of .u.tained -oltage -ariation .hall not a//l' in the ca.e. where the circum.tance. are rea.ona&l' &e'ond the control of tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee e)g) ma0or &rea1;down.9 grid failure.9 accident.9 .'.tem di.tre.. condition.9 etc)

$iii%

tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall ma1e all

/o..i&le effort. to en.ure that the grid -oltage. remain within the following -oltage le-el. at all /oint. of it. Tran.mi..ion '.tem<

)ominal !oltage (2!) ?44 334 =>3 >> ==L

'a@imum !alue (2!) ?34 3?5 =?5 >5 ==)7A

'inimum !alue (2!) >74 344 =34 >4 =4

* 11kV voltages to be maintained by the transmission licensee only in those cases where 11kV supply is extended from the EHT substation.

(+) Sa&et# Standards? $i% tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall o&.er-e the general .afet' requirement. a. laid down in I! Rule.9 =I579 for con.truction9 in.tallation9 /rotection9 o/eration and maintenance of electric .u//l' line. and a//aratu.) $ii% Rele-ant rule. under I! Rule.9 =I57 /ertaining to .afet' .tandard. and /ractice. .hall &e followed) $iii% tate Tran.mi..ion #tilit' H Tran.mi..ion ,icen.ee .hall de-elo/ it. own O/eration and Maintenance Manual $including afet' Regulation.

$iii% tate Tran.mi..ion #tilit' H Tran.mi..ion ,icen.ee .hall de-elo/ it. own O/eration and Maintenance Manual $including afet' Regulation.% 2lau.e $c% of .ection A> read with ection 5> of the Act) (c) Feeder A aila+ilit#? $i% The feeder a-aila&ilit' gi-e. the /ercentage of time during which the feeder remained a-aila&le for tran.mi..ion) Feeder A-aila&ilit' .hall &e calculated &a.ed on following formula
A A aila+ilit# o& B ()o o& &eeders C D1:. E Annual outages in &eederE%ours) C =.. Feeder Total a aila+ilit# in &eederE%ours

Dere9 total a-aila&ilit' in hour. i. equal to the num&er) of hour. in a 'ear i)e) GA74 $non;lea/ 'ear% $ii% The Tran.mi..ion ,icen.ee .hall achie-e IIM feeder a-aila&ilit' from the /reliminar' .tage it.elf) (d) Su+Estation A aila+ilit#? $i% The .u&;.tation a-aila&ilit' e8/re..ed in /ercentage i. the mea.ure of the e8tent the /ower tran.mi..ion ca/acit' remained a-aila&le from a .u&; .tation) formula<
A A aila+ilit# o& SS B (Installed ca3acit# in '!A C D1:. E Outage in '!A C ;ours) Installed ca3acit# in '!A C D1:.

u&;.tation a-aila&ilit' .hall &e calculated &a.ed on following

$ii% The Tran.mi..ion ,icen.ee .hall achie-e IAM a-aila&ilit' from the /reliminar' .tage it.elf)

u&.tation

(e) !oltage $n+alance? $i% The /ha.e -oltage. of a >;/ha.e .u//l' .hould &e equal in magnitude and /ha.e angle) The load. on each /ha.e .hould &e &alanced) De-iation. will re.ult in decrea.ed efficienc'9 negati-e torque9 -i&ration. and o-erheating) e-ere un&alance could lead to malfunctioning of .ome equi/ment) The un&alance i. com/uted a. follow.<
M (oltage #n&alance N Ma8 De-iation from Mean of O(RP9 (P"9 ("RQ R =44 Mean of O(RP9 (P"9 ("RQ

Where9 (RP i. (oltage &etween R : P /ha.e.9 ( P" i. (oltage &etween P : " /ha.e. and ("R i. -oltage &etween " : R /ha.e.) $ii% u&0ect to Di.tri&ution ,icen.ee$.% o&.er-ing the +rid 2ode 2onnection 2ondition. in thi. regard9 the -oltage un&alance .hall not e8ceed the -alue. gi-en &elow<

Im3lementation Stage

!oltage Le el

Limit o& oltage un+alance 3 M > M >

Preliminar' tage ; ,e-el = Tran.ition tage ; ,e-el 3 Tran.ition tage ; ,e-el 3

3341( and A&o-e =>31( >>1( and ==1( &u.e. in !D( u&.tation M

Pro-ided that the a&o-e limit for (oltage un&alance at the interconnection /oint with Di.tri&ution '.tem are .u&0ect to

,icen.ee maintaining current un&alance &etween /ha.e. within limit of >M a//lied for all feeder. of one -oltage cla.. emanating from a .u&;.tation including railwa' traction etc) mea.ured at > .u&;.tation. in a row) The (oltage un&alance .hall &e mea.ured at .u&;.tation. /ro-ided with mea.uring in.trument. ha-ing accurac' cla.. within =M limit) (&) )eutral !oltage ,is3lacement ()!,)? $i% #n&alance in load. on three /ha.e. cau.e .hifting of neutral from earth /otential) Neutral di./lacement i. a//lica&le for tran.former. with S tar PointC .olidl' grounded) #nder .olidl' grounded condition.9 the /otential of neutral .hould &e equal to earth i)e) Bero) "ut in actual condition.9 the earthing of the .tar /oint i. im/erfect and .o the .tar to ground offer. .mall re.i.tance) Thi. re.ult. in flow of negati-e .equence current. $&ecau.e IR T IP T I" i. not equal to Bero9 where9 I R i. the current in the R;Pha.e9 IP i. the current in the P;Pha.e and I " i. the current in the "; Pha.e% through neutral to ground) The neutral therefore .hift. from earth /otential) Thi. /erformance .tandard .hall &e achie-ed for .tar /oint of all !DT tran.former. ha-ing >>1( or ==1( on the low -oltage .ide) $ii% #n&alance -oltage. and di./lacement of neutral re.ult in decrea.ed efficienc'9 negati-e torque9 lea1age current.9 -i&ration. and o-erheating) e-ere un&alance and neutral di./lacement could lead to malfunctioning of .ome equi/ment) $iii% The tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall

en.ure that the neutral /oint -oltage of the tran.former. with re./ect to earth will not ha-e /otential greater than 3M of the no load /ha.e to /ha.e -oltage of the tran.former)

$i-% Thi. .tandard .hall &e im/lemented in the Preliminar' $,e-el =% it.elf) (g) !oltage !ariation Inde@ (!!I)?

tage

(oltage (ariation Inde8 re/re.enting the degree of -oltage -ariation from nominal -alue $in M% o-er a ./ecified /eriod of time .hall &e com/uted .e/aratel' &' the tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee for higher than nominal .'.tem -oltage and lower than nominal .'.tem -oltage a. /er the following formula< ) !!I B S9uare Root o& F (!i 0 !s) - G )H C (=.. G !s) A IB= Where9 (i N RM -alue of mea.ured -oltage $in 1(% at i th hour in the /eriod for which ((I i. com/uted (. N RM -alue of the nominal .'.tem -oltage i)e) ?441(9 3341( and

=>31( etc) a. ma' &e a//lica&le at the interconnection /oint N N Num&er of hourl' mea.urement. o-er the ./ecified /eriod of time The data from defecti-e metering or an' a&normal data .hall &e di.carded from calculation.) The ((I .hall &e com/uted on monthl' &a.i.< Preliminar' tage 6 ,e-el = I4M of &u.e. UN =4 To &e achie-ed for more than

Tran.ition tage 6 ,e-el 3 &u.e. Final tage 6 ,e-el > &u.e. (%) S#stem Ade9uac#?

UN 7 To &e achie-ed for more than I4M of

UN ? To &e achie-ed for more than I4M of

'.tem adequac' i. the a&ilit' of the electric .'.tem to recei-e the generated /ower or .u//l' the aggregate electrical demand and energ' requirement. of it. con.umer. at all time.9 ta1ing into account .cheduled and rea.ona&l' e8/ected un.cheduled outage of .'.tem element.) Adequac' of the /ower .'.tem i. u.uall' mea.ured in term. of ,o.. of ,oad Pro&a&ilit' $,O,P%) ,O,P i. the /ro&a&ilit' of tran.mi..ion .'.tem ca/acit' not &eing a&le to meet .'.tem load) ,O,P can al.o &e e8/re..ed a. ,o.. of ,oad !8/ectation $,O,!% in hour. /er 'ear) Thi. mea.ure doe. not con.ider the amount or duration of the generation ca/acit' .hortfall) tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee are e8/ected to achie-e ,O,! hour. in /ercentage a. under<

Im3lementation Stage

)os( o& %ours in #ear w%en s#stem demand

Loss O& Load E@3ectation (LOLE) in

A o& %ours (CB* C=..GD1:.) ca n +e &ull# met su+"ect to generation a aila+ilit# (A) Preliminar' ,e-el = tage 6 A??7 AGG? G7A3)? can not &ull# met e en wit% generation a aila+ilit# (* B D1:. E A) =>=? GA7 GA)74 =5M =4M =M

Tran.ition tage 6 ,e-el 3 Final tage 6 ,e-el >

(i)

S#stem Securit#? ecurit' i. the a&ilit' of the electric .'.tem to with.tand .udden

di.tur&ance .uch a. electric .hort circuit or unantici/ated lo.. of .'.tem element9 detailed in 2lau.e 7 of Manual on Tran.mi..ion Planning 2riteria i..ued &' 2!A) The tate Tran.mi..ion '.tem .hall &e de.igned for a .ecurit' le-el of n;= i)e) to with.tand a .ingle contingenc' with little negati-e effect) Thi. mean. the mo.t .e-ere fault or tri//ing of a critical generator9 tran.former or line .hould not re.ult in in.ta&ilit' of the .'.tem9 o-erloading line. andHor tran.former. for more than =5 minute.9 -oltage dro/ of more than =4M when the .'.tem im/ort i. increa.ed &' 34M) tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall maintain the .'.tem

.ecurit' le-el of Vn;=V $.ingle contingenc'% /lu. ./inning re.er-e margin for tead' tate O/eration) Im3lementation Stage S#stem Securit# Le el o& InE=J (Single Contingenc#) 3lus s3inning reser e margin o&? No requirement Tran.ition tage 6 ,e-el 3 Final tage 6 ,e-el > 4)5M of .'.tem /ea1 load =M of .'.tem /ea1 load mandator'

Preliminar' tage 6 ,e-el =

:(

REPORTI)G REK$IRE'E)T A), CO'PLIA)CE

:(= tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall furni.h to the 2ommi..ion an half 'earl' re/ort in the format /re.cri&ed at ANN!R#R!; A9 &' Octo&er >=.t and A/ril >4th of each 'ear on actual /erformance -i.;W; -i. the /erformance .tandard. laid down in the.e .tandard. a. modified from time to time) The re/ort .hall contain all /arameter. irre./ecti-e of whether .uch /arameter. are a//lica&le during the current re/orting /eriod) The tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall maintain the &a.e data li1e ,og heet9 2om/laint Regi.ter. and Interru/tion Regi.ter and rele-ant load flow .tudie. in re./ect of .'.tem .ecurit' etc) at .u&;.tation le-el for com/ilation of monthl' re/ort at circle le-el) The con.olidated re/ort .hall &e &a.ed on circle;wi.e com/ilation for whole tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee) The circle;wi.e com/ilation and &a.e data at .u&;

.tation le-el .hall &e .u&0ect to it. .crutin' a. con.idered nece..ar' &' the 2ommi..ion)

:(- The tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall di./la' on their we&.ite the actual /erformance again.t the required .tandard. on a monthl' &a.i.) :(8 For the /ur/o.e of thi. Regulation9 the half;'ear /eriod. would &e a. follow.< $a% $&% =.t Dalf 'ear< 3nd Dalf 'ear< =.t A/ril to >4th e/tem&er =.t Octo&er to March >=.t)

:(> The 2ommi..ion ma'9 from time to time9 modif' the content. of the regulationHformat. or add new regulationHformat. for additional information) :(/ In addition to the hard co/ie.9 the information .hall nece..aril' &e .u&mitted in .uch electronic form or through com/act di.1. or e;mail a. the 2ommi..ion ma' direct) :(: E&&ect of default in com/liance with the tandard. $a% 2on.equent to failure of tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee to meet /erformance .tandard. ./ecified herein9 the affected #tilit'H2on.umer. .hall &e entitled to .ee1 reliefHcom/en.ation from tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee9 a. ma' &e determined &' the 2ommi..ion<

Pro-ided that the T#HTran.mi..ion ,icen.ee .hall &e gi-en an o//ortunit' of &eing heard &efore .uch com/en.ation i. determined &' the 2ommi..ion<

Pro-ided further that the com/en.ation .o determined .hall &e /a'a&le within I4 da'. of it. determination &' the 2ommi..ion< Pro-ided al.o that the /a'ment of com/en.ation &' the tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee .hall &e without /re0udice to an' /enalt'9 which ma' &e im/o.ed or /ro.ecution initiated &' the 2ommi..ion a. /ro-ided in the Act) $&% The 2ommi..ion at it. own di.cretion ma' require the tate

Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee to furni.h a re/ort on actual /erformance le-el. maintained again.t the .tandard. ./ecified &' the 2ommi..ion with it. Petition. for Annual Re-enue Requirement $ARR% and Tariff Determination9 which .hall &e .u&0ect to /u&lic hearing for tariff .etting &' the 2ommi..ion)

1(

'ISCELLA)EO$S

Annual Re iew o& Per&ormance Standards 1(= The 2ommi..ion in con.ultation with Tran.mi..ion tate Tran.mi..ion #tilit'

HTran.mi..ion ,icen.ee .hall re-iew the /erformance .tandard. for '.tem a. ./ecified a&o-e once in e-er' 5 'ear. or more frequentl' a. ma' &e required)

$se o& t%e In&ormation

1(- The 2ommi..ion .hall ha-e the right to u.e the information .u&mitted &' tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee a. it deem. fit including /u&li.hing it or /lacing it on the 2ommi..ionK. we&.ite andH or directing the tate Tran.mi..ion #tilit' HTran.mi..ion ,icen.ee to di./la' the information in the licen.eeC. we&.ite) Power to Amend 1(8 The 2ommi..ion ma'9 at an' time add9 -ar'9 alter9 modif' or amend an' /ro-i.ion. of thi. Regulation.) Sa ings 1(> Nothing in thi. Regulation .hall &e deemed to limit or otherwi.e affect the inherent /ower of the 2ommi..ion to ma1e .uch order. a. ma' &e nece..ar' to meet the end. of 0u.tice or to /re-ent a&u.e. of the /roce.. of the 2ommi..ion) 1(/ Nothing in thi. Regulation .hall &ar the 2ommi..ion from ado/ting in conformit' with the /ro-i.ion. of the Act9 a /rocedure9 which i. at -ariance with an' of the /ro-i.ion. of thi. Regulation9 if the 2ommi..ion9 in -iew of the ./ecial circum.tance. of a matter or cla.. of matter. and for rea.on. to &e recorded in writing9 deem. it nece..ar' or e8/edient for dealing with .uch a matter or cla.. of matter.)

1(: Nothing .tated in thi. Regulation .hall9 e8/re..l' or im/licitl'9 &ar the 2ommi..ion from dealing with an' matter or e8erci.ing an' /ower under the Act for which no Regulation ha. &een framed9 and the 2ommi..ion ma' deal with .uch matter.9 /ower. and function. in a manner it thin1. fit)

E@em3tion 1(1 The 2ommi..ion ma' rela8 adherence to ./ecific /erformance .tandard during Force Ma0eure condition. .uch a. war9 mutin'9 ci-il commotion9 riot9 flood9 c'clone9 .torm9 lightening9 earthqua1e9 grid failure9 and .tri1eHcurfew9 loc1out9 fire affecting the tate Tran.mi..ion #tilit'C.H Tran.mi..ion ,icen.eeK. in.tallation. and o/eration acti-itie.) 1(D The 2ommi..ion under ./ecific circum.tance. ma' al.o rela8 an' /ro-i.ion. of Regulation in general or in ./ecific ca.e. for the /eriod$.% ./ecified in it. order$.%)

Chapter 3

PO7ER I),$STR<

I),$STR< PROFILE !,!2TRI2ITP i. one of the -ital requirement. in the o-er all de-elo/ment of the econom' and i. therefore9 a//ro/riatel' called the L7%eel o& ,e elo3mentM) In fact9 the /ower .ector ha. /la'ed a dominant role in the .ocio;economic de-elo/ment of the count') A. a con-enient -er.atile and relati-el' chea/ form of energ' it /la'. a crucial role in agriculture9 tran./ort9 indu.tr' and dome.tic .ector) Dence /ower ha. all along remained in the /riorit' li.t of Indian /lanner. and /lan outla'. ha-e reflected thi. a./ect) The outla'. for /ower .ector ha-e &een around =IM of the total outla'. for the /u&lic .ector in -ariou. /lan /eriod.) There ha. &een a ./ectacular increa.e in the in.talled generating ca/acit' of electricit' in the countr') =>74MW at the time of inde/endence9 De./ite tremendou. increa.e in the a-aila&ilit' of /ower .ince inde/endence there i. acute /ower .hortage ga/ &etween demand and .u//l') The /er ca/ita con.um/tion of /ower in the countr' i. -er' low a. tarting with a ca/acit' of a&out

com/ared to the /o.ition in the de-elo/ed countrie.) Power i. a 1e' in/ut for economic growth ha. a. direct relation.hi/ with the national /roducti-it' a. al.o the o-erall econom' of the countr') There ha. &een di-er.ification of the .ource. of generation in term. of h'del9 thermal and nuclear .ource.) The .hare of h'del in the total generating ca/acit' had dra.ticall' come down and that of thermal had .hown noticea&le increa.e) Another .ignificant change i. the increa.ing .hare of 2entral .ector. in recent 'ear.) The .hare of the thermal element in the in.talled generating ca/acit'9 which i. al.o /redominantl' coal;&a.ed9 .how. a .tead' increa.e) Thu.9 the relati-el' chea/er and a more de.ira&le change in term. of a higher .hare of h'del .ource9 which i. renewa&le9 ha-e not materialiBed)

POWER CE!"R#O The /ower .ector i. at cro.. road. toda') There i. a chronic /ower .hortage in the countr' mainl' attri&uta&le to demand of /ower continuou.l' out.tri//ing the .u//l')

;<,EL PO7ER In the /re.ent glo&al energ' conte8t9 there are certain a./ect.9 which ha-e acquired a new .ignificance) The de-elo/ment of h'dro/ower ha. to &e gi-en a ma0or thru.t in the current decade) We .till ha-e large unta//ed h'dro /ower /otential9 &ut it. de-elo/ment ha. .lowed down on account of lac1 of financial re.ource.9 inter.tate ri-alr'9 inefficienc' of certain .tate electricit' &oard.9 -ariation. in the cour.e of the mon.oon. etc) a concerted

effort i. im/erati-e to o-ercome the hurdle. and enlarge the .hare of the h'dro /ower generation in the countr') Thi. will hel/ not onl' in ta//ing a renewa&le re.ource of energ'9 &ut will /ro-ide e..entiall' needed /ea1ing .u//ort to thermal /ower generation with the /attern of demand for electricit') ince the /lanner.C initial enthu.ia.m a&out the large h'del /ro0ect. ha. waned .omewhat9 India will do well to ta1e re.ource to

the 2hine.e /attern of micro and mini h'del /ro0ect. where-er the terrain i. .uita&le) The National D'droelectric Power 2or/oration ha. &een a..igned a dominant role in accelerating the de-elo/ment of the large h'del /otential in India9 /articularl' in the Dimala'an region) A to/ le-el official committee ha. recommended a R.) >44 2rore reno-ation and moderniBation $R :M% /rogrammed that will .ee1 to co-er I> h'del /ower /lant. in India and re.ult in additional ca/acit' of 53A)G= MW) The growth of the /ower .ector wa. mar1ed &' adequate .hare of h'dro ca/acit' u/ to the end of Third fi-e;'ear Plan $=I7=;77%) Dowe-er9 thereafter there ha. &een a continued decline and the /ro/ortion of h'dro/ower ha. dro//ed from ?5)G7M in =I77 to a&out 3GM &' March =II3) Man' of the /ro&lem. in the /ower .u//l' and /ower .'.tem in the countr' can &e attri&uted inter alia to the declining h'dro .hare in the /ower

.'.tem and con.equent growth of thermal de-elo/ment in the .u&;o/timal manner) +o-ernment of India ha. recentl' con.tituted a grou/ to identif' new h'del /ro0ect. on which ad-ance action can &e ta1en) In order to gi-e a &oo.t to the de-elo/ment of h'dro /ower more and more h'dro electric /ro0ect. are &eing /lanned or &eing im/lemented in the central .ector) In order to achie-e thi. four 2or/oration. ha-e alread' &een .et u/ under 2entral or in 0oint .ector.)

The' are =) National D'droelectric Power 2or/oration $NDP2%) 3) Northea.tern !lectric Power 2or/oration $N!!P2O%) >) Tath/a @hohri Power 2or/oration $N@P2%)

'I)I ;<,EL PLA)TS? There are a num&er of .tate. in the 2ountr' where mini h'del /ro0ect. can &e .et u/ at com/arati-el' lower in-e.tment. to .u//lement other .ource. of energ') According to relia&le e.timate. the total /otential of mini;h'del /lant. all o-er the countr' i. around 5444MW) Thi. include. 39444MW in hill' area. at high head. and low di.charge /oint. and >44MW at low head. and low Di.charge /oint.) Particular dro/. and irrigation .'.tem.) Man' of the tate. ha-e .ur-e'ed /otential mini;h'del .cheme. and identified .e-eral .ite. for in.tance9 Pun0a& ha. identified =>4 fall.) With

a com&ined ca/acit' of =44 MW) Andhra Prade.h ha. identified /ro0ect. that could 'ield a total of 54MW while *arnata1a ha. e.timated that .ome =A5 mini; h'del /ro0ect. in the .tate could 'ield 344 MW) @ammu:*a.hmir ha-e identified 5? mini;h'del /ro0ect .ite. while TamilNadu ha. carried out fea.i&ilit' .tudie. on A3 .ite. with a total /otential of =54MW) The World "an1 ha. e.timate.9 the co.t of generation from mini;h'del tur&ine. to &e onl' 74 /ai.e /er 1Wh at 74 /er cent /lant load factor)

'I)IE;<,EL SC;E'ES ;A!E SE!ERAL A,!A)TAGES( =) The' do not require larger ca/ital in-e.tment and their ge.tation /eriod i. onl' =3 to =G month.) 3) The' are ideal for decentraliBed energ' generating .ource.) >) The.e /ro0ector. cau.e -er' little en-ironmental di.tur&ance.9 and al.o do not ha-e to de/end on an' of the alread' de/leting .ource. of energ') ?) A large num&er of .ite. for mini;h'del /ro0ect. are ea.il' acce..i&le9 a. the' are located on e8i.ting canal. and irrigation .'.tem.)

T;ER'AL PO7ER? Thermal unit. ha-e emerged a. the large.t .ource of /ower in India) "ut unfortunatel'9 the /rogre.. of /ower generation in thi. .ector ha. not &een mar1ed &' an' new &rea1through) At /re.ent .tre.. continue. to &e laid on thermal /ower .tation &ecau.e of .horter con.truction time) #.ing &etter /ro0ect management technique. i. .hortening the con.truction /eriod

for the.e /lant.) It ha. &een /o..i&le to im/ro-e o-erall efficienc' of thermal /lant &' u.ing ga. tur&ine. in con0unction with con-entional .team tur&ine.) The union go-ernment ha.9 in order to .te/ u/ central generation in the countr'9 e.ta&li.hed .u/er thermal /ower tation in different region.) The National Thermal /ower 2or/oration $NTP2% wa. e.ta&li.hed in =IA5 with the o&0ect of /lanning9 /romoting and organiBing integrated de-elo/ment of thermal /ower in the countr')

;IG;LIG;TS? =) Two /art .'.tem for thermal tariff. and .ingle tariff for h'del /ro0ect.) 3) !8change fluctuation. to &e com/en.ated >) O/erating and Maintenance e8/en.e. at 3)5 /er cent re./ecti-el' for thermal and h'del unit. in the &a.e 'ear) ?) O/timal ca/acit' utiliBation norm for thermal unit.< 74441whH1wH'ear< I4 /er cent de/enda&le h'drolog' for .tation. e8ceeding =5M! ca/acit') 5) Tariff to &e com/uted for a /eriod of fi-e 'ear.) 7) Rate of return on equit' will &e =7 /er cent)

T;E STATE ELECTRICIT< *OAR,S? The tate electricit' &oard. $ !".% are autonomou. &odie.

created under the !lectricit' $.u//l'% act9 =I?G and ha-e the .tatutor' re./on.i&ilit' of generating and .u//l'ing /ower in the mo.t economical

manner to the con.umer.) The underl'ing idea &ehind the central enactment wa. to confer autonom' on the !". .o a. to ena&le them to function .trictl' on 2ommercial /rinci/le.)

ROLE OF )ATIO)AL T;ER'AL PO7ER CORPORATIO) ()TPC) In 0u.t =A 'ear. National Thermal Power 2or/oration $NTP2% ha. grown to &e the large.t /roducer of electric /ower in the 2ountr') With o-er =>9444MW commi..ioned ca/acit' and a//ro-ed ca/acit' of =79G>5MW at an e.timate of R.) 3>93=G 2rore) Thi. in.talled ca/acit' of the com/an' account. for a&out 37M of the thermal ca/acit' and =GM of the total ca/acit' of the countr') The com/an' ha. al.o /la'ed the lead role in the augmentation of tran.mi..ion networ1 &' .etting u/ of around =A9444 circuit 1ilometer. of high -oltage tran.mi..ion networ1 acro.. the countr') The.e tran.mi..ion .'.tem. now .tand tran.ferred to the newl' formed Power grid 2or/oration of India) NTP2 ha. &een /la'ing a .ignificant role in meeting the 2ountr'C. /ower demand)

GEO PO7ER S<STE' +eo Power '.tem i. a natural air;conditioning .'.tem for

re.idential and commercial /remi.e.9 u.ing geothermal energ' a-aila&le &eneath the ground .urface at a de/th of 5 meter.) It i. intelligentl' de.igned to -entilate the interior. to all corner. and to effecti-el' enhance the internal condition. &' remo-al of formaldeh'de which i. harmful to one. health) Thi. .'.tem /ro-ide. natural en-ironment;li1e condition. to one.elf9 increa.e. hou.e life and /rotect. the en-ironment) Geo T%ermal Energ# +eo Thermal energ' can &e e8/lained in .im/le term. a. the thermal energ' a-aila&le at a de/th of 5 meter. &elow the ground where the tem/erature remain. .ta&le all round the 'ear &etween =5;=G degree. 2entigrade i)e) 5I;75 degree. Fahrenheit) Thi. thermal energ' doe. not change with re./ect to the out.ide tem/erature con.idera&l') The onl' change -i.i&le i. -er' .mall which al.o ha. a time lag with re./ect to out.ide tem/erature) The tem/erature. &eneath the ground are rather cool $=5 degree. 2% when in .ummer and warm enough $=G degree. 2% during winter) Thi. /ro-ide. the feed for the natural air conditioning .'.tem) Geo Power S#stem O3eration +!O Power '.tem i. a three in one .'.tem com&ining the

effecti-ene.. of three factor. namel'9 +eothermal !nerg' T Air 2irculation T (entilation) Thi. .'.tem i. one of a 1ind .'.tem which en.ure. high qualit' of life with high /erformance at a relati-el' low co.t

,uring Summer 2ool Air In.ideHDot Air Out.ide !entilation +round Air i. /um/ed into the hou.e after &eing cooled &' the +!O PIP!) The hot air i. &eing -entilated out of the hou.e through the attic -entilation Circulation +round Air i. /um/ed into the hou.e after &eing cooled &' the +!O PIP!

,uring 7inter Ma8imum $se o& 7arm and Generated ;eat 6ee3 awa# &rom Cold Air( !entilation +round air i. /um/ed into the hou.e after &eing heated u/ &' the +!O Pi/e) 2urrent Air Ma.. i. di.charged from the attic -entilation) Circulation "' #.ing the +eo Thermal Deat9 the heat generated in the hou.e and the a-aila&le hot ma..9 the hou.e i. 1e/t awa' from the cold) The ./ecial .'.tem namel' olar "le.. introduce. the heat from the .un to the co&&le .tone la'er for rec'cling it to the interior.

T%e e&&ect o& Geo Power S#stem Salient Features o& Geo Power S#stem

NFor ;uman RaceO =( Reco ering Sel& Resistance Duman &od' i. em/owered &' nature to regulate .elf tem/erature) Although thi. /ower ha. &een declining due to the increa.ing u.age of air conditioning .'.tem. in all .ea.on.9 the u.age of thi. natural air conditioning .'.tem hel/. in the re-i-al of thi. /ower)

-( ;ealt%# and Com&orta+le Li ing S3ace The .'.tem. u.age of natural re.ource. to effecti-el' control the tem/erature and -entilate at all hour.9 .ucce..full' creating a &etter9 healthier and comforta&le li-ing ./ace)

8( Protects t%e <oung and t%e Old In thi. age where child care and &etter health .er-ice. for all e./eciall' of the old ha-e ta1en /rimar' .ignificance9 the /ower of thi. .'.tem which minimiBe. tem/erature difference. &etween interior room. hel/. &etter health 1ee/ing for the 'oung and the old)

>( )atural Puri&ication

The .'.tem include. natural /urification of minute im/uritie. in the air which are cleaned &efore &eing /um/ed into the hou.e) Thi. i. done with the hel/ of conden.ed moi.ture which accumulate. at the .urface of the co&&le.tone. and the /i/e.)

/( ;umidit# control and Germ Pre ention #.ing Natural Dehumidifier. and health care material li1e tourmaline9 charcoal and co//er the humidit' i. controlled and al.o hel/ in germ /re-ention)

NEcos#stem and En ironmentO =( Energ# Sa ing The mo.t .carce re.ource in the world i. the form. of energ' a-aila&le to man1ind) With e-er increa.ing de/endence on electricit' a. a medium of energ'9 the in-ention of alternati-e energ' re.ource. i. a tough a.1) The u.age of alternati-e energ' form &' thi. .'.tem greatl' hel/. in reducing the u.age of con-entional electricit' for air conditioning and al.o hel/. in reducing the emi..ion of harmful 2O3 into the en-ironment) -( ;eat Island P%enomenon Reduced Reduction in the u.age of electric air conditioning .'.tem. hel/. in the reduction of the heat i.land /henomenon

N*uilding StructureO
=)

Increased ,ura+ilit# The dura&ilit' of the &uilding &oth e8terior. and interior. i.

increa.ed &' the /re-ention of mould and dewfall) The corro.ion of the &uilding mo.tl' due to water rea.on. and humidit' i. a-oided &' u.ing dehumidifierC. namel' ceramic charcoal and other.) Thi. hel/. to maintain the good condition of the &uilding)

-( Low Cost and 'aintenance Friendl# ince the .'.tem i. made u/ of .e-eral .mall inde/endent unit.9 the maintenance i. .im/le and the co.t. for the .ame are low)

)$CLEAR E)ERG<? The /lanner.9 right from the &eginning under.tood the im/ortance of nuclear energ' in meeting the countr'C. long;term energ' need.) RecogniBing that nuclear technolog' would &e .u&0ect to a /rogre..i-el' re.tricti-e technolog' central regime and al.o that the long term .trategie. for e8/loitation of the countr'C. -a.t thorium re.ource. are &ound to &e .ome what different from tho.e of mo.t other countrie. engaged in nuclear /ower de-elo/ment9 tremendou. em/ha.i. wa. /laced on achie-ing .elf reliance in technolog' de-elo/ment) Thi. /olic' ha. 'ielded rich di-idend. and toda' one can /roudl' u.e the realiBation of indigenou. ca/a&ilit' in all a./ect. of the nuclear fuel c'cle) =) Tara/ur Atomic Power Mahara.htra and +u0arat) tation $TAP %;It /ro-ide. electricit' to

3) Ra0a.than Atomic Power Ra0a.than)

tation $RAT %;It /ro-ide. electricit' to

>) Madra. Atomic Power tation $MAP %;It /ro-ide. electricit' to Madra.) ?) Narora Atomic Power tation $NAP %;It /ro-ide. electricit' to u/ and Delhi)

A,!A)TAGES? =) Nuclear .ource i. clean9 com/act and concentrated) 3) Nuclear i. economical) >) A unit of electricit' from the nuclear /ower .tation. at Tara/ur and *al/a11am co.t ?4 to 5G /ai.e /er 1Wh com/ared with 74 to I4 /ai.e /er 1Wh from thermal tation in the re./ecti-e region.) ?) The greate.t ad-antage of nuclear /ower i. that it can &e in.talled in location e-en remote from h'del and coal re.ource.)

OCEA) E)ERG<?
The long .tanding /ro/o.al to ta/ non;con-entional .ource of ocean energ' for /ower generation i. e8/ected to get a filli/ with a 0oint team of the Tamilnadu electricit' "oard and the Ocean !nerg' 2ell

Indian In.titute of Technolog'9 Madra. commending the offer of the #) ) &a.ed firm .ea .olar /ower $ P% to .et u/ 7 Ocean Thermal !nerg' 2on-er.ion $OT!2% /lant. of =44 MW ca/acitie. each along the Tamilnadu 2oa.t for .eriou. con.ideration and recommending the .etting u/ of one /lant to &egin with at *ula.e1ar/atnam area) The 2a/ital co.t /er *)W) of /ower /roduction i. e.timated at # F=444 for OT!2 /lant com/ared to # F==44 for oil &a.ed # F3344 for coal &a.ed9 # F3>?4 for h'dro9 and # F3?54 for nuclear /ower) The fuel co.t in the ca.e of OT!2 i. /racticall' nil) Moreo-er -alua&le "i /roduct. are o&tained from OT!2 /lant.) The.e include fre.h water for irrigation and drin1ing9 h'drogen and o8'gen which can &e u.ed a. feed.toc1 in manufacture of other /roduct.9 ammonia that can &e u.ed a. fertiliBer. and methanol that can &e mi8ed with ga.oline) If the -alue of the /ower and &'; /roduct. are added together9 the annual income of the t'/ical =44MW /lant can amount to more than # F=44 million)

7I), E)ERG<?
Wind energ' i. fa.t emerging a. the mo.t co.t;effecti-e .ource of /ower a. it com&ine. the a&undance of a natural element with modern technolog') The growing intere.t in wind /ower technolog' can &e attri&uted not onl' to it. co.t effecti-ene.. &ut al.o to other attracti-e feature. li1e modularit'9 .hort /ro0ect ge.tation and the non;/olluting nature of the technolog') In India9 the e8erci.e to harne.. wing energ' include. wind /um/.9 wind &atter' charger.9 .tand alone wind electric generator. and grid connected wind farm.) The de/artment of non;con-entional energ'

.ource. $DN! % in a..ociation with .tate agencie. ha. &een re./on.i&le for creating and .u.taining intere.t in the field)

SOLAR E)ERG<? It i. &elie-ed that with 0u.t 4)= /er cent of the A59444 trillion 1DB of .olar energ' that reache. the earth9 /lanetC. energ' requirement can &e .ati.fied) !lectricit' can &e generated with the hel/ of .olar energ' through the .olar thermal route9 a. well a. directl' from .unlight with the hel/ of olar Photo(oltaic $ P(% technolog') P( '.tem. are &eing u.ed for lighting9 water /um/ing9 and telecommunication. and al.o for -illage .iBe /ower /lant. in rural area.) P( .'.tem. are &eing u.ed to /ro-ide lighting under the National ,iterac' mi..ion9 refrigeration for -accine .torage and tran./ort under the National immuniBation /rogramme9 drin1ing water and /ower for telecommunication.) Indian railwa'. ha-e &een u.ing thi. technolog' for .ignaling)

PRICI)G? !lectricit' &' no mean. i. a chea/ form of energ') If it. efficient u.e i. to &e encouraged9 the /rice of electricit' .hould reflect it. true economic -alue) There could &e cro.. .u&.idiBation within the tariff .tructure to a limited e8tent9 &ut thi. cannot &e e8tended to a le-el where the -ia&ilit' of the indu.tr' i. 0eo/ardiBed)

PRO*LE'S? The /ower .ector in India i. &e.et with a num&er of /ro&lem.) The' relate to dela'. in the formulation and im/lementation of -ariou. /ro0ect.9 /oor utiliBation of ca/acit'9 &ottlenec1. in the .u//l' of coal to thermal .tation9 and it. /oor qualit'9 fault' di.tri&ution and tran.mi..ion arrangement. and &ad /lanning leading to an in0udiciou. h'del thermal mi8) !cological /ro&lem. are al.o -e8ing thi. .ector) Durdle. in en-ironmental clearance. tend to .low down com/letion of /ower /ro0ect.) 2om/en.ator' affore.tation and land acqui.ition ha-e /ro-ed to &e ma0or &ottlenec1. in the clearance of /ower /ro0ect.) The main /ro&lem faced in the ca.e of en-ironmental clearance. i. the .hortage of land for com/en.ator' affore.tation) While /ro0ect authoritie. are /re/ared to in-e.t fund. in affore.tation land9 the .tate go-ernment. are not a&le to /ro-ide the required land) The +o-ernment ha. /ro/o.ed to .et u/ a ta.1 force to loo1 into clearance. for /ower /ro0ect. and ./eed u/ the clearance.)

S;ORT A), LO)G TER' 'EAS$RES TO COPE 7IT; T;E E)ERG< S;ORTAGES? S%ort term Strateg#? =) The increa.ed num&er of .hort ge.tation ga. &a.ed /ro0ect. to add ca/acit' and .ta&iliBe /ower .u//l')

3) Permitting the u.e of ga. and oil fuel. at .elected /ower /lant. either to .u//lement or to .u&.titute coal with a -iew to increa.e /ower /roduction) >) #nderta1ing reno-ation and moderniBation /rogram. at the -ariou. thermal and h'dro /ower /lant. to im/ro-e a-aila&ilit' and /erformance and ma8imiBe /ower generation) It i. ho/ed that Power Finance 2or/oration would /la' a .ignificant role in thi. regard) ?) Im/ro-ing the qualit' and en.uring con.i.tenc' of coal .u//lie. to /ower /lant.) 5) Reduction in Tran.mi..ion : Di.tri&ution lo..e.) 7) !ffecti-e interconnected o/eration of /ower .'.tem. in the -ariou. region. to ena&le tran.fer of /ower from .ur/lu. to deficit .'.tem. and al.o en.uring deli-er' of /ower from 2entral .ector /ower /lant. to &eneficiar' .tate.)

Long term strateg#? =) Acceleration of h'dro de-elo/ment &' focu.ing on remo-ing the -ariou. inadequacie. in organiBation) Management funding etc) it would &e de.ira&le and nece..ar' to ma1e /ro-i.ion of adequate fund. e./eciall' earmar1. for h'dro de-elo/ment) 3) Tlomg I a larger T : D Programmed to remo-e the /re.ent inadequacie.9 .trengthening of the regional grid. and &ringing a&out an o-erall im/ro-ement in the T : D lo..e.)

>) 2oal &enefaction &' ado/ting more .o/hi.ticated technique. to en.ure &etter and con.i.tent qualit' of coal to the /ower /lant.) ?) Di-er.ification of fuel. and mode. of tran./ortation of coal to thermal /ower /lant. to en.ure adequate .u//l' of fuel of a//ro/riate qualit') 5) trengthening the organiBation re./on.i&le for erection and

commi..ioning of /ower /lant.)

PRI!ATE SECTOR PARTICIPATIO) I) PO7ER GE)ERATIO) The central +o-ernment ha. formulated a .cheme to encourage greater /artici/ation &' /ri-ate enter/ri.e. in electricit' generation9 .u//l' and di.tri&ution) Pri-ate enter/ri.e. can .et u/ unit. either a. licen.ee.9 di.tri&uting /ower in a licen.ed area from own generation or /urcha.ed /ower or a. generating com/anie.9 generating /ower for .u//l' to the grid) The &rea1 u/ of the ca/ital in-e.tment i.<

=) 34M equit' out of which at lea.t ==M to &e rai.ed a. /romoterC. contri&ution 3) G4M of the ca/ital in-e.tment to &e rai.ed through loan. and onl' 54M of thi. amount could &e rai.ed from /u&lic Fl.) >) De&t equit' ratio ha. &een rai.ed u/ to ?<= ?) Increa.e in the /re.cri&ed rate of return for the licen.e ha. &een a//ro-ed from the e8i.ting =3M to =5M)

5) 2a/italiBation of intere.t during con.truction ha. &een /ermitted at the actual co.t $in.tead of the /re.ent =M a&o-e the Re.er-e "an1 rate% for the initial /ro0ect a. well a. for the .u&.equent e8/an.ion.) 7) Period of initial -alidit' of the licen.e ha. &een increa.ed to >4 'ear. from the e8i.ting 34 'ear. and .u&.equent e8ten.ion for 34 'ear. on each occa.ion) A) Pri-ate licen.e. ha-e &een e8em/ted from o&taining clearance under the MRPT act) G) To en.ure additional re.ource. mo&iliBation it ha. &een /ro/o.ed that at lea.t 74M of the outla'. come from .ource. other than /u&lic financial in.titution. and at lea.t ==M through /romoterC. contri&ution) I) A ./ecial cell to &e created in de/artment of /ower to deal with /ro/o.al. e8/editiou.l' for /ri-ate .ector /artici/ation)

T;E F$T$RE? +o-ernmentC. deci.ion to in-ite the /ri-ate .ector to /artici/ate in the /ower generation .ector i. mo.t o//ortune and con.tructi-e a//roach Par e8cellence) The /o.iti-e and encouraging initiati-e. from the go-ernment are &ound to find fa-oura&le re./on.e. from the /ri-ate .ector) The .olution to our /erennial /ower crunch .eem. to lie in /ri-ate /artici/ation)

Chapter $

O%ER%#EW O&

LA)CO GRO$P

PROFILE OF GE)TI)G LA)CO PO7ER (I),IA) PRI!ATE LI'ITE, (OPERATIO)S P 'AI)TE)A)CE CO'PA)< FOR LA)CO 6O),APALLI PO7ER PRI!ATE LI'ITE,)
+enting ,anco Power $India% Pri-ate ,imited i. a .u&.idiar' of +enting grou/ of com/anie. &a.ed at *uala ,um/ur9 Mala'.ia) +enting grou/ ha. it. /re.ence in di-er.ified field. li1e Power9 Plantation.9 Pa/er : Pac1aging9 !ntertainment9 Re.ort. : Dotel.9 Pro/ert' de-elo/ment9 2rui.e liner.9 e 2ommerce9 Oil and +a.) +enting grou/ i. Mala'.iaC. leading multinational cor/oration and one of A.iaC. &e.t;managed com/anie. with o-er >79444 em/lo'ee. glo&all') The grou/ i. renowned for it. .trong management leader.hi/9 financial /rudence and .ound in-e.tment di.ci/line) The com&ined mar1et ca/italiBation of the grou/ i. a&out # FI &illion) The o/erating re-enue for the grou/ for the 'ear 344A i. # F=)5> &illion) +enting ,anco Power $India% Pri-ate ,imited ha. entered in to a =5 'ear. O/eration. and Maintenance Agreement with ,anco *onda/alli Power Pri-ate ,imited9 who are the owner. of the >7G MW ga. fired com&ined c'cle /ower /lant at 1onda/alli) +enting ,anco Power $India% Pri-ate ,imited ha. it. regi.tered office at ,anco *onda/alli Power Plant9 *onda/alli IDA9 and *ri.hna Di.trict)

LA)CO GRO$P PROFILE

,AN2O +rou/9 headquartered in D'dera&ad9 India i. one of the leading &u.ine.. hou.e. in outh India) It ha. an a..et &a.e of # F ?54 million and a turno-er of more than # F >44 million) With o/erational e8/erience in /ower /lant. &a.ed on +a.9 "ioma.. and Wind and an o/erating ca/acit' of 54I MW9 ,AN2O i. heading for a ca/acit' of 3544 MW and an a..et &a.e of # F 3)5 &illion &' the 'ear 34=4) ,anco i. a well;di-er.ified grou/ with acti-itie. li1e /ower generation9 engineering and con.truction9 manufacturing9 Information technolog' $IT%9 and /ro/ert' de-elo/ment) ,anco grou/ i. .tri-ing to !m/ower9 !na&le and !nrich /artner9 &u.ine.. a..ociate. and to &e the cho.en -ehicle for growth for .ta1eholder. and .ource of in./iration to the .ociet') The grou/ i. recogniBed a. a leading /la'er in the Indian economic .cenario with o/eration in # A and #*) ,AN2O al.o ha. /re.ence in 2i-il 2on.truction9 Pro/ert' De-elo/ment9 Manufacturing of Pig Iron : Ductile Iron /un Pi/e. and Information Technolog') ,AN2OC. o-erall growth i. attri&uted to it. technical9 2ommercial and managerial .1ill.9 which i. a//reciated &' it. International /artner. 6 2ommonwealth De-elo/ment 2or/oration $A2TI H+lo&ule.% of the #nited *ingdom9 +enting +rou/ of Mala'.ia and Doo.an of *orea)

;ISTOR< A), E!OL$TIO) The ,anco grou/ of com/anie. wa. e.ta&li.hed nurtured and de-elo/ed &' a team of dedicated 'oung technocrat.) The &urning de.ire to achie-e -er.atilit' in engineering ./awned the magnificent decade 6old growth of the /re.ent da' multifaceted conglomerate that touche. the ner-e center of the countr') ,) Ra0ago/al9 a technocrat;turned indu.triali.t9 i. the Founder 2hairman of ,AN2O +rou/) !.ta&li.hed in =IGI9 the +rou/C. acti-itie. range from Power +eneration9 !ngineering and 2on.truction9 Manufacturing to Information Technolog') #nder hi. d'namic leader.hi/9 the +rou/C. ca/ital outla' ha. touched a who//ing # F ?54 million and i. recogniBed a. one of the leading /la'er. in the infra.tructure .ector in India)

MEMBER OF PARLIAMENT

After one;and;a;half decade. of out.tanding contri&ution to the indu.tr'9 Ra0ago/al cho.e to enter /u&lic life in 344>) De conte.ted the recent election. to the ,ower Dou.e of Parliament for (i0a'awada con.tituenc' and won a land.lide -ictor') A. a Mem&er of Parliament9 hi. a-owed mi..ion i. to ma1e a difference in /u&lic life)

OBJECTIVES

=) To /ro-ide &a.ic amenitie. for the rural /oor) 3) To .a-e art. of hi.torical rele-ance which are on the -erge of e8tinction) >) To de-elo/ integrated /rogramme. for the differentl' a&led) ?) To encourage fre.h talent in the area of ./ort.) 5) To ta1e u/ other humanitarian acti-itie.)

LA)CO I),$STRIES LI'ITE,? A) ISO Q..= CERTIFIE, CO( ,anco indu.trie. ,td) i. e.ta&li.hed in the 'ear =II> had .etu/ a .tate;of;the;art integrated Pig Iron and 2ement Plant.9 which had in fact .et the countrie. modern da' technological inno-ation.) The com/le8 ha. a ca/ti-e /ower /lant generating 3)5 MW of electricit' from wa.te that meet. the .u&.tantial /art of the /ower requirement)

LA)CO CO)STR$CTIO) LT,( Thi. wa. e.ta&li.hed in the 'ear =II> and ha. e8ecuted mo.t demanding and difficult /ro0ect. in the field of ci-il and con.truction engineering) ,anco con.truction. ltd) toda' .tand tall and /roud a. one the leading ci-il engineering com/anie. &' &uilding com/etencie.9 de-elo/ing

modern con.truction management method. and &' ado/ting the highe.t .tandard. of guilt') At Lanco di erse dimension o& growt% is ac%ie ed t%roug% con erging ra#s o& ision creating dimensions' *A,ADA TI 2A TIN+ limited an e8am/le of the forward integration of the com/an' e.ta&li.hed in =IIA located .trategicall' &e.ide the Pig Iron Plant a-oiding re;melting and tran./ortation it em/lo'. del-ed /roce.. that en.ure. the highe.t qualit' and dura&ilit')

LA)CO PROJECT LT, Focu.e. on the immen.e o//ortunitie. in the area of Real !.tate.9 2on.truction and Pro/ert' De-elo/ment9 International .ho//ing mall.9 Food counter. etc are a few /ro0ect. on the an-il) ,AN2OC. -enture into /ower i. a natural e8ten.ion of it. core mi..ion) ,anco *onda/alli Power P-t) ,td) i. a .hort ge.tation Pol' fuel &a.ed com&ined c'cle /ower /lant) The >7G)=?? mw $I O% /ower /lant ha. a &uild; o/erate ;own agreement with the .tate go-ernment) It i. ,ancoC. timel' an.wer to the nation. increa.ing /ower need.) ,anco *onda/alli Power ,td) i. a 0oint -enture in-ol-ing ,anco grou/9 +enting +rou/ of Mala'.ia9 Dan0ung $the *orean hea-' indu.trie. and 2on.truction 2om/an'% and the 2ommon Wealth De-elo/ment 2or/oration ,td) The /ro0ect reflect. ,ancoC. a&ilit' to /artner with the glo&al /la'er. and achie-e inter organiBation .'nergie. that gi-e it. -i.ion great .co/e and reach

LA)CO 6O),APALLI PO7ER PRI!ATE LT,

%ision( =) To em/ower9 ena&le and enrich /artner.9 &u.ine.. and a..ociate.) 3) To &e the cho.en -ehicle of growth for the ta1eholder. and a .ource of in./iration for the .ociet')

)ission =) To &e a leader in all area. 1e' to the de-elo/ment of a nation and /rogre.. of the world) 3) To &e a leader in the field of Infra.tructure9 Manufacturing and Information Technolog') >) To &ecome learning organiBation and ena&le /eo/le to thin1 li1e geniu.e.)
o o

Where e-er' a..ociate achie-e. out.tanding re.ult.) Where ca/a&ilitie. are nurtured and .tretched &e'ond &oundarie. for new under.tanding.9 high /erformance9 qualit' relation. and attainment of /eace and ha//ine..)

Where an em/lo'ee ma1e. tran.action from an old world to a new world9 from an old under.tanding to a de.ired under.tanding and from a .u&ordinate to an a..ociate)

?) To con.tantl' e-ol-e and .ee1 .'nergie. &etween the intere.t. of em/lo'er. and tho.e of em/lo'ee. and to wor1 intelligentl' toward. em/owerment of a..ociate.) 5) In -iew of glo&al com/etition and 1nowledge e8/lo.ion infu.ion in the mar1et /lace with com/le89 cogniti-e wor19 we .ee1 to &uild efficiencie. in .uch an uncertain en-ironment through em/owerment of em/lo'ee.)
o o

Where deci.ion;ma1ing i. at frontline le-el. Where deci.ion;ma1ing re./on.i&ilit' -e.t. with .elf;directing team. clo.e to internal and e8ternal cu.tomer. and a..ociate. ta1e charge of their own 0o&..

Where the organiBation i. &uilt9 .lee19 for ./eed9 fle8i&ilit'9 qualit' and .er-ice that are e..ential for glo&al com/etition.

7) To ma1e a..ociation with u. an enriching e8/erience to our /artner.9 &u.ine..e. and a..ociate.) A) To wor1 with hone.t /ur/o.e9 .trategic /lanning and enduring /er.e-erance to achie-e cu.tomer .ati.faction9 .ta1eholder &enefit. and mea.ura&le economic growth for the organiBation)

Philosoph* =) A..em&le &e.t /eo/le9 delegate authorit' and donCt interfere /eo/le ma1e the difference

3) "u.ine.. head. are entre/reneur. >) Mi.ta1e. are fact. of life) It. i. re./on.e to the error that count.)

uccess =) 2reate 'our luc1 &' hard wor1 3) Tru.t T delegation N growth)

Work culture =) 2ommitment9 creati-it'9 efficienc'9 team ./irit)

PRO'OTERS A), EK$IT< PART)ERS The /ower /ro0ect i. /romoted &' ,anco grou/ of India and i. co; /romoted &' =) +enting +rou/ of Mala'.ia 3) $2D2% common wealth de-elo/ment cor/oration #* >) $Doo.an% Doo.an hea-' indu.trie. and con.truction co)ltd in *orea)

LOCATIO) The /lant i. located at *onda/alli indu.trial de-elo/ment area in *ri.hna $Di.t)% of Andhra Prade.h) The /lant i. connected &' road $national high wa' no) I%9 &road gauge railwa' line and i. a//ro8imatel' 35 1m from (i0a'awada )The regi.tered office i. at ,anco hou.e9 No ; 5759 /ha.e ; III9 @u&ilee Dill.9 Road no 6 I39 D'dera&ad9 Andhra Prade.h 5444>>9 India)

Neare.t railwa' .tation earest airport Acce.. road ource of water 2limatic condition

; ! ; ; ;

*onda/alli railwa' .tation "annavaram National highwa' No 6I *ri.hna ri-er I;1m from the .ite Tro/ical hot9 Dumid)

LA)CO PO7ER PLA)T GOPERATIO) A), 'AI)TE)A)CE The /ro0ect com/ri.e of a com&ined c'cle /ower /lant con.i.ting of two $3% ga. tur&ine generating unit.9 two heat reco-er' .team generator and one .team tur&ine generation unit along with all electrical .'.tem9 2ontrol. and in.trumentation9 2i-il9 wor1.) tructural and architectural

,anco *onda/alli Power Pri-ate ,imited $,*PP,% i. an Inde/endent Power Pro0ect $IPP% located at *onda/alli Indu.trial De-elo/mental Area near (i0a'awada in India9 .et u/ at a co.t of around R.)==9444 million $# F3A5 million%9 the Plant i. a >7G)=?? MW 2om&ined 2'cle Power Pro0ect o/erating on Natural +a. a. Primar' fuel) The /lant o/erate. on natural ga. a. the main fuel and Na/hthaJ D D a. the alternati-e fuel. Natural ga. fuel i. &eing recei-ed at .ite from Tati/a1a near Ra0ahmundr' through a /i/eline laid down &' +AI, Fuel Na/htha fuel ; Recei ed Through dedicated /i/eline from DP2, *onda/alli de/ot) D D ; Road tan1er.

The O/eration. : Maintenance of the /lant i. done &' +,PIP, $+enting ,anco Power $India% Pri-ate ,imited% which i. a 0oint -enture of ,anco grou/ D'dera&ad and +enting +rou/ of Mala'.ia)

A7AR,S A), CERTIFICATES =) ,eader.hi/ and !8cellence Award in afet'9 Dealth : !n-ironment 3443 &' 2o;federation of Indian Indu.trie.) 3) "e.t !n-ironmental Im/ro-ement award 344> FAP22I) >) 2ertificate of !n-ironmental management .'.tem with I O =?44= $=II7% from ,RXA A/ril 344>)

?) !n-ironmental !8cellence Award 344? &' +reen;tech Foundation9 New Delhi) 5) 2ertificate of Xualit' Management '.tem with I O I44= ,RXMJ A/ril 344?) 7) 35M 2e.. Re&ate on Water u.e. &' APP2") A) O DA =G44= 2ertified 6 @une 3445)

E)!IRO)'E)T POLIC< We are committed to achie-e .ati.faction of intere.ted /artie. and /rotect en-ironment &' =) +eneration of /ower &' im/lementation of /rudent !co friendl' method.) 3) 2on.er-ation of natural re.ource. li1e natural ga. and water) >) 2om/l'ing to all the legal requirement.) ?) 2ontinual im/ro-ement in the en-ironmental /erformance &' minimiBing the emi..ion and di.charge. : /re-ention of /ollution) 5) !nhancing en-ironmental awarene.. among em/lo'eeC. contractor. and .urrounding .ociet')

K$ALIT< POLIC< We are committed to continuall' im/ro-e the qualit' of our /erformance through the a//lication of our Xualit' /olic') =) #tiliBing 2ommercial9 !ngineering and Duman Re.ource.9 to MinimiBe Ri.1. to Per.onnel9 Plant : !qui/ment and Ma8imiBe /lant A-aila&ilit' for +eneration of Power) 3) Pro-iding the &e.t /olicie. le-el of commercial /erformance for the &enefit of all ta1e Dolder.) >) Im/lementing /rudent utilit' /ractice. and /ro-iding Dealth' and !8cellent Wor1ing !n-ironment in all Di.ci/line. of !ngineering and "u.ine.. a. documented in the Xualit' '.tem) ?) Treating all .taff : familie. fairl' and with re./ect while encouraging /er.onnel growth)

OCC$PATIO)AL ;EALT; P SAFET< (O;PS) POLIC< The Management i. committed to maintain high .tandard. of health and .afet' in the wor1/lace and .hall con.ider OD: &u.ine.. acti-itie.) =) Pro-ide a .afe wor1ing /lace to all of our direct and indirect em/lo'ee. &' minimiBing Occu/ational Dealth : afet' Ri.1. and /racticing National tandard.) 3) Monitor and maintain health9 .afet' and welfare of all em/lo'ee. and com/l' with all a//lica&le .tatute.) in all it.

>)

Pro-ide a//ro/riate and on going Information9 In.truction and Training of our direct and indirect em/lo'ee.)

L6PPLMS CO''IT'E)T TO CLEA) P SAFE E)!IRO)'E)T +,reen -elt )anagement. ,anco 2ommitment to re -egetation i. =) !ncourage nati-e fauna to de-elo/) 3) 2ontri&ute to a reduction in green hou.e ga.e. >) Reduce noi.e le-el ?) MinimiBe the effect of .oil ero.ion) 5) Del/ to re.tore the .ite to a .u.taina&le .'.tem) 7) Im/ro-e a. the a./ect. of the /ower /lant) On going tree. /lanting and maintaining theme are the im/ortant a./ect. of en-ironmental management /rogram at ,AN2O)

)OISE 'A)AGE'E)T !ffort. to minimiBe noi.e emi..ion from equi/ment and acti-itie.) =) Acou.tic lining. around ga. and .team tur&ine. and &oiler.)

3)

ilencer. ha-e &een /ro-ided)

>) Noi.e minimiBation /olic' for equi/ment)

EFFL$E)T ,ISC;ARGE, FRO' PO7ER PLA)T Well;de-elo/ed chemical la&orator' to cater the need for monitoring effluent qualit' a. /er APP2D Norm.) =) +a.eou. emi..ion mgt) 6 a. i..ue. of green hou.e ga.e. ha. &ecome /rominent in the /u&lic) 3) Water mgt) ; Ac1nowledge. im/ortance of maintaining water qualit') >) 2ommunit' /artici/ation) ?) !n-ironmental awarene.. training)

CO'PA)< ;IG; LIG;TS =) >7G)=?? MW com&ined c'cle /ower /lant under &uild 6 o/erate 6 own arrangement with the .tate go-ernment) 3) The .ingle large.t in-e.tment in Andhra Prade.h9 &' an' Andhra Prade.h &a.ed grou/) >) Power /urcha.e agreement firmed with AP TRAN 2O for =5 'ear.) ?) !co 6 friendl'9 adhering to highe.t .tandard. of .afet' and con-er.ion of natural re.ource.)

5) The fir.t /ro0ect cleared &' 2entral !lectricit' Authorit' $2!A% under the international com/etiti-e "idding $I2"% route for /ower /ro0ect. in India) 7) The fir.t of the I2" /ower /ro0ect. in India to achie-e financial clo.ure and com/lete con.truction in .horte.t /o..i&le time) A) One of the lowe.t e-acuation. co.t. to AP TRAN 2O) G) The fir.t /ri-ate .ector /ower /ro0ect to recei-e di.&ur.ement of finance from Power Finance 2or/oration limited9 India) I) The .horte.t con.truction time in the /ri-ate .ector =4),ocation ad-antage. include< a% Pro8imit' to National and .tate Dighwa' &% @u.t =)5 1m from fuel .torage facilit' of Dindu.tan Petroleum 2or/oration limited) c% 2lo.e to the ri-er *ri.hna and u/ .tream of the Pra1a.am "arrage en.uring /erennial water .u//l') d% Ad0acent to 334 1Wh u&.tation of AP TRAN 2O)

Chapter-5

FUNDS FLO

S!"!#M#N!

Funds Flow Statement Introduction The &a.ic financial .tatement. i)e)9 the &alance .heet and /rofit and lo.. account or income .tatement of &u.ine..9 re-eal the net effect of -ariou. tran.action. on the o/erational and financial /o.ition of the com/an') The &alance .heet gi-e. a .ummar' of the a..et. and lia&ilitie. of an underta1ing at a /articular /oint of time) It re-eal. the financial .tate. of the com/an') The a..et. .ide of a &alance .heet .how. the de/lo'ment of re.ource. of an underta1ing while the lia&ilitie. .ide indicate. it. o&ligation. i)e)9 the manner in which the.e re.ource. were o&tained) The /rofit and lo.. account reflect. the re.ult. of the &u.ine.. o/eration. for a /eriod of time) It contain. a .ummar' of e8/en.e. incurred and the re-enue realiBed in an accounting /eriod and the re-enue realiBed in an accounting /eriod) "oth the .tatement /ro-ide. the e..ential &a.ic information on the financial acti-itie. of a &u.ine.. &ut their u.efulne.. i. limited for anal'.i. and /lanning /ur/o.e.) The &alance .heet gi-e. a .tatic -iew of the re.ource. $lia&ilitie.% of a &u.ine.. and the u.e. $a..et.% to which the.e re.ource. ha-e &een /ut at a certain /oint of time) It doe. not di.clo.e the cau.e. for change. in the a..et. and lia&ilitie. &etween two different /oint of time) The /rofit and lo.. account9 in a general wa' indicate. the re.ource. /ro-ided &' o/eration.) "ut there are man' tran.action. that ta1e /lace in an underta1ing and which do not o/erate through /rofit and lo.. account) Thu. another .tatement ha. to &e /re/ared to .how the change in the a..et. and lia&ilitie. from the end of one /eriod of time to the end of another /eriod of time) The .tatement i. called a .tatement of change. in financial /o.ition or a fund. flow .tatement

The Fund. Flow

tatement i. a .tatement9 which .how. the

mo-ement of fund. and i. a re/ort of the financial o/eration. of the &u.ine.. underta1ing) It indicate. -ariou. mean. &' which fund. were o&tained

during a /articular /eriod and the wa'. in which the.e fund. were em/lo'ed) In .im/le word. it i. a .tatement of .ource. : a//lication. of fund.)

Meaning and concept of Funds

The term fund ha. &een defined in a num&er of wa'.)

In a narrow sense It mean. ca.h onl' and a fund. flow .tatement) and ta1e. into account recei/t. and di.&ur.ement. of ca.h) In a broader sense The term Sfund.C9 refer. to mone' -alue. in whate-er from it ma' e8it) Dere Sfund.C mean. all financial re.ource.9 u.ed in &u.ine.. whether in the form of men9 material mone'9 machiner' and other.) In a Popular sense The term Sfund.C9 mean. wor1ing ca/ital9 i)e)9 the wor1ing ca/ital conce/t of fund. ha. emerged due to the fact that total re.ource. of a &u.ine.. are in-e.ted /artl' in fi8ed a..et. in the form of fi8ed ca/ital and /artl' 1e/t in form of liquid or near liquid form a. wor1ing ca/ital) uch a

.tatement enumerate. net effect. of the -ariou. &u.ine.. tran.action. on ca.h

Meaning and concept of Flow of funds

The term flow mean. mo-ement and include. &oth inflow and out flow) The term flow of fund. mean. tran.fer of economic -alue. from one a..et of equit' to another flow of fund. i. .aid to ha-e ta1en /lace when an'

tran.action ma1e. change. in the amount of fund. a-aila&le &efore ha//ening of the tran.action) If the effect of tran.action re.ult. in the increa.e of fund. it i. called a .ource of fund. and if it re.ult. in the decrea.e of fund.9 it i. 1nown a. an a//lication of fund.) Further9 in ca.e the tran.action doe. not change fund.9 it i. .aid to ha-e not re.ulted in the flow of fund.) According to the wor1ing ca/ital conce/t of fund.9 the term flow of fund. refer. to the mo-ement of fund. in the wor1ing ca/ital) If an' tran.action re.ult. in the increa.e in wor1ing ca/ital9 it i. .aid to &e a .ource or flow of fund. and if it re.ult. in the decrea.e of wor1ing ca/ital 9it i. .aid to &e an a//lication or out 6 flow of fund.) Rule The flow of fund. occur. when a tran.action change. on the one hand a non current account and on the other a current account and -ice -er.a onl') In .im/le language fund. mo-e when a tran.action. effect. = 3 > ? a current a..et and a fi8ed a..et9 or a fi8ed and a current lia&ilit' or a current a..et and a fi8ed lia&ilit' or a fi8ed lia&ilit' and current lia&ilit' And fund. do not mo-e when the tran.action affect. fi8ed a..et. and fi8ed lia&ilit' or current a..et. and current lia&ilitie.)

Current and Non-Current Account

To under.tand flow of fund. it i. e..ential to cla..if' -ariou. account. and &alance .heet item. into current and non;current categorie.

2urrent account. can either &e current a..et. or current

lia&ilitie.) 2urrent a..et. are tho.e a..et. which in ordinar' cour.e of &u.ine.. can &e or will &e con-erted into ca.h within a .hort /eriod of normall' one accounting 'ear) 2urrent lia&ilitie. are tho.e lia&ilitie. which are intended to &e

/aid in the ordinar' cour.e of &u.ine.. with in a .hort /eriod of normall' one accounting 'ear out of the current a..et. or the income of the &u.ine..)

List o& current or wor2ing ca3ital accounts Current Lia+ilities Current Assets =) "ill. /a'a&le =) 2a.h in hand) 3) undr' creditor. or account. 3) 2a.h at &an1) /a'a&le accrued or out.tanding e8/en.e. >) Di-idend /a'a&le "an1 o-er >) "ill. recei-a&le) draft) ?) hort;term :de/o.it.) loan. ad-ance. ?) undr' de&tor. or account. recei-a&le) 5) hort term loan. : ad-ance. or Mar1eta&le

5) Pro-i.ion again.t current a..et.)

7) Pro-i.ion for ta8ation9 if it doe. 7) Tem/orar' not amount to a//ro/riation of in-e.tment.) /rofit.)

A) Pro/o.ed di-idend $ma' &e a A) In-entorie. or .toc1. uch a. current or non;current lia&ilit'%) =) raw material 3) wor1 in /roce.. >) .tore. : ./are. ?) fini.hed good. G) Pre/aid e8/en.e. I) Accrued income.

List o& nonEcurrent or 3ermanent ca3ital accounts )onEcurrent or 3ermanent lia+ilities =) !quit' .hare ca/ital 3) Preference .hare ca/ital >) Redeema&le /reference ca/ital )on current or 3ermanent assets

=) +oodwill 3) ,and .hare >) "uilding

?) De&enture. ?) Plant : machiner' 5) ,ong term loan. 5) Furniture : fitting 7) hare /remium Account 7) Trade mar1. A) hare /remium account A) Patent right. G) hare forfeited account G) ,ong;term in-e.tment I) Profit : lo.. account $&alance of I) De&it &alance of /rofit and lo.. /rofit9 i)e)9 credit &alance% account =4) 2a/ital re.er-e ==) 2a/ital redem/tion re.er-e =3) Pro-i.ion for again.t fi8ed a..et. =4) Di.count on i..ue of .hare. ==) Di.count on i..ue of de&enture.

de/reciation =3) Preliminar' !8/en.e. =>) Other deferred e8/en.e.

=) general re.er-e 3) di-idend equaliBation fund =>) In.urance fund =?) 2om/en.ation fund =5) in1ing fund =7) In-e.tment Fluctuation fund =A) Pro-i.ion for Ta8ation =G) Pro/o.ed di-idend

Procedure for 1nowing whether a tran.action re.ult. in the flow of fund. or not< =( Anal#ses t%e transaction and &ind out t%e two accounts in ol ed( -( 'a2e "ournal entr# o& t%e transaction( 8( ,etermine w%et%er t%e accounts in ol ed in t%e transaction are current or nonEcurrent( >( I& +ot% t%e accounts in ol ed are current i(e(4 eit%er current assets or current lia+ilities4 it does not result in t%e &low o& &unds( /( I& +ot% t%e account in ol ed is4 nonEcurrent4 i(e(4 eit%er 3ermanent assets or 3ermanent lia+ilities4 it still does not result in t%e &low o& &unds( :( I& t%e accounts in ol ed are suc% t%at one is a current account w%ile t%e ot%er is a nonEcurrent account4 i(e(4 current asset and &i@ed asset4 or current lia+ilit# and 3ermanent lia+ilit# t%en it results in t%e &low o& &unds( Meaning and definition of fund. flow .tatement Funds &low statements is a met%od +# w%ic% we stud# c%anges in t%e &inancial 3osition o& a +usiness enter3rise +etween +eginning and ending &inancial statements dates( It is a statement s%owing sources and uses o& &unds &or a 3eriod o& time( IA statement o& sources and a33lication o& &unds is a tec%nical de ice designed to anal#Re t%e c%anges in t%e &inancial condition o& a +usiness enter3rise +etween two datesJ( ;;;;;; FO#,*!

IT%e &unds &low statement descri+es t%e source &rom w%ic% additional &unds were deri ed and t%e use to w%ic% t%ese coerces were 3utJ( ;;;;;;;ANTDONP) Funds &low statement as Ias a statement eit%er 3ros3ecti e or retros3ecti e setting out t%e sources and a33lications o& t%e &unds o& an enter3rise( T%e 3ur3ose o& t%e statement is to indicate clearl# t%e re9uirement o& &unds and %ow t%e# are 3ro3osed to +e raised and t%e e&&icient utiliRation and a33lication o& t%e sameJ ;;;;;;; I2WA)IN +,O ARP OF MANA+!M!NT A22O#NT

Fund. flow .tatement9 income .tatement and &alance .heet< Funds &low statement is not a su+stitute o& an income statement4 i(e(4 a 3ro&it P loss account and +alance s%eet( A +alance s%eet is a statement o& &inancial 3osition or status o& a +usiness on a gi en date( It is 3re3ared at t%e end o& accounting 3eriod( T%e +alance s%eet de3icts arious resources o& an underta2ing and %e de3lo#ment o& t%ese resources in arious assets on a 3articular date( ;ence4 &unds &low statement is not com3etiti e +ut com3lementar# to &inancial statements( T%e &unds statement 3ro ides additional in&ormation as regards c%anges in wor2ing ca3ital( It is a tool o& management &or &inancial anal#sis and %el3s in ma2ing decisions(

Difference &etween fund. flow .tatement and income .tatement Fund. flow .tatement =( It %ig%lig%ts t%e c%anges in t%e &inancial 3osition o& a +usiness and indicates t%e arious means +# w%ic% &unds were o+tained during a 3articular 3eriod and t%e wa#s to w%ic% t%ese &unds were em3lo#ed( -( It is com3lementar# %el3s to t%e -( Income statement is not 3re3ared &rom &und &low statement( 8( Onl# re enue item are income statement( Income statement statement( 8( 7%ile 3re3aring &unds &low statement +ot% ca3ital and re enue item are considered( >( T%ere is no 3rescri+ed &ormat &or 3re3aring a &und &low statement( >( It is 3re3ared 3rescri+ed &ormat( 3re3aration o& &unds &low considered( Income .tatement =( It does not re eal t%e in&low and out&lows o& &unds +ut de3osits t%e items o& e@3enses and income arri e at t%e &igure o& 3ro&it or loss(

Difference &etween fund. flow .tatement : &alance .heet Fund. flow .tatement =( It is a statement o& c%anges in &inancial 3osition and %ence is d#namic in nature( -( It s%ows t%e sources and uses o& &unds in a 3articular 3eriod o& time( 8( It is a tool o& management &or &inancial anal#sis and %el3s in ma2ing decisions( >( $suall#4 sc%edule o& c%anges in wor2ing %as to +e >( 3re3ared +e&ore 3re3aring &unds &low statement( 8( -( "alance .heet It is a statement o& &inancial 3osition on a 3articular date and %ence is static in nature( It de3icts t%e assets and lia+ilities at a 3articular 3oint o& time( It is not o& muc% %el3 to management in ma2ing decisions( )o suc% sc%edule o& c%anges in wor2ing ca3ital is re9uired( Rat%er 3ro&it P loss account is 3re3ared( $ses4 signi&icance and im3ortance o& &unds &low statement( =) A fund flow .tatement i. an e..ential tool for the financial anal'.i. and i. of /rimar' im/ortance to the financial management) The &a.ic /ur/o.e of a fund. flow .tatement i. to re-eal the change. in the wor1ing ca/ital on the two &alance .heet date.) If al.o de.cri&e. the .ource. from which additional wor1ing ca/ital ha. &een financial and the u.e. to which wor1ing ca/ital ha. &een a//lied) uch a .tatement i. /articularl' u.eful in a..e..ing the growth of the firm) The .ignificance or im/ortance of

=(

fund. flow .tatement can &e well followed from it. -ariou. u.e. gi-en &elow) It %el3s in t%e anal#sis o& &inancial o3erations The financial .tatement. re-eal the net effect of -ariou. tran.action. on the o/erational and financial /o.ition of a concern) The &alance .heet gi-e. a .tatic -iew of the re.ource. of a &u.ine.. and the u.e. to which the.e re.ource. of a &u.ine.. and the u.e. to which ha-e &een /ut at a certain /oint of time) The fund. flow .tatement e8/lain. cau.e. for .uch change. and al.o the effect of thi. change on the liquidit' /o.ition of the com/an' .ometime a concern ma' o/erate /rofita&l' and 'et it. ca.h /o.ition ma' &ecome more and more wor.e) The fund. flow .tatement gi-e. a clear an.wer to .uch a .ituation e8/laining what ha. ha//ened) -( It t%rows lig%t on man# 3er3le@ing 9uestions o& general interest Which otherwi.e ma' &e difficult to &e an.wered9 .uch a. =) Wh' were the net current a..et. le..er ./ite of higher /rofit. and -ice -er.aY 3) Wh' more di-idend. could not &e declared in ./ite of a-aila&le /rofit.Y >) Dow wa. it /o..i&le to di.tri&ute more di-idend. than the /re.ent earning.Y ?) What ha//ened to the /roceed. of .ale of fi8ed a..et. or i..ue of .hare.9 de&enture.9 ect) Y 5) What ha//ened to the net /rofitY Where did the' goY 7) Dow wa. the increa.e in wor1ing ca/ital financed and how will it &e financed in futureY 8( It %el3s in t%e &ormation o& a realistic di idend 3olic#

ome time. a firm ha. .ufficient /rofit. a-aila&le for di.tri&ution a. di-idend &ut 'et it ma' not &e ad-i.a&le to di.tri&ute di-idend for lac1 of liquid or ca.h re.ource.) In .uch ca.e.9 a fund. flow .tatement hel/. in the formation of a reali.tic di-idend /olic')

>( It %el3s in t%e 3ro3er allocation o& resources The re.ource. of a concern are alwa'. limited and it want. to ma1e the &e.t u.e of the.e re.ource.) A /ro0ected fund. flow .tatement con.tructed for the future hel/. in ma1ing managerial deci.ion.) The firm can /lan the de/lo'ment of it. re.ource. and allocate them among -ariou. a//lication.) /( It acts as a &uture guide A /ro0ected fund. flow .tatement al.o act. a guide for future to the management) The management can come to 1now the -ariou. /ro&lem. it i. going to face in near future for want of fund.) The firmC. future need. want of fund.) The firmC. future need. of fund. can &e /ro0ected wor1 in ad-ance and al.o the timing of the.e need.) :( It %el3s in a33raising t%e use o& wor2ing ca3ital A fund. flow .tatement hel/. in e8/laining haw effecti-el' the management ha. u.ed it. wor1ing ca/ital and al.o .ugge.t. wa'. to im/ro-e wor1ing ca/ital /o.ition of the firm)

1( It %el3s 2nowing t%e o erall credit wort%iness o& a &irm The financial in.titution. and &an1. .uch a. .tate financial in.titution.) Indu.trial De-elo/ment 2or/oration9 indu.trial finance cor/oration of India9 indu.trial de-elo/ment &an1 of India9 etc)9 all a.1 for fund. flow .tatement con.tructed for a mem&er of 'ear. &efore granting loan. to 1now the credit worthine.. and /a'ing ca/acit' of the firm) Dence9 a firm .ee1ing financial a..i.tance from the.e in.titution. ha. no alternati-e &ut to /re/are fund. flow .tatement) LI'ITATIO)S OF F$),S FLO7 STATE'E)T =) It .hould &e remem&ered that a fund. flow .tatement i. not a .u&.titute of an income .tatement or a &alance .heet) It /ro-ide. onl' .ome additional information a. regard. change. in wor1ing ca/ital) 3) It cannot re-eal continuou. change.) >) It i. not original .tatement &ut .im/l' i. arrangement of data gi-en in the financial .tatement.) ?) It i. e..entiall' hi.toric in nature and /ro0ected fund. flow .tatement cannot &e /re/ared with much accurac') 5) 2hange. in ca.h are more im/ortant and rele-ant for financial management than the wor1ing ca/ital) PROCE,$RE FOR PREPARI)G A F$),S FLO7 STATE'E)T The fund. flow .tatement i. /re/ared &' com/aring two &alance .heet. and with the hel/ of .uch other information deri-ed from the account. a. ma' &e needed) The /re/aration of a fund. flow .tatement con.i.t. of two /art. < =) 3) tatement or .chedule of change. in wor1ing ca/ital) tatement of .ource. and a//lication of fund.)

=( Statement or Sc%edule o& c%anges in 7or2ing Ca3ital Wor1ing 2a/ital mean. the e8ce.. of current a..et. o-er current lia&ilitie.) tatement of change. in wor1ing ca/ital i. /re/ared to .how the change. in the wor1ing ca/ital &etween the two &alance .heet date.) Thi. .tatement i. /re/are with the hel/ of current a..et. and current lia&ilitie. deri-ed from the two &alance .heet. A.9 Wor1ing 2a/ital N 2urrent A..et. 6 2urrent ,ia&ilitie. i% ii% iii% i-% An increa.e in current a..et. increa.e. the wor1ing ca/ital) A decrea.e in current a..et. decrea.e. the wor1ing ca/ital) An increa.e in current lia&ilitie. decrea.e. the wor1ing ca/ital) A decrea.e in current lia&ilitie. increa.e. the wor1ing ca/ital) A t'/ical for .tatement or .chedule of change. in wor1ing ca/ital i. a. follow.

=( Statement o& c%anges in 7or2ing Ca3ital E&&ect in wor2ing ca3ital Particulars Current Assets 2a.h in hand 2a.h at &an1 "ill. Recei-a&le undr' De&tor. Tem/orar' In-e.tment. toc1 or In-entorie. Pre/aid !8/en.e. Accrued Income. Total Current Assets Current Lia+ilities "ill. Pa'a&le undr' 2reditor. Out.tanding !8/en.e. "an1 O-erdraft hort term ad-ance. Di-idend Pa'a&le Pro/o.ed Di-idend S Pro-i.ion for Ta8ation S Total Current Lia+ilities 7or2ing Ca3ital (CA E CL) Net Increa.e H Decrea.e in Wor1ing 2a/ital Pre ious Current #ear <ear Increase ,ecrease 888 888 888 888 888 888 888 888 @@@ 888 888 888 888 888 888 888 888 @@@ @@@ @@@ 888 888 888 888 888 888 888 888 @@@ 888 888 888 888 888 888 888 888 @@@ @@@

@@@ @@@

@@@ @@@ @@@

S Ma' or ma' not &e a current lia&ilit')

-( Statement o& Sources and A33lication o& Funds Fund. flow .tatement i. a .tatement which indicate. -ariou. .ource. from which fund. $wor1ing ca/ital% ha-e &een o&tained during a certain /eriod and the u.e. a a//lication. to which the.e fund. ha-e &een /ut during that /eriod) +enerall'9 the .tatement i. /re/ared in tow format.) i% ii% Re/ort Form T Form or an Account form or elf "alancing T'/e)

S3ecimen o& Re3ort Form o& Funds Flow Statement

Particulars Sources o& Funds Fund. from O/eration. I..ue of hare 2a/ital Rai.ing of ,ong term ,oan. Recei/t. from Part'l' Paid hare 2alled;u/ ale. of Non 2urrent $Fi8ed% A..et. Non Trading Recei/t. $Di-idend Recei-edZ)% ale of In-e.tment $long term% Decrea.e in Wor1ing 2a/ital $a. /er .chedule of change. in wor1ing ca/ital% Total A33lications o& Funds Fud. ,o.t in O/eration. Redem/tion of Preference hare 2a/ital Redem/tion of De&enture. Re/a'ment of ,ong term ,oan. Purcha.e of Non 2urrent $Fi8ed% A..et. Purcha.e of ,ong term In-e.tment Non Trading Pa'ment. Pa'ment of Di-idend S Pa'ment of Ta8 L Increa.e in Wor1ing 2a/ital $a. /er .chedule of change. in wor1ing ca/ital% Total 888 888 888 888 888 888 888 888 888 888 888 @@@ 888 888 888 888 888 888 888 888 888 @@@ Amount (Rs()

T Form or An Account Form or Sel& *alancing T#3e Funds Flow Statement

Sources Fund. from O/eration. I..ue of hare 2a/ital I..ue of De&enture. Rai.ing of ,ong term ,oan. Recei/t. from Partl' /aid .hare.9 called u/ Non trading Recei/t. $Di-idend% ale of ,ong term In-e.tment Net Decrea.e in Wor1ing 2a/ital Amount (Rs() 888 888 888 888 888 888 888 888 A33lications Fund. ,o.t in O/eration. Redem/tion of Preference hare 2a/ital Redem/tion of De&enture. Re/a'ment of ,ong term ,oan. Purcha.e of Non 2urrent $Fi8ed% A..et. Purcha.e of ,ong term In-e.tment. Non trading Pa'ment. Pa'ment of Di-idend. L Pa'ment of Ta8e.L Net Increa.e in Wor1ing 2a/ital @@@ Amount (Rs() 888 888 888 888 888 888 888 888 888 888 @@@

S)ote Pa'ment of di-idend and ta8 will a//ear a. an a//lication of fund. onl' when the.e item. are a//ro/riation. of /rofit. and not current lia&ilitie.)

*asicall# t%ere are two met%ods o& calculating Funds From O3erations a% The fir.t method i. to /re/are the /rofit and lo.. account a fre.h &' ta1ing into con.ideration onl' fund and o/erational term. which in-ol-e fund. and are related to the normal o/eration. of the &u.ine..)

&%

The .econd method $which i. generall' u.ed% i. to /roceed from the figure of net /rofit and net lo.. a. arri-ed at from the /rofit and lo.. account alread' /re/ared) Fund. from O/eration. &' thi. method can &e calculated a.

under) Calculation o& Funds &rom O3eration

Particulars Amount (Rs()

2lo.ing &alance of P:, aHc or Retained !arning. $ a. gi-en in the &alance .heet Add ? Non Fund and Non O/erating item. which ha-e &een alread' de&ited to P : , aHc i% De/reciation and De/letion ii% AmortiBation of fictitiou. and Intangi&le =) +ood will 3) Patent. >) Trade Mar1. ?) Preliminar' !8/en.e. 5) Di.count on i..ue of hare.9 etc)9 iii% A//ro/riation of Retained !arning.9 .uch a. =) Tran.fer to +eneral Re.er-e 3) Di-idend !qualiBation Fund >) Tran.fer to in1ing Fund ?) 2ontingenc' Re.er-e9 etc)9 i-% ,o.. on ale of an' Non 2urrent $Fi8ed% A..et.9 .uch a. =) ,o.. on ale of ,and : "uilding. 3) ,o.. on ale of Machiner' >) ,o.. on ale of Furniture ?) ,o.. on ale of long ; term In-e.tment.9 etc -% Di-idend including =) Interim Di-idend 3) Pro/o.ed Di-idend $if it i. an a//ro/riation of /rofit. and not ta1en a. current lia&ilit'

@@@ 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888 888

-i% Pro-i.ion for Ta8ation $if it i. not ta1en in 2urrent ,ia&ilit'% -ii% An' other non;fundH non o/erating item. which ha-e &een de&ited to / : l aHc% Total (a) Less ? Non Fund or Non O/erating item. which ha-e alread' &een 2redited to P : , aHc i% Profit on ale of Non 2urrent $Fi8ed% A..et.9 .uch a. =) Profit on .ale of ,and : "uilding. 3) Profit on .ale of Plant : Machiner' >) Profit on .ale of ,ong ; term In-e.tment.9 etc)9 ii% A//reciation in the -alue of Fi8ed A..et.9 .uch a. Increa.e in the -alue of ,and if it ha. &een credited to P : , aHc iii% Di-idend Recei-ed i-% !8ce.. Pro-i.ion retran.ferred to P : , aHc or written off -% An' other non ; o/erating item. which ha. &een credited to P : , aHc -i% O/ening "alance of P : , aHc or Retained !arning. $a. gi-en in the &alance .heet% Total (+) Funds Generated +# O3erations (Total (a) E Total (*))

888 888 @@@ 888 888 888 888 888 888 888 888 888 888 @@@ @@@

&% Fund. from O/eration. can al.o &e calculated &' /re/aring ad0u.ted Profit : ,o.. Account a. follow.)

Ad"usted Pro&it P Loss Account Particulars To De/reciation : De/letion or AmortiBation of Fiction. and Intangi&le A..et. +ood will9 Patent.9 Trade mar1.9 Preliminar' !8/en.e.9 etc)9 To A//ro/riation of Retained !arning. Tran.fer to +eneral Re.er-e.9 Di-idend !qualiBation Fund9 in1ing Fund9 etc)9 To ,o.. on ale. of an' Non ; 2urrent or Fi8ed A..et. To Di-idend. $Including interim Di-idend% To Pro/o.ed Di-idend $if not ta1en a. a current lia&ilit'% To Pro-i.ion for Ta8ation $if not ta1en a. a current lia&ilit' To 2lo.ing &alance $of P: , aHc% To Fund. lo.t in O/eration. $&alancing figure inca.e .ide e8ceed. the de&it .ide% 888 Amount (Rs) Particulars "' O/ening "alance $of P : ,aHc% "' Tran.fer from e8ce.. /ro-i.ion. "' A//reciation in the -alue of fi8ed a..et. Amount (Rs)

888

888

888 888

"' Di-idend. Recei-ed 888 "' Profit on .ale of fi8ed or non current a..et. "' Fund. from o/eration. $&alancing figure. inca.e de&it .ide e8ceed. credit .ide%

888 888

888 888 888 888

888

888 @@@

@@@

2A D F,OW INTROD#2TION

TAT!M!NT

2a.h /la'. a -er' im/ortant role in the entire economic life of a &u.ine..) A firm need. ca.h to ma1e /a'ment. to it. .u//lier.9 to incur da';to;da' e8/en.e. and to /a' .alarie.9 wage.9 intere.t and di-idend9 etc) In fact 9what &lood i. to a human &od'9 ca.h i. to a &u.ine.. enter/ri.e) It i. -er' e..ential for a &u.ine.. to maintain an adequate &alance of ca.h) "ut man' time. 9 a concern o/erate. /rofita&l' and 'et it &ecome. -er' difficult to /a' ta8e. and di-idend) Thi. ma' &e &ecau.e although huge /rofit. ha-e &een earned 'et ca.h ma' not ha-e &een recei-ed) e-en if ca.h ha. &een recei-ed9 it ma' ha-e drained out $u.ed% for .ome other /ur/o.e.) Thi. mo-ement of ca.h i. of -ital im/ortance to the management) We ha-e .tudied in the /re-iou. cha/ter that the two &a.ic financial .tatement.9 i)e)9 the &alance .heet and /rofit and lo.. account 9 /ro-ide the e..ential &a.ic information on the financial acti-itie. of a &u.ine..9 &ut their u.efulne.. i. limited for anal'.i. and /lanning /ur/o.e.) The &alance .heet doe. not di.clo.e the cau.e. for change. in the a..et. and lia&ilitie. &etween two different /oint. of time) The /rofit and lo.. account al.o fail. to di.clo.e the rea.on. for .hortage of ca.h in ./ite of /o.iti-e net income) Thu.9 another .tatement 9called fund. flow .tatement9 wa. /re/ared to .how the change. in the a..et. and lia&ilitie. from the end of one /eriod of time to the end of another /eriod of time) To underline the im/ortance of fund. .tatement9 the in.titute of 2hartered Accountant. of India $I2AI% i..ued in @une9=IG= Accounting tandard;> dealing with the /re/aration of .tatement of change. in Financial Po.ition) The .tatement of change. in financial /o.ition .ummariBed9 for the /eriod co-ered &' it9 the change. in the financial /o.ition including the .ource. from which fund. where o&tained &' the enter/ri.e and the ./ecific u.e. to which .uch fund. where a//lied) For thi. /ur/o.e9 the term Sfund.C wa. defined a. ca.h and ca.h equi-alent. or wor1ing ca/ital) The .tatement in financial /o.ition9 al.o called Fund. Flow tatement 9 wa. intended to /ro-ide a meaningful lin1 &etween the &alance .heet at the &eginning and at the end of a /eriod and the /rofit and lo.. account for that /eriod) M!ANIN+ 2a.h flow .tatement i. a .tatement which de.cri&e. the inflow. $.ource.% and outflow. $u.e.% of ca.h and ca.h equi-alent. in an enter/ri.e during a /eriod of time) uch a .tatement enumerate. net effect. of the -ariou. &u.ine.. tran.action. on ca.h and it. equi-alent. and ta1e. into account recei/t. and di.&ur.ement. of ca.h) A ca.h flow .tatement .ummariBe. the cau.e. of change. in ca.h /o.ition of a &u.ine.. enter/ri.e

&etween date. of two &alance .heet.) According to A.;> $Re-i.ed%9 an enter/ri.e .hould /re/are a ca.h flow .tatement and .hould /re.ent it for each /eriod for which financial .tatement. are /re/ared) The term. ca.h9 ca.h equi-alent. and ca.h flow. are u.ed in thi. .tatement with the following meaning.< =) 2a.h com/ri.e. ca.h on the hand and demand de/o.it. with &an1.) 3) 2a.h equi-alent. are .hort term9 highl' liquid in-e.tment. that are readil' con-erti&le into 1nown amount. of ca.h and which are .u&0ect to an in.ignificant ri.1 of change. in -alue) 2a.h equi-alent. are held for the /ur/o.e of meeting .hort;term ca.h commitment. rather than for in-e.tment or other /ur/o.e.) >) 2a.h flow. are inflow. and outflow. of ca.h and ca.h equi-alent.) Flow of ca.h i. .aid to ha-e ta1en /lace when an' tran.action ma1e. change. in the amount of ca.h and ca.h equi-alent. a-aila&le &efore ha//ening of the tran.action) If the effect of tran.action re.ult. in the increa.e of ca.h and it. equi-alent.9 it i. called an inflow $.ource% and if it i. re.ult. in the decrea.e of total ca.h9 it i. 1nown a. outflow $u.e% of ca.h)

2,A

IFI2ATION OF 2A D F,OW 2a.h flow. are cla..ified into three main categorie.< =) 2a.h flow. from o/erating acti-itie.) 3) 2a.h flow. from in-e.ting acti-itie.) >) 2a.h flow. from financing acti-itie.)

=)

2a.h Flow. From O/erating Acti-itie.< O/erating acti-itie. are the /rinci/al re-enue;/roducing acti-itie. of the enter/ri.e and other acti-itie. that are not in-e.ting or financing acti-itie.) The amount of ca.h flow. ari.ing from o/erating acti-itie. i. a 1e' indicator of the e8tent to which the o/eration. of the enter/ri.e ha-e generated .ufficient ca.h flow. to maintain the o/erating ca/a&ilit' of the enter/ri.e9 /a' di-idend.9 re/a' loan.9 and ma1e new in-e.tment. without recour.e to e8ternal .ource. of financing) Information a&out the ./ecific com/onent. of hi.torical o/erating ca.h flow. i. u.eful9 in con0unction with other information9 in foreca.ting future o/erating ca.h flow.)

!8am/le. of ca.h flow. from o/erating acti-itie. are< $a% ca.h recei/t. from the .ale of good. and the rendering of .er-ice.J $&% ca.h recei/t. from the ro'altie.9 fee.9 commi..ion.9 and other re-enueJ $c% ca.h /a'ment. to .u//lier. of good. and .er-ice.J $d% ca.h /a'ment. to and on &ehalf of em/lo'ee.) 3) 2a.h Flow. From O/erating Acti-itie.<

In-e.ting acti-itie. are the acqui.ition and di./o.ed of long;term a..et. and other in-e.tment. not included in ca.h equi-alent.) The .e/arate di.clo.ure ca.h flow. ari.ing from in-e.ting acti-itie. i. im/ortant &ecau.e the ca.h flow. re/re.ent the e8tent to which e8/enditure. ha-e &een made for re.ource. intended to generate future income and ca.h flow.) !8am/le. of ca.h flow. ari.ing from in-e.ting acti-itie. are) $a% ca.h /a'ment. to acquire fi8ed a..et. $including intangi&le.%) The.e /a'ment. include tho.e relating to ca/italiBed re.earch : de-elo/ment co.t. and .elf con.tructed fi8ed a..et.J $&% ca.h /a'ment. to acquire .hare.9 warrant.9 or de&t in.trument. of other enter/ri.e. and intere.t. in 0oint -enture. $other than /a'ment. for tho.e in.trument. con.idered to &e ca.h equi-alent. and tho.e held for dealing or trading /ur/o.e.%J $c% ca.h recei/t. from di./o.al of fi8ed a..et. $including intangi&le.%) 2a.h Flow. From Financial Acti-itie.< Financing acti-itie. are acti-itie. that re.ult. in change. in the .iBe and com/o.ition of the ownerC. ca/ital $including /reference .hare ca/ital in the ca.e of a com/an'% and &orrowing. of the enter/ri.e The .e/arate di.clo.ure of ca.h flow. ari.ing from financing acti-itie. i. im/ortant &ecau.e it i. u.eful in /redicting claim. on future ca.h flow. &' /ro-ider. of fund. $&oth ca/ital and &orrowing.% to the enter/ri.e) !8am/le. of ca.h flow. ari.ing from financing acti-itie. are< $a% ca.h /roceed. from i..uing .hare. or other .imilar in.trument.J $&% ca.h /roceed. from i..uing de&enture.9 loan.9 note.9 &ond.9 and other .hort;term &orrowing.J $c% ca.h re/a'ment. of amount. &orrowed .uch a. redem/tion of de&enture.9 &ond.9 /reference .hare. >)

O"@!2TI(! =) Information a&out the ca.h flow. of an enter/ri.e i. u.eful in /ro-iding u.er. of financial .tatement. with a &a.i. to a..e.. the a&ilit' of the enter/ri.e to generate ca.h and ca.h equi-alent. and the need. of the enter/ri.e to utiliBe tho.e ca.h flow.) 3) The economic deci.ion. that are ta1en &' u.er require an e-aluation of the a&ilit' of an enter/ri.e to generate ca.h and ca.h equi-alent. and the timing and certainl' of their generation) >) The .tatement deal. with the /ro-i.ion of information a&out the hi.torical 2hange. in ca.h and ca.h equi-alent. of an enter/ri.e &' mean. of a ca.h flow .tatement which cla..ifie. ca.h flow. during the /eriod from o/erating in-e.ting and financing acti-itie.)

2OP! =) An enter/ri.e .hould /re/are a ca.h flow .tatement and /re.ent it for each /eriod for which financial .tatement. are /re.ented) 3) #.er. of an enter/ri.eC. financial .tatement. are intere.ted in how the enter/ri.e generate. and u.e. ca.h and ca.h equi-alent.) Thi. i. ca.e regardle.. of the nature of the enter/ri.eC. acti-itie. and irre./ecti-e of whether ca.h can &e -iewed a. the /roduct of the enter/ri.e9 a. ma' &e the ca.e with a financial enter/ri.e9 a. ma' &e the ca.e with a financial enter/ri.e) >) !nter/ri.e. need ca.h for e..entiall' the .ame rea.on.9 howe-er different their Princi/al re-enue;/roducing acti-itie. might &e) ?) The' need ca.h to conduct their o/eration.9 to /a' their o&ligation.9 and to /ro-ide return. to their in-e.tor.

# ! AND I+NIFI2AN2! OF 2A D F,OW TAT!M!NT 2a.h flow .tatement i. of -ital im/ortance to the financial management) It i. an e..ential tool of financial anal'.i. for .hort;term /lanning) The chief ad-antage. of ca.h flow .tatement are a. follow.< $=% ince a ca.h flow .tatement i. &a.ed on the ca.h &a.i. of accounting9 it i. -er' u.eful in the e-aluation of ca.h /o.ition of a firm) $3% A /ro0ected ca.h flow .tatement can &e /re/ared in order to 1now the future ca.h /o.ition of a concern .o a. ena&le a firm to /lan and coordinate it. financial o/eration. /ro/erl') "' /re/aring thi. .tatement9 a firm can come to 1now a. to how much ca.h will &e generated into the firm and how much ca.h will &e needed to ma1e -ariou. /a'ment. and hence the firm can well /lan to arrange for the future requirement. of ca.h) $>% A com/ari.on of the hi.torical and /ro0ected ca.h flow .tatement. can &e made .o a. to find the -ariation. and deficienc' or otherwi.e in the /erformance .o a. to ena&le the firm to ta1e immediate and effecti-e action) $?% A .erie. of intra;firm and inter;firm ca.h flow .tatement. re-eal. whether the firmC. liquidit' $.hort;term /a'ing ca/acit'%i. im/ro-ing or deteriorating o-er a /eriod of time and in com/ari.on to other firm. o-er a gi-en /eriod of time) $5% 2a.h flow .tatement hel/. in /lanning the re/a'ment of loan.9 re/lacement of fi8ed a..et. and other .imilar log;term /lanning of ca.h) It i. al.o .ignificant for ca/ital &udgeting deci.ion.) $7% 2a.h flow anal'.i. i. more u.eful and a//ro/riate than fund. flow anal'.i. for .hort;term financial anal'.i. a. in a -er' .hort /eriod it i. ca.h which i. more rele-ant then the wor1ing ca/ital for foreca.ting the a&ilit' of the firm to meet it. immediate o&ligation.)

$A% 2a.h flow .tatement /ro-ide. information of all acti-itie. cla..ified under o/erating9 in-e.ting and financing acti-itie.9 the fund. .tatement e-en when /re/ared on ca.h &a.i.9 did not di.clo.e ca.h flow. from .uch acti-itie. .e/aratel'9 Thu.9 ca.h flow .tatement i. more u.eful than the fund. .tatement) ,IMITATION OF 2A D F,OW TAT!M!NT De./ite a num&er of u.e.9 ca.h flow .tatement. .uffer. from the following limitation.< $=% A. ca.h flow .tatement i. &a.ed on ca.h &a.i. of accounting9 it ignore. the &a.ic accounting conce/t of accrual &a.i.) $3% ome /eo/le feel that a. wor1ing ca/ital i. a wider conce/t of fund.9 a fund. flow .tatement /ro-ide. a more com/lete /icture than ca.h flow .tatement) $>% 2a.h flow .tatement i. not .uita&le for 0udging the /rofita&ilit' of a firm a. non; ca.h charge. are ignored while calculating ca.h flow. from o/erating acti-itie.) PR!PARATION OF 2A D F,OW TAT!M!NT The 2a.h Flow tatement i. to &e /re.ented a. /er the A ;> of the In.titute of 2hartered Accountant. of India $I2AI%) The I2AI i..ued A ;>in @une9 =IG= for the fir.t time) ,ater in March9 =IIA it re-i.ed the .tandard) The model .ti/ulated in A ;> i. the widel' acce/ted model for /re.entation of 2a.h Flow tatement.) All the li.ted com/anie.Hentitie. who.e financial 'ear end. on March9 =II7 and thereafter will &e required to gi-e 2a.h Flow tatement along with "alance heet and Profit and ,o.. Account) The a&o-e amendment come. into effect immediatel' I)e)9 w)e)f)=5;3;=II7

DI TIN2TION "!TW!!N F#ND F,OW TAT!M!NT AND 2A D F,OW TAT!M!NT

Fund. Flow tatement 2a.h Flow tatement

$=% It i. &a.ed on accrued &a.i. of accounting) $3% Fund. flow .tatement i. concerned with change. in Wor1ing 2a/ital /o.ition &etween two "alance heet) $>% Fund. flow .tatement i. &a.ed on a wider conce/t of fund. i)e)9 wor1ing ca/ital)

$=% It i. &a.ed on ca.h &a.i. of accounting) $3% 2a.h Flow .tatement i. concerned onl' with the change. in ca.h /o.ition) $>% 2a.h flow .tatement i. &a.ed on the narrow conce/t of fund. i)e)9 ca.h onl' which i. onl' one com/onent of Wor1ing ca/ital)

$?% A .chedule of Wor1ing ca/ital change. i. /re/ared in the ca.e of Fund. Flow tatement) $5% It .how. the change. of not onl' ca.h &ut al.o of other current a..et. li1e de&tor.9 .toc1 etc $7% The .tatement doe. not .tart with an' o/ening of &alance of an' account and doe. not e-en and with an' .uch clo.ing &alance of an' account) $A% It .how. the change. in the current lia&ilitie. li1e .undr' creditor.9 &ill. /a'a&le etc) $G% In thi. ca.e9 the /rofit from o/eration or the net /rofit i. con.idered a. a /rinci/al .ource. of fund) $I% Fund. Flow .tatement i. u.eful for long;term financial anal'.i. and .ol-enc' of the firm)

$?% No .uch .chedule i. /re/ared in the ca.e of 2a.h Flow tatement) $5% It .how. the change of the o/ening ca.h &alance into the clo.ing ca.h &alance) $7% The .tatement .tart. with the o/ening ca.h and &an1 &alance. and end. with the clo.ing ca.h and &an1 &alance. in mo.t of the ca.e.) $A% It doe. not .how the change. in the current lia&ilitie. of the enter/ri.e) $G% In thi. ca.e9 the main .ource of ca.h inflow i. con.idered to &e the .ale. and not the net /rofit of the &u.ine..) $I% 2a.h Flow tatement a. a tool of financial anal'.i. i. more u.eful to the management in ca.h /lanning and .hort;term anal'.i.)

PR! !NTATION OF 2A D F,OW TAT!M!NT While /re/aring the ca.h flow .tatement9 ca.h flow. from o/erating acti-itie. are /re.ented fir.t9 followed &' in-e.ting acti-itie. and then financing acti-itie. ) the indi-idual inflow. and outflow. relating to in-e.ting and financing acti-itie. are /re.ented .e/aratel' in their re./ecti-e categorie.) The o/erating acti-itie. .ection can &e /re.ented u.ing the direct method or indirect method) In the direct method ca.h flow .tatement i. /re.ented /rimaril' on a ca.h recei/t. and ca.h /a'ment. &a.i.9 in.tead of on accrual &a.i.) In the indirect method9 net income i. ad0u.ted for item. that affected net income &ut did not affect ca.h) Direct Method<

Format of 2a.h Flow Particular. A)

tatement Amount R. Amount R.

2a.h Flow. from O/erating Acti-itie. 2a.h Recei/t.< ale. Intere.t Recei-ed 2a.h /a'ment. for Purcha.e. O/erating !8/en.e. Intere.t /a'ment. Income ta8e. Net 2a.h Flow. from O/erating Acti-itie. 2a.h Flow. from In-e.ting Acti-itie. ale of Plant A..et. ale /f In-e.tment. Purcha.e of Plant A..et. Purcha.e of In-e.tment. Net 2a.h Flow u.ed &' In-e.ting Acti-itie. 2a.h Flow. from Financing Acti-itie. Re/a'ment of "ond. and De&enture. I..ue of 2ommon hare. Di-idend /aid Net ca.h flow. Financing Acti-itie. Net Increa.eHDecrea.e in ca.h

888 888 888 888 888 888 888

888

")

888 888 888 888 888

2)

888 888 888 888 888

888

888

Indirect Method< Format of 2a.h Flow tatement Particular. Amount R. Amount R.

A) 2a.h Flow from O/erating Acti-itie.< Net Income Ad0u.tment. to Reconcile Net income to Net ca.h Pro-ided &' O/erating Acti-itie.< De/reciation +ain on .ale of In-e.tment. ,o.. on .ale of Plant A..et Increa.e in 2urrent A..et. Decrea.e in 2urrent ,ia&ilitie. Net 2a.h Flow. from O/erating Acti-itie. ") 2a.h Flow from In-e.ting Acti-itie.< ale of Plant A..et. ale of In-e.tment. Purcha.e of Plant A..et. Purcha.e of In-e.tment. Decrea.e in 2urrent A..et. Increa.e in 2urrent ,ia&ilitie. Net 2a.h Flow. u.ed &' In-e.ting Acti-itie. 2) 2a.h Flow. from Financing Acti-itie.< Re/a'ment of "ond. and De&enture. I..ue of common .hare. Di-idend. /aid Net 2a.h Flow. from Financing Acti-itie. Net Increa.eHDecrea.e in ca.h

888 888 888 888 888 888 888

888 888 888 888 888 888

888

888 888 888 888

888

Chapter-$

D"!" "N"L%S&S

Particulars Current Assets

-..1

-..:

Increase

,ecrease

undr' de&tor. 2a.h and &an1 Other current a..et. ,oan. and ad-ance. Total Current Assets Current Lia+ilities 2urrent lia&ilitie. Pro-i.ion. Total Current Lia+ilities 7or2ing Ca3ital (CA E CL) )et Increase G ,ecrease in 7or2ing Ca3ital

G4A=3G4? >?4?>534 =5333G A>>5=7 ==/:>-.:D 3=5I7I=7 G77IA?5 8.-::::= D/81/>.1

>AG57?34 5=7I4>37 G5AA5> I3>A4I Q=8-D-.D >G5I=375 G535I>? >1==1=QQ >>-==..Q

?3G57>G? =A7?7G47 A45535 =I4=I>

=7II?>?I =?>G==

/QD/.188

=D:D:88/ ?==7?>IG /QD/.188

D/81/>.1

?==7?>IG D/81/>.1 /QD/.188

Sources Fund. from o/eration. 2harge of de/reciation on fi8ed a..et.

Amount (Rs) A33lications ?45G7>7= Increa.e in Wor1ing 2a/ital GI>I5I Decrea.e in Ta8 lia&ilit' >=>D.8-.

Amount (Rs) ?==7?>IG >=5I33 >=>D.8-.

C%anges in 7or2in Ca3ital Statement &or t%e #ear -../ E-..: (Amout Rs() Particulars -..: -../ Increase ,ecrease Current Assets 2a.h and "an1 undr' De&tor. 5=97I49>3 7 >A9G579?3 >G943>97> ? >39377957 =>977797I 3 595GI9G55

Other 2urrent A..et. ,oan. and Ad-ance. Total Current Assets Current Lia+ilities 2urrent ,ia&ilitie. Pro-i.ion Total Current Lia+ilities

4 G5A9A5> I3>9A4I Q=48-D4-. D >G95I=937 5 G95359I>? >14==14=Q Q ??93==944 I ==9A??9?5 = //4Q//4>: .

5 G>?9I7> GI59I=I 1-4.-=4.D =

339AI4 3A9AI4

G945?9G3A G94=49AI? =:4.:/4:= 559I559?7 4 //4Q//4>: .

=Q48.14=1

>495>79?> G 5=59=?4 8=4./=4/1 D

)et 7or2ing (CA E CL) Decrea.e in Wor1ing 2a/ital

==9A??9?5 = 8=4./=4/1 D

8=4./=4/1 D

Sources Decrea.e in Wor1ing 2a/ital 2hange of De/reciation on Fi8ed A..et.

Amount (Rs)

A33lications

Amount (Rs) =>9A5A9?4I 7A9>5I =84D->41:D

==9A??9?5= Fund. ,o.t in O/eration Decrea.e in Deffered Ta8 394G49>=A ,ia&ilit' =84D->41:D

C%anges in 7or2in Ca3ital Statement &or t%e #ear -..> E-../ (Amout Rs() Particulars -../ -..> ,ecrease Current Assets

2a.h and "an1 undr' De&tor. Other 2urrent A..et. ,oan. and Ad-ance. Total Current Assets Current Lia+ilities 2urrent ,ia&ilitie. Pro-i.ion Total Current Lia+ilities )et 7or2ing (CA E CL) Decrea.e in Wor1ing 2a/ital

>G943>97>? >393779575 G>?9I7> GI59I=I 1-4.-=4.D= G945?9G3A G94=49AI? =:4.:/4:-= 559I559?74 //4Q//4>:.

I9G3I9>3A 5G9I439I37 AI9>>7 I5>9A5A :Q41:/48>: >49GA59I=> =944G9A4> 8=4DD>4:=: >A9GG49A>4 =G94A?9A>4 //4Q//4>:.

3G9=I?9>4A 3797>79>7= A55973A 5A9G>G

339G3=94G7 /=411=4.-. A944394I= 884:Q:4-Q.

/=411=4.-.

=G94A?9A>4 /=411=4.-.

Funds Flow Statement Amount (Rs) Amount (Rs)

Sources

A33lications

Funds From Operation

2hange of De/reciation on Fi8ed A..et.

Increa.e in Wor1ing =79I3I933A 2a/tial Decrea.e in Differed Ta8 =95>59?5= ,ia&ilit' =D4>:>4:1D

=G94A?9A>4 >GI9I?G =D4>:>4:1D

C%anges in 7or2in Ca3ital Statement &or t%e #ear -..8 E-..> (Amout Rs() Particulars -..> -..8 Increase ,ecrease Current Assets 2a.h and "an1

I9G3I9>3A

3I935A9I?5

=I9?3G97=G

undr' De&tor. Other 2urrent A..et. ,oan. and Ad-ance. Total Current Assets Current Lia+ilities 2urrent ,ia&ilitie. Pro-i.ion Total Current Lia+ilities )et 7or2ing (CA E CL) Decrea.e in Wor1ing 2a/ital

5G9I439I37 AI9>>7 I5>9A5A :Q41:/48>: >49GA59I=> =944G9A4> 8=4DD>4:=: >A9GG49A>4 =39AGI9?7I /.4:1.4=QQ

3G9>??9=>> A>5934A 3>79G77 /D4/1>4=/= 39>5>9A57 595549=I7 14Q.84Q/5497A49=II /.4:1.4=QQ

>4955G9AI> 7559GA= A=79GI=

3G95339=5A ?95?=9?I> 8/4D=14=11 >D4:.:4:>:

=39AGI9?7I >D4:.:4:>:

>D4:.:4:>:

Funds Flow Statement Amount (Rs) Amount (Rs)

Sources

A33lications Fund. ,o.t in O/eration

Decrea.e in Wor1ing 2a/ital 2hange of De/reciation on Fi8ed A..et. I..ue of hare 2a/ital Increa.e in Differed Ta8 ,ai&ilit'

=39AGI9?7I =9>35935I =797>I9>74 373975A 8=4.=:41>/

>=94=79A?5

8=4.=:41>/

C%anges in 7or2in Ca3ital Statement &or t%e #ear -..- E-..8 (Amout Rs() Particulars -..8 -..Increase ,ecrease Current Assets 2a.h and "an1 3I935A9I?5 3>94?794?G 793==9GIA undr' De&tor. 3G9>??9=>> =4934G9A?? =G9=>59>GI

Other 2urrent A..et. A>5934A ,oan. and Ad-ance. 3>79G77 Total Current Assets /D4/1>4=/= Current Lia+ilities 2urrent ,ia&ilitie. 39>5>9A57 Pro-i.ion 595549=I7 Total Current Lia+ilities 14Q.84Q/)et 7or2ing (CA E CL) Decrea.e in Wor1ing 2a/ital 5497A49=II /.4:1.4=QQ

A>5934A 57G9I7A 884D-841/Q >9A4?9>IG =9G339A== /4/-14=.Q 3G93I79754 -D4-Q:4:/. -:4>884=8/ 339>A>95?I -:4>884=8/ =9>5497?3 -:4>884=8/ >9A3A9?G5 >4./Q4/D: >>39=4=

Funds Flow Statement Amount (Rs) Amount (Rs)

Sources

A33lications Increa.e in Wor1ing 2a/tial

Fund. From O/eration. 2hange of De/reciation on Fi8ed A..et. Increa.e in Differed Ta8 ,ai&ilit' Mi.celleneaou. e8/en.e.

5I497G5 =G9AGG9?A? 39IGI9444 59>I4 --48184/>Q

339>A>95?I

--48184/>Q

'easo(s) The .undr' de&tor. increa.ed in the 'ear 344A when com/ared with 3447 &ecau.e there i. an increa.ed in O:M fee)

 The ca.h and &an1 &alance of 344A i. decrea.ed due to the /a'ment of di-idend. declared in 3447) The loan. and ad-ance. include. em/lo'ee claim. and de/o.it. with go-ernmentJ in the 'ear 344A9 the loan. and ad-ance. are decrea.ed &ecau.e9 the em/lo'ee. .et off their claim.) The other current a..et. ma0orl' include. intere.t on de/o.it.) The intere.t i. decrea.ed &ecau.e the de/o.it. are u.ed for the /a'ment of di-idend) In the ca.e of current lia&ilitie. there i. an decrea.ed in the 'ear 344A) The /ro-i.ion. are al.o increa.ed9 the additional /ro-i.ion i. created for9 rai.ed .undr' de&tor.)

For the /ur/o.e of /re/aration of Fund. Flow tatement we ha-e to calculate the change. in Wor1ing 2a/ital) The e8ce.. of 2urrent A..et. o-er 2urrent ,ia&ilitie. i. called Net Wor1ing 2a/ital)

&(terpretatio( The Wor1ing 2a/ital tatement treated a.<

 The undr' de&tor. are increa.ed in ?39G579>G?H; the 'ear 344A a. com/ared to the 'ear 3447) The 2a.h and "an1 &alance. are decrea.ed in =A97?79G47H; the 'ear 344A a. com/ared to the 'ear 3447)"ecau.e the +enting ,anco com/an' ha. /aid the di-idend. in 3447) The Other 2urrent A..et. are al.o decrea.ed in A9459535H; the 'ear 344A a. com/ared to the 'ear 3447) "ecau.e the com/an' canceled the di-idend. in 3447)The intere.t i. decrea.ed that i. the rea.on 2urrent A..et. are decrea.ed in 344A) The ,oan. and Ad-ance. are al.o decrea.ed in =9I49=I>H; the 'ear 344A a. com/ared to the 'ear 3447) "ecau.e here the com/an' .et;off the !m/lo'eeC. claim.) The 2urrent ,ia&ilitie. are decrea.ed in =79II?9>?IH; the 'ear 344A a. com/ared to the 'ear 3447)"ecau.e additional con.ultanc' /ro-ided &' the com/an') The Pro-i.ion. are increa.ed in =9?>9G==H; the 'ear 344A a. com/ared to the 'ear 3447)&ecau.e the .undr' de&tor. are increa.ed) The O-erall Wor1ing 2a/ital i. increa.ed in ?=9=7?9>IGH; the 'ear 344A)

In Fund. Flow tatement the Fi8ed A..et. are treated a. .ource &ecau.e de/reciation of fi8ed a..et. are decrea.ed in G9I>9I5IH; the

'ear 344A9 the rea.on i. Fi8ed A..et. doe. not /urcha.e &' the com/an') Deffered ta8 lia&ilit' i. decrea.ed in >9=59I33H; the 'ear 344A)

&(terpretatio(

The Wor1ing 2a/ital treated a.< The undr' de&tor. are increa.ed in 595GI9G55H; the 'ear 3447 a. com/ared to the 'ear 3445) The 2a.h and "an1 &alance. are increa.ed in =>977797I3H; the 'ear 3447 a. com/ared to the 'ear 3445) The Other 2urrent A..et. are increa.ed in 339AI4H; the 'ear 3447 a. com/ared to the 'ear 3445) The ,oan. and Ad-ance. are al.o increa.ed in 3A9AI4H; the 'ear 3447 a. com/ared to the 'ear 3445) The 2urrent ,ia&ilitie. are al.o increa.ed in >495>79?>GH; the 'ear 3447 a. com/ared to the 'ear 3445) The Pro-i.ion. are increa.ed in 59=59=?4H; the 'ear 3447 a. com/ared to the 'ear 3445) The O-erall Wor1ing 2a/ital i. decrea.ed in ==9A??9?5=H; the 'ear 3447)

&(terpretatio(

The Wor1ing 2a/ital treated a.< The undr' de&tor. are decrea.ed in 3797>79>7=H; the 'ear 3445 a. com/ared to the 'ear 344?) The 2a.h and "an1 &alance. are increa.ed in 3G9=I?9>4AH; the 'ear 3445 a. com/ared to the 'ear 344?) The Other 2urrent A..et. are increa.ed in A955973AH; the 'ear 3445 a. com/ared to the 'ear 344?) The ,oan. and Ad-ance. are decrea.ed in 5A9G>GH; the 'ear 3445 a. com/ared to the 'ear 344?) The 2urrent ,ia&ilitie. are decrea.ed in 339G3=94G7H; the 'ear 3445 a. com/ared to the 'ear 344?) The Pro-i.ion. are increa.ed inA944394I=H; the 'ear 3445 a. com/ared to the 'ear 344?) The O-erall Wor1ing 2a/ital i. increa.ed in =G94A?9A>4H; the 'ear 3445)

&(terpretatio(

The Wor1ing 2a/ital treated a.< The undr' de&tor. are increa.ed in >4955G9AI>H; the 'ear 344? a. com/ared to the 'ear344>) The 2a.h and "an1 &alance. are decrea.ed in =I9?3G97=GH; the 'ear 344? a. com/ared to the 'ear 344>) The Other 2urrent A..et. are decrea.ed in 79559GA=H; the 'ear 344? a. com/ared to the 'ear 344>) The ,oan. and Ad-ance. are increa.ed in A9=79GI=H; the 'ear 344? a. com/ared to the 'ear 344>) The 2urrent ,ia&ilitie. are increa.ed in 3G95339=5AH; the 'ear 344? a. com/ared to the 'ear 344>) The Pro-i.ion. are decrea.ed in ?95?=9?I>H; the 'ear 344? a. com/ared to the 'ear 344>) The O-erall Wor1ing 2a/ital i. decrea.ed in =G9>>I9775H; the 'ear 344? &ecau.e here9 the com/an' declared the di-idend.))

&(terpretatio( The Wor1ing 2a/ital tatement treated a.< The undr' de&tor. increa.ed in =G9=>59>GIH; the 'ear 344> a. com/ared to the 'ear3443) The 2a.h and "an1 &alance i. increa.ed in 793==9GIAH; the 'ear344> a. com/ared to the 'ear 3443) The Other 2urrent A..et. are al.o increa.ed in A9>5934AH; the 'ear 344> a. com/ared to the 'ear 3443) The ,oan. and Ad-ance. are decrea.ed in >>93=4H; the 'ear 344> a. com/ared to the 'ear 3443) The 2urrent ,ia&ilitie. are decrea.ed in =9>5497?3H; the 'ear 344> a. com/ared to the 'ear 3443) The Pro-i.ion. are increa.ed in >9A3A9?G5H; the 'ear 344> a. com/ared to the 'ear 3443) The O-erall Wor1ing 2a/ital i. increa.ed in339>A>95?IH; the 'ear 344>)

*I*LIOGRAP;<
REFFERE, *OO6S
FINAN2IA, MANA+!M!NT ; I) M) PAND!P MANA+!M!NT A22O#NTAN2P ; PI,,AI : "A+A(ATI MANA+!M!NT A22O#NTIN+ 6 DARMA : +#PTA

I)TER)ET SITE
www)erca/)org www)wi1i/edia)com www)nwda)go-)in

APPE),IC

*alance s%eet as on 8=st 'arc% -..1 (Amount in Rs()

Particulars SO$RCES OF F$),S ? =) S;ARE;OL,ERST F$),S $a% 2a/ital $&% Re.er-e. and ur/lu. -) ,EFFERE, TAC LIA*ILIT< TOTAL APPLICATIO) OF F$),S ? =) FICE, ASSETS $a% +ro.. "loc1 $&% ,e..< De/reciation $c% Net "loc1 -) C$RRE)T ASSETS4 LOA)S A), A,!A)CES $a% undr' De&tor. $&% 2a.h and "an1 "alance. $c% Other 2urrent A..et. $d% ,oan. and Ad-ance. LESS ? C$RRE)T LIA*ILITIES A), PRO!ISIO)S $a% ,ia&ilitie. $&% Pro-i.ion. )ET C$RRE)T ASSETS TOTAL -..: E .1 -../ E .:

=G9A=I93G4 AG9>?49A>> IA947494=> 39?AG9?3G II95>G9??=

=G9A=I93G4 >A9A5?9>A3 579?A>9753 39AI?9>54 5I937G9443

>=945A95I7 =79GI?9573 =?9=7>94>? G49A=39G4? >?94?>9534 =53933G A>>95=7 ==597?3947G 3=95I79I=7 G977I9A?5 >49377977= G59>A59?4A II95>G9??=

3I9A7A9IAI =?9A=49IG7 =594579II> >A9G579?34 5=97I49>37 G5A9A5> I3>9A4I I=9>3G934G >G95I=9375 G95359I>? ?A9==A9=II ??93==944I 5I937G9443

Pro&it and Loss Account &or t%e 3eriod ended on 8=st 'arc% -..1 (Amount in Rs()
Particulars I(I)CO'E Income from er-ice. Other Income TOTAL II(ECPE),IT$RE Admini.trati-e and Other !8/en.e. ,e..< !8/enditure Reim&ur.a&le under O/eration. and Maintenance Agreement TOTAL III( PROFIT *EFORE ,EPRECIATIO) A), TACATIO) Pro-i.ion for De/reciation I!( PROFIT *EFORE TACATIO) Pro-i.ion for Ta8ation ; 2urrent ; Deferred ; Fringe "enefit. !( PROFIT AFTER TACATIO) ur/lu. &rought forward from Pre-iou. Pear !I( PROFIT A!AIALA*LE FOR APPROPRIATIO)S Tran.fer to +eneral Re.er-e Interim Di-idend R.)=5 /er equit' hare $3445; NI,% Pro-i.ion for Di-idend Di.tri&ution Ta8 !II( *ALA)CE CARRIE, TO *ALA)CE S;EET -..: E .1 I7975?9I43 39>IG9334 II945>9=33 G=9>>?9A54 G=9>>?9A54 ?I9?A?9>45 >=9G749??5 7A9=I397AA 39=G>95A7 75944I9=4= 3?93I39444 $>=59I33% ??7977> ?495G79>5I 3797II935A 7A93G597=A ; ; ; 7A93G597=A -../ 0 .: 55955497?I 393G59GI7 5A9G>795?5 A595II9A=I A595II9A=I ?I9>?I9GI3 3793?I9G3A >=95G79A=G 393AI9I=A 3I9>479G4= =497G49??4 $7A9>5I% ?>?9=?4 =G935I95G4 ??9I5=9G5= 7>93==9?>= ?9?I59=G5 3G94AG9I34 >9I>G947I 3797II935A

Earnings Per S%are E *asic P ,iluted

--

=.

A PRO@!2T R!PORT

ON F#D F,OW TAT!M!NT With Reference To Genting Lanco Power (India) Pri ate Limited (i0a'awada

In Partial Fulfillment of the Requirement For The Award of the Degree In PO T +RAD#AT! $P+% u&mitted "' D#,I AI,A@A *#MARI
$nder t%e Guidance o& 'r E )aga Anil *a+u (+enting ,anco Power $India% Pri-ate ,imited) AC;AR<A )AGARJ$)A $)I!ERCIT< Jul# -..: 0 'a# -..D

CERTIFICATE

Thi. i. to certif' that Mi..) ,$LI SAILAJA 6$'ARI of A2DARPA NA+AR@#NA #NI(!R ITP ha. .ucce..full' com/leted the /ro0ect wor1 titled F$),S FLO7 STATE'E)T in /artial fulfillment of requirement for the award of $PO T +RAD#ATION% /re.cri&ed &' the AC;AR<A )AGARJ$)A $)I!ERSIT<(

Thi. /ro0ect i. the record of authentic wor1 carried out during the academic 'ear $3447 6 344G%)

Dead of the De/artment Naga undari

DECLARATION

I 4 'iss( ,$LI SAILAJA 6$'ARI %ere+# declare t%at t%is 3ro"ect is t%e record o& aut%entic wor2 carried out +# me during t%e academic #ear -..: 0 -..D and %as not +een su+mitted to an# ot%er $ni ersit# or Institute towards t%e award o& an# degree(

Signature o& t%e student (,uli Saila"a 6umari)

"C/!OW0E1,E)E!T I am -er' much o&liged and inde&ted to 'R(6 ;ari 6ris%na Rao4 +eneral Manager of +enting ,anco Power $India% Pri-ate ,imited for hi. a//ro-al and -alua&le .ugge.tion. to ta1e u/ the /ro0ect) I al.o e8tend m' gratitude to 'r) R Srini asa Rao9 Manager $Finance : Account.% for hi. a//ro-al and -alua&le .ugge.tion. to ta1e u/ the /ro0ect in +enting ,anco Power $India% Pri-ate ,imited) I e8/re.. m' dee/ .en.e of gratitude to 'r( )aga Anil *a+u E4 A..t Manager for hi. -alua&le .ugge.tion.9 con.i.tent hel/ and /er.onal intere.t during m' /ro0ect wor1) I am al.o than1ful to 'r( G( Ra"es%4 Accountant for hi. .u//ort and .ugge.tion. during the /ro0ect) I am -er' /lea.ed to e8/re.. m' dee/ .en.e of gratitude to ;;;;;;;;;;;;;;;;;; $Profe..or% for her con.i.tent encouragement) I .hall fore-er cheri.h m' a..ociation with her for e8u&erant encouragement9 /erennial a//roacha&ilit'9 a&.olute freedom of thought and action I ha-e en0o'ed during the cour.e of the /ro0ect)