CHAPTER - I

INTRODUCTION
1

BACKGROUND AND REVIEW OF DVC

DVC is a government of INDIA Enterprise that was founded on 7thJuly 1948 with
a social motive i.e. to safe people from wild and erratic damodar river. The river
spans over an area of 25,000 km2 covering the states of Bihar (now Jharkhand) &
West Bengal.
The head quarters of DVC is Kolkata, west Bengal, India and chairman of the
company is Mr. Arup Roychoudhary. The product of this company is electricity
generation, water supply drainage and transmission and other subsidiary activities
are promotion of navigation, soil conservation and afforestation, promotion of
public health, Agriculture, Industrial economic development as well as general
well being in the valley area of operation.
It is well known to all of us that turbulent Damodar river flowing through
Jharkhand & West Bengal was once known as River of Sorrow. It is evident
that in between the period from the year 1823 to 1948,Damodar River caused at
least 17 devastating floods. Every time, the country side was inundated, crops and
cattle were washed away and communication disrupted.
DamodarRiver originates from the Khamarpeth Hills in the Palamu District of
Chotanagpur Plateau near Tori (Jharkhand), runs for 540 kms and joins river
Ganges near Ulberia in West Bengal. It has a drainage area of 24,235 Sq. K.M of
which 17,514 Sq. K.M. constitute the UPPER VALLEY and the area below the
confluence is called the LOWER VALLEY.
Parts of Palamau , Ranchi , Hazaribagh , Giridih , koderma , Bokaro , Chatra ,
Jamtara , SanthalParganas and Dhanbad Districts in Jharkhand and parts of
Purulia Districts in West Bengal comprise the Upper valley, while the lower valley
is located in the planes of West Bengal covering Burdwan, Bankura and Howrah
Dist.Barakar river originates in Chotanagpur Plateau near the border of Giridih
Dist.[Jharkhand] and ParuliaDist[W.B] and joins with Damodar river at Panchet.
Therefore, DVC was conceived with a primary purpose of Flood Control, to
harness the 540 K.M. long Damodar River taking Tennessee Valley Authority

[TVA] of the USA as model. DVC was created with the Government of West
Bengal, the Government of Bihar (now Jharkhand craved out of Bihar) and the
2

Government of India as the participating Government, through an Act of

Parliament and established on 7th July 1948.
To start with, DVC constructed four major water storage Reservoirs as TILAIYA
Dam and MAITHON Dam on the Barakar river , Panchet Dam on Damodar river
as well as Konar Dam on Konar river. However, it was immediately observed that
the silt inflow into the Reservoirs, due to the soil erosion was much higher than the
expected rate. Obviously this threatened the life of DVC Reservoirs. Therefore,
DVC set up the SOIL CONSERVATION DEPARTMENT in the year 1949 with
its Headquarter at Hazaribag to tackle the twin problems of Reservoir siltation and
land deterioration.
Out of the total Damodar Valley area of 1.75 m.hac, soil erosion problem is
prevailing in around 1.147 m. ha area. A multiplicity of factors contributes to Soil
erosion and effective check is required to prevent soil erosion, so that the reservoirs
built for flood control do not get silted and flood control as well as irrigation
activities are carried out smoothly. The responsibility for soil erosion is not
attributable to DVCs own activities, but to the entire gamut of factors such as
deforestation, mining operations etc which are contributed by other agencies.
Therefore, DVC identified its responsibility to ensure NATURAL RESOURCE
MANAGEMENT in the Valley area by virtue of the provisions of DVC Act, 1948.
This follows naturally from the responsibility entrusted to the DVC, with regard to
ownership and management of the water resources of the Damodar River.
Accordingly, in the pioneering Endeavour of developing the Damodar Barakar
basin, a separate multi disciplinary SOIL CONSERVATION DEPARTMENT
was established by DVC to develop the technical know how and devise the
technology, which could be disseminated and tried at the national level.
The need to view development in a holistic manner has reinforced DVCs firm
commitment to social responsibility, which remains an integral part of its overall
mission.

MISSION AND VISION OF DVC

3

Damodar Valley Corporation, the first major multipurpose integrated River Valley
Project of the country, conceived in line with TENNESSEE VALLEY
AUTHORITY (TVA), came into exitense on July 7, 1948 by an act of Central
Legislature.

MISSION:The assigned mission of the Damodar Valley Corporation under Section 12 of the
DVC Act, 1948:

Flood control
Promotion and operation of schemes for irrigation.

Water supply for industrial and domestic use.

Navigation and drainage

Generation, transmission and distribution of electrical energy.

Promotion of afforestation and control of soil erosion in valley area.

Promotion of public health, agriculture, industrial, economic and

general well being in Damodar valley.

The Vision:To foster integrated development of Damodar Valley Command Area and achieve
par excellence in its multifaceted activities of control of floods, provision of
irrigation, generation, transmission and distribution of electrical energy and also
soil conservation, unified tourism, fisheries, socio-economic & health development
of villages within a radius of 10 KM of its projects.
To establish DVC as one of the largest power majors of Eastern India while
discharging the responsibilities of its other objects adequately.
In order to achieve this goal against the backdrop of the competitive market
scenario in the power sector, the objectives of the corporation have been
redefined.

OBJECTIVES:1. Generate more power at lowest possible cost by improving operational

efficiencies of the existing plants, rejuvenating old generating units through
comprehensive overhauling as well as by installing new generating plants.
2. Transmit, distribute and supply reliable and quality power at competitive
tariff.
3. Improve the financial health of the corporation by adoption of efficient
industrial, commercial and human resource management practices.
4. Ensure optimum utilization of available water resources through effective
and efficient management and harnessing the remaining potential of
Damodar basin to the extent possible.
5. Fortify measures for environmental protection at plant levels and to continue
with the activities of eco conservation in the valley area.
6. Strengthen socio economic development for the inhabitants of villages
neighboring major projects of DVC.

PARTICIPATING GOVERNMENTS
Participating Governments of the Corporation are Central Govt. , Bihar Govt.
(Now Jharkhand Govt.), and West Bengal Govt. The Government consists of a
Chairman and two other members appointed by the Central Government, after
Consultation with Govt. of West Bengal and Govt. of Jharkhand. The General
Manager and the Financial Advisor of the Corporation is appointed by the Central
Government.
The three participating member governments approve the transfer of plough back
of profit and retained interest to the respective Capital Accounts of the three
governments.
The annual reports are sent for approval by the respective State and Central
Legislatures through the respective participating member governments.

POWER GENERATION
6

The power generation history of DVC starts with the installation of one diesel
power station of 1.2 MW at Tilaiya in 1950. It was primarily meant for supplying
power for construction work of dam. It also provided surplus power up to 450 KW
for the electrification of Koderma Mica Mines and Hazaribagh town to meet the
urgent need for power. Similarly, one steam turbo generating station of 2.5MW
was installed at Kumardhubi for supplying power during construction of Maithon
Dam project in early 1951. From here also the surplus power up to 1MW was
supplied to the Chittaranjan Locomotive Works.
The primary consideration of setting up of DVC was control of floods. But the
multipurpose plan also included construction of a hydro electric power plant in
each of the reservoirs with a total generating capacity of 2,00,000 KW and a
thermal power station with an installed capacity of 1,50,000KW. All these schemes
for power generation were included in the first phase of implementing DVC
Project.
When preparation of detailed estimates was taken up and the construction of dams
and hydro-electric power stations began at Tilaiya and Konar, the then technical
experts of DVC with the approval of the participating Governments and the
Planning Commission started work for extending the transmission system to meet
the urgent demand for power in areas bordering the Damodar Valley. Provisions
were made for 376 miles of 132 KW transmission lines and 85 miles of 33KV
transmission lines with 24 sub-stations. Subsequent development of Transmission
and Distribution system of DVC shows that with the increase of load, DVC power
system require expansion and refurbishment programme of transmission and
distribution system.

THERMAL POWER GENERATION

7

The significance of the provision for coal burning thermal power stations in a river
valley where the generation of cheap hydroelectricity has immense possibilities
were mainly for meeting the demand for power to the mines and industries in and
around Damodar valley. Besides this, the thermal power station could cope up with
the seasonal variation in the generating capacity of hydro-electric stations as the
Damodar is basically a monsoon river.
DVC being located in the biggest coal area reserve of the country has the
locational advantages both in terms of logistics and economy for preferring
thermal power generation in DVC system. Hydel and thermal generation have
further been supplemented by the construction of a gas turbine power station in
1989 to provide peaking power in the DVC systems.
Generation
target
Actual
generation
Achievement
(%)

2008-09
13648

2009-10
14663

2010-11
15100

2011-2012
14520

13779

14551

15122.53

14521.52

100.95

100.61

100.15

100.01

HYDEL POWER GENERATION

Being a pioneer integrated river valley project with multipurpose objectives,
DVC had to face constantly challenges of the time and absorb new
technology to execute its project. During the phase between 1950 and 1960
i.e. within a span of ten years DVC completed Hydel Power Stations at
Tilaiya, Maithon, and Panchet dams along with Bokaro A thermal power
station. In the next two decades i.e. between 1961and 1980, six units of
Chandrapura Thermal PowerStation. During the post 1981 period, DVC
constructed 630 MW Bokaro BThermal Power Station, 82.5 MW Gas
Turbine Station at Maithon, one 210 MW unit at Durgapur Thermal Power
Station and one 40 MW Hydel Power Unit at Panchet. The Construction and
commissioning of all the three units of Mejia Thermal Power Station were
9

completed by the end of 1999. The fourth unit of this power station was
commissioned in February, 2005. The table below provides a detailed
breakup of the power generating stations of DVC.
2008-09
2009-10
2010-11
2011-2012

Generation target
300
320
400
320

10

Actual target
357
436
432.09
198.11

A GRAPH DEPICTING ENERGY GENERATION

INCREMENT FROM 2008 - 2012

11

INFRASTRUCTURE
With the time DVC developed and expanded its infrastructure Five thermal power
stations with a capacity of 2570 MW, three hydro-electric power stations with a
capacity of 144 MW and one gas turbine station with a capacity of 82.5 MW
contribute to a total installed capacity of 2796.5 MW. Presently DVC has 60 substations and receiving stations more than 5500-circuit km of transmission and
distribution lines. DVC has also four dams, a barrage and a network of canals that
play an effective role in water management. The construction of check dams,
development of forests and farms and upland and wasteland treatment developed
by DVC play a vital role in eco conservation.
DVC INFRASTRUCTURE AT A GLANCE
DVC Command Area

24,235 sq. kms

POWER MANAGEMENT

Total installed capacity

Thermal power stations
Hydel power stations
Gas turbine station

2796.5 MW
Five capacity 2570 MW
Three capacity 144 MW
One capacity 82.5 MW
At 220 KV- 11 nos.

Sub stations and receiving stations

At 132 KV- 33 nos.

Transmission lines

At 33KV-16 nos.
220 KV-1500 cktkms
132 KV-3415 cktkms

33 KV-1070 cktkms
WATER MANAGEMENT
Major dams and barrage
Tilaiya, Konar, MaithonPanchet dams
and Durgapur barrage.
Irrigation command area
5.69 lakh hectares
Irrigation potential created
3.64 lakh hectares
Flood reserve capacity
1292 million corms.
Canals
2494 kms.
Soil conservation
Forests,Farms,Upland and Wasteland 4 lakh hectares (approx)
treatment
12

Check dams

16,000(approx)

DVC POWER PLANTS

Thermal coal based
Sr. No.

city

State

Bokaro thermal power

station B
Chandrapura thermal
power station
Durgapur thermal power
station
Mejia thermal power
station
Koderma thermal power
station
Durgapur steel thermal
power station
Raghunathpur thermal
power station
Bokaro thermal power
station-A
Total:

Jharkhand

Installed capacity
in MW
630

Jharkhand

890

West Bengal

350

West Bengal

2340

Jharkhand

500+500

West Bengal

1000

West Bengal

1200

Jharkhand

1200

2
3
4
5
6
7.
8

7610

Hydel-power plant
Sr. No.

City

State

1
2
3

Tilaiya dam
Maithon dam
Panchet dam
Total

Jharkhand
Jharkhand
Jharkhand

13

Installed capacity
in MW
4
63.2
80
147.2

Gas based power plant

Sr.No.

City

State

Maithon gas
turbine
Total :

Jharkhand

Installed capacity
in MW
82.5
82.5

Thermal coal based (JVs)

Sr. No.

City

State

Installed capacity
in MW

Bokaro power
supply corporation
Ltd.(BPSCL)
Maithon power
limited
Total:

Jharkhand

302

Jharkhand

1050

1352

Geographic Area of DVC

14

SUMMARY OF BUSINESS/ ACTIVITIES OF DVC AND

ITS LINE OF BUSINESS
HIGHLIGHTS & RECOGNITIONS
1.
DVC emerged as a culmination of attempts made over a whole century to
control the wild and erratic Damodar River. The river spans over an area of 25,000
sq. kms covering the states of Bihar (now Jharkhand) & West Bengal.
A multipurpose development plan was designed similar to Tennessee Valley
Authority (TVA) of United States of America, for achieving flood control,
irrigation, power generation and navigation in the Damodar Valley. Four
consultants appointed by the Government of India examined it and recommended
early initiation of construction of multipurpose Dams, beginning with Tilaiya to be
followed by Maithon.
By April 1947, full agreement was practically reached between the three
Governments of Central, Bengal and Bihar on the implementation of the scheme
and in March 1948, the Damodar Valley Corporation Act (Act No. XIV of 1948)
was passed by the Central Legislature, requiring the three governments the
Central Government and the State Governments of West Bengal and Bihar (now
Jharkhand) to participate jointly for the purpose of building the Damodar Valley
Corporation.
The Corporation came into existence on July 07, 1948 as the first
multipurpose river valley project ofindependent India.
1. Incorporated on 7th July 1948 as Corporation by the Damodar Valley
Corporation Act, 1948 (XIV of 1948) passed in the Parliament of India. The
primary aim of facilitating the economic and industrial growth of the
Damodar Valley Region in Jharkhand and West Bengal (The jurisdictional
area of DVC is also referred to as its Command Area, where it has been
supplying power since 1952) covering 25000 sq. kms.

15

3. The Corporation is wholly owned by the three Governments, Government of

India,
Government of West Bengal and Government of Jharkhand
(erstwhile Bihar). Capital of the Corporation is contributed by these Governments.

FUNCTIONS OF THE CORPORATION:

Section 12 of DVC Act 1948 mandates the following functions within the
command area of DVC, which are otherwise the functions of the Jharkhand State
and West Bengal State
a) the promotion and operation of schemes for irrigation, water supply and
drainage,
b) the promotion and operation of schemes for the generation, transmission and
distribution of electrical energy, both hydro-electric and thermal,
16

c) the promotion and operation of schemes for food control in the Damodar river
and its tributaries and the channels, if any, excavated by the Corporation in
connection with the scheme and for the improvement of flow conditions in the
Hooghly river,
d) the promotion and control of navigation in the Damodar river and its tributaries
and channels, if any,
e) the promotion of afforestation and control of soil erosion in the Damodar Valley,
and
f) the promotion of public health and the agricultural, industrial, economic and
general well-being in the Damodar Valley and its area of operation

17

OBJECTIVES OF STUDY
The project on financial analysis on DVC has been undertaken while
keeping the following objectives in consideration:
1. To learn and understand the capital financial position of the company
and its performance over the years with help of comparative statement.
2. To highlight the key areas where action need to be taken.
LIMITATIONS:

Time limitations
Lack in production exposure.
Unable to visit store location due to far off location.
Unable to get recent financial data.

18

CAPITAL STRUCTURE
In terms of Section 30 of DVC Act, 1948, the entire capital requirement of the
Corporation is to be provided by the participating Governments. Total capital
provided by the participating government till 1968 1969 amounted to Rs. 214.72
crore. There has been no contribution by the participating governments after 1968
1969. Thereafter, no capital was provided by the participating member
governments by way of direct contribution. With transfer of ploughed back share
of profit and interest on capital accounts, the capital balance has increased to Rs.
2611.15 crore as on 31st march, 2006, which has been utilized to partly meet the
capital expenditure of the corporation in terms of provision of Section 30 of the
DVC Act, 1948. Of the total capital contribution of approx Rs 3,313Crore for the
FY 2007-08, Rs 3,184 (i.e. 96.11% of the capital contribution) is for power related
activities.
DVC board is represented by members of the three participating Member
Governments, who approve the transfer of plough back of profit and retained
Interest to the respective capital accounts of the three governments. The annual
reports are also sent for approval by the respective State and Central Legislatures
through the respective participating member governments.

The summarized position of members fund, considering ploughed back fund is

given in the following table:

19

WB
GOVT.

BIHAR GOVT. (NOW

JHARKHAND)

TOTAL

ITEM

CENTRAL
GOVT.

LOAN CAPITAL

1133.43

1072.45

1106.74

3312.62

POWER SURPLUS
PLOUGHED BACK

176.24

176.24

176.24

528.72

RETAINED INTEREST

64.41

35.51

62.96

162.88

TOTAL MEMBERS
FUND

1374.08

1284.2

1345.94

4004.22

20

CAPITAL OUTLAY TOWARDS MAIN OBJECTS (IN

CRORE) FOR THE YEAR 2011

21

It may be pointed out that the excess of capital outlay over contribution is largely
financed from internal resources and market borrowing.

22

FINANCIAL POSITION
SOURCES AND UTILIZATION OF FUND

Note:
(i)

Loan Capital contributed by the participating govts to meet capital

cost of the projects is treated as DVCs own resources.
23

(ii)

Power surplus and Retained Interest ploughed back fund awaiting

transfer to capital head.

SOURCES AND APPLICATION OF FUNDS

The following graphs indicate the sources and application of funds of the
Corporation for the last four financial years ending 2008-2012
SOURCES OF FUND

The increase in paid up capital is due to transfer of share of surplus and

retained interest on capital of the participating Governments to capital
account.
The reserve and surplus account has substantially increased mainly due to
transfer of revaluation gain of fixed assets.
The increase in borrowings over the subsequent years is due to increase in
loan taken from various financial institutions like PFC (Power Finance
Corporation) and provision of additional liability towards pension and
gratuity fund.
24

APPLICATIONS OF FUND

The increase in fixed assets is mainly due to gain on revaluation of fixed

assets, capitalization of MTPS extension project and construction work in
progress in CTPS project.
The increase in investments over the previous years is mainly due to
investment of Provident and Pension fund in specified securities.
The increase in net current assets over the subsequent years is mainly due to
increase in sundry debtors on energy charges.

25

DEPLOYMENT OF INCOME
PARTICULARS

Generation
Overhead & Share of
Subsidiary object
Purchase of Power
Depreciation
Interest

Rs. IN
CRORE
( 2011
12 )
4831

%AG Rs. IN
E
CRORE
( 2010
11)
64.2 3810
2

%AG
E

288

3.82 177

3.1

827
604
864

11
8.03
11.4
8
1.13
0.19
11.3
0
11.1
100

637
338
590

11.1
5.9
10.3

10
5
221

0.2
0.1
3.8

-34

-0.6

5755

100

Bad Debt
Rebate on sale of power
Income Tax
Past years adjustment

84
14
850

Savings

-840

INCOME

7,523

26

66.2

27

28

CHAPTER - II

RESEARCH METHODLOGY
29

Research is a scientific and systematic search for pertinent information on a

specific topic. It is a way to systematically solve the research problems. I did the
above project to study the financial statement analysis through comparative
statementof DAMODAR VALLEY CORPORATION. This type of analysis helps
the management for future planning for the growth of the organization. Through
this statement, the management is able to know the financial soundness other
organization.
The methodology of the present study involves the analysis of' available
literature i.e. the monthly and the annual report of' DAMODAR
VALLEYCORPORATION and the examination of' the books of accounts last
two previous years i.e. 2010-11 and 2011-12.

RESEARCH DESIGN
A research design is the arrangement of condition for collection and analysis of
data in a manner that aims to combine relevance to thee research purpose with
economy in procedure.
Thus, research design is a conceptual structure within which research is
conducted. It constitutes the blue print for the collection, measurement and
analysis of data.
For the purpose of this research, only secondary data have beenused since the
audited statements published are the best available authentic source.
The primary data may not be appropriate and may be misleading. The research is
explanatory in nature.

30

DATA COLLECTION
Two types of data has been collected for the research
(a) Primary data
(b) Secondary data
Primary data are those, which are collected afresh and for the first time. So it is
original in character. Whereas secondary data are those which have already been
collected by someone else and which have already been passed through the
statistical process.
Secondary data are collected through journals, newspaper and electronic media
i.e. Internet websites. The main important sources of secondary data are

Balance Sheet of 2011 and 2012

Yearly annual report ofDVC
Company's Websites
Internet Based Research

31

CHAPTER - III

32

ANALYSIS AND INTERPRETATION

Meaning of Financial Statement
Financial statements refer to such statements which contains financial information
about an enterprise. They report profitability and the financial position of the
business at the end of accounting period. The team financial statement includes at
least two statements which the accountant prepares at the end of an accounting
period. The two statements are: The Balance Sheet
Profit And Loss Account
They provide some extremely useful information to the extent that balance Sheet
mirrors the financial position on a particular date in terms of the structure of assets,
liabilities and owners equity, and so on and the Profit and Loss account shows the
results of operations during a certain period of time in terms of the revenues
obtained and the cost incurred during the year. Thus the financial statement
provides a summarized view of financial position and operations of a firm
33

Meaning of Financial Analysis

The first task of financial analysis is to select the information relevant to the
decision under consideration to the total information contained in the financial
statement. The second step is to arrange the information in a way to highlight
significant relationship. The final step is interpretation and drawing of inference
and conclusions. Financial statement is the process of selection, relation and
evaluation.

Features of Financial Analysis

To present a complex data contained in the financial statement in simple and
understandable form.
To classify the items contained in the financial statement inconvenient and
rational groups.
To make comparison between various groups to draw various
conclusions.
34

Purpose of Analysis of financial statements

To know the earning capacity or profitability.

To know the solvency.

To know the financial strengths.

To know the capability of payment of interest & dividends.
To make comparative study with other firms.
To know the trend of business.
To know the efficiency of management.
To provide useful information to management

Tools of Financial Statement Analysis

Various tools are used to evaluate the significance of financial statement data. The
commonly used tools are these:
1.
2.
3.
4.

Comparative Statements
Trend Analysis
Common-size Statements
Ratio Analysis
35

5. Fund flow Statements

6. Cash flow Analysis

COMPARATIVE STATEMENTS
In comparative statement there is comparison of the financial data at two
timeframe, this helps in deriving meaningful conclusion regarding the
changes in the financial position and operating result of a company.
Statements which show financial data for two or more than two years,
placed side by side for comparison are called COMPARATIVE
FINANCIAL STATEMENTS.
Comparative financial statements not only show the absolute figures of
different years but also provide columns to indicate the increase or decrease
in these figures from one year to another.
In addition these statements are also show changes in percentages form.
Comparison of financial statements can be INTRA FIRMor INTER FIRM.
When financial statementsof two or more years of the same firm are
presented and compared, this INTRA-FIRM COMPARISON is often called
TREND ANALYSIS. When financial statements of two or more than firms
are compared over a number of years, it is known as INTER-FIRM
COMPARISON.
These comparative statements are precious value evaluating the progress of
a firm.
Under Companies Act 1956, companies have to provide current figures with
previous years. Figures in their profit and loss A\c and the balance sheet. For
estimation of the future progress of the firm. It is necessary to take in
36

account its past performance. Therefore, it is financial statements for two or

more years for this purpose comparative statements are prepared.

PURPOSE OF COMPARATIVE STATEMENTS:

To make inter period/inter firm comparison.

To indicate the trends.
To enable forecasting.
To indicate the strengths and weakness of the firm.
To compare the performance.
To analyze expenses.
To analyze profit.
To simplify data

TYPES OF COMPARISON OF FINANCIAL STATEMENTS

Comparison with standard figures

Intra-firm comparison
Inter-firm comparison
Pattern comparison

TECHNIQUES OF COMPARATIVE STATEMENTS

Comparison showing absolute figures

Comparison showing changes in absolute figures
Comparison with averages
Comparison expressed in terms of ration
Comparison through common size statements

Tools for comparison of financial statements:

Comparative financial statements is a tools of financial analysis that shows the
changes in each item of financial statements in both absolute amount and
37

percentage term by taking the item in the preceding accounting period as base.
The comparison and analysis of financial statements can be carried out by using
the following:
a) Comparative balance sheet.
b) Comparative income statements.

COMPARATIVE BALANCESHEET
The comparative balance sheet shows increase and decrease in absolute terms as
well as percentages, in various assets, liabilities and capital. A comparative
analysis of balance sheets of two period information regarding progress of the
business firm.
According to FAULKE, Comparative balance sheet analysis is the study of the
trend of the same items or group of items and computed items in two or more
balance sheets of the same business enterprises of different dates.
Such a comparison throws on the changes and progress made in respect of each

38

item of assets and liabilities. The main purpose of comparative balance sheet is to
measure the short-term and long-term solvency position of the business.

SIGNIFICANCE OF COMPARATIVE BALANCE SHEET

More realistic approach
More stress on change
Reflects trend
Link between balance sheet and income statement
Helpful in planning

OBJECTIVES OF COMPARATIVE BALANCE SHEET

To measure the financial position of an enterprise.
To analyze different items of assets and liabilities in absolute rupees,
i.e. balance on two or more comparative dates.
To analyze increase or decrease in rupees amount as well as in
percentages by taking the dataof previous years as base.
To review the past financing and investing activities and their effect
on the financial position of the enterprise.

CONTENTS OF COMPARATIVES BALANCE SHEET

First column shows items of assets and liabilities.
Second column shows previous years balance sheet figures.
Third column shows current years balance sheet figures.
Fourth column shows absolute change in assets and liabilities.
39

Fifth column shows percentages change in assets and liabilities.

Balance sheet of DVC as on 2011 &2012

Balance sheet of DVC as on 2011 &2012

Assets

2011

Fixed
Assets
Other
Assets
Investme
nt
M/s
expendit
ure
Provident
fund

4458077614
150
7163301519
2
1249086811
8
876762776

Total

106738121

530914998
357

2012

Liabiliti 2011
2012
es
493137026 Capital
502044032 528689725
353 A\c
79
05
828515184 Reserve 249812170 256123342
78
836
655
117428865 Secured 167403791 188958636
39 loan
195
243
326696837 Unsecur 220178159 371563016
ed loan
81
52
46631842 Revenue
A\c
Current
liabilitie
s
Provisio
n fund
58810476
049
40

489438181
291
380849019
17

535107253
055
486387376
64

339191514
9
53091499
8357

435876932
9
58810476
049

COMPARATIVE BALANCESHEET OF DVC

Particular

Amount
(2011)

Amount
(2012)

Absolute
Absolu
change
te
(inc. &dec.) change
in
percent
age %

Fixed assets:
Assets in operation
Construction in
progress work
A. Total fixed assets
B. Investment

231450441
068
213613227
068
44506366
8136
12490868
118

C. working
capital(CA-CL)
Current assets:
41

2817444748
39
2030428820
78
484787355
6917
117428865
39

5029403377 21.72%
1
(105703449 (4.95%)
90)
397236877 8.92%
81
(74798157 (5.99%
9)
)

Stocks and stores

709620177
3
426128598
85
512777945
3
112720300
27
329511
552381454
3
71633015
192

7283637021

1258158558
7
1273015629
7
3151481481

Other liabilities

718795801
6
116170077
23
120860680
6
178853645
95
185964777

Total current
liabilities (ii)
C. Working capital
(i)-(ii)

38084901
917
33548113
275

486397376
64
342117808
14

Sundry debtor
Advance recoverable
Unbilled revenue
Prepaid expenses
Cash & bank balance
Total current assets
(i)
Current liabilities:
Sundry creditor
Earnest money &
security deposit
Other deposit
Creditor for expenses

D. Capital Employed 49110264

( 9529
A+B+C)
E. less long term liabilities
Loan fund
Secured loan
1674037911
95
Unsecured loan
7740000000
42

187435248

2.6%

6077569371 1816283383 42.62%

5
0
5007542350 (120237103) (2.3%)
9244124573
382696
540138123
828515184
78

(202790545 (17.99
4)
%)
53185 16.14%
(497567642 (90.07
0)
%)
112185032
15.66
86
%
5393627571

75.03%

1,113,148,5
74
1,942,874,6
75
2003543081 2,150,066,2
8
23
140083481 (45,881,296)

9.58%

105548356
93
663667539

160.75
%
12.02%
(24.67
%)
27.17
%
1.9%

489382822 4402725574 896.49

4273 744
%

1889586362
43
6880000000

2155484504
8
(860,000,00
0)

12.87%
(11.11
%)

Other loan
Total long term
liabilities
F. Shareholders
funds:
(D-C)
Represented by:
Capital A\C
Central Govt.

1427781598 3027630165
1
2
189421607 226114937
176
895
300016574
115 308992315
160

1728773990
9
1594139998
5
1697526338
5
502044032
79

1820666744
2
1684679155
8
1781551350
5
528689725
05

Reserves and
surplus

249812170
836

Shareholders
fund

300016574
115

W.B.Govt.
Bihar govt.
Total capital A\c

43

1599848567
1
366933307
19
897574104
5

19.37
%
2.9%

918927533

5.3%

905391573

5.6%

840250120

4.9%

266456922
6

5.30%

256123342
655

631117181
9

2.53%

308992315
160

897574104
5

2.9%

COMMENTS:
The analysis of above comparative balance sheet shows that:
Fixed assets increase by Rs. 39723687781 i.e. 8.92 % and current
assets increase by Rs.11218503286i.e. 15.66% .
Working capital shows a change of Rs. 663667539.
Share capital increases by Rs.8975741045 i.e. 2.9% And reserve
and surplus increase by Rs.6311171819 i.e. 2.9%. It made the
financial position of the company strong.
Both current assets and current liabilities increasing.

COMPARATIVE INCOME STATEMENT

44

Trading and profit and loss account is a summary of the result of operation of a
business transacted during an accounting period. It indicated the gross profit and
net profit. But a single trading and profit and loss account does not convey
anything about the progress or increase or decrease in the earnings of the business.
Therefore, it has no significance for the purpose of analysis. Hence, a Comparative
income statement is prepared by taking the figures of two or more than two
accounting periods, to enable the analyst to have definite knowledge about the
progress of the business. Comparative income statement facilitates the horizontal
analysis since each accounting variable is analyzed horizontally.

OBJECTIVES
STATEMENTS:

OF

COMPARATIVES

INCOME

To analyze income and expenditure for two or more years.

To measure the efforts of a firm.
To analyze increase or decrease in income and expenditure in rupee
amounts as well as in percentages by taking the data of previous year as
base.
To review the past operational activities and their effect on the
profitability of the concern.

CONTENTS OF COMPARATIVES STATEMENTS

First column for items of incomes and expenses.
Second column for previous years original figures of income
statement.
Third column for current years original figure of income statements.
Fourth column for absolute changes in these figures.
Fifth column shows relative changes (in percentage).

INCOME STATEMENT OF DVC

Particular
Gross sales
Revenue income

2010-11

45

2011-2012

Sale of power
Sale of water
Rental & wheeling
Other income
A. Total revenue income
Revenue expenses
Fuel
Operation & Maintains
expenses
Cost of power purchased
Prior period expenses
Other expenses
B. Total revenue expenses
Profit before depreciation,
interest and tax
Less depreciation
Profit before interest and
tax
Less interest and finance
charge
Profit before tax
Less tax
Profit after tax

561962
1598
502
13088
577150

735818
7774
488
16054
760134

316217
92856

390710
139110

63733
21845
236
494887
82263

82740
73300
11615
697475
62659

(34521)
47742

(61341)
1318

(59521)

(87124)

(12023)
0
(12023)

(85806)
0
(85806)
(AMOUNT IN LAKHS)

COMPARATIVE INCOME STATEMENTS OF DVC

(AMOUNT IN LAKHS)

Particular

2010-11

2011-2012

Gross sales
46

Absolute
change

% change

Revenue income
Sale of power
Sale of water
Rental & wheeling
Other income
A. Total revenue
income
Revenue expenses
Fuel
Operation &
Maintains expenses
Cost of power
purchased
Prior period
expenses
Other expenses
B. Total revenue
expenses
Profit before
depreciation,
interest and tax
Less depreciation
Profit before
interest and tax
Less interest and
finance charge
Profit before tax
Less tax
Profit after tax

561962
1598
502
13088
577150

735818
7774
488
16054
760134

173856
6176
(14)
2966
182984

30.93%
(2.78%)
22.66%
31.70%

316217
92856

390710
139110

74493
46254

23.55%
49.81%

63733

82740

19007

29.82%

21845

73300

51455

235.54%

236
494887

11615
697475

11379
202588

4,821%
40%

82263

62659

(19604)

(23.83%)

(34521)

(61341)

(26820)

47742

1318

(46424)

(77.69%)
(97.23%)

(59521)

(87124)

(27603)

(46.37%)

(12023)
0
(12023)

(85806)
0
(85806)

(73783) (613.68%)
0
0
(73783) (613.68%)

COMMENTS:
The financial figure relating to sales, expenses and profit are not encouraging.

47

CHAPTER - IV

48

CONCLUSION
The analysis of the data placed in the project provides us the following conclusions
about DVC Balance sheet.
Fixed assets of the DVC increases @8.92% and the working capital i.e.
total current assets minus current liabilities whereas current assets increases
@ 15.66% while current liabilities shown in the comparative balance sheet
increasing at a rate of 27.17% . As a result the working capital is showing a
positive balance i.e. 663667539 with 1.9% increases in the year 2012.
Shareholder fund increases by 8975741045 at the rate 2.9% between the
year 2011 and 2012.
Total capital increases 5.30% with amount 2664569226.
Reserve & surplus increases in the organization @ 2.53% with increasing
amount 6311171819.
In Comparative Income statement total revenue income increases in the year
2012 about Rs. 182984 (in lakhs) i.e.at 31.70%.
The Revenue Expensesincreases revenue income in the year 2012 in
comparison to 2011 i.e. Rs.2, 02,588(in lakhs) i.e. 40%.
So that the organization receives negative balance of profit of Rs. 19604(in
lakhs) i.e. 23.83%.
Even than after deducting depreciation, interest and tax we get a result of
negative balance profit of Rs. 73783(in lakhs) with 613.68%.
Thus, we can conclude that from 2011 to 2012 we get a negative balance of
profit which is not beneficiary for the organization.

49

RECOMMENDATIONS
DVC is poised in a very advantageous position to implement the soil conservation,
afforestation and SIP program due to its huge knowledge and database of the
valley that it has accumulated during its operations in the valley over the last five
decades. The cumulative economic benefits that would trickle down to the
community at large in the command area of DVC would be multiple times the
expenses incurred for delivering the same. DVC could well act as an extension of
the government in a sense that it can supplement many of the govt initiatives and
efforts, as many of its program are in principle in line to state developmental
efforts.
However for better and smoother performance and also to generate adequate
feedback for its activities for fine tuning, DVC should also undertake the
following:
Conduct a rapid economic and social assessment of the command area,
either using its own data collected over the operational period of DVC or by
employing external social surveyors and thus obtain the baseline data against
which to monitor the progress and outcome of the various schemes.

DVC should conduct regular performance review of the various schemes

under implementation. This can be done in multiple manners like taking
feedback from beneficiaries as to what they perceive of the program , would
they like it to continue or not, any modification are required in the program
or not , or through appointing external auditors on selective basis who are
well experienced in social audits to conduct reviews of the programmes.

50

Based on the periodic reviews about the efficacy and outcome, DVC should
be able to scale up or scale down the activities accordingly.

DVC can consider alternative organization structures for implementation of

the programmes, if it wants to speed up the implementation. It can choose
from a centralized or a decentralized approach, or can also consider
contracting some works to repute outside agencies.

51

GLOSSARY OF TECHNICAL TERMS USED IN DVC

INSTALLED CAPACITY: Maximum capacity as per design of the

machine.
INSTALLED CAPACITY (DERATED): Maximum capacity based on
actual regular generation possible.
BASE LOAD CAPACITY: Capacity of the Boiler and turbine matching
with other auxiliary plants.
MW: Megawatt which means one million watts as a measure of electrical
power generated by power stations.
MKWH: Million Kilowatt Hours means 10, 00,000 Kilowatt hours (When
1000 Watts of electrical power is utilized for one hour; the quantum of
energy of energy recorded is 1KW hour which is the unit of energy).
PLF: Plant Load Factor (PLF) is percentage of actual generation to the
generation possible at Installed / Dated capacity.
Man MW ratio: Manpower deployed for 1MW of capacity.

52

 TRANSFORMER: static equipment used for stepping up or stepping down

voltage in transmission and distribution of capacity.
PLANNED MAINTENANCE: As per Indian Boiler Act, Boiler is to be
overhauled once in a year and as per recommendation of the Kulkarni
Committee Turbo generator set is to be overhauled once in 3 to 5 years
depending on the run of the unit.
FORCED OUTAGE: Forced outage means shutdown of the plant for
different reasons including the circumstances arising out of non adherence
to the Planned Maintenance Schedule.
AUXILIARY CONSUMPTION : Power consumed within the premises of
the generating units.
TRANSMISSION LOSS: Quantum of power loss in transmitting and
distributing power from the generating stations to the consumers.

53

BIBLIOGRAPHY
BOOKS:
Financial Management
PANDEY, I.M (2012)
Financial Management
CHANDRA, P (2012)
Analysis of financial
MITTAL, R.K (2010-2011)

statements

REPORTS:

ANNUAL REPORT OF DVC - 2011 AND 2012

P/L A/c OF DVC - 2011 &2012

WEBSITES:

www.dvc.gov.in
http://smaccounting.blogspot.com/2011/01/types-and-methods-of-financial-analysisanalysis.html?m=1
Search Engines: Wikipedia.org
Google.com

54