The Delhi Electricity Regulatory Commission has come out with audited account statements of all the three discoms to substantiate its earlier claim that the companies, contrary to their submissions, have made huge profits and not losses. It has also come out with letters from credit rating companies to prove that the discoms have a good credit record and arranging loans from creditors will not be a problem for them.

On Monday the DERC shot off letters to the Delhi Government’s Power Department and the Chief Executive Officers of the three power distribution companies explaining how the companies have withheld information from the Commission and incorrectly claimed to have cash flow problems.

The latest missive comes days after the Solicitor-General gave his opinion that the DERC can release the new tariff for the city.

To the CEOs of BSES Rajdhani Power and BSES Yamuna, the DERC has written: “The financial position mentioned by you in the representation has been verified from the audited accounts from financial year 2004-05 to financial year 2009-10 of your company submitted by you as well as financial position reflected in the report of your credit rating agency CARE. It is also noticed that even though audited accounts were ready with you and full report of CARE was in your possession but neither did you furnish any data from these two important documents in your representation nor did you enclose these documents for reference to the Delhi Government.”

Refuting BRPL’s contention of a severe cash flow, the DERC pointed out: “You have given projected/estimated figures without any basis, ignoring the fact that the audited accounts for financial year 2009-10 show cash profit of Rs.319 crore. The financial figures prepared from the audited books of accounts show the highest cash profit of Rs.319.16 crore in 2009-10 against loss of Rs.294.77 crore in 2007-08. Tangible net worth in 2009-10 is Rs.575.88 crore and a high net cash accrual of Rs.102.52 crore.”

Credit rating agency CARE has rated the company as BBB+ (Triple B plus) for long-term borrowing and PR3 (PR three) for short-term borrowing. “These are fairly reasonable credit rating. The rating agency CARE in its latest available report dated March 2009 mentions despite good financial position of your company and fairly good credit rating you have chosen to say in your representation that your net worth is negative/ inadequate even though the tangible net worth as on March 31 2010 is Rs.975 crores,” the DERC has written.

Referring to the apprehension by the companies that lenders will put a ban on fresh lending, the DERC has mentioned that no letter from the any lender has been presented to establish that they have refused loan on the ground that net worth from the lenders’ perspective is negative.

It further says that the actual revenue gap up to financial year 2008-09 is not Rs.1004 crore and will be known only after the tariff order. The figure of Rs.1,326 crore stated by the company has been dismissed as a “mere projection in the petition filed on December15, 2009, and is not based on any audited/authenticated figures. It is only the energy account surplus.”

For BYPL, the Commission said the audited accounts for financial year 2009-10 show cash profit of Rs.157.32 crore. The company has a highest cash profit of Rs. 157.33 crore in 2009-10. “Tangible net worth of BYPL in 2009-10 is Rs.320.06 crore, and a high net cash accrual of Rs.71.65 crore,” the DERC has said.

The company too has been rated as BBB+ (Triple B plus) for long-term borrowing and PR3 (PR three) for short-term borrowing by CARE.

Based on the accounts, the DERC has said that BYPL’s tangible net worth as on March 31, 2010, is Rs.320 crore. The actual revenue gap up to financial year 2008-09 is not Rs.235 crore as claimed by the company. “That will be known only after tariff order. It may be a much lower figure or even a surplus. It is misleading to say that the gap is Rs.235 crore, knowing fully well that true up order is pending,” the Commission has noted.

The company’s claims of an additional revenue gap of Rs.766 crore for financial year 2009-10 has also been dismissed.

In the case of NDPL, the Commission has said that the audited accounts for financial year 2009-10 show cash profit of Rs.468.82 crore. According the audited accounts NDPL has a highest cash profit of Rs.468.82 crore in 2009-10.

“The tangible net worth in 2009-10 is Rs.1561.11 crore, and NDPL has a high net cash accrual of Rs. 82.71 crore in 2009-10. And credit rating agency ICRA has rated the company as LAA (L double A) and A1+ (A one plus) for bank lines and credit programme. These are excellent credit rating,” the Commission has said

The company’s tangible net worth at the end of financial year 2009-10 has been pegged at Rs.1561.10 crore. The Commission has also denied that the actual revenue gap up to financial year 2008-09 is not Rs.446 crore and that the additional revenue gap of Rs.670 crore for financial year 2009-10 is only the energy account surplus or gap, which is relevant and not the difference between projection and power purchase cost differential.

Keywords: DERCBSESpower tariff

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