Faced with allegations that its account books are tampered with, power distribution company BSES Rajdhani Power Ltd BRPL has tried to set the record straight by denying the accusation of the Delhi Electricity Regulatory Commission in a letter to the both the regulator as well as the Delhi Government.
Smarting from the DERC’s criticism, the company has asked the Delhi Government not to accept the statutory advice on the grounds that it has been submitted solely by the Chairman and is therefore in contravention of the express provisions of the Electricity Act.
In reply to DERC’s statutory advice to the Delhi Government, the company has pointed out that its financial statements and books of accounts have been audited by a reputed auditing firm recognized by The Institute of Chartered Accountants of India. “The company follows a four tier system of auditing / review. DERC, by its allegation has implicitly questioned the integrity of the renowned members of the Board and their professional skills and ability of the statutory auditors,” the letter reads.
Claiming that the DERC has not interpreted the audited accounts in correct perspective, the Company has pointed out to the DERC: “Even though the profit and loss statement for the financial year 2009-10, on the basis of accrual accounting, reflects profits because the licensee has accounted for an income recoverable from future tariffaggregating to Rs. 827 crores, the company is undeniably in severe liquidity crunch as is clearly evident from the cash flow statement attached as a part of the financial statements, which has to be read together with Balance Sheet and the Profit and Loss account.”
It has further claimed that its poor financial health is reflected by its liquidity position. The company also claims that it continues to resort to heavy borrowings to fund its operations in absence of a cost reflective tariff order. It has cautioned that if the liquidity crunch being faced by the licensee is not adequately addressed, “the Company may not be in a position to fulfill its obligation to supply continuous power on account of its financial inability and consequently should not be held liable for the same.”
In its reply to the Delhi Government the company has said that the statutory advice rendered by the Chairman DERC forecasts unwarranted and false aspersions on the Company. It has also pointed out that the statutory advice should be rejected as personal advice and statutory advice of the Commission, as a whole, as per the procedure should be sought.
The company has also denied that the discoms are overcharging consumers to the extent of Rs. 300 crore at current tariff. “On the contrary, the licensee’s alone has suffered a loss of Rs.1.04 per unit, which translates to Rs.108 crore per month on the power purchase cost alone,” the letter reads.
In reference to DERC claims that Rs.1,775 crore has been given to them on account of purchases from bilateral sources even though they had claimed “zero” purchases in their petitions, the company says it had claimed Rs.290 crore for short term purchases in the ARR Petition, which is also not “insignificant”.
