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“A STUDY ON FINANCIAL PERFORMANCE OF BESCOM”
DEPT. OF COMMERCE, VIDYAVAHINI PG COLLEGE TUMKUR - 572103 1
CHAPTER I
INTRODUCTION
A firm communicates financial information to the customer through
financial statements and reports. The financial statement contains summarized
information of firm’s financial affairs organized systematically. They are meant to
present the firm financial situation to customer preparation of the financial
statement is the responsibility of the top management. As these statements are
used by investor and financial analysis to examine the firm performance in order
to make internal decision they should be prepared very carefully and contain
complete information.
The success of business enterprise at the least its survival depends upon how
the funds are generated and when needed.
The key to all other business activities lies in financial, the simple words,
“Finance” is the management of the monetary affairs of a company/business firm,
it is the process of organizing the flow of funds so that a business can carry out its
objective in the most efficient manner and meet its obligations are they fall down.
Meaning of finance: -
In general terms finance means management of money for your expenses.
In broad terms finance is a science of fund management. Finance includes saving
money and often includes lending money.

Finance has been classified as;
 Business finance
 Personal finance
 Public finance
Finance is also a money budget management. The field of finance deals with
how money is spent and budgeted. It also deals the concept of time, money and
risk, and how they are interested. Individuals use finance as personal finance, by
government as public finance, by business as corporate finance, as well as by a
wide verity of organizations including schools and non-profit organization.
Finance is the need of today’s world economy.
TYPES OF FINANCE
There are mainly two types of finance found in the current economy,
1. PERSONAL FINANCE
In this finance decisions may involve paying for education, financial
durable goods such as real estate and cars, buying insurance.
Ex: health and property insurance, investing and savings for retirement. Personal
financial decision may also involve paying for a loan, or debt obligation.
2. CORPORATE FINANCE
It is the task of providing fund for a corporation’s activities. Corporate
finance can easily categorized in to category.

First one is short-term finance, which generally involves balancing risk
profitability, while attempting to maximize an entities wealth and the value of
its stock.
Long-term funds are provided by ownership activity and long-term credit,
often in the form of Bonds. The balances between these forms the company’s
capital structure short-tem funding or banks extending a line of credit mostly
provide working capital.
Goals of Finance:
a. Profit maximization
b. Wealth maximization
c. Other goals
i. Balance asset structure
ii. Liquidity
iii. Judicious planning of funds
iv. Efficiency
v. Financial discipline
Meaning of Financial performance:
Financial performance means, “Measuring the result of firms policies and
operations in monitory terms. These results are reflected in the firms returns on
investment, return on assets, value added etc.”

FinancialStatements:
A financial statement is an organized collectionof data according to logical
and consistent accounting procedures. Its purpose is to convey an understanding of
some financial aspects of a business firm. It may show position at a movement of
time has in the case Balance Sheet or may revel a series of activity over a given
period of time, as in the case of an income statement.
 Income statement.
 Statement of retained earnings.
 Statement of changes in working capital.
 Balance Sheet.
Analysis and Interpretation of Financial Statements:
Types:
I. Materialused:
a) External analysis.
b) Internal analysis
II. Modes of operations:
a) Horizontal analysis
b) Vertical analysis

Technologyoffinancial analysis:
1. Comparative financial statement.
2. Common size financial statement.
3. Trend Analysis.
4. Fund flow analysis.
5. Cash flow analysis.
6. Cost-Volume profit (CVP) Analysis.
7. Ratio Analysis.

Introduction about company:
The Erstwhile Mysore state had the enviable and glorious position of
establishing the first major hydroelectric generating stations at Shivansamudram
has early as 1902 for commercial operations. The art at that time was still in its
infancy. Even in the advanced countries, the longest transmission line at the higher
voltage in the worked was constructed to meet power needs of mining operation at
Kolar gold fields.
The generating capacity of shivansamudram powerhouse gradually
increased to 42 MW to meet the increased demand for a power. The shimsha
generating station with a installed capacity of 17.2 mega watt was commenced in
the year 1938. The power demand was even in the increase of industrial and rural
Electrification and addiction to generating become imperative first stage of 48
MW and 21 stage of 72 MW of the Mahatma Gandhi hydro electrical station were
commenced during 1948 and 1952. Subsequently the Rudra project with an
installed capacity of 33.2MW and THUNGA BADRA left bank power house with
an installed capacity of 27 MW at minarabad was commissioned during 1964 and
1965 respectively.
The state Government of Karnataka with availability of cheap electricity
power and other infrastructure facility was conducting for increased tempo of
industrial activity. It became necessary therefore augment power generating
capacity by harnessing the entire potential of the Sharagvathi valley. The first unit
of 89.1 MW was commissioned in 1964 and completed in 1977.
The demand power saw a phenomenal increase in the mid sixties and
onwards with the setting up of many public sector and private industries in the
state. As power generation in the state was entirely dependent on monsoon and
subject to its vagaries the state government set up a coal based power plant at
Raichur, the present installed capacity of this plant is 1260MW.

The augment power resource of the state, The KALINADI project with an
installed capacity of the power plant are 810 MW at Nagihari power house and
100 MW supa dam power house with an energy potential of 4.112 MW were set
up.
The transmission and distribution system in the state was under the control
of government of Karnataka (Mysore) till the year 1957. In the year of 1957
Karnataka Electricity Board (KEB) was formed the private distribution companies
were amalgamated with Karnataka Electricity Board.
Till the year 1986, KEB was a profit making organization. However, in the
subsequent years like other state Electricity Board in the country, KEF also started
incurring losses mainly due to the increase in the Agricultural Consumption and
due to the implementation of the socio economic policies of the government.
The performance of power sector affected to improve the performance of the
power sections in the tune with the reform initiated by the government of India.
The government of Karnataka came out with a general policy proposing
fundamental and nodical reforms in the power sector. Accordingly a bill namely
Karnataka electricity reforms Act was passed by the Karnataka Legislature. The
reform bill has mandated major restricting of the KEB and its Corporatization. As
pert of Corporation the Karnataka Electricity Board (KEB) seized to exist and the
Karnataka power Transmission Corporation limited. (KPTCL) to look after
transmission and distribution in the state and VVNS (Vishweshwariah Vidyuth
Nighama Limited) to look after the generating stations under the control of
Erstwhile Karnataka Electricity Board were constituted from 1-8-1999..
As part of reforms the distribution sector was further divided into four
companies viz..

BESCOM – Bangalore Electricity Supply Company Limited
HESCOM- Hubli Electricity Supply Company limited
MESCOM- Mangalore Electricity supply Company limited
GESCOM- Gulburga Electricity Supply Company Limited
CESC- Chamundeshwari Electricity Supply Company limited
These companies came into existence from 1st June 2002

CHAPTER II
RESEARCH DESIGN AND METHODOLOGY
Introduction:
The Encyclopedia of social sciences defines Research as “The manipulation
of generalization to extend corrector verifies knowledge.” This definition
highlights the primary purpose of a Research that is arriving at generalization and
the method of manipulation, which is an aspect of experimentation adopted for the
purpose.
Meaning:
A Research design is the program that guides the investigator in the process
of collecting analyzing and interpreting observations.” It provides a systematic
plan of procedure for the researcher to follow.
Definition:
KERLINGER defines “Research Design as a investigation of hypothesis
propositions about the presumed relations among natural phoneme.”
Title of the Study:
“A study on financial performance of BESCOM in Tumkur Division”
Statement of the Study:
Financial Analysis is an important aspect of Financial Management for
any company. Financial analysis gives the first hand information about the
financial aspects, financial performance, and growth of the company as well
as the liquidity position and profitability of the manufacturing industry.

But, whether the financial analysis is viable or feasible to calculate for
a service sector is to be known. For this reason, the following assertion has
been done.
Scope of the Study:
The study of ratios is a key indicator to the financial position of
BESCOM – Tumkur division, the soundness and the overall financial
performance of the company over 5 years.
The scope of the study also extends to understand whether ratio
analysis is an efficient in power sector, as it is an analytical tool measuring
growth trend.
Objectives Of The Study:
 To know the growth and development of BESCOM during the period 2005
to 2010
 To know the different services rendered by the BESCOM to the customer
and employees.
 To analyze the operating position of BESCOM.
 To identify the operating efficiency of the BESCOM.
 To identify the financial strength of the company in both short term and
long term.
 To assess the status of working capital and financial performance of
BESCOM.
Methodology of the Study:
This study under taken to analyze the performance of BESCOM –
Tumkur division, with the help of both primary and secondary data.

Primary data
 Informal discussion with the officials of the company.
 Constitutes on the data collected study was started with the
discussion with the guide assigned from our college.
Secondary data was collected through:
 Annual report of BESCOM – Tumkur division..
 Collection of industrial and company profile through internet.
Tools Of Data Collection:
There is various ways in which one planes to collect data. Tolls for data
collection are those means by which data is collected.
The tolls for data collection for this study are:
 Interview schedule.
 Trial balance.
 Account related textbook.
 BESCOM web – site.
 BESCOM magazine.
Research Instrument:
Ratio analysis has various methods and tools and techniques to analyze
the data, comparative analysis and interpretation of financial statements,
common measurements statements, techniques in that common size statement
or used in this study.

The analysis and interpretation has been planned carefully in an organized
manner
Limitation Of The Study:
 The study is limited to BESCOM, Tumkur only.
 This study concentrates only on analyzing the financial position of
BESCOM since past five years and does give importance to its working
capital management.
 The study does not carry any inventory ratio as it concentrates only on
credit worthiness of the company and not on inventory analysis.
Plan Of Analysis:
This study is divided into several parts:
 First part deals with the general introduction of BESCOM. Which consists
of introduction to financial analysis and interpretation of financial
statement in BESCOM
 Second part deals with research designing, which consists of statements of
the problem, objectives, scope, limitation of the study and research
methodology.
 Third part deals with the company profile, which includes origin growth
and future prospective of the BESCOM, organization chart.
 Fourth part deals with types of financial analysis and interpretation of
financial statement in BESCOM.
 Fifth part deals with the summary of findings suggestions and
conclusions.

CHAPTER III
COMPANY PROFILE
Origin, Growth and Development of the Company
KARNATAKA ELECTRICITY BOARD (K.E.B) was formed with effect
from 1/10/1957 under the Indian Electricity (Supply) Act of 1948 K.E.B was
corporatized into a company under the Indian Companies Act with effect from
1/9/1999.
It owns some generation stations at shivanasamudrum; jog falls etc., where it
produces electricity through hydroelectric station it also owned on generating
stating at yelhanka where the main fuel is diesel. Its main demand of electricity is
met from Karnataka Power Corporation. Limited. Which is a 100% Karnataka
State Government undertaking? The new hydroelectric station and thermal stations
coming up in the state are under the control of KARNATAKA POWER
CORPORATION LIMITED [KPTCL]. KPTCL also gets its share of electricity
from the central generating stations such as national thermal power corporation,
Nyveli lignite corporation etc. During the last couple of years some independent
power producers like Tata’s and Jindal tractable have put up their plants and
started producing electricity, which is fed into the state grid.
Karnataka is pioneer in the reforms of power sector as Karnataka Power
Corporation was reformed in 1975 to take up the work of power generation
leaving Karnataka Electricity. Board to transmit and distribute the electricity. The
Karnataka Power reforms bill was passed in 1999 and K.E.B was corporatized as a
company under the Indian companies act, 1952.

With effect from 1/9/1999 the name of the organization was changed to
KARNATAKA POWER TRANSMISSION CORPORATION LIMITED
(KPTCL) and the reform activities are in progress. In the reform scenario, KPTCL
is mainly accountable through Karnataka electricity regulatory commission
(KERC).the tariff structure of different categories of consumers, its investment
decision and tariff proposals have to be approved by KERC.
KPTCL to ESCOMS
Government vide order no. 69 BS 12 2001 Bangalore, dated 15/02/2002 has
unbundled KPTCL and formed four distribution companies consequent to this the
function of distribution of power has been totally separated from KPTCL. KPTCL
is now vested with the responsibility of transmitting power all over the state and
construction and maintenance of stations and lines of 66 kV and above. KPTCL
will purchase power from various power producers and sell it to the distribution
companies.
The four newly formed independent distribution companies, which were
registered on 30/04/2002, are Bangalore Electricity Supply Company,
management electricity supply company Hubli Electricity Supply Company and
Gulbarga Electricity Supply Company. They have stated functioning from
01/06/2002. These companies are in charge of distribution of power within their
jurisdiction.

BESCOM Structure
HESCOM GESCOMBESCOM MESCOM
ESCOMS
Gulbarga
Zone
Hubli
Zone
Mangalore
Zone
Bangalore
Rural Zone
Bangalore
Metropolita
n Area Zone

PresentStates ofESCOMS
At present, KPTCL is into transmission and maintenance and ESCOMS for
distribution of electricity in the entire state. It caters to the needs of more than 10
millions consumers. It supplies electricity to houses residential complexes, shops,
industries, low-tension power consumers having irrigation pump sets. It also
supplies electricity to Bhagyajyothi consumers where the state government
introduces 1 bulb for one house scheme respectively. KPTCL levy different rates
of electricity changes to different categories of consumers some of the categories
of consumer are charged at subsidized rates of electricity because of socio-
economic commitments.
Organization Structure
Under each ESCOM, there are about 3 O and M (operation and maintenance)
circles totally to 15 circles in the entire state. Under the circles, there are O and M
divisions and under divisions and under divisions there are O and M sub-divisions
and accounting and non-accounting sections. The sub-divisions and sections
collect the electricitycharges from the consumers and ledger account of all the
consumers are maintained in these sub-divisions and accounting sections. Besides
these, there are major work zones circles and divisions which take up work of
major nature like laying of transmission lines and stations etc. there are other
divisions like MRT [Meter Relay Testing] divisions MPD [master plan division],
system improvement cell etc..

Operations and Maintenance (O and M)
There are about 15 O and M circles headed by superintending engineer’s
electrical and 56 O and M division (revenue) under the above circles headed by
executive engineers. There are 256 O and M sub-divisions under the above
divisions headed by assistant executive engineers and 977 O and M sections under
the sub-division which are headed by assistant engineer electrical / junior engineer
electrical. They look after O and M of distribution systems and arrange new
service connection of the corporation. Apart from the above 17 sub-stations
maintain divisions headed by executive engineer electrical under the control of
superintending engineer TS and SS for all the zones.
Personnel Management
The ESCOMS is having 49,447 employees, which are inclusive of 40,233
regular employees, 598 part time and 8616 temporary workers on contract basis.
The employees of the corporation under regular establishment fall under 2
categories, namely technical and non-technical. The technical cadre comprises of
engineering personnel and skilled employees like meter readers/ operators
/overseers. The non-technical cadre comprises of ministerial staff to look after
audit and account.
Vigilance Cell
The vigilance cell is headed by the Deputy Inspector General of police
under him two superintendents of police are working at Bangalore and Hubli.
There is also vigilance squared located at circle headquarters consisting of
technical and police staff. The vigilance cell investigates allegations of corruption,
misuse of power and mis -appropriation etc. against the employees of the

corporation and also conducts surprise check of installations to detect theft of
energy. The vigilance cell is also responsible for security measures for officers,
projects and important installations of the corporation.
System Improvement Cell
It consists of two circles located at Bangalore and Hubli working under the
administrative control of Chief Engineer Electricity (general). Only Mangalore
and Gulbarga zones are having executive engineer at the zone head quarters. Each
of the O and M circles is having assistant executive engineers to look after
exclusively works, aimed at improving the existing system.
Research Wing
The corporation has a research wing headed by the Chief engineer
electricity, research and development to undertake the study of various research
projects allotted by the Central Board of Investigation Power, New Delhi, as well
as by the KPTCL to formulate new project proposals under research scheme on
power. Besides these, the research wing also undertakes the routine works namely
the designing of earth mats for the new as well as existing stations, investigations
of station earthling, testing of oil samples of power transformers, assessments of
average IP consumption and arranging for awareness programmer on energy
conservation with consumer public industrializes etc.
Mission Statement of BESCOM
Is to ensure complete customer satisfaction by providing its custom we quality,
reliable power at competitive rates.
BESCOM is set it achieve this through

 Best practices in the construction and maintenance of its distribution
network.
 High standards in customer service.
 Optimum usage of technical and human resources.
BESCOM (Profile as per 31-03-2010)
1. AREA -41092 sq kms
2. District - 8 [Bangalore Rural, Urban, Tumkur,
Davanagere, Chitradurga,
Chikkaballapura, Kolar, and
Ramanagar]
3. Population - 6.8 Million
4. Consumers - 7.32 Million
5. No. Distributions of Transformers - 138618
6. HT Line length -68692 ckt. Kms
7. LT Line length -143544 ckt.kms
8. Employees strength : Sanctioned -16841
Working - 10529
9. Total Assets -Rs. 4211.98 Crores
BESCOM Overview
In the year 1999, Karnataka embarked on a major reform of the power sectors.
As a first step, Karnataka Electricity Board [KEB] was dissolved and in its place,
the Karnataka Power Transmission Corporation Limited [KPTCL] was
incorporated. This was followed by the constitution of Karnataka Electricity
Regulatory Commission [KERC] in November 1999.

In the next phase of the reform process, the transmission and distribution
business managed by KPTCL were unbounded in June 2002 four new distribution
companies were formed to distribute power in Karnataka.
As a part of the reforms the distribution sector was further divided into four
companies.
Bangalore Electricity Supply Company Limited [BESCOM] has taken over the
responsibility from KPTCL for the distribution of electricity in 6 districts and
commenced its operations from 1st June 2002.

Corporate Structure of BESCOM
CHAIRMAN
B.O.DManaging Director
TA & QCVigilanceCompany
Secretary
Financial
Advisor
Director
(Technical)
Internal AuditCommunication &
Reforms Co-
ordination Officers
General
Manager
(Technical)
Superintending
Engineer
Electrical
(Procurement)
Controller (Finance)
Controller
(Accounts)

The following are the directors of BESCOM as onthe date of AGM:
1. Shamim bhanu, I.A.S., Chairman
2. Tushar Girinath, I.A.S. Managing Director
3. G.Latha Krishna Rao, I.A.S. Director
4. Dr. Rajkumar katral I.A.S. Director
5. Alok Mohan, I.P.S.,. Director
6. M. Shivamallu. Director
7. Pradi rajnal. Director
8. M. Govindappa. Director
9. Nagesh. H. Director (Technical)
10.Parvathy Keshavachar. Director
11.L. Ravi. Director
12.M. Nagaraju. Director
Organizationstructure of BESCOM
 BESCOM Board: BESCOM Board is consisting of the following members.
Sriyuths
 Principal secretary Energy, Department, GOK: Smt. Shamim Banu, I.A.S
 Managing Director: Sri Tushar girinath, IAS
 Director (Technical): Sri. A.N> Ramesh
 Managing Director, GESCOM: Sri. C.S. Ganesh
 Dep. Sec. Energy Dept.: Smt. Parvathi Keshavachar

The Board members will be meeting regularly every month or on the dates as
situation warrants, for deciding on issues concerned with administrative and
technical matters.
Committees
The following committees are formed in BESCOM for the purposes advise
regarding purchase, technical, accounts and administrative matters.
 Central Purchase Committee
This committee comprises of the following members
o Managing Direct, BESCOM: Chairman
o Director (Technical), BESCOM: Member
o Deputy Secretary, GOK: Member
o Energy Dept. Secretary, KPTCL: Convener
Invitees Chief General Manager (F & C), GM (Tech.), GM (procurement),
GM (RTA).
This committee will meet depending on the procurement action to be initiated as
and when required. In general procurement involving an amount up to 5 crores
will be decided by the committee on the basis of purchase proposals put up by the
procurement wing. Procurement involving an amount above 5 crores will be
referredto the board of decision/approval.

 Technicalcommittee
This committee comprises of the following members:
o Director (Technical), BESCOM: Chairman
o Chief General Manager (Eel), BMAZ: Member
o Chief General Manager (Eel) BRAZ: Member
o General Manager (Tech): Member, Convener
o General Manager (Planning): Member
o General Manager (Procurement): Member
 Accounts and Audit coordinating committee
This comprises of the following members
o Financial advisor, Chairman
o Controller (RTA), Member
o Controller (Accounts), Member
o Controller, BMAZ, Member
o Controller, BMAZ, Member
o Representatives of auditing company (Auditors)
Apart from the above three major committees, several other sub
committees like, borrowing tender qualifying recruitment committee, tender
scrutiny committees, evaluation committee, audit committees, SR preparation
committee etc. are formed on ad-hoc basis depending on the requirements under
specific circumstances. The deliberation on the meetings of these committees will
be purely from the point of view of implementation of company’s policies and

program connected to administrative and technical action, execution of works. The
minutes/deliberation of the board meeting and the committee meetings are not
open/accessible to general public.
Recent Development in BESCOM
IT initiatives in BESCOM
B.R. Vasanth Kumar, Director (Technical) and B.T. Prakash Kumar, AEE,
BESCOM. BESCOM has been following the IT initiatives road map prescribed by
Ministry of Power, GOI under Reforms process to achieve customer satisfaction,
improved performance, low interruptions, improved quality of power supply.
BESCOM intends to be the Best Distribution Company in the country.
About BESCOM
 BESCOM is responsible for power distribution in six districts of Karnataka.
 BESCOM covers an area of 41092 sq. kms. Serving a population of over
168 lacks.
The districts which are serviced BESCOM
 Bangalore Urban
 Bangalore Rural
 Kolar
 Tumkur
 Chitradurga

 Davanagere
 Chikkaballapura
 Ramnagara
BESCOM in IT
 Knowledge based systems to improve consumer relationship.
 The power sector in the country is undergoing a lot of changes to make it
financially viable. Reforms and restructuring are underway making
BESCOM transparent and more responsive to the needs of its consumers.
 BESCOM is using IT to develop effective and efficient solutions to reach
and serve the consumers in a better way.
 IT is also helping BESCOM has risen towards the achievement of total IT
solutions.
ACHIVEMENTS AND AWARDS
The following are the milestones achieved:
 Electronic Mail Service
 BESCOM.ORG also integrates a very high quality inter office electronic
mail system.
 Inter office email can be an effective and efficient system for
communication and documentation.
 The web based email service allows employees of BESCOM to check their
e-mail from any computer with Internet access.
 The system also helps in tracking and monitoring all email
communications.
 Integrated with IVRS and MMS for full customer support.

Centralized consumerbilling information
 Centralized data storage of consumers account information.
 Purging consumers information and billing data for all sub divisions.
 Quick access and retrieval of customer information.
 Fine tuning consumer billing system for accuracy.
 Consumers can pay their bills anywhere.
Interactive Voice Response system
Consumer care and retention is important for most companies in today’s
competitive market place where customers demand immediate access to
information and efficiencyof response.
 Interactive Voice Response System (IVRS) technology provides an
effective and affordable, consumers-friendly information system.
 Accessible from any phone.
 Consumer can get billing information and can lodge their complaints.
 Scheduled of planned outages and important announcements can be
informed by the IVRS>
SAFETY IN USE
DO’S
1. Always used ISI approved equality material
2. Install ELCB to avoid electrical shock.
3. Always call electricityfor repair and checking
4. Get the wiring done by an approved govt. licensed electricity contractor
5. Always ensure that the plug socket is not in reach of children

6. Always ensure that the plug socket to avoid loose contact and
consequently heating and melting
7. Use only three-pin socket.
8. Get the installation checked for earthling of insulation
9. Cover bare portion of electrical connection with insulation tape
10. Use rubber gloves of rubber mat while working on electrical equipments.
11. Use insulated cutting pliers and line tester for handling electricitywire
of equipments.
12. Report the leakages of current of relevant jurisdictional BESCOM
service station.
13. Report slating of poles sagging and snapping of conductor to BESCOM
service station.
14. Eliminate dampness water leakages near electrical wiring equipment.
15. Educate other about safe usage of electricity.
16. Use correctlysize fuse wire.
17. Turn you face away whenever spare over occurs.
18. Switch off supply whenever you see fire near electrical equipments.
19. Before working on replacing any lamp – equipment ensure that supply is
switched off.
ACCIDENTS
In case ofa person coming in contactwith electrify.
1. Do not touch him.
2. Switch off the main supply.
3. Insulate your self with the surrounding and move the person away form
the electrical count act.
4. Given him first aid.

5. Call for the doctor.
6. Inform the relevant jurisdictional BESCOM service station.
DON’TS
1. Touch a snapped conductor.
2. Tie animals to electricitypole and guy wires.
3. Use guy wires fir drying for cloths.
4. Energies the fences.
5. Climb electrical poles.
6. Building house / grow trees and plants underneath the electric lines.
7. Build balconies / windows towards the open lines.
8. Cut tree branches near the overhead lines.
9. Over load the system by additional unauthorized load.
10.Use unearthed electrical equipment.
11.Use open wires/joined wires for appliance.
12.Use broken switches socket or plug.
13.Extend open heating coil for heating water.
14.Extend open/ loose wires form junction.
15.Operate electrical equipment/ switches with wet hands.
16.Allow layman to handle the electric system.
17.Touch a person with bare hands who is in contact with electric supply.
18.Carry long metallic pipes underneath the overhead lines
19.Throw water on live electrical equipment incase of fire.
20.Disconnects a plug by pulling the flexible cable when the switch is on.
21.Plug is any portable lamp/appliance before making sure the switch is
off and the plug is properly inserted in the socket.
22.Connect the customer’s earthling to water/pipes.

23.Use copper wires as substitute for fuse wires.
24.Use Temporary wires for extension of supply.
25.Touch metallic Supports of lines during rainy season.
SAVE POWER:
Power is precious – one unit saved is equal to two units generated. It takes
more than Rs-4 crores of Investment to produce just one mega watt of electric
power. In order to conserve power, customer should follow the philosophy of
“Waste Not,” so that power is available to more important areas like Hospitals,
Railways, Transport, and the like.
TIPS TO SAVE POWER
DOMESTIC CUSTOMERS
1. Power is precious – use it judiciously.
2. One unit saved is equal to units generated.
3. Switch off lights fans and other electrical gadgets when not required.
4. Sunlight is available free of cost make maximum use of daylight and
reduce use of artificial light.
5. Keep the bulbs and tubes clean to get better light.
6. Use low wattage bulbs for corridors and other less important areas.
7. Use light-colored paints and distempers for interiors.
8. Use tube light in place of filament lights. They last longer, consume less
power and give you more lightly.
9. Do not keep the door of your refrigerator open unnecessarily.
10.Reduce the height of partition walls wherever possible.

11.Eschew the use of ornamental and festoonlights.
12.Use cords of suitable capacity to avoid loss of energy and to reduce fore
accidents due to shorts circuits.
13.Use air-conditioners and climate control equipment very sparingly.
14.Keep the motors clean and cool
15.Use capacitors near motor terminals to avoid damage to motor and to
reduce demand charges.
RURAL CUSTOMERS
1. Use foot values of low resistance to save up to 10% power.
2. Use RPVc section pipers to save up to 10% power.
3. Motor and pump should be at same level. Pump should be within 3 meters
room the level.
4. Use pump sets of suitable power depending upon water lifting
requirements. It could save up to 25% power.
5. The capacity of motor should match the requirements using motors of
higher capacity where a lower one is good enough, results in loss of power
use only motors of good efficiency.
6. The pipe in which water comes out should be as close to earth level as
possible.
7. Use capacitors near motor terminal to avoid damage to motors and to
reduce demand charges.
INDUSTRIAL CUSTOMERS
1. Keep the motors clean and cool.
2. Use capacitors near motor terminals to avoid damage to motors and
to reduce demand charges.

3. Tighten belts and pulleys at regular intervals to avoided energy
loosed due to drag.
4. The capacity of motor should match the requirements. Using
motors of higher capacity. Where lower one is good enough results
in loss of power. Use only motors good efficiency.
5. Use grease frequently at all required points in all motor and motor
drives to reduce friction.
6. The machine driven should be very close to the motor.
7. Sunlight is available free of cost make maximum use of daylight and
reduce use of artificial light.
8. Change worn out bearing and repairs them in time.

CHAPTER IV
Theoretical background
Meaning of financial statement
Financial statement is a collection of data organized according to logical
and consistent accounting procedures. Its purpose is to convey an understanding of
some financial aspects of a business firm. It may show a position at a moment in
time, as in the case of balance sheet or may reveal a series of activities over a
given period of time as in the case of balance sheet.
Nature of Financial statement
 Recorded facts:
It refers to the data taken out from the accounting records.
The records are maintained on the basis of actual cost data.
 Accounting conventions:
Certain accounting conventions are followed while preparing
financial statements. The convention of valuing inventory at cost or
market price, which even is lower, is followed.
 Postulates:
The accountant makes certain assumptions while making
Accounting records. One of these assumptions is that the enterprise
is treated as a going concern.

 Personal judgments:
Even through certain standard accounting conventions are
followed in preparing financial statements but still personal judgments
of the accountant plays an important part.
Importance of Financial statement
 Management:
Financial statement is useful for assessing the efficiency for
Different cost centers. The management is able to exercise through
these statement.
 Creditors:
The trade creditors are to be paid in a short period. This
liability is met out of current assets.
 Banker:
The banker is interested to see that the loan amount is secure
and the customer is also to pay the interest regularly.
 Investors:
The investor includes both short-term and long-term
investors. They are interested in the security of the principle
amount of loan and regular interest payment by the concern.

 Government
Financial statement are used to assess tax liability of business
Enterprises the government studies economic situation of the
Country from these statement.
 Trade associate
These associations provide service and protection to the
member. They may analysis the financial statement for the purpose
of providing facilities to these members.
Meaning of Financial statement
A financial statement is an organized collection of data according to
logical and consistent accounting procedures. Its purpose is to convey an
understanding of some financial aspects of a business firm, it may show a position
at a moment of times as in the case of balance sheet, or may reveal a series of
activities over a given period of time, as in the case of an income statement.
Thus the term financial statement generally refers to two basic statements
 Income statement
 Balance sheet
Besides these two statements an origination particularly a company,
May also prepare a statement of retained earnings and statement of changes
In financial position.

Financialstatements
The meaning and significance of each of these statements below.
Income statement:
It is a financial statement, which presents the revenues and expenses
of an enterprise for an accounting period and shows the access of revenues over
expenses. It is also known as profit and loss account. It is generally considered to
be the most useful of all financial statements. It explains what has happened to a
business as result of operation between two balance sheet dates. For this purpose it
matches the revenues and costs incurred in the process of revenues and shows the
net profit earned or loss suffered during a particular period
The nature of the ‘Income’, which is the focus of the income
statement, can be well understood if a business is taken as an organization that
uses ‘inputs’ to ‘produce’ output. The outputs are the goods and services that
the business provides to its customers. The values of these outputs are the
amount paid by the customers for them. These amounts are called ‘revenues’
in accounting. The inputs are the economic resources used by the business in
providing these goods and services these are termed as ‘expenses’ in
accounting.

Balance Sheet
It is a statement of financial position of a specific moment of time.
According to the institute of chartered accountants of India, balance and other
account balanced at their respective book values. Thus, balance sheet
Represents all assets owned by the business at a particular moment of time
and the claims of the owners and outsiders against those assets at the time.
The important distinction between an income statement and balance sheet
is that the income statement is for a period while balance sheet is on a
particular data income statement is therefore a flow report as contrasted with
the balance sheet which is a static report tow ever both are complementary to
each other
Statement of Retained Earnings
It is also termed as profit and loss appropriation account. The statement
gives detail of the distribution of earnings during a particular accounting
period. The balance shown by the income statement is transferred to the
balance sheet through this statement after making necessary appropriations.
The balance of this account represents the retained earnings i.e., accumulated
excess of earning over losses and dividends. They statement is a connecting
link between the balance sheet and income statement. It is fundamentally a
display of things that have caused the beginning of the period retained
earnings, balance to be change into the one shown in the end of the period
balance sheet.

Statement of Changes in Financial Position (SCFP)
The balance sheet shows the financial condition of the business at a
particular moment of time while the income statement discloses the results of
operations of business over a period of time. However, for a better
understanding of the affairs of the business, it is essential to identify the
movement of working capital or cash in and out of the business. This
information is available in the statements of change in financial position of
the business. It may be defined as “a statement which summarizes for the
period the resources made available to finance the activities of an enterprise
and the uses to which such resources have been put”. The statement may
emphasize any of the following aspects relating to changes in financial
position of the business.
 Change in working capital position: in such a case the statement is termed
as SCFP (or) popularly funds flow statements
 Change in cash position: in such a case the statement is termed as SCFP
(or) popularly cash flow statements
 Change in overall financial position: in such a case the statement is termed
simply as statement of changes in financial position (SCFP).

Analysis And Interpretation Of Financial Statement
Financial statements are indicators of two significant factors:
 Profitability
 Financial soundness
A distinction here can be made between the two terms. “Analysis” and
“interpretation”. The term “analysis” means methodical classification of the
data given in the financial statements the figures given in the financial
statement will not help one unless they are put in a simplified form. For ex, all
item relating to “current assets” are put at one place while all items relating to
“Current liabilities” are put a another place. The term interpretation means
explaining the meaning and significance of the data so simplified.
However both “Analysis” and “Interpretation” are complimentary to each
other. Interpretation requires analysis, while analysis is useless without
interpretation. Most of the authors have used the term “Analysis” only to
cover the meanings of both analysis and interpretation, since analysis involves
interpretation. According Myers, “financial statement analysis is largely a
study of the relationship among the various financial factors in a business as
disclosed by a single set of statements and a study of the trend of these factors
ha shown in a serious of statements”. For the sake of convenience, we have
also use3d the term “financial statement analysis” throughout the chapter to
cover analysis and interpretation.

Types of financial analysis:-
Financial analysis can be classified into different categories depending
upon
 The material used
 The modus operandi of analysis
On the basis of material used:-
According to this basis, financial analysis can be of two types
 External analysis
 Internal analysis
External analysis: -
Those who are outsiders for the business do this analysis. The term
outsiders include investors, credit agenesis and government agenesis and other
creditor who have no access to the internal records of the company. These
persons mainly depend upon published financial statements. Their analysis
serves only a limited purpose. The position of these analysts has improved in
resent times on account of increased government control over companies and
governmental regulations requiring more detailed disclosure of information by
the companies in their financial statements.

Internal Analysis: -
Persons who have access to the books of accounts and other
information’s related to the business do this analysis. Such an analysis can
therefore, be done by executives and employees of the organization or by
officers appointed for this purpose by the government or the court under
powers verged in them. The analysis is depending upon the objective to be
achieved through this analysis.
On The Basis of Modus Operation
According to this basis financial analysis can also be of two types.
 Horizontal Analysis
 Vertical Analysis
Horizontal Analysis: -
In case of this type of analysis financial statements for a number of
years are reviewed and analyzed. The current year’s figures are compared with
the standard or base year. The analysis statement usually contains
figures for two or more year and changes are shown regarding each item from
the base year usually in the form of percentage. Such an analysis gives the
management considerable insight into levels and areas of strength and
weakness since this type of analysis is based on the data from year rather than
one date, it is also termed as “Dynamic Analysis”.

Vertical Analysis: -
In case of these types of analysis a study is made of the quantitative
relationship of the various items in the financial statement on a particular date.
For example, the ratio of different items of costs for a particular period may be
calculated with the sales for that period, such an analysis is useful in
comparing the performance of several companies in the same group, or the
date for one period. This is not very conductive to a proper analysis of the
company’s financial position. It is also called ‘Static Analysis’ as is frequently
used for referring to ratios developed on one date or for one accounting
period.
TECHNOLOGY OF FINANCIAL ANALYSIS
1. Comparative Financial Statements:
Comparative financial statements are those statements, which have
been so designed in a way so as to provide time perspective to the
consideration of various elements of financial position embodied in such
statements. In these statements, figures for two or more periods are placed side
by side to facilitate comparison.
2. Common – Size Financial Statements: -
Common – size financial statements are those in which figures reported
are converted into percentages to some common base. In the income statement
he sales figures is assumed to be 100 and all figures are expressed as
percentage of sales. Similarly, in balance sheet. The total of as sects or
liabilities is taken as 100 and all the figures are expressed as a percentage of
this total.

3. Trend Percentages: -
Trend percentages are immensely helpful in making a comparative
study of the financial statements for several years. The method of calculating
trend percentages involves the calculating of percentage relationship that each
item bears to the same item in the base year. Any year may be taken as the
base year. It is usually the earliest year. Any intervening year may also be
taken as the base year. Each item of the base year is taken as hundred and on
that basis percentages for each of the items of each of the years are calculated.
These percentages can be taken as index number showing the relative changes
in the financial data resulting with passing of time.
4. Funds Flow Analysis:-
Funds Flow analysis as become an important tool in the analytical kit
of financial analysis, credit granting institution and financial managers. This is
because the balance sheet of a business reveals its financial status at a
particular point of time.
Fund flow analysis reveals the changes in working caption. It tells
about the sources from which the working capital was obtained and the
Purpose for which is used. It brings out in open the changes, which have taken
place. Behind the balance sheet, working capital being the lifeblood of the
business.

5. Cost –Volume- Profit Analysis:-
Cost volume profit analysis is an important tool of profit planning. It
studies the relationship between the cost volume of production sales and
profit. However, it is an impotent tool for management decision making from
the data provided by both cost and financial records. It tells the volume of
sales at which the firm will break even, the effect of profit an account of
variation in output in selling price and cost and finally, the quantity to be
produced and sold to reach the target profit level
6. Ratio Analysis:-
This most important tool available to financial analysis for their work.
An accounting ratio shows the relationship in mathematically terms between
two inter related accounting figures. The figures have to be interred related
because no useful purpose will be served if ration are calculated between two
figures that are not at all related to each other, example, Sales and discount on
issue of debentures.
Meaning of Ratio
A ratio a simple arithmetically expression of the relationship of one
number to another. It may be defined as the indicated quotient of two
mathematical expressions.
According to accountant’s handbook by Wixom Kill and Bedford, a
ratio “is an expression of the quantitative relationship between two numbers “.

According to Kohler, a ratio “is the relation, of the amount, a, to
another, b. expressed as the ratio of a to b; a: b (a is to b) or as a simple
fraction, integer, decimal, faction or percentage”.
In simple language a ratio is one number expressed in terms of another
and can be worked out by dividing one number into the other.
Classification of Ratio
Functional Classification or Classification according to tests,
1. Liquidity Ratio: -
This is the ratio, which measure the short –terms solvency or financial
position of a firm. These ratios are calculated to comment upon the short term
paying capacity of a concern or a firm’s ability to its obligations.
 Current Ratio: -
Current ratio may be defined as the relationship between current
assets and current liabilities. This ratio also known as working capital ratio is
a measure of general liquidity and is most widely used to make the analysis of
a short-term financial position or liquidity of a firm.
It is calculated by dividing the total current assets by total of the current
liabilities.
Current ratio =current assets
Current liability

 Liquid Ratio (or) Quick Ratio (or) Acid test ratio:-
Quick ratio may be defined as the relationship between quick / liquid/
acid test assets and current or liquid liabilities. An asset is said to be liquid if it
can be converted into cash within a short period without loss of value. The
quick ratio can be calculated by dividing the total of quick assets b total
current liabilities. Thus
Quick/Liquid/Acid Test ratio = Quick/Liquid assets
Current liabilities
2. Long –term Solvency and Leverage Ratio:-
Long term Solvency Ratio convey a firm’s ability to meet the interest
cast and repayments schedules of its long terms obligations.
 Debt Equity Ratio:-
Debit Equity Ratio, also known as external – internal equity ratio is
calculated to measure the elative claims of outsides and the owners (that is
share holders) against the firm’s assets.
Debt equity ratio= Outside funds
Share holders funds

 Debt to total Capitalization Ratio:-
The ratio establishes a link between the long term funds raised from
outsiders and total long-term funds available in the business.
The two words used in this ratio are:-
 Funded Debt
 Total Capitalization
Funded Debt = Debentures + Mortgage loans + Bond + other long
Total Capitalization = Equity share capital +
Preferences share capital +Reserves and surplus + other undistributed reserves
+ Debentures + Mortgage loans + Bonds+ Other long-term loans.
Funded debt is that part of total capitalization which is financed by outsiders.
3. Activity Ratio:-
Activity ratios are calculated to measure the efficiency with which the
resources of a firm have been employed. These ratios are also called as
turnover ratio.
Funded debt to funded debt X 100
total capitalization ratio = total capitalization

 Inventory Turnover Ratio (or) Stock Turnover Ratio:-
Every firm has to maintain a certain level of inventory of finished goods so as
to be able to meet the requirement of the business. Inventory turnover ratio
also known as stock velocity is normally calculated as sales / average
inventory or cost of goods sold / average inventory. Inventory turnover ratio
(ITR) indicates turned the number of time the stock has been turned over
during the period and evaluates the efficiency Term
loan
with which a firm is able to divide the cost of goods sold by the amount
of the average inventory at cost.
Inventory Turnover Ratio =Cost of goods sold
Average inventory cost
 Debtors/Receivables Turnover or Debtors Velocity:-
Debtor’s turnover ratio indicates the velocity of debt collection of firm.
In simple words, it indicates the number time average debtors turnover during
a year, thus
Debtors turnover ratio= net credit annual sales
Average trade debtors
Trade Debtors = Sundry Debtors + Bills Receivables and Account
receivables

Average Trade Debtors = Opening trade Debtors + Closing trade Dr.s
2
 Creditors/ Payable turnover Ratio:-
A supplier of goods that is creditors are naturally interested in finding out
how much time the firm is likely to take in repaying it trade creditors. Creditor’s
turnover ratio can be calculated in two forms
A supplier of goods, that is creditors are naturally interested in finding
out how much time the firm is likely to take in repaying it trade creditors.
Creditor’s turnover ratio can be calculated in two forms
If information about credit purchases is `not available, the figure o
total purchase may be taken as the numerator and the trade creditors includes
sundry credit and bills payables. If opening a closing balance of creditors are
not known, the balance of creditors given may be taken to find out the ratio.
The ratio indicates the velocities with the creditors are turned over in relation
to purchases.
Avg. payment = Avg. trade Creditors (creditor’s + bills payment)
Period ratio Avg. daily purchase
Creditors turnover ratio = Net credit annual sales
Average trade creditors

4. Profitability Ratios:-
Their ratios measure the results of business operations or overall
performance and effectiveness of the firm.
There are two types of profitability ratios are calculated:-
 In relation to sales
 In relation to investments
 Gross Profit Ratio:-
Gross Profit ratio measures the relationship of gross profit to net sales
and is usually represented as a percentage. Thus it is calculated by dividing the
gross profit by sales.
Gross profit ratio= Gross profit x 100
Net sales
Gross profit ration= Sales – cost of goods sold x 100
Sales

 Operating Ratio:-
Operating Ratio establishes the relationship between cost of goods sold
and other operating expenses on the one hand the sales on the other.
The two basic elements of these ratios are operating cost and not sales. Operating
cost can be found by adding operating expenses to the cost of goods.
 Operating Profit Ratio;-
This ratio is calculated by dividing operating profit by sales, operating
profit is calculated as,
Operating profit = Net sales– Operating cost
Operating profit = Net sales – (cost of goods sold+ Administrative and office
expenses + selling and distributive expenses)
Operating ratio = operating cost x 100
Net sales
Operating ratio= cost of goods sold + operating exp. X 100
Net sales

Operating Profit can also be calculated as;
So, Operating ratio = Net Profile + Non- operating expenses
- Non – operating income
This ratio can also be calculated as;
Operating profit ratio = 100 – operating ratio.
 Expenses Ratios: -
Expenses Ratios indicate the relationship of various expenses to net
sales. The operating ratio reveals the average total variations in expenses.
Expense ratio = Expanses x 100
Net sales
 Net Profit Ratio: -
Net profit ratio establishes a relationship between net profit (after taxes)
and sales, and indicates the efficiency of the management in manufacturing,
selling, administration and other activities of the firm. This ratio is the overall
measure of firms profitability and is calculated as
Operating profit ratio = operating profit x 100
Sales

Net Profit Ratio= net profit after tax x 100
Net sales
 Return on Capital Employed:-
The turn’ Capital Employed’ refers to the total of investments made in
a business and can be defined in a number of ways.
The three most widely used definitions of these terms are:-
 Gross Capital Employed = Fixed assets + Current assets
 Net Capital Employed = Total assets – Current Liabilities
 Proprietors Net Capital Employed = Fixed assets + Current
Assets – Outside liabilities
 Return on Equity Capital: -
Ordinary Share holders are more interested in the profitability of a
company and the performance of a company should be judged on the basis of
return on equity capital of the company . Return on the equity capital, which is
the relationship between profit of a company and its equity capital, can be
calculated as;

Return on = Net profit after tax – Preference Dividend
Equity share capital
 Earnings Per Share [EPS]
Earnings per share are a small variation of return on equity capital and
are calculated by dividing the net profit after taxes and preference dividend by
the total number of equity shares.
EPS = net profit after tax-preference dividend
No. of equity shares

CHAPTER V
DATA ANALYSIS & INTERPRETATION
Financial analysis is the process of identifying the financial strength and
weakness of the firm by properly establishing relationships between the items of
the balance sheet and the profit and loss account.
They analysis the forms profitability over time its ability to generate cash to
be able to pay interest and repay principle and relationship between various
sources of funds. As such they concentrate on the analysis of the firm’s present
and future profitability.
So here I had analyzed the collected data in a systematic manner and
interpreted with simple method, then only it will be useful for the study. The
analysis of the collected data are interpreted it with pictorial representation by
using column chart and bar charts etc.

Analysis of financial position of BESCOM in the year 2005-06 based on
the common size statement (Rupees in Crore)
SL.No. Particulars Amount Total %
1 Sources of Funds
Share holder’s funds
Share capital
Share deposit
Reserves and Surplus
205.95
4.76
511.67 722.38
8.48
0.19
21.07
2 Loans/Funds
Secured loans
Unsecured loans
Other Funds: Service line &
security deposits
432.86
76.12 508.99
1196.41
17.82
3.13
49.31
Total I 2427.79 100
II
1
Application of Funds
Fixed Assets
 Gross block
 Less: Depn.
 Net block
 Capital work in progress
2015.56
788.99
1226.56
53.42
(32.49)
50.52
2.20
1279.99 52.72
2 Current Assets, loans & advances
 Inventories, stores & spares
 Sundry Debtors
 Cash & Bank balances
75.40
1858.64
200.86
3.10
72.51
8.27

 Loans, advances & Deposits
 Other current assets
143.99
162.09
5.93
6.63
Total II 2441.02 100.50
Less current liabilities 1293.20 53.26
Net current assets 1147.80 47.28
Total II 2427.79 100

1 Sources of Funds
Share capital
Share deposit
Share deposit adjustment a/c
205.95
1.51
--
684.37 890.34
6.92
0.05
--
23.82
2 Loans/Funds
Secured loans
Unsecured loans
Other Funds: service line/Security
dep.
613.62
97.45 711.07
1373.48
2062
3.20
45.31
Total I 2974.90 100
II
1
Fixed Assets
 Gross block
 Less: Depn.
 Net block
2323.52
781.68 (26.27)
1541.83
77.09
51.82
2.59
1618.93 54.41
 Sundry Debtors
117.19
1884.40
273.08
3.93
63.34
9.17

276.07
180.97
9.27
6.08
Total 2 2731.73 91.82
Total II 2974.90 100

1 Sources of Funds
Share capital
Share deposit
205.95
1.51
931.96 1137.92
6.38
0.04
28.89
2 Loans/Funds
Secured loans
Unsecured loans
dep.
424.65
92.06 516.72
1570.13
13.16
2.85
48.68
Total I 3224.78 100
II
1
Fixed Assets
 Gross block
 Less: Depn.
 Net block
2792.46
858.97 (26.63)
1933.48
175.52
59.95
5.08
2109.01 65.03
 Sundry Debtors
112.72
1484.99
406.75
279.10
3.49
46.04
12.61
8.61

 Other current assets 348.96 10.82
Total II 2632.53 81.57
Total II 3224.78 100

1 Sources of Funds
Share capital
Share deposit
205.95
1.51
906.38 1112.35
5.23
0.04
24.37
2 Loans/Funds
Secured loans
Unsecured loans
dep.
509.32
295.97 805.30
1740.13
13.92
8.09
48.35
Total I 3657.79 100
II Application of Funds
Fixed Assets
 Gross block
 Less: Depn.
 Net block
 Investments
3505.34
945.48
2559.85
137.89
1.00
69.98
3.76
0.02
2698.75 73.76
Current Assets, loans & advances
 Sundry Debtors
147.98
1405.80
4.04
38.43

59.54
171.88
562.35
1.62
4.29
15.37
Total II 2347.57 60.18
Profit and Loss a/c 362.47 9.92
Total II 3657.79 100

1 Sources of Funds
Share capital
Share deposit
205.95
210.01
985.88 1401.85
4.89
4.99
23.41
2 Loans/Funds
Secured loans
Unsecured loans
dep.
330.47
647.15 977.62
1832.50
7.84
15.36
43.51
Total I 4211.97 100
II Application of Funds
Fixed Assets
 Gross block
 Less: Depn.
 Net block
 Investments
3908.23
1087.43
2820.80
161.47
1.00
66.97
3.88
0.02
2983.27 70.83
Current Assets, loans & advances
 Sundry Debtors
105.01
1791.97
2.41
42.55

110.81
171.60
398.27
2.63
4.07
9.46
Total II 2577.67 61.20
Profit and Loss a/c (350.20) (8.36)
Total II 4211.97 100

Table: 1
Table showing the Share capital (Rs in Crore)
Year Amount % to total sources
2005-06 205.95 8.48
2006-07 205.95 6.92
2007-08 205.95 6.38
2008-09 205.95 5.23
2009-10 205.95 4.89
Analysis:
It shows that percentage to the total sources of fund decreasing in every
year though the amount of share capital remains same.

Graph: 1
Graph showing the Share capital (Rs in Crore)
Interpretation:
Because of increasing in borrowings of funds the percentage of share
capital fund is decreasing.
2005-06 2006-07 2007-08 2008-09 2009-10
8.48
6.92
6.38
5.23
4.89
Sharecapital
% to total sourcess

Table: 2
Table showing share deposit (Rs in Crore)
2005-06 4.76 0.19
2006-07 1.51 0.05
2007-08 1.51 0.04
2008-09 1.51 0.04
2009-10 210.01 4.99
Analysis:
The above table reveals that the share deposit to the BESCOM was 4.76
crores in the year 05-06 at the percentage of 0.19, Then in 06-07,07-08 & 08-09 it
decreased to 0.05%, 0.4%,0.4%. But in 09-10 it increased to 4.99%.

Graph: 2
Graph showing share deposit (Rs in Crore)
Interpretation:
Share deposit was decreased up to 0.4% but, in the year 2009-10 it
increased to 4.99% because of GOK has distributed Rs 210 crores towards Equity
investment.
2005-06 2006-07 2007-08 2008-09 2009-10
Percentage 0.19 0.05 0.04 0.04 4.99
0
1
2
3
4
5
6
ShareDeposits

Table: 3
Table showing in Reserves and Surplus ((Rs in Crore)
2005-06 511.67 21.07
2006-07 684.37 23.82
2007-08 931.96 28.89
2008-09 906.38 24.37
2009-10 985.88 23.41
Analysis:
The above table shows that in the year 05-06 reserve and surplus was Rs
311.67 Crores i.e.,21.07% of total assets, It increased in 06-07 and 07-08 at the
rate of 23.82%, 28.89% But in 08-09 and 09-10 it decreased to 24.37% &
23.41%.

Graph: 3
Graph showing Reserves and Surplus ((Rs in Crore)
Interpretation:
Reserves and surplus is increased year to year up to 2008 i.e., 28.89%
increased but from 07-08 to 09-10 its keep on decreasing. It shows that the level of
operating efficiency of BESCOM is decreasing and showing satisfactory.
2005-06,21.07
2006-07,23.82
2007-08,28.89
2008-09,24.37
2009-10,23.41

Table: 4
Table showing secured loans ((Rs in Crore)
Year Amount % to total
sources
2005-06 432.86 17.82
2006-07 613.62 20.62
2007-08 424.65 13.16
2008-09 509.32 13.92
2009-10 330.47 7.84
Analysis:
The above table shows that in the year 05-06 secured loan was 17.82%, In
2006-07 it increased to 20.62%, Then in 07-08 decreased to 13.16%, in 08-09
again increased to 13.92%, But in 09-10 decreased to 07.84%.

Graph: 4
Graph showing secured loans ((Rs in Crore)
Interpretation:
Secured loans is goes on decreasing except in the year 2007 and 2009 i.e.,
20.62% & 13.92 but it is decreased to 7.84% in the year 2010 . because of increase
in total Liability of the company.
2005-06,17.82
2006-07,20.622007-08,13.16
2008-09,13.92
2009-10,
7.84

Table: 5
Table showing unsecured loans (Rs in Crore)
2005-06 76.12 3.13%
2006-07 97.45 3.28%
2007-08 92.06 2.85%
2008-09 295.97 8.09%
2009-10 647.15 15.36%
Analysis:
The above table shows that in the year 05-06 unsecured loans rate was
3.13%, in 06-07 its increased to 3.28%, in 07-08 it decreased to 2.85%, From 08-
09 to 09-10 it increased to 8.09% and 15.36%.

Graph: 5
Graph showing unsecured loans (Rs in Crore)
Interpretation:
Unsecured loans are increased in the year 2010 i.e., 15.36%. When
compared previous year its double increased.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2005-06 2006-07 2007-08 2008-09 2009-10
3.13% 3.28% 2.85%
8.09%
15.36%
Unsecuredloan
year

Table: 6
Table showing other funds ((Rs in Crore)
2005-06 1196.41 49.31
2006-07 1373.48 45.31
.2007-08 1570.13 48.68
2008-09 1740.13 48.35
2009-10 1832.50 43.51
Analysis:
In the above table it shows that, In 05-06 other funds rate of % was 49.31,
in 06-07 decreased to 45.31% , In 07-08 again increased to 43.68%, In 08-09 and
09-10 decreased to 48.35% and 43.51% respectively

.
Graph: 6
Graph showing other funds ((Rs in Crore)
Interpretation:
Other funds are decreased compared to last 2 year. That means borrowing
from outside is reduced in 2009 & 10 i.e., it is reduced up to 48.35%. & 43.51
respectively.
40
41
42
43
44
45
46
47
48
49
50
2005-06 2006-07 2007-08 2008-09 2009-10
49.31
45.31
48.68
48.35
43.51
Otherfund
Year

Table: 7
Table showing fixed assets (Rs in Crore)
Analysis:
Above table shows the fixed assets of company is increased starts from 05-
06 and continued to 06-07, 07-08, 08-09 with 52.72%, 54.41%,65.03%, 73.74%
But in 09-10 it decreased to 70.88%.
application of
fund
2005-06 1279.99 52.72
2006-07 1618.93 54.41
2007-08 2109.01 65.03
2008-09 2697.75 73.74
2009-10 2985.27 70.88

Graph: 7
Graph showing fixed assets (Rs in Crore)
Interpretation:
Fixed assets are increased year to year until to 2009 but, reduce the fixed
assets from 73.74% to 70.88%. It shows that the long-term strength is satisfactory
and equities are effectively utilized in capital assets.
0
10
20
30
40
50
60
70
80
2005-06
2006-07
2007-08
2008-09
2009-10
52.72 54.41
65.03
73.74
70.88
Fixedassets
Year

Table: 8
Table showing net current assets ((Rs in Crore)
application of fund
2005-06 1147.80 47.28
2006-07 1355.97 45.59
2007-08 1115.77 34.97
2008-09 596.57 16.32
2009-10 350.88 8.33
Analysis:
Above table shows the net current assets of the BESCOM was 47.28% of total
asset, But in 06-07, 07-08, 08-09 and in 09-10 it decreased to 45.59%, 34.97%, 16.32%
and 8.33% respectively.

Graph: 8
Graph showing net current assets ((Rs in Crore)
Interpretation:
Current assets are slightly decreased year to year i.e., in 2006 it was
47.28%, and then it decreased to 8.33%. It shows that the weakening of working
capital position of the company.
Percentage
0
10
20
30
40
50
2005-06 2006-07 2007-08 2008-09 2009-10
NetCurrentAssets
YEAR

Table: 9
Table showing current liabilities and provisions (Rs in Crore)
application of fund
2005-06 1293.20 53.26
2006-07 1375.76 46.24
2007-08 1516.76 43.03
2008-09 1750.02 47.84
2009-10 1700.87 40.38
Analysis:
Above table shows the net current liability and provision was 53.26% in 05-
06, and in 06-07, 07-08 decreased to 46.24% and 43.03%, But in 08-09 increased
to 47.84%, in 09-10 decreased to 40.38%.

Graph: 9
Graph showing current liabilities and provisions (Rs in Crore)
Interpretation:
Current liabilities decreased in every year except the year 2009(47.84).
Even it’s decreased in 2010, its having 40.38% of total liability. It shows the
weakening of working capital position in BESCOM.
0
10
20
30
40
50
60
2005-06 2006-07 2007-08 2008-09 2009-10
53.26
46.24
43.03
47.84
40.38
Curentliabilityandprovisons
YEAR

Table: 10
Table showing Sundry Debtors (Rs in Crore)
application of fund
2005-06 1858.64 72.51
2006-07 1884.40 63.34
2007-08 1484.99 46.04
2008-09 1405.80 38.43
2009-10 1791.97 42.55
Analysis:
The above table shows that, there were 72.51% of sundry debtors to the
total application of fund in 05-06 & it decreased year by year till 08-09 to 38.43%
& increased in 09-10 to 42.55%.

Graph: 10
Graph showing Sundry Debtors (Rs in Crore)
Interpretation:
Sundry debtors are decreasing year to year i.e., 72.51% in 2006 but its
increased its sundry debtors rate in 2010 i.e., 42.55%.
0
20
40
60
80
2005-06
2006-07
2007-08
2008-09
2009-10
72.51
63.34
46.04
38.43 42.55
SundryDebtors
Year

Table: 11
Table showing loans, advances and deposits (Rs in Crore)
application of fund
2008-06 143.99 5.93
2006-07 276.07 9.27
2007-08 279.10 8.61
2008-09 171.88 4.29
2009-10 171.60 4.07
Analysis:
The above table shows that loans, advances & deposits were 5.93% to the
total application of fund then it increased to 9.27%, in 07-08 it starts to decrease
and continue to 08-09 & 09-10 that is 8.61%, 4.29% & 4.07% respectively.

Graph: 11
Graph showing loans, advances and deposits (Rs in Crore)
Interpretation:
Loans, advances and deposits are decreased by 4.07%. this shows that the
company has reduced the external capital in its capital structure. This is also a
good sign of improvement.
0
1
2
3
4
5
6
7
8
9
10
2008-06 2006-07 2007-08 2008-09 2009-10
5.93
9.27
8.61
4.29 4.07
Loans,Advances&Deposits
Year

Table: 12
Table showing provision for Depreciation on fixed assets (Rs in Crore)
application of fund
2005-06 788.99 32.49
2006-07 781.68 26.27
2007-08 858.97 26.63
2008-09 945.48 25.84
2009-10 1087.43 25.81
Analysis:
The above shows that in 05-06 provision for depreciation on fixed assets
was 32.49%, In 06-07 it decreased to 26.27%, and increased to 26.63% in 07-08,
and decreased to 25.84%. 25.81% in 08-09 % 09-10 respectively.

Graph: 12
Graph showing provision for Depreciationon fixed assets (Rs in Crore)
Interpretation:
This table shows that there is a continuous decrease in provision for
depreciation on fixed assets. This shows that the company is not effectively
utilizing the current earnings of the company.
2005-06
2006-07
2007-08
2008-09
2009-10
32.49
26.27 26.63
25.84
25.81
DepriciationonFixedasset
Year

Table: 13
Table showing cash and bank balances (Rs in Crore)
application of fund
2005-06 200.86 8.27
2006-07 273.08 9.17
2007-08 406.05 12.61
2008-09 59.54 1.62
2009-10 110.81 2.63
Analysis:
The above shows that in 05-06 cash and bank balance was 08.27% of total
assets. In 06-07 increased to 09.17%, in 07-08 increased to 12.61% but it
decreased to 1.62% in 08-09, and in 09-10 increased to 2.63%.

Graph: 13
Graph showing cash and bank balances (Rs in Crore)
Interpretation:
When compared to last year Cash and bank balances of the company is
increased,. But its very lesser compared to preceding previous year.
8.27
9.17
12.61
1.62
2.63
2005-06 2006-07 2007-08 2008-09 2009-10
Percentage

Table: 14
Table showing profit and loss (Rs in Crore)
Year Amount
2005-06 162.88
2006-07 213.19
2007-08 225.76
2008-09 -362.47
2009-10 -350.88
Analysis:
The above table shows that BESCOM earns 162.88 crores in 05-06 and
increased to 213.19 & 225.76 Crore but in 08-09 and 09-10 it’s incurring a loss of
Rs 362.47&350.88 crores.

Graph: 14
Graph showing profit and loss (Rs in Crore)
Interpretation:
BESCOM was good profit earning company till the year 2008 but from
2009 its incurring a loss. In previous year loss was 350.88 Lakhs
-400
-300
-200
-100
0
100
200
300
2005-06 2006-07 2007-08 2008-09 2009-10
162.88
213.19 225.76
-362.47 -350.88
ProfitorLoss
Year

CHAPTER VI
SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSIONS
Findings
 Share capital percentage is continuously decreased compare to previous
years. It is decreased to 4.89% in the year 2010. It shows that negligence of
share holders in improving or in investing the shares to the company.
 Reserves and surplus is increased from 906.38 lakhs to 985.88 lakhs but it
is reduced in the overall % of total assets and it decreases from 24.37% to
23.41%.
 Borrowings are decreased to 4.07% this shows that the company has
reduced its barrowings and capital structure.
 Working capital position of the company is not good because its current
assets (i.e.876.8 lakh) are more than its current liabilities (i.e.1700.81 lakh).
 Financial performance of the company is satisfactory, because its
investment in fixed assets and on long-term investments are more than 50%
of total balance sheet values.
 There is loss in BESCOM in the year 2009 (362.47 lakhs) and in the year
2010 it occurs a loss of Rs.350.88 lakhs.
 The major thing is , the GOK has distributed the 210 crorers as equity
investment of RS.32 crore and interest free loan of Rs.118 crore.

 There is increase in cash and bank balance i.e. 595.43 lakhs to 1108.14
lakhs which doubled when compared to last year. It shows the BESCOM
has deposits with the bank and having good cash position.

Suggestions
 The company has to take reasonable steps to reduce or control the rate of
increase in operation expense of the company.
 The company has to use its existing resources on fixed assets effectively for
further improvement on earnings in operating income.
 Fixed assets occupied more than 50% of total assets of the company. Proper
steps should be taken to maintain them properly and it is observed that the
fixed assets are not being utilized properly. It is advisable for the company
to go for maximum utilization of the available resources.
 No doubt, the working capital position of the company is not good because
of decrease in current assets and increase in current liabilities so, proper
steps should be taken by the company to improve the working capital
position of the company.
 We know very well that returns generated from investment on current
assets and are very less and further it is just for short-term period. So, it is
advisable to the company to concentrate on this particular issue to further
strengthen its operating efficiency.
 From last year i.e. from 2009 company is incurring loss so, it is advisable to
the company in increasing its profit through investment in long-term assets
utilizing resources of the company properly and effectively.

 Long-term in the capital structure of the company is negligible. This shows
that the company has not capitalized the available debt facility. This is
because debt is the cheapest source of finance than any other sources.
 Company has sufficient precision for depreciation fixed assets. It is
advisable for maximum utilization of this particular sources.
 It is also advisable to the company to improve its cash and bank balances of
the company.
 Instead of keeping resources and surplus as idle, it is advisable for further
utilization of this source of finance.

Conclusion
The company has not favorable in working capital position in all the past 5 years.
Because continuous decrease in current assets of the company. Long-term
financial strength of the company is excellent because investment on fixed assets
and long-term investments are more than 50% of total assets of the company. But
this resource is not properly utilized in making/earning profit in the company.
The operating performance of the company is satisfactory in all the year except in
2009 2010. The company is running under the loss.
In the overall financial performance of the company except in 2009 & 2010 was good in
all last 3 years The step should be taken by the company to improve the operating
efficiency and financial position of the BESCOM company.

Yash full

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