A Study on Performance Appraisal of Dakshin Haryana Bijli Vitran Nigam Limited

Electricity is a critical input for all kinds of economic activities like industrial, agriculture, and commercial and has a vital role to play in economic development and wealth generation for a country. It is also used as a source of light, heat and air-conditioning and as the motive force in the modern household appliances, thereby dramatically improving the quality of life. Electricity also has an overall positive impact on education, health and the environment – in reducing both emission and the pressure on forests. Lighting alone could not provide an economical market for electricity because its use was confined to the hours of darkness. Successful commercial generation depended upon the development of other uses for electricity and particularly on electric traction. There are number of studies covering the working of the State Electricity Board’s and their role in the economic development of an economy. Amongst the factors responsible for the financial distress in the past are; average tariff below cost of supply, skewed tariff rates, low revenue share of different consumer categories, theft and high T&D losses. As a result of the skewed tariff pattern, contribution to revenue by different consumer categories became increasingly different from their share in consumption. Only the contribution of the domestic category was in accordance with its share in consumption: for 21% consumption it contributed about 22% to revenue in 1997-98. During the same year share of agriculture in the total sales was 43%, because of its very low tariff, its contribution to the revenue of the utility remained insignificant at 14% of the total revenue. In contrast, industry’s share in consumption was 22% while it contributed 44% of the revenue.

TABLE - 3 Behaviour of Total Assets The productivity performance (ATO) of DHBVNL from 2001 to 2010 is shown by table – 1. The highest net income of the power corporation is ` 5263.64 crore whereas the lowest net income of the Nigam is ` 1575.87 crore. The net income of the Nigam is increasing from 2001 to 2010 continuously whereas fluctuating trend is observed in total assets of the firm. The average amount of total assets is more as compared to the average amount of net income (` 3371.63 crore > ` 2914.68 crore). The ATO (Assets Turnover Ratio) of the Nigam was 0.83, 0.87, 0.95 and 0.83 for 2001, 2002, 2003 and 2004 respectively. The ATO for 2009 and 2010 is 0.77 and 0.63 respectively which are less in comparison of overall average (industry ATO = 0.89). The highest ATO of the DHBVNL is 0.95 for 2003 and 0.63 is the lowest ATO for 2010. The average ATO of the power corporation is 0.92 which is more as compared to the ATO of 2001, 2002, 2004, 2006, 2009 and 2010. The overall average of four corporations is 0.89 which is less in comparison of DHBVN’s ATO. Annual compound growth rate for net income and total assets is 14 per cent which is significant at one per cent level of significance.

Behaviour of Net Profit

Behaviour of Net Income The profitability performance of the DHBVNL is shown by table – 2. The net profit of the corporation for 2001 and 2002 is negative value (` 191.69 crore & ` 75.40). In 2003 and 2004, the Vidyat Nigam Ltd. earned ` 21.32 crore and ` 43.14 crore respectively. The highest loss of the Nigam is `779.01 (loss) for 2010 whereas ` 75.40 is the lowest loss for 2002. The average net profit (loss) of the Corporation is ` 181.51 crore which is loss. The highest net income of the Corporation is ` 5263.94 crore whereas the lowest income of the Nigam is ` 1575.87 crore. The fluctuating trend is observed in net income of the Nigam from 2001 to 2010. The average income of the DHBVNL is `

and -0.15 respectively. The average NPR is -0.05 which is negative. Annual compound growth rate for net profit and net income are 15 and 14 per cent which is significant at one per cent level of significance.

The secured borrowing performance (SBP) of the corporation is shown by table - 3. The fluctuating trend is observed in secured loan of the Nigam from 2001 to 2010. The highest secured loan is ` 2631.26 crore whereas the lowest secured loan is ` 16.26 crore for 2001. The average amount of secured loan is ` 481.56 crore which is more as compared to the secured loan of 2001 to 2007. The fluctuating trend is observed in total assets of the Nigam from 2001 to 2010. The highest amount of total assets is ` 8314.68 crore whereas the lowest amount of total assets is 1910.10 crore for 2001. The average amount of total assets is 3371.63 crore which is eight times more as compared to the average amount (481.56 crore) of secured loan. The SBP of the Nigam For 2001 is 0.01which is thirty value for SBP of the corporation is t = -1.744 at df = 9 and not significant at 5 percent level of risk. Thus the secured borrowing performance of the Nigam is not significantly changed from 2001 to 2010.

The unsecured borrowing performance of the corporation is shown by table - 4 from 2001 to 2010. The fluctuating trend is observed in unsecured loan of the corporation from 2001 to 2010. The highest amount of unsecured loan is ` 1451.84 crore whereas the lowest amount of unsecured loan is ` 210.21 crore for 2001. The average amount of unsecured loan is ` 629.16 crore which is less as compared to the amount of 2007 (` 631.30 crore), 2008 (` 806.47 crore), 2009 (` 1451.84 crore) and 2010 (` 1226.09 crore). The fluctuating trend is observed in total assets of the Nigam from 2001 to 2010. The highest amount of total assets is 8314.68 crore whereas the unsecured loan of the corporation. The highest USBP of the corporation is 0.28 for 2008 and the lowest USBP is 0.11 for 2001. The average USBP of the DHBVNL is 0.19 which is more as compared to the value of 2001 (0.11), 2002 (0.18), 2004 (0.18), 2005 (0.16), 2006 (0.12) and 2010 (0.15). The t value of the USBP t = -4.342 at df = 9 and significant at 1 percent level of risk. Thus the unsecured borrowing performance of the corporation is highly significantly changed from 2001 to 2010.

Table - 5 shows the depreciation performance of DHBVNL from 2001 to 2010. The fluctuating trend is observed in depreciation performance of the Nigam from 2001 to 2010. The highest amount of depreciation of the corporation is ` 97.01 crore for 2009 whereas `41.74 crore is the lowest amount of depreciation of the power corporation. The average amount of depreciation for ten years is ` 61.62 crore which is more as compared to the depreciation amount

The repair and maintenance performance of DHBVNL from 2001 to 2010 is shown by table - 6. The fluctuating trend is observed in repair and

expenses of the corporation. The average amount of repair and maintenance of the DHBVNL is ` 26.71 crore which is less as compared to the repair amount of 2010 (` 39.71 crore). The gross fixed assets for 2001 is ` 788.12 crore whereas ` 847.19 crore for 2002. The increasing trend is observed in gross fixed assets of the power corporation from 2001 to 2010. The highest amount of gross fixed assets of the corporation is ` 2735.76 crore whereas ` 788.12 crore is the lowest depreciation amount for 2001. The average gross fixed assets of the power corporation is ` 1424.19 crore which is less as compared to GFA (Gross Fixed Assets) of 2010 (` 2735.76 crore). The R & M ratio for all the year under consideration is approximately 0.02. The average R & M ratio is 0.02 which is less as compared to the ratio of 2010. The highest R & M ratio is 0.03 for 2007 whereas 0.01 is the lowest ratio. The R & M ratio is tested through t test where t value is t = -6.00 at df = 9 and significant at 1 % level of risk. Thus, there is significant change is recorded in R & M ratio from 2001 to 2010.

whereas ` 302.47 crore is the average amount of employee expenses. The employee expenses for 2009 is also more as compared to the average amount of employee expenses. The fluctuating trend is observed in employee expenses from 2001 to 2010. The highest net income of the corporation is ` 5263.94 crore whereas the lowest income of the Nigam is ` 1575.87 crore. The fluctuating trend is observed in net income of the Nigam from 2001 to 2010. The average income of the DHBVNL is ` 2914.68 crore which is more as compared to the net income of 2001 to 2010. The average employee expenses f the corporation is 10% of their net income during the period under reference. The employee cost performance for 2001 is 0.10 whereas 0.09 is ECP for 2002. The highest ECP of the power corporation is 0.17 for 2010 whereas 0.06 is the lowest ECP of the DHBVNL. The ECP of the nigam is also tested through t test. The SPSS calculated value for two-tailed test is t = 1.628 at df = 9 which is not significant at 5 % level of risk.

highest total expenses of the corporation is ` 5979.26 crore whereas the lowest total expenses of the corporation is ` 1767.57 crore for 2001. The average amount for total expenses of the Nigam is ` 3083.11 crore for the period under reference for the study. The highest net income of the corporation is ` 5263.94 crore whereas the lowest income of the Nigam is ` 1575.87 crore. The fluctuating trend is observed in net income of the Nigam from 2001 to 2010. The average income of the DHBVNL is ` 2914.68 crore which is more as compared to the net income of 2001 to 2010. The expenses turnover ratio (ETR) of the Nigam for 2001 is 1.12 whereas 1.03 is for 2002. The ETR for 2003, 2004 and 2006 is 0.97, 0.98 and 0.99 respectively which are less than one but near to one. All the other years the ETR is more than one which means that the expenses are more than its income which is not a good indication of the performance. Therefore the corporation earned loss in maximum year under consideration. The t value at two-tailed test is t = 4.76 at df = 9 which is also significant at 1 % level of risk as calculated through SPSS.

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