Haryana Vidyut Prasaran Nigam Limited Costing Manual

Costing Manual

Haryana Vidyut Prasaran Nigam Limited Costing Manual

TABLE OF CONTENTS

S. No 1.1 1.2 1.3 1.4 1.5 1.6 Introduction Objectives and Policies

Section Head

Page Reference 3 3 4 10 14 19

Preparation and Review of Cost Performa D Preparation and Review of Cost Performa F Preparation of Performa C Templates & Formats

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.1

INTRODUCTION
HVPNL is required to maintain Cost Records as per the Performa suggested via notification number G.S.R. 913(E) dated December 21, 2001, also called as Cost Accounting Records (Electricity Industry) Rules, 2001. Costing manual for HVPNL sets out the principles and practice of costing to be applied in preparation of these Cost Records. It is a guiding factor to allocate cost for core as well as non-core activities of the business.

1.2

OBJECTIVES AND POLICIES

Objectives To facilitate preparation of Cost records prescribed by law from time to time

Policies a) Cost records should be prepared and maintained as per prescribed guidelines by law from time to time; b) Preparation of Cost records should be within the timelines prescribed by law (currently 90 days of closure of Financial Year); c) Costing should be done on full absorption basis to identify the full cost; d) Costing process should be transparent with a clear Audit Trial

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.3
1.3.1

Preparation and Review of Cost Performa D

Process Summary

Input
Trial Balance for

Output
Performa D as

Key Controls
Approval of Performa

KPIs for MIS Report

Instances of delay

all units and HVPNL Statement showing Power Transmitted for the year Performa D for last financial year Other Reference Documents Automated Activities

per Cost Accounting Records (Electricity Industry) Rules, 2001

D by Chief Accounts Officer (CAO) Reconciliation of Performa D with Financial Statements

in preparation of Performa D

Notification G.S.R. 913(E) dated December 21, 2001, also called as

Cost Accounting Records (Electricity Industry) Rules, 2001

Preparation of Performa D in ERP environment on the basis of

books of accounts

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.3.2

Process Flowchart

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.3.3

Process Narrative

The activities of Preparation & Review of Cost Performa D for financial year are given below: S. No Activities including controls Responsibility

Receipt of Trial Balance 1 Trial Balance for all units and HVPNL is received from A&R Section within 60 days of closure of financial year. Accounts Officer

Grouping of Ledger codes to Cost Account Heads 2 On the basis of TB ledger codes, Trial Balance for all units are grouped under below mentioned Cost Account Heads: Section Officer

Sale of Power Wheeling of Power Other Income Fuel Cost Repair & Maintenance Sub Stations Repair & Maintenance Transmission Repair & Maintenance Others Wages/Salary & Benefits Admin Overheads Insurance Loss Sales of Fixed Assets Investments Diminution of Value Other Debits/Written Off Grant to HTTS (Capital or Revenue) Rebate Wheeling Prior Period Debits/Credits Depreciation Interest Working Capital or Others Interest Capital Projects

Table given below explains an example of grouping of

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

S. No

Activities including controls Ledger Heads under Repair and Maintenance for all units into Cost Account Heads.
Ledger Head Trial Balance Code 74.1 74.2 74.3 74.4 Repair and Maintenance 74.5 74.6 74.7 74.8 74.9 Code Description Plant and Machinery Building Civil Works Hydraulic Works Line S/C Network Vehicles Furniture/Fixture Office Equipment O&M Y/BARRAGE Cost Account Head

Responsibility

R&M - Sub-Stations. R&M - Others. R&M - Others. R&M - Others. R&M - Transmission Lines. R&M - Others. R&M - Others. R&M - Others. R&M - Others.

(Refer AS.1 for all the Trial Balance Codes to be grouped) Allocation of Expenses 3 Expenses grouped in Step - 2 are allocated to below mentioned sections: Section Officer

Generation Transmission Civil Works Admin Services

(Refer AS.2 Allocation of expenses under various heads)

Basis of Allocation will be as follows

Particulars Sale of Power Wheeling of Power Other Income Fuel Cost Description Income Income Income Expense Basis of Allocation Actual Units Transmitted Actual Actual

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

S. No

Activities including controls

Repair & Maintenance Wages & Salary Admin Overheads Insurance Loss Sale of fixed assets Investment Diminution in value Other Debits Written off Rebate Wheeling Prior Period Debits/ Credits Depreciation Interest W/ Capital & Other Interest Capital Projects Expense Expense Expense Expense Expense Expense Expense Expense Expense Expense Expense Expense Actual Actual Actual Actual Actual Actual Actual Units Transmitted Actual Actual T/ Cost Depreciation N/F Assets

Responsibility

Preparation and Review of Performa D 4 The calculated values for Transmission in Step 3 are plotted under Cost Information head in the Performa D. Previous years values are obtained from Performa D for previous year. The Quantitative Information is mapped in the Performa D from following documents: Section Officer

Section Officer

Statement showing Power Transmitted for financial year Information on Length of Transmission lines from Projects Department. Previous Years Performa D. Senior Accounts Officer

Independent review is performed to assess the correctness of cost as per Performa D, by matching it with consolidated Trial Balance for all the XEN. (Refer AS.3 for Reconciliation Statement of Performa D with consolidated Trial Balance of all XEN)

In case of any variation with the consolidated Trial Balance, the same is reviewed and explained. Final Performa D is authorized by Chief Accounts Officer.

Senior Accounts Officer Chief Accounts Officer

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

Responsibility Matrix

Activity Description Grouping of Ledger codes to Cost Account codes Allocation of Expenses Preparation and Review of Performa D

Section Officer

Accounts Officer

Sr. Accounts Officer

Chief Accounts Officer

Initiate

Review

Authorize

Initiate

Review

Authorize

Initiate

Review

Review

Authorize

Private and confidential

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.4
1.4.1

Preparation and Review of Cost Performa F

Process Summary

Input
Performa C, D

Output
Performa F as

Key Controls
Approval of Performa

KPIs for MIS Report

Instances of delay

and E for the current year Trial Balance for HVPNL

per Cost Accounting Records (Electricity Industry) Rules, 2001

F by Chief Accounts Officer (CAO) Reconciliation of Performa F with Financial Statements

in preparation of Performa F

Other Reference Documents Automated Activities

Notification G.S.R. 913(E) dated December 21, 2001, also called as

Cost Accounting Records (Electricity Industry) Rules, 2001

Preparation of Performa F in ERP environment on the basis of

books of accounts

Private and confidential

10

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.4.2

Process Flowchart

Private and confidential

11

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.4.3

Process Narrative

The activities of Preparation & Review of Cost Performa F for the financial year are given below: S. No Activities including controls Responsibility

Receipt of Cost Performa C and D 1 Cost Performa C and D for the current year are compiled. Accounts Officer

Allocation of expenses to Core/ Non - Core Activities 2 If HVPNL is manufacturing any other product(s) or is engaged in other activities in addition to generation, transmission, distribution or supply of electricity, the particulars relating to utilization of materials, labor and other expenses in so far as they are applicable to such other products or activities shall be categorized as expenses on Non Core activities. Separate Trial Balance is prepared for Core activities as well as Non Core activities. Preparation and Review of Performa F 3 The values of Core activities from Performa C, D and E are plotted in the Performa F along with the values for Non Core Activities segregated in Step 2. The basis of allocation to Core/Non Core Activities is also documented in Performa F. Independent review is performed to assess the correctness of cost as per Performa F, by matching it with Trial Balance. (Refer AS.4 for Reconciliation Statement of Performa F with Trial Balance) 6 In case of any variation with the Trial Balance, the same is reviewed and explained. Final Performa F is authorized by Chief Accounts Officer. Senior Accounts Officer Chief Accounts Officer Section Officer Section Officer

Section Officer

Senior Accounts Officer

Private and confidential

12

Haryana Vidyut Prasaran Nigam Limited Costing Manual

Responsibility Matrix

Activity Description Allocation of expenses to Core/Non Core activities Preparation and Review of Performa F

Section Officer

Accounts Officer

Sr. Accounts Officer

Chief Accounts Officer

Initiate

Review

Review

Initiate

Review

Review

Authorize

Private and confidential

13

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.5
1.5.1

Preparation and Review of Performa C

Process Summary

Input
Performa C for

Output
Performa C as

Key Controls
Approval of Performa

KPIs for MIS Report

Instances of delay

the previous year Trial Balance of BBMB and IPGCL

per Cost Accounting Records (Electricity Industry) Rules, 2001

C by Chief Accounts Officer (CAO) Reconciliation of Performa C with Financial Statements

in preparation of Performa C

Other Reference Documents Automated Activities

Notification G.S.R. 913(E) dated December 21, 2001, also called as

Cost Accounting Records (Electricity Industry) Rules, 2001

Preparation of Performa C in ERP environment on the basis of

books of accounts

Private and confidential

14

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.5.2 Process Flowchart

On the basis of Trial Balance, grouping is done as per cost accounts head by section officer Cost of generation of electricity is computed independently for BBMB and IPGCL and cumulative for HVPN

Trial Balance of BBMB and IPGL reviewed by A&R by Accounts Officer

In case of any variation with the Trial Balance, the same is reviewed and explained

Independent review to assess the correctness of cost as per Performa C by matching it with Trial Balance by Senior Accounts Officer

Performa C is prepared as per cost of Generation as computed by Section Officer

Final Performa C is authorized by Chief Accounts Officer

Private and confidential

15

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.5.2

Process Narrative

The activities of Preparation & Review of Cost Performa C for the financial year are given below: S. No Activities including controls Responsibility

Receipt of Trial Balance 1 Trial Balance of BBMB and IPGCL is received from A&R Section within 60 days of closure of financial year. Accounts Officer

Grouping of Ledger codes to Cost Account Heads 2 On the basis of TB ledger codes grouping is done as per Cost Account Heads: Section Officer

Material/ Fuel Cost Direct Wages Stores and Spares Repair and Maintenance Insurance Depreciation Administrative Overheads Interest and Finance Charges

Computation of Cost of Generation 3 Cost of generation of electricity is computed as per the table below. Cost of generation is computed independently for BBMB and IPGCL and cumulative for HVPN. Further, cost of generation is also computed Per Unit of power generated. Particulars Fuel Cost Direct wages and salaries Stores and spares Repair and maintenance Depreciation Administrative overhead Common pool sale Prior period income Section Officer

Add: Add: Add: Add: Add: Less: Less:

Private and confidential

16

Haryana Vidyut Prasaran Nigam Limited Costing Manual

S. No Less:

Activities including controls Miscellaneous income Cost of generation Selling expenses Interest and finance charges Total cost of generation

Responsibility

Preparation of Performa C 4 Performa C is prepared as per the cost of generation computed in Step 2. Section Officer

Review of Performa C 5 Independent review is performed to assess the correctness of cost as per Performa C, by matching it with Trial Balance. In case of any variation with the Trial Balance, the same is reviewed and explained. Final Performa C is authorized by Chief Accounts Officer. Senior Accounts Officer

Senior Accounts Officer Chief Accounts Officer

Private and confidential

17

Haryana Vidyut Prasaran Nigam Limited Costing Manual

Responsibility Matrix

Activity Description Allocation of expenses to Core/Non Core activities Preparation and Review of Performa F

Section Officer

Accounts Officer

Sr. Accounts Officer

Chief Accounts Officer

Initiate

Review

Review

Initiate

Review

Review

Authorize

Private and confidential

18

Haryana Vidyut Prasaran Nigam Limited Costing Manual

1.5

Templates and Formats

Description Grouping Chart Allocation sheet Reconciliation Statement of Performa D with consolidated Trial Balance of all XEN Performa D Reconciliation Statement of Performa F with Trial Balance Performa F

Frequency Yearly Yearly

Preparer Section Officer Section Officer

Reviewer Accounts Officer Accounts Officer

Approver Sr. Accounts Officer Sr. Accounts Officer

Template

Yearly

Section Officer

Accounts Officer

Sr. Accounts Officer Performa D as per Cost Accounting Records (Electricity Industry) Rules, 2001

Yearly

Section Officer

Sr. Accounts Officer

Chief Accounts Officer Sr. Accounts Officer Chief Accounts Officer Chief Accounts Officer

Yearly

Section Officer

Accounts Officer

Yearly

Section Officer

Sr. Accounts Officer

Performa C

Yearly

Section Officer

Sr. Accounts Officer

Performa F as per Cost Accounting Records (Electricity Industry) Rules, 2001 Performa C as per Cost Accounting Records (Electricity Industry) Rules, 2001

Private and confidential

19