C&D Reading Material - Rural Electrification Corporation Ltd.

National Training Program for C&D Employees
Variant – III
“Financial Management, Stores
Accounting & Office Administration”
REFERENCE MATERIAL

National Training Programme for C&D employees
Variant III
FINANCIAL MANAGEMENT,
STORES ACCOUNTING AND
OFFICE ADMINISTRATION
Reference Material
Prepared by
CIRE Faculty and Consultants
Organized by
CENTRAL INSTITUTE FOR RURAL ELECTRIFICATION
of
Rural Electrification Corporation Ltd
(A Government of India Enterprise)
Shivarampally, NPA Post, Hyderabad – 500 052
Phones Office: 040-2401-8583, 2401-8584, Hostel: 2401-7252
Fax : 040-2401-5896, E-mail : cire.rec@gmail.com
Regd. Office: Core-4, SCOPE Complex, 7 Lodi Road, New Delhi –110 003

Sl.
No.
INDEX
Topic
Page
1 Introduction 1
2
Electricity Distribution Company –
Functions
No.
2-5
3 Electricity Act 2003 6-11
4
5
Rajiv Gandhi Grameen Vidyuthikaran
Yojana (RGGVY)
Accelerated Power Development and
Reforms Programme (APDRP)
12-19
20-23
6 Work Execution 24-30
7 Revenue Management 31-43
8
9
Financial Accountancy & Budgetary
Control
Stores Management And Accounting
Section
44-99
100-119
10 Service Regulations 120-131
11 Office Procedures 132
12 Pension 133-143
13 Pay Bills & TA Bills 144-157
14 Disciplinary Regulation 158-163
15 Consumer Service and Care 164-165
16 Motivation 166-170
17 Communication Skills 171-172
18 Stress Management 173-177
19 Right to Information Act 178-179
20 Procurement contracts 180-186
21 CVC Guidelines in Procurement contracts 187-191
22 Office Automation Equipments 192-198

C&D Employees:
CHAPTER-1
Introduction
Large number of non-executives in secretarial staff, accounts wing, technical
staff in non-executives and Class-IV In Power Distribution Companies are
categorized as C&D employees. The UDCs, LDCs, Stock Verifiers, Store Clerks,
Typists etc. are the ministerial staff. Helpers, Linemen, Line Inspectors,
Electrician, Sub-station Operators, Consumer Complaint Attendants, Meter
Readera fall under the technical staff whereas Peon, Chowkidars, Jamadar setc.
belong to Class-IV employees.
National Training Program for C&D employees:
A comprehensive plan titled as, “National Training program for C&D
employees’ aiming at skill upgrades of the C&D employees working in Power
Distribution companies in the Country is approved by the Ministry of Power,
Government of India, with Rural Electrification Corporation Limited as the
nodal agency for implementation. The program will run through the
remaining period of 11 th five year plan.
The program envisages imparting training to around 75,000 Group C&D
employees in association with various power distribution companies. Among
many other things, it provides for the development of course ware, training of
the faculty, partial financial support to the power companies/empanelled
training institutes as the case may be. The component of training program
delivery consists of the following objectives.
Objectives:
Identify three or four major categories under the C&D category of
employees in power distribution companies, and design custom made
training programmes for these employees
Develop reference material and other instruments necessary to conduct
these training programmes.
Identify and empanel the power utilities and the qualifying training
institutions under the power utilities or otherwise to deliver the training
programmes.
Develop an MIS as an online portal to capture and report updates and also
serve as a platform to provide information to all concerned.
This course is intended for Non-executives category of C&D employees i.e,
LDCs/UDCs/Typists/Accountants/Store-keepers/Store Clerks and such
office assistants. It contains useful information on various topics such as Works
Execution, Revenue Management, Financial Accounting and Budget Control,

Human resources development.

CHAPTER-2
ELECTRICITY DISTRIBUTION COMPANY- FUNCTIONS
DISTRIBUTION SYSTEM
Distribution is a network of lines, receiving Power at 66 Kv/33 Kv and
derating to 11 Kv, and 440 volts and supplying Power to customers
The distribution is divided into two divisions
1. Primary Distribution: Primary Distribution is the network at 11 KV
emanating
from 33/11 Kv SS or 66/11 KV SS
2. Secondary Distribution: It is the network operating at utilization
voltage i.e. 440v/220 volts at consumer premises.
CUSTOMER:
One who receives Power supplied by Licensee (Power Co) at
appropriate tariff.
At what voltages customer gets Power in a Distribution:
• 33KV
• 22KV
• 11 KV
• 440 volts
General Terms Used in Distribution:
1. CURRENT: Current is measured in Amps. The Ampere is the basic unit of
electric current. It is that current which produces a specified forces between
two parallel wires.
2 VOLTAGE: It is measure of electric potential. A potential of one volt appears
across a resistance of one ohm when current one Amp flow through that
resistance.
3. RESISTANCE: Voltage
Current
The unit of resistance is ohm (Ώ)
4. KILOVOLT AMPERE: (KVA): It is the product of Kilovolts and Amps. This
measures the electrical Load on a Circuit or a System.
For Single Phase Circuit KVA: Voltage x Amps/1000
For Three Phase Circuit KVA: √13 x Voltage x Amps/1000

5. KILOWATT (KW) ACTIVE POWER`:
It is the active power of work producing Part
For Single Phase Power (KW): Volts x Amps x Power Factor
1000
For 3 Phase: Power Kw = √3 x Volts x Amps x Power Factor
1000
POWER FACTOR: it is the ratio between KW and KVA.
Power Factor = Kw
KVA
6. KILOWATT HOUR: (Kwh): It is the energy consumed by 1000 watts in one
hour. If
1 kw of electrical equipment is operated for one hour, it would consume 1
kwh of
energy (one unit)
7. MAXlMUM DEMAND: It is highest average KVA recorded with in a month.
The
demand is measured using trivector meter Digital Meter.
8. POWER TRANSFORMER: At 33 KV
It receives Power at 33 KV and derate to 11 KV
Capacities of Power Transformers: 10 MVA, 8 MVA, 5 MVA, 3.15 MVA, 1.6
MVA
9. Distribution Transformer: it receives Power at 11 KV and derates to 4 33
Volts
ELECTRICITY DISTRIBUTION COMPANY
1. What is Electricity Distribution Company:
• It is a company having license and distribute power to various categories of
customers in the area at tariff fixed by Electricity Regulatory Commission
and responsible for energy purchased, and sold.
2. Who will be the Head of Distribution Company
• Distribution Company will be headed by Chairman - Managing Director
with 3-4 Directors.
3. What is the role of Distribution Company
• Distribution Company purchases power from Transco National Grid
and sell to Customer, maintain quality and reliable supply to Customers
4. Administration of Distribution Co

a. Distribution Company is divided in to Zones headed by Chief Engineer
Zone
b. Each Zone is divided into Circles, headed by Superintending Engineers
c. Each Circle is divided in to Divisions, headed by Divisional
Engineer/Executive
Engineers
d. Each Division is divided into Sub-Divisions, headed by Asst. Divisional
Engineer/Sub-Divisional Engineer
e. Each sub-division is divided into sections headed by Assistant
Engineer/junior Engineer. Each section comprising of average 6000-
7000 connections.
FUNCTIONS OF ELECTRICITY DISTRIBUTION COMPANY
• Purchase of Power from Transco/ National Grid
• Distribution of Power to Customers
• Accounting of Energy (input Units) purchased
• Accounting of Energy (Sales) sold to customers
• Maintaining company assets i.e. No. of 33/11 KV Sub-Stations, 33 KV
network length, Power Transformer Capacity, 11 KV network,
Distribution Transformers, LT network, Customer metering.
• Planning for Expansion of substation Capacity
• New sub-stations, lines, additional transformers etc.
• Good Customer Service
• Periodical review of Distribution System
1. Line Losses
2. Overloaded Distribution Transformers
3. Overloaded HT Lines
4. Over loaded Substations
5. Revenue Collections
6. System Defects
7. Low Voltage Pockets
8. Purchase of Line material, and Equipment
9. Execution of new Sub-Stations, Lines
10. Providing Quality Metering to Customer
11. Maintaining Quality and reliable Power to Customer
12. Providing training to employees for upgrading their skills.
13. Execution of new Sub-Stations, Lines
14. Providing Quality Metering to Customer
15. Maintaining Quality and reliable Power to Customer
16. Providing training to employees for upgrading their skills.

FUNCTIONS OF DISTRIBUTION SECTION
A. Distribution Section is having workload of average 6000-7000 customers
1. Who will head the Section: Assistant Engineer/Junior Engineer will head the
Section
2. What are the functions carried out in section
a) Maintaining Assets of Section i.e. length of 33 kv line, No. of Poles,
Power Transformers, 11 KV lines, Distribution Transformers and LT
lines, Meters etc.
b) Maintaining and up dating route maps of 33 KV, 11kv and LT Lines
with Distribution Transformers
c) Customer index
d) Maintaining Equipment registers Power Transformers, Distribution
Transformers
e) O&M of 33/11 Kv Sub-station
f) Maintenance of Lines, and Equipment
g) Monthly meter reading, billing and Collections
h) Peak Load Average readings of DTRS
i) Maintaining fuse call centre
j) Customer Care
k) Releasing New Connections
l) Execution of Extension Works
m) Study on losses and Planning for revamping
• M. I.S. reporting to higher-ups
• Arresting Pilferage
• Proper allocation of work to O&M Staff
• Guiding employees, workers on safety precautions
• Educate Employees, workers on System Losses
• Educate Customer on Energy Conservation
• Educate Workers, employees about Best Practices in Operation and
Maintenance of System.

CHAPTER -3
ELECTRICITY ACT 2003
Its content supercedes and consolidates the provisions of
a. The Electricity Act 1910
b. The Indian Electricity Act 1948
c. The Electricity Regulatory Commission Act 1998
Brief discussion of the above acts
Electricity Act 1910 :-
This act regulates
1. License
2. Works
3. Supply
4. Transmission & Usage of Energy by non licensee
5. Administration and Rules
6. Criminal offenses and Procedures
• Electricity Act 1948
This act rationalises the production and supply of Electricity.
It enacts
a. The Central Electricity Authoirity
b. State Electricity Boards, Transmission companies, Generating companies
c. Powers & duties of State electricity boards, transmission companies and
generation companies
d. The works and trading procedures of Board and companies
e. Boards, Finance, Accounts and Audits
The Electricity Regulatory Commission Act 1998
This Act provides
1. Establishment of Central Electricity Regulatory commission and State
electricity commission
2. Central and State Transmission Utilities

3. Rationalization of Electricity tariff
4. Transparent policies regarding subsidies
Electricity Act 2003:-
This Act was enacted by the Parliament with the objective of
Consolidating the laws relating to Generation, transmission,
distribution, trading and use of electricity.
Taking measures conductive to the development of electricity industry.
Promoting competition in electricity industry
Protecting the interests of consumers
Supply of electricity to all areas
Rationalization of electricity tariff
Constituting a central electricity authority, Regulatory commissions and
Appellate tribunals.
• Section 3: The Central Government shall from time to time prepare
National electricity policy and tariff policy in consultation with State
Government and authority for development of power system.
• Section 4: National Policy on stand alone system for rural areas and non
conventional energy systems.
• Section 5: National policy on electrification and local distribution in
rural areas.
The Central Government in consultation with State Government and State
Commission formulate a National policy for rural electrification of Local
distribution in rural areas through franchises.
• Section 6: The Government shall endeavor to supply electricity to all
areas including villages and hamlets.
Generation of Electricity
• Section 7: Any Generating Company may establish operate maintain a
generating station without obtaining License if it complies with technical
standards.
• Section 8: Hydro electric Generation
Not withstanding anything contained in section 7 any Generating
Company intending to set up hydro station shall obtain license
• Section 9: Captive Generation:

A person may construct, maintain or operate a captive plant and
dedicated transmission lines.
He has the right to open access for the purpose of carrying electricity
from generating plant to destination of his use.
• Section 10: Duties of Generating Company:-
The company shall be able to establish, operate and maintain
Generating station, tie lines, substation and dedicated transmission lines.
Generating company may supply electricity to any licensee for
distribution of power.
• Section 12: Licensing
No Person shall
Transmit electricity
Distribute electricity or
Undertake trading in electricity unless he is authorized to do so by a
license issued by appropriate commission.
• Section 13: Power to Exempt:-
The appropriate commission direct by notification that the provision of
section 12 shall not apply to ay load authority or franchises.
• Section 24: Suspension of distribution license:
The appropriate commission may suspend the license if:-
o The distribution licensee failed to maintain uninterrupted supply
of electricity to consumer.
o The distribution licensee unable to discharge the functions.
o Persistently default.
o The distribution licensee broken the terms conditions of license
Transmission of Electricity
• Section 25: The central Government may make region wise demarcation
for the purpose of inter state, regional and interregional transmissions.
• Section 26: The central Government may establish National load
dispatch centre at National level, and at regions- Regional level dispatch
centers.
• Section 30: The State Commission shall facilitate and promote
transmission, wheeling and inter connection arrangements.

• Section 31: The State Government shall establish a centre known State
level Dispatch Centre.
• Section 34: Every transmission licensee shall comply with such technical
standards of operation and maintenance of transmission lines.
• Section 39:
State Transmission Utility
The state Government may notify the Board or a Government Company
as state transmission utility.
The state transmission utility shall not engage the business of trading in
electricity.
Distribution of Electricity
• Section 42:
Duties of Distribution License:-
The License shall develop and maintain efficient, coordinated and
economical distribution system.
The state commission shall introduce open access.
State Commission permits a consumer to receive supply of electricity
from a person other than the distribution license of his area of supply;
such consumer shall be liable to pay an additional surcharge on
wheeling charges.
The license may establish a forum for redressal of grievances of
consumers.
State commission appoints Ombudsman for redressal of grievances of
consumers who aggrieved by non-redressal at Forum
• Section 43. Every Distribution License shall, on an application by the
owner - give supply to the premises with in a month after receipt of
application.
• Section 50: A distribution license may with prior intimation to
appropriate commission, engage in any other businesses.
• Section 53. The Authority may in consultation with State Government
specify suitable measures for
Protecting public from danger (including persons in Generation,
Transmission and Distribution) arising from Generation,
Transmission, Distribution.

Eliminating or reducing the risk of personal inquiry to any
person
• Section 55: No License shall supply electricity except through
installation of correct meter.
• Section 56: Where any person neglects to pay any charge for electricity,
the license may cut off supply after giving 15 days notice.
• Section 57: The appropriate commission specifies standards of
performance.
Tariff
• Section 61: Tariff Regulations
The appropriate commissions shall specify the terms and conditions
determination of tariff
• Offences and Penalties
• Section 135: Theft of electricity:-
Whoever dishonestly
Taps overhead lines, underground cables or service wires of a license
Tampers a meter, loop connection or any other device or a method
which interferes with proper recording of units.
Damage electric meter.
Shall be punishable with imprisonment for a term which may extend to 3years
or with fine or with both.
• Section 153: The State Government may further purposes of providing
speedy trial of offenses referred constitute as many special courts as
may be necessary
A special court consists of a single judge appointed by Government with
concurrence of High court.

CHAPTER-4
RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA
• Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in
April 2005 by merging all ongoing schemes.
• Under the programme, 90% grant is provided by Govt. of India and 10%
as loan by Rural Electrification Corporation (REC) to the State
Governments.
• Rural Electrification Corporation (REC) is the nodal agency for the
programme
The RGGVY Aims at :
• Electrifying all villages and habitations as per new definition
• Providing access to electricity to all rural households
• Providing electricity Connection to Below Poverty Line (BPL) families
free of charge
Infrastructure under RGGVY
• Rural Electricity Distribution Backbone (REDB) with 33/11 KV (or
66/11 KV) sub-station of adequate capacity in blocks where these do not
exist.
• Village Electrification Infrastructure (VEI) with provision of distribution
transformer of appropriate capacity in villages/habitations.
• Decentralized Distributed Generation (DDG) Systems based on
conventional & non conventional energy sources where grid supply is
not feasible or cost-effective.
Implementation Methodology and conditions under RGGVY
• Preparation of District based detailed project reports for execution on
turnkey basis.
• Involvement of central public sector undertakings of power ministry in
implementation of some projects.
• Certification of electrified village by the concerned Gram Panchayat.
• Deployment of franchisee for the management of rural distribution for
better consumer service and reduction in losses.
• Undertaking by States for supply of electricity with minimum daily
supply of 6- 8 hours of electricity in the RGGVY network.
• Making provision of requisite revenue subsidy by the state.
• Determination of Bulk Supply Tariff (BST) for franchisee in a manner
that ensures commercial viability.

• Three tier quality monitoring Mechanism for XI Plan Schemes made
mandatory.
• Web based monitoring of progress.
• Release of funds linked to achievement of pre-determined milestones.
• Electronic transfer of funds right up to the contractor level.
• Notification of Rural Electrification Plans by the state governments.
RGGVY in the XI Plan
• Continuation of "Rajiv Gandhi Grameen Vidyutikaran Yojana Scheme
of Rural Electricity Infrastructure and Rural Household
Electrification", has been sanctioned in the XI-Plan for attaining the
goal of providing access to electricity to all households,
electrification of about 1.15 lakh un-electrified villages and
electricity connections to 2.34 crore BPL households by 2009. The
approval has been accorded for capital subsidy of Rs.28000 crore
during the Eleventh Plan period, at this stage.
• Rural Electrification Corporation (REC) is the nodal agency for the
scheme.
• Ninety per cent capital subsidy is provided towards overall cost of
the projects under the scheme, excluding the amount of state or local
taxes, which will be borne by the concerned State/State Utility. 10%
of the project cost to be contributed by states through own
resources/loan from financial institutions.
• The states will finalize their Rural Electrification Plans in consultation
with Ministry of Power and notify the same within six months.
Rural Electrification Plan will be a roadmap for generation,
transmission, sub-transmission and distribution of electricity in the
state which will ensure the achievement of objectives of the scheme.
• For projects to be eligible for capital subsidy under the scheme, prior
commitment of the States be obtained before sanction of projects
under the scheme for:
i. Guarantee by State Government for a minimum daily supply of 6-8
hours of electricity in the RGGVY network with the assurance of
meeting any deficit in this context by supplying electricity at
subsidized tariff as required under the Electricity Act, 2003.
ii. Deployment of franchisees for the management of rural distribution in
projects financed under the scheme and to undertake steps necessary
to operationalize the scheme.
SCOPE OF THE SCHEME

Under the scheme, projects could be financed with capital subsidy for
provision of:
1. RuralElectricity Distribution Backbone (REDB)
Provision of 33/11 KV (or 66/11 KV) sub-stations of adequate
capacity and lines in blocks where these do not exist.
2. Creation of Village Electrification Infrastructure (VEI)
i) Electrification of un-electrified villages.
ii) Electrification of un-electrified habitations with a population of
above 100.
iii) Provision of distribution transformers of appropriate capacity in
electrified villages / habitation(s).
3. Decentralized Distributed Generation (DDG) and Supply:
Decentralized distribution-cum-generation from conventional or
renewable or non-conventional sources such as biomass, bio fuel,
bio gas, mini hydro, geo thermal and solar etc. for villages where
grid connectivity is either not feasible or not cost effective. The
funding will be on the pattern of 90% subsidy from Government of
India and 10% loan from REC or from own funds of the state/loan
from financial institutions. The Monitoring Committee on RGGVY,
while sanctioning DDG projects under RGGVY, shall coordinate
with MNRE to avoid any overlap. The provision for subsidy
requirement for DDG is Rs.540 crore.
4. REDB, VEI and DDG would indirectly facilitate power requirement
of agriculture and other activities including irrigation pump sets,
small and medium industries, khadi and village industries, cold
chains, healthcare, education and IT etc. This would facilitate overall
rural development, employment generation and poverty alleviation.

5. Rural Household Electrification of Below Poverty Line Households:
i) BPL households will be provided free electricity connections. The rate
of reimbursement for providing free connections to BPL households
would be Rs.2200 per household.
ii) Households above poverty line are to pay for their connections at
prescribed connection charges and no subsidy would be available
for this purpose.
iii) Wherever SC/ST population exists amongst BPL households and
subject to being eligible otherwise, they will be provided connection
free of cost and a separate record will be kept for such connection.
6. The over-all subsidy of components from Paras 1, 2, 3 and 5 (above)
taken together should be kept within 90% of the over-all project cost.
THREE-TIER QUALITY MONITORING MECHANISM
The projects under the scheme will be subject to Quality Monitoring
Mechanism. The details of the Three Tier Quality Control Mechanism are
as under :-
a. FirstTier:
Project implementing agency (PIA) would be responsible for the
first tier of the Quality Control Structure. Further PIA will engage
third party inspection agency, whose responsibility will be to ensure
that all the materials to be utilized and the workmanship confirm to
the prescribed specifications. It will be synchronized with phased
release of funds under RGGVY and inspection and proof of
corrective action will be mandatory requirement for release of
funds. This inspection will cover approx. 50% villages on random
sample basis for each project and 10% pre-despatch inspections of
major materials.
b. Second Tier : Rural Electrification Corporation, will get the
inspection done of the works/materials from its non-field staff and
by outsourcing it. REC may outsource it to retired employees of
State Electricity Boards/State Utilities/ CPSUs. All such reports
should be organized and analyzed by REC through the project
implementation. These individuals would be designated as REC
Quality Monitors(RQM).
The inspection will cover quality checks at pre-shipment stage at the
vendors' outlet of major materials and 10% villages on random
sample basis.

c. Third Tier
1. Independent Evaluators (Individuals /Agency) will be engaged by the
Ministry of Power for evaluation, at random, of supply and erection
under the programme. These persons would be designated as National
Quality Monitors (NQM). It will be the responsibility of the state to
facilitate the inspection of works by the NQM, who shall be given free
access to all administrative, technical and financial records. Evaluation
will cover 1% villages. They shall also report on the general
functioning of the Quality Control mechanism in the District.
2. The Monitors shall submit their report to the Ministry. The reports of
the NQMs will be sent by REC to the RQM for appropriate action
within a period to be specified. In case quality check by RQM or NQM
reveals 'unsatisfactory' work, the implementing agency shall ensure
that the contractor replace the material or rectifies the workmanship
(as the case may be) within the time period stipulated. In respect of
NQM Reports, the REC Quality Coordinator shall, each month, report
on the action taken on each of the pending Reports. All works rated
'unsatisfactory' shall be re-inspected by RQM or NQM after a
rectification report has been received from the REC Quality
Coordinator. REC will designate an Executive Director as in-charge of
the Monitoring system.
3. Recurrent adverse reports about quality of works in a given District /
State might entail suspension of the Programme in that area till the
underlying causes of defective work have been addressed.
4. The REC Quality Coordinator / Third party inspection unit shall be the
authority to receive and inquire into complaints / representations in
respect of quality of works and they would be responsible for sending
a reply after proper investigation to the complainant within 30 days.
The REC for this purpose, shall ensure the following:-
i. The name, address and other details of the REC Quality Coordinator /
third party inspection unit will be given adequate publicity in the State
(including tender notices, websites, etc.) as the authority empowered
to receive complaints.
ii. All complaints shall be acknowledged on receipt (giving registration
no.) and likely date of reply shall be indicated. On receipt of the report,
the complainant shall be informed of the outcome and the action taken
/ proposed.
iii. Complaints received through the Ministry of Power, REC will normally
be sent to the REC Quality Coordinator for enquiry and necessary
action. In case report from an RQM is desired, this shall be furnished
within the time specified. In case an adequate response is not received

within the stated time schedule, the REC may depute an NQM and
further processing will be done only on the basis of NQM report.
iv. The RQC shall make a monthly report to the REC (in a prescribed
format) and the status of action on complaints shall be discussed in the
District Committees.
v. REC could develop a web site for complaints, inspection and
rectification.
5. The Quality Control Mechanism would be governed by the Quality
Control Manual prepared by REC for the scheme.
OTHER FEATURES
Monitoring Committee:
The Monitoring Committee constituted by the Ministry of Power
under the Chairmanship of Secretary (Power), Government of India
will sanction the projects, including revised cost estimates, monitor
and review the implementation of the scheme in addition to issuing
necessary guidelines from time to time for effective implementation of
the scheme.
Cost Norms:
The cost norms for village electrification are as below. 90% grant will
not be applicable to the amount of state or local taxes, which will have
to be borne by the concerned State / State Utility. They would be
released by the Monitoring Committee in exceptional cases to be
analyzed for border area, remote districts etc.
COST NORMS FOR VILLAGE ELECTRIFICATION
1.
Electrification of
un-electrified
village
a In normal terrain 13
b
2.
In hilly, tribal,
desert areas
Intensive
electrification of
already electrified
village
a A normal terrain 4
Cost (Rs. in
lakhs)
18
In hilly, tribal, 6

3.
FRANCHISEE:
desert areas
Cost of electricity
connection to BPL
household
0.022
The management of rural distribution would be through franchisees
who could be Non-Governmental Organisations (NGOs), Users
Association, Panchayat Institutions, Cooperatives or individual
entrepreneurs. The franchisee arrangement could be for system
beyond and including feeders from sub-station or from and including
Distribution Transformer(s). The franchisee should be preferably
input based to reduce AT&C losses so as to make the system revenue
sustainability
Revenue Sustainability:
Based on the consumer mix and the prevailing consumer tariff and
likely load, the Bulk Supply Tariff (BST) for the franchisee would be
determined after ensuring commercial viability of the franchisee.
Wherever feasible, bidding may be attempted for determining the
BST. This Bulk Supply Tariff would be fully factored into the
submissions of the State Utilities to the State Electricity Regulatory
Commissions (SERCs) for their revenue requirements and tariff
determination. The State Government under the Electricity Act is
required to provide the requisite revenue subsidies to the State
Utilities if it would like tariff for any category of consumers to be
lower than the tariff determined by the SERC. While administering
the scheme, prior commitments may be taken from the State
Government regarding
a) Determination to bulk supply tariff for franchisees in a manner that
ensures their commercial viability.
b) Provision of requisite revenue subsidy by the State Government to the
State Utilities as required under the Electricity Act.
c) The capital subsidy for eligible projects under the scheme would be
given through REC. These eligible projects shall be implemented
fulfilling the above conditionalities. In the event the projects are not
implemented satisfactorily in accordance with the conditionalities
indicated above, the capital subsidy would be converted into interest
bearing loans.
The services of Central Public Sector Undertakings (CPSUs) have
been offered to the states for assisting them in the execution of Rural

Electrification Projects as per their willingness and requirement. With
a view to augment the implementation capacities for the programme,
REC has entered into Memorandum of Understanding (MOUs) with
NTPC, POWERGRID, NHPC and DVC to make available CPSUs'
project management expertise and capabilities to states wishing to
use their services. This is being operationalised through a suitable
Tripartite / Quadripartite Agreement.

Distribution Reforms
CHAPTER-5
ACCELERATED POWER DEVELOPMENT AND
REFORMS PROGRAMME (APDRP)
The Distribution Reforms was identified as the key area to bring about the
efficiency and improve financial health of the Power Sector. Ministry of Power
took various initiatives in the recent past for bringing improvement in the
distribution sector. 29 states have signed the Memorandum of Understanding
with the Ministry to take various steps to undertake distribution reforms in a
time bound in the direction of rationalizing the tariffs, States are now better
committed towards subsidy payment to the utilities.
Accelerated Power Development and Reforms Programme (APDRP)
Government of India approved a scheme called "Accelerated Power
Development and Reforms Programme (APDRP) in March 2003 to accelerate
distribution sector reforms. The main objectives of the programme are:
• Reduce Aggregate Technical & Commercial (AT&C) losses
• Bring about commercial viability in the Power Sector
• Reduce outages & interruptions
• Increase consumer satisfactions
Re-structured APDRP (R-APDRP)
The Govt. of India has proposed to continue R-APDRP during the XI Plan with
revised terms and conditions as a Central Sector Scheme. The focus of the
programme shall be on actual, demonstrable performance in terms of sustained
loss reduction. Establishment of reliable and automated systems for sustained
collection of accurate base line data, and the adoption of Information
Technology in the areas of energy accounting will be essential before taking up
the regular distribution strengthening projects.
Programme Coverage
It is proposed to cover urban areas - towns and cities with population of more
than 30,000 (10,000 in case of special category states). In addition, in certain
high-load density rural areas with significant loads, works of separation of
agricultural feeders from domestic and industrial ones, and of High Voltage
Distribution System (11kV) will also be taken up.
Further, town / areas for which projects have been sanctioned in X Plan R-
APDRP shall be considered for the XI Plan only after completion or short
closure of the earlier sanctioned projects.
Scheme :

Project under the scheme shall be taken up in Two Parts. Part-A shall include
the projects for establishment of baseline data and IT applications for energy
accounting/auditing & IT based consumer service centres. Part –B shall
include regular distribution strengthening projects. The activities to be covered
under each part are as follows.
Part –A: Preparation of Base-line data for the project area covering Consumer
Indexing.GIS Mapping, Metering of distribution Transformers and Feeders,
and Automatic Data Logging for all Distribution Transformers and Feeders
and SCADA/DMS system(only in the project area have more than 4 lacs
population and annual input energy of the order or 350 MU). It would include
Asset mapping of the entire distribution network at and below the 11 KV
transformers and include the Distribution transformers and Feeders, Low
Tension lines, poles an other distribution network equipment, It will also
include adoption of IT applications for meter reading, billing & collection;
energy accounting & auditing; MIS; redressal of consumer grievances;
establishment of IT enabled consumer service centres etc. The base line data
and required system shall be verified by an independent agency appointed by
the Ministry of Power. The list of works is only indicative.
Part- B: Renovation, modernization and strengthening of 11kV level
Substations, Transformers/Transformer Centres, Re-conductoring of lines at
11kV level and below, Load Bifurcation, feeder separation, Load Balancing,
HVDS(11kV), Aerial Bunched conductoring in dense areas, replacement of
electromagnetic energy meters with tamper proof electronics meters,
installation of capacitor banks an mobile service centres etc. In exceptional
cases, where sub-transmission system is weak, strengthening at 33kV or 66kV
levels may also be considered.
Eligibility Criteria for R-APDRP assistance :
The States/Utilities will be require to:
1) Constitute the State Electricity Regulatory Commission
2) Achieve the following target of AT&C loss reduction at utility level:
a. Utilities having AT &C loss above 30%: Reduction by 3% per year
b. Utilities having AT&C loss below 30% : Reduction by 1.5% per year
3) Commit a time frame for introduction of measures for better
accountability at all levels in the project area
4) Submit previous year’s AT &C loss figures of identified project area as
verified by an independent agency appointed by Ministry of Power
(MoP) by 30 th June; the independent agency would verify that:
a. All input points are identified and metered for energy inflow
accounting in scheme area
b. All outgoing feeders are to be metered in substation with
downloadable meter

c. Scheme area should be ring fenced i.e. export and import meters for
energy accounting shall be ensured besides segregating the rural
load of the scheme area by ring fencing if not on separate feeder.
d. The above shall provide the input energy and corresponding cash
collected for calculating AT&C losses. The same shall be carried out
for at least for there billing cycles and got verified by the
independent agency. This loss level will be the baseline for
considering conversion of loan into grant for part B projects
5) Devise a suitable incentive scheme for staff linking to achievements of
15% AT&C loss in the project area.
Funding Mechanism :
1) GoI will provide 100% Loan for part A of the R-APDRP schemes
which shall include projects for establishing Base Line data and It
applications for energy accounting/auditing and IT base consumer
services etc.
2) GoI will provide up to 25% (90% for special category States) Loan for
Part B of the R-APDRP schemes which shall include regular
distribution strengthening projects.
3) The entire loan from GoI will be routed through PFC/REC (FIs) for
the respective schemes funded by them
4) The counterpart funding will be done by PFC/REC(FIs) as per its
prevailing policy.
5) PFC/REC will be the prime lender for funding these schemes. In
case of default by the utility the commercial loan of PFC/REC will be
recovered first(being the primary Lender) before that of any othe
lender for funding such schemes.
Conversion of GOI Loan to Grant:
1) The entire amount of GoI loan (100%) for par A of the project shall be
converted into grant after establishment of the require Base-Line
data system within a stipulated time frame and duly verified by
TPIEA.
2) Up to 50% (90% for special category States) loan for Part-B projects
shall be converted into grant in five equal franchise tranches on
achieving 15% AT&C loss in the project area duly verified by TPIEA
on a sustainable basis for a period of five years.
3) If the utility fails to achieve or sustain the 15% AT&C loss target in
a particular year, that years tranche of conversion of loan to grant
will be reduced In proportion to the shortfall in achieving 15%
AT&C loss target from the starting AT&C loss figure

CHAPTER -6
WORKS EXECUTION
The operations of the power utilities are divided primarily into two categories:
I. Construction works
II. Operation and maintenance
The works of the power utilities are divided primarily into the classes below:
1. Capital works including extensions and improvements.
2. Revenue works including O & M and Tools and Plant;
3. Depreciation fund works.
4. Misc. Works, Non-Departmental Works.
Account Number
The accounts of Electrical undertakings are maintained under statute on the
Double Account System. Cost accounts are maintained on the commercial
double entry basis for all transactions. The departmental sub-divisions of
accounts for cost and statistical purposes are known as ACCOUNT
NUMBERS. They are designed for administrative and financial control and
maintenance of commercial accounts. The transactions of the utility have been
classified under various group heads. Main divisions and sub-divisions, with
different account numbers. The account numbers so prescribed are found in
the Manuals of utilities.
Now the commercial accounting systems with the revised account No's as per
the directions of Government of India (Ministry of Energy) is in vogue in the
utilities.
Execution of Works
The strict observance of the classification has to be ensured at all stages in the
execution of works and the following are to be ensured for taking up works.
I. Preparation of estimates;
II. Scrutiny of estimates;
III. Sanction of estimates;
IV. Sanction of working estimates;
V. Preparation of Budgets;
VI. Application of Budgets;
VII. Issue of work order;
VIII. Incurrence of expenditure;
IX. Booking of expenditure;
X. Closing of working orders;
XI. Preparation of completion reports;
Administrative Approval

The proposal for incurring any expenditure in the utility on a work
initiated is formally accepted by the Board / Corporate Office and is called an
Administrative approval. This approval is accorded by the Board / Corporate
office or the officers of the utility to whom powers have been delegated.
All works in the utility require the Administrative approval from the
competent authority and no work can be taken up for execution without such
an approval. The approval in effect is an order to the department to execute
certain work at the stated cost. After Administrative approval for each work a
detailed estimation must be prepared for the Technical sanction of the
competent authority.
Technical Sanction
The order of the competent authority sanctioning a properly detailed
estimate of the cost of Construction repair or maintenance proposed to be
carried out in the department. As its name indicates, it is no more than a
guarantee that the proposals are technically sound and the estimates are
accurately calculated and based on adequate data. No work should be
executed without proper technical sanction.
The estimate should be prepared in the department form in such a way
the detailed accounting against the departmental account numbers is
facilitated. The Abstract should be made up of the individual details of the
estimate.
No provision on account of establishment and general charges and tools
and plant need be included in the working estimates prepared for each
component part of a scheme as they relate only to the works provision of the
project. Necessary provision for these charges should however, be made in the
detailed sanction of the main scheme.
If in working out a detailed estimate, it is found necessary to make any
important deviations for the design for which Administrative approval was
obtained or If the cost will exceed 10% a revised Administrative approval
should be obtained before technical sanction f is accorded.
Estimate and the amounts of sanctions are strictly confidential and it is
forbidden to communicate them to any contractor, piece worker or tenderer.
Whenever there arises necessity for the revision of a sanctioned
estimate, a detailed comparative statement showing the sanctioned and revised
amounts with detailed explanations for all excess or savings under each
account number should accompany the detailed estimate.
Renewals and replacements chargeable to D.R.F. account should not be
included in O&M estimates. Separate estimates, should be got sanctioned for
which following particulars should be furnished with the proposals.
1. Approximate period during which the material now proposed to be replaced
was in

service.
2. Normal guaranteed life of the material.
3. Reasons of their deterioration earlier then the expected time.
4. Whether the material to be replaced could be used elsewhere and if so, the
approximate value that could be assigned there to.
5. The latest date by which the replacement is considered necessary.
The estimates for tools and plant chargeable to Revenue expenses for
each year should be got prepared and sanction obtained. The estimate should
be classified under Tools and Plant, Furniture, Instruments etc., and should
provide for the minimum.
Work Order
Although the primary object of the accounts of works is to exhibit
simply but accurately, the actual cost of works, the rules require the upkeep of
separate accounts for the several component jobs. This is done by means of
work orders for each construction account or operation & maintenance account
and is designed to
1. Control effectively the financial operations in the field with minimum
office work to the Engineer.
2. Analyse the comparative costs of the various jobs.
3. Maintain statistical information required.
The work order system effectively controls the expenditure in the field
even in the case of large works and though the period of Construction is
prolonged.
Work order is an order which contains a descriptive and an estimate of
cost of proposed work and also conveys the executive approval to proceed
with the work, it is an immediate authority for the field to proceed with the
work.
An application for work order should be sent. The particulars of cost of
materials and labour should be exhibited separately. This application is
prepared by the field with reference to the sanctioned estimate and should
ordinarily cover expenditure to be incurred with in a period of a month
beyond the target date fixed of the completion of the work. Initial accounts
however to be maintained by the concerned field officer operating the work
order for the materials drawn etc.,
It is a fundamental rule that the commencement of execution of any
works should not definitely be authorized by any authority unless a work
order is issued by the proper authority to issue a work order are available.
Orders conveying administrative approval or technical sanction or
communication or budget provisions shall not be taken as authority for
commencing the work without the work order. Such orders are communicated
on the implied under, standing that before any expenditure is incurred, work
orders shall be obtained.

Service Connection Works
Even though provision for service connection is included in the
extension, service connection works will be executed on separate work orders.
The estimate for extensions for rural distribution should be split up during
execution into two parts. Viz., Extension /service connection works. Service
connection work should be executed by the O & M staff after receipt of deposit,
agreement and security deposit from the consumer.
In other cases the expenditure chargeable to the consumer should be
worked out as per an estimate and such an amount collected as a service
connection deposit.
No work order for a service connection should be issued without
obtaining the S.C. deposit, Security Deposit and obtaining an agreement where
necessary. Copies of the work order supported by the estimate accompanied
by a detailed report, necessary sketches etc., application, agreement and
deposit receipts should be sent to the office as and when work orders are
issued.
A monthly return of work orders issued should be sent by each sub
division to the Division Office to reach by the First of the month.
The work order should commence only when the consumers wiring is
completed and after the issue of work order which should exhibit separately
materials, and labour as estimated. The field accosts of the work order should
be maintained by the Distribution Engineer. The accounts should show the
estimated quantity of materials and labour in the horizontal columns. The
requisitions should be noted in the vertical columns.
Within six weeks from the date of giving service or earlier, the
completed work order should be closed and sent to the Divisional Office. The
work orders should be sent with a detailed bill of service connection showing
the allocations between the consumer and the Board and supported by
requisitions and Devolutions, so that the accounts of the service may be closed
and any refunds or charges due from the consumer settled promptly.
Certificate of disposal of surplus materials and check-measurement should be
furnished.
Temporary Services H.T. and L.T. The total expenditure incurred to give
the temporary services should be
deposited in advance by the
consumer. The cost should be as
below:
1. Cost of materials Rs.
2. Cost of labour Rs.
3. Total 1 + 2 Rs.
4. Centage charges on item -3 Rs.
5. Total 3+ 4 Rs.

6. Deduct cost of retrievable materials Rs.
7. Add cost of labour of dismantlement Rs.
8. Total to be deposited by the consumer Rs.
The procedure regarding estimates, work orders and issue of bills etc.,
shall be the same in respect of temporary service, as for ordinary except the
meter readings shall be taken at the end of each period, and bill rendered
promptly.
Temporary services are not entitled to 100 feet of service line free on
public road. Ah the charges incurred in respect of temporary service should be
charged against the consumer and no portion of it is charged to the Board
under the provisions.
Subsidary Records and Financial Records:
In the double entry system of book-keeping the books of original entry are:
1. Cash book
2. Stores ledgers (comprising of Requisitions, devolutions, S.R.B's and
S.I.B’s)
3. Journal book including purchase day book.
4. Centralised payments adjustment journal.
5. Bills payable journal.
All expenditures works is recorded month by month in any of the ledgers.
1. Construction operation ledger in cases of Capital works.
2. Operation and maintenance ledgers in cases of work chargeable to revenue
and working expenses.
3. Clearing account ledger in case of remittance, suspense, debit and deposit
transaction.
4. Service connection cost ledger in the case of service connection works.
5. Deposit of works ledger for D.C. works.
The construction accounts of capital works are separated in three main
divisions.
1. Fixed capital accounts.
2. Clearing accounts.
3. Construction operation accounts.
The construction operation accounts are kept in C.O. Ls. These are
subsidiary to the Fixed Capital accounts and some times to clearing accounts.

The construction operation accounts should be classified and separate ledgers
kept for each class of transactions so as to facilitate future reference. These
accounts are designed to control work on the field and to facilitate detailed
costing. These will be on the basis of work orders.
Each work order is given a number by adding to the Fixed Capital
Account or clearing account number concerned such subsidiary heading as
may be applicable to the particular job. Foe each work, sufficient number of
folios will be opened by the main and subsidiary accounts numbers as given in
the sanctioned estimate.
The provisions under each subsidiary account number as per estimate
should be noted on the top of the folio concerned.
The amount of the work orders issued should similarly be noted with
their numbers from the cash book, journal requisition and Revolutions etc.
Both the charges and receipts relating to each work order are posted on the
debit or credit of the folios for the various account numbers in the C.O.L. The
object of the detailed accounts kept in the C.O.L. is to control expenditure on
each distinct unit or component part of a work, in order to facilitate the correct
posting to the fixed capital.
The accounts in the construction ledgers should be closed to FCL as
often as possible but not less than once every half year.
In the case of small works, the control of expenditure against estimates
can be exercised with reference to C.O.L. itself. For this purpose the monthly
progressive figures should be noted in red ink in the C.O.L. In the case of large
construction works, expenditure against estimate is watched with the help of
the Fixed Capital ledger and the C.O.L.
If the execution of works or additions or improvements which will be
accounted for under the F.C.L. main account is likely to be spread over a long
period, the total expenditure against estimate will be watched from schedules
and against each account number from the totals in the F.C.L. and the unclosed
total in the C.O.L's.
The F.C.L. accounts are designed as a permanent and continuous record
of the cost of each unit of property. All additions improvements and extensions
with information as to their description, period of installation or removal and
cost should also be brought together under each unit of property. No
transactions are posted in the F.C.L. without first being passed through the
C.O.L.'s. To this end, the work order issued for the construction operation
account concerned so that the expenditure with the field may be controlled.
Each time a transfer is made from the C.O.L. to the F.C.L. the name of
the work order and brief particulars with estimate number should be given in
support of the entry in the F.C.L. The estimate amount for the first construction
work Should be noted at the top of each folio in the F.C.L.

The Accounts of work orders relating to O & M ledgers in the ordinary
ledger form. Expenditure is classified in the ledger according to the detailed
account numbers. In the case of works expenditure chargeable to revenue, a
separate folio is opened for each work order.
The clearing accounts represent all running and operation expenses
during construction and all unallocated charges of a general nature works as
well as office on cost which are to be distributed periodically to the various
accounts concerned. But in cases where specific appropriations have been
allotted for a clearing account, the clearance will be deferred till the closure of
the construction estimate when the net expenditure under each clearing
account will be transferred to F.C.L. in proportion to work cost on each work at
the discretion of the Chief Engineer on some reasonable basis.
Personal ledgers containing the account for contractor or running
account or account of supplier of materials on credit are to be maintained.

General:
CHAPTER -7
REVENUE MANAGEMENT
The Revenue of the Utility by sale of Power are obtained from H.T. Consumer
& L.T. Consumers.
The Revenue is also derived from Misc. Revenue like Customers charge,
Surcharge for belated payments, reconnection fees and penalties etc..
The Revenue billing requires meticulous attention and close supervision in
view of the fact that is derived from huge No. of consumers and various
categories of supply. Any laxity in supervision and proper application to tariff
will result in loss of revenue to the utility. For ensuring correct billing and
assessment of revenue thorough knowledge of the tariffs is essential.
The tariffs of the utility are formulated depending on the operation expenses,
wages ~ill, cost of generation etc., these tariffs are revised from time to time
with the approval of the State Regulatory Commission.
The procedure for release of service connection, obtaining of Agreements from
consumers, consumption deposit etc., are notified in "Terms and Conditions of
Supply”.
In some Utilities the accounting and collecting of Revenues in E.R.Os is
entrusted to private Agencies.
Computerization of Revenue Billing and Accounting
In some of the Electricity Revenue Officers (E.R.Os) the consumers account
under slab system of billing are computerized. The particulars of the consumer
related to connected load, contracted load Meter No. and capacity
consumption deposit paid etc., are entered into the master file. The slab
amount fixed and the amount due from the consumer as on a given date are
fed into the master file including the monthly payments made in the E.R.O.
This data is processed and Monthly ledger is produced by the Computer duly
indicating opening balances, Debits/Credits and closing balances in respect of
all the consumer grouped Mandal- Wise/Distribution wise/Category wise.
In respect of slab services due for billing in a month the weekly reading
obtained from the field are entered in the Meter Blank Forms. These meter
readings are fed to the Computer which process the same and produce
adjustment bills with the help of data already available in the master with
regard to opening meter reading anal payment particulars.
In the E.R.O. the work relating to Computerized Billing and Accounting can be
broadly classified as i)furnishing input and ii) Check of out puts.
Input Data to be Furnished by E.R.O.

1. Meter Readings of the consumers pertaining to the cycle to be billed
obtained from Section Officer
2. Collection Data: Details of payments made by consumers from E.R.O.
records.
3. Miscellaneous Data:
Out Put Data:
a. Updating the Meter charges, slab charges, load charges etc.
b. Creation for master for New services and deletion of some of the
services.
c. Carrying out corrections in verified outputs of previous months
through appropriate card codes.
d. Adjustment bill amounts, Bill revisions, credits and debits on
account of adjustments.
e. Dates relating to disconnections and reconnections.
The following output data furnished by the Computer is verified in the E.R.O.
I. Consumer Ledger.
II. Adjustment Bills.
III. Exception Report and Financial Reports.

GENERAL INSTRUCTIONS TO AUTHORISED
PERSON/INSTITUTION FOR MAINTENANCE OF ACCOUNT
RECORDS AS NOMINTED BY THE UTILITY
1. This scheme will be applicable to the services covered under slab systems of
billing only
2. The utility will notify the consumers in specified area/areas, the accounting
agency nominated by utility to maintain the accounts records relating to the
electricity bill amounts collected by the utility or its authorized agents.
3. The accounting agency shall be supplied with the number or required
consumer ledgers.
4. The consumer's ledgers shall be maintained by the Accounting agency on
behalf of the utility Distribution wise in the case of rural services and
section/transformer wise' in the case of the urban services and shall be open
for inspection by the officials of the utility as notified form time to time. The
records should also be produced for check for by the Accountant General or
utilities agency whenever required.
5. The ledgers so maintained by the accounting agency will be treated as
ledgers maintained by the utility.
6. As and when new services are released in a Distribution/Urban Area the
Asst. Engineer in charge of the Distribution/Urban shall prepare a Test report
(Already approved by the utility) in duplicate and after filling in the necessary
details, shall deliver one copy of the Test Report to the accounting agency
under proper acknowledgement.
The Asst. Engineer incharge of the Distribution/Urban area will register the
fact of release of services in the register of service connection, assign the
consumer No. prepare and deliver the initial slab card to the consumers. The
Test Report shall be delivered to the accounting agency along with return of
new services released indicating the assigned slab against each services. The
prompt submission of the Test Reports. return of new service should be
reviewed monthly by the Asst. Divisional Engineer of the Distribution
The Accounting agency shall also maintain the Register of service connections
distributions wise and open consumer-wise docket.
In the case of service released from 1 st to 15 th of month, the Test Reports with
the return should be delivered to the accounting agency before 20 th of the
month, and for the services released from 16 to end of the month the Test
Reports and the return should be handed over to the accounting agency before
5 th of the succeeding month.
10. On the receipt of the Test Reports and statement of slab amounts (i.e.,
Monthly Returns of Services released containing the assigned slab) from the
Distribution Engineer, the accounting agency shall fill in the details in the
consumer ledger.

11. Operating of Consumer Legers:
The consumer ledger shall be in suitable modified form of a columnar ledger.
The consumer ledger shall be category wise and meter reading cycle wise and
distribution wise. The consumers should feature as appearing in meter reading
cycle mainly to ensure that the readings received cycle wise in a month are
fully noted in the ledger. Separate meter reading registers shall be opened for
the services for which maintenance of accounts is entrusted to the accounting
agency and the meter reading registers sent to the accounting agency with the
readings as per the cyclic arrangement.
12. In the case of existing services for which the accounts are presently
maintained by the E.R.O. the agency entrusted with the maintenance of
accounts shall copy the required opening entries i.e., Balancing figuring in the
concerned accounts and commence further accounting. Wherever the closing
balance is not readily available the agency will start the work without the
opening balance and maintain the accounts pending incorporation of opening
balance later. The E.R.O. shall furnish the information to the accounting agency
within a reasonable time i.e., before two months so that the arrears may not
remain unrealized.
13. The Revenue Cashiers and collections agency nominated by utility shall
continue to render every day a copy of the B.CR.C scroll to the E.R.O as per the
existing arrangements. The Asst. Accounts Officers/Accountant (cash) of the
Electricity Revenue Office shall after ensuring that the money realized are
either remitted into the bank or handed over in E.R.O. as the case may be
prepared by the Petty cash book shall deliver the bill collector remittance
challan scrolls to the accounting agency nominated under proper
acknowledgement in the register called” Register of B.C.R.C. handed over the
Agency incharge of maintenance of Account”. Similarly, B.C.R.C.S. relating to
collections made at the E.R.O. counters in respect of services entrusted to the
accounting agency shall be furnished
Note: If the collection relates to arrears, the details of the month to which credit
relates and the surcharge amounts should be indicated distinctly in the
B.C.R.Cs
14. Drawal of Demand Abstract:
Under slab system of billing the demand of major number of services being
almost static, the demand point need not be made against each consumer of the
slab amount in the consumer ledger. A final abstract distribution wise and
category wise shall, however, be drawn from the columnar ledgers. The total
demand for the slab amounts for the month shall be arrived with reference to
fixed slab amounts noted in the consumer ledger and the adjustment bills
prepared in the month. Its correctness should be checked up taking into
account the changes in the demand due to change of slab and also
enhancement in demand by way of new services. After ensuring this the total
demand of the month for the services entrusted shall be notified by the

accounting agency to the E.R.O. distribution-wise/urban as the case may be for
being posted in the Financial Ledger.
15. Credit Posting in the Consumer Legers:
The credit postings are to be made in the consumer ledger from the B.C.R.Cs
noting the surcharge amounts if any collected in the column provided for .
After posting credits in consumer ledger the accounting agency shall confirm
the total amount of credit (with break up of c.c. charge and surcharge) that has
been posted in the consumer ledger distribution wise to the E.R.O to enable
maintenance of Financial Ledger.
The Asst. Accounts Officer/Accountant (Cash) shall compare the total credits
as confined by the agency incharge of maintenance of accounts as figured in
the respective heads in the Financial Ledgers and any discrepancy in the
credits and debits shall be got reconciled before rendering the Trial-Balance.
16. Preparation of 'D' Lists:
The Revenue Cashier/Collection Agent of the utility shall attend the Revenue
office on 30 th of the month for reconciling the lists with them. The Revenue
Cashiers will attend the E.R.O. on 15 th of the month for reconciling the
accounts relating to non slab services. The accounting agency shall prepare the
fist of defaulted consumers as per the consumer accounts to the Asst. Accounts
Officer/E.R.O. This list should be got reconciled by the Asst. Accounts Officer
E.R.O. with the list of defaulters as arrived at from the Register of Revenue
Cashier/Collection Agency, duly updating with the credits received in the
E.R.O. counter through money order or Demand Drafts (D.Ds) and on
reconciliation they shall be sent to Section Officer before 5 th of the succeeding
month. The section officer should return the 'D' list within 5 days after
attending, to the Asst. Accounts Officer/E.R.O. who will forward the same to
the agency incharge of maintenance of accounts for review. The list of services
found not disconnected during review shall be communicated by the agency to
the Asst. Divisional Engineer/Asst. Accounts Officer (E.R.O.) for pursuant
action. The Divisional Engineer Electricity shall invite to the monthly
coordination meeting the accounting agency also to review the position
relating to furnishing of meter readings and returning of 'D' lists, status of
meters etc.
17. When the service is disconnected and the consumer comes up for
reconnection, the agency maintaining accounts should notify the arrears
through the cash memo, slip and direct the consumer for payment to E.R.O.
The Asst. Accounts Officer shall then issue reconnection order on receipt of
total arrears due. These credits will be notified to the accounting agency
through B.C.R.Cs. for posting in the consumer ledger. Where the closing
balance as on the date of transfer has not been intimated to the accounting
agency, the outstanding in the ledger of the E.R.O. should also be verified
and the slip corrected if necessary, before collection of arrears and issue of
reconnection order.

18. The Asst. Accounts Officer/Divisional Engineer Electricity shall nominate
an Accountant to enforce an effective internal check as regard preparation
of 'D' list and result of review of the returned 'D' list by the Section office to
act as liaison among the agency incharge of maintenance of accounts
Distribution Office and E.R.O. and will be responsible for proper
coordination in the matter of collection and maintenance of consumer
accounts.
19. The following information in the form of a- monthly return is to the E.R.O.
by the Accounting Agency in so far as those services for which maintenance
of accounts are entrusted.
I. Financial Progress Report
(Monthly)
II. Sale and Revenue Return -
do-
III. New Services released and first bill/cards issue -
do-
IV. C.C. Charges arrears report -
do-
V. No. of services ordered for disconnection and actually disconnected -
do-
VI. No. of services under door lock -
do-
VII. Return of meter burnt and stuck-up cases
VIII. Assessment return -
do-
IX. D.S.M -
do-
X. Electricity Duty Return
XI. Return of adjustment bills (to be issued, actually issued and balance) -
do-
XII. Return of abnormal consumption and low consumption -
do-
XIII. Return of additional consumption deposit assessed,
realised and that balance due -
do-
20. An agreement will have to be executed before taking up the work by the
agency besides a bank guarantees required by the utility. The utility at liberty
to terminate the contract with 3 months notice if in the opinion of the utility,
the performance of
the agency is found not satisfactory and to invoke Bank Guarantee.
Procedure for Claiming Commission:

Remuneration for attending the work "Maintenance of Accounts' per account
per month shall be paid. The Accounting Agency shall prefer the claim relating
to the months to Asst. Account Officer/E.R.O of utility concerned in the 1 st
week of succeeding month, duly supported by the statement of work done.
The Astt. Accounts officer on receipt of the claim, after satisfying himself that
the entire work entrusted has been completed in all respects by the accounting
agency, should arrange for payment of remuneration within 20 days from the
date of actual receipts of the claim in the E.R.O. duly appending a certificate to
the effect that the work entrusted and the returns due from the agency is
complete in all respects.
The Divisional Engineer Electricity (Distribution) shall then affix the payment
order charging the expenditure to O&M expenses.
Copies of the scheme of slab system of billing of and connected instructions as
available in Board will be made available to the agency for guidance.
Any doubts arising is so far- as they relate to maintenance of Consumer
ledgers, drawl of demand credit postings reconciliation, preparation and issue
adjustment bills will be clarified by the concerned Asst. Accounts Officer
incharge of the E.R.O.

Noting the Meter Readings and Units
The readings taken under cycle-system with the units, should have been
noted by ledger clerks in consumer ledgers, as and when received. The
readings and units shall be noted in the data sheet duly checking the
correctness of units. For the period during which meter was stuckup or there
was no meter, care should be taken to arrive at the consumption with reference
to average/computed consumption as per rules.
The consumption for the entire period should be totalled.
Calculation of Energy Charges & Minimum Charges
The fixed charges and customer charges for all services as per tariffs for
the period to which bill relates shall be calculated and noted in the data
sheets/bill.
Other Charges:
Any item and also the short billing cases noticed, shall be included in
the adjustment bill.
Additional Charges for Late Payment:
The surcharge is leviable per week or part thereof. Care should be taken
to assess the surcharge correctly.
As per new slab system surcharge for late payment is collected by
Revenue Cashier along with Slab amount after due date and also in E.R.O. at
the time of issue of reconnection order and directly credited to Misc. Revenue.
The correctness should be checked ensuring that there are no omissions and if
there is any omission in collection of surcharge, the amount of surcharge, short
collected, should be included in the adjustment bill.
For surcharges already collected by Revenue Cashiers, this aspect
should be checked in particular in respect of general slabs and difference to be
included in the adjustment bill. Penal interest leviable on installments allowed
should also be included in adjustment bills.
Total Bill Amount:
Taking the above charges, the total amount of the bills shall be arrived
at from which the slab amount as assessed for the period (net payments made)
shall be deducted and difference amount (+) or (-) arrived at. Care should be
taken to note the slab amount assessed keeping in view of slab changes if any,
during the period. The difference amount (+) or (-) shall be noted in Col. 14 of
the consumer ledger against the respective consumer and total of such
amounts (net) shall be taken as demand under adjustment bills for the month.
At the time of the demand consolidation of adjustment bills, the surcharge of
late payment included in adjustment bill shall be credited to appropriate head
of account under Misc. Revenue.

Adjustment of Interest on Consumption Deposit:
The credit to be given to consumers towards annual interest on
consumption deposit as per tariff condition, be adjusted from the 'difference'
amount of the adjustment bill (i.e.) before arriving at the amount due from the
consumers
Where the difference amount is positive (+) for a consumer, the same
amount shall be repeated against the Col. Amount due from consumer and
also expressed in words in the adjustment bill form Where the difference
amount is negative (-) the column" Amount due from consumer be noted as
NIL.
Adjusting Excess Credit Against Future payments:
Where the difference amount is negative (-) as per instruction already issued
such credit be adjusted against future payment by suitable entry in the refresh
cared being issued for the succeeding year. Before adjusting against future
months, it should be checked whether the consumer has any arrears
outstanding, if so, the credit should be adjusted first against the arrears and
should there be excess credit(after setting off against arrears) then only, it shall
be adjusted against future payment., A suitable mention shall be made in the
adjustment bill and an entry to that effect should be clearly made on reverse of
new card against the relevant month and part amount if any due against the
month shall be clearly indicated. The adjustment bill amount due from
consumer if positive (+), may be indicated in the card before issue to consumer.
Issue of Adjustment Bill
The adjustment bills shall be dated 15th of the succeeding month and
forwarded to Section Officer along with new cards immediately. The section
Officers are to arrange delivery of the bills/cards to the consumers before 25th
of the month positively, to enable the consumer to make payments from 1 st of
the next month along with slab amount as per new cards. The data sheets/
adjustment bill/new cards shall be checked by the Billing superintendent
100%, other supervisory officials to the extent prescribed by the utility.
On receiving the adjustment bill amount along with slab amount, Revenue
Cashier shall issue a single receipt covering total amount indicating distinctly,
the adjustment bill amount against the column provided for. The B.B.A.
prepared by E.R.0 for adjustment bills and handed over to Revenue Cashier
shall be returned back to E.R.O. duly indicating the date's payment.
Renewal & Issue of New Card for the Succeeding Year
It should be examined whether the consumer has to be allowed the same slab
with reference to latest average consumption. Appropriate slab with reference

to average consumption of the latest period as per adjustment bill, should be
allotted and an indication to the effect shall be made in the adjustment bill.
Collection
The collection shall be monthly for all slab system consumers. The
consumers shall present the Card/Pass Book to revenue (Cashier/Bank and
private agency on the schedule date in a month. The collections of the E.R.O.
are obtained from Revenue Cashiers/bank/Private Agencies stationed at
various stations under jurisdiction of the E.R.O. by cheques, demand drafts,
money orders and payments at E.R.O. Countermand collections through Banks
including Private Agencies. All these transactions will feature in the Cash Book
of the E.R.O.
Collections from consumers are received upto 14 th of every month
without surcharge and surcharge fill 29 th of the month. However, for the
cations made after 29~ of the month, the surcharge shall have to be collected by
the Revenue Cashier/Bank/Private Agency besides slab amount. The
surcharge shall be at flat rates as indicated in the previous paras.
Where collections are to be made at the outstations (villages) by
Revenue Cashiers as per scheduled programme the Revenue Cashiers are to
receive from all types of slab system consumers during the first 14 days of the
month on the day he visits the village without any surcharge, as he may not be
in a position to cover all villages more than once in the first 14 days and upto
29 th with surcharge in 2 nd round visit.
The slab and non-slab (Monthly bills) amount paid belatedly beyond a month,
will be accepted in Electricity Revenue Office only.
On presentation the Card/Pass book by the consumer at the counter the
Revenue Cashier/Bank/Private agency while receiving the amount, makes an
entry duly attested n the reverse of the Card/Pass Book and also issue a receipt
under her signature.
Collection should not be refused if the consumers fail to present the card and
the collection may be accepted. The entries in the card may be made up to date
when the consumers make payment invariably and entries get attested by
Revenue Cashier/Bank/Private Agency. The receipt form shall be in duplicate
original copy to be furnished to the consumer. The double side carbon/shall be
used in Receipt Book by Revenue Cashier/Bank. An entry also be made in
B.C.R.C.(Collection Scroll Book printed duplicate). Original copy of B.C.R. C to
be sent to E.R.O. daily by Revenue Cashier/Bank. The B.C.R.C shall be written
by Revenue Cashier distribution wise/Clerk-wise as now being done.
Advance Collection:
Where the consumers desire to pay in advance, such advance collections for
the period of 6 months and above will be accepted in Electricity Revenue Office
and necessary entries are made in the card to the effect. A separated receipt is
also issued

Revenue Cashiers Register
The Revenue Cashier shall maintain a list of slab system consumers
distributions-wise and the list would be got updated in Electricity Revenue
Office monthly with any changes in slabs and also additions for new services
and deletion for billing stopped services. The list shall be the basis for both
noting the monthly payments and to prepare uncollected items every month
by Revenue Cashier.
Credit Postings in the Ledgers
The credit posting are made in the-consumer ledgers by the Clerks from
B.C.R.C's and the surcharges amount if any collected shall be noted distinctly
in the ledger in the column provided for. The total figure of collection in
respect of each distribution will be arrived.
To ensure misclassifications and misappropriations, these figures have
to be tallied and reconciled with other source which are not directly from the
source of collection. maintenance of financial ledgers.
Defaulter List
The Revenue Cashier shall attend Electricity Revenue Office on 30 th of
every month and reconcile his accounts. The defaulter lists shall be prepared
by the Ledger clerks with reference to uncollected cases blanks as per
consumer ledgers, taking into account the amounts directly received in
Electricity Revenue Office by Money Order and DD/Cheque. The lists will be
reconciled with the list of the Revenue Cashier. The defaulter lists for slab
system consumers/monthly Bills consumers shall be sent to Section Officers on
the same day or next day by Electricity Revenue Office.
Drawal of Demand Abstract and Credit Reconciliation
Through demand posting need not be made against each consumers for the
slab amount in the consumer ledger, the final abstract distribution-wise and
category wise shall be drawn by the clerk for his seat in a separate register as
now drawn from the column ledgers. The total demand for the slab amounts
for the month shall be arrived with reference to fixed slab amounts noted in the
consumer ledger. Based on the final abstract drawn by the clerks, the billing
Superintendent shall have to draw a consolidated demand abstract for his
section and in turn a final demand consolidation for Electricity Revenue Office
as a whole shall be drawn for slab system consumers, Up to this stage, the total
demand shall be inclusive of customer charges, At the stage of preparation of
consolidated journal entry, the customer charges shall be separately computed
based on number of consumers at the prescribe rate for domestic, non domestic
and other categories and the balance amount be reckoned as sale of power
Accounting and Maintenance of Financial Ledgers:
The financial ledgers will be maintained in the E R.O. for billing suspense,
Security Deposit and Miscellaneous Revenue, and bank-wise remittances.

Distribution-wise and taluk-wise/Mandal-wise financial ledgers are to be
maintained under billing suspense and security Deposit. The financial ledgers
have to be posted directly from the cash book (P.C B) giving contra entries in
financial ledgers and cash book vice-versa. Thus the total amount of collections
of the E.R.O. will be featured in the financial ledger.
Credit Reconciliation
The totals of all the financial ledgers will have to be tallied with the total
receipts of the cash book. The figures of financial ledgers will be checked and
reconciled by each Clerk to ensure that the distribution credits arrived at from
his' ledgers are correct. The financial ledger-should contain the opening
balance, the monthly demand raised during that month and the collection
made during the month against the opening balance and demand of the
month;
Thus, the closing balance against each distribution for the month will represent
the arrears due from the consumers for the Board. An abstract is also to be
maintained in the financial ledger indicating distribution-wise O.B. Debit,
Credit and C.B. Such reconciliation Is also to be made in respect of security
deposit register maintained by each Billing Superintendent with the Security
Deposit financial ledger maintained in the General ledger.
Thus, the maintenance of financial ledger in the E.R.O. is an important item of
work should be entrusted review by an Accountant /A.A.O.
The balance shown in the monthly/quarterly return of D.C.B. should tally with
the closing balance financial ledger to depict correct position of E.R.O.
Disconnected Services
When the services are under disconnection, the charges during disconnection
period shall be corresponding to the first slab amount in respect of domestic
and non-domestic and fixed charges and customer charges in respect of
Agricultural category. The period of disconnection of completed months only
shall be taken into account for the above purpose and if the supply is under
disconnection for a portion of the month will not be treated as under
disconnection for purpose of calculation as above. This shall be calculated in
E.R.O. at the time of preparation of adjustment bills. The Revenue Cashier /
Private Agency shall have to collect as per cards slab amounts only.
Review of Additional Consumption Deposits
The review of additional consumption deposit shall be done as usual every
year. The review of non-domestic category shall have to be done by Ledger
Clerk. The review of additional consumption deposit in respect of domestic
category above Rs.500/- (as per recent amendment) shall have to be done by
Billing Superintendent.
Interest on Consumption Deposit

The interest on consumption deposits shall be allowed in adjustment bill only.
Several innovative procedures are being implemented in the Revenue Billing
and Collection by various Utilities.

Chapter -8
A) FINANCIAL ACCOUNTANCY AND BUDGETARY
CONTROL
General Accountancy
1. Since the money transactions have come into vogue in the World, in the
place of barter system, literate people have been trying to maintain their
accounts for the receipt of money and its spending in one fashion or
other in their own way. In such a process, one formal system that
evolved a ‘Single Entry of Accounting’.
Single Entry System of Book- Keeping:
Single Entry is a crude form of Book-keeping under which only Personal
Accounts and a Cash Account are maintained, and only aspect of each
transaction as it effects the Personal Accounts is recorded.
The original records such as the Cash Book, the Purchase Book, the Sale
Book, and the Return Books and even the Bill Books are sometimes maintained,
but the postings there from are only made to the Personal Accounts concerned.
2. The only information that can thus be secured from the Ledger kept
under Single entry would be in relation to Debtors and Creditors, i.e.,
how much is due to the trader from his customers and how much he
owes to his creditors, In the absence of any Impersonal Accounts being
kept, the books fail to disclose information for the preparation of a Profit
and Loss Account, or particulars of Assets and Liabilities for the
preparation of a Balance Sheet. Evidently, therefore this from of Book-
Keeping is of very limited value, and is seldom found in use in any
concern of importance.
Elements of Double- Entry book keeping:
Definition: Book- Keeping is the art of recording business dealings in a set of
books.
Objects of Book- keeping: The primary object of Book-keeping is to enable a
person ascertain accurately and with as little trouble as possible:
i. The amount he has gained or lost in the business during a given period;
and
ii. The amount of his Assets, Liabilities and Capital in the business on any
particular date.

In addition to the above information, however, a dealer would naturally like
that his book should also show the following particulars.
iii. How the amount he has gained or lost is made up.
iv. What amount is owing to him by each of his customers or debtors; and
v. What amount is owing by him to each of his creditors.
vi. What is his liability for payment of taxes to Government.
vii. How his business stands in comparison to other similar business.
This information can only be derived if an accurate and completed record is
kept of all business transactions.
Double- Entry Book- Keeping
3. Double- Entry is the only system of Book- keeping by the employment
of which all the above objects can be achieved, and it is to the
elementary study of this system. It is this system of book-keeping that
enable the trader to obtain a permanent record of his dealings with
those with whom he transacts at any given date. It further helps him to
ascertain whether the result of his transactions has been profitable or
otherwise, and what his exact financial position is at any time. It is both
simple, and universal in its application. It may be applied with equal
success to ones own domestic accounts, to the varied and voluminous
transactions, of the largest business enterprises, as also to the vast
records of the National Exchequer.
Explanation of Terms:
4. Before proceeding further, it is desirable that the reader should study
the exact significance of the following terms which are constantly used
in this work.
Debtor : A person who owes something is called a Debtor.
“Dr.” is an abbreviation of Debtor.
Creditor : A person to whom something is owing is called a
creditor. “Cr” is an abbreviations of creditor.
Thus if A owes B Rs. 10/-, A is B’s Debtor and B is A’s Creditor.
Accounts : An account is a summarized record to transaction
affecting one person, one kind of property or one class of
gains or losses.
Personal Accounts: Accounts recording transaction with persons or Firms are
known as personal Accounts. Accounts recording transaction which do not
affect particular persons but affect business in general, are known as
Impersonal Accounts. Impersonal Accounts may be ether Real Accounts or
Nominal Accounts.

Real Accounts: Real Accounts are accounts of property or possessions, e.g.,
Goods Accounts, Cash Accounts, Bank Accounts, Office Furniture Accounts
etc.
Nominal or Fictitious Accounts: : Record of expenses, gains or losses e.g.,
Rent Account, Salaries Accounts, Advertisement Account etc.
Debit and Credit: In Book-keeping the receiver of any benefit is termed a
debtor and is debited, whereas the giver of any benefit is termed as a Creditor
and is Credited.
To Debit an Account means to enter a transaction on the “Debit” or left-
hand side of the account.
To Credit an account means to enter a transaction on the “ Credit” or
right- hand side of that account.
Goods : The terms “ Goods” is used in general sense to include all
merchandise, commodities or wares in which trader deals.
On Credit: To purchase or sell goods on credit, means receive the goods or
part with them without any payment of cash at the time. In case of Credit
Purchases and Sales, delivery of goods is first made, and the payment is made
after the expiry of an agreed period. In case of Cash Purchases and Sales,
payment is made on delivery of goods.
Assets are Properties: Of every description belonging to a person, such as,
good, cash, furniture, etc. and includes all sums of money owing to him.
Liabilities: Are the debts owing by a person
Capital: Is the excess of assets over liabilities. In other words, Capital is the
amount of a persons assets remaining after providing for the discharge of his
liabilities.
(If for example, a persons Assets amount to Rs. 10,000/- and his liabilities to
Rs.4000/- his Capital is Rs. 10,000/- less Rs.4,000/-ie.,Rs.6,000/-)
Therefore Capital+ Liabilities= Assets.
Solvent : A person is said to be “ Solvent” when his Assets exceed
or equal his Liabilities.
Insolvent : A person is “ Insolvent” when his Liabilities exceed his
Assets.

First Principles of Double- Entry:
5. As has been said before, Book- keeping consist in writhing up Accounts
in a set of books and Accounts are records of facts relating to business
transaction.
Now there cannot be a business transaction unless there are two parties
to it. Further , a transaction might either mean the receipt of a benefit in shape
of money, goods or services, or the giving of such benefit. In order, therefore,
to clearly indicate whether any particular transaction has resulted in the receipt
of benefit or the giving of the benefit it has found necessary to divide each
account into two sections. One section (the left-hand side) of account is thus
utilized for the recording of transaction in respect of which benefit has been
received by that account, and other section (the right-hand side) for recording
transactions in respect of which benefit has been imparted by that accounts. In
this way, the total benefit received and imparted by each account may be
readily perceived by looking at both the sides of the account and the ultimate
position it has parted with or vice versa, may easily be ascertained by adding
up each side and striking a balance.
Another important point to be borne in mind, at this stage, is that the following
facts are common in practically every business.
i. That there must be a number of persons, firms or companies with whom
the trader had to deal.
ii. That the trader must also have some goods, cash, furniture and other
assets or possessions in which or with the help or which may carry
on the business; and
iii. That certain expenses, such as rent wages, salaries advertising etc., must
necessarily be incurred in course of carrying on the business and that
there must be certain sources from which the income of the business
is derived.
“Double –Entry”:
6. In order to decide which account is to be debited and which credited for
the purposes of recording any particular transaction, the first important
point is to see which class of accounts are affected by that transaction.
Having ascertained that, the following rules of debit and credit will
have to be followed.
i. Personal Accounts: These accounts record a traders dealing with other
persons, firms or companies. A separate account is kept of each such
person, firm or company from whom goods may have been
purchased or to whom goods may have been sold on credit, so that
the amount owing to and by the trader can be readily ascertained at
any time.

On the debit side of each Personal Account are recorded the
transactions in respect of which the person becomes the debtor and
on the credit, those in respect of which he becomes the creditor. In
other words, the account of each person, firm or company is debited
with any benefit such person or firm receives and is credited with
any benefit such firm or person imparts.
Dr NAME OF PERSON, FIRM OR COMPANY
Cr
Date Particulars of benefits AMOUNT Date Particular of benefits
AMOUNT
Receive by the person Rs. Ps Imparted by the person
Rs. Ps.
ii. Property of Real Accounts : These accounts record dealing in or with
property, assets or possessions, separate account is kept for each
class of property, such as cash, stock, plant machinery, furniture, etc.,
so that recording therein particulars of each such assets received or
given away, the away, the trader can ascertain the value of the assets
on hand on any particular date.
When any assets is received, the amount, the amount is entered on the debit
side (left-hand side) of that asset account, and on the asset being given away.
That asset account is credited.
Dr. NAME OF ASSET
Cr
Date Particular of Incomings Amount Date Particular of outgoings
Amount
Rs. Ps
Rs. Ps
iii. Nominal or Fictitious Accounts: These accounts of traders expenses or
gains. A separate account is opened for each head of expenditure or
income, such as, rent, salaries, wages, printing, stationary, cartage,
interest, discount, commission, etc., So that the trader can see the
amount expended, lost or gained under each heading. Each such
account is debited when an expenses or a loss is incurred and is
credited when there is any gain.
Dr. NAME OF ASSET Cr.

Date Particular of amounts Amount Date Particular of amounts
Amount
Expended or lost Rs. Ps Gained
Rs. Ps
Rules for Debit and Credit:
7. The above rules of debit and credit in regard to the three classes of account
may thus be summarized.
-Personal Accounts : Debit the receiver and Credit the
giver
-Asset or Real Accounts : Debit what comes in, and credit
what goes out.
-Nominal or Fictitious Accounts : Debit expenses and losses and credit
gains Paid
Landlord, Office rent Rs. 150.00
The two Account affected in this case are Rent Account and Cash Account. The
twofold effect of his transaction is that an expense under the heading of Rent
has been incurred and Cash has been paid out to meet the liability. Therefore,
Rent Account will be debited and Case Account credited.
Summary:
8. As this Chapter is of very great importance, it may not be out of place to
briefly re-state the subject-matter herein, as under.
1. Book- keeping is the art of recording transactions in money or
money’s worth.
2. Its object is to show the trader:
a) How much his customers owe him.
b) What he owes to other people.
c) What profit or loss he makes in the business.
d) What capital he has in his business, and what assets and
liabilities makes up such capital.
e) Comparison of his business with other similar business.
i. Every business Transaction has a two- fold aspect.
ii. In making a complete record of any business transaction, one account
will have to be credited.
iii. Double-Entry is the only scientific system of Book-keeping, as it records
the double or two-fold effect of every transaction.
iv. For a proper record of all business transaction accounts are classified
into (a) Personal Accounts, (b) Real Accounts and (c) Nominal
Accounts.
Subsidiary Records and the Ledger:

It must be made clear, at this stage, that although all transactions find
their ultimate place in shape Accounts in a book called the Ledger,
which is the Chief Book of Accounts, they are entered first in some other
books which are know as “ Books of Original Entry” and are
subsequently transferred from such books to their respective Ledger
Accounts. The Books of Original entry are called “ Subsidiary Books”
and the transferring of the entries from the Subsidiary Books into the
Ledger is termed “ Posting”.
It should be noted that the Subsidiary Books as also the Ledger
have each distinct object to fulfill. Thus whereas the Subsidiary Books are used
for the purpose of maintaining a continuous record of transactions in regular
order of dates, the ledger serves to maintain a classified record of these
transactions with each individual or in any particular commodity, or
transactions relating to any particular head of expenditure or source of again,
so as to facilitate reference when any information is needed in regard to any
particular account.
Journal is one of these Subsidiary Books, and we shall study its form
and use in this Chapter. The Journal literally means “Daily Record”, and in
former times all transactions used to be entered in this Book. Its use now is,
however, restricted to record of certain transaction, as, in modern Bookkeeping,
other subsidiary books have taken place of Journal.
From the previous pages, one must have seen how it is possible to
record any conceivable series of transactions through the two books the Journal
and the Ledger. These are, no double, the main books in Double entry Bookkeeping
even now, but ,if all business transactions were passed through the
Journal, the Labour of recording each transaction with its separate narration in
the Journal and then posting each such entry to two different accounts in the
Ledger would be enormous in a business of any large dimensions necessarily
involving a large number of transactions. Labour-saving methods have,
therefore, been applied to the art of Book-keeping. Experience has shown that
transactions in a trading or manufacturing concern consist mainly of:
i. Receipts or Payments of Cash; and
ii. Purchases or Sales of Goods; and it has been found that if transactions of
a similar nature were recorded together, through some altered forms
of the journal, a considerable amount of labour can be saved. We
find, therefore, that in modern Book-Keeping the original Journal has
superceded by subsidiary Journals, each used for recording a certain
class of transactions.
The following Subsidiary Journal have thus found their place in modern Bookkeeping.
1. The PURCHASES BOOK to record all Credit Purchases.

2. The SALES BOOK to record all Credit Sales.
3. The RETURNS INWARDS BOOK to record all goods returned to us by
our customers.
4. The RETURNS OUTWARDS BOOK to record all goods returned by us
to our suppliers.
5. The CASH BOOK to record all cash received and paid.
6. The BILLS RECEIVABLE BOOK to record all Bills received duly
accepted by our debtors.
7. The BILLS PAYABLE BOOK to record all Bills granted by us to our
Creditors.
The original JOURNAL is now retained only for the purpose of
recording transactions of an extraordinary nature which do not fall within any
of the above sub-divisions.
7. Division of Accounts:
The following Diagram shows the division of accounts in different
classes:
PERSONAL ACCOUNTS IMPERSONAL
ACCOUNTS
Nominal Accounts
The Importance of Ledger:
LEDGER ACCOUNTS
Real Accounts
As has been already stated, the ledger is the chief book of Accounts, and
it is in this book that all the business transactions would ultimately find their
place under their respective accounts in a duly classified form. This process of
transactions which have been previously recorded in the Journal into the
appropriate accounts in the ledger is called “ Positing”. The debit aspects of the
transactions as entered in the debit column of the Journal are posted to the
debit side of the Ledger Accounts concerned, whilst the credit aspects are
entered on the credit side. In posting the entries from the Journal, therefore,
each item is entered into the Ledger, on the same side as it appears in the
Journal, thus a debit amount in the Journal would become a debit amount in
the Ledger and a credit amount in the Journal would become a credit amount
in the ledger.

The importance of transferring all the entries from the Journal into the
Ledger in a well- arranged and classified form needs to be thoroughly
understood. Now one of the objects of Book-keeping is to ascertain, with the
least amount of trouble, what is owing to
a dealer by each of his customers, and what is owing by him to each his
creditors, and it is clear that this cannot be readily done by recording the
transactions in the Journal alone. For instance, if at different times, I sell goods
on credit to A, and look at the Journal entries to what extent A is indebted to
me, on any one particular date. In order to get this information, I must search
through all the entries relating to goods sold to A, and thus ascertain the total
value of the goods I have sold him. Then again, I must sort out entries relating
to the various sums of money, I have received from him to find out the total
amount paid by him. It is clear, therefore, that if this process is to be gone
through in order to ascertain my position realized. Some other means of
bringing together the entries referring it each person or firm must, therefore, be
found. This is done by collecting and condensing in another book called ledger
which so far stand dispersed through the Journal. This is why the Ledger
becomes and indispensable book in Account- Keeping.
What is Trail Balance:
Since accounts are thus debited and credited with like accounts to give
effect to the double aspect of every transaction, it follows that the total of the
debit entries must equal in amounts the total of credit entries. It also follow as
a corollary that the total debit balance must equal the total credit balances.
This, however, would be irrespective of the number of accounts opened or the
number of posting made
When, therefore, all transactions for particular period have been duly
entered in the books and properly posted, you will need to try whether you
have correctly transferred all the entries from the Original Record into a
Ledger. With this object in view, you will prepare a Trial Balance, i.e., a list of
Balances debit or credit standing in the books of trader at any given date.
The agreement of the Trail Balance provides a very useful check upon
the Ledger postings. As a matter of fact, it provides two things, viz.
1. That both aspects of each transaction are recorded and
2. That the books are arithmetically accurate.
Should the Trial Balance disagree, it reveals the presence of errors which must
be found and rectified.
How to prepare a Trial Balance:
A Trial Balance is usually prepared on loose sheets ruled in a form similar to
that of the Journal i.e., with debit and credit money columns side by side. Each

account is given a line, and the name of the account is written in the particular
column. The date column is
used for entering the folio or page of the Ledger on which account appears.
The first money column is used for entering the total of, the debit side of each
Ledger Account, and the second column for the total of the credit side of the
account. If the books are correct, the Debit Total will equal the Credit Total.
The power utilities maintain their accounts in Double Entry System of
Accounting. The following important records are to be maintained in the
utility.
SUBSIDIARY RECORDS AND FINANCIAL LEDGER
In the double entry system of book-keeping the books of original entry are.
1. Cash Book,
2. Stores ledgers (comprising of Requisitions, devolutions, S.R.Bs and
S.I.Bs);
3. Journal book including purchase day book;
4. Centralised payments adjustment Journal;
5. Bills payable Journal;
All expenditure on works is recorded month by month is any one of the
ledgers.
1. Construction Operation ledger in cases of Capital works.
2. Operation and maintenance ledger in cases of works chargeable to
revenue and working expenses.
3. Clearing account ledger in case of remittance, suspense, debit and
deposit transactions.
4. Service connection cost ledger in the case of service connection works.
5. Deposit contribution works ledger for D.C. works.
The construction account of capital works are separated in three main
divisions.
1. Fixed capital accounts.
2. Clearing accounts.
3. Construction operation accounts.
The accounts of utility are maintained under the Book-keeping
principles. To suit the departmental accounting the following are the various
subsidiary records of Books of original entry that are maintained in the
department.
Purchase
Book
To record all credit
Purchase made and
The transactions are posted to the credit of
Individual suppliers accounts and the periodi

admitted for during month total of the F.D. posted to the
account
debit of the sto
Cash Book To record cash receipts and Transactions recorded on the debit side are
payments
posted to the credit of the ledger accounts.
Transactions recorded on the credit side are
posted to the debit of the ledger accounts. Red
ink entries on the credit side (unpaid wages) are
posted to the credit of the ledger account.
Stores
Ledger(Requi
sitions,
devolutions
receipts and
issues
Centralised
payment
adjustment
Bills Payable
Journal
To record all Transactions
a) Requisitions: The
transactions receipts and
issues
All authorizations issued
for payment towards bills
admitted, on the pay officer
All transactions relating to
the acceptance of Bills of
Exchange
Journal To record all transactions of
transfers or adjustments not
involving cash receipts or
payments and stock receipts
or issues
a) Requisitions: The transactions of issue are
posted to the debit side of the ledger
accounts. The total of the S.I.Bs (The total
requisitions is credited to the stock account.
b) Devolutions: The transactions of the
receipts are posted to the credit of the
ledger accounts. The total of the
devolutions is debited to the stock accounts.
Debit the various ledger accounts individually
and credit the total amount of journal for the
month of Centralise Journal payments
adjustment account.
Debit the individual account credit the
progressive total to Bills Payable Adjustment
Account.
The posting are made as per the debit or credit
accounts numbers as indicated in the Journal to
the debit or credit of the ledger accounts.
Preparation of Trial Balance and Check Figures and Agreement of the Trial
Balance:
Posting are made in various financial ledgers from the various sources
and trial balance will be prepared.
The Central government in consultations with the Comptroller and
Auditor General of India and the State Government have framed the Electricity
(supply) and (Annual Accounts) Rules commonly known as Commercial
Accounting System for the State Electricity Boards.
This systems of Accounting is since being followed by the power utility(Viz.
Electricity Boards/their successor utilities)

Financial Statements
-Balance Sheet (BS),Profit and Loss Account (P/L) and Cash
flows
Understanding Balance Sheet
1. What is Balance Sheet?
Balance sheet is a financial statement showing assets on the right side (or
bottom half of the balance sheet) and liabilities on the left (or top half of the
balance sheet). A balance sheet provides an overview of a companies financial
position at a given date. The function of the balance sheet is to show what the
company owns and what it owes. It is one of the main documents that are
legally required to be produced by the companies as part of their annual
accounts.
Equity+ Surplus+ Debt+ Liabilities= Fixed Assets+ Current Assets+ Other
Assets
2. Composition of Balance Sheet
a. Model- Balance Sheet of Bescom for 2003-04
Sl. Particulars SCH. Current Year 2003-04 Previous Year 2002-03
No.
No.
I SOURCES OF FUNDS
Share holder’s Funds
Share capital 1 500,000 500,000
Share Deposit 1A 2,059,151,353 2,059,151,353
Share Deposit
Adjustment account
1B (49,281,953) 12,607,834
Reserves and Surplus
Loans Funds
2 1,285,477,690 3,295,847,090 567,046,143 2,639,305,330
Secured Loans 3 3,310,689,866 2,672,657,145
Unsecured Loans
Other Funds
4 104,759,535 3,415,449,401 113,114,980 2,785,772,125
Service Line and 5 8,620,832,820 7,677,162,484
Security Deposit
TOTAL –I 15,332,129,31
1
13,102,239,939
II APPLICATION
FUND :-
Fixed Assets
OF
a) Gross Block
13,617,123,654 12,789,741,724
b) Less: Depreciation 6 6,031,309,316 7,585,814,338 5,276,877,742 7,512,863,982
c) Net Block
d) Capital
progress
work in 7 451,047,005 534,502,281
Current Assets, Loans
and Advances

a) Inventories, stores &
spares
8 434,725,983 523,769,133
b) Sundry Debtors 9 14,253,315,110 9,385,454,524
c) Cash and Bank 10 332,536,662 628,346,551
Balances
d) Loans, Advances 11 147,240,968 107,638,665
and Deposits
e) Other
Assets
Current 12 4,619,893,954 1,679,308,356
Total -2
Less:
19,787,712,677 12,324,517,229
Current Liabilities & 13 12,492,444,709 7,295,267,968 7,269,643,553 5,054,873,676
Provisions
Significant Accounting 24
Polices and Notes on
Accounts
TOTAL -II 15,332,129,311 13,102,239,939
3. Statutory overview – requirement of the Companies Act, 1956
• Sec 209 – proper books of account to be maintained
• Sec 211 – every Balance sheet to conform to the accounting standings
issued ( as per given in the accounting standards
• Sec 212- Details of subsidiaries to be provided
• Part I of Schedule VI – form of presentation of Balance sheet and its
contents.
• Horizontal or Vertical formats
• Description of items to be included under each subhead and their
discloses.
• Notes assisting in interpretation and disclosure.
4. Statutory overview – Accounting Standards
• Treatment and disclosure under various heads –
- Assets
• Fixed Assets – As 10 (Accounting for fixed assets), As 11
(Accounting for the effects of change in foreign exchange rates),
As 16 (Borrowing costs), As 19 (Leases)
• Investment – As 13 (Accounting for investments)
• Current assets : Inventories AS (Valuation of inventories)
Others
• Deferred taxation – AS 22 ( Accounting for taxes on income)
- Liabilities
• Share capital
• Reserves & surplus
• Long term debt
• Deposits from Consumers
• Current Liabilities
• Consumers contribution towards capital assets – AS 10, AS 12
• Retirement benefits to employees – AS 15

o Notes to include AS 1 (disclosure of detailed accounting policies), AS 4
(contingencies and events after balance sheet)
5. Statutory overview – License clauses
• Generally accepted accounting principles to be approved and
used
• Voltage wise classification of all Balance sheet items may become
mandatory - especially, in view of setting costs across different
voltages to allow Open Access
• Disclosure to follow Accounting Standards
• Business segment wise reporting encouraged/ to be mandatory –
AS 17
• Accounting for de- mergers –AS 14 ( Purchase method)
• Capex – above certain limit – to be approved by ERC
• Alienation of assets – above certain limit to be approved by ERC
6. Fixed Assets
Generally consists of
o Gross fixed assets put to use
o Accumulated Depreciation on the above
o Capital work – in – progress
Expenditure is booked in CWIP as and when incurred –
materials, contract labour or payment for turnkey contracts .
Every year overheads, if specifically identifiable for projects, like
the following are capitalized:
o Interest during construction
o Employee costs
o Administrative over heads are transferred from expense
accounts to capital work in progress accounts
On completion of assets, expenditure transferred from Capital
work in progress to Asset group.
Assets put to use are recorded in Fixed assets register along with
other particulars such as date on which put to use, residual value
estimate, useful life, rate of depreciation to be followed, additions
deletions to the asset value etc.
Common Issue
o Works register generally not maintained in many SEBs
o Pre- 1985 asset classification almost impossible in many SEBs
o Post 1985- assets completion certificate not properly issued.
o Assets capitalized in the financial record in an arbitrary
fashion.
o Current situation, wherein there’s no physical and financial
reconciliation.

o Corporatization couldn’t handle this situation
o Invitation of private players would create chaos (especially if
there’s dispute on the value of each asset)
o Audit qualification under CARO (erstwhile MACARO) is
inevitable.
o Consumers contribution to capital assets- been consistently
not treated as recommended by AS 12 or AS 10. The balance
as –on- date, can be should be treated as free reserve for either
Bonus shares or as part of Equity.
o Accounting policy to be modified by companies for future
treatment
o ERCs are beginning to request for Voltage wise classification
of assets, to understand the ‘cost-to-serve’ model better
o ESAAR suggests for depreciation in the year subsequent to
the year in allow it (Is there rationale to do so?)
o Better to deactivate account codes relating to Generation,
Transmission in a Discom’s chart of accounts.
Importance of this blocs in the Balance sheet
o Under Schedule VI (of the Electricity (Supply) Act, 1948) rate of
return, net block forms the base for calculation of return,
Commission or consumers can raise serious objections, if proper
accounting records are not available
o Even, if Schedule VI rate approach is not taken, the net asset
value is the equity owners block and hence the correct value is
critical for calculating the return to company.
7. Investments
Investments in subsidiaries, fixed deposits, shares, bonds etc
o Investment in subsidiaries and associates would require
consolidation of accounts as per Accounting Standard
Classification according to Schedule VI to Companies Act needed
(quoted, unquoted under trade or others)
Market value to be ascertained for commenting on the permanent
diminution in value ,if any.
Investments for contingency reserve – as per Schedule VI of E(S)
Act- based on the ‘Cost= tariff, an allowance is made in tariff and the
same is to be invested (failing which the tariff will be deescalated to that
extent)- which could be replaced.
Issues
o Evaluation of quoted securities and their fair market values
8. Current Assets- Stories, Spares etc.
Relates to various stores, spares, tools that are held in inventory
Capital stores ( insurance spares) should be identified separately
Issues

o Stores issue etc to be valued strictly according to AS 2 (FIFO or
weighted average method)
o Closing inventory needs to be valued as per AS 2
o Physical verification of year end or continuous verification
processes to be introduced
o Slow moving or obsolete stores to be identified and written – off
o Materials – at- site to be accounted separately
o Existing ESAAR rules to be continued, however, the year end
reconciliation to historic accounting is crucial- some SEBs carry
this differences in Reserves- usually corrected at the time of
corporatization
o One of the major culprits in the inter-unit- account (“IUA”)
balances- needs an good IT software to eliminate this issue
o Outstanding IUAs should be swept away in the corporatization
restructuring activities?
o Cost accounting rules requires classification of capital spares
between< 12 months and > 12 months
o Obsolete / damage / unserviceable spares to be identified and
written off.
9. Current Assets- Assets- Receivables against supply of power
On sale of power (including unbilled estimates), utility has a right
to receive monies from consumers
Sections/ Divisions raise bills on consumers and collects the same
Individual consumer ledgers are maintained in sections/ divisions
and the control account ( summation of these) maintained at
divisional level
Demand Collection Balance is prepared on the consumer category
wise basis for Management control purposes
Issues
o One of the major problems in the sector – no authoritative
accounting of exact status of receivables
o Weak systems in creation of consumer accounts
o Subsidiary ledgers have, Trial Balances carry out global
accounting of DCB
o Second largest asset block in the Balance sheet- in some places
can equal the fixed assets block
o Financed in myriad ways- default to suppliers, lenders,
government, retaining of electricity duty etc.
o Can release more cash in the system, than tariff hikes
o Delayed payment surcharges- one of the components, that
increase the receivable with low probability of collections
o Evaluation of past receivables show large provisioning
requirements (in some cases as close as 75% to 100%)

10. Current Assets – Cash and Bank Balance
Cash balance- physical cash handled
Bank balances
o Remittance account- which can be remitted into only. Balance are
swept periodically to Head office
o Disbursement account – from which payments are made
o ‘In – transit’ accounts to account to account for cheques in transit
Issues
o Floats- money deposited into bank account and not yet utilized
for payment or investment is yet to managed buy many SECs-
opportunity cost/gain
o Reconciliation of cash collected and deposited – yet to be
strengthened
o Introduction of Billing & collection agents/ franchisees – need
for control and monitoring
o Escrow account & monitoring – how to record the same in
accounts management control systems.
11. Current Assets – Others
Advances to suppliers
Advances to contractors
Loans and advances to employees
Tax deducted at source on payments
Loans to subsidiaries
Other sundry debtors
Subsides receivable ( another major category)
Deposits
Issues
o Advances- reconciliation of subsidiary ledger to control accounts
o Inter- unit accounts on transfers of cash, materials, assets, others-
assumes gargantuan proportions- accounts are unable to treat
the balances, since there could be large compensating credits
and debits leading to confusion. Some of the states have
attempted to analyses transaction with a cut-off and treat the
balance as reduction/ increase of values under natural head.
Software or systems needed to resolve this on urgent basis.
12. Current Liabilities- Others
Liabilities to suppliers
Liabilities to Staff
Other Liabilities (deposits, EMDs, interest accrued but not due,
tax deducted at source on income earned etc.)
Issues
o Liabilities for suppliers – materials awaiting clearance –
liability created on basis of past bills? (Should be created only

on title rights passing to buyer and not before. If the title
rights have been assumed, then the rate should be on the
basis of Purchase Order)
o As per Schedule VI to the Companies Act, need to create
classification of dues to small scale units and others.
13. Current Liabilities- Power Purchase
Currently only to Transco which is also single buyer ( Position will
change with assignment/ vesting of PPAs to Discoms since
Transco no longer handle the trading activity)
May be split into individual generators- should states follow
assignment of individual PPAs to discoms
Need to be managed within the payment terms- failure can invite
penalties including invocation of Escrows, curtailment of power
Issues
o Cash flow availability – single buyer had the luxury of mixed pool from
all discoms.
o Will default by one discom to NTPC, curtail power for the entire state or
to a discom area alone.
o Similarly, on assignment of PPA on %basis, will default of one discom
invite invoking of escrow on all discoms
o Will state generation continue to be treated as Banker by all Discoms

14. Current Liabilities - Borrowings
All short terms loans (payable within 12 months), overdrafts for
working capital etc must be classified here
All capital liabilities amount payable within one year, will also be
classified here (international practice)
As far as possible distinct classification to be made
Issues
o Regulatory treatment of interest on liabilities
15. Consumer Security Deposits
Calculated as per ERC regulations – usually 2 or 3 months of
minimum demand ( MMD) is collectable from consumers
Distinction is made for collection of cash and non-cash deposits
(guarantees etc)
Issues
o Reconciliation of individual balance with control account
o Periodical evaluation of consumption – so that higher amount can be
collected from consumers
o Many ERCs have ordered utilities to pay interest (is there any
arbitrage to collect higher MMD)
o Balances of consumers who have left the grid/ disconnected/
discontinued – whether their balances have been properly adjusted?
o Not to be confused with the amount given by consumer for creation
of asset- which is treated separately
16. Long term liabilities ( capital liabilities)
Loan taken for more than a year are classified under this head
Loans from each source is to be identified clearly including
Bonds, debenture etc.,
Loans to be classified as ‘Secured’ or ‘Unsecured’
Loans from state government to be classified separately
o Issues
Interest accrued and due are to be shown along with the major
head
17. Reserves and Surplus
Reserves & Surplus
o Appropriated from profits – contingency reserve, redemption
reserve etc.
o Specific cash received – share premium, redemption of
debentures/ bonds etc
o Accounting (non- cash) revaluation reserve

• Tariff and dividend control reserve - special appropriation of revenues by
regulator without reducing tariffs - effect to smoothen out cyclical trends
for operators
• Surplus - post-appropriation profits
issues
o Forex variance reserve, material variance reserve etc - should be settled
within the accounting period, since standard rates may be used within
the period
o Proper classification and accounting would be required - for eg. Certain
reserve would require statutory investments - contingency reserve and
accounts should be able to monitor the same
o Schedule Vl of the Companies Act has clear definitions to be followed
and this would b important once the companies start declaring dividend
or issue bonus shares etc
o Classification would also be important to use certain reserves - Eg set off
against share premium or a capital reserve
17. Share Capital
o This is the shares issued to shareholders for the consideration paid by
them
o Usually issued as Equity but other type of instruments available
o Returned last to the shareholder after repaying all the monies to other
lenders, creditors
Profit and loss account
1. What is profit and loss account?
It is a financial statement in which the profit or loss made by a business
organization during a defined period of time is shown. Its fundamental
concepts are to recognize and account all the income and expense during the
period in question. It is a legal document which must be produced periodically
in the form required under the Companies Act 1956
Income + Subsidy - Expenses = Profit or Loss

2. Composition of profit and loss account
a) P&L account of Bescom for the year 2003-04
Sl.No Particulars SCH
.No
Current year 2003-04 Previous year 2002-03
I -INCOME
1. Revenue
power
from sale of 14 32,424,670,349
23,535,024,628
2. Rural Electrification 1,885,076,460
3,156,451,760
Subsidy-GoK
228,633,993
210,621,425
II 3. Other Income
15
34,538,380,802
26,902,097,813
TOTAL
-EXPENDITURE
22,076,703,846
1. Purchase of power-KPTCL 16 29,806,423,742
894,000,000
2. Provision for increase in
--
power purchase(share) 16
285,857,786
3. Repairs and Maintenance 17 312,734,988
2,023,931,126
4. Employee costs
18 2,487,500,324
5. Administrative and Other 19
219,265,444
6.
7.
Expenses
Other Charges(Debits)
Total
20
269,578,182
154,306,365
33,030,543,601
142,3666,567
25,642,124,769
III Less : Expenses capitalized
-PROFIT BEFORE
DEPRECIATION AND
INTEREST
1,507,837,201
7,12,823,204
1,259,973,044
IV
Depreciation(net)
-PROFIT BEFORE INTEREST
AND TAXES
21 943,533,416
564,303,785
318,472,214
547,689,840
V
Interest and other Charges
-PROFIT BEFORE PRIOR
PERIOD CHARGES OR
22 340,961063
223,342,722
229,217,626
VI
CREDITS
Prior period charges(+)credits(-) 23
-PROFIT BEFORE RESERVE &
TAXATION
8,631,658
214,711,064
----
31,974,354
229,217,626
VII
Reserve for contingencies
Profit before Taxation
Reserve for Contingencies
-PROFIT BEFORE TAXATION
Provision for Taxation
---
214,711,064,
18,00,000 197,243,272
VIII
IX
-PROFIT AFTER TAXATION
-BALANCE OF PROFIT
BROUGHT OVER FROM
PREVIOUS
87,070,000
179,243,272
127,641,064
___ 179,243,272
BALANCE CARRIED TO
BALANCE SHEET
306,884,336
179,243,272
VIII APPROPRIATIONS
Balance surplus carried to Balance
sheet
306,884,336
179,243,272
IX Significant Accounting policies ant
notes on
Source: Bescom Annual Accounts 2003-04
3. Statutory overview - requirement under the Companies Act, 1956
section 209 - Maintenance of proper books of accounts
Section 211 - Every P&L to conform with the accounting standards
issued

Section 212 - Details of subsidiaries & its treatment
Part I I of Schedule Vl
o Vertical formats
o Aggregate amount of sales by company, with each class separately,
volume of each class sold
o Notes to guide preparation and disclosure
• Electricity duty to be shown separately
• Major items of expenditure to be shown separately- power, rent,repairs
to buildings, insurance, salaries and wages (with sub grouping of
salaries and wages, contribution to PF and other funds, workmen and
staff welfare), taxes, miscellaneous expenses
• Depreciation, interest payments, dividends to be shown appropriately
• Payments to auditors, Managerial remuneration shown separately
• Income tax provision, appropriations to various heads
4. Statutory overview - Accounting Standards
Treatment and disclosure under various heads
o income - By category AS 9 (Revenue recognition)
o Subsidy accounting - AS 12 (Accounting for Government grants)
Expenses
o AS 4 Contingencies
o AS 6 Depreciation
o AS 8 R&D
o AS 1 1 Forex variation
o AS 1 5 Retirement benefits
o AS 1 6 Borrowing costs
o AS 19 Leases
o AS 22 Taxes Notes to include
o AS 1 Detailed accounting policies),
o AS 17 Segment wise reporting,
o AS 21 Consolidation of financial statements

5. Statutory overview- License clauses
Generally accepted accounting principles to be approved and used.
o Voltage wise classification of all income and expenditure may
become mandatory - especially, in view of setting costs across
different voltages to allow Open Access
o Disclosure to follow Accounting Standards
o Business segment wise reporting encouraged/ to be mandatory -
AS 17
o Borrowing costs - careful disclosure to avoid disentitlement
6. Income- Revenue from sale of power
Category wise sale of power (both billed and unbilled)
Other tariff related charges - power factor, fixed demand charges,
consumer charges etc
Electricity duty (state government levy, miscellaneous income (meter
hire)
Issues:
o Billing efficiency- raising of bills on all those liable to pay
o Acceptable bill - without billing errors
o Raising of fuel surcharge, wherever applicable
o Period of bill raising and submission for payment
o Reduction of commercial losses - convertibility to billing
7. Income - Subsidy and Others
Subsidy - Receivable from State Government on the basis as fixed by
Commission and for other policy directives
Grants from other statutory bodies/ governments Incentives under
special schemes like APRDP
interest & other income, delayed payment surcharge (caveat is ability to
collect)
Issues
o Booking of subsidies - timing of receipt, since this would affect cash
flows

o Calculation, justification to ensure that subsidy bridges the gap in
service to those consumers for whom its paid - not a mere gap filling
between revenue and expenses
8. Expenses - Power purchase
Currently, payable to single buyer (Transco or SEB)
May be payable to individual generators in future, on full allocation of
PPAs to Discoms Includes fuel surcharge payable Excludes discounts
received/ penalties levied on early/ late Payments (to be accounted
separately)
Issues
o Fuel surcharge is a pass through (on orders of ERC) and needs to be
tracked independently
o Mix of power purchase and hence need to be passed on to consumers as
power purchase mix adjustment (part of fuel adjustment)
o In MYT, disallowance on inefficiencies of operation (not competitively
procured, higher loss than allowed - draft NTP currently proposes that
all power purchase costs should be pass through)
9. Expenses - Major heads
Salaries and Wages - includes temporary/ contract labour
Repairs and Maintenance - to network, vehicles, buildings etc
Administration and general expense - rent, insurance, telecom,
travelling, training, license fee etc Expenses capitalized should be shown
as a reduction in a distinct fashion
Issues
o Ensure that the employee cost includes retirement benefit charge on
actuarial valuation Capitalisation of employee expenses - proper records
to justify such capitalization
o Capitalisation of Admin expenses - proper records to justify inclusion
o In MYT regime (as per draft NTP), expenses could be benchmarked and
may be disallowed for inefficiency
10. Expenses - Depreciation
Depreciation of all assets used in a year to be charged
Disclosure of various groups - network, buildings, leases etc
Assets written-off
Issues
o Unlike ESMR, depreciation should be charged as per AS 6 on all assets
used in a year (matching principle)
o Voltage wise classification may be required in future
10. Expenses – Interest and borrowing costs:-
Interest on all long term and short term liabilities booked here
Individual details to be presented

o Various categories and classes
o Lease charges should be distinctly displayed – AS 19
Guarantee charges, premium / discount on loans raised should be
separately disclosed
Issues
o Interest on loans not approved by regulator may be disallowed
o Interest capitalization follows Balance of Net Assets Method. More
appropriate would be to identify specific loans for specific purposes
– for example in AP, Balance Net Assets Method is followed,
whereas in Karnataka IDC on specific loans are debited to specific
projects.
11. Expenses – Tax
Companies should calculate as per AS 22 and provide for income tax
In view of government providing subsidy, there could be profit as per
income tax calculation.
Timing difference should be calculated and tax provisioning calculated
issues.
o IT may disallow expenses, in view of regulatory orders (especially
power purchase)
o Tax provision should also take into tax deferral and suitable tax
planning to be carried out
12. Others – Prior and Extraordinary Items:
As 4 would require separate treatment for infrequent prior period and
extraordinary items
Disclosure requirements as set out in the Accounting Standards
Issues
o SEBs were, over years, treating errors in accounting estimates as
prior period charges
o These are not so and should be accounted under natural heads.

Cash Flows:
1. What is a Cash Flow Statement?
Business organizations carry on their activities to earn profit. Yet, no business
entity can rest contended unless such profits are, periodically and ultimately
are converted in to cash. Financial Statements are prepared on accrual basis
and therefore do not throw light on cash management by the Company. A cash
flow statement provides a summary of cash receipts and cash payments, and
displays a reconciliation of the opening and closing balances in cash payments,
and displays a reconciliation of the opening and closing balances in cash with
the cash flows that occurred during the period. Cash flows are inflows and
outflows of cash and cash equivalents. A cash flow statement (CFS) covers an
accounting period.
Sources
Operation
Finances
Investments
Application
Investment
Working Capital
Cash

2. Composition of Balance Sheet
b) Cash Flow Statement of BESCOM
CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 st MARCH 2004
Amount
in Rs
Particulars Current Year
Previous Year
A Cash Flow from Operating Activities
2003 – 2004
2002 - 2003
Net Profit before Tax
Adjustment for:
214,711,064 197,243,272
Depreciation 943,533,416 712,283,204
Interest & Other Charges 340,961,063 318,472,214
Interest Income on Investment - -
Contingency Reserve 31,974,354
Other Income (228,633,993) (210,621,425)
Prior period charges (+) or credits (-) 8,631,658 -
Income Tax (87,070,000) (18,000,000)
Operating Profit before Working
Capital Changes
Adjustment for
1,192,133,207 1,031,351,619
Changes in Inventories 89,043,150 (523,769,133)
Changes in Sundry Debtors (4,867,860,586) (9,385,454,524)
Changes in Loans and Advances (36,602,303) (107,638,665)
Changes in Other Current Assets (2,940,585,598) (1,679,308,356)
Changes in Current Liabilities 5,185,186,633 7,101,939,000
Changes in Provisions 37,614,523 167,704,553
Operating Profit after Working Capital
Changes
(1,344,070,973) (3,395,175,506)
Prior period charges (+) or credits (-) (8,631,658)
Extraordinary items – Contributions from Consumers 590,790,483 355,828,517
Net Cash inflow from Operating Activities
B Cash Flow Investment Activities
(761,912,148) (3,039,346,989)
Changes in Fixed Assets (Net) (1,016,483,772) (8,225,147,186)
Changes in Capital Work in Progress 83,455,276 (534,502,281)
Net Cash Outflow from Investment
(933,028,496) (3,039,346,989)
Activities
C Cash Flow from Financing Activities
Changes in Capital / Share Deposit
Account
2,072,259,187
Changes in Secured Loans 638,032,721 2,672,657,145
Changes in Unsecured Loans (8,355,445) 113,114,980
Service Line and Security Deposit 943,670,336 7,677,162,484
Interest & Other Charges (340,961063) (318,472,214)
Other Income 228,633,993 210,621,425
Net Cash available from Financing
Activities
1,461,020,542 12,427,343,007
D Net Change in Cash and Cash
equivalents – Surplus Cash [(A)+(B)+(C)]
(233,920,102) 628,346,551
Add: Opening Cash and Cash equivalents 628,346,551 -
E Closing Cash and Cash equivalent as on
31.03.2003
394,426,449 628,346,551
Source : BESCOM Annual Accounts 2003 - 04
332,536,662 628,346,551
3. Statutory overview- Companies Act
- Not forming part of the requirements in Schedule VI

- Sec 211- reference to the compliance of AW and hence the following
of AS 3 for reporting
4. Statutory overview – Accounting Standards
Treatment and disclosure as per AS 3
- Operations
o Refers to the revenue producing activities. Change in
working capital is also part of the revenue producing
activities
o Depreciation, interest and dividend are added back
o Taxes are se off under this head
- Investments
o Acquisition and disposal of long term assets including
investments
o Interest and dividend on investments are included here
- Financing
o Interest and loan repayments are shown under this head
o Fresh borrowings are also shown under this head
5. Statutory overview – License Clauses
• Cash flows are generally not required for filing with ERC
• Tariff orders generally ignore the collection efficiency (except in
case of Delhi – privatization MYT principle)
• MYT as proposed in NTP recognizes collection efficiency being
less than 100%
6. Sources of Cash flow – Operating activities
• Sources
o Profit before Tax
o Add: Depreciation, interest and any other non-cash charge
o Less: Tax
o Add/Deduct: working capital adjustments
Opening balance of creditor (PP) – closing balance
of creditors (PP), suppliers and other current liabilities
• Difference is the Net flows from Operating Activities

7. Sources of Cash flow – Investment activities
o Sources
o Net Value of asset sold (i.e. sale value less net book value)
o Sale of investments (similar to above)
o Income from investments – dividend, interest
o Receipt of loans and advances to third parties
• Applications
o Capital expenditure
o Investment made
o Loans and advances to third parties
• Difference is the Net flows from investment activities
8. Sources of Cash flow – Financing activities
• Sources
o Fresh borrowings – working capital, long term loans
o Equity raised from shareholders
o Consumer security deposits
• Applications
o Loan repayments including working capital loans
o Interest payments
o Dividend to equity holders
o Consumer security deposits
• Difference is the Net flows from Financing activities
9. Summary
Net flow from Operating activities + or - Net flow from investment
activities * Net flow from financing activities = Net increase/decrease to
cash position
Opening Cash position + or - Net increase/decrease = Closing cash
position
10. Exclusions in AS 3
• Transactions that do not require cash or cash equivalent need not
be included in cash flow and can be disclosed elsewhere
o Eg. Acquisition of a plant and machinery by issue of
shares, debt-equity swap, issue of bonus shares
• Use of total movements in a resource of a company will reflect
these changes also.
• Disclosure is needed, when the cash or cash equivalent held by
an enterprise that is not available to it.
o Eg. Cash balances of a branch or subsidiary that is legally
prevented from repatriating it to the company

Annexure
Accounting standards applicable in India
Accounting standard sets out the way in which accounting treatments should
be carried out. These accounting standards are issued by the Institute of
chartered accountants of India (ICAI)
AS-1 Disclosure of accounting policies
AS-2 Valuation of Inventories
AS-3 Cash Flow Statement
AS-4 Contingencies and events after Balance sheet
AS-5 Prior period and Extra- ordinary item
AS-6 Depreciation Accounting
AS-9 Revenue Recognition
AS-10 Accounting for Fixed Assets
AS-11 Accounting for Effects in changes in Forex rates
AS-12 Accounting for Government Grants
AS-13 Accounting for Government Grants
AS-14 Accounting Amalgamation
AS-15 Accounting for Retirement benefits for employees
AS-16 Borrowing costs
AS-17 Segment Reporting
AS-18 Related party disclosure
AS-19 Accounting for leases
AS-20 Earning per share
AS-21 Consolidated Financial Statement
AS-22 Accounting for Taxes
AS-23 Consolidation of Investments in Associate
Common abbreviations
APDRP- Accelerated Power Development and Reform Programme
AS- Accounting Standard

BS- Balance sheet
CARO- Companies (Auditor Report) Order
CERC- Central Electricity Regulatory Commission
Companies Act- The Companies Act, 1956, as amended from time to time
CWIP- Capital Work-in-Progress
E(S) Act- Electricity (Supply) Act, 1948
EA 03- Electricity Money Deposit
ERC- Electricity Regulatory Commission
ESAAR- Electricity Annual Accounting Rules, 1985 Rules,1985
FIFO- First in First Out
IT- Income Tax
MACARO- Manufacturing and Companies (Auditor Report) Order
MIS- Managerial Information System
MMD- Months of Minimum Demand
MYT- Multi –year Tariffs
NTP- National Tariff Policy
NTPC- National Thermal Power Corporation Ltd
P/L, P&L- Profit and Loss account
PF- Provident fund
PPA- Power Purchase Agreement
SEB- State Electricity Board
SERC- State Electricity Regulatory Commission
BANK RECONCILIATION – RECEIPT ACCOUNT
A remittance register is maintained for recording the remittance made
during the month into the various bank branches. At the end of the month, but
before the closing of the monthly accounts, the total amount of the remittances
made into the banks branch wise should be journalized as below:
Head office (Bank remittance) account – Debit
To remittance into Bank (Branch- Wise) – Credit

(Being the remittances made into the bank branches during the month and
transferred to Head Office suspense account.
The branch accounts of the bank will be debited with the amount of
remittances advised and crediting to head office suspense account thus
clearing the later account.
The advice of credits in the branch offices of the bank is sent to Head Quarters
by the main office of the bank. The total credits during the month of each
branch should normally agree with the remittance intimated from the field,
though the journal voucher. If however, there is a difference between the
credits advised by the bank and the remittances intimated from the circle office
, the same should feature in the bank reconciliation statement and rectification
attended then and there.
All receipts should be credited to the current account of the utility in the Bank.
The receipts are remitted in various bank branches in the state, and the banks
in turn will transfer the credits to the Main account at the Head Office Bank
daily. The credits advised by the branches will also be intimated to the various
offices. The total remittance made as par the cash book should agree with the
statement of credits so transferred. The offices will furnish details of
remittances made by them into banks in every 10 days in the printed proforma
giving details of remittances, date of remittance, cash book voucher number,
amount etc., to the concerned section at the headquarters. It should be ensured
that all the remittance made in dishonoured cheques, necessary cancellation
entries should be made in the cash book ( both debit and credit sides) Which
should be deducted in the gross remittances furnished in the statement. The
concerned accounts officers are responsible for the reconciliation of the
remittances between the cash book and bank statements.
1. All the remittance made into the current account receipts and bill
collection accounts are transferred by the branches of the bank to the
head office main account.
2. Returns covering the above transactions from 1 st to 10 th, 11 th and 21 st to
the last day of every month should be sent.
3. Returns should be furnished in the prescribed forms.
4. Separate returns shall be submitted for each branch account.
5. The returns have to be submitted in time so as to reach the Head Office
not later than 4 th day after the date upto which the return is to be made.
6. If there are no transactions in any particular period, a NIL return shall
invariably be sent.
7. All returns relating to a particular branch account shall be consecutively
numbered from one upwards for each financial year.
8. The returns shall be prepared by hand in ink legibly
9. On no account should any column be left blank unless it is a case of NIL
return

10. If any cheque is dishonoured and the bank makes a debit entry for this
reason, such debits should be separately shown in the space provide
therefore in the form of the return. Such amounts should not be
deducted from the days remittances on any day.
11. No covering letters are required to be sent.
12. All the returns should be sent to concerned section at Head quarters.
13. One Copy of the return should be retained in the office.
GENERAL OMISSIONS IN THE BANK RECONCILIATION
STATEMENTS AND CHECK SLIPS FURNISHED BY UNITS/ CIRCLES.
i) The closing balances of previous year (i.e.) difference between
remittance and acknowledgement and remittance and transfers are
not correctly taken in the current return as Opening Balance of
Various Branches/Banks.
ii) The check slips indicating the transfer amounts in the scrolls are either
not furnished or furnished incompletely.
GENERAL MISTAKES NOTED IN THE PREPARATION OF CHECK SLIPS
a) The Check slip format communicated by the office of the Financial
Adviser and Chief Controller of Accounts is not strictly adopted by
some of the circles and modifications are made at circle level.
b) Transfer amounts in the scroll are not noted in the check slips against
the correct date.
c) The amounts in the scrolls are not correctly copied in the check slips.
d) No distinction in respect of cash transfers and other debits noted in the
withdrawal column of the scroll is made. Debit entries in the scroll on
account of returned cheques and T.T. charges etc., (i.e.) other than actual
cash transfers also are noted in column 2 of the check slip instead of
column 3.
e) Only one check slip is prepared for two accounts (i.e.) operative and
non-operative accounts of a branch instead of 2 check slips separately
for each account.
f) Transfers during the month shown in the last Branch Scroll are not
taken either in the last month or in the current month.
g) Check slips are not authenticated by Asst. Accounts Officer / E.R.O and
not countersigned by Senior Accounts Officer / Accounts Officer, Circle
Office.

iii. Branch scrolls are not furnished along with check-slips in respect of
certain branches.
iv. One branch scroll is obtained and furnished for two accounts (i.e.)
operative and non-operative A/c, noting transactions on both sides of
the Branch scroll.
v. Statement and check slips are not properly scrutinized in Circle Office
before furnishing to Headquarters.
vi. Large differences between the balances (i.e.) remittance and
acknowledgement and remittance and transfer are appearing without
being analyzed and identifying the items for pursuance with Banks at
ERO/Divisional/ Circle Office with the above item wise details.
BRANCH SCROLLS
The following are some of the defects noticed generally in the Branch Scrolls.
i. Branch names are not noted nor rubber stamp indicating the name of
the Branch, affixed on the scroll.
ii. E.R.O/Division name is not noted on the scroll.
iii. Debiting of T.T./Bank charges at Branch level.
iv. Name of the bank head office to whom amounts are transferred are not
indicated Branch scrolls.
v. Wrong posting of debits/credits in one A/c. instead of another of
utility.
vi. Totalling mistakes.
vii. Omission of incorporation of amounts remitted by the utility, in the
scroll.
viii. Omission of incorporation of certain items of transfer of amounts to
Local Head Office in the withdrawal column of the scroll.
MIS-MATCH IN COMPUTER:
In the computer process individual items of amounts transferred by
Branch to bank Head Office and credited by bank head office to the current
Main A/c, of utility are automatically matched and paired off by the computer.
In this process the following types of omissions etc., are creeping in and the
Banks were required to follow the following instructions to avoid mistakes.

i. Transfers made by the Branch on day to day basis, but shown in the
Branch Scroll as lumpsum transfer at the end of the week or month. As
this is resulting in mismatching of the limpsum amount indicated in the
scroll as transferred and amounts transferred on day to day basis from
the Branch and received as such at Bank Head Office amounts as and
when transferred may be shown in the scroll as transfers to Bank Head
Office instead of clubbing and exhibiting in the Branch scrolls.
ii. Amounts shown in the Branch scrolls as transfer to Bank Head Office
from the Branch where more than one A/c. is available, but one limp
sum amount clubbing the item in the individual accounts is actually
transferred to Local Head Office does not match with individual items
of transfers as shown in the Branch Scroll may be indicated “Account
wise” in the T.T./M.T. from the Branch and noted as such in Bank Head
Office supporting statements furnished to utilities Headquarters daily.
iii. Although individual amount from different accounts or of different
dates are transferred by the Branch, while crediting the same to main
current A/c of utility amounts are clubbed together by the B.H.O. and
given as one lumpsum credit. This also results in mismatch of items of
both Branch and B.H.O. Hence amounts as transferred from Branch
may be given credit at B.H.O. without clubbing.
iv. Although individual amounts are shown as transfers in the withdrawal
column of the Branch Scroll, the amounts are actually transferred to
B.H.O. Clubbing 3 or 4 items on the day. This results in mismatch of
items in Branch and B.H.O. data. Hence amounts as shown in the
withdrawl column of the Branch scroll may be transferred on that day
itself.

DRAWING ACCOUNT
Based on the letter of credit applications, the requirement of funds are
placed by the Head Office in the drawing accounts of the various banks for the
withdrawal and spending. As soon as the advice is received, the fact is
recorded in the cash book against this amount. The cheques are drawn for
payment. The balances in the drawing account also has to be reconciled
periodically. The difference between the debit total and credit total of the cash
book represent the balance in the drawing account. It must be ensured that the
funds advised by the Headquarters are properly credited to the drawing
accounts in the local banks. It must be ensured that the cheques issued are
encashed and properly debited to the drawing accounts in the banks. A
periodical return in the prescribed form will have to be sent.
1. The returns shall be made covering the remittance made from
headquarters to the drawing account from 1 st to 10 th, 11 th to 20 th and 21 st
to the last day of every month.
2. The details to be shown shall refer to the remittances received from
headquarters into the branches to the credit of the drawing account.
3. The returns should be sent in the prescribed forms supplied by
Headquarters.
4. The returns should be submitted in time so as to reach the headquarters
not later than the 4 th day after the date upto which the return is to be
made.
5. A NIL return should be sent if there are no transactions in any period.
6. All return relating to a particular branch account shall be consecutively
numbered from one upwards for each financial year.
7. These returns should be prepared by hand in ink legible.
8. No column should be left blank unless it is a case of Nil return and in
the portion intended to be filled up at Headquarters.
9. No covering letters are required.
10. One copy should be retained by the office.
The receipts at Headquarters will comprise of
i. Revenue Receipts.
ii. Receipts on account of deposits for service connections etc.
iii. Receipts on account of voluntary Loan collections.

iv. Receipts on account of Rural Electrification corporation remittances: and
v. Miscellaneous collections:
Out of the total amounts received the revenue receipts only are being
compared and statement of upto-data receipts during the month are being put
up to the Chief Controller of Accounts/Member (Accounts) comparing the
same with reference to the actuals of previous months to know where is
shortfall in receipts and to pull up the banking system of where there is no
response in accounting and Mail Transfers / Telegraphic Transfers.
The statement shown above shows the comprehensive position of the
entire banks position daily for review by the Chief Controller of Accounts /
Member (Accounts), wherever there is likelihood of getting over draft in the
various banks inter-bank transfers are arranged by the section from the banks
where cash is available to see that over draft is reduced or does not arise.
The Cash required for meeting payments by the Divisional Engineers
salary payments, remittances to Provided Fund, etc., are released by the
headquarters daily as per the applications received by the Chief Controller of
Accounts. The application for letter of credit issue up to the date of application
and balance grant and the amount now required the details for the payment
required, will be furnished by them. These are scrutinized by the section and
after getting approval of the Deputy Chief Controller of Accounts. Cash is
being arranged to be transferred.
Daily transfer of cash balance will be based on the applications received
from the field officers and there is no restriction in applying for cash by the
field officers. For payment of salaries on every 1 st the concerned drawing
officers will submit the applications by 15 th of previous month for payment of
monthly pay for which cash is required on 1 st. These are orders to be issued to
the concerned drawing officers on 1 st of each month so that the drawing
officers can credit the payment order to the drawing account and draw
salaries. The debit for this is received in the main account with State Bank of
Hyderabad on the 1 st i.e. salary day.
Based on the Bank scroll daily cash book is written in the Banking and
Resources section and checked by the Chief Accountant (Budget).
As cash control is made at headquarters a weekly statement of receipts
and payments and the balance in the bank are drawn and authorization for the
payment already made during the previous work and for payments to be made
during the next week are put up to the Chief Controller of accounts / Member
(Accounts) and Chairman and discussed in the ways and means Meeting every
week and approved by the Member (Accounts) Chairman and proceedings are
issued. These ways and Means Statement are compiled with reference to the
applications received from field officers under various heads. The statement

shows expenditure against the grants in respect of capital accounts of
Operation Circles and Projects only.
It is only very rarely that the balances shown in the cash book and the
bank scroll are the same. A bank reconciliation statement is prepared
explaining the reasons for the disagreement of the balances as per the cash
book and the bank scroll. The following are the reasons for the dis-agreement
between the two balances.
Reason for the disagreement between the balances shown by the Bank
scroll and the cash book. The disagreement between the balances as per the
cash book and the bank scroll is only due to some of the entries made in one
not being made in the other.
2) CHEQUES ISSUED BUT NOT PRESENTED:
Cheques issued are entered in the cash book immediately they are issued.
Since the entry is made immediately after issue of the cheque, the result of
issuing a cheque is to reduce the cash book balance. Both the
corresponding entry in the books of the banker will be made only when the
cheque is presented for payment of the Bank. If the reconciliation statement
is prepared after the cheque is issued and entered in the cash book but
before it is present for payment at the bank, there is bound to be difference
between the balance shown by the cash be difference between the balance
shown by the cash book and that shown buy the Bank scroll. In this case
the Bank scroll balance will be greater than the cash book balance.
2) CHEQUE DEPOSITED BUT NOT COLLECTED:
Cheques deposited in the bank for collection are immediately entered in
the cash book. But the corresponding entry will be made in the bank’s book
only after the cheques are collected. In such a case the cash balance will show a
higher figure on the date on which the Reconciliation statement is prepared.
3) DIRECT PAYMENTS INTO THE BANK BY CUSTOMER OR THE
TRADER:
Some times payments due may be made into the bank direct by
customers, and the intimation relating there to might not have been received.
In this case the Bank Scroll balance will be higher than the cash book balance.
4) BANK COMMISSION AND CHARGES:
Bank commission and charges might have been debited to the Transco
account in the bank’s books, but the same might not have been entered in the
cash book. As a result, the Bank Scroll balance will be lower than the cash
book balance.
5) INTEREST ALLOWED ON BOOK BALANCE BUY THE BANKER:

Interest might be credited to the Transco account and may appear in the
Bank Scroll. The corresponding entry might not have been passed in the cash
book. The bank scroll therefore shows a larger balance.
6) CHEQUES RECEIVED AND ENTERED IN THE CASH BOOK BUT NOT
SENT TO THE BANK:
If cheques are received and are entered in the bank column of the cash
book, but for some reason are not sent to the Bank, the cash book shows a
larger balance.
7) CHEQUES ARE SENT FOR COLLECTION AND DISHONOURED:
Some times cheques might have been sent to the bank for collection and
the entry might have been made both in the cash book and also in the Bank
Scroll. If such cheques and dishonored, the banker might have passed the
entry, but the corresponding entry has not been made in the cash book in this
case, the cash book balance will be higher.
8) INTEREST COLLECTED AND CREDITED BY THE BANKER:
The Transco may keep securities with the banker and the banker may be
authorized to collect interest accruing upon them. Such interest might have
been collected and credited to the account in the bank’s books, but he same
may not appear in the cash book.
9) WRONG ENTRIES:
The banker might have made some wrong entries, or wrong entries
might have been made in cash book. The cash book balance or the pass book
balance will be higher depending upon the nature of the wrong entry.
A reconciliation statement may be prepared reconciling the cash book
balance with the Bank Scroll balance. This statement is prepared at periodical
interval. It must be headed ‘Bank reconciliation statement’.

CHAPTER 8
B) BUDGETS AND CONTROL OF EXPENDITURE
A) Classification and System of Accounts
1. CLASSIFICATION OF TRANSACTIONS: In the Budgets the Receipts and
Expenditure of the utility are grouped as shown below:
1. Revenue Receipts
2. Revenue Expenditure
3. Capital Receipts
4. Capital Expenditure
RECEIPTS EXPENDITURE
A. Operating Budget A. Operating Budget
1. Revenue from Sale of Power 1. Purchase Power
2. Less Electricity Duty 2. Generation of Power
3. Revenue subsidies Grants 3. Repairs & Maintenance
4. Other Income 4. Employees cost
5. Administration and General
Expenses
6. Less Expenses Capitalized
7. Other debits
8. Total Expenses
9. Operating Income
B. Finance Charges B. Finance Charges
1. Operating Income 1. Depreciation
2. Interest and Finance Charges
3. Less Capitalised
4. Surplus
C. Surplus Appropriation C. Surplus Appropriation
1. Surplus 1. Payment of principal of
Loans

2. Depreciation 2. Interest during construction
3. Other capital receipts 3. Internal Resources
D. Capital budget D. Capital budget
1. Plan Receipts 1. Plan Capital out-lay
2. Out side plan (receipts) 2. Out side plan out-lay
3. Non-plan (receipts) 3. Non-Plan out-line
2. Section 61 of the Electricity (Supply) Act 1948 lays down that the
utility should submit to State Government in February every year an
Annual Financial Statement in the prescribed form of the estimate of
Capital and Revenue Receipts and Expenditure of the ensuring year,
including a statement of salaries of Members and officers and other
employees of the utility. Sub-section (3) of section 61 requires the
State Government to lay the statement so received on the table of the
House. Sub-section (4) lays down the utility to take into
consideration any comments made in the State Legislature on the
said statement.
Sec: 16 of Electricity (Supply) Act requires the utility to place before the State
Electricity Consulative Council the Annual financial Statement and
Supplementary Statement, if any and take into consideration, any comments
made on the Statement, in the said Council, before submitting the same to the
State Government under sec.61.
3. The departmental subdivisions of accounts for cost and statistical purposes
are known as Account Numbers and are designed for administrative
financial control and maintenance of commercial accounts.
4. SYSTEM OF ACCOUNTS: The system of accounting in the Department is
in accordance with Modern Engineering Accounting, sufficiently detailed
to furnish the true costs of the various jobs and sections and is managed
and maintained by a centralized accounting organization. The various
Divisional and Sub divisional officers in the unit have only the field work
to do and furnish the Circle Office or division office such information and
data as are required for the maintenance of a perfect record of accounts.
5. The Field Officers have however to maintain the initial accounts of cash
and stores handled and of works in good order and on the basis of these
the accounts are written up and dept. The field officers maintain a list of
material s drawn work order-wise under the various requisitions for or
devolutions to stores. All petty cash expended by them out of their
impress is also noted. The Central Office / Division Office checks the
actual against books and closes the works accounts on the basis of
completed work orders.

6. All expenditure is subject to check in the Head Office, Circle Office /
Division office as the case may be before payment, except the payments
made out of impreset, and payments against letter of credit opened with
Banks which are post audited before admittance. The revenue is assessed
and billed for and realization considered in the Branch.
7. The receipts and expenditure are incorporated in the departmental cost
and commercial accounts and monthly accounts are prepared.
B. PREPARATION OF BUDGETS
8. PREPARATION AND SUBMISSION OF BUDGETS: The Central Office of
the system is the unit for the preparation, consolidation and submission of
budgets. The detailed procedure is explained below, Budget is an estimate
of annual receipts and expenditure. Budget estimates for every year should
generally follow the revised estimate of the current year after taking into
account any abnormal circumstances that have been in the current year or
expected in the next year. No increase should be made over the revised
estimate unless adequate reasons are given. It shouldn’t be assumed that
provision should always be made in the budget for next year on the basis
of Revised Estimate as a matter of course. But revised estimate should be
taken as guide.
The following precautions are taken in preparation of the budget:
1) Budget Estimate should be in the prescribed of the budget.
2) Budget Estimate should be submitted by the due date.
3) Budget Estimate should be for the sanctioned schemes only.
4) Provision in the Budget should ensure that the total expenditure is with
in the sanctioned estimate only.
5) Clear and cogent explanation for variations between Budget Estimate
and Revised Estimate for the current year and Revised estimate for
current year and Budget for next year are to be furnished.
6) Provision for expenditure to be incurred for 12 months APRIL to
MARCH.
7) Budget estimate should be for the works entrusted to the concerned
department or system.
Revised estimate should be prepared with great care assuming that at the
time of preparation of Revised estimate that actual for the first six months of
the current year available. Revised estimated estimate may be calculated by
adopting any of the following methods:

(1) By adding actual for the first six months of the current year and those of
the last six months of the last year.
(2) By the method of preparation so that revised estimated equals to the
twice the six months actual of current year.
(3) Calculate the ratio between six months actual estimated equals to the
twice the six months actual of current year.
(4) Average previous three years may be taken and any special weather and
extraordinary conditions considered for greater accuracy.
1. GROSS RECEIPTS: The Senior Account Officer / Accounts Officer should
prepare the revenue statement in the utility from against each source,
showing actual of last year, actual to the end of the month during the year,
and the probables as may be estimated. The sources of revenue should be
grouped under H.T. consumers, licensees, Government departments, L.T.
distribution, etc., as may be convenient and under departmental
classification. Any new sources of revenue, marked decrease or increase
should be indicated and noted on by the Divisional Engineer. Additional
revenue expected from new services likely to be given during the year as
well as revenue expected from places under electrification should be taken
into consideration when framing the estimates. The statements received
should be consolidated by the Senior Accounts Officer / Accounts Officer
and submitted to the Superintending Engineer for approval before
submission to the Financial adviser and Chief controller of Accounts. The
Commercial section may also be required to give its forecast for checking the
divisional revenue estimates. In respect of miscellaneous revenue and other
items or groups of items, the estimates should be worked out in the Circle
Office on the basis of actual and the information available.
2. ELECTRICITY DUTY: Provision fund, Electricity Duty should be worked
out as per the Electricity Duty Act.
In respect of sale of power to Central Government officers to other
utility licenses and electricity consumed in construction, generation and
operation works including the officers of the Transco and sale of power
to agricultural services no Electricity duty is leviable and payable to the
State Government . This aspect should taken into account while making
provisions for electricity duty.

3. REVENUE SUBSIDIES AND GRANTS:
i. Subsidies and grants from State Government
ii. Grants for research and development. The estimates for items i and ii
are prepared in head quarters
iii. Grants in aid for education
4. REVENUE EXPENSES:
a. Purchase of power
b. Generation of power
c. Repairs and Maintenance
d. Employees cost
e. Administration and general expenses
f. Depreciation and related costs
g. Interest and finance charges
h. Interest and finance charges capitalized
i. Other expenses capitalized
j. Other debits
k. Extra ordinary items
a. PURCHASE OF POWER: Provision in respect of power purchased from
central generating stations, State Government, other utility and other
will be made.
b. GENERATION OF POWER: In preparing estimates condition of the
generating units, programme for over – hauling the units, additional
generating units coming up should be taken in to consideration.
Provision for coal, oil, gas, water charges, fuel related costs (i.e. handling
charges, demurrages on wagons, siding charges, losses in transit of coal
/ oil, losses in storage etc.,) consumable lubricants, station supplies
should be made.
c. REPAIRS AND MAINTENANCE: In respect of maintenance and other
charges directly incurred by the field staff, the Divisional Engineers
should be required to send in their budget estimates in utility formed the

udget should be worked to a fair approximation with reference to
previous year’s expenditure under ordinary items. In the case of special
items such as renewals of lamps, repairs to plant and machinery, jungle
clearance, repairs to buildings, etc., working estimates should be
enclosed.
Renewals Replacements: The cost of heavy renewals and replacement’s
of plant and distribution lines should be capitalized. Minor renewals,
replacements and improvement should be charged to grant provided for
under Repairs and maintenance account.
The maintenance budget should further correspond to the annual
maintenance estimates sent by the Divisional Engineers in the financial
progress report from. Any variations (savings or excesses) being explained
in details. The opportunity should be taken to keep the maintenance
charges to the absolute minimum. The following items should be carefully
reviewed and results reported along with the budget estimates.
i. Consumable and the standard fixed
ii. Work establishment sanctions and
iii. Other labour and repairs including renewals to buildings and
equipment – vide also instructions on the preparations of
maintenance estimates.
iv. Tools and plant --- in all estimates for works relating to capital
expenditure provision for tool & plant (ordinary) at 1% of works
expenditure is made. In the budget estimate details of cost of
purchase of tools & plant (against the 1% Tools & Plants
provision in the sanctioned estimate) should be submitted shall
all operation, generation, construction circles and divisions under
capital outlay. As cost of T&P is capitalized no percentage
adjustment in operation branch will be made in account by debit
to capital and crediting O&M.
d. EMPLOYEES COST: The budget for this should be prepared under the
following sub-heads:
i. Pay of Directors of Utility Officers, and other employees including
workmen
ii. Allowances
a. Dearness allowance
b. Other Compensatory allowance etc.,

iii. Bonus
iv. Medical expenses reimbursement
v. Leave Travel Assistance
vi. Earned Leave encashment
vii. Staff Welfare expenses
viii. Pension and gratuity (i.e. Terminal benefits)
ix. a) Proportionate charges transferred to capital towards
establishment charges in respect of capital works executed by
operation circles divisions and Head quarters charges.
b) Pension charges including gratuity should be calculated at
prescribed rate on total pay and allowances and provision made
in the budget.
c) The estimates relating to pay and allowances should be
prepared based on sanctions supported by number statement
which is prepared in prescribed form. In respect of pay and
allowances of officers and staff, it is worked out taking into
account the actual of the first six months of the current year and
the actual strength of staff. With reference to details and
information available in the office copies of the bills, Audit
Registers and Service Books, the salaries and allowances that
should be payable for the next six months the salaries and
allowances that should be payable for the next six months and
next year will have to be worked out and adopted as probables.
e. ADMINISTRATION AND GENERAL EXPENSES: The budget for this
should be prepared under the following sub-heads:
i. Rent, Rates and Taxes
ii. Insurance
iii. Telephone charges
iv. Postage
v. Telegram and Telex charges
vi. Legal charges
vii. Audit fees
viii. Consultancy charges
ix. Technical Fees
x. Other Professional charges (privatization of billing and collection)
xi. Payment to Electricity workers of Panchayats
xii. Conveyance & Travelling

a) Conveyance charges
b) Travelling charges
c) To Employees
d) Vehicle running expenses – petro & oil
e) Vehicle Licence & Registration fee
xiii. a) Fees & Subscription
b) Books & Periodicals
c) Printing
d) Stationery
e) Advertising expenses
xiv. Electricity expenses
xv. Water charges
xvi. Entertainment charges
xvii. Material related expenses
After adopting the actual for the first six months of the current
year as per monthly accounts, the probables for next month and
next year should be arrived at for each head of expenditure based
on miscellaneous sanction register, stationery purchase, printing
programme, past experience, average expenditure for the
previous three years, extra – ordinary circumstances and
abnormal conditions. The total of all these will be incorporated in
the budget proposal.
f. DEPRECIATION AND RELATED COSTS: Provision for depreciation
is worked out at the prescribed rates at Head quarters and the amount is
included in Revenue expenses budget.
In respect of works executed by the divisions/circles of transmission line
construction/project construction provision for depreciation for on 1.
Vehicles, 2. Furniture & Fixtures and 3. Office equipment is worked by
the concerned divisions and circles and the amount provided as debit to
capital works and credit to Revenue expenses – Depreciation.
g. INTEREST AND FINANCE CHARGES: The budget should be
prepared under the following sub-heads as per the general instructions.
i. Interest on various Loans
ii. Interest on consumption deposits
iii. Interest on borrowings for working capital
iv. Interest on GPF
v. Interest on other finance

vi. Cost of raising finance
vii. Lease rentals on lease finance
viii. Bank charges
ix. Guarantee commission
Items i, iii, vi to ix are prepared in Head quarters office item iv and v will
be prepared in Head quarters office and field units while item 2 will be
prepared in field units and included in Revenue expenses budget.
h. INTEREST AND FINANCE CHARGES CAPITALISES: Interest during
construction (i.e. interest to be capitalized) will be worked out at head –
quarters office as per rules prescribed and provided as debit to capital
and credit to Revenue expenses – interest.
i. OTHER DEBITS: Other Debits : In preparing the estimates, general
instructions are followed in respect of the following items and
incorporated in budgets.
i. Provision for Bad, doubtful and disputed debts in respect of
a) Consumers
b) Suppliers and contractors and advances
c) Employees
ii. Write off of the above item
iii. All other losses
iv. Research and development expenses
Note: Other Debits i.e. losses will not be capitalized.
j. OTHER EXPENSES CAPITALISED: As all the expenses as per items b
to f are initially charged to Revenue expenses in the transmission
construction / project construction circle/divisions executing the capital
works they are transferred to capital works by credit the revenue
expenses under the classification “Other expenses capitalized”.
k. EXTRA ORDINARY ITEMS: Losses on account of flood cyclone, fire
etc. are classified under this heads of account. Estimates are based on the
actual for first 6 months of the year and probables for next six months are
proposed as per the balance of works to be executed.
5. SUSPENSE : The budgets for the detailed head of suspense fall under the
major heads. “Capital outlay on Electricity Schemes” and “Revenue

Expense”. The suspense is divided in accounts under miscellaneous
advances (Sundry receivable). Purchase, stock, and sundry Debitors for sale
of power for which the initial accounts are maintained under the various
departmental clearing accounts which should be grouped in budgets as
indicated in the form utility and briefly explained below.
Suspense transactions under sundry receivables, purchases and stock
are grouped under capital budget while those under sundry debtors for sale
of power are grouped under revenue budget.
SUNDRY DEBITORS FOR SALE OF POWER :
Provision for sundry debitor for sale of power should be furnished both
under debits and credits. The debits to this account represent the amount of
revenue assessed for the year. The credits represent the amounts that have
been realized out of the assessment of the years and the arrears outstanding
at the commencement of the year. The details should be furnished towards
the assessment of revenue made or to be made during the year as a debit
provision. The amount that is likely to be realized during the year towards
that years demand and the amount to the realized during the year out of the
outstanding arrears at the commencement of the year should be clearly
given so as to enable to know the actual cash of collection that would be
available during the year for meeting revenue expenditure.
At the headquarters, the revenue receipts budget is finalized taking into
account the generation pattern i.e. power generation and the power
purchase from central sector stations and other boards.
The budget estimates are prepared by the Asst. Account Officer / Sr.
Accounts Officer with reference to the details of each transaction, their
clearance, opening balance at the beginning of the year and the probable
balance expected at the close of the uyear under each item. This shall be
based on an intimate knowledge of the transactions and information
obtained from field officers.
6. CAPITAL BUDGET: A statement should be prepared showing the name of
work estimate amount for works only, work order amount, expenditure to
end of the year, expenditure during the year and probables. It should also
show the sanctioned works for which work orders have not been issued and
the proposals likely to be sanctioned as for as information is available. The
Divisional Engineers should carefully scrutinize the programme of works
and fill in the estimated works expenditure for which funds are required
within the official year. The urgency of works, the Departments liability to
consumers to supply power, the proposals expected to be sanctioned should

e carefully taken into account. Remarks “subjects to availability of
materials” in sanction of estimates should be avoided as the Divisional
Engineer are primarily responsible to ensure these factors in time.
The estimates of works expenditure furnished by the Divisional
Engineers shall be scrutinized, consolidated by the Senior Accounts Officer
/ Accounts Officer any adjustments necessary as seen from the accounts
shall be provided for in the Central Officer – for example --
Released equipments in so far as concerns the wiping out of original
erection and establishment and other charges from capital cost.
Instructions in respect of preparation of budget relating to
i. Generation of power (i.e. trial stage costs in respect of new
generating units)
ii. Repairs and maintenance
iii. Employees cost
iv. Administration and general expenses
v. Depreciation and related costs
vi. Interest and Finance charges ---- apply in preparing budget
estimates for capital expenditure
7. PURCHASES : The estimate under this is closely connected with the stores
budget. The budget under this head is also prepared by the Senior Accounts
Officer / Accounts Officer with reference to following principles.
Provision has to be made both for Debits and Credits Debits provision
represents payments to supplies Credits provision represents receipts of
materials by debits to stock. It is closely connected with stock and works
provision for debits and credits has to be made as follows:
a) Actual for the first “six” months.
b) Expected receipts in respect of pending L.P.O.S already placed.
c) L.P.O.S yet to be placed during the current year for revised estimate.
d) Similar provision for budget estimate for next year has to be made in
respect of items (b) & (c).
The deliveries of materials expected and the payments which can be
made within the financial year after taking into account the contract
conditions the time taken for verification scrutiny and payment of bills
should be carefully examined and the programme of clearance well
planned.

8. SUNDRY RECEIVABLE: (including advances to suppliers etc.) Debit to this
head represents amounts paid as advance to suppliers ending receipt of
materials in good condition, credit represents clearance by transfer to
purchase account after receipt of materials in good condition. Provision in
the revised estimate should be made by adopting actual for the first six
months and probable for the next six months. In the proposals for budget
estimates for next year, provision should be made both for debits and credits
as per the terms and conditions of the purchase order.
9. STORE BUDGET: The budget under stock suspense needs careful
attention. The budget estimates should be prepared showing the value of
stock on hand, the amount of stores required to be purchased and the
probable value of stock on hand, the amount of stores required to be
purchased and the probable value of stores likely to be issued during the
year under the various works. The stores budget should show separately
the stores meant for ordinary operation and maintenance works, spares,
service connections and construction works. Heavy materials required for
large capital works, or renewals or replacement should be carefully
analysed. Time allowed as per local purchase orders for delivery of
materials should be noted and the reserve limit of stock prescribed should
be taken into consideration in preparing the budgets for stock. The stores
budget shall be consolidated under orders of the Superintending Engineer
and sent to him through the Senior Accounts Officer / Accounts Officer for
his check and remarks.
Arrangements should to be made to have the stores budget received
sufficiently early and scrutinized for incorporation in the budget estimates.
i. Provision for debits and credits has to be made.
ii. Materials provision under capital, Operation & Maintenance and
Service Connection cost ledger and other works has to be
provided as credits.
iii. Debit provision represents receipts of material in stores. This is
closely connected with the purchases budget.
9. As far as possible, utility form should be used as working sheets in
the preparation of budgets.

10. While framing the budget estimates, the revised estimate for the
current year and the budget estimate for the ensuring year should be
taken up together for consideration.
11. The budgets as obtained from the Divisional Engineers in respect of
field details and as prepared in the Central Office will be scrutinized
by the Senior Accounts Officer / Accounts Officer and consolidated
in the form prescribed and submitted to the Superintending
Engineer with his comments and review for approval.
12. The following are the special features of appropriations relating to
the major head “Capital outlay on Electricity Schemes”
To meet the demands of consumers promptly, lump sum provisions are
made in respect of operating systems to cover expenditure on
construction of line extension each system is split up into two portions,
the one for works and the other for minor extensions. As new
extensions are sanctioned, funds to meet the expenditure thereon
provided for by re-appropriation by Transco and the Chief Engineer or
the Superintending Engineer can re appropriate funds from “Lumpsum
for minor extensions to meet expenditure under the head”
Distribution of power in the system. “Copies of orders of re
appropriation sanctioned by the Superintending Engineer will sanction
no expenditure will be booked directly against the lump-sum
provisions.
13. The Superintending Engineer should scrutinize the field estimates
the capital expenditure, the stores budget and the maintenance
estimate, with a view to controlling the programmes of the
respective Divisions Engineer and co-ordinate the works and stores.
It should also be seen that the budgets are economical and
extravagance or rush of expenditure is avoided. The “Gross Receipts
and working expenses” should be personally scrutinized to keep
down the working expenses to absolute minimum and ensure
progress in the development of the revenues. The works
expenditure should also be programmed with this object. It should
be borne in mind that the Superintending Engineers and Divisional
Engineers are personally responsible for steady growth of revenues
with minimum outlay and for the commercial stability of the system.
This should be portrayed by the results of the budget.

14. If necessary a conference of the Divisional Engineers, Assistant
Divisional Engineers and the Senior Accounts Officer / Accounts
Officer shall be held before the consolidation of budgets provisions
can be discussed and settled.
15. The budget estimates thus prepared will be forwarded by the
Superintending Engineers to the Chief Engineers / Zone on the due
dates who will scrutinize and consolidate the various estimates and
forward them to the Chief Engineers concerned at head quarters and
Financial Adviser and Chief Controller of Accounts and the Chief
Engineer at head quarter will forward incorporating his estimates to
Financial Advisor and Chief Controller of Accounts.

Note:
1. Provision of funds by competent authority is a condition precedent to
incurring expenditure on a work or other object. The terms
‘expenditure’ used here includes working expenses of Electric Schemes
but not funds of revenue receipts.
2. For payments chargeable to the accounts of other Govt. Departments or
of non-Govt. works and repayments of deposits, no specific provision of
funds is necessary. It is sufficient to see that such payments are made
only in accordance with the rules in the relevant chapter of this code.
3. The budget should in full details in respect of major works showing
separately, works sanctioned and in progress, works sanctioned to be
started, works not yet sanctioned. It should be seen that the works in
progress are completed before fresh works are undertaken and that the
execution of works is not prolonged by short provisions of funds. The
unexpended allotments of the official year will not be available for
expenditure in the following year, unless specific provision is
previously applied for well in time explaining the reasons for the delay
in completing the works before the end of the year.
4. No provision should be made for any unsanctioned works. Allotment
of funds in anticipation of sanction estimates should be exceptional and
on the express orders of competent financial authorities.
5. The outlay on the works and services must be kept within the provision
and under no circumstances any liability be in one year against
anticipated grants in the next year.
6. Estimates relating to
Loans and advances to employees, loans and advances to licenses,
building, furniture & fixture office equipment (including computer),
rolling stock of meters / transformer (i.e. spare units / service units) are
prepared keeping view the instruction s for preparations of budget
estimates and provisions made in revised estimates and budget
estimates.
Redemption of Loans
The term “Loan” implies that the loan is to be redeemed at the end of a
specified period as per terms and conditions of loan. The amounts of
loans to be repaid (as redemption) to various agencies are provided in
the estimate of budget at headquarters office of the utility.

Note:
Note:
C. COMMUNICATION OF GRANTS
16. COMMUNICATION OF GRANTS: The sheets of detailed budget
estimates containing the grants are communicated by the Transco.
They show the budget estimates as finally fixed for the various units
of appropriation. Figures are entered not only against the various
subheads of appropriation but also against the detailed account
heads of which they are composed. Copies of these estimates are
communicated to the Superintending Engineers / Chief Engineer /
Financial advisor and Chief Controller of accounts.
(1) Distribution of the amounts allotted against the various units of
appropriation among the several systems will not ordinarily be
necessary in the utility as the units of appropriation are arranged by
systems and therefore each unit will in variably relate to one system
only, in the case of capital works however if any work of
importance relating to a system is executed by the special
construction circle, it may be necessary to distribute the grant for a
unit of appropriation between the system concerned and the
construction circle. This distribution is made by the Chief Engineer
and intimated to the Superintending Engineers.
(2) The Divisional Engineers will be intimated by the Central Office of
the funds allotted with information whether the estimates have
been sanctioned. It shall then devolve on the Divisional Engineer to
see that the estimates are sent in time, stores arranged and the work
orders issued, amount spent in full time. It may be taken that the
work orders issued are for the funds available.
17. An appropriation or re-appropriation with in the grants of a year
can be authorized at any time before, but not after the expiry of the
year.

(1) Appropriation is intended to cover all the charges including the
liabilities of past years, to be paid during the year or to be adjusted in
the accounts of it. It is operative until the close of the financial year.
(2) A register of appropriations should be maintained in each system
Note:
wherein all appropriations and re-appropriations sanctioned should
be entered.
18. The expenditure should be strictly limited to the grants sanctioned
and no expenditure should be incurred without appropriation or in
excess of it, should any necessary arise for charges for which no
appropriation is made, supplemental grants should be applied for as
soon as possible.
Whenever a proposal is made in the course of a year to incur expenditure
on an object for which no provision has been made in the budget, the
application for sanction to the expenditure should be accompanied by reappropriation
statement for the additional re-appropriation during that
year.

Section – 1
1. Scope:
CHAPTER – 9
STORES MANAGEMENT-I
(a) In a Power utility store are required for the following purposes:
(i) Operation & Maintenance works
(ii) Other Commercial activities; like hiring equipment etc;
(b) They are broadly classified as below for purpose of accounting:
Stores consisting of :
(i) Materials held under ‘Stock’ suspense account
(ii) Tools and plant charged off to final head of accounts under
Generating station, Transmission lines, Substations,
Distribution lines, Offices etc.,
(iii) Spares and other equipment charged off to works
(iv) Consumable charged off to Operation and Maintenance
(c) The detailed accounts procedure for stores held under ‘Stock’
suspense is given hereunder. In respect of items (ii) to (iv)
mentioned above, though their cost in charged to final head under
the works concerned or quantity accounts of receipts, issues and
balances should be maintained, with a view to have proper control
over the materials. This is dealt with later.
2. ‘Stock’ Suspense Account:
The stores transactions emanate as detailed below:
(a) Receipts:
(i) By purchases from suppliers
(ii) By diversion from other stores
(iii) By devolution from works

(b) Issues:
(i) By issue of material of works.
(ii) By issue of material to contractors, consumers, D.C. works, sale
etc.,
(iii) By diversion to other stores of the Transco.
The accounts of the stores are based on the fundamental principle
that all materials purchased shall be charged to the suspense account ‘stock’
in the first instance though the materials purchased may be for a particular
work and are chargeable ultimately to works for which the materials are
issued. However the following transactions need not pass through stock
account and should be charged direct to works by entry in measurement
book or special stores received book.
(a) All machinery for large projects, purchased under supply and
erection contractors.
(b) All special tools and plant for large project including heavy transport
vehicles of 5 Tons and above.
(c) All towers and tower line materials for high voltage transmission
lines.
(d) In the case of materials ordered by the Assistant Engineer /
Divisional Engineer by local purchase under their powers for
emergency use and delivery at site, measurements may be recorded
in measurement book charging the same to the works concerned.
3. Initial records and other accounts books:
(a) The following initial record and other books of accounts are
maintained, for purposes of recording transactions under ‘Stock’
suspense account.
A. INITIAL RECORDS B. OTHER BOOKS
(i) Stores Received Book Numerical Ledger
(ii) Devolution Priced Ledger
(iii) Stores Issued Book Numerical Abstract
(iv) Requisition Priced Abstract

Note:
(i) The Requisition Books, Devolution Books, Stores Received Books
and Stores Issued Books are of financial value and should be
treated as valuables like cheque books. These books will be
available with the head of the stores and will be issued to the
Field Assistant Engineers as per their requirement. As in the
case of cheque books, a register of Requisition Books /
Devolutions Books etc., should be maintained in each stores.
The receipts and issues should be accounted for under proper
authority. When ever new book is operated it should be
intimated to the officer (by Designation) in charge of stores by a
covering letter from the Section Officer.
(ii) Each Section Officer should operate only one Requisition Books /
Devolution book at a time for the purpose. This Requisition
Book / Devolution Book should not be made use of by another
Section Officer. The Requisition / Devolution Books should be
under the personal custody of the officer concerned.
4. Stores Material Index:
An up to date stores material index should be maintained and
correct code no. assigned to each material both for receipt and issue i.e.
Devolution / Stores Received Book and Requisition / Stores Issued
Book. This will serve as guiding factor for posting the transactions
correctly both in numerical and priced ledgers.
5. Bin Card:
A Bin Card is hung up outside each bin or rack in the stores. The
minimum and maximum quantities to be stocked in respect of the
material as fixed by the Superintending Engineer are noted in it. Each
time articles are placed into or taken out of a bin or rack an entry is
concurrently made in the Bin Card and the balance struck. Where
materials are stocked out-door, Bin Cards should be separately
maintained by the Store-keepers and ill issues and receipts concurrently
noted. The Bin Cards should show the balances at any moment and this
should tally with numerical accounts. An entry of receipt of a material
is first made in Stores Received Book and then in the Bin Card while in

the case of issue an entry is made first in the Bin Card and then in the
Stores Issued Book.
Accounting in Field Organisation
6. Receipt of Stores:
(a) By purchases from suppliers:
The requirement of materials for works is estimated with reference
to approved budgets and purchase orders are placed y the
competent authority. The supplies against these orders will arrive
into the stores. The value of these supplies will be debited to ‘Stock’
suspense account crediting supplier’s account (Sundry Creditors).
(b) By diversion from other stores:
Materials are obtained from other stores within the system by issue
of requisitions signed by the officer of the indenting stores or by
issue of requisition by the Field Assistant Engineer coming under the
jurisdiction of the indenting stores while charging the materials to
works. These are classified as inter Divisional Stores drawals. It is of
great importance that these transactions, are responded in the same
month to avoid administrative and accounting difficulties. Also
materials are obtained from the stores of other systems by issue of
requisitions signed by the officer – in – charge of the indenting
stores. These issues are charged to intermediary signed by the
officer-in-charge of the indenting stores. These issues are charged to
intermediary suspense. “Transfer Divisional Account: and should be
responded by the receiving stores in the same month before the
accounts of the month are closed and trial balance is struck.
(c) By devolutions from work:
(i) The stores should be drawn generally to the extent required
before the work is commenced. In exceptional cases materials
drawn for works may become surplus for various reasons. Such
materials should be devoluted to the stores explaining in detail
the reasons for the same. When materials drawn for works and
found surplus are returned to stock, they should be
accompanied by a stores devolution note. (or stores return note).
The devolution notes are written by carbon process in
quadruplicate by the officer in charge of the work. In order to
enable the Accounts Office to correctly value the stores and
credit the account number concerned reference to the original

equisition and the work order for which the materials were
originally drawn from the stores should be given in the
devolutions. In the case of dismantled materials devoluted to
stock, if the number and date of the original requisitions could
not be given by the field, such particulars will enable the stores
to trace the original requisition correctly should be given in the
devolution. Alternatively, the depreciated value of materials
may be arrived at and furnished. One copy of the devolution
notes should be retained by the Supervisor and the other three
copies sent to the stores.
(ii) Each devolution should be accompanied by a detailed
report containing the following information:
(except for retrieved materials)
• Quantity estimated.
• Quantity drawn.
• Quantity issued as actually measured or counted
• Surplus
• Explanation for excess drawl.
(iii) Materials devoluted from works should be accepted in stores
only if they are usable and can again be issued for new works.
If the condition of the material is such that they cannot be
reissued, they should be deemed a scrap and such material
should be accepted as scarp only, if the Devolution gives
reference to survey report in which its write off has been
sanctioned by the competent authority. If however, materials
are such that they can be re-issued after repairs such materials
should be accepted only if they are got repaired, brought to
working condition and then devoluted by the field staff. The
responsibility of accepting such materials and getting them
repaired is not that of the stores.
(iv) The free samples received from companies are generally
returned to them at their cost, if required by them. If the
samples are not required by the company, they may be taken
to stock by credit to Misc. Revenue quoting the firms letter as

authority in the devolution which will be prepared by the
store-keeper. These devolutions should be classified along
with the devolutions for “return of materials from works”.
(d) Stores received book:
General:
(i) All materials received should be examined, counted, weighed or
measured as the case may be, by the custodian with assistance
of O.S.S. or work charged staff provided for the purpose.
After taking delivery of materials and after verification and
check-measurement, the receipt of the material is recorded in
the Stores Received Book. This is an initial record and serves
the purpose of measurement book in so far as stores are
concerned. The pages of the Stores Received Book are in
triplicate and they are machine numbered.
(ii) The following are in the instructions for writing up the Stores
Received Books.
• It will be written up in triplicate
• All the columns in Stores Received Book should be filled in
with diligence and care.
• Entries should be made in ink or indeliable pencil.
• Entries should be recorded continuously.
• No blank page should be left or torn off.
• Pages left blank should be cancelled by diagonal lines and
attested.
• None of the lines should be left blank.
• Any lines not required should be scored through in order to
prevent additional entries being made later on.
• No entries should be erased.
• If mistake, is made it should be corrected by scoring out the
incorrect words of figures and re-writing the correct words
or figures and the corrections attested with dated initials.
• Detailed account of measurements of stores should be
recorded in the Stores Received Book.
• Quantities to be noted should be in the same unit as is found
in the purchase order and written both in figures and words.

• Account No. / Head of Account should be furnished.
• Stores Received Book should be written up on the day the
materials arrive into the stores and except in very exceptional
cases, should not be delayed beyond 3 days from the date of
arrival into stores.
(e) The following additional information should be furnished for materials
received from different sources under foot-note in Stores Received
Books.
(i) When received from suppliers:
• Purchase / Order No. … Date …
• Railway Receipt / Lorry … Date …
• Suppliers Despatch advice No. … Date …
• Damages / Defects … Date …
• RF/under charges / Over
Dimension charges … Date …
• Warfage
• Demurrage
• Consignee’s Acknowledgement
(ii) When received from other stores:
• Date of Receipt of materials into the stores
• Transport Note No. and Date.
• Date of drawl of material
• Mode of conveyance
• Railway receipt / Lorry receipt no.
• Damages, defects, shortages etc.,
(iii) When received through Devolutions from works:
• Quantity estimated.
• Quantity drawn and date
• Quantity used as actually measured or counted
• Surplus
• Reasons for excess drawl
The materials received should be check-measured by the
competent authority and a certificate to that effect recorded in
all the copies of the Stores Received Book under the full
signature of the check-measuring officer with date. It should

ISSUES OF STORES
be done within 10 days from the date of receipt of material
into stores where the check measurement is to be done by
Divisional Engineer / Executive Engineer. In all other cases,
where the Assistant Engineer is competent, checkmeasurement
should be done on the date of recording entries
in this Stores Received Book.
• The original and duplicate copies of the stores received
book should be forwarded to the stores accounts
section (pricing section and the triplicate (fast copy)
will be retained in the stores).
7. General Instructions for issuing stores:
(a) Materials under no circumstances, should be issued on Transport
Notes, on chits or on oral instructions. The physical custodian
should issue only against an authorized requisition duly
countersigned by the Assistant Engineer in-charge of the work.
(b) The specimen signatures of all the officers (i.e.) Section Officer and
above including Head Clerk of Central Office / Deputy Chief
Accountant / Chief Accountant drawing the materials operating
requisitions, as well as officers who countersign the requisitions,
should be available in the register of specimen signatures with the
custodian.
(c) Whenever there is change of incumbency of the Section Officer and
the Assistant Engineer, and other officer’s the fact should be
intimated to the Head of the Stores with the specimen signature of
relieving officer duly attested by the relieved officer. If the materials
are issued to any messenger other than the officer who signed the
requisition it should be done only on production of the specimen
signatures of the messenger duly attested by the officer who signed
the requisition. Such messenger should be of the rank of a lineman
or above.
(d) The issue of materials should be based on the principle of “First-in
and First-Out” method in order to avoid loss due to deterioration
etc.,

(e) The physical custodian is personally responsible for the preparation
of Stores Received Book and Stores issued books correctly.
(f) At each store the gate-pass system should be introduced and for each
issued there should be supporting gate-pass. Even where stores are
at Railway yard this gate pass should be issued. The vehicle no. with
name of owner and name of driver in which the materials are being
loaded should be noted on the gate-pass. The officer-in-charge of
stores should correct all the gate passes from the Gate-Keeper on the
same day in the evening and check the counterfoils with issues of the
date. Any discrepancy should be investigated into and rectified
immediately.
• Requisitions:
The issues in the stores are made in all cases only on the authority of
requisitions. The requisitions are written up in quadruplicate in carbon
process. All requisitions should bear reference to work order no. and
account no. in addition to the brief description of the work. The
quantity should be furnished both in figures and words. The Assistant
Engineer counter signing the requisition is responsible to ensure that the
correct work order no. and account no. are furnished in the requisition
and the quantity is limited to the estimated requirements. He should
verify the estimated quantities in the material card issued along with the
work order. One copy of the requisition is to be retained by the officer
who makes out the requisition as his office copy which should not be
detached from the book. The other three copies after counter-signature
by the Assistant Engineer should be presented in the stores for issue of
materials.
• Stores issued books:
A daily record of stores issued is kept in the stores issued book in form
no. S-6. The pages of the stores issued book are in triplicate and entries
are made on the authority of the requisitions. This daily account is the
basis of the stock transactions.

8. Maintenance of Numerical Ledgers:
(a) Posting of Receipts:
In the stores, the receipts of each day should be posted in the
following order:
(i) Stores Received Books for materials received from suppliers.
(ii) Stores Received Books for materials received from other stores.
(iii) Stores Received Books for materials received from the works
through devolution notes.
The closing balance should be arrived for each transaction of
receipt during the day and this should be furnished in the Stores
Received Book against the transaction in the ‘last column’. This will
indicate stock position in the stores and will facilitate the quantity
reconciliation work.
In the numerical ledgers all the receipt items of the day should
first be posted and then the issues posted. This will ensure that
issues are not made without taking real arrivals into stock.
(b) Posting of Issues:
The quantity recorded in the stores issued book is to be posted in the
numerical ledger and the closing balance arrived at. This closing
balance so arrived should be recorded in the stores issued book in
the last column. After posting in the original and duplicate of the
stores issued book with the requisitions in triplicate should be sent to
stores pricing section on the same day.
9. Closing of Stores Accounts:
The Accounts of all stores for the month should be closed on the 23 rd
and the last.

1. SCOPE:-
CHAPTER – 9
STORES ACCOUNTING SECTION-II
The main functions of the Stores Accounting Section are:-
i. Printing Receipts and issues and maintenance of stores priced
ledgers.
ii. Preparation of the stores priced abstracts and the periodical
returns due to the management.
iii. In respect of sales, arranging for the recovery of cost including
incidental and centage charges.
iv. Arranging quantity reconciliation every month between the
numerical ledger and priced ledger balances.
v. Stock reconciliation certificate i.e. reconciliation between Priced
Ledger balances and Financial Ledger balances.
vi. Annual verification and adjustment of discrepancies noticed.
2. MAINTENACE OF PRICED LEDGERS
Stores accounting and maintenance of priced ledgers, divides itself into
the following groups of operations.
GROUP –‘A’
a) Receipt and check of Stores received Books/Devolutions/Stores Issued
Books/ Requisitions.
b) Pricing of the same
GROUP –‘B’
a) Opening and closing of priced ledger folios with reference to numerical
ledger folios and the maintenance of an index of priced ledgers in the
ledger itself allotting adequate sheets for the same.
b) Posting of priced ledgers
GROUP –‘C’
a) Review and revision of rates.
b) Review of priced ledgers.
GROUP-‘D’
a) Posting of stores priced abstracts.
b) Reconciliation of quantity accounts between numerical and priced
ledgers.
c) Stock reconciliation (i.e.) between priced ledger balances and clearing
ledger balances.
Each of the above groups of operation should be allotted to different
persons or to different sub-sections in such a manner that all the processes of
work are properly detailed and the work will not only be upto date, but the

accuracy thereof will be ‘proved’ day to day by checks and cross checks made
by independent sets of persons.
3. DESPATCH OF STORES RECEIVED BOOKS AND STORES ISSUED
BOOKS FROM STORES TO PRICING SECTION:-
a) The documents of a date say the 1 st of the month should be completely
delivered to Stores Pricing section without fail on the morning of 3 rd
within one hour of the opening of the office. This cycle will continue to
operate, wherever holiday intervene the delivery dates should be
adjusted co-extensively.
b) A register of Stores Received Books, Stores issued books, Devolutions,
Requisitions etc., should be maintained in Pricing Section to watch the
receipt of the same in serial order so that if any serial is withheld by
stores, it can be located and called for.
4. SCRUTINY OF THE STORES RECEIVED BOOKS AND STORES
ISSUED BOOKS:
a) The Stores Received Books and Stores Issued Books should then be
examined to see that:
i. They are prepared on the proper form.
ii. They are signed and countersigned by the proper authority as
required by the rules.
iii. They are received without any serial No. missing.
iv. They are legible written, particularly regarding quantities, and all
corrections thereof are attested by the proper authority i.e.
custodian.
b) The particulars in Devolutions and Requisitions do not vary with those
recorded in the Stores Received Books and Stores Issued Books
respectively.
PRICING
5. GENERAL:-
The pricing is an operation which, for an efficient division of clerical labour,
is best allotted to a set of clerks other than the priced ledger posters. For this
purpose it should be expedient for each pricing clerk to be provided with a
copy of the price list for each class of materials allotted to him in which he
could himself note down in pencil the book average rates from the priced
ledgers, and price and issue documents by reference to such rate lists only.

6. UPTO DATE MAINTENANCE OF AVERAGE RATE LISTS:-
In order to ensure that fresh average rates are struck in the priced ledgers
wherever required the pricing clerks should at the end of the posting of priced
ledger per a day, review the rates shown in Stores Received Books of the day
for purchases from suppliers. Wherever he finds that the rate is more or less
than the average rate, he should note down the item and before commencing
the pricing of the issue vouchers of the following day, he should strick the
fresh average rate, at the same time noting the new rates in his copy of priced
list erasing the previous entry. This ensures-
i. Minimum handling of the priced ledger
ii. A check on the average rate
iii. Quicker pricing by reference to the price list involving less time and
less labour than a reference to individual priced ledger leaf in
various parts of the cabinet.
7. PRICING OF RECEIPTS:-
The materials received into the stores and accounted for the Stores Received
Book by the stores office will be priced as detailed below.
1) When the materials are received from suppliers against Purchase Order:-
In this case, the rate and the value of the total supply as furnished by the
stores office will be checked with reference to Purchase Order and correctness
attested by the Sectional Accountant. The prescribed percentage handling
charges will be added to the value of the purchase order by the Pricing Clerk.
2) Diversion from other stores:-
With reference to the average rate prevailing, the value of materials
received will be filled in by the stores pricing clerk as the debit advice
containing the correct values will generally reach the receiving end after a
lapse o f time say in the next month. On receipt of debit advice from the
supplying stores the value given in the Original Stores Received Book will be
regularized, preparing adjustment Stores received Book will be regularized,
preparing adjustment Stores received Book for excess or less value as the case
may be
3) Devolution from Works:
a) The value furnished by the Section Officer/Asst. Engineer will be
adopted by the Pricing Clerk.
b) The cost of transport work from spot to stored and handling charges
if any incurred will be charged to the work concerned.
c) In respect of unclaimed samples valuation will be at book rates.
4) During stock verification or handing over :
These materials will be priced at the ruling average rate or market rate
whichever is higher on the date of taking the material into stock through Stores
Received Book.

8. FIXING ISSUE RATE:-
a) When the materials are issued from stock the issue rate is fixed
according to the principle of average pricing method of valuation of
stores as explained below:
i. The issue rate should be worked out in the priced ledgers according to
weighted average method, namely by dividing the total value of the
stores by the total quantity in stock. This method should be adopted
every time when fresh, stock is received, the quantity received together
with the value thereof being recorded in the ledger and the issue rate is
calculated a fresh for the entire quantity including the articles newly
received. In the process when the last quantity is fully issued bringing
the quantity to zero, the value also should be zero and there should be
no case of NIL quantity with plus or minus value.
9. ROUNDING OFF PAISE IN FIXING ISSUE RATES-
The issue Rate should be rounded to the nearest 10 paise in respect of high
value items ignoring 5 paise and less. In respect of service connection materials
the rate should be rounded to the nearest 5 paise, ignoring 2 paise and below.
10. PRICING OF ISSUES:-
The pricing clerk will record in the ledger the weighted average rate to be
adopted for the issues. This issue rate will be incorporated in the average rate
list maintained by the pricing clerk. As soon as the batch of requisitions with
Stores Issued Books is received he will fill-up the rate column with reference to
average rate list, calculated and furnished amount for the total quantity.
1) Issue of materials to works:-
The pricing clerk will adopt the weighted average rate when materials are
issued to works.
2) Issue of stock materials on sale:-
Stock materials are sold without inconvenience to works or on account of
surplus or obsolete condition as below:-
i. To contractors for Transco Works
ii. To consumers for the purpose of load development
iii. To officers and staff of the Transco
iv. To other Departments
v. In public auction in respect of surplus, scrap obsolete materials, etc.
3) SALES TO CONTRACTORS FOR DEPARTMENTAL WORKS:-
Materials, to be issued to contractors according to terms and conditions of
agreement for execution of Transco works, should be drawn by the concerned
Section Officer operating the work order on valid requisition duly supported
by written demand from the Contractor for every drawal ONLY BY
CHARGING THE AMOUNT TO THE CONCERNED WORK ORDERS.

Such issues to contractors should however be regulated after drawal on
requisitions, through unstamped Receipts or Transport Notes. Valuation of
these unstamped Receipts or Transport notes will be regulated as per rates
provided in the agreement. At the time of preparation of the contractor’s Bill,
these issues will be valued at the agreement rates and shown as deductions.
The requisitions issued by the field officer quoting work order numbers will
however be valued as per book rates and taken to Accounts. The difference
between the Book rate and the rate provided in the contract will get debited or
credited as the case may be to work concerned.
4) SALE TO PRIVATE PARTIES, OFFICERS AND STAFF AND OTHERS:-
i. Sales outsides the agreement should be based on out-right Cash
Payment at book-rates or market-rates whichever is higher, plus Sales
Tax and usual centages, etc.
ii. On receipt of payment by means of Demand Draft the custodian of the
stores will issue the material, prepare the requisition, obtain the
acknowledgement on the requisition itself from the purchaser, make out
a Stores Issued Book and after posting the same in the Numerical ledger,
send the Requisition/Stores issued Book to accounts Office. The
Demand Draft should be entered in the Petty Cash Book with full
particulars by the Stores custodian and sent to accounts Office
separately for being accounted for in Cash Book.
iii. In the pricing section the book value will be adopted for the purpose of
pricing and the difference between the book value and the sale price
will be adjusted as below in the requisition itself crediting the same to
Miscellaneous Revenue.
5) SALE BY AUCTION:-
Obsolete, surplus materials etc., when sold by public auction, the
highest bidder will deposit the a`mount agreed to in the auction. This amount
will be taken to cash book by credit to sales Account (material). In the stores, a
separate requisition/Stores Issued Book will be prepared charging the material
auctioned to sales account. In the pricing section the book value will be
adopted for the purpose of pricing and the difference between book value and
the amount collected from the highest bidder will be adjusted as below in the
requisition itself. If the book value is less than the bid value, the difference will
be credited to “Loss of Gain on Stock Account’ by means of passing minus
entry for the excess value in the same requisition as shown below:-
Head of Account
REQUISITION
Rate Amount
Rs. Rs. Rs. Rs.
(i) Sales Account --- ---
---
(ii) Loss or Gain on stock --- ---
1,200.00
(-)
200.00
---
Book Value:
1,000.00
(Book Value to be adopted in Stores Issued Book towards credit to stock
Account)

If the book value is more than the bid amount, the difference will be
changed to ‘loss or Gain Account’ in the requisition as shown below.
Head of Account
REQUISITION
Rate Amount
Rs. Rs. Rs. Rs.
(i) Sales Account --- ---
---
800.00
(ii) Loss or Gain on stock --- --- (-) 200.00 ---
Book Value:
1,000.00
(Book Value to be adopted in Stores Issued Book towards credit to stock
Account)
6) Issue of materials to other stores:
When the materials are issued to other stores as per the orders of competent
authority, the weighted average rate will be adopted at the issuing end.
11. Striking Progressive Totals of Devolutions/Stores Received Books and
Requisitions / Stores Received Books and Requisitions/ Stores Issued
Books:-
The pricing clerk after completing the pricing, will strike the progressive
totals on the reverse of the devolution notes, Stores Received Books,
requisitions and stores issued Books independently and reconcile the total
values between devolutions and Stores Received Books as also between
requisitions and Stores Issued Books.
He will incorporate the same in the register of Devolutions/Stores Received
Books and Requisitions/Stores issued Books, and then pass on them to ledger
poster for posting in the priced ledgers. In respect of each batch of documents
sent to Accounts Section, the Pricing clerk, the ledger poster and the Sectional
Accountant should initial at the progressive totals in token of reconciliation of
total values as per requisitions and as per Stores Issued Books.
12. Opening the Initial and Continuation Priced Ledger Sheets:
Priced ledgers should be maintained by categories of stores. Separate card
or loose leaf should be opened for each item of Stores just as they opened in the
stores numerical ledgers. Every sheet opened for an item should be serially
numbered and each completed sheet should have a remark, carried over to
sheet No. endorsed thereon the continuation and value so brought forward
should be checked and attested by the Sectional Accountant in order that there
will not be any serious irregularity in the figures of quantity and value brought
forward from the previous sheet.
1) Exhibition of Maxima and Minima in the Priced Ledger:-
The Maxima and Minima may be shown on the priced ledgers to review
whether the stock receipts and issues and issues are moving, restricting the
balances to the limits prescribed.

2) Index of Priced Ledger:-
To facilitate easy identification of the ledger folio, it is necessary that an
index of priced ledger is maintained in the ledger itself by allotting some sheets
for this purpose.
3) Closing of Non-operated Priced Ledger Sheet:-
The priced ledger sheet not operated for more than one year will be
closed based on the full particulars given by the stores. These particulars
consist mainly of:-
i. The number and the date of last Stores Received Book or Stores
Issued Book and:
ii. Closing balance (which should be NIL) posted in the numerical
ledger upto the time of closing the card, have also been posted in the
priced ledger. Before the cards are closed it should be seen that there
are no balances both in quantity and value in the card, have also
been posted in the priced ledger. Before the cards are closed it
should then be endorsed with the words closed as per advice with
reference to No. & date of Stores Received Book / Stores Issued Book
from the stores over the initials of the sectional accountant of the
pricing section.
Closed cards should be kept in the same binder in which the completed
sheets of other items of the same class are kept. This will enable the cards to be
easily traced if at any time it is proposed to reopen them.
13. The priced ledgers are the basis of all stores accounting and utmost care
should be taken to avoid errors therein. The following instructions are
therefore issued for the guidance of ledger posters with a view to minimize
all chances of errors in ledger posting.
1) Upkeep of Priced Ledgers:-
The ledger poster will be responsible for opening the first and continuation
ledger sheets and for their safe and tidy maintenance. The sheets will be
opened in the same manner as the numerical ledger sheet.
2) Posting of Vouchers:-
Before starting his posting for day, a ledger poster should see that the
Devolutions/ Stores Received Books and Requisitions / Stores Issued Books on
hand relate to the correct stores and group of stores.
During the course of posting, the poster should take care to see:
i. That the nomenclature and material index No. / (priced list number) of
each item or stores as shown in the document corresponds with the
nomenclature and material index No. / (price list number) of the same
item of stores in the priced ledgers. An item in voucher should be
posted in the priced ledger only when the above particulars agree.
ii. That the number and date of the Stores Received Book / Stores Issued
Book, the figures of quantities and values, are distinctly written in the

columns allotted for the respective figures so that mistake of the
following nature do not arise.
Value posting such as Rs.42.50 capable of being read as Rs.425.00 or
Quantity posting such as (7.5 M. Tons capable of being read as 75 M. Tons)
iii. That all Stores Received Books and Stores Issued Books received by him
and all items thereof have been posted in the priced ledgers correctly.
iv. That he should write the letter “P” against each item in Stores Received
Book / Stores Issued Book after it has been posted in the priced ledger
to avoid posting twice.
v. He should post all the vouchers received by him on the date of their
receipt. Should a ledger poster’s work fail into arrears for any reasons,
e.g., rush of vouchers on a particular day,; he is expected, as it is a job
with yardsticks duly prescribed for the post, to pull up his arrears. In
cases of sudden illness or other absences beyond one’s control, the
supervisory head of the section should make arrangements to get the
work done, through other clerks with the approval of the Deputy Chief
Accountant, and a note should be kept of the documents for the correct
posting of which responsibility will rest on the person to whom the
work is allotted.
vi. He should total up receipt and issues if a page is completed during a
month and reconcile the last closing balance struck, by taking the
opening balance of the page, adding the total of receipt and deducting
the total of issues, of the page and should initial the last balance in token
of such, reconciliation. The Accountant initializing the ‘continuation’
ledger sheet should ensure that this reconciliation has been actually
done.
vii. In the course of posting the ledgers, the posters should note down in a
special register in manuscript (to be maintained by him) particulars of
material and Priced Ledger folio No., whenever he finds.
a) Credit balances either in quantity of value:
b) Quantities existing without value or values without quantities ;
and
c) The numerical ledger balances as noted on the stores received
book/stores issued book vary from the balances in the priced
ledgers;
viii. Ledger poster will be responsible for all corrections made in the ledgers.
When wrong posting are detected, the correcting entry should be made
at the end of the postings already made by giving cross reference at the
place where the mistake has occurred. Thus the mistakes would be
rectified without disturbing entries made since the date of the errors.
This will be done under the attestation of the Sectional Accountant.
3) Other Adjustments such as write-backs, under valuation or over
valuation:-
i. In all such cases, the ledger poster should verify the posting of the
original transaction and should give a cross reference against the entry
of original Stores Received Book/Stores Issued Book as well as against

the posting of the Adjustment Stores, Received Book/Stores issued
book.
ii. There should be no over-writings, erasures, smudging scoring off the
entries once made etc. These are strictly prohibited.
14. Stock-verification and adjustment of Differences:
a) The stock in the system should be got verified by an independent
agency once a year, Verification of physical balance of materials at the
stores with that of the ledger balances is called stock verification.
b) The following instructions should be followed for verification.
i. A list of items to be verified each day should be obtained.
ii. The verification report should be filled up in the prescribed form.
iii. Before starting the verification of the stores, it should be ascertained
upto what date and serial No. of stores Received Book and Stores
Issued Book transactions have been posted in the ledger.
iv. Materials of the same nature should be verified at the same time.
v. The verifying officers should not refer to the ledger of the stores
before verification.
vi. The actual quantity verified should then be recorded in the daily
report in link and then the balance as per ledger should be noted.
vii. The issues or receipts, took place after last transaction in the ledger
and before the verification, should be posted and the correct ledger
balance arrived at.
viii. Any discrepancy between the physical balance and the ledger
balance, should be noted in the report with a brief note on the action
taken.,
ix. These reports should by both the stock verifier and custodian of
stores/ Assistant Engineer stores in the case of central stores.
c) The verification reports should be checked up in the office each day they
are received. Stock found surplus should be taken as receipts both in the
quantity and value accounts, the stock as finally determined as surplus
should be credited to Revenue. In the case of stock found deficit the
accounts should be examined to see if the deficiency is due to error in
accounts.
It is not so, the deficiency should be shown as issues both in the quantity
and value accounts and the value debited to Miscellaneous Advances
(Personal Account of the custodian concerned) pending recovery of
sanction to write off.
d) No preliminary adjustments should be made. The discrepancies should
be analyzed and final adjustments carried out within one month. All
final adjustments should be done only after ensuring that the book
balances as per numerical ledger and the priced ledger agree on the date
of verification.
e) Final adjustment should be prepared in the following classification
i. Statement of excesses and shortages for which no accounts
adjustments are made, being petty.

ii. Statement of excesses which are taken to Stock.
iii. Statement of Excesses and shortage of materials of like nature and
like quantities.
iv. Statement of excesses and shortage of materials of like nature but
unlike quantities.
The adjustments are to be done both in stores ledgers and priced ledgers
by means of adjustments Stores Received Books / Stores Issued Books duly
supported by devolutions and requisitions as the case may be.

CHAPTER – 10
SERVICE REGULATIONS – I
Service Regulations vary from one utility to another. However, there
will be only minor variations / deviations. As a reference material, service
regulations of AP Transmission Corporation are given.
Many utilities are following the Government rules and regulations only.
As such, we try to go through certain salient Regulations which are in vogue in
AP Transco
PERMANENT POST:-
Post carrying a definite rate of pay sanctioned without limit of time.
REG. 16(a) AGE OF RETIREMENT:-
The date of retirement of an employee of the Transco other than Class-
IV is the date on which he attains the age of 58 years and of a Class-IV
employee the date on which he attains 60 years.
WHOLE TIME EMPLOYEE:-
Regulations – 20: Unless otherwise distinctly provided, the whole time
of an employee of the Transco is at the disposal of the Transco which pays him,
and he may be employed in any manner required by proper authority without
claim for additional remuneration.
REG.21: LIEN ON A POST
Unless otherwise provided, an employee of the Transco on substantive
appointment to may permanent post acquires a lien on that post and ceases to
hold any lien previously acquired on any other post. For terminating a lien,
Issuance of show cause notice is necessary.
REG. 29(1):
No Transco Servant shall be granted leave of any kind for a continuous
period exceeding 5 years.
REG. 28(3):
Any employee of the Transco who remained unauthorisedly absent
from duty for a continuous period of one year shall be deemed to have
resigned from the service from that date of absence and shall automatically
cease to be in Transco Employment.

REG. 30 PAY ON PROMOTION:
When appointed to the new post involves assumption of duties and
responsible of greater importance than those attached to the permanent post,
employee will draw as initial pay the stage of the time scale next above his
substantive pay in respect of the old post.
REG. 32: DRAWAL / WITHHOLDING OF INCREMENTS:
An increment shall ordinarily be drawn as a matter of course unless it is
with held. An increment may be with held by an authority to whom the
Transco may delegate this power if his conduct has not been good or his work
has not been satisfactory. In ordering authority shall state the period for which
it is withheld and whether the postponement shall have effect of postponing
the future increment i.e. (with or without cumulative effect).
REG. 34(A): ADVANCE INCREMENTS:
The Transco may grant premature increments to an employee in a time
scale in exceptional circumstances. In view of the stagnation in the various
cadres for promotion, advance increments granted for specific purpose like (1)
Post Graduate Increments (2) First and Second position in National Sports
meets and in AP Transco Sports are given as personal/pay equal to the said
increments.
REG. 34(B):
Notwithstanding anything contained in these regulations or any other
Regulations of the Transmission Corporation of AP Ltd. where a Transco
Employees, who is junior, is receiving emoluments in excess of those paid to
persons who are senior to him in that cadre, due to reasons personal to him
and also arising out of fixation of pay by virtue of holding office in a particular
post of the establishment under the Transco such factor alone shall not entitle
the seniors to claim a re-fixation of their emoluments at a higher level on par
with the emoluments of the junior employee.
REG. 47:
The Transco has the power to create or abolish, any post in connection
with the affairs of the
REG. 54 COMBINATION OF APPOINTMENTS :
The Transco may appoint an employee to hold substantively, as a
temporary measure or to officiate in not more than two independent posts at
one time.
His pay then is regulated as follows:
a) The highest pay to which he would be entitled if his appointment to one
of the posts above may be drawn
b) For the other post, he draws such reasonable pay in no case exceeding
half the presumptive pay of the post as the Transco may fix.
REG. 54(1) (B): ADDITIONAL CHARGE APPOINTMENTS:

If an employee is appointed to hold full charge of a second post in
addition to his own, the additional pay which may be granted to him in respect
of the additional post should not exceed 1/5 th of his substantive pay.
REG. 54(1) (C): CURRENT DUTIES:
If an employee is appointed to discharge only the current duties of
second post in addition to his own, the additional pay should not exceed 1/5 th
of his substantive pay. The Chief Engineer is empowered to sanction additional
charge allowance to all his sub-ordinates for a period of 3 months only.
REG. 56(1): PAYMENTS DURING SUSPENSION PERIOD:
An employee under suspension shall be entitled to a subsistence
allowance equal to half the pay drawn by him in addition to D.A. where the
period of suspension exceeds six months, the authority that ordered the
suspension shall be competent increase the said subsistence allowance not
exceeding 50% after 12 months of suspension if in its opinion the suspension is
prolonged for reasons not directly attributable to the employee.
REG. 56(II) (A) (I):
The subsistence allowance may be reduced by a suitable amount not
exceeding 50% upto 12 months if in the opinion of the said authority the period
of suspension is prolonged due to reasons directly attributable to the
employee.
REG. 56(1) (A) (III) (B):
The suspending authority may direct that employee under suspension
shall be granted other compensatory allowances also. If an employee under
suspension is dismissed or removed from service with retrospective effect,
subsistence allowance paid will not be recovered from him.
REG. 57(1): PAY ON REINSTATEMENT:
1. Where an employee who has been dismissed, removed, compulsorily
retired or suspended is reinstated, the authority competent to order the
reinstatement shall consider and make specific order.
a) Regarding the pay and allowances to be paid to the employee for
the period of his absence from duty: and
b) Whether or not said period shall be treated as duty.
2. Where the authority mentioned in CL. (1) above is of the opinion that
the employee is fully exonerated of in the case of suspension, the same
was wholly unjustified, the employee shall be given full pay and
allowances to which he would have entitled had he not been dismissed,
removed, compulsory retired or suspended as the case may be.

3. In all other cases, the employee shall be given such proportion of pay
and allowances as the competent authority may prescribe which shall
not be less than the subsistence allowance.
REG. 57(6): EMPLOYEE PROSECUTED FOR CRIMINAL OFFENCE:
Where an employee is prosecuted in respect of a criminal offence
whether arising out of his official duties or not imprisoned for debt or is
detained under any law providing for preventive detention for a period longer
than 48 hours, he shall be deemed to be under suspension and shall be entitled
only for subsistence allowance.
REG. 59.JOINING TIME:
Joining time may be granted to an employee to enable him to join a new
post, on return from Earned leave of not more than 120 days etc
REG. 59(5):
Where a Transco employees on return from leave has to wait
compulsorily for order of posting, such period of waiting is treated as duty and
joining time shall be allowed to such employee in continuations of such
waiting.
REG. 60(1):
1. Not more than one day is allowed to an employee in order to join a new
post when appointment to such post does not necessarily involve a
change of station. Holidays count as a day for this purpose. No joining
time is admissible in cases where the change of post does not involve
actual change of office.
2. In cases involving change of station, the joining time of six days are
allowed for preparation in addition to the period to cover the actual
journey to the new station.
REG. 61:
REG. 62:
An employee on joining times shall be regarded as on duty.
An employee who does not join his post within his joining time is
entitled to pay or leave salary after the end of the joining time willful absence
from duty after the expiry of joining time may be treated as mis-behaviour for
the purpose of Reg.27
REG. 65(a):
REG. 70(a):
No employee may be transferred to foreign service against his will.
While an employee is in Foreign Service, contributions towards the cost
of his Pension and / or Provident Fund must be paid to the Transco on his
behalf.

REG. 70(b): If the foreign services is in India, contributions must be paid on
account of the cost of leave salary also.

CHAPTER – 10
SERVICE REGULATIONS – PART –II
These regulations generally correspond of A.P. State and Sub-ordinate
Service Regulations of the Government of Andhra Pradesh.
Certain salient features of these regulations are given below:
REG. 4(1) APPOINTMENT TO SERVICE:
A person is said to be appointed to a service when in accordance with
these regulations he discharged for the first time, the duties of a post borne on
the cadre of such services or commences the probation, instruction, training
prescribed for members thereof.
REG. 4(8):
A person is said to be on duty as a Member of a service when he is
performing the duties of a post borne on the cadre of such service or is
undergoing probation, training deputation, on joining time, leave, on duty
with the Army.
REG. 8: APPROVED CANDIDATES:
All first appointments and promotions to a service shall be made by the
appointing authority from a list approved candidates. Such lists shall be
prepared in the manner prescribed by the appointing authority or any other
authority empowered by the Regulations. Where the candidates in such lists
are arranged in their order of preference, appointments to the service or
promotions therein shall be in such order. List approved for appointment by
transfer shall be prepared in the month of September every year so as to be
force until the list of approved candidates for the succeeding year is prepared.
For this purpose, as many eligible candidates as such authority considers
necessarily shall be considered.
8(III):
The list of approved candidates shall be valid for one year from the date
of approval by the competent authority. The Transco may for reasons to be
recorded extend the validity of the list of approved candidates by a period not
exceeding six months. It shall lapse thereafter.
REG. 14(A) (i) (2):
TEMPORARY APPOINTMENTS AND PROMOTIONS:
The appointing authority may appoint or promote temporarily a person
otherwise than in accordance with the provision of those regulations in the
following cases until a person is appointed in accordance with the regulations:
1. Where it is necessary in the interest of the administration to fill up a
vacancy immediately and there would be undue delay in making an

appointment or promotion as the case may be in accordance, with these
regulations.
2. Where it is necessary to fill a short vacancy in a post and the
appointment or promotion, as the case may be, would involve excessive
expenditure on travelling allowances or exceptional administrative
inconvenience.
NOTE:
i. No appointment or promotion shall ordinarily be made under the above
clauses of a person who does not possess the qualification, if any,
prescribed for the post. Every person appointed or promoted under
clause a (i) who does not possess the qualifications shall be replaced as
soon as possible by a person possessing the prescribed qualifications.
ii. A person appointed or promoted under clause (a) shall, whether or not
he possess the prescribed qualifications, be replaced as soon as possible
by an approved candidates qualified to hold the post or by a member of
the service, who is entitled for promotion to the post.
REG. 16(2): LANGUAGE TEST IN TELUGU:
Every person appointed to a service after 15.11.66 shall be within the
period of probation pass the language test in Telugu failing which his
probation shall be extended and the increment postponed without cumulative
effect until he has passed the test.
Any employee by virtue of his having an examination of equivalent standard
in that language shall not be required to pass the language test.
REG. 22:
Where special Regulations (Part – III) lay down that the principle of
reservation of appointment shall apply to appointment by direct recruitment to
any made on the basis of regulations for reservation of appointment.
REG. 22 (A): PREFERENCE TO WOMEN IN DIRECT RECRUITMENT:
1) In the matter of direct recruitment to posts for which women are better,
suited them men, preference shall be given to women. Provided the
preference given to women shall not result in total exclusion of men in
any category of posts.
2) In the matter of direct recruitment to posts and men are equally suited,
other things being equal, preference shall be given to women. Provided
the preference given to women shall not result in total exclusion of men
in any category of posts.
REG. 24(1): PROMOTION:
No employee shall be eligible for promotion to a higher post unless he is
an approved probationer.
REG. 24(1) B:

Promotions in all cases are on merit and ability excepting for 1 stage
promotions I, e AE to ADE (Direct Recruit).
PROBATION:
Where the Special Regulations of any service prescribe a period of
probation for all direct recruits, it is generally for 2 years within a continuous
period of three years. After satisfactory completion of the period and after
passing the tests etc. prescribed in this regard the period of probation, the
employee is declared to have satisfactorily completed the prescribed period of
probation by the appointing authority. In case of failure to pass the tests
prescribed or due to unsatisfactory service during the period of probation, the
competent authority may;
1) Terminate the probation
2) Discharge the probationer
3) Extend the period of probation
REG. 37(A):
A member of service may resign on appointment and the acceptance of
his resignation by the appointing authority shall take effect from the date on
which he is relieved.
Memorandum:
When any information as to be obtained from the subordinate offers by
an official reference the Memo, is ordinarily used. Sometimes a Memo may
include final orders of the Utility on very un-important matters. It is written in
the third person.
Endorsement:
When a paper is to be returned in original to the sender or when it is
referred to a subordinates officer for remarks or for information, the disposal
takes the form of Endorsement. Companies, Contractors and other public
should not be addressed in this form.
D.O. Letters:
In case where an officer has to be addressed in the form of official
procedure and with a view to draw his personal attention, the communication
takes the form of D.O. (Demi Officials)
U.O. Note :( Un-Official Note)
U.Os are made by sending the file to the officer concerned with a note
on which his views are required.

Telephone and Fax Message:
They are used on matters of extreme urgency and the text of the FAX
and telephone messages should be clear and contain Reference No. and the
date and subject matter of the issue.
Notifications:
They are used for notifying the matters in the State Government Gazette
or in the new papers
6) The following Registers are maintained in Head Quarters Offices and most
of these are required to be maintained in other offices also.
Attendance Register
Register of Visitors
Movement Register
Personal Register
Call Book Entry Register
Register of Securities
Service Books
Per Periodical Register
Local Delivery Register
Daily Receipt of Tappals Register
Register of movable and immovable properties of the Staff
Register
Reminder Diary
Outgoing Tappals Register (Dispatch Register)
Stamp Account Register
7) The following rules are to be kept in mind in the day- to- day
correspondence:
i. Correspondence shall be condensed as much a possible and
repetition of un-necessary details should be avoided.
ii. As far as possible it is desirable to avoid personal address in the
communication to the higher authorities.
iii. Separate letter should be written on distinct subject
iv. Every communication should be carefully punctuated and the pages
and paragraph numbered.
8) It should be ensured that the enclosures to the letters are sent without fail.
The references received from the State Government legislative
Assembly, Government of India, other Electricity Utilities and State
Government should be given top priority and replies sent as expeditiously as
possible.
All papers should be treated as confidential. There are certain papers which are
to be classified as “Top Secret”, “Confidential”, and their circulation should be
confined to the officers concerned with the subject and their movement should
be made in a “Confidential Box” Typing and dispatching of secret papers
should be entrusted to selected persons.

Maintenance of Records:
9) Modern Computer Techniques and Principles of Archival Science have
been adopted for the physical care and upkeep of records and microfilming
is also being undertaken on large scale to provide security to the content
historical records and make them easily available to the posterity.
10) The Record Section in an office will receive the closed files from the sections
and keep them in bundles and arrange them chronologically. Records of
each class / subject should kept in separate bundles.
11) Materials used for binding the records are affected by high temperature,
dust, humidity, acidic gases, and sunlight. Paper kept in a hot and dry
climate becomes brittle leather and board get desiccated under similar
conditions. In the presence of excess humidity, paper often tends to
crumple and become faggy. Pests like Cockroaches, Bookworms, Termites
Etc., as well as variety of fungus are dangerous and preventive measures
should be taken to arrest their growth by using D.D.T., Repellants,
Chemicals, etc.
12) Records should be handled with care. They should be not be dragged out
from the record shelves. Smoking should be prohibited in the records room
and firefighting equipment should be kept. Records that have been effected
equipment should be kept. Records that have been effected by drenching in
water should be treated immediately in order to avoid their decay. After
preliminary squeezing of water from the bundles of files, they are spread
open under a fan. wet paper should be separated from one another.
Blotting paper should be pressed to squeeze out any residual water.
Rehabilitation of charred documents and revival or faded and washed out
writing should be done after obtaining advice of the experts. Periodical use
of insecticidal powers like D.D.T. and spray is a good precautionary
measure to prevent insect infection of records. Regular dusting of records is
necessary for keeping them in tidy condition and the room should be well
ventilated. Vacuum cleaners could be employed. In order to avoid contact
of Records with the walls, the Records racks should be installed at least 15
cm away from the wall. The following are the repairing equipment that
should be kept in a record room.
1. Repairing tables preferably with glass top
2. Small hand press
3. Scissors big and small
4. Twin thread and
5. Bodkin for piercing the holes.
13) The Records kept in the sections are collected by the Record Assistant
periodically. The Records that are handed over should be entered in the
“Register of Records Received”. After the Records are collected from the
sections, they are stitched firmly by the Record, Assistant and arrange in
chronological order and according to each class and the arranged properly
in racks. Records are supplied on requisitions made in the prescribed form
by the Section concerned. After a record is taken out, a made in the
prescribed form by the section concerned. After a record is taken is taken

out, a “Dummy Slip” is kept in its place for reference. All Records issued
should be entered in the “Records Issue Register”. In case of records kept
for long periods, the Records section should issue reminder to the section
for return of the same after done with. The Records Branch will be held
responsible if any record is found missing after it is received from the
section. The records issued to the sections should invariable be supported
by requisition in the prescribed form.
Destruction of Records:
The periodical destruction of records shall be generally regulated
according to the following broad principles:
DESTRUCTION OF RECORDS
1. Board proceedings in Routine series,
Memoranda, Endorsements,
Telegrams and Tour Programmes.
YEAR OF DESTRUCTION
At the end of Five Years from the year
to which they relate.
2. Lodge papers At the end of 3 years from the year to
which they relate.
3. Call Books, Arrear Lists, Tappal At the end of 3 years from the close of
Books, Circulation Register, Turn Lists the year to which they relate.
and similar Registers.
4. Office Orders At the end of 40 Years from the close of
the year to which they relate.
The following Records should on no accounts be destroyed
1. Proceedings of the ‘M.S.’ series.
2. Minutes of the Board Meetings
(Confidential Records)
The destruction of records and registers shall be carried out by the
Records clerks after obtaining the orders of the concerned officer. For this
purpose the clerk will take out a list of records to be destroyed in the month of
January.
Before the Records are destroyed, action should be taken as follows:
(a) The dockets sheets which are in good conditions should be separated
from the records and passed on the Assistant in charge of stationery for
being supplied for use again after scoring out nearly, or pasting over the
original entries.
(b) Such of the sheets in the Records as are written on one side only should
similarly be removed and passed on to the Assistant in charge of
stationery for supply as ‘rough slip’.
(c) The ‘Dummy Slips’ in these Records bundles which are not fully written
up should be removed and used again by the Record Branch with
necessary alterations in the entries made on them.
(d) Mode of Destruction:

Each sheet of the record books and papers to be destroyed should
be torn into small bits and then sent for destruction.
(e) A Register of Records destroyed shall be maintained by the Records
Clerk who will enter therein particulars of the records destroyed.

CHAPTER – 11
OFFICE PROCEDURES
1. Efficient administration means transacting the business promptly,
avoidance or check of delay at all stages, elimination of arrears and
efficient working of the organization. Real administrative efficiency is a
result and effect of an officer’s zeal and progressive outlook, intensive
supervision, personal attention, constant review, maintenance of highest
standards, real competence.
2. While in office, all members of the establishment must be behave in a
decent and disciplined manner and give respect to superior officers. All
the visitors should be received cordially and given as much attention as
possible in order to comply with the object of their visit in the quickest
and most efficient manner.
3. At the head quarters, the proposals received from the field officers are
examined by the Technical, Administration and Accounts wings. The
officers of the rank of Assistant Divisional Engineers. Assistant Account
Officers and Personnel Officers process the cases and circulate files, to
their respective heads of the departments and through them to the
members of the board and chairman. Proposals received from the field
are examined with reference to the technical aspects, precedents, legal
implication, financial aspects, etc., and once they are approved by the
competent authority, orders are issued in the form of board
proceedings, memo, etc., depending on the importance of the case.
4. The tappal clerk sends the tappals to the Officer concerned who peruses
them and records his views about the action to be taken on such of the
reference which need immediate attention. The tappals are sent then to
the sections concerned who submit the files to the immediate superior
with the notes after observing the following:
i) Scrutiny of the currents with reference to corresponding
rules and precedents.
ii) Tagging of currents and enclosures
iii) Page numbering
iv) Referencing of the notes.
v) Putting up of previous papers
vi) Flagging
vii) Referencing
viii) Linking the connected files if any
ix) Assigning importance to the file by indicating “Urgent”,
“Ordinary”, “Special”, “Most Immediate”.
5. The following are the forms of communications observed:
Corporate Office Proceedings:
When orders are issued based on the decisions of the Utility board, the
corporate office issues proceedings. Orders sanctioning of expenditure and
other important policy matters will be communicated.

CHAPTER – 12
PENSION
Classification of Pension: Pension is classified into the following different
kinds:
1. Superannuation Pension:
This pension is granted on being compulsorily retired due to attaining a
particular age. Such age in the case of those in superior services is 58 years and
in respect of those in inferior services is 60 years.
NOTE: It should be noted here that afternoon of the last date of the month in
which the actual date of retirement falls is to be taken as to be date of
retirement. In case where the date of birth is a first of a month, afternoon of the
last day of the preceding month shall be the date of retirement.
2. Retiring Pension:
Retiring Pension is granted to a Transco servant who is permitted to retire
or is required to retire in advance of attaining the age of superannuation as:
a) On completion of 20 years of quality service, a Transco servant may
retire on giving written notice of atleast 3 months (or less subject to
acceptability of competent authority) of his intention to do so to the
authority competent to make substantive appointment to that post.
Once such notice is given it cannot be withdrawn except with specific
approval of such authority and such request for withdrawal being made
within the intended date of retirement. When a Transco servant opts to
retire while on leave not due commenced and in such case, leave salary
drawn is to be refunded. For purpose of pension, service upto
maximum 5 years can be added to make the difference between
qualifying service and 33 years or date of superannuation whichever is
earlier. Such Government servant shall not however be eligible for
weightage under Rule 28 E.O.L. on any ground including on M.C. shall
not be reckoned as qualifying service to arrive at 20 years of qualifying
service.
b) On completion 30 years of qualifying service but before attaining the
age of superannuation, a Transco servant may retire giving 3 months
notice of the appoint authority in writing. Withdrawal of election to
retire once intimated is not permitted subsequently except with the
approval of such authority and unless made within intended date of
retirement.
In both such cases of retirement, order permitting or requiring retirement shall
not be issued unless completion of qualifying service is verified in consultation
of Pay and Accounts Officer, Hyderabad / Head of Department / Head of
Office who maintains the services particulars / book of the Transco servant
concerned. (When service cannot be verified due to loss of Intra-ceceability of
service book, once the date of appoint is established by independent direct
evidence, an affidavit given by the employees in respect of his service

supported by collateral evidence of contemporary employees shall be accepted.
G.O.Ms. No. 224 Fin. Plg Dt.28.6.1982)
3. Invalid Pension:
Those declared by the appropriate Medical Authority to be permanently
in capacitated for further service are granted invalid pension. In case, if a
Transco servant is declared to be fit for further service of less laborious
character than he was doing, then he may be employed on lower pay, No
in-valig pension should be granted if the incapacity is directly due to
irregular or intemperate habits of the Transco servant. However, if the incapacity
is not directly due to such habits, but is only accelerated or
aggravated by them, then the pension sanctioning authority should decide
about the deduction to be made on this account.
The amount of in-valid pension shall not be less than the amount of family
pension which would have been admissible to his family had he not been alive
instead.
4. Compensation Pension:
Owing to abolition of permanent post if a Transco servant is selected to
discharge, unless appointed to another post condition of which are atleast
equal to those of his own, he shall have option of taking compensation
pension for service rendered or accepting another appointment on such pay
as offered with previous service counted for pension. Notice of atleast 3
months should be given to a Transco servant before his services are
dispensed with, otherwise for such period by which notice falls short of 3
months he shall be paid the pay and allowances. For period for which pay
is paid in lieu of notice, no compensation pension is payable.
If a Transco servant entitled to compensation pension accept instead of
another appointment entitling subsequently to any class of pension, such
pension shall not be less than the compensation pension admissible had he not
accepted such appointment.
5. Compulsory Retirement Pension: A Transco servant compulsorily retired
from service as a penalty may be granted pension or gratuity or both at a
rate not less than 2/3 and not more than full invalid or gratuity or both
admissible on the date of compulsory retirement. When gratuity of such
pension/gratuity is less than admissible, the A.P.P.S.C is to be consulted.
However, the pension granted or awarded shall in no case be less than
Rs.45/-.
Amount of pension :- The amount of pension to be granted-and to which a
Transco servant retiring is entitled to is determined by length of service in
terms of six monthly completed years of qualifying service and average
emoluments drawn during last ten months of service. Pension is admissible
after completing qualifying service of not less than 10 years (20 six monthly
periods) and for less than 10 yeas, service gratuity admissible. In calculating
length of service, fraction of a period less than this months is ignored and three
months and above period is treated as completed six monthly periods.
For example : M D
” : 3 5 to be treated as six monthly period to be treated
only

’’ : - 5 to be treated only as 1 st six monthly period only
’’ : 9 5 as one year 2 six monthly period.
Fixation of pension is at monthly rates expressed in which rupees
rounding of the fraction to the next higher rupee. When the amount of pension
calculated is less than Rs.45/- pm it should raised to Rs.45/- pm full quantum
of pension is admissible on putting in 33 years (sixty six (66) monthly periods)
of qualifying service which is also the maximum admissible.
Qualifying Service: Determination of amount of pension is based on
qualifying service and average emoluments (points regarding average
emoluments will follow in further paras). Qualifying service means that service
which is eligible to be taken into account for purpose of pension, i.e. countable
service or in other words gross service less service which is not countable. The
Service of a Transco servant shall not qualify unless his duties and pay are
regulated or conditions determined by the Government. Service in nonpensionable
establishment does not qualify unless treated as such by the
Government (Regulation) 361 A of (A.P. Pension Code 1st) Civil Service
Regulations). Qualifying service commences from one date change is taken of
the post of which first appointed either substantively or in an officiating or
temporary capacity. Boy service (i.e.) service rendered before attaining the age
of 16 years of case of Government servants in class-IV service who held a lien
or suspended lien on a permanent pensionable post prior to 17.11.1960 and 18
years in all other cases, does not count. In short, following periods in service
count/do not count as qualifying service.
Countable (Qualifying (a) service rendered from the date of attaining the
age of 16/ 18 years. (For purpose of compensation gratuity, service rendered
before the age of 18 years also count).
b) Service rendered from taking charge of the post to which first appointed.
c) Service rendered upto last date of retirement (last date of the month in
which the actual date of retirement falls is to be taken as the date of
retirement. (DB 1.11.88) retire on 31.10.1988, DB 1.12.88 retires on 30.11.88,
and also (DB 31.10.88 shall retire on 31.10.88 only).
d) All kinds of leave for which leave salary is payable.
e) Extra ordinary leave granted on Medical certificate.
f) Extraordinary leave granted due to inability to join or rejoin duty on
account of civil commotion or for prosecuting higher scientific and
technical studies is allowed by appointing authority while granting.
g) Extraordinary leave upto 36 months in entire service for reasons other than
in (e) and (f).
h) Extraordinary leave sanctioned for taking employment else where subject
to payments of pension and leave contributions.

NOTE: E.O.L. on any ground including on M.C. shall not be reckoned as
qualifying service for arriving at 20 years of qualifying service of those retiring
voluntarily on completion of 20 years of qualifying service (Rule :43).
i) time spent under training period selected for the post as direct recruit and
appointed prior to being sent on training with initial pay of the scale paid.
j) Continuous service rendered under Central Government followed without
interruption by substantive appointment to post to which these rules apply
on permanent transfer on deputation from Central Government.
k) If initially engaged on contract for specific period and subsequently
appointed in regular Capacity in a pensionable Establishment without
interruption of duty subject to refunding of or foregoing of monetary
benefits of Transco contribution to G.P.F. (with interest thereon) including
other compensations for that service, such period in contract for which such
monetary benefits may have been payable shall count.
l) Pre-retirement Civil service in case of re-employment subsequent to having
retired on compensation/invalid pension or compensation/invalid gratuity
subject to cessation of drawal of pension or refund of gratuity sanctioned
for earlier service.
m) Regular Military service rendered after attaining 18 years of age before
Civil employment but restricted to service for which paid from
consolidated fund of India or for which pension contribution is received by
the Transco subject to refunding of gratuity received on discharge or
cessation of drawal of military pension, as the case may be.
n) Time passed under suspension pending enquiry into conduct where on
conclusion of enquiry fully exenterated or suspension held unjustified, in
other cases such period as expressly declared as countable by the
competent authority while passing order.
o) Past service on reinstatement on appeal or review after dismissal, removal
or compulsory retirement. However the in between interruption period
countable, only if regularized as duty or leave by specific order of authority
passing order or of reinstatement.
p) Service rendered in Foreign Service subject to payment to payment salary
and pension contribution for such period.
Non-countable (Non-qualifying):
a) Service rendered as an apprentice.
b) Boy service except for purpose of compensation gratuity.
c) E.O.L. exceeding 36 months (other than on M.C. and for prosecuting higher
scientific and technical studies and on inability to rejoin duty on account of
civil commotion).

d) E.O.L. on any ground including on M.C for arriving at 20 years of
qualifying service of those retiring voluntarily on completion of 20 years of
qualifying service.
e) Suspension period other than expressly declared to be countable.
f) Whole past service on dismissal or removal.
g) Period of interruption between date of dismissal/removal/compulsory
retirement and date of reinstatement unless regularized as duty or leave by
authority passing order.
h) Whole of past service on resignation except when resignation is submitted
to take up another appointment under the government where service
qualities, with proper permission.
i) Whole of past service on interruption in service except in cases as provided
in Rule (27). It should be noted that interruption in spells of Transco service
or between non-Transco service like under municipalities, etc., and Transco
service or between spells or non-Transco service will automatically be
condoned irrespective of period of interruption and period proceeding,
interruption, excluding however the periods of interruptions themselves.
j) Past service on voluntary retirement during period of suspension with no
subsequent reinstatement, unless ordered specifically otherwise.
ADDITION TO QUALIFYING SERVICE:
As stated earlier full amount of pension is admissible only on putting in
33 years of qualifying service. Rule 29 helps those whose service at the time of
retirement on superannuation falls short by 3 years as such Transco servants
who have put in qualifying service of less than 33 years, shall be entitled to add
to the qualifying service the difference (provided not exceeding 3 years)
between such qualifying service and 33 years. This benefit however is not
admissible to those eligible to benefit under rule 10 and 20. Benefit under Rule
29 is also not admissible to those benefited by Rule 43 (5). Rule 43 (1) allows a
Transco servant to retire voluntarily after putting in 20 years of qualifying
service between 33 years or date of superannuation whichever is earlier and
qualifying service put in subject to such difference being limited to maximum
of 5 years.
AVERAGE EMOLUMENTS:
Pension is based on length of service and emoluments drawn during
last 10 months of service. What pay and allowances should be reckoned as
emoluments and what should be considered as emoluments in different
circumstances is dealt in Rule 34. Rule 32 deals with the average emoluments,
the emoluments which should be taken into account for determining average
emoluments, the period which should be taken as last 10 months of service for
purpose of calculating average emoluments. Provisions of rules 31 and 32 dealt
with average emoluments to be arrived at. Keeping these provisions in mind,

to determine average emoluments, emoluments drawn in last 10 months
should be added and such total of addition should be divided by 10.
RETIREMENT GRATUITY:
On completion of 5 years of qualifying service, a Government servant
who retires from service is entitled for retirement gratuity equal to one third of
his emoluments, for each completed six monthly period of qualifying service,
subject to maximum of 2,50,000/- whichever is less w.e. to 1-10.99 ride Too No.
Addl. Sery (per) MS No.346/13-10-99.
If after completing 5 years of qualifying service dies a Government
servant while in service, retirement gratuity as per normal method for
calculation of gratuity adopted whichever is higher, subject to maximum of
Rs.2,50,000/- shall be paid to his family.
If a Transco Servant who has become eligible for service gratuity or
pension dies within 5 years from the date of retirement including compulsory
retirement as a penalty and the service received by him towards gratuity and
or pension are less than 12 times of his emoluments, his family should be paid
a residuary gratuity equal to such difference.
If a Government servant dies in first year of qualifying service, two
times of his emoluments and if he dies after completion of one year but before
completion of 5 years of qualifying service 6 times of his emoluments shall be
paid as retirement gratuity to his family.
Emoluments, as reckoned in accordance with Rule 31 shall for purpose
or retirement gratuity as referred in above cases, be subject to a maximum of
Rs.2,400/- p.m. (limit deleted from 31.4.89).
Average emoluments as referred in rule 32 may be treated as
emoluments by person sanctioning authority in case emoluments have been
reduced during last ten months of service otherwise than as penalty.
FAMILY PENSION:
As per rule 50 (2) family of a deceased Government servant is entitled to
a family pension at 30% of pay last drawn pay in the case of Government
servant on date of death or immediately before retirement was on leave with
allowances, will be taken at what it would have been, had he not been absent
from duty, and in case he had been absent on E.O.L. or suspension, that which
he drew immediately before on such leave or suspension.
Enhanced rate of F.P. at 50% of pay last drawn is allowed where a
Transco servant dies while in service after rendering 7 years or more of
continuous service. Enhanced rate is also allowed in the event of death of a
Transco servant after retirement. Such enhanced rate however is payable for 7
years or till such date on which Transco servant would have reached 65 years
of age had he served, whichever is earlier and thereafter if shall be at the
ordinary rate of 30% of pay last drawn.

Family pension determined on enhanced rate shall in no case exceed
pension sanctioned on retirement. However, where the pension sanctioned on
retirement, is even less than Family pension admissible ordinary i.e. at 30% of
pay last drawn, then enhanced rate shall be limited to such family pension as
admissible rate of 30% of pay last drawn.
Family pension is fixed at monthly rates expressed in whole rupees with
fractions if any rounded off to next higher rupee.
In case of widow or widower, F.P. payable is till the date of death or
remarriage whichever is earlier, in case of son till he attains 25 years or gets
employments whichever is earlier and in case of unmarried daughter till she
attains 25 years of age or till she gets married or gets employments whichever
is earlier, Provided if son or daughter mentally or Physically disabled so as
unable to earn living, payable for life time subject to certain conditions.
(G.O.Ms. No.52, F&P dt.20.2.1984)
MODEL
Mr. X has retired on 30.6.1989 A.N. being his date of birth is 29.6.1931. Other
details are indicated below
Calculate Pension/Retirement Gratuity/Family Pension/Commuted
value of pension of maximum eligible.
Date of Entry into service : 10.8.1954
Pay as an 1.12.1999 : Pay Rs. 4330/- +Rs.25/- F.P.I in the scale
of Rs.3580-150-5380
He was on deputation to Rural Electricity Corporation from 20.1.1984 to
19.1.1986, at the instance of Transco but pension and leave salary contributions
are still awaited from the foreign employer. He was on E.O.L. during the
following periods. He has submitted his application for communication along
with pension papers on 28.12.1968.
12.8.54 to 31.8.1954
10.6.57 to 4.7.57
He was not confirmed in any post.
There is some gap from 10.8.58 to 19.8.58 consequent on his promotion
from Non- Gazetted post to Gazetted post on transfer from Anakapalli to
Vjayawada, which could not be verified whether the period is treated as
joining time or leave or otherwise.
He was under suspension from 13.4.66 to 10.9 1966 AN and the period was
treated
MODEL ANSWER

Calculation sheet for superannuation pension, Retirement gratuity, end
Enhanced family Pension and Normal F.P. and Commuted value of pension.
Date of Birth : 29.6.31
Date of appointment : 10.8.54
Date of superannuation : 30.6.89 AN
Gross qualifying service ; From 1 0.8.54 to 30.6.89
Y m D
34 10 21
Less non-qualifying service:
i) The period from 10.8.58
to 19.8.58 (10 days) is condoned
and the same has to be
deduct. Rule 2800-00-10
ii) The suspension period
treated as such
has to be deducted
Rule 27 (1) (c) 00-04-28 00 05 08
Net qualifying service 34 05 13
The E.O.L periods from 12.8.54 to 31.8.54 and from 10.6.57 to 4.7.57 are
to be ignored as the same is less than 36 months Rule 21 (2).
Average emoluments Rule 31/32
Period of 10 months from 1.9.88 to 30.6.89
Emoluments drawn during last 10 months.

From to Months days pay FPI Rate Total
per month
1.9.88 0.11.88 3 - 4181 25 4205 12,615
1.1
2.88
30.6.89 7 - 4330 25 4355 30,485
43,100
Average emoluments of 10 months = Rs. 4,310/
Superannuation pension = 4310 x 33/66 = Rs.2,155/- pm
Retirement gratuity = R.G. raised to 10,000/- with effect from 31.3.89 deleting
the pay limit of Rs.2,4001- as per B.P.Ms. No.1124 dt 21.10.89.
Last pay drawn x Maximum of 20 months.
4355 x 20 = 87,100/
Family pension Rule 50 (3) (a) (ii)
Enhanced F.P. upto 28.6.96 = 50% of last pay limit to pension Rs.2,155/-
Normal F.P. - from-29.6.96 x = Rule 50 (3) (b) read with 50(2)
4355 x 30/100 = 1306.50 rounded to Rs.1307/- pm
Commuted value: 1/3 of eligible pension maximum/
Table in
Commutation rules 1944 = 59th year value 10.46
Commuted value = 10.46 x 12 x 718 = Rs.90,123.36 rounded to Rs. 90.124
(B.P.Ms.No.847 dt 21.10.86 w.e.f. 16.6.86
B.P.Ms.No.332 dt.13.3.87 (half monthly periods)
The latest amendments of pension rules may be verified while dealing with
pension cases.
5. Study leave
6. Maternity Leave
7. Casual Leave
ELIGIBI LITY OF LEAVE:
Earned Leave (to all employees)
:
Half pay leave:
..15 days in six months credited on 1st
January and July of each year. Maximum
limit 240 days.
..(1) 20 days for each completed year of
service commuted leave during entire
service is limited to 240 days (8 months)
(2) For heart disease T.B. Cancer etc. 6
months of half pay leave is treated as on full
pay.

EXTRAORDINARY LEAVE:
May be granted to a permanent employee if no other leave is available
and the employee applies for extraordinary leave. Non-permanent employees
may be granted, extraordinary leave upto a limit of six or twenty four months
at any one time. Longer periods may be considered for T.B. etc. if one is in
continuous service for more than one year. Chairman is competent to sanction
extraordinary leave without any limit.
SPECIAL DISABILITY LEAVE:
This leave is counted as duty. Chairman/Chief Engineer may grant the
side leave if an employee consequence to performance of his official duties is
disabled by injuries etc., that manifest within 3 months of the occurrence. The
leave may be for a period as certified by Medical Board for class-I and II
Officers and as certified by Civil Surgeon or a Doctor with Post-Graduate
degree for Class-III and IV. It can extended upto 24 months only again on a
certificate from medical Board/Civil Surgeon. Leave salary for special
disability leave is regulated as follows:
120 days on full pay for permanent employee in Class-I, II and III.
50 days for Class-IV on full pay.
For the remaining period of half pay at employees option.
MATERNITY LEAVE:
Upto 3 months for married women employees. Upto six weeks
maternity leave for miscarriage including abortion.
STUDY LEAVE:
May grant leave to its employees in the interest of Transco's service to
study scientific technical or similar problems at their own cost as follows:
1) On half pay leave
2) Should have completed 5 years service and within 3 years before
retirement.
G.P.F. REGULATIONS
A fund known as "A P Transco General Provident Fund" was
constituted by the Transco with effect from 1.3.1972.
Transco of Trustees comprising of Secretary to the Government finance,
Member (Accounts)/F.A. and C.C.A. and one or two representatives of the
employees shall administer the Fund.
All temporary and officiating employees on completion of one year's of
service shall be eligible to join the Fund.
The employees whose services were transferred to Transco on
permanent basis the amount of subscription at his credit along with interest
was transferred to Transco G.P.F.
A Member can discontinue from subscribing to the Fund in which case
his right to removing subscription shall lapse.

NOMINATION:
A subscriber may nominate one or more to receive the amount in the
event of his death duly specifying the share payable when more than one is
nominated. Nomination can be cancelled any time by duly sending a fresh
nomination.
SUBSCRIPTION:
Non-Compulsory : Rs.1000/- and above 6% of his emolument
and not more than his emoluments.
Compulsory : 11% the emoluments.
Interest : Interest is determined by the Transco annually as in
Government and paid into the account annually.
Advance : Temporary advance normally not exceeding 3
months
pay or
half of the amount in the credit may be sanctioned
for
reasons
given under Regulation-16. When applicants
pecuniary
circumstances justify the same.
DECREASE/INCREASE OF SUBSCRIPTION:
The employee may at his discretion increase the subscription twice in a
year or decrease it once in a year. Any arrears of salary received in lumpsum
may at the option of the subscriber credited to G. P.F. subject to the condition
that not less than half such lumpsum is credited to the G.P.F.
PART-FINAL WITHDRAWLS:
Part-final withdrawals are permitted any time after completion of 20
(twenty) years of service or within ten years before the date of his retirement
on superannuation reason specified in Regulation-1 B of the G.P.F. regulations.

CHAPTER – 13
PAY BILLS & TA BILLS
A. Bill or other Voucher presented as a claim for the payment of any amount
shall contain particulars of:
1. The nature of claim.
2. The amount claimed.
3. The period to which the claim relates if it arises periodically e.g.
claim for pay & fixed allowances.
4. The orders sanctioning charge, if it was incurred under special
order.
5. The authority for any deduction made in the bill.
6. The major head, minor head, sub-head and detailed account head
to which the charge (or each part of it) is debitable, and
7. The allocation of charge between Govts. (including Central Govt.)
and the departments, if any such allocation is necessary.
B. Every bill or other voucher shall be prepared in form prescribed under the
rules or in the departmental manual or code concerned for bills or
vouchers.
C. Every bill or the vouchers shall bear the office seal and shall be filled in and
signed in ink; entries and signatures with ball point pens are also
permissible provided the same are clear and legible. The designation and
the seal of the drawing officer should be duly affixed below the signatures.
D. No bill or the voucher containing any erasure shall be presented. Every
correction or alteration in the total of a bill shall separately attested by the
full signature of the person who signs the receipt.
E. When a charge is debitable to more than one major head of account the
drawees shall ordinarily present a separate list for the amount debitable to
each major head, but a single bill shall be prepared for the pay and
allowances of Govt. servant or an establishment debitable to two or more
major heads when the whole charge is met from the revenues of the state.
F. The procedure prescribed for the rounding of the transactions in Govt.
accounts and contractors bills.
1. Transactions of Govt. involving fractions of rupee shall be brought to
account in multiple of 5 paise, portion not below 2 1/2 paise being
rounded off to 5 Paise and those below that amount being ignored.
2. In the case of travelling allowances bills, the rounding shall be done
only at the last stage and not in respect of each item e.g. Railway fare,
Mileage, Daily allowance etc. comprising the claim of an individual .
3. Transactions which do not involve cash payment shall not be rounded
off.

G. No bill or any other vouch and no payment orders shall be signed by a
clerk for the head of the office even if it customary for the clerk to sign
letters for him when he is absent. No bill or the voucher and no payment
order shall be signed with a stamp.
H. When a rule or orders requires that the bills of a certain kind shall be
countersigned before payment no such bill shall be presented until it has
been duly counter signed.
I. The drawing officer shall deduct from a bill for the pay etc., of an
establishment any amount attached by a prohibitory orders of a court of
law. Schedule of recoveries effected in the form prescribed should be
attached intriplicate. One copy of the Schedule should be sent to the Court.
J. Deductions made in the bill shall where required by the rules relating to
such deductions e.g. Provident Funds, Life Insurance Fund, Postal Life
Insurance Fund etc., be supported by Schedules in the prescribed form
detailing the deductions made.
PAY AND ALLOWANCE (INCLUDING LEAVE SALARY) OF GOVT.
SERVANTS:
In the absence of any special order of the Govt. to the contrary, a
Gazetted Govt. servant may draw the bills for his own pay allowances and
leave salary.
Exception: The Secretary, T. B. Board may draw the pay and allowances
of A. P. Gazetted Officers working under the Board in Non-Gazetted bill, so
long as the A.P. Gazetted Officers are in T. B. Board.
b) When a Gazetted Govt. servant draws his first pay bill on being appointed
permanently or no probation to a post in Govt. service for the first time or on
being re-employed after resignation, or forfeiture of past service he shall
submit to the competent authority the health certificate.
c) When claiming leave salary a Gazetted Govt. servant who is on leave within
the state shall submit duplicate bills one of which shall be headed Not
payable.
Non - Gazetted Govt. Servants:
The bil1s for the pay, fixed allowances and leave salaries of non-
Gazetted servants drawn by the head of the office for disbursement to them
should be drawn on the forms prescribed. Separate bills shall be prepared in
each office for each of the- following classes; if. It exists;
a) Permanent establishment
b) Temporary establishment
c) The Govt. servants for whom no establishment returns are submitted
and no service books maintained.

In the pay bills reference to sanctions should be invariably quoted if the
posts are covered under temporary sanctions. The currency of ports sanctioned
should invariably be noted in the pay bills prominently. The posts vacant also
should be indicated in the pay bills.
The following details also should be invariably available:
1. Name and designation.
2. Scale of Pay of the post along with monthly rates of Basic pay, Spl.
Pay if any, DA, HRA, CCA and the allowances should be noted.
3. Duty period pay and leave period pay should be distinct y
exhibited. Claim for leave period should be supported by leave
sanction memo.
The following should be attached to the pay bills:
1. Absentee statement.
2. Last pay certificate
3. Increment certificate
4. Pay fixation orders.
ARREARS B ILL
Arrear pay shall be drawn on a separate bill and not in the ordinary
monthly pay bill. A note of the arrear bill shall invariably be made in the office
copy of the bills for the period to which the claim pertains, over the dated
initials of the drawer of the arrear bill in order to avoid risk of arrears being
claimed over again.
The drawing officer shall also record the following certificates on the arrear bill
under his dated signature
1) That no part of the amount claimed has been drawn previously and that
a note of the arrear claim has been made in the office copy of the bill for
the period to which the claim pertains.
NOTE:
1) In respect of arrear claims of Govt. servants who are transferred from
one office to another the certificate mentioned above, will be recorded
by the old office which proposes the bill and sends them to the next
office for arranging payment.
2) A travelling allowance bill presented after the end of the month
succeeding that in which the journeys covered the claims are performed
shall be treated as arrear bill for the purpose of the rule.

TRAVELLING ALLOWANCE RULES
The following are the definitions given under
A.P.T.A Rules:
ACTUAL TRAVELING EXPENSES means the actual cost of transporting a
Government servant or other person to whom these rules apply, with his
servants and personal luggage, Include charges for ferry and other tolls. They
do not include charges for hotels, travelers bungalows or refreshments or for
the carriage of stores, or conveyances or for presents to coachmen and the like;
or any allowance for which incidental losses or expenses as the breakage of
crockery, wear and tear of furniture or the employment of additional servants.
[Rule 2 (1)3]
COMPENSATORY ALLOWANCE means an allowance granted to meet
personal expenditure necessitated by the special circumstances in which duty
is performed. It includes travelling allowance. [RULE 2 (a)]
CONVEYANCE ALLOWANCE is an allowance granted to a Government
servant, who has to tour regularly within a specified area, for the maintenance
of a specified conveyance and is in lieu of all travelling allowance ordinarily
admissible for the Journeys in the specified area. [Rule 15, Para l]
DAILY ALLOWANCE is a uniform allowance for each day of absence from
head quarters, which is intended to cover the ordinary dally charges incurred
by a Government servant in consequence of such absence.
[Rule 39 (a)]
DAY means a calendar day beginning and ending at midnight. But an absence
from headquarters which does not exceed 24 hours reckoned for "all purposes"
as one day at whatever hour the period begins and ends. [Rule 2 (ii)
FAMILY includes the wife and children, including an adopted son and step
children of a Government servant residing with and wholly dependent on him.
A female Government servant is in no case entitled to charge travelling
allowance on account of her husband except when he is wholly dependent on
tier.
No claim can be made on behalf of a married daughter after the date on which
she was placed under her husband's protection.
In the case of both Gazetted and Non-Gazetted Government servants, for the
purpose of Transfer Travelling Allowance “family” shall include also their
parents, who are wholly dependent on them. [Rule 2 (III) read with G.O.MS.
No. 30 Finance and Planning Dated 11_ 2 _87]
FIXED TRAVELLING ALLOWANCE is an allowance granted to a
Government servant who is required to tour within specified area for not less

than a given period in a week, month, quarter, half-year or year, as the case
may be. [Rule 13]
HEAD QUARTERS means "DUTY POINT". Duty point means the place or
office where the Government servant remains on duty. [Rule 2 (x) read with
Rule 22]
HEAD QUARTERS STATION means the area within the limits of
Corporation, the Municipality the Panchayat or the Village, as the case may be,
in which the duty point is located.
LAST GRADE SERVICE includes all services in the following appointments
unless otherwise declared by the local Govt.:-
a. Service as attenders, head attenders, daffadar, or chober;
b. Service in posts the pay of which does not exceed Rs. 30
MILLEAGE ALLOWANCE is an allowance calculated on the distance
travelled which is given to the cost of a particular journey [Rule 181
NIGHT JOURNEY: - A Journey will be reckoned as night journey when a
Government servant travels by train for atleast three hours between 9 p.m. and
6 am. [Rule 8 under Ann 1]
PERIOD OF ABSENCE FROM HEAD QUARTERS:- A period of absence
from headquarters begins when a Government servant actually travels his
head quarters and when he actually returns to the place in which his head
quarters is situated, whether he halts there or not. [Rule 41]
PAY:- For the purpose of the calculating travailing allowance, pay means the
actual pay drawn by a Government servant in his substantive or officiating
post. It includes personal pay granted to protect a Government servant from
loss of emoluments and overseas pay, but excludes personal pay granted on
other considerations, special pay, language pay, judicial pay/additional pay
under F,R.49 (b) and exchange compensation allowance.[Rule 2(vii)]
PUBLIC CONVEYANCE means a train or other conveyance which plies
regularly for the conveyance of passengers, but does not include a taxi car,
hackney carriage or other conveyance which is hired for a particular Journey.
[Rule 2 (vii)]
SHORTEST ROUTE is a route by which a traveler can most speedily reach his
destination by ordinary modes of travelling. [Rule 19]
TRANSFER means the movement of a Government servant from headquarter
station in which he is employed to another such station, whether to take up the
duties of a new post, or in consequence of change of his headquarters. [RULE
2(x)]

TRAVELLING ALLOWANCE means an allowance granted to a Govt. servant
to cover the expenses which he incurs in travelling in the of the public service.
Rule 2 (b)]
CONTROLLING OFFICERS: -
The travelling allowance bills shall be countersigned by the Controlling
Officers before payment at the Treasury.
The classes of Government servants who may present bills for travelling
allowance without the countersignature of a Controlling Officer are given In
Rule 5, A.P.T.A. Rules.
DUTIES OF CONTROLLING OFFICERS
It is the duty Controlling Officer, or of a Drawing Officer when a bill
does not require countersignature, before counter signing or signing a
travelling allowance bill.
a. To scrutinize the necessity, frequency and duration of Journeys and halts
for which travelling allowance is claimed and to disallow the whole or any
part of the travelling allowance claimed if he considers-
i. That a Journey was unnecessary or unduly protracted or
ii. that a halt was of excessive duration;
b. To scrutinize carefully the distances as well as the rates and the calculations
entered in travelling allowance bills;
c. To satisfy himself that, where the actual cost of transporting servants,
personal effects, etc., Is claimed under these rules, the scale on which such
servants, effects etc., were transported was reasonable; and to disallow any
claim which in his opinion, does not fulfill that conditions
d. To check any tendency to abuse the option of exchanging daily allowance
for railway fare, mileages allowance; and
e. To observe any subsidiary rules which the State Govt. may make for his
guidance
f. To satisfy himself that official claiming regular travailing allowance for
Journeys within his Jurisdiction is not in receipt of any conveyance
allowance. [Rule 7]
CONTROLLING OFFICER - REDUCING THE CIAIM
The Controlling officer may reduce the Travelling Allowance of a
subordinate in the following circumstances, even if the facts given are correct
and the claim is accordingly to relevant rules:

a) If in the opinion of the Controlling Officer the Journey was unnecessary
or unduly protracted, or that halt was of excessive duration. Rule 7 (a)3
b) Any claim where the actual cost of transporting servants personal
effects etc., was, in his opinion, unreasonable.
c) In the case where concessional fares are allowed, the railway allowance
may be limited to such concessional rate, though the Gove servant has
not availed the concessional return tickets, if the Controlling Officer is
not satisfied with return tickets the Controlling Officer is not satisfied
with the reasons for not availing the concessional rates obtainable. [Rule
31]
d) Travelling Allowance to attend an obligatory examination admissible
under rule 82 and 86 may be disallowed if. in the opinion of the
Controlling Officer, the subordinate has culpably neglected the duty of
preparing himself for the examination or has not displayed a reasonable
standard of proficiency in an examination which is not obligatory.
ADMISSIBILITY OF TRAVELLING ALLOWANCES
i. Travelling allowance is also admissible for the following kinds of
Journey:
ii. Journey on tour Rule 581
iii. Journey on transfer: [Rule 693
iv. Journey to a newly appointed Government servant to Join his first post;
[Rule 65]
v. Journey to attend an examination;[Rule 82]
vi. Journey when proceeding on or returning form leave;
vii. Journey on retirement, dismissal or termination of employment;[Rule
89]
viii. Journey to give evidence; [Rule 92]
ix. Journey for medical purposes; [Rule 941]
x. Journey on a course of training; [Rule 102]
xi. Journey for special purposes [Rule 103]
DAILY ALLOWANCE
Daily allowance is a uniform allowance granted to a Government
servant for each day of his absence from head quarters which is intended to
cover the ordinary daily charges incurred by a Government servant [Rule
39(a)]
It can be exchanged for mileage including railway and steamer fare
subject to the conditions prescribed under the Rules [Rule 39(a)]
It is admissible only for journeys or halts in the course of journeys on
tour [Rule 39(b)]

RECKONING A DAY FOR THE PURPOSE FOR CALCULATION OF
DAILY ALLOWANCE:
The period of absence form headquarters of a Government employee for
being eligible to draw daily allowance irrespective of the mode of the travel
shall be as indicated below:
1) A day should be reckoned as to cover 24 hours of absence from
headquarters commencing from the minute the officer leaves the
headquarters. The rate of Daily allowance shall be as follows;
a) Absence of 12 hours and more..1 day allowance
b) Absence of six hours and more.. 1/2 daily allowance
c) Absence of less than six hours. No daily allowance
2) This will apply to all modes of transport.
a) For this purpose the restriction against drawing daily allowance in case
of journey by Bus between 8km and 32km D.A. is not admissible in the
following cases
b) For any day spent on casual leave while on tour
c) For any Sunday or holidays unless the officers is actually in camp.
DAILY ALLOWANCE FOR HALTS EXCEEDING TEN DAYS:
The restriction for drawal of full daily allowance for the period of stay at one
place for more than ten days has since been remove and all Government
employees are eligible to draw full daily allowance for the entire duration of
their tour.
Travelling allowance on transfer
Travelling Allowance is allowed to a Government servant transferred from one
station to another subject to the following conditions:
1. The transfer was for public convenience; and
2. That the Government servant is entitled to pay during the period
occupied by journey. It should be noted that the transfer T.A. is not
admissible in the following cases; i) When the transfer is made at the
request of the Govt. Servant ii) When no transit pay is admissible for the
period of transit(i.e)
a) When the Government servant returns form leave on average
pay exceeding four months or earned leave exceeding s120
days
b) When the Government servant returns from leave on half pay
or extraordinary leave.
Overstayed of Joining Time: In the case of overstayal of joining time
dealt with under F.R. 108, the Government may reduce travailing allowance by
not more than 50% of the amount that would, otherwise be admissible. In the
absence of an order reducing the travelling allowance as aforesaid, travailing
allowance shall be paid in full[Rule 69(a))

ADMISSIBILITY OF T.T.A
Travelling allowance to a Government servant on transfer is admissible to (i)
Self(ii) Family and (ii)personal effects.
FAMILY: The following points to be noted while treating a person as the
member of a Government servant's family for the purposes of travailing
allowance:-
I. He should be wholly dependent on the Government servant and
residing with him.
II. Parents do not include adopted-Father, adopted-mother, step-father,
Step-mother.
III. When the Government servant has more than one wife, claim for T.A
shall be limited to one wife only.[Ruling 1 under Rule 2(iii)]
IV. When both husband and wife who are employees of the Andhra
Pradesh Government are transferred at the same time or with six
months of his/her transfer, from one and the same old station to one
and the same new station, only one of them shall be entitled to
travailing allowance as on transfer, the other being treated as a member
of his/ her family not in the employment of the Andhra Pradesh
Government. [Note 3 under Rule 2(iii)]
V. WHO are treated as members of the family:- i) Wife/Husband (ii)
Children(iii) step children(iv) Adopted son other than adopted son of an
unmarried Christian lady(v)parents(Vi) Married daughter not placed
under the protection of her husband (vii) Widowed daughter vi) Who
are not treated as member of the family:- (i) adopted daughter(ii)
Married daughter placed under 1 he protection of her husband(iii)
Brother and (iv) Sister.
PERSONAL EFFECTS
(Packing and unpacking charges)
In the case of transfer outside the state the employees shall be eligible for the
charges stipulate d for various grades Note (i): For this purpose, they must
produce the receipts
Note (ii) :If an employee carries his personal effects by passenger train or by air
instead of by goods train, he may draw Me actual cost of carriage up to a limit
of the amount which would have been admissible had he taken the maximum
number of kilograms by Goods train.
Note(iii): Subject to the prescribed maximum number of kilogram, an
employee may draw the actual cost of transporting personal effects to his new
station from a place in India other than his old station(Eg from a place where
they are purchased enroute or have been left on the occasion of a previous
transfer) or from his old station to a place in India other than his new station,
provided that the total amount drawn, including the cost of transporting those
personal effects shall not exceed that admissible had the maximum admissible

number of kilograms been transported by good train from the old to the new
station direct.
Note(4): The cost of transportation of personal effects on transfer may be
allowed, subject to the maximum quantity prescribed above the “Quick Transit
Service” rates, if personal effects are actually transported by the “Quick Transit
Service” and that they reached the destination within the specified period
should be recorded by the claimant on the Travelling Allowance Bill.
Note (5): An employee carrying goods by road between place connected by rail
can draw actual expenditure on transportation of personal effects by road or
the amount admissible on transportation by railway by goods train, whichever
is less.
Note (6): In case the personal effects are transported by other modes of
transport like lorry, etc., the existing rules mentioned in Rules and Orders
Issued from time to time shall continue to apply, except as provided for in this
order.
JOURNEY TO ATTEND EXAMINATION: -
A Government servant is entitled to draw travelling allowance for the
journey to and from the place at which he appears for an examination of nay if
the following kinds:-
a. Any special test or departmental or language examination which is
compulsory under any rules or orders for the time being in force
applicable to the Government servant concerned.
b. An examination held under any rules in force in the vernacular
language of hill tribe.
c. In the case of a military officer in civil employ any examination for
promotion in military rank.
d. In the case of a Assistant Surgeon, an examination designed to test his
fitness to rise above an efficiency bar in a time scale.
Provided that:
1) Travelling allowance shall not be drawn under this rule more than twice
for any particular examination or standard of examination and
2) The head of a department may disallow travelling allowance under this
rule to any candidate who, in his opinion,
i. Has culpably neglected the duty of preparing himself for an
obligatory examination; or
ii. Does not display a reasonable standard of proficiency in an
examination which is not obligatory. [Rule 82].
Note: - A claim for travelling allowance under this rule should be supported by
a certificate by the controlling officer to the effect that the conditions prescribed
in the rule have been satisfied.
The examinations to be obligatory passed are those prescribed in the Service
Rules.
JOURNEY WHEN PROCEEDING ON OR RETURNING FROM LEAVE: - A

Government servant is not ordinarily entitled to any travelling allowance for a
journey made during leave or while proceeding on or returning from leave.
The following cases are exceptions to this rule:-
a. Government servants on leave or during vacation, if employed with
consent, In each case, of the head of the department or office as
honorary organizers under the Registrar of Co-Operative Societies may
be granted travelling allowances at the rates to which they would be
entitled If they were not on leave but were performing their ordinary
official duties.
b. A Government servant on leave for a period not exceeding four months
is entitled to travelling allowance for a journey undertaken for the
purpose of passing an examination, provided he is otherwise eligible
calculated either from the place where he was last on duty or from the
place where he is residing, whichever would give him least travelling
allowance. If the place where the Government servant was last on duty
Is also one of the centers where the examination is held, no travelling
allowance will be admissible under this rule.
c. If a Government servant, while on leave makes a Journey under proper
authority and in the public interest, he may, with the approval of
Government, be granted travelling allowance as for a journey on tour.
[Rule 86]
JOURNEY TO GIVE EVIDENCE: -
A Government servant who is summoned to give evidence-
In a criminal case, a case before a court martial, civil case to which
Government is a party or a departmental enquiry held by a properly
constituted authority in India including an Inquiry preliminary to acquiring
land; provide that the facts to which he is to give evidence have come to his
knowledge in the discharge of his public duties:
i. May draw travelling allowance as for a Journey on tour attaching to his
bill a certificate of attendance given by the court or other authority
which summoned him.
ii. When he draws such travelling allowance, may not accept any payment
of his expenses from the court or authority. Any fees which may be
deposited in the Court for the travelling and subsistence allowance of
the witness must be credited to Government;
iii. If the court in which he gives evidence is situated within five miles of
his headquarters no travelling allowance is therefore, admissible for the
Journey, and may, if he is not in receipt of permanent travelling
allowance accept such payment of actual travelling expenses as the
court may make, [Rule 921]
GIVE EVIDENCE WHILE ON LEAVE: -

A Government servant summoned to give evidence while on leave is
entitled to the concession described in this rule, and he shall be allowed
travelling allowance from and to the place at which received the summons.
[Note 1 under Rule 92]
TO GIVE EVIDENCE IN DEPARTMENTAL ENQUIRY WHILE UNDER
SUSPENSION:
A Government servant under suspension summoned to attend any
departmental enquiry may be paid travelling allowance under this rule from
and to the place from which he is summoned as if he were on duty and the
charge debited to the department to which he belongs. [Note 2 Rule 92]
FOR PERUSAL OF OFFICIAL RECORDS CONNECTION WITH THE
CHARGES AGAINST HIM:-
A Government servant who undertakes a Journey for perusal of official
records in connection with any charges pending against him may be paid
travelling allowance under this rule from and to the place from which he
undertakes the journey, In case he is honourable acquitted of the charges[Note
4 under Rule 92]
FOR PERUSAL OF OFFICIAL RECORD TO GIVE EVIDENCE: -
When a Government servant, who is summoned to give evidence before
a Court, undertakes a journey to a place other than that at which the Court is
situated for the purpose of perusing official records in connection with the
giving of such evidence, he may be paid travelling allowance under this rule
for such journey also. [Note 5 under Rule 92]
TO ATTEND DEPARTMENTAL ENQUIRY AGAINST HIM:-
A Government servant is entitled to travelling allowance as on tour for
Journeys to attend departmental enquiries into his conduct whether such
journeys are performed while he is on duty or on leave or under suspension;
subject to the following conditions:
I. The travelling allowance will be restricted to that admissible from his
headquarters to the place of enquiry or from the place at which he has
been permitted to reside during suspension to the place of enquiry,
whichever is less.
II. No Travelling allowance will be admissible, if the enquiry at the outstation
is at the request of the Government servant under suspension.
[Ruling 8 under Rule 92]
TRAVELLING ALLOWANCE TO THE FAMILY OF A GOVERNMENT
SERVANT WHO DIES IN SERVICE: -
If a Government servant dies while in service, members of his family
may be granted travelling allowance for the Journey to his or to any other
place, where they may wish to reside, either from his headquarters or from the

place of his death: provided that the amount shall not exceed what would be
admissible for Journey from the Government servant's headquarters to his
home
For the purpose of this rule the headquarters of Government servant on
leave shall be considered to be the place of his headquarters when he was last
on duty. The rates of travelling allowance shall be those which would be
admissible for a Journey on transfer by the deceased Government servant less
one fare for Journey by rail. The allowance must be claimed within three
months of the death of the Government servant and may be drawn in advance,
if the officer drawing the bill is satisfied that the Journey will be made. Bills of
non- Gazetted Government servant's family members may be drawn and
countersigned by the officers authorized so to deal with the bills of the
deceased Government servant.
In the case of a Gazetted Government servants family bills-may be
drawn by the officer who is the countersigning authority, for the travelling
allowance bills of the deceased officer. If the deceased Government servant
was himself the countersigning authority, the Head of the Department or the
Secretary to Government concerned may draw travelling allowance bills.
Travelling allowance under this rule is admissible only when the
distance to be travelled exceeds 80 kms.
TRAVELLING ALLOWANCE ON RETIREMENT: -
Travelling Allowance is allowed to a retired Government servant and
members of his family from the place of duty to his Horne Town and in respect
of transportation or his personal effects between the same places as admissible
under the rules on the date of his retirement subject to the following
conditions:
1. The concession will be admissible by the shortest route from the place of
duty to his Home Town. The word 'Home Town' means the place which
is so declared by the Government servant in connection with the LTC
Rules.
2. Only expenditure incurred between the place of duty to the Place
nearest to the Home Town and if the Home Town is outside the State
within the limits of the State shall be reimbursed by Government as per
the Travelling Allowance Rules.
3. The concession may be availed by the Government servant at any time
during his leave preparatory to retirement or during refused leave or
within 6 months of the date of his retirement.
4. The concession will be admissible to permanent State Government
Servants who retire on a Retiring Pension or on super annuation, invalid
or compensation pension. It will not be so admissible to Government
servants who quit service by resignation or who may be dismissed or
removed from service.

5. The concession will also be admissible to temporary employees who
retire on attaining the age of super annuation provided they have put in
a total service of not less than 10 years under the State Government.
6. Where an officer is re-employed under the State Government while he is
on leave preparatory to retirement or within 6 months of the date of his
retirement, the concession admissible under these orders shall be
allowed to be availed of by him within 6 months after the expiry of the
period of his re-employment.
7. A member of a Government servant's family who follows him within six
months or precedes him by not more than one month will be treated as
accompanying him. This period will be counted from the date on which
the retiring Government servant himself actually moves to his 'Home
Town'. The claims of travelling allowance in respect of the family
members will not be payable until the Government servant who is
eligible for this concession actually moves to the 'Home Town'.
8. The Travelling Allowance claims admissible under these orders will be
drawn on Travelling allowance bill forms like the Transfer Travelling
Allowance claims. The claims of officers who were their own
Controlling officers before retirement will, however, be countersigned
by the next Higher Officer.
9. Payment of Travelling Allowance claims under these orders may be
made by Treasury Officer in relaxation of the State Treasury Rules.
10. The concession admissible under these orders will be admissible to all
personnel who retire on an after the date of issue of these orders.
11. These orders do not apply to persons who
a) are not in whole-time employ of the Government but engaged on
contract;
b) are paid from contingencies;
c) are eligible for any other form of travel concession on retirement.
(G.O.Ms.No. 80 Fin & Plg (T.A.) Dated 20-3-1975)

CHAPTER - 14
DISCIPLINARY REGULATIONS
Every employee should conduct himself in a disciplined manner and set
an example to the society.
Every utility sets certain acts and omissions which constitute
misconduct. The following shall be treated as misconduct;
1. Willful insubordination or disobedience. Whether alone, or in combination
with another or others, of any lawful and reasonable order of a superior
2. Striking work or deliberate slowing down of work either singly or along
with another or others in contravention of any lawful and reasonable order
of a superior
3. Striking work or deliberate slowing down of work or inciting other
employees to strike work or slow down work in contravention of orders of
any statue, law, enactment or rule for the time being in-force or as applied
from time to time
4. Concerted or organized refusal on the part of employees to receive their
pay
5. Theft, fraud or dishonestly in connection with the Transco a property or
business
6. Taking or giving bribes or any illegal gratification whatsoever
7. Collection or canvassing for collection without the written permission of
the management of any money
8. Habitual late attendance and habitual absence without leave or without
sufficient cause
9. Carrying on money-lending or any other private business without the
permission of the management
10. Drunkenness, lighting riotous or disorderly or indecent behavior in the
premises of the establishment
11. Chit-chatting or loitering in the work premises, habitual negligence or
neglect or work
12. Habitual indiscipline
13. Smoking within the premises of the establishment in places where it is
prohibited
14. Causing willful damage to work in progress or to any property in the
establishment

15. Distribution, exhibition, display or use within boundaries of work-spot or
premises or any Newspapers, handbills, pamphlets or posters, flags or loud
speakers without previous sanction of management
16. Refusal on the part of an employee to work on a job or a machine other than
the job or machine on which is usually engaged without adversely affecting
his service conditions
17. Holding meetings within the boundaries of the establishment or in any of
the premises owned by the utilities without the previous sanction of the
management
18. Gambling within the premises of the establishment
19. Sleeping while on duty
20. Malingering or slowing down of work
21. Unauthorised use of utility’s quarters or land or vehicles
22. Lending or borrowing money to or from subordinate employees
23. Insolvency
24. Writing of anonymous or pseudonymous letters criticizing the utility or
any of its employees
25. Spreading false rumour, or (giving false information, which tend to bring
into disrepute the utility or its employees or spreading panic among them
26. Conviction in any court of law for any criminal offence involving moral
turpitude
27. Theft of employee's property inside the premises of the establishment
28. Continuous absence without permission without satisfactory cause for
more than five days
29. Giving false information regarding name, father's name, qualification, age
or previous service or any other information connection with employment,
at the time to employment or any other time during service
30. Any breach of any rules
31. Abetment of or attempt to commit any of the above acts or misconduct.
Habitual breach of any rules of instructions for the maintenance and
cleanliness or workplaces,
Willful disobedience of any order expressly given or any rule expressly
framed for the purpose of securing safety or willful removal or

disregard of or interference with any safety guard of other device
provided for securing safety.
Accepting service in any establishment other that belonging to the
utility or private employment from any person in the utility’s service.
Leaving one's post without handing over change or without permission
or abandoning or deserting one's post.
Conducting or participating in or promoting an unauthorized raffle,
lottery or benefit performance.
Enrolling as member in any political party.
Engaging in divulgence of an official information or document.
Failure to exercise efficient control and supervision on the subordinate
Staff resulting in general inefficiency or the Branch or Unit.
Unauthorized divulgence of an official information or document.
Bidding or tendering for supply to the utility or for purchasing any
property of the utility either in person or through the press or leaflets,
etc.
Unauthorisedly making any statement in the press or contributing any
articles to the press or any magazine or giving talk on the radio without
prior approval of the appropriate authority or ventilating grievances
through the press or leaflets, etc.
Save in accordance with the provisions of any law for the time being in
force, becoming a member or appearing as a representative of any
Association or Union representing or purported to represent the
employees or any classes of employees of the utility unless such
association or union has been recognized by the utility.
Any other act or omission which may be declared by the utility to be
misconduct.
Leaving the country for any reason, whatsoever without obtaining
specific permission or staying in other country for more days than the
days permitted by the utility, in the 'No Objection Certificate' and being
employed in other country without permission of the utility.
(B.P. (P& G. Per) Ms. No. 94 dt 25.5.92)
a) Competent and appellate disciplinary authorities:
The authorities which may impose any of the penalties mentioned in
regulation 5 and the appropriate authorities to whom appeal lines shall
be as specified against each of the categories in Schedule.

) Competency of authorities superior to disciplinary authority:
c) Where in any case a higher authority has imposed or declined to impose
a penalty under this regulation, a lower authority shall have no
jurisdiction to proceed under this regulation in respect of the same case.
Provided that in cases where a case is sought to be reopened after one
year, the authority concerned (the reopening authority) should obtain
the permission of the next higher authority or the Transco as the case
may be.
d) The fact that a lower authority has dropped a charge against a person as
not proved shall not debar a higher authority from exercising it.
e) Power vested in an authority may be exercised by a superior authority
in its discretion.
Disciplinary authority in certain cases:
1) Where on promotion or transfer, a member of a service in a class,
category or grade in holding an appointment in another class, category
or grace thereof or in another service no penalty shall be imposed upon
him in respect of his work conduct before such promotion or transfer
except by an authority competent to impose the penalty upon a member
of the service in the latter class, category, grade or service, as the case
may be. This provision shall apply also to cases of transfer or promotion
of a person from a post under the jurisdiction of one authority to that
another authority within the same class, category or grade.
2) Where a person has been reverted or reduced from service to an another
or from one class category or grade of a service to another class,
category or grade thereof no penalty shall be imposed upon him in
respect of his work or conduct while he was a member of the service,
class, category or grade, as the case may be, from which he was reverted
or reduced, except by an authority competent to impose the penalty
upon a member of such service, class, category or grade.

Disciplinary action in respect of employee of State/Central/Government
of outside bodies:
a) If any employee to be proceeded against is an employee of the State or
Central Government or of any other outside body and is on deputation
to the utility, no punishment shall be imposed on him without the
concurrence of the authority who lent his services to the utility. If it is
considered that the penalty of compulsory retirement, reduction in rank,
removal or dismissal is to be imposed, the competent authority shall
complete the enquiry in accordance with the provisions of subregulation
(2) of regulation 10 and revert the employee concerned to the
State of the Central Government of other employer, as the case may be
and also toward the record of enquiry for such action as is considered
necessary.
b) If a utility's employee is not Foreign Service, the employer shall not
impose any punishment on him without the concurrence of the utility. If
one of the major punishments of reduction, compulsory retirement,
removal or dismissal is to be imposed, the foreign employees necessaryenquiry,
send the complete papers to the utility and also revert the
employee concerned to the utility’s services for such action as is
considered necessary by the utility against him.
c) In case an employee referred to in clause (a) or (b) has to be suspended
pending enquiry the foreign employer shall place him under
suspension, but shall report forthwith to the lending authority the
circumstances leading to the suspension.
Procedure for imposing penalties:
1. No order imposing or a member of a service a penalty shall be passed
except after.
a) The member of the service is informed in writing by the authority
competent to impose the penalty of the proposal to take action in regard
to him and of the allegations on which the action is proposed to be
taken, and is given an opportunity to make any representations he may
with to make to such authority, and
b) Such representation, if an, is taken into consideration by the authority
competent to impose the penalty.
2. In every case where it is proposed to impose on a member of a service any
of the penalties specified in items (iv), (vi), (vii) and (viii) in Regulation 5,
the authority competent to impose the penalty shall appoint an enquiry
Officer, who shall be superior in rank to the person on whom it is proposed
to impose the penalty, or shall itself hold an enquiry either SUO-MOTU or
on a direction from a higher authority in every such case the grounds on
which it is proposed to take action shall be reduced to the form of definite
charge or charges, which shall be communicated to the person charged
together with a statement.

3. of the allegations on which each charge is based and of any other
circumstances which it is proposed to take into considerations in passing
orders in the case. He shall be required, within a reasonable time, to file a
written statement of his defense and to state whether he desires an oral
enquiry or to be heard in person or both. The person charges may for the
purpose or preparing his defence be permitted to inspect and take extracts
from such official records as he may specify, provided that the enquiry
officer may, for reasons to be recorded in writing refuse such permission, if
in his option, such records are not relevant for the purpose of it is against
public interest to allow access thereto. On receipt of the statement of
defence within the specified time or such further time as may have been
given, an oral enquiry shall be held if such an enquiry if desired by the
person charged or is decided upon by the enquiry officer or is directed by
the competent authority. At that enquiry office may, for special and
sufficient reason to be recorded in writing, refuse to file, call a witness.
After the oral enquiry is committed, the personal hearing shall be given to
him. The enquiry officer shall on completion of the enquiry or the personal
hearing of the person charged or both, forward the proceedings of the
enquiry or the personal hearing of the person charged or both, forward the
proceedings of the enquiry or the authority competent to impose the
penalty unless he is himself such an officer. The proceedings shall contain
the charges trained against the person charged along with the grounds of
charge, written statement field in defence, if any, a sufficient record of the
evidence adduced during the oral enquiry, a memorandum of the point
urged by the person charged during the personal hearing, if any, a
statement of the findings of the enquiry officer on the different charges and
the grounds thereof.
Every employee should desist from committing any of the above
mistakes.

Customer Service Centre:
CHAPTER - 15
CONSUMER SERVICE AND CARE
Customer Service centre can be set up by the utilities to provide a Single
Window interface for all the customer related activities. Customers are thus
spared for the tedious process of approaching several officers for getting their
work done. Customers can approach the Customer Service Centres for availing
new service connections; resolving their complaints related to metering,
billing, disconnections, reconnections, etc; and for processing their service
requests related to category changes, title transfers, load changes, etc.
Generally these customer service centers work on extended and convenient
timing for the benefit of the customers. The entire process of registration of
complaints / service requests, dispatch, status updating, closure is managed
through custom designed software solutions or Software Products. In case the
complaint / service request is not resolved within a specified time limit, the
same is escalated to the notice of higher authorities for expediting the
resolution process. The escalation process is enabled through the intelligent
components of the software.
These service centers are generally setup with good ambience to
enhance the customer interaction experience. Customer service centers have
been successful in bringing down the processing time and have thus
significantly enhanced the customer satisfaction levels.
Customer Service Centers have been implemented in the states of
Andhra Pradesh, Delhi and Karnataka. With the help of these service centers
the distribution utilities have been able to confirm to the stringent service
levels defined by their respective State Electricity Regulatory Commissions.
Electricity Call Centre:
To address the power supply related complaints on a proactive basis
and provide effective, assured and timely services to the customers several
power distribution companies and state electricity boards have set up an
Electricity Call Centers. The call centers work round the clock to receive
customer complaints through several channels such as telephone, fax, email,
etc.
The customer complaints are registered and forwarded to the field
personnel for timely action and rectification. The status of the complaint is
periodically tracked and updated. The customer can know the status of the
complaints registered by contacting the call centre personnel. In case the
complaint is not resolved with in a specified time limit, the complaint is
escalated to the notice of higher authorities for expediting the resolution
process.
The Electricity Call Centers are managed through specially software
solutions, which form the backbone of operations. The software deployed may
vary from technically advanced to simple solutions. The software generally

comprise of Contact Management Solution and /or Process Monitoring
Solution. These call centers are either managed by the utilities personnel or
outsourced to third parties.
Electricity Call Centers have been implemented in the states of Tamil
Nadu, Andhra Pradesh and Karnataka. In the states such as Rajasthan, Delhi,
Madhya Pradesh, etc the call centers are at the various states of
implementation.
Collection through Banks, Post Offices and Camps:
Payment of electricity bills has generally been an unpleasant & timeconsuming
experience for the customers. Long queues, inconvenient timings,
limited modes of payment have made payment of electricity bills a difficult
task for the customers.
Collection Centers could be setup by utilities under proper governance
to enable customers to make payments in an easy and convenient manner.
Collection centers work on extended timing and payments can be made in any
of the centers either through cash, cheques, demand draft, credit cards, debit
cards, etc. Collection centers have been successfully implemented in many
states. Similarly some banks and post offices can be contact for their services
for collecting electricity bills from the consumers. Customers can go to these
banks or post offices and pay their bills either various payment modes

CHAPTER – 16
MOTIVATION
This is a compilation of few free articles by Nido R Qubein from the
source below. We acknowledge with thanks for the permission given to use
them in the reference book to be used for Distribution Reform, Upgrades, and
Management (DRUM) program of the USAID.
http://www.nidoqubein.com/articlesanddownloads.cfm
Motivating employees in an organization is one of the challenging tasks
for the seniors. It becomes more and more difficult with the differences in
caste creed, and religion. However, there are some fundamental motivators,
which when brought into play can have extraordinary results. Instead of
writing a paper on “Motivation – Issues and Aspects”, we thought that the
objective would be better served if the following seven free articles by Nido R.
Qubein is compiled and presented here. There is no logic in arranging them in
the order it has been done.
1. Ten Principles of Motivation
2. What Motivates your Employees?
3. Balanced and Motivated
4. How to Inspire others to peak performance
5. Employees vs Machines
6. Robotic Performance
7. Cultural Diversity: Our future
Ten Principles of Motivation
One of the questions I hear most often from executives is “How do I
motivate my employees to do the things I want them to do?”
The answer is: You don’t !
We can’t motivate people. They are already motivated. But we can
determine what motivates them and use this knowledge to channel their
energies toward our company goals.
From my 20 years of helping executives solve their people challenges,
I’ve learned a few basic principles about motivation. Let me share them with
you:
ALL PEOPLE ARE MOTIVATED

Some people are like water in a faucet. They have the motivation; all
you have to provide is the opportunity. The water is already motivated to
flow. But it doesn’t have the opportunity until you open the tap.
Others are like mountain streams, which flow swiftly but follow their
own channels. People, too, may move energetically, but toward their own
goals. We in management should make it worth their while to channel their
motivations toward the results management is seeking.
PEOPLE DO THINGS FOR THEIR REASONS; NOT FOR YOURS OR MINE
We in management have to show employees what’s in it for them when
they follow behaviors that benefit the company. We can show them by using
rewards and recognition, appealing to their sense of pride and achievement.
PEOPLE CHANGE BECAUSE OF PAIN
When the pain of staying the same becomes greater than the pain of
changing, people will change. For example, Americans didn’t start buying
smaller, fuel-efficient automobiles until the pain of high gasoline prices became
greater than the pain of switching to less roomy and less powerful cars.
THE KEY TO EFFECTIVE COMMUNICATION IS IDENTIFICATION
When something becomes personal, it becomes important. When our
clients or our employees begin to identify with who we are and what we are,
good things begin to happen.
Large corporations have discovered that. Prudential, for example,
knows that its customers want to buy security. So it doesn’t just sell insurance;
it markets peace of mind by inviting all of us to buy “a piece of the rock”.
Kodak doesn’t sell film; it invites its customers to “trust your memories
to Kodak”.
AT&T doesn’t tell us to make long-distance calls. It asks us to “reach
out and touch someone”.
In dealing with employees, it isn’t enough to appeal to them on the basis
of loyalty to the company. They need personal reasons for showing this
loyalty. Whether we’re instituting a new educational program or undergoing a
total restructuring, we can get our employees on board more readily if we
show them how the change will affect them for the better.
When my company sets out to lead corporate teams in developing their
human-relations skills, we don’t tell them what we’re going to do for the
company. We talk about what we’re going to do for the individual. For
example, in the introduction to one of our manuals, we tell supervisors.

We’ve designed this complete educational system to help you master
the skills of supervisory management and enjoy the rewards of leadership and
career enhancement.
From management’s standpoint, the training was designed to increase
the effectiveness of the organization. That’s what sold the company on the
program. But from the employee’s standpoint, it was to upgrade the skills of
the individual. That’s what sold the employees on the program.
THE BEST WAY TO GET PEOPLE TO PAY ATTENTION TO YOU IS TO PAY
ATTENTION TO THEM
That means listening to others and not just hearing them. Listening is
active; hearing is passive. If you listen to individuals long enough, they’ll tell
you what their concerns and problems are.
It’s very important that executives listen to their staff and associates.
We need to take the time to get to know them, not just by name, but also by
their interests and aspirations.
We should try not to come across as interrogators, but ask them friendly
questions about how they are, what they did over the week-end, and what
they’re doing on vacation Then listen. It’s amazing what you’ll learn.
PRIDE IS A POWERFUL MOTIVATOR
Everybody is proud of something. If we find out what makes our people
proud, we can use that insight to channel their motivation. Pride is tied closely
to self-esteem. My friend, Robert W. Darvin, has founded several successful
companies, including Scandinavian Design, Inc., and has often used our
consulting services and invited me to speak to his people. His observations on
self-esteem are worth repeating:
There’s only one thing that counts in a business: building the self-esteem of
your employees. Nothing else matters, because what they feel about themselves is what
they give to your customers. If an employee comes to work not liking his job, not
feeling good about himself, you can be sure that your customers will go away not liking
or feeling good about your company.

YOU CAN’T CHANGE PEOPLE; YOU CAN ONLY CHANGE THEIR
BEHAVIORS
To change behavior, you must change feelings and beliefs. This requires
more than training. It requires education. When you train people, you just try
to teach them a task; when you educate people you deal with them at a deeper
level relative to behavior, feelings and beliefs.
THE EMPLOYEE’S PERCEPTION BECOMES THE EXECUTIVE’S REALITY
This is a very important point. When we speak to employees, they don’t
respond to what we say; they respond to what they understand us to say.
When employees observe our behavior, they respond to what they perceive us
doing, and will try to emulate us.
Suppose you send an employee to developmental workshop or seminar
and she comes back brimming with new ideas and information. But you
haven’t been exposed to all this stimulating stuff, so your behavior doesn’t
change. The employee realizes this and concludes that the behavior she
observes in you is the behavior you want. This may not be the case at all. You
may want the employee to implement all these new ideas, but your employee’s
perception is the reality you get.
YOU CONSISTENTLY GET THE BEHAVIORS YOU CONSISTENTLY
EXPECT AND REINFORCE
We should look for ways to reward employees for doing the things we
want them to do. The reward may take the form of financial incentives, prizes,
or simply public recognition of a job well done. Reinforcement can be positive
or negative, as my Roundtable partner, Ken Blanchard, has taught us all. If
employees learn that a certain type of behavior results in lower earnings, less
favorable hours or less desirable territories, they’ll adjust their behavioral
patterns.
The purpose of most communication is to influence the attitudes and
behaviors of those whom we address. Since the human race is composed of
billions of individuals, each with a different way of responding, no one
approach is universally effective. So it’s important that you learn to express
yourself accurately and in a way that will accomplish your purpose towards
the individual you’re addressing.
The basic process of Communicating

To achieve precision and effectiveness in communicating, you should
understand the basic process of communication. It has four requirements:
• A message must be conveyed
• The message must be received
• There must be a response
• Each message must be understood
Let’s look at these requirements one at a time.
A message must be conveyed
That sounds simple enough. You know what your thoughts are, and
you know how to translate them into words. But that’s where we lose the
simplicity.
Each of us has our own mental dialect. It is the common language of the
culture in which we grow up, modified by our own unique life’s experiences.
Our life’s experiences add color and shades of meaning to different words.
When you speak, your mental dialect must be translated into the mental
dialect of the hearer. So the words you speak acquire a different color when
they pass through the ears of the person who hears you.
It depends upon where you are
You can probably think of numerous opportunities for
misunderstandings on your job and in your culture. If you tell your travel
agent you want a flight to Portland, be sure to specify Maine or Oregon.
Otherwise, you may end upon the wrong.
WE ALL JUDGE OURSELVES BY OUR MOTIVES; BUT WE JUDGE OTHERS
BY THEIR ACTIONS
Put another way, we’re inclined to excuse in ourselves behavior that we
find unacceptable in others. When our employees are late for work, it’s
because they’re irresponsible and have no interest in their jobs. When we’re
late for work, it’s because we were attending to necessary details that had to be
taken care of.
When employees engage in undesirable behavior, we shouldn’t try to
assess motives or change them. Just deal with the behavior. We can’t change
the motives of our employees, but through positive or negative reinforcement
you can affect their actions.
Follow these principles and you’ll find yourself surrounded by motivated
employees who are channeling their energies towards your corporate goals - -
goals in which they have personal stakes.

CHAPTER – 17
COMMUNICATION SKILLS
This is a compilation of few free articles by Nido R Qubein from the
source below. We acknowledge with thanks for the permission given to use
them in the reference book to be used for Distribution Reform, Upgrades and
Management (DRUM) program of the USAID.
http://www.nidoqubein.com/articlesanddownloads.cfm
The effective communication in an organization is important for its
growth and success. The communication is both ways, viz., top to bottom and
bottom to top. The players in the communication must learn how best to
communicate to their seniors as well as to their juniors. Instead of writing a
paper on “Communication – Issues and Aspects”, we thought that the
objective would be better served if the following ten free articles by
Nido R. Qubein is compiled and presented here. There is no logic in arranging
them in the order it has been done.
1. Fundamentals of Communication
2. Principles for communicating with people
3. Building a Boundary less Company
4. How to be an effective communicator
5. How to write effectively
6. Silent communication
7. Unproductive games communicators play
8. Productive games communicators play
9. How to avoid communication barriers
10. How to communicate like a Pro
Fundamentals of Communication
Most of the verbal communicating you do is from one individual to
another. This is true whether you’re in a family, social, or a work setting.
One-on-one verbal communication affords the greatest opportunity for
precision, because immediate feedback can tell you whether you were
understood accurately.
But communicating effectively involves more than just accuracy.
Principles for communicating with people
1) All people are motivated
We cannot motivate them

We can only guide them by their motivations.
2) People do things for their own reasons not for yours or mine.
Show people what they want and they will move heaven and earth to
get it
3) People change because of pain
When the pain of staying the same becomes greater than the pain of
changing, people will change.
4) The key to all effective communication is identification
When something becomes personal, it becomes interesting
5) The best way to get people to pay attention to you is to pay attention to
them
Little things mean a lot
6) Pride is a powerful motivator
Everybody is proud of something
7) You cannot change people; only their behaviors
Attack the behavior; not the person
8) The worker’s perception becomes the supervisor’s reality
What they see is what you get.
9) You consistently get the behaviors you consistently expect and reinforce
Reinforcement can be positive or negative
10) We all judge ourselves by our motives; but we judge others by their
actions.
Any of us can do anything we can convince ourselves we are justified in
doing.

CHAPTER – 18
STRESS MANAGEMENT
Distress To Destress – A Recipe For Relaxation
Stress, strain and anxiety plague the life of people in the current era.
Not a day passes without a report in the newspapers containing information
about people succumbing to trials and tribulations of stress. Stress throws the
homeostasis of the body and tranquility of the mind out of balance. Stress
related disease is reaching an epidemic proportion taking a heavy toll of
human life these days.
“Stress like relatively, is a scientific concept which has the mixed
blessing of too well known but too little understood” lamented, Hans Selye,
who has been referred to, as the Father of Stress research. He defined stress as
“General Adaptation Syndrome in which the body reacts to any threatening
stimulus through a predictable sequence of internal changes including the
release of hormones”.
Stress is the accumulation of normal and abnormal pressures of the
modern living, which tests the individual’s ability to cope. It is the coupled
action of the body and mind involving instant appraisal of the threat and
modulation of the response. In other words, it is the twin action of the body
and mind arising out of threat perception of an unforeseen event and the
individuals’ inability to cope with it by an individual. Dr. Walter Cannon calls
this as the fight or fight reaction of an organism to meet any emergency
threatening its existence.
No doubt, this kind of protective mechanism was necessary for the early
man whose life constantly confronted danger of annihilation from wild
animals and forces of nature. In such a situation, this defence mechanism was
handy either to fight or flee from the enemy for survival. Despite the changed
scenario in which people no longer face such a threat, the body still continues
to react in the same old fashion.
Anatomy of Stress: If any stress promoting activity is carefully analysed, one
can easily identify the following components:
1. Happening of an event
2. Evaluation of the threat
3. Response from the body
4. Outcome
While the triggering mechanism of the stress is always threat perception
of an individual, the reaction is the resultant effect depending upon the mental
makeup.

Biochemistry of Stress: Whenever a person perceives any stressful event, the
brain triggers the Hypothalamus to secrete a hormone called Cortisol Releasing
Factor, which sends messages down in two pathways. On the one track, the
nerve cells in the brain stem and the spinal cord relay these impulses to the
core of the adrenal glands to secrete Epinephrine and nor epinephrine which
increases the heart rate, breathing, alertness and muscle responses.
Simultaneously, Cortisol releasing factor prompts the pituitary gland to
produce a hormone called Adrenocorticotropin to release Cortisol from the
cortex of the adrenal glands into the blood stream in order to speedup the
metabolic activities.
Physiology of Stress: When the hormones are released, it leads to a series of
physiological changes inside the body. At first pupils dilate, so that there will
be better vision followed by mouth drying up to ensure that no fluid enters the
stomach. Thereafter the digestive process stops in order to divert blood supply
to the brain and the muscles in the neck and shoulder. Simultaneously, the
heart starts pounding and the pace of breathing increases many fold. Besides,
the energy is released in the form of glucose and fat from the liver.
Pathology of Stress: Certain amount of stress is required to meet any
emergency. But when the stress response reaches the point beyond which an
individual cannot cope, it has a terrible impact on health and it may develop
into a variety of illnesses. It has been found in research that the impact of
stress accounts for 75% of the visits to the family doctor.
It has also been noticed in research that chronic dilation of the pupils
may result in vision problems while the drying of mouth may cause difficulty
in swallowing. Similarly, muscle tension may lead to pain in the neck,
shoulder and back whereas breathing fast may cause asthma. The pounding of
heart may lead to rise in blood pressure causing cardiovascular and cardio
cerebral diseases.
Psychology of Stress: When stress level surpasses the individual’s capacity to
cope, it also affects mental health. Consequently, people become easily
irritable, impatient, angry, restless, unfocussed and depressed.
Management of Stress: People, who are unable to cope with stress, take to
faulty methods of relaxation. Invariably, they resort to smoking cigarettes,
marijuana-drinking alcohol or drug use. These bad habits will become
addiction in addition to causing major health hazards.
Psychologists suggest two-pronged strategy to combat the impact of
stress. On the physiological front, the individual can do regular physical
exercise in consultation with the family physician. Taking right food at the
fixed time and sleeping for a minimum duration of six hours every day will
help. On the psychological plane, people are encouraged to follow anyone or
more of the following techniques:

1. Savasana (Yoga)
2. Meditation
3. Autogenic training
4. Relaxation response
5. Rational emotive therapy
6. Hypnosis
Hypnosis – Myths and Realities: People in general equate Hypnosis with
black magic or witchcraft overlooking the fact that it is a naturally occurring
state and a scientific phenomenon. It is a fact that each one of us goes through
hypnotic state whenever we are in an altered state of consciousness. The
notion that a subject under hypnosis will lose consciousness is far from truth.
The impression that the subject reveals secrets while in hypnosis is also not
true.
Mechanics of Hypnosis: Hypnosis is a safe technique which offers instant
relaxation to the body and mind. The individual shall sit in a sofa comfortably
or lie down on the floor. It is necessary that the subject shall remove the
spectacles and loosen the tight fitting clothes. Thereafter, suggestions for
relaxation must be addressed to every part of the body. Enough pauses
between instructions is necessary to allow the unconscious mind to act on the
suggestions. This process when performed by one individual on the other is
called Hetero Hypnosis and when it is practiced by an individual without help
of an outsider is called self-hypnosis.
Step by step instructions for any individual who desires to relax using
hypnosis is given hereunder:
As I am sitting comfortably on the chair (or lying down on the floor)
with eyes closed, my whole body has already started going into a wonderful
state of relaxation.
body.
body.
If relaxation means a heavy feeling, such a feel is coming over my entire
If relaxation means a light feeling, such a feel is enveloping my whole
With my eyes comfortably closed, I have started enjoying the excellent
state of relaxation throughout my body.
I feel so good and so comfortable and I am enjoying this wonderful state
of relaxation.
Throughout this period of relaxation, I will be fully alert, awake and
conscious. Now I am going to mentally count from one to ten and at the end of
the count, I will relax even more than I am relaxing now.

ONE The muscles in my face and my jaws are completely relaxed.
TWO The muscles in my neck are extremely relaxed and so are the
muscles of my shoulders.
THREE Both my hands are relaxing now and the fingers even the finger
tips are enjoying this relaxation.
FOUR With every breath I take, the muscles in my chest are relaxing.
FIVE This feeling of relaxation is flowing over the muscles of my
shoulder, stomach and the back
SIX I feel so relaxed now and this relaxation is going down over the
muscles in my thighs.
SEVEN The muscles in my knees are relaxed now.
EIGHT The muscles in my ankles and the feet are very relaxed now. I
feel so calm, comfortable and peaceful in every part of my body.
NINE My whole body is relaxed now.
TEN With every thought that crosses my mind the relaxation in my
body becomes deeper and deeper. With every breath I take, the
relaxation in my body becomes double.
I am going to keep silent for two minutes and during this period of
silence my body moves into a very deep state of relaxation.
I am going to count one to three. At the count of three I will open my
eyes feeling refreshed, relaxed and wonderful.
ONE I feel so calm and comfortable
TWO I am about to open my eyes feeling refreshed, relaxed and
wonderful
THREE My eyes are open now and I feel wonderful, alert and awake.
The procedure outlined above can either memorised and recorded in a
tape for personal use. However, this exercise is subject to compliance of the
following conditions:

There should be a gap of two hours after taking food. People suffering from
major psychosomatic disorders and other illness such as epilepsy can do this
exercise only after clearance from the doctor.
Since leading a life with stress or coping with stress is a matter of choice,
every individual has to take a conscious decision. In this regard, the following
verse from a poem written by ROBERT FROST is quoted reading as under:
Two roads converged into a wood
I choose the one less travelled
And that has made the difference

CHAPTER – 19
RIGHT TO INFORMATION ACT
With the objectives of enforcing Transparency & Accountability in the
working of every public authority, the right of any citizen of India to request
access to information and the corresponding duty of government to meet the
request, the duty of government to proactively make available key information
to all and a responsibility on all sections, citizenry, NGOs, media – the RTI has
been enacted.
Public authority means anybody or institution established by
constitution, any other law made by Parliament or State Legislature or by
notification issued by the appropriate government which includes anybody
owned, controlled or substantially financed or any non-government
organization substantially financed directly or indirectly by the funds provided
by the appropriate government.
Right to Information means:
Inspect works, documents, records
Take notes, extracts or certified copies of documents or records
Take certified samples of material
Obtain information in the form of printouts, floppies, tapes, video
cassettes or in any other electronic mode or through printouts.
By the term “Information”, it means – Records, documents, memos,
opinions & advices, press releases, circulars, orders & log books, contracts and
reports, papers samples & models.
RTI Act came into effect from 12 th October, 2005. The act covers:
Central, State & local governments and all bodies owned, controlled or
substantially financed directly or indirectly by the respective
governments
Non-government organizations substantially financed directly or
indirectly by the funds provided by the appropriate government
Executive, judiciary and legislature
Information relating to private body which can be accessed by / under
other law for the time being inforce.
The act makes it obligatory that every public authority maintain all its
records catalogued and indexed properly. It also calls for computerization of
all records within a reasonable time and subject to availability of resources.

These are certain items exempted from disclosure of information like
those: which would prejudicially affect the sovereignty and integrity of
India
Security, strategic, scientific or economic interests of the state
Relation with foreign state
Lead to incitement of an offence
Forbidden to be published by any court of law or tribunal or the
Disclosure of which may constitute contempt of court
Which would cause a breach of privilege of parliament or the state
legislature
Commercial confidence, trade secrets or intellectual property, the
disclosure of which would harm the competitive position of a third
party, competent authority if satisfied that larger public interest is
served can allow the disclosure of such information
Information available to a person in his fiduciary relationship,
competent authority if satisfied that the larger public interest can allow
the disclosure of such information
Information received in confidence from foreign government
Following are types of issues that can be solved using RTI (for a
legitimate work which is pending)
Issue of passport
Decision by the administrative authority
Faulty construction
Issue of any type of license
Issue of various certificates of marriage, death, birth, SC/ST & OBC etc.
Inclusion of name in voter’s list
Issue of voter ID card
Connection of water, electricity, telephone bills, change of faulty meter,
providing new water or electricity connection etc.
Filing of FIR
Claiming various kinds of refunds or payments etc. like tax refund,
medical reimbursement, provident fund etc.
Anyone can apply in writing or through electronic means in English, or
Hindi or in the official language of the area to the PIO (Public Information
Officer) specifying the particulars of the information sought for. No reason for
seeking information is required to be given. Fee as prescribed (if not belonging
to BPL category) is to be paid.

CHAPTER – 20
PROCUREMENT CONTRACTS
Purchasing means the process of buying – learning a need, selecting a
supplier, negotiation a price and fixing terms for delivery and payment.
Procurement is a generic term, much broader than purchasing, which includes
purchasing and all additional functions connected with the acquisition of
goods, such as inspection upon arrival, supervision, and inventory control and
salvage operation. However purchasing management’s role as sub function of
materials management is important, since it is the responsibility of purchasing
department to procure materials economically and efficiently.
Five basic principles of purchasing
There are five basic principles of purchasing buying materials in right quantity
of right quality at right price, from a right source, at right time and place.
1. Right quality vis-à-vis inspection/quality control/specification and
standardization
2. Right quantity vis-à-vis inventory control/store and physical up
keep/distribution and warehousing
3. Right price vis-à-vis market analysis and market
intelligence/forecasting and market research
4. Right source vis-à-vis sub-contracting/vendor relations/vendor
development
5. Right time and place vis-a-vis production, store/traffic and
transportation/materials handling.
Inventories
Inventories are stock of materials of any kind stored for future use.
Inventories tend to become big without proper control. Inventories are
materials or resources of any kind having some economic value, either
awaiting conversion or use in future.
There is need to maintain some safety or buffer stock in order to
maintain the smooth flow of materials without imparting production.
As more and more stocks of materials are held, this entails grater
investment. If minimum inventory is held with the increase in frequency of
buying the cost of ordering and processing increase. Also this cost of stock-out
poses economic problem. This inventory control is a major material
management function which requires the reduction in material cost without
impairing operational efficiency and there for needs careful attention.
VENDOR DEVELOPMENT

In stores and materials organization, it is essential to have many sources
of supplies so that supplies may be had as per requirement as well as at
economic cost. From commercial view-point it is always preferable to have
more than one supplier for a particular item.
Vendor development is, however, a continuous process and may start
from the collection of names and address from the DGS&D Trade journals and
also form other trade direction, such as directory or SS industries etc.
COMPETITIVE BIDDING
Purchaser must not only buy the right material, in the right quantity, at
the right time but also at the right evaluated prices. There must be a primary
force requiring broad knowledge of the requirements, operation and their use
and awareness of where new ideas are needed. The urge shall be to find a
better way to buy and a better source of supply and continuous coordinated
buying efforts to improve the purchase of services as related to the works.
Functions of purchase are:
1. Standardisation of specifications
2. Market study and cost analysis
3. Maintaining catalogue library
4. Vendor registration
5. Calling for bids
6. Analysis of bids
7. Negotiations where required
8. Selection of suppliers
9. Entering into contract
10. Follow up actions
The central vigilance commission issues guidelines for procurement of
materials for the government organisations.
A codified purchase manual containing detailed purchase procedure,
guidelines and also proper delegation of powers, wherever required, needs to
be made by all the organisations so that there is a system and uniform
approach in decision making. Such an integrated approach is likely to put a
cap on the corruption and would also ensure smoother and faster decision
making.
Procurement files are very important and sensitive documents and thus
there is a need to have a single file system with proper page numbering. The
decisions and deliberations of the individuals or the tender committee also
need to be properly recorded and well documented.
Provisioning of the stores needs to be done with utmost care taking into
account the available stock, outstanding dues/supplies, past consumption,

average life of the available equipment/spares. The requirements also need to
be properly clubbed so as to get the most competitive and best prices.
Requirements should not intentionally be split so as to avoid approval from
higher authorities.
One time purchase for projects or capital equipments / spares should
have proper justification depending on the actual requirements, usage, rate of
return etc. Further the obsolescence factor should also be taken into account
i.e., the equipment to be purchased should confirm to the latest specifications
and technologies available in the market.
Estimated Rates
As the estimated rates is a vital element in establishing the
reasonableness of prices, it is important that the same is worked out in a
realistic and objective manner on the basis of prevailing market rates, last
purchase prices, economic indices for the raw materials/labour, other input
costs, wherever applicable and assessment based on intrinsic value etc.
The below mentioned methods may be adopted for the purpose of
procurement of materials based on the nature of materials to be procured, the
value of purchase, urgency for the materials and the number of known sources
of supply.
OPEN COMPETITIVE BIDDING
For ordering in bulk, with deliveries spread over a long period of time, a
brief advertisement of “notice inviting bids (nib)” is to be issued in the leading
news papers covering English and other local languages, giving details of
materials to be procured and the dates of opening of bids, for the items covered
in the NIB. Full details of the bid specifications are to be made available on the
web address of the purchaser. Interested bidders will download the required
information and submit their bids as per the NIB.
Procurement of materials from registered vendors shall be treated as
procurement by open bids since vendor registration is open to all and all the
eligible vendors are free to participate in the bid.
In case of items for which there is no registered vendors or for major
works involving supply and erection, the purchasing authority may invite bids
through proper advertisement with the prior approval of the competent
authority. In all such cases, open bidding may be resorted to, by advertising in
the dailies having wide circulation both within and outside the state.
Sufficient time must be given, counted from the date of publication of
nib, for the bidders to submit their bids.
The bids should have sufficient validity time to enable the purchaser to
evaluate the bids properly.

There must be a minimum of atleast 3 valid bids to finalize the
purchase. In case of insufficient response, the bids have to be called once
again, ensuring wider publicity. If even then the response is poor, the bid may
be decided on the basis of bids received but with the prior approval of the
competent authority, taking into account rates from earlier orders, duly taking
into account updated rates.
LIMITED COMPETITIVE BIDDING
This is a method of purchase resorted to when the materials are needed
urgently and at short notices. In this mode, the bid invitation and complete
specification will be sent by the purchaser to a limited number of vendors, who
are regular suppliers of the materials. Such vendors are to be selected from out
of the registered vendors. These vendors should have proven past
performance, delivery and quality.
In this case the competent authority decides the number of vendors to
be addressed and bids from only those vendors who received the enquiry are
eligible to quote. Value of materials to be procured in such an event shall be
small, and subject to delegation of powers only.
A minimum of 15 days time is to be given for limited competitive
bidding process. Proper justification for procuring materials under this
procedure should be recorded by the purchasing authority and such
procurement shall be resorted to only for emergency requirements.
Validity of bids under this procedure is only 30 days, counted from the
date of opening of bids because the very purpose is emergency purchase.
Limited competitive bidding should be for the entire quantity indented
and no split up shall be made.
When only one quotation is received against competitive bidding this
should be treated as a single bid and should be decided as per the powers
under “single bid” system.

SHORT NOTICE BIDDING:
When materials required are for immediate use, short notice bidding is
resorted to, subject to the delegation of powers. In this case, the complete
description and standards applicable are spelt out in enquiry letter itself to be
sent to the vendors. No separate specification need be issued. Generally, time
frame of about one week to ten days is given for the vendors to respond,
keeping validity of thirty days from the day of opening of bids.
PURCHASE THROUGH SINGLE BID SYSTEM:
Items of proprietary nature are purchased through single bid process.
These are generally spares etc. These are to be directly procured either from
the original manufacturer or the sub-assembly manufacturer or one of the
dealers approved by the original manufacturer. These purchases are also
subject to the provisions of delegation of powers and proper recording of
reasons for purchase under the system.
RATE CONTRACT ITEMS:
For such of those items which need to be procured regularly and
repeatedly and items of proprietary nature, it may be advantageous to enter
into a rate contract with the manufacturer. Rate contract shall be entered only
with reliable and reputed manufacturers of proven performance and ability.
Term of rate contract shall be for a period of one year. The rate contract
enquiries may be through open/limited/single bid process depending on the
nature of item.
PURCHASE BY REPEAT ORDERS:
Repeat orders may be considered under special circumstances as and
when need is urgent. The procedure enables to cut down lead time of
procurement. Repeat orders may be considered.
1. Quantity in repeat orders should not exceed 50% of quantity ordered in
the original order.
2. Rate in the repeat order should be the same as in the original order –
make sure that prices have not gone down.
3. Repeat orders are permitted only once against an order placed and
within six months from the date of completion of execution of the
original order.
4. Reasons for going for repeat orders to be recorded by the competent
authority.
5. The authority who is empowered to make the purchase is the authority
for approving the repeat order.
6. Repeat order shall be placed when the market is in an up-trend.

Generally a Notice Inviting Bids is issued which contains:
1. The authority authorized to issue the bid documents and the last date
for sale of the bid specifications.
2. The authority authorized to receive the completed bid documents. The
last date and time upto which completed documents would be received.
3. Place, time and date of opening the bid.
4. Cost of bid documents and cost of the documents.
5. Amount of bid security and mode of payment.
Other general conditions are covered in the specification.
Specific mention should be made about price variation formulae, f.e.
requirement, f.e. variation risk cover, delivery schedules etc. Preference is for
prices in rupees. In case of foreign bids exchange variation to be clearly
mentioned by the bidder. Purchaser has to clearly indicate quantities. Bidder
to submit documents establishing their eligibility criteria and also qualification
criteria. Bidder should ensure that there are no ambiguities.
In case of competitive bidding documents to contain:
1. Detailed technical specifications and drawings
2. Qualification requirements
3. General terms and conditions of contract
4. Salient features of contract, if any
5. Schedule of quantities
6. Schedule of deliveries
7. Bank guarantee towards bid security and performance guarantee
8. Deviations taken by the bidder, if any.
1. In certain cases, where, only written specifications may not clarify the
situation, the purchaser may hold a pre-bid meeting with the intending
bidders and clarify all points to all the bidders at one place and time. It is also
possible that the bidders may supplement latest technical developments that
may be considered, if found advantageous to the purchaser.
2. Discussions during the pre-bid meeting should be copied to all the
bidders. All written questions from bidders should be replied in writing by the
purchaser.
Bid opening group of officers shall include one Accounts officer also.
All the officers present should sign in the bid opening register wherein
the number of bids received and the number of bids opened and the number of
bids rejected (reasons for rejection shall be recorded) and they shall sign on all
pages of the original bid document. This is done in the presence of the bidders
present for bid opening.

Bids are evaluated in a prescribed proforma following all rules. Each
organisation would have developed their own proforma depending on the
long experience. After evaluation of bids, negotiations might be held with the
lowest bidder to explore possibility of further reduction in prices.
As per government practice, generally, the lowest bidder will get the
order.
Considering other than the lowest bidder (l 1) would be limited to the
below mentioned cases:
1. When it is definitely felt that L1 cannot supply the total quantity in the
time frame specified.
2. When it is clearly felt that it is undesirable, in view of the critical nature of
items to be procured, to depend on one supplier.
3. When the local manufacturer need to be given an opportunity to match the
rate quoted by L1.
4. Considering other than L 1 shall be limited to two or three bidders only,
say upto 4.
5. In case of negotiations L 1 should get atleast 25% of the quantity to be
ordered.
a) Prior to expiration of bid validity, the purchaser should notify the
successful bidder, in writing, that their bid has been accepted. This
notification of award will constitute the formation of contract. Upon
the successful bidder furnishing the performance security, the
purchaser enters into the contract.
b) The purchaser will also promptly notify each unsuccessful bidder and
discharge the bid security of all of them.

CHAPTER – 21
CVC GUIDELINES IN PROCUREMENT
CONTRACTS
CVC Guidelines For Improvement In The Procurement System And
Common Irregularities/ Lapses Observed In Stores / Purchase Contracts:
PURCHASE MANUAL
The cardinal principle of any public buying is to procure the materials /
services of the ‘specified’ quality, at the most competitive prices and, in a fair,
just and transparent manner. To achieve this end it is essential to have
uniform and well documented policy guidelines in the organization so that this
vital activity is executed in a well-coordinated manner with least time and cost
over runs. In some of the organizations, the purchase manual is either not at
all there or has not been updated for years together. Thus the system of
procurement is quite adhoc and arbitrary.
A codified purchase manual containing the detailed purchase
procedures, guidelines and also proper delegation of powers, wherever
required needs to be made by all the organizations so that there is systematic
and uniform approach in the decision-making. Such an integrated approach is
likely to put a cap on the corruption and would also ensure smoother and
faster decision making.
PROVISIONING
It has been noticed that in certain cases excessive, fraudulent and
infructuous purchases were made without taking into consideration the
important aspects like available stocks, outstanding dues / supplies, past
consumption pattern and average life of the equipments / items etc. These
excessive / infructuous purchases were at times made in collusion with the
firms. This resulted in not only the material lying unutilized for years together
with no residual life but also a lot of extra expenditure was incurred on the
inventory carrying cost. One of the organizations took double procurement
action for purchase of tyres against the same liability. Even the factors like
shelf life of 5 years and the past consumption pattern were ignored while
placing the orders. As no action was taken to dispose off the surplus tyres, the
department is incurring inventory carrying cost of about 20-25% per year for
the last 10 years and the salvage value of the quantity held in stocks is likely to
be ‘Nil’ due to expiry of the shelf life. In few cases, it was noticed that though
the demand for the stores was simultaneously received from different wings /
field units but, they were not clubbed together and were rather processed
individually against the established principle of bulk buying.

The provisioning of the stores needs to be done with utmost care taking
into account the available stock, outstanding dues / supplies, the past
consumption pattern, average life of the equipment / spares. The
requirements also need to be properly clubbed so as to get the most
competitive and best prices. The requirements should not be intentionally
bifurcated / split so as to avoid approval from higher authorities.
ESTIMATE RATES
It was observed that the estimated rates are being worked out in an
unprofessional and perfunctory manner, at times by extrapolating the price of
the lowest capacity equipment or by applying a uniform yearly compounded
escalation over the prices of similar equipment purchased few years ago.
Consequently, the inflated estimated rates prepared by the organizations
resulted in acceptance and payment of higher prices to the firms.
As the estimated rate is a vital element in establishing the
reasonableness of prices, it is important that the same is worked out in a
realistic and objective manner on the basis of prevailing market rates, last
purchase prices, economic indices for the raw material / labour, other input
costs, IEEMA formula, wherever applicable and assessment based on intrinsic
value etc.
NOTICE INVITING TENDER
Against the most preferred and transparent mode of Global tender
enquiry / Advertised tender enquiry, some of the organizations are generally
issuing limited tender inquiry to select venders, irrespective of the value of
purchase. Further, the credentials of the firms and the criteria adopted or
selection of such venders, in most of the cases, are not put on record. This not
only results in lack of competition but also favoritism to the select vendors.
In some cases of global tenders it was observed that though the
organization had given a time of 6-8 weeks for tender opening but the tender
sale was closed 2-4 weeks in advance of tender opening, thereby effectively
giving only one month time to bidders for purchase of tender documents. The
very purpose of floating global tender which is to give wider publicity and
sufficient time to bidders to get the bidding documents and submit their offers,
in such cases seems to have been defeated.
With a view to have wider, fair and adequate competition, it is
important that sufficient time to say 4-6 weeks in case of Advertised/Global
tenders and 3-4 weeks in case of limited tenders is allowed, except, in cases of
recorded emergencies, wherein also, a reasonable time should be permitted
and tenders should be sent by faster means like speed post/fax. The tenders
should preferably be kept open for sale till the date of tender opening or just
one day prior to the date of tender opening. With the widespread use of

information technology, the tender notices should also be put on the website
and e-mail address of the organization should be indicated in the tender notice.
In case of proprietary purchases, the detailed justification for purchase
from a single vendor is not being placed on record. As by issuing single
tender, the competition is totally eliminated and the possibility of paying
higher prices cannot be ruled out.
It is imperative that the purchase on single tender basis be made with
the detailed justification in its support and with the approval of competent
authority, including associated finance.
TENDER / BID DOCUMENT
The terms and conditions being stipulated in the bid documents by some of the
Organizations are quite insufficient and sketchy. Sometimes, the bid document
contain obsolete, unwanted matter and conflicting and vague provisions,
resulting in wrong interpretation, disputes and time & cost overruns.
Even the time/date for receipt and opening of tenders is not being
incorporated in the documents.
The important clauses relating to Earnest money, Delivery Schedule, Payment
terms, Performance/Warrantee Bank Guarantee, Pre-despatch inspection,
Arbitration, Liquidated Damages/Penalty for the delayed supplies and Risk-
Purchase etc. are not being incorporated in the bid documents. All these
clauses are important for safeguarding the interest of the purchaser and also
have indirect financial implications in the evaluation of offers and execution of
the contracts.
All the important clauses as brought out above need to be incorporated
in the bidding documents so as to fully safeguard the interest of the Govt. and
for evaluation of bids on equitable and fair basis and in a transparent manner.
In some cases, it was noticed that the amount of Earnest Money Deposit
stipulated in the tender document was grossly insufficient to protect the Govt.
interest in case of breach committed by the bidder. Some of the organizations
instead of ignoring the bids not accompanied with earnest money deposit
along with the tenders as per bids requirements, asked the bidders to submit
EMD, after tender opening.
The primary objective of submission of Earnest Money Deposit is to
establish the earnestness of bidder so that he does not withdraw, impair or
modify the offer within the validity of the bid. It also helps in restricting if not
eliminating ‘speculative’, ‘frivolous’ or ‘wait and see’ bids. Since any
relaxation regarding submission of Earnest Money Deposit has financial
implications besides giving encouragement to the bidders to submit frivolous
bids as indicated above; the terms & conditions should clearly stipulate that

the offers without Earnest Money Deposit would be considered as
unresponsive and rejected.
Some of the organizations incorporate a specific delivery schedule interalia
mentioning that bids offering delivery beyond stipulated date will be
treated as non-responsive and will be summarily rejected. However, after
opening of the tenders, the bid by one of the organizations with slightly longer
delivery period was not rejected as per the bid guidelines, rather that offer was
also considered and evaluation was made after loading the offer by applying
some unilateral loading criteria. The same resulted in inter se change of
ranking position.
The evaluation / Loading criteria with respect to the important terms
like payment terms, delivery period, performance bank guarantee etc. having
financial implications need to be specified in unambiguous terms in the bid
documents so that the evaluation of bids after tender opening could be made in
a transparent manner without any subjectivity.
The exemptions/reservation of a particular item which normally apply
to SSI units are not being specified in the tender notice / bid documents. The
applicable purchase preference to public sector enterprises as per the
guidelines circulated by Department of Public Enterprises is also not being
incorporated in the bid documents leading to lot of complaints from SSI/PS
Units.
The Government instructions on reservation of items and price
preference to SSI Units and purchase preference to PSUs need to be
incorporated in bid documents.
It has been noticed that some tenderers offer conditional discounts for
coverage within a shorter period, for early inspection/payment etc. and, such
discounts are being considered, at the time of evaluation of tenders by the
organizations.
It needs to be ensured that the evaluation of tenders should not be based
on such conditional discounts and suitable clause should be included in the
bidding documents.
RECEIPTS OF TENDERS
Some of the organizations do not have proper arrangement for receipt of
tenders. There is no tender box for receipt of tenders at scheduled date and
time fixed for tender opening. Instead the trade representatives leave the
tenders with the receptionist or the concerned Purchase Officer(s). This
procedure is highly objectionable as the possibility of tampering and
interpolation of offers cannot be ruled out.

A proper arrangement for receipt of tenders at scheduled date and time
through tender box needs to be adopted.
OPENING OF TENDERS
Some of the organizations are not opening the tenders in public i.e. in
presence of the trade representatives. The system of not opening the tenders in
public is against the sanctity of tender system, and is a non-transparent method
of handling tenders. There could be a possibility of tampering and
interpolation of offers in such cases. The rates at times are not quoted in
figures and words, cuttings / over-writings are not attested by bidders. Some
of the organizations justify such opaqueness in tendering system by making a
reference to their manuals. This is not acceptable.
POST TENDER NOGOTIATION
As per CVC guidelines circulated vide letter No.8 (1) (h) / 98 (1) dtd.
18.11.98, it has been brought out that “the tenders are generally a major source
of corruption. In order to avoid corruption, a more transparent and effective
system must be introduced. As post tender negotiations are the main source of
corruption, post tender negotiations are banned with immediate effect except
in the case of negotiations with L-1 (i.e. Lower tenderer)”. In continuation to
these instructions, following further clarifications were issued vide letter NO.
98/Ord./1 dtd. 15.03.99:
i) The Govt. of India has a purchase preference policy so far as the public
sector enterprises are concerned. It is clarified that the ban on the post
tender negotiations does not mean that the policy of the Govt. of India
for purchase preference for public sector should not be implemented.
ii) Incidentally, some organizations have been using the public sector as a
shield or a conduit for getting costly inputs or for improper purchases.
This also should be avoided.
iii) Another issue that has been raised is that many a time the quantity to be
ordered is much more than L-1 alone can supply. In such cases, the
quantity order may be distributed in such a manner that the purchase
is done in a fair, transparent and equitable manner.
Despite the above instructions, it has been noticed that still repeated
negotiations with the select / all the vendors are being carried out by some of
the organizations in gross violation of the above instructions. The instructions
/ guidelines circulated by CVC on post tender negotiations only with L-1 need
to be strictly followed.

CHAPTER -22
OFFICE AUTOMATION EQUIPMENTS
COMPUTER:
Technically, a computer is a programmable machine. This means it can execute
a programmed list of instructions and respond to new instructions that it is
given. Today, however, the term is most often used to refer to the desktop and
laptop computers that most people use. When referring to a desktop model,
the term "computer" technically only refers to the computer itself -- not the
monitor, keyboard, and mouse. Still, it is acceptable to refer to everything
together as the computer. If you want to be really technical, the box that holds
the computer is called the "system unit."
Some of the major parts of a personal computer (or PC) include the
motherboard, CPU, memory (or RAM), hard drive, and video card. While
personal computers are by far the most common type of computers today,
there are several other types of computers. For example, a "minicomputer" is a
powerful computer that can support many users at once. A "mainframe" is a
large, high-powered computer that can perform billions of calculations from
multiple sources at one time. Finally, a "supercomputer" is a machine that can
process billions of instructions a second and is used to calculate extremely
complex calculations.

CD(COMPACT DISC)
Stands for "Compact Disc." CDs are circular discs that are 4.75 in (12 cm) in
diameter. The CD standard was proposed by Sony and Philips in 1980 and the
technology was introduced to the U.S. market in 1983. CDs can hold up to 700
MB of data or 80 minutes of audio. The data on a CD is stored as small notches
on the disc and is read by a laser from an optical drive. The drives translate the
notches (which represent 1's and 0's) into usable data.
The first CDs were audio CDs, which eventually replaced audio tapes (which
earlier replaced records). Audio CDs have the advantage of allowing the user
to jump to different places on the disc. CDs can also be listened to an unlimited
number of times without losing quality. Audio tapes can start to lose quality
after listening to them as few as ten times. This is because the laser that reads
the data on a CD doesn't put pressure on the disc, whereas the play heads on a
tape deck slowly wear away the magnetic strip on the tape.
In 1985, CD-ROMs hit the computer market. Because they could store far more
information than floppy discs (700 MB compared to 1.4 MB), CDs soon became
the most common software format. In 1988, the CD-R (CD-Recordable)
technology was introduced, allowing computer users to burn their own CDs.
However, this technology did not become mainstream until the late 1990s. A
smaller 3" CD, called "CD-3" is also available and is readable by most trayloading
CD-ROM drives. For a timeline of the history of the CD,
DVD (Digital Versatile Disc)

Stands for "Digital Versatile Disc." It can also stand for "Digital Video Disc,"
but with the mulitple uses of DVDs, the term "Digital Versatile Disc" is more
correct. Yep, the technology naming people just love to confuse us. A DVD is a
high-capacity optical disc that looks like a CD, but can store much more
information. While a CD can store 650 to 700 MB of data, a single-layer, singlesided
DVD can store 4.7 GB of data. This enables massive computer
applications and full-length movies to be stored on a single DVD.
The advanced DVD formats are even more amazing. There is a two-layer
standard that doubles the single-sided capacity to 8.5 GB. These disks can also
be double-sided, ramping up the maximum storage on a single disc to 17 GB.
That's 26 times more data than a CD can hold! To be able to read DVDs in your
computer you'll need a DVD-ROM drive. Fortunately, DVD players can also
read CDs. To play DVD movies on your computer, you'll need to have a
graphics card with a DVD-decoder, which most computers now have.
It's hard to remember what our lives were like without e-mail. Ranking up
there with the Web as one of the most useful features of the Internet, e-mail has
become one of today's standard means of communication. Billions of messages
are sent each year. If you're like most people these days, you probably have
more than one e-mail address. After all, the more addresses you have, the more
sophisticated you look...

E-MAIL: (ELECTRONIC MAIL)
E-mail is part of the standard TCP/IP set of protocols. Sending messages is
typically done by SMTP (Simple Mail Transfer Protocol) and receiving

messages is handled by POP3 (Post Office Protocol 3), or IMAP (Internet
Message Access Protocol). IMAP is the newer protocol, allowing you to view
and sort messages on the mail server, without downloading them to your hard
drive.
Though e-mail was originally developed for sending simple text messages, it
has become more robust in the last few years. Now, HTML-based e-mail can
use the same code as Web pages to incorporate formatted text, colors, and
images into the message. Also, documents can be attached to e-mail messages,
allowing files to be transferred via the e-mail protocol. However, since e-mail
was not originally designed to handle large file transfers, transferring large
documents (over 3 MB, for example) is not allowed by most mail servers. So
remember to keep your attachments small!
A printer is an output device that prints paper documents. This includes text
documents, images, or a combination of both. The two most common types of
printers are inkjet and laser printers. Inkjet printers are commonly used by
consumers, while laser printers are a typical choice for businesses. Dot matrix
printers, which have become increasingly rare, are still used for basic text
printing.
PRINTER
The printed output produced by a printer is often called a hard copy, which is
the physical version of an electronic document. While some printers can only
print black and white hard copies, most printers today can produce color
prints. In fact, many home printers can now produce high-quality photo prints
that rival professionally developed photos. This is because modern printers
have a high DPI (dots per inch) setting, which allows documents to printed
with a very fine resolution.
In order to print a document, the electronic data must be sent from the

computer to the printer. Many software programs, such as word processors
and image editing programs, include a "Print..." option in the File menu. When
you select "Print," you will typically presented with a Print dialog box. This
box allows you to select the print output settings before sending the document
to the printer. After choosing the appropriate settings, you can hit the Print
button, which will send the document to the printer.

SCANNER
A scanner is a device that captures images
from photographic prints, posters,
magazine pages, and similar sources for
computer editing and display. Scanners
come in hand-held, feed-in, and flatbed
types and for scanning black-and-white
only, or color. Very high resolution
scanners are used for scanning for highresolution
printing, but lower resolution
scanners are adequate for capturing
images for computer display. Scanners
usually come with software, such as
Adobe's Photoshop product, that lets you
resize and otherwise modify a captured image.
Scanners usually attach to your personal computer with a Small Computer
System Interface ( SCSI ). An application such as PhotoShop uses the TWAIN
program to read in the image.
Some major manufacturers of scanners include: Epson, Hewlett-Packard,
Microtek, and Relisys.
FAX MACHINE
A fax (short for facsimile and
sometimes called telecopying) is the
telephonic transmission of scannedin
printed material (text or images),
usually to a telephone number
associated with a printer or other
output device. The original
document is scanned with a fax
machine, which treats the contents
(text or images) as a single fixed
graphic image, converting it into a
bitmap. In this digital form, the
information is transmitted as electrical signals through the telephone system.
The receiving fax machine reconverts the coded image and prints a paper copy
of the document.
Almost all modems manufactured today are capable of sending and receiving
fax data. Fax/modem software generates fax signals directly from disk files or
the screen. Even if a document is text only, it is treated by the computer as a
scanned image and is transmitted to the receiver as a bitmap. Faxing a message
online works well if the recipient wants only to read the message. However, if
the document requires editing, it must be converted into ASCII text by an OCR

(optical character recognition) program, or it must be retyped manually into
the computer. A more efficient method of sending documents that require
modification is through the e-mail system. E-mail files are already ASCII text
so they can be edited immediately in any text editor or word processing
program.
The Internet now provides a new and cheaper way to send faxes in some cases.
A number of free and commercial companies provide arrangements for using
the Internet rather than the public telephone system for most or part of the
path to the fax point. Some services also provide the ability to broadcast a fax
to multiple addresses.
XEROX MACHINE
PENDRIVE
Xerox machine - a duplicator (trade
mark Xerox) that copies graphic matter
by the action of light on an electrically
charged photoconductive insulating
surface in which the latent image is
developed with a resinous powder
A pen drive, or a USB
flash drive, is a
portable data-storage
device. Pen drives
have replaced the
floppy drives of old
and have become the
most popular datastorage
devices among
consumers. Micro,
lightweight and handy, a pen drive can be easily carried from place to place by
students, professionals, academicians and independent tech consultants.
Currently available pen drives with storage capacities ranging from 8GB and
32GB can be used to store graphics-heavy documents, photos, music files and
video clips.