Shares of the power utility major lost ground in early trade on Tuesday after the company's financial results for Q4 were affected due to change in billing policy.

BSES shares were down 3% on BSE in early trade to Rs 216. The scrip hit a low of Rs 212. 2,600 shares changed hands in the counter on BSE in the first few minutes of trade.

For Q4 March 2003, BSES reported a 21.4% fall in net profit to Rs 25.07 crore as compared to a net profit of Rs 31.92 crore for the quarter ended 31 March 2002. Total income has decreased 1.8% from Rs 659.24 crore (Rs 6.59 billion) in MQ-2002 to Rs 646.87 crore (Rs 6.46 billion) for MQ-2003.

The Q4 financial performance of the power utility was affected as it withdrew old bills amounting to Rs 135 crore. (Rs 1.35 billion) This billing was earlier made by mistake. The power utility major also said that it would no longer issue bills to customers on an estimated or provisional basis. The new billing system has resulted in a credit of Rs 135 crore (Rs 1.35 billion) to customers on account of 'reconciliation and settlement of accounts', BSES said. The change in billing rates at the power major follows Reliance group acquiring control over BSE in recent months.

The new policy has hit the annual financial performance as well. For the full year FY 2003, BSES posted a sharp 42% fall in net profit to Rs 162.33 crore (Rs 1.62 billion) as compared to a net profit of Rs 280.74 crore (Rs 2.8 billion) for FY 2003.

Total income has decreased from Rs 2,782.67 crore (Rs 27.82 billion) in FY 2002 to Rs 2,776.70 crore (Rs 27.76 billion) in FY 2003. Had the billing procedure not change, BSES would have reported a 6% growth in its FY 2003 net profit to Rs 297 crore (Rs 2.97 billion). The board of directors has recommended a dividend of Rs 4.40 per share for FY 2003.

In January 2003, Reliance had taken control of the management of BSES after increasing its stake to 58% in the latter via open offer. The BSES board had appointed Anil Ambani as non-executive chairman.

In a major attempt to clean up its balance sheet recently, BSES has transferred its stakes in eight generating and distribution subsidiaries to its investment arms. Despite the de-subsidiarisation, BSES continues to control these companies but has ensured that the pressure of losses or loan guarantees does not affect its consolidated profits.

Three power generation companies, BSES Andhra Power, BSES Kerala Power and Tamil Nadu Industries Captive Power, have been de-subsidiarised, along with five distribution companies, including the three ailing Orissa distribution companies and the two it bagged in Delhi last year. Some of the BSES units have seen increased losses and disputes with the respective state regulators.

BSE code: 500390