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Bhilwara Energy LimitedBhilwara Towers, A-12, Sector-I,Noida - 201301 (NCR - Delhi), India
Website : www.bhilwaraenvergy.com / www.lnjbhilwara.com
Bhilwara Energy Limited
Group Salient Features
• The Group has a turnover of Rs. 4,000 crore - Export constitutes 46% (Rs. 1,840
crore).
• One of the largest textile houses in the country with a turnover of over Rs. 2,450 crore
- Export constitutes 42% (Rs. 1,025 crore).
• One of leading manufacturer and exporter of Graphite Electrodes in the country with
turnover of Rs. 1,084 crore - Export constitutes 74% (Rs. 807 crore).
• Largest producer and exporter of Synthetic Blended Yarn and largest range in Greige,
Dyed and Mélange Yarn with total spindleage capacity of nearly 5 Lacs.
• Manufacturer of Wool Blended and Premium Light Weight Fabrics, Worsted Fabric,
Silk Synthetic fashion Fabric and Denim Fabric.
• India's one of the largest vertically integrated Knitwear Company.
• Manufacturer of Flame Retardants, Air – texturized Yarn and Automotive Furnishing
Fabric.
• World's largest single site plant of Graphite Electrodes with a production capacity of
66,000 TPA.
• The Group has 120 MW Thermal Power Plants, approx. 300 MW Hydro Power Plants &
60 MW HFO based Captive Power Plants.
• The Group generated 1,300 Million power units in the year 2009-10.
• A consulting Company providing engineering consultancy services for Hydro Power
Projects.
Group Companies
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LNJ Bhilwara Group
TEXTILES
GRAPHITE
POWER
INFORMATION TECHNOLOGY
OFFICES
RSWM Limited
1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn
2. Mayur Nagar, Banswara Spinning PV Blended, Cotton & Open End Grey Yarn
3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing
4. Rishabhdev Spinning PV Blended Grey Yarn
5. Ringas Fibre Dyeing & Spinning Dyed Yarn
6. LNJ Nagar, Mordi Weaving & PV Fabric Processing & Finishing
7. LNJ Nagar, Mordi Cotton Ring & Open End Spinning, Denim Fabric Weaving & Rope Dyeing, Processing & Finishing
8. LNJ Nagar, Mordi Thermal Power
Cheslind Textiles Ltd.
9. Bagalur Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting
10. Pondicherry Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting
Maral Overseas Ltd.
11. Maral Sarovar Cotton Spinning, Knitting, Dyeing & Finishing, Knitted Garments
12. Maral Sarovar Captive Thermal Power
13. Noida Knitted Garments
14. Noida Knitted Garments
BSL Ltd.
15. Bhilwara PV & Worsted Spinning, PV & Worsted Weaving & Silk Fabric
16. Jaisalmer Wind Power Generation
BMD Pvt. Ltd.
17. LNJ Nagar, Mordi Automotive Furnishing Fabric, Flame Retardant Fabric, Furnishing Fabric
Bhilwara Technical Textiles Ltd.
18. LNJ Nagar, Mordi Technical Textiles
HEG Ltd.
19. Mandideep Graphite Electrodes
20. Mandideep Captive Thermal Power
21. Tawa Captive Hydro Electric Power
Bhilwara Energy Ltd.
22. Pathankot UBDC Stage III Hydro Electric Power Generation
Malana Power Company Ltd.
23. Malana (Kullu) Hydro Electric Power Generation
AD Hydro Power Ltd.
24. Allain-Duhangan Hydro Electric Power Generation(Manali)
NJC Hydro Power Ltd.
25. Tawang Nyam Jang Chhu Hydro Electric Power Generation
Indo Canadian Consultancy Services Ltd.
26. Noida Power Engineering Services
Bhilwara Scribe Pvt. Ltd.
27. Bhopal Medical Transcription Services
28. Bengaluru Medical Transcription Services
Bhilwara Infotech Ltd.
29. Bengaluru IT Services
Corporate Office
30. Noida (NCR-Delhi)
Regional / Marketing
31. Mumbai 35. Ludhiana
32. Kolkata 36. Amritsar
33. Bengaluru 37. Bhilwara
34. New Delhi
25
01
Corporate Information 02
Message from the Chairman 03
Directors’ Report 05
Annexures to the Directors’ Report 10
Standalone Financial Statements
Auditors’ Report 11
Balance Sheet 14
Schedules 15
Cash Flow Statement 25
Balance Sheet Abstract 26
Statement Pursuant to Sec. 212 27
Consolidated Financial Statements
Auditors’ Report 32
Balance Sheet 33
Profit and Loss Account 34
Schedules 35
Cash Flow Statement 51
Attachments of Annual Report
a. Malana Power Company Limited 55
b. AD Hydro Power Limited 92
c. Indo Canadian Consultancy Services Limited 123
d. NJC Hydro Power Limited 142
e. Green Ventures Private Limited, Nepal 151
CONTENTS
Dear Stakeholders,
2009-10 has been a year of rebound for the global economy from the
widespread crisis amidst ongoing policy support and improving financial
market conditions.
India's growth-inflation dynamics are in contrast to the overall global
scenario. The economy is recovering rapidly from the growth slowdown.
The growth is driven by robust performance of the manufacturing sector
on the back of government and consumer spending. IMF and other
economic agencies have been bullish on Indian economy. IMF has
revised the growth forecast of the Indian economy to 9.5% for 2010 from
8.8% projected earlier, based on robust corporate profits and favourable
financing conditions, which are likely to fuel investments.
Sustenance of such high levels of economic growth and development is
dependent on adequate, cost-effective and quality infrastructure.
Accordingly the ongoing economic reforms have attached a high priority
to the better utilization of existing infrastructure and developments in new
infrastructures so that existing bottlenecks do not inhibit the overall
economic growth.
Power Sector is a key constituent of infrastructure and closely linked to
output. To deliver sustained growth rate of over 8% and to meet the
lifeline energy needs of all citizens, the power sector needs to grow at
ChairmanMessage from the
BOARD OF DIRECTORS
KEY EXECUTIVES
STATUTORY AUDITORS
Chairman
Mr. Ravi Jhunjhunwala
Directors
Mr. Riju Jhunjhunwala
Mr. Rishabh Jhunjhunwala
Dr. Kamal Gupta
Mr. Salil Bhandari
Mr. M. K. Doogar
Mr. Sunil Chawla
Mr. Vimal Banka
Mr. O. P. Ajmera Director - Finance
Mr. Ravi Gupta Company Secretary
M/s. S. S. Kothari Mehta & Co.,
Chartered Accountants
New Delhi
TECHNICAL CONSULTANTS
BANKERS
CORPORATE OFFICE
REGISTERED OFFICE
RSW International Inc., Canada
Indo Canadian Consultancy Services Limited
Axis Bank Limited
State Bank of India
HDFC Bank Limited
Yes Bank Limited
IDBI Bank Limited
Kotak Mahindra Bank Ltd.
Bhilwara Towers
A-12, Sector - 1
Noida - 201 301 (U.P.)
Phone : 0120 - 2541810, 4390300
Fax : 0120 - 2531648, 2531745
Bhilwara Bhawan
40-41, Community Centre
New Friends Colony,
New Delhi - 110 025
Phone : 011 - 26822997
CORPORATE INFORMATION
02
Dear Stakeholders,
2009-10 has been a year of rebound for the global economy from the
widespread crisis amidst ongoing policy support and improving financial
market conditions.
India's growth-inflation dynamics are in contrast to the overall global
scenario. The economy is recovering rapidly from the growth slowdown.
The growth is driven by robust performance of the manufacturing sector
on the back of government and consumer spending. IMF and other
economic agencies have been bullish on Indian economy. IMF has
revised the growth forecast of the Indian economy to 9.5% for 2010 from
8.8% projected earlier, based on robust corporate profits and favourable
financing conditions, which are likely to fuel investments.
Sustenance of such high levels of economic growth and development is
dependent on adequate, cost-effective and quality infrastructure.
Accordingly the ongoing economic reforms have attached a high priority
to the better utilization of existing infrastructure and developments in new
infrastructures so that existing bottlenecks do not inhibit the overall
economic growth.
Power Sector is a key constituent of infrastructure and closely linked to
output. To deliver sustained growth rate of over 8% and to meet the
lifeline energy needs of all citizens, the power sector needs to grow at
ChairmanMessage from the
BOARD OF DIRECTORS
KEY EXECUTIVES
STATUTORY AUDITORS
Chairman
Mr. Ravi Jhunjhunwala
Directors
Mr. Riju Jhunjhunwala
Mr. Rishabh Jhunjhunwala
Dr. Kamal Gupta
Mr. Salil Bhandari
Mr. M. K. Doogar
Mr. Sunil Chawla
Mr. Vimal Banka
Mr. O. P. Ajmera Director - Finance
Mr. Ravi Gupta Company Secretary
M/s. S. S. Kothari Mehta & Co.,
Chartered Accountants
New Delhi
TECHNICAL CONSULTANTS
BANKERS
CORPORATE OFFICE
REGISTERED OFFICE
RSW International Inc., Canada
Indo Canadian Consultancy Services Limited
Axis Bank Limited
State Bank of India
HDFC Bank Limited
Yes Bank Limited
IDBI Bank Limited
Kotak Mahindra Bank Ltd.
Bhilwara Towers
A-12, Sector - 1
Noida - 201 301 (U.P.)
Phone : 0120 - 2541810, 4390300
Fax : 0120 - 2531648, 2531745
Bhilwara Bhawan
40-41, Community Centre
New Friends Colony,
New Delhi - 110 025
Phone : 011 - 26822997
CORPORATE INFORMATION
02
REPORT DIRECTORS'
Indo Canadian Consultancy Services Limited, NJC Hydro Power Limited and Green Ventures Private Limited, Nepal along with statement pursuant to the provisions of Section 212 of the Companies Act, 1956 is attached to this Annual Report. The Audited Consolidated Balance Sheet for the year 2009-10 is also attached to this Annual Report.
AD Hydro Power Limited’s, Subsidiary of your Company, 192 MW Allian Duhangan HEP is in the advanced stages of commissioning and is likely to be partly operational in first half of the financial year 2010-11. Once the project is commissioned it will add significantly to the top & bottom line of the Company at consolidated level and the Company’s portfolio of operational projects.
Projects specific information is as under:
Nyamjang Chhu HEP in the State of Arunachal Pradesh
The Detailed Project Report (DPR) for this project has already been approved by the State Authority and as of now is with the Central Electricity Authority (CEA) for their approval. The Company expects to get the approval from CEA within the financial year 2010-11. The Company has formed a 100% subsidiary by the name of NJC Hydro Power Limited for the implementation of said project in the current year itself. To speed up the work, the Company has already awarded the contracts for the constructions of two power projects of 7.5 MW (Khangtang- Nalla) and 3.0 MW (Shyaro-Nallah) for this project to ensure smooth availability of power for the construction of main project.
YEAR OF FIRM STRIDE
To the Members
M/s Bhilwara Energy Limited
Dear Member,
On behalf of the Board of Directors, we have pleasure in presenting the Fourth Annual Report of the Board and audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.
The Company has not yet started its commercial activities and therefore no Profit and Loss Account has been prepared and the expenditure incurred has been shown under Schedule - 5 under the head “Project & Pre-operative Expenses (Pending Allocation)” to the Balance Sheet.
As of 31st March, 2010, the Company’s expenditure on various accounts is detailed below:
(Rs. in Million)
Fixed Assets (Gross) 53.79 113. 99
Pre-operative Expenses 917.98 277.67
Investments 1,886.05 1,884.91
Net Current Assets 482.98 600.29
Miscellaneous Expenditure 14.62 6.61
TOTAL 3,355.42 2,883.47
The financial statements of Subsidiaries of your Company, Malana Power Company Limited, AD Hydro Power Limited,
FINANCIAL HIGHLIGHTS
PARTICULARS 31.03.2010 31.03.2009
04 05
1.8 - 2 times the GDP rate of growth. At >8% GDP growth rate, the required installed power generation capacity is likely
to be around 306,000MW in 2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st
March 2010), which translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been
added during last five years under APDRP (Accelerated Power Development & Reforms Program). Achieving these
goals would require investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable
Energy in the Energy Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.
This scenario presents both immense opportunities and extreme challenges to your Company. The opportunities are in
terms of taking up additional power projects for execution and the challenges shall be for ensuring their execution within
limited timeframe and resources. Successful execution of power projects at hand and new projects can take your
Company to new heights of glory, but this will require raising of bar for achievements of individuals, teams and Company
as a whole.
During the year under consideration, your Company at consolidated level achieved a turnover of Rs. 1,651 million and a
Net Profit of Rs. 981 million.
I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the
project implementation of Allain-Duhangan, the Allain side of the project has started generating power on 17th of
July,2010. However, for want of completion of dedicated transmission line, the project is being operated at lower
voltage in order to evacuate the power through partly completed dedicated transmission line and State Utility
Transmission System. It has been brought to our notice that such operation at reduced voltage has been successfully
carried out for the first time in the world. I would like to extend appreciation to our technical team and consultants for
making this operation a success. Meanwhile, the work of dedicated transmission line has progressed at very fast pace
and is expected to be completed by middle of next month.Thereafter, the operations would be brought back to normal
voltage and power shall be evacuated through the dedicated transmission line. Further, the excavation of Duhangan
tunnel is also progressing well and it is expected that the Duhangan portion shall be operational in the second quarter
of 2011.
I am also pleased to announce that against our applications for 3 hydro power projects in Nepal, two of our applications
namely for : Mughu Karnali-1 for 194 MW and Humla Karnali-1 for 274 MW have been accepted by the Government of
Nepal and requisite licenses have been granted.
I would also like to share that your Company is sincerely exploring possibilities of adding generation capacities in other
renewable sources like : Solar and Wind.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,
Government of Nepal, Government of Himachal Pradesh, Government of Arunachal Pradesh, Government of Punjab,
Himachal Pradesh State Electricity Board, Nepal Electricity Board, PTC India, all Government departments and
agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our
employees and business associates, who despite all adverse circumstances have been the pillar of strength for the
Company.
With Best Regards,
Ravi Jhunjhunwala
Chairman
REPORT DIRECTORS'
Indo Canadian Consultancy Services Limited, NJC Hydro Power Limited and Green Ventures Private Limited, Nepal along with statement pursuant to the provisions of Section 212 of the Companies Act, 1956 is attached to this Annual Report. The Audited Consolidated Balance Sheet for the year 2009-10 is also attached to this Annual Report.
AD Hydro Power Limited’s, Subsidiary of your Company, 192 MW Allian Duhangan HEP is in the advanced stages of commissioning and is likely to be partly operational in first half of the financial year 2010-11. Once the project is commissioned it will add significantly to the top & bottom line of the Company at consolidated level and the Company’s portfolio of operational projects.
Projects specific information is as under:
Nyamjang Chhu HEP in the State of Arunachal Pradesh
The Detailed Project Report (DPR) for this project has already been approved by the State Authority and as of now is with the Central Electricity Authority (CEA) for their approval. The Company expects to get the approval from CEA within the financial year 2010-11. The Company has formed a 100% subsidiary by the name of NJC Hydro Power Limited for the implementation of said project in the current year itself. To speed up the work, the Company has already awarded the contracts for the constructions of two power projects of 7.5 MW (Khangtang- Nalla) and 3.0 MW (Shyaro-Nallah) for this project to ensure smooth availability of power for the construction of main project.
YEAR OF FIRM STRIDE
To the Members
M/s Bhilwara Energy Limited
Dear Member,
On behalf of the Board of Directors, we have pleasure in presenting the Fourth Annual Report of the Board and audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.
The Company has not yet started its commercial activities and therefore no Profit and Loss Account has been prepared and the expenditure incurred has been shown under Schedule - 5 under the head “Project & Pre-operative Expenses (Pending Allocation)” to the Balance Sheet.
As of 31st March, 2010, the Company’s expenditure on various accounts is detailed below:
(Rs. in Million)
Fixed Assets (Gross) 53.79 113. 99
Pre-operative Expenses 917.98 277.67
Investments 1,886.05 1,884.91
Net Current Assets 482.98 600.29
Miscellaneous Expenditure 14.62 6.61
TOTAL 3,355.42 2,883.47
The financial statements of Subsidiaries of your Company, Malana Power Company Limited, AD Hydro Power Limited,
FINANCIAL HIGHLIGHTS
PARTICULARS 31.03.2010 31.03.2009
04 05
1.8 - 2 times the GDP rate of growth. At >8% GDP growth rate, the required installed power generation capacity is likely
to be around 306,000MW in 2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st
March 2010), which translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been
added during last five years under APDRP (Accelerated Power Development & Reforms Program). Achieving these
goals would require investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable
Energy in the Energy Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.
This scenario presents both immense opportunities and extreme challenges to your Company. The opportunities are in
terms of taking up additional power projects for execution and the challenges shall be for ensuring their execution within
limited timeframe and resources. Successful execution of power projects at hand and new projects can take your
Company to new heights of glory, but this will require raising of bar for achievements of individuals, teams and Company
as a whole.
During the year under consideration, your Company at consolidated level achieved a turnover of Rs. 1,651 million and a
Net Profit of Rs. 981 million.
I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the
project implementation of Allain-Duhangan, the Allain side of the project has started generating power on 17th of
July,2010. However, for want of completion of dedicated transmission line, the project is being operated at lower
voltage in order to evacuate the power through partly completed dedicated transmission line and State Utility
Transmission System. It has been brought to our notice that such operation at reduced voltage has been successfully
carried out for the first time in the world. I would like to extend appreciation to our technical team and consultants for
making this operation a success. Meanwhile, the work of dedicated transmission line has progressed at very fast pace
and is expected to be completed by middle of next month.Thereafter, the operations would be brought back to normal
voltage and power shall be evacuated through the dedicated transmission line. Further, the excavation of Duhangan
tunnel is also progressing well and it is expected that the Duhangan portion shall be operational in the second quarter
of 2011.
I am also pleased to announce that against our applications for 3 hydro power projects in Nepal, two of our applications
namely for : Mughu Karnali-1 for 194 MW and Humla Karnali-1 for 274 MW have been accepted by the Government of
Nepal and requisite licenses have been granted.
I would also like to share that your Company is sincerely exploring possibilities of adding generation capacities in other
renewable sources like : Solar and Wind.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,
Government of Nepal, Government of Himachal Pradesh, Government of Arunachal Pradesh, Government of Punjab,
Himachal Pradesh State Electricity Board, Nepal Electricity Board, PTC India, all Government departments and
agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our
employees and business associates, who despite all adverse circumstances have been the pillar of strength for the
Company.
With Best Regards,
Ravi Jhunjhunwala
Chairman
07
SHARE CAPITAL
ENVIRONMENT, HEALTH AND SAFETY
HUMAN RESOURCE DEVELOPMENT
During the period under review, the Company has increased its Authorised Capital from Rs. 140 Crore to Rs. 240 Crore.
The Company has during the period converted 1,74,02,203 Warrants into 1,74,02,203 Equity Shares of Rs. 10/- each and forfeited the balance 20,23,512 Warrants, which could not be exercised.
During the period, the Company has also issued Bonus Equity Shares in the ratio 1:2 (one Bonus Equity Share for every two existing Equity Shares held) and accordingly allotted 4,51,98,143 Bonus Equity Shares.
In the upcoming projects, Environment Management Plan comprising international practices, procedure and norms shall be adopted to take care of environment and social impacts on the Projects. Further, Company is committed to IFC to comply with IFC policy and performance standards on Social & Environmental Sustainability for all upcoming projects / acquisitions and also at corporate level.
Environmental Management Plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around Project area.
The Company strives to implement the best HR practices so as to ensure that talent retention is ensured at all levels. Training is being continuously imparted to all the employees working throughout the organization.
The Company believes that the value created by the employees should be shared with them and promotes culture of employee ownership in the Company. To convert
this philosophy into reality, the Company has set aside a pool of two million Shares in first go to be given to employees at a formulated strike price as per the detailed ESOP Scheme currently under preparation.
Employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company.
As the construction work is under progress without any operation, no dividend is proposed to be declared during the year under review.
The system of internal control has been designed and implemented to meet the particular requirements of the Company and the risks to which it is exposed. The objectives are to identify the level of risk appropriate to the Company, taking into account the need to increase shareholder value through an entrepreneurial culture and ensuring that the Company achieves its objectives.
During the year 2009-10, no employee of the Company was covered as per the provision of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees.
As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors’ of your Company states hereunder:-
i) That in the preparation of the annual accounts for the year ended on 31st March 2010, the applicable
DIVIDEND & OTHER APPROPRIATION
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
85 MW UBDC Stage-III HEP in the State of Punjab
The DPR for the project has already been approved by the State Authority. Implementation agreement has already been signed. The Company is now in process of getting the tariff revised for this project with the state authorities. Once this upward revision in tariff takes place, the Company intends to implement this project on fast track. The total land required for this project is estimated at 839 acres comprising Government as well as private land which have already been identified. Out of this, the Government of Punjab has already approved the acquisition of private land totalling 691 acres for which notification u/s 4 of the Land Acquisition Act is to be issued. The irrigation department of the Government of Punjab has already obtained in principle and forest clearance for approximately 104 acres of forest land required to be used by the Company for realignment and remodeling of main UBDC line.
120 MW Likhu HEP and 50 MW Balephi HEP in Nepal
The Company is in the process of preparing tender documents for these projects and simultaneously working on financial closure for the two projects. The Company has approached an Indian Bank for debt syndication for its Likhu project and has also initiated dialogue with international financial institution for debt arrangement of Balephi project. To protect lender as well overall interest of the Company and also to mitigate the risk, the Company has initiated the process of entering into fallback PPA with the competent authority of Nepal to sell power in the intermittent period of construction of Cross Border Transmission Line.
During the year, the Company has also reached to an agreement with Nepalese parties by increasing its stake in the Balephi Jalbidhyut Company Limited from 33.33% to 60% and rationalised its stake in Green Ventures Private Limited from 63.33% to 57%.
Other Projects
For the other projects, Company is under various stages of implementation like signing of MOU, preparation of DPR and other allied activities.
During the year, the Company has submitted DPR for 10 MW Solar PV Power Project in Rajasthan to Rajasthan Renewable Energy Corporation. The Company has also signed a MOU with M/s. PLG Power, Maharashtra for putting up the 10 MW Solar Power plant in Rajasthan.
The Company is exploring various possibilities in Nepal for identification of new projects and obtaining survey licenses. The Company is in advanced stages of receiving some survey licenses and once received would further take the development of these projects.
Your Company has signed Term Sheets with International Finance Corporation (IFC), a member of World Bank Group and India Clean Energy III Limited, Mauritius, whereby they together will invest US$50 million into the Company in the form of Equity. The funds to be raised will be utilised towards development of power projects of the Company, its subsidiaries, SPVs and Joint Ventures and identification of new projects.
The Company has various projects in pipeline for development and execution in coming years. The Company plans to achieve total generating capacity of~2,500 MW in hydro power by 2016-17. The Company envisages developing all hydro power projects under Clean Development Mechanism (CDM) norms.
NEW ENDEAVORS
FUTURE OUTLOOK
Annual Report 2009-1006
07
SHARE CAPITAL
ENVIRONMENT, HEALTH AND SAFETY
HUMAN RESOURCE DEVELOPMENT
During the period under review, the Company has increased its Authorised Capital from Rs. 140 Crore to Rs. 240 Crore.
The Company has during the period converted 1,74,02,203 Warrants into 1,74,02,203 Equity Shares of Rs. 10/- each and forfeited the balance 20,23,512 Warrants, which could not be exercised.
During the period, the Company has also issued Bonus Equity Shares in the ratio 1:2 (one Bonus Equity Share for every two existing Equity Shares held) and accordingly allotted 4,51,98,143 Bonus Equity Shares.
In the upcoming projects, Environment Management Plan comprising international practices, procedure and norms shall be adopted to take care of environment and social impacts on the Projects. Further, Company is committed to IFC to comply with IFC policy and performance standards on Social & Environmental Sustainability for all upcoming projects / acquisitions and also at corporate level.
Environmental Management Plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around Project area.
The Company strives to implement the best HR practices so as to ensure that talent retention is ensured at all levels. Training is being continuously imparted to all the employees working throughout the organization.
The Company believes that the value created by the employees should be shared with them and promotes culture of employee ownership in the Company. To convert
this philosophy into reality, the Company has set aside a pool of two million Shares in first go to be given to employees at a formulated strike price as per the detailed ESOP Scheme currently under preparation.
Employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company.
As the construction work is under progress without any operation, no dividend is proposed to be declared during the year under review.
The system of internal control has been designed and implemented to meet the particular requirements of the Company and the risks to which it is exposed. The objectives are to identify the level of risk appropriate to the Company, taking into account the need to increase shareholder value through an entrepreneurial culture and ensuring that the Company achieves its objectives.
During the year 2009-10, no employee of the Company was covered as per the provision of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees.
As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors’ of your Company states hereunder:-
i) That in the preparation of the annual accounts for the year ended on 31st March 2010, the applicable
DIVIDEND & OTHER APPROPRIATION
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
85 MW UBDC Stage-III HEP in the State of Punjab
The DPR for the project has already been approved by the State Authority. Implementation agreement has already been signed. The Company is now in process of getting the tariff revised for this project with the state authorities. Once this upward revision in tariff takes place, the Company intends to implement this project on fast track. The total land required for this project is estimated at 839 acres comprising Government as well as private land which have already been identified. Out of this, the Government of Punjab has already approved the acquisition of private land totalling 691 acres for which notification u/s 4 of the Land Acquisition Act is to be issued. The irrigation department of the Government of Punjab has already obtained in principle and forest clearance for approximately 104 acres of forest land required to be used by the Company for realignment and remodeling of main UBDC line.
120 MW Likhu HEP and 50 MW Balephi HEP in Nepal
The Company is in the process of preparing tender documents for these projects and simultaneously working on financial closure for the two projects. The Company has approached an Indian Bank for debt syndication for its Likhu project and has also initiated dialogue with international financial institution for debt arrangement of Balephi project. To protect lender as well overall interest of the Company and also to mitigate the risk, the Company has initiated the process of entering into fallback PPA with the competent authority of Nepal to sell power in the intermittent period of construction of Cross Border Transmission Line.
During the year, the Company has also reached to an agreement with Nepalese parties by increasing its stake in the Balephi Jalbidhyut Company Limited from 33.33% to 60% and rationalised its stake in Green Ventures Private Limited from 63.33% to 57%.
Other Projects
For the other projects, Company is under various stages of implementation like signing of MOU, preparation of DPR and other allied activities.
During the year, the Company has submitted DPR for 10 MW Solar PV Power Project in Rajasthan to Rajasthan Renewable Energy Corporation. The Company has also signed a MOU with M/s. PLG Power, Maharashtra for putting up the 10 MW Solar Power plant in Rajasthan.
The Company is exploring various possibilities in Nepal for identification of new projects and obtaining survey licenses. The Company is in advanced stages of receiving some survey licenses and once received would further take the development of these projects.
Your Company has signed Term Sheets with International Finance Corporation (IFC), a member of World Bank Group and India Clean Energy III Limited, Mauritius, whereby they together will invest US$50 million into the Company in the form of Equity. The funds to be raised will be utilised towards development of power projects of the Company, its subsidiaries, SPVs and Joint Ventures and identification of new projects.
The Company has various projects in pipeline for development and execution in coming years. The Company plans to achieve total generating capacity of~2,500 MW in hydro power by 2016-17. The Company envisages developing all hydro power projects under Clean Development Mechanism (CDM) norms.
NEW ENDEAVORS
FUTURE OUTLOOK
Annual Report 2009-1006
Accounting Standards had been followed along with proper explanation relating to material departures;
ii) That the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the financial year ended on 31st March, 2010;
iii) That the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
iv) That the annual accounts have been prepared on going concern basis.
Mr. Sunil Chawla, Directors, retire by rotation and being eligible, offers themselves for re-appointment.
Your Directors are pleased to inform that Company has inducted Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as an Additional Directors of the Company to hold office upto the date of ensuing general meeting. The Company has received notice u/s 257 of the Companies Act from shareholder of the Company proposing the candidature of Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as Directors of the Company. The Board recommends their appointement.
DIRECTORS
Further, Mr. B. P. Singh has resigned from the Directorship of the Company. Your Board place on record sincere thanks for the contribution made by him during his tenure.
The audit committee of the Company comprises of three Directors viz Mr. O. P. Ajmera, Mr. Vimal Banka and Mr. B. P. Singh. All the members were present during the meeting of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.
M/s. S. S. Kothari Mehta & Co., Chartered Accountants has conveyed their willingness for re-appointment as Statutory Auditors of the Company for the financial year ending on 31st March, 2011. The Company has also received consent letter from M/s. S. S. Kothari Mehta & Co., Chartered Accountants under section 224(1B) of the Companies Act, 1956, being eligible, showing willingness for their appointment as Statutory Auditors of the Company for the financial year ending on 31st march, 2011. The Board recommends for the appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company.
The Auditors’ Report read alongwith Notes to the Accounts is self-explanatory and require no further comments from the Board.
The Company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A are not applicable.
AUDIT COMMITTEE
AUDITORS
AUDITORS’ REMARKS
PUBLIC DEPOSITS
E N E R G Y C O N S E R V A T I O N , T E C H N O L O G Y ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
CORPORATE GOVERNANCE
INDUSTRIAL RELATIONS
ACKNOWLEDGEMENTS
The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out go in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.
Your Company has adopted the doctrine of Corporate Governance to ensure greater transparency, accountability and integrity in the affairs of the Company.
Majority of the Board comprises of Non-Executive Directors who play a critical role in imparting balance to the Board processes by bringing an independent judgment to bear on issues of strategy, performance, resources, standards of Company conduct, etc. The Corporate Governance ideology followed by the Company represents the value framework, the ethical framework and the moral framework under which business decisions are taken.
During the year, your Company maintained harmonious and cordial relations. No man-days were lost due to strike, lockout etc.
Your Directors record their grateful appreciation of the encouragement, assistance and co-operation received
from shareholders, Ministry of Power, Government of India, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Government of Arunanchal Pradesh, Government of Punjab, Government of Nepal, Nepal Electricity Authority, its lenders and other Government Departments. The Board looks forward to their continued support and co-operation in the coming years as well.
Your Directors also place on record the appreciation for investors for their support and confidence reposed by them in the Company.
Your Directors are pleased to place on record the appreciation for the highly motivated employees of the Company for their commitment and the achievements and look forward to their continued support and co-operation in the years to come.
For and on behalf of the Board of Directors
Vimal Banka O. P. AjmeraDirector Director - Finance
Place : NoidaDate : 3rd June, 2010
Annual Report 2009-1008 09
Accounting Standards had been followed along with proper explanation relating to material departures;
ii) That the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the financial year ended on 31st March, 2010;
iii) That the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
iv) That the annual accounts have been prepared on going concern basis.
Mr. Sunil Chawla, Directors, retire by rotation and being eligible, offers themselves for re-appointment.
Your Directors are pleased to inform that Company has inducted Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as an Additional Directors of the Company to hold office upto the date of ensuing general meeting. The Company has received notice u/s 257 of the Companies Act from shareholder of the Company proposing the candidature of Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as Directors of the Company. The Board recommends their appointement.
DIRECTORS
Further, Mr. B. P. Singh has resigned from the Directorship of the Company. Your Board place on record sincere thanks for the contribution made by him during his tenure.
The audit committee of the Company comprises of three Directors viz Mr. O. P. Ajmera, Mr. Vimal Banka and Mr. B. P. Singh. All the members were present during the meeting of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.
M/s. S. S. Kothari Mehta & Co., Chartered Accountants has conveyed their willingness for re-appointment as Statutory Auditors of the Company for the financial year ending on 31st March, 2011. The Company has also received consent letter from M/s. S. S. Kothari Mehta & Co., Chartered Accountants under section 224(1B) of the Companies Act, 1956, being eligible, showing willingness for their appointment as Statutory Auditors of the Company for the financial year ending on 31st march, 2011. The Board recommends for the appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company.
The Auditors’ Report read alongwith Notes to the Accounts is self-explanatory and require no further comments from the Board.
The Company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A are not applicable.
AUDIT COMMITTEE
AUDITORS
AUDITORS’ REMARKS
PUBLIC DEPOSITS
E N E R G Y C O N S E R V A T I O N , T E C H N O L O G Y ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
CORPORATE GOVERNANCE
INDUSTRIAL RELATIONS
ACKNOWLEDGEMENTS
The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and out go in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.
Your Company has adopted the doctrine of Corporate Governance to ensure greater transparency, accountability and integrity in the affairs of the Company.
Majority of the Board comprises of Non-Executive Directors who play a critical role in imparting balance to the Board processes by bringing an independent judgment to bear on issues of strategy, performance, resources, standards of Company conduct, etc. The Corporate Governance ideology followed by the Company represents the value framework, the ethical framework and the moral framework under which business decisions are taken.
During the year, your Company maintained harmonious and cordial relations. No man-days were lost due to strike, lockout etc.
Your Directors record their grateful appreciation of the encouragement, assistance and co-operation received
from shareholders, Ministry of Power, Government of India, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Government of Arunanchal Pradesh, Government of Punjab, Government of Nepal, Nepal Electricity Authority, its lenders and other Government Departments. The Board looks forward to their continued support and co-operation in the coming years as well.
Your Directors also place on record the appreciation for investors for their support and confidence reposed by them in the Company.
Your Directors are pleased to place on record the appreciation for the highly motivated employees of the Company for their commitment and the achievements and look forward to their continued support and co-operation in the years to come.
For and on behalf of the Board of Directors
Vimal Banka O. P. AjmeraDirector Director - Finance
Place : NoidaDate : 3rd June, 2010
Annual Report 2009-1008 09
10
ANNEXURE-I TO THE DIRECTORS' REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY – NIL
B. TECHNOLOGY ABSORPTION – NIL
C. FOREIGN EXCHANGE EARNING AND OUTGO - The details of Foreign Exchange Earnings and Outgo during the year 2009-10 are mentioned in Notes to Accounts.
(Rs. in Million)
Foreign Travelling Nil 0.6
Investment in Joint Ventures in Nepal 80.00 125.0
For and on behalf of the Board of Directors
Place : Noida Vimal Banka O. P. AjmeraDate : 3rd June, 2010 Director Director - Finance
Foreign Exchange Outgo This Year Previous Year
REPORT AUDITORS'
To
The members of Bhilwara Energy Limited
We have audited the attached Balance Sheet of
BHILWARA ENERGY LIMITED as at 31st March, 2010
and also the Cash Flow Statement of the Company for
the year ended on that date, annexed thereto. No Profit &
Loss Account has been prepared as the company has
not commenced any commercial operations, necessary
details have been furnished in Schedule-5 'Pre-
operative expenditure (pending allocation). These
financial statements are the responsibility of the
Company's management. Our responsibility is to
express an opinion on these financial statements based
on our audit.
We have conducted our audit in accordance with
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to
obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
made by the management, as well as evaluating the
overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditors' Report) Order,
2003 as amended by Companies (Auditors' Report)
(Amendment) Order, 2004 (Collectively the Order)
issued by the Central Government of India in terms of
Section 227 (4A) of the Companies Act, 1956 and on the
basis of such checks as we considered appropriate and
according to the information and explanations given to
us, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to
above, we report that:
a) We have obtained all the information and
explanations which, to the best of our knowledge
and belief, were necessary for the purposes of our
audit;
b) In our opinion, proper books of account, as required
by law, have been kept by the Company so far as
appears from our examination of those books;
c) The Balance Sheet and Cash Flow Statement dealt
with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet and Cash Flow
Statement dealt with by this report comply with the
Accounting Standards referred to in sub - section
(3C) of Section 211 of the Companies Act, 1956.
e) On the basis of written representations received
from the directors as on 31st March, 2010 and taken
on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st
March, 2010 from being appointed as a director in
terms of clause (g) of sub section (1) of section 274 of
the Companies Act, 1956.
f) In our opinion and to the best of our information and
according to the explanations given to us, the said
Accounts read with the Accounting policies and
Notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and
give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) In the case of Balance Sheet, of the state of
affairs of the Company as at 31st March, 2010;
and
ii) In the case of Cash Flow Statement, of the cash
flows for the year ended on that date.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Regn. No. 000756N
Arun K. Tulsian
Partner
Membership No.: 089907
Place : New Delhi
Dated : 3rd June, 2010
11
10
ANNEXURE-I TO THE DIRECTORS' REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY – NIL
B. TECHNOLOGY ABSORPTION – NIL
C. FOREIGN EXCHANGE EARNING AND OUTGO - The details of Foreign Exchange Earnings and Outgo during the year 2009-10 are mentioned in Notes to Accounts.
(Rs. in Million)
Foreign Travelling Nil 0.6
Investment in Joint Ventures in Nepal 80.00 125.0
For and on behalf of the Board of Directors
Place : Noida Vimal Banka O. P. AjmeraDate : 3rd June, 2010 Director Director - Finance
Foreign Exchange Outgo This Year Previous Year
REPORT AUDITORS'
To
The members of Bhilwara Energy Limited
We have audited the attached Balance Sheet of
BHILWARA ENERGY LIMITED as at 31st March, 2010
and also the Cash Flow Statement of the Company for
the year ended on that date, annexed thereto. No Profit &
Loss Account has been prepared as the company has
not commenced any commercial operations, necessary
details have been furnished in Schedule-5 'Pre-
operative expenditure (pending allocation). These
financial statements are the responsibility of the
Company's management. Our responsibility is to
express an opinion on these financial statements based
on our audit.
We have conducted our audit in accordance with
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to
obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
made by the management, as well as evaluating the
overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditors' Report) Order,
2003 as amended by Companies (Auditors' Report)
(Amendment) Order, 2004 (Collectively the Order)
issued by the Central Government of India in terms of
Section 227 (4A) of the Companies Act, 1956 and on the
basis of such checks as we considered appropriate and
according to the information and explanations given to
us, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to
above, we report that:
a) We have obtained all the information and
explanations which, to the best of our knowledge
and belief, were necessary for the purposes of our
audit;
b) In our opinion, proper books of account, as required
by law, have been kept by the Company so far as
appears from our examination of those books;
c) The Balance Sheet and Cash Flow Statement dealt
with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet and Cash Flow
Statement dealt with by this report comply with the
Accounting Standards referred to in sub - section
(3C) of Section 211 of the Companies Act, 1956.
e) On the basis of written representations received
from the directors as on 31st March, 2010 and taken
on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st
March, 2010 from being appointed as a director in
terms of clause (g) of sub section (1) of section 274 of
the Companies Act, 1956.
f) In our opinion and to the best of our information and
according to the explanations given to us, the said
Accounts read with the Accounting policies and
Notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and
give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) In the case of Balance Sheet, of the state of
affairs of the Company as at 31st March, 2010;
and
ii) In the case of Cash Flow Statement, of the cash
flows for the year ended on that date.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Regn. No. 000756N
Arun K. Tulsian
Partner
Membership No.: 089907
Place : New Delhi
Dated : 3rd June, 2010
11
12
Annual Report 2009-10
ANNEXURE TO AUDITORS' REPORT
(Annexure referred to in our report of even date)
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) Verification of the fixed assets is being conducted based on a programme by the management, which, in our opinion, is reasonable having regard to the size of the company and nature of its business. As informed to us, no discrepancies were noticed on such verification as compared to book records.
(c) No substantial part of the fixed assets was disposed off during the year.
2. According to the information and explanations given to us and the records examined by us, the Company is not having any inventory, in view of which the related reporting requirement of the Order is not applicable to the company.
3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses 4 (iii) (b) to (d) of the Order are not applicable.
(b) The company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses 4 (iii) (f) and (g) of the Order are not applicable.
4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the company and the nature of its business with regard to purchase of inventory and fixed assets. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.
5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.
(b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts
or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lacs or more in respect of reach party.
6. The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposit) Rules, 1975.
7. In our opinion, the Company has an internal audit system commensurate with its size & nature of its business.
8. Maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 in respect of any of the activities carried out by the company.
9. (a) According to the examination of records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales-tax, Wealth-tax, Service tax, Custom Duty, Excise Duty, Cess and other material statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities during the year and there are no such dues outstanding for more than six months from the date they became payable as on the date of balance sheet.
(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty, Sales Tax, Wealth Tax, Income Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute.
10. Since the Company is yet to commence commercial production, no comments are being offered for accumulated losses at the end of the financial year.
11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.
12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.
13
14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.
15. The Company has not given any guarantee for loans taken by others from financial institutions / banks.
16. In our opinion, and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where such end use has been stipulated by the lender.
17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the company, the funds raised by the Company on short-term basis of Rs. 110 crore have been applied for long-term investment.
18. The Company has not made any preferential allotment of shares, during the year, to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956.
19. The Company has not issued any debentures during the year nor are there any debentures outstanding at the end of the year.
20. The Company has not raised any money through public issues during the year.
21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.
For S. S. Kothari Mehta & Co.Chartered AccountantsFirm Regn. No. 000756N
Arun K. TulsianPartnerMembership No.: 089907
Place : New DelhiDated : 3rd June, 2010
14
Annual Report 2009-10
` in ‘000’Schedules As at
31.03.2010 As at
31.03.2009 SOURCES OF FUNDSShareholders’ FundsShare capital 1 1,755,944 729,941 Reserves and surplus 2 499,479 987,818 Warrants – 9,713 Loans 3 1,100,000 1,156,000 TOTAL 3,355,423 2,883,472
APPLICATION OF FUNDSFixed Assets Gross block 4 13,269 12,089 Less : Depreciation (4,166) (2,169)Net block 9,103 9,920 Capital work-in-progress including capital advances 44,686 104,069 Project and pre-operative expenses (pending allocation)
5 917,983 277,676
971,772 391,665 Investments 6 1,886,047 1,884,901 Current Assets, Loans and AdvancesInventories (Explosive stock) 83 98 Cash and bank balances 7 28,490 31,047 Other current assets 8 3,176 2,828 Loans and advances 9 499,596 634,410
531,345 668,383 Less: Current Liabilities and ProvisionsLiabilities 10 8,964 65,659 Provisions 11 39,400 2,426
48,364 68,085 Net Current Assets 482,981 600,298 Miscellaneous Expenditure 12 14,623 6,608 (to the extent not written off or adjusted) TOTAL 3,355,423 2,883,472 Notes to AccountsThe Schedules referred to above form an integral part of the Balance Sheet.
BALANCE SHEET AS AT 31st MARCH, 2010
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
15
SChEDULE 1: ShARE CAPITAL` in ‘000
As at 31.03.2010
As at 31.03.2009
Authorised200,000,000 (Previous year 100,000,000) Equity shares of ` 10 each 2,000,000 1,000,000
40,00,000 (Previous year Nil ) Cumulative Redeemable Preference Shares of ` 100/– each
400,000 –
2,400,000 1,000,000 Issued, Subscribed and Paid up 1,35,594,428 (Previous year 72,994,082) Equity shares of ` 10 each
fully paid up 1,355,944 729,941
40,00,000 (Previous year Nil) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up
400,000 –
1,755,944 729,941 Of the above ;i) 17,402,203 (Previous year Nil) Equity share have been issued by way of conversion of warrants.ii) 45,198,143 (Previous year Nil) Equity share have been issued as fully paid bonus shares by capitalistion of
Securities Premium Account
SChEDULE 2: RESERVES AND SURPLUS
Capital Reserve Account Opening Balance – – Add : Warrant money forfeited during the year 1,012 – Closing Balance 1,012 – Securities Premium Account Opening Balance 987,818 987,818 Less : Utilised for issue of Bonus Shares during the year 451,981 – Less : Premium on redemption of preference shares. 37,370 Closing Balance 498,467 987,818 499,479 987,818
SChEDULE 3: LOANS
Secured loansTerm Loan From Banks (Note 1) 1,100,000 – From Others (Note 2) – 1,090,000 Unsecured loans Short Term Loan – From Banks – – From Others (Loan From Body corporate) (Note 3) – 66,000
1,100,000 1,156,000
Note 1: Term loan is secured by way of pledge of 3,38,98,607 (Previous year NIL) shares held by Promoters group in the company and first charge by way of hypothecation on the movable assets of the company. Amount due within next one year 1100000 thousand (Previous year ` NIL).Note 2: Term loan is secured by way of pledge of NIL shares (Previous year 271,18,886) shares held by promoter group in the company. Amount due within next one year ` NIL (Previous year ` NIL).Note 3: Amount due within next one year ` NIL (Previous year 66000 thousand)
SCHEDULES TO ACCOUNTS
16
Annual Report 2009-10
SChEDULE 4: FIXED ASSETS ` in ‘000’
GROSS BLOCK DEPRECIATION NET BLOCKParticulars As At
01.04.2009Additions Sale/
AdjustmentAs At
31.03.2010 Upto
01.04.2009 For The
YearSales/
TransferUpto
31.03.2010 As At
31.03.2010As At
31.03.2009Furniture & Fixtures 703 102 – 805 123 106 – 229 576 579 Computers 939 50 – 989 350 247 – 597 392 590 Other office equipments 586 305 – 891 90 112 – 202 689 496 Vehicles 3,268 – – 3,268 814 635 – 1,449 1,819 2,454 Electrical Equipments & Fittings
643 292 – 935 98 77 – 175 760 546
Project Equipment 5,251 431 – 5,682 611 696 – 1,307 4,375 4,639 Building (Explosive Magazine Stores)
359 – – 359 7 18 – 25 334 352
TOTAL TANGIBLE ASSETS
11,749 1,180 – 12,929 2,093 1,891 – 3,984 8,945 9,656
INTANGIBLE ASSETSSoftware 340 – – 340 76 106 – 182 158 264 TOTAL INTANGIBLE ASSETS
340 – – 340 76 106 – 182 158 264
Total (A) 12,089 1,180 – 13,269 2,169 1,997 – 4,166 9,103 9,920 Capital Work In Progress – – – – – – – – 44,686 104,069 Total (B) – – – – – – – – 44,686 104,069 Total (A+ B) 12,089 1,180 – 13,269 2,169 1,997 – 4,166 53,789 113,989Previous year 4,055 8,484 450 12,089 263 2,001 95 2,169 9,920 3,792
SChEDULE 5: PROjECT AND PRE-OPERATIVE EXPENSES (PENDING ALLOCATION)
As at 31.03.2010
As at 31.03.2009
Personnel ExpensesSalaries , wages and bonus 34,152 15,811 Contribution to provident and other funds 1,517 456 Workmen and staff welfare expenses 1,579 508
37,248 16,775 Administrative and other expensesRent 5,770 1,092 Rates & taxes 52 32 Insurance 304 200 Repairs and maintenance 85,734 404 Travelling expense 10,328 7,857 Conveyance 2,180 918 Vehicle running & hiring expenses 4,290 2,819 Communication expenses 790 411 Director remuneration 2,154 1,195 Audit Fees 341 166 Advertisement 622 566 Legal & professional charges 75,208 58,018 Fee & subscription 945 307 Stores consumption 1,283 1,032 Power and fuel 476 181 Testing & Surveys 3,600 3,234 Consultancy Charges 142,582 73,272 Project processing fee 11,600 11,600 Upfront Premium- NJC 243,080 – Miscellaneous expenses 37,372 30,012 Financial / bank charges 274,121 86,252 Wealth Tax 25 15 Depreciation 4,259 2,263
907,119 281,846 Less : Interest earned (Tax deducted at source ` 806/- thousand, (Previous year ` 4515/- thousand) (net of provision for income tax ` 8695 thousand. upto Previous year 6245 thousand).
(26,365) (20,926)
Less -: Profit on Sale of Fixed Assets (19) (19) 917,983 277,676
17
SChEDULE 6: INVESTMENTS (LONG TERM – NON TRADE)` in ‘000’
As at 31.03.2010
As at 31.03.2009
Unquoted – Fully Paid 75,238,123 (Previous Year 75,238,123) Equity Shares of ` 10/- each
of Malana Power Company Limited (Subsidiary company) [includes 50 equity shares (Previous Year 50) held jointly with nominees of the company] Refer Note No. 8 On Schedule
1,810,338 1,810,338
40,000 (Previous Year 40,000) Equity Shares of ` 100/- each of Green Venture Renewable India Pvt. Limited
10,000 10,000
1,80,200 (Previous Year 1,80,200) Equity Shares of ` 10/- of Indo Canadian Consultancy Services Limited (Subsidiary company) [includes 50 equity shares (Previous Year 50) held jointly with nominees of the company}
42,449 42,449
1,90,000 Equity Shares of NR. 100/- each fully paid up (Previous year 190,000 shares NR 100/- each fully paid up) of Green Venture Pvt. Ltd. Nepal (Overseas Subsidiary Company)
22,114 22,114
10,333 Equity Shares of NR. 100/- each fully paid up (Previous year Nil/-) of Balephi Jalvidyut Co. Ltd. Nepal (Overseas Associate Company)
646 –
50,000 Equity Shares of 10/- each fully paid up (Previous year Nil/-) of NJC Hydro Power Ltd (Subsidiary company) (Includes 6 equity shares (Previous year Nil) held jointly with nominees of the company
500 –
1,886,047 1,884,901
SChEDULE 7: CASh AND BANK BALANCES
Cash in hand 312 220 Balances with scheduled banks: In current accounts 8,178 30,827 Deposits with Bank 20,000 –
28,490 31,047
SChEDULE 8: OThER CURRENT ASSETS
Interest accrued on deposits and others 3,176 2,828 3,176 2,828
SChEDULE 9: LOANS AND ADVANCES
(Unsecured, considered good ) Advances recoverable in cash or in kind or for value to be received* 25,747 227,077 Loan to Subsidiary Companies (Interest free)** 252,630 252,630 Loan to Body Corporates 22,176 20,955 Security deposit with govt. departments & others 5,239 20,029 Share application money ( Pending for allotment ) 193,804 113,719
499,596 634,410
*Advance given to Malana Power Company Ltd. Maximium balance outstanding & year end balance ` 1,98,088/- thousand & ` Nil – respectively. (Previous year 5,01,860/- thousand & Rs.1,25,715/- thousand respectively) **Loan given to Malana Power Company Limited Maximum balance outstanding ` 2,52,630/- thousand (Previous Year Rs.2,52,630/–thousand)
18
Annual Report 2009-10
SChEDULE 10: LIABILITIES` in ‘000’
As at As at 31.03.2010 31.03.2009
Sundry Creditors * Payable to Micro and Small enterprises – – Payable to others 3,366 19,687 Deposits from employees and others 95 70 Other liabilities 5,503 45,902
8,964 65,659 * Includes amount payable to companies under the same management, maximum balance outstanding & year end balance ` 6604/- & ` 2314/-respectively. (Previous year ` 12071/- & Rs.6675/- respectively)
SChEDULE 11: PROVISIONS
Taxation including Fringe benefit tax (Net of Prepaid tax ) 866 1,872 Provision for Wealth Tax 8 15 Provision for Premium on redemption of preference shares 37,370 – Gratuity 291 149 Leave encashment 865 391
39,400 2,427
SChEDULE 12: MISCELLANEOUS EXPENDITURE (TO ThE EXTENT NOT wRITTEN OFF OR ADjUSTED)
Share issue expenses Balance as per last account 6,608 6,608 Addition during the year 8,015 – 14,623 6,608
19
SChEDULE – 13: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES
(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Financial statements are prepared on historical cost convention and on the accounting principles of going concern in accordance with Generally Accepted Accounting Principles (“GAAP), comprising of the mandatory Accounting Standards, Guidance Notes and other pronouncements issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. The accounts are prepared on accrual basis. The accounting policies applied by the Company are consistent with those used in the previous year.
(2) USE OF ESTIMATES
The preparation of financial statements requires estimates and assumptions that affect the reported amounts of income and expenses for the period, the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as on the date of financial statements. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.
(3) FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets, which take substantial period of time to get ready for its intended use, are also included to the extent they relate to the period till such assets are ready to be put to use.
The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is any indication of impairment based on internal/external factors.
(4) INTANGIBLE ASSETS
Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with principles given under AS-26- Intangible Assets. These are grouped and separately shown under the Schedule of Fixed Assets. These are amortized over their expected useful life, not exceeding ten years.
(5) VALUATION OF INVENTORIES
Inventories comprising of components, stores and spares are valued at lower of cost and net realizable value. Cost is determined on weighted average basis.
(6) INVESTMENTS
Current Investments are stated at lower of cost and fair value .Long term Investments are stated at cost and provision for diminution in their value, other than temporary, is made in the accounts.
(7) CASh AND CASh EQUIVALENTS
Cash and cash equivalents in the cash flow statement comprise cash at bank and cash / cheques in hand and short term deposits with banks less short term advances from banks.
(8) REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(9) DEPRECIATION
Depreciation is provided on written down value method at the rates and in the manner prescribed in Schedule – XIV to the Companies Act, 1956.
Depreciation on software is provided on written down value method at the rate of 40% per annum based on its estimated useful life.
(10) EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD
Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to construction/ implementation, interest on term loans / debentures to finance fixed assets and expenditure on start-up/ commissioning of assets forming part of a composite project are capitalized up to the date of commissioning of the project as the cost of respective assets. Income earned during construction period is deducted from the total of the indirect expenditure.
(11) MISCELLANEOUS EXPENDITURE TO ThE EXTENT NOT wRITTEN OFF OR ADjUSTED
Preliminary Expenses will be amortized / adjusted starting from the year in which the company commences its commercial operations.
20
Annual Report 2009-10
(12) TAXES ON INCOME
Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.
(13) RETIREMENT BENEFITS
Expenses and liabilities in respect of employee benefits are recorded in accordance with AS 15 – Employee Benefits (revised 2005) issued by the ICAI.
(a) Provident Fund
The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
(b) Gratuity
Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Profit & loss account in the year to which such gains or losses relate.
(c) Leave Encashment
Liability in respect of leave encashment becoming due or expected after the balance date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
(d) OtherShortTermBenefits
Expenses in respect of other short term benefits are recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
(14) PROVISIONS & CONTINGENT LIABILITIES
(a) Provisions are made when the present obligation as a result of a past event gives rise to a probable outflow, embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.
(b) Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote.
(c) Provisions and Contingent Liabilities / Assets are reviewed at each Balance Sheet date and adjusted to reflect the Current best estimates. However contingent assets are neither accounted for nor disclosed in Accounts.
(15) FOREIGN EXChANGE
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transactions. Any difference on subsequent realization is credited charged to revenue account.
(16) IMPAIRMENT OF ASSETS
Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the assets carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).
Previously recognized impairment losses relating to assets are reversed where the recoverable amount increases because of favourable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of assets impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.
21
NOTES TO ACCOUNTS
1. CONTINGENT LIABILITIES
(a) Contingent Liability on account of Projects awarded to the company and acceptance given against the same for which upfront premium is payable post acceptance and before signing of binding Memorandum of Allotment for two projects with the State of Arunachal Pradesh is ` 10.65 crores. (Previous Year Rs.10.65 crores)
(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. – Nepal, and remaining unpaid is Nepali ` 16,66,667/- (equivalent to INR 10,41,720/- aprox.). (Previous year Nepali ` 16,66,667/- (Equivalent to INR ` 10,41,720/-)
2. Estimated amount of contracts remaining to be executed on capital account as on the date of Balance Sheet (net of advances) are ` 11,35,032 in thousand (Previous Year ` 25,119 /- in thousand).
3. On May 26, 2009 Company has issued 4000000, 0.01% Cumulative Redeemable Preference Shares of ̀ 100/- each at par, redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month there after and in such event redemption premium to be paid as per terms of issue.
In the absence of any commercial operations, there is no profit & loss account. The coupon liability of 0.01% that amount to ` 39 thousand has not been provided in the books being in the nature of dividend.
4. In the year 2006-07, the Company had issued 1,94,25,715 share warrants of ` 10/- each convertible into equity shares of ` 10/- each at par. During the current financial year 1,74,02,203 share warrants have been converted in fully paid up Equity share of ` 10 each and balance warrants have been forfeited.
5. As the Company has not commenced commercial operations as on March 31, 2010 no Profit and Loss Account has been prepared. A Statement of Project and Pre-operative expenses (pending allocation) has been prepared as per Schedule 5 and expenses incurred during the year ended March 31, 2010 in relation to the construction of the project, have been included under the said Schedule, to be allocated appropriately to the relevant fixed assets at the time of commencement of commercial operations.
6. On the basis of the information so far made available to the Company by its creditors regarding registration under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (“Act”) there are no such parties as defined under the Act and, therefore, disclosures regarding delay in payment of outstanding amounts and interest payable thereon are not furnished
7. During the year, Company has given undertaking to Yes Bank limited for term loan facilities of ` 260,00,00/- in thousand availed by Malana Power Company Limited, one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.
8. During the year, Company has incorporated NJC Hydro Power Ltd. 100% wholly owned Subsidiary Company.
9. The Company currently holds 63.33% of the equity shares of the subsidiary Company Green Venture (P) Limited, Nepal. Pursuant to the Share Purchase and Joint Venture Agreement to be entered into between the Company and Triveni Energy Private Limited and Mrs. Nirjala Raut, the shareholding of the company in the subsidiary would reduce to 57%, for this, necessary Board Resolution has been passed on dated December 31, 2009.
10. The Company currently holds 33.33% of the equivalent shares of the subsidiary Company Balephi Jalvidyut Company Limited, Nepal. Pursuant to the Share Purchase and Joint Venture Agreement to be entered into between the Company and Triveni Hydro Power Private Limited, the shareholding of the company in the subsidiary would increase to 60%, for this, necessary Board Resolution has been passed on dated December 31, 2009.
11. EMPLOYEE BENEFITS AS PER AS-15
The Company has adopted Revised Accounting Standard-15 ‘Employee Benefit’ issued by the Institute of Chartered Accountants of India
DefinedContributionPlan (` In 000)
2009-10 2008-09
Employer’s Contribution to Provident fund 830 364
Employer’s Contribution to Superannuation fund Nil 230
22
Annual Report 2009-10
DefinedBenefitPlan
The employees gratuity fund is a defined benefit plan, the present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. Both are in the nature of long term benefits.
Reconciliation of amount recognized in Balance Sheet
PARTICULARS Gratuity31.03.2010
(` In 000)
Gratuity 31.03.2009
(` In 000)
Fair value of plan assets at the end of the period – –
Present value of obligations as at the end of the period 291 149
Net Assets/ ( Liability) recognized in the balance sheet ( 291) ( 149 )
PARTICULARS Leave Encashment
31.03.2010 (` In 000)
Leave Encashment 31.03.2009
(` In 000)
Fair value of plan assets at the end of the period – –
Present value of obligations as at the end of the period 865 391
Net Assets/ ( Liability) recognized in the balance sheet (865) (391)
Principal Actuarial Assumptions
a) Economic Assumptions
PARTICULARS Rate (%) 31.03.10
Rate (%) 31.03.09
a) Discount rate 8.10 7.00
b) Future salary increase 5.00 4.50
c) Expected Rate of return on plan Assets 0.00 0.00
b) Demographic Assumptions
PARTICULARS 31.03.10 31.03.09
a) Retirement Age 60 Years 60 Years
b) Mortality Table LIC(1994-96)DulyModified LIC ( 1994-96) Duly Modified
c) Withdrawls Rate Ages withdrawals Rate (%) Ages Withdrawals Rate (%)
Up to 30 Years 3.00% Up to 30 Years 3.00%
Up to 44 Years 2.00% Up to 44 Years 2.00%
Above 44 Years 1.00% Above 44 Years 1.00%
The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary and the entire amount of liability has been considered as expense for the year.
Disclosure in respect of previous three annual periods as required by Revised Accounting Standard- 15 ”Employee Benefits” is not presented as the management considers it impracticable in the absence of requisite information.
23
12. MANAGERIAL REMUNERATION
Details of remuneration & perquisites of Managerial Personnel:
Contribution to salary & other perquisites as expenses for the year Amount (` In 000) 2009-10
Amount (` In 000) 2008-09
Salary 394.02 333.00
Other perquisites 565.43 489.00
Since no Profit & Loss Account has been prepared & no commission is payable to managerial personnel, computation of profits under sec 349 of the Companies Act, 1956 is not applicable.
13. SEGMENTAL REPORTING
As the company’s business comprises of Power generation, there are no other business segments. Therefore the disclosure requirements of Accounting Standard AS-17 are not applicable.
14. Derivative instruments and un-hedged foreign currency exposures.
(a) There are no foreign currency exposures outstanding as at Balance Sheet date.
(b) Particulars of un-hedged foreign currency exposures as at Balance Sheet date are NIL.
15. There are no items of timing differences. Therefore calculation of deferred tax as required by Accounting Standard AS-22 is not applicable for this year.
16. RELATED PARTY DISCLOSURES
(a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries).
i) Malana Power Company Limited.-Subsidiary.
ii) Green Ventures Private Limited. –Subsidiary.
iii) AD Hydro Power Limited. –Subsidiary of a Subsidiary.
iv) Indo-Canadian Consultancy Services Limited. –Subsidiary.
v) NJC Hydro Power Ltd. – Subsidiary.
(b) Associates and Joint Venture Companies
– Balephi Jalvidhyut Company Limited
(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual.
NONE
(d) Key Management Personnel and their relatives
Mr. O.P. Ajmera
(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
NONE
24
Annual Report 2009-10
The following transactions were carried out with the related parties in the ordinary course of business:
(` in‘000)31.03.10 31.03.09
i) Parties referred to in item (a) aboveEquity Shares allotted during the year – –Services received 68,850 34,444OthersOutstanding payable 2,314 6,653Loans & Adv.-Amount receivable 252,630 378, 345Investment as at year end.Equity Shares in Malana Power Company Ltd. 18,10,338 18,10,338Equity Shares in Green Venture Pvt. Ltd.-Nepal 22,114 22,114Equity Share in Balephi Jal Vidyut Co. Ltd.-Nepal\ 646 –Equity Shares in Indo Canadian Consultancy Services Ltd. 42,449 42,449Equity Shares in NJC Hydro Power Ltd. 500 –Equity Shares in Green Venture Renewable India Pvt. Ltd. 10,000 10,000Share Application Money (Pending Allotment) Equity Share in Green Venture (P) Ltd- Nepal
149,239 93,718
ii) Parties referred to in item (b) aboveShare Application Money (Pending Allotment) for equity Shares in Balephi Jalvidyut Company Ltd. (Nepal)
44,565 20,000
iii) Persons referred to in (c) above NIL NILiv) Persons referred to in (d) above NIL NIL
Managerial Remuneration 959 822v) Parties referred to in (e) above NIL NIL
17. Transactions in Foreign Exchange
Sl. No.
Nature of Transaction Amount (` in 000’ ) 2009-2010
Amount (` in 000’ ) 2008-2009
1 Income Nil Nil
2 Expenditure (Foreign Travelling) Nil 636
3 Legal & Professional expenses reimbursement (Foreign) 125 Nil
4 Consultancy received from RSW International Inc. Canada 48,659 Nil
18. Disclosure of other items as required by Part–II of Schedule–VI to the Companies Act, 1956 is not applicable as there are no commercial operations
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
25
CASH FLOW STATEMENT AS AT MARCH 31, 2010
` in '000'
As at As at
31.03.2010 31.03.2009
A. Cashflowsfrominvestingactivities
Acquisition of Fixed Assets (473,236) (610,733)
Investments (1,146) (586,561)
Interest Received 7,889 20,407
Net cash used in investing activities (466,493) (1,176,888)
B. Cashflowsfromfinancingactivities
Proceeds from Issuance of Share Capital 565,321
Long Term Borrowings (net of repayments) (1,090,000) 1,090,000
Short Term Borrowings (net of repayments) 1,034,000 66,000
Increase in Miscellaneous Expenditure (8,015) -
Provision for Redemption of Preference Shares (37,370) -
Netcashfromfinancingactivities 463,936 1,156,000
Net increase / (decrease) in cash and cash equivalents( A+B) (2,557) (20,888)
Cash and cash equivalents at the beginning of the year 31,047 51,935
Cash and cash equivalents at the end of the year 28,490 31,047
Components of cash and cash equivalents
Cash on hand 312 220
With scheduled banks - on current accounts with bank deposits 28,178 30,827
28,490 31,047
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
26
Annual Report 2009-10
I. REGISTRATION DETAILS
Registration No. U31101DL2006PLC148862 State Code 5 5
Balance Sheet Date 3 1 0 3 2 0 1 0
Date Month Year
II. CAPITAL RAISED DURING ThE YEAR (Amount in ` Thousands)
Public Issue – Rights Issue –
Bonus Issue 4 5 1 9 8 1 Private Placement –
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in ` Thousands)
Total Liabilities 3 4 0 3 7 8 7 Total Assets 3 4 0 3 7 8 7
SOURCES OF FUNDS
Paid-up Capital 1 7 5 5 9 4 4 Reserves and Surplus 4 9 9 4 7 9
Share Application Money – Deferred Tax Liability –
Warrants – Secured Loans 1 1 0 0 0 0 0
Unsecured Loans –
APPLICATION OF FUNDS
Net Fixed Assets 9 7 1 7 7 2 Investments 1 8 8 6 0 4 7 (Incl. P.O.P. exps)
Net Current Assets 4 8 2 9 8 1 Misc. Expenditure 1 4 6 2 3
IV. PERFORMANCE OF COMPANY (Amount in ` Thousands)
Turnover – Total Expenditure –
Profit/Loss before Tax – Profit/Loss after tax –
Earning Per Share in ` – Dividend Rate % –
V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary terms)
Item Code No. (ITC Code) 9 8 0 1 0 0
Product Description H Y D R O E L E C T R I C E N E R G Y
BALANCE ShEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
27
NAME OF ThE SUBSIDIARY MALANA POwER COMPANY LTD.
1. Financial Period ended March 31, 2010
2. Holding Companies interest 51% in Equity share
3. Shares held by the holding Company in subsidiary 75,238,123 Equity Shares of Rs.10/- each fully paid.
4. The net aggregate of profits or Losses for the current year of the subsidiary concerns the members of the holding Company
a) Dealt with or provided for in the accounts Nil of the holding Company.
b) Not dealt with or provided for in the Rs. 5,04,497,610.00 accounts of the holding Company.
5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the Company's subsidiary concerns the members of the holding Company
a) Dealt with or provided for in the accounts Nil of the holding Company.
b) Not dealt with or provided for in the Rs. 110,48,61,960.00 accounts of the holding Company.
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
Place : Noida (UP)Dated : 3rd June, 2010
28
Annual Report 2009-10
NAME OF ThE SUBSIDIARY AD hYDRO POwER LIMITED (Subsidiary of M/s Malana Power Company Ltd.)
1. Financial Period ended March 31, 2010
2. Holding Company's interest 44.88% in equity shares
3. Shares held by the holding Company 25,14,07,376 equity shares of in the subsidiary through its subsidiary Rs 10/- each fully paid up M/s Malana Power Company Limited (Indirectly through its Subsidiary-M/s Malana Power Company Limited)
4. The net aggregate of profits or Losses for the current year of the subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the company's subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
Place : Noida (UP)Dated : 3rd June, 2010
29
NAME OF ThE SUBSIDIARY INDO CANADIAN CONSULTANCY SERVICES LTD.
1. Financial Period ended March 31, 2010
2. Holding Company's interest 51% in equity shares
3. Shares held by the holding Company in subsidiary 1,80,200 equity shares of Rs.10/- each fully paid up.
4. The net aggregate of profits or Losses for the current year of the subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the Rs.(44,21,834.00) accounts of the holding Company.
5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the company's subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the Rs.84,65,776.00 accounts of the holding Company.
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
Place : Noida (UP)Dated : 3rd June, 2010
30
Annual Report 2009-10
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES
NAME OF ThE SUBSIDIARY NjC hYDRO POwER LIMITED
1. Financial Period ended March 31, 2010
2. Holding Company's interest 100% in equity shares
3. Shares held by the holding Company 50,000 equity shares of Rs 10/- each fully paid up in the subsidiary
4. The net aggregate of profits or Losses for the current year of the subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the company's subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
Place : Noida (UP)Dated : 3rd June, 2010
31
NAME OF ThE SUBSIDIARY GREEN VENTURES PVT. LTD., NEPAL
1. Financial Period ended March 31, 2010
2. Holding Company's interest 63.33% in equity shares
3. Shares held by the holding Company in subsidiary 1,90,000 equity shares of Nepali Rs.100/- each fully paid up.
4. The net aggregate of profits or Losses for the current year of the subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the company's subsidiary concerns the members of the holding Company
a) Dealt with or provided for in Nil the accounts of the holding Company.
b) Not dealt with or provided for in the N.A. accounts of the holding Company.
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
Place : Noida (UP)Dated : 3rd June, 2010
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES
32
Annual Report 2009-10
AUDITORS’ REPORT
On Consolidated Financial Statements of Bhilwara Energy Limited and its Subsidiaries
The Board of Directors,
BHILWARA ENERGY LIMITED
We have audited the attached Consolidated Balance Sheet of BHILWARA ENERGY LIMITED, its subsidiaries (Collectively the Group) as at 31st March, 2010, the Consolidated Profit and Loss account and the Consolidated Cash Flow Statement (the Consolidated Financial Statements) for the year then ended. These consolidated financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with identified financial reporting framework and are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of subsidiaries, except one subsidiary NJC Hydro Power Limited, whose adjusted financial statements reflect total assets of Rs.27,198,610 thousand as at 31st March, 2010, total revenues of Rs.2,098,568 thousand and total cash flows of Rs.472,914 thousand for the year then ended. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors.
We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard AS-21, ‘Consolidated Financial Statements’ notified under the Companies (Accounting Standards) Rules,2006 and on the basis of the separate audited financial statements of the Group included in the Consolidated Financial Statements.
The auditors of one of the subsidiaries Malana Power Company Ltd. have mentioned in their audit report without qualifying the report that attention is invited to Note 13 of Schedule 20 of the financial statements of that subsidiary, regarding management’s assessment about obtaining the necessary clearances for execution of the Bara Bangal project (having capital work in progress of Rs. 663,073 thousand as at March 31, 2010) as well as obtaining extension of time limit for submission of Detailed Project Report (DPR). Accordingly, the management believes that no adjustments are required to the financial statements in this regard. The auditors have relied upon such management’s assessment and no adjustments have been made to the financial statements for the above matter.
Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, in our opinion and to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st, March 2010;
b) In the case of Consolidated Profit & Loss Account, of the consolidated results of operations of the Group for the year ended on that date; and
c) In the case of Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the year ended on that date.
For S. S. Kothari Mehta & Co.Chartered AccountantsFirm Regn.no.000756N
Arun K. TulsianPartnerMembership No.: 089907
Place : New DelhiDated : 3rd June, 2010
33
` in ‘000’Schedules As at
31.03.2010 As at
31.03.2009 SOURCES OF FUNDSShare Capital 1 1,755,944 729,941 Reserves and Surplus 2 3,090,041 3,081,027 Warrants – 9,713 Minority Interest 5,036,299 4,117,146 Loans 3 12,759,315 9,779,068 Deferred Tax Liability (net) 4 216,837 221,169 Total 22,858,436 17,938,064 APPLICATION OF FUNDSGross Block 5 4,308,734 4,138,181 Less: Depreciation 1,598,005 1,199,856 Net Block 2,710,728 2,938,325 Capital Work In Progress (Including Capital Advances) 12,751,201 10,778,227 Project & Pre-operative Expenses (Pending Allocation) 6 7,116,379 4,336,373
22,578,308 18,052,925 Investments 7 10,646 10,000 Current Assets, Loans & AdvancesSundry Debtors 8 97,108 70,094 Inventories 9 197,140 240,174 Cash and Bank Balances 10 610,176 139,346 Other Current Assets 11 31,132 30,341 Loans and Advances 12 454,714 557,198
1,390,269 1,037,153 Less: Current Liabilities and ProvisionsLiabilities 13 1,053,855 1,099,143 Provisions 14 101,594 89,497
1,155,448 1,188,640 Net Current Assets 234,821 (151,487)Miscellaneous Expenditure 15 34,660 26,626 (to the extent not written off or adjusted) Total 22,858,436 17,938,064 Notes to Accounts 21The Schedules referred to above form an integral part of the Balance Sheet.
CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2010
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
34
Annual Report 2009-10
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2010
` in ‘000’Schedules For the
Year Ended 31.03.2010
For the Year Ended 31.03.2009
INCOMETurnover 1,704,334 1,985,373 Less : Discount on Prompt Payments 31,997 37,232 Less : Handling Charges 7,326 –Less : Unscheduled Interchange Charges 13,391 20,946 Less : Inter Company Revenue – 220 Turnover (net) 1,651,620 1,926,975 Other Income 16 446,948 269,614 TOTAL 2,098,568 2,196,589 EXPENDITUREWheeling Cost 15,434 18,148 Personnel Expenses 17 105,021 112,335 Operating and Other Expenses 18 194,582 171,635 Less : Inter Company Revenue – 220 Depreciation 5 205,603 205,647 Financial Expenses 19 427,104 240,538 TOTAL 947,744 748,083 Profit Before Tax and Prior Period Items 1,150,824 1,448,506 Prior Period Income (Represents Surrender Value of Keyman Insurance Policy)
29,531 –
Profit Before Tax 1,180,355 1,448,506 Current Tax (Including Rs. 1,198 Thousand Pertaining to Earlier Years)
204,146 169,756
Deferred Tax Charge / (Credit) (4,332) 1,684 Total Tax Expense 199,814 171,440 Net Profit 980,541 1,277,066 Less: Minority Interest 480,465 625,762 Profit for the Year 500,076 651,304 Balance Brought Forward from Previous Year 674,252 20,115 Profit Available for Appropriation 1,174,328 671,419 APPROPRIATION:Transfer to/(from) Debenture Redemption Reserve (5,556) (5,555)Transfer to/(from) Minority Interest for Share of above 2,722 2,722 Total (2,834) (2,833)Balance Carried Forward 1,177,161 674,252 Earnings Per Share (in Rs.) 20 – Basic 3.97 8.92 – Diluted 3.97 7.05 The Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
35
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET
SCHEDULE 1: SHARE CAPITAL ` in ‘000
As at 31.03.2010
As at 31.03.2009
Authorised200,000,000 (Previous year 100,000,000) Equity shares of ` 10 each 2,000,000 1,000,000
40,00,000 (Previous year Nil ) Cumulative Redeemable Preference Shares of ` 100/– each
400,000 –
Issued, Subscribed and Paid up 1,35,594,428 (Previous year 72,994,082) Equity shares of ` 10 each
fully paid up 1,355,944 729,941
40,00,000 (Previous year Nil) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up
400,000 –
1,755,944 729,941 Of the above :a) 17,402,203 (Previous year Nil) Equity share have been issued by way of conversion of warrants.b) 45,198,143 (Previous year Nil) Equity share have been issued as Fully Paid Bonus Shares by capitalistion of
Securities Premium Account
SCHEDULE 2: RESERVES AND SURPLUS
Capital Reserve on Consolidation (net) 1,399,512 1,399,512 Capital Reserve:Opening Balance – Add: Warrant Money Forfeited During the Year 1,012 Closing Balance 1,012 Securities Premium Account:Opening Balance 987,818 987,818 Less: Utilised for Issue of Bonus Shares During the Year 451,981 Less: Provision for Premium on Redemption of Preference Shares 37,370 Closing Balance 498,467 987,818 Debenture Redemption Reserve Account:Opening Balance 19,445 25,000 Transferred (to)/from Profit and Loss Account (5,556) (5,555)Closing Balance 13,889 19,445 Consolidated Profit & Loss Account 1,177,161 674,252
3,090,041 3,081,027
SCHEDULE 3: LOANS
Secured loansRedeemable Non-Convertible Debentures of Rs.1,000 thousand each (Refer Note 1 Below)
55,555 77,778
Term Loans 12,703,760 8,351,957 Other Short Term Borrowings From Banks – 500,000 Other Short Term Borrowings From Others – 766,000
12,759,315 9,695,735 Unsecured LoansOther Short Term Borrowings From Banks – 83,333 Other Short Term Borrowings From Others –
– 83,333 12,759,315 9,779,068
36
Annual Report 2009-10
SCHEDULE 4: DEFERRED TAX LIABILITY (Net) ` in ‘000
As at 31.03.2010
As at 31.03.2009
Differences in Depreciation and Other Differences in Block of Fixed Assets as Per Tax Books and Financial Books
226,327 225,970
Income Taxable on Receipt 258 – Gross Deferred Tax Liabilities 226,585 225,970 Gross Deferred Tax Assets 9,748 4,801 Deferred Tax Liability (net) 216,837 221,169
Notes : 1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on land
situated at village Budasan (Gujarat) together with all estate rights etc., present & future, of the Company and further secured by irrevocable and unconditional guarantee extended by Infrastructure Leasing & Financial Services Ltd. (IL&FS). The aforesaid guarantee of IL&FS is secured by way of first charge on all immovable and movable properties, present and future, of the Company on pari-passu basis.150, 7.75% debentures of Rs.1,000 thousand each privately placed with General Insurance Corporation Ltd., New India Assurance Co. Ltd. and Punjab National Bank equally and 100, 7.865% debentures of Rs.1,000 thousand each privately placed with Bank of Baroda were redeemable at par in 36 equal quarterly instalments commencing from 31st December, 2003. However, the above debentures were subject to a call and put option exercisable by the debenture holders and the Company respectively in November, 2007. New India Assurance Co. Ltd (NIA) exercised the call option and 50 debentures of Rs 1,000 thousand each held by NIA were redeemed completely during the financial year 2007-08. Other debenture holders opted to hold the debentures and repayment is being made as per the schedule. Redemption of Rs 722 thousand (previous year Rs 611 thousand) on each debenture has been made till date.
2. Term loans from various banks/financial institutions are secured by way of first mortgage/charge on all the immovable properties wherever situated and hypothecation of all other assets, rights etc., present & future, of the Company on pari-passu basis. Further, the Malana Power Company has provided Corporate Guarantee and has also pledged its Shareholding in the Company for Term Loans taken by its Subsidiary AD Hydro Power Limited. Further in Case of Parent Company i.e Bhilwara Energy Limited, Term Loan is secured by way of pledge of 33,898,607 Equity Shares (Previous Year 21,935,900 Equity Shares) held by Promoter Group.
3. Short Term Loan were secured by subservient charge on moveable fixed assets of the Company.4. Debentures and loans and advances from banks aggregating to Rs. 2,187,467 thousand (Previous year
Rs. 1,598,221 thousand) are repayable within one year.
SCHEDULE 5: FIXED ASSETS ` in ‘000’
GROSS BLOCK DEPRECIATION NET BLOCKParticulars As At
31.03.2009Additions /
AdjustmentSale/
AdjustmentAs At
31.03.2010 Upto
31.03.2009 For The
YearSales/
TransferUpto
31.03.2010 As At
31.03.2010As At
31.03.2009Land - Freehold 35,225 16,439 – 51,664 – – – – 51,664 35,225 Civil Works 1,847,265 – – 1,847,265 504,896 120,357 – 625,253 1,222,012 1,342,369 Roads & Building 479,124 2,525 – 481,649 64,835 12,702 – 77,537 404,112 414,289 Plant & Machinery 958,063 21 – 958,084 325,868 58,486 – 384,354 573,730 632,195 Transmission Lines 199,670 – – 199,670 80,593 10,549 – 91,142 108,528 119,077 Electrical Equipment 27,283 5,244 – 32,527 4,580 1,695 – 6,275 26,252 22,704 Vehicles 51,077 2,335 7,885 45,528 19,453 6,188 1,884 23,756 21,771 31,624 Furniture & Fixtures 27,681 1,735 50 29,366 12,494 3,180 31 15,642 13,724 15,188 Other Equipments 21,326 1,801 1,444 21,684 9,995 2,402 1,132 11,266 10,418 11,331 Computers 21,544 124 – 21,668 14,987 2,644 – 17,631 4,037 6,557 Project Equipment 448,836 149,585 – 598,421 147,494 178,141 – 325,636 272,786 301,342 Software 21,086 121 – 21,208 14,662 4,852 – 19,513 1,694 6,425 Total 4,138,181 179,931 9,379 4,308,734 1,199,856 401,197 3,047 1,598,005 2,710,728 2,938,325 Capital Work In Progress 12,751,201 10,778,227 Total 4,138,181 179,931 9,379 4,308,734 1,199,856 401,197 3,047 1,598,005 15,461,929 13,716,552 Previous Year 3,693,805 445,738 1,362 4,138,181 958,016 242,354 514 1,199,856 14,304,066 11,323,498 Depreciation Transferred to Pre-Operative Expenditure Account
195,593
Previous Year 36,707
Notes : 1) Road & Building includes cost of road Rs.122,838 thousand (Previous year 122,838 thousand) constructed on forest land
diverted for the project under irrevocable right to use.2) Transmission Lines includes Rs.4,181 thousand (Previous year Rs. 4,181 thousand) towards cost of land and compensation
paid to Forest Department for construction of Transmission towers under irrevocable right to use.3) Includes Rs. 51,073 thousand (previous year Rs 27,748 thousand) towards consultancy and other expenses on project
allotted (Also refer Note 13 of Schedule 20).
37
SCHEDULE 6: PROJECT & PRE-OPERATIVE EXPENSES ` in ‘000
As at 31.03.2010
As at 31.03.2009
Personnel ExpensesSalaries, Wages and Bonus 541,805 385,075 Contribution to Provident, Gratuity and Other Funds 43,721 30,519 Workment and Staff Welfare Expenses 39,424 29,648 Total (A) 624,950 445,242 Administrative & Other ExpensesExpenditure on Forest Land (Refer Note No. 10 (c) of Schedule 19 B 269,538 271,848 Rent 64,999 280,242 Rates & Taxes 399 16,950 Insurance 139,050 96,165 Repair & Maintenance 124,770 33,155 Stores Consumption 192,797 127,981 Travelling Expenses 89,590 77,774 Conveyance 24,138 20,496 Vehicle Running & Hiring Expenses 149,065 114,641 Communication Expenses 22,219 16,802 Directors Remuneration 12,024 7,840 Audit Fees 7,119 4,526 Donations and Contributions (other than to Political Parties) 3,591 3,576 Advertisement 678 595 Legal & Professional Charges 207,895 162,116 Fee & Subscription 6,116 4,876 Power & Fuel 17,696 22,406 Testing and Surveys 39,636 35,926 Consultancy Charges 924,696 614,546 Project Processing Fee 254,683 11,601 Miscellaneous Expenses 766,884 330,304 Financial & Bank Charges 431,839 195,033 Fringe Benefit and Wealth Tax 16,692 15 Interest 2,457,308 1,351,309 Depreciation 384,079 188,487 Total (B) 6,607,501 3,989,210 Total (A+B) 7,232,451 4,434,452 Less: Interest Earned 88,359 79,296 Less: Profit on Sale of Fixed Assets 788 19 Less: Scrap Sale 26,925 18,764 Total 7,116,379 4,336,373
SCHEDULE 7: INVESTMENTS
Unquoted - Fully Paid40,000 (Previous Year 40,000) Equity Shares of Rs. 100/- each of Green Venture Renewable India Pvt. Ltd.
10,000 10,000
10,333 (Previous Year Nil) Equity Shares of Rs. 100/- each fully paid up of Balephi Jalbidyut Company Ltd. (Incorporated in Nepal)
646 –
10,646 10,000
SCHEDULE 8: SUNDRY DEBTORS (Unsecured, Considered Good)
Outstanding for a Period Exceeding Six Months 34,631 23,274 Other Debts 62,477 46,820
97,108 70,094
SCHEDULE 9: INVENTORIESStores and Spares (Including Material Lying With Third Parties Rs. 67,772 Thousand, Previous Year Rs. 116,181 Thousand)
197,140 240,174
197,140 240,174
38
Annual Report 2009-10
SCHEDULE 10: CASH & BANK BALANCES ` in ‘000
As at 31.03.2010
As at 31.03.2009
Cash in hand 3,366 3,287 Balances with Scheduled Banks: In Current Accounts 175,473 128,088 In Deposit Accounts 425,557 4,704 In Margin Money Account 5,779 3,267
610,176 139,346 Note: Fixed Deposit and Margin Money include Rs. 400 Thousand (Previous Year Rs. 1,254 Thousand) Pledged with Government departments and HPSEB.
SCHEDULE 11: OTHER CURRENT ASSETS
Interest Accrued on Deposits and Others 3,415 3,025 Surrender Value of Keyman Insurance Policy 767 –Advance Tax & TDS (Net of Provisions) 26,950 27,316
31,132 30,341
SCHEDULE 12: LOANS AND ADVANCES (Unsecured, considered good)
Loans to Employees 3,389 5,175 Loan to Body Corporates 22,176 20,955 Loan to Subsidiary Company (Long Term) (1) –Advances for Projects 289,136 –Security Deposit with Government Department & Others 11,668 26,192 Other Advances Recoverable in Cash or in Kind or For Value To Be Received
83,780 484,876
Share Application Money (Pending for Allotment) 44,565 20,000 454,714 557,198
SCHEDULE 13: CURRENT LIABILITIES
Sundry Creditors (a) Outstanding Dues of Micro & Small Enterprises * – –(b) Outstanding Dues of Creditors other than Micro & Small Enterprises 889,851 822,992 Deposits from Holding Company (Refer Note No. 10 of Schedule 20) – –Advance from Customers 5,327 2,432 Deposits from Contractors and Others 83,291 126,536 Interest Accrued But Not Due on Loan from Institutions 41,857 26,643 Other Liabilities 33,528 120,540
1,053,855 1,099,143
SCHEDULE 14: PROVISIONS
Provision for Tax ( Net of Advance Tax Rs 465,487 Thousand (Previous Year Rs. 280,234 Thousand))
7,335 40,543
Provision for Premium on Redemption of Preference Shares 37,370 –Provision for Gratuity 1,403 2,289 Provision for Long Term Compensated Absences 14,898 10,368 Provision for Continuity Linked Bonus 40,588 36,297
101,594 89,497
SCHEDULE 15: MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)
Share Issue ExpensesOpening Balance 26,626 26,626Add: Incurred During the Year 8,034 –Closing Balance 34,660 26,626
39
SCHEDuLES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOuNT
SCHEDULE 16: OTHER INCOME ` in ‘000
For the Year Ended 31.03.2010
For the Year Ended 31.03.2009
Interest from Subsidiary Company (Gross, Tax Deducted at Source Rs. 49,788 Thousand (Previous Year Rs. 14,647 Thousand ) (See Note)
359,288 199,923
Interest on Bank Deposits (Gross, Tax Deducted at Source Rs. 203 Thousand, (Previous Year Rs. 56 Thousand))
1,227 622
Interest on Income Tax Refund – 517 Foreign Exchange Fluctuation (net) 8,012 – Profit on Sale/Discard of Fixed Assets (net) – 270 Sale of Voluntary Emission Reductions 75,982 66,528 unspent Liabilities Written Back 1,200 – Surrender Value of Keyman Insurance Policy 767 – Miscellaneous Income 472 1,754
446,948 269,614 Note: Interest Paid by Subsidiary Company Transferred to Pre–Operative Expenses.
SCHEDULE 17: PERSONNEL EXPENSES
Salaries , Wages and Other Expenses 91,514 98,300 Contribution to Provident Fund, Gratuity & Other Funds 4,494 7,483 Long Term Compensated Absences 3,195 1,660 Workmen and Staff Welfare Expenses 5,818 4,892
105,021 112,335
SCHEDULE 18: OPERATING AND OTHER EXPENSES
Power and Fuel 5,982 7,282 Repairs and Maintenance – Plant & Machinery 51,920 27,722 – Civil Works 316 307 – Buildings 1,504 701 – Others 2,302 4,225 Rent 18,811 21,176 Rates and Taxes 3,344 7,046 Insurance 5,709 12,456 Traveling & Conveyance 9,914 10,371 Legal & Professional Expenses 6,054 –Director's Remuneration 38,547 9,503 Commission to Managing Director 12,457 14,643 Auditor's Remuneration :– Audit Fee 908 635 – Fees for International Reporting – 348 – Fees for Special Audit 303 – – Fees for Certification 276 239 – Out of Pocket Expenses 7 4 Loss on Fixed Assets Sold /Discarded (net) 223 – Foreign Exchange Fluctuation (net) – 17,043 Donations and Contributions (other than to Political Parties) 763 1,217 Expenses on Sale of Voluntary Emission Reductions (Including Commission)
15,453 9,978
Bad Debts 3 1,575 Miscellaneous Expenses 19,785 25,164
194,582 171,635
40
Annual Report 2009-10
SCHEDULE 19: FINANCIAL EXPENSES ` in ‘000
For the Year Ended 31.03.2010
For the Year Ended 31.03.2009
Interest– On Term Loans and Debentures 311,832 101,293 – To Banks 12,030 136,486 – To Others 198 1,000 Bank Charges Including Guarantee Commission and Processing Fees (Net of Upfront Fees / Commitment Charges Reimbursed by Subsidiary Company Rs 8,273 Thousand, (Previous Year Rs 7,750 thousand))
103,044 1,759
427,104 240,538
SCHEDULE 20: EARNING PER SHARE
Net Profit as Per Profit and Loss Account 500,076 651,304 Equity Shares at the Beginnning of the Year 72,994,082 72,994,082 Equity Shares at the End of the Year 135,594,428 72,994,082 Weighted Average Number of Equity Shares in Calculating Basic EPS 126,011,297 72,994,082 Potential Dilutive Shares – 19,425,715 Weighted Average Number of Equity Shares in Calculating Dilutive EPS 126,011,297 92,419,797 Basic Earnings Per Share (in Rupees) 3.97 8.92 Diluted Earnings Per Share (in Rupees) 3.97 7.05
41
Schedule – 21
SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation of Financial Statements1. Financial statements are prepared on historical cost convention and on the accounting principles of
going concern in accordance with Generally Accepted Accounting Principles (“GAAP), comprising of the mandatory Accounting Standards, Guidance Notes and other pronouncements issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. The accounts are prepared on accrual basis. The accounting policies applied by the Company are consistent with those used in the previous year.
Use of Estimates2. The preparation of financial statements in conformity with generally accepted accounting principles requires
managements to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
Fixed Assets3. Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors.
Investments4. Current Investments are stated at lower of cost and fair value .Long term Investments are stated at cost
and provision for diminution in their value, other than temporary, is made in the accounts.
Valuation of Inventories5. Inventories comprising of components and stores and spares are valued at lower of cost and net realizable
value. Cost is determined on weighted average basis.
Depreciation6. (i) Depreciation is provided on written down value method at the rates and in the manner prescribed in
Schedule – XIV to the Companies Act, 1956. (ii) Depreciation on software is provided on written down value method at the rate of 40% per annum
based on its estimated useful life. (iii) Depreciation on Project equipments (net of their expected realizable value at the completion of the
project) has been provided as per straight line method over the period upto the revised expected date of completion of the project i.e. March 31, 2010.
(iv) On the assets of generating unit and other Plant & Machinery, depreciation is provided on straight–line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV to the Companies Act, 1956.
Intangible Assets7. Capital Expenditure on purchase and development of identifiable non–monetary assets without physical
substance is recognized as Intangible Assets in accordance with principles given under AS–26 – Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets. These are amortized over their expected useful life.
8. Leases (Where the Company is the Lessee) Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased
item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight line basis over the lease term.
9. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured.
42
Annual Report 2009-10
Sale of Electricity Revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply
to HP state Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.
Consultancy Services Revenue comprises income received on account of consultancy fees received for the services rendered
on accrual basis, whereas tender fee is recognized on receipt basis. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate
applicable. Voluntary Emission Rights (VER) Revenue is recognised as and when the VER’s are sold and it is probable that the economic benefits will
flow to the Company.
10. Expenditure Incurred During Construction Period Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to
construction/ implementation, interest on term loans/ debentures to finance fixed assets and expenditure on start–up/ commissioning of assets forming part of a composite project are capitalized upto the date of commissioning of the project as the cost of respective assets. Income earned during construction period is deducted from the total of the indirect expenditure.
11. Miscellaneous Expenditure to the extent not written off or adjusted Preliminary / Share Issue Expenses will be amortized / adjusted in the manner to be decided by the Board
of Directors, starting from the year in which the Company commences its commercial operations.
12. Employee Benefits Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised Accounting
Standard 15 – Employee Benefits (revised 2005) issued by the ICAI.Provident Fund(a)
The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
(b) Gratuity Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability
recognized in the balance sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Profit & Loss Account in the year to which such gains or losses relate.
(c) Leave Encashment Liability in respect of leave encashment becoming due or expected after the balance date is estimated
on the basis of an actuarial valuation performed by an independent Actuary using the projected unit credit method.
(d) Superannuation Benefit The Company makes contribution to superannuation fund which is the post employment benefit in
the nature of a defined contribution plan & contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
(e) Other Short Term Benefits Expenses in respect of other short term benefits are recognized on the basis of the amount paid or
payable for the period during which services are rendered by the employee.
13. Taxes on IncomeProvisions for current taxes are made in accordance with the provisions of applicable tax statutes.(a) In Accordance with the Accounting standard AS–22 ‘Accounting for Taxes on Income’ issued by (b) the ICAI, Deferred tax Liability/Assets arising from timing differences between book and income
43
tax profits is accounted for at the current rate of tax to the extent these differences are expected to crystallize in later years. However, Deferred Tax assets are recognized only if there is a reasonable/virtual certainty of realization.
14. Foreign Currency Transactions Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of transactions. Any difference on subsequent realization is credited / charged to revenue account.
15. Provisions & Contingent Liabilities (a) Provisions are made when the present obligation as a result of a past event gives rise to a probable
outflow, embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.
(b) Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote.
(c) Provisions and Contingent Liabilities / Assets are reviewed at each Balance Sheet date and adjusted to reflect the Current best estimates. However contingent assets are neither accounted for nor disclosed in Accounts.
16. Impairment of Assets Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the assets carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).
Previously recognized impairment losses relating to assets are reversed where the recoverable amount increases because of favourable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of assets impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.
17. Earning Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
18. Cash & Cash Equivalents Cash and Cash equivalents in the cash flow statement comprise cash at bank and cash/cheques in hand
and short term reports with banks less short term advances from banks.
Notes to AccountsB.
1. Basis of Consolidation The Consolidated Financial Statements have been prepared by consolidating the financial statements of the
company with those of its subsidiaries as on 31st March 2010, in accordance with Accounting Standard 21 (AS 21) – Consolidated Financial Statements issued by The Institute of Chartered Accountant.
(a) The subsidiary companies considered in the consolidated financial statements are:Name of Subsidiary Country of
IncorporationProportion of Ownership As on 31st March 2010 (%)
Malana Power Company Limited INDIA 51.0%Indo Canadian Consultancy Services Limited INDIA 51.0%Green Ventures Private Limited NEPAL 63.3%AD Hydro Power Limited(A subsidiary of Malana Power Company Limited)
INDIA 44.9%
NJC Hydro Power Ltd. INDIA 100%
44
Annual Report 2009-10
The financial statements of parent Company and its subsidiaries have been consolidated on line by line basis by adding together book value of like items of assets, liabilities, incomes and expenses after eliminating intra group balances and the unrealized profit / losses on intra group transactions, and are presented to the extent possible, in the same manner as the Company’s independent financial statements.
(b) Figures pertaining to the subsidiary company have been reclassified wherever necessary to bring them in line with parent company’s financial statements.
(c) Investments other than in subsidiaries have been accounted in accordance with Accounting Standard 13 (AS 13) - Accounting for Investments.
2. CONTINGENT LIABILITIES Contingent liabilities not provided for:
(a) Contingent Liability on account of Projects awarded to the company and acceptance given against the same for which upfront premium is payable post acceptance and before signing of binding Memorandum of Allotment for two projects with the State of Arunachal Pradesh is Rs. 106,500 thousands (Previous Year Rs. 106,500 thousands).
(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. –Nepal, and remaining unpaid is Nepali Rs. 1,667 thousand (equivalent to INR 1,042 thousand). (Previous year INR 1,042 thousand)
(c) Guarantee given for loans availed by AD Hydro Power Limited, subsidiary company, amounting to Rs. 800,000 thousand (Previous year Rs. 450,000 thousand).
(d) Claims made against the Company not acknowledged as debts amounting to Rs.693,790 thousand (previous year 369,175 thousand)
(e) Bank Guarantees outstanding amounting to Rs. 6,094 thousand (previous year Rs. 5,594 thousand)
The Company has been advised that these cases are not probable to be decided against the Company and therefore no provision for the above is required.
3. Estimated amount of contracts remaining to be executed on capital account as on the date of Balance Sheet (net of advances) are Rs. 3,015,636 thousand (Previous Year Figure Rs. 1,389,680 thousand).
4. During the year, holding Company has given undertaking to Yes Bank limited for term loan facilities of Rs.2,600,000/–in thousand availed by Malana Power Company Limited one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.
5. On May 26, 2009 Company has issued 4,000,000,0.01% Cumulative Redeemable Preference Shares of Rs. 100/– each at par, redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month thereafter and in such event redemption premium to be paid as per terms of issue.
In absence of any commercial operations, there is no profit & loss account. The coupon liability of 0.01% that amount to Rs. 39 in thousand has not been provided in the books being in the nature of dividend.
6. In the year 2006-07, the Company had issued 19,425,715 share warrants of Rs 10/- each convertible into equity shares of Rs. 10/- each at par. During the current financial year 17,402,203 share warrants have been converted in fully paid up Equity share of Rs.10 each and balance warrants have been forfeited.
7. There are no unprovided present obligations requiring provision in accordance with the guiding principles as ennunciated in AS-29 as it is not probable that an outflow of resources embodying economic benefit will be required.
8. Prior Period Items Includes : Expenses 829 thousand (previous year 404 thousand) Income 1,832 thousand (previous year 3 thousand)
9. The subsidiary Company, Malana Power Company Limited, is eligible for tax holiday under Section 80-IA of the Income Tax Act, 1961. In view of unabsorbed depreciation in the initial years, the Company has not availed the tax holiday benefit up to accounting year 2006-07. However, based on its profitability, it has decided to avail the deduction from the accounting year 2007-08 and will continue to avail it till accounting year 2015-16. The Company is liable to pay Income-Tax for the year under the provisions of Section 115JB of the Income-Tax Act, 1961.
10. (a) Land includes Rs. 5,677 thousand paid to Deputy Commissioner, Kullu towards transfer of government’s agriculture land measuring 10.76 hectare for which the execution of lease deed is pending.
(b) Land includes Rs. 298,070 thousand paid for 12.51 hectares land, out of which mutation for execution of 9.75 hectares in favour of Company has been completed. Apart from notified land, 2.76 hectares land has been acquired directly from the villagers and the mutation is in progress.
45
(c) Rs. 778,180 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring 264.36 hectares represents amount paid towards loss of environment value, compulsory afforestation, cost of tree felling and Catchment Area Treatment Plan.
11. On account of various reasons beyond the control of the Company (like significant geological problems experienced in tunneling work and others), the project in ADHPL has undergone significant cost over–runs and the total estimated cost of the project has gone up from Rs. 8,956,000 thousand to Rs. 20,212,820 thousand. In view of the management, such increase in estimated project cost has not affected the going concern assumption of the Company. Further, based on financial projections (including the projected tariff), arrived at after considering the past experience of running similar power project and renewable source of fuel, the management believes that profits are expected to accrue once the project commences commercial operation and hence, no adjustment is required to the carrying amount of fixed assets on account of impairment.
12. In an earlier year, the Company had given an upfront premium of Rs. 612,000 thousand for 200 MW Bara Banghal HEP project in state of Himachal Pradesh. Further, the Company has incurred expenses in the nature of consultant fees and other expenses of Rs. 51,073 thousand in relation to this project. Thus, an amount of Rs. 663,073 thousand is appearing as capital work in progress in respect of this project as at March 31, 2010.
Approx. 21.46 hectares of land for the said project falls under the Dhauladhar WildLife Sanctuary, where no construction is permitted. The Company has filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project. Further, as per the terms of the Pre–Implementation Agreement signed with the State Government of Himachal Pradesh, the upfront premium of Rs 612,000 thousand will get forfeited if the Detailed Project report (‘DPR’) of the project is not submitted by October 31, 2010, for which the Company has filed an application with the authorities for the extension of time limit for the submission of said DPR. Pending the decision on application by the Supreme Court of India for grant of the clearance and by the State Government for extension of the time limit, the Board of Directors are confident that the Company will get the necessary approvals shortly and will be able to complete the project within specified time frame and no provision there against is required in these financial statements.
13. Interest from subsidiary company in Schedule 16 – Other Income and interest received from subsidiary company and Bank Charges in Schedule 18 – Financial Expenses represents due to Malana Power Company Limited (MPCL) from its subsidiary AD Hydro Power Limited (ADHPL) which has been added to Project and Preoperative Expenses in ADHPL. Similarly Interest received by Bhilwara Energy Limited (BEL) from its subsidiary MPCL has been reduced from Project and Preoperative Expenses in BEL. Consultancy charges received by (Indo Canadian Consultancy Services Limited) ICCSL from BEL, ADHPL and MPCL has been added to Project and Preoperative Expenses in respective Companies.
14. Derivative instruments and un–hedged foreign currency exposures. (a) There are no foreign currency exposure outstanding as at Balance Sheet date. (b) Particulars of un–hedged foreign currency exposures as at Balance Sheet date are as follows:
Particulars 2009–10 2008–09
Foreign Currency Loan Rs. 43,516,800 (USD 960,000 @ closing rate of 1USD= Rs. 45.33)
Rs. 66,790,400 (USD 1,280,000 @ closing rate of 1USD=Rs. 52.18)
Advance for equipment Rs. 2,846,356 (CHF 66,816 @ closing rate of 1CHF= Rs. 42.60
Rs. 8,495,410 (CHF 187,000 @ closing rate of 1CHF= Rs. 45.43
Creditor for Engineering Fees and Supervisory Manpower Support
Rs. 15,641,500 (CAD 350,000 @ closing rate of 1 CAD = Rs. 44.69)
Rs. 16,712,000 (CAD 400,000 @ closing rate of 1 CAD = Rs. 41.78)
Rs. 19,571,401 (USD 431,754 @ closing rate of 1 USD = Rs. 45.33)
Rs. 1,240,380 (EURO 18,000 @ closing rate of 1 EURO = Rs. 68.91)
15. RELATED PARTY DISCLOSURES(a) Enterprises that directly or indirectly through one or more intermediaries control or are controlled by
or under common control with the reporting enterprise. None
46
Annual Report 2009-10
(b) Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture.
SN Power Holding Singapore Pte. Ltd. RSW International Inc.(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that
gives them control or significant influence over the enterprise, and relatives of any such individual. None(d) Key Management Personnel and relatives of such personnel: Mr. Ravi Jhunjhunwala Mrs. Rita Jhunjhunwala Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala Mr. R.P. Goel Mr. O.P.Ajmera(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence. HEG Limited RSWM Limited SN Power Global Services Pte. Ltd. The following transactions were carried out with the related parties in the ordinary course of
business:
Particulars 2009–10(Rs’000)
2008–09(Rs’000)
With parties referred to in item (a) above Nil NilWith parties referred to in item (b) above
Allotment of Shares- – 40,942Security Premium on allotment of Shares- – 511,778Consultancy Charges Paid- 85,540 –Balance Payable- 277Balance Receivable- 2,595 14,668
With parties referred to in item (c) above Nil NilWith parties referred to in item (d) above –
Rent Paid- 3,775 3,480Remuneration Paid- 55,177 27,646Balance Payable- 12,457 14,643
With parties referred to in item (e) aboveRent Paid- 3,878 3,620unsecured loan taken and repaid- – 150,000Interest Expense- – 3,345Consultancy Services Rendered- 778 979Consultancy Services Received- 116,004 –Reimbursement of Expenses paid- 2,763 2,812Amount Receivable- – 157Amount Payable- 49,034 31,968
16. ‘EMPLOYEE BENEFITS’ AS PER AS–15 Defined Contribution Plan Contribution to Defined Plan, being in the nature of short term benefit, recognized as expense for the year
are as under: (Rs.’000)
Particulars For the year ended on
March 31, 2010
For the year ended on
March 31, 2009 (Rs.’000) (Rs.’000)
Employer’s contribution to Provident Fund 10,813 10,844Employer’s contribution to Superannuation Fund 2,849 3,296
47
Defined Benefit Plan The employees gratuity fund is a defined benefit plan, the present value of obligation is determined based
on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. Both are in the nature of long term benefits.
The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans:
Profit and Loss AccountNet employee benefits expense (recognised in Employee Cost):
Particulars For the year ended
on March 31, 2010 (Rs.’000)
For the year ended
on March 31, 2009 (Rs.’000)
Current Service Cost 2,473 2,504Interest cost on benefit obligation 965 658Expected return on plan assets (861) (349)Net actuarial (gain)/ loss recognised in the period (1,616) 501Net benefit expense 961 3,316Actual return on plan assets 102 29
Balance Sheet Details of Provision for Gratuity:
Particulars As at 31–Mar–10
(Rs.’000)
As at 31–Mar–09
(Rs.’000)Defined benefit obligation 13,621 13,091Fair value of plan assets 12,935 10,773Plan asset / (liability) (687) (2,020)
Changes in the present value of the defined benefit obligation are as follows:
Particulars As at 31–Mar–10
(Rs.’000)
As at 31–Mar–09
(Rs.’000)
Opening defined benefit obligation 13,092 9,402
Interest cost 965 658
Current service cost 2,473 2,504
Benefits paid (2,364) –
Actuarial (gains)/ losses on obligation (543) 526
Closing defined benefit obligation 13,622 13,091
Changes in the fair value of plan assets are as follows:
Particulars As at 31–Mar–10
(Rs.’000)
As at 31–Mar–09
(Rs.’000)
Opening fair value of plan assets 10,775 4,364
Expected return 861 349
Contributions by employer 2,592 6,037
Benefits paid (2,365) –
Actuarial gains / (losses) 1,072 24
Closing fair value of plan assets 12,936 10,774
The Defined benefit obligation amounting to Rs. 13,622 thousand is funded by assets amounting to Rs. 12,936 thousand and the Company expects to contribute Rs. 687 thousand during the year 2010–11.
48
Annual Report 2009-10
Principle Actuarial AssumptionsParticulars For the year ended
on March 31, 2010(Rs.’000)
%
For the year ended on March 31, 2009
(Rs.’000)%
Discount Rate 7.8 7.0Expected rate of return on assets 6.0 6.0Future Salary Increase 5.0 4.8Withdrawal rate 1 to 3 1 to 3
Leave Encashment Liability Profit & Loss Net employee benefits expense (recognised in Employee Cost):
Particulars Earned Leave 31.03.2010
(Rs.’000)
Earned Leave 31.03.2009
(Rs.’000)Current service cost 3,896 3,231Interest cost on benefit obligation 698 511Expected return on plan assets – –Net actuarial loss(gain) recognized in the year 2,257 (993)Net Expense recognized in the Profit & Loss A/c 6,851 2,749
Balance SheetParticulars Earned Leave
31.03.10(Rs.’000)
Earned Leave 31.03.09(Rs.’000)
Fair value of plan assets at the end of the period – –Present value of obligations as at the end of the period 13,602 9,549Funded Status (13,602) (9,549)Excess of actual over estimated – –Net Assets/ ( Liability) recognized in the balance sheet (13,602) (9,549)
Changes in the present value of the defined benefit obligation are as follows:
Particulars Earned Leave 31.03.10(Rs.’000)
Earned Leave 31.03.09 (Rs.’000)
Present value of obligations at the beginning of the period 9,549 7,298
Interest cost 698 511
Current service cost 3,896 3,231
Benefits paid (2,799) (498)
Actuarial (gain) / Loss on obligation 2,257 (993)
Present value of obligations at the end of the period 13,602 9,549
Changes in the fair value of the plan assets are as follows:
Particulars Earned Leave 31.03.10 (Rs.’000)
Earned Leave 31.03.09(Rs.’000)
Fair value of plan assets at the beginning of the period – –
Expected return on the plan assets – –
Contributions – –
Benefits paid – –
Actuarial gain / (loss) on plan assets – –
Fair value of plan assets as at the end of the period – –
49
Principal actuarial assumptionsPARTICULARS Rate (%) 31.03.10 Rate (%) 31.03.09a) Discount rate 7.8 7.00b) Future salary increase – –c) Expected Rate of return on plan Assets 5.0 4.5
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
Disclosure in respect of previous three annual period as required by Revised Accounting Standard–15 “Employee Benefits” is not presented as the management considers it impracticable in the absence of requisite information.
17. Auditor Remuneration
Particulars 2009–10 2008–09
Audit Fees 2,649 1,265
Other Services 1,343 1,517
Out of Pocket Expenses 170 100
18. Leases In case of assets taken on Operating Lease:
Particulars For the year ended
March 31, 2010
For the year ended
March 31, 2009
Lease payments for the year 41,137 90,580
19. Segment Reporting as required by Accounting Standard (AS–17) issued by the Institute of Chartered Accountants of India:–
(Rs. In ‘000)
Particulars 2009-10 2008-09
1 Segment Revenue
a) Power 1,566,725 1,795,438
b) Consultancy 84,895 131,757
Sub Total 1,651,620 1,927,195
Less : Inter-segment Revenue – 220
Net Segment Revenue 1,651,620 1,926,975
2 Segment Results (Profit(+) / Loss(-) before Tax and interest from each segment)
Profit before Tax
a) Power 1,194,484 1,440,416
b) Consultancy (14,129) 8,090
1,180,355 1,448,506
Provision for Taxation
– Current Tax & FBT 204,146 169,756
– Deferred Tax (4,332) 1,684
Profit after tax 980,541 1,277,066
3 Other Information
I Segment Assets
a) Power 23,891,294 18,994,123
b) Consultancy 122,590 132,581
Total Assets 24,013,884 19,126,704
50
Annual Report 2009-10
(Rs. In ‘000)
Particulars 2009-10 2008-09
II Segment Liabilities
a) Power 14,074,954 11,125,445
b) Consultancy 65,939 67,260
Total Liabilities 14,140,893 11,192,705
III Capital Expenditure
(Including Capital work in Progress)
a) Power 4,931,105 4,721,881
b) Consultancy 1,805 4,261
Total 4,932,911 4,726,142
IV Depreciation
a) Power 199,646 201,292
b) Consultancy 5,957 4,355
Total 205,603 205,647
V Non Cash expenditure other than depreciation
a) Power – –
b) Consultancy – –
Total – –
20. Previous year figures have been regrouped and rearranged wherever considered necessary to confirm to this year classification.
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907
Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
51
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010
` in ‘000’For the
Year Ended31.03.2010
For the Year Ended31.03.2009
CASH FLOW FROM OPERATING ACTIVITIESProfit Before Tax 1,180,355 1,448,506 Adjustments for:Depreciation 205,603 205,647 Interest Paid 427,104 240,538 Interest Received 360,515 201,062 (Profit) / Loss on Sale of Fixed Assets 223 (270)Cash Generated from Operations 1,452,770 1,693,359 Direct Taxes Paid 204,146 169,756 Operating Profit Before Working Capital Changes 1,248,624 1,523,603 Adjustments for Changes in Working Capital:Sundry Debtors (27,014) (13,357)Inventories 316 (470)Loans & Advances and Other Current Assets (60,322) 176,841 Liabilities and Provisions (364,022) (155,307)Net Cash from Operating Activities 797,580 1,531,310 CASH FLOW FROM INVESTING ACTIVITIESAcquisition of Fixed Assets (net) (4,195,647) (4,790,559)Investments (646) – Interest Received 360,515 201,062 Net Cash from Investing Activities (3,835,779) (4,589,497)CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issuance of Preference Shares 400,000 – Proceeds from Conversion of Warrants 165,321 – Long Term Borrowings 4,329,580 1,849,147 Short Term Borrowings (1,349,333) 849,333 Interest Paid (427,104) (240,538)Miscellaneous Expenditure (8,034) – Provision for Redemption of Preference Shares (37,370) – Minority Interest 435,966 583,685 Net Cash from Financing Activities 3,509,027 3,041,627 INCREASE IN CASH OR CASH EQUIVALENTS 470,829 (16,559)Cash and Cash Equivalents at the Beginning of the Year 139,346 155,905 Cash and Cash Equivalents at the Closing of the Year 610,176 139,346 Components of Cash and Cash EquivalentCash in hand 3,366 3,287 Balances with Scheduled Banks: In Current Accounts 175,473 128,088 In Deposit Accounts 425,557 4,704 In Margin Money Account 5,779 3,267 Total 610,176 139,346
As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N
Arun K. TulsianPartnerMembership No. 089907Place : New DelhiDated : 3rd June, 2010
For and on behalf of the Board of Directors
O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary
ATTACHMENT
OF
ANNUAL REPORTS
LIST OF ATTACHMENTS
Financial Statement of Subsidiaries for the year ended 31st March, 2010
1. Malana Power Company Limited
2. AD Hydro Power Limited
3. Indo Canadian Consultancy Services Limited
4. NJC Hydro Power Limited
5. Green Ventures Private Limited (Nepal)
FINANCIAL RESULTSOF
MALANA POWER COMPANY LIMITED
Dear Stakeholders,
2009-10 has been an year of rebound for the global economy from the
widespread crisis amidst ongoing policy support and improving financial
market conditions.
India's growth-inflation dynamics are in contrast to the overall global
scenario. The economy is recovering rapidly from the growth slowdown.
The growth is driven by robust performance of the manufacturing sector on
the back of government and consumer spending. IMF and other economic
agencies have been bullish on Indian economy. IMF has revised the growth
forecast of the Indian economy to 9.5% for 2010 from 8.8% projected
earlier, based on robust corporate profits and favourable financing
conditions, which are likely to fuel investments.
Sustenance of such high levels of economic growth and development is
dependent on adequate, cost-effective and quality infrastructure.
Accordingly the ongoing economic reforms in India have attached a high
priority to the better utilization of existing infrastructure and developments
in new infrastructures so that existing bottlenecks do not inhibit the overall
economic growth and export dynamism.
Message from the Chairman
Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of 8%
through 2031-32 and to meet the lifeline energy needs of all citizens ('POWER for All by 2012' : target of 1000 KwHr
(Units) of per capita consumption of electricity), the power sector needs to grow at 1.8 - 2 times the GDP rate of growth. At
>8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in 2016-17
and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which translates into
a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five years under
APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require investments of US $
250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy Mix and; urgent need to
develop the alternatives : both in the Fuel & Technology terms.
During the financial year the turnover of the MPCL stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs. 989.211
Millions and cash profits from business is Rs. 1,189.989 Millions.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India, Government
of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments and agencies,
investors, lenders, and bankers for the unending support. I would also take this opportunity to thank our employees and
business associates, who have been the pillar of strength for the Company.
With best wishes,
Ravi Jhunjhunwala
Chairman
Annual Report 2009-10
57
Dear Stakeholders,
2009-10 has been an year of rebound for the global economy from the
widespread crisis amidst ongoing policy support and improving financial
market conditions.
India's growth-inflation dynamics are in contrast to the overall global
scenario. The economy is recovering rapidly from the growth slowdown.
The growth is driven by robust performance of the manufacturing sector on
the back of government and consumer spending. IMF and other economic
agencies have been bullish on Indian economy. IMF has revised the growth
forecast of the Indian economy to 9.5% for 2010 from 8.8% projected
earlier, based on robust corporate profits and favourable financing
conditions, which are likely to fuel investments.
Sustenance of such high levels of economic growth and development is
dependent on adequate, cost-effective and quality infrastructure.
Accordingly the ongoing economic reforms in India have attached a high
priority to the better utilization of existing infrastructure and developments
in new infrastructures so that existing bottlenecks do not inhibit the overall
economic growth and export dynamism.
Message from the Chairman
Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of 8%
through 2031-32 and to meet the lifeline energy needs of all citizens ('POWER for All by 2012' : target of 1000 KwHr
(Units) of per capita consumption of electricity), the power sector needs to grow at 1.8 - 2 times the GDP rate of growth. At
>8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in 2016-17
and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which translates into
a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five years under
APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require investments of US $
250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy Mix and; urgent need to
develop the alternatives : both in the Fuel & Technology terms.
During the financial year the turnover of the MPCL stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs. 989.211
Millions and cash profits from business is Rs. 1,189.989 Millions.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India, Government
of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments and agencies,
investors, lenders, and bankers for the unending support. I would also take this opportunity to thank our employees and
business associates, who have been the pillar of strength for the Company.
With best wishes,
Ravi Jhunjhunwala
Chairman
Annual Report 2009-10
57
Annual Report 2009-10
TO THE MEMBERS
MALANA POWER COMPANY LIMITED
The Directors of the Company are pleased to present their Thirteenth Annual Report on the business and operations of the Company and
audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.
Director's Report
58
FINANCIAL PERFORMANCE (In Million)
TOTAL TURNOVER 1619.439 1853.616
Less : Discount on prompt payments/ Unscheduled interchanged charges 52.714 58.178
Net Sales 1566.725 1795.438
Other Income 446.551 133.899
Total Income 2013.275 1929.337
PROFIT BEFORE INTEREST, DEPRECIATION AND TAX 1792.473 1746.930
Interest 426.871 105.222
PROFIT BEFORE DEPRECIATION AND TAX 1365.602 1641.708
Depreciation 199.646 201.292
Profit before tax and prior period income 1165.956 1440.416
Prior Period Income (represents Surrender Value of Keyman Insurance Policy) 28.528 –
Profit before Tax 1194.484 –
Provision for Tax
– Current Tax 204.141 163.199
– MAT credit reverse – –
– Tax for earlier years – –
– Deferred Tax 1.133 1.299
– FBT/WT Tax – 1.150
NET PROFIT AFTER DEPRECIATION AND TAX (PADIT) 989.211 1274.768
Balance brought forward from previous year 2924.050 1643.727
AMOUNT AVAILABLE FOR APPROPRIATION 3913.260 2918.495
APPROPRIATION 5.556 5.555
Transfer to debenture redemption reserve adj. – –
for Employee Benefits provision (net of tax Rs. 141000)
Total 5.556 5.555
Surplus carried to Balance Sheet 3918.816 2924.050
Basic and diluted Earning Per Share (EPS), (In Rs.) 6.71 8.98
Your Company’s turnover for this financial year stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs 989.211 Millions and
cash profits from business is Rs. 1,189.989 Millions. The Company has sold 1,81,223 units of VER’s during the year, which has
earned Rs. 75.982 Millions.
Particulars For the Year ended For the Year ended
31.03.2010 31.03.2009
DIVIDEND
POWER BUSINESS
OPERATIONAL PERFORMANCE
POWER SALES
THE FUTURE OUTLOOK-INDIAN POWER SECTOR
Keeping in view the financial commitment of the Company, your directors do not propose any dividend for the financial year under
review.
During the period under review the plant availability touched 99.94% and as per the available hydrology data the generation stood at
305.790 Million Units. The operation data for the year is as given below:
(In Million Units)
1. Total Generation 339.825 360.050 305.790
2. Less: Auxiliary Transmission Loss 3.732 4.184 3.167
3. Less: Royalty/Wheeling to Govt. HPSEB 61.841 65.479 55.682
4. Less: Impact of Unschedule Interchange Energy 0.425 1.262 2.765
5. Total Units sold 273.827 289.125 244.176
During the year the company recorded a sale of 244.176 Million. The Company has been selling its generated power to PTC India Ltd.
on short term contract basis. The present contract with PTC is expiring on 30th June 2010. Your Directors are pleased to inform you that
the Company has already entered into power sale contract with PTC India Ltd. for another period of three months i.e. from July, 2010 to
September, 2010 for sale of power to Punjab.
Energy is an essential part of the overall development of the country.
S. No Particulars 2007-08 2008-09 2009-10
59
Annual Report 2009-10
TO THE MEMBERS
MALANA POWER COMPANY LIMITED
The Directors of the Company are pleased to present their Thirteenth Annual Report on the business and operations of the Company and
audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.
Director's Report
58
FINANCIAL PERFORMANCE (In Million)
TOTAL TURNOVER 1619.439 1853.616
Less : Discount on prompt payments/ Unscheduled interchanged charges 52.714 58.178
Net Sales 1566.725 1795.438
Other Income 446.551 133.899
Total Income 2013.275 1929.337
PROFIT BEFORE INTEREST, DEPRECIATION AND TAX 1792.473 1746.930
Interest 426.871 105.222
PROFIT BEFORE DEPRECIATION AND TAX 1365.602 1641.708
Depreciation 199.646 201.292
Profit before tax and prior period income 1165.956 1440.416
Prior Period Income (represents Surrender Value of Keyman Insurance Policy) 28.528 –
Profit before Tax 1194.484 –
Provision for Tax
– Current Tax 204.141 163.199
– MAT credit reverse – –
– Tax for earlier years – –
– Deferred Tax 1.133 1.299
– FBT/WT Tax – 1.150
NET PROFIT AFTER DEPRECIATION AND TAX (PADIT) 989.211 1274.768
Balance brought forward from previous year 2924.050 1643.727
AMOUNT AVAILABLE FOR APPROPRIATION 3913.260 2918.495
APPROPRIATION 5.556 5.555
Transfer to debenture redemption reserve adj. – –
for Employee Benefits provision (net of tax Rs. 141000)
Total 5.556 5.555
Surplus carried to Balance Sheet 3918.816 2924.050
Basic and diluted Earning Per Share (EPS), (In Rs.) 6.71 8.98
Your Company’s turnover for this financial year stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs 989.211 Millions and
cash profits from business is Rs. 1,189.989 Millions. The Company has sold 1,81,223 units of VER’s during the year, which has
earned Rs. 75.982 Millions.
Particulars For the Year ended For the Year ended
31.03.2010 31.03.2009
DIVIDEND
POWER BUSINESS
OPERATIONAL PERFORMANCE
POWER SALES
THE FUTURE OUTLOOK-INDIAN POWER SECTOR
Keeping in view the financial commitment of the Company, your directors do not propose any dividend for the financial year under
review.
During the period under review the plant availability touched 99.94% and as per the available hydrology data the generation stood at
305.790 Million Units. The operation data for the year is as given below:
(In Million Units)
1. Total Generation 339.825 360.050 305.790
2. Less: Auxiliary Transmission Loss 3.732 4.184 3.167
3. Less: Royalty/Wheeling to Govt. HPSEB 61.841 65.479 55.682
4. Less: Impact of Unschedule Interchange Energy 0.425 1.262 2.765
5. Total Units sold 273.827 289.125 244.176
During the year the company recorded a sale of 244.176 Million. The Company has been selling its generated power to PTC India Ltd.
on short term contract basis. The present contract with PTC is expiring on 30th June 2010. Your Directors are pleased to inform you that
the Company has already entered into power sale contract with PTC India Ltd. for another period of three months i.e. from July, 2010 to
September, 2010 for sale of power to Punjab.
Energy is an essential part of the overall development of the country.
S. No Particulars 2007-08 2008-09 2009-10
59
Annual Report 2009-10
India is one of the fastest growing economies of the world and has been recording high GDP growth over the last few years. Economists
predict that the Indian economy will continue to maintain the same tempo in future also, which will lead to further increase in demand for
electricity due to the fact that the growth in GDP and Power consumption are positively correlated, i.e., both move in the same direction.
India’s power generation capacity increased to 1,59,398 MW as on 31st March 2010 as compared to 1,47,965 MW as on
31st March 2009, an increase of 7.72%. The total energy available increased from 6,89,021 MUs ( 2008-09) to 7,46,493 MUs
(2009-10), an increase of 8.34%.
As per Planning Commission estimates, total electricity requirement in the country at eight per cent GDP growth is projected to cross
1,000 BU by 2011-12 and further rise to 2,118 BU by 2021-22. The Planning Commission has estimated that for an energy
requirement of 1,097 BU in 2011-12 (at eight per cent GDP growth), installed capacity has to be 2,20,000 MW. At the same GDP
growth rate, total installed capacity is required to be 306,000 MW and 425,000 MW in 2016-17 and 2021-22 respectively. Over
the last decade, India’s electricity generation has surged from 480.7 BU in 1999-00 to 771.17 BU in 2009-10. However, there still
exists a wide gap between demand for power and actual supply and this translates into huge opportunity for the power sector
companies to capitalize on.
Increase in power capacity and economic growth over the years have led to rise in per capita consumption of electricity in India from
566.7 KWh in 2002-03 to 704.2 KWh in 2007-08, growing at a CAGR of 3.69 per cent. However, India’s consumption is still one of
the lowest in the world with the global average being around 2,701 KWh.
With the Indian Economy growing at more than 7 to 8 percent annually, the demand for power has been outstripping supply. India
continues to experience acute shortages in energy supply (11.7%) and peak load capacity (13.3%). Both energy demand and peak
demand are expected to grow at between 7-8% up to 2017 and at 6-7% thereafter.
In order to cater to its growing requirement of electricity, India has to reduce its dependency on fossil fuels by looking at other
alternatives of energy which are both cost effective and cleaner in nature. Hydro Power, besides supplementing demand for electricity,
is also one of the better available choices for meeting peak demand. As of March 2009 the total installed capacity of Hydro Power in
India was about 37,000 MW. However, almost 70% of the exploitable hydro power capacity of 1,48,701 MW still remains to be
developed. As per Hydro Power Policy 2008, the Government of India plans to tap the unexploited capacity by end of 14th Five year
plan ( 2022-23 to 2026-27), which means that Hydro Power will see a surge in investment during the next 15 years.
Off late, the Government of India has taken many initiatives starting
from the enactment of Electricity Act 2003, introduction of Open
Access , setting up of Regulatory Commissions at the Centre and
States, unbundling of state electricity boards, modification of mega
power policy, formulation of Competitive Bidding Tariff, facilitation of
trading of surplus/merchant capacity and setting up of Power
Exchanges. All these initiatives have had positive results and attracted
more investment in the power sector.
The short term power market has been gradually consolidating its
position in the Indian power sector. The volume of traded power grew
by 37 per cent during 2009-10 as compared to the previous year.
According to Central Electricity Regulatory Commission (CERC)
estimates, the power exchanges and trading licensees transacted
short term power worth Rs.192.17 billion in 2009.
A notable recent development has been the emergence of industrial
consumers for power procurement through exchanges. During 2009,
over 20 industries procured a total of 154.4 million units (MUs)
through the power exchange (IEX).
For merchant plants, the tariffs are governed by supply and demand in
the market. The current demand-supply gap, which is expected to
continue for at least next 10 years , provides not only investment
opportunities in the power sector but will also boost the sale of power
in the spot market/ on short term contract basis.
The real asset of our company is human resource and thrust for better
utilization of Human resource and improvement in work practice
continued during the year. Training and development at all levels of
employees was given due priority by the company to increase
effectiveness. Special emphasis was given to organization building
and shaping right attitudes, team building and work culture, besides
preparing employees to understand the trends in fast changing
technology and switching over to latest technology for achieving
higher results. During the year from time to time employees of the
company were deputed to various training programmes to further
develop their skill in various areas of operations of the company.
The company is also committed to provide a zero injury workplace to
its employees and workers all across its units. Employees are
adequately covered under various insurance policies against risk of
health and life disasters. The company continues to empower its
employees to achieve business successes.
The Company has proper and adequate systems of internal control to
ensure protection of assets, proper financial and operating functions
and compliance with the policies, procedures, applicable Acts and
Rules. The company’s internal controls are supplemented by
internal/management audits covering all financial and operating
functions. The Audit committee at their meetings regularly review the
financial, operating, internal audit and compliance reports to improve
performance.
HUMAN RESOURCE DEVELOPMENT
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
INTERNAL CONTROL SYSTEMS
60 61
Annual Report 2009-10
India is one of the fastest growing economies of the world and has been recording high GDP growth over the last few years. Economists
predict that the Indian economy will continue to maintain the same tempo in future also, which will lead to further increase in demand for
electricity due to the fact that the growth in GDP and Power consumption are positively correlated, i.e., both move in the same direction.
India’s power generation capacity increased to 1,59,398 MW as on 31st March 2010 as compared to 1,47,965 MW as on
31st March 2009, an increase of 7.72%. The total energy available increased from 6,89,021 MUs ( 2008-09) to 7,46,493 MUs
(2009-10), an increase of 8.34%.
As per Planning Commission estimates, total electricity requirement in the country at eight per cent GDP growth is projected to cross
1,000 BU by 2011-12 and further rise to 2,118 BU by 2021-22. The Planning Commission has estimated that for an energy
requirement of 1,097 BU in 2011-12 (at eight per cent GDP growth), installed capacity has to be 2,20,000 MW. At the same GDP
growth rate, total installed capacity is required to be 306,000 MW and 425,000 MW in 2016-17 and 2021-22 respectively. Over
the last decade, India’s electricity generation has surged from 480.7 BU in 1999-00 to 771.17 BU in 2009-10. However, there still
exists a wide gap between demand for power and actual supply and this translates into huge opportunity for the power sector
companies to capitalize on.
Increase in power capacity and economic growth over the years have led to rise in per capita consumption of electricity in India from
566.7 KWh in 2002-03 to 704.2 KWh in 2007-08, growing at a CAGR of 3.69 per cent. However, India’s consumption is still one of
the lowest in the world with the global average being around 2,701 KWh.
With the Indian Economy growing at more than 7 to 8 percent annually, the demand for power has been outstripping supply. India
continues to experience acute shortages in energy supply (11.7%) and peak load capacity (13.3%). Both energy demand and peak
demand are expected to grow at between 7-8% up to 2017 and at 6-7% thereafter.
In order to cater to its growing requirement of electricity, India has to reduce its dependency on fossil fuels by looking at other
alternatives of energy which are both cost effective and cleaner in nature. Hydro Power, besides supplementing demand for electricity,
is also one of the better available choices for meeting peak demand. As of March 2009 the total installed capacity of Hydro Power in
India was about 37,000 MW. However, almost 70% of the exploitable hydro power capacity of 1,48,701 MW still remains to be
developed. As per Hydro Power Policy 2008, the Government of India plans to tap the unexploited capacity by end of 14th Five year
plan ( 2022-23 to 2026-27), which means that Hydro Power will see a surge in investment during the next 15 years.
Off late, the Government of India has taken many initiatives starting
from the enactment of Electricity Act 2003, introduction of Open
Access , setting up of Regulatory Commissions at the Centre and
States, unbundling of state electricity boards, modification of mega
power policy, formulation of Competitive Bidding Tariff, facilitation of
trading of surplus/merchant capacity and setting up of Power
Exchanges. All these initiatives have had positive results and attracted
more investment in the power sector.
The short term power market has been gradually consolidating its
position in the Indian power sector. The volume of traded power grew
by 37 per cent during 2009-10 as compared to the previous year.
According to Central Electricity Regulatory Commission (CERC)
estimates, the power exchanges and trading licensees transacted
short term power worth Rs.192.17 billion in 2009.
A notable recent development has been the emergence of industrial
consumers for power procurement through exchanges. During 2009,
over 20 industries procured a total of 154.4 million units (MUs)
through the power exchange (IEX).
For merchant plants, the tariffs are governed by supply and demand in
the market. The current demand-supply gap, which is expected to
continue for at least next 10 years , provides not only investment
opportunities in the power sector but will also boost the sale of power
in the spot market/ on short term contract basis.
The real asset of our company is human resource and thrust for better
utilization of Human resource and improvement in work practice
continued during the year. Training and development at all levels of
employees was given due priority by the company to increase
effectiveness. Special emphasis was given to organization building
and shaping right attitudes, team building and work culture, besides
preparing employees to understand the trends in fast changing
technology and switching over to latest technology for achieving
higher results. During the year from time to time employees of the
company were deputed to various training programmes to further
develop their skill in various areas of operations of the company.
The company is also committed to provide a zero injury workplace to
its employees and workers all across its units. Employees are
adequately covered under various insurance policies against risk of
health and life disasters. The company continues to empower its
employees to achieve business successes.
The Company has proper and adequate systems of internal control to
ensure protection of assets, proper financial and operating functions
and compliance with the policies, procedures, applicable Acts and
Rules. The company’s internal controls are supplemented by
internal/management audits covering all financial and operating
functions. The Audit committee at their meetings regularly review the
financial, operating, internal audit and compliance reports to improve
performance.
HUMAN RESOURCE DEVELOPMENT
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
INTERNAL CONTROL SYSTEMS
60 61
Annual Report 2009-10
INTERNAL AUDIT
ENVIRONMENT RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
Internal Audit at MPCL is an independent, objective and assurance function conscientious for evaluating and improving the
effectiveness of risk management, Control, and governance processes. The function prepares annual audit plans based on risk
management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation.
Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the audit
committee and senior management. Quarterly Internal audit reports are submitted along with the management’s response to the Audit
Committee. The Audit Committee monitors performance of Internal Audit on a periodic basis through review of the internal audit plans,
audit findings & swiftness of issue resolution through follow ups.
The company has planted 650 nos. of deodar saplings along the river bank and also planted 220 nos. of fruit trees viz Apple 150, Kiwi
30, Japani Fruit 25, Cherry 10, Walnut–5 at Doonkhra Housing Complex and Malana Township area. The Company has also
distributed 200 saplings of fruit trees among 20 villagers of village–Chowki. The disposal of hazardous waste is being done as per
approved standard/Norms of Pollution Control Board.
The Company has also contributed towards preparation and fixation of environmental awareness boards from Nehru Kund to Rohtang
Pass as per the request of Pollution Control Board – Badah, Kullu.
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers,
business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance
overall performance. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes account
of guidelines and statements issued by stakeholder representatives and other regulatory bodies. The Company continues to support
local initiatives to improve infrastructure to support other corporate social responsibility initiatives.
We are committed to providing a working environment, which is both safe and fit for the intended purpose and ensures that health and
safety issues are a priority for all business operation
As a constructive partner in the communities in which it operates,
company has been taking concrete action to realize its social
responsibility and has spent on the infrastructure development
including construction, widening of roads and strengthening and
construction of bridges.
Your Company assessed and prioritized the needs of the local
community and took initiatives like renovation of temples, organizing
of local fair/festival, vocational training programme in tailoring,
repair of foot Bridge on river parvati connecting Katgla Village. To
make our efforts sustainable, we had been providing teachers to the
local Govt. school and are also providing free medicines.
Particulars required by the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given in the prescribed
format as Annexure-I to the Directors’ Report.
Information in accordance with the provisions of Section 217(2A) of
the Companies Act, 1956 (the Act), read with the Companies
(Particulars of Employees) Rules, 1975, as amended, regarding
employees is given in Annexure-II to the Directors’ Report.
As required under Section 217 (2AA) of the Companies (Amendment)
Act, 2000, the Directors’ of your Company states hereunder:-
i) That in the preparation of the annual accounts, the applicable
Accounting Standards had been followed along with proper
explanation relating to material departures;
ii) that the accounting policies have been selected and applied
consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year and
of the profit or loss of the Company for the financial year
2009-2010.
iii) that the proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with
the provisions of this Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
iv) That the annual accounts have been prepared on going concern
basis.
In accordance with the provisions of the Companies Act, 1956 and of
the Articles of Association of the Company, Mr. Bidyut Shome and
Ms. Rohini Roshanara Sood, Directors of the Company, are liable to
retire by rotation at the forthcoming Annual General Meeting and
being eligible, offer themselves for re-appointment. The Board
recommends their re-appointment at the ensuing Annual General
Meeting. The aforesaid reappointment/appointments are subject to
the approval of the members and the necessary resolutions have been
incorporated in the notice of the Annual General Meeting.
DISCLOSURE OF PARTICULARS
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
DIRECTORS
62 63
Annual Report 2009-10
INTERNAL AUDIT
ENVIRONMENT RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
Internal Audit at MPCL is an independent, objective and assurance function conscientious for evaluating and improving the
effectiveness of risk management, Control, and governance processes. The function prepares annual audit plans based on risk
management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation.
Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the audit
committee and senior management. Quarterly Internal audit reports are submitted along with the management’s response to the Audit
Committee. The Audit Committee monitors performance of Internal Audit on a periodic basis through review of the internal audit plans,
audit findings & swiftness of issue resolution through follow ups.
The company has planted 650 nos. of deodar saplings along the river bank and also planted 220 nos. of fruit trees viz Apple 150, Kiwi
30, Japani Fruit 25, Cherry 10, Walnut–5 at Doonkhra Housing Complex and Malana Township area. The Company has also
distributed 200 saplings of fruit trees among 20 villagers of village–Chowki. The disposal of hazardous waste is being done as per
approved standard/Norms of Pollution Control Board.
The Company has also contributed towards preparation and fixation of environmental awareness boards from Nehru Kund to Rohtang
Pass as per the request of Pollution Control Board – Badah, Kullu.
The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers,
business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance
overall performance. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes account
of guidelines and statements issued by stakeholder representatives and other regulatory bodies. The Company continues to support
local initiatives to improve infrastructure to support other corporate social responsibility initiatives.
We are committed to providing a working environment, which is both safe and fit for the intended purpose and ensures that health and
safety issues are a priority for all business operation
As a constructive partner in the communities in which it operates,
company has been taking concrete action to realize its social
responsibility and has spent on the infrastructure development
including construction, widening of roads and strengthening and
construction of bridges.
Your Company assessed and prioritized the needs of the local
community and took initiatives like renovation of temples, organizing
of local fair/festival, vocational training programme in tailoring,
repair of foot Bridge on river parvati connecting Katgla Village. To
make our efforts sustainable, we had been providing teachers to the
local Govt. school and are also providing free medicines.
Particulars required by the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given in the prescribed
format as Annexure-I to the Directors’ Report.
Information in accordance with the provisions of Section 217(2A) of
the Companies Act, 1956 (the Act), read with the Companies
(Particulars of Employees) Rules, 1975, as amended, regarding
employees is given in Annexure-II to the Directors’ Report.
As required under Section 217 (2AA) of the Companies (Amendment)
Act, 2000, the Directors’ of your Company states hereunder:-
i) That in the preparation of the annual accounts, the applicable
Accounting Standards had been followed along with proper
explanation relating to material departures;
ii) that the accounting policies have been selected and applied
consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year and
of the profit or loss of the Company for the financial year
2009-2010.
iii) that the proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with
the provisions of this Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
iv) That the annual accounts have been prepared on going concern
basis.
In accordance with the provisions of the Companies Act, 1956 and of
the Articles of Association of the Company, Mr. Bidyut Shome and
Ms. Rohini Roshanara Sood, Directors of the Company, are liable to
retire by rotation at the forthcoming Annual General Meeting and
being eligible, offer themselves for re-appointment. The Board
recommends their re-appointment at the ensuing Annual General
Meeting. The aforesaid reappointment/appointments are subject to
the approval of the members and the necessary resolutions have been
incorporated in the notice of the Annual General Meeting.
DISCLOSURE OF PARTICULARS
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
DIRECTORS
62 63
Annual Report 2009-10
AUDIT COMMITTEE
SUBSIDIARY COMPANY
AUDIT REVIEW
REDEMPTION OF DEBENTURES
FOREIGN EXCHANGE EARNINGS AND OUTGO
PUBLIC DEPOSITS
During the year the committee met three times to review company’s financial results, internal control systems, risk management policies
and internal audit reports. The audit committee of the Company comprises of three members. The proceedings of the committee were in
accordance with the provisions of the Companies Act, 1956.
The AD Hydro Power Ltd, a subsidiary company is in the process of developing 192 MW hydro electric project in the state of Himachal
Pradesh. The Company had started the construction of the project in early 2005 and the project is likely to be operational by July, 2010.
The Annual Report for the year 2009- 10 and Accounts for the year ended on March, 10 as required under Section 212 of the
Companies Act, 1956 of the said subsidiary Company is attached.
Statutory Auditors’ Report to the members and comments of the Board of Directors thereon annexed hereto and form part of this report
as required under Section 217(3) of the Companies Act, 1956.
During the financial year 2009-2010, amounting to Rs. 22.2 Millions have been redeemed.
During the year under review, the inflow of foreign exchange was 75.982 Million and outflow of foreign exchange was Rs. 20.070
million.
The company has not accepted any deposits from the public during the year under report. Information required to be disclosed under
Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors)
Rules, 1988 has been given in Part (B) of the Annexure forming part of this Report.
CORPORATE GOVERNANCE
AUDITORS
AUDITORS’ REMARKS
ACKNOWLEDGMENT
The Company’s philosophy on Corporate Governance envisages the
attainment of the highest levels of transparency, accountability and
equity, in all facets of its operations, and all its interactions with the
stakeholders including shareholders, employees, customers,
government, suppliers and lenders and to build the confidence of the
society in general. The Company believes in adopting the philosophy
of professionalism, transparency and accountability in all areas and is
committed to pursue growth by adhering to the highest national and
international standards of Corporate Governance.
The majority of the board comprises of Non-Executive Directors who
play a critical role in imparting balance to the Board processes by
bringing an Independent judgment to bear on issues of strategy,
performance, resources, standards of Company conduct, etc. The
audit committee of the board meets regularly and provides assurance
to the Board on the adequacy of internal control systems and financial
systems. The Corporate governance policy followed by the Company
represents the value framework, the ethical framework and the moral
framework under which business decisions are taken.
M/s S. R. Batliboi & Co., Chartered Accountants, has conveyed their
willingness for re appointment as statutory auditors of the Company
for the financial year ending on 31st March, 2010. The Company has
also received consent letter from S.R. Batliboi & Co., Chartered
Accountants, under section 224(1B) of the Companies Act, 1956
being eligible showing willingness for their appointment as statutory
auditors of the Company for the financial year ending on 31st March,
2011. The Board recommends for the appointment of M/s S.R.
Batliboi & Co., Chartered Accountants, as Statutory Auditors of the
Company.
The observations made by the Auditors with reference to the Notes to
the Accounts for the year under report are self-explanatory and require
no further comments from the Board.
The Directors wish to place on record their deep appreciation for
continued guidance and support received from the Ministry of Power,
Government of Himachal Pradesh, Himachal Pradesh State Electricity
Board, Punjab State Electricity Board, Power Trading Corporation
Limited, Commercial Banks, Financial Institutions and other
Governmental Departments. The Board would also like to express
great appreciation for the commitment and contribution of its
employees at all levels achievement and looks forward to their
continued support and cooperation in the coming years as well.
Last but not least, the Company thanks its shareholders for the trust
reposed in the Management and their unstinted support.
For and on behalf of the Board of Directors
Place: Noida Ravi Jhunjhunwala
Date: 2nd June, 2010 Chairman and Managing Director
64 65
Annual Report 2009-10
AUDIT COMMITTEE
SUBSIDIARY COMPANY
AUDIT REVIEW
REDEMPTION OF DEBENTURES
FOREIGN EXCHANGE EARNINGS AND OUTGO
PUBLIC DEPOSITS
During the year the committee met three times to review company’s financial results, internal control systems, risk management policies
and internal audit reports. The audit committee of the Company comprises of three members. The proceedings of the committee were in
accordance with the provisions of the Companies Act, 1956.
The AD Hydro Power Ltd, a subsidiary company is in the process of developing 192 MW hydro electric project in the state of Himachal
Pradesh. The Company had started the construction of the project in early 2005 and the project is likely to be operational by July, 2010.
The Annual Report for the year 2009- 10 and Accounts for the year ended on March, 10 as required under Section 212 of the
Companies Act, 1956 of the said subsidiary Company is attached.
Statutory Auditors’ Report to the members and comments of the Board of Directors thereon annexed hereto and form part of this report
as required under Section 217(3) of the Companies Act, 1956.
During the financial year 2009-2010, amounting to Rs. 22.2 Millions have been redeemed.
During the year under review, the inflow of foreign exchange was 75.982 Million and outflow of foreign exchange was Rs. 20.070
million.
The company has not accepted any deposits from the public during the year under report. Information required to be disclosed under
Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors)
Rules, 1988 has been given in Part (B) of the Annexure forming part of this Report.
CORPORATE GOVERNANCE
AUDITORS
AUDITORS’ REMARKS
ACKNOWLEDGMENT
The Company’s philosophy on Corporate Governance envisages the
attainment of the highest levels of transparency, accountability and
equity, in all facets of its operations, and all its interactions with the
stakeholders including shareholders, employees, customers,
government, suppliers and lenders and to build the confidence of the
society in general. The Company believes in adopting the philosophy
of professionalism, transparency and accountability in all areas and is
committed to pursue growth by adhering to the highest national and
international standards of Corporate Governance.
The majority of the board comprises of Non-Executive Directors who
play a critical role in imparting balance to the Board processes by
bringing an Independent judgment to bear on issues of strategy,
performance, resources, standards of Company conduct, etc. The
audit committee of the board meets regularly and provides assurance
to the Board on the adequacy of internal control systems and financial
systems. The Corporate governance policy followed by the Company
represents the value framework, the ethical framework and the moral
framework under which business decisions are taken.
M/s S. R. Batliboi & Co., Chartered Accountants, has conveyed their
willingness for re appointment as statutory auditors of the Company
for the financial year ending on 31st March, 2010. The Company has
also received consent letter from S.R. Batliboi & Co., Chartered
Accountants, under section 224(1B) of the Companies Act, 1956
being eligible showing willingness for their appointment as statutory
auditors of the Company for the financial year ending on 31st March,
2011. The Board recommends for the appointment of M/s S.R.
Batliboi & Co., Chartered Accountants, as Statutory Auditors of the
Company.
The observations made by the Auditors with reference to the Notes to
the Accounts for the year under report are self-explanatory and require
no further comments from the Board.
The Directors wish to place on record their deep appreciation for
continued guidance and support received from the Ministry of Power,
Government of Himachal Pradesh, Himachal Pradesh State Electricity
Board, Punjab State Electricity Board, Power Trading Corporation
Limited, Commercial Banks, Financial Institutions and other
Governmental Departments. The Board would also like to express
great appreciation for the commitment and contribution of its
employees at all levels achievement and looks forward to their
continued support and cooperation in the coming years as well.
Last but not least, the Company thanks its shareholders for the trust
reposed in the Management and their unstinted support.
For and on behalf of the Board of Directors
Place: Noida Ravi Jhunjhunwala
Date: 2nd June, 2010 Chairman and Managing Director
64 65
Annual Report 2009-10
ANNEXURE II TO THE DIRECTORS REPORT
Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees)
Rules, 1975 and forming part of Directors Report for the year ended 31st March 2010 are given hereunder:
I. Persons employed for the full year
1. Mr. Ravi Chairman 51.004 B.Com (Hons), 30 55 1.11.2001
Jhunjhunwala & MD MBA
2. Mr. M.M. CEO 4.532 B Tech. (Civil), 32 56 11.09.2008
Madan MBA
Sl. Qualification Experience Age Date of
No. (Rs. in Million) Commencement
of Employment
Name Designation Remuneration
ANNEXURE I TO THE DIRECTORS' REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
1. CONSERVATION OF ENERGY – NIL
2. TECHNOLOGY ABSORPTION – NIL
3. FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Repair & Maintenance 16.281 –
b) Traveling Expenses 2.066 0.560
c) Professional Expenses 1.570 18.120
d) Fees and Subscription 0.153 0.011
Total 20.070 18.691
Others (Sale of Voluntary Emission Rights) 75.982 66.528
Total 75.982 66.528
I) Foreign Exchange Outgo This Year Previous Year
Rs. In Million
II) Foreign Exchange Earnings
66
67
Auditors' report
To
The Members of Malana Power Company Limited
1. We have audited the attached Balance sheet of Malana power Company Limited (‘the Company’) as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s report) order, 2003 (as amended) issued by the Central Government of india in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.
4. Without qualifying our opinion, attention is invited to Note 13 of Schedule 20 of the financial statements, regarding management’s assessment about obtaining the necessary clearances for execution of the Bara Bangal project (having capital work in progress of rs. 663,073 thousand as at March 31, 2010) as well as obtaining extension of time limit for submission of detailed project report (dpr). Accordingly, the management believes that no adjustments are required to the financial statements in this regard. We have relied upon such management’s assessment and no adjustments have been made to the financial statements for the above matters.
5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
i. We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
ii. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
v. on the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india;
a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;
b) in the case of the profit and loss account, of the profit for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year ended on that date.
For S. R. BATLIBOI & CO.Firm registration number: 301003eChartered Accountants
per Raj Agrawalpartner Membership No.: 82028
place : Gurgaondate : June 2, 2010
68
Annual Report 2009-10
Annexure referred to in paragraph 3 of our report of even datere: Malana power Company Limited (‘the Company’)
(i) (a) the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.
(iii) (a) the Company has granted loan to one Company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount involved during the year was rs. 4,262,368 thousand and the year- end balance of loan granted to such company was rs. 3,750,520 thousand.
(b) in our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.
(c) As informed to us and as per the terms of the subordination Loan agreement with the lenders, the loan granted and interest thereon is re-payable after the payment is made to outside lenders and once the project commences commercial operations. Accordingly, the Company has not demanded repayment of any such loan and interest thereon during the year and there has been no default on the part of the party to whom the money has been lent.
(d) there is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.
(e) the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses 4(iii) (f) and (g) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.
(iv) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of power. during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company. due to the nature of its business, the Company is not required to sell any services.
(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.
(b) in our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.
(vi) the Company has not accepted any deposits from the public.
(vii) in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
(ix) (a) the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. the provisions relating to employees’ state insurance are not applicable to the Company.
Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education
69
and protection fund, income-tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.
(x) the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a bank or debenture holders. there are no dues outstanding to any financial institution.
(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) in our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.
(xiv) in our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiary from bank or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.
(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
(xviii) the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.
(xix) According to the information and explanations given to us, the Company has created security or charge in respect of debentures outstanding during the year.
(xx) during the year under review, the Company has not raised money through public issues; hence, clause 4 (xx) of the Companies (Auditor’s report) order, 2003 (as amended) is not applicable to the Company.
(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For S. R. BATLIBOI & CO.Firm registration number: 301003eChartered Accountants
per Raj Agrawalpartner Membership No.: 82028
place : Gurgaondate : June 2, 2010
70
Annual Report 2009-10
BALANCe sHeet As At 31st MArCH, 2010
As per our report of even dateFor S. R. Batliboi & Co.Firm registration No. : 301003e Chartered Accountants
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
place : Noidadate : June 2, 2010
(` ’000) Schedules As at
March 31, 2010As at
March 31, 2009SOURCES OF FUNdSShareholders’ Fundsshare capital 1 1,475,257 1,475,257 reserves and surplus 2 7,187,273 6,198,062 8,662,530 7,673,319 secured loans 3 3,279,315 1,399,735 unsecured loans 4 – 198,261 3,279,315 1,597,996 deferred Tax Liability (net) 5 226,130 224,997 TOTAL 12,167,975 9,496,312 APPLICATION OF FUNdSFixed Assets 6 Gross block 3,288,874 3,290,738 Less : Accumulated depreciation/amortisation 1,194,523 996,809 Net block 2,094,351 2,293,929 Capital work in progress (including capital advances) 735,871 690,017 2,830,222 2,983,946 Investments 7 4,929,556 4,929,556 Current Assets, Loans and Advancesinventories 8 19,736 20,052 sundry debtors 9 41,220 21,608 Cash and bank balances 10 59,123 26,152 other current assets 11 560,029 199,962 Loans and advances 12 4,035,629 1,657,423 4,715,737 1,925,197 Less: Current Liabilities and Provisions Current Liabilities 13 293,935 305,711 provisions 14 13,605 36,676 307,540 342,387 Net Current Assets 4,408,197 1,582,810 TOTAL 12,167,975 9,496,312 Notes to Accounts 20the schedules referred to above and notes to accounts form an integral part of the Balance sheet.
71
proFit ANd Loss ACCouNt For tHe YeAr eNded 31st MArCH, 2010
As per our report of even dateFor S. R. Batliboi & Co.Firm registration No. : 301003e Chartered Accountants
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
place : Noidadate : June 2, 2010
(` ’000)Schedules For year ended
March 31, 2010For year ended March 31, 2009
INCOME turnover 1,619,439 1,853,616 Less : discount on prompt payments 31,997 37,232 Less : Handling charges 7,325 8,674 Less : unscheduled interchange charges 13,392 12,272 Turnover (net) 1,566,725 1,795,438 other income 15 446,551 269,182 TOTAL 2,013,276 2,064,620 EXPENdITURE Wheeling Cost 15,434 18,149 personnel expenses 16 38,480 32,752 operating and other expenses 17 166,889 131,506 depreciation 6 199,646 201,292 Financial expenses 18 426,871 240,505 TOTAL 847,320 624,204 Profit before tax and prior period items 1,165,956 1,440,416 prior period income (represents surrender value of keyman insurance policy)
28,528 –
Profit before tax 1,194,484 1,440,416 Current tax (including ` 1,198 thousand (previous year rs Nil) pertaining to earlier years)
204,140 163,199
deferred tax charge / (credit) 1,133 1,299 Fringe benefit tax – 1,150 total tax expense 205,273 165,648 Net Profit 989,211 1,274,768 Balance brought forward from previous year 2,924,050 1,643,727 Profit available for appropriation 3,913,261 2,918,495 APPROPRIATION: transfer from debenture redemption reserve 5,556 5,555 TOTAL 5,556 5,555 Surplus carried to balance sheet 3,918,817 2,924,050 Earnings per share (figures are not annualised) (in `) – Basic/diluted (Nominal value ` 10 per share) 19 6.71 8.98 Notes to Accounts 20 The Schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account.
72
Annual Report 2009-10
sCHeduLes to tHe ACCouNts
SCHEdULE 1: SHARE CAPITAL(` ’000)
As at March 31, 2010
As at March 31, 2009
Authorised 160,000,000 (previous year 160,000,000) equity shares of ` 10 each
1,600,000 1,600,000
Issued and Subscribed 147,525,731 (previous year 147,525,731) equity shares of ` 10 each
1,475,257 1,475,257
Paid-up 147,525,731 (previous year 147,525,731) equity shares of ` 10 each, fully paid up *
1,475,257 1,475,257
*of the above 75,238,123 (previous year 75,238,123) equity shares are held by Bhilwara energy Ltd., the holding Company
1,475,257 1,475,257
SCHEdULE 2: RESERVES ANd SURPLUS(` ’000)
As at March 31, 2010
As at March 31, 2009
Securities premium account 3,254,567 3,254,567 debenture redemption reserve Balance as per last account 19,445 25,000 Transferred to profit and loss account (5,556) 13,889 (5,555) 19,945Profit and loss account 3,918,817 2,924,050 7,187,273 6,198,062
SCHEdULE 3: SECUREd LOANS(` ’000)
As at March 31, 2010
As at March 31, 2009
debenturesredeemable Non-Convertible debentures of ` 1,000 thousand each (refer Note 1 below)
55,555 77,778
Loans and advances from banks (refer note 2 below)
term loans– rupee loans 3,180,243 755,167 – Foreign currency loans 43,517 3,223,760 66,790 short term loans– From banks (refer note 3 below) – 500,000 3,279,315 1,399,735
73
Notes:
1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on land situated at village Budasan (Gujarat) together with all estate rights etc., present & future, of the Company and further secured by irrevocable and unconditional guarantee extended by infrastructure Leasing & Financial Services Ltd. (IL&FS). The aforesaid guarantee of IL&FS is secured by way of first charge on all immovable and movable properties, present and future, of the Company on pari-passu basis.150, 7.75% debentures of ` 1,000 thousand each privately placed with General insurance Corporation Ltd., New india Assurance Co. Ltd. and punjab National Bank equally and 100, 7.865% debentures of ` 1,000 thousand each privately placed with Bank of Baroda were redeemable at par in 36 equal quarterly instalments commencing from 31st december 2003. However, the above debentures were subject to a call and put option exercisable by the debenture holders and the Company respectively in November 2007. New india Assurance Co. Ltd (NiA) exercised the call option and 50 debentures of ` 1,000 thousand each held by NiA were redeemed completely during the financial year 2007-08. Other debenture holders opted to hold the debentures and repayment is being made as per the schedule. redemption of ` 722 thousand (previous year ` 611 thousand) on each debenture has been made till date.
2. Term loans from various banks are secured by way of first mortgage/charge on all the immovable properties wherever situated and hypothecation of all other assets, rights etc., present & future, of the Company on pari-passu basis.
3. Short term loan were secured by subservient charge or movable fixed assets of the Company.
4. debentures and loans and advances from banks aggregating to ` 757,982 thousand (previous year ` 832,221 thousand) are repayable within one year.
SCHEdULE 4 : UNSECUREd LOANS :(` ’000)
As at March 31, 2010
As at March 31, 2009
Short-term loans & advances – From banks – 83,333 – From holding Company – 114,928
– 198,261
SCHEdULE 5 : dEFERREd TAX LIABILITy (NET) : (` ’000)
As at March 31, 2010
As at March 31, 2009
deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets as per tax books and financial books
225,872 224,997
income taxable on receipt 258 – gross deferred Tax Liabilities 226,130 224,997 deferred Tax Assets – – gross deferred Tax Assets – – deferred Tax Liability (Net) 226,130 224,997
74
Annual Report 2009-10
SCHEdULE 6: FIXEd ASSETS(` ’000)
Land– Freehold
Road & Building
Civil Works Transmission Lines
Plant & Machinery
Furniture & Fittings
Office & Other
Equipments
Vehicles Total Tangible
Assets
Software Total Intangible
Assets
Total Previous Year
Gross Block
At April 1, 2009 21,517 224,958 1,847,265 199,670 958,063 5,743 9,934 11,890 3,279,040 11,698 11,698 3,290,738 3,286,337
Additions – – – – 21 11 218 429 679 – – 679 4,825
Deductions/ Adjustments – – – – – – 1,441 1,102 2,543 – – 2,543 424
As at March 31, 2010 21,517 224,958 1,847,265 199,670 958,084 5,754 8,711 11,217 3,277,176 11,698 11,698 3,288,874 3,290,738
Depreciation
At April 1, 2009 – 56,645 504,896 80,593 325,868 3,751 6,692 8,210 986,655 10,154 10,154 996,809 795,685
For the year – 7,572 120,357 10,549 58,486 360 891 928 199,143 503 503 199,646 201,292
Deletions / Adjustments – – – – – – 1,129 803 1,932 – – 1,932 168
As at March 31, 2010 – 64,217 625,253 91,142 384,354 4,111 6,454 8,335 1,183,866 10,657 10,657 1,194,523 996,809
Net Block March 31, 2010 21,517 160,741 1,222,012 108,528 573,730 1,643 2,257 2,882 2,093,310 1,041 1,041 2,094,351 2,293,929
Net Block March 31, 2009 21,517 168,312 1,342,370 119,077 632,195 1,993 3,241 3,680 2,292,385 1,544 1,544 2,293,929
Capital Work in Progress
Building under erection 71,705 37,430
Capital Advances 1,093 12,839
Advance for project allotted (refer note 3 below)
663,073 639,748
Sub Total 735,871 690,017
Total Fixed Assets as at March 31, 2010
21,517 160,741 1,222,012 108,528 573,730 1,643 2,257 2,882 2,093,310 1,041 1,041 2,830,222
Total Fixed Assets as at March 31, 2009
21,517 168,312 1,342,370 119,077 632,195 1,993 3,241 3,680 2,292,385 1,544 1,544 2,983,946
Notes :1) Road & Building includes cost of road ` 122,838 thousand (Previous year ` 122,838 thousand) constructed on forest land diverted for the project under irrevocable right to use.2) Transmission Lines includes ` 4,181 thousand (Previous year ` 4,181 thousand) towards cost of land and compensation paid to Forest Department for construction of Transmission towers under irrevocable
right to use.3) Includes ` 51,073 thousand (previous year ` 27,748 thousand) towards consultancy and other expenses on project allotted (Also refer Note 13 of Schedule 20).
SCHEdULE 7 : INVESTMENTS :
(` ’000)
As at March 31, 2010
As at March 31, 2009
Long Term Investments (At Cost)
In Subsidiary Company Unquoted
492,955,640 (previous year 430,155,640) equity shares of ` 10 each fully paid of Ad Hydro power Limited (pledged with security trustee on behalf of lenders of Ad Hydro power Limited)
4,929,556 4,301,556
share application money pending allottment in Ad Hydro power Limited
– 628,000
4,929,556 4,929,556
SCHEdULE 8: INVENTORIES
(` ’000)
As at March 31, 2010
As at March 31, 2009
stores and spares (including material lying with third parties ` 2,043 thousand, previous year ` Nil)
19,736 20,052
19,736 20,052
75
SCHEdULE 9: SUNdRy dEBTORS
(` ’000)
As at March 31, 2010
As at March 31, 2009
(Unsecured, Considered good)
outstanding for a period exceeding six months – –
other debts 41,220 21,608
41,220 21,608
SCHEdULE 10: CASH ANd BANk BALANCES
(` ’000)
As at March 31, 2010
As at March 31, 2009
Cash on hand 597 318
Balances with scheduled banks:
on current accounts 25,526 23,815
on deposit accounts 30,200 1,054
on margin money account 2,800 965
59,123 26,152
Included in deposit accounts are :
– Fixed deposit of ` 200 thousand (previous year ` 200 thousand) pledged with the H.p. Government sales tax department and ` Nil thousand (previous year ` 854 thousand) pledged with Himachal prades state electricity Board.
SCHEdULE 11: OTHER CURRENT ASSETS
(` ’000)
As at March 31, 2010
As at March 31, 2009
interest accrued on deposits and others 51 39
interest accrued on loan given to subsidiary Company 559,211 199,923
surrender Value of Keyman insurance policy 767 -
560,029 199,962
SCHEdULE 12: LOANS ANd AdVANCES
(` ’000)
As at March 31, 2010
As at March 31, 2009
Unsecured, considered good
Loans to employees 1,944 3,032
Loan to subsidiary Company (long term) 3,750,520 1,360,756
Advances for projects (refer note no 10 of schedule 20) 252,630 252,630
other advances recoverable in cash or in kind or for value to be received
27,459 38,190
deposits - others 3,076 2,815
4,035,629 1,657,423
Included in Loans and Advances are :
i. dues from the company under the same Management
Ad Hydro power Limited (Maximum amount outstanding during the year ` 4,262,368
thousand (previous year ` 3,292,519 thousand)
3,750,520 1,360,756
76
Annual Report 2009-10
SCHEdULE 13: CURRENT LIABILITIES(` ’000)
As at March 31, 2010
As at March 31, 2009
Sundry creditors (a) outstanding dues of Micro & small enterprises * – – (b) outstanding dues of creditors other than Micro & small
enterprises (*refer note no 11 of schedule 20)32,530 35,747
deposits from holding company (refer note no. 10 of schedule 20) 252,630 252,630 deposits from contractors and others 4,475 1,190 interest accrued on loan from holding Company – 10,787 other liabilities 4,300 5,357
293,935 305,711 Creditors includesManaging director's commission payable 12,457 14,643
Schedule 14: Provisions(` ’000)
As at March 31, 2010
As at March 31, 2009
Provision for Fringe Benefit Tax (net of advance fringe benefit tax ` Nil, (previous Year ` 3,133 thousand))
– 17
provision for Wealth tax – 30 provision for income tax (net of advance tax ` 465,487 thousand (previous year ` 280,234 thousand))
5,595 28,258
provision for Gratuity – 1,002 provision for Long term compensated absences 3,105 2,161 provision for Continuity Linked Bonus 4,905 5,208
13,605 36,676
SCHEdULE 15: OTHER INCOME(` ’000)
For the year ended March 31, 2010
For the year ended March 31, 2009
interest from subsidiary company (Gross, tax deducted at source ` 49,788 thousand (previous year ` 14,647 thousand)
359,288 199,923
interest on bank deposits (Gross, tax deducted at source ` 169 thousand, (previous year ` 56 thousand))
886 248
interest on income tax refund – 517 Foreign exchange fluctuation (net) 8,012 – Profit on sale/discard on fixed assets (net) – 270 sale of voluntary emission reductions 75,982 66,528 unspent liabilities written back 1,200 – surrender Value of keyman insurance policy 767 – Miscellaneous income 416 1,696
446,551 269,182
SCHEdULE 16: PERSONNEL EXPENSES (` ’000)
For the year ended March 31, 2010
For the year ended March 31, 2009
salaries , wages and other expenses 31,214 25,030 Contribution to provident funds 2,034 1,806 Contribution to superannuation funds 400 1,028 Gratuity expenses – 971 Long term Compensated Absences 943 131 Workmen and staff welfare expenses 3,889 3,786
38,480 32,752
77
SCHEdULE 17: OPERATINg ANd OTHER EXPENSES(` ’000)
For the year ended March 31, 2010
For the year ended March 31, 2009
power and fuel 3,626 3,822 repairs and maintenance – plant and machinery 51,920 27,721 – Civil works 316 307 – Buildings 706 701 – others 1,081 1,577 rent 3,882 3,623 rates and taxes 3,335 1,121 insurance 5,267 12,260 traveling & Conveyance 8,008 6,398 Legal and professional expenses 6,054 4,231 director's remuneration 38,547 9,503 Commission to managing director 12,457 14,643 Auditor's remuneration : – Audit fee 908 552 – Fees for international reporting – 348 – Fees for special audit 303 – – Fees for certification 276 239 – out of pocket expenses 7 4 Loss on fixed assets sold /discarded (net) 223 – Foreign exchange fluctuation (net) – 17,042 donations and contributions (other than to political parties) 763 1,217 expenses on sale of Voluntary emission reductions (including commission)
15,453 10,481
Miscellaneous expenses 13,757 15,716 166,889 131,506
SCHEdULE 18: FINANCIAL EXPENSES(` ’000)
For the year ended March 31, 2010
For the year ended March 31, 2009
interest– on term loans and debentures 311,832 101,293 – to banks 12,030 136,481 – to others – 1,000 Bank charges including guarantee commission and processing fees (net of upfront fees / commitment charges reimbursed by subsidiary Company ` 8,273 thousand, (previous year ` 7,750 thousand))
103,009 1,731
426,871 240,505
SCHEdULE 19 : EARNINgS PER SHARE (EPS) (` ’000)
For the year ended March 31, 2010
For the year ended March 31, 2009
Net profit as per profit and loss account 989,211 1,274,768 equity shares at the beginnning of the year 147,525,731 139,170,176 equity shares at the end of the year 147,525,731 147,525,731 Weighted average number of equity shares in calculating basic/diluted eps
147,525,731 142,003,986
Basic & diluted earnings per share (in rupees) 6.71 8.98
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Annual Report 2009-10
SCHEdULE – 20: NOTES TO ACCOUNTS
Nature of Operations1.
Malana power Company Limited (hereinafter referred to as ‘the Company’) is engaged in the generation of hydro electric power and development of hydro power projects.
Statement of Significant Accounting Policies2.
Basis of preparation(a)
The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies (Accounting standards) rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
Use of Estimates(b)
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
Fixed Assets(c)
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
the carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. the recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.
depreciation(d)
on the assets of generating unit and other plant & Machinery, depreciation is provided on straight-line (i) method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.
On fixed assets other than those covered under (i) above, depreciation is provided on written down value (ii) method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.
Intangible Asset(e)
Computer software purchased from outside are amortized on written down value method at the rate of 40% per annum based on its estimated useful life.
Leases(f)
Where the Company is the lessee
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.
Investments(g)
Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments.
79
Inventories(h)
inventories comprising of components and stores and spares are valued at lower of cost and net realizable value. Cost is determined on weighted average basis.
Revenue recognition(i)
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Sale of Electricity
revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply to Himachal pradesh’s state Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.
Interest
revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Voluntary emission rights (VER)
Revenue is recognised as and when the VER’s are certified and sold and it is probable that the economic benefits will flow to the Company.
(j) Foreign currency translation
Foreign currency transactions
initial recognition(i)
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion(ii)
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
exchange differences(iii)
exchange differences arising on the settlement of monetary items or on reporting of such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.
(k) Retirement and other employee benefits
Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined (i) contribution schemes and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. there are no obligations other than the contribution payable to the respective fund/trust.
Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation on (ii) projected unit credit method made at the end of each financial year.
short term compensated absences are provided for based on estimates. Long term compensated (iii) absences are provided for based on actuarial valuation. the actuarial valuation is done as per projected unit credit method at the end of each financial year.
Liability under continuity linked loyalty bonus scheme is provided for on actuarial valuation basis, which (iv) is done as per projected unit credit method at the end of each financial year.
Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.(v)
(l) Income taxes
tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected
80
Annual Report 2009-10
to be paid to the tax authorities in accordance with the income-tax Act, 1961 enacted in india. deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. in situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
the carrying amount of deferred tax assets are reviewed at each balance sheet date. the Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
MAt credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAt) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the institute of Chartered Accountants of india, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.
(m) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
(n) Provisions
A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. these are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
(o) Cash and Cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
the Company’s activities during the year involved generation of the Hydro power (refer Note 1). Considering 3. the nature of Company’s business and operations, there are no separate reportable segments (business and/ or geographical) in accordance with the requirements of Accounting standard 17 ‘segment reporting’ issued by the Companies (Accounting standard) rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.
the Company is eligible for tax holiday under section 80-iA of the income tax Act, 1961. in view of unabsorbed 4. depreciation in the initial years, the Company has not availed the tax holiday benefit up to accounting year 2006-07. However, based on its profitability, it has decided to avail the deduction from the accounting year 2007-08 and will continue to avail it till accounting year 2015-16. the Company is liable to pay income-tax for the year under the provisions of section 115JB of the income-tax Act, 1961.
the Company has the necessary permission from the Government of Himachal pradesh to own, operate & 5. maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 5, 2001 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions.
81
Contingent Liabilities not provided for6.
(a) Guarantee given for loans availed by Ad Hydro power Limited, subsidiary company, amounting ` 800,000 thousand (previous year ` 450,000 thousand).
(b) Claims made against the Company not acknowledged as debts –
Demand from Divisional Forest Officer in respect of damages to forest trees (i) ` 3,421 thousand (previous year - ` 3,421 thousand).
demand of stamp duty and registration fees (ii) ` 40,990 thousand (previous year ` 40,990 thousand).
the Company has been advised that these cases are not probable to be decided against the Company and therefore no provision for the above is required.
Capital Commitments7.
estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) ` 656,016 thousand (previous Year ` 761,145 thousand)
Related Party disclosures8.
Names of related p(a) arties
Holding Company : Bhilwara energy Limited
Subsidiary Company : Ad Hydro power Limited
Enterprises having significant influence over the Company
: sN power Holdings singapore pte. Ltd.
Fellow Subsidiary Companies : indo Canadian Consultancy services Limited,
Green Ventures private Limited
key Management Personnel : Mr. ravi Jhunjhunwala, Chairman & Managing director
Relatives of key Management personnel
: Mrs. rita Jhunjhunwala (Wife of the Chairman & Managing director)
Mr. riju Jhunjhunwala (son of the Chairman & Managing director)
Mr. rishabh Jhunjhunwala (son of the Chairman & Managing director)
Enterprises owned or significantly influenced by key Management personnel or their relatives
: HeG Limited, rsWM Limited.
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Annual Report 2009-10
(b) Transaction with related parties(` ‘000)
Nature of Transaction
Holding Company/ Enterprises
having significant influence over the
Company
Subsidiary/Fellow subsidiary Company
key Management Personnel
Relative of key Management
Personnel
Enterprise over which key management
personnel /relative having significant
influence
March 2010
March 2009
March 2010
March 2009
March 2010
March 2009
March 2010
March 2009
March 2010
March 2009
Transactions during the year
rent
a) Mrs.rita Jhunjhunwala 357 –
b) Mr. rishabh Jhunjhunwala 1,709 1,740
c) Mr. riju Jhunjhunwala 1,709 1,740
d) rsWM Limited 3,878 3,620
Consultancy service charges paid to indo Canadian Consultancy services Limited
14,895 220
remuneration paid to Mr. ravi Jhunjhunwala,
10,019 9,503
Commission paid to Mr. ravi Jhunjhunwala,
12,446 14,643
Value of other perquisite (assignment of Keyman insurance policy in favour of Mr. ravi Jhunjhunwala)
28,528 –
reimbursement of expenses paid to HeG Limited
2,382 2,266
reimbursement of expenses paid to rsWM Limited
381 546
reimbursement of expenses paid to indo Canadian Consultancy services Limited
232 1034
reimbursement of expenses paid to Ad Hydro power Limited
1,712 3,125
reimbursement of expenses recovered from Ad Hydro power Limited
15,264 10,061
reimbursement of expenses recovered from indo Canadian Consultancy services Limited
16,685 698
share application money given to Ad Hydro power Limited (net)
– 1,391,056
shares acquired in Ad Hydro power Limited
628,000 763,056
Allotment of shares to Bhilwara energy Limited
– 42,613
Allotment of shares to sN power Holdings singapore
– 40,942
securities premium on Allotment of shares to Bhilwara energy Limited
– 532,667
securities premium on Allotment of shares to sN power Holdings singapore
– 511,778
unsecured Loan repaid to Bhilwara energy Limited (including interest)
202,237 646,602
unsecured Loan taken from Bhilwara energy Limited
76,521 761,700
unsecured Loan repaid by Ad Hydro power Limited
5,189,100 2,212,132
unsecured loan taken from HeG Limited
– 150,000
83
(` ‘000)
Nature of Transaction
Holding Company/ Enterprises
having significant influence over the
Company
Subsidiary/Fellow subsidiary Company
key Management Personnel
Relative of key Management
Personnel
Enterprise over which key management
personnel /relative having significant
influence
unsecured loan repaid to HeG Limited
– 150,000
unsecured Loan given to Ad Hydro power Limited
7,615,100 3,356,741
interest income on unsecured loan given to Ad Hydro power Limited
359,288 199,923
interest expense on loan from HeG Limited
– 3,345
Balances outstanding as at the year end
As at March
31, 2010
As at March
31, 2009
As at March 31,
2010
As at March 31,
2009
As at March
31, 2010
As at March
31, 2009
As at March
31, 2010
As at March
31, 2009
As at dec 31
As at March
31, 2010, 2009
As at March 31,
2009
Balances Receivable:
investment in Ad Hydro power Limited
4,929,556 4,301,556
unsecured Loan given to Ad Hydro power Limited
3,750,520 1,360,756
interest amount recoverable on unsecured Loan
559,211 199,923
share Application Money pending allotment
– 628,000
receivable from rsWM Limited – 157
Balances Payable:
sN power Holdings, singapore – 277
interest payable on unsecured Loan taken from Bhilwara energy Limited
– 125,715
deposit taken from Bhilwara energy Limited
252,630 252,630
indo Canadian Consultancy services Limited
– 1,558
Mr. ravi Jhunjhunwala 12,457 14,643
Guarantees given by the Company on behalf of Ad Hydro power Limited
800,000 450,000
payable to HeG Limited – 4,353
Supplementary Statutory Information 9. (` ’000)
Particulars March 2010 March 2009
(a) Managing director Remuneration
salaries 5,825 5,525
Commission 12,457 14,643
rent paid 3,495 3,315
Contribution to provident Fund 699 663
other perquisites (assignment of Keyman insurance policy) 28,528 –
51,004 24,146
Notes: a) As the future liability for the gratuity and earned leaves is provided on actuarial basis for the Company as a
whole, the amount pertaining to the directors is not ascertainable and therefore, not included. b) perquisites have been considered as per taxable value as per income tax Act, 1961
84
Annual Report 2009-10
Particulars March 2010 March 2009
(b) Computation of net profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956 :Profit for the year before taxation as per Profit & Loss Account 1,194,484 1,440,417
Add: Depreciation as per Profit & Loss Account 199,646 201,292
directors’ remuneration 51,004 24,146
Loss on sale of Fixed Asset 223 -
1,445,357 1,665,855
Less: depreciation u/s 350 of the Companies Act 199,646 201,292
Profit on sale of Fixed Assets – 270
Net Profit in accordance with Section 198 and 349 1,245,711 1,464,292
Commission @ 1% of Net Profit 12,457 14,643
During the financial year 2007-08, the Company has paid 50% upfront premium of 10. ` 252,630 thousand to the Government of Himachal Pradesh as first instalment for the 140 MW Chango Yangthang HEP project which was awarded to the Company. this amount has been paid by the Company on behalf of its holding company, Bhilwara energy Limited (‘BeL’) with an understanding that all rights, obligations, rewards and risks of this project will belong to BeL. For making the said payment, a corresponding amount of ` 252,630 thousand had been received from BEL in the financial year 2007-08, which has been shown under the head ‘deposits from holding company’ under ‘Current Liabilities’ in the financial statements. An agreement has already been entered into between the two shareholders - sN power and Bhilwara energy Limited and the Company, wherein BeL has agreed that all rights, obligations, rewards and risks of this project will belong to BeL and no liability there against will devolve on the Company.
the Government of india has promulgated an Act namely the Micro, small and Medium enterprises development 11. Act, 2006 which came into force with effect from october 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company and relied upon by the auditors, none of the creditors fall under the definition of ‘supplier’ as per the Section 2(n) of the Act. in view of the above, the prescribed disclosures under section 22 of the Act are not required to be made.
Leases12.
In case of assets taken on Operating Lease:
Office premises and vehicles are obtained on cancellable operating leases. All these leases have a lease term varying between 3 to 5 years. there are no restrictions imposed by lease arrangements. there are no subleases.
(` ‘000)
Particulars For the year ended
March 31, 2010
For the year ended
March 31, 2009
Lease payments for the year 3,882 3,623
in an earlier year, the Company had given an upfront premium of 13. ` 612,000 thousand for 200 MW Bara Banghal Hep project in state of Himachal pradesh. Further, the Company has incurred expenses in the nature of consultant fees and other expenses of ` 51,073 thousand in relation to this project. thus, an amount of ` 663,073 thousand is appearing as capital work in progress in respect of this project as at March 31, 2010.
Approx. 21.46 hectares of land for the said project falls under the dhauladhar WildLife sanctuary, where no construction is permitted. The Company has filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project. Further, as per the terms of the pre-implementation Agreement signed with the state Government of Himachal pradesh, the upfront premium of ` 612,000 thousand will get forfeited if the detailed project report (‘DPR’) of the project is not submitted by October 31, 2010, for which the Company has filed an application with the authorities for the extension of time limit for the submission of said dpr. pending the decision on application by the supreme Court of india for grant of the clearance and by the state Government for extension of the time limit, the Board of Directors are confident that the Company will get the necessary approvals shortly and will be able to complete the project within specified time frame and no provision thereagainst is required in these financial statements.
85
gratuity (AS 15- Revised)14. The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as
15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement/ termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the Company makes provision of such gratuity asset/ liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.
The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet:
Profit and Loss Account Net employee benefits expense (recognised in Employee Cost):
Particulars For the year ended on March 31, 2010
(` ’000)
For the year ended on March 31, 2009
(` ’000)Current service Cost 490 564
Interest cost on benefit obligation 385 280expected return on plan assets (330) (160)Net actuarial (gain)/ loss recognised in the year (592) 286past service cost - -Net benefit expense (47) 971Actual return on plan assets 877 162
Balance Sheet details of Provision for gratuity:
Particulars As at March 31, 2010 (` ’000)
As at March 31, 2009 (` ’000)
Defined benefit obligation 4,363 5,133Fair value of plan assets 4,410 4,130
47 (1,002) Less: unrecognised past service cost - - plan asset / (liability) 47 (1,002)
Changes in the present value of the defined benefit obligation are as follows:
Particulars For the year ended March 31, 2010
(` ’000)
For the year endedMarch 31, 2009
(` ’000)Opening defined benefit obligation 5,133 4,000interest cost 385 280Current service cost 490 564Benefits paid (1,600) -Actuarial (gains)/ losses on obligation (45) 288Closing defined benefit obligation 4,363 5,133
Changes in the fair value of plan assets are as follows:
Particulars For the year ended March 31, 2010
(` ’000)
For the year endedMarch 31, 2009
(` ’000)opening fair value of plan assets 4,130 1,998expected return 330 160Contributions by employer 1,002 1971Benefits paid (1,600) –Actuarial gains / (losses) 547 2Closing fair value of plan assets 4,410 4,130
The Defined benefit obligation amounting to ` 4,363 thousand is funded by assets amounting to ` 4,410 thousand and the Company expects to contribute ` 1,002 thousand during the year 2010-11.
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Annual Report 2009-10
the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Particulars For the year ended March 31, 2010
For the year ended March 31, 2009
% %
investments with insurer 100 100
the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
the principal assumptions used in determining gratuity for the Company’s plans are shown below:
Particulars For the year ended on March 31, 2010
For the year ended on March 31, 2009
% %
discount rate 7.50 7.00
expected rate of return on assets 8.00 8.00
Future salary increase 5.00 4.50
Withdrawal rate 1 to 3 1 to 3
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Amounts for the current and previous four years are as follows*:
(` ‘000s)
For the year ended March 31, 2010
For the year ended March 31, 2009
For the year ended March 31, 2008
Defined benefit obligation 4,363 5,133 4,000
plan assets 4,410 4,130 1,198
Surplus / (deficit) 47 (1,002) (2,002)
experience adjustments on plan liabilities 24 (260) -
experience adjustments on plan assets 547 2 -
* As the Company has adopted As -15 (revised) in the year 2007-08, the above disclosures as required under Para 120 (n) have been made prospectively from the date the Company has first adopted the standard.
Defined Contribution Plan
(` ‘000s)
For the year ended March 31, 2010
For the year ended March 31, 2009
Contribution to provident Fund 2034 1,806
Contribution to superannuation Fund 400 1,028
2,434 2,834
Particulars of Unhedged Foreign Currency Exposure as at the Balance Sheet date15.
Particulars 2009-10 2008-09
Foreign Currency Loan ` 43,516,800 (USd 960,000 @
closing rate of 1USd = ` 45.33)
` 66,790,400 (usd 1,280,000 @
closing rate of 1usd = ` 52.18)
provision against equipment supplied ` 2,846,356 (CHF 66,816 @ closing rate of
1CHF = ` 42.60)
` 8,495,410 (CHF 187,000 @
closing rate of 1CHF = ` 45.43)
87
Additional information pursuant to the provisions of paragraphs 3, 4C and 4d of Part II of Schedule VI 16. to the Companies Act, 1956
a) Information in respect of generation and Turnover:
2009-10 2008-09(i) installed capacity (technically estimated) 86 MW 86 MW(ii) Generation M.u. 305.790 360.050(iii) Less:- Auxiliary Consumption and Associated
transmission LossM.u. 3.167 4.185
Free energy to Govt. of H.p. M.u. 45.393 53.380Free energy to HpseB for wheeling of power M.u. 10.289 12.099
(iv) turnover (including impact of ui Charges – (2.764 ) M.u., (previous year (1.26) Mu))
M.u. 244.176 289.125
` ’000 1,619,439 1,853,616
b) Imported and indigenous stores and spare parts consumed (included under respective heads of profit & loss account) :
Percentage of total consumption
Value (` ’000)
Stores & Spares 2009-10 2008-09 2009-10 2008-09imported 70.72 – 28,902 –indigenously obtained 29.28 100.00 11,967 13,218
100.00 100.00 40,869 13,218
c) Expenditure in foreign currency, net of TdS (Cash basis)
2009-10 (` ‘000)
2008-09 (` ‘000)
travelling 2,066 560professional services 1,570 18,120repair & Maintenance 16,281 –Fee & subscription 153 11others 1 -
d) Earnings in foreign currency (Cash basis) 2009-10
2009-10 (` ‘000)
2008-09 (` ‘000)
others (sale of Voluntary emission rights) 75,982 66,528
Previous year’s figures have been regrouped where necessary to confirm to this year’s classification. 17.
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
place : Noidadate : June 2, 2010
As per our report of even dateFor S. R. Batliboi & Co.Firm registration No. : 301003e Chartered Accountants
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
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Annual Report 2009-10
CAsH FLoW stAteMeNt As At MArCH 31, 2010
Particulars March 2010` ’000
March 2009` ’000
A. Cash flow from operating activities
Net profit before taxation 1,194,485 1,440,416
Adjustments for:
depreciation 199,646 201,292
interest expenses 323,862 105,222
(Profit) / Loss on fixed assets sold / discarded (net) 223 (270)
provision for / (reversal of) continuity linked bonus (303) 306
provision for / (reversal of) gratuity (1,002) (1,000)
provision for / (reversal of) compensated absences 944 131
unrealised foreign exchange loss/(gain) (8,012) 17,042
interest income (360,174) (64,888)
Operating profit before working capital changes 1,349,669 1,698,251
Movements in working capital:
(increase) / decrease in sundry debtors (19,612) 7,999
(increase) in other current assets (767) –
decrease / (increase) in loan and advances 11,559 (21,466)
decrease / (increase) in inventories 316 (471)
(decrease) / increase in current liabilities (989) 21,134
Cash generated from operations 1,340,176 1,705,447
direct taxes paid (Net of refund) 226,851 169,056
Net cash from operating activities 1,113,325 1,536,391
B. Cash flows from / (used in) investing activities
Purchase of fixed assets (including capital work in progress)
(46,533) (56,637)
purchase of investments – (763,056)
share application money paid – (628,000)
Loans and advances to subsidiary Company (2,389,764) (1,144,608)
Proceeds from sale of fixed assets 388 526
interest received (including received from subsidiary) 873 64,876
Net cash from/ (used in) investing activities (2,435,036) (2,526,899)
89
Particulars March 2010` ’000
March 2009` ’000
C. Cash flows from financing activities
proceeds from issuance of share capital – 1,127,999
Fixed deposits redeemed 1,683 –
proceeds from / (repayments of) short term borrowings (698,261) 198,261
(repayment of) long –term borrowings (622,408) (248,887)
proceeds from long –term borrowings 3,010,000 –
interest paid (334,649) (94,435)
Net cash from financing activities 1,356,365 982,938
Net increase / (decrease) in cash and cash equivalents (A+B+C)
34,654 (7,570)
Cash and cash equivalents at the beginning of the year
24,469 32,039
Cash and cash equivalents at the end of the year 59,123 24,469
Components of cash and cash equivalents
Cash on hand 597 318
With banks – on current accounts 25,526 23,815
– on deposit accounts 30,200 200
– on margin money account 2,800 136
59,123 24,469
Notes:
1. Difference in the figure of cash and bank balance as per schedule 10 and as shown above of ` Nil thousand (previous year ` 1,683 thousand) represents long term investment in fixed deposit with an original maturity of more than three months.
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
place : Noidadate : June 2, 2010
As per our report of even dateFor S. R. Batliboi & Co.Firm registration No. : 301003e Chartered Accountants
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
90
Annual Report 2009-10
1. REgISTRATION dETAILS
registration No. 1 9 9 5 9 state Code 0 6
Balance sheet date 3 1 0 3 2 0 1 0
date Month Year
2. CAPITAL RAISEd dURINg THE yEAR (Amount in ` Thousands)
public issue – rights issue –
Bonus issue – private placement –
3. POSITION OF MOBILISATION ANd dEPLOyMENT OF FUNdS (Amount in ` Thousands)
total Liabilities 1 2 4 7 5 5 1 5 total Assets 1 2 4 7 5 5 1 5
SOURCES OF FUNdS
paid-up Capital 1 4 7 5 2 5 7 reserves and surplus 7 1 8 7 2 7 3
share Application Money – deferred tax Liability 2 2 6 1 3 0
secured Loans 3 2 7 9 3 1 5 unsecured Loans –
APPLICATION OF FUNdS
Net Fixed Assets 2 8 3 0 2 2 2 investments 4 9 2 9 5 5 6 (incl. p.o.p. exps)
Net Current Assets 4 4 0 8 1 9 7 Misc. expenditure –
Accumulated Losses –
4. PERFORMANCE OF COMPANy (Amount in ` Thousands)
turnover 2 0 1 3 2 7 6 total expenditure 8 1 8 7 9 2
Profit/Loss before Tax 1 1 9 4 4 8 4 Profit/Loss after tax 9 8 9 2 1 1
earning per share (in `) 6 . 7 1 dividend per share (in `) –
5. gENERIC NAMES OF PRINCIPAL PROdUCTS/SERVICES OF COMPANy (as per monetary terms)
item Code No. (itC Code) 9 8 0 1 0 0
product description H Y d r o e L e C t r i C e N e r G Y
BALANCE SHEET ABSTRACT ANd COMPANy'S gENERAL BUSINESS PROFILE
place : Noidadated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
91
Name of the subsidiary Ad Hydro Power Limied
Financial period ended March 31, 20101.
Holding company’s interest 88% in equity shares2.
shares held by the holding company 492,955,640 equity shares 3. in the subsidiary of ` 10 each fully paid up Amounting to ` 49,295.56 lacs
The net aggregate of profits or losses 4. For the current period of the subsidiary concerns the members of the holding company
dealt with or provided for in the accounts Nil a. of the holding company
not dealt with or provided for in the NA b. accounts of the holding company
The net aggregate of profits or losses 5. for the current period of the subsidiary concerns the members of the holding company
a. dealt with or provided for in the accounts Nil of the holding company
b. not dealt with or provided for in the NA accounts of the holding company
stAteMeNt pursuANt to seCtioN 212 oF tHe CoMpANies ACt, 1956, reLAtiNG to suBsidiArY CoMpANies
place : Noida dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA Chairman & Managing director
ROHINI ROSHANARA SOOd director
BHARAT SINgH Company secretary
92
Annual Report 2009-10
FiNANCiAL resuLtsoF
Ad HydRO POWER LIMITEd
Dear Stakeholders,
2009-10 has been a year of rebound for the global economy from the
widespread crisis amidst ongoing policy support and improving financial
market conditions.
India's growth-inflation dynamics are in contrast to the overall global
scenario. The economy is recovering rapidly from the growth slowdown.
The growth is driven by robust performance of the manufacturing sector
on the back of government and consumer spending. IMF and other
economic agencies have been bullish on Indian economy. IMF has
revised the growth forecast of the Indian economy to 9.5% for 2010 from
8.8% projected earlier, based on robust corporate profits and favourable
financing conditions, which are likely to fuel investments.
Sustenance of such high levels of economic growth and development is
dependent on adequate, cost-effective and quality infrastructure.
Accordingly the ongoing economic reforms have attached a high priority
to the better utilization of existing infrastructure and developments in new
infrastructures so that existing bottlenecks do not inhibit the overall
economic growth.
Message from the Chairman
PROJECT STATUS AND CONSTRUCTION ACTIVITIES
The commissioning of Allain Side of the Project is at an
advanced stage and is likely to become operational by July,
2010. On completion, this would constitute 70% of the total
capacity of generation of electricity. During construction, in the
past and in 2009, the Project encountered serious geological
surprises in the excavation of tunnel and delay in statutory
clearances for transmission line, which not only resulted into
substantial cost overruns but also delayed the commissioning
of the project.
The International Finance Corporation, Washington (IFC)
being lead lender in the project, carried out the detailed
appraisal of the project as per the changed conditions and
accepted an upper ceiling of the project cost of Rs 20,213
Million for the purposes of financing. All other participating
lenders in the project also extended their full support to the
project, recognizing the ground realities being faced by the
company.
For the Duhangan Side of the Project, the Directors wish to
inform that the excavation work at the Duhangan side is in
progress and is expected to be completed by December, 2010.
The work on Transmission Line is going on at a fast pace, and
is likely to be completed by July/August, 2010. Work on Plan B
of Transmission Line is also progressing well, and is likely to be
completed by end June, 2010.
Annual Report 2009-10
Directors’ Report
94
TO THE MEMBERS
AD HYDRO POWER LIMITED
PROJECT EXPENSES
The Directors of the Company are pleased to present their
Seventh Annual Report along with the audited statement of
accounts for the financial year ended 31st March, 2010
together with the Auditors' Report thereon.
The Company has not yet started its commercial activities and
therefore no Profit and Loss Account has been prepared and
the expenditure incurred has been shown under Schedule -6
under the head “Project & Pre-operative Expenses (Pending
Allocation)” to the Balance Sheet.
During the financial year ending 31st March, 2010, the
following expenditure has been incurred on the project as per
the details given below:
(Amount in ` Million)
Fixed Assets ( Gross ) 934.624
Capital Work in Progress 11,970.644
Preoperative Expenses 5,648.625
Net Current Assets (841.863)
Miscellaneous 20.018
TOTAL 17,732.048
PARTICULARS AMOUNT
Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of over
8% and to meet the lifeline energy needs of all citizens, the power sector needs to grow at 1.8 - 2 times the GDP rate of
growth. At >8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in
2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which
translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five
years under APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require
investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy
Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.
I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the
project implementation of Allain-Duhangan, the Allain side of the project is likely to start generating power by the
second half of July, 2010. Further the excavation of Duhangan tunnel is also progressing well and it is expected that the
Duhangan portion shall be operational in the second quarter of 2011.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,
Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments
and agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our
employees and business associates, who despite all adverse circumstances have been the pillar of strength for the
Company.
With best wishes,
Ravi Jhunjhunwala
Chairman
95
PROJECT STATUS AND CONSTRUCTION ACTIVITIES
The commissioning of Allain Side of the Project is at an
advanced stage and is likely to become operational by July,
2010. On completion, this would constitute 70% of the total
capacity of generation of electricity. During construction, in the
past and in 2009, the Project encountered serious geological
surprises in the excavation of tunnel and delay in statutory
clearances for transmission line, which not only resulted into
substantial cost overruns but also delayed the commissioning
of the project.
The International Finance Corporation, Washington (IFC)
being lead lender in the project, carried out the detailed
appraisal of the project as per the changed conditions and
accepted an upper ceiling of the project cost of Rs 20,213
Million for the purposes of financing. All other participating
lenders in the project also extended their full support to the
project, recognizing the ground realities being faced by the
company.
For the Duhangan Side of the Project, the Directors wish to
inform that the excavation work at the Duhangan side is in
progress and is expected to be completed by December, 2010.
The work on Transmission Line is going on at a fast pace, and
is likely to be completed by July/August, 2010. Work on Plan B
of Transmission Line is also progressing well, and is likely to be
completed by end June, 2010.
Annual Report 2009-10
Directors’ Report
94
TO THE MEMBERS
AD HYDRO POWER LIMITED
PROJECT EXPENSES
The Directors of the Company are pleased to present their
Seventh Annual Report along with the audited statement of
accounts for the financial year ended 31st March, 2010
together with the Auditors' Report thereon.
The Company has not yet started its commercial activities and
therefore no Profit and Loss Account has been prepared and
the expenditure incurred has been shown under Schedule -6
under the head “Project & Pre-operative Expenses (Pending
Allocation)” to the Balance Sheet.
During the financial year ending 31st March, 2010, the
following expenditure has been incurred on the project as per
the details given below:
(Amount in ` Million)
Fixed Assets ( Gross ) 934.624
Capital Work in Progress 11,970.644
Preoperative Expenses 5,648.625
Net Current Assets (841.863)
Miscellaneous 20.018
TOTAL 17,732.048
PARTICULARS AMOUNT
Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of over
8% and to meet the lifeline energy needs of all citizens, the power sector needs to grow at 1.8 - 2 times the GDP rate of
growth. At >8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in
2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which
translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five
years under APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require
investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy
Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.
I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the
project implementation of Allain-Duhangan, the Allain side of the project is likely to start generating power by the
second half of July, 2010. Further the excavation of Duhangan tunnel is also progressing well and it is expected that the
Duhangan portion shall be operational in the second quarter of 2011.
On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,
Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments
and agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our
employees and business associates, who despite all adverse circumstances have been the pillar of strength for the
Company.
With best wishes,
Ravi Jhunjhunwala
Chairman
95
its position in the Indian power sector. The volume of traded
power grew by 37 per cent during 2009-10 as compared to the
previous year. According to Central Electricity Regulatory
Commission (CERC) estimates, the power exchanges and
trading licensees transacted short term power worth
Rs.192.17 billion in 2009.
A notable recent development has been the emergence of
industrial consumers for power procurement through
exchanges. During 2009, over 20 industries procured a total of
154.4 million units (MUs) through the power exchange (IEX).
For merchant plants, the tariffs are governed by supply and
demand in the market. The current demand-supply gap, which
is expected to continue for at least next 10 years , provides not
only investment opportunities in the power sector but will also
boost the sale of power in the spot market/ on short term
contract basis.
During the year under review, an allotment of 62,800,000
equity shares was made at par to Malana Power Company
Limited, and 37,352,841 equity shares were allotted at par to
IFC, Washington.
The total paid up equity capital of the Company stands at
` 5,601 million as on the date of this report.
Your Company has adopted and implemented Environmental
Management Plan as per the norms of IFC, Washington to
address various environmental and social issues. It also
includes Public consultation and disclosure plan through mode
of local community participation, consultation, and dialogues.
SHARE CAPITAL
ENVIRONMENT, HEALTH AND SAFETY
consumption is still one of the lowest in the world with the global
average being around 2,701 KWh.
With the Indian Economy growing at more than 7 to 8 percent
annually, the demand for power has been outstripping supply.
India continues to experience acute shortages in energy
supply (11.7%) and peak load capacity (13.3%). Both energy
demand and peak demand are expected to grow at between 7-
8% up to 2017 and at 6-7% thereafter.
In order to cater to its growing requirement of electricity, India
has to reduce its dependency on fossil fuels by looking at other
alternatives of energy which are both cost effective and cleaner
in nature. Hydro Power, besides supplementing demand for
electricity, is also one of the better available choices for
meeting peak demand. As of March 2009 the total installed
capacity of Hydro Power in India was about 37,000 MW.
However, almost 70% of the exploitable hydro power capacity
of 1,48,701 MW still remains to be developed. As per Hydro
Power Policy 2008, the Government of India plans to tap the
unexploited capacity by end of 14th Five year plan ( 2022-23 to
2026-27), which means that Hydro Power will see a surge in
investment during the next 15 years.
Of late, the Government of India has taken many initiatives
starting from the enactment of Electricity Act 2003, introduction
of Open Access , setting up of Regulatory Commissions at the
Centre and States, unbundling of state electricity boards,
modification of mega power policy, formulation of Competitive
Bidding Tariff, facilitation of trading of surplus/merchant
capacity and setting up of Power Exchanges. All these
initiatives have had positive results and attracted more
investment in the power sector.
The short term power market has been gradually consolidating
97
India is one of the fastest growing economies of the world and
has been recording high GDP growth over the last few years.
Economists predict that the Indian economy will continue to
maintain the same tempo in future also, which will lead to
further increase in demand for electricity due to the fact that the
growth in GDP and Power consumption are positively
correlated, i.e., both move in the same direction.
India’s power generation capacity increased to 1,59,398 MW
as on 31st March 2010 as compared to 1,47,965 MW as on
31st March 2009, an increase of 7.72%. The total energy
available increased from 6,89,021 MUs ( 2008-09) to 7,46,493
MUs (2009-10 ), an increase of 8.34%.
As per Planning Commission estimates, total electricity
requirement in the country at eight per cent GDP growth is
projected to cross 1,000 BU by 2011-12 and further rise to
2,118 BU by 2021-22. The Planning Commission has
estimated that for an energy requirement of 1,097 BU in 2011-
12 (at eight per cent GDP growth), installed capacity has to be
2,20,000 MW. At the same GDP growth rate, total installed
capacity is required to be 306,000 Mw and 425,000 MW in
2016-17 and 2021-22 respectively. Over the last decade,
India’s electricity generation has surged from 480.7 BU in
1999-00 to 771.17 BU in 2009-10. However, there still exists a
wide gap between demand for power and actual supply and
this translates into huge opportunity for the power sector
companies to capitalize on.
Increase in power capacity and economic growth over the
years have led to rise in per capita consumption of electricity in
India from 566.7 KWh in 2002-03 to 704.2 KWh in 2007-08,
growing at a CAGR of 3.69 per cent. However, India’s
The Company will, in all likelihood, be commencing
commercial generation of electricity by end June, 2010 or early
July, 2010.
The revised Project Cost Ceiling for financing purposes as
approved by The International Finance Corporation,
Washington now stands at Rs 20,213 Million and to be
financed as follows;-
(` in Million)
Equity Malana Power Company Ltd (88%) 4,928
International Finance Corporation, (12%) 672
Total 5,600
Debt Senior IFC, IDBI and other commercial banks 9,975
Debt –Subordinate Malana Power Company Ltd 4638
Total 20,213
As on 31st March 2010, an amount of ̀ 17,732.048 million has already been
incurred on the project with the following means of finance:
(` in Million)
1 Equity contribution from Malana Power Co. Ltd 4,929.556
2 Equity contribution from IFC, W 671.972
3 Senior Debt from International Finance Corporation 2,150.000
4 Senior Debt from Local Lenders
(IDBI, PNB, Axis Bank, PSB & OBC) 6,230.000
5 Debt from Holding Company
(Malana Power Company Ltd.) 3,750.520
Total 17,732.048
Energy is an essential part of the overall development of the
country.
STATUS OF FINANCING
THE FUTURE OUTLOOK-INDIAN POWER SECTOR
96
Annual Report 2009-10
its position in the Indian power sector. The volume of traded
power grew by 37 per cent during 2009-10 as compared to the
previous year. According to Central Electricity Regulatory
Commission (CERC) estimates, the power exchanges and
trading licensees transacted short term power worth
Rs.192.17 billion in 2009.
A notable recent development has been the emergence of
industrial consumers for power procurement through
exchanges. During 2009, over 20 industries procured a total of
154.4 million units (MUs) through the power exchange (IEX).
For merchant plants, the tariffs are governed by supply and
demand in the market. The current demand-supply gap, which
is expected to continue for at least next 10 years , provides not
only investment opportunities in the power sector but will also
boost the sale of power in the spot market/ on short term
contract basis.
During the year under review, an allotment of 62,800,000
equity shares was made at par to Malana Power Company
Limited, and 37,352,841 equity shares were allotted at par to
IFC, Washington.
The total paid up equity capital of the Company stands at
` 5,601 million as on the date of this report.
Your Company has adopted and implemented Environmental
Management Plan as per the norms of IFC, Washington to
address various environmental and social issues. It also
includes Public consultation and disclosure plan through mode
of local community participation, consultation, and dialogues.
SHARE CAPITAL
ENVIRONMENT, HEALTH AND SAFETY
consumption is still one of the lowest in the world with the global
average being around 2,701 KWh.
With the Indian Economy growing at more than 7 to 8 percent
annually, the demand for power has been outstripping supply.
India continues to experience acute shortages in energy
supply (11.7%) and peak load capacity (13.3%). Both energy
demand and peak demand are expected to grow at between 7-
8% up to 2017 and at 6-7% thereafter.
In order to cater to its growing requirement of electricity, India
has to reduce its dependency on fossil fuels by looking at other
alternatives of energy which are both cost effective and cleaner
in nature. Hydro Power, besides supplementing demand for
electricity, is also one of the better available choices for
meeting peak demand. As of March 2009 the total installed
capacity of Hydro Power in India was about 37,000 MW.
However, almost 70% of the exploitable hydro power capacity
of 1,48,701 MW still remains to be developed. As per Hydro
Power Policy 2008, the Government of India plans to tap the
unexploited capacity by end of 14th Five year plan ( 2022-23 to
2026-27), which means that Hydro Power will see a surge in
investment during the next 15 years.
Of late, the Government of India has taken many initiatives
starting from the enactment of Electricity Act 2003, introduction
of Open Access , setting up of Regulatory Commissions at the
Centre and States, unbundling of state electricity boards,
modification of mega power policy, formulation of Competitive
Bidding Tariff, facilitation of trading of surplus/merchant
capacity and setting up of Power Exchanges. All these
initiatives have had positive results and attracted more
investment in the power sector.
The short term power market has been gradually consolidating
97
India is one of the fastest growing economies of the world and
has been recording high GDP growth over the last few years.
Economists predict that the Indian economy will continue to
maintain the same tempo in future also, which will lead to
further increase in demand for electricity due to the fact that the
growth in GDP and Power consumption are positively
correlated, i.e., both move in the same direction.
India’s power generation capacity increased to 1,59,398 MW
as on 31st March 2010 as compared to 1,47,965 MW as on
31st March 2009, an increase of 7.72%. The total energy
available increased from 6,89,021 MUs ( 2008-09) to 7,46,493
MUs (2009-10 ), an increase of 8.34%.
As per Planning Commission estimates, total electricity
requirement in the country at eight per cent GDP growth is
projected to cross 1,000 BU by 2011-12 and further rise to
2,118 BU by 2021-22. The Planning Commission has
estimated that for an energy requirement of 1,097 BU in 2011-
12 (at eight per cent GDP growth), installed capacity has to be
2,20,000 MW. At the same GDP growth rate, total installed
capacity is required to be 306,000 Mw and 425,000 MW in
2016-17 and 2021-22 respectively. Over the last decade,
India’s electricity generation has surged from 480.7 BU in
1999-00 to 771.17 BU in 2009-10. However, there still exists a
wide gap between demand for power and actual supply and
this translates into huge opportunity for the power sector
companies to capitalize on.
Increase in power capacity and economic growth over the
years have led to rise in per capita consumption of electricity in
India from 566.7 KWh in 2002-03 to 704.2 KWh in 2007-08,
growing at a CAGR of 3.69 per cent. However, India’s
The Company will, in all likelihood, be commencing
commercial generation of electricity by end June, 2010 or early
July, 2010.
The revised Project Cost Ceiling for financing purposes as
approved by The International Finance Corporation,
Washington now stands at Rs 20,213 Million and to be
financed as follows;-
(` in Million)
Equity Malana Power Company Ltd (88%) 4,928
International Finance Corporation, (12%) 672
Total 5,600
Debt Senior IFC, IDBI and other commercial banks 9,975
Debt –Subordinate Malana Power Company Ltd 4638
Total 20,213
As on 31st March 2010, an amount of ̀ 17,732.048 million has already been
incurred on the project with the following means of finance:
(` in Million)
1 Equity contribution from Malana Power Co. Ltd 4,929.556
2 Equity contribution from IFC, W 671.972
3 Senior Debt from International Finance Corporation 2,150.000
4 Senior Debt from Local Lenders
(IDBI, PNB, Axis Bank, PSB & OBC) 6,230.000
5 Debt from Holding Company
(Malana Power Company Ltd.) 3,750.520
Total 17,732.048
Energy is an essential part of the overall development of the
country.
STATUS OF FINANCING
THE FUTURE OUTLOOK-INDIAN POWER SECTOR
96
Annual Report 2009-10
– Medicines are provided free of cost to the laboures and the
villagers residing in the project affected area.
– The Company has well equipped 3 ambulances having
Oxygen cylinders, IV fluid and first aid boxes at both the
sites.
– Health department of the Company is also involved in the
activities like, Pulse Polio Immunization programme, STD/
HIV–AIDS awareness programme, universal
immunization programme for children & antenatal women
etc.
– Bio medical waste is managed according to WHO
guidelines and sent to Municipal Corporation, Kullu for
further handling after segregation at health centre.
– A Community hall at Sethan has been completed and
inaugurated .
– Provision of drinking water facility for Sethan village has
been completed.
– Provision of Irrigation water for Sethan village is under
progress and likely to be completed by end of September.
– Construction of Buddhist Gompa temple in Prini is under
progress.
– Construction of 2nd storey of Govt. school building at Aleo
has been completed
– First Aid Training of laborers and Engineer/ Supervisors
has been conducted by External agency.
– In house training for EHS&S personnel has been started
on regular basis during EHS&S departmental meeting
held every week on Wednesday.
– Fire fighting & Fire prevention training for site staff,
security personnel & Contractors Engineer has been
imparted by third party.
– A hoarding for Environment Awareness installed at Manali
tourist town.
– Equipments of worth 30 Lacs (Smoke meter for Petrol &
Diesel, BOD Incubator, HVS, Noise meter) have been
provided to HP State Pollution Control Board on kind basis
for Environmental monitoring & Pollution Control
measures.
– Construction of Jamdagani Rishi temple at Jagatsukh is
nearing completion.
– Construction of Panchayat Bhavan at Jagatsukh is
completed.
– “Job Safety Analysis”, sling safety, training for Supervisors
and above level was conducted at various Project site
locations.
– Training regarding Frost bite and its prevention has been
given by AD Hydro health department at all the project
sites.
– Drivers training is being done on regular interval.
– Award of “Renewal of Consent to Establish under Water
(Prevention & Control of pollution) Act, 1974 and Air
(Prevention & Control of pollution) Act, 1981” up to March
31, 2010 from H.P. State pollution Control Board vide
letter number HPSPCB (20)/A.D. HEP–Kullu /
09–17036–38 which was due since 2005.
– All the previous Show cause notices issued under Water
(Prevention & Control of pollution) Act, 1974 and Air
98
– Work of Slogan writing for Govt. High School, Prini;
– Stadium for Jamdagni Temple at Prini, RD 2000 Allain
Road;
– Govt. Primary School at Prini (Double Storey);
– Shifting and laying of water supply line from Prini to Chalet
Village;
– Modification and placing of dustbins.
– The Company has established and is maintaining solid
waste management system at the site.
– For providing education to the children of workers at site, a
creche has been operational.
– For ensuring road safety in the site area, the Company has
made an expenditure of Rs 6.55 million for the
construction of Parapets along Project roads that are
nearing completion. Further, at both Allain and Duhangan
sites, one additional road barrier has been set up to ensure
road safety.
– The Company has one primary health centre at Prini,
having well experienced medical officer and other
paramedical staff. Project has also two first aid centers at
Hamta Potato farm and Duhangan weir site with trained
First Aiders.
– Primary health centre at Prini is having all basic facilities
for emergency handling including well equipped
diagnostic laboratory.
– Weekly health check up of employees is being carried out
every Friday on voluntary basis.
99
The Directors have pleasure in informing the members that
during the year, IFC has chosen ADHPL as one of the eight
projects across the globe for efforts made towards social
causes and in recognition IFC has proposed visit of Blackstone
Mission (consultant to IFC) in the last week of June 2010
During the year under review, there were a total of 15 total
reported injuries. One unfortunate fatality occurred on the
transmission line, there were 13 Lost Time Injuries (LTI) and 1
Medical Treatment Injury (MTI) at the site. A very detailed
analysis and reporting has been prepared on the cause of the
accident and eventually the Fatality. Based on the findings;
trainings, tool box discussions, Job safety analysis have been
framed and are being practiced so that the chances of such
accidents are minimized.
We should also mention about the TRI’s and state that the HSE
focus put in place has brought this down from 42 reported
injuries and 10 fatalities in 2008-09.
The Company is committed to ensuring that it conducts its
business in accordance with ethical, professional and legal
standards.
As a constructive partner in the communities in which it
operates, your company has been proactive towards its social
responsibility. Some of the major activities undertaken during
the year by the company towards fulfilling its social
responsibility objectives are: .
Completion of work on:
– P.C.C. playground at Govt. Middle School, Aleo;
– C/O Double Storey building for G.S., Aleo;
CORPORATE SOCIAL RESPONSIBILITY
Annual Report 2009-10
– Medicines are provided free of cost to the laboures and the
villagers residing in the project affected area.
– The Company has well equipped 3 ambulances having
Oxygen cylinders, IV fluid and first aid boxes at both the
sites.
– Health department of the Company is also involved in the
activities like, Pulse Polio Immunization programme, STD/
HIV–AIDS awareness programme, universal
immunization programme for children & antenatal women
etc.
– Bio medical waste is managed according to WHO
guidelines and sent to Municipal Corporation, Kullu for
further handling after segregation at health centre.
– A Community hall at Sethan has been completed and
inaugurated .
– Provision of drinking water facility for Sethan village has
been completed.
– Provision of Irrigation water for Sethan village is under
progress and likely to be completed by end of September.
– Construction of Buddhist Gompa temple in Prini is under
progress.
– Construction of 2nd storey of Govt. school building at Aleo
has been completed
– First Aid Training of laborers and Engineer/ Supervisors
has been conducted by External agency.
– In house training for EHS&S personnel has been started
on regular basis during EHS&S departmental meeting
held every week on Wednesday.
– Fire fighting & Fire prevention training for site staff,
security personnel & Contractors Engineer has been
imparted by third party.
– A hoarding for Environment Awareness installed at Manali
tourist town.
– Equipments of worth 30 Lacs (Smoke meter for Petrol &
Diesel, BOD Incubator, HVS, Noise meter) have been
provided to HP State Pollution Control Board on kind basis
for Environmental monitoring & Pollution Control
measures.
– Construction of Jamdagani Rishi temple at Jagatsukh is
nearing completion.
– Construction of Panchayat Bhavan at Jagatsukh is
completed.
– “Job Safety Analysis”, sling safety, training for Supervisors
and above level was conducted at various Project site
locations.
– Training regarding Frost bite and its prevention has been
given by AD Hydro health department at all the project
sites.
– Drivers training is being done on regular interval.
– Award of “Renewal of Consent to Establish under Water
(Prevention & Control of pollution) Act, 1974 and Air
(Prevention & Control of pollution) Act, 1981” up to March
31, 2010 from H.P. State pollution Control Board vide
letter number HPSPCB (20)/A.D. HEP–Kullu /
09–17036–38 which was due since 2005.
– All the previous Show cause notices issued under Water
(Prevention & Control of pollution) Act, 1974 and Air
98
– Work of Slogan writing for Govt. High School, Prini;
– Stadium for Jamdagni Temple at Prini, RD 2000 Allain
Road;
– Govt. Primary School at Prini (Double Storey);
– Shifting and laying of water supply line from Prini to Chalet
Village;
– Modification and placing of dustbins.
– The Company has established and is maintaining solid
waste management system at the site.
– For providing education to the children of workers at site, a
creche has been operational.
– For ensuring road safety in the site area, the Company has
made an expenditure of Rs 6.55 million for the
construction of Parapets along Project roads that are
nearing completion. Further, at both Allain and Duhangan
sites, one additional road barrier has been set up to ensure
road safety.
– The Company has one primary health centre at Prini,
having well experienced medical officer and other
paramedical staff. Project has also two first aid centers at
Hamta Potato farm and Duhangan weir site with trained
First Aiders.
– Primary health centre at Prini is having all basic facilities
for emergency handling including well equipped
diagnostic laboratory.
– Weekly health check up of employees is being carried out
every Friday on voluntary basis.
99
The Directors have pleasure in informing the members that
during the year, IFC has chosen ADHPL as one of the eight
projects across the globe for efforts made towards social
causes and in recognition IFC has proposed visit of Blackstone
Mission (consultant to IFC) in the last week of June 2010
During the year under review, there were a total of 15 total
reported injuries. One unfortunate fatality occurred on the
transmission line, there were 13 Lost Time Injuries (LTI) and 1
Medical Treatment Injury (MTI) at the site. A very detailed
analysis and reporting has been prepared on the cause of the
accident and eventually the Fatality. Based on the findings;
trainings, tool box discussions, Job safety analysis have been
framed and are being practiced so that the chances of such
accidents are minimized.
We should also mention about the TRI’s and state that the HSE
focus put in place has brought this down from 42 reported
injuries and 10 fatalities in 2008-09.
The Company is committed to ensuring that it conducts its
business in accordance with ethical, professional and legal
standards.
As a constructive partner in the communities in which it
operates, your company has been proactive towards its social
responsibility. Some of the major activities undertaken during
the year by the company towards fulfilling its social
responsibility objectives are: .
Completion of work on:
– P.C.C. playground at Govt. Middle School, Aleo;
– C/O Double Storey building for G.S., Aleo;
CORPORATE SOCIAL RESPONSIBILITY
Annual Report 2009-10
Internal audit plans cover matters identified in risk
management assessments as well as issues highlighted by the
Board, the audit committee and senior management. Quarterly
Internal audit reports are submitted along with the
management’s response to the Audit Committee. The Audit
Committee monitors performance of Internal Audit on a
periodic basis through review of the internal audit plans, audit
findings & swiftness of issue resolution through follow ups.
Information of employees in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, is given in
Annexure-II to the Directors’ Report.
As required under Section 217 (2AA) of the Companies
(Amendment) Act, 2000, the Directors of your Company state
hereunder:-
i) That in the preparation of the annual accounts, the
applicable accounting standards had been followed along
with proper explanation relating to material departures;
ii) that the accounting policies have been selected and
applied consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the company at the end of
the financial year and of the profit or loss of the Company
for the financial year 2009-10;
iii) that the proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
the assets of the Company and for preventing and
detecting fraud and other irregularities; and
iv) that the annual accounts have been prepared on going
concern basis.
Mr. Ravi Jhunjhunwala and Mr. Øistein Andresen retire by
rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for reappointment there at.
Mr. R. P. Goel was appointed as Whole Time Director with
effect from 29th November 2009 for a period of two years.
During the year the Company met thrice to review Company’s
financial results, internal control systems, risk management
policies and internal audit reports. The audit committee of the
Company comprises of three members.
The Company has received consent letter from S.R. Batliboi &
Co., Chartered Accountants under section 224(1B) of the
Companies Act, 1956 who, being eligible have shown their
willingness for appointment as statutory auditors of the
Company. The Board recommends the re-appointment of
M/s S.R. Batliboi & Co., Chartered Accountants as Statutory
Auditors of the Company.
The observations made by the Auditors with reference to the
Notes to the Accounts for the year under report are self-
explanatory and require no further comments.
DIRECTORS
AUDIT COMMITTEE
AUDITORS
AUDITORS’ REMARKS
100
(Prevention & Control of pollution) Act, 1981 have been
revoked by Himachal Pradesh State Pollution Control
Board vide letter number HPSPCB (20) / Allain Duhangan
HEP – Kullu /09–13010–11.
– National Safety Day was celebrated on March 4, 2010 with
big fervour.
Your Company’s Human Resources Development strategy
focuses on building the competence, commitment and
motivation of employees. The Company recognizes serious
scarcity of trained expert personnel in power sector. With the
expansion of the power market, there is growing requirement
for not just qualified engineers, but also for finance, marketing,
commercial, IT and HR personnel.
The Company recognizes human resources as a key
component for facilitating organization growth and regularly
invests in augmenting its human resources with latest tools,
equipments and techniques through focused and structured
become an attractive employer in the industry.
The Company is also committed to provide a zero injury
workplace to its employees and workers all across its units,
security of employees is one of the prime concerns of the
Management. Employees are adequately covered under
various insurance policies against risk of health and life
disasters. The company continues to empower its employees
to achieve business successes. Accordingly suitable changes
at Site Management level have also been made.
As the construction work is under progress, without any
HUMAN RESOURCES DEVELOPMENT
DIVIDEND & OTHER APPROPRIATION
operation, no dividends are proposed to be declared during the
year under operation.
INTERNAL CONTROL SYSTEMS
Your Company has an adequate internal control procedure
commensurate with the nature of its business and size of its
operations. Internal Audit is conducted at regular interval. The
internal control system in all areas of operations, regularly
checked by both external and internal auditors that have
access to all records and information. The Company also
maintains a system of internal control designed to provide
reasonable assurance regarding the effectiveness and
efficiency of operations, the adequacy of safeguards for
assets, the reliability of financial control and compliance with
applicable laws and regulations. The Company is continuously
upgrading these systems in line with the best available
practices. Audit Committee meetings are held where these
reports and variance analysis are discussed and action taken.
Operational reports are tabled at the Board Meetings after
discussions at Audit Committee Meetings.
INTERNAL AUDIT
Internal Audit is an independent, objective and assurance
function conscientious for evaluating and improving the
effectiveness of risk management, Control, and governance
processes. The function prepares annual audit plans based on
risk management and conducts extensive reviews covering
financial, operational and compliance controls and risk
mitigation. Areas requiring specialized knowledge are
reviewed in partnership with external experts.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
101
Annual Report 2009-10
Internal audit plans cover matters identified in risk
management assessments as well as issues highlighted by the
Board, the audit committee and senior management. Quarterly
Internal audit reports are submitted along with the
management’s response to the Audit Committee. The Audit
Committee monitors performance of Internal Audit on a
periodic basis through review of the internal audit plans, audit
findings & swiftness of issue resolution through follow ups.
Information of employees in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, is given in
Annexure-II to the Directors’ Report.
As required under Section 217 (2AA) of the Companies
(Amendment) Act, 2000, the Directors of your Company state
hereunder:-
i) That in the preparation of the annual accounts, the
applicable accounting standards had been followed along
with proper explanation relating to material departures;
ii) that the accounting policies have been selected and
applied consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the company at the end of
the financial year and of the profit or loss of the Company
for the financial year 2009-10;
iii) that the proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding
PARTICULARS OF EMPLOYEES
DIRECTORS’ RESPONSIBILITY STATEMENT
the assets of the Company and for preventing and
detecting fraud and other irregularities; and
iv) that the annual accounts have been prepared on going
concern basis.
Mr. Ravi Jhunjhunwala and Mr. Øistein Andresen retire by
rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for reappointment there at.
Mr. R. P. Goel was appointed as Whole Time Director with
effect from 29th November 2009 for a period of two years.
During the year the Company met thrice to review Company’s
financial results, internal control systems, risk management
policies and internal audit reports. The audit committee of the
Company comprises of three members.
The Company has received consent letter from S.R. Batliboi &
Co., Chartered Accountants under section 224(1B) of the
Companies Act, 1956 who, being eligible have shown their
willingness for appointment as statutory auditors of the
Company. The Board recommends the re-appointment of
M/s S.R. Batliboi & Co., Chartered Accountants as Statutory
Auditors of the Company.
The observations made by the Auditors with reference to the
Notes to the Accounts for the year under report are self-
explanatory and require no further comments.
DIRECTORS
AUDIT COMMITTEE
AUDITORS
AUDITORS’ REMARKS
100
(Prevention & Control of pollution) Act, 1981 have been
revoked by Himachal Pradesh State Pollution Control
Board vide letter number HPSPCB (20) / Allain Duhangan
HEP – Kullu /09–13010–11.
– National Safety Day was celebrated on March 4, 2010 with
big fervour.
Your Company’s Human Resources Development strategy
focuses on building the competence, commitment and
motivation of employees. The Company recognizes serious
scarcity of trained expert personnel in power sector. With the
expansion of the power market, there is growing requirement
for not just qualified engineers, but also for finance, marketing,
commercial, IT and HR personnel.
The Company recognizes human resources as a key
component for facilitating organization growth and regularly
invests in augmenting its human resources with latest tools,
equipments and techniques through focused and structured
become an attractive employer in the industry.
The Company is also committed to provide a zero injury
workplace to its employees and workers all across its units,
security of employees is one of the prime concerns of the
Management. Employees are adequately covered under
various insurance policies against risk of health and life
disasters. The company continues to empower its employees
to achieve business successes. Accordingly suitable changes
at Site Management level have also been made.
As the construction work is under progress, without any
HUMAN RESOURCES DEVELOPMENT
DIVIDEND & OTHER APPROPRIATION
operation, no dividends are proposed to be declared during the
year under operation.
INTERNAL CONTROL SYSTEMS
Your Company has an adequate internal control procedure
commensurate with the nature of its business and size of its
operations. Internal Audit is conducted at regular interval. The
internal control system in all areas of operations, regularly
checked by both external and internal auditors that have
access to all records and information. The Company also
maintains a system of internal control designed to provide
reasonable assurance regarding the effectiveness and
efficiency of operations, the adequacy of safeguards for
assets, the reliability of financial control and compliance with
applicable laws and regulations. The Company is continuously
upgrading these systems in line with the best available
practices. Audit Committee meetings are held where these
reports and variance analysis are discussed and action taken.
Operational reports are tabled at the Board Meetings after
discussions at Audit Committee Meetings.
INTERNAL AUDIT
Internal Audit is an independent, objective and assurance
function conscientious for evaluating and improving the
effectiveness of risk management, Control, and governance
processes. The function prepares annual audit plans based on
risk management and conducts extensive reviews covering
financial, operational and compliance controls and risk
mitigation. Areas requiring specialized knowledge are
reviewed in partnership with external experts.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
101
Annual Report 2009-10
102
ANNEXURE - I TO THE DIRECTORS' REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
( DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES,1988
1. CONSERVATION OF ENERGY -NIL
2. TECHNOLOGY ABSORPTION - NIL
A. RESEARCH AND DEVELOPMENT ( R & D ) -NIL
B. TECHNOLOGICAL ABSORPTION, ADAPTATION AND INNOVATION-NIL
C. EXPORTS & FOREIGN EXCHANGE EARNING AND OUTGO
(` in Million)
I. Foreign Exchange Outgo
Engineering Fee and Consultancy charges 64.609 42.321
Legal and Professional charges 117.565 –
Travelling 0.254 0.382
Financial charges 0.969 –
Capital and Project Equipments 101.743 122.382
Total 285.140 165.085
PARTICULARS 2009-10 2008-09
ANNEXURE-II TO THE DIRECTORS REPORT
Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2010 are given hereunder:
Mr. O. P. Ajmera President (Finance) and CFO 3.572 C.A., C.S. 48 yrs. 17-03-1987
Name Designation Remuneration Qualification Age Date of (` in Million) Commencement
of Employment
PUBLIC DEPOSITS
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS & OUTGO
CORPORATE GOVERNANCE
The Company has not accepted any deposits from the Public
during the year under report. Therefore, provisions of Section
58A are not applicable.
Information required to be disclosed under Section 217 (1)(e)
of the Companies Act, 1956 read with Companies (Disclosure
of Particulars in the report of Board of Directors) Rules, 1988
has been given in the Annexure I forming part of this Report.
Your Company follows practices of good Corporate
Governance with strong belief that corporate governance is a
key element in improving efficiency and growth as well as
enhancing investor confidence.
The majority of the Board comprises of Non-Executive
Directors who impart balance to the Board processes by
bringing an independent judgment to bear on issues of
strategy, performance, resources, standards of Company
conduct, etc. The audit committee of the board meets regularly
and provides assurance to the Board on the adequacy of
internal control systems and financial systems. The Corporate
governance policy followed by the company represents the
value framework, the ethical framework and the moral
framework under which business decisions are taken.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The Directors are pleased to place on record their appreciation for
the continued support received from the lenders of the Company
namely IFC, IDBI, PSB, OBC, AXIS Bank, PNB, J & K Bank and
United Bank of India. The Directors also acknowledge the
assistance and continued support provided by the Ministry of
Power, Government of India, Government of Himachal Pradesh,
Himachal Pradesh State Electricity Board, Commercial Banks and
other Government Departments / Bodies / Authorities and looks
forward to their continued support and cooperation in the coming
years as well.
The Board would also like to express great appreciation for the
commitment and contribution of its employees at all levels. Last but
not least, the Company thanks its shareholders for their unstinted
support.
For and on behalf of the Board of Directors
Place: Noida Ravi Jhunjhunwala
Date: June 02, 2010 Chairman
103
Annual Report 2009-10
102
ANNEXURE - I TO THE DIRECTORS' REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
( DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES,1988
1. CONSERVATION OF ENERGY -NIL
2. TECHNOLOGY ABSORPTION - NIL
A. RESEARCH AND DEVELOPMENT ( R & D ) -NIL
B. TECHNOLOGICAL ABSORPTION, ADAPTATION AND INNOVATION-NIL
C. EXPORTS & FOREIGN EXCHANGE EARNING AND OUTGO
(` in Million)
I. Foreign Exchange Outgo
Engineering Fee and Consultancy charges 64.609 42.321
Legal and Professional charges 117.565 –
Travelling 0.254 0.382
Financial charges 0.969 –
Capital and Project Equipments 101.743 122.382
Total 285.140 165.085
PARTICULARS 2009-10 2008-09
ANNEXURE-II TO THE DIRECTORS REPORT
Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2010 are given hereunder:
Mr. O. P. Ajmera President (Finance) and CFO 3.572 C.A., C.S. 48 yrs. 17-03-1987
Name Designation Remuneration Qualification Age Date of (` in Million) Commencement
of Employment
PUBLIC DEPOSITS
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS & OUTGO
CORPORATE GOVERNANCE
The Company has not accepted any deposits from the Public
during the year under report. Therefore, provisions of Section
58A are not applicable.
Information required to be disclosed under Section 217 (1)(e)
of the Companies Act, 1956 read with Companies (Disclosure
of Particulars in the report of Board of Directors) Rules, 1988
has been given in the Annexure I forming part of this Report.
Your Company follows practices of good Corporate
Governance with strong belief that corporate governance is a
key element in improving efficiency and growth as well as
enhancing investor confidence.
The majority of the Board comprises of Non-Executive
Directors who impart balance to the Board processes by
bringing an independent judgment to bear on issues of
strategy, performance, resources, standards of Company
conduct, etc. The audit committee of the board meets regularly
and provides assurance to the Board on the adequacy of
internal control systems and financial systems. The Corporate
governance policy followed by the company represents the
value framework, the ethical framework and the moral
framework under which business decisions are taken.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The Directors are pleased to place on record their appreciation for
the continued support received from the lenders of the Company
namely IFC, IDBI, PSB, OBC, AXIS Bank, PNB, J & K Bank and
United Bank of India. The Directors also acknowledge the
assistance and continued support provided by the Ministry of
Power, Government of India, Government of Himachal Pradesh,
Himachal Pradesh State Electricity Board, Commercial Banks and
other Government Departments / Bodies / Authorities and looks
forward to their continued support and cooperation in the coming
years as well.
The Board would also like to express great appreciation for the
commitment and contribution of its employees at all levels. Last but
not least, the Company thanks its shareholders for their unstinted
support.
For and on behalf of the Board of Directors
Place: Noida Ravi Jhunjhunwala
Date: June 02, 2010 Chairman
103
Annual Report 2009-10
104
Annual Report 2009-10
Auditors' report
To
The Members of AD Hydro Power Limited
1. We have audited the attached Balance sheet of Ad Hydro power Limited (‘the Company’) as at March 31, 2010 and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s report) order, 2003 (as amended) issued by the Central Government of india in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we report that:
i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
ii. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
iii. The balance sheet and cash flow statement dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
v. on the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india;
a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;
b) in the case of cash flow statement, of the cash flows for the year ended on that date.
For S. R. BATLIBOI & CO.Firm registration number: 301003eChartered Accountants
per Raj Agrawalpartner Membership No.: 82028
place: Gurgaondate: June 2, 2010
105
Annexure referred to in paragraph 3 of our report of even date
re: Ad Hydro power Limited ('the Company')
(i) (a) the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. in respect of material lying with third parties, the management has a process of confirmations and reconciliations with the third parties during the year.
(c) the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.
(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses 4(iii) (a), (b), (c) and (d) of the Companies (Auditor’s report ) order, 2003 (as amended) are not applicable to the Company.
(e) the Company has taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount involved during the year was rs. 4,262,368 thousand and the year-end balance of loan taken from such company was rs.3,750,520 thousand.
(f) in our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.
(g) As informed to us and as per the terms of the subordination Loan agreement with the lenders, the loan taken and interest thereon is re-payable after the payment is made to outside lenders and once the project commences commercial operations. Accordingly, the lenders have not demanded repayment of any such loan and interest thereon during the year and thus, there has been no default on the part of the Company.
(iv) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of scrap. during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. since the Company has not yet commenced commercial production, the Company has not sold any services. during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.
(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.
(b) in our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.
(vi) the Company has not accepted any deposits from the public.
(vii) in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) the Company is in construction phase and is yet to commence operations. Accordingly, the provisions of clause 4(viii) of the Companies (Auditor’s report) order 2003 (as amended) are not applicable to the Company.
(ix) (a) undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities though there has been delay in one case of dues related to income tax. the provisions relating to employees’ state insurance are not applicable to the Company.
Further, since the Central Governent has till date not prescribed the amount of cess payable under section 441 A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education
106
Annual Report 2009-10
and protection fund, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.
(x) As the Company is yet to commence commercial operations as on March 31, 2010, the Profit & Loss Account has not been prepared. Hence, we are not required to comment on whether or not the accumulated losses at the end of financial year is fifty percent or more of its net worth and whether it has incurred cash losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has no outstanding dues in respect of debenture holders.
(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) in our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.
(xiv) in our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.
(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on an overall examination of the Balance sheet and Cash Flow statement of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
(xviii) the Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. in our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.
(xix) the Company did not have any outstanding debentures during the the year.
(xx) during the year under review, the Company has not raised money through public issues: hence, clause 4 (xx) of the Companies (Auditor’s report) order, 2003 (as amended) is not applicable to the Company.
(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For S. R. BATLIBOI & CO.Firm registration number: 301003eChartered Accountants
per Raj AgrawalPartner Membership No.: 82028
place : Gurgaondate : June 2, 2010
107
BALANCe sHeet As At 31st MArCH, 2010
As per our report of even dateFor S. R. Batliboi & Co.Chartered AccountantsFirm registration No. : 301003e
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA director
ROHINI ROSHANARA SOOD director
SANDeeP CHANDNA Company secretary
place : Noidadate : June 2, 2010
(` ’000)schedules As at
March 31, 2010As at
March 31, 2009SOURCeS OF FUNDSShareholders' Fundsshare capital 1 5,601,528 4,600,000 share application money (pending allotment) – 628,000
5,601,528 5,228,000 Loan funds secured loans 2 8,380,000 7,140,000 unsecured loans 3 3,750,520 1,360,756
12,130,520 8,500,756 TOTAL 17,732,048 13,728,756 APPLICATION OF FUNDS Fixed Assets Gross block 4 934,624 776,500 Less : Accumulated depreciation 376,400 185,722 Net block 558,224 590,778 Capital work-in-progress including capital advances
5 11,970,645 9,984,140
project and pre-operative expenses (pending allocation)
6 6,025,024 4,004,558
18,553,893 14,579,476 Current Assets, Loans and Advances inventories 7 177,321 220,024 Cash and bank balances 8 499,766 69,303 other current assets 9 188 158 Loans and advances 10 23,329 36,559
700,604 326,044 Less: Current Liabilities and Provisions Current liabilities 11 1,523,854 1,180,289 provisions 12 18,613 16,493
1,542,467 1,196,782 Net Current Assets (841,863) (870,738)Miscellaneous expenditure (to the extent not written off or adjusted)
13 20,018 20,018
TOTAL 17,732,048 13,728,756 Notes to accounts 14
the schedules referred to above form an integral part of the Balance sheet.
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Annual Report 2009-10
sCHeduLes
SCHeDULe 1: SHARe CAPITAL
(` ’000)
As at March 31, 2010
As at March 31, 2009
Authorised
700,000,000 (previous year 700,000,000) equity shares of ` 10 each
7,000,000 7,000,000
Issued, subscribed and paid up
560,152,841 (previous year 460,000,000) equity shares of ` 10 each
5,601,528 4,600,000
492,955,640 (previous year 430,155,640) equity shares are held by Malana power Company Limited, the Holding Company along with its nominees.
5,601,528 4,600,000
SCHeDULe 2: SeCUReD LOANS
(` ’000)
As at March 31, 2010
As at March 31, 2009
rupee term loans
– From banks 6,230,000 5,290,000
– From an institution 2,150,000 1,150,000
short term loans
– From others – 700,000
8,380,000 7,140,000
Note:
1. Term loans from banks and institutions are secured by way of a first mortgage/charge on all immovable properties wherever situated, both present and future, and hypothecation of all movable assets, rights, etc., present and future, of the Company, on pari passu basis. Further, the holding company, Malana power Company Limited, has provided corporate guarantee and has also pledged its share holding in the Company.
2. rupee term loan from an institution represents loan from iFC, Washington, a minority shareholder.3. Loans include amounts payable within one year ` 329,485 thousand (previous year ` 700,000 thousand)
SCHeDULe 3: UNSeCUReD LOANS
(` ’000)
As at March 31, 2010
As at March 31, 2009
Long term loan
– From Holding Company 3,750,520 1,360,756
3,750,520 1,360,756
Loans include amounts payable within one year ` Nil (previous year ` Nil)
109
SCHeDULe - 4 : FIXeD ASSeTS (` ’000)
GROSS BLOCK DePReCIATION NeT BLOCK
particulars As atApril 1,
2009
Additions deduction As atMarch 31,
2010
As atApril 1,
2009
For the year
deletion As atMarch 31,
2010
As atMarch 31,
2010
As atMarch 31,
2009
Buildings 252,963 2,525 – 255,488 8,183 5,070 – 13,253 242,235 244,780
project equipments 443,533 149,154 – 592,687 146,846 177,443 – 324,289 268,398 296,688
electrical installation 25,852 4,952 – 30,804 4,082 1,559 – 5,641 25,163 21,769
Furniture & fixtures 19,088 678 – 19,766 7,945 2,352 – 10,297 9,469 11,143
Computers 10,920 74 – 10,994 7,693 1,301 – 8,994 2,000 3,227
Office equipments 7,223 699 3 7,919 2,659 725 3 3,381 4,538 4,564
Vehicles 16,921 45 – 16,966 8,314 2,231 – 10,545 6,421 8,607
Total 776,500 158,127 3 934,624 185,722 190,681 3 376,400 558,224 590,778
previous Year 381,883 394,923 306 776,500 151,140 34,693 111 185,722 590,778 230,743
SCHeDULe – 5 : CAPITAL WORK IN PROGReSS(` ’000)
particulars As atApril 1, 2009
Additions during the Year (Net)
As atMarch 31, 2010
Land – freehold (Refer note no. 5(a) & (b) of schedule 14 )
303,745 3,046 306,791
roads 1,294,720 82,894 1,377,614
Buildings 14,586 5,713 20,299
Head race tunnel 1,576,763 667,980 2,244,743
pressure shaft/ penstock 512,027 157,319 669,346
upstream/ barrage 1,238,334 8,658 1,246,992
power house 966,080 20,938 987,018
switch Yard– Mechanical 166,561 28,529 195,090
switch Yard Civil 93,422 1,457 94,879
Construction power 41,471 2,138 43,609
transmission line
– right to use 239,487 142,026 381,513
– expenditure on forest land (refer Note no 5 (c) of schedule 14)
270,803 233,847 504,650
– others 1,321,331 321,187 1,642,518
Turbine & Generators 934,303 289,725 1,224,028
Gates 77,143 21,362 98,505
Valves 18,785 10,075 28,860
power Cables 75,962 28,966 104,928
power transformer 175,280 39,059 214,339
equipments under installation 4,787 629 5,416
Electro & mechanical auxilliary services 43,507 31,147 74,654
eot Crane 22,570 – 22,570
Capital stocks 298,525 (67,570) 230,955
– includes stocks lying with third parties ` 204,345 thousand (previous year ` 251,027thousand)
Capital advances 293,948 (42,620) 251,328
Total 9,984,140 1,986,505 11,970,645
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Annual Report 2009-10
SCHeDULe 6: PROJeCT AND PRe-OPeRATIVe eXPeNSeS (PeNDING ALLOCATION)
(` ’000)Particulars As at
April 1, 2009Additions during
the YearAs at
March 31, 2010Personnel expensessalaries , wages and bonus 363,916 135,633 499,549 Contribution to provident funds 22,177 5,839 28,016 Contribution to superannuation funds 3,762 1,059 4,821 Gratuity expenses 4,124 1,112 5,236 Long term compensated absence 1,121 3,010 4,131 Workmen and staff welfare expenses 29,140 8,705 37,845
424,240 155,358 579,598 Administrative and other expensesrent 43,841 13,430 57,271 Rates & taxes 251 95 346 insurance 95,651 42,729 138,380 repairs and maintenance – plant and machinery 25,095 5,790 30,885 – Civil works 1,812 – 1,812 – Buildings 3,245 34 3,279 – others 2,524 375 2,899 travelling expense 68,277 8,952 77,229 Conveyance 19,557 2,401 21,958 Vehicle running & hiring expenses 111,434 32,641 144,075 Communication expenses 16,018 4,836 20,854 Auditor's remuneration : – Audit Fees 2,254 552 2,806 – international reporting 1,231 426 1,657 – special Audit Fees – 524 524 – other services 613 641 1,254 – out of pocket expenses 214 163 377 Charity and donations (other than to political parties) 3,576 15 3,591 director remuneration 6,645 3,225 9,870 tender expenses 13,446 559 14,005 Legal & professional charges 104,089 28,585 132,674 engineering fees {Additions include ` 36,816 thousand pertaining to prior period (previous Year ` Nil)}
383,466 218,212 601,678
Consultancy charges 157,808 22,628 180,436 Test & Survey Expenditure 32,692 – 32,692 expenditure on forest land (refer note no 5 (c) of schedule 14)
271,848 (2,310) 269,538
environment health and safety 6,688 11,422 18,110 Fee & subscription 4,569 602 5,171 Consumption of stores, spares and Consumables 126,949 64,565 191,514 Hiring of equipment 234,686 19,651 254,337 power and fuel (net of recoveries of ` 36,155 thousand (previous year ` 43,467 thousand)
22,186 (4,966) 17,220
installation charges 3,612 – 3,612 security arrangement expense 43,896 22,647 66,543
111
(` ’000)Particulars As at
April 1, 2009Additions during
the YearAs at
March 31, 2010social welfare expenses 124,612 16,383 140,995 Miscellaneous expenses (net of recoveries ` 5,747 thousand (previous year ` 4,870 thousand)
60,988 16,048 77,036
Fringe benefit tax 16,667 – 16,667 interest on term Loan 1,144,238 746,711 1,890,949 interest to Holding Company 205,086 356,248 561,334 interest on others 1,985 3,040 5,025 Financial / bank charges (includes commitment charges / upfront fee reimbursed to holding Company ` 8,273 thousand (previous year ` 7,750 thousand)
108,715 49,003 157,718
depreciation 186,209 190,681 376,890 3,656,673 1,876,538 5,533,211
Less : interest earned (tax deducted at source ` 504 thousand, previous year ` 130 thousand) (net of provision for income tax ` 1,629 thousand (previous year ` 195 thousand))
(57,591) (3,308) (60,899)
Less : scrap sale (18,764) (8,122) (26,886) 4,004,558 2,020,466 6,025,024
SCHeDULe 7: INVeNTORIeS(` ’000)
As at March 31, 2010
As at March 31, 2009
stores and spares (including stocks lying with third parties ` 65,729 thousand (previous year ` 116,181 thousands)
177,321 220,024
177,321 220,024
SCHeDULe 8: CASH AND BANK BALANCeS(` ’000)
As at March 31, 2010
As at March 31, 2009
Cash on hand 2,227 2,708 Balances with scheduled banks: on current accounts 124,360 64,093 on deposit accounts 370,200 200 on margin money accounts 2,979 2,302
499,766 69,303 included in deposit accounts is :
Fixed deposit of ` 200 thousand (previous year ` 200 thousand) pledged with the H.p. Government sales tax department
SCHeDULe 9: OTHeR CURReNT ASSeTS(` ’000)
As at March 31, 2010
As at March 31, 2009
interest accrued on deposits 188 158 188 158
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Annual Report 2009-10
SCHeDULe 10: LOANS AND ADVANCeS (Unsecured & considered good)
(` ’000) As at
March 31, 2010 As at
March 31, 2009 Loans to employees 1,445 451 Advances recoverable in cash or in kind or for value to be received
18,531 32,052
security deposit 3,353 3,347 Advance income tax / tax deducted at source (net of provision for tax of ` Nil thousand (previous year ` 17,719 thousand))
– 709
23,329 36,559
SCHeDULe 11: CURReNT LIABILITIeS(` ’000)
As at March 31, 2010
As at March 31, 2009
sundry creditors *(a) Outstanding dues of Micro & Small Enterprises – – (b) Outstanding dues of creditors other than Micro & Small enterprises
822,165 768,100
deposits from contractors and others 83,196 125,276 interest accrued but not due on loan from an institution 41,857 26,643 interest accrued but not due on loan from holding company 559,211 199,923 other liabilities 17,425 60,347
1,523,854 1,180,289 * refer note no. 13 in schedule 14
SCHeDULe 12: PROVISIONS(` ’000)
As at March 31, 2010
As at March 31, 2009
provision for tax (Net of advance tax / tax deducted at source ` 19,861 thousand, (previous year ` Nil))
866 –
Provision for Fringe Benefit Tax (net of advance fringe benefit tax ` Nil thousand (previous year ` 15,172 thousand))
– 1,495
provision for Wealth tax – 40 provision for Gratuity 1,112 1,138 provision for Long term compensated absences 5,108 3,805 provision for Continuity Linked Bonus 11,527 10,015
18,613 16,493
SCHeDULe 13: MISCeLLANeOUS eXPeNDITURe (to the extent not written off or adjusted)
(` ’000) As at
March 31, 2010 As at
March 31, 2009 share issue expenses Balance as per last account 20,018 20,018
20,018 20,018
113
SCHeDULe – 14: NOTeS TO ACCOUNTS
1. Nature of Operations
Ad Hydro power Limited (hereinafter referred to as ‘the Company’) is in the process of setting up a 192 MW hydro electric power generation plant. the Company is still in the construction stage and has not yet commenced commercial power generation during the period ended March 31, 2010.
2. StatementofSignificantAccountingPolicies
(a) Basis of preparation
The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies (Accounting standards) rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
(b) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires managements to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
(c) Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
the carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. the recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.
(d) expenditure on new projects
Expenditure directly relating to construction activity is capitalized and classified as “Capital work in Progress” and will be apportioned to fixed assets on completion of the project. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. income earned during construction period is deducted from the total of the indirect expenditure.
(e) Depreciation
(i) depreciation on Building is provided on straight–line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.
(ii) depreciation on project equipments (net of their expected realizable value at the completion of the project) has been provided as per straight line method over the period upto the expected date of completion of the project i.e. June 30, 2010.
(iii) On fixed assets other than those covered under (i) & (ii) above, depreciation is provided on written down value method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.
(f) Leases
Where the Company is the lessee
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the schedule of project and pre-operative expenses (pending allocation) on a straight-line basis over the lease term.
114
Annual Report 2009-10
(g) Inventories
inventories comprising of stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis.
(h) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Interest
revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Sale of Scrap
Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.
(i) Miscellaneous expenditure to the extent not written off or adjusted
preliminary/share issue expenses will be amortized / adjusted in the manner to be decided by the Board of directors, starting from the year in which the Company commences its commercial operations.
(j) Foreign currency translation
Foreign currency transactions
(i) initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non–monetary items which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
(iii) exchange differences
exchange differences arising on the settlement of monetary items or on reporting of such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.
(k) Retirementandotheremployeebenefits
(i) Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined contribution schemes and the contributions are charged to the Expenses / Project & Preoperative expenses (pending allocation) in the year when the contributions to the respective funds are due. there are no obligations other than the contribution payable to the respective fund/trust.
(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation on projected unit credit method made at the end of each financial year. The amount paid/ payable in respect of present value of liability for past services is charged to the Expenses / Project & Preoperative expenses (pending allocation).
(iii) short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. the actuarial valuation is done as per projected unit credit method at the end of each financial year.
(iv) Liability under continuity linked loyalty bonus scheme is provided for on actuarial valuation basis, which is done as per projected unit credit method at the end of each financial year.
(v) Actuarial gains/losses are immediately taken to Expenses / Project & Preoperative Expenses (pending allocation) and are not deferred.
115
(l) Provisions
A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. these are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
(m) Income Taxes
Current income tax on interest income is measured at the amount expected to be paid to the tax authorities in accordance with the income tax Act, 1961 enacted in india and is netted from such interest income. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. in situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
the carrying amount of deferred tax assets are reviewed at each balance sheet date. the Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
(n) Cash and Cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short–term investments with an original maturity of three months or less.
3. As the Company has not commenced commercial operations as of March 31, 2010, no Profit and Loss Account has been prepared, but in lieu thereof, a statement of project and pre–operative expenses (pending allocation) has been prepared as per schedule 6 and expenses incurred upto the year ended March 31, 2010 in relation to the construction of the project, have been included under the said schedule, to be allocated appropriately at the time of commencement of commercial operations. Necessary details as required under part ii of schedule Vi of the Companies Act, 1956 have been disclosed under schedule 6 in respect of the said expenses.
4. the Company has signed a Quadripartite Agreement on 5th November, 2005 with Rajasthan Spinning & Weaving Mills Ltd (rsWM) (the holder of implementation rights /promoter), Malana power Company Limited and Government of Himachal pradesh for transfer of the project from rsWM to the Company to give effect to implementation Agreement signed between rsWM and Government of Himachal pradesh.
(5) (a) Land includes ` 5,677 thousand paid to deputy Commissioner, Kullu towards transfer of government’s agriculture land measuring 10.76 hectare, for which the execution of lease deed is pending.
(b) Land includes ` 298,070 thousand paid for 12.51 hectares land, out of which mutation for execution of 9.75 hectares in favour of Company has been completed. Apart from notified land, 2.76 hectares land has been acquired directly from the villagers and the mutation is in progress.
(c) ` 778,180 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring 264.36 hectares represents amount paid towards loss of environment value, compulsory afforestation, cost of tree felling and Catchment Area treatment plan.
6. Related Party Disclosures
(a) Names of related parties:
Ultimate Holding Company : Bhilwara energy Limited
Enterpriseshavingsignificantinfluenceover the Company
: sN power Global services pte. Ltd.sN power Holding singapore pte. Ltd.
Holding Company : Malana power Company Limited
Key Management Personnel : Mr. r. p. Goel, Whole time director
Fellow Subsidiary : indo Canadian Consultancy services Limited Green Ventures pvt Limited
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Annual Report 2009-10
(b) Transactions with related parties(` ’000)
Nature of Transaction Ultimate Holding Company
Holding Company/ enterprises
havingsignificantinfluenceoverthe
Company
Key Management Personnel
Fellow Subsidiary
March 2010
March 2009
March 2010
March 2009
March 2010
March 2009
March 2010
March 2009
Transactions during the year
remuneration paid to Mr. r.p. Goel 3,225 2,678
Consultancy charges to indo Canadian Consultancy services Limited
22,628 29,022
Consultancy charges to sN power Holdings singapore pte. Ltd.
36,817 –
Consultancy charges to sN power Global services pte. Ltd.
116,004 –
reimbursement of expenses incurred by Malana power Company Limited on behalf of the Company
15,264 10,061
reimbursement of expenses incurred on behalf of Malana power Company Limited
1,712 3,125
reimbursement of expenses incurred by indo Canadian Consultancy services Limited on behalf of the Company
7,260 2,324
reimbursement of expenses incurred on behalf of indo Canadian Consultancy services Limited
30 382
share application money received from Malana power Company Limited (net)
– 1,391,056
shares Capital allotted to Malana power Company Limited
628,000 763,056
reimbursement of expenses incurred by Bhilwara energy Limited on behalf of the Company
1,450 1,097
reimbursement of expenses incurred on behalf of Bhilwara energy Limited
1,055 1,119
unsecured Loan taken from Malana power Company Limited
7,615,100 3,356,741
unsecured Loan repaid to Malana power Company Limited
5,189,100 2,212,132
interest expense on unsecured loan taken from Malana power Company Limited
359,288 199,923
Balances outstanding as at the year end
Investments:
share application money pending allotment – 628,000
investment by Malana power Company Limited 4,929,556 4,301,556
Balances Receivable:
Bhilwara energy Limited – 626
Balances Payable:
indo Canadian Consultancy services Limited – 3,392
sN power Global services pte. Ltd. 20,149 –
unsecured Loan taken from Malana power Company Limited
3,750,520 1,360,756
interest accrued on unsecured Loan from Malana power Company Limited
559,211 199,923
Guarantees given by the Malana power Company Limited on behalf of the Company
800,000 450,000
117
7. Contingent Liabilities (Not provided for)
(` ’000)
Particulars 2009–10 2008–09Bank guarantee outstanding 2,500 2,000Claims by contractors / suppliers against the Company not acknowledged as debts*
649,249 324,764
* the Company believes that these claims are not probable to be decided against the Company and therefore, no provision for the above is required.
8. Capital Commitments
estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) ` 1,224,588 thousand (previous Year ` 603,416 thousand)
9. On account of various reasons beyond the control of the Company (like significant geological problems experienced in tunneling work and others), the project has undergone significant cost over-runs and the total estimated cost of the project has gone up from ` 8,956,000 thousand to ` 20,212,820 thousand. Management is of the view that such increase in estimated project cost has not affected the going concern assumption of the Company. Further, based on financial projections (including the projected tariff), arrived at after considering the past experience of running similar power project and renewable source of fuel, management believes that profits are expected to accrue once the project commences commercial operation and hence, no adjustments are required to the carrying amount of fixed assets on account of impairment.
10. Unhedged foreign currency exposure at the balance sheet date
Particulars 2009–10 2008–09
Creditor for engineering Fees
` 15,641,500 (CAD 350,000 @ closing rate of 1CAD = ` 44.69)
` 16,712,000 (CAd 400,000 @ closing rate of 1CAd = ` 41.78)` 1,240,380 (euro 18,000 @ closing rate of 1euro = ` 68.91)
Creditor for supervisory Manpower support
` 19,571,401 (USD 431,754 @ closing rate of USD = ` 45.33)
Nil
11. Statutory Supplementary Information
(` ’000)March 2010 March 2009
(a) Directors Remunerationsalaries, wages and bonus 1,942 1,602Allowances 1,283 1,076
3,225 2,678Notes:a) As the future liability for the gratuity and earned leaves is provided on actuarial basis for the Company as
a whole, the amount pertaining to the director is not ascertainable and therefore, not included.b) perquisites have been considered as per taxable value as per income tax Act, 1961c) In the absence of profits, remuneration to Director is paid within the limits prescribed in Schedule XIII of
the Companies Act, 1956.
(b) expenditure in foreign currency (net of TDS) (` ’000)March 2010 March 2009
engineering Fees and Consultancy charges 64,609 42,321Legal and professional charges 117,565 –travelling 254 382Financial charges 969 –
183,397 42,703
(c) Value of Imports calculated on CIF basis (` ’000)March 2010 March 2009
project equipments 101,743 122,382101,743 122,382
118
Annual Report 2009-10
12. Additional information pursuant to the provisions of paragraphs 3, 4C and 4d of part ii of schedule Vi to the Companies Act, 1956
a) Imported and indigenous stores and spare parts consumed:Percentage of total consumption Value (` ’000)
Stores & Spares March 2010 March 2009 March 2010 March 2009imported 10.03 08.14 6,476 3,552indigenously obtained 89.97 91.86 58,089 40,076
100.00 100.00 64,565 43,628
13. the Government of india has promulgated an Act namely the Micro, small and Medium enterprises development Act, 2006 which came into force with effect from october 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company and relied upon by the auditors, none of the creditors fall under the definition of ‘supplier’ as per the Section 2(n) of the Act. in view of the above, the prescribed disclosures under section 22 of the Act are not required to be made.
14. Gratuity–Definedbenefitplan(AS15–Revised)
The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the Company makes provision of such gratuity asset / liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.
The following tables summarise the components of net benefit expense recognised in the Expenses / Project & Preoperative Expenses (pending allocation) and the funded status and amounts recognised in the balance sheet:
Schedule of Project and pre–operative expenses (pending allotment)
Netemployeebenefitsexpense(recognisedinEmployeeCost):
Particulars For the year ended
March 31, 2010 (` ’000)
For the year ended
March 31, 2009 (` ’000)
Current service Cost 1,154 1,091
Interest cost on benefit obligation 340 231expected return on plan assets (271) (104)Net actuarial (gain)/ loss recognised in the period (111) (119)past service cost – –Net benefit expense 1,112 1,099
Actual return on plan assets (775) (133)
Balance Sheet
Details of Provision for Gratuity:
Particulars As atMarch 31, 2010
(` ’000)
As atMarch 31, 2009
(` ’000)Defined benefit obligation 5,690 4,530Fair value of plan assets 4,578 3,393
(1,112) (1,138)Less: unrecognised past service costplan asset / (liability) (1,112) (1,138)
119
Changesinthepresentvalueofthedefinedbenefitobligationareasfollows:
Particulars As atMarch 31, 2010
(` ’000)
As atMarch 31, 2009
(` ’000)Opening defined benefit obligation 4,530 3,298interest cost 340 231Current service cost 1,154 1,091Benefits paid (726) –Actuarial (gains)/ losses on obligation 393 (90)Closing defined benefit obligation 5,690 4,530
Changes in the fair value of plan assets are as follows:
Particulars As atMarch 31, 2010
(` ’000)
As atMarch 31, 2009
(` ’000)opening fair value of plan assets 3,393 1,298expected return 271 104Contributions by employer 1,138 1,962Benefits paid (727) –Actuarial gains / (losses) 503 29Closing fair value of plan assets 4,578 3,393
The Defined benefit obligation amounting to ` 5,690 thousand is funded by assets amounting to ` 4,578 thousand and the Company expects to contribute ` 1,112 thousand during the 2010-11.
the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Particulars As atMarch 31, 2010
As atMarch 31, 2009
% %investments with insurer 100 100
the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
the principal assumptions used in determining gratuity liability for the Company’s plans are shown below:
Particulars For the year ended on
March 31, 2010
For the year ended on
March 31, 2009% %
discount rate 7.50 7.00expected rate of return on assets 8.00 8.00Future salary increase 5.00 5.50Withdrawal rate 1 to 3 1 to 3
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Amounts for the current and previous four years are as follows*:
Particulars For the year ended on
March 31, 2010
For the year ended on
March 31, 2009
For the year ended on
March 31, 2008Defined benefit obligations 5,690 4,530 3,298plan assets 4,578 3,393 1,298Surplus / (deficit) (1,112) (1,138) (2000)experience adjustments on plan liabilities (410) 112 –experience adjustments on plan assets 503 29 –
* As the Company has adopted As –15 (revised) in the year 2007–08, the above disclosures as required under Para 120 (n) have been made prospectively from the date the Company has first adopted the standard.
120
Annual Report 2009-10
DefinedContributionPlan
(` ’000)Particulars 2009-10 2008-09Contribution to provident Fund 5,840 5,768Contribution to superannuation Fund 1,059 1,249
6,899 7,017
15. Leases
In case of assets taken on Operating Lease:
Office premises, vehicles, equipments, guest houses and godowns are obtained on cancellable operating leases. All these leases have a lease terms varying between 3 to 5 years. there are no restrictions imposed by lease arrangements. there are no subleases.
(` ’000)
Particulars For the year ended
March 31, 2010
For the year ended
March 31, 2009 Lease payments for the year 37,255 86,957
16. in accordance with Accounting standard 22 ‘Accounting for taxes on income’, issued by the institute of Chartered Accountants of india, in view of the fact that the Company is under the stage of setting up the hydro power project, deferred tax assets have not been accounted for in the books since it is not virtually certain whether the Company will be able to take advantage of such items.
17. the Company has not undertaken reconciliation during the year with one of its key contractors / suppliers having payables aggregating to ` 8,780 thousand, advances recoverable of ` 45,375 thousand and inventory lying with him of ` 84,163 thousand as at March 31, 2010. subsequent to the year end, the management is in the process of seeking confirmation from this contractor / supplier for the balances outstanding. In the opinion of the management, such advances / inventory are fully recoverable and consequential adjustments required on reconciliation of the balances payable to / receivable from this contractor / supplier will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the reconciliation is completed.
18. Segment Information
the Company’s activities during the year involved setting up of the Hydro power project (refer Note 1). Considering the nature of Company’s business and operations, there are no separate reportable segments (business and/ or geographical) in a ccordance with the requirements of Accounting standard 17 ‘segment reporting’ issued by the Companies (Accounting standard) rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.
19. Previous year’s figures have been regrouped where necessary to confirm to this year’s classification.
As per our report of even dateFor S. R. Batliboi & Co.Chartered AccountantsFirm registration No. : 301003e
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA director
ROHINI ROSHANARA SOOD director
SANDeeP CHANDNA Company secretary
place : Noidadate : June 2, 2010
121
CAsH FLoW stAteMeNt As At MArCH 31, 2010
(` ’000)
As at March 31, 2010
As at March 31, 2009
A. Cashflowsfrom/(usedin)investingactivities Acquisition of fixed assets (2,795,607) (3,464,426)
Fixed deposit redeemed 2,302 10,993
Fixed deposit (placed) (2,979) –
interest received 3,278 9,050
Net cash (used in) investing activities (2,793,006) (3,444,383)
B. Cashflowsfromfinancingactivitiesproceeds from issuance of share capital 373,528 763,056
share application money received – 628,000
proceeds from long term borrowings 3,629,764 2,834,609
interest paid (780,500) (749,508)
Netcashfromfinancingactivities 3,222,792 3,476,157
Net increase / (decrease) in cash and cash equivalents (A+B) 429,786 31,774
Cash and cash equivalents at the beginning of the year 66,801 35,027
Cash and cash equivalents at the end of the year 496,587 66,801
Components of cash and cash equivalents Cash on hand 2,227 2,708
With scheduled banks – on current accounts 124,360 64,093
With scheduled banks – on deposit accounts 370,000 –
496,587 66,801
Note:
1 Difference in the figure of cash and bank balance as per schedule 8 and as per above of Rs 3,179 thousand (Previous year Rs 2,502 thousand) represents long term investment in fixed deposit with an original maturity of more than three months.
As per our report of even dateFor S. R. Batliboi & Co.Chartered AccountantsFirm registration No. : 301003e
per Raj AgrawalpartnerMembership No. 82028
place : Gurgaon dated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA director
ROHINI ROSHANARA SOOD director
SANDeeP CHANDNA Company secretary
place : Noidadate : June 2, 2010
122
Annual Report 2009-10
1. ReGISTRATION DeTAILS
registration No. 2 6 1 0 8 state Code 0 6
Balance sheet date 3 1 0 3 2 0 1 0
date Month Year
2. CAPITAL RAISeD DURING THe yeAR (Amount in ` Thousands)
public issue – rights issue –
Bonus issue – private placement 1 0 0 1 5 2 8
3. POSITION OF MOBILISATION AND DePLOyMeNT OF FUNDS (Amount in ` Thousands)
total Liabilities 1 9 2 7 4 5 1 5 total Assets 1 9 2 7 4 5 1 5
SOURCeS OF FUNDS
paid-up Capital 5 6 0 1 5 2 8 reserves and surplus –
share Application Money – deferred tax Liability –
secured Loans 8 3 8 0 0 0 0 unsecured Loans 3 7 5 0 5 2 0
APPLICATION OF FUNDS
Net Fixed Assets 6 0 2 5 0 2 4 investments – (incl. p.o.p. exps)
Net Current Assets ( 8 4 1 8 6 3 ) Misc. expenditure 2 0 0 1 8
Accumulated Losses –
4. PeRFORMANCe OF COMPANy (Amount in ` Thousands)
turnover – total expenditure –
Profit/Loss before Tax – Profit/Loss after tax –
earning per share (in `) – dividend per share (in `) –
5. GeNeRIC NAMeS OF PRINCIPAL PRODUCTS/SeRVICeS OF COMPANy (as per monetary terms)
item Code No. (itC Code) 9 8 0 1 0 0
product description H y d r o e l e c t r i c e n e r g y
BALANCe SHeeT ABSTRACT AND COMPANy'S GeNeRAL BUSINeSS PROFILe
place : Noidadated : June 2, 2010
For and on behalf of the Board of directors
RAVI JHUNJHUNWALA director
ROHINI ROSHANARA SOOD director
SANDeeP CHANDNA Company secretary
123
Financial ResultsoF
Indo CanadIan ConsultanCyservICes ltd.
124
Annual Report 2009-10
DiRectoRs' RePoRt
to the Membersthe Directors have pleasure in presenting the 15th annual Report together with the audited statements of accounts for the year ended 31st March 2010.
Financial Performance(Rs. in lacs)
Particulars Current year Previous Year
Gross Revenue 852.91 1321.89
expenditure 944.72 1197.44
Profit before Depreciation & tax
(91.81) 124.45
Depreciation 59.57 43.55
Profit/(Loss) before tax
(151.38) 80.90
Prior Period income 10.03 –
Deferred tax assets 54.65 3.85
Profit/(Loss) After Tax (86.70) 22.98
Add/(Less): Profit/(Loss) brought forward from previous year
601.91 578.93
Profit/(Loss) brought forward
515.21 601.91
dividend
the Directors do not recommend any dividend for the year 2009-10.
review of Performance
During the financial year, the company designed several projects and provided its technical consultancy services to hydro and thermal projects ranging in size from 5MW to about 1000 MW in India, Rwanda and Nepal. The Company carried out site identification, preparation of feasibility study, detailed design and project reports and engineering of hydro project in complex and varied geological, topographic climatic and hydrological conditions in association with its Joint Ventures partner, RsW inc. the company has gained specialized knowledge and experience in the field of engineering of hydro projects of small, medium and large capacity, transmission line and substation projects up to 765 KV. the company is providing consultancy to several clients for hydro projects implementation including services for investigations, due diligence studies, preparation of pre feasibility reports and detailed project reports, detailed design and drawings, technical specification, construction supervision, system engineering etc. Till date iccs has completed detailed design of 12 hydro power
projects and four thermal power projects with installed capacity of about 450 MW and these projects have been commissioned. DPR and detailed engineering for about 32 projects having installed capacity of 3500 MW are under progress. The Company has bagged several contracts during the year financial year 2009- 10 including tender engineering for Vishnugad Pipalkoti project (444 MW) in Uttarakhand and preparation of feasibility report of Kali Gandaki Koban project (about 350 MW) in Nepal. the company derives the strength from the experience staff having core knowledge in specialized areas of qualifications. Experts from RSW, Inc provide significant contribution from their experience of several projects in different areas, magnitude and difficult conditions. During the year, Company has taken up the work of Techno economic approval of DPR for nyamjang chhu HeP (900 MW) in arunachal Pradesh for Bhilwara energy limited. The company is also in the process of finalizing the DPR of chango Yangthang HeP (140 MW) for Bel.
Infrastructure development
It has been a steady growth for Company over the years in terms of expanding its current assets of Computers, peripherals and software. the company possesses the state-of-the-art design and project management software. The Company is equipped with latest software in Civil, electrical and Mechanical engineering which comprises NISA Finite Element Package for analysis, Primevara Software for projects Management, Staad Software for structural analysis, ETAP Software for electrical system analysis and Auto Cad Civil 2009 for drafting, FLAC2D for rock support design and Hammer for water hammer analysis.
Human resource development
the company from its inception has given special attention to human resources development and total quality management at different levels. Today, ICCS is a strong force of about 90 engineers and technicians. Efforts are being aimed towards imparting technical skills and improve productivity of the company. During the year, there was no employee getting salary exceeding the limit prescribed under Section 217(2A) of the Companies Act, 1956 as detailed in Annexure – I.
directors’ responsibility statement
Your Directors would like to inform members that audited accounts containing the Financial statements for the year 2009-10 are in full conformity with the requirements of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and they fully present the company’s financial condition and results of operations. these financial statements are audited by the Statutory Auditors, M/s KRA & Associates, Chartered Accountants.
125
directors
Mr. Ravi Jhunjhunwala and Mr. Claudio Vissa , Directors retire from the Board by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.
energy Conservation, technology absorption and Foreign exchange
the information required pursuant to the companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 pertaining to Energy conservation and Technology Absorption and Foreign Exchange Earnings are not applicable. However during the financial year 2009-10 the Company has not incurred any expenditure in Foreign Exchange during the financial year 2009- 10.
acknowledgements
the Directors wish to place on record their appreciation for continued cooperation extend by various Departments of the Central and State Government, Financial Institutions and the Bankers. the Directors also express their appreciation to employees for their dedicated services rendered to the company.
For and on behalf of the Board of DirectorsIndo CanadIan ConsultanCy servICes ltd.
ravI JHunJHunWala chairman
Place: Noida Date: 3rd June, 2010
Your Directors further confirm that pursuant to Section 217 2(AA):
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) appropriate accounting policies have been selected and applied consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company on 31st March, 2010 and of the profit of the Company for the year ended on that date;
(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
auditors
The term of appointment of M/s. KRA & Associates, Chartered Accountants, auditors of the Company, expires on the conclusion of the forthcoming annual General Meeting and being eligible, they are recommended for reappointment.
Public deposits
the company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A are not applicable.
Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 ad forming part of Directors Report for the year ended 31st March, 2010 are given hereunder.
I. Persons employed for the full year
name designation remuneration (rs in lacs)
Qualification experience age Commencement of employment
sh. Rakesh Mahajan Director - civil 44.32 B.e. ( civil) M tech (civil)
MBa
30 50 1998
II. Persons employed for Part of the year
name designation remuneration (rs in lacs)
Qualification experience age Commencement of employment
Sh. U C Dubey Director- elect 24.48 B.e ( elect) 39 61 1998
126
Annual Report 2009-10
auDitoRs' RePoRt
audItor's rePort to tHe MeMBers oF Indo CanadIan ConsultanCy servICes ltd.
We have audited the attached Balance sheet of Indo CanandIan ConsultanCy servICes ltd. as at March 31, 2010 and the Profit & Loss Account of the company for the year ended on that date annexed there to.
These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We have conducted our audit in accordance with auditing standards generally accepted in india. these standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2005, issued by the Central Govt. of India in terms of section 227 (4A) of the Companies Act, 1956, we give in the annexure hereto a statement on the matters specified in paragraph 4 & 5 of the said order as under.
Further to our comments in the annexure referred to in paragraph 1 above, we report that:
a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, the Company has kept proper books of accounts, as required by law so far, as appears from our examination of the books.
c) The Balance Sheet and the Profit & Loss Accounts referred to in this report are in agreement with the Books of accounts of the company.
d) In our opinion, the Balance Sheet and Profit & Loss A/c dealt with the report are in the compliance with the accounting standard referred to in section 211 (3C) of the Companies Act 1956, in so far as they apply to the company.
e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the significant Accounting Policies and other notes there on give the information required by the Companies Act 1956, in the manner so required and give a true and fair view:
I. In the case of Balance Sheet, of the state of affairs of the Company as at March 31,2010 and
II. In the case of Profit & Loss Account, of the loss of the company for the year ended on that date.
For Kra & assoCIateschartered accountants
rohit talwar(Partner)Membership No. 054876
Place : New DelhiDated : 3rd June, 2010
127
anneXure to audItors' rePort
anneXure reFerred to In ParaGraPH 1 oF tHe audItor’s rePort to tHe MeMBers oF Indo CanandIan ConsultanCy servICes ltd on tHe aCCounts For tHe year ended 31st MarCH 2010.
i) a) the company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets
b) The fixed assets have not been physically verified by the management during the year.
c) During the year, in our opinion and according to the information and explanations given to us, we are of the opinion that a substantial part of the fixed assets has not been disposed off by the company.
ii) a) the company has not taken any loan secured or unsecured, during the year from, companies, and firms or other parties listed in the register(s) maintained under section 301 of the companies act 1956.
b) The company has not granted any loan to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.
iii) in our opinion and according to the information and explanation given to us, Company does not have internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and the sale of services.
iv) a) according to the information and explanation given to us, we are of the opinion that the transaction made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the companies act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given to us each of these transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.
v) in our opinion and according to the information and explanation given to us, the company has not accepted any deposits from public , hence this clause is not applicable.
vi) In our opinion, the company has no internal audit system commensurate with the size and nature of its business.
vii) We were informed that the company is not required to maintain any cost record under section 209(1)(d) of the companies act, 1956.
viii) a) the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Investor education protection fund, employees’ state insurance, income tax , sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. according to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31.03.2010 for a period of more than six month from the date they became payable.
b) According to the records of the company and the information and explanations given to us, no disputed amount payable in respect of sale tax, income tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2010 which were outstanding for a period of more than six month from the date they became payable.
ix) the company does not have any accumulated losses at the end of the financial year but it has incurred cash loss during the year.
x) according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.
xi) according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.
xii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the companies (Auditor’s Report) Order, 2003 are not applicable to the company.
xiii) according to the information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments.
xiv) according to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.
xv) according to the information and explanations given to us, the company has not taken any loan and hence the related clause is not applicable on the company.
128
Annual Report 2009-10
xvi) according to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long term investment. No long-term funds have been used to finance short-term assets except permanent working capital.
xvii) according to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act.
xviii) according to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.
xix) according to the information and explanations given to us, during the period covered by our audit report, no public issue has been made by the company.
xx) according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
For Kra & assoCIateschartered accountants
rohit talwar(Partner)Membership No. 054876
Place : New DelhiDated : 3rd June, 2010
129
Balance sHeet as at 31st MARCH, 2010
as per our report of even date attached
For Kra & assoCIateschartered accountants
rohit talwarPartnerMembership No. 054876
Place : New DelhiDated : 3rd June, 2010
For indo canadian consultancy services ltd.
ravi Jhunjhunwala Director
rishabh Jhunjhunwala Director
` in ‘000’
schedules as at 31.03.2010
as at 31.03.2009
sourCes oF Funds
shareholders’ Funds
shareholder's Funds
share capital 1 3,533 3,533
reserves & surplus
Profit and Loss Account 2 53,118 61,789
56,651 65,322
aPPlICatIon oF Funds
Fixed assets
Gross Block 3 25,717 25,495
Less : Depreciation 19,950 15,105
net Block 5,767 10,389
deferred tax assets 9,293 3,828
Current assets, loans & advances 4
Sundry Debtors 57,920 79,967
cash & Bank Balance 12,735 11,230
other current assets 26,810 17,801
loans & advances 10,065 9,366
107,530 118,364
Current liabilities and Provisions
Current Liabilities 5 35,258 42,161
Provisions 30,682 25,098
net Current assets 41,590 51,104
56,651 65,322
Significant Accounting Policies & Notes to Accounts 9
Schedules referred to above and notes to accounts form an integral part of the Balance sheet.
130
Annual Report 2009-10
PRoFit & loss account FoR tHe PeRioD enDeD 31st MARCH, 2010
as per our report of even date attached
For Kra & assoCIateschartered accountants
rohit talwarPartnerMembership No. 054876
Place : New DelhiDated : 3rd June, 2010
For indo canadian consultancy services ltd.
ravi Jhunjhunwala Director
rishabh Jhunjhunwala Director
` in ‘000’
schedules For the year ended31.03.2010
For the year ended31.03.2009
InCoMe
Professional charges 84,895 131,757
other income 6 396 432
85,291 132,189
eXPendIture
Personnel expenses 7 66,541 79,183
administrative & other expenses 8 27,926 40,161
94,466 119,344
PROFIT/(LOSS) BEFORE DEPRECIATION (9,175) 12,845
DePReciation 5,957 4,355
Profit/(Loss) before Tax and Prior Period Income (15,132) 8,490
Prior Period income 1,003 400
Deferred tax 5,465 385
Provision for taxation 0 4,450
Fringe Benefit Tax 0 956
Wealth tax-earlier year (6) 1
Profit /(Loss) after Tax (8,670) 2,298
Profit /(Loss) Brought Forward 60,191 57,893
PROFIT/(LOSS) CARRIED FORWARD 51,521 60,191
E.P.S. (in Rs.) Basic/ Diluted (24.54) 6.50
Significant Accounting Policies & Notes to Accounts 9
Schedules referred to above and notes to accounts form an integral part of the Profit and Loss Account
131
scHeDules to accounts
sCHedule 1: sHare CaPItal` in ‘000
as at 31.03.2010
as at 31.03.2009
authorised
10,00,000 Equity Shares of Rs.10/- each 10,000 10,000
Issued, subscribed and Paid up
3,53,300 (Previous year 3,53,300)Equity Shares of Rs.10/- each fully paid-up
3,533 3,533
3,533 3,533
*of the above 1,80,200 Equity Shares are held by Bhilwara Energy Limited, the Holding Company
sCHedule 2: reserves and surPlus
share Premium 1,598 1,598
Profit & Loss Account 51,521 60,191
53,118 61,789
sCHedule 3 : FIXed assets` in ‘000
Gross BloCK dePreCIatIon netBloCK
Particulars as at01.04.09
addi. Dur. the Year
Dedn. Dur. the Year
as at31.03.10
upto01.04.09
addi. Dur. the Year
Dedn. Dur. the Year
upto31.03.10
as at31.03.10
as at31.03.09
tangible assets
Furniture & Fixtures 774 – 50 724 658 23 31 649 75 116
Office Equipments 1,474 35 – 1,509 521 156 – 676 833 954
computers & computer Peripherals
9,685 – – 9,685 6,944 1,096 – 8,040 1,645 2,741
Motor Vehicles 3,672 1,649 1,533 3,789 2,115 379 1,081 1,412 2,377 1,558
electrical equipments
788 – – 788 400 59 – 459 329 389
Project equipments 53 – – 53 37 2 – 40 13 15
total tangible assets
16,446 1,684 1,583 16,548 10,674 1,715 1,112 11,276 5,272 5,772
Intangible assets
software 9,048 121 – 9,170 4,432 4,243 – 8,674 495 4,617
Total Intangible assets
9,048 121 – 9,170 4,432 4,243 – 8,674 495 4,617
total 25,495 1,805 1,583 25,717 15,105 5,957 1,112 19,950 5,767 10,389
Previous Year 21,416 4,261 182 25,495 10,892 4,355 142 15,105 10,389 10,524
132
Annual Report 2009-10
sCHedule 4: Current assets, loans & advanCes ` in ‘000
as at 31.03.2010
as at 31.03.2009
sundry debtors
Sundry Debtors (Unsecured, considered good by the Management)
– outstanding for more than six Months 34,631 24,372
– others 23,289 55,595
57,920 79,967
Cash & Bank Balances
Cash in hand (As certified by the Management) 171 41
cheques in Hand – 454
Balance with scheduled Banks in current account
– on current accounts 7,407 7,285
– on Fixed Deposits 5,157 3,450
12,735 11,230
other Current assets
advance tax & tDs (net of Provisions) 26,810 17,801
26,810 17,801
loans & advances
Advances recoverable in cash or in kind for value to be received
(Unsecured considered good by Management) 10,065 9,366
10,065 9,366
total 107,530 118,364
sCHedule 5: Current lIaBIlItIes & ProvIsIons
Current liabilities
sundry creditors
– Micro small and medium enterprises * – –
– others 28,969 30,825
Other Liabilities 5,436 8,905
advance from customers 852 2,432
35,258 42,161
Provisions
– Retirement benefits & Leave Encashment 5,820 4,011
– Continuity Liability Bonus 24,156 21,074
– Wealth tax – 1
– Fringe Benefits Tax (Net of Advances) – 12
Provision for LTA and Medical Benefits 706 –
total 30,682 25,098
* Supplier / Vendors have not provided their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid / payable under this Act have not been given.
133
sCHedule 6: otHer InCoMe ` in ‘000
as at 31.03.2010
as at 31.03.2009
interest received 341 374
other income – 10
Misc. income 55 47
396 432
sCHedule 7: Personnel eXPenses
Salaries, wages and other expenses 62,551 74,799
Contribution to provident and other funds 2,060 3,277
Workmen and staff welfare expenses 1,929 1,107
66,541 79,183
sCHedule 8: adMInIstratIve & otHer eXPenses
Rent 14,929 17,553
Repair & Maintenance (car running & mait) 502 950
Rates & taxes 9 4
insurance 442 196
legal and Professional 2,205 5,921
traveling expenses 1,906 3,973
electricity 2,356 3,460
Bad Debts 3 1,575
Repair & Maintenance Building 798 1,180
Repair & Maintenance others 719 518
telephone 627 850
Establishment Exp. 714 868
Project expenses 514 1,038
Printing & stationery 685 882
Fee and Subscription 455 439
audit Fees 75 83
Gift & Presentation 433 203
interest 198 5
Bank Gurantee charges 8 2
Bank charges 27 27
Miscellaneous expenses 321 433
27,926 40,161
134
Annual Report 2009-10
schedule 9: sIGnIFICant aCCountInG PolICIes and notes to aCCount
notes on Business activities1)
inDo canaDian consultancY seRVices liMiteD (hereinafter referred to as “the company”) is engaged in consultancy services, including comprehensive engineering consultancy for hydro-electric, thermal and non-conventional energy power projects.
Significant Accounting Policies2)
Basis of Preparationa)
The financial statements are prepared and presented under the historical cost convention, in accordance with the Indian Generally Accepted Accounting Principle (“GAAP”), comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India (“ICAI”) and the presentation requirements of the Companies Act, 1956.
All income and expenditure having a material bearing on the financial statements are recognized on an accrual basis except in case of Tender fee which is booked on receipt basis.
use of estimatesb)
The preparation of financial statements is in conformity under the GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities, disclosure of contingents assets and liabilities at the date of financial statements and the results of operations during the reporting period. Actual result could be different from these estimates. Any changes in estimates are adjusted prospectively in the current and future period.
Contingencies are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated.
revenue recognitionc)
Revenue comprises income received on account of consultancy fees received for the services rendered on accrual basis, whereas tender fee is recognized on receipt basis.
Fixed assetsd)
Fixed assets are stated at cost of acquisition less accumulated depreciation. the cost included all expenditure incurred up to the date of installation of the Assets. Depreciation has been provided on Written down method using the rates prescribed in Schedule XIV to the Companies Act, 1956.
Assets costing less then Rs.5,000 are depreciated at the rate of 100%. As per management, the rates are indicative of the estimated useful lives of these assets.
Intangible assets are amortised over useful life or license period whichever is shorter.
Impairment of assetse)
The carrying amount of assets is reviewed at each balance sheet date if there is indication based on internal/external factors. An Impairment Loss is recognized wherever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and its use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. a Previously recognized impairment loss is increased or reversed depending upon change in circumstances.
Foreign Currency transations f)
transactions denominated in foreign currencies are initially recorded at the exchange rate prevailing on the day the transaction.
All exchange gain/loss on restatement of monetary items as at balance Sheet date are recognized in the Profit and Loss Account.
taxationg)
income – tax expense comprise current tax i.e. amount of tax for the year determined in accordance with the Income – Tax Act, 1961, Fringe benefit tax and deferred tax charge of credit (reflecting the tax effects of timing difference between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax charge rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation
135
laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.
Employees Benefits:h)
Expenses and Liabilities in respect of employee’s benefits are recorded in accordance with revised Accounting Standard 15 - Employee Benefits.
(i) Provident Fund
The Company makes contribution to statutory contribution fund in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952 which is defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
(ii) Gratuity
Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by and independent actuary using the projected unit credit method.
actuarial gains and losses arising from past experience and changes in actuarial assumptions are charges or credited to the profit and loss account in the year to which such gains or losses relate.
(iii) leave encashment
Liability in respect of leave encashment becoming due or expected after the balance sheet is estimated on the basis of an actuarial valuation performed by an independent actuary using projected unit credit method.
(iv) Superannuation Benefit
The Company makes contribution to superannuation fund which is a post employment benefit in the nature of a defined contribution plan & contribution paid or payable is recognized as expenses in the period in which services as rendered by the employee.
(v) Other short term benefits
Expenses in respect or other short term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
i) taxes on Income
(i) Provisions for current taxes are made in accordance with the provisions of applicable tax statutes.
(ii) Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the timing difference between taxable incomes and accounting income originated in one period and are capable of reversal in one or more subsequent periods.
j) Provisions & Contingent Liabilities / Assets
(i) Provisions are made when the present obligation of a past event gives rise to a probable outflow, embodying economic benefits on settlement, and the amount of obligation can be reliable estimated.
(ii) Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits in remote.
(iii) Provisions and Contingent Liabilities / Assets are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
k) earning Per share
Basic earning per share are calculated by dividing the net profit or loss for the period attributable to equity Shareholders by the weighted average number of equity shares outstanding during the period.
For the Purpose of calculating diluting earning per share, the net profit or loss for the period attributable to equity Shareholders by the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive Potential equity shares.
136
Annual Report 2009-10
notes to aCCounts
Contingent liabilities 1. (Rs. in lacs)
PartICulars year ended 31.03.2010
Year ended 31.03.2009
(a) Claims not acknowledge as debts nIl nil
(b) Estimated amount of contracts remaining to be executed on capital account and not provided for
nIl nil
(c) Other claims for which company is contingently liable nIl nil
(d) Bank Guarantees (net of Margin Money) 35.94 35.94
(e) service tax demand under appeal 1.30 nil
The following disclosures have been made as required by the Accounting Standard – 15 (Employees 2. Benefit):
Employee Benefits
Defined Contribution Plan (Rs. in lacs)
Contribution to Defined Plan, recognized as expenses for the year/ period are as under
year ended 31.03.2010
Year ended 31.03.2009
Employer’s Contribution to Provident fund 21.09 29.06
Employer’s Contribution to Superannuation fund 13.90 7.89
Defined Benefit Plan
The employee’s gratuity fund scheme managed by trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave encashment is recognized in the same manner as gratuity. the company is maintaining fund with icici prudential.
Profit & Loss Account
Net Employee Benefits expenses (Recognized in Employee Cost) (Rs. in thousand)
PartICulars Gratuity31.03.2010
Gratuity 31.03.09
current service cost 655.49 719.00
Interest cost on benefit obligation 229.57 147.29
expected return on plan assets (260.04) (85.42)
net actuarial loss (gain) recognized in the year (871.30) 315.85
Net Expense recognized in the Profit & Loss A/c (246.28) 1,096.72
Balance sheet (Rs. in thousand)
PartICulars Gratuity31.03.2010
Gratuity 31.03.09
Fair value of plan assets at the end of the period 3,946.57 3,250.48
Present value of obligations as at the end of the period 3,277.18 3,279.50
Funded status 669.39 (29.02)
excess of actual over estimated 22.10 (6.77)
Net Assets/ (Liability) recognized in the balance sheet 669.39 (29.02)
137
Changes in the present value of the defined benefit obligation are as follows: (Rs. in thousand)
PartICulars Gratuity31.03.2010
Gratuity 31.03.09
Present value of obligations at the beginning of the period (01/04/2009) 3,279.50 2,104.12
interest cost 229.56 147.29
current service cost 655.49 719.01
Benefits paid (38.17) nil
Actuarial (gain) / Loss on obligation (849.20) 309.08
Present value of obligations at the end of the period (31/03/2010) 3,277.18 3,279.50
Changes in the fair value of the plan assets are as follows: (Rs. in thousand)
PartICulars Gratuity31.03.2010
Gratuity 31.03.09
Fair value of plan assets at the beginning of the period 3,250.48 1,067.71
expected return on the plan assets 260.04 85.42
Contributions 452.12 2,104.12
Benefits paid (38.17) nil
Actuarial gain / (loss) on plan assets 22.10 (6.77)
Fair value of plan assets as at the end of the period 3,946.57 3,250.48
Principal actuarial assumptions
a) economic assumptions
PartICulars rate (%) 31.03.2010
Rate (%) 31.03.2009
a) Discount rate 8.10 7.00
b) Future salary increase 5.00 4.50
c) expected Rate of return on plan assets 8.00 8.00
b) demographic assumptions
PartICulars 31.03.2010 31.03.2009
a) Retirement age 60 years 60 Years
b) Mortality Table LIC ( 1994-96) Duly Modified LIC ( 1994-96) Duly Modified
c) Withdrawals Rate ages Withdrawals rate (%)upto 30 years 3.00%
31- 44 years 2.00%above 44 years 1.00%
Ages Withdrawals Rate (%)Upto 30 Years 3.00%31- 44 Years 2.00%Above 44 Years 1.00%
earned leave
Profit & Loss
Net Employee Benefits Expenses (Rs. in thousand)
PartICulars earned leave 31.03.2010
earned leave 31.03.2009
current service cost 1,245.53 1,379.37
Interest cost on benefit obligation 223.44 151.26
expected return on plan assets nil nil
net actuarial loss (gain) recognized in the year 163.23 (1.68)
Net Expense recognized in the Profit & Loss A/c 1,632.20 1,528.95
138
Annual Report 2009-10
Balance sheet (Rs. in thousand)
PartICulars earned leave 31.03.2010
earned leave 31.03.2009
Fair value of plan assets at the end of the period nil nil
Present value of obligations as at the end of the period 4,524.33 3,192.06
Funded status (4,524.33) ( 3,192.06)
excess of actual over estimated nil nil
Net Assets/ ( Liability) recognized in the balance sheet (4,524.33) (3,192.06)
Changes in the present value of the defined benefit obligation are as follows:
PartICulars earned leave 31.03.2010
earned leave 31.03.2009
Present value of obligations at the beginning of the period (01/04/2009)
3,192.06 2,160.79
interest cost 223.44 151.26
current service cost 1,245.53 1,379.37
Benefits paid (299.87) (497.74)
Actuarial (gain) / Loss on obligation 163.23 (1.68)
Present value of obligations at the end of the period 4,524.33 3,192.00
Changes in the fair value of the plan assets are as follows:
PartICulars earned leave 31.03.2010
earned leave 31.03.2009
Fair value of plan assets at the beginning of the period nil nil
expected return on the plan assets nil nil
Contributions nil nil
Benefits paid nil nil
Actuarial gain / (loss) on plan assets nil nil
Fair value of plan assets as at the end of the period nil nil
Principal actuarial assumptions
a) economic assumptions
PARTICULARS Year Ended 31.03.2010
Year ended 31.03.2009
a) Discount rate as on 31.03.2009 8.10 7.00
b) Future salary increase 5.00 4.50
c) Expected Rate of return on plan Assets 0.00 0.00
b) demographic assumptions
PartICulars year ended 31.03.2010 Year ended 31.03.2009
a) Retirement age 60 years 60 Years
b) Mortality Table LIC (1994-96) Duly Modified LIC (1994-96) Duly Modified
c) Withdrawals Rate ages Withdrawals rate (%) upto 30 years 3.00% 31- 44 years 2.00% above 44 years 1.00%
Ages Withdrawals Rate (%) Upto 30 Years 3.00% 31- 44 Years 2.00% Above 44 Years 1.00%
139
Prior Period Items 3) (Rs. in lacs)
Prior Period income 18.32
Prior Period expense 8.29
total (net) 10.03
deferred tax (as-22)4)
A. Deferred tax has been accounted for in accordance with the Accounting Standard 22 “Accounting for taxes on income”.
B. Following are the major components of Deferred Tax Assets/ (Liabilities). (Rs. in Lacs)
Deferred Tax Liabilities as at 31.03.2010
as at 31.3.2009
Depreciation (4.55) ( 9.73)
Deferred tax assets
Employee Benefits 97.48 48.01
net deferred tax assets 92.93 38.28
C. The company has not recognized deferred tax assets on unabsorbed depreciation and business loss computed as per income tax laws.
5) related Party dIsClosures
(a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise.
name of related Party relationship1. aD Hydro Power limited. associate company
2. Bhilwara energy limited. Holding company
3. Malana Power company limited. associate company
4. nJc Hydro Power limited associate company
5. Green Ventures Pvt. ltd. associate company
(b) Associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise or a joint venture.
rsW International Inc.
(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual.
none
(d) Key Management Personnel and their relatives
none (e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
HEG Ltd. / RSWM Ltd.
note: Related Party relationship is as identified by the company and relied upon by the Auditors.
140
Annual Report 2009-10
The following transactions were carried out with the related parties in the ordinary course of business:
(Figures in rs. ‘000)
sr. no.
this year Previous year
I) For the parties referred to in item (a) above. nIl nil
II) For the persons referred in to item (b) above.
services rendered 45,177 43,775
Outstanding receivable 6,006 46,514
III) For the parties referred in to item (d) above. nIl nil
Iv) For the persons referred in to item (e) above.
Reimbursement of expenses received 22,538 7,103
Reimbursement of expenses paid 11,256 16,014
Rent paid 18,565 19,694
Outstanding payables 28,602 27,615
6. earning Per share (as-20) (in Rs. ‘000)
Basic /Diluted Earning Per Share year ended 31.03.2010
Year ended 31.03.2009
Profit/Loss after Tax attributable to Equity Shareholders (8,670.26) 2,297.95
Weighted Average Number of Equity Shares (No.) 353,300 353,300
nominal Value of equity shares (Rs.) 10 10
earning Per share (Rs.) (24.54) 6.5
7. transactions in Foreign exchange (in Rs. ‘000)
nature of transaction year ended 31.03.2010
Year ended 31.03.2009
expenditure (Foreign travelling) nil 73.38
income nil nil
8. auditor remuneration (in Rs. ‘000)
Particulars year ended 31.03.2010.
year ended 31.03.2009
audit Fees 75.00 75.00
9. The company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable, as required, under the Act, have not been made.
10. Balance of Debtors and Creditors and Loans / Advances is subject to confirmation.
11. Previous year figures have been regrouped where necessary. Amount in decimals have been rounded off to the nearest rupee.
For Kra & assoCIateschartered accountants
rohit talwar(Partner)Membership No. 054876
Place : New DelhiDated : 3rd June, 2010
For indo canadian consultancy services ltd.
ravi Jhunjhunwala Director
rishabh Jhunjhunwala Director
141
1. reGIstratIon detaIls
Registration no. u74899Dl1995Plc064168 state code 5 5
Balance sheet Date 3 1 0 3 2 0 1 0
Date Month Year
2. CaPItal raIsed durInG tHe year (amount in rs. thousands)
Public Issue – Rights Issue –
Bonus issue – Private Placement –
3. PosItIon oF MoBIlIsatIon and dePloyMent oF Funds (amount in rs. thousands)
Total Liabilities 5 6 6 5 1 Total Assets 5 6 6 5 1
sourCes oF Funds
Paid-up capital 3 5 3 3 Reserves and surplus 5 3 1 1 8
secured loans – unsecured loans –
aPPlICatIon oF Funds
net Fixed assets 5 7 6 7 investments –
net current assets 4 1 5 9 1 Misc. expenditure –
accumulated losses – Deferred tax assets 9 2 9 3
4. PerForManCe oF CoMPany (amount in rs. thousands)
turnover 8 5 2 9 1 total expenditure 1 0 0 4 2 4
Profit/Loss before Tax ( 1 5 1 3 2 ) Profit/Loss after tax ( 8 6 7 0 )
Earning Per Share in Rs. ( 2 4 . 5 4 ) Dividend Rate % –
5. GENERIC NAMES OF PRINCIPAL PRODuCTS/SERvICES OF COMPANy (as per monetery terms) - Consultancy services
item code no. (itc code) n a
Product Description n a
BalanCe sHeet aBstraCt and CoMPany's General BusIness ProFIle
For Kra & assoCIateschartered accountants
rohit talwar(Partner)Membership No. 054876
Place : New DelhiDated : 3rd June, 2010
For indo canadian consultancy services ltd.
ravi Jhunjhunwala Director
rishabh Jhunjhunwala Director
142
Annual Report 2009-10
Financial ResultsoF
NJC Hydro Power Ltd.
143
DiRectoRs' RePoRt
dear Membersthe Directors have pleasure in presenting the 1th annual Report together with audited Balance sheet for the period ended 31st March 2010 together with the auditors’ Report thereon.Financials Highlightsthe company has not started its commercial activities and therefore no profit & loss Account has been prepared. the company has incurred Rs 27,916- as preliminary expenses.Company AffairsYou are aware that your Company has been incorporated as SPV by “Bhilwara Energy Limited” for implementing “Nyamjang Chhu Project” in the State Arunachal of Pradesh. The process for transferring the project from “Bhilwara Energy Limited” to your Company is in advance stage and will be done very soon.dividend & other Appropriationas the company has not yet started commercial activities, no dividend is proposed to be declared during the year under review.Particulars of employeesDuring the year 2009-10, none employees of the company was covered as per the provision of section 217(2a) of the companies act, 1956 (the act), read with the companies (Particulars of employees) Rules, 1975, as amended, regarding employees.directorsshri. Vimal Banka retire at the forthcoming annual General Meeting and being eligible, offered himself for reappointment.Auditorsthe term of appointment of M/s s.s. Kothari Mehta & Co., Chartered Accountants, expires at this Annual General Meeting and being eligible they have offered themselves for re-appointment. the Board recommend their appointment.Auditors’ remarksthe auditors’ Report read along with notes to the accounts is self explanatory and require no further comments from the Board.Public deposits the company has not accepted any Deposit from the Public during the year under report.therefore, provisions of section 58a are not applicable.energy Conservation, technology Absorption And Foreign exchangethe information required pursuant to the companies (Disclosure of particulars in the report of the Board of
Directors) Rules, 1988 pertaining to energy conservation, Technology Absorption and Foreign Exchange Earnings are nil. the company has not incurred any expenditure on Foreign exchange. directors’ responsibility StatementYour Directors would like to inform members that audited accounts containing the Financial statements for the year 2009-10 are in full conformity with the requirements of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and they fully present the company’s financial condition and results of operations. these financial statements are audited by the Statutory Auditors, M/s S.S Kothari Mehta & Co., Chartered Accountants.your directors further confirm that pursuant to Section 217 2(AA):(i) in the preparation of the annual accounts, the
applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) appropriate accounting policies have been selected and applied consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company on 31st March, 2010 and of the profit/ loss of the Company for the year ended on that date;
(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
AcknowledgementsYours Directors record their grateful appreciation of the encouragement, assistance and co-operation received from Ministry of Power - Govt. of india and arunachal Pradesh, other Government Departments, Banks & Financial institutions, shareholders, employees etc. the Board looks forward to their continued support and co-operation in the coming years as well.
For and on behalf of the Board of DirectorsNJC Hydro Power Limited
o.P. Ajmera Vimal Banka Director Director
Place: noida Date: 2nd June, 2010
144
Annual Report 2009-10
auDitoRs' RePoRt
to tHe MeMBerS oF NJC Hydro Power LIMIted
We have audited the attached Balance sheet and cash Flow statement of nJc Hydro Power limited as at 31st March, 2010. No Profit and Loss account has been prepared as the company has not commenced any commercial operations, relevant details are furnished in Schedule-2 ‘Project and Preoperative expenses (pending allocation)’. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditors’ Report) Order, 2003 as amended by the Companies (Auditors’ Report) (amendment) order,2004 (collectively the order) issued by the Central Government of India in terms of the section 4a of section 227 of the companies act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.
Further to our comments in the annexure referred to above, we report that:
i) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit.
ii) In our opinion, proper books of account as required
by law have been kept by the Company so far as appears from our examination of those books.
iii) the Balance sheet and cash Flow statement dealt with by this report are in agreement with the books of account.
iv) in our opinion, the Balance sheet and cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the companies act, 1956.
v) On the basis of written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies act, 1956.
vi) In our Opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the companies act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india:
a) in the case of Balance sheet, of the state of affairs of the company as at 31st March, 2010. and
b) in the case of Cash Flow Statement, of the cash flow for the year ended on that date.
For S.S. Kothari Mehta & Co.chartered accountantsFirm regn.no.000756n
(Arun K. tulsian)PartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
145
ANNeXUre to AUdItorS' rePort
referred to in Paragraph 3 of our report of even date to the members of NJC Hydro Power Limited for the year ended 31st March, 2010.
1.. The company does not have any fixed assets.
2. the company does not have any inventory.
3. (a) the company has neither granted nor taken any loan, secured or unsecured, to/from Companies, firms and other parties covered in the register maintained under section 301 of the companies act, 1956.
(b) Since there are no such loans, reporting regarding terms & conditions and overdue amounts is not applicable.
4. in our opinion and according to the information and explanations given to us, there are adequate internal systems commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in india, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.
5. There are no transactions that need to be entered in the register maintained under section 301 of the companies act, 1956.
6. The company has not accepted any fixed deposits from public to which the provisions of section 58-A, 58-AA or any other applicable provisions of the companies act, 1956 apply.
7. Internal audit provisions are not applicable to the company for the year under report.
8. in our opinion and according to the information and explanations given to us, undisputed statutory dues including income tax and any other material statutory dues have been generally regularly deposited during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010. the provisions of employees Provident Fund and employees state insurance Acts are not applicable to the company for the year under report.
9. There are no disputed unpaid liabilities in respect of income tax and other applicable statutory dues.
10. As the company has been in existence for less than five years, the reporting on accumulated losses and cash losses is not applicable.
11. The Company does not have any dues payable to any financial institutions, banks and debenture holders.
12. the company has not given any loans on the basis of pledge of shares, debentures and other securities.
13. the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.
14. in our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. therefore, the provisions of clause 4(xiv) of the Order are not applicable to the company.
15. according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.
16. there were no term loans raised during the year by the company.
17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investment.
18. the company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the companies act, 1956.
19. The company has not issued any debentures during the year nor has any outstanding debentures.
20. the company has not raised any money through public issues during the year.
21. During the course of our examination of the books & records of the company carried out in accordance with the generally accepted auditing practices in india, we have neither come across any instance of fraud on or by the company, noticed and reported during the year, nor have we been informed of such case by the management.
For S.S. Kothari Mehta & Co.chartered accountantsFirm regn.no.000756n
(Arun K. tulsian)PartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
146
Annual Report 2009-10
Balance sHeet as at 31st MaRcH, 2010
as per our report of even date attached
For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn no. 000756n
Arun K. tulsianPartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
FoR NJC Hydro Power LIMIted
o.P. AJMerA Director
VIMAL BANKA Director
` in ‘000’
Schedules As at 31.03.2010
SoUrCeS oF FUNdS
Shareholders Funds
sHaRe caPital 1 500
totAL 500
APPLICAtIoN oF FUNdS
Project and pre- operative expenses (pending allocation) 2 29
29
Current Assets, Loans and Advances
Cash and bank balances 3 472
4 472
Less: Current Liabilities and Provisions
Liabilities 20
Provisions –
20
Net Current Assets 452
Miscellaneous expenditure 5 19
(to the extent not written off or adjusted)
19
totAL 500
Significant Accounting Policies and Notes to Accounts 6
147
scHeDules to accounts
` in ‘000
As at 31.03.2010
SCHedULe 1: SHAre CAPItAL
Authorised
50,000 equity shares of (Previous Year nil) Rs.10/- each 500
Issued, Subscribed and Paid up
50,000 equity shares (Previous Year nil) of Rs.10/- each fully paid-up (entire share capital is held by Bhiwara Energy Ltd.-holding company and its nominees)
500
500
SCHedULe 2: ProJeCt ANd Pre-oPerAtIVe eXPeNSeS (PeNdINg ALLoCAtIoN)
Personnel expenses –
Administrative and other expenses
Rates & taxes 1
audit Fees 20
Legal & professional charges 4
Miscellaneous expenses 4
29
29
SCHedULe 3: CASH ANd BANK BALANCeS
cash in hand –
Balances with scheduled banks: in current accounts
472
472
SCHedULe 4: LIABILItIeS
sundry creditors 20
20
SCHedULe 5: MISCeLLANeoUS eXPeNdItUre(to the extent not written off or adjusted)
Preliminary expenses 19
19
148
Annual Report 2009-10
SCHedULe - 6: SIgNIFICANt ACCoUNtINg PoLICIeS ANd NoteS to ACCoUNtS
A. ACCoUNtINg PoLICIeS
1. the accounts are prepared on historical cost convention and in accordance with the disclosure requirements of the companies act, 1956.
2. the company follows accrual method of accounting for expenses.
B. NoteS to ACCoUNtS
1. The Company was incorporated on 16th December 2009. The accounts have been prepared from the date of incorporation upto 31st March 2010.The figures relating to pervious year are not applicable.
2. The Company has been incorporated to put up power projects in the state of Arunachal Pradesh.
3. Since the Company has not started any commercial operations, no Profit & Loss Account has been prepared. Necessary details of expenditure incurred during the period have been presented under the Project and Pre-operative expenses (pending allocation).
4. other additional information required pursuant to the provisions of schedule Vi of the companies act, 1956 is not applicable.
as per our report of even date attached
For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn no. 000756n
Arun K. tulsianPartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
FoR NJC Hydro Power LIMIted
o.P. AJMerA Director
VIMAL BANKA Director
149
casH FloW stateMent as at MaRcH 31, 2010
` in '000'
As at 31.03.2010
A. Cash flows from investing activities
acquisition of Fixed assets (9)
Net cash used in investing activities (9)
B. Cash flows from financing activities
Proceeds from issuance of share capital 500
increase in Miscellaneous expenditure (19)
Net cash from financing activities 481
Net increase / (decrease) in cash and cash equivalents( A+B) 472
Cash and cash equivalents at the beginning of the year –
Cash and cash equivalents at the end of the year 472
Components of cash and cash equivalents
cash on hand –
With scheduled banks - on current accounts with bank deposits 472
472
as per our report of even date attached
For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn no. 000756n
Arun K. tulsianPartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
FoR NJC Hydro Power LIMIted
o.P. AJMerA Director
VIMAL BANKA Director
150
Annual Report 2009-10
1. regIStrAtIoN detAILS
Registration no. u4 0101Dl2009Plc196998 state code 5 5
Balance sheet Date 3 1 0 3 2 0 1 0
Date Month Year
2. CAPItAL rAISed dUrINg tHe yeAr (Amount in rs. thousands)
Public Issue – Rights Issue –
Bonus Issue – Private Placement –
3. PoSItIoN oF MoBILISAtIoN ANd dePLoyMeNt oF FUNdS (Amount in rs. thousands)
Total Liabilities 5 0 0 Total Assets 5 0 0
SoUrCeS oF FUNdS
Paid-up Capital 5 0 0 Reserves and Surplus –
Share Application Money –
Secured Loans – Unsecured Loans –
APPLICAtIoN oF FUNdS
Net Fixed Assets 2 9 Investments –
(inc. P.o.P. exps)
net current assets 4 5 2 Misc. expenditure 1 9
Accumulated Losses – Deferred Tax Assets –
4. PerForMANCe oF CoMPANy (Amount in rs. thousands)
Turnover – Total Expenditure –
Profit/Loss before Tax – Profit/Loss after tax –
Earning Per Share in Rs. N A Dividend Rate % –
5. geNerIC NAMeS oF PrINCIPAL ProdUCtS/SerVICeS oF CoMPANy-eLeCtrICIty geNerAtIoN (as per monetary terms)
item code no. (itc code) 9 8 0 1 0 0
Product Description H Y D R o e l e c t R i c e n e R G Y
BALANCe SHeet ABStrACt ANd CoMPANy'S geNerAL BUSINeSS ProFILe
as per our report of even date attached
For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn. no. 000756n
Arun K. tulsianPartnerMembership No. 089907
Place : new DelhiDated : 2nd June, 2010
FoR NJC Hydro Power LIMIted
o.P. AJMerA Director
VIMAL BANKA Director
Financial ResultsoF
Green Ventures PVt. Ltd.(nePaL)
152
Annual Report 2009-10
auditoRs' RepoRt
to
the shareholders of Green Ventures (P) Ltd.
We have audited the accompanying Balance sheet of Green Ventures (P.) Ltd. as of 31st March, 2010 and the related statements of cash Flows and changes in equity for the period from 1st april 2009 to 31st March, 2010.
These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with nepal standards of auditing or relevant practices. those standards or relevant practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
as per the provisions of the companies act, 2063 we state that:
1) We have received prompt replies to our queries and explanations asked for.
2) The books of accounts have been maintained as required by law.
3) the Balance sheet and cash flow statements comply with the books of accounts maintained by the company.
4) The business of the Company appears to have been conducted satisfactorily in so far as appears from our examination of the books and records of the company.
5) In our opinion and to the best of our information and according to the explanations given to us and from our examination of the books of account of the company, we have not come across the cases where the Board or any member thereof or any employee thereof or any employee of the company has acted contrary to the provisions of the law or caused loss or damage to the company or misappropriated to the funds of the company.
In our opinion, the financial statements give a true and fair view of the financial position of the company as of 31st March 2010 and its cash Flows and changes in equity for the period from 1st april 2009 to 31st March 2010.
narayan Bajaj, Fcanarayan Bajaj & associateschartered accountants
date : 15th april, 2010place : Kathmandu
153
Green Ventures Pvt. Ltd. (Nepal)
(nepali Rs.)
schedules as at 31.03.2010
as at 31.03.2009
source of funds
shareholders' fund
share capital 1 415,757,048.00 227,025,000.00
Reserve and surplus 2
total shareholders' fund 415,757,048.00 227,025,000.00
Mid-term & Long term Loans
– secured – –
– unsecured 3 – –
Gross total 415,757,048.00 227,025,000.00
aPPLication of fund
fixed assets 4 69,253,912.99 53,295,113.96
Work-in-progress 5 – –
investment in share 6 – –
current assets
inventory 7 – –
Trade & Other Receivables 8 2,930,374.36 2,714,445.69
Cash and Bank Balance 9 15,343,733.46 2,581,951.19
Prepaid expenses, Advances & Deposits 10 58,867,522.95 82,044,033.90
total current assets 77,141,630.77 87,340,430.78
Less: current Liabilities & Provisions
Trade & Other Payables 11 7,985,911.78 232,809.66
provisions 12 – –
total current Liabilities 7,985,911.78 232,809.66
net current assets 69,155,718.99 87,107,621.12
Pre-Operating Expenses Pertaining to Capitalisation 13 277,347,416.02 86,622,264.95
Gross total 415,757,048.00 227,025,000.00
contingent Liabilities 14
notes to accounts 15
Balance sHeet as at 31st MaRcH, 2010
as per our report of even date
narayan Bajaj, fca directornarayan Bajaj & associateschartered accountants
date : 15th april, 2010place : Kathmandu
154
Annual Report 2009-10
stateMent oF cHanges in equity
for the Period froM 1st aPriL, 2009 to 31st March, 2010
Particulars share capital General reserve
retained earnings
total
opening Balance (1st april, 2009)
share capital 30,000,000.00 30,000,000.00
advance against share capital
BHilWaRa eneRgy ltd., india 149,950,000.00 149,950,000.00
tRiveni eneRgy (p) ltd. nepal 47,075,000.00 47,075,000.00
during the period (from 1st april, 2009 to 31st March, 2010)
share capital – –
advance against share capital
BHilWaRa eneRgy ltd., india 88,832,048.00 88,832,048.00
tRiveni eneRgy (p) ltd. nepal 99,900,000.00 99,900,000.00
closing Balance (31 March, 2010) 415,757,048.00 – – 415,757,048.00
as per our report of even date
narayan Bajaj, fca directornarayan Bajaj & associateschartered accountants
date : 15th april, 2010place : Kathmandu
155
Green Ventures Pvt. Ltd. (Nepal)
scHedules to accounts
scheduLe 1 : share caPitaL (nepali Rs.)
s. no.
Particulars as on 31st March, 2010
as on 31st March, 2009
a. authorised
equity share
5,00,00,000 shares @ 100 per share 5,000,000,000.00 5,000,000,000.00
B. issued
equity share
50,00,000 shares @ 100 per share 5,000,000,000.00 5,000,000,000.00
c. subscribed
equity share
3,00,000 shares @ 100 per share 30,000,000.00 30,000,000.00
d. Paid up
equity share
3,00,000 shares @ 100 per share 30,000,000.00 30,000,000.00
total (a) 30,000,000.00 30,000,000.00
advance against share capital
BHilWaRa eneRgy ltd., india 238,782,048.00 149,950,000.00
tRiveni eneRgy (p) ltd., nepal 146,975,000.00 47,075,000.00
total (b) 385,757,048.00 197,025,000.00
total (a+b) 415,757,048.00 227,025,000.00
scheduLe 2 : reserVe & surPLus
a. general Reserves – –
B. Retained earnings – –
total – –
scheduLe 3 : MediuM terM & LonG terM Loan
a. secured Loan – –
1. long term loan – –
2. Debenture – –
B. unsecured Loan – –
1. long term loan – –
2. Debenture – –
3. other unsecured loan: – –
total – –
156
Annual Report 2009-10
scheduLe 5: Work in ProGress (nepali Rs.)
s no.
Particulars as on 31st March, 2010
as on 31st March, 2009
1 Work in Progress: – –
total – –
scheduLe 6: inVestMent
s no.
Particulars
a. investment on listed companies – –
B. investment on non-listed companies – –
total – –
scheduLe 7: inVentories
s no.
Particulars
a. store, spare parts, loose tools – –
B. Stock – –
total – –
scheduLe 4: fixed assets (Nepali Rs.)
Particulars Dep. Rate
Cost Price (GROSS BLOCK) DEPRECIATION Balance (NET BLOCK)
Balance as on
1 April 2009
Addition During the
Period
Sales/Adjus. During the
Period
Balance as on
31 March 2010
Accumulated Balance up to 31 March
2009
For the period
Sales/Adjus. During the
period
Accumulated Balance up to 31 March
2010
Balance as on
31 March 2010
Balance as on
31 March 2009
A. LAND
LaNd 0% 21,932,606.75 26,303,007.50 – 48,235,614.25 – – – – 48,235,614.25 21,932,606.75
TOTAL 21,932,606.75 26,303,007.50 – 48,235,614.25 – – – – 48,235,614.25 21,932,606.75
B. BuILDING –
PRe FabRicated OFFice buiLdiNg 5% 1,349,995.00 – – 1,349,995.00 – 67,499.75 – 67,499.75 1,282,495.25 1,349,995.00
tOtaL 1,349,995.00 – – 1,349,995.00 – 67,499.75 – 67,499.75 1,282,945.25 1,349,995.00
C. VEhICLES
Kia SOReNtO ba 6 ch 6385 20% 3,741,395.80 56,213.00 – 3,797,608.80 – 748,279.16 – 748,279.16 3,049,329.64 3,741,395.80
tOyOta hiLux (ba 6 ch 7514) 20% 2,757,462.50 – – 2,757,462.50 – 551,492.50 – 551,492.50 2,205,970.00 2,757,462.50
tOyOta hiLux (ba 6 ch 6653) 20% 2,770,810.00 – – 2,770,810.00 – 554,162.00 – 554,162.00 2,216,648.00 2,770,810.00
tOyOta caRROLa caR (ba 6 ch 8529) 20% 3,784,917.20 113,000.00 – 3,897,917.20 – 756,983.44 – 756,983.44 3,140,933.76 3,784,917.20
tOyOta hiLux (ba 6 ch 9366) 20% 2,806,947.81 – 2,806,947.81 – – – – – – 2,806,947.81
tOyOta hiLux (ba 6 ch 9367) 20% 2,806,952.80 169,500.00 – 2,976,452.80 – 561,390.56 – 561,390.56 2,415,062.24 2,806,952.80
tOyOta hiLux (ba 6 ch 9508) 20% 2,796,359.80 – 2,796,359.80 – – – – – – 2,796,359.80
tOyOta hiLux (ba 6 ch 9509) 20% 2,796,359.80 – 2,796,359.80 – – – – – – 2,796,359.80
yamaha biKe ba 29 Pa 3824 20% 129,970.00 – – 129,970.00 – 25,994.00 – 25,994.00 103,976.00 129,970.00
yamaha biKe ba 29 Pa 3836 20% 129,970.00 – – 129,970.00 – 25,994.00 – 25,994.00 103,976.00 129,970.00
TOTAL 24,521,145.71 338,713.00 8,399,667.41 16,460,191.30 – 3,224,295.66 – 3,224,295.66 13,235,895.64 24,521,145.71
D. Furniture & Off. Equit.
Site Furn. & equip. 25% 2,096,158.71 168,422.00 – 2,264,580.71 – 524,039.68 524,039.68 1,740,541.03 2,096,158.71
Office equipment 25% 1,278,338.51 703,024.00 – 1,981,362.51 53,742.50 306,149.00 – 359,891.50 1,621,471.01 1,224,596.01
Furniture and Fixture 25% 2,197,686.75 1,509,937.00 – 3,707,623.75 27,075.00 542,652.94 – 569,727.94 3,137,895.81 2,170,611.75
Total 5,572,183.97 2,381,383.00 – 7,953,566.97 80,817.50 1372,841.62 – 1,453,659.12 6,499,907.85 5,491,366.47
this period end balance: 53,375,931.43 29,023,103.50 8,399,667.41 73,892,377.52 80,817.50 4,664,637.03 – 4,745,454.53 69,253,912.99 53,295,113.93
Note: deprecation has not been charged on the additions made during the financial year.
157
Green Ventures Pvt. Ltd. (Nepal)
scheduLe 8: trade & other receiVaBLes (nepali Rs.)
s no.
Particulars as on 31st March, 2010
as on 31st March, 2009
a. Advance Income Tax 223,505.11 7,576,44B. advance to director
nirajala Raut 2,706,869.25 2,706,869.25
total 2,930,374.36 2,714,445.69
scheduLe 9: cash & other BaLance
s. no.
Particulars
a. cash Balance 95,692.44 –B. Bank Balance1. Bank of Asia (A/c no. 06CL005121NPR001) 94,326.81 970,726.202. Mahalaxmi Finance Co. Ltd. A/c No. 10-00009 109,895.49 1,037,082.213. Nepal Bank Ltd. 2-11-65431 20,000.00 20,000.004. Nepal Bank Ltd. CA 4021 10,000.00 10,000.005. NIB Bank no. 012-4528100 471,034.04 405,318.776. NMB Bank Ltd. - 004 00000 283 C 4,560,109.56 –7. RBB 109006583601current account 84,849.00 84,849.008. RBB 2967 Okhal Dhunga Current Account 5,466.00 5,466.009. RBB 407 Charikot 10,000.00 10,000.00
10. scB 01-1985426-01 25,000.00 –11. scB 02-1985426-01 short call deposit 9,847,360.12 28,509.0112. Sanima Bank Ltd. A/c no. 10,000.00 10,000.00
total 15,343,733.46 2,581,951.19
scheduLe 10: PrePaid exPenses, adVances, Loans & dePosits
s. no.
Particulars
a. Advances to Party Annex A 57,124,679.95 60,211,763.25B. Advances to Staff Annex B 457,374.00 2,310,705.52c. Bank Gurantee & Letter of Credit Annex B1 – 409,948.63d. Land Acquisition Advance Annex C 1,285,469.00 19,111,616.50
total 58,867,522.95 82,044,033.90
scheduLe 11: trade & other PayaBLes
s. no.
Particulars
1. Other Payables Annex D 7,764,407.78 117,899.402. Audit Fee Payables 144,950.00 66,900.003. TDS Payables Annex E 76,554.00 48,010.26
total 7,985,911.78 232,809.66
scheduLe 12: ProVisions for incoMe tax
s. no.
Particulars
total – –
158
Annual Report 2009-10
scheduLe 13: Pre-oPeratinG exPenses PertaininG to caPitaLisation
s. no. Particulars for the year ending
31st March, 2010
For the year ending
31st March, 2009
a. Licence & registration expenses: 1,694,000.00 4,630,438.06
Company Registrar Office Expenses – 1,450,025.00
Licence Renew Expenses – 1,000,000.00
generation licence application Fee 1,000,000.00 1,000,000.00
Licence Up-grade Expenses – 680,413.06
PPA Licence Expenses 444,000.00 –
licence transmission line survey 250,000.00 500,000.00
B. survey expenses: 25,735,437.00 29,329,978.29
consultancy Fee 25,492,700.00 –
detail project Report – 27,508,704.17
EIA Expenses 242,737.00 996,017.00
Water Flow survey – 825,257.12
c. Bridge construction: – 20,000.00
Bridge Civil Works – 20,000.00
d. transmission Line : 2,425,777.00 376,901.00
Transmission Line Expenses 2,425,777.00 376,901.00
e. road construction 150,635,318.88 28,536,070.36
Road Construction Expenses 150,635,318.88 28,536,070.36
f. Land acquisition 427,442.00 6,657,426.00
Land Acquisition Expenses 427,442.00 6,657,426.00
G. administrative expenses: 9,807,176.19 14,184,951.04
1. Office expenses (Annex F) 321,745.25 215,837.48
2. Bonus (dashain) to staff 200,603.00 741,033.00
3. Insurance Expenses 82,460.81 502,469.00
4. audit Fee 146,900.00 77,800.00
5. Advertisement Expenses 43,976.00 46,273.00
6. Telephone and Communication Expenses 322,486.33 590,028.00
7. Exchange Rate Loss 497,093.00 –
8. Guest Entertainment Expenses 308,763.00 194,917.00
9. Miscellaneous Expenses (Annex G) 1,287,796.09 1,342,654.28
10. Office Rent 2,135,567.20 997,073.00
11 Repair and Maintenance 137,435.00 120,239.66
12. printing stationary 89,273.00 276,146.00
13. Tangal House Expenses 500,702.48 960,687.33
14. Salary Office Staff 4,694,082.52 5,586,508.00
15. salary site staff 567,152.00 289,884.00
16. Legal Expenses – 14,300.00
17. Site Visit Expenses 1,298,768.77 257,962.00
18. Project Site Office Expenses 195,061.00 127,850.00
19. Travelling Expenses 629,563.00 2,444,840.33
20. Vehicle Expenses 499,360.43 620,364.84
159
Green Ventures Pvt. Ltd. (Nepal)
SCHEDULE - 15: Significant Accounting Policies & Notes To Account
a. siGnificant accountinG PoLicies
(1) accounting conventions:
the Financial statements are prepared under historical cost conventions on accrual concept and are in accordance with nepal accounting standards and other prevalent statutory requirement of nepal. the Accounting policies are applied consistentely by the company.
(2) use of estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual and estimates are recognized in the period in which the results are known/materialized.
(3) fixed assets:
Fixed Assets are stated at cost and the cost includes all the expenses incurred up to putting the assets into use.
(4) depreciation:
Depreciation has not been charged on the additions and sales made during the financial year.
(5) Going concern:
Financial Statements of concern is presented on going concern basis.
a. notes to accounts
1. income statements:
Profit & Loss Statement has not been prepared in view of construction period of the company.
2. Regrouping of figures:
Previous Quarter figures have been regrouped/rearranged wherever necessary and the figures have been restated.
s. no. Particulars for the year ending
31st March, 2010
For the year ending
31st March, 2009
21. Depreciation Expenses 4,664,637.03 23,827.50
22. Less: Profit On Sale of Vehicle (1,230,373.21) –
23. less: Miscellaneous income (61,764.00) –
24. less: land acquisition capitalised (7,017,980.00) –
25. less: interest income (506,132.51) (1,245,743.38)
total for the Period (1st april, 2009 to 31st March, 2010) 190,725,151.07 83,735,764.75
add: accumulated expenses up to 31st March, 2009) 86,622,264.95 2,886,500.20
total accumulated expenses up to 31st March, 2010 277,347,416.02 86,622,264.95
scheduLe 14: continGent LiaBiLities
s no.
Particulars as on 31st March, 2010
as on 31st March, 2009
total – –
160
Annual Report 2009-10
annexure a : adVance to the Party
s. no. name of the Party as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)
1. Belephi Jal Bidhyut co. ltd. 208,377.00 220,147.00
2. anK construction (p) ltd. – 18,950,000.00
3. iteco nepal 12,470,915.25 2,771,800.25
4. Mainawati steel industries (p) ltd. 20,366,650.00 12,366,650.00
5. MeH consultants (p) ltd. 475,000.00 475,000.00
6. narayan Bajaj & associates 10,000.00 –
7. Nepal Environment & Scientific Ltd. (NESS) 780,600.00 780,600.00
8. R K construction – 2,000,000.00
9. p s Ramechhap Jv – 2,100,000.00
10. Rasuwa-sva Joint ventures – 19,000,000.00
11. Ravindra nath – 1,547,566.00
12. iteco ceMat icgs 300,000.00 –
13. Ramechap sherpa construction pvt. ltd. 22,513,137.70 –
total 57,124,679.95 60,211,763.25
annexure B : adVance to staffadVance aGainst office Work
s. no. name of staff as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)
Advance for Office Works
1. Badri Rijal 58,923.00 100,000.00
2. anil Kumar dhungana – (2,276.00)
3. Balaji agency (custom clearing) – 62,874.00
4. Bandana Marandhar – 550.00
5. Baijay Karki – 117,433.00
6. Chabi Niraula – 16,140.00
7. chandra Bahadur (sirse House) 12,715.00 12,715.00
8. Chuda Sapkota – 17,495.00
9. Deepak Shrestha – (4,768.00)
10. ganesh thapa – 33,779.00
11. Jyoti Karki 14,600.00 15,000.00
12. Kanchan panta – 28,097.00
13. Krishna neupane – 50,000.00
14. Majuwa Bhunthan (Ramechhap) – 2,000.00
15. Markandeya Neupane – (22,076.16)
16. Mithila pandey 110,000.00 81,481.00
17. o.p. soni 16,000.00 16,000.00
18. Pashupati Kafle – 10,000.00
19. petty cash account – 516,904.00
20. Prakash Dhungana – (400.00)
21. Prakash Pokharel – 332,520.68
161
Green Ventures Pvt. Ltd. (Nepal)
s. no. name of staff as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)
22. punya prasad Bhattarai – 5,000.00
23. Ram sharma – 8,790.00
24. Rameshwer dahal – 20,150.00
25. saran Kc – 27,715.00
26. sonam lama – 33,892.00
27. sunil Regmi – 37,265.00
28. Tika Lama – (4,000.00)
29. Uma Shankar Kamti – 3,290.00
30. uttam Magar – 3,000.00
31. vipin arora – 30,000.00
advances against staff salary
1. Chuda Sapkota – 6,036.00
2. Deepak Shrestha – 5,200.00
3. ganesh thapa – 36,000.00
4. saran Kc – 36,000.00
5. shyam Khatri – 4,600.00
6. sonam lama – 36,000.00
7. Tika Lama – 5,000.00
8. Uma Shankar Kamti 706.00 185,000.00
9. uttam Magar – 36,000.00
10. vipin arora 244,430.00 412,299.00
total 457,374.00 2,310,705.52
annexure B1 : Bank Guarantee & Letter of credit
s. no. name of the Party as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)
1. GUA PS 08/152 (Bank Guarantee) – 18,924.02
2. GUA PS 08/231 (Bank Guarantee) – 320,300.00
3. guarantee 012guacu09-0003 – 35,362.30
4. guarantee 012guacu09-0006 – 35,362.31
total – 409,948.63
162
Annual Report 2009-10
annexure c : adVance for Land acquisition
s. no. name of the Party as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)1. Bhaviraj sunuwar – 200,000.002. Bhoj Raj ghimire – 583,907.003. Champak Sunuwar – 1,100,000.004. dev Raj ghimire – 1,990,062.505. dhir narayan (Kitta no. 1066) – 500.006. ganesh Bahadur shrestha – 5,000.007. gyan narayan shrestha – 124,219.008. Hari Kaji gautam – 2,000.009. Jivan Kumar nepal – 2,460,938.0010. Kar narayan shrestha – 251,562.0011. Khadag Kumari nepal – 1,689,062.0012. Khil nath timilsina 250,000.00 250,000.0013. Khayam Raj sunuwar – 300,000.0014. Khil prasad – 7,000.0015. Krishan Raj ghimire (Kitta no. 1183) 210,000.00 210,000.0016. lal prasad nepal – 365,616.0017. Lal Prasad Nepal (Brokrage) – 400,000.0018. Lok Kumar Nepal – 1,850,000.0019. Lok Prasad Nepal – 227,781.0020. Mal pot (nar Bahadur sunuwar) – 2,500.0021. Man Kumari sunuwar 220,000.00 220,000.0022. Man narayan shrestha – 50,000.0023. Mithu Borali – 20,000.0024. Mohan Kumar nepal – 100,000.0025. Mohan Raj ghimire – 1,222,656.0026. Murari sharma – 1,467,969.0027. nanda Raj ghimire – 320,313.0028. purna Bahadur shrestha – 25,000.0029. Rabanya Kumar Nepal – 100,000.0030. Ram chandra nepal – 100,000.0031. seshraj ghimire 355,469.00 1,000.0032. saroj sunuwar 250,000.00 250,000.0033. surya Kumari nepal – 1,277,344.0034. surya prasad nepal – 1,917,187.0035. Yadukul Gautam – 20,000.00
total 1,285,469.00 19,111,616.50
annexure d : other PayaBLes
s. no. name of the Party as on 31st March, 2010
(rs.)
as on 31st March, 2009
(Rs.)1. anK construction co. pvt. ltd. 2,300,000.00 –2. p.s. Ramechhap Jv 1,473,484.15 –3. Rasuwa-sBa Joint ventures 1,500,000.00 –4. R. K. construction 2,235,901.61 –5. triveni properties pvt. ltd. 255,022.02 –6. pipco agency – 111,864.407. Staff Insurance Payable – 6,035.00
total 7,764,407.78 117,899.40
163
Green Ventures Pvt. Ltd. (Nepal)
annexure e : Green Venture (P) Ltd.
details of tds Payabless. no. Particulars amount
1. Nepal Environmental and Scientific Services P. Ltd. 2,655.002. Divakar Vaidhya 8,500.003. Jyoti Karki 125.004. pashupati dhurge 3,292.005. Prakash Dhungana 4,646.006. Uma Shankar Kamti 2,654.007. vipin arora 22,075.008. triveni properties pvt. ltd. 225.509. Mithila pandey 12,223.00
10. triveni properties private limited 20,158.00total 76,554.00
annexure f : detaiL of office exPenses
details for the year ending on
31st March, 2010
For the year ending on
31st March, 2009Bank Charges 76,145.25 105,009.48postages and courier 5,913.00 11,142.00Electricity expenses 177,167.00 62,938.00Meeting Expenses 53,630.00 2,377.00local conveyance 8,890.00 34,371.00total 321,745.25 215,837.48
annexure G : detaiL of MisceLLaneous
details for the year ending on
31st March, 2010 (rs.)
For the year ending on
31st March, 2009 (Rs.)
Medicine Expenses 33,615.00 17,242.00Accidental Expenses 253,405.00Miscellaneous Expenses 248,405.47 1,013,596.28Electric Lock 4,375.00 –nail cutter 80.00 –Fooding Expenses 184,361.00 –Parking Expenses 1,710.00 –Clearing Expenses – 19,944.00photo copy 17,306.00 –Handling Expenses – –Election Expenses – –Water Expenses 14,340.00 –Canteen Expenses 4,500.00 42,378.00Gift Expenses 81,643.62 24,400.00Security Expenses 36,910.00 67,642.00news paper – 9,772.00Books & Periodicals 325.00 7,680.00Compensation Expenses 220,000.00 –employment Fund 27,680.00 –Donation Expenses 145,650.00 140,000.00Topo Sheet Expenses 13,490.00 –total 1,287,796.09 1,342,654.28
details of share capitalParticulars amountBhilwara energy 19,000,000.00nirjala Raut 1,500,000.00triveni energy 9,500,000.00total 30,000,000.00
164
Annual Report 2009-10
casH FloW stateMent as at MaRcH 31, 2010
(Rs. '000)
as at 31.03.2010 as at 31.03.2009 cash fLoW froM oPeratinG actiVitiesa. 1. Net Profit / Loss before tax and extraordinary items
add:1. depreciation 4,664,637.03 23,827.502. Expenses written off – –3. Interest expense – –4. Accumulated Pre-Operating Expenses – –5. decrease (increase) in pre-operating
Expenses Pending for Capitalisation(190,725,151.07) (83,735,764.75)
2. Operating Cash flow before Change of Working Capital1. decrease (increase) in current assets
(Other than Cash & Bank Balance)22,960,582.28 (78,653,272.16)
2. Increase (Decrease) in Current liabilities 7,753,102.12 (342,519.34)3. interest paid – –4. Tax paid / refund – –5. Cash flow before extraordinary items – –6. Income/(Expense) from extraordinary items – –Net Cash flow from Operating Activities (A) (155,346,829.64) (162,707,728.75)
B. Cash flow from Investing Activities – –1. Interest / Dividend received – –2. Sale (Purchase) of Fixed assets or Investment (20,623,436.09) (53,192,225.15)3. decrease (increase) in loans, advances and deposits – –4. Decrease (Increase) in Construction Work in progress – –Net cash flow from Investing Activities (B) (20,623,436.09) (53,192,225.15)
c. Cash flow from Financing Activities – –1. Issue of Shares (except bonus shares) – 28,500,000.002. advance against shares 188,732,048.00 189,045,840.923. dividends paid – –4. investment in shares – –
5. others – –
Net cash flow from Financing Activities (C) 188,732,048.00 217,545,840.92net increase (decrease) in cash and cash equivalents = (a+B+c) 12,761,782.27 1,645,887.02Cash and cash equivalents at the beginning of the year 2,581,951.19 936,064.17cash and cash equivalents at the end of the year 15,343,733.46 2,581,951.19
as per our report of even date
narayan Bajaj, fca directornarayan Bajaj & associateschartered accountants
date : 15th april, 2010place : Kathmandu
Group Salient Features
• The Group has a turnover of Rs. 4,000 crore - Export constitutes 46% (Rs. 1,840
crore).
• One of the largest textile houses in the country with a turnover of over Rs. 2,450 crore
- Export constitutes 42% (Rs. 1,025 crore).
• One of leading manufacturer and exporter of Graphite Electrodes in the country with
turnover of Rs. 1,084 crore - Export constitutes 74% (Rs. 807 crore).
• Largest producer and exporter of Synthetic Blended Yarn and largest range in Greige,
Dyed and Mélange Yarn with total spindleage capacity of nearly 5 Lacs.
• Manufacturer of Wool Blended and Premium Light Weight Fabrics, Worsted Fabric,
Silk Synthetic fashion Fabric and Denim Fabric.
• India's one of the largest vertically integrated Knitwear Company.
• Manufacturer of Flame Retardants, Air – texturized Yarn and Automotive Furnishing
Fabric.
• World's largest single site plant of Graphite Electrodes with a production capacity of
66,000 TPA.
• The Group has 120 MW Thermal Power Plants, approx. 300 MW Hydro Power Plants &
60 MW HFO based Captive Power Plants.
• The Group generated 1,300 Million power units in the year 2009-10.
• A consulting Company providing engineering consultancy services for Hydro Power
Projects.
Group Companies
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23
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3034 26
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4
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12
20 19
21
27
11
31
29 33
9
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LNJ Bhilwara Group
TEXTILES
GRAPHITE
POWER
INFORMATION TECHNOLOGY
OFFICES
RSWM Limited
1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn
2. Mayur Nagar, Banswara Spinning PV Blended, Cotton & Open End Grey Yarn
3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing
4. Rishabhdev Spinning PV Blended Grey Yarn
5. Ringas Fibre Dyeing & Spinning Dyed Yarn
6. LNJ Nagar, Mordi Weaving & PV Fabric Processing & Finishing
7. LNJ Nagar, Mordi Cotton Ring & Open End Spinning, Denim Fabric Weaving & Rope Dyeing, Processing & Finishing
8. LNJ Nagar, Mordi Thermal Power
Cheslind Textiles Ltd.
9. Bagalur Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting
10. Pondicherry Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting
Maral Overseas Ltd.
11. Maral Sarovar Cotton Spinning, Knitting, Dyeing & Finishing, Knitted Garments
12. Maral Sarovar Captive Thermal Power
13. Noida Knitted Garments
14. Noida Knitted Garments
BSL Ltd.
15. Bhilwara PV & Worsted Spinning, PV & Worsted Weaving & Silk Fabric
16. Jaisalmer Wind Power Generation
BMD Pvt. Ltd.
17. LNJ Nagar, Mordi Automotive Furnishing Fabric, Flame Retardant Fabric, Furnishing Fabric
Bhilwara Technical Textiles Ltd.
18. LNJ Nagar, Mordi Technical Textiles
HEG Ltd.
19. Mandideep Graphite Electrodes
20. Mandideep Captive Thermal Power
21. Tawa Captive Hydro Electric Power
Bhilwara Energy Ltd.
22. Pathankot UBDC Stage III Hydro Electric Power Generation
Malana Power Company Ltd.
23. Malana (Kullu) Hydro Electric Power Generation
AD Hydro Power Ltd.
24. Allain-Duhangan Hydro Electric Power Generation(Manali)
NJC Hydro Power Ltd.
25. Tawang Nyam Jang Chhu Hydro Electric Power Generation
Indo Canadian Consultancy Services Ltd.
26. Noida Power Engineering Services
Bhilwara Scribe Pvt. Ltd.
27. Bhopal Medical Transcription Services
28. Bengaluru Medical Transcription Services
Bhilwara Infotech Ltd.
29. Bengaluru IT Services
Corporate Office
30. Noida (NCR-Delhi)
Regional / Marketing
31. Mumbai 35. Ludhiana
32. Kolkata 36. Amritsar
33. Bengaluru 37. Bhilwara
34. New Delhi
25
LEADING BY EXAMPLE
AN
NU
AL
REPO
RT 2
009-1
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Bhilwara Energy LimitedBhilwara Towers, A-12, Sector-I,Noida - 201301 (NCR - Delhi), India
Website : www.bhilwaraenvergy.com / www.lnjbhilwara.com
Bhilwara Energy Limited
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