09. torrent power grid limited - annual report 2009-10
TRANSCRIPT
9Torrent Power Grid Limited
Dear Shareholders,
Your Directors have pleasure in presenting the 5th Annual Report and Audited Accounts for the year ended on31st March, 2010.
Financial Results
A summary of financial results for the year under review is given below:
(Rs. in Lacs)
Particulars For the year For the yearended on ended on
31st March, 2010 31st March, 2009
Total Income 298.34 31.45
Gross Profit before Depreciation, Interest and Tax 271.68 (41.23)
Depreciation 115.86 9.31
Interest - -
Profit / (Loss) Before Tax 155.82 (50.54)
Current Tax 27.00 -
Deferred Tax 31.23 -
Profit / (Loss) After Tax 97.59 (50.54)
Balance brought forward (50.54) -
Balance available for appropriation 47.05 (50.54)
Appropriations
Transfer to General Reserve - -
Balance carried to Balance Sheet 47.05 (50.54)
47.05 (50.54)
Dividend
Your Directors do not recommend any dividend for the year under review.
Operations
The Company is a joint venture between Torrent Power Limited (TPL) and Power Grid Corporation of IndiaLimited (PGCIL) for setting up transmission system for evacuation of power from 1147.5 MW SUGEN GeneratingStation. The system includes 400 kV Double Circuit lines from SUGEN Generating Station to 400 kV PGCILsub-station at Pirana with LILO at 400 kV TPL sub-station at Pirana and 400 kV Single Circuit LILO onJhanor-Vapi line of PGCIL at SUGEN Generating Station.
The Company has received a Transmission License from Central Electricity Regulatory Commission to set up400 kV transmission lines stated above. There being a change in the scope of work covered under the project,the Company has applied for amendment in the Transmission License as per provisions of Section 18(1) ofthe Electricity Act, 2003 to the Central Electricity Regulatory Commission (CERC). The Company has been
DIRECTORS’ REPORT
10 Annual Report 2009-2010
conferred with powers under Section 68 and Section 164 of the Electricity Act, 2003 by the Ministry of Power,Government of India for laying transmission lines.
Last year, the Company commissioned the first phase of 26 k.m. Single Circuit 400 kV LILO on Jhanor-Vapi line.During the year, the second phase of 80 k.m. 400 kV Double Circuit line for LILO of Jhanor-Dehgam line atSUGEN Generating Station has been commissioned. Work is in progress for the third phase which involvesextending the aforesaid 400 kV Double Circuit line to Pirana sub-station. All orders have been placed and workis in progress for the third and final phase of 141 k.m. 400 kV Double Circuit line from SUGEN Generating Stationto Pirana sub-station of PGCIL with LILO at 400 kV sub-station of TPL at Pirana. All efforts are being made tocomplete the third and final phase as per the schedule.
The Company has also filed a petition with CERC for determination of transmission tariff for the first phasecommissioned in March 2009 as per the provisions of CERC’s Regulation (Terms and Condition of Tariff) 2004and 2009.
Financial Arrangements
The Company allotted 3,00,00,000 equity shares of Rs. 10 each at par aggregating to Rs. 30 Crores to the jointventure partners viz. TPL and PGCIL in the ratio of 74:26 respectively during the year under review. With this,the paid-up equity share capital of the Company is Rs. 90 Crores.
The Company has been sanctioned Term Loan of Rs. 244 Crores. The Company has availed disbursement ofRs. 135 Crores during the year under review which was outstanding as on 31st March, 2010.
Directors’ Responsibility Statement
In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for the year2009-10, the Board of Directors states that:
1. In preparation of the annual accounts, the applicable accounting standards have been followed alongwithproper explanation relating to material departures, if any;
2. The Directors have selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as on 31st March, 2010 and of the profit for the year ended on 31st March, 2010;
3. The Directors have taken proper and sufficient care for maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities; and
4. The financial statements have been prepared on a going concern basis.
General
(a) Directors
Shri K. K. Shah retires by rotation at the ensuing Annual General Meeting and being eligible, offers himselffor re-appointment. Shri Mahesh Agrawal has been appointed as an Additional Director since the lastAnnual General Meeting. He holds office upto the commencement of the ensuing Annual General Meetingof the Company. Shri R. C. Singh was appointed as the Whole-time Director during the year under review.Your Directors recommend their appointment / re-appointment.
Shri I. N. Jha resigned during the year under review. Shri Sudhir Shah is liable to retire by rotation at theensuing Annual General Meeting. He has expressed his unwillingness to be re-appointed as a Directorof the Company. The Board of Directors places on record its sincere appreciation for the valuable servicesrendered by them during their tenure.
(b) Auditors
M/s. C. C. Chokshi & Co., Statutory Auditors of the Company retire at the ensuing Annual General Meetingand being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointmentas Statutory Auditors of the Company.
11Torrent Power Grid Limited
(c) Particulars of Employees
The Company has not employed any employee during the year drawing remuneration exceeding the limitsprescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 as amended.
(d) Conservation of Energy and Technology Absorption
Since the Company is not a scheduled industry, details in respect of Form A pursuant to Rule 2 of theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not furnished.Details relating to technology absorption required to be disclosed under the Rules are given in theannexure to and forms part of this report.
(e) Foreign Exchange Earnings and Outgo
During the year under review, foreign exchange earnings and outgo were nil.
(f) Acknowledgement
Your Directors place on record their appreciation for the promoters, TPL and PGCIL for continuousguidance and support extended to the Company.
For and on behalf of the Board of Directors
Gurgaon S. K. Chaturvedi
30th April, 2010 Chairman
12 Annual Report 2009-2010
RESEARCH AND DEVELOPMENT (R&D)
1. Specific areas in which R&D was carried out by the Company
• The Company did not carry out any basic R&D work during 2009-10.
2. Benefits derived as a result of above R&D initiatives
• Not Applicable
3. Future Plan of Action
• Not Applicable
4. Expenditure on R&D
• No expenditure of capital or recurring nature has been incurred on R&D.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1. Efforts made towards technology absorption, adaptation and innovation
• Not applicable
2. Benefits derived as a result of the above efforts
• Not applicable
3. In case of imported technology (imported during the last 5 years reckoned from the beginningof the financial year), following information may be furnished:
a. Technology imported Not Applicable
b. Year of import Not Applicable
c. Has technology been fully absorbed? Not Applicable
d. If not fully absorbed, areas where this has not taken
place, reasons therefor and future plans of action Not Applicable
For and on behalf of the Board of Directors
Gurgaon S. K. Chaturvedi
30th April, 2010 Chairman
FORM B: ANNEXURE TO DIRECTORS’ REPORT
13Torrent Power Grid Limited
To the Shareholders ofTORRENT POWER GRID LIMITED
1. We have audited the attached Balance Sheet of Torrent Power Grid Limited as at 31st March, 2010 andalso the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexedthereto. These financial statements are the responsibility of the Company’s management. Our responsibilityis 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. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditor’sReport) (Amendment) Order, 2004 (together ‘Order’) issued by the Central Government in terms of Section227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifiedin paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
a. we have obtained all the information and explanations, which to the best of our knowledge andbelief 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 sofar as it appears from our examination of the books;
c. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report isin agreement with the books of account;
d. in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt withby this report comply with the Accounting Standards referred to in sub-section (3C) of section 211of the Companies Act, 1956;
e. in our opinion and to the best of our information and according to the explanations given to us,the said accounts read with significant accounting policies and other notes thereon, give theinformation required by the Companies Act, 1956 in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet of the state of the affairs of the Company as at 31st March,2010;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
5. On the basis of written representations received from the Directors as on 31st March, 2010 and taken onrecord by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of theCompanies Act, 1956;
For C.C. CHOKSHI & CO. Chartered Accountants
(Registration No. 101876W)
(Gaurav J. Shah)Partner
Ahmedabad, 1st May, 2010 Membership No. 35701
AUDITORS’ REPORT
14 Annual Report 2009-2010
1. The nature of the Company’s business / activities during the year is such that the requirements of clause(xiii) and (xiv) of paragraph 4 of the Order are not applicable to the Company.
2. (a) The Company has maintained proper records showing full particulars, including quantitative detailsand situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the year. According to theinformation and explanations given to us, no material discrepancies have been noticed on suchverification.
(c) The Company has not disposed of a substantial part of fixed assets during the year.
3. (a) As explained to us, inventories were physically verified during the year by the management at reasonableintervals.
(b) In our opinion and according to the information and explanations given to us, the procedures ofphysical verification of inventory followed by the management are reasonable and adequate in relationto the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the company ismaintaining proper records of inventory and no discrepancies were noticed on such physical verification.
4. The Company has neither granted nor taken any loans, secured/unsecured to/from Companies, firms orother parties covered in the register maintained under section 301 of the Companies Act, 1956.
5. In our opinion and according to the information and explanations given to us, there are adequate internalcontrol procedures commensurate with the size of the Company and the nature of its business for thepurchase of inventory and fixed assets and for sale of services. During the course of audit we have notobserved any continuing failure to correct major weaknesses in such internal controls.
6. In our opinion and according to the information and explanations given to us, there are no transactionsthat need to be entered into the register maintained under section 301 of the Companies Act, 1956.
7. The Company has not accepted any deposits from the public to which the provisions of Section 58A and58AA of the Companies Act, 1956 and rules framed there under are applicable.
8. In our opinion, the company has an adequate internal audit system commensurate with the size and thenature of its business.
9 In respect of the services provided by the Company, maintenance of cost records has not been prescribedby the Central Government under clause (d) of sub section (1) of Section 209.
10. (a) According to the information and explanations given to us, the Company is regular in depositingundisputed statutory dues including Provident Fund, Pension Fund, Professional tax, Investor Educationand Protection Fund, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty and Other MaterialStatutory dues with appropriate authorities during the year.
(b) According to the information and explanations given to us, no undisputed amounts payable in respectof Income tax, Wealth tax, Sales tax, Custom duty, Excise duty and cess were outstanding as at 31st
March, 2010 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 Sales tax, Customduty, Wealth tax, Service tax, Excise duty, Income tax and cess, which have not been deposited onaccount of any dispute.
11. The Company has been registered for a period less than five years and therefore the provisions of clause(x) of Para 4 are not applicable.
12. In our opinion and according to the information and explanations given to us, the Company has notdefaulted in the repayment of dues to banks.
13. The Company has not granted loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
15Torrent Power Grid Limited
14. According to the information and explanations given to us, the company has not given any guarantee forloans taken by others from banks or financial institutions.
15. According to the information and explanations given to us, and on an overall examination of the balancesheet of the Company, we report that no funds have been raised on short term basis have been used forlong-term investment.
16. The Company has not made preferential allotment of shares to parties and companies covered in theregister maintained under section 301 of the Companies Act, 1956.
17. No debentures have been issued by the Company and hence the question of creating of securities orcharges in respect thereof does not arise.
18. During the year, the Company has not raised money by public issue.
19. To the best of our knowledge and belief and according to the information and explanations given to us,no fraud on or by the Company was noticed or reported during the year.
For C.C. CHOKSHI & CO.Chartered Accountants
(Registration No. 101876W)
(Gaurav J. Shah)Partner
Ahmedabad, 1st May, 2010 Membership No. 35701
16 Annual Report 2009-2010
BALANCE SHEET
AS AT 31ST MARCH, 2010
Schedule As at As at31st March, 2010 31st March, 2009
Rs. Rs.
SOURCES OF FUNDSShare Capital 1 900,000,000 600,000,000
Reserves & Surplus 2 33,121,008 -Secured Loans 3 1,350,000,000 -Deferred Tax Liability (Net) 3,122,987 -
TOTAL 2,286,243,995 600,000,000
APPLICATION OF FUNDS
Fixed AssetsGross Block 4 1,118,303,186 235,762,718
Less: Depreciation 14,386,568 1,038,618
Net Block 1,103,916,618 234,724,100
Capital Work-in-Progress 841,712,867 188,008,722
1,945,629,485 422,732,822
Pre-operative expenses incurred during construction
to be capitalised on completion of project 5 37,629,255 156,142Investments 6 240,061,953 -Current Assets, Loans and Advances 7
Inventories 1,453,746 1,560,103
Sundry Debtors - 2,788,463
Cash and Bank Balances 213,791,672 198,765,171
Loans and Advances 7,713,657 2,420,410
222,959,075 205,534,147
Less: Current Liabilities and Provisions 8
Current Liabilities 154,319,660 33,299,750
Provisions 5,716,113 177,041
160,035,773 33,476,791
Net Current Assets 62,923,302 172,057,356
Debit Balance of Profit and Loss Account - 5,053,680
TOTAL 2,286,243,995 600,000,000
Significant Accounting Policies and Notes on Accounts 9
As per our report of even date S.K. ChaturvediChairman
For C.C. Chokshi & Co. Jagrut VyasChartered Accountants Managing Director
V.C. JagannathanDirector
Gaurav J. Shah Kapil KhandelwalPartner Director
Nilesh PatelCompany Secretary
Ahmedabad, 1st May, 2010 Gurgaon, 30th April, 2010
17Torrent Power Grid Limited
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule As at As at31st March, 2010 31st March, 2009
Rs. Rs.
INCOME
Transmission Charges Income 29,833,562 3,144,765
29,833,562 3,144,765EXPENDITURE
Salaries and Wages
Salary, Wages and Bonus 789,282 28,344
Contribution to PF and Other Funds 34,329 1,540
Gratuity and Leave Encashment 3,704 3,071
827,315 32,955
Repairs and Maintenance Expenses - Plant & Machinery 962,623 156,534
Audit Fees 254,244 110,300
Other Miscellaneous Expenses 621,166 102,031
Miscellaneous Expenses written off - 6,866,100
Depreciation 13,170,539 930,525
Less:Transferred from Overhead line contribution (1,584,000) -
14,251,887 8,198,445
PROFIT/(LOSS) BEFORE TAX 15,581,675 (5,053,680)
Provision For :
Current Tax 2,700,000 -
Deferred Tax 3,122,987 -
PROFIT/(LOSS) AFTER TAX 9,758,688 (5,053,680)
Balance Brought Forward from previous year (5,053,680) -
Balance Carried to Balance Sheet 4,705,008 (5,053,680)
Basic and Diluted Earnings per Share of face value of Rs.10 each
(Refer Note 10 of Schedule 9) 0.16 (0.16)
Significant Accounting Policies and Notes on Accounts 9
As per our report of even date S.K. ChaturvediChairman
For C.C. Chokshi & Co. Jagrut VyasChartered Accountants Managing Director
V.C. JagannathanDirector
Gaurav J. Shah Kapil KhandelwalPartner Director
Nilesh PatelCompany Secretary
Ahmedabad, 1st May, 2010 Gurgaon, 30th April, 2010
18 Annual Report 2009-2010
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH, 2010
Year ended Year ended31st March, 2010 31st March, 2009
Rs. Rs.
Cash Flow from Operating ActivitiesNet Profit Before Tax 15,581,675 (5,053,680)Adjustments For:Depreciation 11,586,539 930,525Miscellaneous Expenditure Written Off - 6,866,100Operating Profit before Working Capital Changes 27,168,214 2,742,945(Increase)/Decrease in Receivables 2,761,277 (2,820,604)(Increase)/Decrease in Inventories 106,357 (1,560,103)Increase/(Decrease) in Current Liabilities and Provisions 2,839,072 100,041Cash Generated from Operations 32,874,920 (1,537,721)Taxes Paid (5,266,061) (2,129,604)Net Cash Flow from Operating Activities 27,608,859 (3,667,325)Cash Flow from Investing ActivitiesPurchase of Fixed Assets (Including Capital Work in Progress) (1,452,520,405) (179,614,939)Purchase of Investments (240,061,953) -Net Cash used in Investing Activities (1,692,582,358) (179,614,939)Cash Flow from Financing ActivitiesProceeds from issue of Equity Shares 300,000,000 299,750,000Secured Loan Received 1,350,000,000 -Overhead line Contribution 30,000,000 -Unsecured loan Received - 1,399,944Unsecured loan Paid - (1,399,944)Net Cash generated from Financing Activities 1,680,000,000 299,750,000Net increase in Cash and Cash Equivalents 15,026,501 116,467,736Cash and Cash Equivalents as at 01-04-2009 198,765,171 82,297,435Cash and Cash Equivalents as at 31-03-2010 213,791,672 198,765,171
15,026,500
Note: 1The Cash Flow Statement has been prepared under the ‘ Indirect Method’ set out in Accounting Standard-3 ‘Cash Flow Statement‘ issued by the Institute of Chartered Accountants of India.
As per our attached report of even date S.K. ChaturvediChairman
For C.C. Chokshi & Co. Jagrut VyasChartered Accountants Managing Director
V.C. JagannathanDirector
Gaurav J. Shah Kapil KhandelwalPartner Director
Nilesh PatelCompany Secretary
Ahmedabad, 1st May, 2010 Gurgaon, 30th April, 2010
19Torrent Power Grid Limited
SCHEDULES
FORMING PART OF THE BALANCE SHEET
SCHEDULE ‘1’ : SHARE CAPITAL
As at As at31st March, 2010 31st March, 2009
Rs. Rs.
Authorised
12,50,00,000 Equity Shares of Rs.10/- each 1,250,000,000 1,250,000,000
1,250,000,000 1,250,000,000
Issued, Subscribed and Paid up
9,00,00,000 Equity Shares of Rs.10/- each 900,000,000 600,000,000
(Previous Year 6,00,00,000 Equity Shares of Rs. 10/- each)
TOTAL 900,000,000 600,000,000
Out of above, 6,65,99,500 (Previous Year 4,43,99,500) equity shares of Rs 10/- each fully paid up are held
by Torrent Power Limited, the holding Company.
SCHEDULE ‘2’ : RESERVE AND SURPLUS
As at As at31st March, 2010 31st March, 2009
Rs. Rs. Rs.
Capital Reserve
Overhead line contribution 30,000,000 -
Less: Transferred to Profit & Loss Account 1,584,000
28,416,000 -
Balance in Profit and Loss Account 4,705,008 -
TOTAL 33,121,008 -
20 Annual Report 2009-2010
SCHEDULE ‘3’ : SECURED LOANS
As at As at31st March, 2010 31st March, 2009
Rs. Rs.
Term Loan:
Bank of Baroda 1,350,000,000 -(Repayable within one year Rs. Nil)
TOTAL 1,350,000,000 -
(The above term loan is secured by way of first pari passu charge created on the entire moveable propertiesincluding transmission towers, insulators and other moveable assets, book debts, operating cash flows,revenues, intangibles, trust and retention account and by way of pledge of 30% shares held by Torrent PowerLimited in the equity share capital of the Company)
SCHEDULE ‘4’ : FIXED ASSETS
(Rs.)
PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
As at Additions Deductions As at As at Additions Deductions As at As at As at1-Apr-09 during during 31-Mar-10 1-Apr-09 during during 31-Mar-09 31-Mar-10 31-Mar-09
the year the year the year the year
Overhead
Transmission Line 235,080,025 880,433,107 - 1,115,513,132 930,525 13,170,539 - 14,101,064 1,101,412,068 234,149,500
Furniture, Fixtures
and
Office Equipments - 1,468,301 - 1,468,301 - 87,439 - 87,439 1,380,862 -
Vehicles 682,693 639,060 - 1,321,753 108,093 89,972 - 198,065 1,123,688 574,600
TOTAL 235,762,718 882,540,468 - 1,118,303,186 1,038,618 13,347,950 - 14,386,568 1,103,916,618 234,724,100
Previous Year 682,693 235,080,025 - 235,762,718 43,237 995,381 - 1,038,618 - 234,724,100
Capital Work-in Progress 841,712,867 188,008,722
1,945,629,485 422,732,822
Note:
Additions during the year and Capital Work-in-Progress include borrowing cost of Rs. 5,13,55,698 (Previous Year Rs. Nil) incurred during the year, which are directly attributable to
construction of qualifying assets in accordance with Accounting Standard-16 “Borrowing Costs” notified by the Companies (Accounting Standards) Rules, 2006.
21Torrent Power Grid Limited
SCHEDULE ‘5’ : PRE-OPERATIVE EXPENSES INCURRED DURING CONSTRUCTION TO BE
CAPITALISED ON COMPLETION OF PROJECT
As at As at31st March, 2010 31st March, 2009
Rs. Rs.
PRE-OPERATIVE EXPENSESSalary , Wages and Bonus 13,590,563 3,440,976Gratuity and Leave Encashment 1,734,932 27,642Contribution to Provident and Other Funds 997,400 292,670
Employee Welfare Expenses 180,774 43,474Insurance Expenses 91,876 53,604Advertisement Expenses 71,400 151,975
Repairs & Maintenance Expenses-Others 362,085 701,055Audit Fees - 132,574Director Sitting Fees - 195,000
Professional Fees 2,754,008 1,199,853Registration and Filing Fees - 100,000Traveling Expenses 976,674 496,685
Miscellaneous Expenses 4,079,790 1,453,738Depreciation 182,816 108,093Interest and Finance Charges 51,655,898 -
Fringe Benefit Tax 10,000 66,000
76,688,216 8,463,339
Less : INCOMEInterest on Bank Fixed Deposits 4,051,380 5,452,230{Tax Deducted at Source Rs.6,56,614
(Previous Year Rs.80,926)}Rent Recovery from Employees 5,600 -Dividend on Investments 61,953 -
Less : Provision for Income Tax - 61,0004,118,933 5,391,230
72,569,283 3,072,109
Less: Capitalised during the year 34,940,028 2,915,967
Pre-Operative expenses incurred during construction to becapitalised on completion of the Project (Net) 37,629,255 156,142
22 Annual Report 2009-2010
SCHEDULE - ‘6’INVESTMENTS (AT COST)
As at ’31st March, 2010 As at ’31st March, 2009No. of Units Rs. No. of Units Rs.
Current Investments - Non TradeIn Units (Unquoted)
Kotak Floater Long Term Plan - Daily Dividend 9,923,121 100,023,075 - -
HDFC Cash Management Fund. - Treasury 3,988,546 40,011,100 - -
Advantage Plan
Birla Sun Life Savings Fund -Institutional -
Daily Dividend 4,998,104 50,015,025 - -
ICICI Prudential Flexible Income Plan -
Daily Dividend 473,001 50,012,753 - -
TOTAL 240,061,953 -
No. of Units Rs. No. of Units Rs.
Current Investments purchased andsold during the year:
Kotak Liquid (Institutional Premium) -Daily Dividend 8,178,781 100,010,950 - -
HDFC Liquid Fund - Daily Dividend 3,922,645 40,003,922 - -
Birla Sun Life Cash Plus - Institutional - 4,629,186 50,005,855 - -
Daily Dividend
ICICI Prudential Liquid SuperInstitutional Plan - Daily Dividend 499,939 50,004,988 - -
23Torrent Power Grid Limited
SCHEDULE ‘7’CURRENT ASSETS, LOANS AND ADVANCES
As at As at31st March, 2010 31st March, 2009
Rs. Rs.
CURRENT ASSETSInventoriesStores and Spares 1,453,746 1,560,103
Sundry Debtors (Unsecured) (Considered Good)Debts outstanding for a period exceeding six months -
Other-Torrent Power Limited (Holding Company) - - 2,788,463(Maximum Balance outstanding during the yearRs 2,46,41,205/-, Previous year Rs. 27,88,463/-)
Cash and Bank BalancesCash on hand 8,523 10,913
Balance with scheduled banks in :Current Accounts 33,563,149 6,234,258
Fixed Deposit Accounts 180,220,000 192,520,000
213,791,672 198,765,171
LOANS & ADVANCES(Unsecured Considered Good)
Advances recoverable in cash or in kind or for valueto be received 261,659 234,473
Advance Tax and Tax Deducted at Source 7,451,998 2,185,937
7,713,657 2,420,410
TOTAL 222,959,075 205,534,147
24 Annual Report 2009-2010
SCHEDULE ‘8’CURRENT LIABILITIES AND PROVISIONS
As at As at31st March, 2010 31st March, 2009
Rs. Rs.
CURRENT LIABILITIESSundry Creditors(Other than Micro, Small and Medium Enterprises) 154,319,660 33,299,750
154,319,660 33,299,750
PROVISIONSProvisions For :Taxes 2,827,000 127,000
Gratuity 1,934,970 23,521Leave Encashment 954,143 26,520
5,716,113 177,041
TOTAL 160,035,773 33,476,791
25Torrent Power Grid Limited
SCHEDULE - ‘9’
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS
A) Significant Accounting Policies
1. Basis of Preparation of Financial Statements:
The Company has applied provisions of the Companies Act, 1956 for preparation of its financial statements.The financial statements are prepared and presented under the historical cost convention on accrualbasis of accounting, in accordance with the accounting principles generally accepted in India and comply
with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.Accounting policies have been followed consistently otherwise than stated specifically.
2. Use of Estimates:
The presentation of financial statements requires certain estimates and assumptions. These estimates
and assumptions affect the reported amount of assets and liabilities on the date of financial statementsand the reported amount of revenues and expenses during the reporting year. Difference between theactual result and estimates are recognized in the year in which the results are known / materialized.
3. Capital Receipts:
Contribution received from Gujarat Mineral Development Corporation Limited towards construction of
Overhead Lines is treated as capital receipt and accounted as Capital Reserve.
4. Revenue Recognition:
Revenue (income) is recognized when no significant uncertainty as to the measurability or collectabilityexists.
5. Inventories:
Inventories are valued at weighted average cost or net realizable value whichever is lower.
6. Fixed Assets:
Fixed Assets are stated at historical cost less accumulated depreciation. Advances given to suppliers for
identified capital project/ expenditure are included in Capital Work-in-Progress.
7. Impairment of Fixed Assets:
Fixed Assets are reviewed for impairment losses whenever events or changes in circumstances indicatethat the carrying amount may not be recoverable. An impairment loss is recognized for the amount by
which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an assets’net selling price and value in use.
8. Expenditure during Construction Period:
Expenditure incurred during construction/pre-operative period including interest and finance charges onspecific loans, prior to commencement of commercial operation is capitalised and interest on temporary
investments of the specific loan funds earned during the construction period is deducted from the totalof the capital expenditure.
9. Depreciation and Amortisation:
Depreciation is provided on Straight Line Method at the rates prescribed under Schedule XIV to the Companies
Act, 1956 or at the rates prescribed under the Central Electricity Regulatory Commission (Terms &Conditions of Tariff) Regulations, 2009, whichever is higher. The depreciation rates on the assets asmentioned below have been used for providing depreciation, which are higher than the rates prescribed
under Schedule XIV to the Companies Act, 1956:
Asset Description RateOverhead Lines 5.28%Office Equipments 6.33%
26 Annual Report 2009-2010
Depreciation is provided on additions / deductions of the assets during the period from / up to the month inwhich the asset is added / deducted.
10. Retirement and Other Employee Benefits:
Retirement Benefits in the form of Provident Fund, Family Pension Fund and Superannuation Schemes,
which are defined contribution schemes, are charged to the profit and loss account of the period in whichthe contributions to the respective funds accrue.
The Company has created Employees Group Gratuity Fund which has taken a Group Gratuity InsurancePolicy from Life Insurance Corporation of India (LIC). Premium on the above policy as intimated by LIC
is charged to the profit and loss account. The adequacy of balances available is compared with actuarialvaluation obtained at the period-end and shortfall, if any, is provided for in the profit and loss account.
Provision for leave encashment is determined and accrued on the basis of actuarial valuation. Actuarialgains and losses are immediately recognized in the profit and loss account and are not deferred.
11. Taxation:
Provision for Current tax is made on the basis of estimated taxable income for the current accounting periodand in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from “timingdifferences” between accounting and taxable profit for the period is accounted for using the tax rates and
laws that have been enacted or substantively enacted as the balance sheet date. Deferred tax assets arerecognized and carried forward if there is reasonable certainty that sufficient future taxable income willbe available against which such assets can be realized.
12. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognised when there is a present
obligation as a result of past events and it is probable that there will be an out flow of resources.
Liabilities which are of contingent nature are not provided but are disclosed at their estimated amount in theNotes to the Accounts. Contingent assets are neither recognized nor disclosed in the financial statements.
B) Notes Forming Part of Accounts:
1) Estimated amount of contracts remaining to be executed on capital account and not provided for is
Rs. 53,96,60,870 (Previous Year Rs. 174,72,05,618)
2) Contingent Liabilities not provided for in respect of guarantees given by banks on behalf of the Company-Rs. 2,20,000 (Previous year Rs. Nil).
3) Hitherto, the Company followed accounting policy of providing depreciation on fixed assets as per Straightline Method and at the rates prescribed under Schedule XIV to the Companies Act, 1956. Effective from
1st April, 2009, with an objective of more appropriate presentation of the financial statements, the Companyhas changed the policy to provide the depreciation as per Straight line Method and at the higher of (i) ratesprescribed under Schedule XIV to the Companies Act, 1956 or (ii) rates prescribed under the Central
Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2009. Consequently, thedepreciation charged to the Profit and Loss Account is higher for the year by Rs. 11,63,448 and profit beforetaxation for the year is lower by the same amount.
4) The Company’s primary business is Transmission of Electricity. Based on the guiding principles givenin Accounting Standard on “Segment Reporting” [(AS-17) issued by the Institute of Chartered Accountantsof India], this activity falls within a simple primary business segment and accordingly the disclosure
requirements of AS-17 in this regard are not applicable.
5) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which areoutstanding as at the Balance Sheet date. The above information has been determined to the extent suchparties have been identified on the basis of information available with the Company. This has been relied
upon by the auditors.
27Torrent Power Grid Limited
6) Pre-operative Expenses includes Managerial Remuneration to Director as under:
(Rs.)
Year ended Year ended31st March, 2010 31st March, 2009
Salary and Other allowances 9,98,764 10,71,800Contribution to Provident and Other Funds 82,295 1,24,106
Total 10,81,059 11,95,906
Note: Managerial Remuneration is subject to Shareholders approval at the ensuing Annual General Meeting.
7(a). Names of Related Parties and description of relationship.
1 Associates Power Grid Corporation of India Limited
2 Holding Company/ Enterprise Torrent Power Limited
Controlled by the Holding Company Torrent Private Limited
Torrent Energy Limited
Torrent Pipavav Generation Limited
Torrent Power Bhiwandi Limited
Torrent Pharmaceuticals Limited
Torrent Cables Limited
Gujarat Lease Financing Limited
Torrent Power Services Private Limited
Heumann Pharma Gmbh & Co. Generica KG,
Torrent Do Brasil Ltda.
Zao Torrent Pharma
Torrent Pharma GmbH.
Torrent Pharma Inc.
Torrent Pharma Philippines Inc.
Torrent Australasia Pty Ltd.
Laborotrios Torrent SA de CV
Torrent Pharma Japan Co. Ltd
Torrent Power AEC Limited Employees’ Group Gratuity Scheme
Torrent Power AEC Limited Officers’ Superannuation Scheme
Torrent Power SEC Limited Employees’ Group Gratuity Scheme
Torrent Power SEC Limited Officers’ Superannuation Scheme
TPGL Gratuity Trust
TPGL Superannuation Fund
TPL Employee Group Gratuity Trust
TPL Employee Superannuation Trust
AEC Cements & Constructions Limited
3 Enterprise Controlled by the Company TPG Gratuity Trust
TPG Superannuation Fund
4 Key Management Personnel Jagrut Vyas – Managing Director R C Singh – Director
5 Relatives of Key Management Personnel Harsha Vyas, Wife Pushpa Singh, Wife
Mahek Vyas, Son Wanshraji Devi, Mother
Satin Vyas, Brother Riteshkumar Singh, Son
Meena Vyas, Sister Poonam Singh, Son’s wife
Bhavana Vyas, Sister Master Yajush, Son’s son.
Chetna Vyas, Sister
28 Annual Report 2009-2010
7(b
)R
elat
ed P
arty
Dis
clo
sure
s:
(R
s)
A
ss
oc
iate
sE
nte
rpri
se
sH
old
ing
Co
mp
any/
Ke
y
Ma
na
ge
me
nt
TO
TAL
co
ntr
oll
ed
by
En
terp
ris
es
c
on
tro
lle
d
by
Pe
rso
nn
el
the
C
om
pa
ny
the
Ho
ldin
g C
om
pan
y
Year
end
edYe
ar e
nded
Year
end
edYe
ar e
nded
Year
end
edYe
ar e
nded
Year
end
edYe
ar e
nded
Year
end
edYe
ar e
nded
31.0
3.10
31.0
3.09
31.0
3.10
31.0
3.09
31.0
3.10
31.0
3.09
31.0
3.10
31.0
3.09
31.0
3.10
31.0
3.09
A)
Volu
me
of t
rans
actio
ns :
Pur
chas
e of
Mat
eria
ls-
77,8
7,75
3-
--
--
-—
77,8
7,75
3
Ser
vice
s
Rec
eive
d5,
43,3
1,58
7
3,52
,51,
328
--
90,3
97-
--
5,44
,21,
984
3,52
,51,
328
Ser
vice
s
Pro
vide
d-
--
-4,
63,2
2,72
6
31
,44,
765
--
4,63
,22,
726
31,4
4,76
5
Man
ager
ial
Rem
uner
atio
n-
--
--
-10
,88,
603
11,9
5,90
610
,88,
603
11,9
5,90
6
Loan
s R
ecei
ved
--
--
27,0
4,57
113
,99,
944
--
27,0
4,57
113
,99,
944
Loan
s P
aid
--
--
27,0
4,57
1
13,9
9,94
4-
-27
,04,
571
13
,99,
944
Con
trib
utio
n
to F
unds
18,3
5,71
5-
--
--
18,3
5,71
5-
Equ
ity C
ontr
ibut
ion
7,80
,00,
000
77
,935
,000
--
22,2
0,00
,000
22
1,81
5,00
0-
-
30,0
0,00
,000
29
9,75
0,00
0
B)
Bal
ance
s at
the
end
of
the
year
:
Rec
eiva
ble
--
--
-27
,88,
463
--
—
27
,88,
463
Sha
re C
apita
l23
,40,
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00
156,
000,
000
--
66,5
9,95
,000
44,3
9,95
,000
--
89,9
9,95
,000
59,9
9,95
,000
29Torrent Power Grid Limited
8) Payment to Auditors:(Rs)
Year ended Year ended31st March, 2010 31st March, 2009
Audit Fees 1,65,450 1,10,300
Tax Audit Fees 55,150 -
Other Services – certificates etc. 33,090 -
Reimbursement of Expenses 554 -
Total 2,54,244 1,10,300
9) Employee Benefits:
The accounting liability on account of gratuity and leave encashment (retirement benefit in the nature ofdefined benefits plan) is accounted as per AS 15 (revised 2005) dealing with Employee benefits.
The Company operates a defined benefit plan (the Gratuity and Leave Plan) covering eligible employees,which provides a lump sum payment to vested employees at retirement , death, incapacitation ortermination of employment, of an amount based on the respective employees salary and tenure of
employment.
30 Annual Report 2009-2010
Status of Gratuity and Leave Plan as required under AS-15 [revised]: (Rs.)
As at 31st March, 2010 As at 31st March, 2009
Particulars Leave Gratuity Leave GratuityEncashment Encashment
a. Reconciliation of opening and closingbalances of the present value of thedefined benefit obligation:Obligations at the beginning of the year 26,520 56,435 - -Current Service cost 8,96,889 2,73,627 26,520 56,435Interest Cost 2,254 3,243 - -Actuarial (gain) / loss 2,760 31,29,900 - -Benefits paid - - - -Obligations at the end of the year 9,28,423 34,63,205 26,520 56,435
b. Reconciliation of opening and closing
balances of the fair value of plan assets: Plan assets at the beginning of the year, at fair value - 32,914 - -Expected return on plan assets - 72,203 - -Actuarial gain / (Loss) - (47,206) - -Contributions - 14,70,324 - 32,914Benefits paid - - - -Plan assets at the end of the year, at fair value - 15,28,235 - 32,914
c. Net Liability/(Asset) recognised in theBalance Sheet as at 31st March, 2010. Obligations at the end of the year 9,28,423 34,63,205 26,520 56.435Plan assets at the end of the year, at fair value - 15,28,235 - 32,914Liability recognized in the Balancesheet as at 31-Mar-2010. 9,28,423 19,34,970 26,520 23,521
d. Cost for the period:Current service cost 8,96,889 2,73,627 26,520 56,435Interest cost 2,254 3,243 - -Expected return on plan assets - (72,203) - -Net Actuarial loss/ (gain) 2,760 31,77,106 - 56,435Liabilities assumed on transfer of employee - (27,04,571) - -Net cost 9,01,903 6,77,202 26,520 56,435
e. Investment details of plan assets:Contributions to fund the obligations under thegratuity plan are made to Life InsuranceCorporation of India, who has invested the fundssubstantially in the government securities.
f. Assumptions Interest rate 8.25% 8.25% 7.25% 7.25%Expected rate of return on plan assets - 9.25% - 9.00%(Yield on long term bonds of CentralGovernment prevailing on 31-Mar-2010)
Note:
The estimates of future salary increases considered in the actuarial valuation take account of inflation, promotionand other relevant factors, such as supply and demand in the employment market. Future separation andMortality rates obtained from relevant data of Life Insurance Corporation of India.
31Torrent Power Grid Limited
10) Earnings per Share (Rs.)
Year ended Year ended31st March, 2010 31st March, 2009
Profit/(Loss) after tax (Rs.) 97,58,688 (50,53,680)
Nominal Value per Equity Share (Rs.) 10 10No. of Equity Shares (Weighted) 6,05,75,342 3,16,67,466Basic and Diluted Earnings per Share (Rs.) 0.16 (0.16)
11) The components of Deferred tax liability and assets as at 31st March, 2010 are as under:(Rs.)
As at As at31st March, 2010 31st March, 2009
a) Deferred tax liability:
Depreciation 3,18,23,223 -
b) Deferred tax assets:
Preliminary Expenses 14,00,272 -Provision for gratuity 6,57,696 -Provision for leave encashment 3,24,313 -
Unabsorbed depreciation 2,63,17,955 -
Net Deferred tax liability 31,22,987 -
12) Previous year figures have been regrouped and rearranged, wherever considered necessary.
Signatures to Schedule 1 to 9
As per our attached report of even date S.K. ChaturvediChairman
For C.C. Chokshi & Co. Jagrut VyasChartered Accountants Managing Director
V.C. JagannathanDirector
Gaurav J. Shah Kapil KhandelwalPartner Director
Nilesh PatelCompany Secretary
Ahmedabad, 1st May, 2010 Gurgaon, 30th April, 2010
32 Annual Report 2009-2010
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE:ADDITIONAL INFORMATION UNDER PART IV OF THE SCHEDULE VI OF THE COMPANIES ACT, 1956
I Registration Details
Registration Number State Code
Balance Sheet Date
II Capital raised during the year (Rs. in thousands)
Public Issue
Right Issue
Bonus Issue
Private Placement
III Position of Mobilisation and Deployment of Funds (Rs. in thousands)
Total Liabilities Total Assets
Sources of Funds Application of Funds
Paid up Capital Net Fixed Assets and CWIP
Reserves and Surplus Investments
Secured Loans Net Current Assets
Unsecured Loans Pre-operative Expenses
Deferred Tax Liabilities Miscellaneous Expenditure
Service Line and Accumulated Losses
IV Performance of the Company (Rs. in thousands)
Turnover
Total Expenditure
Profit / (Loss) before Tax
Profit / (Loss) after Tax
Earnings per Share (in Rs.)
Dividend Rate %
V Generic names of Principal Products / Services of Company (as per monetary terms)
Item Code No. (ITC Code)
Product Description
r r r 4 6 6 6 0
3 1 0 3 2 0 1 0
4 4 N I L
4 4 N I L
4 4 N I L
N I 3 0 0 0 0 0
0 0 N I L
6 2 2 8 6 2 4 4
1 3 5 0 0 0 0
0 3 1 2 3
3 3 1 2 1
r 4 9 0 0 0 0 0
r r r 4 4 0 0 4
r 2 9 3 7 6 2 9
r 1 1 6 2 9 2 3
2 4 0 0 6 2
6 1 9 4 5 6 3 0
BALANCE SHEET ABSTRACT
6 2 2 8 6 2 4 4
r 3 5 4 N I L
0 0 N I L
4 4 6 2 9 8 3 4
3 9 8 1 4 2 5 2
r 4 ( 1 5 5 8 2
r 4 ( 5 9 7 5 9
r r ( 0 0 . 1 6
r r r 4 4 2 0 -
r r r 4 4 0 N A
r r r 4 4 0 N A
S.K. ChaturvediChairman
Jagrut VyasManaging Director
V.C. JagannathanDirector
Kapil Khandelwal Director
Nilesh PatelCompany Secretary
Gurgaon, 30th April, 2010